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Q2 2008 Breakwater Resources Ltd. Earnings Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Hello. This is the conference operator. Welcome to the Breakwater Resources conference call and webcast to present the company's second quarter 2008 results to shareholders. After the presentation, there will be an opportunity to ask questions. (OPERATOR INSTRUCTIONS) At this time, I would like to turn the conference over to Ann Wilkinson, Vice President, Investor Relations. Please go ahead, Ms. Wilkinson.

ANN WILKINSON, VP, INVESTOR RELATIONS, BREAKWATER RESOURCES LTD.: Good morning and thank you for joining us. This analyst conference call is being webcast on a live listen-only basis. Our news release detailing the financial and operating results was issued yesterday after the market closed and can be found on our website at www.breakwater.ca. Joining me are members of Breakwater's senior management team. After opening remarks and a discussion of our operating results by our President and Chief Executive Officer, George Pirie, Dave Langille, Breakwater's Vice President Finance and Chief Financial Officer, will discuss our financial results. Steve Hayes, our Vice President Commercial, will then update you on zinc market conditions. Also available to answer questions later on are a number of other senior Breakwater officials. We have a few housekeeping items to dispense with before starting. First, we are including news media and members of the public on this webcast on a live listen-only basis. Second, you will hear our executives use forward-looking language to discuss our operations. This language includes estimates and statements that describe the Company's future plans, objectives and goals, including words that indicate Management's expects a stated condition or result to occur. We have included a cautionary note on such forward-looking statements in our news release and direct our listeners to read this note to understand the limitations of such forward-looking information. Third and final, all dollar amounts are in Canadian currency unless otherwise stated. I will now pass the call over to George Pirie.

GEORGE PIRIE, PRESIDENT & CEO, BREAKWATER RESOURCES LTD.: Thank you, Ann. Good morning everyone. Last conference call I indicated that Breakwater's management team would continue to execute on its long-term plan for the Company. At the same time, I expressed confidence in the group's ability on the back of poor results in the fourth quarter of 2007 and the first quarter of 2008 to demonstrate flexibility and resilience in the face of tough markets. The objective was and remains to lower our costs at our operations, to move all our operations to positive cash flow and to improve our profitability. I think our financial and operating results for the second quarter of 2008 illustrate that my confidence in our ability to be adaptable was well-founded. Improvements were made in virtually all areas of the organization despite facing weak zinc and lead prices, a weak U.S. dollar and rising input costs. We constrained our capital and reprioritized our expiration programs to focus on the excellent prospects at Langlois, the acquired Metco properties, the Mina Profunda discovery at Toqui and within the existings infrastructure at Mochito. Additionally, we continue to explore on the Coulon property with our joint venture partner. We have completed the restructuring of Myra Falls and have already seen the benefits demonstrated in the results from the operation. Significantly, we have accomplished this while growing our cash balance to approximately $45 million, with a concentrated inventory value at $76 million versus $65 million at December 31st. These improvements were made in the face of continuing significant challenges including 30% increases in treatment charges, oil in unchartered territory and a scarcity of skilled labor in most of our markets and, of course, a precipitous drop in zinc prices. We remain focused on continuing to make improvements at all of our operations. With that, I'll turn the call over to Dave Langille, our Vice President Finance and Chief Financial Officer.

DAVE LANGILLE, VP, FINANCE & CFO, BREAKWATER RESOURCES LTD.: Thank you, George, and good morning. In the second quarter we realized net earnings of C$8.1 million or C$0.02 per share. Sales of concentrate increased by 87%...

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