Q3 2023 Fortuna Silver Mines Inc Earnings Call

Speaker 1: Greetings and welcome to the Fortuna Silverminds Q3 2023 financial and operational results.

Greetings and welcome to the Fortuna Silver Mines' Q3, 'twenty to 'twenty, three financial and operational results call.

Speaker 1: At this time, all participants are in a listen-only mode, and the floor will be open for questions after the presentation.

At this time all participants are in a listen only mode and the floor will be open for questions. After the presentation. If anyone should require operator assistance. During the conference. Please press star zero on you'll find keypad. Please note. This conference is being recorded I will now turn the conference over to your host.

Speaker 1: during the conference, please press star zero on your phone keypad.

Speaker 1: I will now turn the conference over to your host, Jorge Roberto Ganoza, CEO of Fortuna Silver.

Jorge Alberto Guy knows that CEO of Fortuna silver mines Jorge over to you.

Speaker 2: Thank you, Yenny, and good morning to all and welcome again.

Thank you Ian Ian.

Turning to all and welcome again.

Speaker 2: In addition to myself, we have on the line, Luis Dario Ganoza, Chief Financial Officer, Cesar Velasco, Chief Operating Officer of Latin America, and David Whittle, Chief Operating Officer for West Africa.

In addition to myself, we have on the line Louisa do Yoga and also Chief Financial Officer since out of Alaska, Chief Operating Officer, Latin America, and David Whittle, Our Chief operating officer for West Africa.

Speaker 2: For your reference, during the conference call, we have provided a third quarter results presentation available on the landing page of our website under feature presentation.

For your reference during the conference call we have provided.

Third quarter results presentation available on the landing page or for website under future presentations.

Speaker 2: As we will be making forward-looking statements during the call, please refer to our cautionary statements, including in the presentation, news release, MDNA and the risk factors in Individual appearance, the record of this report is

Sure.

As we will be making forward looking statements during the call. Please refer to our cautionary statements included in the presentation news release, MD&A and the risk factors in our annual information form.

Speaker 2: Technical information in the presentation has been reviewed and approved by Eric Chapman or Senior Vice President Technical Services and qualified person. Financial figures contain in the presentation and discussed in the course in today's call are presented in US dollars on this otherwise stated.

Technical information in the presentation has been reviewed and approved by Eric Chang, Our senior Vice President Technical services and qualified diverse.

Financial figures is contained in the presentation and discussed in the Gulf.

Today's call are presented in U S dollars.

Unless otherwise stated.

Speaker 2: Yesterday before market opened, we reported record production and financial results. Our noteworthy results are the successful outcome of two years of hard work and focused execution on our strategic plan. We have placed ourselves in a strong position to deliver shareholder value today and into the future.

Yesterday day before market open we reported record production and financial results are noteworthy results are the successful outcome of two years of hard work and focused execution on our strategic plan.

We have placed ourselves in a strong position to deliver shareholder value today and into the future.

Speaker 2: Since the Roxco acquisition in mid 2021, we have successfully expanded and consolidated our presence in two of the most exciting mining regions in the world, West Africa and Latin America. We have a balanced mine asset portfolio that offers multiple value enhancing opportunities.

<unk> acquisition in mid 2021, we have successfully expanded and consolidated or braces.

Two of the most exciting mining regions in the World of West Africa, and Latin America, we have a balanced asset portfolio that offers multiple value enhancing opportunities.

Speaker 2: Now, let me tell you why the achievements of this quarter are so important. I see this as an inaugural quarter due to the start of contribution of our feet and flagship mind seghella. So I'll be comparing performance versus the previous second quarter, which I believe helps better see the impact and the change in the business.

Now let me tell you why the achievements of this quarter are so important.

This is an inaugural quarter due to the start of contribution before fees and flagship mainstay gayla.

So we are comparing performance versus the previous second quarter, which I believe helps later to see the impact and the change in the business.

Speaker 2: Production and financial results are highlighted by record figures across all relevant metrics of the business.

Production and financial results are highlighted by record figures across all relevant metrics of the business.

Speaker 2: Gold equivalent production of 128,671 ounces.

Equivalent production of 128671 ounces.

Speaker 2: an increase of 38% compared to the second quarter of the year.

Increase of 38% compared to the second quarter of this year.

Speaker 2: sales of $243 million, an increase of 53% compared to the second quarter, net earnings of 27.5 million, or nice.

Sales of $243 million, an increase of 53% compared to the second quarter net.

Net earnings of 27, and a half million dollars.

Or nine cents per share.

Speaker 3: Adjusted meant earnings of 10 cents per share beating

Adjusted net.

Earnings of 10 cents per share beating.

Analyst consensus.

Speaker 3: and a notably large free cash flow from operations amounting to $70 million, compared to $9.5 million in the second quarter.

And a notably large free cash flow from operations amounting to $70 million compared to $98 million in the second quarter.

Speaker 3: Our consolidated cash cost was well below $900. And ASIC was $1,312 per gold equivalent ounce.

Our consolidated cash cost was well below $900.

<unk> was $1312 per gold equivalent ounce.

Speaker 3: We continue tracking well to meet the upper end of guidance range for the year, powered by the Yaramoku, Seguera and Trejo Mama in contribution.

