Pan American Silver Corp. (PAAS) Earnings Call Transcript & Summary

Welcome, everyone, to Pan American Silver's 2024 Investor Day. We are very pleased you could join us. My name is Siren Fisekci, I'm the VP of Investor Relations and Corporate Communications at Pan American. We're looking forward to sharing with you today a more in-depth view of our strategy and our business. Before we get started with the formal agenda, I'd like to cover a few items. We would like to acknowledge we are gathered today -- where we are gathered today. We are hosting this meeting on the traditional treaty territory of many nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee and the Wendat Peoples and is now home to many diverse First Nations, Inuit and Metis peoples. We also acknowledge that Toronto was covered by Treaty 13 with the Mississaugas of the Credit. Today's meeting is being webcast. [Operator Instructions] There will be time for questions at the end of each agenda topic, and we will also have some time at the conclusion of the formal presentations for any remaining questions. The link to a recording of the webcast will be posted following the event. We plan to break halfway through the operations section, and feel free to take one as you need, obviously. And there are refreshments just outside the room and wash rooms are located by the elevators. The formal session will end just before 1:00 p.m. when lunch will be served and you'll have the opportunity to visit with members of the Pan American team. So thanks again for joining us, and let's move on to Pan American's 2024 Investor Day. I will invite our President and CEO, Michael Steinmann, up to the podium.

Thanks, Siren. And good morning, everyone. It's a pleasure to be here. Good morning to everybody here in the room, and good morning, everyone, on the call to our 2024 Investor Day. I'm really excited to have the team here and show you for quite a few hours here what our plans are for the next coming years and what on this year, obviously, and so I'm really excited to share that with you. And let's just dive right in. Of course, we'll use forward-looking statement. You have the cautionary note at the beginning of the presentation. So we'll start off here. We'll look a bit about the strategy and the overview. Chris has some great videos for us on the exploration side. I'm sure you saw the press release yesterday with a lot of results, kind of overwhelming to read it there, but when Chris will show us the video, it will make all sense why we are so excited about those results that we published yesterday. Steve and his team will then go to the operations. We will spend quite some time on ESG as this is kind of replacing our annual ESG call as well, and you will obviously have chances to ask after each section. We'll then go through the finance part, and I'll close, and we'll have enough time for questions, Q&A and then have lunch later on. Just to start with our vision, which actually hasn't changed. We decided actually that we wanted to be the world's premier silver producer 30 years ago when the company started with the reputation of excellence and we put that discovery, engineering, innovation, sustainable development, that's really all of that's what we do. And we will see all these points, and we'll have them explained in more detail to you. I know I get quite often the question as we produce quite a bit of gold right now, but I will show you, first of all, we're actually trading with the silver price. And second, this is really just a moment in time as we close 2 transactions which were a bit more gold rich and the silver is still to come. But when you look at our reserve resources, it's very clear that we're holding the biggest reserve and resources in the silver space. Like any meeting that we do at Pan American, also this one, I would like to start with safety. You see there our statistics for last year or the last 3 years, already good results, the years before, but very, very strong results for 2023 on the safety side. And I think really based on quite a few things that Steve and his team implemented and one is doing safety differently. So that's not only that, we do safety differently, but that's actually how the program is called, and it's really focusing on leading indicators, not lagging indicators, so they'll have the lagging indicators just there and the statistics, we try to get away from that and really focus much more on leading indicators focused on behavioral-based safety programs and has been very successful, I think, so far, it takes a lot of time and effort, obviously, in installing. And you can imagine, we are working in a lot of jurisdiction where the safety consciousness is not the same, strong or hasn't been and so there is a lot of like a longer process to go through it, but I think it has been very successful, Steve, I think that it's fair to say. And the results you see there on the slide. So 30 years this year, 30 years Pan American. We have quite a few people here in the room and myself that follow that journey for over 20 years. So a long time with the company, and I'm really proud of what we have achieved in that time and the size and quality of company that we have been able to build. And I think on this slide, it's very clear kind of how we did in [ Navidad ]. I want to go and dive into all the details. I think this goes way back to the beginning of Pan-American, but of course the 2 latest and large transaction that we did, first Tahoe and then Yamana really changed this company and made it bigger, stronger, better with many very strong assets, lots of flexibility, very strong financials. So that really came out, I would say, from those 2 transactions, you see there on the Tahoe side, we got Timmins & Bell Creek and Timmins West to our portfolio. We got Shahuindo, La Arena and of course, Escobal, we will talk about all these assets in way more detail you probably saw that we announced, when was it, about 2, 3 weeks ago, the divestment of La Arena, which is pretty astonishing that at the end and after -- since 2019, this asset was running we actually assumed that it will run out by 2021 of reserves. We are able to explore and Chris' team found more reserves until 2026. And with the sale of La Arena, we recovered about 1/3 of the transaction cost of that transaction. Just when you look at it, obviously, a whole different ball game or gold price and silver prices were at that time. And then, of course, the Yamana Gold transaction with the addition of very important and large assets to our portfolio. And that's how it looks like when you look at the 2 transactions, Tahoe potentially adding 20 million ounces of silver. I know Escobal is not in production yet, and Sean will give us more details on that. But it also added over 400,000 ounces of gold, strong synergies. But what is really amazing in that transaction, if you look, is the cost of it, $1.1 billion. And again, that's really because you go back, if I remember right, gold was somewhere at [ 1,108 ounces ] or so at that time. So quite a different world than now. And then the Yamana transaction, adding immediately 9.2 million ounces of silver, 565,000 ounces of gold and very strong synergies. We will see some details on that, way above $60 million. We were guiding $40 million to $60 million, but we are way above $60 million, and that transaction was $2.8 billion. And Sam will give us all the details on the divestments. But we recovered a large part of the transaction already in all the transactions that Sam was able to accomplish with the divestments we did over the last 14 months. So it's really a combination of what we do and how we grew the company and you see on the silver and gold side is a combination of M&A activity. But then getting strong as such spending a lot of efforts on brownfield exploration. That's really what we're focusing on our exploration. Replacing reserves, adding reserves, and then hopefully, from there, growing assets and expanding production, and there's many examples there that we did so, and it has been an incredible success story. I think with this combination of purchasing assets and then expanding them further and replacing reserves and adding mine life to them. And that's how that looks like. If you put it all together, that's back to 2006, you see that we had. And that's only silver, of course. We could just do the same with gold. This is not equivalents, by the way, we don't lose really equivalents, this is just silver million ounces. We started with 213 million ounces. We acquired 420 million ounces, and this is just a reserve, so not resources again. We mined -- contained 463 million ounces. Our brownfield exploration teams replaced 316 million ounces. This is really big value creation by finding that around our assets and put that immediately into production. And now sitting on the largest cell resource of, I think, any silver producer in the world, so 486 million ounces, just reserves. But it's not only that, when you look on the right-hand side with that brownfield exploration, we not only discovered all these ounces that some of them, of course, we mined already since 2006 or they are in the mine plan in the coming years. But that includes, on top of it, the large world-class current discovery at La Colorada. It includes what I just mentioned before, and many years of added gold production at La Arena, which allowed us now to divest that asset, and a lot of reserve replacement in the gold side and base metal side as well. So very successful programs at very, very reasonable cost. So it's really the way -- we don't do really greenfield expression like new, new projects. We leave that really to the junior market, but we are really focused on that immediate value creation on brownfield. I will just pass over this. You have to -- most people or everybody on this picture is here. So you will have the chance, if you are live here in the room to mingle and meet with the management team. As I said, a lot of people here with a bit more gray hair, including myself, I'm with the company for over 20 years and then also a very good mix of young people that we added in for our future. So very good depth of management team that we have. We don't have our senior managers or country managers here, but I just want to show you what -- how we run the company. It's a very decentralized structure, a strong believer that you need to empower the people on site to run the assets. We're running 11 assets. So you have to do that. And we're a strong believer in using local people, and you see there we don't put the experts in. We find everywhere very strong engineers, metallurgists, geologists, very good miners in other countries we are active. So this is really the way to do it to have strong people locally from their countries who know the country, know the language. And by the way, when we talk about language this counts for the head office as well. You will -- if you come to Vancouver, you will get along very well with Spanish. You don't need to speak English, but you need at least to speak Spanish if you want to talk to everyone. So all these efforts, when you look back and that goes back to 2014, so the last 10 years, really superior shareholder return when you compare it to the other silver peers at plus 65% while our peer group is actually negative there, and you see in the small print too is included in the peer group. So a very strong result for the last 10 years. And one reason for that is really our capital allocation. I think we will hear more about that. But I think most of you know the story. I told you many times, there's really just 3 buckets for it. Strong balance sheet, absolutely crucial for us. That's the way to react on opportunities, these opportunities when it comes to M&A and to expansions to have strong balance sheet. You see we closed last quarter with just about $1.1 billion of liquidity between the cash. No short-term debt, but just the cash there and our revolving line of credit that is untapped. And when you look at the debt side and that we came in from the Yamana transaction, and so we will get more detail, I think, from Ignacio on the bonds there. The gross leverage 1.2x at the moment, and of course, a lot of cash coming in this year, and we will continue working on this. We -- I think we paid back about $400 million last year on that, and we'll continue to do so. The next bucket of capital allocation is really focusing on building strong new projects. I'm sure La Colorada Skarn is one of them, and then return to shareholders, and we'll talk about dividend share buybacks later on. This -- I love this map because I often get the question, why are you in Peru, why are you in Mexico, would you go somewhere else? So these are the large silver deposits in the world. And I think it makes very clear why we are in Mexico, why we are in Peru, why we are in Latin America because about 60% of the silver production comes from there. You see most of the big silver deposits along the cordilleras from Southern Patagonia where we mine all along this all the way up to Alaska. We don't have an operation in Alaska, but it's very clear why we are in these countries, and we are very comfortable, and we worked all our careers in those places. Just quickly, and you know the map, 11 operations. Once La Arena deal closed, it will be down to 10. And then Dolores will come to an end of such mining cycle this year, and then we'll go into a long multiyear leach cycle. Scott will tell us about that. So south one of the largest reserves. And I really like when you look at the pie graph there, is the diversification by country, and you see there the numbers. This is Q1 revenue per country and very difficult, obviously, for us to kind of deal with the different country risks in the places we are working to be a diversified, geographically-diversified mining company. We will hear more about the Skarn. It's just a little teaser there. You see I'm holding there at a drill core, and that's the amazing part. You can look at drill cores like that for hundreds of meters. Very coarse, very clean, [indiscernible], obviously, a lot of zinc in it but a lot of silver as well. A very exciting project. And I don't want to dive in the details here for time reasons. We're going to see a lot of details with 3D images from Chris and then will connect in Martin Wafforn, our Senior VP of Technical Services, to explain us more in detail about the Skarn, very exciting project. And as I said, fully homegrown found with brownfield exploration. I know you all have questions about the Escobal, so I will ask Sean, who is running Guatemala's effort for us. And just to give a few details on this, and then I will continue or Sam will continue.

Right. Great. Good morning. I'm Sean McAleer, Senior Vice President of Strategic Initiatives. Primary focus is on Escobal activities in Guatemala, so I'm based in Guatemala. And obviously, we've done some other things during the transactions here, but that's where my focus is. I think you're all familiar with Escobal, the production during their operations with Tahoe from 2014 to 2017, about 20 million ounces a year. Currently, we're in care and maintenance activities. And those activities are outlined pretty well in our sustainability report. There's a 2-page summary of our activities that we do there and some of the programs we do to maintain social license and some of the activities we do to maintain the mine. So for us, it's important safety as well. We've got a small workforce there, lots of equipment and lots of activities in the underground. So it still is a sizable activity and operation for us, and we do focus quite a bit on safety and environment as well. So I think we've got a good team on the ground and a good crew that will help us ramp up when we do conclude the consultation process. The consultation process itself. This is an overview of the [indiscernible] process. Obviously, the Phase 1 and Phase 2 have been completed. Those are activities that took quite a bit of time during the pandemic, as you might recall, we had lots of disruptions for the meetings that we were supposed to have as well as the change in government that we had before in 2020. And now we're in Phase 2 of the consultation process with another change in government in January. So that process so far has only had one meeting this year. That was February 21. And we saw a change initially at the Ministry of Mines before she even took over the office, they had appointed someone else to that role. So that created some disruption there. And then recently, we've had the removal of the Vice Minister of Sustainable Development, which is the office that has run the consultation process. That role has not been replaced yet. So we're looking forward to the appointment, and we're hoping that, that happens by the end of the month. And then we hope that there's some meetings in July where we'll get some definition about future activities and time line. So that's really the next steps for us. The consultation time line was published on the MEMS website. It was supposed to conclude March 31 this year. And obviously, that time line wasn't met, so we'll see with the new appointment of the Vice Minister, how that is going to be resumed hopefully, in July, and that's what we're hoping for. And the next thing is on Navidad. And I didn't want to talk too much on that. But it's obviously a long-term optionality for us. It's a great project in Chubut. We are all watching very closely the changes in the government in Argentina. And hopefully, that we see some favorable conditions for investment decisions or advancing this project in the future. But for now, we're still standing by, and I'm going to turn it back over to Michael right now. And I think we'll have some questions -- oh, for Sam. So we'll have some questions and answer here later. We can talk a bit more about Escobal.

Good morning, everyone. I'm Sam Drier. I'm SVP for Business Development here at Pan American. In addition to the catalysts that Michael and Sean mentioned being Skarn and Escobal, we continually search for opportunities that add scale and quality to our portfolio in an accretive fashion. As Michael mentioned, we've had tremendous success in being opportunistic when pursuing M&A transactions. We maintain a strong balance sheet to be able to put us in a position that if an opportunity presents itself that we can take advantage of it. That being said, when evaluated against the criteria of scale, long-life assets with exploration upside. The universe of primary silver producing assets is somewhat limited. And when you turn to development assets, you'll notice when you look at the Pan American portfolio, we already hold a number of the best development assets, either directly in our portfolio. You've heard very briefly about the Skarn and you'll hear more about it. You've heard very briefly about Navidad, but that's a long-term optionality that's in our portfolio or indirectly through our investment in New Pacific, and gaining exposure to the Silver Sand at the Carangas project there. With respect to New Pacific, this is a good example of one of the models that Pan American uses in its approach to gain exposure to development assets. Some companies use a toehold approach where they take a small stake in an exploration company. However, when we see a development asset that demonstrates its scale and quality potential, we try and take a meaningful stake in it, in these companies and be able to participate in the development opportunity. Our stake in New Pacific at the moment is just under 12%. Another aspect that Pan American has demonstrated that strength in is that of portfolio optimization. As Michael alluded to it earlier, but since we've acquired Yamana in early 2023, we successfully delivered on our stated objective of portfolio optimization to the tune of just shy of $1 billion. That $1 billion assumes that La Arena will close shortly. And so with that being said, the most recent one is the sale of La Arena operating mine and the La Arena II copper gold development project that we entered into an agreement with Zijin at the beginning of May. This package, we've sold for a total of $245 million of cash upfront, a $50 million contingent payment and a 1.5% gold NSR royalty. And as I mentioned, we hope to close this transaction in Q3 of this year. Just post the closing of the Yamana transaction, we were successful in the sale of the 56.25% stake in the MARA project for $475 million in cash. And there again, we retained a 0.75% copper royalty. Shortly thereafter, we saw that interest in Agua de la Falda for also a copper gold project for $45.55 million in cash, and retained 2 royalties, 1 precious metals for 1.25% and a 0.2% base metals royalty. What these 3 transactions have demonstrated is that we're able to monetize noncore assets for cash at good valuations while retaining upside 2 projects with high-quality name producers, through the retention of the various royalties. And talking about royalties, you'll recall that Pan American back in 2015, 2016 contributed a package of royalty and streams that led to the creation of Maverix Metals. And in 2023, we saw the remaining portion that we had in Maverix. And this whole transaction starting from inception was an exceptional transaction for Pan American and led us to realizing just over $150 million for our interest. Lastly, we sold more operating -- well, it was an operating mine at one point in time, Morococha in Peru. But it had been on care and maintenance for a while and we sold that for $25 million. And we also sold a package of noncontrolling equity interest for $47 million in cash. So all in all, a really great success that we've seen on the portfolio optimization front, and we continuously evaluate assets in our portfolio. That being said, we do have additional early-stage exploration projects that have been identified for future development. And we look to continue to evaluate ways to maximize shareholder value and optimize our overall portfolio. And with that, I'm going to hand back to Michael.

