Q4 First Majestic Silver Corp Earnings Call
Thank you for standing by this is the call Chris operator, welcome to the first Majestic silver as Q.
Q4 production results and 2024 guidance conference call.
Speaker Change: 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.
Speaker Change: Enjoying the question queue you May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero on your telephone keypad.
Speaker Change: If you are participating through the webcast you can submit a question in writing by using the form in the lower section of the webcast screen.
Speaker Change: I would now like to turn the conference over to Mr. Keith Neumeyer, President and Chief Executive Officer of first Majestic Silver Keith. Please go ahead.
Keith Neumeyer: Thank you operator.
Thanks Fred.
Keith Neumeyer: For everyone joining our call today.
Keith Neumeyer: We have.
Keith Neumeyer: Our senior staffs on this call.
Keith Neumeyer: Somewhat separated right now remotely so played out.
Sound quality is sufficient.
Speaker Change: As we all participate in this call I would like to introduce a couple of individuals Firstly, Steve Holmes, our chief operating officer Who's on the line with us today.
People want to say Hello.
Steve Holmes: Hello, everybody.
Speaker Change: We also have David <unk>, our Chief Financial Officer.
David: Hello, everyone.
And Samir Patel, our general counsel and corporate Secretary.
Samir Patel: Good morning, everyone.
Speaker Change: And Manny <unk>, our vice President corporate development and Investor Relations.
Speaker Change: Individual.
Manny: Before I get into.
Manny: My recap of today's news I'd like to pass this call over to Samir.
Samir Patel: To read our forward looking statements.
Samir Patel: Thanks, Keith before we begin today's call I would like to remind you that we will be referring to certain non <unk> measures and making certain statements regarding first majestic silver and its operations.
Samir Patel: Institute forward looking statements in accordance with the applicable Canadian and U S Securities laws.
Samir Patel: All statements that are not historical facts, such as statements regarding future estimates plans well.
Samir Patel: Patients are future performance constitute forward looking statements that reflect the companys current views with respect to future events.
Samir Patel: These statements are necessarily based upon a number of assumptions and estimates that while considered reasonable by the company.
Samir Patel: Currently subject to significant business economic competitive political and social uncertainties and contingencies.
Samir Patel: We encourage you to refer to the cautionary language included in our news release that was disseminated earlier this morning, and the disclosure on non <unk> measures and our most recently filed management's discussion and analysis as well as the risk factors set out in our most recently filed annual information form.
Samir Patel: As a reminder, these documents along with all of our continuous disclosure documents are available on SEDAR plus and on Edgar.
Samir Patel: Investors are cautioned against attributing undue certainty or reliance on any forward looking statements made during today's call.
Samir Patel: And the company does not intend or assume any obligation to update these forward looking statements or information other than as required by law.
Samir Patel: That I will turn the call back to Keith.
Samir Patel: Yeah.
Keith Neumeyer: Thanks, Samir I appreciate that.
Keith Neumeyer: I'm not going to read the news release of course, I think all of you have it in front of you. So I don't need to go through it in detail, but there is some highlights that I think should be discussed and I will address now throughout this call.
Keith Neumeyer: First of all have question and answers.
Keith Neumeyer: After my short presentation, you saw Q4 being a pretty strong quarter 2023 was was somewhat of a challenging year, we started off.
Keith Neumeyer: With the shutting down of generic Canyon, which in itself was a difficult decision to make it was the right decision remind you and we've got.
Keith Neumeyer: A lot of excitement around the future of generic J&J, but that can be discussed.
Keith Neumeyer: Or at some other point in this.
Keith Neumeyer: This call or at <unk>.
Keith Neumeyer: Whenever we get a chance to get together over the year, because we will be coming out with additional news on that asset over the next 12 to 18 months, but just covering off Q4, we can see we ended the year up quite strongly.
Keith Neumeyer: Santa Elena hit an all time record again is not the first time, we've done that.
Keith Neumeyer: We're pretty excited about the future excited today and that's a huge land package.
Keith Neumeyer: It should be a bigger mine as far as I'm concerned, but Tom the only time will tell but.
Keith Neumeyer: Their exploration that's going on there that production is coming out of there. It's just it's pretty fantastic.
