Hi, this is the conference operator. Welcome to the Torex Gold Resources Inc., second quarter 2023 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star and 0. I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead, Mr. Rollins.
Thank you, operator. Good morning, everyone. On behalf of the Torex team, welcome to our Q2 2023 conference call. Before we begin, I wish to inform listeners that our presentation accompanying today's conference call can be found under the investor section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on page 2 of today's presentation, as well as those included in the Q2 2023 MD&A. On the call today, we have Jody Kuzenko, President and CEO, Andrew Snowden, CFO, as well as Dave Stefanuto, Executive Vice President, Technical Services and Capital Projects. Following the presentation, Jody, Andrew, and Dave will be available for the question and answer period.
This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements in MD&A are posted on our website and have been filed on SEDAR. Also, note that all amounts mentioned in this call are US dollars, unless otherwise stated. I'll now turn the call over to Jody.
Thank you, Dan, and good morning to all on the line. Welcome to the Torex Gold Q2 2023 results call. I'll open my remarks by saying that we're at the halfway mark in the year, and we're where we wanted to be. Opening highlights include, first, production is tracking nicely to the midpoint of the guided range. Second, development of Media Luna is on schedule and on budget, with 18 months left to go in the project build. Third, exploration drilling continues to demonstrate the potential for reserve and resource growth on both sides of the Balsas River. In terms of the agenda for the call, it will be the same as usual. I'll provide a brief reminder of the strategic pillars that continue to frame our execution plans. I'll step you through the key business and operational highlights specific to the second quarter.
Over to Andrew, who will provide a review of the financial results. Dave will provide a progress update on Media Luna. I'll then make some closing remarks and hand the call over to the operator for the question and answer period. Starting here on slide four, a quick review of our strategic pillars that set out the five key areas of focus as we make our way through 2023. On optimize and extend ELG, the recently released drill results from the ELG underground highlight the potential to replace reserves again in 2023, while also growing resources across multiple deposits, which bodes well for the future reserve growth and our plans to fill the mill post 2027.
In addition to future considerations, if we look at today's performance, we've been successful in increasing mining rates in the ELG Underground, setting yet another quarterly production record with Q2 performance. On de-risk and advance Media Luna, the project is tracking to schedule and budget. We passed the 4.5 kilometer mark in the Guajes Tunnel and executed purchase orders for the entirety of the underground mining fleet. Additionally, we recently awarded the contract for the underground construction and vertical development scopes. This contractor is now mobilizing to site. On grow reserves and resources, our 2023 exploration and drilling program is tracking nicely to plan, and we expect to release the first set of infill and step-out drilling results from EPO in the coming weeks.
We're excited about the potential to develop yet another mining front at EPO, which will also support our plans to fill the mill with higher-grade feed beyond 2027. On prudent capital management, we remain in a solid position to fund the development of Media Luna, as at the end of the quarter, we had $606,000,000 left to spend on the project against available liquidity of $527 ,000,000 . Lastly, on ESG excellence, in May, we published our eighth annual Responsible Gold Mining Report, outlining the excellent work accomplished in 2022 on matters of safety, environment, community, and climate. Turning now to slide five, we produced over 107,000 ounces in the quarter, placing us at 230,000 ounces through the first half of the year.
We're in a solid position to achieve full-year production guidance, and if and as we do that, it will be the fifth year running. The lower production quarter-over-quarter was expected and reflects where we are in the sequencing of our pits. With the depletion of the Guajes pit in May and the ongoing focus on waste stripping at Alamo pit, we were processing a much greater proportion of lower-grade stockpile material in the quarter. The focus on waste stripping will continue through much of Q3 before ore production ramps back up in Q4.
On financials, the impact of the stronger Mexican peso and focus on waste stripping is reflected in total and all-in sustaining cash costs, which were above the upper end of the guided range for the quarter. The team is working hard to bring that into the guided range for full year. Cash flow from operations was $90 ,000,000 . This includes $17 ,000,000 of tax payments and the annual PTU payment of $30 ,000,000 , PTU being the Mexican legislative employee bonus. With spending of $77 ,000,000 on the Media Luna project during the quarter, we closed Q2 with $285 ,000,000 of cash on hand and available liquidity of $527 ,000,000 .
