Q4 2023 Torex Gold Resources Inc Earnings Call

Operator: Thank you for standing by. This is the conference operator. Welcome to Torex Gold's fourth quarter and full year 2023 conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star, then 1 on your telephone keypad.

Thank you for standing by this is the conference operator, welcome to <unk> fourth quarter and full year 2023 conference call and webcast. As a reminder, all participants are and listen only mode and the conference is being recorded after the presentation W. An opportunity to ask questions to join the <unk>.

Thank you you May press Star then one on your telephone keypad should you need assistance during the conference call you may signal operator by pressing Star N Zero I would now like to turn the conference over to Dan Rollins Senior Vice President corporate development and Investor Relations. Please go ahead.

Operator: Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Dan Rollins: Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q4 and full year 2023 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found in the investor section of our website at www.torexgold.com. I would also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on page 2 of today's presentation, as well as those included in the Q4 2023 MD&A. On the call today, we have Jody Kozenko, President and CEO, Andrew Snowden, CFO, as well as Dave Stefanuto, Executive Vice President, Technical Services and Capital Projects. Following the presentation, Jody, Andrew, and Dave will be available for the question and answer period.

Thank you operator, and good morning, everyone.

<unk> welcome to our queue for in full year 20 twenty-three conference call.

Before we begin I wish to inform listeners that a presentation accompanying today's conference call can be found under the investors section of our website at www.

W Dot <unk> dot com.

I would also like to note that certain statements to be made today by the management team may contain forward looking information.

As such please refer to the detailed torturing notes on page two of today's presentation.

Well that was included in the queue for 2023 M D N a.

On the call today, we have Jodi <unk>, President and CEO, Andrew Snowdon CFO.

Well, Dave stepping Newdow executive Vice President Technical services and capital project.

Following the presentation Jodie, Andrew and they will be available for the question and answer period.

Dan Rollins: This conference call is being webcast and will be available for replay on our website. Last night's press release and the company financial statements and MD&A are posted on our website and have been filed on CDAR. Please also note that all amounts mentioned in this call are in U.S. dollars unless otherwise stated. I'll now turn the call over to Jody.

This conference call is being webcast and will be available for replay on our website.

Last night's press release, and the company financial statements and M. D. N. A are posted on our web site and have been filed in Cedar.

Please also note that all amounts mentioned in this call our U S dollars unless otherwise stated.

I will now turn the call over to Jodie.

Jody Kozenko: Thank you, Dan, and good morning to all on the line. I'll open my remarks today by speaking to how proud I am of both the operations and the project teams at Morelos for another strong year of results. On the operating side of the business at ELG, we produced 454,000 ounces of gold, and we delivered on our original production guidance for the fifth straight year and solidified our position as the largest gold producer in Mexico. In Q4, we also achieved the second highest quarter of production in our history, and this was driven by a number of new operational records, which I'll speak to shortly. Alongside our operational results, the MediaLuna team continued to make significant progress. The project was 60% complete at the end of the year, with 84% of expenditures committed and 56% of expenditures incurred.

Thank you and good morning to all on the line.

Open my remarks today by speaking to how proud I am of 30 operations in the projects teams Ecorolla for another strong year of herself.

On the operating side of the business that he L. G. We produced for 154000 ounces of gold and we delivered on their original production Guy that's for the fifth straight year and solidify our position, it's the largest gold producer in Mexico.

In queue for we also achieved the second highest quarter of production in our history and this was driven by a number of new operational records, which I'll speak to shortly.

A lot of side or operational results. The many leaving a team continue to make significant progress the.

The project with 60% complete at the end of the year with 84% of expenditures committed and 56 per cent to the expenditures incurred.

Jody Kozenko: We remain on schedule for first copper concentrate production by the end of this year. Dave will speak more about the project specifics, but with 21 months behind us. And with 12 months to go in the project period, we are very much tracking the schedule. In terms of CAPEX for the project, procurement for equipment, materials, and services is tracking reasonably well to the feasibility study plan. That said, the strength of the Mexican peso remains a headwind to contend with, along with general inflationary pressures, and the teams continue to work hard to find offsets against these pressures. Andrew will speak to this subject in more detail shortly.

We remain on schedule for first corporate concentrate production by the end of this year.

We'll speak more to the project specifics, but with 21 months behind us.

In 12 months to go into project period, we are very much tracking to schedule.

In terms of topics for the project procurement for equipment materials and services is tracking reasonably well to the feasibility study plan that.

That said that the strength of the Mexican peso remains the headwind to contend with.

With general inflationary pressures and the teams continue to work hard to find all set against these pressures Andrew will speak to this subject in more detail shortly.

Jody Kozenko: Most importantly, from my perspective, we accomplished what we accomplished in 2023 safely with no last time injuries for the full year at ELG and none in the second half of the year at the Meti Luna project. We continue to pride ourselves on being one of the safest operators in the industry, and I'm happy to say that, in Q4, we surpassed 10 million hours worked without a last time injury at the ELG operations for the third time since 2020, which is a pretty significant achievement and one that I'm personally very proud of. Beginning on slide four, this is our strategy.

Most importantly from my perspective, we accomplished what we accomplished in 2023 safely with no lost time injuries for the full year at El G and none in the second half of the year at the Mettie Luna project.

We continue to pride ourselves in being one of the safest operators in the industry and I'm happy to say that in Q4, we surpassed 10 million hours worked without the lost time injury at the E. L. G operations.

The third time since 2020, which is a pretty significant achievement in one that I'm personally very proud of.

Beginning on slide for this is our strategy. This should look familiar but a bit different to most of you while our strategic pillars remain largely consistent with what you've seen for the last three years.

Jody Kozenko: This should look familiar but a bit different to most of you, while our strategic pillars remain largely consistent with what you've seen for the last three years. Given the progress we've made on our plan, it was time to update the strategy to reflect some slight shifts in focus. I'll take you through this pretty quickly.

Even the progress we've made on your plan. It was time to update the strategy to reflect some slight shifts infocus I'll take you through this pretty quickly first the previous pillar of advance and Derisk Medio Luna is now squarely focused on getting muddy alumina done deliberating the project on schedule and on budget and then ramping up.

Jody Kozenko: First, the previous pillar of advancing and de-risking Medialuna is now squarely focused on getting Medialuna done, delivering the project on schedule and on budget, and then ramping up the mine to full production of 7,500 tons per day. A number of key project risks that we were actively managing just a year ago are now in the rear view mirror. We broke through in the YHAS tunnel in December, and we've now obtained all permits for both the operational and development phases.

Mine too full production of 7500 tons per day.

A number of cheap project risks that we were actively managing just a year ago are now in the rear view mirror, we broke through into why has tunnel in December and we've now obtained all permits for both the operational and development phases.

