SilverCrest Metals Inc.

Good morning, ladies and gentlemen, and welcome to Silvercrest Report's second quarter 2023 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, the 10th of August, 2023. I would now like to turn the conference over to Eric Fierre. CEO and Director. Please go ahead, sir.

Thank you, operator, and good morning, everybody, and thanks for joining. Today we'll be providing commentary on our robust Q2 2023 results and H2 guidance, after which we'll be happy to take questions. The slide deck we'll be referring to in this presentation is available on our website at silvercrestmetals.com under the Investors tab. Before I get started, I'd like to direct you to the forward-looking statements on slide two. All figures discussed this morning are in U.S. dollars unless otherwise stated, and any references to the report are in relationship to the recently released updated technical report. All of the ounces, all of the ounce comments on ounce and per ounce references discussed will be based on silver equivalent ounces unless otherwise specified. On the call with me today is Chris Ritchie, President, and Pierre Boudoin, Chief Operating Officer. Starting on slide three, Q2 marked another successful quarter for production. We have continued to generate free cash flow after eliminating our debt with $25 million repayment in the quarter. also adding approximately $4 million in bullion and $8 million of cash to our treasury assets, while spending about $10 million in sustaining capital. Our balance sheet continues to be a differentiator among our peers. The Las Chispas operation continues to perform well, with 13,400 ounces of gold and 1.45 million ounces of silver sold in the quarter In line with estimates in the report and quarterly levels outlined in our guidance almost all operating parameters showed improvement over Q1 2023 including underground mine ramp up which continued to progress well with an average mining rate of 818 tons per day for the quarter. a 16% increase from Q1 and in line with the updated technical report estimates. Last week we released the results of the updated technical report, which will be filed within 45 days. The data used to compile the report was generated from actual underground operations resulting in a production and cost profile that we are confident in. The change in the broader economy and our project from the last three years warranted an updated study that is more in line with current operating environment. We hope the release of these Q2 results will continue to highlight our strong margins and balance sheet as well as our unique position to opportunistically allocate our capital. We continue to advance our ESG initiatives including a strong focus on health and safety, as well as managing the risks and opportunities within the communities which we operate. During the quarter, we've delivered our inaugural ESG report, an important de-risking event to align our disclosures with the meaningful work that has been completed to date. We are very proud to have been recognized in Mexico with the ESR socially responsible company distinction for 2023. I will now pass it to Chris to discuss financial results for the quarter.

Thanks, Eric. Moving to slide four. The operational performance of the List Las Chispas asset was highlighted by our strong free cash flow and growth on our balance sheet while increasing our sustaining capital spend and repaying $25 million of debt. In the quarter, we generated revenue of $62 million. Our cost of sales was $23.7 million, reflecting a strong mine operating margin of 62%. As costs tend to track prices in our industry, these margins can be a significant differentiator relative to other assets. Net income in the quarter was $23.7 million, or 16 cents per share. This is inclusive of an $8.6 million or $0.06 per share unrealized foreign currency loss, which compares to a $1.1 million unrealized foreign currency gain or $0.01 per share in Q1 2023. Net free cash flow was $43.7 million for $0.30 per share, which compares to $21.8 million in Q1. Our net free cash flow in the quarter benefited from financial items like the return of value added taxes, and deferral of payables and taxes, which are scheduled to be paid in Q1 2024. We ended the quarter with $59 million of Treasury assets, which included approximately $53 million in cash and $6 million of bullion. An undrawn $70 million revolving credit facility remains available. Now on to slide five. Capital allocation is critical to the success of any business, and given our strong margins and free cash flow, we find ourselves in a unique position to have choices. A single asset company, our first allocation priority is to maintain a defensive balance sheet that allows us to weather the uncertainties of this business, but also to be well-positioned to be opportunistic. Equally as important is our focus on growth. Our infrastructure has been built and adding more ounces to the production profile through exploration success has the potential to benefit our valuation. Another priority is to add bullion to our balance sheet as another currency to be managed. We believe ounces above the ground are worth more than ounces in the ground, given that the risk of producing them has been incurred, and we believe that these ounces are a better store of value than fiat currency. While we look for new projects to develop, we believe that bullion on our balance sheet will enhance our multiple relative to cash while providing healthier leverage for our investors and a hedge against inflation. We are also happy to have announced a share buyback or normal course issuer bid yesterday, supporting a capital allocation priority to return capital to shareholders. We are in a healthy operational and financial position because of the support of our shareholders And despite our risk being significantly reduced, approximately one-third of the shares issued were done so at higher levels than the share price today. We are well aware of the challenges to discover, permit, finance, build, and operate a mine. And as a result, we see the NCIB as an opportunity to both reinvest in our own asset at a much lower risk level and recognize our supporters. With that, I will now pass it on to Pierre to discuss operations at Las Chispas. Thanks, Chris.