Thank you very much.
When the decision is made to impose sanctions on a country, economic sanctions are often those that first come to mind. We are one of the few companies currently conducting activities in Sudan. In the document that has been distributed to you, we try to describe for you the vision of a mining operation in Sudan. I should say at the outset that the comments in the presentation are made from the perspective of a resource company. It is of course possible that the various economic sanctions that could be imposed might approach the question from various angles, depending on whether mining companies, the oil and gas industry or any other operation were involved.
Let me now quickly put things into context. Currently, supply and demand of natural resources are not in balance. This is true for practically all kinds of minerals, and for oil. As we show in slide 3, this is also what explains the significant rise in demand for gold in recent years. According to Bank of Montreal economists, among several others, the demand is going to last for some time because of the time needed to increase capacity to match the sudden spike in demand. This spike, as you know, is often attributed to the rapid development of the economies of China and India. So it is likely to last for some time yet.
A little less known is the fact that, previously, operators and producers of natural resources, certainly mining resources, essentially all came from the big four countries, namely Australia, Canada, the United States and South Africa. Very recently, that old order has changed. Whether in mining or oil and gas, the producers are increasingly new players that we have identified on slide 4. They are China, Indonesia and Russia. They are playing an ever more active role in the production of natural resources. They are homes to growing companies that are making a greater and greater mark on the world stage. It is important to remember this. Any freeze in Canadian activities in Sudan, for example, whether in mining or in oil and gas, could benefit the emerging players in China, Russia and Indonesia.
With the context now set, I would quickly like to introduce the company that I represent today, La Mancha Resources Inc. La Mancha is a Canadian company headquartered in Montreal. It is listed on the Toronto Stock Exchange, the TSX, has a market capitalization of $61 million—as of last March 31—and is presently operating two mines, one in Côte d'Ivoire and another in Sudan. The latter is the Hassaï mine, 150 km northeast of Khartoum.
The Hassaï mine has been in operation since 1992 and has produced over 2 million ounces of gold to date. The forecast production for 2008 is about 100,000 ounces of gold. Once produced, every ounce is sent to Canada where it is refined and sold on the international market. We presently employ 850 people, of whom 20 are expats, and 830 are locally hired and trained, Sudanese, that is. The mine is presently the only one in operation in the country. But we must remember that there is a lot of exploration going on at the moment and, unfortunately, it is not being done by Canadian companies, but exclusively by companies from China and Indonesia.
As a producer, La Mancha has a relatively short history. We began production activities after having acquired the assets of AREVA, a company based in France. A few months after we had acquired the Sudanese assets, the Sudan Divestment Task Force (SDTF), which appeared before this committee a few weeks ago, placed La Mancha on its highest offenders list because of our company's operations in Sudan. The objective of the Sudan Divestment Task Force is to provide financial markets with information about the operations of various public companies conducting activities in Sudan.
Their initial recommendation, based on information available in the public domain, was rather damaging. The organization put us on its highest offenders list simply because of our presence in Sudan.
However, the dialogue that came after August 2007 allowed us to describe the benefits resulting from La Mancha's presence in Sudan, the type of operations we had, our positive influence on the local population because of the training and instruction we provide, the working conditions in place at the site, the company's environmental policy, and so on. As a result, the Sudan Divestment Task Force reviewed its position and removed La Mancha from its highest offenders list.
This position was confirmed in November, when consultants appointed by the Sudan Divestment Task Force came to visit our operations in Sudan to confirm the statements that had been made to the Sudan Divestment Task Force committee.
A little more practically, not preventing companies like La Mancha or other Canadian producers from operating in Sudan has a number of advantages. I describe them in a few of these slides. First, it creates favourable working conditions. I can mention no discrimination in hiring and promotion, workforce training, respecting workers' human rights, and their religions, and so on. Most Canadian companies observe these policies and continue to do so outside the country. We do so in Sudan.
The same goes for environmental policies. It is important to know that the people developing the resources of a country are doing so responsibly. Again, blocking access for Canadian companies runs the risk of opening the door to companies whose environmental policies are less dynamic than is the norm among publicly traded companies in Canada.
Looking at regional development, many Canadian companies, including La Mancha, continue to have policies that are very socially oriented in their actions and their overseas operations. This deserves to be highlighted; several schools and hospitals have been built thanks to funding provided by our company, for example. We have provided water and electricity to a number of places.
In a few words, that is our position. If economic restrictions are to be imposed that would limit commercial links between Canada and Sudan, it is important that companies developing natural resources be exempted from those restrictions. Once again, the present great demand for natural resources means that any space vacated by Canadian companies would be immediately taken by Chinese, Indonesian or Russian companies.
As the example of Talisman Energy very recently showed, this is not necessarily beneficial for the local population. In the folder you have received, you will find an article describing what has happened since Talisman Energy left Sudan several years ago. Clearly, this special case is not necessarily representative of everything that can happen in those situation, but it is still an important example to keep in mind.
Of course, we are ready to take your questions.