Jody Kozenko: From where we sit today, we're confident in our ability to deliver first production in 2024, commercial production in early 2025, and achieve steady state production within the three year ramp-up we outlined in the technical report. Next, our teams are focusing on integrating the MediLuna project with our ELG operations to really get the site working inside the same system. And from there, we'll optimize the entire Morelos property to have both sides of the river running at continuously improved performance in terms of productivity and costs, no different than what we do today at ELG operations. While our operations and project teams are hard at work, it's critical that we remain focused on disciplined growth and capital allocation. With $465 million of available liquidity at year-end, we're pretty pleased to say that available liquidity now is greater than the remaining spend on the MediLuna project, which is $384 million left to spend. And that is before even considering the four quarters of strong cash flow we have coming to us from ELG operations this year. On the bottom left of the slide, you'll see Grow Reserves and Resources. This isn't new.

Okay.

From where we sit today, we're confident in our ability to deliver first production and two 424 commercial production in early twenties 25, and achieved steady state production within the three year ramp up we outlined in the technical report.

Next our teams are focusing on integrating the Medi Luna project with R. E. L. G operations to really get the site working inside the same systems.

And from there will optimize the entire morello is property to have both sides of the river running at continuously improved performance in terms of productivity and costs no different than what we do today at Yale G operations.

While our operations a project teams are hard at work, it's critical that we remain focus on disciplined growth and capital allocation.

With $465 million of available liquidity at year end, we're pretty pleased to say that available that quiddity now is greater than the remaining spend on the media Luna project, which is 384 million left to spend.

And that is before even considering the four quarters of strong cash flow, we have coming to us from Y'all G operations. This year.

On the bottom left of the slide you'll see grow research and resources. This isn't new the two areas of near term focus our drilling at E. L. G underground, which is further increased our confidence to replace reserves and increased resources in the secondary is drilling on the south side of the Biosys River. It continues to highlight the potential for new mining areas.

Jody Kozenko: The two areas of near-term focus are drilling at ELG Underground, which has further increased our confidence to replace reserves and increase resources, and the second area is drilling on the south side of the Balsas River. It continues to highlight the potential for new mining areas, such as EPO and Media Luna West. We're making good progress on completing an internal pre-feasibility study this year on EPO to see how we can optimally fit this into our future life of mine plans as an additional source of feed for the mill. In the bottom center, you'll see retain and attract the best industry talent as a new pillar, but this really isn't new to the Torex agenda. We can continue to see our talent and our culture as key strategic differentiators in terms of our ability to consistently deliver results.

Such such as E P O and Medio Luna West.

We're making good progress on completing an internal pre feasibility study this year on a P O to see how we can optimally fit this into our future life of mine plans.

An additional source of feed for the mail.

In the bottom center early you'll see retain and attract best industry talent as a new pillar, but this really isn't new to the <unk> agenda. We can continue to see our talent and our culture as key strategic Differentiators in terms of our ability to consistently deliver results and finally, there on E. S. D excellence, we close.

Jody Kozenko: And finally, on ESG excellence, we closed the year with a lifetime injury frequency of 0.31 per million hours worked, and we continue to work on our sustainability agenda such that risks in this category are responsibly managed. Turning to some highlights of our results, as you can see from this chart, Torex has firmly asserted itself as a consistent, reliable producer with average production over the past five years of over 450,000 ounces. Production in 2023 was near the midpoint, the full year guided range, full year total cash costs, and ASIC came in at the upper end of the revised guided ranges, total cash costs at $866 per ounce, while ASIC was $1,200 per ounce. While free cash flow was negative in the year, as expected, company-wide, we generated $181 million of positive cash flow for the full year.

The year was the last time in three frequency of 0.31 per million hours worked.

And we continue to work or sustainability agenda, such that risks in this category are responsibly manage.

Turning to him some highlights of our results on slide five so you can see from this chart tore axis firmly asserted itself as a consistent reliable producer with average production over the past five years of over 450000 ounces.

Production in 2023 was near the mid point the full you're guided range full your total cash cost and <unk> came in at the upper end the revised guided ranges total cash cost at $866 per ounce, while <unk> was $1200 per ounce.

Well free cash flow was negative and the year is expected companywide, we generated $181 million a positive cash flow for the full year, that's prior to spending $366 million on the menu Luna project.

Jody Kozenko: That's prior to spending $366 million on the Medialuna project. Really, that $181,000 is a testament to the cash generation capability of our Morelos asset. We exited the year with a very strong balance sheet, and Andrew will touch on that in more detail when he is up. On slide six, I wanted to point out that the strong production in Q4 was driven by a number of operational records that were broken for both the quarter and the year. While not shown specifically on these charts, in the ELG open pits, the average tons per day mined for the quarter were 19,400.

Really that 181 is a testament to the cash generation capability of our Morelos asset.

We exited the year with a very strong balance sheet and Andrew will touch on that in more detail when he is up.

On slide six I wanted to point out that the strong production Q4 was driven by a number of operational records that were broken for both the quarter and the year.

Well not sounds specifically on these charts and the E. L. T open pits average tons per day mind for the quarter was 19400.

Jody Kozenko: This set a new daily ore tons mined record and certainly contributed to the finished production results you see on the top left. On the top right, throughput rates in the processing plant remained above 13,000 tons per day for the fourth consecutive quarter. And so the team set a new annual throughput record of 13,178 tons per day. On the left, you can see that grades picked up as expected in Q4 following the completion of that low-grade, high-strip phase of the open-pit mine plan we saw through the middle of 2023. Finally, on the bottom right, the momentum from ELG Underground continued into the fourth quarter with mining rates averaging 2,300 tonnes per day in Q4 and over 2,000 tonnes per day for the year. This is important for two reasons.

Set a new daily or tons mind record and certainly contributed to the finished production results you see on the top left.

On the top right throughput rates in the processing plant remains above 13000 tons per day for the fourth consecutive quarter.

And so the team set a new annual report record of 13178 tons per day.

Bottom left you can see the grades picked up is expected in queue for following the completion of that low grade high strip phase of the open pit mine plan, we saw through the middle of 2023, and finally on the bottom right. The momentum from El G underground continued into the fourth quarter with mining rates averaging 2300.

Tons per day in Q4, and over 2000 tons per day of the year. So it is important for two reasons first it surpassed the previous annual records set in 2022 and second it means that we achieved our targeted production rate wonderful year ahead of our schedules.

Jody Kozenko: First, it surpassed the previous annual record set in 2022. And second, it means that we achieved our targeted production rate one full year ahead of our schedule. Now to slide 7 on the topic of the 2024 Outlook. This table captures the guidance we issued in mid-January. There are a couple of important takeaways.

Over now to slide seven on the topic of the 2024 outlook. This table captures the guidance we issued in mid January there are a couple of important takeaways first.

Jody Kozenko: First, 2024 will be the first year we're also reporting on a gold equivalent basis as we begin to see meaningful copper production in Q4 when MediAluna comes online. Second, production is forecast to be slightly lower this year than in 2023, as we're budgeting a one month shutdown of the processing plant in Q4. This will allow for the necessary upgrades to be done to the processing plant as part of the Meti and Luna projects. This includes the tie-in for the copper and iron sulfide flotation circuits, the tie-in for the regrind mills and the water treatment plant, as well as the installation of a variable speed drive on the ball mill.

