Hochschild Mining Aktie

Good morning, everyone, and welcome to our presentation of our H1 results. Here with me is Eduardo Noriega, our CFO; and Charlie Gordon in London.

Charlie, please, we can go to Page 3. Okay. Well, first, let me say that we have on H1, the strongest ever half-year financials. We have produced 150,000 ounces, a little bit more. Revenues went up 62%, up to $844 million. Our adjusted EBITDA went up 119% to $492 million. The EPS went up 208% to $0.37. Our attributable all-in sustaining cash cost was $2,448 per ounce gold equivalent. We end up with $309 million in cash, and our net cash position is of $51 million. The dividend that we have established following our policy is $0.04, equivalent to $21 million.

What do we have to do with the rest of the second half? Well, Mara Rosa reorganization is on track. We will talk about during this presentation. Royropata, the environmental permit was submitted to the Peruvian government at the date that we plan to do so. We continue working on Monte do Carmo on engineering, and the decision of the FID will be at the end of the year. We continue having a strong ESG metrics, and we have also reviewed our all-in sustaining cash costs for the end of the year, and the new range is between $2,380 to $2,500 per ounce.

Basically, the reasons for this review is being FX in the different countries that we operate and also the price, the gold and silver price that affects directly to worker's profit sharing and royalties, for example. So, I mean, the guidance stay -- in terms of production stay as it was defined at the beginning of the year. And the all-in sustaining cash cost is the figures that I just gave it to you.

Okay. I pass the presentation to Eduardo Noriega to go through the financial results. So Charlie, if you can go to Page 5, please. Go ahead, Eduardo.

Thank you very much, Eduardo, and good morning. So this strong set of financial results, as Eduardo described as a record half-year results are mainly characterized by strong metal prices, but also strong operations and the recovery of our operational capabilities in Brazil. Revenue was up 62%, and it was mainly driven by higher prices, gold and silver prices, that was partially offset by scheduled lower ounces produced.

Cost of sales went up 11%, mainly due to, as I said, scheduled higher tonnage, including waste movement in Mara Rosa to recover our operational capabilities. We also had the impact of higher prices in royalties, workers' profit sharing, export tax in Argentina and other items directly correlated to prices. And also, we saw stronger local currencies in Peru and Brazil and net inflation in Argentina. I would say all those effects are closely tied to the stronger gold and silver prices.

In terms of administrative expenses, the increase is -- versus last year is mainly driven also by the performance of the company prices impacting [ LTIP ], but also worker's profit sharing and bonus provisions.

In others, we recorded a higher adjustment to our mine closure provisions of $6 million and also the impact of higher prices on some items in other expenses like the social contribution that we have in Argentina.

Finally, effective tax rate was 35%, mainly including special mining taxes. And the FX appreciation in Brazil and Argentina -- special mining taxes and royalties are in Peru, sorry, and also the impact of FX movements in Brazil and Argentina. Excluding these effects, our effective tax rate would have been 32%. We didn't record any exceptional items in the first half of the year.

If we can go to the next page, please, Charlie. Here, we have the cash evolution, and I would just like to start saying that the free cash flow was very strong in the year and accounted for around $156 million in total. You can see that the cash that we were able to generate in Inmaculada and San Jose, very strong, the first one at $288 million, the second one $149 million. In Mara Rosa, we used $18 million to fully recover our capabilities and build a thickener -- install a thickener and open the pit. We invested $16 million in brownfield exploration. Our corporate overhead was $30 million.

In terms of tax paid, we paid $129 million from which most of it is -- went to Peru and Argentina. We reduced debt by $80 million. We paid $84 million in dividends, $26 million to Hochschild shareholders and the rest $58 million to our joint venture partner in San Jose, McEwen Mining.

We had temporary movements in working capital negative of $37 million. We executed our care and maintenance and mine closure budgets and invested $70 million, and we paid interest -- net interest of $8 million. In addition to those elements, we invested in Monte do Carmo $9 million to advance in our permitting process in -- sorry, in our engineering process in Royropata, $6 million. In Aclara, we made a capital contribution of $9 million in Q1, and we had other investments in $3 million, mainly the expenses that our -- the Tiernan company invested in other -- in our current project.

So with that, our ending balance of cash and short-term investments was $309 million. Again, a very strong free cash flow generation in the first half of the year. Despite high in temporary movements, like the working capital, and also, I didn't mention, but in the tax line, around $80 million were taxes that belong to the previous year 2025 that were paid in March and in May, note that regularization of 2025 taxes.

If we can go to the next page, please, on cost drivers, in the all-in sustaining cost at the HOC operations was $2,448 per ounce. In Inmaculada, the cost was $1,953 per ounce, and that cost included the impact of the scheduled lower grades, but also the impact of higher prices in workers' profit sharing and other items of the cost. We also had a stronger sol, local currency in Peru, which had an impact. And we had scheduled sustained CapEx increases, mainly to develop new areas and to execute our infill drilling program.

In San Jose, our all-in sustaining cost was $2,944, and those -- that cost includes -- include the impact of lower grades from the border areas that we're mining and also the impact of higher prices in royalties and export tax. We also observed a local net inflation in Argentina. We were expecting more a devaluation, but we saw in this first half, a net inflation of around 7%.

In the case of Mara Rosa, the all-in sustaining cost of $3,551 per ounce is -- includes the -- all the efforts and investment that we have made to recover -- to successfully recover operational capabilities in the country. And also -- in Mara Rosa, we also had the impact of the stronger real versus the U.S. dollar. I would like to highlight that the company has made strong efforts implementing a cost reduction and efficiency projects that has helped us mitigate the impact of general inflation in the mining industry associated to higher metal prices.

Again, a very good performance. And as Eduardo pointed out, just would like to reiterate that the adjustment that we have done to our all-in sustaining cost guidance is mainly associated to higher prices and its direct impact in our all-in sustaining costs and also the impact of stronger FX rates locally and net inflation in Argentina. All the rest of the inflationary pressure have been offset by our efficiency projects.

We can go please to the following page on capital expenditures. We have maintained our guidance of between $210 million and $225 million for the year. In the first half, we invested $105 million in sustaining CapEx on a consolidated basis. In Inmaculada, we invested $69 million, and this number mainly includes mine developments and projects like the expansion of the tailings dam, where we invested $10 million. We also executed our infill drilling campaign and other support CapEx.

In the case of San Jose, our CapEx was $15 million, mainly related to mine developments. And in the case of Mara Rosa, the $21 million invested in the first half is mainly associated to all the programs that we explained before to recover the mine operational capabilities, mainly the thickener, but also the opening of the pit.

On the following page, please, on the balance sheet, we had $309 million in cash and short-term investments, as stated before. And the cash generation of $156 million free cash flow is reflected in our -- the transformation of our net debt position by the end of 2025 of $20 million to a net cash position of $51 million. The interim dividend went up 300% to $0.04 per share. And our net cash to last 12 months EBITDA was minus -- sorry, the net cash was 0.1x, much below our target of between 0.5x and 1.5x net debt to EBITDA in preparation for the investments where we are scheduled to do in Monte do Carmo and Royropata.

Back to you, Eduardo.

Thank you very much. Charlie, we can go to Page 11. Okay. Just to remember what we defined 3 years ago, it was a strategy that pursue the delivery and to reach growth. Yes. Basically, we defined 4 pillars. The first one was a brownfield to bring long-term value, basically expanding our life of mines in each of the sites that we operate, also to be focused on resources that would end up mineable. It's not -- it's important to bring mineable resources and also to continue expanding our land packages in all the countries that we operate to maximize the chances to bring new resources.

On the operational excellence, of course, we have a lean philosophy across the company, looking for cost efficiencies. Also, we would like to go by the book on the project development. That's why we are working on Monte do Carmo at the moment. And of course, it's very important for us to be on the sites and to have a leadership that is present with the people.

On ESG, we need to continue to focus on safety. Safety is the most important thing for us, but of course, as you know, water is something that is very delicate today in the world. So we like to focus on water management. As you know, we -- 3 years ago, we implemented a new community approach, especially in Peru. And -- I mean, the result has been that no blockages or whatsoever during the 3 years, and of course, talent management.

And on the fourth pillar is the disciplined capital allocation, where we are looking to produce capital returns to our shareholders. But of course, through our balance sheet, we need to fund in organic growth so also to be able to pay debt. And of course, if we do any M&A, this M&A has to be value-accretive.

If we can go to the next page, please. Two years ago, also, we classified the assets on core assets and noncore assets. So today, we are focused on our 3 core assets, which is Inmaculada, Mara Rosa and San Jose. We also focus on the projects that we have on the near term, Monte do Carmo and Royropata. And also, we have been working very hard on getting value out of those noncore assets. And the best samples you have is that Tiernan Gold today and Aclara has a value of $300 million and Crespo, Azuca and Acrata was sold.

If we go to the next page, please. As Eduardo Noriega mentioned, we need to be very focused on cost and looking for efficiencies. Today, we have more than 50 initiatives in place to be able to control or to offset the inflation that we are living in the mine industry. And that inflation has been able to set -- I mean, to set off with these initiatives. So the only reason why we have reviewed the new guidance, cost new guidance is because we had the FX effects and also the price-related cost.

In this page, you can see different top initiatives that they have been implementing in each site. We believe that we will be able to achieve the guidance in terms of cost and also in terms of production applying these programs.

Going to Inmaculada on Page 14, please, Charlie. Inmaculada, as you know, is our flagship operation. The guidance in -- for 2026 is between 174,000 to 185,000 ounces of gold, and we are in -- I mean, we are in that path to be able to achieve these results. Sadly, I have to say that we have a contractor fatality in June, but we have done an extensive investigation on what happened and apply all the lessons learned from this situation. Also, I would like to mention that, as you can see, the production profile, it goes a bit down, yes. But I have to say that this is the -- I mean, the results of having higher prices that let you pass through the planned lower grades.

If we go to the Page 15, I mean this is -- Inmaculada has been a fantastic story. We started in Inmaculada back in 2015. And if you remember, we used to have 1 million ounces of gold equivalent. It was 80 million ounces of silver equivalent. In the last 10 years, we have been able to discover 80 veins and bring a total resource of 5.2 million ounces of gold.

What is next in Inmaculada? Well, in Inmaculada, we are trying to do exploration at the south of the deposit. That is something that we haven't tested yet. Also, Minascucho, we just got the permit, and we are waiting for social permitting that's at the northwest of the deposit. We have found at Eduardo Belt some new veins that could be potential resources in the next years. And also, we believe that we will be able to bring around 250,000 ounces this year or inferred resources. But as you can see, I mean, this year, our focus is to try to bring potential resources, potential new areas to be able to expand, again, the resource in Inmaculada.

Going to Page 16, we have Royropata project. We have a great new here and is that we have been able to file the environmental permit with the new Peruvian government. Also, as you know, I mean, we have been able to build this document. We have worked with specialist consultants. We closed our agreements with the communities back in 2024. And today, we believe that we have a year of revision, and we could be seeing the permit granted next year around August. That's the plan.

I mean, the thing about Royropata is that we have 3.3 million ounces of gold equivalent. As you can see, the grade is 412 grams of silver and 1.5 grams of gold. And the average width of the deposit is 13 meters. Also, you know that we have a plant of 3,000 tonnes ready to receive this material at our Selene plant that is in care and maintenance since 2023. So we believe that we have a huge value to bring to the company developing this new project.

And also, if we can go to the next page, you can see that we brought a lot of resources from 2007 to 2025, but between 2027 and 2030, we believe that we can look for new resources to extend Marco vein. Good news for the company is that we just got the semi-detailed permit that let us drill from 40 platforms, and we are going to target the extension of Pallancata vein and also the new areas that we believe that we can bring new resources. So I believe that in a couple of years, we can have a new fantastic asset that will complement the production in Peru with at least 100,000 ounces per year.

If we go to Page 18, you can see our land package between Inmaculada, Pallancata and Selene. It's 152,000 hectares. It's a huge land package. We have been able to add 6 million ounces of gold equivalent to date. And we are using the most advanced exploration tools that are available in the market. The latest thing that we are doing is micro-gravity survey. And we are testing current veins with these models, and we believe that there is a very good correlation. So between this micro-gravity and also the long-hole drilling, we believe that we have the tools to explore all this area and continue bringing resources to our plants at Inmaculada and Selene.

Okay. Going to Page 19, we fly to Brazil to Mara Rosa. Mara Rosa, as you know, it was an asset that we acquired in Brazil, our first asset. During 2025 and 2026, we have been working on a reorganization, and finally, we have finished that. We have solved all the filtering issues. We have a new contractor in place. And our guidance -- we keep our guidance for 2026 between 67,000 and 80,000 ounces.

If we go to the next page, I believe that the most interesting thing is the graph at the bottom of the page, the run-rate performance. And as you can see, in August, we have the crushing, milling and filtering plants nearly to our nameplate capacity. Good news is that we were able to implement the thickener that now is fully commissioned and working in record time in 3 months. And the most important thing is that today, we come with a very competent mining contractor, and we are doing many, many improvements at the mine. So I believe that the second half for Mara Rosa is going to be very good for the company. I mean, we have finished all this work.

If you can go to Page 21, Charlie, please, you can see the open pit there. You can see the filters. You can see the dry stack on the right upper corner of the page. That is, I mean, state-of-the-art in terms of stability and everything. The thickener in place, you see the ore stockpile full of ore and also the filtering plan with the ceilings ready for -- I mean, with the roofs ready for the rainy season.

If we go to Page 22, we can see the Mara Rosa near-mine program to add new resources. As you know -- I mean, the place where Posse, which is Mara Rosa is placed is orogenic trend that extend for 20 kilometers. And we have many mining concessions along this trend. Currently, we are evaluating a structural corridor with 3 structures: Posse, Araras and Speti. We believe that we have promising results from drilling at the north of Posse. I mean, the idea is to continue bringing -- as we establish in our strategy, is continue bringing new resources to current assets.

If we can go to Page 23, we can see Monte do Carmo. Monte do Carmo is our new project in Brazil that we acquired in 2024 for $60 million is 1 million ounces of gold, located in a very mining-friendly Tocantins state, which is north of Goiás. I mean, this project is fully permitted, and I have to say that has an excellent infrastructure in terms of paved highways, hydropower plants, airports, cities, big cities, that I'm sure you will attract very good talent once we start the operation.

Today, we are working on waste rock facilities and pre-stripping engineering and going to detailed engineering. The plant engineering done by Ausenco is nearly finished. Of course, we continue doing some pile drilling. And, of course, we have been able to talk to suppliers in order to talking about the orders for milling, crushing, power lines and filtration to make sure that the lead times of those equipments are ready for us.

We expect to present to the market an updated economic and go to our Board of Directors for FID at the end of this year. And -- I mean, at that point, we will have finished 100% of our basic engineering. And through H1 2027, we will go, I mean, to perform the detailed engineering of all the components.

Basically, we -- once you have a basic engineering, you can apply a fast-track construction strategy developing detailed engineering during construction, that's the idea. But, I mean, I believe that the first thing is to make sure that based on basic engineering, we have a very strong project, even at very conservative prices. That also is established on our strategy to make sure that any M&A has to be value accretive.

I'm going to San Jose. San Jose is doing very well in terms of production. Unfortunately, I mean, inflation has went down in Argentina. Today, we have up to 16%, but unfortunately, we didn't have any devaluation. So, I mean, cost is increasing. And it's incredible how many efficiency projects we have done in order to control those costs. But I mean 16% of cost increase is a lot. So -- I mean, we believe that we will be able to finish the year inside the new ranges that we have presented to the market and, of course, be able to accomplish with our guidance.

In terms of exploration, if we can go to Page 25, I mean, we believe that San Jose has -- still has a lot of potential in terms of new resources. In 2026, we have been drilling Huevos Verdes West in Ayelen and Maura. We are also using microgravity survey that has been completed 70% in areas that we believe that it could have new resources. And of course, also, we are working at the San Jose province where we have some mining properties, and we believe that we can bring more value to the company.

Okay. Changing the subject. If we go to Page 26, I believe that we have -- I mean, we need to talk to the new Peruvian government. As you know, we had elections on July 28, and Keiko Fujimori was appointed as a new President in Peru. I have to say that a new cabinet has been appointed, and I would say that it's technical and investment friendly. At the inaugural address, it was centered basically on restoring stability, confidence and growth. We believe that these early moves that give us signals of continuity and pragmatic market-oriented tone.

