Q2 2024 Pan American Silver Corp Earnings Call

August 8, 2024

Good morning ladies and gentlemen and welcome to the Pan American Silver second quarter 2024 unaudited results conference call and webcast.

Operator: Ordered 2024 Unaudited Results Conference Column Webcast. At this time, all lines are in a listen-only mode.

Operator: Unaudited Results Conference Call and Webcast. At this time, all lines are in a listen-only mode.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call was recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Siren Fisekci, VP of Investor Relations. Please go ahead.

Operator: Following a presentation, we will conduct a question-and-answer session. If at any time during this call, you require immediate assistance, please press star zero for the operator.

Speaker Change: At this time all lines are in a listen only mode.

Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

Operator: This call is being recorded on Thursday, August 8, 2024.

Siren Fisekci: I would now like to end the conference over to Siren Fisekci, VP Investor Relations. Please go ahead.

This call has been recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Siren Fisekci, VP Investor Relations. Please go ahead.

Siren Fisekci: Thank you for joining us today for Pan-American Silver's Q2 2024 conference call. This call includes forward-looking statements and information and makes reference to non-GAF measures.

Siren Fisekci: Thank you for joining us today for Pan American Silver's Q2 2024 conference call. This call includes forward-looking statements and information and makes reference to non-GAAP measures. Please see the cautionary statements in our MD&A news release and presentation slides for our Q2 2024 unaudited results, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO. Thanks, everyone.

Siren Fisekci: Please see the cautionary statements in our MDNA use release and presentation slides for our Q2 2024 unaudited results, all of which are available on our website.

Michael Steinmann: Please see the cautionary statements in our MD&A news release and presentation slides for our Q2 2024 unaudited results, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO .

Michael Steinmann: I'll now turn the call over to Michael Steinmann, Pan-American president and CEO. Thanks, Siren, and thank you everyone for joining the call. Our operations generate its record cash flow before changes in working capital of $203.3 million in Q2. This resulted in $102.1 million free cash flow in Q2. Balance sheets, grant further improved. The cash balance is rising to $337.2 million at Q3, an increase of $36.1 million from the previous quarter. This strong financial performance was impacted by an unusual income tax expense driven primarily by foreign currency exchange rate fluctuations in the quarter. Namely, devaluations of the Presivian real and the Mexican peso, which was used foreign-dominated deductible tax attributes as well as inflation adjustments on monetary liability in Argentina.

Michael Steinmann: Thanks, Siren, and thank you, everyone, for joining the call. Our operations generated record cash flow before changes in working capital of $203.3 million in Q2. This resulted in $102.1 million of free cash flowing. Balance Sheet, Strength Further Improved. The cash balance is rising to $337.2 million at June 30th, an increase of $36.1 million from the previous quarter. This strong financial performance was impacted by an unusual income tax expense, driven primarily by foreign currency exchange rate fluctuations in the quarter, namely evaluations of the Brazilian Real and the Mexican Peso, which reduced foreign-dominated deductible tax attributes as well as inflation adjustments on monetary liabilities in Argentina.

Michael Steinmann: Thanks, Siren, and thank you, everyone, for joining the call.

Michael Steinmann: Our operations generated record cash flow before changes in working capital of $203.3 million in Q2.

Michael Steinmann: This resulted in $102.1 million free cash flow in Q2.

Speaker Change: Balanchine, Strunk, Further Improved

Speaker Change: The cash balance is rising to $337.2 million at June 30th, an increase of $36.1 million from the previous quarter.

Michael Steinmann: The reported net loss in Q2 of $21.4 million, or $0.06 per share, was significantly impacted by the $93.1 million in income tax expense and the $26.7 million net realizable value inventory expense. Adjusted earnings were $40 million, or $0.11 per share. However, the impact of the inflation-driven Argentine income tax, which was not adjusted, reduced adjusted earnings by three cents per share.

This strong financial performance was impacted by an unusual income tax expense, driven primarily by foreign currency exchange rate fluctuations in the quarter.

Namely, evaluations of the Brazilian Real and the Mexican Peso, which reduced foreign-dominated deductible tax attributes, as well as inflation adjustments on monetary liabilities in Argentina.

Michael Steinmann: The report in that last Q2 of 21.4 million or six cents per share was significantly impacted by the $93.1 million income tax expense at a $26.7 million naturalizable value inventory expense. Adjusted earnings were $40 million of $0.11 cents per share. The impact of the inflation-driven Argentine income tax, which was not adjusted, reduced adjusted earnings by $3 cents per share.

Michael Steinmann: The reported net loss in Q2 of $21.4 million or $0.06 per share was significantly impacted by the $93.1 million in income tax expense and the $26.7 million net realizable value inventory expense.

The adjusted earnings were $40 million or $0.11 per share.

The impact of the inflation-driven Argentine income tax, which was not adjusted, reduced adjusted earnings by $0.03 per share.

Michael Steinmann: Turning to operations, silver production of $4.57 million in Q2 must be lower expected range of $5.36 to $5.78 million for the quarter as continuous ventilation constraints that lack of a radar affected silver grades and through books. I'm very pleased to report that the new ventilation infrastructure was completed at the end of June, and commissioning and startup of the new fans started on July 11, 2024, as scheduled, and ventilation conditions in the deeper eastern areas of the mine have improved significantly. We are currently accelerating mine rehabilitation and development rates, which has steadily increased access to the higher-grade deep eastern Candelaria production areas.

Michael Steinmann: Turning to operations, silver production of 4.57 million ounces in Q2 was below our expected range of 5.36 to 5.78 million ounces per quarter, as continued ventilation constraints at La Colorado affected silver grades and throughput. I'm very pleased to report that the new ventilation infrastructure was completed at the end of June, and commissioning and startup of the new fans started on July 11th, 2024, as scheduled, and ventilation conditions in the deeper eastern areas of the mine have improved significantly.

Speaker Change: Turning to operations, silver production of 4.57 million ounces in Q2 was below our expected range of 5.36.

Michael Steinmann: to 5.78 million ounces per quarter has continuous ventilation constraints that La Colorado affected silver grades and throughput.

Michael Steinmann: I'm very pleased to report that the new ventilation infrastructure

Michael Steinmann: was completed at the end of June and commissioning and start-up of the new fan started on July 11, 2024. As scheduled, ventilation conditions in the deeper eastern areas of the mine have improved significantly.

Michael Steinmann: We are currently accelerating mind rehabilitation and development rates.

Michael Steinmann: We are currently accelerating mind rehabilitation and development rates, which should steadily increase access to the higher grade Deep Eastern Candelaria production area. As a result, we are expecting to achieve high throughput and grades in the second half of 2024 as planned. The slides that accompany this call, available on our website, include a brief video that shows the operations of the new ventilation fans that were installed at the surface of the shaft.

Michael Steinmann: As a result, we are expecting to achieve higher throughput and rates in the second half of 2024 as planned. The slides that the company is called, available on our website, include the brief video that shows the operations of the new ventilation fans that were installed at the surface of the chef. The fully concrete lined 5.5 meter diameter by 580 meter deep water group of ventilation chef, that was completed last December.

Speaker Change: Our installed at the surface of the shaft fully concrete line five five meter diameter by 580 <unk>, while they don't put ventilation shaft that was completed last December.

Michael Steinmann: This is a fully concrete-lined 5.5 meter diameter by 580 meter deep Guadalupe Ventilation Shaft that was completed last December. I'd like to congratulate the team on the successful completion of this large, complex project. Silver production was also impacted by weather-related disruptions at Dolores and Salamoro. At Dolores, open pits, geotechnical challenges hampered ore tons mined, and unusually prolonged dry conditions limited water availability, which impacted the leaching site. This resulted in lower grades and a low ratio of ounces recovered to ounces stacked during the quarter.

Michael Steinmann: I'd like to congratulate the team on the successful completion of this large, complex project. The production was also impacted by weather-related disruptions at the Lawson Salomoral, at the Lawres Open Pitch Geotechnical Challenges, Hempbert Orton's Mind, and unusually prolonged fire conditions, limited water availability, which impacted the region's cycle. This resulted in lower grades and low ratio of answers recovered to amounts of stacked during the quarter. We now expect to extend or stack activities and increase heat irrigation rates throughout Q3, given some stockpile processing and the start of the rainy season. At Salomoral, heavy precipitation in South and Argentina restricted access to the satellite Nathi zone, impacting throughput and grades.

Speaker Change: I'd like to congratulate the team on the successful completion of this large complex project.

Speaker Change: Silver production was also impacted by weather related disruptions at Dolores and Cerro Moro at Dolores open pit geotechnical challenges hampered ore tonnes mined and unusually prolonged dry conditions limited water availability, which impacted the leaching stack.

Speaker Change: This resulted in lower grades and low ratio of ounces recovered two ounces stacked during the quarter.

Michael Steinmann: We now expect to expand over-stacking activities and increase heat irrigation rates throughout Q3, including some stockpile processing at the start of the range. At Cerro Moro, heavy precipitation in southern Argentina restricted access to the satellite NATI zone, impacting throughput and grade. We have regained access to NATI and expect to make up the Q2 shortfall in production during the remainder of the year. However, in Aminiera, Florida, unusual heavy rains restricted access to the site and resulted in a 10-day suspension of ore processing during the quarter.

Michael Steinmann: We now expect to extend or second activities and increased litigation rates throughout Q3.

Michael Steinmann: Some stockpile processing at the start of the rainy season.

Michael Steinmann: At Cerro Moro heavy precipitation in south in Argentina restricted access to this otherwise not be impacting throughput and grades.

