Q2 2024 SilverCrest Metals Inc Earnings Call
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Operator: Please stand by. Your conference is about to begin.
Operator: Should you require operator assistance? Simply press star and zero.
Operator: Good day, everyone, and welcome to this Silvercrest Model's second quarter 2024 results conference call. A reminder that all participants are in a listen-only mode, but later you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. Please note this call may be recorded.
Operator: Please stand by. Your conference is about to begin. Should you require operator assistance, simply press star and zero. Good day, everyone, and welcome to this Silvercrest Metals second quarter 2024 results conference call. A reminder that all participants are in a listen-only mode, but later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your touchtone phone. Please note this call may be recorded. I will be standing by should you need any assistance, and it is now my pleasure to turn the floor over to CEO and Director, Mr. Eric Fier. Welcome, sir.
Good day everyone and welcome to this Silvercrest Metals second quarter 2024 results conference call.
A reminder that all participants are in a listen-only mode, but later you will have the opportunity to ask questions during the question and answer session.
You may register to ask a question at any time by pressing the star and 1 on your touchtone phone. Please note this call may be recorded. I will be standing by should you need any assistance, and it is now my pleasure to turn the floor over to CEO and Director, Mr. Eric Fier. Welcome, sir.
Operator: I will be standing by.
Operator: Should you need any assistance, it is now my pleasure to turn the floor over to CEO and Director, Mr. Eric Fier.
Operator: Welcome, sir.
Eric Fier: Thank you, Operator. Good morning, and thanks everybody for joining us.
Eric Fier: Thank you, operator. Good morning, and thanks everybody for joining. Today will be providing commentary on Q2, 2024 results, after which will be happy to take questions.
Eric Fier: Today we'll be providing commentary on Q2 2024 results, after which we'll be happy to take questions. The slide deck we'll be referring to is available on our website, silvercrestmetals.com, under the Investor tab. Before we get started, I'd like to direct you to the forward-looking statements on slide two. All figures discussed this morning are in U.S. dollars unless otherwise stated. All of the ounce and per ounce references discussed will be based on silver equivalent ounces sold unless otherwise indicated.
Thank you, Operator. Good morning and thanks everybody for joining.
Today we'll be providing commentary on Q2 2024 results, after which we'll be happy to take questions. The slide deck we'll be referring to is available on our website, silvercrestmetals.com, under the Investor tab.
Eric Fier: The slide deck will be referring to as available on our website, silvercrestmetals.com, under the investor tab. Before we get started, I'd like to direct you to the forward-looking statements on slide two. All figures discussed this morning are in US dollars unless otherwise stated. All of the ounce and per ounce references discussed will be based on silver equivalent ounces sold unless otherwise indicated. Our silver equivalent references are based on a gold-to-silver ratio of 79.5 to 1.
Before we get started, I'd like to direct you to the forward-looking statements on slide 2. All figures discussed this morning are in U.S. dollars unless otherwise stated. All of the ounce and per ounce references discussed will be based on silver equivalent ounces sold.
Eric Fier: Our silver equivalent references are based on a gold to silver ratio of 79.5 to 1. On the call with me today is Rob Doyle, the recently announced interim CFO; Chris Ritchie, President; and Cliff Lafleur, Vice President of Operations, starting on slide three.
Unless otherwise indicated.
Our silver equivalent references are based on a gold to silver ratio of 79.5 to 1. On the call with me today is Rob Doyle, recently announced interim CFO , Chris Ritchie, President, and Cliff Lafleur, Vice President of Operations.
Eric Fier: On the call with me today is Rob Doyle, recently announced interim CFO, Chris Richie, president, and Cliffluffler, vice president of operations, starting on slide three. Q2 is another strong quarter for us both operationally and financially, given our strong performance in the first half of the year. And to the start of each two, we have announced positive revisions to our annual sales, cash costs, and all in sustaining cost guidance. These changes were all made under the same silver equivalent assumptions as our original guidance. Silver equivalent sales of 2.6 million ounces in Q2 and 5.2 million ounces in H1 provided us with the comfort to increase our annual sales guidance to 10 to 10.3 million ounces from our original guidance of 9.8 to 10.2 million ounces.
