Q4 First Majestic Silver Corp Earnings Call
Speaker Change: [music].
Thank you for standing by this is the conference operator, welcome to the first Majestic silver.
Q4 production results and 2020 forward guidance conference call.
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.
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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, Craig.
Keith Neumeyer: For everyone joining our call today.
Keith Neumeyer: We have our.
Our senior staffs on this call we're somewhat separated right now remotely so hopefully that 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 and say Hello.
Steve Holmes: Hello, everybody.
Speaker Change: We also have David <unk>, our Chief Financial Officer.
David: Hello, everyone.
Speaker Change: And Samir Patel, our general counsel and corporate Secretary.
Samir Patel: Good morning, everyone.
Samir Patel: And Matti <unk>, our vice President corporate development and Investor Relations.
Samir Patel: Our individual.
Samir Patel: Before I get into.
My recap of today's news I'd like to pass this call over to Samir.
Samir Patel: Just to read our forward looking statements.
Yeah.
Samir Patel: Thanks Pete.
Speaker Change: 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 in its operations that constitute forward looking statements in accordance with applicable Canadian and U S Securities laws.
Speaker Change: Statements that are not historical facts, such as statements regarding future estimates plans or expectations of future performance constitute forward looking statements that reflect the company's current views with respect to future events.
Speaker Change: These statements are necessarily based upon a number of assumptions and estimates that while considered reasonable by the company.
Speaker Change: Inherently subject to significant business economic competitive political and social uncertainties and contingencies.
Speaker Change: 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 Ifr S 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.
Speaker Change: As a reminder, these documents along with all of our continuous disclosure documents.
Speaker Change: Payable on SEDAR, plus and on Edgar.
Investors are cautioned against attributing undue certainty or reliance on any forward looking statements made during today's call.
Speaker Change: The company does not intend or assume any obligation to update these forward looking statements or information other than as required by law with that I will turn the call back to Keith.
Speaker Change: Yeah.
Keith Neumeyer: Thanks, Samir I appreciate that so.
Keith Neumeyer: So I'm not going to read the news release of course, you want to thank all of you have it in front of us. 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 throughout this call and of course, we have question and answers.
Keith Neumeyer: After my short presentation, you saw Q4 being a pretty strong quarter 2023, which was somewhat of a challenging year, we started off.
With the shutting down of generic Canyon is itself was a difficult decision to make it was the right decision remind you and we've got a lot of excitement around the future of Jerry can you move that can be discussed.
At some other point.
Keith Neumeyer: This call or at Q.
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: <unk> laid out at an all time record again.
Keith Neumeyer: The first time was done happened.
We're pretty excited about the future exactly and that's a huge land package.
Keith Neumeyer: It should be a bigger mine as far as I'm concerned, but the only time will tell but.
Keith Neumeyer: The.
Keith Neumeyer: Their exploration that's going on there that production is coming out of there. It's just it's pretty fantastic and there is a chance it sounds like that could potentially even exceed the production of San Demus, which would be pretty interesting is that actually did occur.
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.
Keith Neumeyer: Next couple of years, one of the big things that we really achieved is really improving our ESG score versus buy a topic that is relevant in today's environment in 19.
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 or E.
Keith Neumeyer: Our our team.
Which reports under <unk>.
Keith Neumeyer: Direct directorship.
Keith Neumeyer: <unk> is responsible for this initiative underway and.
Keith Neumeyer: It's pretty exciting to see.
Exploration for that.
Keith Neumeyer: For 2020.
Keith Neumeyer: Or it's going to be.
Keith Neumeyer: Our 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 Cherry Canyon. The balance that is being spread throughout Mexico. The company had close to 27 million ounces of silver equivalent production.
Keith Neumeyer: 2023.
Keith Neumeyer: 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: Just moving along we were able to successfully sell two of our assets look a pterosaur mine wheelabrator silver mine, we have very large positions in both share I'm Andre and solar storm, which we're optimistic that it will turn into interesting investments for us over time.
Keith Neumeyer: We're assisting the managements of both of those companies.
Whenever necessary and we're optimistic where we're actually pretty impressed with the progress that both companies have been making.
Keith Neumeyer: With both of those assets. So there's been I would suggest that.
Listeners to this call would go to there.