Michael Steinmann: We have regained access to Nathi and expect to make up the Q2 shortfall in production during the remainder of the year. A Minera Florida, unusual heavy rain to restrict its access to the site, and resulted in a 10-day suspension or processing during the quarter. We have now upgraded the road access to both Salomoral and Minera Florida, which should have used the impact and heavy rainfall events in the future. We produced 220.4,000 ounces of gold in Q2, slightly below our expected range of 221 to 252,000 ounces. Continued strong performance at JAPO-Bina and higher gold rates and recoveries at the opinion helped offset the weather-related impacts at Salomoral, the Lawres, and Minera Florida.

Michael Steinmann: Have regained access to nasty and expect to make up the Q2 shortfall in production John as a reminder of the year.

Speaker Change: I mean, you had a florida unusual heavy rains have restricted access to the site and resulted in a 10 day suspension or processing during the quarter.

Michael Steinheim: We have now upgraded the road access to both Cerro Moro and Minera Florida, which will reduce the impact of heavy rainfall events in the future. We produced 220.4 thousand ounces of gold in Q2. Slightly below our expected range of 221 to 252,000. However, continued strong performance at Jacobina and higher growth rates and recoveries at El Peon helped offset the weather-related impacts at Cerro Moro, Dolores, and Minera Florida. Costs in Q2 came in better than expected, with all in sustaining costs, excluding any readjustments for both the silver and gold segments, below our guidance ranges for the quarter.

Michael Steinmann: We have now upgraded the road access to both Cerro Moro at Minera, Florida.

Michael Steinmann: It's used the impact and heavy rainfall events in the future.

Michael Steinmann: Produced 224000 ounces of gold in Q2 slides.

Michael Steinmann: Slightly below our expected range of 221 to 252000 ounces continue.

Michael Steinmann: Continued strong performance at Jacobina, and higher gold grades and recoveries and Jan <unk>.

Speaker Change: The weather related impact a title model So Lewis I.

Doug: Absolutely Doug.

Michael Steinmann: Costs in Q2 came embedded unexpected, with all in-sustaining costs excluding an area adjustments for both the silver and gold segment below our guidance ranges for the quarter. Silver segment all-in sustaining costs were $18.12 per ounce, excluding an area adjustment that increased costs by 95 cents per ounce. Gold segment all in-sustaining costs were $1,465 per ounce, excluding an area adjustments that increased costs by $19 per ounce. In total, $26.7 million of area adjustments were included in Q2 production costs. The enemy adjustments are primarily related to projections of higher future unit cost at the Lawres to extract the in-heat inventory once or stacking activities have been completed.

Speaker Change: Costs in Q2 came in better than expected with all in sustaining costs, excluding on our readjustments for both silver and gold segment below our guidance ranges for the quarter.

Michael Steinheim: Silver segment all in sustaining costs were $18.12 per ounce, excluding an NRV adjustment that increased costs by $0.95 per ounce. Gold segment oil in sustaining costs were $1,465 per ounce, including NRV adjustments that increased costs by $119 per hour.

Speaker Change: Silver segment, the all in sustaining costs were $18 12 per ounce, excluding in a readjustment that increased cost by $95 per ounce gold segment, all in sustaining cost per 1000 foot.

Michael Steinmann: $465 per ounce, excluding via testaments of increased costs by $119 per ounce.

Michael Steinmann: In total, $26.7 million of NRV adjustments were included in Q2 production costs. The NRV adjustments are primarily related to projections of higher future unit costs at Dolores to extract the in-heat inventories once ore stacking activities have been completed. We are on track with our major projects for the year. The new dry stack tailing storage facility at Waran is on schedule to be completed in the second half of 2024 and will be commissioned thereafter. The construction of the PACE plant project at Timmins is on schedule to be completed in Q3 2024. This will enhance ore extraction and improve mine stability at the Belgrade mine.

Michael Steinmann: In total $26 $7 million of panel via adjustments were included in Q2 production costs. The NMB adjustments primarily related to projections of higher future unit costs at Dolores to XT.

Michael Steinmann: Correct.

Michael Steinmann: Inventories once or stacking activities have been completed.

Michael Steinmann: They are on track with our major projects for the year. The new dry stack sailing storage facility at Guarón is on schedule to be completed in the second half of 2024 and will be commissioned there-up. The construction of the paste plant project at Timmons is on schedule to be completed in Q3 2024. This will enhance our extraction and improve mine stability at the Brow Creek Mine. A chuckle bean will continue to advance plant upgrades and to stabilizing throughput at 8400 tons per day and recoveries at 96%. They're also progressing the optimization study to optimize the long-term economic and growth potential in Chuckle Bean.

Michael Steinmann: We're on track with our major projects for the year, the new dry stack tailings storage facility has brought on is on schedule to be completed in the second half of 2024 and will be commissioned thereafter.

Michael Steinmann: The construction of the paste ponds project attainments.

Michael Steinmann: Scheduled to be completed in Q3 2024.

Michael Steinmann: This will enhance our extraction unimproved mind stability at the Bell Creek mine.

Michael Steinmann: At Chaco Bina, we continue to advance plant upgrades aimed at stabilizing throughput at 8,400 tons per day and recoveries at 96%. They're also progressing the optimization study to optimize the long-term economic and growth potential of Jacobean. At Escobar, we met with several Guatemalan government institutions to support the LL169 consultation process over Q2 and into Q3. During this period, we also hosted compliance visits by the Ministry of Energy and Mines and the Ministry of the Environment under the Care Maintenance Program for Escobar. The appointment of the Vice Minister of Sustainable Development, who will assume responsibility for overseeing the consultation process, remains to be time.

Michael Steinmann: Chuck will be and that will continue to advance planned upgrades and to stabilizing throughput at 8400 tons per day and recoveries at 96%.

Michael Steinmann: We're also progressing the optimization study to optimize the long term economics and growth potential and chuckled.

Michael Steinmann: At Escobar, we met with several of what the Mountain Government institutions to support the LL169 consultation process over Q2 and into Q3. Given the successful commissioning of the substantial lack of ventilation system upgrade in July, they are maintaining our operating outlook for production, cash costs, the all-in-sustaining costs, and capital expenditures in 2024. While they anticipate children go production to fall within our original guidance range, they expect production for both to be more heavily weighted to the fourth quarter of 2024, then originally indicated in our quarterly operating outlook, and for annual civil production to be covered the low end of the annual guidance range.

Speaker Change: Escobar the message several Guatemalan government institutions to support the allo <unk> consultation process over Q2 and into Q3.

Speaker Change: During this period, we also hosted compliance visits by the Ministry of Energy and mines Ministry of environment, and the account maintenance program for <unk>.

Speaker Change: The appointment of the Vice Minister of sustainable development, who will assume responsibility for overseeing that consultation process remains timely.

Michael Steinmann: Given the successful commissioning of the substantial LaGuardia Ventilation System upgrade in July, we are maintaining our operating outlook for production, cash costs, law and sustaining costs, and capital expenditures in 2020. While we anticipate silver and gold production to fall within our original guidance range, we expect production for both to be more heavily weighted to the fourth quarter of 2024 than originally indicated in our quarterly operating outlook, and for annual silver production to be towards the low end of the annual guidance.

Speaker Change: Given the successful commissioning of the substantial backlog of anti medicine system upgrade in July maintaining our operating outlook for production cash costs, the all in sustaining costs and capital expenditures in 2020.

Speaker Change: While we anticipate silver and gold production to fall within our original guidance range.

Speaker Change: <unk> production for both to be more heavily weighted to the fourth quarter of 2024 than originally indicated in our quarterly operating outlook.

Speaker Change: <unk> annual silver production to be towards the low end of the annual guidance range.

Michael Steinmann: With improvements in our balance sheet, WQ2, next step declined to $472.3 million, to maintain our base cash dividend at 10 cents per common share. We look forward to increasing levels of free cash flow from back half-weighted production in 2024.

Michael Steinmann: With improvements in our balance sheet in WQ2, net debt declined to $472.3 million. We maintain our base cash dividend at $0.10 per common share. We look forward to increasing levels of free cash flow from back half-weighted production in 2024. Together with the other members of our management team, we will now be happy to take your questions.

Speaker Change: This improvement in our balance sheet, our Q2 net debt declined to $472 3 million.

Speaker Change: We maintain our base cash dividend at <unk> <unk> per.

Speaker Change: Per common share.

Speaker Change: We look forward to increasing levels of free cash flow from back half weighted production in 2024.

Michael Steinmann: To other members of our management team, we would now be happy to take your questions.

Speaker Change: Does that make the other members of our management team, who will now be happy to take your questions.

Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speaker phone, please lift the hands up before pressing any keys. One moment, please, for your first question.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be answered in the order they are received. Should you wish to decline from the polling process, please press star followed by the. If you are using a speakerphone, please lift the handset before pressing any key. One moment, please, for your first question. The first question comes from Cosmos Chiu with CIBC. Your line is now open.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the wondering you touched on phones, you will hear three Tom prompt acknowledging your request and their questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by the Q.

Speaker Change: You are using a speaker phone please lift the handset before pressing any key one moment. Please for your first question.

Cosmos Chiu: Hi, thanks, Michael. Um, maybe my first question is about La Colorado. Michael, you kind of touched on that.

Cosmos Chiu: Your first question comes from Cosmos Q with CIBC. Your line is now open.

Cosmos <unk>: Your first question comes from Cosmos <unk> with CIBC. Your line is now open.

Cosmos Chiu: Hi, thanks, Michael and team. Maybe my first question is on La Colorado. Michael, you touched on it. La Colorado, the ventilation shaft is now in place. Sounds like it's going pretty well. Could you maybe elaborate? Is it functioning as expected? How is that, you know, sort of help air flow?

Cosmos <unk>: Hi, Thanks, Michael and team.

Cosmos Chiu: La Colorado, the ventilation shaft is now in place. Sounds like it's going pretty well. Um, could you maybe elaborate? Is it functioning as expected? Uh, how has that, you know, sort of helped airflow?

Cosmos <unk>: Maybe my first question is on La Colorado, Michael you kind of touched on it.

