SilverCrest Metals Inc.

Good morning, ladies and gentlemen, and welcome to the Silvercrest Report's second quarter 2023 conference call. At this time, all lines are in 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, November 9, 2023. I would now like to turn the conference over to Eric Feer. Please go ahead.

Thank you, operator. Good morning and thanks everyone for joining. Today we'll be providing commentary on our Q3 2023 results, after which we'll be happy to take questions. The slide deck we'll be referring to is available on our website at silvercrestmetals.com under the investor tab. Before we get started, I'd like to direct you to the forward-looking statement on slide two. All figures discussed this morning are in U.S. dollars unless otherwise stated. All of the ounce and per ounce references discussed will be based on silver equivalent ounces sold unless otherwise specified. Our silver equivalent reference are based on a gold to silver ratio of 79.51 to one. On the call with me today is Chris Ritchie, President and Pierre Boudoin, Chief Operating Officer, starting on slide three. Q3 marked another successful quarter for Las Chispas, and we remain on target to meet our 2023 sales and cost guidance. Our strong operating margins continued to substantial free cash flow in the quarter. Las Chispas continues to perform well with gold sales of 14,500 ounces of gold and silver sales of 1.53 million ounces. Silver equivalent sales totaled 2.68 million ounces, bringing year-to-date sales to 7.69 million ounces, positioning us well to meet our annual guidance of 9.8 to 10.2 million ounces. All in sustaining costs from the quarter were better than expected and compares favorability to the annual guidance. Pierre will discuss the factors that led to this in his portion of this presentation. We remained debt free and our total treasury assets increased by nearly 40% from Q2 to $81.7 million. Our financial strength and resilience are unique attributes that deserve attention in the market, where accessing capital is both difficult and expensive. Our robust free cash flow and healthy balance sheet provide us with significant capital allocation flexibility, which we used in the quarter to optimistically explore buyback shares and increase our bullion holdings. On the ESG front, we signed a collaboration agreement to work on agricultural infrastructure, sewage system, and water concessions for agricultural use for our nearby communities. This is another positive step in the company's five-year water stewardship plan. This agreement advances our continued efforts to help our communities secure state and federal funding for water related infrastructure to protect their livelihoods and create long term economic resilience. The benefits of these efforts are already being felt in the community. The improved access to water allows for a second planting season, creating an opportunity for increased household income for our local partners. I will now pass on to Chris to discuss the financial results for the quarter.

Thanks, Eric. Moving to slide four. The operational performance of Las Chispas was highlighted by our strong free cash flow and continued growth of our treasury assets. In the quarter, we generated revenue of $63.8 million. Our cost of sales was $26.4 million, reflecting a notable . Net income in the quarter was $29.9 million, or 20 cents per share. Net free cash flow was $33.4 million or 23 cents per share. As in previous quarters in 2023, our net income and net free cash flow in the quarter benefited from financial items like the return of value added taxes and the application of net operating losses, which are commonly known as tax loss carry forwards. Our net operating losses were fully utilized in Q3 and beginning in Q4 2023, we anticipate accruing income taxes at Mexico's corporate tax rate of 30%. Our 2023 income taxes, as well as the extraordinary and special mining duties, will be due and paid in Q1 2024, which will impact our income and cash flow in 2024. We will begin making quarterly income tax installments and annual payments for the extraordinary and special mining duties in 2024. Now on slide five. Prudent capital allocation has always and continues to be an important area of focus for our team. As a single asset company, our first allocation priority is to maintain a defensive balance sheet that allows us to proactively manage risk, weather the uncertainties of our industry, while also being positioned to take advantage of the opportunities that arise in cyclical businesses. After the $7.1 million spent on the share buyback, we were still able to grow our treasury assets in the quarter by nearly 40% to $81.7 million. Our total treasury included $70 million of cash and $11.7 million of gold and silver bullion. We remain debt-free with access to an undrawn $70 million revolving credit facility. We have also resumed our focus on growth. In Q3, we announced a $10 million exploration budget for Las Chispas that will run through the end of Q1 2024. This program is focused on both conversion of ounces and the discovery of new ounces. In the quarter, $2.8 million was spent on exploration. Opportunistically returning capital to our shareholders was a focus in the quarter. In the middle of the quarter, we announced and launched a share buyback that allows for the repurchase of up to 5% of our shares outstanding. In the seven and a half weeks that the buyback was active, we repurchased $7.1 million, or 20% of the allowable limit. We are also focused on increasing exposure to gold and silver for our investors by adding bullion to our balance sheet as another currency to be managed. In the quarter, we increased our bullion position by $6.1 million. We are actively managing this position through the utilization of an option strategy which helps to manage both the upside and downside risks. Our objective is to earn a superior yield over our other balance sheet instruments while increasing exposure to our preferred store of value in a risk-adjusted manner. Subsequent to the quarter, we have continued to add to our bullion holdings. With that, I will now pass it on to Pierre to discuss operations at Las Chispas.