Q2 2024 Andean Precious Metals Corp Earnings Call
Speaker Change: Andean Precious Metals
Operator: conference call to discuss the company's operating highlights and financial results for the three and six months ended June 30th, 2024. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star and then one using a telephone keypad.
Speaker Change: Good morning everyone and welcome to Andean Precious Metals conference call to discuss the company's operating highlights and financial results for the three and six months ended June 30th 2024.
Speaker Change: As a reminder, all participants are in a listen-only mode, and the conference is being recorded.
Speaker Change: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star and then one using a telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I'd now like to turn the floor over to Amanda Mallough, Director of Investor Relations. Please go ahead.
Speaker Change: I'd now like to turn the floor over to Amanda Malone, Director, Investor Relations. Please go ahead.
Amanda Mallough: Thank you, Operator, and good morning, everybody. Before we get started, I would like to point out that during today's call, we may make forward-looking statements, as defined. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors. Our press release, MD&A, and financial statements are available on both CDAR Plus and on our corporate website at andeanpm.com. With us on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO, Juan Carlos Sandoval, our Chief Financial Officer, and Alex Pascual, our new Director of Financial Planning and Analysis. Following management's formal remarks, we will open the call. And now I will pass it on to Alberto.
Amanda Malone: Thank you, Operator, and good morning, everyone.
Speaker Change: Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under Canadian Securities Law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements.
Speaker Change: Our press release, MD&A, and financial statements are available on both CDAR Plus and on our corporate website at AndeanPM.com
Speaker Change: With us on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO, Juan Carlos Sandoval, our Chief Financial Officer, and Alex Pascual, our new Director of Financial Planning and Analysis.
Speaker Change: Following management's formal remarks, we will open the call to questions.
Alberto Morales: Thank you, Amanda, and welcome, everyone. I am pleased to share that Andean Precious Metals has delivered a robust quarter, highlighted by key operational milestones and strong financial growth. Our strategic efforts, our yielding efforts, and our ongoing focus on operational excellence are driving our continued success. We have record production and revenues by achieving, on a consolidated basis, 2.5 million silver equivalent ounces produced, which is a 103% increase from Q2 2023. Our revenue soared to $69.8 million, marking a 357% year-over-year increase. Additionally, we have successfully commissioned the FDF project.
Speaker Change: And now I pass it on to Alberto.
Alberto Morales: Thank you, Amanda, and welcome, everyone.
Alberto Morales: I am pleased to share that Andean Precious Metal has delivered a robust quarter, highlighted by key operational milestones and a strong financial growth.
Alberto Morales: Our strategic efforts, our yielding efforts, and our ongoing focus on operational excellence is driving our continued success.
Alberto Morales: We have record production and revenues by achieving, on a consolidated basis, 2.5 million silver equivalent ounces produced, which is a 103% increase from Q2 2023.
Speaker Change: Our revenue soared to $69.8 million, marking a 357% year-over-year increase.
Speaker Change: We have successfully commissioned the FDF project.
Alberto Morales: Our new fine mineral processing plant at San Bartolome was commissioned on July 23, 2024. It is now operating at 13, hundred tons per day, and we aim to ramp it up to 1,500 tons per day by the end of Q3 2024. Enhancing, Overall Performance, and Sustainability. Due to shows a strong financial performance. Significant improvements in San Bartolomé's financial metrics with a gross operating margin of $5.15 per silver equivalent ounce, up from 1.52 in Q2 2023, and a gross margin ratio of 24.45%.
Speaker Change: Our new fine mineral processing plant at San Bartolome was commissioned on July 23rd, 2024.
Speaker Change: It is now operating at 1,300 tons per day.
Speaker Change: We aim to ramp up to 1,500 tons per day by the end of Q3 2024, enhancing overall performance and sustainability.
Speaker Change: Q2 shows a strong financial performance.
Speaker Change: Significant improvements in San Bartolomé's financial metrics, with a gross operating margin of $5.15 per silver equivalent ounce, up from 1.52 in Q2 2023.
Speaker Change: in a gross margin ratio of 24.45% compared to 22.95% in the previous year.
Alberto Morales: Compared to 22.95% Andean Precious Metals, on Operational Efficiency. Despite the decrease in total plant throughput by 29% at San Bartolome, our focus on processing purchased ore and increasing production at Golden Queen contributed to a robust finance. On Health, Safety, and Environmental Stewardship. We achieved zero lost time injuries and no reportable environmental.
Speaker Change: on operational efficiency. Despite the decrease in total plant throughput by 29% at San Bartolome, our focus on processing purchased ore and increasing production at Golden Queen contributed to a robust financial result.
Speaker Change: on Health, Safety, and Environmental Stewardship.
Speaker Change: We achieved zero lost time injuries and no reportable environmental incidents, demonstrating our commitment to safe and sustainable operation.
Alberto Morales: Demonstrating our commitment to saving and sustainable office space. On Exploration and Expansion, we continued exploration activities with a focus on PACA, Alta Vista, and Golden Wings, and the development of the FDF expansion is a key part of our growth strategy. Our consolidated production reached a record 2.5 million silver equivalent ounces during the quarter.
Speaker Change: On exploration and expansion, we continued exploration activities with a focus on PACA, Alta Vista, and Golden Wing, and the development of the FDF expansion are a key part of our growth strategy.
Speaker Change: Our consolidated production, which at a record 2.5 million silver equivalent ounces during the quarter,
Alberto Morales: As we express, it's an increase of 103% from the same period of last year. This increase was largely due to the incremental production from Golden Queen, which added $16,986. We achieved a record quarterly revenue of 69.8 million, which, as expressed, represents a 357% increase compared to Q2 2020. This growth was driven primarily by an additional 40 million in revenue from Golden Queen and a 14.5 million increase from Sambato
Speaker Change: As we expressed, it's an increase of 103% from the same period of last year. This increase was largely due to the incremental production from gold in Quin, which added 16,986 gold-equivalent ounces.
Speaker Change: We achieved a record quarterly revenue of $69.8 million, which, as expressed, represents a 357% increase compared to Q2 2023.
Speaker Change: This growth was driven primarily by an additional $40 million in revenue from Golden Queen and a $14.5 million increase from San Bartolo.
Alberto Morales: We continue to invest in exploration and development, with a focus on identifying new sources of oxides, meat, and meal feed and advancing potential products. Our exploration efforts are aimed at enhancing our ore resource base and ensuring future growth at both of our islands. However, market conditions for silver and gold remain volatile, driven by factors beyond our control, such as inflation, interest rates, and geopolitics.
Speaker Change: We continue to invest in exploration and development.
Speaker Change: with a focus on identifying new sources of oxides, meat, meal feed, and advancing potential projects.
Speaker Change: Our exploration efforts are aimed at enhancing our oar resource base and ensuring future growth at both of our assets.
Speaker Change: Market conditions for silver and gold remain volatile.