We continue tracking well to meet the upper end of our guidance range for the year powered by they get a multiple singular until you're on the line contribution.

Speaker 2: The record financial performance was mainly driven by FEGELA, or flagship mine, contributing full quarter production for the first time. In addition, we also benefited from higher gold production at the Aramoco related to higher grades in new extensions of Zone 55.

The record financial performance was mainly driven by our flagship mine.

<unk> full quarter production for the first time in <unk>.

Asia, We also benefited from higher gold Baroque stride, yet our muscle related to higher grades and new extensions of <unk> 55.

Speaker 3: as well as an overall steady performance across the mines portfolio where we observed abating inflation in consumables and recorded gains from continuous optimization initiatives.

As well as an overall steady performance across the mine sports portfolio, where we observed abating inflation in consumables on a recorded gains from continued optimization initiatives.

Speaker 3: In terms of the Seguila mine, we were still ramping up production during the Third Quarter. By the end of September , the process planned was exceeded.

In terms of a circular mine, we were still ramping up production during the third quarter by the end of September the process plant was exceeded.

Speaker 3: Exceeding nameplate capacity of 154 tons per hour by 13%.

Exceeding nameplate capacity of 154 tons per hour by 13%.

Speaker 3: Looking forward, in the fourth quarter, we expect to benefit from steadier production at higher throughput.

Looking forward in the fourth quarter, we expect to benefit from state of your production at higher throughput rate.

The mine recorded gold production of 31498 ounces at.

Speaker 3: The mine recorded low production of 3198 Hounds.

Speaker 3: had a cash cost of 395 lb.

At a cash cost of $395 per ounce.

Speaker 3: an ageing of $788 per ounce, industry leading cost.

<unk> of $788 per ounce industry, leading cost.

Speaker 3: Over the coming months, we expect cash costs and ACIC to gradually gravitate towards our guidance projections in the range of $500 for cash costs and $1,000 for ACIC.

Over the coming months, we expect cash cost in AC to gradually gravitate towards our guidance project shifts in the rates in the range of $500 for cash cost them a thousand dollar for AC.

Speaker 3: This is explained by higher projected stripping in our plants and longer whole-age distances as feet operations have been.

This is explained by higher predicted stripping in our plans and longer haulage distances as Pete the operations out of that.

Speaker 3: David would provide further insights into our operations at Seguel and Jaramoco later on.

David will provide further insights into our operations subscale and yet our multiple.

Later on.

Speaker 3: As we transition out of two years of intensive investment, an enter a cash harvest phase, capital allocation becomes a topic for us.

As we transition out of two years of intensive investment and then there are cash harvest face capital allocation becomes a topical issue for us.

Speaker 3: or priorities are to continue strengthening the balance through that reduction.

Our priorities are to continue strengthening the balance sheet through debt reduction.

Speaker 3: Or this leverage ratio currently stands at a low 0.5 times net debt to EBITDA. However, we want to see that ratio will be low 0.500 different conservative scenarios.

Our leverage ratio currently stands at a low 0.5 times net debt to EBITDA. However, we want to see that ratio well below 0.5 under different conservative scenarios.

Speaker 3: Another priority is ensuring exploration programs remain well-funded. We have focused on high-value opportunities in the portfolio and reserve replacement at our minds.

Another priority is ensuring exploration programs remain well funded with a focus on high value opportunities in the portfolio and reserve replacement to other mines.

Speaker 3: Currently we have 11 drill rigs turning across our proper

Currently we have 11 drill rigs turning a grocer brokered piece and we remain open to other avenues to continue enhancing shareholder value.

Speaker 3: and we remain open to other avenues to continue enhancing shareholder value.

Speaker 3: For example, with our bank leaders wearing discussions to leave certain covenants to become active again on our share repurchase code.

For example, we were buying land there. So we're in discussions to lease certain covenants to become active again on our share repurchase program.

Speaker 3: In September , we completed the acquisition of CHESA resources and the Diambasut GO project in Senegal.

In September we completed the acquisition of Chase, our resources and <unk> Gold project in Senegal.

Speaker 3: The ambassuth is an exciting, advanced stage exploration opportunity and a very strategic technology wing.

The <unk> is an exciting advanced stage exploration opportunity and a very strategic feat for us.

Speaker 3: It complements our advanced project pipeline, and Senegal is a near-neighbor country to our existing operations.

It complements our advanced product pipeline and San Diego is a near neighbor countries to our existing operations.

Speaker 3: We're making best use of time here, and are already drilling with three rigs exploring for additional ons.

We're making best use of time here and are already drilling with three rigs exploring for additional <unk>.

Speaker 3: Also, during September and October , we had good news at our San Jose mine in Mexico.

Also during September and October we had good news at our San Jose Mine in Michigan.

We announced receipt of a positive Mexican court ruling reinstating our tool here environmental impact of <unk>.

Speaker 3: of a positive Mexican court ruling when stating or talking about a environmental impact authorization.

Speaker 3: The court did not leave any credit to the surprising January resolution. He should buy the Mexican environmental agency some are not.

The court did not give any credit to the surprising January ratio evolution issued by the Mexican environmental agency somewhere in that.

Speaker 3: Our mine has operated normally throughout this area with Semarnat and we hope this noise is behind us.

