Good morning, ladies and gentlemen, and welcome to the Pan American Silver Third Quarter 2023 Unaudited Results Conference Call and Webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Wednesday, November 8, 2023. I would now like to turn the conference over to Siren Fisekci, Vice President of Investor Relations. Please go ahead.

Thank you for joining us today for Pan American Silver's Q3 2023 Conference Call. This call includes forward-looking statements and information and makes reference to non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for our Q3 2023 unaudited results, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Thanks, Siren, and thank you, everyone for joining our call today. Let me begin with an update on our progress integrating the assets we acquired through the Yamana transaction that closed on March 31st. I'm happy to report that we have integrated the four new operations into Pan American's organization and advanced on streamlining the new company with the sale of non-core assets. We have also reorganized the Yamana Latin American regional offices in line with focusing support to the mine operations and continuing to enhance corporate oversight, leadership, systems policies and procedures by taking advantage of substantial synergies and business improvement opportunities. Working with the new teams, we are evaluating many optimizations and mine life extension opportunities. We look forward to sharing more with you on that in the coming quarters as we advance detailed studies and near mine exploration programs and update the life of mine plans. We committed to rationalizing our portfolio following this transformative transaction and we have made significant progress on that objective earlier than I think most would have expected and with additional opportunities yet to come. In Q3, we completed the sale of our interest in the MARA project in Argentina and the Morococha mine in Peru. And on Monday, we completed the sale of our interest in the Agua de la Falda project in Chile. In Q2, we divested certain non-controlling equity investments, which are largely inherited from Yamana. We increased our equity interest in New Pacific in Q3 to 11.6% of New Pacific's outstanding common shares, helping to further advance interesting Bolivian silver projects by leveraging our long-standing operating success we have enjoyed at San Vicente over the past 24 years. We also committed to paying down certain higher interest debt incurred for the Yamana transaction. We repaid the amounts drawn on the sustainability-linked credit facility and as of September 30th have the full $750 million available on our credit facility in addition to working capital of $832 million, which includes cash and short-term investments of $386 million. Total debt of $809 million is largely related to two senior notes, Pan American assumed to the Yamana transaction as well as lead and construction loans. These notes have attractive terms, $500 million with a coupon of 2.63% maturing in 2031, and $283 million with a coupon of 4.625% maturing in 2027. Pan American has a strong balance sheet, which gives us the flexibility to manage business cycles and capitalize on growth opportunities. The steps we have taken to divest non-core assets and repay debt will also significantly reduce costs going forward. We expect to save approximately $90 million in cash annually primarily from the elimination of care maintenance, project development, and reclamation costs associated with MARA and Morococha. In addition to interest expenses from having repaid the $280 million that was drawn on the credit facility at the end of June 30, 2023. We expect further savings from the Yamana acquisition and the former synergies which we estimate will be about $40 million to $60 million annually. Finally, it is important to remember that we retain future upside on both the MARA and the Agua de la Falda projects to the precious and base metal royalties we retained with the strong counterparties in those projects. With that, let's move on to our results for the third quarter. The acquisition of the four Yamana operating mines has provided a significant increase in production with reduced unit operating costs and enhanced diversification. We produced 5.7 million ounces of silver and 244,200 ounces of gold in Q3. All-in sustaining costs for the silver segment were $18.19 per ounce and $1,451 per ounce for the gold segment. While operating performance at most of our mines was in line with expectations, two operations faced unique challenges that weighed on Q3 results. In the silver segment, La Colorada continued to be impacted by ventilation constraints which resulted in reduced throughput, limited access to higher-grade zones of the mine and required intensive ground support innovations in areas where high heat and humidity have rendered older ground support methods ineffective. We do not expect an improvement in La Colorada's performance until the new ventilation infrastructure is completed around mid-2024 and we are able to increase development of mining rates in the deep east part of the mine thereafter. We are making good progress on that work. The excavation of the concrete line shaft reached a depth of 522 meters