Speaker Change: driven by factors beyond our control such as inflation, interest rates, and geopolitical factors.
Alberto Morales: We are closely monitoring these trends to navigate the challenges and capitalize on them. In summary, our second quarter was marked by strong operational performance and financial growth. We remain committed to our strategic goals and look forward to continuing this positive momentum. Now turning to slide six.
Speaker Change: We are closely monitoring these trends to navigate the challenges and capitalize on opportunities.
Speaker Change: summary, our second quarter was marked by strong operational performance and financial growth
Speaker Change: We remain committed to our strategic goals and look forward to continuing this positive trajectory.
Alberto Morales: During the quarter, we made significant strides in advancing our FDF project. The completion of all concrete, structural, steel, and mechanical works shows our team's dedication. As of June 30, 2024, we have incurred approximately $5.5 million against a budget of $6.7 million. The commissioning of the client's mineral processing plant on July 23, 2024, was a pivotal milestone. The plant is now operating, as we said, at 1,300 tons per day, and we are on track to ramp it up to 1,500 tons per day by the end of Q2.
Speaker Change: Now turning to slide six.
Speaker Change: During the quarter, we made significant strides in advancing our FDF project.
Speaker Change: The completion of all concrete, structural, steel, and mechanical works shows our team's dedication.
Speaker Change: As of June 30, 2024, we have incurred approximately $5.5 million against a budget of $6.7 million.
Speaker Change: The commissioning of the Fines Mineral Processing Plant on July 23, 2024 was a pivotal milestone for us.
Speaker Change: The plant is now operating as we said at 1,300 tons per day and we are on track to ramp up to 1,500 tons per day by the end Q3 2024.
Alberto Morales: This advancement not only optimizes the processing of the FTF deposit but also enhances our overall operational efficiency. The FDF deposit, with its 3.3 million tons of proven and probable reserves, grading 58 grams per ton of silver, represents a substantial resource. The utilization of previously considered waste materials aligns with our sustainability goals, contributing to both improved silver recovery and reduced environmental impact. Golden Queen.
Speaker Change: This advancement not only optimizes the processing of the FTF deposit, but also enhances our overall operational efficiency.
Speaker Change: The FDF deposit, with its 3.3 million tons of proven and probable reserves, grading 58 grams per ton of silver, represents a substantial resource base.
Speaker Change: The utilization of previously considered waste materials aligns with our sustainability goals, contributing to both improved silver recovery and reduced environmental impact.
Alberto Morales: This was our second full quarter operating Golden Queen after the acquisition in late November of last year. As a reminder, it offers a fully permitted open bid heat bleach operation in a tier one jurisdiction. Advancing our goal of being a mid-tier producer in the Americas, Golden Queen produced 16,986 gold equivalent ounces this quarter, reflecting a strong recovery from the December 2023 fire and improved operations post acquisition, with strengthening our Management Team at Golden Wing with the addition of Sylvain Lessard. President and General Manager
Speaker Change: Golden Queen, this was our second full quarter operating Golden Queen after the acquisition in late November of last year.
Speaker Change: As a reminder, it offers a fully permitted open-pit heat bleach operation in a Tier 1 jurisdiction, advancing our goal of being a mid-tier producer in the Americas.
Speaker Change: Golden Queen produced 16,986 gold equivalent ounces this quarter, reflecting a strong recovery from the December 2023 fire and improved operations post-acquisition.
Speaker Change: with Strengthen Our Management Team at Golden Wing with the addition of Silvan Lazar as President and General Manager.
Alberto Morales: His exceptional leadership skills, deep technical knowledge, and proven abilities are driving operational excellence and cost control aligned perfectly with our company. We continue to focus on the opportunities ahead, namely optimizing its mine plan, improving ore recovery and production, with increasing cash flow and optimizing operating costs. We are also defining and prioritizing exploration targets to help realize the potential upside of Golden and extend the operating life of mines with a plan to present a fulsome exploration program for the market towards the end. Following the Golden Queen Acquisition, Andean is now a very different company than it was just to have mom. This acquisition represents a significant transformation.
Operator: Conference Call to discuss the company's operating highlights and financial results for the three and six months ended June 30th, 2024. As a reminder, all participants are in a listen-only mode, the conference is being recorded.
Speaker Change: His exceptional leadership skill, deep technical knowledge, and proven capabilities is driving operational excellence and cost control aligned perfectly with our company's goals.
Speaker Change: We continue to focus on the opportunities ahead.
Operator: After the presentation, there will be an opportunity to ask questions. To join the question key, you may press star and then one using a telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and euro.
Speaker Change: namely optimizing mine plan, improving ore recovery and production, and increasing cash flow and optimizing operating costs per ounce.
Amanda Mallough: I now like to turn the floor over to, I'm in the below, director and best relations. Please go ahead. Thank you operator and good morning everyone. Before we get started, I would like to point out that during today's fall, we may make forward-looking statements as defined under Canadian security law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our press release, MDNA, and financial statements are available on both Cedar Plus and on our corporate website, at AndeanPM.com. With us on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO. Juan Carlos Sandeval, our financial officer and Alex Pasquoel, our new director of financial planning and analysis.
Speaker Change: We are also defining and prioritizing exploration targets to help realize the potential upside at Golden Queen.
Speaker Change: and extend the operations life of mines with a plan to present a fulsome exploration program to the market towards the end of the year.
Speaker Change: Following the Golden Queen acquisition, Andean is now a very different company than it was just 12 months ago.
Alberto Morales: Effectively doubling our company's size across critical metrics such as revenue, reduction, reserves, and workforce, as we continue to integrate Golden Queen into our operation. Additionally, our team has been focused on streamlining processes to enhance efficiency and performance, in alignment with our annual plan for 2020. We anticipate the second half of this year will be better reflecting this integration with improved production and enhanced operations. We have also developed a strong platform to support our ambitions of becoming a mid-tier producer in the Americas. We have several years of available reserves as well as a diversified acid base of cold and silver production that is expected to drive growth in cash flow and profitability going forward.
Speaker Change: This acquisition represents a significant transformation, effectively doubling our company's size across critical metrics such as revenue, production, reserves, and workforce.
Speaker Change: As we continue to integrate Golden Queen into our operations,
Speaker Change: Our team has been focused on streamlining processes to enhance efficiency and performance.
Amanda Mallough: Following management formal remarks, we will open the call to questions.
Speaker Change: in alignment with our annual plan for 2024.
Alberto Morales: And now I pass it on to Alberto. Thank you, Amanda. And welcome everyone.
Speaker Change: We anticipate the second half of this year will be better reflecting this integration with improved production and enhanced operational efficiencies.
Alberto Morales: I am pleased to chair that Andean Precious Medal has delivered a robust water. I lighted by key operational milestones and a strong financial growth. Our strategic efforts are yielding efforts and our ongoing focus on operational excellence is driving our continued success. We have record production and revenues by achieving on a consolidated basis 2.5 million silver equivalent analysis produced, which is a 103% increase from Q2 2023. Our revenue soar to 69.8 million, marking a 357% year-over-year increase.
