SilverCrest Metals Inc.

Good morning, ladies and gentlemen, and welcome to Silvercrest Report's 2023 Annual Financial Results. At this time, our 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 need assistance, please press star zero for the operator. This call is being recorded on Monday, March 11, 2024. I would now like to turn the call over to Eric Fehr, CEO. Please go ahead.

Thank you, operator. Good morning, and thanks, everyone, for joining. Today we'll be providing commentary on Q4 and full year 2023 results, after which we'll be happy to take questions. The slide deck we'll be referring to is available on the website at silvercrestmetals.com under the investor tab. While these results took a bit longer to get filed than we planned, we are extremely proud of what we've accomplished during 2023 and thank you for your patience in making this announcement. 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 references are based on gold to silver ratio of 79.51 to 1. On the call with me today is Chris Ritchie, President, and Cliff Lepore, Vice President, Operations. Starting on slide 3, 2023 was our first full year of commercial production and a successful one at that. We exceeded 2023 sales guidance with 10.25 million ounces sold and beat the lower end of cost guidance with all sustaining costs averaging $12.58 per ounce. Our strong operating margins of 61% provided flexibility to allow more than $87 million of capital to be allocated in 2023. while still ending the year, one of the best balance sheets in the silver space. In the first half of 2023, we repaid the remaining $50 million of debt, ending the year debt-free with $105.2 million in treasury assets, which included $86 million in cash and $19.2 million in bullion. In total, $37.2 million was invested in exploration, share buybacks, and bullion purchases. These are all areas of business that we believe drive further value for our shareholders. In 2023, we released our inaugural ESG report and made significant process in our local communities to improve water access and reliability. These efforts allowed for a second planting season, which helps support the increase income for the local community partners. We were recognized for our continued efforts and contributions by receiving a number of ESG distinctions in Mexico. I will now pass the call to Chris to discuss financial results for both the fourth quarter and the year.

Thank you, Eric. Moving to slide four, Las Chispas performed well throughout the fourth quarter with gold sales of 16,100 ounces and silver sales of 1.28 million ounces. Silver equivalent sales totaled 2.6 million ounces, bringing the year-to-date sales to 10.25 million ounces, exceeding the top end of our annual guidance. In the quarter, we generated revenue of $61.3 million and our cost of sales was $24.4 million. 2023 revenue was $245.1 million and cost of sales was $96.8 million for an impressive average annual operating margin of 61%. As costs tend to move with the metal price, this margin is a significant differentiator amongst our peers. Net earnings in the quarter was $35.9 million or 25 cents per share. Total net earnings for the year was $116.7 million or 79 cents per share. Free cash flow in the quarter was $24.1 million or 16 cents per share. Annual free cash flow totaled $121.1 million or 82 cents a share. Sustaining capital spend in the quarter was $12 million for a total of $37.1 million spent in 2023, consistent with the 2023 technical report projections. Now on slide five. Treasury assets increased by 29%, or $23.5 million in the quarter, with cash and cash equivalents growing by $16 million, and our bullion position increasing by $7.5 million. During 2023, our treasury assets increased by $54.4 million, or 107%, to $105.2 million. Our bullion holdings outperformed all other currencies on our balance sheet in 2024, and we are proud to be providing increased exposure to bullion for our shareholders while fighting to make a better return on our invested capital. To enter 2024 with this financial strength after only our first year of commercial production is a unique accomplishment that we believe is a differentiator in the industry and something that provides resilience, flexibility, and the ability to make prudent choices when allocating capital. Over the past three years, our stock has had a healthy relationship with the gold and silver price. We strive to increase the sensitivity our stock has to the metal price while reducing the risk for our shareholders. Our balance sheet strength and the choice to hold bullion on our balance sheet are ways we believe we are reducing risk while giving investors more exposure to their currency of choice. It is important to note that we do expect our pace of cash build to slow in 2024 due to a number of factors. Our cash flow in 2022 and 2023 benefited from tax loss carry-forwards and will slow somewhat in 2024 as we pay accrued income taxes and duties from 2023. These payments will be made in Q1 2024 when we also begin to pay regular quarterly income tax installments. In H1 2024, We will also be making payments to our new and outgoing contractors, which will impact our cash flow. This includes an advance of $7.5 million for equipment purchase, which will save us $1.5 million in interest costs over the life of the contract. We have worked hard to create this financial strength and we are happy to be in a position to make better long-term decisions that benefit our shareholders. With that, I will now pass it on to Cliff to discuss operations at Las Chispas.