Eric Fier: Q2 was another strong quarter for us, both operationally and financially, given our strong performance in the first half of the year, and to the start of H2, we have announced positive revisions to our annual sales, Cash Cost, and All-in-Sustaining Cost Guidance. These changes were all made under the same silver equivalent assumptions as our original guidance. Silver equivalent sales of 2.6 million ounces in Q2 and 5.2 million ounces in H1 provided us with the comfort to increase our annual sales guidance to 10 to 10.3 million ounces from our original guidance of 9.8 to 10.2 million ounces.
Starting on slide 3.
Q2 is another strong quarter for us, both operationally and financially, given our strong performance in the first half of the year and to the start of H2, we have announced positive revisions to our annual sales.
Cash Cost and All-in-Sustaining Cost Guidance. These changes were all made under the same silver equivalent assumptions as our original guidance.
Silver equivalent sales of 2.6 million ounces in Q2 and 5.2 million ounces in H1 provided us with the comfort to increase our annual sales guidance to 10 to 10.3 million ounces.
From our original guidance of 9.8 to 10.2 million ounces.
Eric Fier: With cash costs and all in sustaining costs and the first half of the year becoming coming below the bottom end of our original guidance, we have the confidence to revise our 2024 guidance from book for both. We now expect cash costs to be $9.25 to $7.75 and all-in sustaining costs to be $14.90 to $15.75 to $15.75 per ounce. Our balance sheet continues to demonstrate strength and flexibility, with both cash and bullion holdings increasing notably in the quarter. We are now pleased to be going into H2 with continued confidence in our execution. As I mentioned, we have improved our guidance for a total silver equivalent ounces sold, cash costs, and corporate all-in sustaining costs.
Eric Fier: With cash costs and all-in sustaining costs in the first half of the year coming below the bottom end of our original guidance, we have the confidence to revise our 2024 guidance for both. We now expect cash costs to be $9.25 to $7.75, and all-in sustaining costs to be $14.90 to $15.75, or $15.75 per ounce.
With cash costs and all-in sustaining costs in the first half of the year coming below the bottom end of our original guidance, we have the confidence to revise our 2024 guidance for both.
We now expect cash costs to be $9.25 to $7.00.
in $0.75 and all in sustaining costs to be $14.90 to $15.
in seventy-five cent two fifteen dollars and seventy-five cents per ounce our balance sheet continues to demonstrate strength and flexibility with both cash and boolllean holdings increasing notably in the quarter
Eric Fier: Our balance sheet continues to demonstrate strength and flexibility with both cash and bullion holdings increasing notably in the quarter. On to slide 4. We are now pleased to be going into H2 with continued confidence in our execution. As I mentioned, we have improved our guidance for total silver equivalent ounces sold, cash costs, and corporate all-in sustaining costs. However, our exploration and sustaining capital remain unchanged.
on to slide 4. We are now pleased to be going into H2 with continued confidence in our execution.
As I mentioned, we have improved our guidance for total silver equivalent ounces sold, cash costs, and corporate all-in sustaining costs. Our exploration and sustaining capital remain unchanged.
Eric Fier: Our exploration is detaining capital of remain unchanged.
Eric Fier: Before I pass it, the call to Rob, to discuss our financial results in the quarter, I'd like to take a moment to officially welcome him to the team.
Eric Fier: Before I pass the call to Rob to discuss her financial results for the quarter, I'd like to take a moment to officially welcome him to the team. We're thrilled to have Rob join as an interim CFO, bringing with him a wealth of experience. Thank you, Rob.
before i pass it the call to rob
to discuss her financial results in the quarter. I'd like to take a moment to officially welcome him to the team. We're thrilled to have Rob join as an interim CFO , bringing with him a wealth of experience. Welcome, Rob.
Eric Fier: We're here with him, a wealth of experience. Welcome, Rob.
Rob Doyle: Thank you, Eric, and good morning, everyone. I am delighted to be joining such a high-quality company with an incredible asset and a talented management team. I'm very much looking forward to rolling up my sleeves in my new role. Moving to slide five.
Rob Doyle: Thank you, Eric, and good morning, everyone. I'm delighted to be joining such a high quality company with an incredible asset and a talented management team. I'm very much looking forward to rolling up my sleeves in my new role.
unknown: I am delighted to be joining such a high quality company, with an incredible asset and a talented management team. I'm very much looking forward to rolling up my sleeves in my new role.