Speaker Change: We have also developed a strong platform to support our ambitions of becoming a mid-tier producers in the Americas.
Speaker Change: We have several years of available reserves as well as diversified asset base of gold and silver production that is expected to drive growth in cash flow and profitability going forward.
Juan Sandoval: Our operational expertise and strong financial position enable us to continue to act on future opportunities for growth through acquisition. With that, I will hand over the reins to Juan Carlos, who will review our financials in more detail. Thank you, Alberto. First, I will start with Tamba Dolomé; our operation scene will be... During the second quarter, we purchased 228,000 tons, a 36% increase compared to Q2 2020. This rise was driven by a strategic plan to increase third-party oxides, impacted mainly by the discontinuance of Arpanjanko's deposit and this late start-up on the air. However, headgrading, 155 grams, is from 109- on 119 grams per ton in Q220. Meanwhile, revenue surged 95%.
Speaker Change: Further, our operational expertise and strong financial position enable us to continue to act on future opportunities for growth through acquisitions.
Speaker Change: With that, I will hand over the reign to Juan Carlos who will review our financials in more details.
Alberto Morales: We have successfully commissioned the FDF project. Our new fine mineral processing plant at Tolome was commissioned on July 23, 2024. It is now operating at 1300 tons per day. We aim to ramp up to 1500 tons per day by the end of Q3 2024, enhancing overall performance and sustainability. Q2 shows a strong financial performance, significant improvements in San Batolomé's financial metrics with a gross operating margin of $5.15 per silver equivalent announced from 1.52 in Q2 2023 and a gross margin ratio of 24.45 per cent. Compared to 22.95% on operational efficiency, despite the decrease in total plant throughput by 29% of San Bartolome, our focus on processing purchase or an increasing production at Golden Queen contributed to a robust financial results.
Juan Carlos: Thank you, Alberto. First, I will start with San Bartolome, our operations in Bolivia.
Juan Carlos: During the second quarter, we purchased 228,000 tons, a 36% increase compared to Q2 2023.
Juan Carlos: This rise was driven by our strategic plan to increase third-party oxide purchase materials for processing.
Juan Carlos: Silver equivalent ounces produced were down 12% when compared to Q2 2023, impacted mainly by the discontinuance of Arpajaco's deposit and the late startup of the FDF project.
Juan Carlos: However, head grade improved to 155 grams per ton, up from 119 grams per ton in Q2 2023.
Juan Sandoval: 29.8 million, who are driven by higher serial dwellings for the board and improved real-life cell rumble. We sold 1.1 million silver equivalent ounces, at an average price of $27.81 per ounce, prior to Q2 2023. Has Gross Operating Margin for Silver Equivalent Ounce was $5.50, from $1.52. Andean Precious Metals was $5.50, from $1.50, reflecting higher real-
Juan Carlos: Revenue surged 95% to $29.8 million driven by higher sales volumes for the quarter and improved realized silver and gold prices.
Juan Carlos: We sold 1.1 million silver equivalent ounces at an average price of $27.81 per ounce.
Alberto Morales: On health, safety, and environmental stewardship, we achieved zero lost time injuries and no reportable environmental incidents, demonstrating our commitment to safe and sustainable operation. On exploration and expansion, we continued exploration activities with a focus on Paca, Altavista, and Golden Queen, and the development of the FDF expansion are a key part of our growth strategy. Our consolidated production reached a record 2.5 million silver equivalent ounces during the quarter. As we express, it's an increase of 103% from the same period of last year.
Juan Carlos: Compared to Q2 2023, cash gross operating margin for silver equivalent unsold was $5.15.
Juan Carlos: are up from $1.82.
Juan Sandoval: And the gross margin ratio improved to 24.45. Capital expenditures in the second quarter were $1.7 million, and 1.2 million directives for the SPF. Andean Precious Metals and the 1.2 million directives, Holding on to Golden Queen, operating every night. Andean Precious Metals, Golden Queen produced 16,986 gold equivalent ounces to 2020, demonstrating solid operational performance and Strong Recovery from the Fire Incident in Lakeland. Revenues reached $40 million for the 17,348 Golden Quibble & Bounce Assaults at an average realized price of $2,305. Total operating cash costs per ounce sold net by product. 1350 miles per hour.
Juan Carlos: reflecting higher real-life prices, and the gross margin ratio improved to 24.45% up from 22.95%.
Speaker Change: Capital expenditures in the second quarter were $1.7 million, with $1.2 million directed towards the FDS.
Speaker Change: Holding on to Golden Queen's operating and financial performance.
Alberto Morales: This increase was largely due to the incremental production from Golden Queen, which added 16,986 gold equivalent ounces. We achieved a record quarterly revenue of 69.8 million, which, as expressed represents, a 357% increase compared to Q2 2023. This growth was driven primarily by an additional 40 million in revenue from Golden Queen and a 14.5 million increase from San Bartolome. We continued to invest in exploration and development, with the focus on identifying new sources of oxides, meat, meal feed, and advancing potential projects. Our exploration efforts are aimed at enhancing our ore resource base and ensuring future growth at both of our assets.
Speaker Change: Golden Queen produced 16,986 gold-equivalent ounces in Q2 2024, demonstrating solid operational performance and strong recovery from the fire incident in late December .
Speaker Change: Revenues reached $40 million for the quarter with 17,348 gold equivalent ounces sold at an average realized price of $2,305 per ounce.
Speaker Change: The total operating cash cost per ounce sold, net of byproducts, was $1,350 per ounce, which is a direct result of the improved operations at Golden Queen since its acquisition in November 2023.
Juan Sandoval: Chasing direct resolve the blame, prove the operations of Goldenin' Andean Precious Metals Chasing direct, since its acquisition in November 2020. And finally, the only sustaining cost, an all-in-cost, brown, sold, net-of-by-broth. 1,700 of, 1,792 per ounce, underscoring our focus on maintaining while delivering mom for the... Moving on to our overall financial performance, for the second quarter, we saw a substantial improvement in our financial matters. Consolidated Revenue, 9.8, a significant rise from the 15.3 million in Q2 2020.
Speaker Change: And finally, the only sustaining cost and only cost per ounce sold metal by-products were $1,752 and $1,782 per ounce respectively.
Alberto Morales: Market conditions for silver and gold remain volatile, driven by factors beyond our control, such as inflation, interest rates, and geopolitical factors. We are closely monitoring this trend to navigate the challenges and capitalize on opportunities.
Speaker Change: underscoring our focus on maintaining cost efficiency while delivering on production targets.
Speaker Change: Moving on to our overall financial performance.
Speaker Change: For the second quarter, we saw a substantial improvement in our financial metrics.