2024 will be the first year. We're also reporting on a gold a couple of basis as we begin to see meaningful copper production in queue for when Betty Luna comes online.

Second production is forecast to be slightly lower this year than in 2023 as were budgeting of one month's shutdown of the processing plants in Q4.

This will allow for the necessary upgrades to be done to the processing plants as part of the media Luna project. This includes the tie in for the copper and iron sulfide flotation circuits. The time for the Regrind melts in the water treatment plant.

As well as the installation of variable speed drive on the ball mill.

Jody Kozenko: As a result of this lower production, total cash costs are expected to be modestly higher in 2024 than in 2023, reflecting both the one month shutdown and the initial startup costs at MediAluna. That said, all-in sustaining costs are guided lower for 24 than for 23, as capitalized waste stripping is significantly lower now that we're through the high strip phase at the open pit. We've also factored in considerations for the stronger PESA, and Andrew will provide specifics on that momentarily.

As a result of this lower production total cash costs are expected to be modestly higher and 24, then a twenty-three reflecting both the one month shut down and the initial startup costs that <unk> Luna.

That said all in sustaining costs are <unk> guided lower for 24 than a 23 is capitalized waste stripping is significantly lower now that we're through the high strip phase at the open pits.

We've also factored in considerations for the stronger pesos and Andrew will provide specifics on that momentarily.

Jody Kozenko: Finally, we're very pleased that this will be the last year of significant investment at Medialuna with a guided range of $350 to $400 million. We expect capital expenditures to decrease significantly in 2025 and a rapid return to positive free cash flow during 2025. Looking longer term, on slide 8, the work we've done over the last few years to improve mining rates and plant deficiencies and add meaningful ounces to the mine plan continues to improve the long-term outlook, and you can see in this table how it's evolved.

Finally, we're very pleased that this will be the last year of significant investment at Mezzaluna with a guided range of $350 million to $400 million, we expect capital expenditures to decrease significantly in 25 at a rapid return to positive free cash flow during 2025.

Looking longer term on slide eight the work we've done over the last few years to improve mining rates implant deficiencies and add meaningful ounces to the mind plan continues to improve the longterm outlook and you can see in this table how it's evolved.

Jody Kozenko: Two years ago, we were guiding 385,000 to 425,000 ounces for this year and for 2024. Now guidance for this year is solidly above that, and it's averaging over 450,000 ounces of gold equivalent ounces per year through 2027. The benefit of the reserve additions we made in 2022 can be seen in the improved production profile for the year of 2028, which is now 10% higher than outlined in the 22 technical report. This reflects a deferral of lower grade stockpiles and replacing them with higher grade run of mine feed. We can expect to further improve on the production outlet by continuing to replace and grow ELG underground reserves and potentially bringing EPO into that life of mine plan I discussed. With that, I'll pass the call over to Andrew to walk us through the financial performance and balance sheet positioning. Okay, thank you, Jody, and good morning, everyone.

Two years ago, we were guiding 385 to 425000 ounces for this year for 2024 now guidance for this year is solidly above that and it's averaging over 450000 ounces of gold equivalent ounces per year through 2027.

The benefit of the reserve additions we made in 2022 can be seen in the improved production profile and the year of 2028, which is now 10 per cent higher than outlined in the 22 Technical report.

This reflects the deferral of lower grade stockpiles and replacing it with higher grade run of mine feet. We.

We can expect to further improve on the production <unk> by continuing to replace and grow E. L. G underground reserves and potentially bringing a P O into that life of mind plan I discussed.

With that I'll pass the call over to Andrew to walk us through the financial performance and balance sheet positioning.

Once you <unk> good morning, everyone.

Andrew Snowden: I'll start my commentary first on slide 10, where you can see we closed out 2023 on a solid financial note, supported by the strong operational performance achieved in the fourth quarter, which Jody just walked through. During Q4, we achieved our strongest all-in sustaining cost performance of the year, with our ASIC margins improving to 46 percent, driven by higher fourth quarter production, ongoing focused cost management, and also a strong realized price of almost $2,000 an ounce. And this is actually the highest quarterly realized gold price seen by the company. Although financial performance was supported by these higher gold prices, we were impacted in the year by the strength of the peso, which averaged 17.7 to one U.S. dollar in 2023. And this is compared to our budgeted rate of 20 to one. The stronger peso throughout the year increased our all-in sustaining cost by approximately $50 an ounce throughout the year.

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Andrew Snowden: Considering the ongoing strength of the peso, we have budgeted for 2024 on the basis of an 18 to 1 exchange rate, and this is also the rate that's reflected in both our total cash costs and our all-in sustaining cost guidance, which Jody walked through earlier. Recall that for every one peso move relative to the U.S. dollar, our oil and sustaining costs will be impacted by about $10 million a Looking next to the bottom left quadrant of this slide, as expected, capital spending continued to increase in the fourth quarter with $124 million spent on Media Luna. This is the highest quarterly spend on the project today. We expect project expenditures to remain around these levels through to and including the third quarter of this year before decreasing in Q4 as we approach commercial production. For full year 2023, total capital spending was $478 million, and that includes $366 million spent on the Media Luna project.

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We expect project expenditure to remain around these levels through two I'm, including the third quarter of this year before decrease you needed to for his reproach commercial production.

For full year 2023 total capital spending was $470 million includes 366 million spent so I'm going to be doing a project.

Andrew Snowden: And this directly impacted free cash flow, as shown in the bottom right quadrant of the slide. Excluding the spend on Media Luna, our underlying business, including costs incurred on drilling and corporate, continued to produce robust cash flows with over $180 million of free cash flow for the year. Turning now to slide 11, you can see a summary of our unit cost performance for the year, and despite the ongoing pressure from the stronger Mexican peso I referenced, overall costs were largely in line with the costs achieved in 2022. And the open pay costs were slightly higher, just given the additional stockpile rehandling and contractor costs associated with a period of elevated waste stripping in the second and third quarters.

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Excluding with spend all media Luna underlying business, including <unk> on drilling corporate continue to produce robust cash flows.

$118 million of free cash flow for the.

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And despite the ongoing pressure from a stronger Mexico, Mexican pretty sore I referenced overall costs will largely line with a <unk> 2022.

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Second and third quarters.

Andrew Snowden: At ELG Underground, you can see that record mining rates led to the stronger cost performance there compared to 2022. And then finally, at the processing plant, the increased costs relative to 2022 reflect the higher consumable prices flagged at the start of the year, particularly cyanide pricing, as well as a stronger Mexican peso. And these were partly offset by higher mill throughput.

E L. G underground and you can see the record mining rights, let's have a stronger performance.

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And finally, the processing plant the increased costs relative to 2022 reflect the higher prices fly to install it to be a particularly fine art <unk> as well as a stronger Mexican peso unusual partly offset by the highest milk route.