Thank you, Sam. And yes, great results. And really just to emphasize again, all these royalties there are now 4. I think 4 or 5 royalties with very strong counterpartners, it's [indiscernible], Glencore, [indiscernible], et cetera. We did not monetize that yet, but I'm sure at the right time, it will happen. There's a lot of interest in this kind of royalties, as you can imagine. And that -- further cash inflow that will probably come in the future from monetizing those assets, too. So I think if you add it all up together, you get pretty close to about 45% recovery of the Yamana transaction costs with the sale of all these assets. So and in a very, really short time frame. So kudos to our team that was able to do that. I talked about that we have the largest reserves in the world on the silver side. You see it there in the silver space, not only reserves but resources as well. On the production, we are #2, Fresnillo #1, but reserve and resources very, very clearly the leader in the space. And I think this graph says it all. When you look at market cap and liquidity, as a name, really by itself up there in the upper corner, you see a lot of smaller silvers. The silver space is pretty small space by itself, you see a lot of small producers there on the left-hand side of the graph. And then really a separation there a bit with Hecla then of course, Fresnillo, smaller market cap way less liquidity is not 100% of the shares are float and the Pan American really on its own up there. Very, very liquid name in the silver space. And I mentioned that we talk about gold versus silver. But when you look at actually last year, we're actually leading the pack there as well on the correlation of the silver price. So which makes a lot of sense as we are the second largest producer as we are the most liquid name and that we hold the biggest reserve and resources, we should really trade with the silver price, and that's what's happening. And when you get the 10-year shareholder return and a bit a different graph there. I showed already the 65%. So we surpassed there by 2 development single-asset companies earlier on, but a very strong return to our shareholders over 10 years. So of course, again, very, very silver focused. And just a few words to silver. I know it was -- it took a while for silver to kind of wake up, which is normal. I've seen them many times in my career, gold is first come in and silver. This year, everybody wants to talk about silver. This data is from the Silver Institute from [ Midu ] every year, a large survey. You can download the silver report from the Silver Institute website. And very clearly, a supply shortfall on the silver side, now 3 years in a row that will probably continue -- we see a silver market of about 1 billion ounces, give or take, including recycling. And last year, silver demand of about 1.22 billion ounces. The interesting part of the silver story is really that about 70% of silver is produced as a byproduct to a large base metal production, right? We're talking about copper production, zinc production and then also some gold production. As metal prices are already high, we see a lot of demand on the copper side. All the copper producers are already at full production. So I don't see really a lot of additional copper production coming up, which would mean that we'll bring some silver in the market as well. So I don't really think that the supply side will change really a lot. The demand side, on the other hand, is really changing strongly, and you see there. We just put 2 applications there. In general, it's nearly 60% of the silver market of the silver supplies used every year for industrial application, of which the biggest one is for electronics, and you see there a strong growth up to this year's plan about 486 million ounces or nearly 50% of all the silver produced goes into the electrical application. And the biggest one there is really photovoltaic included in that. And you see the growth is just astonishing, when it goes from 89 million ounces used in 2021 to 194 million ounces last year and prediction of 232 million for this year. So very, very strong growth, and this will continue, I think, for a long time and will be together with cars, not only electric cars, but electric cars are using more silver. It's really the electronic components that drives that and a really strong story for silver here in the future as a green metal together with copper and the battery metals. Absolutely needed. It's the strongest and first electrical conductor in the world. And of course, that's the reason why it's used widely in electronic applications and not very easy replaceable. We'll talk a bit more during the talk about the strategic priorities, but it's just in one slide there, we said we started with safety, of course, our operations is the bread and butter of our business, and so never forget that. We're really here to produce the metal that the world needs, and that's what we do. And Steve's team is working every day hard on that. We explore new projects, Skarn is a great product of that. We continue, we heard from Sean's work in Guatemala. We'll always work with shareholder return. We're paying dividends since 2010. And we have a strong dividend policy in place and that will continue like that. And we heard from Sam how we have been able to optimize our portfolio. And I think with that, I don't know, do we go straight to production, Sam?

We do some Q&A.

We do some Q&A. Okay, great. Siren, are there any questions in the room right now? Or do you want to -- or you prefer to wait for later?

On Escobal, could you explain what that Phase II really was supposed to be. I know it hasn't started with the government change, but what is the process that needs to be followed in that phase II?

Yes. So Phase II -- the first part of Phase II was delivering information to the Xinka from the government institutions and the company. That part was completed last year, and there's additional activities around that with evaluating the information, and those activities have been taking place since October up until recently. There's still some of that going on right now. What we're expecting in the next few months or is ongoing now is that the Xinka will take the information and deliver it to their different groups, so they can evaluate the information. And hopefully, the next phase will be us returning to the table and hearing which concerns they have, what the different issues are that need to be addressed by the government through additional mitigations or other activities to eventually reach an agreement and go forward with the operation.

Sean, Escobal as well. Should we be at all concerned that there's been so many changes with a new government. We talked about the Vice Minister and then you talked about some other minister, she didn't even get to sit down. Does that -- should we be at all concerned about what -- any kind of read through in terms of the new government that's come in?

Yes, it's hard to say. I mean, there's been -- I think 3 ministers have been replaced so far. The first was the MEM, then after that, there was a switch for the Minister of Environment. That was a few months ago as well. And we just saw a changeover in the Ministry of Communication and then the Ministry of Health resigned. And I guess if we look back in history and saw changes in government in Guatemala, we'd probably see similar types of changes. I'm not really sure in great detail, but I think there's always that disruption during changeover. And maybe a bit optimistic to hope that the transitions are smooth and that things are going to resume day one from a new government. So I think we're experiencing some of that certainly in the Ministry of Energy and Mines and in some of the other ministries as well so, I think that's just something that we should all anticipate and maybe it is something that creates a little bit of loss of continuity and it takes us a while to get back on track again.

Continuing with Escobal then, Sean, you mentioned that the Vice Minister role hasn't been replaced, and yet there will be meetings in July. So just to understand that -- is it necessary for that Vice Minister role to be replaced? Or will the process continue with these meetings in July and meeting subsequent to that? Maybe I'll add to that too. I mean, these delays on Escobal, maybe they're both a blessing and a curse. I mean look what the silver price has done, right? So -- but that being said, if you could just give a little bit more color on the path looking forward whether or not this role is replaced, And what the meetings look like?

Yes. So we meet regularly with the Ministry of Energy and Mines, and we also meet with the Secretary to the President, who's like the President's Chief of Staff and coordinates all the other ministries. And so in those meetings, what we understand is that the first milestone will be the appointment of the Vice Minister for Sustainable Development. And that's expected to be at the end of the month, at least is what we've been told. And so that's what -- we're watching for that. And then following that, after some time, we would expect a working meeting probably in July. So that's the sequence I'm seeing. And hopefully, in that working meeting, there's some kind of determination on time line activities and more specifics about the process time line, which we saw expire back in March. So that's what we're expecting going forward, I would say, into July, August. And hopefully, for our Q2 update call, we'll have a lot of information about that as a result of these events and these meetings if they do take place.

I just have a quick question,[indiscernible]. This is Ovais from Scotiabank. Just you've answered some good questions on Escobal. So maybe I'm going to move on from Escobal right now, but -- and maybe we'll come back to that. But in terms of -- Sam, in terms of you and your team have done a great job in terms of divesting noncore assets. You're building up some good cash position on that end. Is there a plan that you have now sold some of your noncore assets to start kind of looking at opportunities on the M&A side? Is there opportunities that you're looking at in terms of the development side or more producing, any focus on the commodity itself, more focused on the gold or more focused on silver, maybe some color on that?

I can take that Ovais. And yes, look, I mean, when you saw on the slides how this company grew in 30 years to the size it has now, and it's really this combination of M&A activity. And then once we have the assets built on them, right, make them bigger, make them better or divest them if it's not a great fit. And I don't see any reason why we would change that strategy. It has been incredibly successful and will continue. I think what's really important when you look at the M&A side, is really to create accretive transactions. I think we have been successful with the last very large 2 transactions to provide that, and that's really important to me, right? You have to have strong synergies, you have to be accretive when you deliver. If you just do the same than the former holder of the asset, there's really no point to do that. So you have to create additional value. I think it worked out very well. And if we have the chance to do that, we have the balance sheet to react right away and we will for sure. I think that's really the way to grow the company. I would just like to answer one -- I see there is a question from [ Chuck Vitton ] from CIBC. And it's going back to Escobal, but I can take this one, Sean. It's really -- he is asking how does this outreach look like, the communities and then he's asking do you know what they want and what the mechanism is or can you actually deliver royalties or something like that. I think the problem at Escobal when it started was really the distribution of [ Alpha ] project, which was one issue. I think ILO-169 really -- as an idea why ILO-169 consultations are done is really to identify the impact of a project to a population or indigenous population in this case and to identify how to mitigate that and/or if you can't mitigate it, how to compensate for it. So that's really the process for it. So at the end, really for us, it's -- yes, royalties can be part of that. There are other ways of sharing part of the project, jobs, other projects, you name it, there can be a long list of it. And we are not at that spot yet to kind of negotiate that part that will come, I guess, somewhere towards the end of the consultation. I think with that, probably to keep on time here, we move forward and have Steve talking about operation. There will be ample time in between all this to ask your questions.

Thank you, Michael, and good morning, everyone. My name is Steve Busby. I'm the Chief Operating Officer for the company, like Michael, I've been with the company now for over 20 years and very pleased to be here today to present. We're going to present more details on 4 of our primary operations as well as the Skarn project with help of -- Chris Emerson is going to take us through the geology and the locations we're going to work together and kind of tag team this presentation on a few of these operations. So if we just jump right in, we'll start with La Colorada. A little bit of an overview as we've talked in several of the last quarterly conference calls. We're really working to restore ventilation on this mine. That restoration project is on track. We will be commissioning the fans on the new Guadalupe shaft during July next month. Everything is on track for that. It's looking good. We're successfully excavated the 580-meter deep shaft. I'm going to go into a little bit more detail on the challenges that we had over the years for the ventilation at La Colorada, I give you a little bit better impression. But -- and also share with you where we're at in terms of getting this new shaft up and running, which looks very, very good. We're very excited about it, very optimistic. It will bring us back to be able to ramp this production up, get the advances back on track, get some of the rehabilitation work in the eastern Candelaria zone done so that we can get back up to plus 2,000 tonne a day operation by year-end. That's really what we're focused on. So when you look at La Colorada during this year, it's obviously production back-end loaded, and the costs will be lower as that production comes off. We -- it's a large component of fixed cost at La Colorada, a lot of labor costs there. So as tonnage comes up as the ounces of production comes off, or comes up that base cost comes down pretty dramatically. So we've been very challenged without this ventilation shaft that we committed to 3.5 years ago. It's now coming to a fruition, it is going to pay us big dividend in the future. We're quite confident of that. So with that, I think I'm going to let Chris walk us through a little bit of a video here. Go ahead.

Absolutely. Hi, everyone. Chris Emerson, VP of Exploration and Geology. We're going to dive into La Colorada and the vein specifically to start with. I've got some technology so across things, it all works. And really, the idea is to give you an overview of where we are, the local geology and then dive into some of the results that we were happy to release yesterday after market. So with that, we'll get started. And as you know, we're in Mexico, we're going to zoom into just Zacatecas, and we're sort of on the west side, Durango sitting over here. And when we look at below the regional geology, we're in the Sierra Madre. This is a prolific silver belt. And we are looking at all of the different deposits sitting around us, you have San Martin 30 kilometers away, and that's the Skarn deposit. Here, we're zooming in. We've got these limestones in the green with these lower volcanic complex, which is where all the silver deposits are sitting in the Sierra Madre. And then over to the west, we've got these upper volcanics, which I'll explain in a bit more detail as we go into the local geology. Again, we're looking at a large concession package of around over 8,000 hectares and in the center we are sitting there in La Colorada. We're going to zoom now into where we are in the mine itself and overlay some of the local geology where I'll pause it there. Limestones in the blue sitting over to the west. The red are the veins, the main veins are Recompensa, Amolillo, the HW vein going into the NC2 and really that target zone over to the east, and I'll explain some more when we get to it slightly in this presentation. And the new Cristina vein sitting to the south and some pleasing results from that as we've started to drill this area. So now we're going to sort of zoom into the sort of infrastructure, and I'll help Steve out here a little bit in terms of -- got the Ross Beaty shaft sitting in the center there, where most of the production comes up and down. We got the tailings down to the south. We have an oxide plant, sulfide plant sits next to it and the new Guadalupe shaft sitting over to the east there. The access comes in from the side as we can see. So La Colorada, 86 million ounces of reserves at the moment. That was the update over in 2023. And really, we are showing strong growth of this mine as we drilled. I mean, Mike, prior to me drilling through the 2010 up until when I came on in 2016, we continued that 20,000 to 30,000 meters drilling a year. We did have a decrease in the reserves midyear last year, which we're updating this year. And that was really a combination of -- we did find stuff, we were drilling. We were finding additional reserves. However, increasing costs, increasing widths, mining widths, et cetera, dilution, et cetera, which all made us and historic reserves, which weren't ever going to get into the life of mine production, which has always been constantly updated. So there was a decrease. We're still selling at 86, and it's hopefully in this presentation we show that we've still got growth opportunities as we move through. So now we're going to dive into sort of the 3D portion of the videos. And again, those main structures -- the black lines here is all the infrastructure that we have and you've got the shaft in the middle, the Ross Beaty shaft, the Candelaria [ Australia ] mines, which we talk about a lot, and Steve will talk about as well. And all that exploration that we're targeting is now focused over on the east portion of Candelaria and the NC2 extensions. Here, we have, obviously, a lot of the channel sampling and all of that silver grade being shown there. So one thing to bear in mind, when you're looking at these 3Ds, 3D images, you are going to see the veins as looking rather large. However, you have to remember that these veins are sort of 0.5 to 2 meters wide. As you look at this in 3 dimensions, you see along the plane and they look larger than they actually are. So just bear that in mind when you look at the Skarn that we're going to show you the -- where that sits compared to the veins and how the veins look compared to the Skarn. Skarn is a huge deposit, hundreds of meters in drill, in drill depth of mineralization. So here, we're looking at a cross-section through all of the different structures and the Skarn sitting down at depth 800 to 1,000 meters below depth. We're going to spin this round. And the dark drill traces you're seeing is some of the recent drilling that we're doing -- and we've just put on there, some of the projections of some of these new structures that we're now finding in La Colorada, which we're all very excited about, and the press release highlights. We've just done a 360 around it. Again, we're seeing that Skarn, which we're going to describe in future in the presentation after Steve. So Cristina, new a structure that we've defined in recent drilling in several years ago. We're looking now at this eastern area, which is really the target area, which is the projection of the NC2 and there's -- having drilled through when we're drilling through, we're finding additional play structures, which is very common in these sort of vein systems. So the NC2 extension. We released some great results this year. We're looking at around 300 meter depth profile of this, over 200-meter wide extension, and it's still open to the east. These are some of the great results. I mean 3.6 meters over 1 kilo with good base metal, 2.2 meters at 5.9 kilos and again, good base metal. So really great results from the NC2 extension. And certainly, this is where the mine will be moving towards. So while we were drilling that, we hit an additional structure, the Mariana, again, some 250 meters in vertical, a couple of hundred meters in extension and again, all open to the east. And again, really what we've proven here is that these are all very silver-rich silver structures. And again, this is in the press release, and we'll just highlight some of those results, 0.7 meters at 2.6 kilos, 2 meters at 689 g. So again, when you're drilling through it had a specific objective and then you're starting to hit these play veins. This just adds additional excitement certainly for the geology team. So now what we're going to do is we stepped out and some of the drilling -- so the 903, which is one of our larger Skarn ore body sits over to the East. We were drilling that with S-05. We knew that we had another set of structures the San Geronimo. We hit those, and we also set further south and hit the Cristina, which is, again, you'll see these play structures, the major objective being the Cristina. We hit some plays over here, which was the S-71 and S-20. And the S-05, which I mentioned, we were drilling for the NC but went through the San Geronimo, and I think the results speak for themselves nearly 2 meters at 1.7 kilo, 2 meters at over a 1 kilo. And a really nice surprise, which is why we love geology, 29 meters with great base metals and a good silver component. I would love to say that we really weren't looking for that, but I'll take it if it comes around, but the Cristina structure that we were drilling came out with some really, really nice results. So plan for the future. We're definitely going to be targeting the eastern portion, the Cristina system, the San Geronimo system and the NC2 extensions. And yes, I think there's great upside for La Colorada at the moment. We continue to work with the tech services and hopefully, the future of La Colorada veins.

