Good morning, everyone, welcome to our conference to present the Q3 2024 results. I am here in Lima with Eduardo Noriega, our CFO, and in London is Charlie Gordon, our head of investor relations. Group production in the quarter was just over 96,000 gold equivalent ounces or 8 million silver equivalent ounces, which is the strongest quarter we have had for almost five years. Production rose by 16% on the second quarter and clearly shows the impact of raising production contribution from our new Mara Rosa mine. The nine-month result was just over 249,000 gold equivalent ounces or 20.7 million silver equivalent ounces.
This result means that we remain on track to meet our overall attributable production targets for 2024 of between 343,000-360,000 gold equivalent ounces, or 28.0-29.9 million silver equivalent ounces. At Inmaculada, we continue to see the benefits from our optimization initiatives, which result in better than forecast tonnage and grades. Output in the quarter was almost 38,000 ounces of gold and 1.7 million ounces of silver, which is a gold equivalent of 58,000 ounces. The nine-month total is at almost 168,000 ounces, which is 15% improvement on the first nine months of 2023, with the delays to the permit decision impacting mine developments and consequently on production.
Turning to our new Mara Rosa operation in Brazil, as you know, we reached commercial production in the second quarter of this year, and since then, we have seen the plant reach 7,000 tons per day nominal capacity, as expected. A monthly production go over 9,000 ounces in September. We are now at the full production rate and can look forward to a strong last quarter of 2024. In Argentina, grades were temporarily lower than forecast, but the operation is still delivering a solid quarter, with output of 2.3 million silver equivalent ounces, which gives a nine month total of 7 million ounces. The fourth quarter of the year has always been the strongest for this mine, and we expect the same in 2024.
In terms of costs for the company as a whole, we are reiterating our 2024 guidance, which, if you remember, is between $1,510 and $1,550 per gold equivalent ounce. Our 2024 brownfield campaign has continued, and I am pleased to report the result at Inmaculada has been consistently strong, especially in the Tesoro and Nicolas vein, and we expect to be able to deliver substantial additions to Inmaculada resource base at the end of the year. We also has been able to add resources at both the other two operations.
On the financial side, we have approximately $85 million of cash, which translate to a net debt of $227 million, and a net debt to the last 12 months to EBITDA of 0.6x , which is reducing fairly quickly from the 0.8x at the end of June, and reflects, among other things, the repayments of around $45 million of debt in the quarter. Of course, with the current high metal prices, we are generating some solid cash flow, and the net debt figures is expected to continue to reduce as we near the year, as we are near the end of the year. So in summary, we continue with the implementation of our simplified strategy, focusing on our core assets and delivering another strong quarter with the operation on track to meet our group 2024 production and cost guidance targets.
We are also excited, excited to have almost complete our work on our next potential project at Monte do Carmo, in the neighborhood of Tocantins State in Brazil. With that, I would like to open up for questions. Thank you very much.
Thank you, sir. As a reminder, to ask a question, please signal by pressing star one. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two, and please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, it is star one to ask a question. Now, the first question comes from Laura Chan, from RBC Capital Markets. Please go ahead.
Hey, guys. Thanks so much for the call. I just have a couple of questions on my side. Can we just get an update on what you're seeing at the Monte do Carmo option? And if, and if you do exercise it, what would the timeline to your first production look like?
Yes, thank you. As I said, we are continuing with the work at Monte do Carmo as part of, I mean, the work that we decided to do during the option. And also, as you know, the option terminates in February 2025. So, I mean, as we would like to do as quick as possible, we are still doing some work. And the timeline, if we decided to go ahead with the, I mean, with the option, that would mean that, we probably could start construction on 2026. Yeah, let's say that it would take us a couple of years, so we could have production from Monte do Carmo in 2028.
Mm-hmm. Okay, that's really clear. And I just, I was wondering if I could also get an update on the expansion of the processing plant at San Jose. How's that going to be completed at the end of the year?
No, we cannot hear you. Could you repeat the question, please, and get closer to your mic?
Oh, so sorry. I was just wondering if I could get an update on the expansion of the processing plant at San Jose?
San Jose?
I think that's the extension of the plant at San Jose, how that's going.
