Pan American Silver Corp. Aktie

Well, right down to the second, good afternoon, everyone. As you know, I'm Swiss Canadian, so we have to start on time and doesn't work a different way for me.

Welcome, everyone here in the room. My name is Michael Steinmann. I'm the President and CEO of Pan American. For quite a while actually already. I think this is my 11th year as CEO and my 23rd year with the company, together with a few other white hat guys here in the room, Steve and Martin and Ignacio, we started all at the same time in 2003 or 2004. So we can tell you the story, and it's an incredibly exciting story about Pan Am and by the way, welcome also to everyone on the call. I hope there's a lot of listeners there. It's all recorded, so you can go back and listen because there will be a lot of information.

So a very exciting story. What happened in the last 2 years. We did this just about 2 years ago, I think, when we closed the Yamana transaction and Pan Am went to a lot of changes there. Of course, that has all settled now and we closed in September also the acquisition of the 44% of the [ Juanicipio ] mine when we purchased Max Silver and Sam will give us more details on that. But -- of course, big changes to Pan American and a very different, much, much stronger company. And you will see this afternoon that there's a lot to come still. A lot of catalysts that are up there. And I just want to mention a few, but we just put that actually Timmins, an update on Timmins today.

And there's a lot of interesting discoveries at Timmins, and we'll take a few more months to work through that, but very interesting, and we'll see a lot of details on that. Of course, La Colorada [ Garden ], our flagship homegrown, all found internally, one of the biggest discoveries in the world over the last few years and probably will be for a long time, which is going to build our next -- just jump in and ask the question. There will be like maybe 3, I think 3 times a question and answer period in between. And then, of course, at the end. And when we are done here, unfortunately not for the people on the phone, there will be some cheese out there and some time to mingle to ask more questions. You have a big team here, technical team from the company, as I said, with a long history. So and finance, obviously. So we should be able to answer all the questions you have. So let's get started. And of course, we not only me, but we all will use forward-looking statements. So please make sure to read the cautionary notes in our public filings.

Just a quick agenda. I'm not going to step through that. You will see how it goes forward. It's just a logic step if the introduction and -- we have the different teams that will explain you all the catalysts, what we did over the last few years and where we see and this is going and how the company is going to grow. So I'm not -- you don't see that in. Okay, yes. Okay. So that's the company now. You see there the map. Of course, we are still active in Latin America. And I got a lot of questions about the geography and why we are where we are. And this is really a geology that dictates where we are. If we want to be a large silver producer in the world, that's where you have to work.

Large part of the silver deposits are really found in the [indiscernible] so somewhere from Southern Chile or Argentina all the way up to Alaska. So you see there like pearls on a string, that's where our assets are. That's where our projects are. You see 2 outliers in that sense, Jacobina in Brazil and the Timmins assets in Canada, way further to the east and guess what, there's no silver there. Those are pure gold producers. So silver you can find gold in many other places, but silver is a bit harder to find. And when you find silver, silver comes with base metals and with gold. So we find it with [indiscernible], copper and gold, hence, we produce all those metals as well. So that's just a bit different than gold where you look at Jacobina, that really just produces gold. And I think Steve, it only produces a few thousand ounces of silver a year. So very, really pure gold producers. You can't find that on the silver side. But it's really the geology that dictates where we are located with our. You see the 10 producing mines, actually, it's only 9 mines that we are running. The tenth mine is [ TofaniCepio ] mine in Mexico. It's a joint venture with Fresnillo for [indiscernible] osteoperator. So it's 29 mines that we are running.

As I said, we are advancing several projects, La Colorada, the car, obviously, [ Workatobring ] Escobal back into production and now look at the potential expansion and optimization of Jacobina and now what we published this morning, doing a lot of work on the Timmins camp as well. And of course, if we want to be a successful mining company, you need large reserves and resources. That's really the base of your business. And we have the largest silver reserves and the largest silver resources in the world. Not on the gold, but a respect for gold reserve as well. And you see there, what's really important for us, the very nice diversification in Latin America.

Of course, we're running our assets in jurisdictions that are more risky than just doing it in Canada. That is what it is. If you want to have exposure to LatAm, which is one of the biggest metal producer on the planet, Pan American is an excellent way to play that exposure. But I really like to be diversified in different countries. So we are not too exposed to any given election cycle or any other issue in one of the countries, and that's what we have achieved there. But very nice diversification within Latin America. But really, we work in the places we know.

Most of us, including myself, span all their careers and a lot of their private life [indiscernible] I lived and worked for over 16 years in LatAm. Obviously, now, we still work there. We speak the language. We know the places. I think it's absolutely crucial to be successful to do it so. So I already said that the leading exposure to silver. I think during today, we can show you how that works out. We built -- we have built many mines. Can there's not many groups that can say that of themselves, but we have, and we will continue to do so the big growth that we have had, incredible cash flow generation. And that was a strong cash flow generation when silver was at $35 a couple of years ago.

