Great Panther Mining Limited

as does permitting, and we expect to complete an updated resource estimate for the underground by the fourth quarter. We hope to have more to report next quarter. As with many in the industry, we are seeing inflationary headwinds impact our cost of operations significantly more than anticipated for the year. For that reason, we have had to adjust our 2022 cost guidance, which Sandra will detail later in the call. We continue to look for ways to best manage our liquidity taking cost-improving actions and deferring capital expenditures where possible. Revenue for the quarter was $30 million on production of 16,629 gold ounces. Inflation and necessary spending on capital programs led to cash costs of $1,575 per gold ounce sold, and ASIC excluding corporate G&A of $3,080 per ounce per gold ounce sold. As previously stated, we expect to have high costs in the first half of 2022 due to the heavy stripping required to position Tucano for return to steady state production in the second half. We expect costs to normalize and cash flow to improve as production increases throughout the second half of the year and into 2023. We ended the quarter with $21.1 million in cash and cash equivalents and borrowings of $43.4 million. Sandro will go into further detail on these financial results later in the call. I will now pass the call over to Fernando Cojonejo, COO, to discuss results from our operations.

Thank you, Alan, and good morning, everyone. Reduction from Tucano during the second quarter was in line with expectations as stripping continued in preparation for accessing main or lenses and therefore third grades in the second half of 2022. When looking at the production results this quarter compared to the last quarter, we are starting to see modest improvements in line with our plan to return to a normalized rate of production. Goal production for this quarter was 16,629 ounces compared with 14,037 ounces in the first quarter of this year, which is an increase of 18% and 20,609 ounces In Q2 2021, decrease of 39%. Total mine tonnage increased by 76% compared to Q1 2022 and 36% compared to the same quarter last year. This is a result of having two mining contractors, UNM and MINAGS, operating in parallel throughout the different pits. Tucano is in the process of moving into better operational conditions with lower stripping ratios for the year and mining higher volumes of ore for the next several months. Mine ore tonnage and gold grades during the second quarter were also higher compared to the first quarter of 2022. A total of 291,160 tons of mine ore were processed this quarter versus 232,000 21,213 tons in Q1 2022, an increase of 25%. And 211,913 tons in Q2 2021, also a 37% increase. The planned feed rate for the quarter was 0.69 grams per ton, compared to the 0.57 gram per ton in Q1 2022, an increase of 21%, and 0.81 gram per ton in Q2 2021, a decrease of 15%. As Alan mentioned, inflation has had a significant impact on all key consumables and services used in our business, including diesel, cyanide, and others. In addition, due to higher than normal rainfall levels in northern Brazil, particularly in the first quarter of this year, it was necessary to fast track the expansion of the Tucano tailings facility, as well as the installation of evaporators to manage water levels in our tailings facilities. These two items led to an increase in capital spending and led to a higher than anticipated cost for the quarter. Cash cost rounds sold were $1,575 compared with $1,617 in Q2 2021. And ASIC per gold ounce sold, excluding corporate G&A, was $3,080, mostly due to highest tripping levels and the additional capital expenditures explained a few moments ago. During the quarter, the resource conversion program for the Urucum North underground project was completed, and an updated resource estimate is currently being developed by our team in Brazil. In parallel, the company has started trade-off studies for ramp development and mining methods in parallel with engineering and metallurgical project work, while planning activities are underway. The permitting process has also started with the state environmental agency, SEMA, Project development, including the update of mineral resources and reserves, is on track to be completed by the fourth quarter of this year. Regional target definition, validation, and prioritization is currently underway in consultation with Gold Spot Discoveries. This project began in June and results are expected in early August. Portable drills are being contracted and a 2,500 to 3,500-meter drill program is expected to begin in August upon completion of the Gold Spot Study. At Coricancha, we are continuing to evaluate options to optimize the project and will report new developments as they arise. I will now pass the call over to Sandra Baycock to discuss our financial results in more detail. Thank you.

Thank you, Fernando. Revenue for the quarter was $30 million compared with $39 million in the same quarter last year on gold sales of 16,076 ounces compared with 21,459 ounces in the same period last year. The average realized gold price was $1,865 per ounce versus $1,850 per ounce in Q2 2021. And our mine operating income was $0.1 million compared with a loss of $2.6 million. Our net loss was $12.1 million compared with a net loss of $8.7 million in Q2 2021. And EBITDA was negative $5 million compared with negative $0.9 million in the same quarter last year. Net cash flows from operating activities before change in non-cash working capital was negative $8.3 million compared with negative $0.9 million in Q2 2021. We ended the quarter with cash and cash equivalents of $21.1 million compared with $35.2 million for the same period in 2021 and $33.4 million at the end of Q1 2022. We made significant investments in the business in the second quarter, including $15 million in stripping, $7.1 million in capital investments, and $1.8 million in exploration. Further, we repaid $5.5 million in debt on a net basis, with borrowings totaling $43.4 million on June 30, 2022. In addition, during Q2, the company issued shares for proceeds of $3 million through the ATM facility. Finally, we received $13 million in cash proceeds from NearStar in relation to a settlement of NearStar's rights and obligations, including NearStar's indemnity agreement in connection with the Coricancha mine. As Alan and Fernando both mentioned previously, we have determined that Takano cost guidance for the year must be adjusted. Cash costs have been revised from $1,200 to $1,300 an ounce sold to a range of $1,400 to $1,500 per ounce sold, gold ounce sold. ASIC, excluding corporate GNA, has been revised from a range of $1,600 to $1,700 per gold ounce sold to a range of $2,200 to $2,300 per gold ounce sold. The significant difference between ASIC and cash costs reflects investments in stripping, which will yield gold production in 2023, as well as necessary capital expenditures Fernando mentioned earlier on the Tucano tailings facilities. Forecast production remains within the previously guided range of 85,000 to 100,000 ounces. The company expects to generate positive cash flows from its mining operations in 2022 prior to capital investments, debt repayment obligations, and exploration and development costs. However, further financing will be required to improve working capital, fund plan capital investments, and exploration programs for its operating mines and meet scheduled debt repayment obligations. We are evaluating options to that to secure new sources of capital to allow us to achieve our longer-term objectives. Thank you. That's all we have for formal remarks. I will now turn the call back to the operator for the question and answer period.