On the economic team, we are very happy because Julio Velarde has been reappointed to the Central Bank. You know that the Peruvian sol has been the most established effects in Latin America. And this -- Julio Velarde, who will continue as Governor of the Central Bank, has decided to extend his leadership until 2031.

Also, as a Ministry of Economy, Elmer Cuba has been appointed, and he is a macroeconomist, very well reputed, respected macroeconomist and also former Central Bank Director. We expect to have a growth of 3.5% GDP in 2026. The Mining and Energy Minister, Guillermo Shinno, has been appointed as a minister. He used to be Vice Minister of Mines, and it's a person that has a lot of experience on the private sector also. And I believe that the Fujimori's platform for the -- for our sector is try to formalize mining, tackle illegal mining and also simplify permitting. So I believe that while it's important this news for investors is because -- I mean, we have an improvement sentiment with renewed expectations to have faster permitting, and I'm sure that the country is going to be attracting new investments.

And so -- I mean, I know that permitting remains challenging overall because, I mean, we need to have -- I mean, we need to implement a lot of changes on regulations that the Fujimori's government has presented, but I mean, of course, we have the Royropata permit now with this government, and I believe that that's very good news for the company. I insist that Royropata is -- it could be the new flagship of Hochschild Mining. And we need to continue developing this project.

If we go to Page 27, again, I mean, this slide is always on our presentation is that we believe that we have a valuation opportunity. Now, we have Mara Rosa that I believe that on H2 is going to perform. Inmaculada continues having a very strong performance. And today, Royropata, we have already presented the permit. And Monte do Carmo, we believe that at the end of the year, we are going to be able to present the FID. So with all these news, if we compare ourselves with our peers, we have still a very low value. So that's an opportunity to buy our share, and the expectation is that the value is going to grow in the future.

As a conclusion, well, 2026 H1 has been, as we said, a record performance in terms of financial. I am extremely happy with the execution that we have been able to implement at Mara Rosa in its turnaround. We have very strong Peruvian and Argentinian cash flows. The dividend is going to be $21 million. And also, as we established in our strategy, Tiernan and Aclara's investments now are valued at more than $300 million.

And what is coming is Monte do Carmo project advancing with FID, as I explained. We believe that our brownfield program will deliver new additional ounces. Royropata project to deliver more than 100,000 ounces gold equivalent started production in 2028. And of course, we will be keeping our disciplined capital allocation strategy to make sure that we pay debt, that we have the cash to continue investment and for sure to give returns to our shareholders.

With this, I have finished the presentation. And of course, please, I would like to open the Q&A session. Thank you so much for being here today.

[Operator Instructions] I will now hand over to Charlie Gordon, who will be asking the questions for today.

Thank you very much. The first question is on long-term value. What do you believe is currently the biggest gap between Hochschild's underlying asset value and its market valuation? And what specific actions will management take to close that gap?

Eduardo, you may.

Thank you, Eduardo. I think the most important value catalyst that the company has at this time is, one, the, to prove our execution capacity in Mara Rosa. We have recovered operational capacity in our new asset in Brazil, Mara Rosa. And I think that is coming soon. Then, of course, we have our 2 new advanced projects in Monte do Carmo in Brazil, very close to Mara Rosa and with also a great exploration upside. And finally, a very large silver deposit in Peru, our Royropata project. Once we are able to advance on those projects and prove our operational capacity in Mara Rosa, I think the value -- the perception of the value on the -- of the company will recover fast.

Thank you very much. This next question is on costs and margins. Given the current gold and silver price environment, how confident are you that Hochschild can maintain or improve its AISC performance whilst simultaneously investing heavily in its growth projects?

Thank you, Charlie. Higher price environment is certainly a positive environment for the company given the stronger margins that we are able to achieve. However, higher prices also bring higher cost, not only because of general inflation in the industry, but also because of the direct correlation of prices with royalties, export taxes, workers' profit sharing in Peru.

I think the -- our strong focus on cost efficiencies and cost reductions that we have proven to have to mitigate this general inflation together with the new production coming from 2 excellent assets like Royropata and Monte do Carmo are the catalysts that will help us mitigate inflation even further and reduce our all-in sustaining cost in the future.

Thank you. The next question is, could you provide an update on the fatal contractor accident at Inmaculada in June? What corrective actions have been implemented?

Of course. Well, let me say that safety is our first priority. We want to make sure that every single worker that goes to our operations go back to their home safely. That was a very unfortunate situation. Rodney, our contractor, he was involved in a fatal accident basically because -- I mean, they have to develop a front with a raised climber -- I mean, the explosion didn't go out, and they tried to go up and fix the front. And suddenly, the raise climber cage stopped. Unfortunately, he decided to self-rescue himself and -- using a cable. It was 100 meters raise. So -- I mean, he died in that attempt.

I mean, we have done a full investigation. Clearly, we can improve certain procedures like lockout of these raise climbers, but also it's clear that we need to continue working on behaviors. At the end of the day, based on the engineering of the process, I mean, it was a safe process and the other guy that was with Rodney was rescued, so -- I mean, nothing really happened, but I mean Rodney decided to take this action.

So we believe that we need to continue working on things related to behaviors, mental health, working with a psychologist at the site and make sure that people make the best possible decisions once they are alone. So that's -- I believe that that's the trend that the industry in general has to follow.

Thank you. The next question is, are you seeing any operational issues at Inmaculada or San Jose that investors should be aware of?

No, not for the moment. I mean, Inmaculada is running really well. We are producing 4,100 tonnes per day from the underground mine. I mean, we have the flexibility. We have been doing the development to have different fronts with different grades. And I believe that from now on -- I mean, the second semester is going to be very positive. That's Inmaculada. I don't see any issues.

And at San Jose, the same. I mean, San Jose, the only thing is that we are in the borders of the mineralization, as you know. And of course -- I mean, there is some variability on the grades. But I mean, San Jose has been working also on making their developments make sure that they have the flexibility to reach the annual production goals.

Thank you. The next question is, congratulations on a very strong first half. What are your priorities for the second half? And what actions remain outstanding at Mara Rosa?

Well, basically, the priority for this year is to complete the turnaround at Mara Rosa and make sure that we have a second semester demonstrating to the market that Mara Rosa is working correctly. I would say that we need to continue working with Fagundes, our new contractor, to make sure that they do the pushback at the mine to give us the flexibility to have the different fronts with grades, with high grades that we can process at the plant.

I have to say that the plant is working smoothly, crushing area, milling, leaching, the thickener is in place today. Filtering is also working really well. We have been able to control the dry stack procedure. So today, I believe that the operation is totally stable. We need to continue working at the mine giving us some flexibility to have different fronts with grades to reach the annual guidance that we believe we can do it.

Thank you very much. Next question is, with the share price having risen strongly, what do you think the market is still underestimating about Hochschild?

Well, I can pass that question to Eduardo Noriega.

Thank you, Eduardo. Really, our -- the 2 assets, the 2 projects that we have in front of us, Royropata and Monte do Carmo, are the ones, the assets that will actually transform the company and increase production materially to above 500,000 ounces of gold equivalent ounces per year. Those are the 2 catalysts, as I said before, for the value of the company. Those 2 assets will also prove Hochschild's capacity to build projects on budget, on time, which is something we have done in the past with Inmaculada and that we are prepared to do going forward.

And also, we'll demonstrate our capacity to add further value through exploration. We should recall that the Royropata asset is an asset that was discovered through our brownfield exploration plan and that adds a lot of value to our shareholders. And in the case of Royropata, it was a strategic acquisition that took advantage of a specific situation of the target company right before the cycle of high prices. So I think in general terms, we are very happy with those 2 assets, and we are fully confident that we'll add a lot of value to our shareholders.

Thank you. Next question is on growth and production. With production expected to increase significantly from 2028, what are the key milestones management must achieve over the next 12 to 24 months to deliver that growth on schedule and within budget?

Well, basically, I believe that we need to get to the FID of Monte do Carmo, making sure that we present to the market a strong project, a profitable project at consensus prices. And then, once we got the FID, we should start constructing using our knowhow to make sure that the project is built on time and on budget. That will give us a production on 2028 from Brazil, additional production.

And on the other hand, we have Royropata project. As I said, Royropata is a very big silver project. It's a project that could give us like 13 million, 15 million ounces of silver per year. As you know, we have presented already the permit to the Peruvian government. And the thing we need to do now is to pursue this approval working together with the authorities, and of course, responding to any questions that they might have.

With these 2 projects in place, I mean, we can add like 200,000 ounces to the current level of production and that could be a fantastic result for Hochschild Mining.

Thank you. This is a further question on Monte do Carmo. As construction of Monte do Carmo is expected to begin in 2026, what are the biggest remaining execution risks, particularly around capital costs, permitting and construction time lines? And how are you managing the likely costs and margins of the project?

Well -- I mean, the first step is to finish the basic engineering and make sure that based on basic engineering, there has a margin -- an error margin of plus 10 -- plus/minus 10%. We need to present a robust project that with the level of CapEx and certain sensitivities is still -- I mean, it has to be profitable. Then -- I mean, we need to define the construction strategy. I believe that once you have basic engineering, the level of definition of the engineering is quite advanced. We could use a fast-track strategy developing detailed engineering on certain parts through the construction. And with the right supervision and the right contracts and contractors, that's something that we need to choose. In the next few months, I believe that we can be successful on this project.

Thank you very much. This question is on capital allocation. How are you balancing investment in exploration and new projects with dividends and other shareholder returns? And what conditions would allow you to increase the dividend materially in the coming years?

Thank you, Charlie. Our capital allocation priorities has in the first position the execution of our brownfield exploration plans and programs as well as the development of our advanced projects, Monte do Carmo and Royropata. So that is the main priority for use of funds of the company.

In addition, we announced a couple of years ago a new dividend policy that would allow the company to distribute between 20% and 30% of the attributable free cash flow generated by the company. So I think with that policy we will serve our shareholders with a return for its capital and at the same time will allow us to keep strengthening our balance sheet for future growth opportunities. The policy was recently approved. I think it's valid. It's working well. And at this point, we have no plans to change that policy.

Okay. Next question is brownfield exploration seems to be a big focus. Is this something you will continue to prioritize as you develop your projects? And how much value does the brownfield work generate?

Well, I would say that brownfield is probably the source of value, the most important source of value for the company because at the end is a cheap operation. I mean, the -- to drill in your own property and to bring new ounces is probably the most profitable thing that you can do. So the idea is to extend life of mine in our sites. Of course, it's the same strategy at our projects. And -- I mean, we have demonstrated that through brownfield exploration we can bring projects like Royropata that today counts with 3 million ounces of gold.

Thank you very much. Next one is does the submission of the Royropata EIA give you confidence that the timetable to production is on track?

I believe so. I believe so that the -- with the current government, I believe that we can go ahead and get this permit. And as we announced, also we are planning to start a soft start of Royropata probably next year with the remainder of some tonnage with low grade that we have at the old Pallancata mine. So we can start working with the communities and do a very soft starting, staffing the mine and everything. So I believe that, yes, we can accomplish with the current schedule.

Thank you. Next question. In this metal pricing environment, is it a good time to buy or sell precious metal projects? Are you looking at any opportunities at the moment?

I think that this -- at any part of the cycle, you should be -- we should be disciplined on identifying the right opportunities for the company. And the right opportunities for us means ensuring that we have the high-quality assets that we want to have in our portfolio. So specifically in this part of the cycle, when prices look to be high, but we know there are also projections that gold and silver prices will go even higher, it's a good time, I would say, to -- probably it's more a sellers' market. However, there are several options and alternatives to also secure the new assets, new projects through buying mechanisms or option mechanisms that would allow the mining companies to keep growing. We're permanently looking for opportunities in our portfolio and also looking for other alternatives outside.

Okay. Thank you. And the final question is, once Mara Rosa reaches full production, and it's fully ramped up, do you expect AISC to sustainably fall back below $1,500 an ounce?

Well, I would say that with today's prices, it will be very difficult to go back to $1,500. What we are doing at the moment is with a different consultant is to analyze what will be the optimal cost for an open pit like the one we have in Mara Rosa. So we are going to work with these consultants for the next 2, 3 months, realize what it would be the gaps between the current situation and the ideal one and try to implement all the corrections for Budget 2027.

Thank you very much. That's all the questions we have at the moment. I'm just going to hand it back to Eduardo Landin for any final remarks.

Well, basically, as I said, at the end of the presentation, I believe that we had a very strong H1 with best results, historical results at Hochschild Mining. We expect to have a second half that could be better because Mara Rosa will continue improving, and San Jose and Inmaculada are doing extremely well this year. And I believe that also this year, we will put the first steps for the new 2 projects that will -- I mean, that could nearly double our production from 2028 onwards.

I believe that Royropata discovery has been a fantastic asset that we brought through our brownfield exploration and could bring many years of very profitable production. And also, Monte do Carmo could be our second operation, and based on the lesson learned that we have -- that we have got from Mara Rosa, I'm sure it will be a fantastic operation and very profitable, too. So -- I mean, our idea as management is to increase -- continue increasing production. And of course, once we reach that level of production to have the life of mine to continue producing for many years. Thank you very much.

Thank you to the management team for joining us today. That concludes the Hochschild Mining retail investor presentation. Please take a moment to complete a short survey following this event. A recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.

Hello, and welcome to Hochschild Mining's 2026 Interim Results Presentation. [Operator Instructions]

I would now like to hand the call over to Eduardo Landin, Hochschild Mining's CEO, to begin. Please go ahead, sir.

Good morning, everyone, and welcome to our presentation of our H1 results. Here with me is Eduardo Noriega, our CFO; and Charlie Gordon in London. Charlie, please, if we can go to Page 3.

Okay. Well, first, let me say that we have on H1, the strongest ever half year financials. We have produced 150,000 ounces a little bit more. Revenues went up 62%, up to $844 million. Our adjusted EBITDA went up 119% to $492 million. The EPS went up 208% to $0.37. Our attributable all-in sustaining cash cost was 2,448 per ounce gold equivalent. We end up with $309 million in cash and our net cash position is of $51 million. The dividend that we have established following our policy is $0.04, equivalent to $21 million.

What do we have to do with the rest of the second half? Well, Mara Rosa reorganization is on track. We will talk about during this presentation. Royropata, the environmental permit was submitted to the Peruvian government at the day that we plan to do so. We continue working on the Monte de Carmo on engineering and the decision of the FID will be at the end of the year. We continue having a strong ESG metrics, and we have also reviewed our all-in sustaining cash costs for the end of the year, and the new range is between $2,380 8 to $2,500 per ounce.

Basically, the reasons for this review is being FX in the different countries that we operate. and also the price, the gold and silver price that affect directly to word profit sharing and royalties, for example. So I mean the guidance stays in terms of production stay as it was defined at the beginning of the year. And the all-in sustaining cash cost is the figures that I just gave it to you.

Okay. I pass the presentation to Eduardo Noriega to go through the financial results. So Charlie, if you can go on to Page 5, please.

Go ahead, Eduardo.

Thank you very much, Eduardo, and good morning. So this strong set of financial results, as Eduardo described as a record half year results are mainly characterized by strong metal prices, but also strong operations and the recovery of our operational capabilities in Brazil Revenue was up 62%, and it was mainly driven by higher prices, gold and silver prices that was partially offset by scheduled lower houses produced.

Cost of sales went up 11%, mainly due to, as I said, schedule higher tonnage, including waste movement in Mara Rosa to recover our operational capabilities. We also had the impact of higher prices in royalties, workers profit-sharing, export tax in Argentina and other items directly correlated to prices. And also, we saw stronger local currencies in Peru and Brazil and net inflation in Argentina. I would say all those effects are closely tied to the stronger gold and silver prices.

In terms of administrative expenses, the increase is versus last year is mainly driven also by the performance of the company prices impacting LP, but also over to profit sharing and bonus provisions. In others, we recorded a higher adjustment to our mine closure provisions of $6 million and also the impact of higher prices on some items in other expenses like the social contribution that we have in Argentina.

Finally, tax rate, the effective tax rate was 35%, mainly including special mining taxes. And the FX appreciation in Brazil and Argentina, special mining taxes and royalties are in Peru, sorry, and also the impact of FX movements in Brazil and Argentina. Excluding these effects, our effective tax rate would have been 32%. We didn't record any exceptional items in the first half of the year.

If we can go to the next page, please, Charlie. Here, we have a cash evolution, and I would just like to start saying that the free cash flow was very strong in the year and account for around $16 million. in total. You can see the cash that we were able to generate in Inmaculada and San Jose, very strong, the first 1 at $288 million, a second $149 million. In Mara Rosa, we used $18 million to fully recover our capabilities and build a thickener, install a thickener and open the beat. We invested $16 million in brownfield exploration. Our corporate overhead was $30 million.