Andrew Snowden: I will note here, though, that with ammonia prices coming down through the course of 2023, we have secured improved cyanide pricing for the 2024 year, and I don't expect that to be as significant of a cost pressure on this year's cost profile. Turning now to slide 12, you can see the impact of increased capital spending on our cash balance, which declined by about $200 million through the year from $376 million at the start of the year to a closing cash balance of $173 million. As you can see here, this use of cash was primarily driven by the $478 million spent on capital, including the $366 million attributable to the Media Luna project. In addition to this capital expenditure, the company also paid $116 million in taxes during the year.

I will note here, though that with pneumonia price is coming down and <unk> through the course of 2023, we have secured improved sign on pricing for the 2020 for Ya.

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Turning amount to fly 12, you can see the impact.

Increased capital spending on our cash balance, which declined by about $200 million through the year from $376 million at the start of the year. So we're closing cash balance of 173 modem.

Did you see her refuse with cash was primarily driven by the 478 million spent on capital, including that <unk> $66 million to reach bolted that'd be the lunar project.

In addition to the capital expenditure the company also paid $160 million in taxes. During the we also did see a negative working capital outflow of about $40 million, which was partially related to some slower b a T refunds, we sold towards the end of the year.

Andrew Snowden: We also did see a negative working capital outflow of about $40 million, which was partially related to some slower VAT refunds we saw towards the end of the year. However, these VAT refunds did resume in February with $12 million collected in the last few weeks, and we expect further amounts to be received in March. While I'm talking cash, though, I do want to just remind everyone that, as always, we do expect seasonality in our cash flow related to taxes and royalty payments through the course of 2024. Through this year, I expect monthly tax installments will continue to average about $6 million a month, but we also expect a small annual income tax bill, which we paid in March. In addition, the annual 7.5% mining tax, this is accrued throughout the year but paid annually in March, and we expect $25 million there to be paid next month.

<unk> C refunds could resume in February with $12 million collected from the last few weeks.

And we expect further amounts to be received mmm mmm in March.

While I'm talking cash, though I do want to just remind everyone, but as always we do expect seasonality, an all cash flow related to taxes and royalty payments through the course of 2024.

Through this year I expect monthly <unk>, some stolen will continue to average about $6 million a month, but we also expect a small annual income tax <unk> prepaid and mulch.

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$25 million back to be paid next month.

Andrew Snowden: And in addition to that, there's a 0.5% royalty related to the proceeds from gold and silver sales. This, again, is accrued monthly through the year but only paid in Q1, and we expect about $4 million of that royalty to be paid next month. And finally, just to remind everyone about the Mexican profit sharing payment, that again is accrued monthly through the year and paid out annually in Q2. The 2023 PTU that we expect to be paid in May of this year is about $24 million.

And in addition to that <unk>, 0.5% royalty related to the proceeds from Golden Silver styles, but if a guy is a crude monthly through the year, but only paid in Q1 or we expect for about $4 million I'm not royalties repaid next month.

And finally, just to remind everyone about the Mexican profit sharing payment they.

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Andrew Snowden: Finally, on cash flow, the one item I did want to also highlight is the seasonality impact that we'll see in Q4, and as Jody referenced earlier, we are expecting to have the plant shut down for a month in Q4 for the media lunatics, and so we'll only have about two months of revenue during that period. With the shutdown, in addition to the significant level of Media Luna spending anticipated over the remainder of the year, we do expect free cash flow to remain negative through 2024 before turning positive in mid 2025 with a ramp-up of Media Luna and a significant decline in our capital expenditure. I'm looking at our liquidity position on slide 13. Just one point I wanted to highlight here: as you can see, our lease-related obligations did increase during the quarter to end the year at $32 million.

I finally on cash flow to one I just might be going through a sort of highlights.

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Which was shut down in addition to the significant level of me be able to spending up to to pay for the remainder of the year. We do expect free cash flow through my neck and slipped through 2024 before turning positive mid 2025, with a ramp up with media Luna and significant declines in all capital expenditure.

I'm looking at all liquidity position on <unk>, just one point I wanted to highlight here you can see all leagues related obligations did increase during the <unk> $32 million.

Andrew Snowden: These leases relate to mobile equipment for MediaLuna, with $20 million outstanding for advanced payments made by our lessor during the year, and with the arrival of our first pieces of Sandvik equipment in the fourth quarter, $12 million in leases did commence. These leases will continue to climb throughout 2024 and into 2025 as we take further deliveries on our underground media lunar mining fleet. The key takeaway from this slide, though, is that our balance sheet remains strong with $465 million in available liquidity, and we're well positioned to allow us to deliver on our strategic priorities. And as illustrated on slide 14, you can see how this liquidity position well supports Media Luna on our strategic goal of maintaining at least $100 million of cash on the balance sheet. As noted earlier, available liquidity of $465 million is now greater than the $384 million of capital remaining on Media Luna.

These leases relate to mobile equipment for media Luna <unk> payments made <unk> <unk>.

With the arrival of our first pieces of <unk> uhm equipment in the fourth quarter $12 million and <unk>.

<unk> will continue to decline throughout 2024, and it's a 2025 because it takes care of the deliveries on our underground immediately undermining fleet.

But can you take away from this slide though has a balance sheet remains strong.

$465 million and available what it says well positioned to allow us to deliver on our strategic priorities.

And as illustrated on Slide 14, you can see how this liquidity position well supports media Luna on our strategic goal of <unk> at least $100 million with cash on the balance sheet.

A note sedalia available liquidity of 465 million no greater than the 384 million of capital remaining on media Luna.

Andrew Snowden: And when including our strategic goal of maintaining $100 million in the balance sheet, we only require $19 million of cash flow from ELG over the next four quarters to achieve this, which I expect, sitting here in mid-February, we've already generated that level of free cash flow. Given the solid liquidity position, coupled with strong ongoing free cash flow from ELG, which was over $180 million in 2023, we're extremely confident in our ability to fund MediaLuna exit 2024 with a strong balance sheet and, as I mentioned, return to positive free cash flow generation next year in 2025. Now, finally, I'll touch briefly on hedging, which is summarized here on slide 15. And just to note, to take advantage of the higher gold prices we saw in Q4 and to match the spending profile forecast through the course of this year on MediaLuna, we have locked in an additional 17,000 ounces of gold forward sales in Q3 of 2024. And that was at a price of just over $2,100 an ounce.

What including all strategic goal of maintaining $100 million on the balance sheet, we only require $19 million of cash flow from E. L. G. A.

For the next four forces to achieve this which I expect sitting here in mid February we've already generates at that level of free Joshua.

Give them a solid liquidity position, coupled with strong ongoing free cash apart from E. L. G, which was over $180 million in 2023 were extremely confident in our ability to fund Luna exit 2024, with a strong balance sheet.

Mentioned beta deposits of free cash flow generation next year 2025.

Uhm now finally, I'll touch briefly on briefly on <unk> on 515.