Thank you, Chris. So moving on, on the operations. I mean we employ really 2 types of mining methods at La Colorada, sublevel stoping and depending on the ground conditions, will choose between sublevel stoping and the cut and fill. We do backfill as much of the waste rock as we can underground to avoid trend to hoist waste rock and give us more capacity on the hoist for ore. Typically, we run 15 meter sublevels at La Colorada. Again, that can be adjusted depending on ground conditions. We do run into challenging ground. We have pretty strong ground support standards at the mine. Those standards have been upgraded. With the ventilation challenges we had, we found as we pushed hot air back through the mine workings, the previous ground support standards were inadequate to support that hot air and that moist air and the effects it has on that volcanic rock. So we changed the ground support standards. It's quite an elaborate standard these days. If you look at the process plant, we actually have 2 process plants at La Colorada, one is an oxide leach circuit, we're actually not running that this year. We're really not mining much oxide this year. We still have some oxide in the reserves, but it will be into the future. So that plant is sitting idle. We're really focused on the sulfide plant we built back in 2017. It's a pretty conventional plant, 3 stages of crushing, 1 stage of ball milling. We do a selective flotation, zinc, lead. We float concentrates and ship concentrates out of the site by truck, and we go to a conventional tailings facility. If you look back on historical production, and this really shows where we had the ventilation issues as we continue to develop, and I'm going to get into this in a little more detail, but as we continue to develop on the Candelaria zone deep into the east, we found more and more heat, more and more humidity. And we were unable to put new raised bores, new ventilation infrastructure in on that each side through that volcanic ground. We just couldn't hold the ground despite some elaborate efforts on trying to pregrout the ground, pregrout the column of rock with cement before we pulled the raise bores. Some technologies that have been used all over the world, but it just didn't work here. It's just -- there's too much water in this ground, it's too wet, it's too soggy, and we couldn't get the cement to stick. So after years of trying to get raise bores into the east to support the normal advance we were doing on the mine, we opted to go to the Guadalupe shaft and blind sink the shaft. Again, 580 meters deep, allow us to pull. We're going to put a 2,000-horsepower fan, actually, 2 of them, 1 operating, 1 standby. On the surface of that shaft, that's what's underway now. That will start up in July. And that will bring that hot air directly to the surface right above the Candelaria zone as opposed to pushing it back through the mine and affecting all the ground support and all the other raise bores that we have on the western side of the mine in the [ better ] rock. So this year, as we bring that ventilation circuit online, we'll see a big dramatic change of production. Overall, for the year, we're still on track for the 5.7-to-5.3-million-ounce production this year, $21 to $24 an ounce all-in sustaining. Again, that's back-end loaded, those costs will come down as that production rate comes up. So once we get this ventilation established, it will be a whole different mine back to what we're used to at La Colorada. This year on sustaining capital, we got about $22 million to $23 million of sustaining capital, large part of that is an underground mine infrastructure for the ventilation. We got some booster fans underground. We are bringing refrigerated air underground during the summer months and we like to boost that and get it off to the east, where that lead us, and once again, as that heats up, we'll bring it straight up the Guadalupe shaft and that's operating. Some money spent on the exploration, as Chris displayed the results. We're very excited about the exploration at La Colorada. We're finding lots of potential as we move east, perfect alignment with the Guadalupe shaft. We didn't know those ore deposits were there, but it's really lining up well. So again, a big change in the operation as we get this underway and back up operating. We do have our normal equipment replacements and rebuilds, and we do have a tailings dam expansion on tailings dam 6 this year. This just kind of gives you a bit of a long history of the raise bores. I don't want to dwell in the history, but it kind of covers some of the raise bores that we attempted to do in the normal course of mining along the Candelaria, we failed to get some raise bores in there. We just couldn't get them to stick in the ground. We lost a lot of pilot holes. We lost a lot of steel with the raise bore contractor. We actually lost some rimmer heads even as that ground would come in as we're trying to excavate it with those raise bores. We did look at Alimak raising, and we brought in some of the experts from North America and the ground just was not conducive for Alimak raising either. So that's when we opted in 2021 to sync the shaft, the Guadalupe shaft, a fully cement line, 5.5-meter diameter on the east side. You see we were able to get up to nearly 1 million CFM of airflow into the mine even before Guadalupe comes online. Most of that air is all on the west side of the mine. So once again, we're having to pump and boost that air with a lot of horsepower over to the east side, but then all that hot air gets passed back through the mine. So the big advantage of Guadalupe will be reducing the power requirements we need. So that's adding cost today once Guadalupe comes on, we can shut down some of those booster fans. And then we'll also be able to bring that hot air out and not destroy our other infrastructure. So that comes online next month. We're really looking forward to it, and you see a big change as that comes in. So now we'll move over to the Skarn overview. Just as an introduction, and then I'm going to turn it over to Chris and to Martin Wafforn back in Vancouver. He's going to join us on the webcast here, to describe this PEA that we issued early in the year. We're really excited about this. This was our discovery we announced in 2018 with the first drill hole into the Skarn and we produced a PEA in early 2024, describing a 50,000 tonne per day sublevel cave mine that will produce over 17 million ounces a year of silver for the first 10 years of production, as well as over 400,000 tonnes of zinc and 200,000 tonnes of lead, quite a large mine. We did estimate a capital to build that facility of $2.8 billion, about a 6-year build. We described that we're going to be looking for partners, and we've got a lot of interest in this project from the large zinc producers and large zinc smelting houses. So we've been talking to them and exploring how we may set up a relationship, a partnership and moving this project forward. Meanwhile, I'll turn it over to Chris and to Martin. So please go ahead.

Yes. Hi, everyone. Back with the -- that was their technology. And so we'll dive straight in. Obviously, we know where we're sitting, we know where we've got the veins. Again, we're over on the eastern portion, as described, we're going to now bring in the larger Skarn sitting down around 800 to 1,000 meters below. We're looking at all of the drilling, those drill traces coming down, the drilling was done a lot from surface and using a directional technology to drill down another hole and then play off. This was worked out better for us in terms of economics. We've got 3 ore bodies, the 901 to the 903, 902. We're going to spin this around, so you get a good idea before really looking at some -- in more detail the geology. So one thing worth commenting as we move through into the midyear is that the resource, the geological modeling was done over a year ago. Obviously, we released the December 23 PEA with the updated resource, but the model was from 2023. So it's worth mentioning that we've got over 75,000 meters of new drilling that's going to go into an updated geological model for the midyear, which is coming up, which we'll be releasing in August. So certainly, work that's gone on. And really, a lot of the focus has been on the 902 and the blue trace here is all that new drilling that we've done, which will be coming into the new resource. So really, really, we've got to step back into a really basic geology. We've got the volcanics, the pink on top, and we've got the blue limestones the carbonate is underneath. So what I want to do is I want to just dive into a little bit of the basics of how we've built and understand the geological model. So the red is these intrusives, which come up from depth and when they hit the limestone, remember the blue stuff, it creates alteration. And that garn -- the alteration is garnets the browns and the greens. Now when we've done all of this drilling, we've been able to log all of the core and we're able to define this geological model. So the mineralization then comes up and actually then feeds into this alteration zone around these intrusives. So as you look through this, I mean, this is detailed geological modeling, which gives us confidence in the current resource that we have. And here you see the 2 veins that are coming through potentially post the main source of the Skarn mineralization. And really just giving a very basic cross-section through this is we've got the 3 ore bodies surrounding these intrusive, which is where you have this alteration. And then you've got these greens and darker greens, browns, which again has been all mapped out to try and control and understand where we see the main sources of the mineralization coming. So that really gives you a very 101 basic idea of the geology in alteration. So in April this year, we released some additional drill results from the 902. And certainly, the EU 121, I mean, when we're drilling 77 meters and 600 grams of silver and plus 27 lead and zinc with a 22 at 1.4 kilos, really shows a really high-grade core within the 902, which we've obviously been working to try and define better for the resource update. So we have big, long intercepts. We know that this is all now going to come into the new model. So the model I'm showing here is that 2022 reso -- or geological model resource. And here we have -- just to give you an idea of the continuity of this drilling and the values we see, the NSR is inclusive of all the recoveries and the net smelter costs, et cetera. And this really then defines the geological resource model. And you can see the reds, the darker sort of 902, which shows us that higher grade and certainly over $100 a tonne. And this now morphs into when we build the actual resource, which you see on the -- in the tables, that now starts to include the mining shapes, which Martin is going to talk a bit more. Now you see it becoming more solid because that's what we're really able to mine. And Martin is going to go through that in terms of how we build that model to then give you guys the resource, which is eventually economical to mine. So the Skarn, it's something we found as Pan American in 2018 and certainly being -- and able to drill. And with that, I will turn it over to Martin Wafforn.

Thank you, Chris. Good morning, everyone. Just confirming, you can hear me fine?

Yes. We can hear you fine, Martin.

Perfect. So as you saw the 3 large zones that make up the Skarn deposit are very different from the narrow veins in the existing mine. Actually, if you could switch to 44 [indiscernible] and the geotechnical assessment of mining zones that are hundreds of meters thick and at depth is a key consideration of the mine design. We completed over 6,000 meters of geotechnical drilling between 2021 and 2023, and continue today with the drilling and logging program, focusing on the Skarn and on the waste and the caving zone directly above it. For mining method and selection, we were able to establish design parameters by visiting other large-scale underground operations, reviewing technical reports, attending caving conferences and working with some consultants who are real experts in the field, including [indiscernible] from SRK. Our optimization methodology has been that with each new version of the resource model, we review options of higher grades with long-haul stoping, median grades with sublevel caving and lower grades with block caving. Sublevel caving was selected as the mining method for the PEA as we gave the best economic results. In terms of the ventilation assessment, certainly our experience with high temperatures at La Colorada, Steve discussed, identified early on that heat removal would be key. We expect in situ rock temperatures of more than 40 degrees Celsius. Additionally, auto compression in the 1,000-meter deep intake air shaft and equipment operations further contribute to heat loading. The concept that we developed working with our consultants to maintain workable temperatures is to use high airflow volumes as the primary means for heat removal sampled reverted with surface refrigeration plants to chill the air during daytime when there are high ambient temperatures. The ventilation circuit design is for high-quality, long-term infrastructure, including 10-meter diameter concrete line, fresh and exhaust air shafts. In terms of dewatering, the concept is to identify water-bearing structures with diamond drilling and to drill large diameter wells to intercept these structures and dewater the mine. Initial pumping rates are expected to be high to lever the water level to below the first planned Polish level at the 1,200-meter elevation before it can be developed. We expect that water pump from underground will be stored in ponds on surface to align for cooling prior to discharge to the environment. For concentrate transport, average daily production will be 2,850 tonnes that will be transported to ocean ports by truck with the possibility of some trucking to the smelter at Torreon. There is a rail right away about 20 kilometers from the mine that we are currently studying to see if that will be a viable alternative. Metallurgical testing was conducted on samples that were carefully selected and prepared to be representative of the deposit and to match the expected head grades of the mining inventory. We find that we have to repeat some of the test work because that the resource model kept expanding, and we changed from an initial long-haul stoping method to sublevel caving, which in turn change the expected head grades. The metallurgical results are detailed in Section 24 of the technical report. The high-grade, high-quality zinc and silver lead concentrates to be produced will be easily marketable -- betterly marketed. I'll touch on the filtered tailings, power supply and process plants in subsequent slides, if you would advance to the next slide, please. Talking about sublevel caving, I'd like to think of sublevel caving or SLC, as a step between block caving and long-haul stoping with backfill. Generally speaking, block caving will have higher initial capital and lower operating costs than SLC, long-haul stoping will have higher operating costs and will not be able to achieve close to the production rates, largely because of the unit operations, including the extended back to new cycles. In SLC, all of the ore is drilled, blasted and locked 1 rig at a time. We rely on caving of the waste to fill the board left by the extracted ore. SLC is a top-down method that is conducive to automation and high production rates. The top-down feature takes advantage of the grade profile of the Skarn deposit, which has higher value per tonne resource at the top, and we can delay the cost of extending the ramps and shafts to the bottom elevations until well into the production period. The PEA design for SLC has sublevels developed on 25-meter vertical intervals, from an access brand, a footwall drift is established, running parallel to the long access of the ore body, and crosscuts are developed across the ore body to the hanging wall on a spacing of 15 meetings. To start mining, a slot is ringed and blasted at the hanging wall side and the rings are retreated in a sequence with 1 ring drilled, blasted and mapped at a time. The rings are drilled all the same. You can see the shape of the rings and the polygons that are drawn above the production crosscuts on the diagram to the right. The tonnage map from each ring is molded and carefully controlled by a cave flow model. Overall, we think that we can achieve 84% ore body recovery with 19% dilution at just over 100% of the tonnage drawn. As the ore from each ring is extracted, the cave waste material fills the void and act as a vacuum for subsequent ore rings blasted. The caving of the waste is the critical aspect of SLC. We don't cave the ore body, we drill and blast it, but it is critically important for personnel safety that the waste does cave and keep the void filled. The geotechnical assessment of the capability of the waste and the size of the excavation that we will need for the waste up to start caving is key as well as the instrumentation required and the options available to get the waste caving if it doesn't start as expected. Our plan is to mine the 3 zones down at the same vertical rate using productivity rates that we benchmarked against other sublevel caving mines. If you move to the next slide, please? This next slide shows the plan view of the initial surface layout. Tailings will be thickened to recycle water to process filtered and then conveyed to the storage facility shown as a large brand shape at the bottom of the graphic. The filter tales will then be distributed in the facility by truck, spread and less using bulldozers and tilled with distillate aid with drain in production. The outer 100-meter rim of the tailings will be come back for stability. Ultimately, the large filter tailing storage will completely cover the existing conventional storage facilities. From a long-term storage and stability perspective, this will effectively buttress the existing tailing stands. The plan also shows the locations of the processing plant, the main ventilation shafts as well as the portals for the twin declines, one of which when we fitted with a 3,800-meter-long conveyor way and the other use for personnel and material movements. Moving to the next slide, the process flow sheet. We have a conventional crushing, grinding and 2 product flotation circuit. When in operation, the ore will be primary crushed underground and conveyed to a covered coastal storage on service. Ore will be reclaimed from the ore storage to open circuit secondary crushing and closed-circuit tertiary crushing and from there to a fine ore bay. The crush product will be grounded in a conventional bore mill circuit comprising 3 large bore mills operating in a closed circuit with hydrocyclines. We have a selective flotation plan with both the lead and zinc retro flotation concentrates being reground before 2 stages of cleaning. Final concentrates will be thickened, filtered and shipped. Moving to the next slide. And without getting into too much detail, as Steve has already mentioned, the estimated initial capital is $2.8 billion over a 6-year construction period, with peak spending in years 4 and 5 when the mill is being constructed. The depth of the deposit and the mine development time drives the construction period -- the length of the construction period with large capital items that the mill have been scheduled as late as possible. Unit operating costs averaged just under $41 per tonne over the life of the mine. And we think about $38.50 per ton when we're in full production. On the next slide, please. Highlighting the after-tax net present value from the PEA results, all of these are in the technical report, $1.087 billion at an 8% discount rate, with an after-tax and IRR of 14% using average life-of-mine metal prices of $2,800 per tonne zinc. $2,200 per tonne of lead and $22 per ounce of silver. Average annual production from the first 10 years, as Steve mentioned, is 17.2 million ounces of silver, 427,000 tonnes of zinc and 218,000 tonnes of lead, so a very significant producer. Note as well, as Chris mentioned, that this PEA is based on the mineral resource estimate at December 15, 2023, and which has 243,000 meters of drilling. The geological model was completed in December 2022 and near the mineral resource estimate nor the PEA include the more than 40,000 meters of drilling that was completed during 2023 or the additional drilling, I think another 35,000 meters completed during 2024 that is expected to be reflected in our midyear resource update. Moving to the next slide, please. The sensitivity analysis we conducted to plus or minus 20% of the assumed silver and zinc prices. It turns out that 20% may have been a bit low on the silver sensitivity. We also showed sensitivity at 8% and 6.5% discount rates. The 6-year investment period, this long construction period is responsible for the sensitivity to the discount rate. In the technical report, we'll also provide some further information on the sensitivity of the product to a 30,000 tonne per day rate versus a 50,000 tonne a day base case. And on the next slide, this chart prepared using data primarily from S&P Global's database shows that relative to 2023 mine performance, the La Colorado Skarn would rank as the fourth largest producing global silver mine. The 17.2 million assets from the Skarn deposit, 17.2 million assets is the estimated annual production for the first 10 years of the PEA. And finally, moving to the next slide. Like the previous slide, the Skarn would rank as the fourth largest global zinc producer. Also note the bar showing S&P Global's estimated mine life, whereby they project that by the mid-2030s, the world's biggest set mines are going into closure of other than Skarn. In any event, the Skarn is projected to be a very important source of zinc and copper production -- and silver production. And with that, I'll hand it back to Steve.

Thank you, Martin. Yes, very exciting project. We're really looking forward to advancing on that and we continue to advance on that this year. So moving on, I want to talk about our Jacobina mine, which we acquired with the Yamana transaction in 2023. This mine was really the attraction of what brought us to the Yamana transaction. And we were fortunate to bring many of you that are here in the room today down on a tour of the mine in January. And you got to see firsthand why we're so excited about this mine. It's really an incredible deposit. It's really a great team that we work with, highly skilled, motivated local people in the area that run this operation for us, and we couldn't be more pleased with that team and how they're performing. Currently, we're running the mine at steady-state 8,400 tonnes per day processing rate. We're producing right in the kind of 200,000 -- 185,000 to 200,000 ounces a year. We're happy with that rate with all the infrastructure we have in place today. We are conducting an optimization study to help lead us to where -- what is the potential, what is the true long-term potential of this operation given the vast resource potential that you're going to hear from Chris. And I think we'll just jump right into that, Chris, if you want to give us an overview of that.

