Sierra Metals Inc.

Thank you for standing by. This is the conference operator. Welcome to the Sierra Medals, Inc. First Quarter 2024 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 one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Jean-Pierre Cortelvio, Manager of Business Development and Investor Relations for Sierra Metals. Please go ahead.

Good morning, everyone. I'd like to note that this earnings call contains forward-looking information that is based on the company's current expectations, 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 the company's website. The accompanying presentation for today's call is available for download from the company's website at sierramedals.com. Today's press release, the financial statements, and the MD&A are posted on our website and on CDAR+. Please note that all dollar amounts mentioned on today's call are in US dollars unless otherwise noted. And lastly, I'll remind everyone that starting in 2024, the company modified its definition of cash cost to include treatment and refining charges, selling costs, and on-site G&A. We think that this is a more accurate and more transparent way of reporting to the market. Now we can clearly identify the sustaining capital portion of the total costs. Following management's prepared remarks, a Q&A period will follow. Speakers on today's call are Ernesto Valareso, our CEO, and Jose Fernandez-Vaca, our CFO. And now I'd 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. As seen on slide three, our focus is to continuously ensure we provide a workplace environment where all our employees and contractors are safe. This includes a continuous improvement approach to safety where we conduct regularly safety programs, safety inspections, and safety audits for all employees and contractors. This has been very well received by everyone throughout the company as we all recognize that being safe leads to a productive work environment. We released our first quarter 2024 production results on April 18 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, but will instead provide highlights as seen on slide four. On a consolidated basis, in the first quarter of 2024, our two operating mines, Yauricocha and Bolivar, produced almost 20 million copper equivalent pounds, which is a 21 percent increase from Q1 2023. This was from processing almost 640,000 tons of ore in the first quarter, which was 23 percent higher than in the same quarter a year ago. Breaking this down by metals, copper, silver, gold, and lead were respectively 36, 10, 19, and 10 percent higher in Q1 when compared to the same quarter in 2023. At Bolivar, the mine achieved record metal production, while at Yauricocha, the mine continues to maximize production above the 1120 level. As a reminder, we obtained our permit to mine the massive ore body below the 1120 level on February 21st of this year. Development is on track to achieve full production by Q4 2024, which will allow Yauricocha to achieve full processing capacity of 3,600 tons per day. approximately 40% increase from current run rates. As a result of our strong Q1 production, we are reaffirming our 2024 guidance, and we continue to generate strong cash flows from our operations, further improving our financial position. More of this later from Pepe when he discusses our financial results. All in all, it was another strong quarter. Moving on to slide five, As previously mentioned, it was a record quarter of metal production at Bolívar as the mine continued its trend of quarter-over-quarter production increases. During Q1 2024, Bolívar produced 11.4 million copper equivalent pounds from nearly 8 million pounds of copper, more than 200 ounces of silver, and over 4,000 ounces of gold. All metals produced in Q1 were significantly higher than in Q1 2023. The improved production from Q1 2023 to Q1 2024 was mainly driven by higher metal grades mined from the advancements in the mine's development, which allowed for access to higher-grade mineralized zones, including the Dulce Zone. To date, exploration results in the high-grade Dulce Zone have been very, very encouraging. Cash costs and all-in sustaining costs for Q1 2024 were $2.44 and $3.12, respectively, per copper equivalent payload times. The increase in all-in sustaining costs in Q1 when compared to Q1 2023 is mainly driven by the increased development at the mine to access higher grade zones. Some of the initiatives undertaken in the last quarter that helped boost productivity included starting a new tailings dam project with dam number two under construction and engineering for dam number three currently underway. Definition drilling, which was enhanced operational predictability and resume construction of the integration tunnel, which will reduce haulage costs. We remain on track to meet guidance for 2024 at Bolivar. Turning to Yorikocha on slide six, Q1 operating results were better than Q1 2023, which is a direct reflection of the team's effort over the last 12 months to maximize output above the 1120 level. Now, having obtained a permit to mine below the 1120 level in February, the mine has started the development process to access this large ore body. I'm pleased to report that we are on budget and on track to achieve capacity of 3,600 tons per day by the fourth quarter of the year, a 40% increase from current run rates. For Q1 2024, copper and lead grades remain aligned with Q1 2023, as gold, silver, and zinc rates were lower. As anticipated, mining was primarily in the lower grade ore bodies. However, copper equivalent production remained in line with Q1 2023. We're expecting throughput rates, grades, and metal production volumes to improve as development below the 1120 level progresses. In the first quarter of 2024, Yorikocha had a cash cost per copper equivalent payable pound of $3.27 and an all-in sustaining cost of $3.69. The higher all-in sustaining costs in Q1 when compared to Q1 2023 is primarily a result of costs associated with development below the 1120 level. I won't take you through all the significant productivity and cost reduction initiatives that we undertook during the quarter, other than to highlight the following. Development below the 1120 level has started, with a new mining contractor focused exclusively on the underground development. New mining equipment is on site, and improved main ventilation and pumping infrastructure has been installed. All in all, the team at Yauricocha did a great job maximizing production and reducing costs where possible. We remain on track to meet guidance for 2024. As many of you have seen, on May 7th, we announced an updated NI43-101 compliant mineral reserve and resource estimate for both Bolívar and Yauricocha. This estimate is the first one in over three years, and as shown on slide seven, highlights the significant amount of mineral reserves and resources we have at both our mines. The key here is the five plus years of proven and probable reserves life of mine at Yalicocha, and the three plus years at Bolivar. Also, I'd like to highlight the eight and 10 years, respectively, life of mine of measure and indicated resources. These are very, very compelling for the future of our mines as we continue to deliver long-term value for our stakeholders. Now, over to Pepe to discuss our financial results.