Good morning, ladies and gentlemen, and welcome to the Nevsun Resources annual 2016 and fourth quarter 2016 results conference call. I now would like to turn the meeting over to Mr. Cliff Davis, President and CEO. Please go ahead, sir.
Good morning from Vancouver. With me today is our Chief Operating Officer, Frazer Bourchier; and our Chief Financial Officer, Tom Whelan. Before I begin, a few cautionary comments. The following prepared statements and discussion contains forward-looking statements regarding production, past and future financial results, as well as the potential arising from exploration programs and the strategic direction of the Company.
Forward-looking statements are by their nature uncertain and frequently, but not always, are identified by words such as expects, anticipates, believes, and similar expressions or statements that events and conditions or results will, could, or should occur or be achieved. Actual achievements or future events or conditions may differ materially from what is projected due to a variety of risks, uncertainties, and other factors.
We encourage all listeners to thoroughly read yesterday’s news release as well as the annual financial statements, the entire MD&A, and our AIF; all of which have been filed on SEDAR and EDGAR and are also available on our website. All the financial numbers referred to today are in United States dollars.
Now I’m going to provide my views of what we’ve accomplished over the last year and where we’re headed for 2017 and [for a few] years. We’ll then open the call up to a question-and-answer period.
Nevsun’s past year was transformational. We executed an opportunistic acquisition of one of the best copper gold assets in the world not only for the next 15 to 20 years, but perhaps for some decades if the lower zone proves up or other upper zone targets come to fruition through our exploration.
We have an excellent asset in the Bisha Mine that has provided significant cash flow to allow us to create even more value through the acquisition of Timok in Serbia. At a macro level in relatively few years, Nevsun has transformed from explorer to producer and now to producer-developer.
The development part of the business is now our most significant focus because we believe the biggest opportunity for the Company lies in our newly acquired asset. I’ll talk about that in a few minutes. The successful expansion of the business has occurred because we have been very financially focused. We were careful to make the right acquisition. We are all about asset quality, which makes return to shareholders possible. High grade, carefully managed assets allow one to produce cash, which in turn can be reinvested or returned to shareholders.
It’s a simple philosophy, but not easy to execute nor easy to choose to be so selective. Frankly, we were fortunate to have positioned Nevsun to be so opportunistic. Through the acquisition of Timok, we have created the platform for significant production and earnings growth for the coming years. The team is advancing a prefeasibility study with delivery plan for September of this year. We have had drills turning in both the upper zone and lower zone.
We expect to invest $45 million at the upper zone in 2017 and another $17 million in the lower zone. Right now we have more than 20 drills working on over 130,000 meter drill programs. I’m not aware of any other peer company making this kind of investment in exploration. It’s money well spent and we’re very optimistic on both Timok as well as Bisha that these dollars will turn into resources and reserves. I’ll talk about that a bit later.
Participated Analysts: Matt Murphy – Macquarie Capital Markets; Dalton Baretto – Canaccord Genuity; Walt Lipinski – Summit Mortgage Group; Stefan Ioannou – Cormark Securities; Craig Hutchison – TD Newcrest Securities; Sam Crittenden – RBC Capital Markets.