Keith Neumeyer: There is a chance it sounds like that could potentially even exceed the production of San demus, which would be pretty interesting effect actually did occur but.
Keith Neumeyer: I can tell you that internal discussions are are going along that path, but nevertheless, we'll see how that all transpires over the.
Next couple of years, one of the big things that we achieved is really improving our ESG score versus a topic that is relevant in today's environment and.
Keith Neumeyer: And in Iowa, We're just on a road trip.
Keith Neumeyer: A couple of months ago through Europe and were complemented by a couple of institutions, who have actually added to their positions because of this exact score.
Keith Neumeyer: Our our team.
Keith Neumeyer: Which reports under manny's.
Keith Neumeyer: Direct directorship is.
Keith Neumeyer: It's very responsible for this initiative underway in.
Keith Neumeyer: It's pretty exciting to see.
Keith Neumeyer: Exploration.
Keith Neumeyer: For 2020.
Or it's going to be.
Keith Neumeyer: A major exploration program Wow.
Keith Neumeyer: We booked $39 million being spent on exploration in 2024, which is obviously a major investment of about $10 million is going into.
Keith Neumeyer: Cherry Canyon, the balance that is being spread throughout Mexico. The company had close to 27 million ounces of silver equivalent production.
Keith Neumeyer: In 2023.
Mid mid way between our guidance a little bit north of 10 million ounces of silver, which you can see in the company's news release.
Keith Neumeyer: And.
Just moving along we were able to successfully sell two of our assets look a pterosaur mine with a prius silver mine, we have very large positions in both share Madre at silver storm, which we're optimistic that we will turn into interesting investments for us over time.
Keith Neumeyer: We're assisting the managements of both of those companies whenever necessary.
Keith Neumeyer: We're optimistic where we're actually pretty impressed with the progress that both companies have been making.
Keith Neumeyer: With both of those asset so there's been I would suggest that.
Keith Neumeyer: Listeners to this call would go to there.
Keith Neumeyer: Websites Sierra Madres website is Super storm side, I will look at really what they're doing because you know what theyre doing at both laprairie and look at Terra as far as I'm concerned is pretty pretty exciting.
Keith Neumeyer: Following the some of the analysts' reports that have come out. This morning, and also does the stock performance. This morning.
Keith Neumeyer: We're down a little bit more than <unk> X or some of our peers I gather that's probably likely to do with the Logan.
Keith Neumeyer: The guidance that we're giving in.
We just want to cover this off as it is fairly important.
We were challenged with how we guide.
We were quite optimistic when we lost the water well back in Q2 of 2023, we weren't expecting that it was going to be a big challenge.
Keith Neumeyer: Drilling a new water roll in.
Keith Neumeyer: Just simply bringing the water back online.
Keith Neumeyer: But after three year olds.
Keith Neumeyer: The third hole actually hit water, which was nice to see but the first two are not that successful the third well that we drilled didn't give us the amount of water that we're hoping so we're now drilling.
Keith Neumeyer: Additional wells, we're budgeting for Q1 to drill three additional holes.
Keith Neumeyer: For water.
Keith Neumeyer: But our guidance, which and we debated this among management on how we guide because I think our guidance is.
Keith Neumeyer: Quite conservative I think we've kind of a little gone a little bit overboard.
Keith Neumeyer: Quite frankly.
But.
Keith Neumeyer: We're assuming that.
We do not discover any water in 2024.
Keith Neumeyer: And that's why we're showing the costs that we're showing in this table on this industry surveys.
Speaker Change: I don't believe it quite honestly.
And we've had this internal discussion among among the senior management team that.
We actually.
Speaker Change: Can't come up with a number so we decided okay go ultra Conservatives and just assume that there's no additional water we're going to run at.
Speaker Change: Two two to $2 4 million ounce right.
Speaker Change: For all of 2024, which of course of course was fixed costs.
Speaker Change: And.
Speaker Change: And then the lower throughput youre going to have elevated costs of course, we're not going to accept this.
Speaker Change: To drive these costs down throughout the first couple of quarters of 2024, and we expect to hit water sometime throughout the next couple of quarters, which will also of course bring Lincoln Tyler backup to its normal throughput rates and normal cost rates, but.