A note here on liquidity, our liquidity position will be enhanced over the coming days as we're in the final stages of amending our credit facilities, which will extend the maturity date of our facilities by one year to 2026 and increase the total borrowing capacity by an additional $50 ,000,000 . The amendment was always part of our plan, as we did not want to be overly focused on paying down debt in the same year we were ramping up production from Media Luna. Overall, the improved financial flexibility reflects, I think, the strength and confidence of our lenders in our underlying business. Turning now to some operational highlights on slide 6. You can see there in the top left that shows the quarterly production I've already discussed. The dip there in Q2 should be read in conjunction with the graph on the bottom left on grade.
You can see that process grade was down as a result of processing a greater portion of stockpiled material, given the sequencing of the open pits. The top right, and I don't want this to be overshadowed by the grade story, the processing plant team set a new quarterly milling record of 13,293 tons per day, driven by ongoing process improvement and maintenance practices. Finally, on the bottom right, you can see we also delivered another record quarter on the underground mining front, hitting more than 1,900 tons per day and closing in on our targeted rate of 2,000 tons per day by the end of 2024. Moving to slide seven, the overview of our annual guidance, we're well-positioned for another successful year.
On the production front, we're tracking towards the midpoint of the guided range, with quarterly production in the second half expected to mirror that of the first. Total cash costs and all-in sustaining costs are tracking towards the upper end of the guided ranges, given the focus on waste stripping and the stronger Mexican peso. Like production, we expect quarterly TCC and AISC to mirror quarterly costs in H1. On the capital front, sustaining capital expenditures are on track for the full year, with capitalized stripping expected to remain elevated through much of Q3 before dropping off in Q4 as we move out of a period of higher stripping at El Limón . Finally, you can see here how we're tracking on Media Luna CapEx, with $144 ,000,000 spent through the first half.
While spending on Media Luna is expected to increase in H2, the lower level of spending in H1 has us tracking towards the lower end of the guided range. The lower spending is not expected to impact overall timeline, and any capital not incurred in 2023 will be incurred in 2024. Turning now to slide 8. We're excited about the success we're having at the ongoing drilling program at ELG Underground. We see potential here to extend the life of this mine well beyond the current reserve life of 2026. At El Limón Sur Deep, it's the top right in the section view on the slide, drilling returned multiple high-grade intercepts, including 88.9 grams per ton gold equivalent over 14.5 meters, and 11.2 grams per ton gold equivalent over 29 meters. It's pretty exciting.
These two notable holes, in addition to what else we're seeing here, validates the high-grade nature of the feeders in this area of deposit, but also demonstrates the potential for ongoing resource growth at depth. At Sub-Sill South, drilling encountered mineralization down to the 400 meter elevation, which is 125 meters below the lowest resources at Sub-Sill and some 275 meters below ELD. In addition, follow-up drilling 100 meters to the west of El Limón Sur Deep continues to highlight the potential for another new zone of underground mineralization. Clearly, plenty of upside here, and we're very excited about the long-term prospects of ELG Underground. Next up on the exploration front will be a release detailing initial results from the 2023 program at EPO.
That's on the south side of the river, it's focused on upgrading additional inferred resources to the indicated category and growing the overall size of the resource envelope. We expect to release these results in the coming weeks. Turning now to slide 9 for a quick point on ESG. In May, we published our 8th annual Responsible Gold Mining Report, which details the great work our team does at site on community relations, environmental protection, and most importantly, safety, the safety of our employees and our rapidly expanding contractor base, with now over 1,200 people working on the Media Luna project. Our performance on safety is reflected on the bottom left of this slide. Our lost time injury frequency at quarter end remains at an industry-leading 0.58. I'll now turn the call over to Andrew to speak to the quarterly financial performance.
Great. Thank you, Jody, good morning, everyone. Q2 was another financial quarter delivered to plan here at Torex, with the expected lower head grade due to a greater proportion of stockpiled material processed and higher stripping at El Limón pit pushback, resulting in an increase in costs as compared to Q1. In addition, the strength in the Mexican peso I highlighted in our Q1 earnings call did extend through Q2, so we are continuing to see this put pressure on costs. Year-to-date, the peso has averaged a rate of about 18.2 to 1 US dollar, that compares to the rate we budgeted, which was at 20 to 1. Year-to-date, so through to the 6 months to June, this has had an impact of approximately $10 ,000,000 on operating costs, or approximately $45 an ounce.