Speaker Change: <unk> ventilation shaft is now in place it sounds like it's going pretty well.

Speaker Change: Could you maybe elaborate is it functioning as expected.

Speaker Change: That sort of helped airflow and ultimately I guess, what I'm trying to get choice.

Cosmos Chiu: And ultimately, I guess what I'm trying to get to is, in terms of getting to 2,000 times per day, you said you're going to get to it by year end, along with higher grades. Is it going to be more a straight line, sort of increase from now until the end, or is there going to be some kind of step change? And is that going to be part of the fact that, as you mentioned, overall Q4 is going to be stronger than Q2.

Cosmos Chiu: And, and ultimately, I guess what I'm trying to get to is, um, in terms of getting to 2,000 times per day, you said you're going to get to it by year end, along with higher grades. Is it going to be more of a straight line sort of increase from now until then? Or is there going to be some kind of step change? And is that going to be part of the fact that, as you mentioned, overall, Q4 is going to be stronger than Q3?

Speaker Change: In terms of getting to 2000 tons per day, you said youre going to get to it by year end along with higher grades.

Speaker Change: Is it going to be more straight line sort of increase from now until then or is there going to be some kind of step change and is that going to be part of the fact that as you mentioned overall Q4 is going to be stronger than Q4.

Michael Steinmann: Yes, thanks, Cosmos.

Michael Steinmann: Yes, thanks, Cosmos. Yeah, the shaft completion and the installation and startup of the fan were right on time, as we indicated for the, you know, since the beginning of the year, that would happen mid-year. It happened mid-year. It looks very exciting on the results side, on the impact on the mine of that shaft, which, as you know, was a multi-year project, really, to kind of bring us back on track here with the production in La Corada.

Cosmos: Yes, Thanks Cosmos.

Michael Steinmann: Yeah, the shaft completion and the installation and startup of the fan was right on time, as we indicated for the, you know, since beginning of the year that will happen mid year. It happened mid year, and it looks very exciting what we see on the, on the result side on the impact to the mind of the shaft, which, as you know, was a multi year project ready to kind of bring us back on track here with the production line.

Cosmos: Yes.

Cosmos: The SaaS completion.

Speaker Change: Installation and startup costs.

Speaker Change: Defense was right on time as we indicated.

Speaker Change: Forgetting off the units will happen mid year it happened midyear.

Speaker Change: It looks very exciting what we see.

Speaker Change: Results had an impact.

Jesse: Hey, Jesse Nonetheless, multiyear protect waiting to kind of bring us back on track here, but.

Steven Busby: But I don't know about Steve; maybe give some luck.

Michael Steinmann: But, Steve, maybe you could give some more details. Sure, and good morning, Cosmos. Thanks for the question. I have to say we're incredibly happy with the results of this new shaft. Immediately, when we turned the fans on, on July 11, we increased overall flow rates into the mine by about 200,000, 300,000 cubic feet per second of airflow, or feet per minute, sorry. And immediately, we saw temperatures drop in the Candelaria East zone by three degrees Celsius.

Speaker Change: Steve maybe just sure good morning Cosmos. Thanks for the question.

Steven Busby: Sure, and good morning, Cosmos. Thanks for the question. I have to say we're, we're incredibly happy with the results of this new shaft. Immediately when we turn the fans on July 11th, we increased overall flow rates into the mind by about 200,000, 300,000 cubic meter a feet per second of air flow or a few feet per minute. Sorry. And immediately we saw temperatures drop in the Candolary East on by three degree wetball Celsius. So substantial improvement, which led immediately we saw a pump in tonnage of 25% over what we've been seeing up until that point through the year. We were about 1,400 tons a day going in for the year before we started that fan.

Speaker Change: We're.

Speaker Change: Frankly happier with the results of this new shaft immediately when we turn the pads.

Speaker Change: July 11th we.

Speaker Change: Increased overall forwards into the mine.

Speaker Change: About $200 300000 cubic meters.

Speaker Change: <unk> per second.

Speaker Change: First of all.

Speaker Change: Our feet per minute.

Speaker Change: And immediately we saw temperatures drop and the candle or are you selling by three degrees.

Steve: So, a substantial improvement, which led immediately to a bump in tonnage of 25 percent over what we'd been seeing up until that point in the year. We were about 1,400 tons a day going in for the year before we started that fan. We're now up at around 17, a little over 1,700 tons a day. So, between now and the end of the year, the other thing I wanted to mention is that we have also bumped our development up 10 percent from where we were prior to when that fan started up.

Speaker Change: So a substantial improvement, which led immediately we saw a bump in tonnage of 25% over what we've been seeing outcome until that point through the year. We were about 1400 tonnes a day going in.

Speaker Change: For the year before we started.

Steven Busby: We're now up at around 17, a little over 1,700 tons a day. So, between now and the end of the year, the other thing I wanted to mention is that we also bumped our development up 10% from where we were prior to when that fans started up. So, within the two and a half, three weeks of running the fan, we've seen an incredible boost of production and development rates. That'll continue to ramp up. You know, I think for purposes of quarterly reporting, it'll be a bit of a straight, you know, line ramp up. Obviously, day to day, there's fluctuations that take place.

Speaker Change: We're now up at around 17 little over 17, 100 tonnes a day so between now and the end of the year. The other thing I wanted to mention is that we also bumped our development.

Speaker Change: From where we were prior to the one that im sorry.

Steve: So, within the two and a half, three weeks of running the fan, we've seen an incredible boost in production and development rates, and that'll continue to ramp up. You know, I think for purposes of quarterly reporting, it'll be a bit of a straight line ramp up. Obviously, day-to-day, there are fluctuations that take place. But we're feeling good that we're starting from a good base, and we'll ramp up through the rest.

Speaker Change: Within the 253 weeks of running the FAA, we've seen incredible boost production and development rates.

Speaker Change: <unk> continued to ramp up.

Speaker Change: I think for purposes of quarterly reporting that it'll be a bit of a straight line.

Speaker Change: I'd wrap up obviously day to day, there is fluctuations that take place.

Steven Busby: But we're feeling good that we're starting from a good base, and we'll ramp up through the rest of the year.

Speaker Change: But we're feeling good that we're starting from a good base and will ramp up through the rest of the year.

Cosmos Chiu: Yeah, that's great to hear.

Cosmos Chiu: Yeah, that's great to hear. And then maybe on the quarterly guidance as well. Michael, as you mentioned, Q2, due to weather-related issues, silver production was lower than your quarterly guidance. However, I do see that your cost on sustaining costs was also lower or better than your quarterly guidance. So how were you able to achieve that lower cost despite lower production? And ultimately, what is your ability to sustain those lower costs on a going for basis? Can we see that once again in terms of that, you know, better cost once again in Q3 and Q4?

Speaker Change: Yes, that's good.

Cosmos Chiu: And then maybe on the quarterly guidance as well. Michael, as you mentioned, due to weather-related issues, silver production was lower than your quarterly guidance. However, I do see that your cost on sustaining costs was also lower or better than your quarterly guidance. So how would we achieve that lower cost despite lower production, and ultimately what's the, you know, your ability to sustain those lower costs on a go for a basis. Can we see that once again in terms of that, you know, better cost once again in keeping for. So don't forget that especially at La Palada and other places with increased production.

Speaker Change: And then maybe on the quarterly guidance as well.

Speaker Change: Well as you mentioned.

Speaker Change: Q2, due to weather related issues.

Speaker Change: Silver production was lower than your quarterly guidance. However.

Speaker Change: I do see that.

Speaker Change: Your cost on sustaining cost was also lower.

Speaker Change: Better than quarterly guidance, so how we would achieve that lower costs, despite lower production and ultimately what's the.

Speaker Change: <unk>.

Speaker Change: Your ability to sustain those lower costs on a go forward basis can we see that once again in terms of that.

Speaker Change: Better cost once again in Q4 and Q4.

Michael Steinmann: Don't forget that, especially at La Colorado and other places with increased production later in the year, and La Colorado is the best example of that, we obviously have a fixed cost there, and having a larger denominator will bring the cost per ounce right down. That's really the reason why we forecast those lower costs at La Colorado going into the year, really based on that ramp-up of production. So that's, of course, still there for us.

Speaker Change: Well don't forget that especially at La Colorado.

Speaker Change: Prices with increased production.

Michael Steinmann: Later in the year, in La Palada's best example of that, we obviously have a fixed cost there, and having a larger denominator will bring the cost barons right down. That's really the reason why we forecast those lower costs that La Palada go into the year, really based on that ramp up of the production. So that's, of course, still there, still there for us.

Speaker Change: Later in the year.

Tom: Thanks, Tom.

Tom: Thanks.

Speaker Change: <unk> costs, there and having a larger denominator of old Brenda cost per ounce right.

Speaker Change: The reason why we forecast those lower cost a lot below that level and for the year really based on that time, Bob Boston production.

Speaker Change: Of course still Theyre still there for us.

Steven Busby: Yeah, just add cause most I think in the first half of the year, some of the lower costs we've seen has been related to the timing of our inventory of byproduct credit sales relative to what we're producing. We sold a bit more byproduct than what we produced during that period.

Unknown Executive: Yeah, just to add, Cosmos, I think in the first half of the year, some of the lower costs we've seen have been related to the timing of our inventory of byproduct credit sales relative to what we're producing. We sold a bit more byproduct than we produced during that period. So that'll offset as we look to the second half of the year. As Michael says, we do anticipate substantially reduced unit costs per ton at La Colorado.

Speaker Change: Yes.

Speaker Change: Just.

Speaker Change: So I think in the first half of the year some of the lower cost we have seen has been related to.

Tom: The timing of our inventory.

Speaker Change: Byproduct credit sales relative to what we're producing we sold before byproduct wont be produced.