by the end of Q3 2023 and is expected to be fully excavated to a depth of 593 meters by year-end. The installation of two large exhaust fans on the surface of the shaft will be completed by mid-2024. The commissioning of this large primary ventilation system will deliver refrigerated fresh air directly to the heat source in the deep eastern area work faces and immediately exhaust vertically to the concrete line shaft. This will avoid sending hot air back through the mine where it is damaging our ground support systems. In the gold segment, mined gold grades were lower than we were expecting at El Penon. Based on recent reconciliation data, we have initiated a review of our mining sequence in certain sections of the mine to achieve a more stable gold production. Over the next several months, we will be adapting the mine development schedule for El Penon to provide more flexibility when encountering unexpected grade shortfalls in this highly variable deposit. The delineation drilling strategy has been reviewed to reduce the grade variation risk we are currently encountering. El Penon remains one of our core assets with excellent exploration potential and excess mill capacity, supporting that mine as being an important contributor to the company's future cash flow. Given year-to-date production and our outlook for the next two months, we are reaffirming our annual 2023 guidance ranges for silver and gold production with the expectation that production for both will come in at the low end of the ranges. We expect the gold segment cash costs and all-in sustaining costs to be within our guidance ranges for 2023. We expect silver segment cash costs and all-in sustaining costs to be marginally above our guidance range largely due to ventilation constraints at La Colorada that I mentioned earlier, and the two weeks expansion of operations at that mine in early October to address security concerns as previously disclosed. We are maintaining our 2023 guidance for base metal production and sustaining and project capital expenditures as well. We reported a net loss of $22.7 million in Q3 or a basic loss per share of $0.06. Adjusted earnings were $3.1 million or $0.01 per share. Operating cash flow was $114.6 million, net of $35.8 million in taxes paid. Including the cash dividend of $0.10 per common share we declared yesterday, we will have paid $130.5 million in total dividends this year. Turning to the La Colorada Skarn project, we are on track to release the preliminary economic study by year-end. The study will be based on using a sublevel caving mining method, which we believe offers superior economic benefits given the size and geometry of the large silver-bearing polymetallic deposit. We will carefully consider potential alternatives for the optimum funding structure for the current project once the preliminary economic study is released and all of the development details, risks, and opportunities can be thoroughly discussed and debated. The ILO 169 consultation process for the Escobal mine in Guatemala continued to progress in Q3, Pan American has now hosted three visits to the mine for local and digital representatives and their advisers, and several other meetings have been held. This included working meetings with local representatives and Guatemala's Ministry of Energy and Mines, or MEM for short. I know many of you check MEM's website for the Escobal consultation, which does provide very transparent reporting on the process. I noted that MEM had intended to complete the consultation by the end of October. Although the schedule was not met, all the participants continue to engage in a peaceful, comprehensive, transparent, and good faith consultation process. The next consultation meeting is scheduled for November 10th and as usual we are not providing a time frame for the completion of the consultation or potential restart of the mine. Other consultation processes move ahead; we are also continuing with our care maintenance activities for Escobal. I would like to congratulate the Pan American team in Guatemala for receiving first place in the environment category from Guatemala's chamber of the industry for their work on reformation and conservation project. The project involves an innovative approach to the reproduction of oak trees within the Escobal mine area with the primary objective of revitalizing forest regions in the mine property and transforming them into protected, valuable habitats for flora and fauna. If you'd like to learn more about this, we have the video posted on Pan American's LinkedIn page where we regularly post updates on some of our company's initiatives and events. In closing, we are pleased with our progress on integration of Yamana assets, which is delivering Pan American with significant production growth and reduced unit costs. We are currently preparing our plans for 2024 focusing on safe, reliable, cost-efficient operations and the development of additional value-enhancing future growth opportunities. We will continue to evaluate ways to streamline our overall portfolio with the aim of remaining the world's premier silver mining company. Together with the other members of our management team, we would now be happy to take your questions.