Eric: thank you eric and good morning everyone i am delighted to be joining such a high -quality company with an incredible asset and talent management team
Rob Doyle: Moving to slide five, in the quarter we generated record revenue of 72.7 million and record my operating earnings of 41.5 million. Cash flow generation in the quarter was robust, with operating cash flow of 39.6 million, or 27 cents per share. We also recorded strong free cash flow of 24.3 million, or 16 cents per share, which came after investing 15.3 million in sustaining capital. Net earnings in the quarter of 6.5 million or 4 cents per share were impacted by a weakened peso following the results of the Mexican general election. It is important to note that we report earnings per share on a non-adjusted basis, which can result in some noise quarterly, particularly when we observe more notable exchange rate movements.
unknown: I'm very much looking forward to rolling up my sleeves in my new role.
Rob Doyle: In the quarter, we generated record revenue of $72.7 million and record mine operating earnings of $41.5 million. Cash flow generation in the quarter was robust, with operating cash flow of $39.6 million, or $0.27 per share. We also recorded strong free cash flow of $24.3 million, or $0.16 per share, which came after investing $15.3 million in sustaining capital.
unknown: In the quarter, we generated record revenue of $72.7 million and record mine operating earnings of $41.5 million. Our net earnings for the quarter added to the retained earnings on our balance sheet. Something that we are very proud of as a young company. As students of the industry will know, retained earnings are a very rare achievement in our business. I'm now going to pass the call to Chris to speak to the treasury assets on our pristine balance sheet.
Chris: Moving to slide 5.
unknown: In the quarter, we generated record revenue of $72.7 million and record mine operating earnings of $41.5 million.
Chris: Cash flow generation in the quarter was robust.
Chris: with operating cash flow of $39.6 million or $0.27 per share.
Chris: We also recorded strong free cash flow of $24.3 million, or $0.16 per share, which came after investing $15.3 million in sustaining capital.
Rob Doyle: Net earnings in the quarter of 6.5 million, or 4 cents per share, were impacted by weakened pesos following the results of the Mexican general election. It is important to note that we report earnings per share on a non-adjusted basis, which can result in some noise quarterly, particularly when we observe more notable exchange rate movements. The depreciation of the peso at the end of the quarter resulted in unrealized foreign exchange losses of $2.8 million and largely drove the non-cash deferred tax expense of $14.3 million.
Speaker Change: Net earnings in the quarter of 6.5 million or 4 cents per share were impacted by a weakened peso following the results of the Mexican general election.
Chris: It is important to note that we report earnings per share on a non-adjusted basis, which can result in some noise quarterly, particularly when we observe more notable exchange rate movements.
Rob Doyle: The depreciation of the peso at the end of the quarter resulted in unrealized foreign exchange losses of 2.8 million and largely drove the non-cash deferred tax expense of 14.3 million. This aspect of our tax is reflected in note 18 of our financial statements, but in simple terms reflects the change in our anticipated tax attributes over the life of the mine due to changes in the effects. If the recent volatility in the Mexican peso persists, we would expect that these non-cash market market items will continue to be a feature of future earnings, both positive and negative.
Chris: The depreciation of the peso at the end of the quarter resulted in unrealized foreign exchange losses of $2.8 million and largely drove the non-cash deferred tax expense of $14.3 million.
Rob Doyle: This aspect of our tax is reflected in note 18 of our financial statement but, in simple terms, reflects the change in our anticipated tax attributes over the life of the mine due to changes in the exchange rate. If the recent volatility in the Mexican peso persists, we would expect that these non-cash mark-to-market items will continue to be a feature of future earnings, both positive and negative. Current taxes of $11.8 million were higher than the prior period as a result of the utilization of all of our Mexican tax loss carry forwards in 2023, following strong operating performance since commercial production was achieved in Q4 2022.
Chris: this aspect of our tax is reflected in note to' eighteen of our financial statements but in simple terms reflects the change in our anticipated tax attributes over the life of the mine due to changes in the fx
Chris: if the recent volatility in the mexican pasopsists we would expect that these noncash mark to-market items will continue to be a feature of future earnings grow positive and negative
Rob Doyle: Current taxes of 11.8 million were higher than the prior period as a result of the utilization of all of our Mexican tax loss carried forward in 2023 following strong operating performance since commercial production was achieved in Q4 2022. Our net earnings for the quarter added to the retained earnings on our balance sheet, something that we are very proud of as a young company. As students of the industry will know, retained earnings is a very rare achievement in our business.