Speaker Change: We can't guarantee that we don't have any technical guidance suggests that we're going to be successful. Therefore, we decided to take the ultra ultimate Conservative view on this asset.
Speaker Change: So that's.
Speaker Change: That's where that number is being driven from.
Speaker Change: Hopefully it turns out.
Speaker Change: Better than obviously, what we're guiding.
Moving along.
Speaker Change: Our investments in exploration.
Speaker Change: Not quite a record but.
Speaker Change: $35 million in exploration.
Speaker Change: Big Big program, we're happy to be able to spend those kinds of dollar sales, hence lino again.
Speaker Change: Good ground to that in investments of course, Sandy was as well and to a lesser degree.
Speaker Change: Jerry Canyon.
Speaker Change: And I think that's about it for the news release, So why don't we just open.
Speaker Change: Call up to questions.
Speaker Change: Thank you Keith we will now proceed with the question and answer session. Once again to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.
Speaker Change: A speaker phone please pick up the handset price Maloney Keith to withdraw your question. Please press Star then two.
Speaker Change: If youre participating today through the webcast you can submit your question in writing by you think the swarm in the lower section of the webcast screen.
Speaker Change: Our first question is from Craig Hutchison with TD Securities. Please go ahead.
Craig Hutchison: Hey, guys. Good morning, Thanks for taking my question.
My first question is regarding to inflation can you give us a sense of kind of what the inflation rate youre seeing in Mexico, I noticed you're using a slightly weaker Mexican peso exchange rate of 18 versus the current 72 now but.
Craig Hutchison: What's what's the sort of <unk>.
Craig Hutchison: Sensitivity with regards to the <unk>.
Craig Hutchison: Peso.
Craig Hutchison: Like what what percentage of your costs are fixed and the Mexican peso.
Craig Hutchison: Well.
Speaker Change: Thanks, Craig for your question.
Speaker Change: I'll quickly answer that question and I'll pass on to David.
Speaker Change: But.
David: Our our inflation rate I think we used in 2023 worked out to about 8%.
David: <unk>.
Speaker Change: David You can correct me, if I'm wrong on that but.
David: The peso has been stronger than expected of course, even with the lower energy prices.
David: The analysts that I listen to any ways or even calling for lower oil prices. So.
David: With the election coming up and in.
David: In Mexico and the uncertainty.
David: This new government is going to do because the current government is selling bonds. It quite inflated prices, which is supporting the peso. So that's been a little bit unusual.
David: So there has been an influx of capital coming into their country, which which is.
David: Unfortunately negatively affected us like we had 21 to one peso to the dollar only go out 18 months ago and now we're at 17 as you say, we when we when we used 18 in our budget.
David: We just went with consensus we looked at all the banks.
David: And then looked at even Eurobank.
David: And looked at all the consensus and we just kind of came up with the number I.
Speaker Change: Magic is just a number that we felt comfortable using we think the peso will weaken hopefully we're right on that but I. Just don't we don't have a crystal ball David Im not sure. If you have any comments you'd like to add to that.
David: Yes, that's absolutely right Keith so when we prepared the budgets we took.
David: Consensus such the different banks projections for 2024.
It looked like they were from a starting point of about 18, they were projecting a weakening of the Mexican peso by about half a point a quarter.
David: It looks like some others have half that.
David: Same rate of let's say weakening throughout the year. So we're seeing a stronger Mexican peso than what we thought at the beginning of the year, but the rate at which <unk>.
David: It is expected to weekend. This is pretty much the same in terms of how we how we offset that Craig is through our cost savings initiatives, which we have been pretty successful at last year implementing many cost saving initiatives that have helped us sort of offset.
Inflation and.
David: And offset some of this strength in the Mexican peso and in 2024, we also have significant cost saving initiatives that.
David: That are in our budget that we feel confident that we'll be able to to get but as Keith said that is something that we're watching.
David: From what I understand many of the economists.
David: It feel it's one of the most difficult years to predict what the peso is going to do but in general we feel it's going to.
David: We get from this point onward.
David: Into the year.