Or mine has operated normally throw all desire with semi and we hope these noisy it's behind us now.

Speaker 3: In September , we announced the discovery of a new high-grade mineralized structure at San Jose named Viesca.

In September we announced the discovery of a new high grade mineralized structure at San Jose named ESC.

Speaker 3: the discovery hole intersected 9.9 meters at 1.2 kilograms silver equivalent per ton within a broader halo of mineralization.

The discovery hole intersected 99 meters at 1.2 kilogram silver equivalent per ton within a broader halo of mineralization.

Speaker 3: Yesi is located east of the main Trinidad-Victoria system where production takes place currently and some 200...

<unk> is located.

East of the main 'twenty that Victoria system, where production takes place squarely.

And some 200 meters.

Speaker 3: from existing underground infrastructure. Yes, it is a blind discovery, meaning it does not have any recognizable surface expression.

From the existing underground infrastructure, yes. It is a blind discovery, meaning it does not have any regular nice level surface expression.

Speaker 3: And we're currently drilling with two core rigs, working to gain better geologic understanding of this new zone.

And we're currently drilling with two core rigs working to gain better geologic understanding of these new so.

Speaker 3: on health and safety across the business, we recorded one LPI.

On health and safety across the business, we recorded while L. P I.

Speaker 3: As of the end of the quarter, or year-to-date, LTI frequency rate stands at 0.38 and the total recordable frequency rate at 0.88.

As of the end of the quarter or year to date LTI frequency rate stands at 0.38, and a total recordable frequency rate at 0.86.

Speaker 3: This compares to 0.22 and 2.37 a year ago, respectively.

This compares to zero point, 22, and $2 37, a year ago, respectively.

Speaker 3: Worth noting is the achievement of our Yaramoko Mine team, which in the quarter recorded three years free of lost time.

Worth noting is the achievement of forget a multiple mine team, which in the quarter recorded three years free of lost time injuries.

Speaker 3: year to date, we have no reportable events on the environment.

Year to date, we have no reportable events on the environment.

Speaker 3: I will now let David and Cesar provide a high-level overview of our business and performance in West Africa and Latin America. We can start with you, David.

I would now let David emphasis I provide a high level overview of our business and performance in West Africa, and Latin America, We got started with you David.

Speaker 4: Yes, thanks, Olga. Operations in West Africa performed strongly during the third quarter of 2023. All sites demonstrated excellent safety performance with no significant incidents and zero LTIs.

Okay. Thanks for that.

Operations in West Africa performed strongly during the third quarter of 2020 full.

<unk> demonstrated excellent safety performance with no significant incidents.

<unk>.

Speaker 4: Mr Gaila, the mine's first full quarter of production, result of 31,498 Touses of Gold, which followed the successful completion of the processing plant performance test in August . The operation is now exceeding the complete process.

That's the goal of the months' first full quarter King was also the <unk>.

498 passengers do you should follow the successful completion of the processing plant.

Our performance in August.

Operationally is now exceeding nameplate capacity.

Speaker 4: At Yaramoto guidance was increased by approximately 14% to 110,000 to 120,000 ounces and the mine also achieved a milestone of operating three years without an LTI.

Yes, my guidance was increased by approximately 40.

There's 110 to 120000 ounces.

The mine also achieved a milestone of operating suite usefully optionality.

Speaker 4: In the third quarter, Stagalia mined 502,326 tonnes of ore at an average grade of 3.48 grams per tonne and 1,156,540 tonnes of waste for a strip ratio of 2.3.

In the second quarter, CDI, Lamont 500, and 326 tons of oil and an average grade of three point alright grams per tonne.

On 1 million 156540 tons of white space lifestyle.

So two points right.

Speaker 4: All processed was 310,387 tonnes at 3.83 grams per tonne.

Oil price test was 310000 students in light.

383 grams per tonne.

Speaker 4: Mining operations focused on the antenna pit in order to access the higher grade areas and to source sufficient fresh rock for the completion of the processing plant's performance.

Mining operations focused on the <unk>.

In order to access the higher grade areas and to source as.

Well with the completion of the processing plants the Coleman.

Speaker 4: At the Agsium pit the first program of grade control really took place, topsoil stripping and storage commenced and the whole road construction continued as planned.

At the <unk> pit, but soon as program a great consoled totaling place.

So shipping and storage commenced in the whole REIT construction continues as planned.

Speaker 4: of the cooler pet initial great controlling starter and should be completed in the fourth quarter of this year.

Cool.

Initial great consulting thoughtful.

And should be completed in the fourth quarter of this year.

Speaker 4: Process plant operations ramped up beyond the night flight capacity of 154 tonnes per hour during the quarter, achieving an average rate throughput of 162 tonnes per hour.

Alright, Thanks plant operations ramped up beyond the knife fight paucity of about 154 tons per hour during the quarter, achieving an average right.

306, two tons per annum in.

Speaker 4: In September , an average throughput of 174 tons per hour was reached.

In September an average throughput of 174 tons per hour was reached.

Speaker 4: Process plant improvements are currently allowing to proceed to land approximately 40% transitional and oxide ore, which enables the processing of additional quantities of some of the higher grade oxide ore mine earlier.

Process plant improvements.

Allowing for a blend of approximately 40% transitional and oxide ore.