Absolutely. Thanks, Steve. As many had the pleasure of being on site, we're sitting in Brazil, Salvador, 340 kilometers over to the east. Jacobina, sitting here is a bit of a regional geology map. It's worth noting the pink on the west side is the basement rock, which is the older rock there. And then with sandwich right in between 60,000 hectares of concessions over 155 kilometers strike from sort of the base up to the north. And we see these conglomerate packages outcropping along the strike of this -- of the tenement, which certainly is an exploration target for the future. You'll see the bedding plains or striking that sort of north-south direction and the basement rocks over to the west here. Here's a bit more of a detailed view of the regional geology and really those red conglomerates is what we're looking for, green being the intrusives. These rocks have been cooked. They're very old, 2.4 billion to 3 billion years old, and it's a [indiscernible] deposits. So the mineralization is within these quartz conglomerates and within the matrix, imagine that this was a big stream system and depositing gold way back billions of years ago. So we're across a 10-kilometer north being over here and South [indiscernible]. And we've got lots of different mining centers along -- all connected by underground galleries and development. And here, we've got the resource shapes sitting on top of those and we're going to sort of flip and look west, underneath you'll see the dark traces, which is the drilling, and that's been happening along the strike of all of these different deposits. Kind of era, which has been the mainstay and higher grade up to the north. We're going to face those out, and we're going to look at just at the infrastructure and then this is the life of mine stopes, which has created that resource that was released midyear last year in 2023. And we really like this slide because this shows the development of drilling. And in each of the different companies from Anglo American and willing resources and then Yamana took it over in 26 almost. And then they really started to ramp up the drilling and the drilling is on the left-hand side there up to sort of 120,000 meters a year. And of course, as the productions come up, they've increased the resource base to where we are now at 3 million ounces of gold as reserve with a fairly good measured and indicated resource and inferred. And now if we just look at the additions and looking down here, so we've got 3 million for reserves. There's been 2.2 million ounces from 2020 added and they produced 1 million. And hence, that constant increase in reserve base over the years with that drilling, which is really, really important. So back to the life of mine. We're now going to focus in on [indiscernible] Sul, which has really been -- was defined early on just with a couple of drill holes, and we're going to show within the next section of the video is how we increase that confidence and how we've been able to build that reserve resource base. Underground connectivity, [indiscernible] will also released in the recent press release last night. We're going to zoom into really, as I mentioned, the development of these conglomerates and the reserve as it builds out. Again, sporadic drilling across this in the South than 2019, 2020. And it just -- as we infill and increase the drill confidence here, we get to a point where we add resources on around an 80 by 80 meters to spacing and '24, we have the current drill program at 13,000 meters here some of the highlights through here you'll see multiple intercepts because we're hitting multiple conglomerates, and we're going to show you a section in a minute on that. And so we're sitting at -- and as we increase that drill spacing, we increase the resource and the confidence and as it sits in the recent 2023 at over 300,000 indicated and over 700,000 ounces in resource, inferred resource. So as you saw that increase in drilling over the years and really these packages across this 10, 14-kilometer with these conglomerates really gives us an idea of the potential that sits here. And this is all open down dip as well. This is the plan for '24 and we'll spin it around and really to show the down dip extensions are all open and a cross-section to finish with, which really shows how these red conglomerate packages are all stacked up together. So we're able to go through a multiple hit these packages. So [indiscernible], really, really great in terms of adding additional reserves and -- additional resources and reserves, and that's going to go into the mine plan certainly for the future that south of the main -- the main mine itself. And so the exploration and trying to find new areas like [indiscernible] for the future, really started to target the Maricotta zone. Again, these results were released last night. And it's sitting to the west of Canavera. So sometimes when you see sections and you see all of these steps here, we're really behind this. And that's certainly been the target of exploration in '24. So we're now going to -- again, this is the Maricotta sitting over to the west of Canavera's, and this is where the target has been. And we have been building on historic drilling. Certainly, from additional drilling just happened over the years, and really, it was taking that drilling and '22, just starting to, again, infill, infill and then we get to a point where we become confident and certainly the '24 have shown us good results, which we released in the press release last night. Nearly 3 meters at 5.8%. So remember that the reserve grade is 2 grams. So anything excess of 2 grams is looking pretty good for us and some great results. And in gray, you'll see the historic. So this is a 2-kilometer length if we're looking west. And there's some historic stuff at 2.4 at nearly 12 grams. And over here, looking at 1.8 at nearly 10 grams, that's for us is all open. And certainly, that infill drilling will start to add resources in this midyear update for '24. And again, just kind of projecting where we see the future. It's open to the north as well, there is another series of deposits, which as we build out and the mine infrastructure follows this allows us to get in there and drill. The 2024 drill program, infill drilling, of course, and we're going to flip around. And again, I'll show you one of the sections where we see these reefs stacked up against each other, which is -- which is certainly what we like to see. So as Steve was mentioning, Jacobina, from an exploration point of view, it's open down dip. It's open along strike, and we look forward to continue exploring in the future. Thank you.

Thank you, Chris. Moving on. I just want to cover the mining method we employ at Jacobina currently is a sublevel open stope mining method with very limited backfill that's being utilized. We do see a limitation in how far down dip we can take this mining method. So as we look into the future, a big focus of the optimization program is looking at alternatives to this mining method that would allow us to mine the deposits down dip into the potential that Chris was talking about. But we're also finding some other really exciting potential with the change of mining method that I'll describe here shortly. But for now, we're using the sublevel open stope mining method on all the structures that we mine, we do leave pillars behind. We do leave some pillars behind within the stack reefs that Chris described. Processing wise, it's pretty straightforward. It's a standard crushing, grinding, cyanide leach and then we do a carbon and pulp gold recovery and produced gold dore, and then we go to a conventional tailings' facility. If you look at the history of production with this, it's been a very strong producer. We see it really at steady state. We had record-breaking production in 2023 for the full year of the mine, 3/4 of that was under Pan American's leadership. 1/3 of last year was under Yamana's leadership, 196,000 ounces produced. And this year, we're forecasting again the 185,000 to 203,000 ounce production, pretty much steady state. Cost-wise, we are -- we do have a different methodology of costs. So the costs are quite complex when you try to go back in time and compare our costs with what Yamana's accounting systems and methods were, they were doing a gold equivalent accounting basis, we do a by-product credit. Obviously, at Yamana or at Jacobina, there's very little byproduct credit here. But some of the growth capital that was being expanded, we view it as being more operating expense, more sustaining capital. Some of the G&A that was being pushed up to the corporate G&A, we kind of go the opposite way. We like to push those costs down to the sites based on the time distribution of our people and how they apply theirselves in the corporate groups and in the regional offices to our mine sites, which is really where they're dedicated. It's a decentralized approach and they get charged out more or less as a consultant. So it's a whole different approach when you look at -- you can't really compare directly G&A costs. You can't really compare directly cost per ton or the East Coast given the way that the accounting systems are different. But it gives you a feel, we are seeing a bit of a higher sustaining costs this year and the sustaining projects we're looking at between $53 million to $55 million this year. There's a little bit being spent to connect some of the mines that Chris described. We still got some interconnecting galleries that will complete on that. Exploration is a big spend there, $16 million this year that we're spending. We're seeing great results. We're seeing great opportunities there, and that's going to only feed our optimization studies that we're working on. We do have some lease payments there, optimizing our abilities to manage the business. We got $12 million approximately in lease payments this year for mobile mine equipment. We do have some replacements and rebuilds on mobile and mining equipment. We have some planned upgrades that were underway to bring it up to the standards that we think we need to meet to run a Pan American Silver operation there. And we have a tailings dam expansion underway this year. We also have about $14 million to $15.5 million of growth projects 2 growth projects. The big focus one is the mine optimization, and I'll talk a little bit more about that shortly. We are part of the optimization of the future. We're looking at a filtration plant there and going to a dry stackable filter [ cake ] for our tailings. We do have some power supply upgrades that we're doing, again, focused on the future so that we can secure power for any upgrade that we may need into the future. We're doing some more water treatment coming out of the mine, we're kind of optimizing or enhancing our water treatment from the mine. So we're not putting as much water in the process plant, where it's more expensive to control by building higher tailings facility. So that will save us money into the long-term. And then projects wise, we are completing what Yamana called the Phase III projects. The last 3 of which are really a tailings line upgrade, we're expanding the diameter of the tailings line that would have capacity for potential expansion. We're putting some better screening machines in the crusher and some grinding circuit screening that will help us run higher tonnage through the plant with the CIP circuit and keep it stable. In terms of the optimization study, as I mentioned, we're looking -- there are some really exciting work coming out of this. And we're looking at moving towards a paste fill, the open stope mining with a paste backfill. The paste backfill will allow us to manage the seismicity we're seeing as we go to depth and we spread laterally , we start to see an increase of seismicity in the region given the -- you're leaving open stopes behind, and those pillars do tend to start to fail over time. So that's what drives that seismicity. So to manage that seismicity and to allow us to mine deeper and allow us to mine at a higher rates more laterally, we see a paste backfill plant really providing us significant benefits into the future. It also reduces the amount of tails that we put on the surface because we can use a lot of our tails as that paste backfill material and send it back underground. So we're studying that. We're doing some test work on paste backfilling right now. Preliminarily, our concepts look really solid on paper, and it does look like a significant benefit to move that way. And it also allows us to increase the recovery of the reserve or mining. We're leaving behind pillars, as I mentioned, in these reefs, these stacked reefs, with the same development that we're currently doing, we can pull a lot of those pillars back into production and then backfill those stopes with paste. So that we get a higher -- much higher recovery of the resource than we currently are. So we're pretty excited that this will actually potentially lead to not only increased production opportunities, which we think there are some there, we'll have to see how the study comes out, but also lead to lower cost because the same development can give us more ore tonnes. So all that's going to roll up. We're doing further work on that. We're doing some testing in the paste backfill now with the different tailings' materials, and we'll come out with the study during the first half of 2025 that will start to finally define what is -- what is the optimum approach to Jacobina over the long-term? What kind of economics can we see here? What kind of production rates. And that's where we'll see the expansion capabilities of this operation. Given the resource growth opportunities we have along this immense deposit, we're very excited about what the options are moving forward there. So with that, before we take a break, we'll just open up for some Q&A. John, go ahead.

Excuse me, I'm used to thinking about ore grades and rock temperatures. Would 40 Celsius or 104 Fahrenheit be the hottest operating underground mine in the world or second or third hottest?

No.

And would you walk us through 1 or 2 of the hotter mines as an example of the cooling methods they use in their ore grades that are able to afford the cooling methods.

Yes. Great question, John. No. La Colorado is not anywhere near the hottest mine in the world. There's actually some mines or several mines that I'm aware of that are reaching temperatures of 70 degrees C, which are dangerous temperature. They're actually unlivable temperature. So they do require cooling. They do require a lot of cooling. So they are higher grade mines than when you look at the NSR values of what they're mining, they're typically higher grade. So we're dealing with a much lower temperature gradient than what we're seeing in some of those mines. However, the difference is the rock types, the rock types that we're encountering, even though that's not the hottest temperature of what mines have faced, with this kind of rock, this kind of temperature is very detrimental to the conventional way that we were mining and our inability to get conventional raise bores into this ground is unique compared to some of these mines where you see the 70 degrees C. That is the different.

70 degrees.

Celsius.

Which mine?

Well, a couple that I'm aware of would be just up the road to get the silver mine has seen temperatures up to that level. And in Arizona, some of those deep copper mines, the [ Rose Metal ] mine that they're talking about developing is up there.

If I could ask a second question. I was just trying to calculate at today's prices, the Colorado Skarn output. And I was getting $516 million for silver at $30; $1,127 million for zinc at $1.20; and I was generous and used $1.10 for lead at $520 million. So I'm sort of teasing Michael for not giving us a demand supply on zinc because the zinc revenues twice as much. But world steel output is down 1% this year. That's a large use of zinc. If the cars are electric with more aluminum skins, that's west zinc. The recent exchange inventories of zinc are around 390,000 tonnes, they bottomed in the mid-50s a year ago. So it's up sevenfold, eightfold. So give us the sales pitch for zinc. I know you're Pan American Silver, but the mines really zinc.

I'm going to let Michael deal with that.

Yes. Thanks, John. You're absolutely right. It's 60% in our study and the prices have changed since then, but 60% of the revenue is Zinc. Silver is about 20%, but it's a meaningful number on the silver side. And hence, my announcement from the beginning that we are looking for partners for that same core base metals and very focused on our side on the silver. I was -- before I joined Pan America and I was working in the zinc business, and I obviously talk to people in the zinc business. And when you look at the graph we show with the larger zinc managing the world, you will notice there that from about 2030, 2032, most of them will come to an end or not, maybe -- I don't mean is not coming to an end, but it's going deeper down and it's mining more copper there than zinc, while the big zinc producer is still looking at probably about a 2% to 2.5% average growth on the zincs demand over the next like 30 to 40 years. I'm not the zinc guy anymore. We are focused on the silver. As I said, I talked to a lot of the very, very large zinc producer. There's a lot of interest on a long-life, large project like that, as you can imagine. And I didn't notice that anybody will be worried about the future zinc demand in the world. I think when you look at long-term infrastructure build, when you look at how much of the carbon footprint is used in the world to produce steel and concrete. And as an example, when I come in from the airport and the drive under the Gardner and I'll look up on the bridge here, you feel what I mean, right? I mean if we would build, for example, infrastructure, long-term infrastructure with rebar that is -- that is protected with zinc, for example, and I think that's probably where it's going to go. That money is a way better investment than doing what we're doing right now and just rebuilding that infrastructure way by their use and for your infrastructure money and way better use if you look at the carbon footprint in the future. But I really -- when I talk to the zinc producer, I did not hear any worries about the same demand here over the next, let's call it, 3 to 4 decades. Yes.

It's Jackie Przybylowski from BMO. I just wanted to ask about that partnership process you're going through for the La Colorada Skarn. Can you talk a little bit about how it's going? And maybe with all the exploration and future potential that you maybe are delineating, is there sort of motivation to wait until some of that's more fleshed out before you continue that partnership? Or how can we expect that time line to go?

I think by now, I talk to all the big zinc players in the world, so that's what kind of the first step. As I indicated, I would like to focus on the silver. So I don't have with the final model yet with me. But when you look at the 20% revenue from the silver, it kind of guide to you a little bit in what I'm thinking should be our ownership in this project obviously needs a little bit more buffer there to account for lower and higher silver prices over decades. And that's really what we are moving on. So it's probably not going to be just 1 partner. It's probably going to be like 3 or I mean, look, look at maybe Antamina kind of style right, where you have several producers and the smelter in there as well to participate in a project of that size. Not so much -- I mean, on the capital side only, but also on the logistics side, obviously, when you have to move what is it about 1 million tonne or more than 1 million tonne of concentrate, I think, between the zinc and lead per year. So I will advance those discussions during the year. It's really a bit too early to talk about that. While we continue to update the resource model and drill, you heard that it's about a 6-year build. So there's still time to adjust for that. But I think it's the right time to start talking to strong partners how to split this, and that will -- it will take a while to get the agreements and everything in place. And then while -- the beauty and La Colorada's value go through this construction, we can continue to mine the veins, we saw that the 3D continuation and new discoveries that Chris just talked. And for a long time, I thought, well, once we are -- because as we're mining in the eastern side, when you start the caving, if that's the mining method we go at the end, you have to stop, obviously, mining on top of the vein. So you mine them out over the next 6 years or whatever it takes for the construction. But now I think with Chris' results, it goes so far to the east, that has maybe even away, I would guess, to continue mining high-grade veins as well just further away from the caving zone. So definitely, kind of a singular situation where you can plan and build the mine, while you have a mine still running on the higher levels.

If I could ask a follow-up, given what you mentioned and what you showed that a lot of the zinc mines are going to be decreasing or coming offline in the next decade. Are you seeing more interest right now from smelters looking for potential feed? Or I mean, I know you mentioned you're looking for maybe a mix, but is your preference to find somebody to operate the mine? Or would you look just at smelter partners?

It's all open for us, really. I don't want to determine that yet. I mean there's 2 different stories. I mean we have to be careful here not to look at too short of a time frame, right? A lot of the zinc market on the smelting side is pretty hot. I mean we got very attractive treatment terms for us right now because there's a shortage of concentrate right now. But this is -- when you look at the market, this is not something that's going to persist for the next decades and it's moving up and down. So when I talk -- of course, it's different when I talk to investors, they look at today's market and say, well, wait a minute, prices are there and what I want to talk to the big smelting houses and big producers, they all think in multi-decade long projects, and that's really the attraction of this one. So they're not really distracted that where the numbers sit right now today.

One more on this. You studied long-haul stoping and presumably with a higher cutoff grade, you showed that high-grade core in 902 area. Why not cast this mine as a higher grade, lower tonnage, lower CapEx mine that you maybe can do yourself, no need for partners, et cetera?

Maybe I'll start and pass it on to Steve. But don't forget that quite a bit of that very high-grade drilling that we published and what you saw there is not included yet in the resource update. So I think...

Never too late to change.

Sorry?

Never too late to change?

No, no, I completely agree. It will be included in the resource update. And I think Steve can talk about what he's looking at on the mining method side.

Yes. No, if I could add, we selected the sublevel caving for the PEA because it was a superior economic case for the resource model that we had at the time of the PEA. With this new resource model that's coming on now, we are revisiting the mining methods, the mining shapes and we're going to reistigate that. Keep in mind, to get to this depth, the -- somebody asked me earlier today, are you still going to need 4 entrances? Are you still going to need twin ramps? Are you still going to need twin shaft? The answer is yes, no matter what mining method we need. We've got to have the proper ventilation. We got to have the proper access to get people and materials and ore in and out of the mine. So there is a capital component to that that's pretty hefty. But we are going to revisit that because that 902 core is a lot different than what we modeled in the PEA model. So we'll be investigating all 3 mining methods, once again, as part of this new resource estimate. Thereafter, we'll look at new mining methods, and we'll decide are we ready to move to PFS with the current design? Or are we going to back off and redo a new PEA with a different mining method that will be yet to be decided. Yes. There was one question, Michael, on the Board from Chuck. Yes. And I think it was [indiscernible].