Just a note to take advantage of the higher gold prices resorting to fall and <unk> should be spending profile forecast through the course of this year I'll meet you Luna we have locked in an additional 17000 ounces of gold forward sales in Q3 of 2024 and that was at a price of just over $2100 an ounce.

Andrew Snowden: I bring in the Q3 average forward price of over $2,000 an ounce. This now brings our total amount of gold hedged for the year to 158,000 ounces at an average gold price of 19.72 an ounce, and you can see that summarized on this slide by quarter. As noted in the past, we feel these purpose-built hedges are prudent to protect about 40% of our gold production this year, during a period in which internal cash flow is a key source of funding for Media Luna. Also, just to note, there have been no changes to the zero cost collars placed to hedge against foreign exchange rates for the Mexican peso. And as a reminder, we expect approximately 45 percent of media lunar expenditures to be peso-denominated.

B Q3 average forward price to over $2000 an ounce.

This now brings our total amount of gold hedged for the year to 158000 ounces on average gold price of 1972 amps.

You can see that summarized on this slide by by quarter.

I've noted in the past we feel these purpose built <unk> protect the violence <unk> about 40 per cent sorry about gold production. This year during a period in which internal cashflow with a key source of funding for me <unk>.

Also just to note there'll be no change to the zero <unk> colors place the hedge against thrown exchange rates for the Mexican peso.

It was a reminder, we expect approximately 45% immediately in your expenditures.

<unk>.

Andrew Snowden: With that, I'll turn the call over to Dave for an update on Media Luna. Thanks, Andrew, and good morning to everyone on the call. Slide 17 shows the progress at Media Luna during the fourth quarter. The project is 60% complete, up from 49% at the start of the quarter, and it is tracking the schedule and budget. Underground development work is also 60% complete, and I'm proud of the work our teams have done at the site. To date, underground crews have achieved 22,000 meters of lateral and vertical development, with about 14,800 meters of lateral and vertical development remaining on the project. This is split approximately 50-50 between project capital development and operating. On the surface, construction of the important Mazapa bypass road and bridge is now complete, allowing for delivery of large equipment to the south side of the Balsas River.

With that I'll turn the call over to that your front updates on <unk>.

Thanks, Andrew and good morning, everyone on the call Slide 17 shows the progress at media Luna during the fourth quarter. The project to 60 per cent complete up from 49% that started the quarter and just trying to schedule and budget.

Underground development work is also 60% complete and I'm proud of the work our teams have done that site.

Project to date underground crews have achieved 22000 meters of lateral and vertical development with about 14800 meters of lateral and vertical development remaining on the project. This is split approximately 50 50 between project capital development and operating.

Surface construction of the important Mazafa bypass road and bridge is now complete allowing for deliveries of large equipment to the south side of the <unk> River.

Creek Foundation work, including the Y as can be your drive station flotation plant water treatment plant and 230 K V substation continue to make good progress with plan completion expected this quarter.

Dave Stefanuto: Concrete foundation work, including the YS conveyor drive station, flotation plant, water treatment plant, and 230 KV substation, continues to make good progress, with planned completion expected this quarter. Pouring of the foundation to the paste plant is well underway, with our single largest pour to date completed in the Thickner area. Production mobile equipment deliveries have also commenced. These include the Diesel Electric Sandvik Rhino Raise Borer and the first Sandvik Electric Ju

According to the foundations for the pace Clint are well under way with our single largest port today completed in the <unk> area.

Production mobile equipment deliveries of also convinced these include the diesel electric Sandvik, Ryan old <unk> and the first Sandvik electric Jumbo a simulator for this equipment is also arrived and has been commissioned that site with the first operators, having already completed their initial training and.

In parallel our operational readiness and workforce transition plans continue to keep pace with physical progressed to ensure we can execute efficiently during the commissioning and ramp up phases of the project later this year.

Dave Stefanuto: A simulator for this equipment has also arrived and has been commissioned at site, with the first operators having already completed their initial training. In parallel, our operational readiness and workforce transition plans continue to keep pace with physical progress to ensure we can execute efficiently during the commissioning and ramp-up phases of the project later this year.

That one slide 18.

As noted earlier breakthrough otherwise tunnel was completed in December three months ahead of schedule I wanted to touch on how impressive achievement. This is given that the tunnel is not only seven kilometers long, but also six meters wide by six and a half metres high the alignment at the tunnel at the break viewpoint was within centimeters a truly remarkable accomplishment.

Dave Stefanuto: As noted earlier, breakthrough of the Wyeth Tunnel was completed in December, three months ahead of schedule. I want to touch on how impressive an achievement this is, given that the tunnel is not only seven kilometers long but also six meters wide by six and a half meters high. The alignment of the tunnel at the breakthrough point was within centimeters, a truly remarkable accomplishment.

Crews that were previously working on the tunnel have now been redeployed to assist with a capital development work at media Luna lower further ensuring our ability to complete all required project development connection to the tunnel will improve travel time between both sides of the river and now connects the two sides as one unified operation. There's also <unk>.

Opportunities for more efficient and uninterrupted installation of mine services and the aura handling convey or in the tunnel.

The majority of these conveyor consult components, including your all the conveyor tables and belt segments have been received anchor bolting to hang the conveyor commenced in January and conveyor installation is expected to take several months with commissioning in August of 2024.

Dave Stefanuto: Crews that were previously working on the tunnel have now been redeployed to assist with the capital development work at Media Luna Lower, further ensuring our ability to complete all required project development. Connection of the tunnel will improve travel time between both sides of the river and now connects the two sides as one unified operation. This also creates opportunities for a more efficient and uninterrupted installation of mine services and the ore handling conveyor in the tunnel. The majority of these conveyor components, including all the conveyor tables and belt segments, have been received. Anchor bolting to hang the conveyor commenced in January, and the conveyor installation is expected to take several months with commissioning in August of 2024. On slide 19, we've included some pictures of these key accomplishments I just highlighted.

On Slide 19, we've included some pictures of these key accomplishments I just highlighted concrete works on the surface are seen in both the top left photo outside the self poodle upper where the pace plant and killing sticking there will be installed in the bottom left photo where footings for the flotation circuits are nearing completion ahead of steel erection, which is <unk>.

Part of this month.

The top middle photo shows part of the completed Mazafa bypass road and bridge.

The top right photo shows Jodie initiating the final blast for breakthrough at the Y as tunnel and finally to the bottom left is our sandvik Rhino raised or that was delivered to site and <unk>.

Some read lots of progress has been made it a number of significant accomplishments were achieved during Q for the first production still on track for Q4 of this year. We're looking forward to delivery media Luna to plan with that I'll turn the call back over to Judy Thanks, Dave.

Dave Stefanuto: Concrete works on the surface are seen in both the top left photo outside the south portal upper, where the paste plant and tailings thickener will be installed, and the bottom left photo, where footings for the flotation circuits are nearing completion ahead of steel erection, which has started this month. The top middle photo shows part of the completed Mazapa Bypass Road and Bridge.