Alberto Morales: Summary, our second quarter was marked by strong operational performance and financial growth. We remain committed to our strategic goals and look forward to continuing this positive trajectory.
Juan Sandoval: This revenue growth was driven by a 103% increase in Silver Equivalent Products and the higher average real-life prices for silver and gold. Total cost of sales increased to $47.8 million in the second quarter due to incremental costs involving and higher cost firms to the San Bartolomeo operation.
Speaker Change: Consolidated revenue reached $69.8 million, a significant rise from the $15.3 million in Q2 2023.
Alberto Morales: Now turning to slide stakes. During the quarter, we made significant strides in advancing our FDF project. The completion of all concrete, structural, steel, and mechanical works shows our team's dedication.
Speaker Change: This revenue growth was driven by a 103% increase in silver equivalent production and higher average real life prices for silver and gold.
Speaker Change: Total cost of sales increased to $47.8 million in the second quarter.
Alberto Morales: As of June 30, 2024, we have incurred in approximately 5.5 million against a budget of 6.7 million. The commissioning of the fine's mineral processing plant on July 23, 2024 was a pivotal mile, on for us. One is now operating, as we said, a 1,300 tons per day and we are on track to run pop to 1,500 tons per day by the end Q3, 2024. This advancement not only optimizes the processing of the FDF deposit, but also enhances our overall operational efficiency.
Speaker Change: attributable to incremental costs from Golden Queen and higher costs from the San Bartolomeo operations due to increased sales volume.
Juan Sandoval: YouTube Increase, finance costs were $1.6 million, mainly due to the interest on the gold and queen's name. We realize that foreign exchange gains were $2.4 million driven by premiums on U.S. dollar sales in Bolivia. Capital expenditures for the quarter totaled $5.2 million.
Speaker Change: Finance costs were $1.6 million, mainly due to the interest on the Golden Queens Main Street Priority Loan.
Speaker Change: We realized a foreign exchange gain of $3.4 million driven by premiums on U.S. dollar sales in Bolivia.
Juan Sandoval: Andean Precious Metals, John Sclodnick, and John Sandoval, Andean Precious Metals, 33.5 million 33.5 million. We remain vigilant regarding market volatility and Pat Donor on that. The focus continues to be on operational efficiency. Andean Precious Metals, in 2024.
Speaker Change: Capital expenditures for the quarter totaled $5.2 million, of which $1.7 was Sambar Tolome and $3.5 million for Golden.
Speaker Change: We remain vigilant regarding market volatility and its impact on our financial portfolio. Our focus continues to be on operational efficiency and strategic growth.
Alberto Morales: The FDF deposit with its 3.3 million tons of proven and probable reserves, grading 58 grams per ton of silver, represents a substantial resource base. The utilization of previously considered waste materials aligns with our sustainability goals, contributing to both improved silver recovery and reduced environmental impact.
Juan Sandoval: Smart Play, Robust Financial Performance, and Significant Operational Andean Precious Metals, We are well positioned for continued growth and are committed to delivering well. Moving on to our Capitalist Structure on Swaggy Lake. On June 30, 2024, we had liquid assets of $87 million in cash, a negative net debt, and 121 million working people. The mandate is, and will continue to be, to maintain our balance sheet to support. Now, I'll turn it back over to Alberto for any closing remarks.
Speaker Change: In conclusion, Q2 2024 was marked by a robust financial performance and significant operational milestones.
Speaker Change: We are well-positioned for continued success and are committed to delivering value to our shareholders.
Alberto Morales: More than queen, this was our second full-quarter operating golden queen after the acquisition in late November of last year. As a reminder, it offers a fully permitted open bid heat bleach operation in a tier 1 jurisdiction, advancing our goal of being a mid-tier producer in the Americas. Golden Queen produced 16,986 gold equivalent ounces, this quarter, reflecting a strong recovery from the December 2023 fire and improved operations post acquisition. With strengthen our management team at Golden Queen with the addition of Van La Saar, as present in general management.
Speaker Change: Moving on to our capital structure on slide 11.
Speaker Change: As of June 30, 2024, we had liquid assets of $87 million of cash and cash equivalents.
Speaker Change: a negative net debt, and $121 million of working capital.
Speaker Change: My mandate is and will continue to be on maintaining our balance sheet to support future growth.
Speaker Change: Now, I'll turn it back over to Alberto for any closing remarks.
Juan Sandoval: Thank you, Juan Carlos. Summarized, Andean Precious Metal has demonstrated strong operational and financial performance in the. Our advancements in the FDF project, record production, and revenue growth underscore our commitment to creating value and achieving our strategic objectives.
Alberto: Thank you, Juan Carlos.
Alberto: To summarize...
Alberto: Andean Precious Metal has demonstrated strong operational and financial performance in the second quarter.
Alberto: Our advancements in the FDF project, record production, and revenue growth underscores our commitment to creating value and achieving our strategic objectives.
Alberto Morales: Its exceptional leadership skill, deep technical knowledge, improving capabilities, is striving operational excellence and costs control aligned perfectly with our company's goals. We continue to focus on the opportunities ahead, namely optimizing its mine plan, improving all recovery and production, and increasing cash flow and optimizing operating costs per ounce. We are also defining and prioritizing exploration targets to help realize the potential upside of Golden Queen and extend the operations life of mines with a plan to present a full-sum exploration program for the market towards the end of the year.
Alberto Morales: San Bartolome, we will be working towards signing additional agreements to process high-margin third-party work and stabilizing production from the Golden Queen. We will continue to leverage our expertise and experience to stay focused on the implementation of the identified strategies to optimize operations, production, and efficiency. We appreciate your continued support and look forward to updating you on our progress in the coming course. With that, I will now open the call for questions. Operator, please go ahead. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. To ask a question, you may press star and one on your telephone keypad.
San Bartolome: At San Bartolome, we will be working towards signing additional agreements to process high-margin third-party work and stabilizing production from the FDF project.
Speaker Change: At Golden Queen, we will continue to leverage our expertise and experience to stay focused on the implementation of the identified strategies to optimize operations, productions, and efficiencies.
Speaker Change: We appreciate your continued support and look forward to updating you on our progress in the coming quarters.
Operator: You will hear a tone acknowledging your request. If you're using a speakerphone, we do ask that you please pick up your handset before pressing the key. So let's take your questions. You may press Naurin, too. We'll pause for a moment as callers join the question queue. Our first question today comes from Justin Chan from SCP Research Finance. Please go ahead with your question. Thanks, guys. Congratulations on the positive cash flow. I think that's a huge catalyst. And just to compliment the new disclosure, I really like it. It was a lot of useful information, so it made it a lot easier this morning.
Speaker Change: With that,
Speaker Change: I will now open the call for questions.
Speaker Change: Operator, please go ahead.