In April the price has seen a additional quantities of some of the higher grade oxide ore mined daily rate of the year.

Speaker 4: long-term oxide transitional feed will be in the order of 10 to 15 percent.

Long term upside transitional feet will be in the order of 10% 15%.

Speaker 4: So Gayle's strong performance resulted in both cash costs per ounce and ASIC being below guidance range at $395 and $788 an ounce respectively.

So guy was strong performance resulted in cash cost.

It's an AC being below guidance range at $3 95 to $798 an ounce respectively.

Speaker 4: Finally, operations from performance in the quarter become to continue to see improvements in throughput and a continuation of good grades and positive wrong reconciliation is a process in place.

Following the operation strong performance in the quarter, we can see continue to see improvements in throughput.

Continuation of good grade positive reconciliation needs is probably 16 plant.

Speaker 4: As a result, we expect our production to achieve the upper end of the IQ.

As a result, we expect gold production to achieve.

The items.

Speaker 4: A D.A.R.A. Motto, strong production performance still at 34,000 and 36 ounces of gold.

Yeah Michael.

Strong production performance.

For gas and 36 ounces of gold.

Speaker 4: Mine production at Yaramata was 127,060 tons and an average grade of 8.12 grams per ton.

Mine production.

It was 127000 tons at an average grade of 812 grams a tonne.

Speaker 4: mining operations, which we please from the 55 zone underground mine. Development continued at the QV or body of the legacy mine with the first soaping operations commencing towards the end of quarter.

Mining operations with <unk> from the <unk> underground mine.

<unk> continues as the key the ore body at the <unk> mine with the first stoping operations commencing towards the.

Towards the end of the quarter.

Speaker 4: So the processing plant, 137,281 tonnes were treated at an average grade of 7.72 grams per tonne, with recovery at 98.5% enabled by the increased feed grade.

So the processing plant.

37291 tons were treated at an average grade of 772 grams a tonne.

We've covered 98.

And in April by the increase the growth.

Speaker 4: The increase in production resulted in the year today, A.C. at Caramoto being below the lower end of annual guidance at $1,429 per hour.

The increase in production resulted in year to date.

<unk> been delighted that lower end of annual guidance at $1421 per ounce.

Speaker 4: In the third quarter, Roxgold, in cooperation with other mining groups and stakeholders, engaged with the government of Burkina Faso with regards to the government's proposed variation to metal royalty.

In the third quarter rock salt in cooperation with other mining rigs and stakeholders engaged with the government of Makena satisfied with results.

Governments proposed variation to metal royalties.

Speaker 4: This collaborative approach has seen a small increase in royalties of 1.5% at current gold prices.

These collaborations are privates have seen a small increase in royalties of 1.5% at current gold prices.

Speaker 4: With a maximum increase of 2%, once gold prices exceed $2,000 an hour.

With a maximum increase of 2% once coal prices I E G.

$1 an ounce.

Speaker 4: Finding development operations continue to encounter high grade areas with all body widths generally greater than previously experienced.

Finding and development operations continued to Lancaster high grade areas, we ore body, which generally lighter than previously experienced.

Speaker 4: They've been activities are starting to progress in some of these high-grade areas and as a result we expect 2023 production to be within the revised diamonds rate to the 110 to 120,000 out.

So I've been activities are starting to progress in some of these higher grade areas and as a result, we expect 2023 production to be within the revised guidance range of 110.

220000 gases.

Speaker 4: The company anticipates having a similar gold production range in 2024.

The company anticipates, having a similar gold production in 2020.

Cool.

Speaker 4: Diamond drilling during the third quarter was focused on the lower eastern side of the 55 zone ore body. Drill results have seen an extension on strike to expected mining boundaries, as well as the inclusion into the mine plan of an additional eastern ore drive at the lowest part of the 55 zone ore body.

Diamond drilling during the third quarter was five for some of our eastern side of the 55 zone ore body.

<unk> also seen an expansion on slide two I expected mining batteries as well as the inclusion into the mine plan of an additional eastern all drivers are always part of the safety cards ore body.

Speaker 4: Starting in the fourth quarter and throughout 2024, we'll focus again on testing further western stripe extensions of 55-side, as well as testing for potential deeper extensions.

Drilling in the fourth quarter and throughout 2024, well pilot just became on testing for the western strike extensions of chip supply side as well as testing for potential or extensions.

But the Olga.

Speaker 3: Thank you David. Thank you. Thank you for here. And good morning to everyone. When I consolidate the basis, the Latin American operations deliver solid gold and silver production with good safety performance in the quarter.

Thank you David.

Okay.

Thank you Jorge and good.

Good morning to everyone.

On a consolidated basis, Ziggy Latin American operations delivered solid gold and silver production.

Good safety performance in the quarter.

Speaker 4: We also continue to advance several key sustaining capital projects at both the Lindero and Cayoma Mines.

We also continued to advance several key sustaining capital project at both <unk> and Cod Yamana mines.

Speaker 3: Regarding costs, we are starting to see some reduction tendencies on main supplies and consumables, like diesel, cement, sulfuric acid, cyanide and other reagents.

Regarding costs, we are starting to see some reduction tendencies are main supplies and consumables like diesel cement, so a full recast it cyanide and other reagents.