In terms of tax paid, we paid $129 million from which most of it is in gold went to Peru and Argentina. We reduced debt by $80 million. We paid $84 million in dividends, $26 million to Hochschild shareholders and the rest $58 million to our joint venture partner in San Jose, McEwen mine. We had temporary movements in working capital negative of $37 million. We executed our current maintenance and enclosure budgets, but invested $17 million we paid net interest of $8 million.

In addition to these elements, we invested in Mote de Carlo, $9 million in our permitting process -- sorry, in our engineering process. In Royropata $6 million. In Aclara, we made a capital of $9 million in Q1, and we had other investments in $3 million, mainly the expenses that our -- the Tiernan company investing in the organ projects. So with that, our ending balance of cash and short-term investments was $309 million.

Again, a very strong free cash flow generation in the first half of the year despite having temporary movements like the working capital and also I didn't mention, but in the tax line, around $80 million were taxes that belong to the previous year 2025 that were paid in March and in May, the regularization of the tax.

If we can go to the next page, please, on cost drivers in the all-in sustaining cost at the hog operation was $ 2,448 per ounce. In Inmaculada, the cost was $1,983 per ounce, and that cost included the impact of the scheduled lower grades, but also the impact of higher prices in worker profit sharing and other items of the cost. We also had a stronger solid local currency in Peru, which had an impact and we had scheduled sustained CapEx increases mainly to develop new areas and do execute our infill drilling program.

In San Jose, our all-in sustaining cost was $2,944 -- and those -- that cost include the impact of lower grades from the border areas that we're mining and also the impact of higher prices in royalties and export taxes. We also observed a local net inflation -- local net inflation in Argentina, we were expecting more a devaluation, but we saw in this first half, a net inflation of around 7%. In the case of Mara Rosa, the all-in sustaining cost of $3,551 per ounce is -- includes the -- all the efforts and investment that we have made to recover to successfully recover operational capabilities in the country.

And also in Mara Rosa, we also had the impact of the stronger real versus the U.S. dollar. I would like to highlight that the company has made strong efforts implementing a cost reduction and efficiency projects that has helped us mitigate the impact of general inflation in the mining industry associated to higher metal prices.

Again, a very good performance. And as Eduardo pointed out, I just would like to reiterate that the adjustment that we have done to our values between in cost guidance is mainly associated to higher prices and the direct impact in our all sustaining costs and also the impact of stronger FX rates locally and net inflation in Argentina. All the rest of the inflationary pressure have been offset by our efficiency projects. We can go please to the following page on capital expenditures. We have maintained our guidance of between $210 million and $225 million for the year. In the first half, we invested $105 million in sustaining CapEx on a consolidated basis.

In Inmaculada, we invested $69 million, and this number mainly include mine developments and projects and the expansion of the tailings done where we invested $10 million. We also executed our infill drilling campaign and other support CapEx. In the case of San Jose, our CapEx was $5 million, mainly related to mine development. And in the case of Mara Rosa, the $21 million invested in the first half is mainly associated to all the programs that we explained before to recover the mine operational capability is mainly the thickener but also the opening of the pit.

On the following page, please, on the balance sheet. We had $309 million in cash and short-term investments, as stated before, -- and the cash generation of $156 million free cash flow is reflected in our -- the transformation of our position by the end of $25 million or $20 million to a net cash position of $51 million.

The interim dividend went up 300% to $0.04 per share. And our net cash to last 12 months EBITDA was minus -- sorry, the net cash was 0.1x much below our target of between 5x and 1.5x net debt to EBITDA, in preparation for the investments where we are scheduled to do in Monte do Carmo and Royropata. Back to you Eduardo.

Thank you very much. Charlie, we can go to Page 11. Okay. Just to remember, what we defined 3 years ago, it was a strategy that pursue the delivery and to reach the growth. Basically, we defined 4 pillars. The first one was brownfield to bring long-term value, basically expanding our life of mines in each of the sites that we operate. also to be focused on resources that would end up mineable, it's not -- it's important to bring mineable resources. -- and also to continue expanding our land packages in all the countries that we operate to maximize the chances to bring new resources.

On the operational excellence, of course, we have a lean philosophy across the company, looking for cost efficiencies -- also would like to go by the book on the project development. That's why we are working on Monterrat the moment. And of course, it's very important for us to be on the sites and to have a leadership that is present with the people. On ESC, we need to continue to focus on safety. Safety is the most important thing for us -- but of course, as you know, water is something that is very delicate today in the world. So we like to focus on water management. As you know, we -- 3 years ago, we implemented a new community approach, especially in Peru. I mean the result has been that no blockages or whatsoever during the 3 years. And of course, talent management.

And on the Fourth pillar is the disciplined capital allocation where we are looking to produce capital returns to our shareholders. But of course, through our balance sheet, we need to fund in organic growth -- so also to be able to pay debt. And of course, if we do any M&A, this money has to be value accretive.

If we can go to the next page, please. Two years ago, also, we classified the assets on core assets and noncore assets. So today, we are focused on our 3 core assets, which is Inmaculada, Mara Rosa and San Jose. We also focus on the projects that we have on the near term, Monte do Carmo, Royropata, and also, we have been working very hard on getting value out of those noncore assets. And the best samples you have is the Tierman Gold today and Aclara has a value of $300 million and Crespo, Azuca and Arcata was sold.

If we go to the next page, please. As Eduardo Noriega mentioned, we need to be very focused on cost and looking for efficiencies Today, we have more than 50 initiatives in place to be able to control or to offset the inflation that we are living in the mine industry. And that inflation has been able to set -- I mean, to set off with these initiatives. So the only reason why we have reviewed the new guidance caused new guidance is because without the effects and also the price related cost -- in this page, you can see different top initiatives that they have been implementing in each site. We believe that we will be able to achieve the guidance in terms of cost and also in terms of production applying these programs.

Going to Inmaculada, on Page 14, please. Charlie, Inmaculada, as you know, is our flagship operation. The guidance in -- for 2026 is between 134, -- 174,000 to 185,000 ounces of gold -- and we are -- I mean, we are in that path to be able to achieve these results. Sadly, I have to say that we have a contractor fatality in June, but we have done an extensive investigation on what happened and apply all the lesson learned from this situation.

Also, I would like to mention that, as you can see, the production profile, it goes a bit down, yes. But I have to say that this is the -- I mean, the results of having higher prices that led you pass through the planned lower grades. If we go to the Page 15, I mean this is -- Inmaculada been a fantastic story. We started Inmaculada back in 2015. And if you remember, we used to have 1 million ounces of gold equivalent it was 80 million ounces of silver equivalent. In the last 10 years, we have been able to discover an veins and bring a total resource of 5.2 million ounces of gold.

What is next in Inmaculada? Well, Inmaculada, we are trying to do exploration at the south of the deposit. That is something that we haven't yet. Also, Minascucho, we just got the permit, and we are waiting for social permitting that's at the northwest of the deposit.

We have found Eduardo well, some new pains that could be potential resources in the next years. And also, we believe that we will be able to bring around 250,000 ounces this year or infer resources. But as you can see, I mean, this year, our focus is to try to bring potential resources, potential new areas to be able to expand again the resource Inmaculada.

Going to Page 16, we have Royropata project. We have a great new here and is that we have been able to file the environmental permit with the new Peruvian government. Also, as you know, I mean, we have been able to build this document. We have worked with specialist consultants. We closed our agreements with the communities back in 2024. And to be, we believe that we have a year of revision we will be seeing the permit granted next year around AAs. That's the plan.

I mean the thing about Royropata is that we have 3.3 million ounces of gold equivalent. As you can see, the grade is 412 grams of silver and 1.5 grams of gold. And the average width of the deposit is 30 meters. Also, you know that we have a plan of 3,000 tonnes ready to receive this material at our Selene plant that is incurred maintenance since 2023. So we believe that we have a huge value to bring to the company, developing this new project.

And also if we can go to the next page, you can see that we brought a lot of resources from 2007 to 2025, but between 2027 and 2030, we believe that we can look for new resources to extend Marco vein. Good news for the company. It is that we just got the semi-retail permit that let us drill from 40 platforms and we are going to target the extension of Pallancata vein and also the new areas that we believe that we can bring new resources. So I believe that -- in a couple of years, we can have a new fantastic asset that will complement the production in Peru with at least 100,000 ounces per year.

If we go to Page 18, you can see our land package between Inmaculada and Pallancata and Selene. It's 152,000 hectares is a huge land package. We have been able to add 6 million ounces of coal equivalent to date. And we are using the most advanced exploration tools that are available in the market. The latest thing that we are doing is micro gravity survey. We are testing current veins with these models, and we believe that there is a very good correlation. So between this micro gravity and also the long hauls drilling, we believe that we have the tools to explore all this area and continue bringing resources to our plants and Inmaculada and Selene.

Okay. Going to Page 19. We fly to Brazil to Mara Rosa. Mara Rosa, as you know, it was an asset that we acquired in Brazil, our first asset. During 2025 and 2026, we have been working on a reorganization and finally, we have finished that. We have sold all the filtering issues. We have a new contractor in place. And our guidance, we keep our guidance for 2026, between 67,000 and 80,000 ounces. If we go to the next page, I believe that the most interesting thing is the graph at the bottom of the page, the run rate performance.

And as you can see, in August, we have the crushing in and filtering plants billing to our nameplate capacity. Good news is that we were able to implement the sticker that now is fully commissioned and working in record time in 3 months. And the most important thing is that today, we come with a very competent mining contractor, and we are doing many, many improvements at the mine. So I believe that the second half of Mara Rosa going to be very good for the company. I mean, we have finished all this work.

If we can go to Page 21, Charlie, please. You can see the open pit there. You can see the filters. You can see the dry stack on the right upper corner of the page. That is, I mean, state-of-the-art in terms of stability and everything. The thickener in place, you see the ore stockpile full of water and also the filtering plant with their ceilings ready for -- I mean with the roofs ready for the rainy season.

If we go to Page 22, we can see the Mara Rosa near-mine program to add new resources. As you know, I mean, the place where Posse, which is Mara Rosa, is placed is a organic trend that extends for 20 kilometers and we have many mining concessions along this trend. Currently, we are evaluating a structural corridor with 3 structures, Posse, Araras and Speti. And we believe that we have promising results from drilling at the North of Posse. I mean the idea is to continue bringing as we establish in our strategy is continue bringing new resources to current assets.

If we can go to Page 23, we can see Monte do Carmo. Monte do Carmo is our new project in Brazil that we acquired in 2024 for $60 million is 1 million ounces of gold. It's located in a very mining-friendly Tocantins state, which is north of Goias. I mean this project is fully permitted. And I have to say that has an excellent infrastructure in terms of paid highways, hydropower plants, airports, cities, big cities, that I'm sure you will attract very good talent once we start the operation.

Today, we are working on waste rock facilities are pre-stripping engineering, going to detail engineering. The plant engineering done by Ausenco is nearly finished. Of course, we continue doing some pile drilling -- and of course, we have been able to talk to suppliers in order to talking about the orders for mining, crushing, power lines and filtration -- to make sure that the lead times of those equipments are ready for us.

We expect to present to the market and update the economic and go to our Board of Directors for FID at the end of this year. And I mean, at that point, we will have finished 100% of our basic engineering. And through H1 2027, we will go I mean, to perform the detail engineering of all the components. Basically, once you have a basic engineering you can apply a fast construction strategy, developing detailed engineering during construction that idea.

But I mean, I really do the first thing is to make sure that based on basic engineering, we have a very strong project even at very conservative prices. That also does also is established on our strategy to make sure that any M&A has to be value accretive. And in San Jose, San Jose is doing very well in terms of production. Unfortunately, I mean, inflation has went down in Argentina. Today, we have up to 16 -- but unfortunately, we didn't have any valuation. So I mean, cost is increasing. And it's incredible how many efficiency projects we have done in order to control those costs. But I mean 16% of cost increase is a lot. So I mean, we believe that we will be able to finish the year inside the new ranges that we have presented to the market. And of course, be able to accomplish with our guidance.

In terms of exploration, if we can go to Page 25, I mean we believe that San Jose has -- still has a lot of potential in terms of new resources. In 2026, we have been drilling in spares West in Ayelen and Maura. We are also doing microgravity survey that has been complete, 70% in areas that we believe that we could have new resources. And of course, also, we are working at the San Jose province where we have some mining properties, and we believe that we can bring more value to the content.

Okay. Changing the subject. If we go to Page 26, I believe that we have -- I mean we talk with the new Peruvian government. As you know, we have elections on July 28, and Keiko Fujimori was appointed as a new president in Peru. I have to say that a new cabinet has been a point, and I would say that it's technical and investment friendly.

At the inaugural address, [indiscernible] Center basically on restoring stability, confidence and growth, we believe that these early moves that give us signals of continuity and pragmatic market orientated tonne. On the economic team, we are very happy because Julio Velarde has been reappointed to the Central Bank. You know that the Peruvian sol has been the most establish effects in Latin America. This -- Julio Velarde will continue as a governor of the Central Bank has decided to extend his leadership until 2031.

Also, as a ministry of economy, Elmer Cuba has been a appoint. He is a macro economies, very well-reputed respected macroeconomies and also former Central Bank Director. We expect to have a growth of 3.5% GDP in 2026. I -- the mining and energy minister, Guillermo Shinno, has been appointed as a minister. He used to be Vice Minister of Mines -- and it's a person that has a lot of experience on the private sector also. And I believe that the Fujimori platform for the -- for our sector is try to formalize mining, tackle illegal mining and also simplify permitting. So I believe that why it's important this news for investors is because I mean we have an improvement sentiment we renew expectations to have faster permitting.

I'm sure that the country is going to be attracting new investments. And so I mean, I know that permitting remains challenging overall because, I mean, we need to have -- I mean, we need to implement a lot of changes on regulations that the Fujimori's government has presented. But I mean, of course, we have the Royropata pyramid now with this government, and I believe that that's very good news for the company. I insist that Royropata is -- it could be the new flagship of Hochschild mining, and we need to continue developing this project.

If we go to Page 27, again, I mean, this slide is always on our presentation is that we believe that we have a valuation opportunity -- now we have Mara Rosa that I believe that OSI is going to perform. I macular continues having a very strong performance -- and today, Royropata, we have already presented the permit and Monte do Carmo, we believe that at the end of the year, we are going to be able to present the FID.

So with all these news, if we compare ourselves with our peers, we have still a very low value. So that's an opportunity to buy our share -- and the expectation is that the value is going to grow in the future.

If we go into Page 27, as a conclusion, well, 2026 H1 has been as we said, a record performance in terms of financial I'm extremely happy with the execution that we have been able to implement at Mara Rosa in its turnaround. We have very strong Peruvian and Argentina in cash flows -- the dividend is going to be $21 million. And also, as we established in our strategy, children and car investments now are valued at more than $300 million.

I mean, what is coming is Monte Cabo project advancing with FID, as I explained, we believe that our brownfield program will deliver new additional ounces Road project to deliver more than 100,000 ounces gold equivalent, started production in 2028. And of course, we will be keeping our disciplined capital allocation strategy to make sure that we pay debt that we have the cash to continue investment for sure to give returns to our shareholders.

With this, I have finished the presentation. And of course, please I would like to open the Q&A session. Thank you so much for being here today.

[Operator Instructions] My first question is from Richard Hatch from Berenberg.

Just I've just got 3 financial questions for Eduardo. Please, the first one is just Eduardo, on the administrative costs, they picked up because of bonus provisions, what should we expect those costs [indiscernible] as we go into the second half of the year? And that's the first one.

Second one is just on the working capital. So you see working capital over H1 in of about $45 million. I just wonder if you could help us how we should think about working capital in H2? And then thirdly, just on cash tax, what kind of cash tax number should we be modeling for H2 '26?

Richard, on admin expenses, I would expect a same amount for the second half. I mean I would say that the most important impact here is workers' profit sharing. You know that in Peru, around 8% of the profit before income tax is shared among employees. So that has had a rate impact on admin expenses. And then the rest of the items are pretty much -- should be pretty much similar to what we saw in H1 this year.

In terms of working capital, certainly towards the end of the year, we typically see an improvement on working capital. You see that we had a negative movement of $37 million in the slide that I presented -- so I think that, that amount should be offset in the next -- in the second half of the year. And finally, on -- I don't know -- I could not hear you very well on the tax. But I'll take the tax payments that we had in the first as was were $129 million from this $129 million, part of it around $70 million were regularization of 2025 taxes in the offline taxes executed in March and May this year. So it's included in here.