Alberto Morales: Following the Golden Queen acquisition, and the end is now a very different company than it was just two months ago. This acquisition represents a significant transformation, effectively doubling our company's size across medical, critical metrics such as revenue, reduction, reserves, and workforce. As we continue to integrate Golden Queen into our operations, our team has been focused on streamlining processes to enhance efficiency and performance in alignment with our annual plan for 2024. We anticipate the second half of this year will be better reflecting this integration with improved production and enhance operational We have also developed a strong platform to support our ambitions of becoming a mid-tier producers in the Americas.
Speaker Change: Ladies and gentlemen, at this time we'll begin the question and answer session. To ask a question, you may press star and one on your telephone keypad. You will hear a tone acknowledging your request.
Speaker Change: If you're using a speakerphone, we do ask that you please pick up your handset before pressing the keys.
Speaker Change: So, withdraw your questions, you may press star and two.
Speaker Change: We'll pause a moment as callers join the question queue.
Justin Chan: My first question is just on San Bartolome and, I guess, as you look at the current quarter and the next quarter, your oil purchase volumes ticked up in Q2, do you think they can increase a little bit further? And likewise, just on the FTF, what are you expecting for Q3 and Q4 volumes, you know, maybe averaging through the quarter? Hello Justin. This is Alberto.
Speaker Change: Our first question today comes from Justin Chan from SCP Research Finance. Please go ahead with your question.
Justin Chan: Thanks, guys. Congratulations on the positive cash flow. I think that's a huge catalyst. And just to compliment, the new disclosure, I really like it. It was a lot of useful info, so it made it a lot easier this morning.
Speaker Change: My first question is just on...
Speaker Change: on San Bartolome and
Speaker Change: As you look at the current quarter and the next quarter, your oil purchase volumes ticked up in Q2. Do you think they can increase a little bit further?
Alberto Morales: We have several years of available reserves as well as diversified acid-base of cold and silver production that is expected to drive growth in cashflow and profitability going forward. Further, our operational expertise in strong financial position enables us to continue to act on future opportunities for growth through acquisitions.
Speaker Change: And likewise, just on the FTF, I guess what are you expecting for Q3 and Q4 volumes, you know, maybe averaging through the quarter?
Alberto Morales: Well, thank you for your question. So let me first address..., purchase the purchases. The answer to that is yes; we're actively pursuing to increase our third-party war purchases. And we have certain projects on the pipeline that we're hoping to materialize that will increase our tonnage, available tonnage for processing. So we're heavily involved, I would say, and aggressively pursuing that avenue. Now, in connection with the FDF, yes, indeed. It took us about four to six weeks longer to get it commissioned, but we're finally fully commissioned and working on it.
Speaker Change: Hello, Justin. This is Alberto. Well, thank you for your question. So let me first address...
Juan Sandoval: With that, I will hand over the rain to Juan Carlos, who will review our financials in more details. Thank you, Alberto.
Speaker Change: The purchase the purchases the answer to that is yes, we're actively pursuing to increase our third-party war purchases
Juan Sandoval: First, I will start with the summit element, our operations in Bolivia. During the second quarter, we purchased 228,000 tons, a 36% increase compared to 2023. This rise was driven by a strategic plan to increase third-party oxide purchase materials for processing.
Speaker Change: and we have certain projects on the pipeline that we're hoping to materialize that will increase our tonnage, available tonnage for processing.
Speaker Change: So, we're heavily involved, I would say, and aggressively pursuing that avenue.
Speaker Change: Now, in connection with the FDF, yes, indeed, it took us about four to six weeks longer to get it commissioned, but we're finally fully commissioned working on it.
Alberto Morales: And during these initial stages, when we're starting to produce roughly about 1,300 tons per day, we are starting with the upper part of the FDF. That upper part of the FDF is really the ending part of the Payakos deposit, the low-grade Payakos deposit. So the gray is going to start to increase as we go deep into the FTF. So we're looking, if you wanted to use the analogy of micro mining, one of the FTF by starting to achieve, as soon as possible, deeper zones where we can get higher grades and get to the 50 grams per ton, average grade Breton.
Juan Sandoval: Silver equivalent ounces produced were down 12%, when compared to 2022-23. In fact, it mainly by the discontinuance of our project was the process and the late start-up of the FDF project. However, head grading proved to 155 grams per tonne, from 119 grams per tonne into 2023. Revenue surged 95% to 29.8 million driven by higher sales volumes for the quarter and improved realized Silver and Gold prices. We sold 1.1 million Silver equivalent ounces at an average price of 27.81 dollars per ounce. Compared to 2022-23, cash growth operating margin for Silver equivalent ounce sold was $5.15 up from $1.52, reflecting higher realized prices and the gross margin ratio improved to 24.45% up from 22.95%.
Speaker Change: And during these initial stages, where we're starting to produce roughly about 1,300 tons per day,
Speaker Change: We are starting with the upper part of the FTF. That upper part of the FTF, it's really the
Speaker Change: ending part of the PAYACO's deposit, the low-grade PAYACO's deposit. So the grade is going to start to increase as we go deep into the FTF.
Speaker Change: So we're looking, if you wanted to use the analogy on a micromining plan of the FDF, by starting to achieve as soon as possible deeper zones where we can get higher grade and get to the 50 grams per ton.
Alberto Morales: That'll be a ramp-up for that. But to be summarizing your question, we're hoping to average roughly approximately 30,000 ounces produced from the FDF on a monthly basis in total beginning August. So that's roughly what we're estimating. And certainly by the time we exhaust the opposite part and continue to go into the deeper portion.
Speaker Change: average grade per ton. That'll be a ramp-up for that.
Pat: and Pat.
Speaker Change: To be summarizing your question, we're hoping to average roughly, approximately, I would say 30,000 ounces produced from the FDF on a monthly basis on total beginning August .
Juan Sandoval: For example, expenditure is in the second quarter were 1.7 million with 1.2 million directed towards the FDF.
Speaker Change: So that's roughly what we're estimating, and certainly by the time we exhaust the upper part and continue to go into the deeper portion, we are expecting that that could be increased, but perhaps at the beginning, starting beginning of next year.
Alberto Morales: We are expecting that that could be increased, but perhaps at the beginning, starting the beginning. Okay, thanks. That's, that's, that's quite helpful. So maybe to read between the lines, the You'll probably just in terms of fully your guidance. It's back halfway to that'll probably more come from or purchasing than the FDF, at least for the next two quarters. Yes.
Juan Sandoval: Moving on to Gold and Queen's operating and financial performance. Gold and Queen produced 16,986 gold equivalent ounces in Q2 2024. Demonstrating solid operational performance and strong recovery from the fire incident in late December.
Speaker Change: [inaudible]
Speaker Change: Okay, thanks. That's quite helpful. So, maybe to read between the lines, the...
Speaker Change: You'll probably just
Speaker Change: In terms of full year guidance, it's back halfway, so that'll probably more come from or purchasing than the FDF, at least for the next two quarters.