Thank you, ladies and gentlemen, we will now conduct the Question-and-Answer Session. Your first question comes from the line of Cosmos Chiu. Your line is now open.

Thanks, Michael and team.

Hi, good morning.

Hi, good morning. Maybe if I can start off with El Penon, first. And I guess you know what I'm going to ask in terms of the shortfall in grade. Am I reading it correctly? I guess in Q3 your head grade was 98 grams per tonne and 2.7 grams per tonne for gold. If I look at the proven and probable, it's closer to 213 grams per tonne or probable 148 grams per tonne. So the grade in the quarter was about half for gold and silver compared to your reserve grade. Is that correct? And maybe if you can elaborate on kind of what happened?

Yes, Cosmos. Steve here. How is it going? Yes, basically, if I can talk first about Q3, we had anticipated mining in areas we've been developing for most of the year according to a mine plan that was developed previously in 2022. We were planning to develop into these high-grade structures that would be mined in the second half of this year. Three of those structures, and keep in mind, El Penon is spatially quite vast. We're mining several faces across vast areas about 12 kilometers by 5 kilometers. So, there's a lot of development that goes into these areas all over the different mine. And there were three of these areas that were particularly high-grade gold, not so much silver that we expected to go into. So when you look at the reserves, that average is correct, but the distribution depends on sequencing, which can affect that grade quite a bit. Now, when we mined into these areas, what we discovered is that looking back now and evaluating what happened there, three of those areas that were particularly high-grade had very limited drilling information on them. They were drilled quite a bit wider than the normal reserves that we would like to see. So, we're reconfiguring our drill programs to target these higher grade areas in the future. It was really a Q3 impact. It's going to carry us over into Q4, because they were scheduled to be mined this quarter. So we're going to be looking at those areas, drilling more and kind of increasing the density of drilling, particularly in the higher-grade zones of the reserves. We're just finding it's not to the level that gives us the risk tolerance that we want to see. So that's going to work into our plans for next year. Depending on how that increased drilling goes, that will adjust those higher-grade zones that we're seeing. I think we're going to see positive and negative surprises as we do that just with the variability of the ore deposit. But according to your question on was the silver grade really half of that? The answer is yes, and that relates to sequencing. We do have higher grade silver zones. But the average grade is about 158 grams silver on the reserves when you put the proven and probable together. So we were 98. That's just sequencing.

Just to add, Cosmos, as Steve explained, with an undercapitalized exploration project here at Yamana, it was running with not enough drill density, as we would do it. And in order to fix that, we increased our drilling on site to about 10,000 meters a month. We actually will spend quite a bit more. I mean I was like paring back greenfield drilling far, far away and focusing really on further drilling on site. So we'll further increase that drilling to catch up with what should have been done in the past and now we're very confident here that, I mean, I was at the mine a couple of weeks ago and we've seen some very interesting intercepts there. So that drilling, as I said, is back now at 10,000 meters a month and we'll increase further in the coming months.

And Cosmos, if I can kind of add a little bit more detail too, as we mined into those high-grade zones and we didn't see the ores that we expected. At El Penon, there's quite a bit of feed that goes to the plant that's low grade. So when we're not producing off the mine, we supplement from the low-grade stockpiles, which are significantly lower in silver grade and that's what drives that.

Sure. And if I could follow up on that question. In terms of Q4, I don't know how much you can share with us but you've maintained your guidance for the year but how much of these higher-grade stopes have you factored into your Q4 number? And how much of hitting those Q4 numbers is dependent on getting some of these high grades up? I'm just trying to figure out how much conservatism you've factored in in light of the grade portfolio that you realized in Q4?

Yes. So we're moving into Q4, Cosmos, anticipating we're not going to see that high grade we had anticipated in the original mine plan. So where we say we're going to still make the gold guidance on the low end, it's really looking at our other operations to kind of make up some of that difference.

Of course. Okay, great. Maybe if I can switch gears a little bit going to Escobal and Guatemala. Thanks, Michael, for the update. On top of the conversation, I think we're all aware that there was a presidential election earlier this year. There could be a or there will be a presidential transition early next year. However, there seems to be a bit of noise in terms of the Supreme Court and validity of the runoff in terms of the election. How much should we monitor that situation? How much of that situation could potentially impact the timeline of Escobal?

Of course, I hand you over to Sean McAleer here, who is running Guatemala for us in the country. So please Sean.

Yeah. I think it's hard to speculate what the outcome will be with some of that noise that you mentioned. The President of Guatemala has publicly stated his commitment to a smooth transition at the Ministry of Energy and Mines. The transition team from the newly elected party has met on several occasions with the MEM, and so they are moving forward to have a smooth transition in January as well. We've met with members of the incoming team a few times. And it's hard to say what the timing will be and if there's going to be any delays. Certainly, if there's a transition and the process isn't completed by the end of the year, we would expect that that would take some time to continue that on. But they are committed as well to the ILO 169 consultation process. And so we're looking forward to a government transition in January. And we'll continue working with the government as needed.

Great. Thanks, Michael, Sean, and Steve, and Siren. Those are all the questions I have. Thanks again.

Thanks, Cosmos.