Pardon me wrapped up here I wanted to just take some time to highlight some noteworthy exploration risk results. We released during the choir and touch on the plan for this year starting on slide 21.

Beginning here with the E. L. G underground our understanding of the structural controls of your body is evolving and results indicate that mineralization is controlled by north northwest structural corridor as we call them trends here on this plan to you you can also see northeast trampling fault, they're two of them, they're left lacquer endzone 71.

Dave Stefanuto: The top right photo shows Jody initiating the final blast for breakthrough at the Wyes Tunnel. And finally, to the bottom left is our Sandvik Rhino raised borer that was delivered to site. In summary, lots of progress has been made and a number of significant accomplishments were achieved during Q4. With first production still on track for Q4 of this year, we're looking forward to delivering Media Luna to the plant. With that, I'll turn the call back over to Jodi. Thanks, Dave. Before we wrap up here, I wanted to just take some time to highlight some noteworthy exploration results we released during the quarter and touch on the plan for this year, starting on slide 21. Beginning here with the ELG underground, our understanding of the structural controls of the ore body is evolving, and results indicate that mineralization is controlled by north-northwest structural corridors.

One false in blue on the image.

Where are these trends intersect these faults will be a key focus of our exploration and drilling program in 2024.

Shortly results at Yale J underground have increased our confidence in the ability to continue to replace reserves a year after year and you can expect a year in 2023 mineral reserve and resource update in March.

Moving into the south side of the balance this riverstone here on slide 2022, 22, we conducted our first drilling many Luna west since 2013, some 10 years ago and have identified it as a potential third mineralized zone within the <unk> cluster.

Jody Kozenko: We call them trends here on this plan view. You can also see northeast trending faults. There are two of them there, La Flaca and Zone 71 faults in blue on the image.

Drilling encountered mineralization in close proximity to existing and planned infrastructure being developed as part of medical Luna with some very notable high grades, including almost 30 grams per ton over 14 meters.

Jody Kozenko: Where these trends intersect, these faults will be a key focus of our exploration and drilling program in 2024. Importantly, results at ELJ Underground have increased our confidence in the ability to continue to replace reserves year after year, and you can expect our year-end 2023 Mineral Reserve and Resource Update in March. Moving to the south side of the Balsas River, shown here on slide 2022, we conducted our first drilling at Metiluna West since 2013, some 10 years ago, and we have identified it as a potential third mineralized zone within the Metiluna cluster. Drilling encountered mineralization in close proximity to existing and planned infrastructure being developed as part of Media Luna with some very notable high grades, including almost 30 grams per ton over 14 meters.

Well, it's still early days that many Luna west they're strong potential for this to become yet another source of fee to fill the mail the.

The positive trial results were encountering encountering further underscore our beliefs and the resource potential at the south side the property.

A portion of the 2024 budget at medical Luna will be focused in this area.

Finally on slide 23 of the positive results from our twenty-three exploration and drilling program will form the baseline for 2024 program, which is outlined here <unk>.

$30 million has been budgeted for this program in 2024 50 million of which is attributed to the <unk> cluster, where will be conducting infill that expansionary dwelling any P O and furthering the exploration program that Luna West. We're also interested in a new target called total Santos you can see it there in plan view wearing and argue.

Jody Kozenko: While it's still early days at Media Luna West, there's strong potential for this to become yet another source of feed to fill the mill. The positive drill results we're encountering further underscore our belief in the resource potential of the south side of the property. A portion of the 2024 budget at Meti Luna will be focused in this area. Finally, on slide 23, the positive results from our 23 Exploration and Drilling Program will form the baseline for our 2024 program, which is outlined here. $30 million has been budgeted for this program in 2024, $15 million of which is attributed to the Media Luna cluster, where we'll be conducting infill and expansionary drilling at EPO and furthering the exploration program at Media Luna West.

Drilling program will kick off this year.

12, a million dollars has been set aside for further drilling at El G underground, where we will look to access untapped upside along the trends and continue to add reserves and expands resources and finally $3 million has been allocated for near mine and regional exploration and drilling there are a number of targets across morello that warrant <unk>.

<unk> investigation, and really speak to how we see this as a long life foundational asset.

All in 2023 was just an excellent ear across the board we look forward to delivering this pivotal year in 2024, and really setting ourselves up for decades of mining Morello said with that for growth in Mexico and beyond.

Jody Kozenko: We're also interested in a new target called Todos Santos. You can see it here in plan view, where an inaugural drilling program will kick off this year. $12 million has been set aside for further drilling at ELG Underground, where we will look to access untapped upside along the trends and continue to add reserves and expand resources. And finally, $3 million has been allocated for near-mine and regional exploration and drilling. There are a number of targets across Morelos that warrant additional investigation and really speak to how we see this as a long-life foundational asset. All in all, 2023 was just an excellent year across the board.

Now turn the call back over to Ariel to initiate the question process.

Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if you're using a speaker phone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then too.

We will pause for a moment as colors join the queue.

Our first question comes from Eric Windmill of Scotiabank. Please go ahead.

Good morning, the detour extreme thanks for taking my question, maybe just firstly on the financial side, great to see you've got lots of liquidity here any comments on how we should think about the balance sheets through this year. When you plan to draw on I need the credit facilities or you know kind of move on cash balance is <unk>.

Jody Kozenko: We look forward to delivering this pivotal year in 2024 and really setting ourselves up for decades of mining at Morelos, and with that, for growth in Mexico and beyond. I'll now turn the call back over to Ariel to initiate the question process. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.

Pretty helpful. Thanks.

<unk> and Uhm forgot Andrew Eric So we expect as I mentioned in my my <unk> to <unk> $100 million cash balance throughout the year and so as a cash balance looks to decline below with that then we'll start off first rolls on the credit facility.

Operator: You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star, then 2. We will pause for a moment as callers join the conversation. Our first question comes from Eric Windmill of Scotiabank. Please go ahead. Great, good morning to the Torex team. Thanks for taking my question. Maybe just firstly on the financial side, great to see you've got lots of liquidity here. Any comments on how we should think about the balance sheet through this year when you plan to draw on any of the credit facilities or, you know, kind of minimum cash balances and how you're going to manage that? Be helpful.

As I mentioned, we do have a fairly significant cash outflows Henry Q1, particularly in March with all of the checks payments I mentioned, the 7.5% royalties of 0.5 per cent royalty another tax payments and so my current expectation is that we will start to draw on the facility in March of this year, and then I'll probably expect.

Quarterly draws in and around the same level throughout the the first three quarters of this year as we continue to deliver on our media Luna Uhm expenditure.

Okay fantastic. Thank you very much Andrew.

Maybe just another question to Mexico, obviously lots of news in the headlines. These days any comments on Sir what's happening on the ground or you know any potential impacts here too.

Eric Windmill: Yeah, and so Andrew here, Eric, and we expect, as I mentioned in my commentary, to try and maintain a $100 million cash balance throughout the year. And so as our cash balance looks to decline below that, then we'll start our first draws on the credit facility. As I mentioned, we do have a fairly significant cash outflow here in Q1, particularly in March with all of the tax payments. I mentioned the 7.5% royalty, the 0.5% royalty, and other tax payments.