For the second half, we may see, excluding those $70 million, we should see a similar amount, probably a little bit higher because there are more prepayments that are made in the second half versus the second in the second half versus the first half, also pretty much a similar number, a little bit higher, excluding the $70 million that I pointed out.

[Operator Instructions] We have a question from Ian Russouw from Barclays.

Yes, a few questions from me. Can you guys hear me?

Very well, yes.

Perfect. Yes. Just firstly, on the dividend. Obviously, you said you paid the dividend in line with your policy, but if I look at your apply the policy that you, I guess, showed the reconciliation of the full year results. If I apply that to H1 numbers, I get dividend sort of per share significantly higher than what you declared. So how should I think about the interim dividend? It doesn't seem like you exactly applied your policy for that versus, I guess, what you did for the full year?

And then the second question, just on Monte to Karma. It seems like your -- there's obviously been a bit of a delay in the time line for the FID over the last couple of years, I guess, more than a 12-month delay, but you've never really changed the first production time lines, Eduardo, you just mentioned, I guess, perhaps fast-tracking construction. But how should we think about that and the risks of that first production figure? And I guess if you are only doing detail engineering later than previous plan, does that sort of introduce additional risks for the project and for the scope and time lines, et cetera?

Okay. Well, basically, what we need to build modular, I believe that is between 18 months and 24 months, yes. So I mean, once you have basic engineering, you can go and hire contractors. That's usually the use back in 2015 at Inmaculada. I mean, I did it with 60% basic engineering. In this case, we do have 100% basic engineering. Of course, we can fast track all the single work I mean, all the civil detail engineering.

And also, I have said that we are talking with the suppliers of the main equipment also to make sure that the lead times are in line with our expectations. So I believe that taking into account all these numbers and all the data, we could be able to start production at the end of 2028. That's the situation.

Thank you, Eduardo. Let me address in questions on thank you for being that question, Ian. So our policies and annual policy, we said that we were going to distribute between 20% and 30% of the attributable free cash flow. So basically, you need to deduct the non-attributable portion of the free cash flow of Argentina, basically, in summary, that is what this is about.

And when looking at the interim dividend, we -- what you should do is we're not expecting to pay to apply that same policy to the first half -- we're actually looking at the overall -- the entire year modeling for different scenarios on prices, prices could stay will go up, -- so we save some room for that situation. So that's how we discuss the H1 numbers. And of course, we listen to market and see where we are and try to meet both objectives.

The first one, important one, I want to follow the policy, the annual policy. And the second 1 is pay event that we would protect us from an expected situation in the second half. And on -- but we don't apply the policy to the first half. It's more a smaller proportion of the full leading expected is paid as interim dividend.

Okay. All right. Yes, I guess it just creates some uncertainty about what people should forecast for the interim dividend, but understood. And then just coming back to the cost guidance. Obviously, the costs have gone up quite materially, particularly at Mara Rosa versus, I guess, previous expectations, you've already talked about pricing and FX having the most -- sort of the biggest impact?

How should we think about if we strip out these sort of one-off impacts prices and FX, what should we think of Mara Rosa on a sort of normalized basis once it reaches full production I guess that's the first question. And then secondly, just what are you assuming for prices and FX in your -- in the updated guidance for the rest of the year?

Thank you, Ian. So the revised all-in sustaining cost, as I said, includes the higher prices and FX local inflation. -- from the increase around 60% has to do with higher prices at a total level and 40% has to do with FX large local inflation in Argentina. As you will see, our guidance for the year in Mara Rosa is lower than what we had in H1.

Our H1 number, as I said, include around $90 million of CapEx that had to do with bringing Mana Rosa back into stable production, which we have achieved by the end of -- by the end of June, -- and of course, we're seeing that better -- that good performance in July and August. We don't provide a guidance for Mara Rosa in the long term because we are actually fine-tuning our efficiency measures and the is super focused on after recovering production just making sure that we can to all the efficiencies that we can in Mara Rosa.

I would say, Ian, to let's wait until the guidance for the next year for you to have a better idea on what would be more the run rate of Mara Rosa. But certainly by applying the full year guidance to your equation, you will see that the cost is improving materially in the second half, and we expect that to improve even more in the coming years. .

Okay. All right. Maybe just on that sort of ramp-up in the useful, I guess, that slide was quite ectin terms of the run rates over the months. What's assumed for the rest of the year in terms of throughput? Are you assuming this 6,300 tonnes per day or 7,000 tonnes per day within that guidance?

Yes. I would believe that we will be able to run rate at 7,000 tonnes per day at least.

That range. Yes. Okay. But what -- and the range of the sort of bottom end of the top end of the production guidance, I mean, is that just flexing the throughput rates and grades? How should we think about that?

4 No. I mean, really, the range is going to depend on the grades that we will be able to reach at the bottom of the pit. But we want to make sure that we do it in a good partner to make sure that we don't take material from 2027. It is very important to keep the planning that we have decided to have in place. So I believe that I mean what we are trying to do is to be as close as possible to the upper end of the guidance.

There are currently no further questions in the phone queue. With this, I'd like to hand the call back over to Charles for any webcast questions.

Thanks very much. The first question is -- what are the key changes that you have already seen and that you expect in the second half of the year with the new mining contractors at Mara Rosa. And my second question is, are you optimistic about potential mine life extensions at San Jose what do you need to sustain mine operations for longer?

Well, the first question is that I met personally Fagundes, that is the mining contractor, and I believe that we reach 1 of the best contractors in Brazil. They're extremely responsible and very focused on safety, which is very important for us. The run rate for Fagundes, I mean, they have reached 70,000 tonnes per day -- and I believe that they could reach like 75 -- up to 80,000 tonnes per day some days.

So we have to we believe that we could recover part of the material that has not been reached during the first half. So I don't know if that answers your question, but I believe that we are in very good hands, I have to say. I mean in terms of San Jose, San Jose has a very strong mining properties. You know that all the mining property between Cerro Negro and San Jose, is a social property.

We believe that with the new tools that we are using for exploration, we will be able to continue adding resources at San Jose. I mean, let's wait for the exploration results at the end of the year, but we have some promising results that they are published on the H1 report.

Go ahead, Charlie.

Thank you very much. The next one is you mentioned submitting the environmental impact assessment to the government for Royropata, what are the next steps now? And when would you expect to begin operations?

4 I mean with the environmental impact study approval has different steps and different phases during this year that we just studied. The first step was to submit the whole document and upload it to the system. And that's something that was done before the 22nd of August. Now we have a first period with the admissibility that it takes like between 4 and 6 weeks. So we have the admissibility response from the government.

And then there is some sessions that we need to have with the communities that the government will be present to make sure that the communities are -- they agree with the impact study assessment. What we believe is that we have been extremely professional working with very strong consultants to make sure that we have presented a very solid document.

So together with the good relationship that we have with the communities and have to be very insist on this matter. I mean we have been able to change the way that we have a relationship with the communities Today, what we are planning is to integrate the community on asset contractors as an employees. I believe that they are happy with this new solution for them. So -- that's the steps. I mean, we have this what we call Tier social layer with them and then continue with approval, we will have some questions from the authority and what we expect is to have the approval in a year.

Okay. And the last question here at the moment, it looks like. It looks like you're doing well getting on top of issues in our erosion. Is it fair to expect a full run rate for 2027? And what might that level be?

I mean -- what we believe is that with the current prices, I mean, the prices stay as they are today, we believe that the plan could be between 7,000 tons per day at its maximum -- of course, we will start -- I mean, once the plan is totally established, we will start doing some bottleneck studies to -- in order to maximize production at our plants.

But at the end, once you reach the Mason capacity, the production depends on the rates. And the grade depends on your cutoff and the cutoff depends on the cost and the price. So I mean, we have already studied the budget for 2027. And of course, we will try to maximize production, but making sure that level of production is not a one-off. What we want is to establish a level of production that will continue for several years, and we believe that at current prices, with current rates it could be around 80,000 tonnes per -- 80,000 ounces per year.

Okay. Thank you very much. That's all the questions there are from the webcast. Can I go back to the phone lines to check there anymore t?

Yes, we have a follow-up question from Ian Rossouw from Barclays.

Yes, just a couple of follow-ups. So firstly, just obviously, there was a bit of catch-up payment at, I guess, cash up from Argentina and you paid a $58 million minority dividend to McEwen. How should we -- I guess, first question is, what is the cash position currently in Argentina? And then how should we think about sort of minority dividends in the second half?

Thank you, Ian. The cash position is around is more than $100 million. In fact, it's around $110 million. There are the -- so -- and the idea is to keep a strong balance sheet in Argentina to execute on our exploration plans. As Eduardo pointed out, the geological potential of San Jose is huge, and we want to make sure we execute on those plans. We certainly once we certainly would like to -- we will distribute the excess of cash to the shareholders. But that will probably happen more towards the early next year versus when we finalized the reporting period or accounting period or 2026.

Okay. Okay. So we should not expect another big one in the second half?

No.

Okay. All right. And sorry, can you guys still hear me?

Yes.

Just a follow-up. I guess it's a question I asked in February or March at the results. Just obviously, you participated in a placing at Aclara in the period and obviously followed your sort of proportionate shareholding for the $10 million placing, what's the plan going forward for the stake? And if there are more equity raisings at Aclara, would you consider sort of following your proportional stake again?

Yes. Thank you very much. So we know the Aclara team is working on different strategies to finance the development of their projects, and they are very capable and that they have been very successful in doing so in the past. I think from what we have discussed with them, they are more looking on debt facilities and on asking for more money. But we will see. They have not finalized that exercise, and we'll see to see -- we'll see how they come back to us.

As Eduardo pointed out, our -- our core assets are our operating mines, and we -- we're focused on gold and silver. We like the exposure that we have at Aclara, but we're mainly focused on [indiscernible]. So we need to wait and see how the development of the Aclara team move along, and we'll see from there. But at this point, we're not considering investing more in Aclara.

Okay. And then maybe just the same question on Penn Gold. Are there any other sort of movements in cash balances we can expect in the second half that might impact the consolidated numbers?

No. Thank you for that question, Ian. No, there is no expected here at is well funded to advance a project closer to feasibility and permitting stage -- so that is the work that the team led by [indiscernible] is executing. We are very happy with the exposure that we have in car we have a bill a lot of value for our shareholders and that he is doing a fantastic job. That's depsoit. Sorry sorry, Dinara, sorry. That deposit is one of the largest gold deposits in the region. And we have a 69% stage there. So there is a lot of value for shareholders. and a lot of work, but also a lot of work to be done, as I said, from a technical perspective to move closer to a feasibility and permitting stage, but no need for additional capital contribution.

Okay. But what cost or CapEx will you consolidate from them in the second half? Should we expect a similar number in H1.

I mean you can look at the first half appeal the multiplier by 2, that's our rough -- our rough estimate is not an official guidance because we would like to move as fast as we can in all the studies that we have. It will depend on the capacity from vendors, contractors and the team to execute No, but I think having an approach that I just described...

Might be reasonable.

Thank you. With this, I'd like to hand the call back over to Eduardo Landin for any additional or closing remarks. Over to you, sir.

Well, thank you very much for being here this morning. As we said, we presented a very strong set of results for each one. Let me say something that I feel very proud. The Hochschild Mining has been named Best Place to Work in each of our operations and also at the corporate office. So we believe that one of our main I mean, the main thing in the company is the talent, we feel very happy to receiving this award. So thank you so much.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Hello, and welcome to the Hochschild Mining Q2 Production Results Presentation. [Operator Instructions]. I'd like to turn the call over to your host today, Mr. Eduardo Landin. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today to discuss our second quarter production results. I'm joined today by Eduardo Noriega, our CFO; and Charlie Gordon, our Head of Investor Relations.

Before we turn to our operational performance, I'd like to briefly comment on the broader investment environment in Peru. We welcome the more constructive outlook that has emerged in recent months. While there is still work to be done, a more stable and predictable environment has the potential to strengthen investors' confidence and support long-term economic growth. Of course, we remain committed to investing responsibility, developing high-quality mining projects and creating lasting value for our shareholders, our employees and for our host communities and the country.

Going to the production. Overall, we delivered another solid quarter. Attributable production was just 76,000 gold equivalent ounces, taking first half production to almost 152 gold equivalent ounces. Inmaculada performed well again. They are very good. San Jose delivered a strong quarter than Q1, and we are continuing to make encouraging progress at Mara Rosa as we execute our operational turnaround. As a result, we remain on track to achieve our 2026 production guidance of between 300,000 and 328,000 gold equivalent ounces.

Starting with Inmaculada, the operation produced just over 45,000 gold equivalent ounces, broadly in line with our expectations. Tonnage was slightly ahead of plan, although it was offset by a moderate lower grades. Overall, the operation continued to perform well and remain on track to meet its full year guidance.

Before I move on, I'd like to acknowledge the tragic accident that occurred at Inmaculada in June. Our thoughts remain with the families, friends and colleagues of our contractor. Following the incident, we temporarily suspended activities in the operation while conducted a comprehensive investigation. The findings have now been shared across all our operations, and we are implementing the lesson learned to further strength our safety culture and reduce the risk of similar events in the future.

In Argentina, San Jose also had a strong quarter, producing almost 32,000 gold equivalent ounces. A slightly higher than forecast tonnage was partially offset also by a slightly lower grades. And the operation remains on track to achieve its annual production target.

Turning to Mara Rosa. We continue to make encouraging progress with our operational turnaround. Production improved from the first quarter, supported by a better plant stability and early benefit of transitioning into the new mining contractor, Fagundes. Our focus remains on improving mining sequence, accelerating waste movement and increasing access to higher grade ore while reducing haulage distances and strengthening ore control. We are also continuing to improve filtration availability and water management.

During the quarter, we began commissioning the new tailings thickener, which we expect will improve processing stability, water management and tailing disposal. Alongside that, our mining contractor has continued to strengthen site leadership and operating routines. And together, these initiatives should support further operational improvements during the second half of the year.

Turning briefly to costs. Attributable all-in costs are currently tracking around 5% to 10% above our original guidance range. That's mainly due to the impact of higher commodity price on royalties, workers' profit sharing and selling expenses, together with a strong-than-expected local currencies across our operational jurisdictions and continued cost inflation in Argentina. We will provide a further update with our half year results in August and revised guidance if necessary.

Looking at our growth projects. Monte do Carmo continued to advance during the quarter and as we progress engineering and permitting activities. We are still on track to bring the project forward for an investment decision in the second half of the year. At Royropata, we are also making good progress and expect to submit the revised environmental impact assessment to the Peruvian authorities in the coming weeks. Our brownfield exploration program also gathered momentum during the quarter with encouraging initial drilling results across all the 3 operations, reinforcing the strength of our exploration pipeline.

Finally, our balance sheet remains in a very strong position. We ended the June with approximately $309 million of cash and net cash position of around $51 million. That's significant improvement from the end of the last year and reflect the strong cash generation from our operations despite paying our final dividend and distributions to our San Jose joint venture partner during the period.

With that, I'd be happy to take any of your questions. Thank you very much.

[Operator Instructions] And our first question today is coming from Marina Calero of RBC Capital Markets.

You mentioned that your costs are tracking 5% to 10% ahead of guidance. Can you help us break that down between what is driven by the gold and silver prices and what is purely inflation?

Thank you, Marina. This is Eduardo Noriega. So that increase is purely explained by higher metal prices impacting royalties and workers' profit sharing and export taxes in Argentina. So it's purely because of that. There's also a minor impact due to the strengthening of the local currencies, the Peruvian peso, the Brazilian real. And there is some net inflation in Argentina. But all that -- those elements are also a result of the macroeconomic environment, which are pushing -- that are having gold and silver prices stronger than what we anticipated when we did our guidance.

And then I have a second question on Royropata. You mentioned the change in the Peruvian administration at the beginning of the call. Does -- do you see any potential changes to scope in Royropata? Or is -- do you see any potential for permitting fast tracking or any other scope changes to the project?

Well, let me explain what is the next steps. We are going to present the document in the next few weeks -- in a couple of weeks, probably. I mean, the official time to review this document is like 90 days, working days. Typically, it takes like around a year to review a full environmental study, which is a document that it contains like 16,000 pages. So I believe that the new government will be willing to do it as soon as possible, but it will really depend on the complexity and the team of CENACE.