Steven Busby: So that that a loss that as we look to the second half of the year, as Michael says, we do anticipate reduced, you know, unit cost for tons substantially at La Palada. We are seeing some improvements that we've made at several moral and jack of being that they're coming in a pretty good cost for ton. So we kind of projected that out with the actual byproduct credits.

Tom: During that period, so that will offset as we look at it.

Tom: The second half of the year as Michael says, we do anticipate reduced unit cost per tonne substantially all Colorado, we are seeing some.

Unknown Executive: We are seeing some improvements that we've made at Cerro Moro and Jacobina; they're coming in at pretty good costs per ton. So we've kind of projected that out with the actual byproduct credits, and that's what we're saying that will come in in line with what we guided for our cash and East Coast costs. And one last point: Cosmos.

Michael Steinmann: Improvements that we've made at Cerro Moro and Jack Athena Theyre coming in a pretty good cost per tonne. So we've kind of projected that out.

Tom: Actual.

Tom: Byproduct credits announced where we're saying that we feel will come in.

Steven Busby: We're not sure we're saying that we feel will come in line with what we guided for our cash and East Coast cost.

Michael Steinmann: In line with what we guided for.

Tom: Gross cost from this year.

Michael Steinmann: One last point, Cosmos Chiu, as I always mention, on the coast side, currency fluctuations have a big impact in our coast. We saw a devaluation in the quarter, especially in the Mexican peso and the Brazilian rail. And that had a positive impact on our coast and will continue to do so if that continues down the road.

Tom: One last point.

Tom: Yes.

Unknown Executive: As I always mention, on the cost side, currency fluctuations have a big impact on our costs. We saw a devaluation in the quarter, especially in the Mexican peso and the Brazilian real, and that had a positive impact on our costs and will continue to do so if that continues down the road. Just on the flip side of that, obviously, when you have a devaluation of the currency, we see kind of an increase in our non-cash tax expense due to those currency fluctuations. So you see that in our earnings numbers, but that's a non-cash tax expense there.

Tom: Sales months and on the cost side current.

Tom: Currency fluctuations have a big impact on our cost we saw the devaluation in the quarter.

Speaker Change: Firstly on the Mexican peso.

Speaker Change: <unk>.

Speaker Change: And that path.

Tom: Positive impact on our costs and we'll continue to do so we've got continuous down the road.

Michael Steinmann: So just on the flip side of that, obviously, when you have the devaluation of the currency, we see an increase of our non-cash tax expense due to those currency fluctuations. So you see that in our earnings numbers, but that's a non-cash tax expense there. And I really like to see that the positive impact to our cost that we have now, and it's very, very exciting combination of lower cost and higher mental prices, which obviously must reflect.

Tom: On the flip side of that obviously.

Tom: The devaluation of the currency we see.

Tom: Kind of an increase up however, noncash tax expense.

Tom: Due to those currency fluctuations, so youll see that.

Tom: Our.

Tom: Our earnings numbers.

Speaker Change: That's it.

Tom: So it's a noncash.

Tom: Tax expense there.

Unknown Executive: And I really like to see the positive impact on our costs that we have now. It's a very, very exciting combination of lower cost and higher level projects, which obviously must reflect the reflection of that obviously must be the record cast.

Speaker Change: <unk> like to see the positive impact to our cost.

Tom: Now.

Tom: Alright, very exciting combination of lower cost and higher metal prices.

Tom: Steve.

Michael Steinmann: The reflection of that, obviously, must have record cost for.

Tom: Okay.

Steve: That reflects on all stopped obviously I must have record cash flow.

Michael Steinmann: I agree.

Cosmos Chiu: And maybe one last question on Escobar. It seems from your MD&A meetings are still continuing into Q3, despite the fact that the appointment of the Vice Minister of Sustainable Development is still pending. Am I reading that correctly?

Michael Steinmann: And maybe one last question on basketball: it seems like from your MBA meetings are still continuing into Q3, despite the fact that the appointment of the vice minister of sustainable development still pending. Is that in my reading that correctly, and is there any more updates in terms of Guatemala and basketball? Yeah, we have actually quite a large number of meetings with government officials during the quarter. And I think, you know, after a bit of slow startup, I think of the new government. They have most of the people in place. There's still a few people missing to be put there, but I think the other meetings scheduled between us and the government officials has definitely improved.

Tom: Great and maybe one last question on ESCO, Paul It seems like from your MD&A meetings are still continuing into Q3, despite the fact that.

Speaker Change: Your appointment.

Tom: And as Gerald sustainable development is still pending.

Speaker Change: Is that.

Speaker Change: By reading that correctly and is there any more update in terms of Guatemala basketball.

Michael Steinmann: And are there any more updates in terms of Guatemala and Escobar? Yeah, we actually had quite a quite a large number of meetings with government officials during the quarter. And I think, you know, after a bit of a slow startup, I think of the new government. They have most of the people in place; there's still a few people missing to be put there. But I think the other meeting schedule between us and government officials has definitely improved. And I look forward to continuing and going back into the full consultation meetings that we need to have to advance this.

Tom: Yes.

Tom: Quite a large number of meetings, but.

Speaker Change: Government of vessels during the quarter.

Speaker Change: And after a bit of slower startup I think of the new government. They have most of the people in place are still a few people missing.

Speaker Change: B B.

Speaker Change: Put there but.

Speaker Change: Thank you you have to meet the schedule.

Ellen: NASA and Ellen.

Speaker Change: Government officials as definitely improve.

Michael Steinmann: And looking forward to continue and go back into that, you know, the full, the full consultation meetings that we need to have to advance this.

Speaker Change: Looking forward to continue on go back into that.

Speaker Change: For the full consultation meetings that we need to have advanced.

Cosmos Chiu: Great, that's great to hear.

Cosmos Chiu: Great, that's great to hear. And thanks again, Michael, Steve, Joanne, and the team for those other questions.

Speaker Change: Great that's great to hear and thanks again, Michael Stevens Julien.

Cosmos Chiu: And thanks again, Michael, Steve, and Jordan and team, and those other questions. Thanks, Carlos.

Speaker Change: Those are the questions.

Cosmos <unk>: Thanks Cosmos.

Don Demarco: Your next question comes from Don DeMarco with National Bank Financial. Your line is now open.

Operator: Your next question comes from Don DeMarco with National Bank Financial. Your line is now open.

Speaker Change: Your next question comes from Don Demarco with National Bank Financial Your line is now open.

Don Demarco: Thank you, Operator and Michael and team. Maybe first question, just continuing on with basketball. So, you know, I've been looking at the price of the contingent value rights, and they've eased a little bit over the recent months. Do you think this is a fair indicator of the likelihood of a restart or just the, the tenor of activities that at basketball related to the consultation process? You know, I will be careful when you look at the price of the contingent value rights. You know, there is a three hundred and 50 million CVRs out there. So a large number, and when you look at the trading numbers, this is a very limited trading on those CVRs.

Don Demarco: Thank you, Operator, and Michael and team. Maybe my first question, just continuing on with Eskimo. I've been looking at the price of the contingent value rights, and they've eased a little bit over the recent months. Do you think this is a fair indicator of the likelihood of a restart or just the tenor of activities at Escobar related to the consultation process?

Don Demarco: Thank you operator, and thank Michael and team maybe.

Don Demarco: Maybe first question just continuing on with basketball.

Don Demarco: So I've been looking at the price of the contingent value rights and they've eased a little bit over the recent months.

Speaker Change: Do you think this is a fair indicator of the likelihood of a restart or just.

Speaker Change: The tenors activities that basketball related to the consultation process.

Michael Steinmann: I would be careful when you look at the price of the contingent value, right, as you know there are 300 and... 15, 30 million CVRs out there, so a large number. And when you look at the trading numbers, this is a very limited trading on those CVRs. So I, you know, they obviously follow the Pan American share price, of course. And then I think, you know, the fact that the new government needed a bit longer to set everything up here could have had an impact on that, but I will not read too much into it, as I said, as it is a very, very limited trading of those CVRs.

Speaker Change: I won't be careful when you look at the price of the contingent value rights as you know there is about 300.

Speaker Change: Thank you David $30 million.

Speaker Change: Cvr's out there so a large number and when you look at the trading numbers.

Speaker Change: Pigment to trading on those.

Speaker Change: On both CVR so.

Don Demarco: So I, you know, they obviously follow the Pan American share price, of course. And then I think, you know, the fact that the new government needed a bit longer to set everything up here. Could have had an impact with that, but I would not read too much into it as a status. It is a very, very limited trading of those CVRs. Okay, and then just, I mean, it's encouraging to hear that there's a number of meetings that have been held. But is there any, you know, visibility for next meetings or the filling of that vacancy?

Speaker Change: They obviously follow.

Speaker Change: Pan-american share price of course.

Speaker Change: Thanks.

Speaker Change: Locked up.

Speaker Change: New government needed a bit longer to set everything up here <unk>.

Speaker Change: APAC was up I will not read too much into as I said I think there's a very very limited trading off dose CVR.

Don Demarco: Okay. And then just, I mean, it's encouraging to hear that there are a number of meetings that have been held. But is there any visibility for next meetings or the filling of that vacancy? This is just kind of maybe repeating some of the questions that were asked by the last caller, but just wondering what we might anticipate in the coming months in this process.

Speaker Change: Okay.

Speaker Change: And then just I mean, it's encouraging to hear that Theres a number of meetings that had been held.

Speaker Change: But is there any.

Speaker Change: Visibility for.

Speaker Change: Next meetings or the ceiling of that vacancy. This is just kind of maybe repeating some of the questions that were asked by the last caller, but but just wondering what we might anticipate in the coming months on this process.

Michael Steinmann: This is just kind of maybe repeating some of the questions that were asked on the last caller, but just wondering what we might anticipate in the coming months on this process. Okay, I mean, we anticipate that that role will obviously be filled by the government in time, and we will pick up, I think, with that kind of the style of meetings we had before.