<unk> yeah.

Yeah, I think Eric what's capture the headlines recently is the federal government's announcement on 20th law.

<unk>, many of which are constitutional in nature, but to that touch on the mining industry is a proposed ban on openness <unk> mining and then some pretty serious limitations on water concessions in water scarce areas couple of comments on that there is just no indication at all that any of this <unk>.

Andrew Snowden: And so my current expectation is that we will start to draw on the facility in March of this year, and then I'll probably expect quarterly draws in and around the same level throughout the first three quarters of this year as we continue to deliver on our Media Luna expenditure. Okay, fantastic. Thank you very much, Andrew. Maybe just another question, too, on Mexico. Obviously, there is lots of news in the headlines these days about Mexico.

To be retroactive so established companies like <unk>, you should be able to continue operating well into the foreseeable future S. B a.

Plan to do and the other thing I would say is that we did expect some excitement if you will during the pre election period, and so I wouldn't confuse that with really a specific policy oriented movements here in the mining industry. So the Morena administration needs.

Jody Kozenko: Any comments on sort of what's happening on the ground or, you know, any potential impacts here on Madi Luna or Yalchit? Yeah, I think, Eric, what's captured the headlines recently is the federal government's announcement on 20 law amendments, many of which are constitutional in nature. But, too, that touches on the mining industry is a proposed ban on open mining and then some pretty serious limitations on water concessions and water-scarce areas. A couple of comments on that. There's just no indication at all that any of this is thought to be retroactive, so established companies like Torex should be able to continue operating well into the foreseeable future, as we plan to do. And the other thing I would say is that we did expect some excitement, if you will, during a pre-election period. And so I wouldn't confuse that with really specific policy-oriented movements here in the mining industry. So the Morena administration needs a majority in Congress to pass any of these constitutional amendments.

<unk> and the Congress to pass any of these constitutional amendments. There is some six months to go here until the June election will see what gets tables and advanced but it's a long way to go before either of those amendments as a done deal.

Okay Fantastic. Thank you very helpful. The upgrade to the progress that may be a Luna and I look forward to following the updates this year back.

Back in the queue. Thanks.

Our next question comes from Don Demarco, a National Bank financial Please go ahead.

Thank you operator, and good morning, Jodie and <unk>.

So Judy <unk> contributing factors to success and offer some success in queue for hours, you mentioned mining rights Rupert grades.

On grades in particular.

What what can we expect for the open pit grades through the you're in 2024.

Mmm.

Yeah, I'll start with open pit mining in 2024, it's going to be what I would describe as that usual levels in Q1, and Q2 and then it tapers off significantly in Q3 and Q4 in terms of how that translates into process grade it'll be fairly flat during the fall.

Jody Kozenko: There are some six months to go here until the June election. We'll see what gets tabled in advance, but it's a long way to go before either of those amendments is a done deal.

Eric Windmill: Okay, fantastic. Thank you. Very helpful. Great to see the progress at Medialuna, and I look forward to following the updates this year. I'll hop back in the queue.

<unk> first three quarters of this year and then picks up in queue for as we bring Betty Luna feed on overall year on year. We closed 2023, I think about 3.3, grandma tongue and will be slightly above that in 2024 somewhere between three and a half and four grand Baton.

Operator: Thank you. Our next question comes from Don DeMarco of National Bank Financial. Please go ahead.

Don Demarco: Thank you, operator, and good morning, Jody and the Torex team. So, Jody, a lot of contributing factors to the success and operational success in Q4, as you mentioned, mining rates, throughput, and grades on grades in particular. What can we expect for the Open Pit grades?

<unk> equivalent.

Okay. Thank you.

And Uhm next question looking to the 30 day shutdown the the one more shot down that you mentioned.

Jody Kozenko: through the year in 2024. Yeah, Dawn, I'll start with open pit mining in 2024. It's going to be what I would describe as usual levels in Q1 and Q2, and then taper off significantly in Q3 and Q4. In terms of how that translates into process grade, it'll be fairly flat during the first three quarters of this year and then picks up in Q4 as we bring Betty Aluna's feed on. Overall, year-on-year, we closed 2023 at, I think, about 3.3 grams a tonne, and we'll be slightly above that in 2024, somewhere between 3.5 and 4 grams a tonne gold equivalent.

Can you provide any more color on this site specifically for instance, do you know the timing of the shutdown is earlier later or later in Q4 is there a possibility that it straddles Q3 and during the shutdown will you continue to mine and stockpile or.

Mmm, well definitely continue to mine in stock pile or in one of the important things to mention is that we have a full year mine plan out of E. L. G and so irrespective of the timing of the shut down where mining and so if it moves a little to the right well to just continue to produce it's not as though it's a brand new project.

And if it doesn't turn on exactly in October that were out of production or cash flow.

Jody Kozenko: Okay, thank you. And next question, looking to the 30-day shutdown, the one-month shutdown that you mentioned... Can you provide any more color on this? For instance, do you know the timing of the shutdown? Is it earlier or later in Q4? Is there a possibility that it straddles Q3?

From where we sit today, we're looking at either the month of October or November one of the things that we're really focused on to keep that shut down tight is to integrate as much as possible in the plans maintenance periods that we take monthly between now and the time of the queue for shut down I'll give you an example.

Jody Kozenko: And during the shutdown, will you continue to mine and stockpile ore? We'll definitely continue to mine and stockpile ore, and one of the important things to mention is that we have a full year mine plan out of ELG, and so irrespective of the timing of the shutdown, we're mining, and so if it moves a little to the right, we'll just continue to produce. It's not as though it's a brand new project, and if it doesn't turn on exactly in October, we're out of production or cash flow. From where we sit today, we're looking at either the months of October or November. One of the things that we're really focused on to keep that shutdown tight is to integrate as much as possible into the planned maintenance periods that we take monthly between now and the time of the Q4 shutdown. I'll give you an example.

Paul.

Mmm <unk> Luna <unk> calls for an additional trash screen on the last shut down we didn't early February part concrete for that and on the shut down in April we will be installing that trash screen, that's already baked into the production plan and so will be looking to fill up each of those maintenance periods, which.

With as much <unk> scope as we can and so from where we sit today Don we're looking at some point in queue for preferably earlier away from Christmas as possible, we canceled Christmas and twenty-three we would like to have it in 24 and be celebrating bringing mettie Luna online.

Jody Kozenko: The MediALUNA flow sheet calls for an additional trash screen. On the last shutdown we did in early February, we poured concrete for that, and on the shutdown in April, we will be installing that trash screen. That's already baked into the production plan, and so we'll be looking to fill up each of those maintenance periods with as much MediALUNA scope as we can. And so from where we sit today, John, we're looking at some point in Q4, preferably earlier away from Christmas as possible. We cancelled Christmas in 2023.