As a reminder, on an annual basis, each 1 peso variance in the exchange rate will have about a $10 ,000,000 impact on operating costs. As shown here on slide 11, these operational and foreign exchange factors combined have resulted in Q2 total cash costs of $848 an ounce, all-in sustaining costs of $1,308 an ounce, and adjusted EBITDA of $106 ,000,000 . Given the continued focus on waste stripping through Q3, we expect costs and EBITDA in Q3 to be comparable to those reported in Q2, before then improving in Q4.
With the potential ongoing strength of the Mexican peso, I expect this will continue to put some pressure on costs and will put us at the upper end of the guided range for both total cash costs and all-in sustaining costs for the full year. Finally, on this slide, just commenting now on free cash flow, which is shown in the bottom right quadrant of the chart. We reported a $37 ,000,000 free cash flow deficit during the quarter. This reflects the annual PTU, or employee profit sharing payment, which was $30 ,000,000 . That's paid in May of each year. Also, the free cash flow is impacted by the increased spending on capital.
Specifically, the spending on Media Luna increased by $11 ,000,000 in the quarter to $77 ,000,000 , with further increases forecast in Q3 and Q4, which, based on spending to date, I expect this will bring us to the lower end of the guided Media Luna capital range for 2023. Turning now to slide 12, you can see a summary of our unit cost performance. Despite the ongoing pressure from the stronger Mexican peso, mining costs are tracking well and, and generally in line with the costs achieved in 2022. In the open pits, improved productivity has helped offset peso pressures, with unit costs tracking in line with last year. Whereas in the underground, cost pressures have been more than offset by economies of scale, given the increased mining rates achieved year-to-date.
At the processing plant, the increased costs relative to 2022 reflect the higher consumable prices we flagged when we released our full year guidance at the beginning of the year, as well as the stronger Mexican peso. While the stronger peso is putting upward pressure on costs, we are continuing to look for opportunities to reduce costs, and this is something we've demonstrated our ability to do over the past few years. Turning now to slide 13, you can see here the $37 ,000,000 in negative free cash flow we saw in the quarter led to our June 13th cash balance, reducing to $285 ,000,000 . Outside of our operating EBITDA, there's three key drivers behind this change in cash in the quarter.
Firstly, and, and most significantly, being capital spending, where we invested $125 ,000,000 in the quarter, which included $77 ,000,000 at Media Luna, which is up from the $66 ,000,000 in Q1. Secondly, we paid the annual PTU or, or employee profit sharing. That, as I mentioned, was $30 ,000,000 during the quarter, and that's included at least on this chart, within changes in working capital. Finally, quarterly tax payments were $17 ,000,000 during the quarter, which is relatively in line with the $6 ,000,000 -$7 ,000,000 a month of tax installments I, I anticipate for the full year 2023.
Although the high tax and PTU quarters for 2023 are now behind us, we do expect quarterly free cash flow to continue to be negative for the balance of the year and into 2024, as Media Luna capital continues to increase. I'm turning now to slide 14. You can see here that despite the increased capital spending in Q2, our balance sheet remains very strong and positions us well to fully fund Media Luna. We closed out the quarter with $285 ,000,000 in cash, and a further $242 ,000,000 of available capacity on our credit facility, so a total of $527 ,000,000 in available liquidity.
In addition to this available liquidity, we expect to close an amended credit agreement with our banking syndicate in the next few days, which will extend the maturity of our revolving and term loan facilities by 1 year into 2026, and also increase the total capacity of the revolving facility by $50 ,000,000 . In line with the extension, the drawdown date on the term facility will also be extended 1 year to the end of 2024. On a pro forma basis, if we assume this was closed at June 30, this would have put our June 30 available liquidity at $577 ,000,000 . I think this additional credit capacity really reflects the strength of the underlying business and provides, provides us with additional financial flexibility to support our strategic priorities.
This is really demonstrated on the next slide here on slide 15, where you can see how this liquidity well supports the remaining forecast capital expenditures on Media Luna, and our ability to deliver on our broader strategy by investing meaningfully in exploration and drilling, while maintaining a strong balance sheet during the build period. Including the additional $50 ,000,000 of borrowing capacity on the revolving facility, we now estimate only $129 ,000,000 of free cash flow needs to be generated from ELG over the next 18 months to fund our strategic priorities, which includes the $606 ,000,000 of remaining Media Luna spend and maintaining $100 ,000,000 of cash on the balance sheet.