I think we already answered, maybe the question is will a potential partner need to have sublevel cave experience. I think we just -- Steve just answered that nothing is certain stone yet. But of course, one idea, it's not only to help on the capital side. But if that's a mining method that we decide to go or obviously be nice to have somebody with experiences for us, sublevel caving will be a new mining method that we don't have experience in always.

Just a quick question for me. In terms of exploration, obviously seems to be a big focus for the company. Infill results that Chris showed us, show good continuity. Exploration results show us good mine life extensions. Jacobina as well as [ La Colorada ] have kind of at least a 15-year-plus mine lives. Is there a plan to bring those ounces forward? Is that just to create more flexibility. Obviously, Yamana was looking at doing expansion at Jacobina. Any thoughts there in terms of what the future possibilities could be?

Yes. Jacobina, we are -- as part of this optimization study, we are looking at where that's going to take us in terms of throughput and expandability of that mine. We feel under the open stope mining method, we're really at the limits unless we find more deposits like Maricotta might be able to be a supplement to what we have. But we think the real value is changing the mining method, and that's going to open up more tonnes for the same development. It should move us towards an expansion, but I don't want to commit to anything there until we get this optimization work done, which will come out in the first part of next year.

And any opportunities at La Colorada?

La Colorada right now, we just want to get our feet back on the ground with the ventilation reestablish this ventilation. Chris has doing the infill drilling on these new zones. We want to see how those start to open up. We got some ideas of how we're going to go after those. That could lead to some interesting opportunities for us between what we're currently mining in the veins and the processing and up to the skarn. So that's open right now. Right now, our focus is just getting this mine back into the ventilation we need to run it properly and then we'll start looking at potential upside opportunities from there next year. Okay. So do we have time for the break. Okay, a quick 10 minute break and then we'll cover a few more of our operations when you get back. 10 minutes, please. Thanks. [Break]

Okay. We're back in. Hopefully, everybody is back online on the webcast. So I appreciate everybody's attention. We'll get started. We're going to go through in more detail, 2 more operations, El Peñon and Huaron. And I want to introduce our newest member of the team, which is actually a returning member of the team and very privileged to have Mr. Scott Campbell. He's our Senior Vice President of Operations & Projects. Just took the assignment here in early April, and welcome back, Scott. He used to work for us. He came to us with the Tahoe acquisition worked for doing all our projects in South America, he left for greener pastures for a while and has come back, and we're really happy to have you back, Scott. So I'm going to let him present all the rest of the operations.

Thanks very much, Steve, for that warm welcome, and we are supposed to be back after a 2-year hiatus at a peer organization. And one of the main things that really brought me back to Pan American was the growth and the potential and the continued success of this organization and the quality of the leadership team and the longevity of continued success. So it's a pleasure to be back. So Steve mentioned we have, I'll give a rundown here about the Huaron and El Peñon operations. And then together with Chris will tag team load that he'll cover the exploration and geology. And then I'll continue with the other operations. There are 6 others. And obviously, El Peñon has already been discussed. So I will go into Huaron. So let's start off with Huaron. We run as a historic mine and operating nearly continuously since the early 1900s. There was a brief time in the 1990s once operations were stopped prior to when we did the acquisition of Huaron. So there's a lot of potential in Huaron. Chris will get into this, the recently discovered Horizonte zone. We're very, very excited about. It's that the horizontal ones close to surface, and it's providing a favorable mix of ores from what we've seen so far, we're very encouraged by that. This whole Horizonte discovery really emphasizes the importance of brownfield near mine exploration. Yes. Go ahead, Chris, you're on.

Right. we're back. And as Scott mentioned, I mean we're now shooting to Peru. We're up in the high ends within the Pasco province close to Cerro de Pasco. You have seen epithermal belt where we've got lots of different polymetallic deposits. And as mentioned, we're sitting down here. We've got around 48,000 hectares in and around the -- we're on mine. We are surrounded by Chunghwa, which is a Vulcan operation, slight to the south of the operation itself there, really looking at the local geology and we're going to superimpose the veins, the red veins, which are all striking east to west, west to east. We've got a anticline sitting in the middle. I'm going to pause it there. So all of these structures are surrounding we've got an anticline. It's like 120 structures which makes up the resource and reserve here at Huaron historic mine, the anticline, and we've got intrusive sitting below that, potentially, the source of these fluids, and so really, when we look at the context, and what I'm showing here is the main sort of 8 structures, which makes up around 30% of the current reserve resource. And the veins, again, as I mentioned, stretching East/West, different dips, strikes and we have an extensive underground workings. Again, this mine has been going for 100 years. All of the drilling that's happened, all those drill traces, drilling out all of these different veins, which are polymetallic in nature. And now just superimposing as mentioned, we're sitting on 50 million ounces of silver here, and we're only looking around 30% of those reserve life of mine shapes here at the moment. Really just to put it into context, it will be way too crowded if I put them all. And you can see the infrastructure and all these different veins, which are currently being mined. And as Scott mentioned, we're really encouraged about the horizonte zone, which sits down to the south. A bit of a history and we're going back to 2009, we're continuously drilling around 20,000 to 30,000 meters here. We have a good -- we do find continuously here at Huaron. However, we did see in 2023, a reduction in reserves from close to that 60 million down to 50 million, 8 million ounces of silver came out of reserve. And that was because we always have these changing parameters from 43-101 exception. And with the content updating how can you put things into reserves? Is it based on the historic, can you back up that historic, how's it got? So with this sort of historic mine, we'll constantly have to review some of the older reserve blocks, they got moved out and hence, we had a bit of a -- not just depletion but a reduction as well from the reserve. But we found again in Huaron and we're setting out at that 51 million ounces of silver. The horizonte zone, which we're going to focus on today, and that came out in the news release, that came out yesterday evening. And as Scott mentioned, this is close to the surface as a southern area. I mean, as you can see, there is some historic workings down there already. But really, we've just gone in and follow up some of the historic values gone in started to infill drill and started to pull together. And bringing access back into these areas, rehabilitating some of these galleries, et cetera. And you can see some of the nice results we're seeing here at 1.68 over 300 grams with really good base metals. And we -- and I think this is something that the sort of old mines can give us when you go back into areas, find projections, and this is what we're looking to drill out in the future. So again, we see some really nice upside in the exploration on these older veins, which were known, just going back in and systematically drilling these structures and getting some nice results, I mean results of over 300 grams a tonne is almost double the reserve grade that we have currently at we're on. Another structure Cometa Ramal that was being mined to the West. Again, you can see the reserve which came in recently, and it's just really extending these vein structures out 4 meters over 300 grams, which is which is I think 2.3 at 600, I mean these are fabulous grades for Huaron for the future. And so we're very excited to be going into these older areas. And as you'll see, the strike out to the southeast is all there, and it's certainly something we're looking forward to drilling in the future as we're going to sort of back end of '24 and into '25. These would certainly be some of our targets. So that was Cometa Ramal, one of the other structures, and we're just going to focus on one more structure in this horizonte zone to really just give you a feel for the grades that we're getting here. And it's copper, started drilling in 2020. Again, we define Guatem reserves, we're actually mining here now and really that infill drilling and accentual drilling is starting to pay dividends and starting to see some really good results. 0.8 of 756 with really good lead and zinc, which is for -- as I mentioned, Huaron, it's certainly high grade. And as we can see, everything is still striking off to the Southeast, some infill drilling for this year and then we'll be building out those programs in '25. So just spin around here, and then we're going to zoom back out, and we're going to look at the Patrick vein, which again was in the release yesterday. This is, again, really highlights, again, the historic nature of Huaron and going back into some of these areas and infill drilling, this is still open to the west certainly 1.66 at 819 grams a tonne with spectacular lead and zinc numbers. So this, again, is within historic workings, and it's certainly open to the west and it's something we're going to be following up on as we move into the back end of this year. And it just keeps giving. It's been mining for 100 years plus. We keep finding additional areas and we're really looking forward to this horizonte zone down to the Southeast and building that out over the next year. Over to you Scott.

Great. Thanks, Chris. You can see a rich past and a bright future at Huaron that we're very, very excited about. Located up to 4,500 meters about sea level about a 3-hour drive from Lima, it's got a lot of advantages. Anyway, regarding the mining, the processing methods, so it's an open stope mining method. We're on that we implement the processing plant as a flotation plant located at site. Regarding costs. So with a near surface operation characteristic of horizonte as you get deeper and deeper into a mine, of course, costs and maintenance costs, ventilation cost, development cost increase one more favorable aspect of horizonte it's near surface. So we expect -- so far, the cost in developing that have been favorable, and we'll continue to do so in the future. We're pretty excited about the upcoming commissioning in Q3 and then the ramp up in Q4 of our filtered tailings plant at Huaron. It's a big project. This will give us our tailings facility many advantages. It will be a dry stack, compared to a dry stack. We'll minimize the footprint of the future to storage. We will assure the geotechnical stability of the facility, and this will maximize our water recycle and minimize our net water usage. So that's another benefit of Huaron looking forward. A recently completed state -- federal state highway has been paved upto Huaron from the Coast of Lima, which cuts down transport time for concentrated shipments and it's a safer alternative to the old central highway that runs up and it's much less crowded too. So it's another advantage. We source a lot of our skilled labor locally from the areas of direct influenced and there the longevity of the Huaron operation, we're seeing second, sometimes third generation miners at our operations, which is really good from the local town of Hawaii. So over now to the El Peñón mine, underground gold mine in Northern Chile. We acquired El Peñón through the Yamana transaction last year. It's located in the Atacama Desert in Region 2 of Chile, so a 2-hour drive from the port city of Antofagasta, of course, the Escondida operations, all of our operations are big open pit copper mines are located nearby. We faced a lot of challenges last year to meet the production guidance of 106,000 ounces of gold. We finished close to 130 last year. That shortfall is really attributable to the widely based infill drilling and high-grade areas. Guidance for this year is just about 130,000 ounces, and we're on track to meet that guidance. Over to you Chris, go ahead.

All right. So a lot of the videos. And certainly, I was literally just now El Peñón, Atacama Desert as Scott was mentioning, and so we've got the Pease belt, which does house a lot of low-sulfidation sort of epithermal gold deposits. And certainly, again, Southeast of angst is those rocks. And as mentioned, Escondida just over to the east of El Penon, Soldado and some of the other deposits of this type within this belt. It's we've got around 120,000 hectares sitting right on the center of El Penon within that, and you can see us on dealer to the East. Here's the access in, as mentioned, 1650 and you're coming from the Northeast there. I'm going to zoom into a bit more of the deposit itself and just really a very quick geology. We've got the Cretaceous. It's lined by 2 faults, and right in the center are the particular rocks that we want to find, which is [indiscernible] and Rhyolite sites which house the low-sulfidation gold system, as Candida sitting over there pretty close. So the red outlines are the vein structures that we see on the ground. So core area, where the coal mine is slightly north as runs around 140 kilometers from north to south. We've got 2 other deposits, which come as in the release from yesterday, [indiscernible], which are relatively high silver grades. We'll talk about those in a minute. So we're going to zoom into the core mine. You've got the dry stack tailings all the way down there. You see it closer on this more in-depth Google. And now really, I mean, looking at the extensive underground workings that we have and we're starting to bring on the resource shapes I mean that's over 14 kilometers from north to south. And here are some of the main structures. And when we talk about some of the areas, Pampa Campamento, which was on the release, we're going to talk about [indiscernible], which is space structure and Paloma, which is sitting over to the North. And when we look at this in 3 dimensions, and when you start to see all of the different deposits or ore shoots within these major structures, it's quite remarkable, the development as well that goes into trying to get to these areas and develop and mine these. But extensive, I mean it's a world-class deposit. And the infrastructure alone is quite remarkable, and it's all accessible underground from literally from North to Sol. It takes a while to get there, but you can drive it. So we're going to start to focus on some of the details. And really, the history of Alpine has really been from 1992, '93 all the way up until today, where they've been constantly finding additional veins. Those additional brains bring on those ounces to 500,000 ounces through the history, and that's really being supported by the drilling. At the moment, we're drilling around 90,000 meters. We've got 20,000 that's not there, which was additional infill drilling on reserve confirmation. And we're also putting in an additional 30,000 meters probably towards the back end of this year. to continue that drilling. And as Scott mentioned, we did suffer a little bit with the reserve reconciliation last year. It's something we're working on. As I mentioned, 20,000 meters going into reconfirmation of those reserve blocks, in that hybrid areas, and it's something we're working on for the midyear update. So coming to tell you much more, something we're working on and very conscious of. But certainly, from the exploration point of view, we'll be looking at seeing that increase in resource this year, certainly to try and show the potential that may exist -- and some of that potential certainly sits in Pampa Campamento. It's one of our stars -- main stayers of the production. Around 50% of the reserve sits here in Pampa Campamento. It's being mined at the moment. And where we've had a lot of successes towards the sort of northern portion at depth of the structure itself. And I'm just going to explain a couple of bits here. You've got this pink which is the right for calls organic. And they've certainly been the mainstay, the host lithology rock that the mineralization likes to get into and certainly being the main stay for the most of the mine. Now recently, that structure is being broken in terms of finding mineralization in the green day site for volcanics below it. And that's a sort of a game changer because it means that the potential in some structures now can go deeper, whereas before it was only really focused on just the pink the rhyolites. And certainly, in Pampa Campamento, we're down about 750 meters, which is really good, and that's certainly the largest vertical extent we see it but El Penon today and is in an intrusive and site which certainly opens up potential for the future. This was -- some of the results came in the release recently, and we'll just focus on some of those from 163 nearly a meter of 11 grams and 258 at 1.8 at 12 grams. So certainly showing the potential that still exists in areas of these structures. The future, certainly down, down dip, and it's open, and we're in this newly defined lower unit, which bodes well for the future. We're now going to flip out and have a look at another structure, which, again, A lot of production comes from that sits closer at Pampa Campamento in the southern portion of the mine. And if we, again, same kind of a deal, we're going to look at current infrastructure where the production is, you've got the resource reserve shapes. And then the drilling that's certainly within infill drilling and showing us some really nice widths and good grades. Again, it was in -- it was in the press release. And we're really focused up in these relics. And this really, again, shows you that it's still now open at depth, whereas before, the idea was not it only sits in the relight in the pink. Now we're showing that in other veins we're seeing it open into the data, which is which is good. And again, 1.5 at 8.2 grams gold. So we're certainly looking at increased drilling, get the infill done, get some confidence and then going lower into these day sites. We're going to set very quickly over to [ Paloma ], which is again being 1 of the mainstays of the production over the past year. I think within the last 12 months, 30,000 ounces has come from here alone. And -- this is mainly within the -- in the day site. And certainly, future program of drilling in this particularly high-grade structure is programmed these are all in [ Septober 3.5 ] and certainly, again, at depth within the structure and in the sort of Rock unit, which is planned for the future. open in both directions and cross section. And now we're just going to flip out -- and really, again, these results were in the release recently. We're going to focus in on our Pampa's sort of target. This is new for us. We're hoping to get some inferred resource into the statement midyear this year. And I think you're going to see that this -- there's 20,000 meters that have already gone in, we've got another 10,000 meters planned for here this year. And for us, -- there was historic drilling here. It wasn't focused. We've now got back in. We started to infield drill. We've now defined an area of 500 meters on strike from the previous operations. And as you can see, some great intercepts. We're in those rights. -- the extent of this package is around 300 meters, and it's all open to the south. And you can see some of the results 1.22 grams and a kilo silver, which was really good. And from the historic which I mentioned, that's worth noting. I mean from way back there's 1.2 at over 4.2 grams, and all of this is open to the south. So encouraging stuff, a lot of drilling to do, a lot of work to do. And so looking forward to getting back down to El Peñon to review that. And I think it's worth mentioning. I mean you've got all of these structures striking off south. There are future areas, which are untouched. The Southern block is certainly a focus of ours now. And I think you'll see from indulging me for 5 seconds to show you, and you'll be able to visualize what's happening at El Peñon today. These are roles going along to the south, drilling out to Pampa the dry stacks over to the right and all of this open and not a lot to see just the Atacama Desert. So with that, I'll leave you with the potential that exists.