Chris: Current taxes of $11.8 million were higher than the prior period as a result of the utilization of all of our Mexican tax loss carry forwards in 2023 following strong operating performance since commercial production was achieved in Q4 2022.
Rob Doyle: Our net earnings for the quarter added to the retained earnings on our balance sheet, something that we are very proud of as a young company. As students of the industry will know, retained earnings are a very rare achievement in our business. I'm now going to pass the call to Chris to speak to the treasury assets on our pristine balance sheet.
unknown: Our net earnings for the quarter added to the retained earnings on our balance sheet.
unknown: Something that we are very proud of as a young company.
unknown: As students of the industry will know, retained earnings is a very rare achievement in our business.
Rob Doyle: I am now going to post a call to Chris to speak to the Treasury assets on our pristine balance sheet.
unknown: I'm now going to pass the call to Chris to speak to the treasury assets on our pristine balance sheet.
Chris Richie: Thanks, Rob. Now on slide 6. Treasury assets increased by 34% or $31.2 million to end the quarter at $122.3 million. We added 20% to our gold and silver bullion holdings and benefited from a $3.1 million mark-to-market increase as a result of strong metal prices in the quarter.
Chris: Thanks, Rob. Now, on slide six.
Chris Ritchie: Thanks, Rob. Now, on slide six.
Chris Ritchie: Treasury assets increased by 34% or $31.2 million to end the quarter at $122.3 million. We added 20% to our gold and silver bullion holdings and benefited from a $3.1M mark to market increase as a result of strong metal prices in the quarter. As a result, bullion holdings grew to $24 million at the end of the quarter. Our bullion holding program continues to prove its merits, with further additions expected in the second half of the year. I will now hand the call to Cliff to discuss operations at Lusher.
Chris: Thanks, Rob. Now on slide six.
Chris: treasury assets increased by thirty-four percent or thirty-one point two million dollars to end the quarter at one hundred and twenty-two point three million dollars
Chris: We added 20% to our gold and silver bullion holdings and benefited from a $3.1 million mark-to-market increase as a result of strong metal prices in the quarter.
Chris Richie: As a result, bullion holdings grew to $24 million at the end of the quarter. Our bullion holding program continues to prove its merits, with further additions expected in the second half of the year.
Chris: As a result, bullion holdings grew to $24 million at the end of the quarter.
Chris: Our bullion holding program continues to prove its merits with further additions expected in the second half of the year.
Cliff Lafleur: I will now hand the call to Cliff to discuss operations at Las Chisas.
Chris: I will now hand the call to Cliff to discuss operations at Las Chispas.
Cliff Lafleur: Thanks, Chris. I'm now on slide seven. Underground mining rates increased to approximately 1,100 tons per day. Higher than our planned exit rate at the end of the year of 1,050 tons per day. This increase in productivity is due to the strong collaboration of our site team with our two mining contractors heading into H2 2024. The Las Chisas planned average 1216 tons per day and is expected that throughout will average 1200 tons per day as planned through the remainder of 2024. The plan recovered 2.7 million ounces with process grades of 765 grams per tonne, silver equivalent.
Cliff Lafleur: I'm now on slide seven. Underground mining rates increased to approximately 1,100 tons per day, higher than our planned exit rate at the end of the year of 1,050 tons per day. This increase in productivity is due to the strong collaboration of our site team with our two mining contractors heading into H2 2024. The Los Chispas plant averaged 1,216 tons per day, and it is expected that the entire plant will average 1,200 tons per day as planned for the remainder of 2024.
Chris: I'm now on slide seven, the plant set yet another quarterly record with silver equivalent recoveries of 98.4%. We continue to use our stockpiles to optimize plant production, and this has allowed us to continue with strong process recoveries, a key driver in our consistent silver equivalent sales in the six quarters since declaring commercial production. Our first half all-in sustaining cost of $14.89 per ounce gave us confidence to adjust our annual guidance for 20
Chris: Thanks, Chris. I'm now on slide 7.
