MAG Silver Corp. (MAG) Earnings Call Transcript & Summary

Hello. And welcome to MAG Silver Inc. Annual 2020 Meeting. Please note that today's meeting is being recorded. During the meeting, we'll have a question-and-answer session. Only shareholders that are registered and proxy holders can submit questions and they must pertain to the agenda items only. You can submit questions or comment at any time by clicking on the Message icon. It is now my pleasure to turn today's meeting over to Jonathan Rubenstein, Chairman of the Board. Mr. Rubenstein, the floor is yours.

Thank you. Good morning, ladies and gentlemen. My name is Jonathan Rubenstein. It's my pleasure to welcome you and to call to order the 2020 Annual General and Special Meeting of the shareholders of MAG Silver Corp. This year due to public health restrictions related to COVID 19, MAG Silver Corp. is holding its annual general and special meeting by a live audio cast for the first time. This meeting will only consider the formal matters described in the management information circular. No management presentation on the company will be given at this meeting. For current information regarding the company, please refer to the company's website, the address is www.magsilver.com. Given the virtual format of this meeting, we encourage registered shareholders and duly appointed proxy holders, who have specific questions or comments on an item of business to submit these questions now. Only persons who are registered as shareholders or named as proxy holders may do so. In particular, beneficial shareholders, who've submitted their proxies through their brokers may not do so unless they are named proxy holders. To submit a question or comment, please click on the question icon on the meeting screen. Only questions and comments relevant to the items of business at this meeting, which are submitted by registered shareholders and named proxy holders will be addressed. Questions and comments from others in attendance will not. For the purposes of the meeting today, voting on all matters will be conducted by online poll. Registered shareholders and duly appointed named proxy holders will be asked to vote on each item of business. If you have already voted by proxy, it is important that you do not vote again here at this meeting, unless you intend to change your initial vote. Any vote on a ballot will void all votes on a previously submitted proxy. So any meeting participants who complete any section of a ballot at this meeting must complete every other section of the ballot in order to record their votes on the order -- on the items of business at this meeting. In a few moments, the polls will be open for all items of business to be voted on at the same time. This will allow you to vote on every item immediately. The matters of business to be voted on and your available voting options will be visible on the voting panel on your screen. To submit a vote, please select the Voting Choice, displayed on your screen. Ballots may be submitted until shortly before the termination of this meeting. At the end of the meeting, we will announce provisional voting results based on proxy votes received prior to the meeting. Computershare will now open the online polls for voting. The meeting will now come to order. In accordance with the articles of the company, I will act as Chairman of this meeting. I appoint Geneve Say, of Blake, Cassels & Graydon LLP, to act as Secretary. Anita Basi of Computershare Investor Services Inc. will serve as Scrutineer for this meeting. We will now proceed with the formal portion of the meeting. To expedite the meeting, in accordance with the articles of the company, I will make all of the motions and no motions need to be seconded. Now for the business. Notice of this meeting was filed and the notice calling this meeting of shareholders together with the management information circular and proxy form were mailed to the shareholders on May 20, 2020. A copy of the declaration as to such mailing has been provided by the Scrutineer and will be enacted to the minutes of this meeting as a schedule. As such, proper notice of the meeting has been given. I will dispense with the reading of the notice calling the meeting. A quorum for a meeting of shareholders of the company is 2 shareholders or 2 proxy holders representing shareholders or any combination thereof, holding not less than 5% of the issued shares entitled to be voted at the meeting. The Scrutineer has advised me that proxies were received from the holders of a sufficient number of shares to constitute a quorum. I declare the meeting to be regularly and properly called and constituted for the transaction of business. The formal report of the Scrutineer will be attached as a schedule to the minutes of this meeting. The meeting will only consider a number of formal matters, following which, the meeting will be terminated. There will not be a management presentation or a general question-and-answer period. I now present the annual consolidated financial statements of the company for the year ended December 31, 2019, and the auditor's report on the financial statements as required by the B.C. Corporate -- Business Corporations Act. The financial statements are available on SEDAR under the company's profile. The next item of business is to fix the size of the Board of Directors. Currently, the Board of Directors of the company consists of 8 Directors. The company is proposing to decrease the number of directors to 7 for the ensuing year, as is permitted by the articles of the company and the provisions of the B.C. Business Corporations, Act. I now move that the number of directors on the company's Board be decreased to 7. Is there any discussion? Registered shareholders and named proxy holders may submit discussion, questions using the question line on their screen. I'll pause for a moment. If there's no further discussion, registered shareholders and named proxy holders may now vote on this motion. If you've not already voted, please complete your online ballot by selecting a voting option on the voting panel displayed on your screen. Again, if you've already voted by proxy, it is important that you do not vote on the ballot unless you intend to change your initial vote. I'll pause for a moment. [Voting]

I'll give you the results of the vote at the end of the meeting. The next item of business is the election of directors for the ensuing year. The persons who are proposed by management for election are listed in the management information circular. All such nominees have indicated their willingness to serve as directors for the ensuing year. I nominate the following persons for election as directors: Peter Barnes; Rick Clark; Selma Lussenburg; Jill Leversage; Dan MacInnis; George Paspalas, who is also President and CEO; and Derek White. Pursuant to the advanced notice policy, approved by shareholders at the 2012 Annual Meeting and amended effective March 23, 2018, any additional Director nominations for today's meeting were required to have been received by the company by no later than the close of business on May 19, 2020. As no nominations were received prior to that date, there are no further nominees eligible to stand for election today. Accordingly, I now declare the nominations closed and move that those 7 persons nominated be elected as directors of the company to hold office until the termination of the next annual meeting of holders of common shares of the company or until their successors are elected or appointed. Is there any discussion? Please submit by the question line. If there is no further discussion, registered shareholders and named proxy holders may now vote on the motion and complete your ballot. [Voting]