Speaker 3: in Mexico, we're experiencing some pressure from the strengthening of the Mexican vessel versus the US dollar of roughly 20% when compared to 2022 levels.

In Mexico, we are.

We're experiencing some pressure from the strengthening of the Mexican peso versus the U S dollar of roughly 20% when compared to 2022 levels.

Speaker 3: Now, I will discuss our operational performance during the third quarter.

Now I will discuss our operational performance during the third quarter.

Speaker 3: In Argentina, Lindero Minedo, 1.9 million pounds of ore, with a stripping ratio of 1.1 to 1. And looking forward, the stripping ratio is expected to continue its positive trend through to the end of the year to approximately 0.7 to 1.

In Argentina, I mean data mined one 9 million tons support with a stripping ratio of one one to one and.

And looking forward to the stripping ratio is expected to continue its positive trend through to the end of the year to approximately 0.7 to one.

Speaker 5: a total of 1.5 million tons of ore were placed on the leach pet at another H-gold grade of 0.62 grams per ton containing an estimated 29,068 ounces of gold.

A total of one 5 million tons of poor were placed on the leach pad at an average gold grade up zero point 62 grams per ton containing an estimated 29068 ounces of gold.

Speaker 5: Lindedos Gold production in the quarter was 20,933 ounces, in line with the mining sequence and the mineral reserves.

<unk> gold production in the quarter was 20933 ounces in line with the mining sequence and the mineral reserves.

Speaker 5: In accordance with our mine plan, the higher stripping ratios seen in the first nine months of the year positioned us for improved access to higher grade material to be mined during the upcoming fourth quarter.

In accordance with our mine plan.

Higher stripping ratios seen in the first nine months of the year position us for improved access to higher grade material to be mined during the upcoming fourth quarter.

As a result.

Speaker 5: the Nero anticipates, placing about 1.6 million tons or four on the Lichpet at a higher average grade of 0.67 grams per ton.

I mean data anticipates, placing about one 6 million tons before on the Leach pad at a higher average grade of zero point 67 grams per tonne.

Speaker 5: One of the most relevant capital projects for Indelo in 2023 and 2024 is the Leachpad expansion, which will serve for the next several years of products.

One of the most relevant capital projects, putting data in 2023, and 2024 is the leach pad expansion, which will serve for the next several years of production.

Speaker 5: As of September the 30th, this project is 13%

As of September 30th These project is 13% complete.

Speaker 5: mobilization of the contractor's personnel and equipment has already commenced. The first shipments of geomembrane and geosynthetic clay liner have arrived at site, and the project remains on schedule for conclusion during the second half of 2024. The estimated time of time.

Mobilization of the contractors' personnel and equipment has already commenced.

First shipments of Geo membrane and Geo synthetic clay liners have arrived at site and the project remains on schedule for conclusion during the second half of 2024.

The estimated time of.

Time of completion.

Speaker 5: is aligned with the stacking plan and production requirements for next year.

He is aligned with the stacking plan and production requirements requirements for next year.

Speaker 5: ASIC for the quarter was $1,611 per ounce, mainly due to higher cash costs per ounce resulting from a combination of lower production and higher indirect costs, but partially compensated by higher capitalized stripping costs.

<unk> for the quarter was 1690 <unk>.

And $11 per ounce, mainly due to higher cash cost per ounce, resulting from a combination of lower production and higher indirect costs, but partially compensated by higher capitalized stripping costs.

Speaker 5: A-TIC is expected to be at the high end of final guidance. Has Carpex execution picked up in the four quarter?

<unk> is expected to be at the high end of annual guidance as Capex execution picks up in the fourth quarter.

Speaker 5: Lindeiro continues capturing significant savings, particular on key consumables, and the focus remains on cost control and good graphics execution.

I mean that a continuous capturing significant savings, particularly on key consumables and the focus remains on cost control and good capex execution.

Speaker 5: Moving up to Mexico, San Jose's production reflects a 43% and 42% increase in silver and gold production when compared to the previous quarter.

Moving up to Mexico, San Jose production reflects up 43%, 42% increase in silver and gold production when compared to the previous quarter.

Speaker 5: The mine produced 1.4 million ounces of silver at an average head grade of 189 grams per ton and 8,205 ounces of gold at an average head grade of 1.14 grams per ton.

The mine produced one 4 million ounces of silver at an average head grades of 189 grams per tonne.

And 8000 to 105 ounces of gold at an average head grade of 114 grams per tonne.

Speaker 5: Management continues executing on an improved mining and processing plan through a year end to recover part of the lost production from the second quarter.

Management continues executing on an improved mining and processing plant through at year end to recover part of part of the lost production from the second quarter.

Speaker 5: Silver and gold production for the third quarter of 2023, weighing compared to the third quarter of 2022, is explained by the lower grade profile of the mineral reserves in the mine.

Silver and gold production for the third quarter of 2023 lane compared to the third quarter of 2022 is explained by the lower grade profile of Dominion our reserves in the mine plan.

Speaker 5: San Jose is estimated to be approximately 15% above the upper end of its cost guidance for the year. As a result of catching up during the fourth quarter and post-imposed on development meters from the previous quarter.

San Jose is estimated to be approximately 15% above the upper end of cost guidance for the year.

As a result of catching up during the fourth quarter pause in postpone development meters from the previous quarters.