Oh, sorry, sorry, sorry. Yes. I mean, communication is not very good today. As you know, we are spending $1 million on CapEx in San Jose to expand the capacity up to 2,000 tons, and we expect to finish that project at the end of the year. So we'll have the benefit of-
Okay, thanks
- having 2,000 tons in 2025.
Okay, so full benefit in 2025. Great.
Thank you.
Thank you. We'll now move to our next question from William Dalby from Berenberg. Please go ahead.
Yeah. Hi, Eduardo. Thanks a lot for the call. Just a couple from me. Firstly, around grades, really, starting in Inmaculada, obviously, you've been quite strong there in terms of grades. So just wondering if we can get a bit of a steer on how that sort of outlook is on grades, you know, returning towards the reserve grade of around kind of 3.5 grams gold, 140 grams silver. Is that, is that reasonable? And what would the sort of trajectory be there? Would that be sort of over the next few quarters, or are you, are you seeing the sort of grades as of Q3, kind of able to sustain those going forward? That's the first question.
Yeah. What I expect for Q4 is to get to 3.5 grams, and 3 grams, and 150 grams, 3.5 grams in gold and 150 in silver, more or less, which is-
Uh-huh
... very close to the average grades of the reserves. That's the expectation today for Q4. But, I mean, since we are discovering new areas, you know, and getting into new areas, sometimes we are surprised by grades. So I mean, let's see what happen, but, as a, I mean, as a projection, I would use those grades.
Okay, helpful. And then just following up on recoveries, it seems like silver recovery there is running quite high, sort of above 90%. Is that sort of a fair assumption going forward as well?
Yeah, totally. I, I expect to keep... I mean, since the source of the mineral is more or less the same area, I expect to keep 90% the rest of the year for silver recovery.
Okay, helpful. And then, yeah, just sort of similar for San Jose, grades for this year have been, you know, a fair bit below the reserve grades, and you also flagged in the quarterly that sort of temporarily lower grades this quarter. Can you maybe give a bit of a steer there as well on the grades? Thank you.
I mean, our project- our projection is to get up to 4.5, I mean, between 4.5 and 4.9, in, in gold, and, around 270 grams in silver. I have to say that during the Q3, we have some, dilution issues that has been solved already, so I expect the, the grades return, to the figures that I just gave it to you.
Okay, very helpful. And then just lastly, on Mara Rosa,
Yeah
... just backing out the gold recovery there, came in at, unless I'm mistaken, came in at 94%, which kind of was a fair bit above what we were assuming. So again, you know, can we maybe get a bit of a steer or, having sort of ramped up now for best part of half a year, what sort of recoveries do you think we can expect going forward? You know, 90%+ ?
No, I would say that 90%. 90% is the nominal recovery that we are expecting for the rest of the year. So I don't expect to have more than that, more than 90%.
Okay, that's helpful. Yeah, all from me. Thank you very much, guys.
Thank you. Thank you for your questions.
As a reminder, to ask a question, please signal by pressing star one. Our next question comes from Tim Huff from Canaccord. Please go ahead.
Hi, Tim.
Yeah. Hi, Eduardo. Thanks very much for the call and really good quarter, specifically on net debt. I only had two questions, really. One on Inmaculada, one on Mara Rosa.
... Just sort of following up from what Will said. You ran through the grade profile, but Inmaculada seems to be running pretty well, especially quarter-over-quarter at the time. And, you know, you guys have processed up to as much as, like, 340 in a quarter in the past. I was just wondering, are you comfortable going above third quarter throughput rate at the mill at Inmaculada? Because it seems like everything's going pretty well. For three quarters in a row, you guys beat our forecast. I didn't really know what you guys think. We've talked about the mine quite a bit, but I just thought I'd ask about the mill and how things are going there.
Sorry, Tim, I think the line was quite fuzzy there. Just wonder if you could repeat that and maybe be as near as possible to the microphone.
Yeah, it was on the throughput rate at Inmaculada. If you're expecting grades to recede a bit, would you expect the throughput to come up in the fourth quarter?
Yeah. Yeah, I mean, talking about throughput, what I expect from Inmaculada is to maintain 110,000 tons per month. So which is quite strong, you know, compared with the months before. So, I mean, that's the result of the initiatives that we took at the beginning of the year. Remember that we hired a consultant, and we have been working with them. So throughput has reached every single day 3,850 tons per day. That means that, I mean, we will be around 110,000 tons per day, I mean, per month, the rest of the year.