This internal cash flow requirement of $129 ,000,000 over the next 18 months compares with $220 ,000,000 that we've actually generated from, from ELG, over the past 12 months, and this supports our confidence in funding Media Luna internally. Finally, now just an update on, on hedging. You can see here, summarized on slide 16, the quantity and price of gold hedges for the remainder of 2023 and 2024 remain unchanged and continue to provide effective support for the Media Luna capital spend. We don't have any current intent to increase the gold hedging profile you see here on this, on this slide further.
On these gold hedges, we, we generated a modest realized loss of $600,000 during the quarter, while the non-cash gain of $50 ,000,000 you'll see recognized in our income statement reflects the weaker forward prices that we saw at the end of the quarter. I talked a little bit about peso cost pressures during the call today. I will note that we are continuing to assess options for foreign exchange hedging, given approximately 45% of the remaining capital on Media Luna is exposed to movements in the Mexican peso. No final decision has been made there yet, but we plan to be, and we plan to be opportunistic with the aim of minimizing any further downside risk while leaving the potential to benefit from weaker prices, should the Mexican peso weaken relative to the US dollar through the build period.
With that, I'll now hand the call over to Dave, who'll provide an update on Media Luna.
Thanks, Andrew. Slide 18 shows the progress at Media Luna after the first 15 months of a 33-month build period. The main takeaway is that the Media Luna project is tracking to budget and to schedule, with the first concentrate production still anticipated in Q4, 2024, and commercial production in early 2025. At quarter end, the project was 35% complete across procurement, engineering, underground construction development, and surface construction, up from 24% at the start of the quarter. Both engineering and procurement rates picked up as we issued a number of schedule critical purchase orders, such as our battery electric support equipment with MacLean and battery electric personal transport vehicles with Rokion. Underground construction and vertical development contracts were awarded to Dumas, with the various crews now mobilizing to site.
The award of the ball mill motors and variable frequency drives and additional electrical equipment, including surface pad-mounted transformers and switchgear. Underground development kept pace during the quarter, with 18 active headings. In Media Luna lower, the main spiral ramp, which will connect to the Guajes Tunnel , was completed. Development was prioritized at the south side to complete the underground excavation for the ore bins and the ore passes to support mobilization of the underground construction contractor. Delivery of the Guajes conveyor table segments commenced with the aim of installing the conveyor anchors and tables later this year. On the north side of the Balsas River, civil works for the water treatment plant were completed, as well as rough grading for the 230 kilovolt substation.
Extension of the main water management culvert below the area of the new flotation plant and copper concentrate storage facilities were significantly advanced, allowing remaining mass civil works to begin. Relocation of the power distribution and installation of new buried power conduits around the flotation plant are expected to be completed early next quarter, allowing preparation for the start of the plant concrete foundations. Additional camp modules to host project staff were also installed. During the quarter, we invested $77 ,000,000 in the project, resulting in a remaining expenditure of $606 ,000,000 over the next 18 months. As of quarter end, 45% of the upfront project expenditures have been committed, including 31% incurred.
While the level of spending is expected to increase in H2, given the lower spend rate through the first half of the year, we expect full expenditures to be toward the lower end of the guided range of $390 ,000,000 -$440 ,000,000 . Slide 19 provides an update of the schedule critical Guajes Tunnel. Based on the progress to date, we are on track for breakthrough of the Guajes Tunnel in early Q1 2024, if not earlier. At the end of July, the main Guajes Tunnel had advanced more than 4,700 meters, having delivered an average daily advance rate of 6.9 meters per day since the start of the year. South portal lower had advanced over 2,100 meters, with the main spiral ramp being completed.
Our crews will now begin to progress from south to north in the Guajes Tunnel . Prioritization for development on the south side has been given to the mass excavations related to the ore and waste handling systems. This will ensure development remains well in advance of the requirement for our underground construction contractor. Given the rates we've experienced to date, we gradually recovered lost time due to earlier delays related to challenging ground conditions in the south portal upper and lower. Turning to slide 20 and some recent pictures of the project. On the top left, you can see the earthworks related to the sedimentation and decant ponds located outside South portal lower. Work on the ponds has accelerated with completion of the access road slope stabilization work.
The middle top picture is a new security building, while the top right, you can see breakthrough of the west adit vent tunnel, which is located towards the top of the Media Luna deposit. At the bottom left, you can see the civil works being carried out to expand the pad for the MML camp, which was significantly completed in July, and in the bottom right, you can see the copper flotation cells arriving at site.