Keith Neumeyer: Websites, Sierra Madres website as Superstorm sites have a 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 the stock performance. This morning.
Keith Neumeyer: We're down a little bit more than TV X or some of our peers I got that.
Keith Neumeyer: Probably likely to do with the Logan.
Keith Neumeyer: Guidance that we're giving in.
Keith Neumeyer: We just wanted to cover this off because it is fairly important.
Keith Neumeyer: We were challenged with how we guide.
Keith Neumeyer: We were quite optimistic when we lost the water well back in Q2.
Keith Neumeyer: 2023, we weren't expecting that it was going to be a big challenge.
Keith Neumeyer: Re drilling a new water roll in.
Keith Neumeyer: Just simply.
Keith Neumeyer: 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 were 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: By Conservative I think we've gone a little bit overboard quite quite frankly.
Keith Neumeyer: But.
We're assuming that.
Keith Neumeyer: We do not recover 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.
Keith Neumeyer: I don't believe it can honestly.
Keith Neumeyer: And we've had this internal discussion among among the senior management team but.
Keith Neumeyer: We actually can't come up with the numbers. So we decided okay go ultra Conservatives and just assume that there's no additional water we're going to run at this two two to two four.
Keith Neumeyer: Julian ounce rate for all of 2024, which of course of course was just fixed cost.
Keith Neumeyer: And.
Keith Neumeyer: And the lower throughput youre going to have elevated costs of course, we're not going to accept this.
Keith Neumeyer: 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 had a backup to its normal throughput rates.
Keith Neumeyer: Normal cost rates, but.
Keith Neumeyer: 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.
Keith Neumeyer: So.
Keith Neumeyer: That's where that number is being driven from.
Keith Neumeyer: Hopefully it turns out.
Keith Neumeyer: Better than obviously, what we're guiding.
Keith Neumeyer: Moving along.
Keith Neumeyer: Our our investments in exploration.
Keith Neumeyer: Not quite a record but.
Keith Neumeyer: $35 million in exploration.
Keith Neumeyer: Big Big program, we're happy to be able to spend those kinds of dollar sales, Pennsylvania will get.
Keith Neumeyer: Good ground to that investment of course, sandy was as well and to a lesser degree.
Keith Neumeyer: Jerry Canyon.
Keith Neumeyer: And I think that's about it for the news release, So why don't we just open the.
Keith Neumeyer: Don't 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 challan acknowledging your request.
Speaker Change: A speaker phone please pick up the handset price volatility.
Speaker Change: 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 that's farm 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 rates youre seeing in Mexico, I noticed you're using a slightly weaker Mexican peso exchange rate of 18 versus the current 17 now but.
Craig Hutchison: What's the what's the sort of sensitivity.
Craig Hutchison: Sensitivity with regards to the peso.
Craig Hutchison: Like what percentage of your costs are fixed and the Mexican peso.
Speaker Change: Well thanks.
Speaker Change: Thanks, Craig for your question.
Quickly answer that question and I'll pass on to David.
Speaker Change: But our our inflation rate I think we used in 2023 worked out to about 8%.
Speaker Change: The.
Speaker Change: David You can correct me, if I'm wrong on that but.
Speaker Change: The the peso has been stronger than expected of course, even with lower energy prices and the analysts that I listen to any ways or even calling for lower oil prices. So.
Speaker Change: I know with the election coming up and in Mexico and the uncertainty.
Speaker Change: What 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.
Speaker Change: So there has been an influx of capital coming into their country, which which is.
Speaker Change: Unfortunately negatively affected us.
Speaker Change: <unk> 21 to one peso to the dollar only 18 months ago and now we're at 17 as you say we.
Speaker Change: When we when we used 18 in our budget.
Speaker Change: We just went with consensus we looked at all the banks.
Speaker Change: And then looked at even your bank.
Speaker Change: And looked at all the consensus and we just kind of came up with the number.
Speaker Change: Not magic.
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 I'm not sure. If you have any comments you'd like to add to that.
David: Yeah, that's absolutely right Keith so when we prepared the budgets we took consents.
David: Consensus such.
David: Different banks projections for 2024.
David: 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.
David: It is expected to weekend. This is pretty much the same in terms of how we how we offset that.