Okay. Thank you for that and adding to that question. Then can you just comment on the pace of the ramp up toward commercial production post at one month shutdown period and connecting <unk>.

Yeah, I'm gonna make a distinction here between mine ramp up and processing plant ramp up let me see the process plant ramp up as being fairly rapid you can see in our information that we plan to get the commercial production in Q1 of 2025, because really you were just turning on the copper and iron Sulphides flotation circuits.

Jody Kozenko: We would like to have it by 2024 and be celebrating bringing MediALUNA online. Okay, thank you for that. Adding to that question, can you just comment on the pace of the ramp up toward commercial production post that one month shutdown period and connecting the mill to various tie-ins and so on? Yeah, I'm going to make a distinction here between mine ramp-up and processing plant ramp-up. We see the process plant ramp-up as being fairly rapid.

Which is not an exceptionally complex process now on the mining site, we've given ourselves three full years to ramp up to 7500 tons. A day in fact, the mind will essentially be paid off before we ramp up to full production and so we expect that will be a long process we have.

Jody Kozenko: You can see from our information that we plan to get to commercial production in Q1 of 2025 because, really, we're just turning on the copper and iron self-isolation circuits, which is not an exceptionally complex process. Now, on the mining side, we've given ourselves three full years to ramp up to 7,500 tons a day. In fact, the mine will essentially be paid off before we ramp up to full production. And so we expect that to be a long process. We have to open up many headings. At full production, the Meti Aluna mine will be turning somewhere between 90 and 100 stopes a year.

Have to open up many headings in full production the <unk> of mine will be turning somewhere between 90 and 100 steps a year that takes time that takes time and so we've given ourselves enough time reasonably to be able to do that again the emphasis for the <unk> team on the feasibility study was to put it.

Something realistic that will hold ourselves accountable too that's project schedule Capex and includes the ramp up schedule.

Jody Kozenko: That takes time, and so we've given ourselves enough time, reasonably, to be able to do that. Again, the emphasis for the Torex team on the feasibility study was to put out something realistic that we'll hold ourselves accountable for. That's the project schedule, CAPEX, and includes the ramp-up schedule. OK, thank you very much. That's all the questions I have.

Okay. Thank you very much that's all the questions I have.

Once again, if you have a question. Please press Star then one.

Our next question comes from Wayne Lamb of RBC. Please go ahead.

Hey morning, just.

Just a question on cause I know you guys have got it to the top and the basic guidance, just which came in at the very top and despite in almost record quarter production wise in queue for just curious what the main driver is on that outside the stronger pay so.

Don Demarco: Once again, if you have a question, please press star then 1. Our next question comes from Wayne Lamb of RBC. Please go ahead. Hey, morning.

Operator: I just had a question on costs. I know you guys have guided to the top end of basic guidance, which came in at the very top end despite an almost record quarter in terms of production-wise in Q4. Just curious what the main driver is for that outside the stronger peso, and are there any elements that continue to drive cost pressures higher versus your expectations? I mean, really, Wayne. The main single driver for the ASIC being at the higher end of our guided range was the peso. I mean, we were expecting to have a strong Q4 operationally, and so that was built into our revised guidance when we issued that. And it was really the peso hanging out around that 17 to 1 that was the real main driver. www.thevenusproject.com Okay, great.

Are there any other elements that continued drive cost pressures higher versus your expectations.

Oh.

Really worried the maiden single drive before will be <unk>, a higher end of of some of our diverse range was the pay Sir I mean, we we were expecting to have a strong Q4 operationally and so that was built into the wall uncontrolled revised guidance for me to shoot that and it was really the the <unk> around <unk>.

That was the the the the the.

The real main driver.

Okay, great. Thanks, and then.

Wayne Lamb: Thanks. And then maybe just curious about Medea Luna, following up on the question about the timeline, the breakthrough in the tunnel was obviously a big milestone for the company. Are there any activities that you can get a head start on now with that completed kind of ahead of schedule? Yeah, this is Dave Stefanuto here.

Maybe just curious on Medea Luna follow up on the question on the timeline the breakthrough on the tunnel was obviously a big milestone for the company.

Are there any activities that you can get a head start on now with that completed kind of ahead of schedule.

Yeah. It does Dave stuffed noodle here definitely I think what the advanced in three months has done for US is allowed us to actually improve the installation of the wise conveyor, which is going to be critical in terms of building up our worst dark call in advance of commissioning that flotation plant so although retarded.

Dave Stefanuto: Definitely, I think what the advance in three months has done for us is allowed us to actually improve the installation of the Hawaii conveyor, which is going to be critical in terms of building up our ore stockpile in advance of commissioning that flotation plant. So, although we're targeting an August commissioning date, we think we've got a little bit of flexibility to try and advance that to increase some production and reduce some risk in terms of that initial ramp-up of the flotation plant. Okay, perfect. Thanks. And maybe just on the remaining CapEx spend this year, are there any remaining long-lead time items, or are you just wondering what the bottleneck components are in getting to completion in Q4? Yeah, a good question.

In in August commissioning date, we think we've got a little bit of flexibility to trying to advance that to increase in production and reduce some risks in terms of that initial ramp up of the flotation plant.

Okay perfect. Thanks, and maybe just on the remaining Capex spend this year are there any remaining long lead time items are just wondering what the bottleneck components are and getting to completion in Q4.

Yeah. Good question I mean, as we suspected all along electrical components in electrical switchgear had been the challenge on the project.

Wayne Lamb: I mean, as we suspected all along, electrical components and electrical switch gear have been the challenge on the project. And it's been a challenge in the industry in general, you know, certainly driven by the excitement around alternative energy sources, EV power, and so on. So we're feeling that.

And it's been a challenge in the industry in General you know certainly driven by by the excitement around alternative energy sources E V power and so on so we're feeling that so we're tracking that very closely and unfortunately electrical equipment is one of the last things that you engineer on a project. So there were some of our our later appeals.

Dave Stefanuto: So we're tracking that very closely, and unfortunately, electrical equipment is one of the last things that you engineer on a project. So there were some of our later POs that we issued. I can say that all of those POs have been issued, and we're tracking that very well. So, some of the longer lead POs for the high-voltage equipment, we did get out on the street early on those, and they're tracking well as well. So, we are making sure that our vendors meet their commitments, and that's really the next step that we need to focus on.

That we issued I can say that all of those appeals have been issued and we're tracking that very well. So some of the longer the pillows for the high voltage equipment, we did get out on the street early on those and they're tracking well as well so, but we are making sure our vendors meet their commitment and that's really the next step that we're we're we need to focus on.

Dave Stefanuto: Okay, perfect. Thanks for that detail and thanks for answering my question. As there appear to be no more questions, this concludes today's conference call. You may disconnect your lines.

Okay perfect.

That detail and thanks for answering my questions.

As there appear to be no more questions. This concludes today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.

Operator: Thank you for participating and have a pleasant day. Transcription by ESO. transcription.eso.eu Transcription by ESO, www.ryanthompson.com

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