Thanks, Chris. Plenty of upside to that key asset down to Chile and El Peñon. So the mining method in El Peñon [indiscernible] method and one of the recovery circus got primary crusher, milling CCD wash in the Merrill Crowe plant and we produce silver gold dore bars there. It's really characterized Steve used the word steady state to describe a couple of our operations, and this is really one of them an opinion. It's a reliable production in a really favorable jurisdiction in near Antofagasta. Of course, Anvia is a port city international airport, long issues mining, experienced, skilled workforce and it's a pretty favorable place to deliver for the mining community in Chile. We're leveraging our experience with narrowband mining and other operations at opinion to really optimize and increased productivity there. things like split lasting that increased productivity, where we like to try to segregate our waste material during the blasting process and other improvements we've learned along the way. You saw a photo there a minute ago that, that interesting photo that burns the Chris showed. That was a picture of the tristate you can see up to the right. That's a key feature of opinion. That's really stable, thanks to the value filter system that we have there. It's footprints mined maximizes the recircling of water. Given the location the Atacama Desert what that's really, really important. And yes, we've got a strong management team there, very low turnover characteristic of our Chilean operations and they really focus on continuous improvement in business excellence as we do through all our operations. So I move on now to the Shahuindo mine in North Central Peru, Shahuindo is located just side to say about a 2.5 hour driven the City of Cajamarca that was acquired from the Tahoe acquisition in 2019. It's an open pit oxide deposit with that leach pad, and really perpetual sort of perpetual expansions of the leach pad in to the waste storage facilities that characteristic of an open pit in leach-pad oxide gold line, 2,000 years above sea level. a lot of historical mining in and around the area, a lot of gold mining there. One of the real challenges we faced at showing is sourcing up, of course, material, in the pit to ensure a proper blending for the lease pad to ensure the permeability recovery, longer stability for leased too. So that's something that we're always looking to improve on. This assuring the correct ratio in proportion of course interia fine material to guarantee that permeability, opportunities that's showing to include optimizing the footprints of the leach pad and the waste. We're looking at an infill dump option within the pit as the mine becomes more mature. We're currently commissioning our Marinos water treatment plant that's located at the downstream tool of our waste of our main waste dump. And we're also building another expansion to the lines, [indiscernible] this year. The agglomeration plant at Shien will be disassembled and removed. Also, we will start this year and likely complete in Q1 of next year. Going on to [indiscernible] operation has been going well, another steady-state operation, a long history of gold production in the area. The Bell Creek paste plant is scheduled to come online in Q3 of this year, and this will reduce and help mitigate the squeezing phenomenon that we see, especially at depth. -- associated with local seismicity depth where the -- we've got some challenges there, but we're mitigating that through other methods as well. The hoist both at [indiscernible] Bell Creek er, operating well in accordance with their design capacities. And we may even deepen the Bell Creek shaft, the studies underway to take a look at that, the feasibility of that currently. One of the big challenges we face in the Tims area is competition for skilled labor, of course, a lot of competitors the new Greenstone Mine, the Cote mine opening up or long sort of in the area with 100 kilometers or so. So we compete for resources there. However, it is 1 of our most productive operations there. And again, second generation miners, third generation miners dedicated work for us and really cohesive management team of attune I'll be going there this afternoon actually. Moving on back to South America to Bolivia. The same Santa Underground Silver mine located in the [indiscernible] area of Altiplano Bolivia. The mining silver up there for Century to 100 years. It's about 4,500 meters about C level. It's a consistent producer outperforming so far this year. small scale. However, it's really reliable steady-state operation. We share the operational revenue there with the state mining company, otherwise not called [indiscernible]. And the contract conditions with come haven't changed since we made the acquisition. So it's a favorable thing for both parties, solid cash flow generator for both us and for the Cable the state mining company. Back over to Minera Florida, underground mine in Central Chile now located about a 2-hour drive from the capital city of Santiago, Chile, also acquired during the [indiscernible] activity the acquisition last year. We've got a very good relationship with the local community there in fact the communities adjacent to the operation. Challenges at Florida had to do with rain, hearings the last couple of years, but we're working around that, and we're well prepared to handle that. this year -- I'm sorry, Minera Florida. And we'll turn over there, also a solid management team. It's quite easy to attract resources to work there because it's so close to the capital city of Santiago corepration potential there to extend the mine life is favorable. Over to Argentina now, Cerro Moro underground operation. We're very familiar looking in the province of Santa Cruz. We've got operational experience in San career the nearby Manatee Beto complex, which is currently enclosure. So we're leveraging that experience in country. We recently opened the NATI open pit, which is about a 30-kilometer drive from [indiscernible], so that's increasing throughput in the process plant. [indiscernible] got a short reserve life key to ongoing profitable production there has to do with cost savings opportunities, continuous improvement and its exploration potential, too. And finally, moving on to back to Mexico, to the Dolores mine. The [indiscernible] operations will cease in July of this year, and we'll continue to drain down the leach pad and recover ounces of inventory for the next several years. we're going to leave the experience that we've gained at the [indiscernible] closure site, which is a couple of hundred kilometers away and as we move to close here next year at Dolores. One of the challenges that we have in the lowest currently is the water scarce it's been in tri-year. We're waiting for the onset of the rainy season here in towards the middle or end of July to get back to our program radiation as on the leach pad. And of course, the closure Dolores and the gradual scaling down that operation, we'll be able to leverage resources that we have there to just further strengthen the staffing that we have at the Colorado to stop the upcoming ground project too. So there's some favorable side to that as well.

My question is on Huaron. Usually, during these investor days, it doesn't get a lot of love I was actually kind of surprised the air time we received yesterday and also today in terms of the press release and the Investor Day today. So I guess, compared to when you first started operating role back in the early -- what has changed? What's getting you excited? Is it really the exploration results that Chris is telling you? Or is it the tailings facilities that you've now put in place to drive stock tailings? And ultimately, what's the upside here? If I look at it, production is about flat year-over-year cost is coming down. And so ultimately, is that what you're looking at?

Yes, I'll go ahead and field that one. Thanks, Cosmos. We're very excited about what we see we're on, to be honest. And Scott mentioned that it's at horizonte zone to be able to open up a new zone closer to surface and supplement it with the deepening of the mine. If you remember, over the last 5 years, we deepened the mind to what we call the 100 level. which is a new level for us. It's producing quite well, but it is costly. It's taking some dewatering. It's taken some ventilation, some additional haulage costs, things like that. So supplementing that with production from horizontal, we're seeing some real potential that could lead us to an expansion and optimization there as we look into the future. We're excited about it. We haven't defined an expansion there. But given the drilling. And I got to give our team credit there. They've really stepped up their game in terms of standards that they've applied. And you're seeing some of the continuous improvement programs that Scott touched upon at all of our operations were on has really accelerated. And when you go to Huaron today, the standards are top-notch. It's a first-class mine, and we're opening up a new area, and we're really excited about the potential.

El Peñon. What is the current reserve life? And how would the profile be? I know that mine has been going and going forever. But under the current reserve plan, how would that production profile look.

Thanks. Obviously, when we look at the gold reserve and it's producing around 130 a year now, you're out for about 6 -- 5, 6 years. But as shown, there is large potential and we're really putting a lot of effort now with the drill rigs and the amount of meters we're putting into Pampa's finding additional inferred resources that will take some time to bring those into indicated and then the reserve and then additional production in light of mine. But I think as you can see, we are really confident that the depth and the strike potential will exist there. I think that's...

As always when you look historically, El Peñon. I think mostly had like 4 or 5 years reserve life, which I really don't like. I think it's not the right thing to have a relatively short life to make proper capital allocation decisions. I rather have 8, 9 years ahead of us. So that's why we increased it rolling. That's why looking at all these new areas. It was kind of a bit of a surprise, obviously, on the reconciliation we had last year. I think we are we are getting there. And now Steve -- Chris team is working on adding a resource and get this longer life. And then once we have that under the belt, I think Steve can obviously look at throughput numbers.

One more Development in the sustaining capital is very low. Is most of it expensed? Or are you in a low point in the development cycle?

No. It's actually quite an increase in development this year, but it's all mostly being expensed. We've capitalized very little normal development in our operations underground only if we were to develop between structures, a long drift or something would be capitalized. So most of that is showing up in the expenses.

Just in general, there's obviously a bit of change on how we account for the cost when you compare with Yamana. And so you will see in many places, less couple more expenses on development that we believe it's the right way. That's how we always did it in the El Paso. So comparing the numbers, they are not really apples to apples. But now you can compare them to all the other operations in by than we do everywhere else.

Just sticking with El Peñon in terms of the reconciliation. Obviously, that was due to lack of drilling. I would believe, I think it was around 60 meters spacing. What level of spacing do you require, Chris, to kind of increase that confidence to a level where you feel reconciliation and continuation has improved? And secondly, in terms of the infill results that we've seen so far, how has that come across in terms of your expectations?

Yes, absolutely. I mean, yes, I mean, when you look at the [indiscernible] and we look at the resources I build, that's something they're working on at the moment. We've seen that from a 45, we've got to put it in probably another 10 meters to 30. I think it would be a better number. So that's something we're working on in specifically where we believe there's some areas of higher risk. So we say we're just trying to derisk this now, which obviously the infill drink is doing. And I don't have the numbers at the moment. It's something our teams are working on in [indiscernible] with the corporate teams and certainly the midyear, we'll update the market, but I just don't have a number fee the moment.

Just in can to the drilling down, it requires a huge amount of drilling. And we are still at -- I think when you look at the graph there, it looks like a lower number, but it's just a different way we do it. I really like, I think, when we approved drill budgets the first got results. I mean Chris showed in the press release of exceptional results that they achieved. And then we add in for the second half of the year more drilling and more money. It's just really a way for us to control it, not to I don't like just to approve channel huge exploration programs, it's really result driven. That's what Steve mentioned -- Chris mentioned later on what there's still a lot of drilling to come in the second half that is not in there. So it's definitely a positive when you look at the extension enormous extension that needs a lot of drilling and a lot of underground development every year.

Yes. As you've gone through mine by mine, your all-in sustaining costs have increased a lot over the last 5 years. Is there any kind of structural impediment to improving your cost profile?

Yes. I mean we did experience some pretty extensive inflation and cost escalation coming out of the pandemic at all of our operations. It was pretty widespread. But I'd say over and above that, we also have seen our reserve grades kind of drop off a little bit, and that does affect our cost per ounce because our cost per ton hasn't really -- it's not really the driver when you look over the last 2 or 3 years, it's really the grade that's driving that all-in sustaining cost and a bit more sustaining capital that we're spending.

One addition I always tell when you look at our costs, especially as we are so international in different places and a lot of other drivers for those costs, exchange rates comes to mind really be important. Obviously, it depends on which jurisdiction we are. You can imagine there was a lot of cost pressure in Mexico before the election and last year as a cost driver at a very strong peso help on the other side, in Timmins, obviously, the weak Canadian dollar, which is foreign currency for us. So those exchange rates can have a huge impact as well. So you have to look a bit of different things. It's not just on the on-site cost. But if is absolutely right, we obviously experienced inflation that we all experience when we go out there a number lives worldwide, we experienced that very strongly for a few years, and then it's really slowing down now and inflation side, which is a good thing.

I think we're ready to move on to ESG and Brent and Chris. Great. Good morning, everyone. My name is Brent Bergeron. I'm the Senior Vice President of Corporate Affairs, and sustainability. I joined Pan American back in 2019 in charge of the overall sustainability strategy for the company, the ESG reporting side of things. Also another portfolio such as government relations and also security, which some of you have seen that coming out of the Covitbendemic been very busy with that portfolio. So I'll go into some of the highlights on that during my presentation. So in terms of the highlights themselves, most of you probably know that we published our sustainability report, our 2023 sustainability report back in May 23. So a lot of the information that I'm going to be talking about today is actually contained in that report. So I'll just hit on some of the highlights. But over the past year, where our team has actually been concentrating significantly is with the process of integrating some of the assets that we've acquired through the Yamana acquisition. When we started a process of integration, we did take a look at some of the policies that Yamana had in place, and we compare them, of course, to ours. And -- there were some differences, but mainly, they weren't that great in terms of the differences that we encountered. So it started making the integration process a lot easier for us. We looked at different ways where we could align and improve some of the stuff that we're doing at Pan American also based on some of the activity that Yamana was doing with some of their assets. But what's important is that during that entire process that we were staying in touch also with our communities and government and our investors and also making sure that as we move through the sustainability organization and the integration process, that we were listening to our stakeholders in terms of what's actually important to them also. So we find that the process actually went extremely well during 2023. The engagement with the acquired sites has actually worked quite well. The support that our corporate team is actually giving to the site has been welcomed very well from the Yamana site. So that's given us a lot of comfort in terms of trying to work with them and improving in terms of what we can be doing to just continuously improve in terms of what we're doing as a company on the sustainability perspective. So in terms of the highlights, I won't go through all of them here, but I'll just highlight a few of them, which were really important to us. Of course, Health and safety is our #1 priority. And in terms of the goals that we set for ourselves last year, very important. We didn't have any fatalities last year, which was an important goal for us in terms of keeping our people safe at our mine sites, but also in terms of some other indicators where we surpassed some of the goals that we actually put in place at the beginning of the year. In terms of another 1 that is actually quite important to us is the aspect of water. Water is a very important component of what we do in terms of our overall processes, but also in terms of how this interacts with the communities around us. So we want to make sure that we continuously are steward in terms of what we're doing in terms of our intake of water at our sites, but also being able to ensure that we are not having a significant impact on the water balances in the areas. As some of you have seen, we have sites that are very close to our operations. Therefore, the water balance in the areas where we operate becomes not only important to us from an operational perspective, and Scott touched on that in terms of scarcity and different places from droughts that we are seeing. But also in terms of what the community are doing in some of the projects that we're actually working with them. Important to note, which is in terms of doing the overall analysis of the Yamana sites and some of the sites that we've actually divested. Our 2020 -- our 2030 goals of actually achieving a 30% reduction in overall the global footprint that we have, we're actually going to be able to reinstate that this year and say that we're going to continuously meet that target in 2023. So we've done the analysis of the Yamana sites. We've done the analysis of the ones that we divested, and we've confirmed that we're going to keep going with those types of goals in the future. In terms of governance and management, of course, the tone from the top is extremely important when we take a look at the company's overall sustainability strategy. So our interaction with the Board of Directors is extremely important to the management team, but also our sites -- we do have different committees at the Board level that we report to on an ongoing basis every quarter, of course. With a lot of the information that drives the sustainability strategy of our company. There's what we call the communities and Sustainable Development Committee and also the Health and Environment Committee. There are 2 committees that really take a look at what the company is doing from a sustainability perspective, looking at a lot of the indicators and the targets that we're using to continuously monitor on a quarterly basis how we're moving forward with them.