Speaker 5: ASIC for the year incorporates an intensive infield drilling campaign at the recently discovered Yessir Vane, where additional drilling is underway from both circus and underground.

<unk> for the year incorporates an intensive infill drilling campaign at the recently discovered ESG vein.

Additional drilling is underway from both surface and underground.

Speaker 5: Regarding Peru, Cayoma produced 308,221 ounces of silver.

Regarding Peru.

<unk> produced 308000 to 121 ounces of silver.

Speaker 5: This is a 6% increase from the same period in 2020.

This is a 6% increase from the same period in 2022.

Speaker 5: At an average height of 83 grams per tons, over the line is well positioned to achieve the upper end of annual guidance.

At an average head grade of 83 grams per ton silver and the mine is well positioned to achieve the upper end of <unk>.

Annual guidance.

Speaker 5: think and lead production was 14 and end point three million pounds respectively, which represents an 18 and 14% increase in production from the same period in 2022.

Zinc and lead production was 14 and $10 3 million pounds, respectively, which represents an 18 and 14% increase in production from the same period in 2022.

Speaker 5: Increased production is the result of positive grade reconciliation to the research model in level 16 and 18 of the animals base.

Increased production is the result of positive grade reconciliation to the reserve model in level 16, and 18 of the Animas vein.

Speaker 5: Think and let average head grades were 5.07% and 3.66% a 16 and 10% higher for think and let respectively. When compared to the same period in 2020?

Zinc and lead average head grades were five point, <unk>, 7% and 366%, a 16 and 10% higher for zinc and lead respectively when compared to the same period in 2022 inch.

Speaker 5: increased recoveries for synchon less. We're driven by those higher grades.

Increased recoveries for zinc and lead were driven by those higher grades I think that covers Latin America operations back to you Jorge.

Speaker 5: I think that covers Latin America operations. Back to you, Jorgen.

Speaker 3: Thank you, Cesar. Luis, review for Financials.

Thank you.

With a review of our financials.

Speaker 6: Sure, thank you. So I'll be focusing my commentary on the...

Sure. Thank you.

I'll be focusing my commentary on the <unk>.

Speaker 6: Comparable quarter of 2022 sales of $243.1 million in the third quarter of this year worth $77 million Above you through we a three of 2022. This is a 46% increase explained Primarily by the contribution of 35,500 ounces

Comparable quarter of 2022 sales of.

$243 1 million in the third quarter of this year were $77 million.

Above Q through Q3 of 2022. This is a 46% increase explained.

Primarily by the contribution of 35500 ounces of.

Speaker 6: from gold from Seguila in the quarter, as well as higher middle prices.

Gold from <unk> in the quarter as well as higher metal prices.

Speaker 6: Year-over-year realized gold and zero prices were up to 12% and 23% respectively.

Year over year realized gold and silver prices were up 12% and 23% respectively.

Speaker 6: Our cash cost of sales per gold, equivalent ounce was $814. This is 8% or $67 per ounce below the prior year.

Our cash cost of sales per gold equivalent ounce was $814. This is 8% or $67 per ounce below the prior year.

Speaker 6: Cash cost of sales at Segel was $397 per ounce and slightly below $500 per ounce when including capital eases related to the mining contractor which are reported as part of ASIC but excluded from cash cost per ounce.

Cash cost of sales at <unk> was $397 per ounce and slightly below $500 per ounce, when including capital leases related to the mining contractor, which are reported as part of basic but excluded from our cash cost per ounce.

Speaker 6: At Yadamoko we have also reported a significant reduction in cash cost around of approximately $180, related to the effect of higher grades, a trend that has remained constant throughout the year as David pointed out.

And you had a multiple we have also reported a significant reduction in cash cost per ounce of approximately $180 related to the effect of higher grades a trend that has remained constant throughout the year.

David pointed out.

Speaker 6: These positive impacts were partially offset by higher cash costs per gold equivalent ounce at the Nero and San Jose.

These positive impacts were partially offset by a higher cash cost per gold equivalent ounce.

NATO and San Jose.

Speaker 6: In the case of Lindero, this is mostly aligned with the expected reduction in head grates consistent with a mind flam.

In the case of the narrow this is mostly aligned with the expected reduction in the head grades consistent with the mine plan in.

Speaker 6: In the case of San Jose, this is mainly due to higher mining costs to make up for the shortfall of production in the second quarter of this year, related to the illegal blockade. And higher mining and some...

In the case of San Jose This is mainly due to higher mining cost to make up for the shortfall of production in the second quarter of this year related to the illegal blockade.

The higher maintenance and indirect costs.

Speaker 6: As a result of the higher volume sold, lower cost per ounce and higher mental prices, minor operating income increased 166% year over year.

As a result of the higher volumes sold lowered cost per ounce and higher metal prices mine operating income increased 166% year over year year.

Speaker 6: While our general administration expenses remain for the most part cons...

While our general and administrative administration expenses remained for the most part constant.

Speaker 6: This strong operating leverage effect has resulted in an increase in operating income of almost 700% from 5.7 million dollars in Q2 of last year to 45.5 million in Q3 of 2023.

The strong operating leverage effect has resulted in an increase in operating income of almost 700%.

From $5 $7 million in Q2 of last year to $45 5 million in Q3 of 2023.

