Trekor Metals Limited Common Shares

Good day and thank you for standing by. Welcome to the TSECO Mines Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Burgo, Vice President of Investor Relations. Please go ahead.

Thank you, Liz. Welcome, everyone, and thank you for joining TSECO's third quarter 2024 conference call. The news released in regulatory filing announcing our financial and operational results was issued yesterday after market close and is available on our website at tesecomines.com and on CDAR+. I am joined today in Vancouver by TSECO's President and CEO, Stuart MacDonald, TSECO's Chief Financial Officer, Bryce Hamming, and our COO, Richard Tremblay. 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. As such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our third quarter MD&A and the related news release, as well as the risk factors particular to our company. These documents can be found on our website and also on CEDAR+. I would also like to point out that we will use various non-GAAP measures. 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 like to turn the call over to Stuart for his remarks.

Thank you, Brian. Good morning, everyone. I'm glad you're able to join us today for our review of Teseco's third quarter operational and financial results. I'll start with our 100% owned Gibraltar mine, which had a solid operating performance in the period, despite the first few weeks of the quarter being impacted by the planned downtime for major mill repairs in one of our two concentrators. This maintenance work and the in-pit crusher move were disrupted by the labour strike in June. But in the third week of July, we were able to restart concentrator number one and ramp back up to full capacity. Third quarter copper production was 27 million pounds on a head grade of 0.23% copper. Although mill availability was below plan for the quarter, we were still able to process 7.6 million tons of ore, which is a good result considering the disruptions. Copper recoveries notched a little higher than the previous quarter at 79%, but are still lower than normal due to oxidized ore in the upper benches of the new connector pit. So when they are running, the mills have been able to consistently run above the design capacity of 85,000 tons a day, which demonstrates the throughput upside we had spoken about previously. And we expect that higher throughput to drive higher copper production in Q4. However, the lower mill availability in the third quarter means that we no longer expect to make up the production that was lost during the labor strike in June. So we're now forecasting current year production to be between 105 and 110 million pounds, compared to our original guidance of 115 million. One significant change this quarter was molybdenum production, which increased to more than 400,000 pounds in Q3. That's more than we've produced in any quarter since 2021. And it's being driven by higher moly grades in the new connector pit. We expect that to continue going forward, and we should be able to get back to producing 2 million pounds per year or more of molly. At today's price of 21 or $22 a pound, that will represent a pretty significant improvement to our cost structure going forward. Total site costs of 111 million in the third quarter was similar to previous quarters, except Q2, which was lower due to the mine being shut down for the labour disruption. Our C1 cash cost of 292 US per pound was impacted by a lower allocation of capitalized stripping costs and lower production volumes, life of mine average. Partially offsetting these higher unit costs was lower off-property costs as we made our initial shipments under the new off-take agreements, which have negative TCRCs. We expect off-property costs to continue to decline as some of our older off-take agreements at higher TCs unwind. And in fact, next year, we're expecting TCRCs to be close to zero compared to about 17 cents a pound last year in 23. TSECO's realized copper price in the third quarter remained a healthy 4.23 per pound, and that helped to drive solid financial results in the quarter. We generated 48 million of adjusted EBITDA, 55 million of earnings from mining operations, and 65 million of operating cash flow. Looking ahead to 2025, we're expecting slightly higher copper grades for the year, higher mill throughput, and also the restart of Gibraltar's SXEW plant, which has been idle since 2016. Copper production is expected to be in the range of 120 to 130 million pounds from Gibraltar. and molly grades and production will also be higher. So we're looking at a strong production year, which is a real positive. But I do want to caution that we expect production to be weighted to the second half of the year, as mill feed in the first half will include some lower grade stockpiled ore. Turning over to Florence now, where construction activities have really ramped up in recent months, and we're very pleased with the progress. The SXEW plant is really starting to take shape We're nearing the end of the bulk concrete pouring for the foundations, and pre-assembly and installation of the structural steel is well underway. In September, we began installation of process equipment, and as of last week, almost all of the settling tanks have been installed. Installation of piping for this new equipment has now started. On the wellfield, we've completed 40 out of the 90 wells that are planned for the construction phase, and that's in line with our schedule. And with four drill rigs now operating, we should see the well completion rates accelerate going forward. Also, from a safety and environmental perspective, pleased to report that we've not had any lost time injuries or reportable environmental incidents so far on the project. Year to date, we've spent $97 million US on construction capital. And as we've previously disclosed, we expect total costs to come in within 10 to 15% of the $232 million estimate. And that's the estimate that we published with our technical report in March 2023 based on costing from 2022. Overall, I'm pleased with how the first nine months of construction has progressed. Our recruiting and other plans for operational readiness are also progressing well, and we remain on schedule for first copper in late 2025. Should be a very exciting year for us ahead. We haven't spoken a lot about Yellowhead recently, but we are preparing to submit the initial project description and enter into the provincial and federal environmental assessment process. We have a few years of permitting work ahead of us, but this remains a very good project in a top tier jurisdiction. As a reminder, the Yellowhead Technical Report from 2020 outlined a project with annual crop production of 180 million pounds over a 25 year mine life. and with significant gold and silver by-product credits that generate a cash cost of $1.67 per pound of copper. That study now is almost five years old and used a long-term copper price assumption of only $3.10 per pound. So it's due for an update and next year we're planning to update it with current metal prices and costs. We'll also be incorporating the recently announced Canadian tax credits for copper mine development, which have the potential to significantly improve that project's economics as well. Even though it's still a few years away from being construction ready, there's a lot of value there to be unlocked. I'll pass the call to Bryce in a minute to talk about the specifics of our financials, but I do want to emphasize that our balance sheet remains in a strong position. with a cash balance of over 200 million Canadian at the end of Q3 and an undrawn credit facility. Our stock price is up about 80% year to date, and over the last four months we utilized our at-the-market equity offering for the first time, issuing a total of 12.1 million shares for net proceeds of 37.3 million Canadian. The strike at Gibraltar over the summer was unexpected and had an impact on our projected cash flows. We also expect increased spending on yellowhead over the next year and will be advancing some growth initiatives at Gibraltar, including restart of the SXEW plant and studies on sulfide leaching. So the extra cash from the ATM will allow us to move forward on these initiatives and still maintain a solid cash balance through the Florence build. With that, I'll turn it over to Bryce.