And then that gets reported to the overall Board of Directors. They also do quite a bit in terms of looking at some of the policies that we're putting in place and the strategies that we're bringing forward. approving that strategy and making sure that, that gets implemented overall towards all of our operations. So on the management side, of course, the management team is quite active in terms of looking at sustainability. And I just wanted to caveat that by saying that the aspect of sustainability is not necessarily just a tick-the-box exercise for our company. We do look at it from a strategic perspective, and making sure that what we are doing on the sustainability side is looking at the risk aspect of what we're encountering at site looking at the opportunities that we are also encountering at sites and being able to implement that in terms of our overall strategy to lower the overall risk of what we're doing. We know that community risk, water risk, those have become much more important for us these days, and we want to make sure that, that gets involved from the operational side to make sure that we're lowering the overall operational risk of what we're doing in different communities or different countries where we're operating. Important to note also in terms of the overall structure of the compensation of our senior management team. You can see the different categories here in terms of how much sustainability is actually embedded overall compensation. It takes into account the aspect of safety, diversity in terms of hiring practices, the environment. And also, the last year, we had a significant amount of our compensation linked to different aspects of implementing the towards sustainable mining standard from the Mining Association of Canada, which was done not just in -- at our Canadian operations, but also at the international level. In terms of the overall ESG strategy, there's different pillars that we take into account. But 1 of the things that we try and do here is actually align what's important for our stakeholders, what's important for our communities and align that in terms of our policies and our standards and our guidelines in terms of what we're doing to make sure that the important aspects of what our stakeholders are seeing, which is important to them are consistent in terms of what we're doing in terms of our overall management team. So important for us to look at some of the guidelines that we're putting in place and providing quite a bit of training to our local staff, making sure that we're hiring people that are very confident in terms of being able to implement the policies that we want in terms of the different areas where we're operating. But another thing that we did over the past 5 years, which I think are really important is that we implemented a system of what we call sustainability performance indicators. Those indicators are -- some of them are actually -- well, the majority of them are actually tied to the objectives that we put in place on a yearly basis for some of the compensation that we have for our senior executives. So they're very important in terms of not just the reporting aspect, to senior management or the Board of Directors, but also looking at the overall performance of what we're doing in terms of environment, in terms of water, in terms of community incidents. A very important 1 is community grievances and how quickly we actually respond to them, how we actually mitigate them in the future. So these are all things that actually get reported on a quarterly basis to the Board of Directors so that they know that we're moving in the right direction. In 2023, we actually. We evolved our sustainability performance indicators to include a new 1 that has to do specifically with the measuring the level of investments that we're actually doing in communities taking a look at how the implementation of these projects are moving forward and actually trying to understand the positive impact that we're actually having on the community. So what we're doing is implementing them, following the implementation process. but also taking a look specifically on the actual impact and the results of the projects that we're investing in different places. Of course, in terms of our overall compliance, our sustainability report is based on GRI standards, SASB, TCFD, which is information that's included in the sustainability report. We do have memberships to different organization, which becomes extremely important to us in terms of implementing our strategy. Of course, the towards sustainable mining standard that we use from the Mining Association of Canada, as I mentioned, being a member of the Mining Association of Canada requires us to implement the TSM standard, at our Canadian sites, but we are also doing it at all of our international sites as that standard is actually being accepted by direction counties where we do operate right now and expanding even more. As a member now at the World Gold Council, we are looking at mention the responsible gold mining practice standard, which is actually very important to our refiners these days in terms of making sure that the products that we are sending to them is actually complying with that standard. And another 1 that's very important, and we reached the milestone actually earlier this year is that we are now a full-fledged member of the voluntary principles on human rights and security. We started implementing that approximately Five years ago, this was an important milestone for us to reach as you have to go through training and [indiscernible] process to be an actual member of it. And given a lot of the security incidents, given a lot of the social incidents that are happening around our mine sites these days, it's extremely important for us to make sure that people are security teams, our social teams are well trained in terms of security incidents, use of force or anything having to do with a -- is that any type of those types of incidents going to have a significant impact on the company's reputation and its ability to operate in different countries and the ones that we've integrated. And we're also -- we've also surpassed some of the targets that we did put in place for our corporate goals in 2023. So we're moving quite well in those areas. There's still quite a bit of work that we need to do in terms of the aspirational objective of actually becoming net 0 by 2050. Some of that has to do with new technologies coming in. Some of that has to do with some of the strategies and initiatives that are coming directly from our sites. And some of it has to do with the accessibility of different types of energy that we can get from different countries. Over the past year. We've been able to change in Mexico, the source of our electricity to renewable sources as opposed to conventional one. So that has actually helped us in terms of being able to achieve our targets during the past year. Tailings also a very important one. And I just wanted to mention here that when we take a look at the management of our tailings, we have significant resources available to us, not only at sites, but also at the corporate office, and there's quite a bit of coordination that's being done in those areas. We do our audits. We do our management of our tailings sites in terms of the mining associations of Canada, the tailings guideline, which we've been using across all of our operation and the Canadian Dam Association. Now we know that over the past years, there's been quite a bit of publicity in terms of the global industry standard for tailings management, which has had been developed by the Church of England and some investors in Europe. We've chosen at this point to be consistent with the 2 standards that we're using here from the Mining Association of Canada and also the Canadian Dam Association. In some cases, when we compare it to the GIST the standards. But what we're currently doing as a member of MAC is work directly with the analysis of both stars and making sure that whatever improvements that we can do into the Canadian standard is or surpassing the standard that is coming in at the international level. And I just want to mention these, which I think these examples here, which I think is really important. I know that we've seen it from some of the presentations on the operational side. But we do have quite a bit of monitoring. We do have quite a bit of work that has been done in different places. I use the [indiscernible] tailings facility, of course, over the years, we're seeing an increase in terms of the legal requirements in different countries, increasing with respect to how we're managing tailings facilities. But also, we're looking at it, as Steve mentioned, from the operational side of things in terms of know that sometimes we have situations where increasing the amount of land that we need for these types of facilities can be sometimes difficult whether it's simply based on the land ownership that we have or the communities around us. So looking at different technologies such as what we're looking at in Jacobina or at Huaron in terms of the dry filter plant to try and make sure that the impact of our facilities in the future is actually being reduced as opposed to actually increasing in size. In terms of socioeconomic contributions, I mean, there's quite a bit that we do in this area. And we wanted to highlight the economic value distributed in different countries. And over 2023, that value got up to approximately $2.4 billion, which [indiscernible] what's important to us is that 87% of that value that is being created is actually staying in the countries where we actually operate. We believe that's extremely important because we want to make sure that our operations do have a significant impact locally and in the countries. And we're seeing those amounts actually being described and there's quite a bit of information in our sustainability report on this. In terms of our actual point that we do specifically at site, we invest close to $15 million in terms of what we consider to be community investment projects. They look at everything having to do with agricultural projects, health programs, education programs and really important for us to make sure that we're doing this in collaboration and they're consistent with some of the priorities that we're getting back from the communities. We know that when we have a mining operation, it's not everybody that can work for the mine site. So it's important for us to take a look at the ecosystem around of our mine site also in terms of some of the investments that we can be making with them into projects that are going to be sustainable over the longer term. Mining projects do have a finite life. So we want to make sure that we're investing properly into projects that are going to survive the actual mine life in terms of continuing, in terms of economic contribution after we've left those areas. And finally, I just wanted to mention on this one here. I know I'm out of time, so I'll just go quickly for this one. But we're also taking a look at this, and this is part of a process that we have inside of our area, which is taking a look at some of the -- sometimes, some of the projects that we're currently doing from an operational perspective, looking at some of the closures that we're doing at different mine sites or looking at legacy issues that may have been there in the past that we want to be able to make sure that when they show up as a risk item for us, whether it's from an operational point of view or from a sustainability point of view, we are actively working on them. A good example of this was the relocation process that we did with some families that were living at the La Colorada Mine. It had attracted the attention of an international NGO but turn that on in terms of looking at it from a risk perspective and how we could work in collaboration with the families. We worked in collaboration with the United Nations Office for human rights in Mexico, where they participated in a process of relocation with us. They assisted the families and they were a strong observer of the process. And we were able to get to an agreement with the families whereby some of the more relocated individually on their own or some of them actually took housing that we built for them in a different area. So I think that when we take a look at these types of risks, what we're trying to do is make sure that we are identifying these in terms of what that means for risk for our operations at the present time. But also more importantly, especially when we take a look at the La Colorada project, we have this big expansion project that we're going to be doing with the Skarn. So let's take a look at all the sustainability risks that are around us and make sure there's a place to actually be able to manage or mitigate some of those risks before we start making those significant investments in the future. So that's it for me in terms of the overall sustainability aspect. As I mentioned, there's quite a bit of information in our sustainability report if some of you would like to get back to it. And I'd be happy to take any questions or comments if you have so.

What kind of programs or initiatives is the company doing to better educate the population around Escobal about the benefits of the mine during the consultation process?

I'll let -- Sean has been working on that significantly so I'll let him take that one. Yes. Go ahead.

You called me just when my leg fell asleep. No, we have quite -- actually quite a few programs. The biggest program to have is the visitor program. So I think last year, if I remember correctly, we had 4,300 visitors it's in the sustainability report. But that process is an open invitation for any of the community members to come to the site, I think about 85% of those visitors were local, and that's from the town of San Rafael, the municipality of San Rafael and the nearby communities that are there. That process is pretty important. We have social media as well. So our Facebook page has 20,000 followers, and we are pretty active posting videos on the process, mostly on care and maintenance, but providing some information about what it would look like if we were operating as well. So that has quite a bit of impact because that's used a lot there. We also have some other programs that are very specific to some of the local schools where they visit and do an environmental tour or a biodiversity tour as well. So we're pretty active with that. And I would say that over the last 5 years since Pan American acquired Escobal, we've had a real impact in shifting that. And we see that in our Pulse surveys that we take, and we just ask general questions about what are the concerns if the mine operates, what are the benefits that the mine operates and then 1 to 5 score on the level of acceptance. So our acceptance score range is somewhere around 4.2 to 4.4 recently. And the biggest concern that we have for the mine operating is lack of local employment. The biggest benefit they see for the mine operating is local -- or I'm sorry, employment itself. But then it cascades down some other concerns there. There's water there, there's use of royalties and things like that, but I think those programs are pretty effective, and we're doing some other things as well but those are the highlights, I think.

I'd just like to mention that I've had the chance to visit Sean in Guatemala. And it's really interesting because we tend to hear a lot with respect to what's going on with the consultation process and the [indiscernible] parliament and [indiscernible] community, even going into the community around the mine site. And one of the things that I really love about Escobal is that it's part of an ecosystem of a mine site that has a very small footprint and is actually surrounded by neighbors. And talking to some of those neighbors, it's not all in terms of the negative aspect of what we sometimes hear in some of the newspapers. There are neighbors there that are actually quite positive about the mine site in terms of what the team is doing with respect to water discharge at the site and not water discharge is helping in terms of some of the agricultural, the animals that are being raised in the area. So there is some significant positive stuff that is happening also but we do have to go through this consultation process and completed. Yes.

Yamana had a very interesting system of polling communities around the mine sites on a proactive basis to get leading indicators on your social license to operate. Did you adapt that system? Or is there a similar system in place with Pan American?

Yes. So we did take a look at that system that they have. And it is a survey type system that they send out. One of the things that we do, especially with our community teams at different sites is to actually go into the communities and get the Pulse exactly of what is actually going on, looking at the grievance system that is actually in place. And the grievance system is sometimes it's mouth to mouth that we can actually get. And we tend to get 2 things from that, which is good from the way that we're currently doing it right now. One is that we do get the complaints anyway. We do get information requests or whatever is coming in. So we do get to understand exactly what's going on at a very specific time. That does get reported to us at the corporate level, so that we understand also in terms of the priorities. But it also gives us a chance to work quickly in terms of reacting to some of the questions that they have, some of the complaints that they may have. What we found with the survey is that it did give them an indication of the level from quarter-to-quarter but we didn't find that there was a significant connection to be able to react quickly to some of the issues that may come up. So we're finding that the system that we have in place right now is working a lot faster and more effective in terms of building that relationship, which is what we're aspiring to do with all of our communities right now.

Brent, Nick Clarke, TD Securities. If I could just follow up on some of the remarks that Sean just made in terms of the Pulse scores at 4.2 to 4.4. Could you guys share a little bit about maybe where those scores were maybe 3, 4, 5 years ago when you first acquired the asset?

That's a program in a survey we initiated July last year. So I don't have any benchmarking. And again, it's something we were actually inspired by what Yamana was doing, but I thought it was a little too complex and a little too obstructive. So we just wanted something much easier to deploy. And so we put together a very simple survey tool that we could use due in 5 minutes and not scientific, certainly not as robust as hiring a group like they had at Yamana or hiring a Gallup, which we've done those kinds of perception surveys before. But I can't really say. What I can say is that you've got a population around Escobal, which is mostly employed in daily work in agriculture. And so there's obviously a lot of concern, a lot of appetite for employment. That's the biggest requests we get at our public detention office as well, which is another -- which we have at all the -- all of the operations. But there's 2-page summary about Escobal in the sustainability report that summarizes all these things. And if I get the numbers wrong, I think the Pulse survey results are in there. Certainly, the top concerns and the top benefits are there, but I would refer to you that report to take a look at those 2 pages. It will summarize all these different programs we're talking about at Escobal in particular.

In terms of GHG emissions, can you remind us which of your operations you currently use or potentially testing battery-powered equipment? And overall, as a company, is that an initiative that you're pushing for?

Steve, do you want to answer? Well. Yes, I'll just mention that in terms of what we're looking at, especially on the development side, the Skarn project or some of the other, we are looking at different types of technologies to see how we can actually integrate that in terms of our long-term plans also. We know that there is technology out there. We know that there are other companies that are actually implementing as pilot projects in different places. Some companies have actually moved quite quickly on it. But it's very site-specific sometimes. So we're looking at the technology right now to see how we can actually implement that in our projects and the ones especially that we're doing on the development phases. Steve?

Yes. Just to add to Brent's point, is in the Skarn design, we're specifically designing that to be conducive for battery equipment. We're looking at -- with the sublevel cave, that's one of the big benefits is everything is done on a level. So battery equipment works very well when you're not hauling material up a hill. So hauling on a level and dumping it down a shot to a crusher and conveying out is very, very electric friendly, if you will. So we're really focused on that design in Skarn. In terms of the other operations in Latin America, what we found is we really need a new mine development to go in and large areas to implement a battery program because just buying a battery piece of equipment and all the infrastructure you have to build around that and all the support functions you need from the supplier to support those that just doesn't exist. So we haven't really had an opportunity to go in on a large scale. Perhaps the Horizonte zone and MARA is going to be a good candidate, where we going on a much larger scale and look at an area and develop that specifically for battery applications. So we are looking at those but we don't have them deployed into soon.

Okay. If there's no more questions, we'll get to our finance team for their presentation. Thank you.

Thank you, Brent. My name is Ignacio Couturier. I'm Pan American's Chief Financial Officer. I'm joined today with Guido Mastropietro, our VP of Finance and Treasury. And we'll talk a little bit about our strategy, our finance management. So generally, our approach in the management of Pan American's finances is to ensure the stability and growth of our company through the use of its financial resources. So in terms of growth, of course, we want to make sure that we -- I think it's the -- we should move on to the next slide -- Oh, sorry. There you go. Sorry about that. I want to ensure that we have the financial flexibility to be opportunistic when growth opportunities come up, when M&A opportunities come up, when we have large capital expenditures. So in terms of the main aspects, we look at debt. Of course, for those who follow the history of Pan American, we've always had very low debt levels. We target a gross debt to gross debt-to-EBITDA ratio of less than 1. We've also always been able to repay our debt relatively quickly once we've drawn on it. We have a revolving credit facility, which we've drawn for the 2 most recent acquisitions, which we repaid in very short time. We always make sure that we borrow within our capacity that we don't borrow more than we can repay. And currently, in our balance sheet, we have 2 very large -- 2 large bond issuance that we acquired through the Yamana acquisition, and we'll talk a little bit about that. Liquidity, Michael mentioned our total liquidity of over $1 billion. That's a combination of the undrawn amounts on our line of credit, plus the cash on hand. Capital expenditures, we've always focused on the return on investment on our large capital expenditures. We have focused on being able to do a capital allocation process where we look at all the capital that we have on hand and try to decide what's the most important one and invest in those. As you know, we've mentioned the Skarn project. I think the funding of that will be heavily dependent on ultimately what the partnership structure looks like. As Martin mentioned in the presentation, is around $2.8 billion, but obviously, we'll -- how much we invest in that, how much we fund that will depend on the ultimate partnership for that. Asset base. We talked a little bit about our approach to M&A, always looking for opportunistic M&A, looking at the divestment of noncore assets. We focus on synergies, being able to extract value through our acquisitions. Guido will talk a little bit about the synergies achieved in the Yamana acquisition as well as the Tahoe acquisition back in the day. And finally, return to shareholders. So we have a long track record since 2010 of returning value to shareholders through dividends as well as repurchase of shares. On the dividend front, we have a base dividend of $0.10 per share per quarter. We have a policy, which is based on our net cash position. The variable portion is based on being in a net cash position. Currently with Yamana bonds, we are in a net debt position. So we are paying $0.10 a share. In addition to that, we've had various share purchase programs over the years. Most recently, in March this year, we announced a normal course issuer bid for the repurchase of shares up to 5% of our issued and outstanding shares. In Q1, taking advantage of low share price, we repurchased about 1.7 million shares at an average price of $14 a share. Hedging policy. We've had a long-standing and consistent risk management hedging policy. We do not hedge either gold or silver. We focus on our byproducts are some key inputs like diesel as well as our FX exposure. FX is really important given that most of our labor cost, which is the largest chunk of our overall operating costs are based in local currency. So Guido will talk a little bit about our hedging policies and how that's worked over the years. Moving on. Here, we can -- this is a bit of a repeat. Our total liquidity position of over $1 billion comprised of both the undrawn amounts on our credit facility plus the cash and short-term investments on hand. And here's a little bit of the details on our -- on the amount of bonds that we hold, as you can see, there's 2 tranches. The larger one, the $500 million one due with the maturity of 2031 at a very attractive rate of 2.63%. Obviously, today, we couldn't issue that at that level. And then with a more -- with a sooner maturity of 2027, $283 million at 4.63%. For those who look at our financial statements, you'll see that on a quarterly basis, we've been booking around $20 million of interest expense. The reality, though, there's a lot of noncash items there. It's around $9 million of actual cash interest that we pay on a quarterly basis. Moving on to a little bit of a history of our leverage. The bars there represent our adjusted EBITDA, and the lines represent our leverage ratio on a gross basis. This is the way that the credit agencies look at it. So you can see back in 2019, there was an increase. That's when we drew around $335 million for the acquisition of Tahoe. As you can see, the next year that drops as we fully repaid that amount. And then once again, in 2023 with the acquisition of Yamana and including those bonds, we can see that gross leverage ratio increased to 1.72%. It's currently dropped around 1.2%, and that's -- that was the use of the funds from the sale of their assets last year, mostly MARA, that we used to repay the amount that was drawn under the credit facility. Now we look at it actually, when we look at it internally, we look at a net debt basis. That's where we offset the gross amount of debt by the cash on hand. So you could see after the acquisition of Yamana, our gross debts was around $1.3 billion. On a net basis, around $1 billion, offset by the cash. Today, we're at around $900 million. So it's a large decrease. That was the use of the funds from the divestitures to repay some of that debt. Further on, assuming that we close the La Arena transaction later in the year, you'll see that our net balance for debt would drop to just below $400 million. So quite an improvement on our balance sheet. Once again, reemphasizing our focus on a very strong very strong balance sheet and low debt levels. With that, I'll pass it on to Guido to talk about capital allocation.