So at this stance since the new government is not in place, I wouldn't give any improvement -- I wouldn't consider any improvements on the time. The actual time line that we have established and we mentioned to the market is a year for the approval and then another 9 to 12 months for the operational permits that are next to the environmental permits.

Now we'll go to Daniel Major of UBS.

So a couple of questions. Just first on the costs, you mentioned 5% to 10% above the guided range. Is that 5% to 10% above $2,320, the top end of the range or the middle of the range? Like how should we calibrate that?

Well, I would calibrate it, putting 10% -- 5% to 10% in both numbers, yes, that would be increase. It's like a new range increased by 5% to 10%.

Okay. So it's not necessarily 5% to 10% above the top end. Okay. And I mean -- yes, you mentioned it's predominantly driven by royalties and FX. Can you remind us the -- particularly the gold, silver price assumptions embedded in your budget to generate that range?

Yes, Eduardo Noriega will answer that question.

Thank you, Daniel. The prices that we used to provide the guidance in early this year was $3,200 for gold and $34 for silver. So in light of where prices are today, you can tell that those -- the increase in prices do have an impact in our costs.

Okay. And the same for FX, what was the FX?

No. The FX impact is smaller than what we have in prices, but it's also there. We were expecting to have a flat Brazilian real and Peruvian sol, but we're seeing an appreciation of above 5%. So there is an impact from that as well.

Okay. But yes, the currency, I guess, has moved in the other direction to some degree towards the end of the period. Okay. That makes sense. All right. Yes. And then you mentioned expect an investment decision on Monte do Carmo towards the end of the year. Can you give us a steer about how the CapEx on that is tracking? My memory is that the scope is kind of reasonably similar to Mara Rosa, but I guess, yes, clearly, CapEx is going to be higher. Is it like $300 million handle like sensible sort of level?

Well, yes, of course. I mean, the difference between Mara Rosa and Monte do Carmo is not the plan. The plan is -- I mean, we are designing a very similar plan with very small changes. I mean, we're incorporating a SAG mill in Monte do Carmo. We believe that, that's a very good change. And also, we are incorporating the tailings thickener and all the improvements that we have been able to review as Mara Rosa. I mean the good -- the big difference between Mara Rosa and Monte do Carmo is the pre-stripping that we need to do it before we mine at Monte do Carmo.

So there is an important amount of money there. I mean, I would say between $50 million and $80 million pre-stripping that we need to incorporate into the CapEx. I would say that, I mean, considering that it's going to be more than $300 million is a good assumption. But it's too early for me to give you a final number because we are reviewing, and we expect to have 100% of basic engineering in December.

We are repeating some of the engineering. Remember that we did some studies, but we are not complete. And we believe that we need to be very, very responsible on this. We want to present to our Board of Directors a bulletproof project and also demonstrate that our turnaround in Mara Rosa is totally complete. So with both things, we believe that we are going to be in a very strong position to bring value to shareholders.

Okay. Yes. So from a perspective of the changes you mentioned, like overall processing capacity and scope, we should think about a similar but larger pre-strip and factored in a number of the additional improvements you've already made at Mara Rosa. Okay. That's clear. And then just maybe the final one, it just follows up on Marina's question. So when you say you've got roughly a year for the approval of the [ Minera ] at Royropata and then another 12 -- 9 to 12 months the operational permit, where would that take us to in terms of FID, your best guess at this point?

I mean FID, it could be, I would say, very -- I mean, I don't know if we will have a formal FID for Royropata. I mean, Royropata is a project that -- I mean we have -- in August, we have a Board of Directors meeting and probably, I mean, we could decide to go ahead. But I mean, basically, at Royropata, today, the permit is the main activity. And then it's basically development in the mine. So I mean, I don't know if we are going to have a formal FID. I believe that in terms of Royropata is something that we have already decided.

Sorry, maybe I'll rephrase that. When would you expect to be fully permitted then and...

Fully permitted, I expect to have -- I mean, the environmental permit in a year, okay, from today a year. And then we will have between 9 and 12 months, different permits, different operational permits that it's not the environmental agency, the one that gives to you, it's the mining ministry, the one that gives you the operational permits. And it's considered much easier. The operational permits, they are much easier in general terms.

[Operator Instructions] We'll go to Jasper Mainwaring of Berenberg.

Just following up on Monte do Carmo. Do you still expect the all-in sustaining cost to be sub sort of $1,000 an ounce, which maybe seems a bit ambitious given where costs are at the moment? Or should we be expecting costs much like the CapEx maybe to be higher than this with the updated economics in H2?

Well, I would that it's too early to give a figure. Remember that -- I mean, we work -- when we gave that guidance, I mean, that cost guidance, we were working based on a feasibility study that was done by the seller. Today, I believe that the best thing is to finish basic engineering and construct a new cost that for sure is going to be very competitive, but we need to work it out. It's too early to give a guidance today.

Okay. Great. And then on Royropata as well, what operational grades can you guide to? Should we be sort of thinking about it as being 350 grams per tonne silver, about 1.5 gram per tonne gold or higher or lower than that?

Well, that's really measured and indicated resources, the grades that you just mentioned. I mean, we are converting all the resources today, measured and indicated. I believe that, I mean, we would consider -- I mean, if you are considering 600 grams of silver and 1.5 grams of gold, I would consider a dilution between, I don't know, 20% and 30% to calculate the final grade that it will go to the plant. Because when we -- I mean, later in the year, we'll start calculating reserves together with a detailed engineering that we are doing on the mining operations to have a base planning document for the next 15 years.

Okay. Got you. And if I could just fit in one more. On Mara Rosa, do you expect the plant to hit the full run rate in H2? Or what run rate should we sort of be thinking about in H2? And then should we expect it, therefore, to run at, I think it's 2.65 million tonnes per annum in 2027, which is that profile going forward?

I mean, for sure, in 2027, I expect to have 2.5 million tonnes per year. I mean this year, what I can -- I have been in Mara Rosa, Monte do Carmo and [indiscernible] last week. And I was impressed the improvements that we have been able to put together in Mara Rosa. I could tell you that the last few days that the thickener is totally in place. We are working at a rate of above 7,000 tonnes per day on the whole plant. The only thing is the mine. The mine is today the bottleneck. We got a new contractor, as I mentioned. And they are ramping up very quickly. So I expect in a month or a couple of months to be in full production, reaching the full capacity of the mine.

[Operator Instructions] Mr. Landin, we have no further questions at this time, sir. I'll turn the call back over to you for any additional or closing remarks. Thank you.

Okay. Thank you very much first to being here. Let me say that we are very positive around our operations. I mean, Inmaculada has been performed very strong. I'm sure it will finish the year also very strong. I am very impressed also on improvements that we have been able to put together in Mara Rosa. Mara Rosa, today, is a very stable operation. As I said, I mean, the mine is the bottleneck today, and we have a very strong contractor that is -- has a lot of operational discipline and safety in his top of mind. And San Jose is also doing very well.

On top of that, we have promising results on brownfield. And I'm sure that we will bring more resources to the table from now until the end of the year. And probably the most important thing is that we are progressing very quickly on the new 2 projects. So I believe that there is a huge opportunity for Hochschild to produce -- to increase production in the next few years, and it reach much bigger value, much higher value than has today. So it's -- I believe that it's a very good opportunity for all of us. Thank you very much.

Thank you, sir. Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may now disconnect. Have a good day, and goodbye.

Thank you.

Hello, and welcome to Hochschild Q1 2026 Results. [Operator Instructions] I would now like to hand the call over to Eduardo Landin. Please go ahead.

Good morning, and hello, and welcome to our conference call to discuss our first quarter production results. I'm here visiting our San Jose mine in Argentina with Eduardo Noriega, our CFO; and in London is Charlie Gordon, our Head of Investor Relations. In the first quarter of 2026, we have delivered a total production of almost 76,000 gold equivalent ounces with a solid performance from Inmaculada and a rising contribution from Mara Rosa in Brazil, meaning that we are currently on track to meet our production and cost guidance for 2026 of 300,000 to 328,000 gold equivalent ounces at a cost of $2,157 to $2,320 per gold equivalent ounce, respectively. Inmaculada production was just over 48,000 gold equivalent ounces and in line with our plan. A slightly higher tonnage was partially offset by lower grades, reflecting higher prices during this Q and the resulting reduction in cut-off grades compared with Q1 2025.

Here at San Jose, tonnage was higher than in the first quarter of 2025, although silver grades were slightly lower. It is consistent with the normal variability we see when mining in the vein border zones as well as the impact of higher prices on the cut-off grades. Production totaled just under 27,000 gold equivalent ounces and overall, the mine remains on track to achieve its annual target. Turning to Mara Rosa. The turnaround program continued to make steady progress with the operation delivering improvements in plant performance, a stronger maintenance execution and higher daily run rate across the circuit. We also continue to advance key operational initiatives, including the mining contractor replacement, which was 75% mobilized by the end of March. At the same time, the new tailings thickener remained on schedule with all major components now on site and field work preassembly well underway.

We expect commissioning to begin at the end of this month with operation starting by the end of May 2026. Overall production at Mara Rosa for the quarter was 13,500 gold equivalent ounces, which was only slightly below expectations and this mainly reflects equipment availability and the impact of the rainy season of both tonnage and rates. Work at our Monte Do Carmo project continued during the quarter with some good progress across detailed engineering, equipment selection, permitting and legal work, and environmental studies. We also completed geotechnical and geomechanical studies, continued to build out our project team and progressed key procurement packages, including power, camp, earthwork and pre-stripping the contracts.

The company continue to expect the project to be submitted to the Board for the final approval on the third quarter of this year. Also on Royropata, we have made very good progress. And basically, we were waiting for the results of the Peruvian elections to deliver the document to the new authorities to start the evaluation of the environmental impact study of Royropata. The 2026 brownfield exploration program has commenced across all sites during the period with early results pending, we will report the first set of results in the Q2 production statement in July 2026.

Turning to the balance sheet. We have cash and cash equivalents of around $412 million, which give us a net cash position of approximately $95 million, which is a pleasing improvement from the $23 million net debt position that we report at the end of 2025. I should point out that this cash position includes $230 million held in Argentina, of which $84 million is invested in financial instruments to mitigate inflation and devaluation risk. $35 million is also held on German gold to support development of Volcan project. With that, I would like to open for questions. Thank you very much.

[Operator Instructions] Question is from Richard Hatch from Berenberg.

Just a couple of questions. The first one, just on that cash, of which $230 million gross is held in Argentina. Is there a plan to try and dividend out some of that cash to [top co] just so that you can fund projects like Monte Do Carmo? Or can you just talk a little bit about that? And then just secondly, how confident are you with your current cost guidance just in light of the inflationary environment? And sorry, last one, just any comments around the Peruvian election? Should we be worried about anything or consider anything? Or is it just business as usual?

Well, let me start with the third question, which is the Peruvian elections. As you know, we have the first round on the Peruvian elections. And unfortunately, we don't have a final result yet. It has been some problems with the first round at Lima at poll colleges. Some of them did not open and some of them opened late. So I mean, there have been many questions about these elections. At the moment, I mean, the counting is around 94% and Keiko Fujimori will pass to the second round. There is a difference between the Sanchez, which is the left-wing candidate and Lopez Aliaga which is the right-wing candidate of only 13,000 votes nationwide.

So I mean there is some rumors that it could be -- I mean, that it might repeat the elections in Lima based on the situation that happened on Sunday. I believe that in any case, I mean, elections will be between for sure Keiko, and I believe that based on the situation in Lima, Rafael Lopez Aliaga has a very good chance to pass to the second round. That's my comment about election. We have to be patient. In any case, as I say always, I mean, Hochschild Mining has been working in Peru for many, many years, like 100 years. And so I mean, we are ready for any environment, of course. Eduardo will continue with the rest of the questions.

Thank you, Eduardo, and thank you, Richard, for your question. Regarding the cash that we have in Argentina, the $230 million from that total amount, which is consolidated at the Hochschild level, 49% is for our partner in Argentina, McEwen and -- but yes, we are -- we have plans to deal in that cash out so that we can fund our projects, but also reduce -- keep reducing debt that we have at a corporate level. So yes, there is a plan for that, and there are mechanisms that we are evaluating right now to execute. But it clearly shows the strong cash generation capacity that all our assets have, including our asset in Argentina, which, as you know, is a high-grade asset with a lot of geological potential.

In terms of the all-in sustaining cost guidance, we are keeping our guidance, Richard, despite the fact that, as you know, gold and silver prices are higher than what we projected when we provided the guidance -- when we produced our budget by the end of last year. So despite that fact and also the fact that oil prices are going up and there is some inflation in the industry, we are working around efficiency projects and other initiatives to mitigate the inflation and pressure from vendors that we're seeing in the market. So that's what we have on that question.

We'll now take our next question from Felicity Robson from Bank of America.

Silver grades at San Jose were lower in the quarter, obviously, in line with the change in the cost of grade. How can we expect grades to develop here over the course of the year, please?

Thank you for the question. Yes, exactly. I mean there is 2 variables that affect the grades at San Jose. One is the cut-off grade, as you said, but also the variability that we are finding on the areas where we are mining. And you know that we are on the border of the mineralization. What we expect with grades, I mean, to have enough grades for sure to accomplish with the guidance of San Jose, around between 60,000 and 65,000 ounces of gold equivalent for the year attributable to Hochschild.

[Operator Instructions] Our next question is from Alfonso Salazar from Scotiabank.

Actually, the question that I have regarding the elections in Peru has been answered. But just a follow-up on that side. Can you remind us what is the political agenda regarding mining from Lopez Aliaga and Sanchez? And the second question that I have is -- also regarding the Argentina's dividend. And what is -- are you planning to maintain operations? Or is it possible to maintain operations there for longer? And what is the outlook for San Jose now that you are in Argentina as we speak regarding the opportunities to maintain operations there given the high gold price that we have today?

Look, I mean the position of Lopez Aliaga and Keiko Fujimori in terms of the mining industry, it is more or less the same. Probably during the campaign Rafael Lopez Aliaga has expressed some -- I mean he has been talking about the concessions because it was something that was on the table and he wanted to make a difference. But at the end, I mean, I believe that Rafael Lopez Aliaga is a guy that will respect current laws and the current constitution. In the case of Sanchez, it's different. I mean Sanchez is a very left-wing candidate. And of course, I mean, he's talking about nationalized companies in every single industry, I mean as well as Castillo did during the campaign.

I don't know if in the remote possibility that he will become President of Peru, I'm not sure if he will be able to do so because at the end, I mean, Peru is a country that leads from exportation of the mining industry. And I mean it will be a very, very big mistake. So social wise, it will be very, very complicated. In terms of the San Jose, I mean, the availability of mineral, I mean, at the moment, we have something like 2 years life of mine. We continue having a lot of brownfield exploration. We're having some results with new areas close to the current mineralization. And I mean, if there is any comments regarding dividends, I will pass the question to Eduardo Noriega that is here with me.

Thank you very much. Certainly, we are producing strongly from San Jose. There's a lot of geological potential, and we are -- we continue finding new minerals. I have to say that historically, San Jose has always had like 3, 4 years of life of mine, but we have been able to increase the life of mine on an annual basis. So that -- and we do have a plan to execute on that. In terms of the cash that we have, I think it's a good show of how strong the cash generation capacity of our asset in Argentina has, and the task that we have in front of us now is how we use that cash to distribute to our -- to San Jose shareholders, Hochschild Mining and McEwen mining for us to continue our investments either in Argentina or in other jurisdictions.

[Operator Instructions] We will now take our next question from Marina Calero from RBC.

I joined the Q&A late, so apologies if this has already been asked. I wanted to ask a question on Monte Do Carmo. It looks like you are ready to move on with the project. Can you give us an indication on when you could start construction? And based on that, when do you expect to see first production?

Thanks, Marina, for the question. I mean, as I said, we are planning to finalize all the studies during Q2 2026, and be ready to present to the Board for final decision on construction. I mean if we got the approval, and I believe that it's a very profitable project at current prices, we will go ahead with several contracts, and we expect to start right away construction -- construction in terms of a contractor for the pre-stripping and for sure, all the movements that we will need to do before the first rainy season that would occur December 2026. In terms of the time to build this project, the first schedule that has been presented to me is like 24 months from July onwards. So I believe that we could see some initial production from Q3 2028.

Okay. That's good to hear. And I understand you have a lot of potential in the pipeline Monte Do Carmo, Royropata, but what other optionality do you have in your portfolio? Could we see Pallancata come back into production if the current spot price remains where it is?