Speaker Change: Okay, Thanks, and maybe just like a follow on question.
Speaker Change: With regards to the capital program that you guys have this year, the $39 million of expansionary capital.
Speaker Change: Can you talk to what those projects are in which which assets are allocated to.
Speaker Change: Yes, Steve do you want to jump in and address that.
Steve Holmes: Yes sure they are.
Steve Holmes: The expansionary capital really is consists of a couple of things we reclassify.
Steve Holmes: Exploration as part of that in some cases, we also classify.
Steve Holmes: Mine development inside the company, we do not have any major capital investment projects like dual circuit, which we completed last year pretty successfully.
Steve Holmes: So this year, we're focused really on mine development and exploration.
Steve Holmes: And there's a few other things that are.
Steve Holmes: No.
Steve Holmes: Kind of.
Steve Holmes: You know focused on the expansionary side, a little bit different like the mint, the midst of a little bit different.
Steve Holmes: But yeah our.
Steve Holmes: Our expansionary capital.
Steve Holmes: <unk> is really focused on.
Steve Holmes: Underground mine development and or about 31000 meters at 66 million and that our PP&E, which is mostly a mix of sustaining and some expansion, but mostly sustaining is about $22 million. So theres nothing that really stands out except for when you say expansion area.
It's really about exploration, it's about certain mine development.
Speaker Change: Yes, so it's more of an accounting treatment I think maybe David might want to comment as well, but it's.
Speaker Change: It's always a battle between the accountants and the company on.
Speaker Change: What you define as sustaining and what you define as expansionary itself.
Speaker Change: <unk>.
Speaker Change: Costing debate, David do you want to add to that.
David: Well I think Steve is right.
David: When you look at where we're investing our money. This year there is a significant portion.
David: All of the exploration in this program is expansionary.
David: As far as the <unk>.
David: Split on underground development between what sustaining and expansionary we have.
David: Certain rule sets that we follow and we don't change and it depends where the development being done than what it's for and how it's how we ultimately classify it but.
David: But in terms of.
David: The where the majority of the dollars in our capital for 2024 is being spent it's definitely geared to the expansion.
David: Our.
David: Existing assets and really.
David: The three larger ones, it's sandy Ms, Santa Elena and Dr. Kenyon with the exploration program that we're doing there.
David: Okay.
Speaker Change: Okay great.
Speaker Change: Last question I'll turn it over to next caller, but.
Speaker Change: In terms of the grades are starting to mass youre still sort of trending below reserve.
Speaker Change: Can you just talk to kind of what the profile looks like they're on that in terms of the great outlook.
Speaker Change: Do you expect to kind of trend back to reserves or are you just seeing higher dilution overall.
Speaker Change: I'm not sure of Gonzalo is on their phone Steve.
Speaker Change: Steve but let.
Speaker Change: Let me quickly address that and then I'll pass it to you Steve.
Speaker Change: <unk>.
Steve Holmes: Sandy Miss over the last 12.
Steve Holmes: Plus months has been going through a transition whereby we've got a very large structure that we've been mining for quite some time, I think probably four or five years from memory, but Steve could add more context to that but.
Steve Holmes: In that vein has been slowly depleting over the last 12 months and we have been.
Steve Holmes: Bringing other structures other veins back online or not online buy back into production.
Steve Holmes: But it does take time as it doesn't happen overnight. This is <unk>.
Steve Holmes: Very very large mine near Scott.
Yes, probably 300 kilometers of underground development in minutes.
Steve Holmes: Just simply.
Steve Holmes: It's a ship you are turning in the sea is not going to happen overnight so to transition from one big structure too.
Steve Holmes: Several other structures that will come in line over the next 12 to 24 months.
Steve Holmes: I believe you will see grades improve over over that period of time, but it doesn't happen overnight.
Speaker Change: Steve do you have anything to add.
Steve Holmes: That's exactly right so at San Demus Theres, a couple of really big gains in the last four or five years that the company has been feeding off of you know Jessica.
Steve Holmes: Gina Victoria, So this jessica vein, it's pretty moderate lying dipping vein.
Steve Holmes: And.
Steve Holmes: If you run them five or six meters.
