Trekor Metals Limited Common Shares

Good morning. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to the SECO's 2023 Fourth Quarter and Year-End Earnings Conference Call. Online subbing plays on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number 2. Thank you. Mr. Bergo, you may begin your conference.

Thank you, Ina. Welcome, everyone, and thank you for joining TSECO's fourth quarter and full year 2023 conference call. The news release and regulatory filing announcing our financial and operational results was issued yesterday afternoon. It is available on our website at tsecominds.com, as well as on CDAR. I am joined today in Vancouver by Teseco's President and CEO, Stuart MacDonald, Teseco's Chief Financial Officer, Bryce Hamming, and our COO, Richard Trombley. As usual, before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information. This information, by its nature, is subject to risks and uncertainties that may cause the stated outcome to differ materially from the actual outcome. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our fourth quarter MD&A and the related news release, as well as the risk factors particular to our company. I would also like to point out that we will use various non-GAAP measures during the call. You can find explanations and reconciliations regarding these measures in the related news release. And finally, all dollar amounts we will discuss today are in Canadian dollars unless otherwise specified. Following opening remarks, we will open the phone lines to analysts and investors for questions. I would now turn the call over to Stuart for his remarks.

Thanks, Brian. Good morning, everyone, and thank you for taking the time to join us for Teseco's year-end and Q4 earnings call. It's definitely an exciting and busy time for our company, and today I can provide an update on recent Gibraltar results and also Florence construction activities. I'll then pass the call over to Bryce for some additional detail on the financials. and financial results and our recent financing initiatives of Florence. But let's start with Gibraltar as Q4 was another strong production quarter and a great finish to the year. The mine produced 34 million pounds of copper on average grades of 0.27%. It's a great result and we definitely benefited from the higher grade, higher quality ore in the bottom of the Gibraltar pit. Actually, the result could have even been better if not for slightly lower mill throughput which averaged 83,000 tons per day. That's slightly below plan due to lower mill availabilities in the quarter as we prepared for the schedule maintenance in January. The strong production and a higher capital strip allocation led to lower unit operating costs. C1 cash costs for the fourth quarter were $1.91 a pound. Looking at the year as a whole, Gibraltar produced 123 million pounds at a C1 cost of $2.37 a pound. That production number is a significant increase over 2022 and also above our annual guidance. Certainly, 2023 was a tale of two halves, with lower grades in the first half and higher production in the second half. But for the full year, Copperhead grade averaged 0.25%, which is right in line with our reserve grade. And with that, we're able to generate $190 million of adjusted EBITDA. That's indicative of what the mine can achieve in an average year, with a realized copper price of $3.84 per pound. And it really bodes well for the coming years where we expect higher pricing. For 2024, the Gibraltar pit will continue to be the main source of mill feed until the middle of the year, when we transition to the connector pit, where we've been stripping now for over a year. We expect a smooth transition to the new connector pit, which will then be the main source of mill feed for the next five years. We previously disclosed two mill downtimes that are going to impact production in 2024. We've already completed one of those, a major component replacement of mill number two, which was planned to be a two-week down, and we successfully completed that ahead of schedule in January. The capital cost of the new mill equipment should be covered by insurance, and we're also pursuing an insurance claim for the lost production. Those discussions are ongoing, but it could be a significant insurance recovery in the range of $20 million or higher. and we're aiming to finalize that claim in the next few months. The second mill downtime will occur in the second quarter this year, when mill number one will be shut down for about three weeks to allow for the relocation of the input crusher and other maintenance. That crusher currently sits on top of the connect ore zone, and we've got about 10 million of capex left to complete the move. That's a project that we've been working on now for nearly two years at a total cost of 50 million. These two mill downtimes result in about 7 to 8 million pounds of lost copper production in 2024. And after taking that into account, we expect to produce about 115 million pounds of copper for this year. So that's very similar to last year's annual guidance, although we expect a more stable quarterly production profile this year. 2025 should be a much better production year as we won't have the mill downtime and grades will also increase as we get deeper into the connector pit. So moving on to Florence now, and that was certainly a major permitting milestone that we achieved in Q4. With permits now in hand, the project has transitioned into the construction phase. In recent months, the focus has been on site prep and civil work to prepare for wellfield drilling, as well as procurement and negotiation of key contracts. There are two key aspects to the development of the commercial facility. We need to drill the initial wellfield for the ramp-up, and that's about 90 wells to be drilled during the construction phase. And we need to build the SXEW plant and surface infrastructure. The well field drilling is already underway, and the plant construction will begin in the second quarter. We'll be using four drill rigs for the initial well field, which should be complete and ready for injection in the third quarter of 2025, about three months ahead of the SXEW plant commissioning. This allows time for pre-leaching of the initial ore blocks so that when the SXEW plant is ready, we have pregnant leach solution to begin plating copper in the fourth quarter next year. As we announced in January, we've added a few months to the original 18-month schedule, which we believe reduces execution risk and allows us to spread our spending over an extra quarter where we can benefit from Gibraltar cash flow in 2025, which, as I said, is going to be a strong production year. So we're not racing here. It's a disciplined approach with a focus on delivering an on-budget project and maintaining a strong balance sheet. We recently signed a fixed price contract for the construction of the plant and surface infrastructure, and that cost represents roughly 40% of the remaining spend, and it's now locked in. We continue to see some inflationary pressure, and it's possible we'll see some modest escalation on our published CapEx number, but we think that will be very manageable. In the rest of our business and at our other projects, we remain disciplined, and we're not planning any other significant capex this year. At Yellowhead, we continue to advance important community discussions ahead of permitting. And at New Prosperity, we've recently extended our standstill agreement again. And the dialogue continues with the goal of finalizing a resolution this year. So we have lots on the go, but the key focus is on execution of Florence. It's an exciting time for the company, and in less than two years, we'll be adding 85 million pounds of low-cost copper production. That's 80% production growth in the near term. With that, I'll turn it over to Bryce now for some additional finance commentary.