Michael Steinmann: Look, I mean, we anticipate that that role will obviously be filled by the government in time, and we will pick up, I think, with that, the kind of style of meetings we had before. As I said, at the moment, all I can say is that, you know, there has been quite an impressive number of meetings with government officials between the company and us. And, you know, it was really quite a slow start to the year with the new government, which There's obviously a new government, as you can imagine, a lot of new officials in place, brought up to speed who, you know, have other issues to deal with in the country than just as global as you can imagine. And, you know, now they're in place, most of them probably for five, six months now. So I think I think we see kind of a normalized, normalizing meeting schedule here in the.

Speaker Change: We anticipate that that role will obviously be filled by the government in time.

Speaker Change: It will pick up.

Speaker Change: With that.

Speaker Change: Kind of style meetings, we have before us.

Michael Steinmann: And as I said at the moment, all I can say is that, you know, there has been a number of meetings with government or proposals between the company and us, and, you know, that's really, like quite a slow start of the year with the new government, which kind of has to be expected, obviously, a new government, as you can imagine, a lot of new officials in place that need to be brought up to speed, that, you know, have other issues to deal with in the country than just as the public can imagine, and, you know, now they're in place most of the time, probably five, six months now, so I think I think we see kind of a normalized, normalizing meeting schedule here in the future.

Speaker Change: At the moment.

Speaker Change: I can say is that.

Operator: Ordered 2024 Unaudited Results Conference Column Webcast. At this time, all lines are in a listen only mode. Following a presentation, we will conduct a question and answer session.

Speaker Change: Housekeeping.

Speaker Change: Impressive number of meetings with government outside cells preparing the company in Austin.

Speaker Change: <unk>.

Speaker Change: That's great.

Operator: If at any time during this call, you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024.

Speaker Change: Maybe if I can.

Speaker Change: Quite a slow start off the year with the new government, which kind of possibly expect that obviously.

Speaker Change: New government is it kind of imagine a lot of nurofen sheltering in place.

Siren Fisekci: I would now like to end the conference over to Siren Fisekci, VP Investor Relations. Please go ahead. Thank you for joining us today for Pan-American Silver's Q2 2024 Conference Call. This call includes forward-looking statements and information and makes reference to non-GAF measures.

Speaker Change: Up to speed.

Speaker Change: Other issues to deal with in the country.

Speaker Change: Escobar listen cutting matching.

Speaker Change: And now they are.

Speaker Change: And place most of time, probably five six months now so.

Speaker Change: We see kind of that.

Unknown Executive: Please see the cautionary statements in our MDNA use release and presentation slides for our Q2 2024 Unaudited Results, all of which are available on our website.

Speaker Change: Normalized.

Speaker Change: Normalizing be discussing all here in the future.

Don Demarco: Okay, okay, we'll look forward to that. And so next question: like the quarter, do we see a true portfolio effect here? You got lower costs offsetting higher costs at different operations. The cornerstone mines look strong, Jacobean in particular. And now you've got this optimization work that's underway. The mines are running seemingly great at 8,400 tons per day. Are you still, is the optimization still looking at maybe trying to increase that throughput, or what are some of the areas of focus that we can look forward to whenever?

Don Demarco: Okay. We'll look forward to that.

Speaker Change: Okay, Okay, we'll look forward to that and.

Don Demarco: And so next question, the quarter, we see a true portfolio fact here. You got lower costs, offsetting higher costs at different operations. The cornerstone mine looks strong, and Jack will be in in particular. And now you've got this optimization work that's underway.

Speaker Change: So next question on the quarter, we see a true portfolio facts here, you've got lower costs offsetting higher costs with different operations. The cornerstone mines look strong Jacobean in particular now.

Michael Steinmann: I'll now turn the call over to Michael Steinmann, Pan-American President and CEO. Thanks, Siren, and thank you everyone for joining the call. Our operations generate its record cash flow before changes in working capital of $203.3 million in Q2. This resulted in $102.1 million free cash flow in Q2. Balance sheets, grant further improved. The cash balance is rising to $337.2 million at Q3, an increase of $36.1 million from the previous quarter. This strong financial performance was impacted by an unusual income tax expense driven primarily by foreign currency exchange rate fluctuations in the quarter.

Speaker Change: You've got this optimization work that's underway.

Michael Steinmann: The mines running seemingly great at 8400 tons per day, are you still, is the optimization still looking at maybe trying to increase that throughput? Or what are some of the areas of focus that we can look forward to whenever that report will be released? Yeah, very, very excited about Jackabina, and there's a very, very strong cash flow over for us, very strong production, you know, very, very long line life. So yes, we're still working on the optimization.

Speaker Change: The mine is running seemingly great at 8400 tons per day are you still is your optimization is still looking at maybe trying to increase that throughput or what are some of the areas of focus that we can look forward to whenever that report will be released.

Michael Steinmann: Yeah, very excited about Jacobina. And as you see, very, very strong cash flow for us, very strong production, you know, very, very long mine life.

Speaker Change: Yes, we're very excited about our company.

Speaker Change: Very very strong cash flow work for us very strong production.

Speaker Change: And a very very long mine lives.

Speaker Change: Yes, we're still working on the optimization I think there is.

Michael Steinmann: So, yes, we're still working on the optimization. I think there is much more to do with Jacobina, but maybe Steve, you want to give that a shot? I know you're not ready yet with the study, but maybe a few little points. Sure. Thanks for the question, Don. Yeah, the optimization work is proceeding at full speed. We are seeing benefits to changing some of the mining methods, particularly at depth, as we've talked about in the past, that would allow us to capture more of the resource recovery, reserve recovery with the same development. That...

Steven Busby: I think there is; there is much more to do with Jackabina, but maybe Steve, if you want to get that. I know you're not ready yet; we're just starting to do anything about that. Maybe a few of the funds. Sure.

Speaker Change: That's much more to do with telco being down, but maybe Steve you want to just I.

Steve: I know you are not ready yet.

Steve: Thank you.

Steve: A few of them.

Steven Busby: Thanks for the question, Dom. Yeah. The optimization work is proceeding at full bore. We are seeing benefits to changing some of the mine methods, particularly at depth, as we've talked in the past that would allow us to capture more of the resource recovery, reserve recovery with the same development. That could lead to higher throughput. You kind of, you kind of said it well. We're really happy running 8400 tons a day. We got a throttle there. Everything's coming in line. We're making a few upgrades to circuits and the process plan, a few upgrades, and some of the systems in the mine. We're very happy with our training there.

Steve: Sure. Thanks for the question Dan, Yes, the optimization work is proceeding well bore.

Michael Steinmann: Namely, devaluations of the Presivian Real and the Mexican peso, which was used foreign-dominated deductible tax attributes as well as inflation adjustments on monetary liability in Argentina. The report in that last Q2 of 21.4 million or six cents per share was significantly impacted by the $93.1 million income tax expense at a $26.7 million naturalizable value inventory expense. Adjusted earnings were $40 million of $11 cents per share. The impact of the inflation driven Argentine income tax, which was not adjusted, reduced adjusted earnings by $3 cents per share.

Speaker Change: We are seeing benefits is changing some of the mining methods, particularly as we talk.

Steve: <unk>.

Steve: Would allow us to capture more of the resource recovery reserve recovery with the same development.

Steve: raze, Monica Moretto. Circuits in the process plan, a few upgrades in some of the systems in the mine, we're very happy with where it's running there, and we want to make sure that the optimization study is done in a way that will achieve the same kind of stable, steady-state run at a higher throughput, with an understanding of all aspects of that. So there's still a lot of work to do. We're still talking, you know, sometime in the first half of next year to come out with the results. We do, I would say, tend to think it's going to show us higher throughput, but I don't really want to give any numbers on that.

Dan: Is that correct.

Speaker Change: Leading to the higher throughput.

Speaker Change: You kind of you kind of said it well, we're really happy to broadening maybe 400 tons a day, regardless throttle there.

Speaker Change: The thing is coming in line, we're making a few upgrades.

Speaker Change: Sure Crimson necrosis plan, a few upgrades and some of the systems and the mine, we're very happy with where it's running there and we wanted to make sure that the optimization study is done in a way that will.

Don Demarco: And we want to make sure that the optimization study's done in a way that will achieve the same kind of stable steady state run at a higher throughput with understanding all aspects of that. So there's still a lot of work to do. We're still talking, you know, sometime in the first half of next year to come out with the results. We do, I would say, tend to think it's going to show us higher throughput, but I don't really want to give any numbers. Okay, thanks for that, Steve.

Michael Steinmann: Turning to operations, silver production of $4.57 million in Q2 must be lower expected range of $5.36 to $5.78 million for the quarter as continuous ventilation constraints that lack of a radar affected silver grades and through books. I'm very pleased to report that the new ventilation infrastructure was completed at the end of June and commissioning and startup of the new fans started on July 11, 2024 as scheduled and ventilation conditions in the deeper eastern areas of the mine have improved significantly.

Speaker Change: We will achieve the same kind of stable steady state run.

Speaker Change: Higher throughput.

Dan: Understanding all aspects of that so theres still a lot of work to do but we're still talking.

Dan: Sometime in the first half of next year to come out with the results.

Dan: We do.

Dan: I would say tend to think it's going to show us hard throughput, but I don't really want to give any numbers on that right now.

Don Demarco: Okay, thanks for that, Steve. And, well, in the meantime, it's looking great. So, last question. Looking to the Mexican administration, Claudio has been in the seat now for a few months. Have you had a chance to meet with the new administration, and are there any concerns or issues that might potentially develop into concerns in the quarters ahead with this?

Dan: Okay, Thanks for that Steve and well in the meantime.

Don Demarco: And well, in the meantime, it's looking great.

Dan: It's looking great. So last question.