Chris: Underground mining rates increased to approximately 1,100 tons per day, higher than our planned exit rate at the end of the year of 1,050 tons per day.
Chris: This increase in productivity is due to the strong collaboration of our site team with our two mining contractors heading into H2 2024.
Chris: The Los Chispas plant averaged 1,216 tons per day, and it is expected that throughout will average 1,200 tons per day as planned for the remainder of 2024.
Cliff Lafleur: The plant recovered 2.7 million ounces with process grades of 765 grams per ton, silver equivalent. The plant set yet another quarterly record with silver equivalent recoveries of 98.4%. We continue to use our stockpiles to optimize plant production, and this has allowed us to continue a strong process recovery, a key driver in our consistent silver equivalent sales in the sixth quarter since declaring commercial production. Corporate all-in sustaining costs in the quarter of $16.88 per ounce increased from quarter one as expected due to increased production and development of two mining contractors on site as well as a $1 million write-down of warehouse inventory in the quarter. Our first half all-in sustaining cost of $14.89 per ounce gave us confidence to adjust our annual guidance for 2024. I'll now pass it back to Eric to conclude the presentation.
Chris: The plant recovered 2.7 million ounces with process grades of 765 grams per ton silver equivalent. The plant set yet another quarterly record with silver equivalent recoveries of 98.4 percent.
Cliff Lafleur: The plan set yet another quarterly record with silver equivalent recovery at 98.4%. We continue to use our stockpiles to optimize plant production. And this has allowed us to continue with strong process recoveries. A key driver and our consistent silver equivalent sales in the six quarters since declaring commercial production. Corporate all in sustaining costs in the quarter of $16.88 cents per ounce increased from quarter one.
Chris: We continue to use our stockpiles to optimize plant production, and this has allowed us to continue a strong process recovery, a key driver in our consistent silver equivalent sales in the six quarters since declaring commercial production.
Chris: Corporate all-in sustaining costs in the quarter of $16.88 per ounce increased from quarter one as expected due to increased production and development with two mining contractors on site as well as a $1 million write-down of warehouse inventory in the quarter.
Cliff Lafleur: As expected, due to increased production and development with two mining contractors on site, as well as a $1 million write down a warehouse inventory in the quarter. Our first half all-in sustaining costs of $14.89 cents per ounce gave us confidence to adjust our annual guidance for 2024.
Chris: Our first half all in sustaining costs of $14.89 per ounce gave us confidence to adjust our annual guidance for 2024.
Eric Fier: I'll now pass it back to Eric to conclude the presentation. Thanks, Cliff. On to slide eight. Looking forward to the rest of 2024, the results of the first half of the year presented us well to meet our improved 2024 guidance. We remain committed to work on our exploration program at Los Chispas with drilling in the quarter, focusing on converting high potential infertile resources to indicator resource, with additional focus being put on identifying new targets regionally and at Los Chispas. Subsequent to the end of the quarter, we released our second annual ESG report. We are proud to have a very common sense approach to sustainability.
Chris: I'll now pass it back to Eric to conclude the presentation.
Eric Fier: On to slide eight. Looking forward to the rest of 2024, the results of the first half of the year present us well to meet our improved 2024 guidance. We remain committed to working on our exploration program at Las Chispas, with drilling in the quarter focusing on converting high potential inferred resources to indicated resources with additional focus being put on identifying new targets regionally and at Las Chispas. Subsequent to the end of the quarter, we released our second annual ESG report.
Chris: baswith
Chris: on the slide 8.
Chris: Looking forward to the rest of 2024, the results of the first half of the year present us well to meet our improved 2024 guidance. We remain committed to work on our exploration program at Las Chispas, with drilling in the quarter, focusing on converting
Chris: High Potential Inferred Resources to Indicated Resource, with additional focus being put on identifying new targets regionally and at Las Chispas.
Chris: Subsequent to the end of the quarter, we released our second annual ESG report. We are proud to have a very common sense approach to sustainability.
Eric Fier: We are proud to have a very common sense approach to sustainability. As someone who has spent the past 20 years building relationships in the communities around Las Chispas, ESG is more than data; it's finding ways to truly make a difference, and it's done through constant engagement and collaboration with local and government stakeholders. Our local communities rely heavily on agriculture and ranching for their livelihoods and are directly impacted by water scarcities in Sonora.