Juan Sandoval: Revenue reached 40 million for the quarter with 17,348 gold equivalent ounces sold at an average realized price of 2,305 per ounce. The total operating cash cost per ounce sold at an average price of 2,305 per ounce, was 1350 per ounce, which is a direct result of the improved operations of Golden and Queen since its acquisition in November 2023. And finally, the only sustained cost, an all-in-cost per ounce sold net-of-buy product, where 1,752 and 1,782 per ounce respectively, underscoring our folks on maintaining cost efficiency while delivering non-production targets.
Justin Chan: Okay. Okay, thanks. That's really helpful on that side of things.
Speaker Change: Yes.
Justin Chan: Also, I guess what's back-calculated is your CapEx guidance. I saw you reiterated it today, but I guess halfway through the year, your CapEx is below that run rate, let's say. I guess, how much potential is there for you to come in below your full year guidance on CapEx, do you think? In the second half, are you pretty confident that you'll hit that $24 million number? Yeah, thank you, Justin. It's JC.
Speaker Change: Okay, thanks. That's really helpful on that side of things. Also, I guess back-calculated is your CapEx guidance. I saw you reiterated it today, but I guess halfway through the year, your CapEx is
Speaker Change: below that run rate, let's say.
Speaker Change: I guess, how much potential is there for you to come in below your full year guidance on CapEx, do you think?
Speaker Change: In the second half, are you pretty confident that you'll hit that kind of $24 million number?
Juan Sandoval: I would say we are well in line with what was presented. As you know, we have a budget of around $20 million, and half of it has been spent on the first half.
J.C.: Yeah, thank you, Justin, it's J.C., I would say we are, we're in line with what's presented, you know, we, we, we, we, we, we have a budget for our 20 million dollars. How will they have to extend for the first half?
Juan Sandoval: So I would, yeah, I would say we are well in line. Uh, his funding. We will be reaching out among our families. Okay.
Juan Sandoval: Moving on to our overall financial performance. For the second quarter, we saw a substantial improvement in our financial metrics. The solid-dated revenue reached 69.8 million, a significant rise from the 15.3 million in Q2 2023. This revenue growth was driven by a 103% increase in silver equivalent production, and higher average real-life prices for silver and gold. Total cost of sales increased to 47.8 million in the second quarter, a hurdle to incremental cost from Golden Queen, and higher cost from to the sum of total male operations, due to increased sales loans.
J.C.: So I would yeah, I would say we are well in line
Justin Chan: Okay, those two are, uh, those two are quite helpful, I think. Overall, maybe just one last one on, I guess, working capital. Are you expecting any kind of movement in the second half? I noticed, for example, your receivables are a little bit lower than, let's say, they are traditionally. Is that just, you know, is there anything specifically behind that, or would you expect those numbers to normalize?
J.C.: Okay.
Speaker Change: Thank you. Thank you.
Juan Sandoval: And or just any other movements in working capital that I should be aware of modeling in the second half? Yeah, not really, Justin. Our accounts receivable and our accounts payable. They have those differences, that's a close-months, closing months, but I would say for purposes of money for the rest of the year, they're pretty stable. I don't see any big differences from what we have right now. As you can see, we have a strong working capital and a strong balance. So I would say they would pretty much keep that thing... Okay. And then, sorry, anyone else on the line? I just have one last one.
Speaker Change: Okay, those two are quite helpful, I think.
Speaker Change: I mean, overall, maybe just one last one on, I guess, working capital. Are you expecting any kind of...
Speaker Change: Any kind of movement in the second half, I noticed your, for example, your receivables are a little bit lower than, let's say, they are traditionally.
Speaker Change: Is that just, you know, that is anything specifically behind that or would you expect kind of those numbers to normalize and or just any other movements working capital that I should be aware of modeling the second half.
Juan Sandoval: Signance costs were 1.6 million, mainly due to the interest on the Golden Queen's mainstream higher priority loan. We realized that foreign exchange gains of 3.4 million, driven by premiums on U.S, dollar sales in Bolivia. Capital expenditures for the quarter total 5.2 million, from which 1.7 was summed our total net, and 3.5 million for Golden Queen. We will remain vigilant regarding market volatility and its impact on our financial performance. Our focus continues to be on operational efficiency and strategic growth.
Speaker Change: Yeah, not really, Justin. Our accounts are receivable and our accounts are payable. They have those differences as a closing.
Speaker Change: months, closing months, but I would say for purposes of modeling for the rest of the year they're pretty stable. I don't see any big differences from what we have right now. As you can see we have a strong
Speaker Change: working capital and strong balance. So I would say they would pretty much stay, keep that same trend.
Justin Chan: Now that you are starting to generate positive cash flow and earnings, I guess on tax timing, is it best to model it as... as your underlying earnings are incurred, or is there any subtlety there that we should be aware of? I mean, everything is sold, and we get paid within 30 days, and that's it. I would say no. No, no difference.
Speaker Change: Okay, and then, sorry anyone else on the line, I just have one last one. Now that you are starting to generate positive cash flow and earnings,
Juan Sandoval: In conclusion, Q2 2024 was marked by a robust financial performance and significant operational milestones. We are well positioned for continued success, and are committed to delivering value to our shareholders.
Speaker Change: I guess on tax timing, is it best to model it as your underlying earnings are incurred or I guess are there any subtleties there that we should be aware of?
Speaker Change: No, I mean everything is sold and we get paid within 30 days and that's, you know, I would say no.
Juan Sandoval: Moving on to our capital structure on swag 11. As of 2030 and 2024, we had liquid assets of 87 million of cash and cash equivalent, a negative net debt, and 121 million of foreign capital.
Juan Sandoval: OK. Okay, so just model this kind of cash tax and along with underlying earnings. Correct. Okay, great. Thanks a lot, guys. I really appreciate the call and congratulations. Thank you, Justin.
Speaker Change: No, no difference. OK. Where are we, then?
Speaker Change: Okay, so just model kind of cash tax and along with underlying earnings.
Juan Sandoval: Our mandate is and will continue to be on maintaining our balance sheet to support future growth.
Speaker Change: Eric, Eric, Eric, Eric,
Speaker Change: Okay, great. Thanks a lot, guys. I really appreciate the caller and the call. Congratulations.
Operator: Once again, if you would like to ask a question, please press star and 1. Our next question comes from John Sclodnick from Desjardins. Please go ahead with your question. Hi guys, yeah, thanks for taking my question here and congrats on a good quarter and get ready to see that free cash flow generation. I guess a little bit further on those third-party or sources, just wondering if you're seeing, you know, fixed cost purchase opportunities or fixed margins. I would say we're looking at both. John, it's good to talk to you.
Alberto Morales: Now, I'll turn it back to over 12 hours to provide any closing remarks. Thank you Juan Carlos. To summarize, Andy and Prision's medal has demonstrated strong operational and financial performance in the second quarter.