David: Greg is through our cost savings initiatives, which we've 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.
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 it.
From what I understand many of the economists.
David: Feel it's one of the most difficult 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.
Speaker Change: Which which assets are allocated to.
Speaker Change: Yes, Steve do you want to jump in and address that.
Steve Holmes: Yeah sure they.
Steve Holmes: The expansionary capital really is consists of a couple of things we reclassify.
Steve Holmes: Exploration is part of that in some cases, we also classify mine.
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 and there's a few other things that are.
Steve Holmes: No.
Steve Holmes: Kind of.
Steve Holmes: Focused on the expansionary side, a little bit different like the mint the myths 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.
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.
You say expansion area, it's really about exploration, it's about certain mine development.
Speaker Change: Yes, 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: Cost and 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's a significant portion.
David: All of the exploration in this program is expansionary.
David: As far as the 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 here to the expansion.
David: Our.
David: Existing assets and really.
David: The three larger ones it's sandeep.
David: Santa Elena and <unk> Kenyon with the exploration program that we're doing there.
David: Yeah.
Speaker Change: Okay great.
Speaker Change: Last question and I'll turn it over to next caller, but.
Speaker Change: In terms of the grades are deciding to math 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 grade outlook do.
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.
Speaker Change: But let.
Speaker Change: Let me quickly address that and then I'll pass it to 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.
Speaker Change: From memory, but Steve could add more context to that but Tom.
Speaker Change: And in that vein has been slowly depleting over the last 12 months, we've been bringing other structures other veins back online or not online but back into production.
Speaker Change: But it does take time and it doesn't happen overnight. This is.
Speaker Change: It's a very very large mine near Scott.
Speaker Change: Yes, probably 300 kilometers of underground development.
Just simply it's a shift you are turning in the sea is not going to happen overnight so to transition from one big structure too.
Speaker Change: Several other structures that will come in line over the next 12 to 24 months.
Speaker Change: I believe you will see grades improve overall 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 Jessica Regina Victoria. So this jessica vein.
Steve Holmes: Moderate lying dipping vein.
Steve Holmes: And 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 more narrow veins.
Steve Holmes: There's a number of them listed even in the press release Spike Roberta Robert <unk>.
Steve Holmes: A number of other ones.
Steve Holmes: 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'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 you know 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.
Steve Holmes: Your dilution management your Overbreak management, and we have very robust programs that are addressing those things I think 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 that.
This year as we go forward.
Speaker Change: Alright, Thanks, guys and best of luck and I'll turn it over to Paul.
Paul: Thanks, Greg.
Speaker Change: The next question is from Don Demarco with National Bank Financial. Please go ahead.
Don Demarco: Thank you Robert Good morning, Keith.
Don Demarco: At long cantata, what flow rate you require to resume optimal operational performance and.
Don Demarco: 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 well across multiple wells.
Don Demarco: Yeah.
Speaker Change: Give you a general comment and I'll pass your question on to Steve.
Speaker Change: Yes.
Third hull is adding.
From memory.
Speaker Change: Just 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 youll steep can correct me on that but yes. It does.
Speaker Change: Third well is adding some water, but not sufficient.
Speaker Change: So where we're.
Speaker Change: 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.
We just.
Speaker Change: Our guidance is based on what I said earlier.
Speaker Change: This 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.
Speaker Change: Where the heck is water so it's just.
Speaker Change: It 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 deal with and Thats why we guided.
Speaker Change: We have had some criticism from investors our shareholders that we guided.
Mid last year that we would have to have this issue resolved and it has not been resolved yet which was.
Speaker Change: Price to us.
Speaker Change: We're still working diligently on getting this resolved and 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 that's where it should be running at.
Speaker Change: <unk>.
Speaker Change: We're hoping it will get there in the next couple of quarters.
Speaker Change: Okay.
Speaker Change: Okay. Thanks, So we'll stay tuned.
Speaker Change: As those calls plan for Q2, one of our drilled.
Speaker Change: Moving on to the next question, Gary Canyon referred to as a temporary suspension.
Can you provide some color on the work that's underway, there now and the probability and timing of a potential restart.
Speaker Change: You know back of the envelope.
Speaker Change: We talk about 2026.
Speaker Change: A key date or the key here pardon me.
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: <unk>.