Eric Fier: As someone who has spent the past 20 years building relationships in the communities around Los Chispas, ESG is more than data. It's finding ways to truly make a difference, and it's done through constant engagement and collaboration with local and government stakeholders. Our local communities rely heavily on agriculture and ranching for their livelihoods and are directly impacted by water scarcity in Sonora. and this, in the second year of our Water Stewardship Plan, local farmers and ranchers saw a significant improvement in water access reliability. This has allowed some community members to establish second planting seasons, boosting income potential and developing agricultural resilience.
Speaker Change: As someone who has spent the past 20 years building relationships in the communities around Las Chispas,
Speaker Change: ESG is more than data. It's finding ways to truly make a difference and it's done through constant engagement and collaboration with local and government stakeholders.
Speaker Change: Our local communities rely heavily on agriculture and ranching for their livelihoods and are directly impacted by water scarcities in Sonora.
Eric Fier: In the second year of our Water Stewardship Plan, local farmers and ranchers saw a significant improvement in water access reliability. This has allowed some community members to establish second planting seasons, boosting income potential and developing agricultural resilience.
Chris: and this.
Speaker Change: In the second year of our Water Stewardship Plan, local farmers and ranchers saw a significant improvement in water access reliability. This has allowed some community members to establish second planting seasons.
Speaker Change: Boosting Income Potential and Developing Agricultural Resilience. As we continue to execute on this plan, we look to further expand the reach and impact of our programs.
Eric Fier: As we continue to execute on this plan, we look to further expand the reach and impact of our programs. That wraps up our formal commentary for today.
Operator: As we continue to execute on this plan, we look to further expand the reach and impact of our program. That wraps up our formal commentary for today. Operator, please open the line for questions. Gentlemen, thank you, and to our phone audience joining us today. If you would like to ask
Operator: That wraps up our formal commentary for today. Operator, please open the line for questions. Gentlemen, thank you and to our phone audience joining us today. If you would like to ask,
Eric Fier: Operator, please open the line for questions.
Operator: That wraps up our formal commentary for today. Operator, please open the line for questions.
Operator: Gentlemen, thank you. And to our FOAD audience joining today, if you would like to ask a question at this time, simply press star and one on your telephone keypad. Pressing star and one will place your line into a queue, and we'll take your questions one at a time.
Operator: Gentlemen, thank you. And to our phone audience joining us today, if you would like to ask a question at this time, simply press star and 1 on your telephone keypad. Pressing stars and 1 will place your line into a queue and will take your questions one at a time. Also, a friendly reminder that if you're joining today on a speaker set or speaker phone, please return to your handset for the best audio quality.
Speaker Change: Gentlemen, thank you. And to our phone audience joining today, if you would like to ask a question at this time, simply press star and one on your telephone keypad. Pressing star and one will place your line into a queue and will take your questions one at a time.
Operator: Also a friendly reminder that if you're joining today on a speaker set or speaker phone, please return to your handset for the best audio quality. Once again, ladies and gentlemen, that is star and one if you would like to ask a question, and we'll pause for a moment to give everyone a chance to signal. And once more, ladies and gentlemen, star and one. Just a few more moments for everyone to signal if you do have a question.
Speaker Change: Also a friendly reminder that if you're joining today on a speaker phone, please return to your handset for the best audio quality. Once again, ladies and gentlemen, that is star and one if you would like to ask a question. And we'll pause for a moment to give everyone a chance to signal.
Operator: Also, a friendly reminder that if you're joining today on a speaker set or speaker phone, please return to your handset for the best audio quality. Once again, ladies and gentlemen, that is star and one. If you would like to ask a question, we'll pause for a moment to give everyone a chance to signal.
Operator: Once again, ladies and gentlemen, that is star and one. If you would like to ask a question, we'll pause for a moment to give everyone a chance to signal. And once more, ladies and gentlemen, star and one, just a few more moments for everyone to signal if they do have a question. And, gentlemen, we have no signals from our phone audience.
Operator: that
Operator: And once more, ladies and gentlemen, star and one, just a few more moments for everyone to signal if you do have a question.