Steve Holmes: Pretty massive vein to pull out as Keith said. This this vein system has been depleting and so we're moving outwards towards a more narrow veins are theirs.
Steve Holmes: There's a number of them listed even in the press release like Roberta Robert <unk>.
Steve Holmes: A number of other ones.
Steve Holmes: And so this issue of controlling dilution is super important for us and we've been working on that all year, along and in fact, we.
Steve Holmes: We've actually seen a reduction of nearly 50% of the unplanned over break.
Steve Holmes: In our our stoping process, our long haul stoping process. So.
Steve Holmes: As the veins get more frequent in the mining faces there theyre more stoping faces to manage the veins are narrower and so you've got to be better at your dilution management. Your Overbreak management, and we have very robust programs that are addressing those things.
In 2024, we do see a slight downtick in the grade.
Steve Holmes: At San Demus, it's not very significant but.
Steve Holmes: There's a lot of focus on this issue of managing dilution for more narrow veins that we have to extract.
Steve Holmes: This year as we go forward.
Speaker Change: Alright, Thanks, guys and best of luck and I'll turn it over to the next call.
Thanks, Greg.
Speaker Change: The next question is from Don Demarco with National Bank Financial. Please go ahead.
Don Demarco: Thank you operator, good morning, Keith at lung cantata, what flow rate you require to resume optimal operational performance and are you thinking to combine slow from the third well that you drilled recently with others that are planned in Q1 to satisfy requirements across multiple wells.
Don Demarco: Yes.
Speaker Change: I'll just give you a general comment and I'll pass your question on to Steve but.
Speaker Change: There would be the third hole is adding up from memory that was based on what I've been told by my operational staff of course is about a one liter per per hour I think it is or whatever you will steepen correct me on that but yes.
Speaker Change: Third well is adding some water, but not sufficient enough. So we're going to work as.
As I said earlier in the call that we're going to we're planning on drilling three additional holes in Q1.
Speaker Change: Hopefully the first one hand side, we have no idea so unfortunately.
Speaker Change: We just.
Speaker Change: That.
Our guidance is based on what I said earlier that Tom.
It is going to become challenging hopefully its not as challenging as we are guiding hopefully it turns out much better than we're guiding but.
Speaker Change: Without the technical knowledge of.
Speaker Change: Where the heck is water as it.
Speaker Change: Has become a little bit of a surprise for us that it has been as difficult as it's turned out to be we thought it would be out much easier challenge to to deal with and Thats why we guided in.
Speaker Change: We have had some criticism from investors our shareholders and show that we guided.
Speaker Change: Mid last year that we would have to have this issue resolved and it has not been resolved, yet which was a bit of a surprise to us.
We're still working diligently on getting this resolved when it goes to throughput.
Speaker Change: Really 3000 tonnes a day is really the magic number.
Speaker Change: And that's what we need to get these costs down to sub 20 Bucks.
Speaker Change: And thats, where it should be running at.
Speaker Change: And then.
Speaker Change: We're hoping it will get there in the next couple of quarters.
Speaker Change: Okay. Okay.
Speaker Change: Okay. Thanks.
Speaker Change: I would just stay tuned.
Speaker Change: As those calls plan for Q Q1 are drilled.
Speaker Change: Moving on to the next question Garik Canyon referred to as a temporary suspension.
Speaker Change: Could you provide some color on the work that's underway, there now and the probability and timing of a potential restart.
You know back of the envelope.
We talk about 2026.
Speaker Change: A key date or the key here pardon me.
Speaker Change: There's a lot of things that has to happen and then quite honestly I can guide you.
Speaker Change: In this call.
Speaker Change: Because we just don't have the information available to us.
Speaker Change: There is a number of things that our technical staff are working on right now.
Speaker Change: Mill improvements.
Mine planning.
Speaker Change: There is quite a lot of moving parts.
Speaker Change: So what I would like to do is just passes question on to Steve and I think maybe Steve might have additional color on cantata as well because I didn't finish that answered, but Tom Steve why don't you take over.
Steve Holmes: John discussed both of those mines.