Thank you, Ignacio. Yes. So as Michael alluded to earlier, we have a very clearly delineated strategy for capital allocation, really underpinned by 3 pillars of which maintaining balance sheet flexibility is really nonnegotiable on at the top of that list. It's what allows us to be flexible and during times of low metal prices and be able to expand countercyclically. It's also what allows us to be able to really jump on opportunities as they come up on the M&A side. So it's been really instrumental through Pan American's history and being able to expand the production profile as well as to really execute on our growth strategies. With that, as Ignacio mentioned, we focus on those acquisitions where we identify opportunities to be able to really maintain that flexible balance sheet and that low debt. Number two, invest in high-return projects, again, something that has been mentioned throughout the presentation. We do have a couple of exciting catalysts in the portfolio, of which one on the La Colorada Skarn, we've invested over the last 4, 5 years since that first drill hole in 2018. We've invested north of $150 million, and we're continuing to invest in that and delineating the resource and that's something that we strongly believe is how we can add value to our shareholders. And then when it's -- when we have the financial flexibility to do so, we're able to focus on shareholder returns, for which we've returned about $854 million since 2010. In terms of 2024, there's not a lot of new information here. You've seen most of this. Really, the only additional information that we're presenting here is the sustaining capital and the reclamation expenditures broken out by quarter. But the production, as we previously guided, there's no update to the guidance at this stage. Really, it's a very backloaded year as we had previously mentioned. And this is related to a variety of aspects. But really, like La Colorada expecting, as Steve brought up earlier today, really an improvement in conditions towards the end of the year in that east zone of the mine. And then with that, an increase in production, decrease in costs. At the same time, we are facing some mine sequencing in Cerro Moro and Shahuindo, which improves operations towards the end of the year. So really 2024 backloaded year, more so maybe than previous times. And that's seen in the cash cost in East, which you see right there with the really high level of cash cost in sort of the first half of the year. We did beat Q1 costs on the silver segment, and we're within at the low end on the gold segment but really expecting that first half to really shake up as where we had guided. So into Q1 cash flows, which you've seen already again, really, it's reinforcing what we guided for. We guided that the low point of cash for the year, all else equal, was going to be during the first quarter. And that's reflective of that lower production, higher costs, higher income tax payments. Just one other item that we wanted to point out here is that net changes in working capital. In terms of working capital, really, about half of that is leach pad inventories and then the other half is really an AP movement, which happens at the start of the year with all the bonus payments for our operations. As Ignacio mentioned, on the Yamana integration and synergies, we've vastly exceeded what we anticipated. We were able to deliver on that -- on those synergies in the -- essentially in the first year of post-acquisition. So in terms of G&A, we're north of $60 million, which $40 million to $60 million was our previous guidance. And then on top of that, we also were able to cut back on spending on some of the greenfield explorations. We focused some of that to the brownfield but then as well rationalize some of the hectares that we are carrying, the Yamana was carrying and then as well as with the dispositions, reduce the debt load, reduced the interest component that we're paying as well as reduce all that care and maintenance that really was idle in the portfolio and utilizing cash. So there's another $90 million of cash savings. So that again speaks to that the way that we focus on acquisitions, and we focus on our -- delivering our strategy, we're really looking at opportunities where we can deliver this type of success out of it. Ignacio has already presented the dividend and share buybacks. So really just a focus on that, it is a net cash position. It does give us that flexibility to pay a higher dividend when the balance sheet is strong, which focuses back to like really that pillar that underpins our strategy and allows us to keep growing. Currently, we are on a net debt position, about $0.5 billion. And -- but we have made progress towards bringing it back to our net cash position. And then with the La Arena disposition, hopefully, we'll get even closer to that and eventually allow our shareholders to participate on the health of the company. The share buyback, really, we've -- as previously announced, 1.7 million shares at $14.16 average price, most executed in Q1 with a small amount that was done at the end of Q1 and settled in Q2. And then yes, that's the strong history of shareholder returns that I alluded to earlier. And as you can see throughout our history, we've paid strong dividend during high metal price periods, decreased the dividend in 2016 when we approved the La Colorada and Dolores expansion projects, and we were spending north of $250 million in those 2 projects at a time of weak metal prices. So we started reducing the dividend in 2015 and then 2016, again and then start increasing it as we start seeing the benefits of those expansions and that investment in the business. Today, we're at that $0.40 baseline, which is a $0.10 per quarter that Ignacio presented. And then lastly, on my side is the hedging strategies. Ignacio mentioned that we don't hedge gold and silver but we are very active in our local currencies, some of our FX exposure as well as some of the diesel exposure and the base metal exposure that we have. So we are looking to really lock in and those areas lock in rates that are consistent with our life of mine plans or better than our life of mine plans and then being very opportunistic so that's something that allows us to maintain a bit of flexibility and take the pressure off the silver and gold, which we do won't remain fully unhedged and fully exposed to market prices. And then with that, I'll pass it back to Ignacio.

Thanks, Guido. And just to wrap up the finance section of the presentation today. We are rated investment grade by both S&P and Moody's. So I encourage everyone to look at those reports that are publicly available. We are large scale. We have a large-scale portfolio of 11 operating mines and moving into 10 operating lines once we sell La Arena with 2 very interesting catalysts in our portfolio. We've talked about the Skarn plus Escobal today, highly diversified 7 jurisdictions in Latin America. We have a management team with vast experience in Latin America. We've been working in Latin America for a long time. I'm originally from Peru. Guido is originally from Argentina, as Michael mentioned, there's a lot of us in the Vancouver office that are -- speak Spanish as a first language. Yes, and obviously, the conservative approach to managing our balance sheet. The finance has always worked our tour advantage in terms of having the flexibility of acting when we need to. That's something we'll continue to do. We'll continue to look at ways to reduce our debt levels and to optimize our portfolio. So with that, Michael, I'll hand it over to you for closing remarks. [indiscernible]

Well, great. Lots of information, I'm sure, but I really -- I love the videos, Chris. It's very -- it makes it very easy to understand. What we talked about in the press release because it's often very difficult to explain geology just in a few paragraphs. But just to add to Ignacio's point and he explained it very well in our strategy, and I showed you that slide at the beginning. And I think it really as it out. You run your operations efficiently, safely, strong, look after the communities around so we don't have these issues there. We make sure we have a strong balance sheet and you return to shareholders, you return to shareholders, not only when metal prices are high but you have to be capable to return to shareholders at any place in the metal price cycle, it's obviously not the same amount is so there are ups and downs depending at we -- what else we do with the capital, and we invested in high-return properties, high return projects will obviously have a bigger return for shareholders than just returning it in dividend. But I think the dividend for us is always a very central part of the project. You heard a lot about optimization of portfolio. And for me, it was really important to be here today and explain you maybe go to the next slide with that. Only talk about the operations but it's a big team here, so you the depth of the management team. I know I have the pleasure to talk to many of you during the year but you normally don't have the chance to meet so many people after management team. There's obviously a lot of people behind this with a lot of really, really high-quality experience in our fields. That's the only way to run a company in that size. And I just wanted to make sure that you get to meet part of the management team that you can ask them questions directly. You don't have to get it always from me, ask the people directly. I hope I was able to show that we had the gold to sliver [indiscernible] still even though we produce quite a bit of gold. It's really just a high-quality mining company. I think it is a large transaction. It's only 14 months back. It's a lot of work to do an integration like that. A lot of operations, a lot of people, a lot of asset sales and all that in 14 months, I think I wanted to do that first and get it done, and then we come and show you the result. I think it's hopefully very clear to you now where it's going, what the idea was behind that transaction, what it is the result of it as a stronger, bigger and better Pan-American silver, but also with a lot of upside, not on the upside on our big catalysts, but upside on the exploration, how important brownfield exploration is to us, how much value we have created over the last few years with brownfield experts, and we'll continue to do that and absolutely this is the bread and better of our business, and that's really important to continue. And -- have the strong catalysts, maybe we will find more strong catalysts. If you find accretive ways to do that. If you think back on Escobal, we structured at CVR at the time when we purchased the mine, we didn't pay for the mine. We will pay for the mine once it's running again when we exchange those CVRs into Pan Am shares. And hopefully, after closing of the La Arena transaction, it is clear to everyone, obviously, when you look at the numbers there, that huge catalyst came to us at the moment as kind of a semi-free option. Of course, we have ongoing payments during the year to maintain the care maintenance status of the asset, but an incredible option that is out there. And last but not least, you have to have a strong balance sheet to do all that. It's incredibly important for all of us and especially to me to run a mining company with low debt. We go through big cycles, big that mining companies normally doesn't work together. It's great to do. It's a great tool for us to react quickly opportunities, react quickly on not only M&A, but the new projects we saw and do that, but we also saw how quickly we always pay back. And I think the fact that we paid back $400 million last year, and we will show that we're going to pay back more this year, makes it very clear how important it is for us to run the company with a very strong balance sheet at all times. So with that, I think I will open it to questions here and...

Michael, Don DeMarco, National Bank. So my question is -- pertains to Q2. Q2 is coming to a close in the next few weeks. Ignacio provide a little bit of color on the share buybacks during the quarter rather in Q1. And so just wondering on Q2, though, is there -- are you tracking guidance? Is there going to be any surprises, positive or negative, that you can share with us at this point?

We obviously Don -- we didn't release Q2 yet, and we have to wait where we're going. I would expect very similar. I mean that's why we put the quarterly guidance out there. So because this year is such an extreme year of -- if we would have just divide the production by 4, you would not have worked out as it's so back-end loaded. And there's always a big back-end loading on our production, especially in Peru, which is just related to rainy seasons when you run the keep leaches. But here there's La Colorada and Cerro Moro, some other operations, [indiscernible] before we just felt prudent to put the quarterly guidance, and that's obviously what is out there and what you can follow on it, right? So I think it's -- La Colorada, as Steve said, the ventilation will be running early July. So that will be a big milestone for the beginning of the change of La Colorada. So until then, I would expect more of the same. I mean, still the same, and still the same ventilation issues that we had in Q1 and before, obviously, until it's fixed. And then the improvement that we had in our guidance in Q3 and Q4. I say on the cost side, I mean you saw our costs in Q1, we had a strong beat on the cost side on the silver side. and the low end on the gold side. Just to make clear and to the earlier question from you, [indiscernible] the cast and I mentioned that it's exchange rate, but it's also driven by product credits, right, as we don't show equivalents but byproduct cost. So the impact of higher metal prices is bigger on our silver operations normally than our gold operations because we have more byproduct credits on the silver mine because silver -- you can't find silver on it's, right. Jacobina is hardly any byproducts but when you look at Huaron or San Vicente, et cetera, La Colorada, you have a lot of byproduct credits -- of course, when the byproduct metal prices are high, which they have been pretty healthy a while of the quarter, now they gave in a bit. So I haven't seen the number neither yet, but I would expect that on the cost side, that should look pretty similar. I wouldn't see really any big reason why that would have changed during the quarter, if everything still closes the same. So Look, as I said, it's -- we are not at the end of the quarter yet. We don't have numbers out there. But I think when you look through all these themes, you can kind of see where it's going, so as more of the same than the improvements are in the second, third and fourth quarter.

Okay. And one more quick question on the Skarn. If you could just clarify what the next catalyst or steps are on the Skarn. I think what I heard is that you're going to have a resource update midyear, take a look at that, incorporate some of the drilling, there might even be a higher-grade zone. You've spoken to all your potential partners. But given that you're still sort of thinking about mining methods and so on, should we not expect any announcement of a deal with the partner in the near term?

No. I mean, we are not there yet. This is quite a complex deal, obviously. And look, for me personally, I think if I -- if we have internally some clarity on how the partnership could look like by the end of the year, that will be fixed that for us. I don't think so that that's like already packed down legally and with contracts and everything by the end of the year. So I think the next step is really the resource update than the team going and looking at all the different mining methods again and clarify which way we want to go. So we're going to do something smaller, higher grade do we stay at the big size and probably have multiple partners. So there's still all these possibilities. But at the end, a really exciting product. I mean, we found that in our mind, we didn't have to purchase it, didn't have to buy it, it was done with our own drill program. And for me, as a geologist that I can't even recall that anybody found like a world class deposit undermine that is in production for probably about 50 years. So that's a really exciting part of it.

Thanks, Michael. It seems like everyone is saying their name. So [ Garry Shin ] here from CIBC. Maybe, Michael, you kicked off the presentation earlier today by saying that as a silver producer, you need to be in Latin America. And a lot of moving parts, most recently, the election in Mexico. So in your opinion, if you can give us some color in terms of which countries do you believe are trending better? Which countries do you believe are not trending as well?

I have -- I got quite often this question. Can you rank the countries for me? And it's very hard to do because what is it that you're looking at trending better on tax side or trending better on development of projects or infrastructure, et cetera, et cetera. So we're going through, yes...

Like where would you be willing to spend more money?

And again, look, it looks -- that they can't say a lot at what's the size of the property, how long is the mine life, et cetera. So there's definitely look in the past, Argentina has been quite difficult because it has been difficult to take money out. So that wouldn't have been my first country to invest money. But now we have seen quite some changes in Argentina. So I think it's trending in the right direction. It's not there yet for sure but it's definitely trending in the right direction. We had election in Mexico, which I would expect we're going to see probably more of the same than what we have seen under AMLO over the last few years, but the new President didn't take office yet. So we'll see where this is going. But at the end of the day, we are working in so many jurisdictions, and we're looking at such a long mine life in most of our assets and as a company, those elections every 4 year, actually there is elections that were 2 years in most places. So there's always a lot of change -- and I think you have to be very careful. You cannot just change all your plans and programs just because there has been an election or there will be an election coming. That's just a part of life. And I don't really see an issue with that. You noticed that, obviously, I'm talking around your point because I don't want to -- I think it's very hard question to answer in the sense that the countries we are in, it's for several reasons. You saw that there's still other places where you can find silver. It's not only Latin America, and I looked at a few of them, and I stayed away from them because it's places that we -- none of us has experienced and knows them. None of us would speak the language. Our ownership is not that clear, et cetera, et cetera. So we really decided to work in the place not only where the silver is, but in jurisdictions that we know and understand very well. So we feel comfortable in them. And so we already made that decision. And well, maybe you make your investment decisions in Bolivia, a little bit different than in Peru or maybe it turns around again after several years, I think we are comfortable in all the jurisdictions we work because we made that decision already before that where we want to be.

At the back of the room, Matt Murphy from Jefferies. Michael, you haven't used the share buyback tool that much over the last decade and you made reference to it a couple of times. I guess if we look at a good scenario of margin expansion and free cash flow, is that something you'd look to more? Or is it more continue sort of building up the cash balance?

You're right, we haven't used. We used mostly dividend. I wanted to deliver it within the hands of the shareholders, if they want to use that dividend to buy more shares and get more exposure. With that, everybody has different tax situation, depending if we're talking to people in Europe or in North America. And people prefer one or the other tool as to increase their return. So I wanted to leave it with shareholders. It's just this time has been so different when we issued shares to purchase Pan Am at $18, I think it was $18, $20, or something like 14 months ago, then we see our share price, not only ours, but a big disconnect between metal prices and share prices here for a while, and I think it's changing now slowly but we saw that it was kind of a no-brainer obviously, for us to go in and buy back shares at $14 when we just issued them at $18, $20, not even 1.5 years ago, and that was really one of the main reason. I have been in the precious metal space, another huge fan of share buybacks in the past, and let me explain normally, especially as a silver producer in the past, you would trade at when I started with Pan Am, I think at that time, we will probably trade 2x or something like that. So it just doesn't make any sense to go at the buyback your stock. I think that has changed a lot, and there's maybe still a small premium or not, we can discuss. I think people are not always using the right discount rate, I think that's kind of creating a premium that is probably not that real. I don't know. They obviously plan on our metal prices you use. But there has been definitely a window there to buy back shares at a way lower, and I think there will be probably more. And we have the plan in place, and we will be very opportunistic on react right away if there's the opportune time to buy back shares. But in general, you saw our policy, we really like dividends as well.

If I could just follow up on remark, you made earlier about potential sale of some of the royalties that you've generated in the past year or so post Yamana, if those do materialize in the next year or so would you already have something that's internally earmarked for that cash flow? Or would that increase your likelihood of doing some kind of a focused M&A?

I mean when we look at -- when you looked at the 2 bonds we have, and as we know, there's more cash coming in this year. And obviously, at this price, we generate healthy cash flows as well. The big bond $500 million that is due in 2031 at 2.6% doesn't seem -- in my view, doesn't seem to be a big urgency to pay that back. There's the shorter one that I think it matures in mid or so 2027 but nearly twice as much on the interest side. And I think that's a more interesting one to pay back and use some of our cash for that. I think automatically, we will be in a net cash position with those moves and our dividend will increase to shareholders, so there will be more return for shareholders. And we will continue to invest money in our assets. So La Colorada comes to mine, hopefully, a result of the optimization study at Jacobina, hopefully, with an expansion there, maybe Huaron looking at an expansion there in the future. So I think we have very exciting projects where we can use that cash. So that's not an issue. Well, so thanks, everyone on the phone. Thank you, everyone here to come. Thank we have lunch served and the management team will be here for further questions. It was an absolute pleasure to show you Pan American, how it looks after the transaction, after the integration, after really kind of the hard work is done of the transaction. And I think you hopefully agree with me that it's quite a different company, a very exciting company with a very exciting future. And with thank you. Thank you very much for calling in and for coming here. Thanks.