Michael Steinmann: So, last question: looking to the Mexican administration, a cloud has been in the seat now for a few months. Have you had a chance to meet with the new administration? Are there any concerns or issues that might potentially develop the concerns in the quarters ahead with this change? Yeah, the new administration has been elected. You are right, but they are not. They did not take office. Yes. September 1st, development of the change happens. So, it's a bit, a bit, a bit early to want to hear questions. Okay. I think we will continue to happily work with a bit of going to Mexico.

Speaker Change: Looking to the Mexican administration cloudy has been in the seat now for a few months have you had a chance to meet with the new administration.

Michael Steinmann: We are currently accelerating mine rehabilitation and development rates, which has steadily increased access to the higher-grade deep eastern candelaria production areas. As a result, we are expecting to achieve higher throughput and rates in the second half of 2024 as planned. The slides that the company is called, available on our website, include the brief video that shows the operations of the new ventilation fans that were installed at the surface of the chef. The fully concrete lined 5.5 meter diameter by 580 meter deep water group of ventilation chef, that was completed last December. I'd like to congratulate the team on the successful completion of this large complex project.

Speaker Change: Are there any concerns or issues that.

Speaker Change: It might potentially developing concerns.

Dan: In the quarters ahead.

Dan: With this change.

Don Demarco: Yeah, the new administration has been elected. You're right, but they are not. They did not take office. Yes, in the Army.

Speaker Change: Yes, the new administration has been elected yet right, but they're not they don't take office yes.

Dan: September.

Dan: September 1st volatile the change outs and so.

Dan: It's a bit early to answer your question look I think that will continue to happen Embarkment Davita Gulf of Mexico, Mexico has always been a good place for us to embark we have very strong operations in Mexico.

Michael Steinmann: Mexico has always been a good, good place for us to work. We have very strong operations in Mexico. Oh, sorry, sorry October 1st, sorry. Okay, we'll be the change. So, as I said a bit early, but I, you know, I don't see for see any big changes how we work with the government in Mexico. The governments, as you know, change; change every country we are working over time. And we are dealing with very long reserve flights and some of our assets, especially when you look at the luck without a scar. You know, there will be many, many administrations passing while we produce for decades and decades on that asset in the future.

Michael Steinmann: October 1st. Oh, sorry. Sorry. October 1st.

Dan: Oh, sorry, sorry October 1st sorry.

Michael Steinmann: Sorry, that will be the change. So, as I said a bit earlier, but I, you know, I don't foresee any big changes in how we work with the government in Mexico. Governments, as you know, change every country we work in over time, and we are dealing with very long reserve lives in some of our assets, especially when you look at the La Corada scar. You know, there will be many, many administrations passing while we produce for decades and decades on that asset in the future. So I'm very happy to work in Mexico. I don't I don't see any issue at this point. Okay Michael, thanks so much for that, and good luck with Q3. Thank you.

Speaker Change: Okay, what would be the changeover.

Speaker Change: As I said a bit earlier.

Dan: I don't see foresee any big changes, how we work with development in Mexico.

Michael Steinmann: The production was also impacted by weather-related disruptions at the Lawson Salomoral, at the Lawres Open Pitch Geotechnical Challenges, Hempbert Orton's Mind, and unusually prolonged fire conditions, limited water availability, which impacted the region's cycle. This resulted in lower grades and low ratio of answers recovered to amounts of stacked during the quarter. We now expect to extend or stack activities and increase heat irrigation rates throughout Q3, given some stockpile processing and the start of the rainy season.

Dan: Governments.

Speaker Change: Okay change every country, we are working overtime.

Dan: We are dealing with very long reserve lives in some of our assets.

Dan: If you look at <unk> com.

Dan: And our Doubleclick, many many administrations passing.

Dan: We produce for decades and decades on that asset in the future. So.

Michael Steinmann: So, I'm very happy to work in Mexico. I don't see any issue at this point.

Dan: But we are very happy to work in Mexico, I don't see any issue at this point.

Michael Steinmann: Okay, Michael.

Don Demarco: Okay, Michael, thanks so much for that, and good luck with Q3.

Dan: Okay, Michael Thanks, so much for that and good luck with Q3.

Michael Steinmann: Thanks so much for that, and good luck with Q3. Thank you.

Michael Steinmann: Thank you.

Michael Steinmann: At Salomoral, heavy precipitation in South and Argentina restricted access to the satellite Nathi zone, impacting throughput and grades. We have regained access to Nathi and expect to make up the Q2 shortfall in production during the reminder of the year. A Minera Florida, unusual heavy rain to restrict its access to the site, and resulted in a 10-day suspension or processing during the quarter. We have now upgraded the road access to both Salomoral and Minera Florida, which should have used the impact and heavy rainfall events in the future.

Operator: Operator. Hello. Oh, up right there.

Dan: Operator.

Dan: Hello.

Operator: Hello, operator.

Dan: Hello, operator.

Nicholas: Nicholas, if you can hear us here in the Q2, ask a question. Thanks, Michael. I'm taking my question here. I just had a question on Sarah Moro, if I could. I understand that the grades have been a little bit variable here for the previous two quarters, and that's been due to some regulated impacts. But I hope you guys could provide some color on what the next quarter to might look at there with respect to greater than two point. Thank you. Yeah, and it's really interesting on that, not the sound that we're mining that is part of it.

Operator: Nicholas, if you can hear us, you're in the queue to ask a question.

Dan: Nicholas if you can hear as you are in the queue to ask your question.

Nicholas: Thanks, Michael, for taking my question here. I just had a question about Sarah Morrow. I understand that grades have been a little bit variable here for the previous two quarters, and that's been due to some weather-related impacts, but I was hoping you guys could provide some color on what the next quarter or two might look like there with respect to grades. Thank you.

Nicholas: Thanks, Michael Thanks for taking my question here I just had a question on Cerro Moro if I could.

Speaker Change: I understand the grades have been little bit variable here for the previous two quarters in Japan Thats been due to some <unk>.

Michael Steinmann: We produced 220.4,000 ounces of gold in Q2, slightly below our expected range of 221 to 252,000 ounces. Continued strong performance at JAPO-Bina and higher gold rates and recoveries at the opinion helped offset the weather-related impacts at Salomoral, the Lawres and Minera Florida. Costs in Q2 came embedded unexpected, with all in-sustaining costs excluding an area adjustments for both the silver and gold segment below our guidance ranges for the quarter. Silver segment all in-sustaining costs were $18.12 per ounce, excluding an area adjustment that increased costs by 95 cents per ounce.

Dan: These impacts, but I was hoping you guys could provide some color on what the next quarter or two might look like with respect to grades you too. Thank you.

Michael Steinmann: Yeah, it's really hinging on that knotty zone that we are mining that is probably 25 kilometers away from Cerro Moro, a high-grade satellite, and we couldn't really access that site all the time during Q2 because of the really, really strong rains and snowfalls during winter. We are obviously getting now into springtime soon, and access has been re-established. So that's why we're obviously maintaining our outlook for the production there. Let's see if you want to give some details.

Dan: Yes.

Speaker Change: It is really hinging on the not the sone that.

Speaker Change: That we're mining that.

Michael Steinmann: Yeah, I think it was from a plenty of us cloned us away from from Sarah Moro, high grade, high grade satellite. And we couldn't really access that site all the time during Q2 because of the really, really strong range and snow falls during winter, via obviously getting now into, you know, spring time soon. And access has been reestablished. So that's why I've been, you know, maintaining obviously our house up for the production there. Yeah, sure, Nicholas. And you know, we were, we were pushing pretty hard to get not a young line towards the end of last year.

Speaker Change: Clearnet.

Speaker Change: Plenty of pop kilometers away from from Cerro Moro.

Speaker Change: Great High grade satellite and we couldn't really access that that site. All the time during Q2 because of some really strong rain and snowfall.

Dan: During winter.

Dan: Obviously getting now into spring time soon.

Dan: And access has been re established so that's why.

Steve: Obviously, our outlook for the production <unk> Steve.

Michael Steinmann: Yeah, sure, Nicholas. And we were pushing pretty hard to get knotty online towards the end of last year. We talked about it. It was kind of the next grade level, if you will. We were going to open it up after mining out the higher-grade portions of the ZOE deposit. It was very important to us. So we pushed out there and got that up and running quite well early in Q1. And it was starting to deliver pretty well.

Michael Steinmann: Gold segment all in-sustaining costs were $1,465 per ounce, excluding an area adjustments that increased costs by $19 per ounce. In total, $26.7 million of an area adjustments were included in Q2 production costs. The enemy adjustments are primarily related to projections of higher future unit cost at the Lawres to extract the in-heat inventory once or stacking activities have been completed.

Steve: Sure Nicholas.

Speaker Change: We were we were pushing pretty hard to get.

Steve: Online towards the end of last year, we talked about it it was kind of the next.

Steven Busby: We talked about it. It was kind of the next grade zone, if you will. We were going to open up after mining out the higher grade portions of the story deposit. It was very important to us. So we pushed out there, got that up and running quite well early in Q1. And it was started to deliver pretty well. You know, I have to admit, yeah, we had some pretty good range there, you know, higher than normal. But we also, our role wasn't really built to the kind of standards we would have liked to see. So the combination of the two definitely limited, restricted our ability to access the pit.

Speaker Change: Grades zone, if you will we're going to open up after mining of higher grade portions of the deposit it was very important to us. So we pushed out there <unk> got that up and running quite well early in Q1.

Steve: I have to admit, yeah, we had some pretty good rains there, higher than normal, but our road wasn't really built to the kind of standards we would have liked to have seen. So the combination of the two definitely limited our ability to access the pit. We didn't really have dewatering systems in place to the degree that we should have to dewater the pit in these kinds of rainstorms. So we've been, as we've regained access and now we are mining back in Knotty at the rates we'd like to mine, upgrading those roads.

Dan: I think we're starting to deliver pretty well.

Dan: To admit yes, we had some pretty good range there.