Operator: And gentlemen, we have no signals from our phone audience.
Operator: And gentlemen, we have no signals from our phone audience.
Eric Fier: Thanks everyone for attending our results call.
Operator: Thanks, everyone, for attending our results call. Have a good day.
Eric Fier: Thanks, everyone, for attending our results call. Have a good day.
Operator: Have a good day.
Operator: Thanks everyone for attending our results call. Have a good day.
Operator: Ladies and gentlemen, this does conclude today's teleconference, and we do thank you all for your participation. You may now disconnect your lines.
Operator: Ladies and gentlemen, this does conclude today's teleconference, and we do thank you all for your participation. You may now disconnect your lines. Thank you very much.
Speaker Change: ladies and gentlemen this does conclude today's teleconference and we do thank you all for your participation you may now disconnect your lines
unknown: Lots of different songs.
Operator: Please stand by. Your conference is about to begin. Should you require operator assistance? Simply press star and zero.
Operator: Good day everyone and welcome to this Silvercrest Model's second quarter, 2024 results conference call. A reminder that all participants are in a listen only mode but later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. Please note this call may be recorded. I will be standing by.
Operator: Should you need any assistance and it is now my pleasure to turn the floor over to CEO and director, Mr. Eric Fier. Welcome sir. Thank you operator.
Speaker Change: cameras Francis Ford Nathan Frier Christopher Five David Winter
Eric Fier: Good morning and thanks everybody for joining. Today will be providing commentary on Q2, 2024 results after which will be happy to take questions. The slide deck will be referring to as available on our website, silvercrestmetals.com under the investor tab. Before we get started I'd like to direct you to the forward looking statements on slide two. All figures discussed this morning are in US dollars unless otherwise stated. All of the ounce and per ounce references discussed will be based on silver equivalent ounces sold unless otherwise indicated. Our silver equivalent references are based on a gold the silver ratio of 79.5 to 1.
Eric Fier: On the call with me today is Rob Doyle recently announced interim CFO, Chris Richie, president and Cliffluffler, vice president of operations starting on slide three. Q2 is another strong quarter for us both operationally and financially given our strong performance in the first half of the year. And to the start of each two we have announced positive revisions to our annual sales, cash costs and all in sustaining cost guidance. These changes were all made under the same silver equivalent assumptions as our original guidance.
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Eric Fier: Silver equivalent sales of 2.6 million ounces in Q2 and 5.2 million ounces in H1 provided us with the comfort to increase our annual sales guidance to 10 to 10.3 million ounces from our original guidance of 9.8 to 10.2 million ounces. With cash costs and all in sustaining costs and the first half of the year becoming coming below the bottom end of our original guidance we have the confidence to revise our 2024 guidance from book for both.
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Eric Fier: We now expect cash costs to be $9.25 to $7.75 and all in sustaining costs to be $14.90 to $15.75 to $15.75 per ounce. Our balance sheet continues to demonstrate strength and flexibility with both cash and bullion holdings increasing notably in the quarter. We are now pleased to be going into H2 with continued confidence in our execution. As I mentioned, we have improved our guidance for a total silver equivalent ounces sold, cash costs, and corporate all-in sustaining costs.
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Eric Fier: Our exploration is detaining capital of remain unchanged.
Rob Doyle: Before I pass it, the call to Rob, to discuss our financial results in the quarter, I'd like to take a moment to officially welcome him to the team. We're here with him a wealth of experience, welcome Rob. Thank you Eric and good morning everyone. I'm delighted to be joining such a high quality company with an incredible asset and a talented management team. I'm very much looking forward to rolling up my sleeves in my new role.
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Rob Doyle: Moving to slide five, in the quarter we generated record revenue of 72.7 million and record my operating earnings of 41.5 million. Cash flow generation in the quarter was robust with operating cash flow of 39.6 million or 27 cents per share. We also recorded strong free cash flow of 24.3 million or 16 cents per share which came after investing 15.3 million in sustaining capital.
Rob Doyle: Net earnings in the quarter of 6.5 million or 4 cents per share were impacted by a weakened peso following the results of the Mexican general election. It is important to note that we report earnings per share on a non-adjusted basis which can result in some noise quarterly, particularly when we observe more notable exchange rate movements. The depreciation of the peso at the end of the quarter resulted in unrealized foreign exchange losses of 2.8 million and largely drove the non-cash deferred tax expense of 14.3 million.