Well, I mean the optionality for Hochschild is Royropata, the deposit. As you know, we have 3 million ounces of gold equivalent, most of them silver with high grades and very good vein width. So we believe that the optionality is there. But of course, we need to get a new permit, and that's something that we believe that it will be received around August 2027, if the government takes a year of evaluating the document that we are going to present right now.

And of course, after July -- August 2027, we will have like a year of another different permits, operation permits and development, et cetera, to start production more or less at the same time of Monte Do Carmo, I would say. In terms of the possibility to start up Pallancata, we have done an initial evaluation. We have some sources, but I mean it's not that -- I mean it's not that profitable because we are talking about less than 100 grams silver equivalent. So I wouldn't like to make any expectations on the possibility of restart Pallancata because we haven't finalized that analysis. It will be something very positive to try to start up at a small rate because it could be a very nice way to do a ramp-up for the whole unit. But it's something that we are analyzing right now. And probably we could give more information on Q2 in July.

If I may add, Eduardo, to the optionality on Royropata and Monte Do Carmo that we have. I just would like to highlight that we also -- as you may recall, we have a 69% stake in Tiernan Gold, the company that owns the Volcan project in the Maricunga belt in Chile, which has more than -- or around 11 million gold equivalent ounces. It's a company that is performing very well since we executed the reverse takeover in December last year. And the other optionality that we have is not related to precious metals, but you may recall that we have a 20% stake in Aclara, the rare earth project that has a project in Brazil and a project in Chile, and that has also made significant advances in the treatment or the processing of rare earth to produce final products, mainly the magnet in the U.S. So that the performance of the Aclara is also doing very well.

And we have a follow-up question from Richard Hatch from Berenberg.

Just 2 follow-ups, sorry. First one is just for Eduardo Noriega. Just on the net cash number, just to confirm, you haven't paid your significant tax payment yet, right? That's Q2. So we would expect to see a chunky tax payment come out in the second quarter. Is that correct? And then the second one is just on strategy, just more broadly, like you've got good growth options internally, whether it's Royropata or Monte Do Carmo. I'm just wondering whether you're looking for other opportunities to think about the next project further down the line? Or do you think you're comfortable with the portfolio as it stands and you don't need to do any more to build out?

Thank you, Richard. On the tax payments and the cash balance that we have, I have to say that the 2025 tax payments in Peru occurred already in March. So that was already executed. There is -- the final payment of the 2025 taxes in San Jose is coming -- sorry, in Argentina is coming in the second quarter. So part of that temporary payment already occurred, the one in Peru and the other one in Argentina is coming in the second quarter. And the other question in terms of optionality we do believe that there is -- we're fully focused on permitting of Royropata and advancing on the engineering works in Monte Do Carmo. I think you had another question on that front. Could you please...

No, it's just more whether you needed to fill out the -- I don't think you necessarily need to, but whether you're open to filling out the project pipeline with other projects similar to Monte Do Carmo or Mara Rosa. And sorry, just to be 100% clear, like I think when you spoke at the earnings call in earlier this year, we kind of suggested that there would be something like a -- at least we had the feeling that it would be like $150 million cash tax out payment in the first half of the year. Is that still the case?

So I'm just kind of -- if that's -- because if that is the case, then I'm kind of surprised that your cash balance is as strong as it is. Is there anything that we need to be thinking about there? Or is it just simply just showing the market that you're generating a lot of cash from these assets at this point in the cycle?

There is a portion of those -- of the pending taxes that will be paid in Q2, the ones in Argentina. So it's around $50 million that is pending. The rest is already in our cash balance. And regarding growth options, aside from being focused on our 2 growth projects, we also are working with our corporate development team to look for alternatives in the region. So that process is an ongoing process. We monitor all the opportunities. Although I have to say we don't have anything -- we're not -- we're in a preliminary phase identifying opportunities.

There are currently no further questions. With this, I'd like to hand the call back over to Eduardo for closing remarks.

What I would like to say to finalize this call is that we have demonstrated in Q1 that we are delivering the production that we said at the beginning of the year, which is very positive. And also that we are advancing on the 2 projects that I believe that the real optionality that Hochschild have for investors. Monte Do Carmo is a real opportunity to have a second operation in Brazil, producing around between 8,000, 9,000 -- I mean 80,000 to 90,000 ounces per year with good all-in sustaining cost and also Royropata is our new flagship. So I believe that we are doing everything in our ability to make sure that those projects become a reality, and they will become part of our portfolio to make sure that from 2028 onwards, we could add this production to our portfolio. That's it. Thank you so much for your time and for being here at the call. Thank you.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Okay. Good morning, everyone. Welcome to Hochschild financial presentation 2025 results. We have very good news today. Let me go to, first of all, the disclaimer, and that's the basically takeaways. As I said, 2025 has been a very good year with the strongest ever financials. We produced 311,000 ounces. The revenue went up 28%. The EBITDA went up 39%, up to nearly $600 million.

Our attributable all-in sustaining cash cost was $2,138 per ounce, and we end up the year with $317 million in cash. Our net debt was $23 million. Dividend is going to be 5p. And we have had a significant amount of resources, 1.7 million ounces gold equivalent, especially at Inmaculada and also at Royropata. What's going on in 2026? I mean we will continue developing our projects. Mara Rosa, all the turnaround project is on track. The management transition is also complete. We have a new COO in place, and he's choosing his team in Brazil. Royropata MEIA is on schedule. I mean, we have been working with Ausenco to make sure that the document will be ready in July to be presented to the new government in Peru. As you know, we have elections.

Then, of course, we will continue with the non-core assets to be monetized. And strong ESG metrics continue, especially I'm very -- I feel very proud by our safety performance. We closed the year with 0.97 frequency rate. And also Tiernan Gold and Aclara is -- I mean, we did the RTO and Aclara continue with the permitting processes in Brazil and in Chile and also working on the vertical integration.

If we go to the next page, 2.5 years ago, we said that we will be focusing in our precious metal assets and the focus for these 2.5 years has been at Inmaculada, Mara Rosa and San Jose. Also, we said that we will be focused on developing the new 2 projects, Monte do Carmo that we acquired and Royropata is a brownfield discovery and also delivering on non-core assets that we said that they were non-core and we would do something about it.

I mean what we have done is monetize Tiernan Gold, Aclara for sure and Crespo, Azuca and Arcata that we sold. Going to the ESG performance. As I said, we feel extremely proud with our safety track record. It's a world level -- world-class level achievement. Also on the environmental performance, we are near perfect score. As you can see on the graph below, I mean, we have been always maintaining above 5.5 out of 6. We feel also very proud that we have increased the local workforce, I mean, giving a job to people that lives close to our sites, 66%.

And also in terms of energy, we have been able to pass all the energy contract to renewable. That's very important for us. And finally, we have included -- we have been included on the FTSE4Good Index series, which is also very good for the company. Going to the financials, I would like to introduce Eduardo Noriega that will help with the presentation. Thank you, Eduardo. Go ahead.

Thank you, and good morning. As Eduardo said, we have a strong set of financial results during 2025, mainly driven by the strong metal prices. As you can see, our revenue was more than $1.2 billion, attributable net profit at $159.6 million, EPS at $0.31 and adjusted EBITDA very strong as well at $584 million. In terms of revenue, as I said, the revenue was higher, mainly explained by strong metal prices. As you can see, gold price was 37% higher than last year and silver price was 54% higher.

The strong metal price conditions partially offset -- more than offset the challenges that we had in Mara Rosa, which are being resolved. I have to say that in terms of production in 2025, we -- in Argentina, we're producing 100% concentrates to benefit from the strong commercial conditions of concentrates compared to dore. Cost of sales were 12% higher than last year's, mainly associated to higher production volumes, both at San Jose and Inmaculada. And we also had the fixed cost at San Jose during the stoppage period and during the ramp-up period.

Finally, higher prices had an impact on royalties and workers' profit sharing, mainly in Peru. In terms of admin expenses, we had higher expenses, mainly associated to higher professional fees associated to transactions we closed during the year, mainly the RTO of Tiernan, and we also had higher workers' profit sharing associated to higher prices. Under others, net, we had higher net expenses mainly associated to the elimination of a benefit that we had in Argentina, an export benefit that was eliminated in April 2025.

And in 2024, we had it for the full year, explained around $13 million. And we also had adjustments to our mine closure provisions for $9 million, aligned with our plans and the execution of the closing plans of our projects. Net interest -- net interest expenses were higher, mainly associated to 2 noncash events: one, the change in fair value of Monte do Carmo's royalties agreement with Sprott, which had an impact of $7.5 million and the unrealized fair value losses of Tiernan warrants issued in the capital raise of $7.4 million. As I said, both noncash effects.

The effective tax rate for the period was 39%, but from which around 6% were represented the special mining tax and the royalties in Peru that, as you know, are calculated as a percentage of our operating margin, operating income, but is booked in the income tax line. We also had withholding taxes of that represented a 2% increase in the effective tax rate. Before these impacts, our effective income tax rate would have been 31%.

Finally, under exceptional items, we had a net impact of around $47 million, mainly associated to the reversal of impairments in Aclara, Volcan, and San Jose. So none of our assets have impairments now, and that had a positive impact in the exceptional column of $79 million pretax. And we also had a negative exceptional impact of $26 million on the revenue due to the rolled-forward of some of the hedges that we had from H2 2025 to H1 2028. So that mark-to-market of those hedges passed through the P&L in 2025 under exceptional items.

In terms of cash evolution, our cash increased materially from $97 million to $317 million, mainly driven by the strong cash generation capacity of our Inmaculada mine, $315 million. We had $162 million generated in San Jose. We used $30 million in Mara Rosa to recover from production challenges. We had $33 million invested in exploration programs, $57 million of corporate expenses. And then after the blue column, we had taxes paid for $36 million. current maintenance and closure plans for $34 million. We paid interest net of $15 million. We had a temporary increase of indebtedness of $24 million. We paid $17 million in dividends, mainly the $10 million final dividend of 2024 paid in June and $5 million of interim dividend of 2025 paid in September.

And we had a temporary negative change in working capital of $54 million, mainly associated to our decision to produce more concentrate, which has more -- higher DPO and also a temporary accumulation of stockpiles in Mara Rosa and Inmaculada as part of our production plans. Monte do Carmo, we invested $30 million from which $13.5 million is a buydown option of the Sprott agreement at Monte do Carmo. And also, we had the early settlement of the deferred consideration at Monte do Carmo of $9.75 million.

That's included in the $30 million. We invested $7 million in Royropata. We made a capital injection in Aclara to retain our 20% share of $8 million. And of course, we executed the RTO of Tiernan, which brought $40 million of additional cash to the group at a consolidated level. In terms of all-in sustaining cost, our all-in sustaining cost, I don't know if I -- our all-in sustaining cost was $2,138 per gold equivalent ounce in 2025, as expected and as guided, higher than what the all-in sustaining cost that we had in 2024.

If we look at each of the mines in Inmaculada, we had lower grades, partially offset by higher processed tonnage. We also had the impact of prices in our workers' profit sharing and commercial discounts. In the case of San Jose, our margin -- sorry, our production plan was in the border areas of the deposit, giving us lower grades also as anticipated. We had the impact again of higher prices in royalties and export taxes. And as I said in the P&L explanation, we -- in 2024, we had the FX export program that was suspended in April 2025.

In the case of Mara Rosa, the all-in sustaining cost was a result of lower production volumes and grades and of course, the CapEx that we incurred during the year to address the operational challenges that we had. Capital expenditures, we had $203 million of sustained CapEx in our 3 mines. In Inmaculada, we're including mine development costs, mainly $80 million, tailings dam expansion of $17 million incurred during the period. We also invested in our reverse osmosis plant to dewater the tailings dam of Inmaculada.

In San Jose, we had mine development cost of $26 million, drilling of $3 million and mine raised borrowing for $2 million. In Mara Rosa, we invested in our plant and filter improvements for $16 million, and we also invested at the mine, as you can see in the slide, stripping programs and sustaining CapEx, both combined $17 million.

In terms of the balance sheet, we have a very strong -- we ended up with a strong balance sheet with $317 million in cash and net debt of $23 million. We continue deleveraging the company with a net debt-to-EBITDA ratio at 0.04x, well below the threshold that we have -- that we indicated in the -- throughout the cycle. The company is well positioned to invest in our growth projects, Monte do Carmo and Royropata. And as I said before, this strong balance sheet will give us the opportunity to do so. We -- as you are aware, we also -- we announced our dividend policy a couple of years ago, and this is the first year in which we are executing the policy at a variable rate.

Our dividend policy considers distributing between 20% and 30% of the attributable cash flow of the company with a minimum annual dividend of $10 million, subject to be -- to have a net debt-to-EBITDA ratio of below 1.5x. We paid $5 million of interim dividend in October 2025, and we are now declaring a final dividend of $0.05 per share, which accounts for $26 million, taking the total dividend paid for the period to $31 million.

We're showing in this slide the dividend calculation. And as you can see, our total free cash flow is $193 million and the nonattributable piece of that free cash flow mainly associated to Argentina, which also generated a strong cash of $54 million, bringing the attributable free cash flow to $139 million. Back to you, Eduardo, for the strategy section.

Thank you, Eduardo. This is a picture of the Brazilian team. Cash is in the middle. We go to the next page. This slide is just to remember the strategy that we designed during -- I mean, back in August 2023. We said that brownfield will be a very important pillar. We believe that it is a long-term value. Discovering new resources is where the value -- the maximum value is for the mining business. And through brownfield, we extend the life of mine of our existing assets. So it's important that also brownfield is very well focused on mineable resources.

I mean there is this tendency of bringing resources, but at the end of the day, you want very good quality resources. Then the second pillar is the operational efficiency. Something very important for us is to be on site. I mean the leadership has to be visiting the sites, and we have been doing that for the past 2.5 years. Also lean philosophy across the company, cost efficiencies through programs. And of course, at the time to develop the new projects is to know how to develop on time and on budget.

ESG, world-class safety. As I said, we feel very proud. Water management focus is very important. We implemented a new community approach, and I have to say that we didn't have any blockages or any problem with communities for nearly 3 years. That's very important. Talent management with very good objectives in place. And of course, all our KPIs, ESG KPIs in place for 2030. Finally, the fourth pillar is the disciplined capital allocation, funding organic growth through our balance sheet, of course, pay the debt if we can, capital returns through our policy -- dividend policy.

And if we do any M&A, it has to be value accretive as we have demonstrated in Mara Rosa and also at Monte do Carmo. As I said, brownfield is very important, and we have demonstrated that during 2025, where we have had 1.7 million ounces of gold equivalent. Out of 1.7 million, 1.1 million has been discovered in Royropata. And of course, as you can see, we made in 2024, some projections of resources to be discovered from 2024 to 2030. But today, on 2026, at the beginning of 2026, we have 4.5 million ounces in resources in our base resources.

And as you can see, the performance in Inmaculada, we brought 0.5 million ounces in -- as I said, in Royropata, 1.1 million. And also in San Jose, we have been able to replace partially the -- I mean, the production. Inmaculada continue being our flagship mine is producing above 200,000 ounces per year with very good all-in sustaining cash cost. We continue having a large regional land package with a huge potential. And as I said, we have been able to add more resources during 2025. In the last 10 years, we have been able to discover 80 new veins at Inmaculada.

We have brought 5.2 million ounces of gold. And in 2026, we have plans in the Southeast and north of Inmaculada. We are going to drill nearly 18,000 meters and we are aiming to bring at least 250,000 ounces. As you can see on the map, there is many places with potential veins that there are still -- I mean, that we have still the possibility of discovering them.

Then going to Royropata. As I said, Royropata is a major brownfield discovery. We have today nearly 3 million ounces of gold equivalent with very good grades. We are talking about like 550 grams per tonne of silver. And this deposit is most silver. It's like 90% silver. The good news is that average width of the veins is like 30 meters or more. So it's going to be a very productive mine once we put it into production.

Today, we have the agreements with the communities. That's very good, and we did that in 2024, all the easement. And we are working with Ausenco and also with Stantec as a peer reviewer to present to the Peruvian government a very solid and -- I mean, very solid and very well done technical document to be evaluated by the new government. So we expect to file this in August 2026 once we have the elections and to be approved a year after.

As I said, we have had 1 million ounces in Royropata. But the good thing here is that we have all these -- I mean, all this discovery is around here, and we have all these new veins, continuation of the current veins that could be add more resources. So at the end of the day, Royropata could become a massive deposit that it will bring a very profitable production to the company from 2028 onwards.