Steve Holmes: Okay. Let me go back to La and cantata is so what we need in water long cantatas, five liters per second and Keith mentioned that this third hole that we drilled we've got at least one to one and a half liters per second moving on that.
Steve Holmes: We're currently outfitting another well that we drilled that we think will give us another one liter per second and then we have three more drill holes planned in the next 60 days to try to get the other three liters per second so if we get five liters per second of additional water volume off the well fields into the wall.
Steve Holmes: Our system pipeline to the plants, we will be back up at full capacity. It will take a little bit of time once we get that to refill the inventory at the plants because you know there's two plants up there and.
Steve Holmes: And we have a number of other activities going on.
Steve Holmes: To make sure the integrity of the water system is 100%.
Steve Holmes: That is well metered and instrumented so.
Steve Holmes: We've taken a very conservative approach.
Steve Holmes: In terms of watch and toddlers.
Guidance.
Steve Holmes: We're hopeful that we're going to find that extra 40 meters per second in the next couple of months and get things going again.
Steve Holmes: But remember down in this era desert area. They have a very distinct rainfall season, and the big months for long Qatada is August last year. The August rainfall was 80% below normal and that had a direct impact on the well field. So we're hopeful that we returned to <unk>.
Steve Holmes: <unk> in August and get a normal rainfall and that that will help us resolve this issue.
Steve Holmes: As far as Jarrett Canyon goes Cherry Canyon has a lot of opportunities for improvement and even though we've done the temporary suspension. We've had teams working on many issues to get Gerrick canyon positioned to restart.
Steve Holmes: For example.
Steve Holmes: We're looking at the plant because plant reliability towards the end of 2022 was quite difficult because of the record winter snowfall. So we've looked at winter as Asian issues on that plant, we have to do some work and the oxygen plant there there's a whole number of issues that we've gone through and we've.
Steve Holmes: Done that in great detail. So we know what we need to do in the plant.
Steve Holmes: We also know what we need to do in terms of gaining more confidence in the reserves and resources that we might have there.
Steve Holmes: And that's why the exploration program as robust this year.
And we also know that from that we'd need an optimized mining plan before we make any kind of decision to restart as Keith said Theres a lot of moving parts with your Canyon, we don't have a firm restart date it'll depend on the results of many of these studies, including dewatering, which is.
Steve Holmes: Major issue at your Kenyan so.
Steve Holmes: We will just have to see how these studies come through and what kind of information they give us and then I am sure in the future we can give better guidance.
Speaker Change: Okay, Steve Thanks for the additional color can you give me any indication of how much youre spending at Sierra Canyon, just to sort of maybe.
Steve Holmes: We use that to assess the level of priority.
Steve Holmes: On the asset.
Steve Holmes: Including exploration or or not including exploration studies, we have ongoing and work in the mail and so on.
Speaker Change: I know, we got the guidance coming out.
Speaker Change: Yes.
Speaker Change: Total spend for <unk> in 2024 will be.
Speaker Change: Somewhere south of $30 million.
Speaker Change: Kind of around that range.
Speaker Change: And that includes our exploration.
Speaker Change: And there are some fixed.
Speaker Change: We're working on driving down but.
That's kind of back of the envelope.
Speaker Change: Okay. That's helpful. Thank you and sticking with you for final question.
Speaker Change: Is M&A another option in your golf leavers.
Speaker Change: If so what stage of company jurisdiction do you prefer.
Does that is that is that.
Speaker Change: <unk> question or what.
Speaker Change: [laughter].
Speaker Change: You first Majestic has 20 years in so.
Speaker Change: We put the company together 20 years ago and I think.
Speaker Change: It's pretty obvious that we built this business through M&A activity.
Speaker Change: <unk>.
Speaker Change: Urban Daniel obviously, it was a huge discovery for us.
Speaker Change: And I guess you can say del Toro is also a big discovery well actually even laprairie. It was a big discovery. So over the 20 year history of the company, we've had some pretty important geological fines, but.
Speaker Change: The branch of the business has been built through M&A. So.
I don't think thats going to change much over the next 20 years.
Speaker Change: If I'm still around.
Speaker Change: One thing we should talk about is the mint.
I completely didn't bring that up but.
