MAG Silver Corporation

Hello everyone and welcome to MagSilver's Q2 2024 results videocast. Please refer to our financial statements and MD&A posted on our website or filed under CEDAR and EDGAR for further details. Let's take a look at the Q2 results from the Wanasipio mine, which is operated by Fresneo PLC, our 56% partner in the mine. All information related to the Wanusipio mine is discussed here on a 100% basis. We continue to build on the robust foundation set in the first quarter with Q2 production of 5 million ounces of silver, which together with strong gold, lead and zinc production delivered 7.1 million ounces of silver equivalent production. The processing plant continued to perform well delivering nameplate processing rates per operating day. For the quarter, Wannasipio milled 337,000 tonnes of ore at an average silver grade of 498 grams per tonne and an average silver recovery of 92.4%. The recovery improvement this quarter was driven by the commencement of commercial pyrite production at 1SCPO, delivering incremental silver and gold recovery. Our strong operational performance was rewarded by a very supportive commodity price environment. with all metals enjoying strong appreciation during the quarter. Silver revenue totaled $129 million during the period on silver sales of 4.3 million ounces. Total revenue, including by-products, totaled $175 million on silver equivalent sales of 5.8 million ounces. Treatment and refining costs for the quarter were around $8.4 million, delivering total sales of $167 million. Pivoting to operating costs, the mine's cash operating costs were $1.15 per silver ounce sold, with all-in sustaining costs of $4.49 per silver ounce sold, an industry-leading result. On an equivalent basis, the mine delivered an equally impressive industry-leading result with cash operating costs of $8.86 and all-in sustaining costs of $11.31 per silver equivalent ounce sold. This performance represents a record for Anosipio as it has continued to optimise operations and focus on cost control. We are very pleased with the cost performance at Juan Ocipio and we hope to see further improvements through the remainder of 2024 and into 2025. The positive pricing environment together with the positive cost performance delivered strong margin expansion for the quarter with Juan Ocipio generating a cash operating margin of 74% and a record all-in sustaining margin of $110 million in Q2. Q2 continued to be a strong cash generation quarter for Wannasipio, driven by the delivery of stable operating costs and expanding production in a supportive commodity price environment. Wannasipio generated cash flow from operations of $93 million for the quarter, with the mine generating $89 million in free cash flow. From a corporate perspective at Magsilva, Our equity accounted income from the joint venture was $25 million, yielding net income of $22 million, or 21 cents per share for the quarter. Our adjusted EBITDA was $50 million. During the quarter, MAG continued to repatriate excess cash from Wannacipio, with $30 million in interest and loan repayments received. MAG's cash position continued to build, and closed a quarter at $97 million with no debt. We continue to progress our exploration programs during the second quarter. At the LADA project, drilling targeting the Cheminus, Bear and new regional targets totaled 10,776 metres in Q2. At Cheminus, drilling extended ore chutes from surface to 900 metres below surface. doubling the depth of known mineralisation and it remains open at depth. Directional holes at Bear extended the Bear East Zone down plunge to 1200 metres below surface and it remains open in all directions. Initial drilling commenced on the twist target interpreted to host a potential dilation zone similar to the Kerr Addison mine five kilometres east of the Larder project. Assays received to date have identified a widespread gold zone hosted in multiple rock types, which we plan on following up in Q3 with seven additional holes. At the Deer Trail project in Utah, drilling continued on phase four, focused on lower elevations and aimed at offsetting the Carissa discovery. 1,610 meters were drilled at Carissa with final results pending. Deer Trail continues to confirm the hub and spoke thesis and we are encouraged by the results as we enter the final stages of the 100% earning into the property. We recently announced the Deer Trail project was impacted by the Silver King fire in central Utah. I'm pleased to report the fire has been contained and we have recommenced drilling. Beyond Larder and Deer Trail, underground drilling at Wanasipio continued with 10,699 metres drilled, which is focused on upgrading mineralisation for near to mid-term mine planning. Regional surface drilling focused on the Canada Honda structure with 4,546 metres drilled. Now we must not lose sight of the fact that only 5% of the Wanasipio property has been explored. So we continue to work with Fresneo to unlock the potential of both near mine and regional exploration at Wanasipio. At MAG, ESG continues to be something we take very seriously and something we believe we do very well. We're committed to running our operations to the highest international standards. We recently published our third annual sustainability report, which speaks for itself and underscores our continued commitment to transparency with our stakeholders while providing a comprehensive overview of the company's ESG commitments, practices and performance. I encourage you to read our sustainability report. It's available on our website or available from the company on request. Turning to Outlook, the second quarter continued to validate the strength and quality of our operations at Wanosipio. We achieved solid milling rates, improvements in recovery, and exceptional head grades, all in a very supportive commodity price environment. With the continued operational outperformance in the first half of 2024, guidance has been increased. Silver head grade at 1 Ocipio is now expected to be between 420 and 460 grams per tonne for 2024, which is an increase from our previous silver grade guidance of 380 to 420 grams per tonne. As a result of the grade over performance, 1 Ocipio is now expected to produce between 16.3 million and 17.3 million ounces of silver, yielding between 14.5 million and 15.4 million payable silver ounces. and we have reduced our all-in sustaining cost guidance from $9.50 to $10.50 down to a range of $8.50 to $9.25 per silver ounce sold. This revised cost guidance is a reflection of the higher production expected in the second half of 2024. Thank you for watching today and I look forward to our next video cast in November when I'll update you on our third quarter 2024 results.