With that, I'll now turn the call back over to Jody.
Thanks, Dave. Just by way of wrap commentary here, we're well on track to deliver another solid year in 2023. Production is tracking towards the midpoint of the guided range, development of Media Luna is tracking to budget and schedule, and our exploration drilling continues to demonstrate the underlying resource potential of the entire Morelos property. With a strong balance sheet, robust financial liquidity, we think we're well positioned to fund our strategic preop priorities, which, when you combine that with the execution capability of this team, that just continues to show itself quarter after quarter, we anticipate that will lead to a further re-rating of the company's share price and create value for everyone who believes in us. With that, I'll pass the call over to the operator for the Q&A.
Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. The first question comes from Wayne Lam with RBC. Please go ahead.
Yeah, thanks. Morning, everyone. Just a quick question at ELG on the underground mining rates. The, the prior commentary had mentioned exiting the year at 1,800 tons per day, implying that there was still a ramp-up period through the year. Obviously, you guys have well outperformed that. Given the 1,900 tons per day achieved in the quarter, just wanted to clarify if we should be modeling 1,800 as an average for the full year, or if that bar should now be set to exiting the year at the higher 2,000 ton per day target that you guys had set for 2024.
Yeah, that's a good question, Wayne. The reality is, is that the performance you see in ELG Underground shows our ability to flex plans from an execution perspective as the business needs require. As the mining sequence shaped up, in Q2 and in Q3, we're really pushing hard in the underground to beat that 1,800 tons per day. You can expect a performance in Q3 that's either similar or greater to that you saw in Q2, and then it'll come off again in Q4. What we're doing, we don't wanna push so hard that we deplete reserves so quickly, and so we're trying to balance the push on the underground with what we're seeing in the pits to deliver on our overall commitments.
I think probably a safe modeling number is in the 1,900 tons per day range for the balance of this year, recognizing that Q3 will be high, and then we're looking to step that up one more step in the performance next year.
Okay, great. Thanks, and good to, good to see the result. Maybe moving to Media Luna. I think you guys had mentioned the 45% CapEx exposure to the Mexican peso. I guess the peso has moved nearly 3 points from the 20 to 1 using the feasibility study. I'm just wondering if you might be able to provide an estimate for what kind of impact that's had on the, on the project, given that that's nearly $400 ,000,000 exposure on the $875 estimate, or what kind of sensitivity the CapEx has around that FX rate?
Yeah, sure, Wayne, it's Andrew, Andrew here. I'll, I'll take that question. The way I'll think about that sensitivity, Wayne, would be, you know, for every kind of 1 peso movement in the exchange rate, that would impact our project capital by about $50 ,000,000 for the full project life through until the end of 2024. Obviously, there has been some of that would have been realized in the, in the expenditure that has been incurred to date. I'd probably say maybe there's around $5 ,000,000 of, of that incremental pressure that's been realized within our capital spend through to the end of June. Looking forward to the rest of the project, that $50 ,000,000 sensitivity per peso, I think is a reasonable assumption to take.
Okay, great. Thanks for that detail. Maybe just last one, on the facility. How does the refinancing tie in with the Sustainability-Linked Loan? Just wondering if those are, are mixed together or if they're two completely separate. Just given the lower spend anticipated this year and the strong cash balance, you guys currently have, when do you guys anticipate the first drawdown on the facility? Is that kind of well into next year?
Yeah. So, I'll take those questions again, Wayne. So on the facility, this new facility or this amended and upsized facility and extended facility is exactly the same as the Sustainability-Linked Loan. So this is a Sustainability-Linked Loan. Those KPIs, which have that 5 basis points basis point impact we talked about last quarter, are captured within this, within this loan facility. It's just that same loan facility that's been extended. Our total credit capacity, once this gets closed in the next few days, will be that $300 ,000,000 I referred to in my commentary. In terms of kind of timing on drawdown, I don't expect that we'll be drawing down on the facility this year.
With the extension of the facility, we now have until the end of next year to draw down on the term loan. That's helpful. Previously, we would've had to draw on it this year, otherwise that availability would have fallen away. My current projections are that we won't need to draw on that until, until at some point in the first half of next year.
Okay, perfect. That's all for me. Thanks for taking my questions.
The next question comes from Don DeMarco with National Bank Financial. Please go ahead.