Your next question comes from the line of Ovais Habib from Scotiabank. Your line is open.

Hi, Michael, Sean McAleer, and team.

Good morning.

Hi, good morning.

Hi. Some of my questions have already been answered and thanks for the color on El Penon. But I did have two more questions. Just number one post the amount of transactions; obviously, one of the priorities was to sell non-core assets. It was really great to see the sale of MARA as well. Are you expecting to continue to monetize non-core assets? And are we expecting any sort of release or any sort of update on asset sales by the end of this year?

As you know, selling assets is a very dynamic process, and doing deals. So I can't give you exact timing, but we're definitely working, as I mentioned in the preamble to this call, that we are working on further optimization of our portfolio. So that's continuing. There are quite a few more assets in our portfolio that impact our operations or our production profile right now. And we've received some interest in those. So we definitely will continue that process. I'm really very pleased with what the team has been able to achieve in the really short time – I think we announced in the summer after only three months. If you look at the big numbers that really allowed us to repay for the full year, or the last, but is it now 10 months? Just about below – just a quick number; $398 million in debt also for the full year paid about $130.5 million in dividends including the dividend payment that just has been announced yesterday. So huge change obviously to our already strong balance sheet before, which was really supported by these asset sales. And just let me mention again that, as I put it here in the press release, we're looking at about a $90 million annual saving in care maintenance costs, project development costs from MARA and Morococha and then plus as you saw, we repaid our line of credit fully. So there are substantial savings on interest payments there as well so these three things together amount to about $90 million. Now you have to add on top of this synergies. We've talked in the past; we always guided somewhere around $40 million to $60 million in synergies. I think we are pretty confident we will be at the upper end of that range. On the synergy side, I think there's still a bit more to do on the optimization we're working on. And further synergies that are coming in. We will have to wait for the end of the year, we have all the final tally and numbers, and I guess early next year, we'll have the final number there on the synergies. So big changes from those dispositions of assets, and that theme will continue. Do we have something ready to share with you this year still or early next year? As I said, it's a very dynamic process, so I can't really pin the team down on one month or more or less, but we'll for sure try the best here to advance that theme and continue that theme that we started this year on the disposition.

Thanks for the color on that, Michael. And just in regards to the synergies, obviously, you mentioned $40 million to $60 million. Have you already started seeing those synergies kind of going into Q3? Or I'm guessing we are expecting more kind of going into Q4 and more into 2024?

Yeah, some is in Q3, but very little on the synergy side for sure. Not on the current maintenance cost, as you remember the closing of those deals happened really especially MARA, Morococha, which are the biggest ones on the current maintenance close. And I think like just a week before the end of Q3, so no advantage really in Q3 on that. But from Q4 on, we will see the full effect of those savings. And then, of course, that will go into the next year 2024 together, as I said, with some additional synergies that we will be able to harvest there as well.

Okay. Sounds good. And just switching gears a little bit, last question from me, we saw that you had increased your stake in New Pacific this quarter. How do we think about Pan American's position on the silver signs project and on Bolivia as well?

Yes. Look, we are in Bolivia since 1997, a long time. It's been a very successful place for us. And also this quarter, San Vicente did very, very well. So that's to continue and it's a place that we are very happy doing business. Now, you look at New Pacific, and there are big discoveries, exploration discoveries. It's still an earlier stage, but they are all of the size that are absolutely of interest for Pan American, and if they come through as a mine, with our experience in Bolivia as I said, combined with that large size on the silver side of course that's of interest for us. And that's really the reason why we continue – we have been in New Pacific from the beginning on. We liked the projects very early stage and we did some of the first financing to help bring in that exploration and drilling forward. And when New Pacific looked for financing, we were happy to increase slightly our stake and continue to advance those projects in Bolivia.

Perfect. And that's it from me in terms of questions. So thanks for my questions, Michael.

Thanks, Ovais.

Your next question comes from the line of Carey MacRury from Canaccord Genuity. Your line is now open.

Hi, good morning, guys. Just a question on Cerro Moro. There was a big jump in the on-site direct operating cost this quarter versus last quarter. Just wondering if you can give any color on what drove that increase.

Yeah. So I think it's – hi, Carey, this is Steve. Overall, I think the cost at Cerro Moro, it's reflecting the development we have to do to get to some of these really high-grade variable ore deposits. So our development rates increased; the mining widths have kind of decreased according to schedule. So it was pretty much on plan relative to what we anticipated for overall spending there. And then, I think financially, we had some impacts on the cost.