Speaker 6: We have this closed, we expect higher depletion at Segella in future quarters related to the purchase price allocation from the rock sole acquisition.

We have disclosed we expect higher depletion of scalar in future quarters related to the purchase price allocation from the <unk> acquisition.

Speaker 6: We anticipate depletion will increase over next 2-3 quarters towards run rate levels on a run rate wars.

We anticipate depletion will increase over the next two to three quarters towards run rate levels on a per ounce basis.

Speaker 6: We estimate that for the level of ounces sold in the quarter, this would add an additional non-cash charge of around 10 million dollars to cost of sales or approximately $300 per ounce.

We estimate that for the level of ounces sold in the quarter. This would add an additional non cash charge of around $10 million to cost of sales or approximately $300 per ounce.

Speaker 6: Continuing with the income statement, we have recorded $8.2 million of net interest and finance costs compared to 2.4 million in Q3 2022.

Continuing with the income statement, we have recorded $8 $2 million of net interest and finance costs compared to $2 4 million in Q3 2022.

Speaker 6: This $8.2 million in 2023 is comprised of 5.1 million of net interest charges.

This $8 $2 million in 2023 is comprised of $5 1 million of net interest charges.

Speaker 6: And 3.1 million of accounting accretion for various concepts including mineclosure, ride of his assets and the outstanding convertible depth.

And $3 1 million of accounting accretion for various concepts, including mine closure right of use assets and the outstanding outstanding convertible debt.

Speaker 6: In the comparable quarter, 1.3 million dollars of interest charges were capitalized, whereas no interest capitalization took place in Q3 of the current year.

In the comparable quarter $1 3 million of interest charges were capitalized, whereas no interest capitalization took place in Q3 of the current year.

Speaker 6: Our effective tax rate in the quarter was 18%. As we have disclosed as well, no income tax was recorded and seghella in the quarter due to income tax offsets from the construction phase.

Our effective tax rate in the quarter was 18% as we have disclosed is well no income tax was recorded in the quarter due to income tax offsets from the construction phase.

Speaker 6: Under a full income tax scenario we would expect effective tax rates on a consolidated basis between 35 and 40

Under a full income tax scenario, we would expect an effective tax rate on a consolidated basis between 35 and 40%.

Speaker 6: Moving on to free cash flow on liquidity, we reported $70 million of free cash flow on the back of strong cash flow operations of $106.5 million.

Moving on to free cash flow and liquidity, we reported $70 million of free cash flow on the back of strong cash from operations of $106 5 million.

Speaker 6: Compared to the prior year, free cash flow and cash from operations increased by 36 and 42 million dollars respected.

Compared to the prior year free cash flow and cash from operations increased by 36% and $42 million respectively.

Speaker 6: Her total liquidity at the end of the quarter was $162.3 million, up $64.4 million from the end of June 2023, reflecting the strong free cash flow generation in the quarter.

Total liquidity at the end of the quarter was $162 3 million up $64 $4 million from the end of June 2023, reflecting the strong free cash flow generation in the quarter.

Speaker 6: As Jorge mentioned, we paid down $40 million of debt and expect to continue paying down debt in the coming quarter.

As Jorge mentioned, we paid down $40 million of debt.

And expect to continue paying down debt in the coming quarters.

Speaker 6: a reference of $40 million of that reduction represents quarterly interest-expand savings of approximately $0.8 million at current interest rate.

As a reference of $40 million of debt reduction represents quarterly interest expense savings of approximately zero point $8 million at current interest rates.

Speaker 6: Finally at the end of Q3, our total, 2023, our total net depth was $134 million down from $198 million in June 2023.

Finally at the end of Q3, our total 2023, our total net debt was $134 million down from $198 million in June 2023.

Speaker 6: for a total net depth to eviter ratio of 0.5.

For our total net debt to EBITDA ratio of 0.5.

Back to you for him.

Speaker 3: Thank you, that concludes management discussion of results. Jenny.

Thank you that concludes management's discussion of results Jamie.

Back to you.

Speaker 1: Thank you very much Jorge. At this time, we will be conducting our question and answer.

Thank you very much Jorge at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your fine keep have now.

Speaker 1: If you would like to ask a question, please press star one on your phone.

Speaker 1: confirmation term will indicate that your line is in the question key. You may press start too if you would like to remove your question.

Confirmation tone will indicate your line is in the question you May Press Star two if you would like to remove your question from Nicky So anyone using speaker equipment, it might be necessary to pick up your handset before pressing Keith please hold a moment, whilst we poll for questions.

Speaker 1: For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please hold a moment.

Speaker 1: your first question is coming from Derek Remill of Scotia Bank. Derek, your line is

Thank you. Your first question is coming from Derek Glynn of Scotia Bank.

Your line is life.

Speaker 7: Great, thanks so much. Hi, Jorge and team. Nice to see the free cash flow on Q3 and the stock responding well. Just a few quick questions from me. If you don't mind, Edland Darrell on the phase two leak pad expansion. And can you just remind me what the critical path items are? And I guess how much additional tonnages will get you?

Great. Thanks, so much I know Jorge and team nice to see the free cash flow in Q3, and the stock responding well.

Just a few quick questions from me if you don't mind Atlan Darryl on the phase two leach pad expansion can you just remind me what the critical path items are and I.