Thank you, operator, and good morning, everyone. The last caller talked about mining rates. I, I have a question about the throughput. I see congratulations on this record throughput in the quarter. Can you comment on the drivers of this? The trend seems to be upward, and is it sustainable at the Q2 level, or what, what should we expect going forward?
Thanks for the question, Don. The driver of this is really 2-fold. 1, opening up more headings and have plenty of places to work and active mining fronts. 2, really working on utilization of the existing mining fleet. Sometime ago, we took the scope on managing the mining fleet from our underground mining contractor and are doing that ourselves. 2 drivers there, 1 is efficiency and the other is cost. I think those 2 things taken together really contributed to the increased mining rates.
Okay, great. Great to see that. I, I saw that you drew on stockpiles, and the, the average gold grade was a little bit lower in the quarter. Going forward, would you anticipate additional draws on stockpiles, or, or was that something that was more of a Q2-only item?
Yeah, I think you can expect to see, Don, the continued draw in stockpiles through Q3. As we complete the aggressive stripping phase in El Limón and get to ore in the latter part of Q3 and into Q4, we'll pull off stockpiles and head to ore at El Limón in Q4. Think about Q3 as looking a lot like Q2. Q4 is looking a lot like Q1.
Okay, thank you. As a final question, we, we know that Torex challenged the mining law reforms and challenged the unconstitutionality of it. As I understand, there's no immediate or anticipated impact to Torex, but can you give us an update on, on this process and what the next steps and timing might be?
Sure. Happy to. I'll give you just a brief overview. As you can imagine, there's lots of moving pieces here and quite a bit of detail. Torex did file something called an amparo to challenge the totality of the mining laws. In Mexico, the way it works, if the view is that the laws are unconstitutional, there isn't a single challenge on those. They're done on a owner-by-owner or company-by-company basis. Many of our peers in Mexico have also filed a similar challenge. The way the process works is that the case is adjudicated on the merits in terms of interim relief and then final relief. We've now been granted some interim relief on the amparo. The state has appealed that, so that continues to wind its way through the court system.
In the meantime, while this gets resolved and addressed through the judicial process, there's also a political process ongoing, where the opposition parties have challenged the mining laws. That's happening in a parallel path. In the meantime, Torex carries on business as usual. To date, we haven't seen any impact to the operations, and, quite frankly, with our relationships with the regulators and the maturity of our permitting and our operations, we don't expect to in the interim.
Okay, great. Well, thank you for that, and certainly, good luck to that, to you, both you and all your peers. That's all for me.
Thank you.
Once again, if you have a question, please press star then one. The next question comes from Eric Winmill with Bank of Nova Scotia. Please go ahead.
Hi, morning, to everyone here. Thanks for taking my question. Just a quick question on the drilling here at ELG. Just wondering if you could elaborate a bit on the plans going forward and obviously some pretty decent hits. What do you still see in terms of getting that into the mine plan, or how much drilling is needed there? Thanks.
Yeah. I'll take that one, Eric. We have $6 ,000,000 in the budget allocated to ELG underground this year. We're about halfway through that. We like what we're seeing down deep. We like what we're seeing to the west of El Limón Sur. We haven't yet pulled together our mine plans for 2024. We're in the midst of doing that. Early projections, at least from my perspective, one of the things I like about what we're seeing is the elevated copper numbers over to the areas in El Limón Sur and El Limón Sur West, and that should dovetail nicely with us having landed the copper flotation circuit as part of the Media Luna project.
Not only are we seeing increased life there and increased availability of production, what I see there is the potential for increased margins because we now have the processing capability to, to make money off of what we're seeing down there. Down deep, over to the west, we're pulling the mine plans together, and the margins look like they're going to be healthy.
Okay, great. No, that's super helpful. Thank you. Just another quick one from me. In terms of the In-pit tailings deposition, anything there or any sort of milestones or next steps we're looking for?
Yeah, I'll take that one. We have gone to some extra steps here to have a very detailed, thoroughly complete technical permit application. We're now in the final stages of pulling that together. We expect to file that application in August, so imminently. Just as a reminder to everyone on the call, we have plenty of time to discuss and land that in-pit tailings deposition permit. We have capacity in our existing filtered tailings storage facility out to 2026. That's by design, to give ourselves plenty of time to land that permit in advance of when we need it.
Okay, fantastic. Thanks so much for the added color, and congrats on a good quarter.
Thanks, Eric. Appreciate it.
Thanks.
As there appears to be no more questions, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.