That's great. That's, that's sort of what I expected, a little bit above our forecast, but that's really helpful. Thank you. And then the other one was on Mara Rosa grades, and we obviously hear a little bit about what we were expecting for the past two quarters.
Oh, yeah.
I was wondering how you...
Yep.
Yeah, on the Mara Rosa grades.
Yeah, Mara Rosa-
I was just wondering, how you see that going forward in?
I will see... I mean, I can see some variations between months because it depends where you are on the pit. But I think Mara Rosa grades will be between 1 gram and 1.36 grams. So between 1 gram and 1.4 grams, I would say that that's the fair projection for the grades of Mara Rosa in the last term.
Okay, that's very helpful. Thank you very much.
You're welcome.
Thank you. As a final reminder to ask a question at this time, please signal by pressing star one. We will now take our next question from Camilla Jenkins a private investor. Please go ahead.
Hi, Camilla.
Hello. Hello, can you hear me?
Yes, very well.
Hello? Yes, awesome.
Very well. Very well, very well.
Thank you. Thank, thank you, Eduardo. It was just in the presentations before, are we still looking at all-in associated costs for 2025 at your estimation of the $1,300-$1,400? Are you still-
On 2025, you mean?
Yeah, sorry, 2025. Yes, yes.
Well, let me tell you that we are in the middle of the budget process. Yeah-
Right
... we can see some inflation, some inflation, I mean, when we are considering all the supplies and everything that we use for the mining process.
Mm-hmm.
But I have to say that we are doing a huge effort, you know, to reach the figure that we presented at the Capital Markets Day-
Yep
... back in November-
Yeah
... last year.
Correct.
Yeah.
Right, yeah.
So, I mean, my expectation is to be around $1,400, probably a little bit more, but that's-
Okay
... going to depends on this budget process and of course, our negotiation with some suppliers. I mean, the thing is that at these prices, silver at more than $30 and gold at $2,700, you know, everyone wants-
Mm
... to participate of the party. So we have a lot of pressures-
Mm
... you know, inflation pressures on the cost. So, but we are trying to manage that. And for sure-
Okay
... at the end of the year, we will be able to present you a guidance for 2025.
2025. Lovely. Okay, thank you so much. Thank you.
You are totally welcome.
Thank you. We have a follow-up question from William Dalby, from Berenberg. Please go ahead.
Yeah. Hi again, just a quick follow-up. Just actually on exploration, looking at some of those drill results you had in the report, on Inmaculada, particularly looking quite decent there, especially from Tesoro. So yeah, the question really is just I'm wondering if you can talk a bit more or give a bit more color around the exploration strategy at Inmaculada, and also specifically when we might see a resource upgrade coming from Inmaculada. Thank you.
Okay. Thank you very much. Well, I mean, as you remember, we got the environmental permit that it will give us 20 years of permit. And that's, I mean, the output of that permit is that we have a lot of targets in Inmaculada to explore for the next 20 years. We have studied this brownfield exploration strategy, doing some drilling around the area of Angela Northeast, which has been yielding with fantastic grades, and Tesoro, Nicolas as part of this belt. And we are getting very, very good results, as you can see on the tables. We are getting ready to present resources at the end of the year, and we expect to have very good ones.
That's what I can say at the moment.
Okay. Thank you very much, guys.
You're welcome.
Thank you. It appears there are currently no further questions at this time. With this, I'd like to hand the call back over to Eduardo for any additional or closing remarks. Over to you, sir.
Well, first of all, I would like to thank you to be at the conference. And just a summary, I mean, we have a very strong Q3 results. I think it's... Yeah, I mean, we try to simplify the strategy to focus ourselves on a brownfield exploration, efficient, being very efficient at the mines and with a lean philosophy across the company. Also, a very strong performance on ESG, especially on safety, and a lot of capital discipline. And so, I mean, once we have started implementing this strategy, I mean, we are seeing during this year the result of that one.
So, I mean, we expect a good Q4, and looking forward, you know, for the results at the end of the year, that which it will include, of course, new resource additions. Nothing else from me. Thank you very much.