Also at the regional level, you can see here, we have Inmaculada, in the South, Pallancata and Selene. And we have different targets. Condorillo, we have Minascucho in Inmaculada. We have [ Saycata ] and [ Gaby Marina ] close to Selene. So there is a lot of regional potential to bring new deposits with a potential of 3 million, 4 million, 5 million ounces of gold equivalent. So that's -- this land package has a huge value in terms of our strategic brownfield strategy.

Then go to Mara Rosa. Mara Rosa is an open pit gold mine, as you know. We have 1 million ounces resource. We have been able during 2025 and 2026 to reorganize and to stabilize the output. Ramping up to full production, it will be on H1 2026 once we have the signal in place. But I have to announce that today, the crushing, milling and filtering plant is performing at nameplate capacity. So the signal is going to give us flexibility, but I mean, the capacity is already reached.

And also the dry stack, which is a difficult thing to do in a rainy environment is totally controlled. Well, here, we have some details of everything we have done. I would say that the only thing is pending is the overlap of the contractors, the mine contractors. We have done a tender, and we have select Fagundes. Fagundes is one of the best Brazilian contractors in the whole country. And we have a plan to the overlap between R&D and Fagundes from now until July, more or less, yes.

So from July onwards, we will have a mine output of, let's say, 80,000 tonnes, and that will give us the opportunity to push back the mine and also to make available all the ore to pass through the material through the plant. As you can see, production KPIs evolution, they are extremely positive. Here is December and you have February and everything has increased. The crushing, milling and also filtering are above I mean, these levels in November, December that they were very low.

Better than text and voice pictures, and you have the mine here. I mean you have the filters working. This is the dry stack. Even in the rainy season, you see that it is totally compacted and ready. And this is the [ signal ], the fabrication, production of the walls and also the civil installation on site. And also, you have some roofs that we have installed around the filtering plant to make sure that we have the area protected during the rain. Also at Mara Rosa, we have still a lot of potential on brownfield exploration, and we are drilling.

As you can see, Posse is here, and we have all this area for possible incorporation. So at the end of the day, the strategy is the same. I mean, we would like to add at least a year of resources every single year. So -- in that sense, we can maintain that 1 million ounces in terms of resource base, producing like 100,000 -- well, let's say, 80,000 between 80,000, 90,000 ounces per year. Monte do Carmo, you remember that we acquired this project, we paid $60 million, is located in Tocantins, that's north of Goias, close to Mara Rosa.

We have -- I mean, it's fully permitted. And today, what we are doing is a gap analysis to make sure that all engineering is correct. We are completing the engineering on the, I would say, at the end of May, and we will be trying to present an economic case in June 30. That will be around June 30. That's our objective. Good news is that we have repeat all the metallurgic tests, and we got 94% recovery, which is extremely high. That's very good news.

All the geotechnical studies are nearly finished to make sure that the pit is stable and everything. Transmission line has already the permit and is ready for construction. And as I said, I mean, we will update the economics in mid-2026. We aim to start production in 2028 if we start construction on July 2026. San Jose is a mine that commenced in 2007 -- back in 2007, a year after I joined Hochschild. 2025 production has been very good, 120,000 ounces, and we believe that this year is going to be more or less the same.

During 2025, we have been implementing cost-effective measures at the whole process. And I mean, we are trying to contain cost as low as possible in an environment which is difficult. As you know, Argentina has a lot of inflation during 2025 and worse even before. But I mean, the team is working there. The grades are there. There is a huge cash generation in San Jose, which is very positive for us. In terms of exploration, San Jose still has a lot of potential, not even -- not only on the mine area, but also on the district. This is Cerro Negro and this is San Jose. So there is a lot of mining properties that we own, and we are exploring with new technology.

But also in Santa Cruz province, we are mapping and sampling a couple of projects that it could be a new future discovery. Well, in terms of valuation, I have to say that once Mara Rosa turnaround is nearly finished, we continue having a very strong Inmaculada performance. And we are one of the few mining companies that have 2 projects -- developing projects that I mean, could represent an increase in production of 60%. So it could be -- it could mean that Hochschild Mining could reach 0.5 million ounces of production in 2028.

I believe that there is still a very important valuation opportunity for investors. So that's very good news for us, for shareholders also. And I believe that the performance of our share has been very impressive, and I am very proud of the team, the work that they have done. Finally, as a conclusion, 2025 has been a very strong year in terms of financials. It's important not only the financial, but also the ESG performance is we continue having a world-class performance on safety and environment and also very -- I feel extremely proud of the community relations situation.

We have a great team in place that they have changed the way we relate with communities. Also, we have executed the turnaround on Mara Rosa. The management transition is in place. I feel very comfortable with the actual management team. Inmaculada continued having a very solid performance. Tiernan is already listed on the TSX, and it has its own future from now on and also $31 million on dividends. The future is, of course, completing Monte do Carmo economic assessment and starting construction, brownfield program to continue delivering new resources to extend life of mine.

Royropata, as you can see, that's the most important projects that we have at Hochschild, 3 million ounces, most of it silver, huge veins, continuation. It seems like a very, very good deposit. We will continue with disciplined capital allocation to make sure that money is well spent. And of course, the investment in Tiernan and Aclara has become a value of $300 million plus, which is very good for the company. I have to say that 2.5 years ago, we said that we will be focused on core assets and delivering profitable growth. And today, we feel very proud that we have accomplished our promise. Thank you very much.

Thank you for the presentation. We have had a number of questions, please submitted and submitted live. [Operator Instructions].

The first question is, Inmaculada seems to be doing a lot of the heavy lifting again. Are we too reliant on that one mine at the moment?

Okay. Inmaculada is a mine that has been producing since 2015 and average has been produced 200,000 ounces of gold. Today, we have an important amount of resources. And now in June, we will have the new life of mine. I have to say that we have had 0.5 million ounces of inferred resources on 2025. So I believe that, that mine is going to continue with very good health -- I mean, with very healthy production and also very good cost.

Thank you. The next question is -- if gold and silver prices stay around the current levels, how much free cash flow could Hochschild generate?

I would like to pass that question to Eduardo Noriega.

Thank you, Eduardo. So the cash generation capacity of the group is very strong as we have demonstrated that in 2025. If spot prices remain as they are, which are higher than the average we had in 2025, the cash generation capacity could be depending on how much we invest in our developing projects, but taking into account what we have, the plan that we have in front of us, it could reach $500 million per year, more or less.

Thank you very much. The next question is, as a shareholder, I'm pleased to see the balance sheet improving. With net debt much lower, how should we think about the balance between reinvesting in the business and increasing returns to shareholders?

Thank you, Charlie. Our capital allocation policy takes into consideration that our first priority is to develop our short-term growth strategies. In this case, we have 2 projects that we need to build, one Monte do Carmo, the other one in Brazil, the other one Royropata in Peru. And between both, we think that the CapEx could be around $500 million. So the second -- and of course, we also invest in our brownfield exploration plans.

In 2026, we expect that budget to be around $38 million. The second priority is to pay down debt, and we continue doing so, and that's what we're going to do in 2026 as well. And third, capital returns. And for that, we have implemented a dividend policy that takes into account distributing between 20% and 30% of our free cash flow. And that's also being executed and where that's how we estimated our dividend of -- total dividend for the 2025 period of $31 million.

And then, of course, being prices as they are our fourth priority, which is inorganic growth or M&A needs to -- also needs to be taken into consideration. And the strategy that we're following today is making sure that we strengthen our balance sheet as much as we can so that when the opportunity comes, we are prepared to keep growing the company through acquisitions as we did in the last 3 years with Monte do Carmo and before that with Mara Rosa in Brazil.

Thank you. The next question is, from management's perspective, what is the biggest operational risk facing the company that investors might not fully appreciate?

Well, I would say in terms of risk, I mean, we have an electoral year in Peru. And of course, we are presenting the new environmental permit for Royropata. So I would say that there is a risk. I mean it's not a big risk because we have been operating in Peru for many, many years in different situations. But that would be a risk that I would point it out. On the other side, I mean, I don't see a major risk. I mean, the normal risk of mining operations that, of course, I mean, we know exactly how to deal with them.

Thank you. The next question is, Hochschild has historically operated in parts of Latin America where permitting and regulatory environments can change. How do you balance geological opportunity with political risk when you decide where to invest next?

Well, as you probably know, I mean, we've been in Peru for many years, and we have been working in many different situations. Also, I mean, many years ago, we decided to expand our operations to Argentina. And today, we believe that we are very good operators in Argentina, where we know very well the country. And 5 years ago, we decided to diversify risk and we decided to go to Brazil. We acquired Mara Rosa. And after a period of time, we acquired also Monte do Carmo.

So we believe that we have diversified risk expanding our operations in Brazil. I mean, we feel extremely comfortable in Peru, and that's the reason, I mean, we found this very good deposit in the new brownfield discovery, which is Royropata. And therefore, I mean, being working in these 3 countries, we believe that we have diversified the risk, and we feel quite comfortable in terms of permits against the production, I mean, the opportunities that we have.

Thank you very much. The next question is, given that fuel and energy are significant costs in mining operations and tensions in the Middle East are happening, how exposed is Hochschild to rising energy prices?

But I would say that for us, it's an important cost, yes. But I mean, in Peru, I mean, still today, there's not been a raise of energy cost. We have some stocks in all our operations. I mean, we will be exposed to any -- I mean, price raise on diesel or -- but I mean, I believe that it's not going to be that significant.

Thank you very much. The next question on a similar line. Has the current geopolitical environment created any supply chain challenges for the business, particularly around equipment, chemicals or shipping routes?

Well, I mean, I will pass the question to Eduardo Noriega in terms of commercial challenges. But in terms of supply, I mean, we buy iron balls, we buy cyanide, we buy steel in general, and we didn't see any problems in those products. In terms of the routes, Eduardo?

Thank you, Eduardo. We're monitoring closely the situation in the Middle East and how that may impact the worldwide supply chain of different materials. So far, as Eduardo pointed out, we're not seeing any impact on the business. We don't import directly from that part of the world. So on that front, I think we are -- that the risk is well monitored.

In terms of our exports, we also do not export to the Middle East any of our products. And we are monitoring the global routes or routes regarding our exports of concentrate. Most of our dore production goes to the U.S. to Canada and also to Switzerland. But so far, no impact on Hochschild.

Thank you very much. The next question is, when do you expect Mara Rosa to reach steady-state production and steady-state cost levels?

Well, I believe that Mara Rosa is going to reach steady production on H2 2026. We are doing everything in our hands and as I said, I mean, today, we have already reached nameplate capacity at the plant, and we are in the middle of a change of contractor at the mine, where I believe that it is going to result in an increase of the mining output. And with that, I mean, we will reach maximum capacity at the mine.

Thank you very much. The next question is, can you share the expected time line for the Royropata project? And any comments on the outlook for the mining industry in Peru as we approach presidential elections?

Well, I mean, the timetable, the schedule for Royropata is as follows. We are planning to present the documents to the government -- to the next government in July, August, taking into account that we have now in April, we have elections and the new government will be in charge from July onwards. So we are planning to present that document, and we expect to have a year of evaluation. So we expect to get the environmental permit in July, August 2027.

Then we have the operational permits that will come, let's say, in a year. So we expect to start developing the mine on June, July 2028 and start getting production at the end of that year. I mean in terms of the mining -- I mean, the mining industry situation based on the elections, I mean, we don't expect any major changes on legislation. And I mean, today, Peru is an extremely important part of the copper and gold and silver industry. And we don't expect any changes on that based on the elections.

Thank you. The final question is ESG and CSR are important when looking at investing. How are you giving back and protecting the communities you work within -- work in?

Well, I have to say that 2.5 years ago, we decided to change the strategy with communities. We -- I mean, we complete a new team. The team really has been very close to the communities, working on their developments and giving a lot of jobs in the areas. That means that, I mean, communities are getting better in time. And I have to say that we didn't have any problems blockages or anything like that in the past 2.5 years. So that situation reflects that we are doing in terms of the community relationship, we are doing much better than we used to do it 3 years ago.

Thank you. That's all the questions we have time for today. I'll now hand back to the management team for any closing remarks.

Okay. Let me say that today, Hochschild is very well positioned for the next step. We have Mara Rosa turnaround already done. We have Inmaculada with very strong performance. And we have in the next few years, Royropata, Monte do Carmo as a growth opportunities. If we analyze our valuation against our peers, we are still below. So I believe that there is a very good opportunity on investment -- on investing in the Hochschild shares. Thank you very much for your presence.

Thank you to the management team for joining us today. That concludes the Hochschild Mining investor presentation. Please take a moment to complete a short survey following this event. A recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.

Good morning, hello, and welcome to our conference call to discuss our fourth quarter production results. I am here in Lima, Peru with Eduardo Noriega, our CFO; and in London is Charlie Gordon, our Head of Investor Relations. Group production in the quarter was just under 80,000 gold equivalent ounces, which was 13% higher than the third quarter and include good contributions from Inmaculada and San Jose. And of course, there was a better level of output at Mara Rosa, which is in a steady ramp-up phase.

Therefore, for the year as a whole, Hochild produced just over 311,000 gold equivalent ounces ounces, which is within our revised guidance. I can also point out that we expect all-in sustaining costs for 2025 to be at the higher end and marginally above our revised guidance of between $1,980 and $2,080 per gold equivalent ounces. The current record high prices are translated into a swift increase in cyclical costs such as royalties, workers profit sharing, selling expenses and export taxes in Argentina. We will provide more detail at the full year results in March.

A key focus during the period was, of course, at Mara Rosa, where I am pleased to say that our turnaround program has continued making steady progress. We made good progress with the pushback developments, which improved access to the higher grade ore and have stabilized the plant with a stronger maintenance practice. This has delivered higher throughput and improved productivity. We have also focused on managing the rainy season and strengthening the filtration and detox capacity through a better maintenance spare parts availability and moisture control.

Mining performance has also improved, boosted by the more reliable equipment and infrastructure. The key remaining challenges are managing the rainy season, completing the installation of the new tailing thickener and ensuring consistent filtration and detox availability at 7,000 tonnes per day. Gold production for the quarter totaled just over 7,000 ounces, which the full year result being 40,000 gold equivalent ounces. This means we hit our revised target of between 35,000 and 45,000 ounces.

Inmaculada has another strong period with close to 54,000 gold equivalent ounces produced in the quarter, driven by stronger grades -- gold grades and increased tonnage. This brings the total for the year up to 210,000 ounces, which is just above the upper end of our guidance of between 199,000 to 209,000 ounces. As you remember, in the third quarter, we know that rapidly rising prices will influence how we think about the cutoff grades in our mine plans over the few quarters. This is now creating opportunities to process material that was previously considered marginal, but can now deliver extremely healthy margins, and we are seeing this most clearly at Inmaculada.

In Argentina, production shows a 17% increase from previous quarter with a strong grade profile and solid tonnage. Output was almost 37,000 gold equivalent ounces, which makes 126,640 ounces for the year and well within our guidance range. On the exploration side, our brownfield program has continued to deliver encouraging drill results, which we expect to lead to further resources addition in all our mines as well as in our 2 projects, Monte do Carmo and Royropata. They will be reported at our full year results in March. Our business development team has also remained busy, and I was pleased to see the completion last month of our transaction to list Tiernan Gold at the Toronto Stock Exchange. This raised $12 million for Hochschild and will allow Tiernan team to advance with the Vulcan Gold project over the next few quarters.

Our current stake is just under 70%, and it is valued approximately up to $158 million. Other non-core assets is our 20% stake in Aclara, which is currently valued at approximately $112 million. Turning to our balance sheet. We had a very strong quarter of cash flow generation. We ended the year with cash balance of $317 million, which has resulted in now very small net debt position of $23 million and a net debt-to-EBITDA ratio of 0.04x. This is due to the solid quarter at Inmaculada and San Jose and of course, the big increase in precious metals price.

As usual, we also provide guidance for this year. In summary, we expect to produce between 300,000 and 328,000 gold equivalent ounces in 2026 at an all-in sustaining cash cost of $2,157 and $2,320. That's the range in gold equivalent ounces. You can see the speed of the forecast by mine in the release. I should also point out that the equivalent numbers are calculated using the average gold silver ratio of Q4 2025, which is 77x. Sustaining and development CapEx is set at between $210 million to $225 million, and the exploration budget will be around $45 million. With that, I would like to open up for questions. Thank you very much.

[Operator Instructions] Our first question is from Felicity Robson from Bank of America.

It seems the ramp-up at Mara Rosa is going according to plan. Could you give some color on when to expect the completion of the installation of the thickener and maybe how we can think about the production profile between H1 and H2?

