Aris Mining Corporation

Good morning, everyone, and welcome to the Area of Mining Q2 2024 Operational and Financial Results Call. We'll begin with an overview for management, followed by a question and answer session period. To join the question queue, you may press star then one on your telephone keypad. As a reminder, all participants are in listen-only mode, and the conference is being recorded. Should you need assistance during the conference call, you may seek signal and operator by present start and zero. Please note that the accompanying presentation that management will refer to during today's call can be found in the events and presentation section of Iris Mining's website and irismining.com. Also, Iris Mining's second quarter 2024 financials have been filled on CEDAR Plus and EDGAR and can also be found on their website. I would now like to turn the conference over to Mr. Niu Wadir, Chief Executive Officer. Please go ahead.

Thank you, Operator, and good morning to everybody, and thank you for joining us on our 2024 Q2 Earnings Call. With me today in Bogota are Richard Thomas, our COO, and Richard Zorocetti, our CFO. But before we go into the quarterly results, I'd like to draw your attention to slide two, which shows our quarterly statements, as we will be making several forward-looking statements today. With that out of the way and starting on slide three, I'd like to share our operational and financial highlights with you before handing it over to Richard Thomas, who will discuss our operational performance and give us an update on our transitional growth projects at Segovia and Lomato. Then Richard Lorisetti will discuss our financial performance this quarter and for the first half year. Harris Mining produced 49,000 ounces of gold in Q2 and 99,983 ounces in H1. We generated a half year adjusted EBITDA of 64.5 million and our adjusted earnings were 18.1 million or 12 cents a share. Segovia generated a significant oil industry margin of 60.6 million in H1, contributing to our funding of our expansion projects. During H1, we invested 70 million in growth projects, including 7.5 million allocated to exploration programmes. As highlighted in our news release on Monday, our drilling programme at Segovia continues to deliver high-grade intersections confirming the continuity and extensions of the large-scale veins at depth and along stripe, and supporting Segovia's status as one of the highest-grade gold operations in the world. Without going into too much detail, as this will be covered by Richard, I'd like to briefly touch on the expansion of our Segovia operations and the construction of the Mamato lower mine. Both projects remain on track and we continue to expect to achieve an annual gold production rate of approximately half a million ounces in the second half of 2026. And again, before I hand over to Richard, I'd like to spend a minute just to discuss Sote Norte. On June 28th, we completed the acquisition of the additional 31% in Sote Norte, therefore increasing our project ownership to 51%. with Mubadala retaining a 49% interest. And they became a 9.3% shareholder of Aris Mining. We continue to develop the development team and integrate it into our management structure and procedures. We're also progressing the new Salte Norte development plan study to look into our next project growth for 27, beyond the feasibility to study levels round the way, with the results of these studies expected in early 25. I'd also like to take the opportunity to emphasise that local contract mining partners will be integrated into the new Salte Norte design and development plan. With that, I'd like to hand over to Richard to carry on the discussion. Thanks, Neil.

Moving on to slide number four. In the first half of 2024, we processed relatively low-grade material at Segovia, averaging at 9.2 grams per tonne, and we did experience an unplanned seven-day plant maintenance shutdown in April, which affected our H1 production for the year. However, since May, the Segovia plant has been operating at its design capacity of 2,000 tonnes per day and is on track for expansion to 3,000 tonnes per day by early 2025 to support our future production growth. Despite these operational challenges in the first half of the year, Aris Mining remains on track to meet the low end of its four-year production guidance of 220,000 to 240,000 ounces. And what gives us confidence is this, that we have opened up some very high-grade sections in the El Silencio mine, which we identified in our drilling program, and we are currently exploiting these. We are seeing this grade reporting to the mill at present. Also, we have managed to upgrade our Bolivia soft and that production has been increased by 25%, which allows us increased production from the El Silencio mine. Moving on to slide number five, where we provide further details of the cost structure of our Segovia operations and our contract mine partners business model. In quarter 2, 2024, the cash cost balance is $1,222 per ounce for mine operations and $1,174 per ounce for on-tractor CMP operations. Cash costs for owner mining remained relatively stable with a modest 2% increase compared to Q1 2024. However, the cash costs for on-title CMPs rose by 11% in the previous quarter, directly driven by a 12% increase in realized gold prices, to $2,308 balance in Q2. Similarly, the purchase and processing costs balanced for material delivered by third-party CMPs who operate off-title increased by 29% in Q2. This was due to both the rise in realised gold prices and the delivery of significantly higher-grade material in Q2, which averaged 29.1 grams per tonne, compared to the 18.7 in the previous quarter. However, despite the higher costs, third-party CNP Melfi purchases contributed approximately $7.2 billion to Segovia's all-interstanding margin of $60.6 million in the first half of the year, while consuming only 5% of Segovia's willing capacity. Moving on to slide number six, the Segovia process plant expansion progressed as scheduled with overall engineering work 85% complete. Manufacturing of the new wall was completed on time and final payment has been made. The new wall is expected to be delivered on site in September. Construction progress also includes the installation of concrete retaining walls, material receiving bins, foundation equipment, and CNP receiving facilities, and the assembly of conveyor belts and other capital equipment. Additional work on the foundations and capital expenditures have increased the overall budget to $15 million, as previously discussed in our press release on July 16th. Like the Segovia processing plant, expansion is complete in early 2025. Following a ramp-up period, Segovia is expected to be able to produce over 300,000 ounces of gold per year. As Neil mentioned, our 2024 exploration program, which is approximately 70% complete, has delivered excellent results as it's closed in our press release on Monday. We expect to report updated mineral resources and reserve estimates for Segovia in quarter four. Moving on to slide 7, I'd also like to update you on the construction progress at Mamata Lower Mine. As you know, we commenced construction of the new Mamata Lower Mine in Q3 2022, following the receipt of environmental permits in July 2023. The Lower Mine will access a wider porphyry-type modernisation below the Upper Mine, with both mines estimated to produce a combined 162,000 ounces of gold per year over a 20-year mine life. Detail design and engineering of the process facility are over 90% complete. Manufacturing of the process product equipment ordered in Q1 of this year is progressing on schedule with long lead items on track to meet contractual delivery dates. The portal development is ahead of schedule with completion expected by the end of the month. The contractor selected for the 2nd D time is preparing equipment for mobilization and key items like patrol rigs are already on site. Preparation for the road access to the processing plant is progressing well and asphalting has commenced this month. Design and engineering of the power supply to the mine and process plant are complete and the land rights acquisition process continues to the main power line. Design of the paste plant and water treatment plant are well underway. As of the end of July 2024, the estimated cost to complete the lower mine construction is $246 million, of which $122 million will be funded by stream financing, resulting in $124 million of cost to complete on a net basis. Finally, I'd like to draw your attention to the video link at the bottom of the slide, which I recommend you visit for photographs and video updates of the Mamata lower mine construction progress. With that, I'd like to hand over to our CFO, Richard Uriuzete.