Yeah. This is Ignacio. In addition to what Steve just mentioned, it's worth mentioning that there was a buildup of inventory at the end of Q2; the production in Cerro Moro was backloaded into Q2, the last couple of weeks of June, and that inventory flushed out during Q3. So that was another factor contributing to the higher costs for Cerro Moro Q3 relative to Q2.

But just in general, I think we talked quite often about what our cost drivers are on our side. So there's a big difference between our silver segment mines and the gold segment mines because the silver segment mines in many cases come with base metals. So as these are by-product credits, our base metal prices have a big impact on our costs both ways; if they go up or down, it can be a headwind or tailwind for us. And another big impact is the exchange rate. So depending on any given country, that impact can be quite big because we have a lot of spending in local currency. So we always have to keep that in mind. Of course, we look at it and not always at the per ounce base, but per tonne base which is more like a neutral way for us to track the cost. So there we see obviously that variability which is often driven, as I said, up and down by other factors as well.

Maybe just a follow-up to that maybe for Ignacio. Last quarter, there was a $32 million of fair value adjustments relating to the Yamana transaction, like, I'm just wondering are there still fair value adjustments flowing through these numbers this quarter? Or have those pretty much more or less flushed out now?

Yeah. Those were minor PPA adjustments. Just to keep in mind that our initial purchase price allocation that's just preliminary. We have a year to finalize those numbers. We didn't see any more changes in Q3. So I'd say stay tuned. As I said, we have a year to finalize those numbers. But I think all those small changes are mostly flushed out in Q2. And yeah, as I said we have a year and we'll see how those numbers end up when we finalize our analysis on the purchase price.

Great. That's it for me. Thanks, guys.

Thank you.

Your next question comes from the line of Don DeMarco from National Bank Financial. Your line is now open.

Thank you, operator. And good morning, Michael and team. We'll start off with Escobal. We're seeing a lot of activity in terms of the meetings here a number of visits, but can you share what is discussed at these meetings? I mean, why would there be a need to go to the mine three times? Are they impressed by the mine? Or what's the nature of their visit and what are they looking at?

Obviously, I mean this is a very open process as we always described and our doors are open to a lot of visitors. And we had those visits by the representatives as well. So, where I see it is very positive. And yes, a lot of activity around the consultation and mine visits during this quarter. Maybe Sean, do you want to give some more color to that?

Yes. The first visits we had in August that was over 40 members of Parliament came to the mine site. It was the first time many of them had been to the mine site. So, just a general site tour and overview of what the mining activity is, what the operation involves, a visit to the underground mine, to the processing plant, and the tailings facility. So, obviously, you can imagine that day-long tour and then lots of questions around those tours. And then there were two other visits where we talked about water and then another visit which focused on our filtered tailings facility, along with questions around the design of that facility and some of the aspects of that facility. So, during the meetings we're going into some detailed discussions about water quality, water quantity. It's always pretty dynamic meetings with lots of learning and Q&A. So that's been pretty productive and really good dialogue over the last quarter.

Thanks, Sean. As I said, a very positive and open dialogue here which is, of course, the way that the consultation has been out so far, and we obviously support that way.

Thank you for that, Michael. And so looking ahead at this consultation process, I judge that will weigh on the process and determine if it was carried out to true ILO 169 standards. But what happens beyond that? I mean at that point, the consultation would largely be concluded. Will you then be negotiating or continuing your discussions with the local representatives? What happens beyond the decision?

I think the process is outlined in our slides as well on our website. Once the consultation is finalized, the report will be handed over about the consultation to the Supreme Court in Guatemala and the Supreme Court will then determine if everything has been followed in the process. I would assume the court ruling afterwards can decide to reinstate our mining license.

That's pretty accurate. I think yes, and I think we'll get some more color around that over the coming months and coming weeks in the future meetings.

Okay, fair enough. And because the court can say the process followed the ILO 169 product, but that doesn't necessarily mean that the mine gets restarted. But anyway, we'll look for color in the coming months. But we're encouraged by this activity that took place this quarter.

Yes, definitely.