Speaker Change: If there's questions around them in we'd love to talk about it.
Okay. Thank you for that.
Speaker Change: Good luck in 2024.
Speaker Change: Yes, but just to answer your question a little bit more thoroughly because maybe I didn't give you that.
Speaker Change: The most thorough answer I could have it has as far as I'm concerned it has to be silver and needs to be in production.
Speaker Change: Where were we cannot fill our portfolio with a bunch of exploration projects.
That does make the space a lot smaller than others may think.
Speaker Change: Once again, if you have a question. Please press Star then one.
Speaker Change: The next question is from Kevin O'halloran with BMO capital markets. Please go ahead.
Kevin O'halloran: Hey, guys. Thanks for taking my question.
Kevin O'halloran: Maybe just on exploration at Santa Elena what should we expect in terms of reserve replacement or maybe what's the plan breakdown between exploration and greenfield targets versus more kind of resource conversion drilling.
Wow.
Kevin O'halloran: There's lots of talk about around that.
Kevin O'halloran: And we have to be somewhat.
Kevin O'halloran: Careful.
Kevin O'halloran: With our disclosure around that so I'll just I'll pass this question over to Steve.
Kevin O'halloran: Yes.
Steve Holmes: With that guidance.
Steve Holmes: Sure Okay. So.
Steve Holmes: Right now were mining <unk> and it's been Super good for us.
Steve Holmes: Fantastic vein better than we thought.
Steve Holmes: And it continues to be better than we thought.
Steve Holmes: So we're continuing to drill that day and both on the east and the West and seeing good results. We're also drilling in the original Santa Elena mine at depth.
Steve Holmes: And Alejandro the Bajo and we also have the Americas side of it. These are other they're not the main center Atlanta vein, but they're there.
Steve Holmes: There are adjacent veins that are economic.
Steve Holmes: We have very good silver content, but we also have.
Steve Holmes: It's a huge land package as Keith mentioned and we've got we have targets.
Steve Holmes: All over I don't think we've tested less than 20% of our land package insert Atlanta, it's absolutely huge.
Steve Holmes: And one of the one of the challenges. We have is how do you prioritize where you drill and what kind of conversion. So we focus on replacing depletion, but we also focus on what we call Wildcat, which is finding another aratana and the program for 2024. It is inclusive of both.
Steve Holmes: Okay.
Steve Holmes: Yes.
Speaker Change: Great. Thanks, and maybe just a follow up on that should we expect some production out of the Santa Elena mine getting.
Getting blended in with their Matondo this year.
Yes, Steve go ahead.
Speaker Change: Yes.
Steve Holmes: The plan. This year is in Q2 to bring the Santa Elena mine back online.
Steve Holmes: It's fairly fairly limited, we're going to be bringing ore out of the Alejandro.
Steve Holmes: <unk>.
Steve Holmes: We are going to blend it and so youll see throughput rates increase.
Steve Holmes: As we go into the year.
Speaker Change: Uh huh.
Speaker Change: Our metallurgical results there have been really good in 2023 as you know we completed this dual circuit.
Speaker Change: Spansion, Santa Elena which includes the new press filter plants curtails and.
Speaker Change: Leach tank in our CCD, we're also optimize the Hague Melba high intensity grinding mill and when we put all that together, we got major improvements in our recovery rates for both gold and silver by.
Speaker Change: By blending.
Speaker Change: Santa Elena or the Santa Elena ores.
Speaker Change: Two the Irma Tanya ores, we expect to get throughput increases and we expect to have higher silver recoveries.
Speaker Change: And maintain excellent gold recoveries. So yeah, we're excited to get back in there and show some show some throughput from both sides, although central lineup be kind of a fairly small compared to aratana remember Tanya is going to carry the weight. So sent to wane as we go forward.
Alright, great I appreciate that I will pass it onto the next caller.
Speaker Change: Thank you.
Speaker Change: I will now pass the floor over to Mr. Mike Carruthers manager of Investor Relations at first Majestic silver to take us through the questions that have been submitted today through the webcast.
Mike Carruthers: That's great. Thank you very much scaling.
Mike Carruthers: Had a couple of questions come in this morning, Keith in relation to first mint, which did touched on briefly earlier.