Of course. Well, I mean, we have finished the engineering for sure. We have finished all the purchasing. And today, we are doing all the earthwork in order to start the installation. We believe that we can have the thickener in place at the end of Q1 or maybe during April. And for sure, we will have the thickener in place working, connected to the plant and giving the results in H2 for sure. In terms of the split between H1 and H2, I would say that it could be between 35%, 40% up to, I mean, 60%, 65% on the second one.

[Operator Instructions] Our next question is from Marina Calero from RBC Capital Markets.

Just a couple of questions on my side. First, on Monte de Carmo, can you give us an update on the time line for [ final ] financial decision? And if you were to go ahead this year, how should we be thinking about CapEx for that project? And I'll ask my second question later.

Thank you, Marina. Well, our objective in 2026 is for sure to take the decision of construction. For that, we are doing all the engineering studies, trade-offs. We want to have at least an important percentage of detailed engineering done -- and we believe that, that could be the end of May or June. So our objective today is to start construction for sure at the end of H1. In terms of CapEx, at the moment, I mean, we have like between $5 million and $8 million for the year, but that could be modified if we start construction. And I believe that we'll be able to spend around $50 million for the first -- I mean, for the second half of the year with all the construction that we'll be able to do before the rainy season in 2027.

That's very helpful. And second question is on your all-in sustaining cost profile. Your guidance is based on a gold price of $3,200 and a silver price of $34, but current spot levels are much higher. How will your sustaining -- your all-in sustaining cost for 2026 look like at current gold and silver prices, please?

Thank you, Marina. As you know, our all-in sustaining cost is impacted by prices in royalties, [ corporate ] profit sharing and some commercial discounts and selling expenses. If spot prices remain -- if prices remain as they are at the spot prices, we're going to be closer to the upper part of our guidance. That's what we estimate currently.

It appears there are currently no further questions. With this, I'd like to hand the call back over to Eduardo Landin for any additional or closing remarks. Over to you, sir.

There is no more questions? Okay. Well, thank you very much. No, just to say that thank you for being in the conference call. Sorry about the time. I know that it's lunch time in England, but I mean, we have something today, which is very important. No, just to say that I believe that the fourth quarter was very strong in terms of cash generation, it has been reflected on our balance sheet. And of course, the capacity of the company of generating cash is incredible at these prices.

So our main objective this year is for sure to be on our guidance. and try to make as much cash possible and of course, developed our 2 projects like Monte de Carmo and Royropata. I have to say that Royropata is going very well. I mean we just started writing the document to be presented to the authorities in July this year. And well, I mean, the company could be a huge cash generation machine if we are able to put all these projects together in production with current prices.

Thank you very much. Nothing else from me.

Good day, and welcome to today's Hochschild Q3 Results 2025 Conference Call. My name is [ Sergio ], I'll be your coordinator for today's event. [Operator Instructions] And now I'd like to hand the call over to your host, Eduardo. Please go ahead.

Good morning, and hello, and welcome to our conference call to discuss our third quarter production results. I am here in Lima, in New York with Eduardo Noriega, our CFO; and Charlie Gordon, our Head of Investor Relations.

First, I want to start saying that our new COO, Cassio Diedrich joined last month and is now working with us in Lima. And we all look forward to his leadership and contribution to the organization. We have already been at Mara Rosa with him and this time we are traveling to our flagship mine in Inmaculada. Group production in the quarter was just over 70,000 gold equivalent ounces and of course, include minimal production from Mara Rosa in Brazil, where I'm sure you remember, we stopped the processing plant for 4 weeks in July. Nevertheless, we remain on track to keep our revised production and cost forecast.

Our main focus during the period was, of course, at Mara Rosa, where I am pleased to say that our turnaround program has continued making very good progress. Mining movement rates has ramped up during the quarter from 44,000 tonnes per day in August to its current rate exceeding 70,000 tonnes per day. And we were also able to complete all the required plant maintenance during the stoppage in July. All 4 tailing filters are now up and running, and we expect the production rates from the operation to raise in the fourth quarter, while we wait for the delivery of the purchased tailing thickener in the first half of next year.

We have also largely completed our reorganization of the Brazil operations with the appointment of the new Brazilian General Manager, Ediney Drummond as well as new operation manager alongside with a revamped management structure. Group production for the quarter totaled almost 40,500 ounces. And this means that we are on track to hit the revised target of between 35,000 and 45,000 ounces gold equivalent.

Inmaculada has continued to its solid year with close to 50,000 gold equivalent ounces produced in the quarter, which brings the total for the year so far at 156,000 ounces and is well on track to meet our forecast between 199,000 and 209,000 ounces for the year as a whole. There were some lower grades in the quarter due to the adjustment to our mine sequence to address geomechanical challenges with temporarily restricted assets to a higher grade zone, but this how -- I mean, this now has been totally solved. In Argentina, production show a small increase from the previous quarter, although rates were a little lower as we mine in the borders of the veins. Output was 30,000 -- 31,000 gold equivalent ounces, which make almost 84,000 ounces for the first 9 months. We are on track to meet the annual forecast.

On the exploration side, our brownfield program has continued to deliver encouraging drilling results, which by the full year we expect will lead to further resource addition in all our mines as well in our 2 projects, Monte do Carmo and Royropata. Our balance sheet remains strong. We ended the quarter with a cash balance of $92 million, resulting in a net debt of $246 million, a net debt-to-EBITDA ratio of 0.4x. It's worth to highlight that this figure reflects a few notable items, including $40 million working capital increase, mainly in Argentina to protect the balance sheet ahead of upcoming midterm elections, the $30 million of repurchase the Monte do Carmo streaming agreement from Sprott and the $5 million in term -- interim dividend paid to shareholders. Lower production at Mara Rosa and the cost associated with the ongoing turnaround plan also played a role in the quarter results.

Looking ahead, the record price we are seeing should drive a strong cash flow generation in the fourth quarter. And as we move into the next year, this sustained higher prices will also influence how we think about cutoff grades in our mines, opening up opportunities to process previously marginal lower grade material that we will still deliver but I mean, this situation even considering these lower grades will deliver a very strong healthy margin.

With that, I would like to open for questions. Thank you very much.

[Operator Instructions] And our first question is from Marina Calero from RBC Capital Markets.

I have a couple of questions on your comments around the opportunity to reduce cutoff grades. Can you give us a bit more color on what sort of gold and silver prices you're expecting to use in your reserve calculations? And what it means for production levels next year? It looks like Inmaculada, you're running at maximum throughput capacity. So does that mean that production for next year will be below the 200,000 ounce level?

Yes, Marina. We're in the middle of the discussion of the budgeting process, and we are analyzing this possibility. I mean if we consider the current prices, really, we could have a reduction of 15% in production. But we are not going to take that as the -- that limit as the one we would like to use. The only thing is that we are considering if we are in some areas, where we have some marginal grades, then we will take the opportunity to pass it through the plan. I would not expect to have an impact that more than, let's say, 10% or even lower. But I would like to confirm a figure because, I mean, we are still discussing this issue. This only will affect San Jose and Inmaculada. In the case of Mara Rosa, as you know, we are trying to mine the higher-grade material at the beginning of the operation on the first 3 years. So I mean that will not affect the production of Mara Rosa.

Okay. Understood. So just to clarify, the impact -- production impact at Inmaculada will be less than 10%. And do you expect any implications for CapEx?

No. I mean, there will not be implication on CapEx because as I said, we are not going to do an additional development to reach lower grade areas. I mean the only thing is that we are going to give the CapEx level as planned. But if there is the opportunity on the area to extract low-grade material, I mean, of course, we will take that opportunity. Otherwise, I mean, if we don't take that opportunity now that we have the gold at 4,000 I mean, it's a material that is going to stay there forever.

[Operator Instructions] Our next question is from Will Dalby from Berenberg.

Just a few questions from me. I guess, starting on Inmaculada. You sort of mentioned in the release, those geomechanical challenges which you say were one-off. I just wonder if you can maybe give a little bit more color around what happened there, provide a little bit more confidence that, that is, in fact, a one-off occurrence. And I guess following on, how has that impacted your expectation for Inmaculada this year for 2025 volumes? I know you maintained guidance for the year, but I just wonder whether there could be some latent impact in Q4. It would be good to have your thoughts. That's the first question.

Okay. Thank you for the question. Well, basically, to give you more color, there were these high-grade area where we -- we were doing some developments. We saw that -- I mean, there were some fractures on the support. So we decided to stop production from that area and do a bypass, a small bypass to reach that area without crossing this area where there were some faults. I mean that is already done. And of course, we are going to be able to reach that high-grade area during the fourth quarter. So I don't expect any effect at all on the production guidance of Inmaculada. We will recover that material in the next month for sure.

Okay. That's very helpful. And then maybe the next one just on San Jose in Argentina and this inventory build. I wonder if you could, again, just kind of expand on that a little bit as to the logic there. And then more specifically, kind of how you're expecting that to unwind? And actually, if you're able to sort of give a bit of a steer as to the working capital move in H2 as a whole, that would be quite helpful as well.

Well, let me explain. We keep some inventory of concentrates in Argentina. I mean, not to convert those dollars, but those payments in dollars into pesos. As you know, once we sell them, we receive the dollars, and we need to convert it into pesos. So we kept this inventory for around $37 million or $40 million. But now it's already shipped. So I mean, it's something that is going to be received in the next week or so. And as you know, the -- I mean, the elections are next Sunday. So we expect that any effect on the exchange rate is going to be happening on Monday next month, yes. So I mean, the objective of this -- keeping this material has been achieved. And to give you more color on the -- I mean, I don't expect to see any effect on H2 working capital. Once we recover this $40 million, I mean, the working capital level, it will remain as it used to be during the first H1.

Okay. And then just the last one is actually around Volcan and obviously saw the announcements recently about that process getting listed in Toronto. Just as sort of in reference to Hochschild owning 80% of that pro forma business once [ Tiernan ] is listed. Just be helpful if you had an idea of the kind of indicative market cap of that business based on the placement and the number of shares. If you have that number at hand, that would be quite helpful.

Let me pass this question to Eduardo Noriega as he is much more involved than myself.

Thank you, Will, for your question. Yes, that was moving along -- is moving along well. We have not executed or completed [ transaction ] yet. It is in progress. So certainly, in terms of valuation, we are -- that will -- that is being defined these days when we are talking to the different accounts to try to complete the financing solution. But certainly, the strategy is to raise fresh funds for the project, for the Volcan project, which, as you know, is around 11 million gold -- gold ounces project in resources. So raising these funds will allow projects to advance to close to feasibility and permitting stage.

We will now move to our next question from Robert Bonte-Friedheim from SMC.

It's Robert Bonte from Scarlet Macaw Capital. So I just want to follow up on San Jose. So if I run the numbers correctly, I think you had just under 5,000 ounces of gold -- kilo ounces of gold -- 5,000 ounces of gold and 220 kilo ounces of silver, I think in terms of the difference between production and sales. And if I ran the numbers at September average prices, that's $27.7 million. At spot, that's already $31.5 million. And so I guess, am I thinking about that correctly that that's the big part of your working capital that you're selling later? It's just that as [indiscernible] shareholders, we get extra $4 million or $5 million just because the prices have gone up since September. Is that fair to think about that way?

Thank you, Robert. You're partially right, correct. So most of the $40 million to do with the inventories that we have temporarily kept for us to collect the dollars after -- after the election this weekend. But the other portion also in San Jose has to do with accounts receivable that you always have the chance to collect part of it upfront or just wait until the material gets to the refinery. So part is inventories, the majority of it, as we pointed out, and the remaining part is our receivables that we have -- for sales that we have executed, but that we have not received the anticipated payments. It will be received later on.

Okay. Understood. Okay. It's a windfall. So it hurts pro forma your debt numbers at the end of 3Q and your working capital will improve once you sell and improve both your net debt and the working capital and the revenue and the profits in fourth quarter.

You're correct.

It's about, yes, $30 million, $40 million. So net debt would be $40 million better actually on apples-to-apples, okay? And the other question I had, can you just give us a bit more as I have 3 questions. The second one is a little bit on -- on Brazil, Mara Rosa, can you give us a bit more color now about how you want us to think about -- again, you've done third quarter now, how fourth quarter is looking?

Well, let me say that the good news is that a week ago, we have been able to put the fourth filter up and running. And I mean, still, we need to -- I mean, we need a couple of weeks to finalize the commission and to make sure that everything is correct. I would say -- I mean, I don't want to give a figure for Q4 because what I can say is that we are going to be for sure -- I mean, for sure on the guidance. I mean we are going to give the guidance on cost and production. It is [ steady ] between [ 35 ] and [ 45 ]. But to give you an idea, I mean, with the 4 filters, we could go up to 4,000 tonnes per day, 4,000 -- between 4,000 and 5,000 tonnes per day. And that's the figures that we are considering for next year, at the beginning of next year until we get the thickener in place. So that will give us the opportunity to have better production than Q3 for sure. I mean we continue opening the mine and trying to make sure that we have all the materials ready for 2026. And as you can see, we have improved between -- I mean, from 40,000 tonnes per day up to 70,000 tonnes per day of moving waste to open the mine as much as possible and to be ready for 2026.

Okay. Understood. That's helpful. My third question is, I want to follow up on Volcan. And again, in Volcan, again, I think there's -- the one thing I want to get clarity on, can you remind us just an outline what is the range of CapEx required for this project? And what is the range of ounces that there might be even inferred, [indiscernible] inferred and what's the next catalyst there?

Thank you, Robert. So the estimated CapEx for the project, the construction CapEx would be around $1 billion and there is a sustaining CapEx over the life of the mine of around $300 million. And then in terms of total resources, the ones that are being used for the pre-economic assessment that is published in that [ Tiernan ] website. [ Tiernan ] is a subsidiary of [indiscernible] Mining owning the Volcan project are 11 million gold ounces. So those -- that is the total loans that we have in the project.

And what is the grade and what is the water situation?

The grade consider is at around 0.62, 0.64 grams per tonne. And in terms of water, we currently -- that the company has a water right over a couple of water wells in the region that we know that other companies are starting to request authorization to use them. So that is a base assumption. And then, of course, there are other alternatives that not only [indiscernible] Mining and Volcan, but also other players in the region are considering, mainly desalinated project -- desalinated projects. So the projects to desalinate seawater and to be pumped in the Maricunga belt region to source of water, not only Volcan but others. So those are the 2 plants being the -- in this pre-economic assessment, the base case and with the support that we have of using the water from the growth that we have.

Got you. And in terms -- I know there's Maricunga. Kinross has Maricunga and Lobo-Marte, Barrick, Newmont also. So what is the -- do we have a rough CapEx? I mean how much water desalination plant add? What's the range to the overall CapEx bill?

We are not showing that calculation, but certainly, it will be taken into account in the estimates of the project evaluation. I have to say that the project is highly profitable with long-term prices of 2,700 ounces of gold per year. So any additional cost, I'm sure we'll be able -- will be absorbed by efficiencies, but also with a more robust gold price that we are seeing today.

And our next question is from Alfredo Schmutzer from Equinox Partners.

So I wanted to follow up -- I wanted to follow up on the cut-off grade reduction. So you mentioned at the beginning that it's not going to be more than 10%, but are there any way to mitigate that reduction in production? Any way to maybe increase throughput or just trying to see what to expect for next year?

I mean, as I said, Alfredo, I mean, we are in the middle of the calculations, and we have not decided yet how much of those resources. It's something that we have [indiscernible] in the [indiscernible], I mean, throughput production at Inmaculada. As you know, the nameplate for Inmaculada is 3,500. And I mean we are at the moment about [indiscernible] the budgeting process to see cost to see everything and go to the market with a proposal with a budgeting proposal that I'm sure is going to maximize the NPV of the company. Because at the end of the day, I mean -- I mean, we are not trying to pass through, I mean, low grades. So what we want is to find the equilibrium between passing through some of those grades through the plant in order to maximize life of mine and NPV. Let's wait until Q4, yes. We will be presenting production figures and for sure, all the guidance. And you will see that we are trying to find this sweet spot between grades, production margins and capacities and everything.

It appears there are currently no further questions at this time. With this, I'd like to hand the call back over to Eduardo for any additional or closing remarks. Over to you, sir.

Thank you very much. Well, just to say that we have a strong Q3. We have progressed with the turnaround situation of Mara Rosa. I'm extremely happy with the performance of our team. Having all the management in place, we are having a very positive feeling for 2026. So thank you very much for being here, and see you next time.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.