Yes, hi Don, Steve here. The ventilation is going to be completed by mid-next year. So what should we be modeling for AISC in the next two or three quarters in the $25 to $30 range or is that kind of in the pipeline? Yes, I'd say we're going to be trending towards the upper $20. We are seeing some improvements. There has been some work done in reducing dilution. We're seeing better grades. It's really a tonnage play right now. We're trying to get air pumped into some areas so we can get some higher throughput. I think we're going to see some marginal improvements in that. But until that new shaft comes on, I don't think we'll see a major change there.

Hi, guys. Good morning. Thanks for taking my question. Just on La Colorada as a follow-up question. On the throughput, should we assume the throughput that we saw in Q3, is representative of the throughput we can expect until sort of mid-next year in terms of ventilation once the upgrades are running?

Yes. Thanks, Craig. Steve here. The simple answer is yes, I think that's correct. I mean we are focused on advancing development rates, which will generate a bit more ore. We brought additional contractors on; we are getting a little bit more air into some of the areas. So I think you'll see some marginal improvement in overall tonnage. But yes, once again, until that shaft comes on, we won't see a material change in throughput.

Just a way in there and I think Steve talked about there. We expect to finalize the escalation of the shaft later in...

We're on track to finishing the excavation by year-end, and then we'll be installing the big ducting systems and the big fans or 2,000 horsepower fans each that we'll be putting on the surface and commissioning by mid-year next year.

Right. So all on time, as we indicated already, like I think a couple of quarters ago.

And on budget as well.

Okay. I have a question about Cerro Moro or EMAS in general. Is the lack of drilling density that affected the expected grades for El Penon a concern at other operations like Cerro Moro? Or do you feel more confident about the drilling work done so far and the grade profile there?

Yes, Craig, it's Chris here. Certainly when we look at El Penon and we look at the spacing of the 60 by 60 and going down at 30 by 30 meters for that initial gridding and drilling when we look at Cerro Moro certainly, we see a higher ratio of drilling. And certainly, the ore shoals have behaved more consistently. Even though varied within the major structure of Escondida and Zoe. So no, we certainly don't have that feeling in Cerro Moro. And really as Mike mentioned, the increase in El Penon drilling up to 10,000 meters on a monthly basis, we're certainly trying to catch up with some losses at the beginning of the year due to a change in contractors which was completed in January this year before we got on to site. So certainly, we see that we're going to be catching up there.

And if I can add, I want to emphasize that there are absolutely no concerns with Jacobina. We're observing excellent ore zones there with strong continuity. Even in Florida, we see the need to begin drilling to add more tons to the reserve category. That project also looks very promising, aligning with what Chris discussed.

And just to mention, I mean, El Penon, we see some nice upside in the exploration sort of more blue space up. So certainly something we'll be concentrating on in 2024.

Okay, great to hear. And maybe one last question for me. Just La Arena, the sustaining CapEx is tracking well below guidance I think some of that has to do with the lack of development of the leach pad construction some dump work preparation. But is that something that's going to impact production next year or something you guys need to catch up on?

Yes, hi Craig, it's Steve again. The main factor driving this is the pre-strip capital and how we account for the pre-stripping of the open pit. A significant portion of that was shifted to operating costs this quarter, and it's likely that we'll see this in Q4 as well. I believe our ACOs were solid; it's just a matter of whether we classify the pre-strip as capital or expenses. Some of the costs are being deferred into 2024 for the Pad V expansion, and we are currently addressing that. At the moment, we appear to be on track to ensure it doesn't disrupt production, but it is definitely one of our primary areas of focus.

Okay. Thanks guys.

Thank you.

Your next question comes from the line of John Tumazos from Very Independent Research. Your line is now open.

Thank you very much for taking my question. Concerning new projects in general and the Colorado Skarn in particular, do you have a minimum hurdle rate threshold rate of return? Or do you revise on some qualitative things like exploration potential, size, synergies with the next mine store, et cetera? Tell us how the Board approval eventually of the La Colorada Skarn project will go in the context of your approval process.