Speaker Change: Mill improvements.
Speaker Change: Mine planning.
Speaker Change: Is there is quite a lot of moving parts.
Speaker Change: So what I would like to do is just pass this 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 why don't you take over.
Speaker Change: Discuss both of those mines.
Steve Holmes: Okay, Let me go back to la and cantata, 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.
Our system pipeline to the plants will be back up at full capacity. It will take a little bit of time once we get that to re skill the inventory at the plants because you know there's two plants up there.
Steve Holmes: And.
Steve Holmes: And we have a number of other activities going on.
To make sure the integrity of the water system is 100%.
This well metered and instrumented so.
Steve Holmes: We've taken a very conservative approach.
Steve Holmes: In terms of launch and toddlers.
Steve Holmes: 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 rocket TADA as 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 normal in August and get a normal rainfall and that that will help us resolve this issue.
Steve Holmes: As far as generic Canyon goes jerk 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: That's why the exploration program as robust this year.
And we also know that from that we need an optimized mining plan before we make any kind of decision to restart as Keith said there is a lot of moving parts with your Canyon, we don't have a firm restart date.
Steve Holmes: It'll depend on the results of many of these studies, including dewatering, which is a 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'm 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 you're spending on share Canyon, just to sort of maybe you.
Steve Holmes: Can you use that to assess the level of priority.
Steve Holmes: On the asset.
Steve Holmes: Including exploration or or not putting exploration studies, we have ongoing and work in the mail and so on.
Speaker Change: I know, we got the guidance coming up.
Speaker Change: Yes.
Speaker Change: Total spend for <unk> in 2020 for Ob <unk>.
Speaker Change: Somewhere south of $30 million.
Speaker Change: But kind of around that range.
Speaker Change: And that includes exploration.
Speaker Change: And there are some fixed costs that were.
Speaker Change: We're working on driving down but.
Speaker Change: That's kind of back of the envelope.
Speaker Change: Okay. That's helpful. Thank you and I think he's sticking with you for final question.
Speaker Change: Is M&A another option in your golf leavers.
Speaker Change: If so what stage accompanying a jurisdiction do you prefer.
Speaker Change: Does that is that is that.
Speaker Change: Our bagged question or what.
Speaker Change: Yes.
Yes.
Speaker Change: You first Majestic has 20 years in so.
Speaker Change: We put the company together 20 years ago, and I think I think it's pretty obvious that we built this business through M&A activity.
Urban Tango, 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 they're 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.
Speaker Change: I think thats going to change much over the next 20 years.
Speaker Change: If I'm still around.
One thing we should talk about is the mint.
Speaker Change: I completely didn't bring that up but.
Speaker Change: If there's questions around them in we'd love to talk about it.
Speaker Change: Okay. Thank you for that.
Speaker Change: Well 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.
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: We cannot until our portfolio with a bunch of exploration projects and 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.
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.
Maybe just on exploration at Santa Elena what should we expect in terms of reserve replacement or or maybe what's the plan breakdown between exploration and greenfield targets versus more kind of resource conversion drilling.
Speaker Change: Well, there's a lot to talk about around that.
And we have to be somewhat.
Speaker Change: Careful.
Speaker Change: With our disclosure around that so.
I will pass this question over to Steve.
With that guidance.
Steve Holmes: Sure Okay. So right.
Steve Holmes: Right now were mining <unk> and it's been Super good for us.
Steve Holmes: Fantastic Weil and better than we thought.
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 are there adjacent veins that are economic.
A very good silver content, but we also have.
It's a huge land package as Keith mentioned and we've got we have targets.
Steve Holmes: All right I don't think we've tested less than 20% of our land package in Santa 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: Yeah.
Speaker Change: Great. Thanks, and maybe just a follow up on that should we expect some production out of the Santa Elena mine.
Speaker Change: Getting blended in with their Matondo this year.
Steve Holmes: Steve go ahead.
Steve Holmes: Yes.
The plan. This year is in Q2 to bring the Santa Elena mine back online, but 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.
Steve Holmes: And.
Steve Holmes: Metallurgical results there have been really good in 2023 as you know we completed this dual circuit.
Steve Holmes: Expansion at Santa Elena, which includes the new press filter plants curtails.