Justin Chan: Thank you, Justin.
Speaker Change: Once again, if you would like to ask a question, please press star and 1.
Speaker Change: Our next question comes from John Sklodnik from Desjardins. Please go ahead with your question.
John Sklodnik: Hi, guys. Yeah, thanks for taking my question here and congrats on the good quarter. And yeah, great to see that free cash flow generation. I guess a little bit further on those third-party ore sources, just wondering if you're seeing fixed cost purchase opportunities or fixed margin?
Alberto Morales: Our advancements in the FDF project, record production, and revenue growth underscores our commitment to creating value and achieving our strategic success, of Objectives. At San Bartolome, we will be working towards signing additional agreements to process high margin per party work and stabilizing production from the FDA project. At Golden Queen, we will continue to leverage our expertise and experience the state focus on the implementation of the identified strategies to optimize operations, productions and divisions. We appreciate your continued support and look forward to updating you on our progress in the coming quarters.
John Sclodnick: We're pursuing, as Alberto already mentioned, trying to get new long-term contracts on their fixed prices. And we're also, you know, looking at more spot prices for spot purchases as well. So yeah, that's what we have. Okay, so it should be a blend.
John Sklodnik: Andean Precious Metals
Alberto: I would say we're looking at both, John . Good to talk to you. We're pursuing, as Alberto already mentioned, trying to get new long-term contracts on their
Juan Sandoval: and Juan Sandoval.
Juan Sandoval: and more spot prices or spot purchases as well. So.
John Sclodnick: Okay, great. And then I guess a little more on capital allocation. I mean, yeah, you guys are generating free cash flow.
Juan Sandoval: Yeah.
Juan Sandoval: That's what we have right now, John .
John Sklodnik: Okay, so it should be a blend. Okay, great. And then, I guess, a little more on capital allocation. I mean, yeah, you guys are generating free cash flow. FDF construction is largely behind you. NCID is complete, just beyond, I guess, acquisitions, which it sounds like you're still actively looking at. I'm just curious how you're thinking about that, or just happy to continue to build the treasury and add to those marketable securities.
John Sclodnick: FDF construction is largely behind you, NCIB is complete, just beyond, I guess, acquisitions, which it sounds like you're still actively looking at. I'm just curious how you're thinking about that, or just happy to continue to build the treasury and add to those marketable securities. Yes, well, yes, John.
Operator: With that, I will now open the call for questions. Operator, please go ahead. Ladies and gentlemen, at this time, we'll begin the question in the answer session. To ask a question, you may press star and one on your telephone keypad. We'll hear a tone acknowledging your request. If you're using a speaker phone, we do ask to please pick up your hand set before pressing the keys. So, we'll draw your questions. You may press star and two. We'll pause a moment as colors join the question to you.
Alberto Morales: To be specific, we have always told the market that we are actively looking for opportunities, as they come across to us and are opened, to deploy our war chest. Our cash flow strength, we have a very strong cash flow position. We're still under leveraged.
John Sklodnik: Yeah, well, yeah, John , to be specific on that, we have always told the market.
John Sklodnik: that we're actively looking for opportunities.
Speaker Change: as they come across to us and were opened.
Justin Chan: Our first question today comes from Justin Chan from SCP Research Finance. Please go ahead with your question. Thanks, guys. Congratulations on the positive cash flow. That's a huge catalyst. Just to compliment, the new disclosure, I really like it. There's a lot of useful info, so maybe a lot easier this morning.
Speaker Change: to deploy our war chest, our cash flow strength. We have a very strong cash flow position. We're still under leveraged. We can still look even, this cash flow generation, the titles, and the end to even look.
Alberto Morales: We can still look at even this cash flow generation with titles and the end to even look at another acquisition that we hope will be transformational, depending on what's available in the market, but I can just say that we're active. Fair enough.
Speaker Change: at another acquisition that we hope will be transformational, depending on what's available in the market. But I can just say that we're actively looking.
Alberto Morales: My first question is just on San Bartolome. As you look at the current quarter and the next quarter, your purchase volumes took up in Q2. Do you think they can increase a little bit further? Likewise, just on the FTF, I guess, what are you expecting for Q3 and Q4 volumes, maybe averaging through the quarter?
John Sclodnick: Yeah, no, I know it's always a tough question on a conference call. And I guess, turning to Soledad Mountain, just curious what you're seeing on the exploration front and if there's any kind of oxide targets that you're excited about. Yeah, we will be. It's definitely something we're working on. Our intention is probably before the end of the year to present a more comprehensive exploration plan. We have been working on that, so, yes, before the end of the year, the intention is to present a plan that will, you know, extend my life. Okay, excellent. Well, that's it for me on questions.
Speaker Change: Fair enough. Yeah, I know it's always a tough question on a conference call. And I guess just turning to Soledad Mountain, just curious what you're seeing on the exploration front and if there's any kind of oxide targets that you're excited about.
Speaker Change: Yeah, we will be. It's definitely something we're working on. Our intention is probably before the end of the year we present a more comprehensive exploration plan. We have been working on that.
Alberto Morales: Hello, Justin. This is Albert. Thank you for your questions. Let me first address the purchases. The answer to that is yes. We're actively pursuing to increase our third-party war purchases, and we have certain projects on the pipeline that we're hoping to materialize that will increase our tonnage available tonnage for processing. We're heavily involved, I would say, and aggressive pursuing that. In connection with the FTF, yes and yes, it took us about four to six weeks longer to get it commissioned, where we're finally completely commissioned working on it.
Speaker Change: So, yes, before the end of the year, the intention is to present a plan that will, you know, extend the life of mine.
John Sclodnick: Exciting to see you guys generate that free cash flow, and yeah, thanks a lot for that call. Yeah, ladies and gentlemen, and for asking the additional questions. We're finishing today's question and answer session. I'd like to turn the conference call back over to Alberto Morales for closing remarks. Operator, our colleague Amanda has received one question from our investor. So, if you don't mind, before we close the call, I'll let her raise the question open.
Speaker Change: Okay, excellent. Well, that's it for me for questions. Exciting to see you guys generate that free cash flow, and yeah, thanks a lot for that call.
Speaker Change: And ladies and gentlemen, in showing no additional questions, we will conclude today's question and answer session. I'd like to turn the conference call back over to Alberto Morales for closing remarks.
Alberto Morales: Operator, our colleague Amanda has received one question from our investors. So if you don't mind, before we close the call, I'll let her raise the question openly.
Alberto Morales: During these initial stages, we're starting to produce roughly about 1,300 tons per day. We're starting with the upper part of the FTF. That upper part of the FTF is really the ending part of the Payacos deposit, the low-grade Payacos deposit. The gray is going to start to increase as we go deep into the FTF.