Sure. There is currently no board approval. We are in the late stages of exploration at La Colorada Skarn, and as I mentioned, we will release our study at the end of the year, which will provide shareholders with more information about the significance of this large discovery and our vision for long-term mining operations. There are numerous factors that influence the hurdle rates you mentioned. Long-term metal prices greatly impact these calculations, especially for a project like Skarn that spans many years. The initial capital required and the metal prices used in future models are particularly crucial. Ultimately, it boils down to the quality of the asset, mine life, and exploration potential. We continue to drill at La Colorada Skarn and consistently find more resources, indicating that this asset is still expanding. While our current study has a cutoff from December 2022, we've actually drilled an additional 50,000 meters since then, so the deposit continues to grow. This snapshot we're analyzing is just a moment in time. As you noted, many factors contribute to calculating an IRR for a project, and various aspects—like country, jurisdiction, size, and proximity to other mines—play a role in our decision-making process, which will be detailed in our study.

So for example, is 5% or 10% a minimum hurdle rate of return?

5% would be a very, very low number; of course that's not something we are looking at. But as I said, look, it depends. Metal prices are a critical and also difficult decision when you're looking at a very, very long mine life. It's much easier obviously to kind of come up with the metal price if we look at a normal precious metal kind of projects that normally run like let's not call them 10 to 12 or 15 years. Very different when you look at long lives like the Colorado Skarn. Not only that, but you're dealing with not only silver on this side, but also lead and zinc, and of course, concentrate contracts that play into this as well. Just one side note here, which is really nice. Obviously, La Colorado polymetallic has a lot of zinc in there, a lot of silver as well. Just as a side note, La Colorado is producing a really, really clean zinc and black concentrate already now from the veins, and the metallurgical testing we do shows that the Skarn will produce the same. So that's very attractive concentrates in this term. So again, a lot that plays in there, but we would expect quite favorable concentrate terms for that kind of quality.

So Michael, someone might be listening and reading between the lines in a way that maybe you don't want to. Should someone infer from your explanation that the project requires higher lead and zinc prices than current prices, but because it's a multi-decade project, you're going to, you might wait for lead and zinc to recover to $2 and go ahead, assuming that it was a zinc recovers to $2?

No, my point, John, is that the beauty of long-life assets like everywhere in the world is that you don't have to time for a zinc price or lead price or precious metal price cycle. We all know that this is very difficult to do because you have construction time upfront and none of us knows where the prices go exactly, but that's exactly the beauty. When you look at these very, very long mine lives that are going to catch a few, quite a few of those cycles anyway. And that's the beauty. That's the reason why mining companies, especially large mining companies, look for very large, long-life assets, because it takes that risk out of the equation.

Michael, one last one. I'm sorry to be so interested this morning. Some investors are impatient and their clients have quarterly performance pressures on stuff like that. And they don't understand that it takes a long time, four or five years just to get to the PEA point here. And sometimes in the stock market, they love Bre-X that publishes 150 million ounces of gold that don't exist, and they disrespect meticulous engineers that take five years to plan the project. Do you think that it would be appropriate to buy back a little bit of your stock since some of these short-term investors might give up, sale project that's like a junior stock that's going nowhere stale?

Let me first answer on the timing. This has been incredibly fast. If you think it's like what, five years since the first drill hole in this Skarn, resulting up to 9.25 billion tonnes of resources still to grow, as I said. If this were a pure greenfield discovery, we were talking probably about 15 or more years to bring a project to that place. The reason why it went so fast is obviously it sits below in La Colorada, one of our silver mines, so that helps with infrastructure and drilling much faster and getting that work done. So the team has done an excellent job to advance the project that quickly to an economic study here; so that's pretty impressive and would not be possible if it weren't an on-site discovery. Talking about share buyback that you mentioned, look, as I said this year, the Board opted to return capital to shareholders in the form of dividends. It's over $130 million. We're still working and finalizing the new dividend policy. We will probably put that in place at the beginning of the year, which is the normal and logical place for us to do that. It will be at the Board's discretion, how we return further capital to shareholders; we're paying dividends uninterrupted since 2010. Of course, we disposed of quite a few assets, which have had a very positive effect, as I mentioned on our balance sheet and our shareholders participated with that with the dividend payment. So we'll see next year, but the Board's decision will be in what form and shape that return to shareholders will happen. As I said this year, very strong dividend payments, and for sure dividend will always be one part of it, and I will continue to do so.

Thank you.

Thank you, John.

There are no further questions at this time. I will now hand over the call back to Michael. Please continue.

Thank you, everyone for calling in today. Like – we will provide early 2024 our outlook for the New Year. I know it was later this year because of the transaction. But normally we do that in January and we'll do that in January 2024, when we'll share all those details with you. And until then have a great end of the year and talk to you in January. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.