Steve Holmes: Each tank in our CCD, we're also optimize the Hague Melba high intensity grinding mill and when we put all that together, we've got major improvements in our recovery rates for both gold and silver.
Steve Holmes: By blending.
Steve Holmes: Santa Elena or the Santa Elena ores.
Steve Holmes: Two there Natalia ores, we expect to get throughput increases and we expect to have higher silver recoveries.
Steve Holmes: 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 and <unk>.
Speaker Change: That's fairly small compared to Aratana remember Tanya is going to carry the weight so sent to wane as we go forward.
Speaker Change: Alright, great I appreciate that I will pass it onto the next caller.
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 we've had a couple of questions come in this morning, Keith in relation to first mint, which did touched on briefly earlier to summarize them, we sort of wanted to get the status on the mint itself. When you anticipate the first floor and the first sale.
Mike Carruthers: Yeah.
Keith Neumeyer: For those who aren't aware the company has been selling.
Keith Neumeyer: Silver products too.
Keith Neumeyer: Primarily investors shareholders and then.
Keith Neumeyer: It worked out over time that even outside.
Keith Neumeyer: Of our internal network a lot of sales started coming in and we realized that the men's for really the bottleneck.
Keith Neumeyer: We reached peak silver production.
Keith Neumeyer: Kind of funny.
We the means that we use.
Keith Neumeyer: Just could not give us more ounces despite our demand.
Speaker Change: Uh huh.
Speaker Change: Our demand we estimate when we don't know time will tell in 2024 will be an interesting year to prove the thesis out.
Nevertheless, we expect somewhere between 2% to 300%.
Speaker Change: Increased sales through our our retail.
Speaker Change: E Commerce website.
Speaker Change: As a result of opening up our own meeting facility.
Speaker Change: We made the decision about a year ago.
<unk> taken some time.
Permits took forever getting the equipment on site and then getting the people in place and just all the logistics of starting a brand new entity or a business.
Speaker Change: As has of course, there's challenges, but it's pretty been pretty.
Speaker Change: Exciting time for us.
Got some extremely talented people working for <unk> that I was.
Speaker Change: <unk>.
Speaker Change: I was able to acquire from other competitors.
Speaker Change: And they were happily.
Speaker Change: Moving over to US we're the only mining company that I'm aware of that actually will produce ounces on the ground and process and sell them too and then buyer.
Speaker Change: I don't think there's anyone else who does that.
Speaker Change: We're anticipating as I said earlier.
Speaker Change: Somewhere in that 25 to 30 million, maybe $40 million range in revenue.
Speaker Change: From them and in 2024.
Speaker Change: We'll see if that prediction pans out to hold me to that but.
Speaker Change: That's kind of the number that we're on.
Speaker Change: We're working towards.
Speaker Change: Our first pour or stamps will be likely in two to three weeks.
Speaker Change: I was just there a couple of weeks ago with the team.
Speaker Change: Things are progressing quite nicely, but theres still a couple of.
Speaker Change: 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.
Speaker Change: On this exciting project in the next few weeks.
Speaker Change: That's great. Thank you Keith we have one final call pardon me webcast question in 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: Yeah.
Okay well.
Speaker Change: Okay I'll pass that on this TV, probably knows that number off the top of this.
Speaker Change: Yeah.
Speaker Change: Yeah. So.
Speaker Change: You know over overnight just over 90% of the silver equivalent ounces will be coming out of them return goes 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.
Speaker Change: Thank you.
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.
Keith Neumeyer: If everything quite nicely Lam, Joe I'd like to thank all of you.
Keith Neumeyer: The banks that contributed on this call today I. Appreciate all your detailed questions. We always are open to that and if there's any information that somehow we avoided today or did not discuss.
Please give manny or Mark a call and they will assist you in finding whatever information that you require so thanks, Paul Thanks for all your time and happy.
Keith Neumeyer: Happy new year.
Keith Neumeyer: Today's conference call you May now disconnect. Your lines. Thank you for participating and have a pleasant day.
Yes.
Keith Neumeyer: Okay.
Keith Neumeyer: [music].
Keith Neumeyer: Okay.
Keith Neumeyer: [music].
Keith Neumeyer: Yes.
Keith Neumeyer: [music].
Keith Neumeyer: Okay.