Rob Doyle: This aspect of our tax is reflected in note 18 of our financial statements but in simple terms reflects the change in our anticipated tax attributes over the life of the mine due to changes in the effects. If the recent volatility in the Mexican peso persists, we would expect that these non-cash market market items will continue to be a feature of future earnings, both positive and negative. Current taxes of 11.8 million were higher than the prior period as a result of the utilization of all of our Mexican tax loss carried forward in 2023 following strong operating performance since commercial production was achieved in Q4 2022.
Rob Doyle: Our net earnings for the quarter added to the retained earnings on our balance sheet, something that we are very proud of as a young company. As students of the industry will know, retained earnings is a very rare achievement in our business.
Chris Richie: I am now going to post a call to Chris to speak to the Treasury assets on our pristine balance sheet. Thanks Rob. Now on slide 6. Treasury assets increased by 34% or $31.2 million to end the quarter at $122.3 million. We added 20% to our gold and silver bullion holdings and benefited from a $3.1 million mark to market increase as a result of strong metal prices in the quarter. As a result, bullion holdings grew to $24 million at the end of the quarter. Our bullion holding program continues to prove its merits with further additions expected in the second half of the year.
Clifford Lafleur: I will now hand the call to Cliff to discuss operations at Las Chisas. Thanks, Chris. I'm now on slide seven. Underground mining rates increased to approximately 1,100 tons per day. Higher than our planned exit rate at the end of the year of 1,050 tons per day. This increase in productivity is due to the strong collaboration of our site team with our two mining contractors heading into H2 2024. The Las Chisas planned average 1216 tons per day and is expected that throughout will average 1200 tons per day as planned through the remainder of 2024.
Clifford Lafleur: The plan recovered 2.7 million ounces with process grades of 765 grams per tonne, silver equivalent. The plan set yet another quarterly record with silver equivalent recovery is at 98.4%. We continue to use our stockpiles to optimize plant production. And this has allowed us to continue with strong process recoveries. A key driver and our consistent silver equivalent sales in the six quarters since declaring commercial production. Corporate all in sustaining costs in the quarter of $16.88 cents per ounce increased from quarter one. As expected, due to increased production and development with two mining contractors on site, as well as a $1 million right down a warehouse inventory in the quarter.
Clifford Lafleur: Our first half all in sustaining costs of $14.89 cents per ounce gave us confidence to adjust our annual guidance for 2024.
Eric Fier: I'll now pass it back to Eric to conclude the presentation. Thanks, Cliff. On to slide eight. Looking forward to the rest of 2024, the results of the first half of the year presented us well to meet our improved 2024 guidance. We remain committed to work on our exploration program at Los Chispas with drilling in the quarter, focusing on converting high potential infertile resources to indicator resource with additional focus being put on identifying new targets regionally and at Los Chispas.
Eric Fier: Subsequent to the end of the quarter, we released our second annual ESG report. We are proud to have a very common sense approach to sustainability. As someone who has spent the past 20 years building relationships in the communities around Los Chispas, ESG is more than data. It's finding ways to truly make a difference, and it's done through constant engagement and collaboration with local and government stakeholders. Our local communities rely heavily on agriculture and ranching for their livelihoods and are directly impacted by water scarcity in Sonora, and this, in the second year of our Water Stewardship Plan, local farmers and ranchers saw an significant improvement in water access reliability. This has allowed some community members to establish second planting seasons, boosting income potential and developing agricultural resilience.
Eric Fier: As we continue to execute on this plan, we look to further expand the reach and impact of our programs. That wraps up our formal commentary for today.
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Operator: Ladies and gentlemen, this does conclude today's teleconference and we do thank you all for your participation. You may now disconnect your lines. Thank you very much. Nathan Fier, Travis Anderson, Unknown Executive, Nathan Fier, Travis Anderson, Unknown Executive, Unknown Executive, Nathan Fier, Travis Anderson, Unknown Executive, Nathan Fier, Travis Anderson, Unknown Executive, Nathan Fier, Travis Anderson, Unknown Executive, Nathan Fier, Travis Anderson, Unknown Executive,