The auditors of the company are Deloitte & Touche LLP chartered accountants. Management proposes that they'd be reappointed until the next annual meeting. I now move that the auditors be reappointed at a remuneration to be fixed by the directors. Is there any discussion? If there is no discussion, registered shareholders and named proxy holders may now vote on this motion. If you have not already voted, again, don't vote unless you want to change your vote. [Voting]

The next item of business is the approval of the continuation of the company's third amended and restated stock option plan and of the unallocated options thereunder. The full text of the stock option plan resolution is set out in the management information circular. The continuation of the third amended and restated stock option plan was approved by the Board of Directors of the company on May 13, 2020, subject to the majority of votes of shareholders of the company cast at this meeting. I now move that the resolution set out on Page 14 of the management information circular for this meeting, approving the continuation of the company's third amended and restated stock option plan and of the unallocated options thereunder be approved. Is there any discussion? There being no discussion, registered shareholders and named proxy holders may now vote. Again, don't change your vote unless you want to change everything. [Voting]

The next item of business is the approval of the continuation of the company's amended and restated share unit plan and of the unallocated entitlements thereunder. The full text of the share unit plan resolution is set out in the management information circular. The continuation of the amended and restated share unit plan was approved by the Board of Directors of the company on May 13, 2020, subject to the approval of the majority of votes of shareholders of the company cast at this meeting. I now move that the resolution set out on Page 15 of the management information circular of the company for this meeting, approving the continuation of the company's amended and restated share unit plan be approved. If there's any discussion, please submit. There being no discussion, registered shareholders and named proxy holders may now vote. [Voting]

The next item of business is the approval of the amendments and continuation of the company's second amended and restated deferred share unit plan and of the unallocated entitlements thereunder. The full text of the deferred share unit plan resolution is set out in the management information circular. The amendments to the deferred share unit plan were approved by the Board of Directors of the company on May 13, 2020, and the Toronto Stock Exchange conditionally approved the amendments on May 13, 2020, subject to the approval of such amendments and continuation by a majority of votes of shareholders of the company cast at this meeting. I now move that the resolution set out on Pages 16 and 17 of the management information circular for this meeting, approving the amendments and continuation of the second amended and restated deferred share unit plan of the company be approved. Is there any discussion? If so, please submit it. There being no discussion, registered shareholders and named proxy holders may now vote. [Voting]

The next item of business is to consider, and if thought fit, approve a nonbinding resolution approving the company's approach to executive compensation. The full text of the advisory executive compensation resolution is set out in the management information circular. I now move that the resolution set out on Page 18 of the management information circular for this meeting, accepting the approach to the company's executive compensation program be approved. If there's any discussion, please submit. There is no discussion. So now you may vote. If you -- again, if you have not already voted, please complete your online ballot now by selecting a voting option on the voting panel. [Voting]

Is there any other business that may properly be brought before this meeting? If so, use the question line on your screen to raise additional business. There is no additional business. For registered shareholders and named proxy holders, who have not voted on all matters of business, please do so now and submit your ballots. If you have already voted by proxy, but are now submitting a ballot, please note that all votes in your proxy will be canceled, and none of those votes will be recognized. Only the ones in the ballots will be recorded. We'll be closing the polls momentarily. [Voting]

Balloting is now closed. That concludes the voting at today's meeting. Based on provisional results, provided to me by the Scrutineer, I declare that all matters brought before today's meeting have been approved. I declare the nominees namely Peter Barnes; Richard Clark; Jill Leversage; Selma Lussenburg; Daniel MacInnis; George Paspalas; and Derek White have been elected to the Board of MAG for the ensuing year. I would ask the Scrutineer to compile the report regarding the final voting results on all business matters, and I direct that the results be included in the minutes of this meeting. The results of the voting will be announced in a press release in accordance with the policy that the Toronto Stock Exchange filed on -- and it will be filed on SEDAR. As all of the business, for which this meeting was called, has been completed, I now declare the meeting terminated. Thank you for attending.

Excuse me, Jonathan, I'd like to say something.

Please.

This is George Paspalas, President and CEO of MAG. I think most people realize Jonathan has actually not -- has not stood for reelection this year and is stepping off the Board of MAG. Jonathan has been our Chairman since 2007. And it's -- undoubtedly, Jonathan has played a pivotal role in advancing MAG from a small exploration company, which IPO-ed in 2003, into now a $1.5 billion significant company in the silver space, and importantly, on the cusp of getting into production and for the first time in MAG's life enjoying the benefits of having cash flow. And it's a wonderful outcome for MAG to be where it is. And that wouldn't have happened without Jonathan's leadership. Particularly during his tenure as Chairman, there were some difficult times. And Jonathan, on behalf of the Board, and I also know on behalf of shareholders, I would like to thank you for your stewardship of MAG since 2007. We really appreciate your guidance. Personally, I've appreciated your mentoring for me. And we wish you all the best in your future endeavors.

Thank you very much, George, it's very gracious.

Factual.

All right. I'll call the meeting to an end. Thank you, everyone.