Michael Steinmann: They are on track with our major projects for the year. The new dry stack sailing storage facility at Guarón is on schedule to be completed in the second half of 2024 and will be commissioned there-up. The construction of the paste plant project at Timmons is on schedule to be completed in Q3 2024. This will enhance our extraction and improve mine stability at the Brow Creek mine. A chuckle bean will continue to advance plant upgrades and to stabilizing throughput at 8400 tons per day and recoveries at 96%. They're also progressing the optimization study to optimize the long-term economic and growth potential in chuckle bean.

Dan: Higher than normal, but we also are road wasn't really built to the kind of standards. We would have liked to screen. So the combination of the two definitely.

Dan: Limited restricted our ability to access the pit, we didn't really have dewater and systems in place to the degree that we should have.

Steven Busby: We didn't really have dewatering systems in place to the degree that we should have to dewater the pit in these kind of range storms. So we've been, as we've regained access, and now we are mining back in, in naughty at the rates we like to mine. We're upgrading those roads. We're upgrading those dewatering systems so that we can face these storms in the future. And we're also looking at plans now to accelerate production in Naughty to kind of claw back what we missed in Q2 there. We feel pretty good that we got a good plan in place to be able to do that.

Dan: So the water in the pit and these kind of rain storms. So we've been as we've regained access and now we are mining back and nausea upper rates, we'd like tomorrow. We're upgrading those roes were up early north sea borne system. So that we can face the storms in the future.

Steve: We're upgrading those dewatering systems so that we can face these storms in the future, and we're also looking at plans now to accelerate production in Knotty to kind of claw back what we missed in Q2 there. We feel pretty good that we have a good plan in place to be able to do that, but that's going to load up Q4 more so, and you won't see as much coming in Q3. So when you look at the distribution at Cerro Moro, it's going to be stronger in Q4.

Dan: And we're also looking at plans now to accelerate production.

Dan: So it kind of claw back what we invest in Q2 that are we.

Dan: Feel pretty good that we've got a good plan in place to be able to do that but that's going to load up Q4, more so you won't see as much coming on in Q3. So when you look at the distribution of Cerro Moro is going to be stronger in Q4 than Q3.

Nicholas: But that's going to load up Q4 more. So you won't see as much coming out in Q3. So when you look at the distribution that's real moral, it's going to be stronger in Q4. Couturier. Got it. Okay. That's helpful. Thanks, Steve.

Dan: Yeah.

Nicholas: Got it. Okay, that's helpful. Thanks, Steve.

Dan: Got it okay. That's helpful. Thanks, Steve.

Michael Steinmann: Just if I could sneak in one more. We're almost halfway through the quarter to year. And I understand that to be a Black Rain at two transactions, still expected to close sometime this quarter. I was just wondering if you guys could provide any updates or color on what you should have. Happening, and if there's anything that would respect you, affordable sets; there's so many points. Yeah, thank you. That's right. And at the moment, we are still waiting for some regulatory approvals, and at the moment it's the plan for Q3. Great.

Speaker Change: Just if I could sneak in one more we're almost halfway through.

Speaker Change: Quarter to your and I understand that.

Nicholas: Um, just if I could sneak in one more, we're almost halfway through the quarter here, and I understand that the Arena 2 transaction is still expected to close sometime this quarter. I was just wondering if you guys could provide any updates or color on when you see that happening, and if there's anything with respect to approvals that you're still waiting for.

Speaker Change: Arena two transaction is still expected to close sometime this quarter I was just wondering if you guys could provide any updates or color on what you said.

Speaker Change: Happening and if there is any.

Speaker Change: Anything with respect to <unk>.

Speaker Change: For both.

Dan: Okay.

Michael Steinmann: Yes, that's right. And at the moment, we're still waiting for some regulatory approvals, and, you know, at the moment, it's still planned for Q3.

Dan: Yes.

Dan: That's right at the moment, we're still waiting for some regulatory approvals.

Dan: At the moment its scope on from Q3.

Nicholas: Great. Thanks, Michael.

Michael Steinmann: Great. Thanks, Michael.

Michael Steinmann: Thanks, Michael.

Operator: Thank you. There are no further questions at this time.

Michael Steinmann: Thank you.

Operator: There are no further questions at this time. I will now turn the call over to Michael for his closing remarks.

Dan: There are no further questions at this time I will now turn the call over to Michael for closing remarks.

Michael Steinmann: I will now turn the call over to Michael for closing remarks. Thank you, operator. And thanks, everyone, for joining the call today.

Michael Steinmann: Thank you, operator, and thanks, everyone, for joining the call today. It's very exciting, very exciting times coming here for Pan Amer. Please, you've got a glimpse here when you look at the record revenues, record cash flow, free cash flow, and costs below guidance. Obviously, a very nice combination here when you go into a high metal price environment. At the same time, we finalized the ventilation system at La Colorado after quite a few years of very, very hard work to get there.

Michael Steinmann: Thank you operator, and thanks, everyone for joining the call today, very exciting very exciting times coming handful, Panama because a glimpse here when you look at the record record revenues record cash flow free cash flow.

Michael Steinmann: Very exciting, very exciting times coming here for Pan Amer please. You've got the glimpse here when you look at the record, record driving news, record, cash flow, free cash flow, cost below guidance. Obviously, a very nice combination here when you go into a high medical price environment. At the same time, we finalized the ventilation system at Lackler Auto after quite a few years; a very, very hard work to get there. So Steve explained, we already see an increase in not only production numbers, but also development meters. We are nearly back on development meters on track, where we want to be at about 2,000 meters a month, I believe.

Michael Steinmann: Costs below guidance, it's obviously, a very nice combination here, let me go into a high copper price environment at the same time.

Operator: To other members of our management team, we would now be happy to take your questions. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speaker phone, please lift the hands up before pressing any keys. One moment, please for your first question.

Dan: Finalized.

Steve: About the lessened system that Lockwood out after a quite a few years of very very hard work to get there. So Steve explained we already see an increasing not only production number but also development needs are nearly back on development meters.

Michael Steinmann: So, as Steve explained, we already see an increase in not only production numbers but also development meters. We are nearly back on development meters on track where we want to be at about 2,000 meters a month, I believe. So, that, you know, will lead to a ramp-up at La Colorado, as I explained, that will lead to lower costs at La Colorado, and, you know, a very exciting combination. While we still obviously work on our exciting SCARN deposit, there's no doubt that this is one of the largest, worldwide largest discoveries of silver and base metals over the last decade, and we'll continue working on that.

Dan: On track, where we want to be yet.

Speaker Change: 2000 meters a month I believe so.

Michael Steinmann: So that will lead to a ramp up at Lackler Auto, as I explained, that will lead to lower cost at Lackler Auto. And we're very exciting combination, while we still obviously work on our exciting car and reposite. No doubt it is one of the largest worldwide largest discovery of similar based models over the last decade. I will continue by working that, and of course, they'll have the optionality on Escobal. So lots of exciting projects ahead of us and right out there to harvest the fruits of high medical price of the combination of lower cost.

Speaker Change: Will lead to a ramp up at a local level as I explained that will lead to lower costs at La Colorado.

Cosmos Chiu: Your first question comes from Cosmos Q with CIBC. Your line is now open. Hi, thanks, Michael and team.

Speaker Change: Very exciting combination, while we're still obviously barak on our exciting content cost.

Speaker Change: This is one of the largest worldwide largest discovery somewhat based models over the last decade.

Michael Steinmann: Maybe my first question is on La Colorado. Michael, you touched on it. La Colorado, the ventilation shaft is now in place. Sounds like it's going pretty well. Could you maybe elaborate? Is it functioning as expected? How is that, you know, sort of help air flow? And ultimately, I guess what I'm trying to get to is, in terms of getting to 2,000 times per day, you said you're going to get to it by year end, along with higher grades.

Dan: <unk> of course, they'll have the optionality.

Michael Steinmann: And, of course, they'll have the optionality on Escobar. So, lots of exciting projects ahead of us, and right out there to harvest the fruits of high metal prices with a combination of lower costs. So, looking forward to reporting on Q3 later this year. Until then, have a good time. Thanks, everyone.

Speaker Change: <unk>, so lots of exciting projects ahead of us.

Dan: Yes.

Speaker Change: Right out there to harvest the fruit itself.

Speaker Change: <unk> prices have been a combination of all of our costs are looking forward to report on Q3 later this year until then have a good time thanks, everyone.

Michael Steinmann: So looking forward to report on Q3. I'll leave this year; until then, have a good time. Thanks, everyone.

Michael Steinmann: Is it going to be more a straight line, sort of increase from now until the end, or is there going to be some kind of step change? And is that going to be part of the fact that, as you mentioned, overall Q4 is going to be stronger than Q2. Yes, thanks, Cosmos. Yeah, the shaft completion and the installation and startup of the fan was right on time as we indicated for the, you know, since beginning of the year that will happen mid year, it happened mid year and it looks very exciting what we see on the, on the result side on the impact to the mind of the shaft, which as you know, was a multi year project ready to kind of bring us back on track here with the production line. But I don't know about Steve, maybe give some luck.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thanks for participating in SAE Please Disconnect Your Lines.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Speaker Change: [music].

Steven Busby: Sure, and good morning, Cosmos. Thanks for the question. I have to say we're, we're incredibly happy with the results of this new shaft immediately when we turn the fans on July 11th, we increased overall flow rates into the mind by about 200,000, 300,000 cubic meter a feet per second of air flow or a few feet per minute. Sorry. And immediately we saw temperatures drop in the Candolary East on by three degree wetball Celsius.

Steven Busby: So substantial improvement, which led immediately we saw a pump in tonnage of 25% over what we've been seeing up until that point through the year, we were about 1,400 tons a day going in for the year before we started that fan. We're now up at around 17, a little over 1,700 tons a day. So between now and the end of the year, the other thing I wanted to mention is that we also bumped our development up 10% from where we were prior to when that fans started up.

