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 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any backhoe 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 two. Thank you. Mr. Brian Bergo, you may begin your conference.

Thank you, Ina. Welcome, everyone, and thank you for joining Teseco's second quarter 2024 conference call. The news release and regulatory filing announcing our financial and operational results was issued yesterday after market close and is available on our website at tesecominds.com and on CDAR. I am joined today in Vancouver by Teseco's President and CEO, Stuart McDonald, Teseco's Chief Financial Officer, Bryce Hamming, and our COO, Richard Shaw. 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 second 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 the opening remarks, we will open the phone lines to analysts and investors for questions. I'll now turn the call over to Stuart for his remarks.

Great. Thanks, Brian, and good morning, everyone. Thanks for taking the time to join us today to review our second quarter operating and financial results. It's been another eventful quarter and a busy first half, really. We've had a number of significant accomplishments so far this year, including consolidating 100% ownership of our Gibraltar mine, refinancing our bonds, Completing Florence project financing and then having a very positive start to construction activities of Florence. More on that in a minute, but I'll start with Gibraltar operations. The mine produced 20 million pounds of copper and 185,000 pounds of molybdenum in the second quarter. Production was impacted by the planned downtime in mill number one for the crush and move project and for maintenance on the sag mill. and also a strike of the mine's unionized workforce, which shut down both mills and the whole site for 18 days in June. All of that downtime resulted in total tons milled being about 25% below nameplate capacity, and that, of course, has a direct knock-on effect to copper production. Copperhead grades averaged 0.23%, which was generally in line with our expectations, and copper recoveries were 78%, slightly below plan due to the inconsistent mill operating time, as well as processing some partially oxidized ore from the upper benches of the connector pit. Mining rates were also impacted by the labor disruption, but our strip ratio remained in line with plan. We started accessing initial sulfide ore from the new connector pit, and the transition into that new pit will continue over the next few months. We'll be completely out of the Gibraltar pit this fall. Running part of the quarter with only one mill obviously has an impact on unit costs, and our total operating costs, or C1, increased to $2.99 per pound in Q2. The copper prices were very strong, with our realized price of almost $4.50 a pound in the quarter. The strike in June was a disappointing outcome for us, but we're pleased to be able to resolve that with a new three-year union contract and get all operations back to normal in the third week of June. In terms of earnings, it was our first full quarter reflecting 100% ownership of Gibraltar, and we generated 71 million of adjusted EBITDA and 77 million of earnings from mining operations. Those numbers included a $26 million insurance recovery related to repairs that were done earlier in the year. Nonetheless, a very good result considering the operational disruptions, and it demonstrates the earnings potential when we get Gibraltar back to full production levels here in the second half of the year. I'm happy to say that the in-pit crusher relocation was successfully completed in early July without any issues. This was a two-year, $50 million project and a major undertaking for our project team, so congratulations to everyone involved. Concentrator number one is back up. and with both mills now running at capacity, we're looking forward to a strong second half. We obviously lost some production during the strike, but looking at the potential to increase our mining rate slightly in the coming months, and we also believe there are opportunities to push mill throughput to get back some of the lost pounds. Overall, we expect total copper production for the current year to come in between 110 and 115 million pounds, and that's slightly below our original guidance of 115 million pounds. So that means a 20% to 30% increase in production in the second half over the first half of the year. Looking ahead to 2025, it's shaping up to be a good production year, and our concentrate production will be supplemented by additional pounds from the restart of the Gibraltar SXEW plant. That plant was actually built in the 80s and operated for about 13 years, producing on average 6 to 7 million pounds per year. Teseco then restarted it in 2007 and operated again until 2015. So it's a well-established operation. Over the last few quarters, we've been stacking new oxide ore from connector pit onto the old leach pads. By next year, we should have well over 50 million pounds of contained copper on the leach dumps. And we have advanced plans to refurbish the plant over the next year at a cost of around 8 million. And expect to be able to restart cathode production in Q2 next year. which is a year ahead of the previous schedule and our previous thinking. Our updated modeling indicates the plant could provide an additional 4 to 5 million pounds of copper production annually for many years to come. So it's positive news and a great outlook for the mine going forward. Moving to Florence, construction of the commercial facility is advancing on schedule. Construction activity really ramped up in the second quarter. We now have over 200 contractors at site. in addition to our owner's team and site management. Wellfield drilling has gone according to plan so far, with 18 wells completed at the end of June. We had two rigs drilling the production wells during the second quarter, and we added a third drill in July, now assessing the need for potentially adding a fourth. At the plant site, construction focused on earthworks and pouring the concrete foundations for the SXEW plant, and related infrastructure like tank containment systems. Construction capex in the second quarter was $37 million U.S. and $55 million year-to-date. In the next few months, Earthworks will be complete, and we expect to begin mechanical installations and structural work on the SX. We've recently added some construction photos to the Florence section of our website, and I'd encourage everyone to... Keep an eye on that, and we'll be adding more in the coming months so you can follow our progress. Pretty exciting to see things happening on the ground, so it's great. On the recruiting side, we've been very successful at building the permanent operating team for the project. We'll eventually have about 170 full-time staff and operators for the commercial production phase. Right now, so far, we've hired about 70 of those positions. Florence is in the middle of a great copper belt in central Arizona. There's a lot of highly qualified candidates already living in the region. And we have a very innovative, exciting mining project that's getting a lot of attention. So there's a lot of interest in applicants for all of our job searches and postings. That's all going very well. I was actually down in Florence not too long ago and had an opportunity to see the progress and meet some of the new team members of the Florence team. And, yeah, very impressive with everything that's taking place on site. It's a great project happening, supported by an experienced and dynamic team, and we're now less than 18 months away from first copper. As we've talked about in the past, we believe Teseco is in a very unique position with a low-cost copper project in the Tier 1 jurisdiction, and now so close to first production. Despite the pullbacks... In prices over the last couple of months, we believe that the medium to long-term fundamentals for copper have never been stronger. There continues to be very little in the way of new copper supply available to come online in the next five years. We saw some significant financial flows into and then out of the copper markets over the last six months, and I think it's a matter of time before we have a real supply deficit, and then the financial players will really move, and it's going to be interesting at that time to see where prices go. The short-term predictions are always difficult, and that's why we continue to keep our price protection program in place. To remind everyone, we have a minimum price of $3.75 a pound protected for the rest of this year, and a minimum price of $4 a pound protected for all of next year. These are copper collars, but the ceiling prices are high and provide to Sequel with a lot of pricing upside over the next 18 months. Just one more topic before I pass the call over to Bryce, just regarding our Yellowhead project. Certainly, let's not forget about it. It's a large open-pit copper project in a great location just north of Kamloops, BC. We updated the feasibility study a few years ago, which outlined a project that will produce an average of 180 million pounds of copper a year over a 25-year mine life. That would make it one of the largest copper mines in North America. We're getting ready to initiate the EA process. In connection with that, we've recently opened a project office to support community engagement. And we're also doing a small field program this year, which includes geotech drilling and test pitting to gather data that we're going to use going forward as we move through permitting. So on that note, I'm going to pass the call over to Bryce, who can provide some more color on our financials.