Sierra Metals Inc.

Thank you for standing by. This is the conference operator. Welcome to the Sierra Metals Inc. 4th Quarter 2023 Financial and Operating Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to John Pierre Fort del Rio, Manager of Business Development and Investor Relations for Sierra Metals. Please go ahead, sir.

Good morning, everyone. I'd like to note that this earnings call contains forward-looking information that is based on the company's current base estimates and beliefs. Please review this slide and other forward-looking information contained in the company's annual information form, which is publicly available on CEDAR Plus and on the company's website. The accompanying presentation for today's call is available for download from the company's website at sierrametals.com. This morning's press release, the financial statement, and the MD&A are posted on our website and on CIRA+. Please note that all dollar amounts are mentioned today in today's call are in U.S. dollars unless otherwise noted. I will also point out that the Kushi mine was deemed a non-core asset in 2023 placed on current maintenance on September 20, 2023, and thus the results of the mine are not included in the consolidated results or in our 2023 and 2024 guidance, and has been declassified as a discontinued operation in our financial statements, with all historical results related to CUSI also declassified. Speakers on today's call are Ernesto Valareso, our CEO, and Jose Fernandez Bata, our CFO. Following management's prepared remarks, a Q&A period will follow. And now I would like to turn the call over to Ernesto.

Thank you, Jean-Pierre, and good morning, everyone. Let me begin, as we always do, by discussing our company's number one priority, safety. It is without a doubt that our strong operating performance this past year is due in large part to our improved approach to safety. Our focus is to continuously ensure we provide a workplace environment where all our employees and contractors are safe, and as a result, are able to maximize their productivity. As you hear me always say, a safe mind is an operating mind. As shown on this slide, we can see how everyone at Sierra Metals has embraced our improved focus on safety. Excuse me. For 2023, each buy trended in the right direction. We aspire to be a leader amongst our peer group within our industry. Before I get into the details of the quarter, let me provide some highlights of the past year. I joined Sierra Metals 15 months ago, knowing the company had strong assets and with the right team, strategy and hard work, we could turn the company around in short order. During this time, With the support of the board and many of our shareholders, we recruited a new senior management team with the goals of improving safety, increasing efficiency, and reducing costs throughout our business. It hasn't been easy, but we can now see our hard work being realized. While there are many initiatives that I'm very proud of, some specific ones to highlight include ramping Bolivar's production close to 5,000 tons per day, This has proven to be the backbone of our operational improvements. Our team obtained the permit to mine below the 1120 level at Yauricocha, which will be a great source of growth for the company going forward. This will allow to ramp up Yauricocha's production by 40% by year-end. Putting CUSI on current maintenance and starting the divestment process. We replaced our mined mineral resources by more than 100% ensuring our sustained production. And at the corporate level, we improved our financial position through refinancing our debt, completed a $16 million Canadian equity finance, and uplisted to the OTCQX in the US, thereby expanding our shareholder base. And as such, We are pleased to see our stock price respond by increasing over 200%, thus validating our strategy. Now let's move on to an overview of our results. We released our fourth quarter 2023 production results on February 1st and our financial results earlier today. I will assume everyone has had a chance to review them. So I will not be going into detail on each mine, but will instead provide these highlights. On a consolidated basis, our two operating mines, Yalicocha and Bolivar, processed nearly 774,000 tons of ore in the fourth quarter of 2023, which was 59% higher than in the same quarter a year ago. For the full year of 2023, Our two mines processed nearly 2.5 million pounds of ore, which was 24% higher than in 2022. All metals produced in Q4 2023 and food year 2023 were significantly higher than in 2022. All of these resulted in 21.1 million copper equivalent pounds produced in the fourth quarter of 2023. which was a 78% increase over the same quarter last year. For 2023, we produced 76.7 million copper equivalent pounds, which was 37% higher than in 2022. Needless to say, operationally, 2023 was a tremendous year for Sierra Meras. Through the hard work by everyone throughout the company, we turned around our operations. Our hands-on approach created a safe, dynamic, and responsive operating environment which has stabilized operations and builds a platform for growth. Now, let me move on to some specific highlights of Bolívar and Yauricot. Bolívar achieved a throughput of 410,000 times in Q4 2023, a 52% increase from Q4 2022. For the year 2023, the mine increased throughput by 57% over 2022. Our team did a great job during the year of getting the mine throughput levels back to its capacity of close to 5,000 tons per day. This was a key factor for Shura Metals in achieving our goals last year. Some of the initiatives undertaken in 2023 that helped boost productivity and reduce costs in Bolívar includes starting new tailings dam projects increase development improving ability of available sorry improving availability of soils improving water recovery using 50 less fresh water upgrading definition drilling that improves the modeling process and purchasing new blasting equipment As a result of the increased throughput levels, copper equivalent production was higher and costs were lower in 2023 versus 2022. Copper equivalent production was 36.6 million pounds in 2023, which was 116% higher than 2022. We met our 2023 guidance. When comparing 2023 to 2022, Grades for all metals and recovery rates were higher. Cash costs and all-in sustaining costs for 2023 were $1.87 and $3.29, respectively, per cover equivalent time. Cash costs were lower than 2023 guidance, while all-in sustaining costs were 4 cents higher than guidance. The agriculture highlights. The agriculture processed nearly 264,000 pounds during Q4 2023, an increase of 73% over Q4 2022. On each quarter throughout 2023, the agriculture increased its throughput rate and increased the amount of metal produced. Corporate equivalent production for Q4 last year of 10.9 million pounds represented a 100% increase over the fourth quarter of 2022. As a result of higher grades mined, higher recovery, and increased throughput rates, copper equivalent pounds produced was 40 million pounds, or 2% higher than a year ago, thereby meeting 2023 production guidance. As well as gold, copper, zinc, silver, and lead production were higher in 2023 than in 2022. In the fourth quarter of 2023, the agriculture had a cash cost per copper equivalent payable pound of $1.84 and an all-in sustaining cost per copper equivalent payable pounds of $3.47. For 2023, cash costs per copper equivalent payable pound of $2.05 was above guidance, and in all sustaining costs per copper equivalent payable pound of $3.56, which met guidance. I want to take you through all the significant productivity and cost reduction initiatives that we undertook at the agriculture during the quarter, other than to highlight the following. Increased availability of scopes. improve main ventilation and pumping infrastructure, optimize mine haulage cycle with damper trucks, improve mine development, and improve copper recoilless. All in all, Latina Yabicocha did a great job maximizing production and reducing costs where possible until we are able to mine the ore body below the 1120 level. As we announced on February 21st, 2024, we obtained this permit to develop the mine below the 1120 level. The permitting team did a fantastic job in obtaining the permit in less than a year. Mining below the 1120 level will be a game changer for Yabicocha and Sierra Meros. To put it simply, the ore body below 1120 is huge. Access to it will allow us to implement bulk mining techniques utilizing sub-level cable mining methods. This will increase throughput and lower costs, allowing the mine to reach its full potential of 3,600 tons per day, a 40% increase from current run rates within six to nine months with a modest investment in development capital of between $4 million to $5 million. Now let me hand the call over to Pepe, our CFO.