Speaker Change: Thank you.

Speaker Change: [music].

Operator: Special thanks to my family and friends and to the New York Times.

Speaker Change: Yes.

Steven Busby: So within the two and a half, three weeks of running the fan, we've seen incredible boost of production and development rates. That'll continue to ramp up. You know, I think for purposes of quarterly reporting, it'll be a bit of a straight, you know, line ramp up, obviously day to day, there's fluctuations that take place. But we're feeling good that we're starting from a good base and we'll ramp up through the rest of the year.

Michael Steinmann: Yeah, that's great to hear. And then maybe on the quarterly guidance as well. Michael, as you mentioned, due to due to weather related issues, silver production was lower than your quarterly guidance. However, I do see that your cost, on sustaining costs, was also lower or better than your quarterly guidance. So how we would achieve that lower cost despite lower production and ultimately what's the, you know, your ability to sustain those lower costs on a go for a basis.

Michael Steinmann: Can we see that once again in terms of that, you know, better cost once again in keeping for. So don't forget that especially at La Palada and other places with increased production. Later in the year in La Palada's best example of that we obviously have a fixed cost there and having a larger denominator will bring the cost barons right down. That's really the reason why we forecast those lower costs that La Palada go into the year, really based on that ramp up of the production.

Michael Steinmann: So that's of course still there, still there for us. Yeah, just add cause most I think in the first half of the year, some of the lower costs we've seen has been related to the timing of our inventory of byproduct credit sales relative to what we're producing we sold a bit more byproduct than what we produced during that period. So that that a loss that as we look to the second half of the year, as Michael says, we do anticipate reduced, you know, unit cost for tons substantially at La Palada.

Michael Steinmann: We are seeing some improvements that we've made at several moral and jack of being that they're coming in a pretty good cost for ton. So we kind of projected that out with the actual byproduct credits. We're not sure we're saying that we feel will come in line with what we guided for our cash and east coast cost. One last point, Cosmos Chiu, as I always mention, on the coast side, currency fluctuations have a big impact in our coast.

Michael Steinmann: We saw a devaluation in the quarter, especially in the Mexican peso and the Brazilian rail. And that had a positive impact on our coast and will continue to do so if that continues down the road. So just on the flip side of that, obviously, when you have the devaluation of the currency, we see an increase of our non-cash tax expense due to those currency fluctuations. So you see that in our earnings numbers, but that's a non-cash tax expense there.

Michael Steinmann: And I really like to see that the positive impact to our cost that we have now and it's very, very exciting combination of lower cost and higher mental prices, which obviously must reflect. The reflection of that, obviously, must have record cost for.

Michael Steinmann: I agree. And maybe one last question on basketball, it seems like from your MBA meetings are still continuing into Q3, despite the fact that the appointment of the vice minister of sustainable development still pending. Is that in my reading that correctly, and is there any more updates in terms of Guatemala and basketball? Yeah, we have actually quite a large number of meetings with government officials during the quarter. And I think, you know, after a bit of slow startup, I think of the new government.

Michael Steinmann: They have most of the people in place. There's still a few people missing to be to be put there, but I think the other meetings scheduled with between us and the government officials has definitely improved. And looking forward to continue and go back into that, you know, the full, the full consultation meetings that we need to have to advance this.

Cosmos Chiu: Great, that's great to hear. And thanks again, Michael, Steve and Jordan and team and those other questions.

Michael Steinmann: Thanks, Carlos.

Don Demarco: Your next question comes from Don DeMarco with National Bank Financial. Your line is now open. Thank you, operator and Michael and team. Maybe first question, just continuing on with basketball. So, you know, I've been looking at the price of the contingent value rights and they've eased a little bit over the recent months. Do you think this is a fair indicator of the likelihood of a restart or just the, the tenor of activities that at basketball related to the consultation process?

Don Demarco: You know, I will be careful when you look at the price of the contingent value rights. You know, there is a three hundred and 50 million CVRs out there. So a large number and when you look at the trading numbers, this is a very limited trading on those on those CVRs. So, I, you know, they obviously follow the Pan American share price, of course. And then I think, you know, the fact that the new government needed a bit longer to set everything up here.

Don Demarco: Could have had an impact with that, but I would not read too much into it as a status. It is a very, very limited trading of those CVRs. Okay. And then just, I mean, it's encouraging to hear that there's a number of meetings that have been held. But is there any, you know, visibility for next meetings or the filling of that vacancy?

Michael Steinmann: This is just kind of maybe repeating some of the questions that were asked on the, by the last caller, but, but just wondering what we might anticipate in the coming months on this process. Well, I mean, we anticipate that that role will obviously be filled by the government in time and we will pick up, I think with that, the kind of the style of meetings we had before. And as I said at the moment, all I can say is that there, you know, there has been what I think pressed the number of meetings with government of proposals between the company and us.

Michael Steinmann: And, you know, that's, it was really like quite a slow start of the year. It's, you know, that's, it was really like quite a slow start of the year. It was really like a slow start of the year. [inaudible] was really like a slow start of the year. It was really like a slow start of the year. Okay, thanks for that, Steve. And well, in the meantime, it's looking great. So, last question, looking to the Mexican administration, a cloud has been in the seat now for a few months.

Michael Steinmann: Have you had a chance to meet with the new administration? Are there any concerns or issues that might potentially develop the concerns in the quarters ahead with this change? Yeah, the new administration has been elected. You are right, but they are not. They did not take office. Yes. September 1st, development of the change happens. So, it's a bit, a bit, a bit early to want to hear questions. Okay. I think we will continue to happily work with a bit of going to Mexico.

Michael Steinmann: Mexico has always been a good, good place for us to work. We have very strong operations in Mexico. Oh, sorry, sorry October 1st, sorry. Okay, we'll be the change. So, as I said a bit early, but I, you know, I don't see for see any big changes how we work with the government in Mexico. The governments, as you know, change, change every country we are working over time. And we are dealing with very long reserve flights and some of our assets, especially when you look at the luck without a scar.

Michael Steinmann: You know, there will be many, many administrations passing while we produce for decades and decades on that asset in the future. So, I'm very happy to work in Mexico. I don't see any issue at this point.

Don Demarco: Okay, Michael. Thanks so much for that and good luck with Q3. Thank you.

Operator: Operator.

Nicholas: Hello. Oh, up right there. Nicholas, if you can hear us here in the Q2, ask a question. Thanks, Michael. I'm taking my question here. I just had a question on Sarah Moro, if I could. I understand that the grades have been a little bit variable here for the previous two quarters and that's been due to some regulated impacts. But I hope you guys could provide some color on what the next quarter to might look at there with respect to greater than two point.

Nicholas: Thank you. Yeah, and it's really interesting on that, not the sound that that we're mining that is part of it. Yeah, I think it was from a plenty of us cloned us away from from Sarah Moro, high grade, high grade satellite. And we couldn't really access that site all the time during Q2 because of the really, really strong range and snow falls during winter via obviously getting now into, you know, spring time soon.

Nicholas: And access has been reestablished. So that's why I've been, you know, maintaining obviously our house up for the production there. Yeah, sure, Nicholas. And you know, we were, we were pushing pretty hard to get not a young line towards the end of last year. We talked about it. It was kind of the next grade zone, if you will. We were going to open up after mining out the higher grade portions of the story deposit.

Nicholas: It was very important to us. So we pushed out there got that up and running quite well early in Q1. And it was started to deliver pretty well. You know, I have to admit, yeah, we had some pretty good range there, you know, higher than normal. But we also, our role wasn't really built to the kind of standards we would have liked to see. So the combination of the two definitely limited restricted our ability to access the pit.

Nicholas: We didn't really have dewatering systems in place to the degree that we should have to dewater the pit in these kind of range storms. So we've been, as we've regained access and now we are mining back in, in naughty at the rates we like to mine. We're upgrading those roads. We're upgrading those dewatering systems so that we can face these storms in the future. And we're also looking at plans now to accelerate production in naughty to kind of claw back what we missed in Q2 there.

Nicholas: We feel pretty good that we got a good plan in place to be able to do that. But that's going to load up Q4 more. So you won't see as much coming out in Q3. So when you look at the distribution that's real moral, it's going to be stronger in Q4.

Michael Steinmann: Couturier. Got it. Okay. That's helpful. Thanks, Steve. Just if I could sneak in one more. We're almost halfway through the quarter to year. And I understand that to be a Black Rain at two transactions, still expected to close sometime this quarter. I was just wondering if you guys could provide any updates or color on what you should have. Happening, and if there's anything that would respect you, affordable sets, there's so many points. Yeah, thank you. That's right. And at the moment, we still waiting for some regulatory approvals and at the moment it's the plan for Q3. Great. Thanks, Michael. Thank you.

Operator: There are no further questions at this time.

Michael Steinmann: I will now turn the call over to Michael for closing remarks. Thank you, operator. And thanks, everyone, for joining the call today.

Michael Steinmann: At the same time, we finalized the ventilation system at Lackler Auto after quite a few years, a very, very hard work to get there. So Steve explained, we already see an increase in not only production number, but also development meters. We are nearly back on development meters on track, where we want to be at about 2,000 meters a month, I believe. So that will lead to a ramp up at Lackler Auto as I explained, that will lead to lower cost at Lackler Auto. And we're very exciting combination, while we still obviously work on our exciting car and reposite.

Michael Steinmann: No doubt it is one of the largest worldwide largest discovery of similar based models over the last decade. I will continue by working that and of course, they'll have the optionality on Escobal. So lots of exciting projects ahead of us and right out there to harvest the fruits of high medical price of the combination of lower cost.

Michael Steinmann: So looking forward to report on Q3. I'll leave it this year, until then have a good time. Thanks, everyone.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thanks for participating in SAE Please Disconnect Your Lines.

Q2 2024 Pan American Silver Corp Earnings Call

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