John Sclodnick: Yeah, the question is just if the company has any plans to renew the NCI. To that effect, what I would say is that we have exhausted the number of available shares to be repurchased under our current NCIV program. And certainly, in order to consider the removal of this, we would need to get advice from the council, as I believe the regulatory environment requires some waiting period on it, which, So, for now, I cannot go one way or another. One will basically need to get advice from the council as to the waiting period.
Amanda Malone: Yeah, the question is just if the company has any plans to renew the NCIB program.
Speaker Change: To that effect, what I would say is that we have exhausted the numbers of available shares to be repurchased back under our current NCIAB program.
Alberto Morales: So we're looking if you wanted to use the analogy on a micro mining plan on the FDA by starting to achieve as soon as possible deeper zones where we can get higher grade and get to the 50 grams per ton average grade per ton that will be a ramp up for that but to be summarizing your question we're hoping to average roughly approximately I would say 30,000 ounces produced from the FDA on a monthly basis on total beginning August. So that's roughly what we're estimating and certainly by the time we exhaust the opposite parts and continue to go into the deeper portion we are expecting that that could be increased but perhaps at the beginning starting beginning of the next year.
Speaker Change: And we're certainly, in order to consider the renewal of this, we would need to get advice from counsel, as I believe the regulatory environment requires for some waiting period on it, which
Speaker Change: So, for now, I cannot go one way or another, one will basically need to get advice from council as to the waiting period that this may represent.
Alberto Morales: And if there are any further questions, and basically, I would like to thank you all for joining us today and for your continued support. As we have expressed, we remain committed to driving our business forward and look forward to sharing our progress in the coming quarters ahead. Thanks again, and have a great day. This brings to a close today's conference call.
Speaker Change: And if there is no more further questions, then basically I would like to thank you all for joining us today and for your continued support.
Speaker Change: As we have expressed, we remain committed to driving our business forward and to look forward to sharing our progress in the coming quarters ahead.
Speaker Change: Thanks again and have a great day.
Alberto Morales: Okay thanks that's that's that's quite helpful so maybe to read between the lines the you'll probably just in terms of fully your guidance it's back halfway to that'll probably more come from or purchasing than the FDA at least for the next two quarters. Yes. Okay thanks that's that's really helpful and that's other things. Also I guess back half-related is your your CAPEX guidance I saw you reiterated it today but you know you're I guess halfway through the year your CAPEX just below that runway let's say I guess how much how much potential is there for you to come in below your full your guidance and CAPEX you think in the second half are you pretty confident that you'll hit that kind of 24 million dollar number.
Alberto Morales: Yeah thank you just in its JC I would say we are we're in line we what was presented and you know we we we have a part of around $20 million how will they have been spent for the first half so I would yeah I would say we are well in line I think we'll be spending or we'll be reaching that around the end of the year. Okay okay that's those two are those two are quite helpful I think I mean overall maybe maybe just one last one on I guess working capital are you expecting any kind of any kind of movements in the second half I noticed your for example your receivables are a little bit lower than let's say they are traditionally is that just you know is that is anything specifically behind that or would you expect kind of those members to normalize and or just any other movement to work in capital that I should be aware of modeling the second half.
Alberto Morales: Yeah not not really just in our accounts receivable and our accounts payable they have those differences as a closing months a closing month but I would say for purposes of modeling for the rest of the year they're pretty stable I don't see any big differences from what we have right now as you can see we have a strong working capital and strong balance So I would say that things would be pretty much state that keep that same trend Okay, and then sorry, I didn't open the line. I just have one last one.
Alberto Morales: Now that you are starting to generate positive cash loan earnings, I guess on tax timing, is it best to model it as as your underlying earnings or incurred or I guess are there any subtleties there that we should be aware of? No, I mean, everything is sold and we get paid within 30 days and that's, you know, I would say no, no, no difference. Okay, so just just model kind of cash tax and yeah, along with underlying earnings. All right. Okay, great, thanks a lot guys. I really appreciate the color and the call and congratulations. Thank you, Justin. Once again, if you would like to ask a question, please press star and one.
John Sclodnick: Our next question comes from John Sclodnick from Desjardines. Please go ahead with your question. Hi guys, yeah, thanks for taking my question here and and congrats on the good quarter and yet reducing that free cash flow generation. I guess a little bit further on those third party or sources. Just wondering if you're seeing you know fixed cost purchase opportunities or fixed margin. I would say we're looking at both. John, good to talk to you.
John Sclodnick: We're pursuing a sub-ector already mentioned trying to get new long-term contracts on their fixed prices and we're also, you know, looking at more spot prices, spot prices as well. So yeah, that's what we have right now. Okay, so it should be a blend.
Alberto Morales: Okay, great. And then I guess a little more on capital allocation. I mean, yeah, you guys are generating free cash flow. FDF constructions largely behind you and see ideas complete just beyond, I guess, acquisitions, which it sounds like you're still actively looking at. Just curious how you're thinking about that or just happy to continue to build the treasury and add to those marketable securities. Yes, well, yes, John, to be specific in that, we have always told the market that we're actively looking for opportunities as they come across to us and we're open to deploy our watches or our cash flow strength.
Alberto Morales: We have a very strong cash flow position. We're still under leveraged. We can still look even, this cash flow generation in titles and the end to even look at another acquisition that we hope will be transformational depending on what's available in the market. But I can just say that we're actively looking.
Alberto Morales: Fair enough, yeah, no, I know it's always a tough question on a conference call. And I guess just turning to solid ad mountain, just curious what you're seeing on the exploration front and if there's any kind of oxide targets that you're excited about. Yeah, it's definitely something we're working on. Our intention is probably before the end of the year, we present a more comprehensive exploration plan. We have been working on that. So, yes, before the end of the year, the intention is to present a plan that will, you know, extend the life of mine.
John Sclodnick: Okay, excellent.
John Sclodnick: Well, that's it for me for questions. Exciting to see you guys generate that free cash. Oh, and yeah, thanks for that color.
Operator: Yeah, the gentleman and showing the additional questions will conclude today question and answer session.
Alberto Morales: I'd like to turn the conference call back over to Alberto Morales for closing remarks. Operator, our colleague Amanda has received one question from our investors. So if you remind before we close the call, I'll let her raise the question openly. Yeah, the question is just if the company has any plan to renew the NCIB program. To that effect, what I would say is that we have exhausted the numbers of available shares to be repurchased back under our current NCIB program.
Alberto Morales: And we're certainly in order to consider the renewal of this, we would need to get advice from council as I believe the regulatory environment requires for some waiting period on it, which. So for now, I cannot go one way or another one will basically need to get advice from council as to the waiting period that this may represent.
Alberto Morales: And if there is any no more further questions and basically I would like to thank you all for joining us today and for your continued support. As we have expressed, we remain committed to driving our business forward and to look forward to sharing our progress in the coming quarters ahead. Thanks again and have a great day.
Operator: This brings to a close today's conference call. We may now disconnect your lines. Thank you for participating and have a pleasant day.