Mike Carruthers: To summarize them, we've just sort of wanted to get the status on the mint itself. When you anticipate the first floor and the first sale.
Mike Carruthers: Yes.
Mike Carruthers: Yes.
For those who aren't aware the company has been selling.
Mike Carruthers: Silver products too.
Mike Carruthers: Primarily investors shareholders and then.
Mike Carruthers: It worked out over time that even outside.
Mike Carruthers: Of our internal network a lot of sales started coming in and we realized that the men's for really the bottleneck.
Mike Carruthers: We reached peak silver production, which is kind of funny.
Mike Carruthers: We the means that we use.
Mike Carruthers: Just could not give us more ounces despite our demand.
Mike Carruthers: And.
Mike Carruthers: Our demand we estimate when we don't know time will tell in 2024 will be an interesting year to prove that thesis out.
Mike Carruthers: Nevertheless, we expect somewhere between 2% to 300%.
Mike Carruthers: Increased sales through our our retail.
E Commerce website.
Mike Carruthers: As a result of opening up our own meeting facility.
Mike Carruthers: We made the decision about a year ago.
<unk> taken some time.
Mike Carruthers: Permits took forever getting the equipment on site and getting the people in place and just all the logistics of starting a brand new entity or a business.
Mike Carruthers: As has of course its challenges, but it's been a pretty.
Mike Carruthers: Exciting time for us.
Mike Carruthers: Got some extremely talented people working for <unk> that I was.
Mike Carruthers: I was able to acquire from other competitors.
Mike Carruthers: And they were happily.
Mike Carruthers: Moving over to US we're the only mining company that I'm aware of it actually will produce ounces on the ground and process and sell them too and then buyer.
Mike Carruthers: I don't think there's anyone else who does that.
Mike Carruthers: We're anticipating as I said earlier.
Mike Carruthers: Somewhere in that $25 million to $30 million, maybe $40 million range in revenue.
From them and in 2024.
Mike Carruthers: We'll see if that prediction pans out to hold me to that but.
That's kind of a number that we're working towards.
Mike Carruthers: Our first pour or stamps.
Mike Carruthers: Stamps will be likely in two to three weeks.
Mike Carruthers: I was just there a couple of weeks ago with the team.
Mike Carruthers: It says things are progressing quite nicely, but there is still a couple of.
Mike Carruthers: Things that need to be accomplished before we can actually achieve our first port but as I said, you know what will happen in Q1, and we hope to come out with further news.
Mike Carruthers: On this exciting project in the next few weeks.
Yes.
Speaker Change: That's great. Thank you Keith we have one final call pardon me webcast question regards to Santa Elena question is with regards to 2024 production guidance for <unk>, how much of that production will be from <unk>.
Speaker Change: Okay.
Okay.
Keith Neumeyer: Okay I'll pass it on as TV, probably knows that number off the top of that.
Keith Neumeyer: Yeah.
Speaker Change: Yeah. So.
Speaker Change: Over overnight just over 90% of the silver equivalent ounces will be coming out of <unk> as I mentioned central Lantus contribution will be quite small and it doesn't start to Q2. So.
Speaker Change: Over 90%.
Speaker Change: That's great. Thank you, Steve and Thats. Our final question from the webcast portion of today's conference call.
Thank you.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Keith for any closing remark.
Keith Neumeyer: Yes, I think we covered off everything quite nicely Lam, Joe I'd like to thank all of you.
The banks that contributed on this call today.
We shared all your detailed questions. We always are open to that.
Keith Neumeyer: If there is any information that somehow we avoided or did not discuss please.
Please give manny or Mark a call and they will assist you in finding whatever information that you require so thanks al. Thanks for all your time and.
Happy new year.
Keith Neumeyer: Today's conference call you May now disconnect. Your lines. Thank you for participating and have a pleasant day.
[music].
Keith Neumeyer: Yes.
Keith Neumeyer: Okay.
Keith Neumeyer: [music].
Keith Neumeyer: Yes.
Keith Neumeyer: [music].
Keith Neumeyer: Okay.
Keith Neumeyer: [music].
Keith Neumeyer: Okay.