I guess, how much additional tonnage is we'll get Ya.

Sure.

Speaker 3: Critical paths and sayessor if you want to.

Critical path and a successful.

Speaker 5: Sure, well critical parts were in fact the Gio-Main Brain and Gio-Synthetic Clay Liner, you know those were

Q1 expense sure Jorge.

Well critical paths where in fact.

<unk> main brain on Geo synthetic clay liners those were properly ported curious in time.

Speaker 5: Properly porches in time and are on their way to site. You know, first shipments have already arrived almost 30 to 40% of those. The remaining ones, they do need the first quarter of 2024.

Or on their way to you.

To cite the first shipments have already arrived almost 30% to 40% of those the remaining ones here.

First quarter of 2024, and now the civil contractor mobilization, which is one of the main.

Speaker 5: And now the civil contractor mobilization, which is one of the main packages and activities who is mobilizing us with speed.

I could guess and activities.

Mobilizing as we speak.

Speaker 5: So that should cover those critical paths.

So that should cover those critical paths and.

Speaker 5: And I'm being language with a broad respect to the second part of the question.

And be in line with Roger with respect to the second Bertolli question.

Speaker 3: This expansion of the Lich, but it was contemplated in the reen of the sign.

This expansion of the Leach pad.

This was contemplated in the original design.

Speaker 3: and it serves basically a

Each serves basically.

Speaker 3: supports the loan. It does not provide for an expansion of throughput.

The supports the long it does not.

Provide for an expansion of throughput.

Speaker 3: No, it was a scheduled expansion in the design to support the 1920,000 tons per day of all that we ran through.

It was a scheduled expansion injury side.

To support the 19 20000 tonnes per day.

Or that we we run through your process.

Speaker 7: Okay, fantastic. Appreciate that. Thank you. And in terms of exploration, Lendero, any comments there? I assume recall was at every zero or one of the targets there?

Okay Fantastic I appreciate that thank you and in terms of exploration.

<unk> any comments there are some recall was in Arizona or one of the targets there.

Speaker 3: At Ling Nero, we have focused or exploration funding in 2023 with priorities in Segella.

As Lynn Liddle.

We have a focused or or exploration funding.

In 2023.

With priorities in a singular.

Speaker 3: as a high value of opportunities. And then on life of my replacement, the funding has been prioritized for the Yeramoku mine and the San Jose mine, right? So Lindero and...

As a as high value opportunities.

And then on.

Life of mine replacement.

The funding has been prioritized for the Euro multiple mine in the San Jose mine right, So lean data and.

Speaker 3: and Cayoma have not received any significant funding.

And <unk>.

We have not received any significant funding in 2023, and we would expect to see.

Speaker 3: in 2023 and we would expect to see some funding allocated towards Arizaro in 2024. Remember, at 2023, still has been a capital intensive year for us on the Segela Bill. So we rationalized or a bit or exploration fund.

Some funding allocated toward savvy silo in 2020 four right remember at 2023 steel has been a capital intensive year for us on the scale of build so we rationalized or a beat or exploration funding right. Okay.

Speaker 7: Okay, thank you. Appreciate that. Maybe just one more for me. If you don't mind, Shannels A, obviously, some pretty great expiration results recently. I know still early days, but any comments on what you think that could mean for the mind plan.

Okay. Thank you I appreciate that maybe just one more for me if you don't mind, San Jose I always see some pretty great exploration results recently I know, it's still early days, but any comments on what you think that could mean for the mine plan.

Speaker 3: You know, yes, he is an exciting discovery, very exciting, high grade, close to existing infrastructure.

You know it.

Yes, he is an exciting discovery.

Very exciting.

High grade close to existing infrastructure.

Speaker 3: But as is the case, now we have to migrate from an exciting discovery.

But as is the case now we have to migrate from an exciting discovery.

Speaker 3: to see how this contributes to our production. And that's the phase we are currently in.

Two to see how does this contribute to our production.

<unk>.

And that's the phase we are currently in.

Speaker 3: And we need time. What I can say is that it's high grade. Structurally, it's making sense to us. But how meaningful it is or it becomes to the production?

And.

And we need time right what I can say is that it's high grade it.

Structurally, it's making sense to us.

But how meaningful it is or it becomes too the production.

Speaker 3: It's something that we still need to answer. And that's why we are conducting exploration work here with a high sense of priority. And we'll look forward to reporting on this as we advance.

It's something that we still need to answer and that's why we are.

Conducting exploration work here with a with a high sense of priority.

Yeah.

We will look forward to reporting on these as we advance them okay.

Speaker 7: Okay, thanks so much. I appreciate you taking my questions and congrats on a good quarter. Cheers. Thank you.

Okay. Thanks, so much I appreciate you taking my questions and congrats on a good quarter.

Thank you.

Speaker 8: Thank you very much. Just as a reminder, if there are any remaining questions, please press star one on your phone keypad now.

Thank you very much just as a reminder, if at all any remaining questions. Please press star one on your keypad.

Okay, but you appear to have any further questions I will now hand back over to the management team for any closing comments.

That's oh error on our part thank you very much.

Have a good day.

Thank you very much everybody. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful rest of the day. Thank.

Thank you for your participation.

Thank you.

Yeah.