MAG Silver Corporation

Hello everybody. Welcome to MagSilver's Q1 2024 results videocast. Please refer to our financial statements and MD&A posted on our website or filed on CDAR and EDGAR for further details. Okay, so firstly, let's take a look at the Q1 results from the 1 Escipio mine. which is operated by Fresneo PLC, our 56% partner in the project. All information related to the Juan Escipio mine is discussed here on a 100% basis. All reference to dollars are in US dollars. We had a strong first quarter with four and a half million ounces of silver produced. which, together with strong gold, lead and zinc production, delivered 6.4 million ounces of silver-equivalent production. The processing plant continued to perform well, despite a prolonged planned maintenance shutdown. For the quarter, Juan Escipio milled 326,000 tonnes of ore at an average silver grade of 476 grams per tonne and an average silver recovery of 89%. With continued strong silver prices, silver revenue totaled $95 million during the period on silver sales of 4 million ounces. Total revenue, including byproducts, totaled $134 million on silver equivalent sales of 5.6 million ounces. Silver prices continued to be margin supportive, with the mine realising an average silver price of $23.73 for the quarter. Treatment and refining costs for the quarter were around $10 million in aggregate, delivering total sales of $124 million. Pivoting now to operating costs. The mine's cash operating costs were $2.50 per silver ounce sold, with all-in sustaining cash costs of $6.11 per silver ounce sold. On an equivalent basis, the mine delivered equally impressive cash operating costs of $8.66 and all-in sustaining cash costs of $11.22 per silver equivalent ounce sold. This performance was a record for 1SCPO and we're very proud of this result as it showcases how far 1SCPO has come in this optimisation and cost control journey since commissioning commenced just over a year ago. The positive cost performance delivered robust margins, with 1Ocipio delivering a record all-in sustaining margin of $70.4 million in Q1. Q1 continued to be a strong cash generation quarter for 1Ocipio, driven by the delivery of reductions in operating costs in a stable yet elevated commodity price environment, specifically in the precious metal complex. Onecipio generated cashflow from operations of 42.5 million for the quarter, with the mine generating 27.8 million in free cashflow. From a corporate perspective at MAG, our equity accounted income from the joint venture was 19.4 million, yielding net income of 15 million or 14 cents per share for the quarter. Our adjusted EBITDA was $32.5 million. During the quarter, MAG continued to repatriate excess cash from Juan Escipio, with $17.5 million in interest and loan repayments received here in Vancouver. MAG's cash position remained strong with $74.7 million as of March 31 and with no debt. We continued to progress our exploration programs during the first quarter. In late March, we closed the acquisition of a gold stake property adjacent to our larder project in Ontario. This acquisition doubles our landholding in one of the most prolific gold producing camps in the world. Our team are working on integrating the property into our programs and we look forward to providing updates in the coming quarters. On the Larder project, drilling targeted the Cheminus and Bear areas and totaled 5,391 metres in Q1 of 2024. Targets tested included the down-plunge extension of the high-grade double knuckle at the bear east zone and extending the Cheminus south mine sequence down-plunge. Initial results showed robust grades at economic thicknesses in the north bear zone. At the Deer Trail project in Utah, phase three drilling delivered exciting results with two of the hub holes intercepting alteration and mineralization consistent with what is expected on the edges of porphyry systems. Phase four drilling, which was focused on offsetting the Carissa discovery, was accelerated as the early onset of snowfall last year impacted the commencement of the third porphyry hub target. During Q1, 1,208 metres were drilled at Carissa, with final results pending. Deer Trail continues to confirm the hub and spoke thesis, and we continue to be encouraged by the results as we enter the final stages of the 100% earned into the property. Beyond Larder and Deer Trail, we must not lose sight of the fact that only 5% of the one-ocipio property has been explored. We continue to work with Fresneo, our partner and operator at Wynasipio, to unlock the potential of both near mine and regional exploration at Wynasipio, to expand the resources and reserves, as well as proving up potential new upwelling targets. At MAG, ESG continues to be something we take very seriously and something we believe we do very well. We are committed to running our operations to the highest international standards. We are well underway with the preparation of our 2023 sustainability report, which we expect to publish later this year. The report will underscore our continued commitment to transparency with our stakeholders while providing a comprehensive overview of the company's ESG commitments, practices, and most importantly, performance. Looking forward, we announced production and cost guidance for one of CPO for 2024, which is expected to produce between 14.3 million and 15.8 million silver ounces, yielding between 13.2 and 14.6 million payable ounces, at all in sustaining cash costs between $9.50 and $10.50 per ounce of silver sold. Our Q1 performance positions us well for the achievement of guidance in 2024. We also published our updated technical report on Juan Ocipio, outlining robust economics with an after-tax NPV of $1.2 billion over an initial 13-year mine life, generating annual average free cash flow exceeding $130 million. Remember, the 13-year mine life is the reserve mine life only. The actual mine life will significantly exceed the 13 years as resources are incorporated into the reserve base and the mine plant. Mineral resources increased by 33% from the 2017 PEA, with substantial growth in measured and indicated categories. Inferred Resources also expanded, highlighting significant near-term high-grade upside potential, while the inaugural Mineral Reserve Estimate enhances economic confidence. I encourage you to view the technical report presentation, available on our website, as it clearly portrays the quality of the 1-Ocipio asset and reinforces 1-Ocipio as a high-margin, long-life Tier 1 mining asset. Thank you for watching today and I look forward to our next videocast in August when I'll update you on our second quarter 2024 results.