So of course, no surprise that those really strong cash flows now persist, and you saw probably Q1, again, another really, very strong quarter that we delivered there. The reserves I talked about, you have to replace reserves. I have a slide there and obviously, optionality that is not fully valued yet in our share price. And just quickly, you see on the silver on the left side and gold on the right side there. How, obviously, Silver be started working on, first, how over many years, we increased that silver production, you see there, how do you call that the COVID dip, I guess, and then the growth again this year, we guided 25 million to 27 million ounces of silver production. And just the blue dot show you all the operations we built during the time with the team that you see here and obviously more people, it's not just 3, 4 people that built those mines.

But this is all internal work that we did on the silver and on the gold side. So a very proven mine builder, and I think it's important when you want to be a proven operator, but we not only know how to operate them, but you also know how to build your minds. So absolutely crucial for that. So what we're going to talk about today is, of course, La Colorada, we put out an updated PA now a few weeks ago, very exciting project. It was exciting before, maybe a bit confusing for 2 years when we came out with the first PEA because we basically we're on a plan to build the biggest zinc mine in the world with a lot of silver production. But the exploration team and Chris will show a lot has been incredibly successful in adding high-grade silver discoveries not only in the [indiscernible], but also in veins that we actually had enough high-grade material available to come out with, I would call it, the first phase or Phase 1 high-grade silver production. That gave us the opportunity to come out with a PA with a smaller project, still big, but producing over 19 million ounces of silver a year in the peak years, very exciting project that we're going to build here over the next 5 years. And we see a lot of details about that.

Obviously, the Timmins camp, we're going to talk. We have -- 2 of our people here from Timmins that run Timmins for us, and they have been very successful up there. Jacobina, I think we should make very clear, we always called it the optimization study, and I got question. So when is the study coming out and if you have a chance afterwards to talk to Steve, it's actually, I think, 32 different studies. So it's not just 1 study. Some are coming out. Some we're building this year. So it's an ongoing process to see how far we can go at Jacobina in 1 of our past gold asset that actually right now, I think we have a mine plan until 2053, and just an asset that just keeps growing. And of course, the latest addition, which is the 44% of 1 is CPSC, they're brand-new Silver mine in Mexico in the biggest silver district on the planet that district has produced, I think, about 4.5 billion ounces of silver historically.

And I think it's in production for about 450 years. So that's a real elephant country when you look at silver. We made a big change to our shareholder return. I'm sure you've seen that. We just announced after Q1 that we plan to return $1 billion to our shareholders this year. We're already at close to the end of Q2. So this is coming quick. It's a mix between dividends, which we fix now as a $305 million [indiscernible] , we paid $0.18. We increased the dividend every quarter, and the last increase brought us to $0.18 per share per quarter, which was the equivalent of $305 million. I just wanted to fix that number now because we're buying back shares very quickly, there will be less shares outstanding. So automatically, as we fix the dividend, you as shareholders will receive every quarter a little bit more dividend on the shares that you hold. So that number will be fixed. And then the rest, let's call it, $700 million will be share buybacks. And you see there having tended in other big surprised that we just put it equal for each quarter. It's not going to exactly happen like that.

Of course, we react on like down days, et cetera, be opportunistic on there. But that goes full steam ahead. I have all intentions in the world to return the $1 billion. I think we are already closed. We finished Q1 with over 800 million -- sorry, $1.8 billion cash and that's still growing fast, and it was a good time to return way more to our shareholders. While we still have far enough cash available to go through all the builds and expansions that we plan to do so.

So incredible story on the return to our shareholders is going to be a very nice return. And I really hope that we can do this for many years to come, obviously, depending on metal prices, but I think we are now as a size of a company an environment of metal price where it generate so much free cash flow that absolutely is the time to return more money to our shareholders.

Just quickly talked about reserve replacement, and Chris will show more after that. But that's over the last 20 years, 65% of all the silver we mined were replaced in P&P, not in resources, there's way more resources, but just improvement in problem reserves. And you see there are the cost to replace. And that's all the drilling, all the development and everything to get there and bring it to P&P $0.80 an ounce. We can't buy ounces for that money. Obviously, nowhere in the world. Nobody had any silver price would have ever sold silver at $0.80. So that's a big value creation over time. And that does not include what you see on the right side, which is probably close to 400 million ounces between the skarn and the high-grade discoveries in veins that Chris and his team achieved and that's on the silver ounces. It doesn't include all the gold that you replace doesn't include all the base metals that you added.

So very strong reserve replacement. I'm sure there will be more questioned about Escobal, but just quickly here. You see there a picture of Escobal always impressive when you see how small the footprint is of 1 of the best silver mines in the world. Unfortunately, still not in operation. I know it has been frustrating, frustratingly slow for all of us here, including myself. But there's study progress on it. It just takes a long time just for people that are not aware, this was an asset that belongs to a company called Tower Resources really lost social license and was forced to go basically back into a consultation with an indigenous group, and that's really what we're working on over the last 3, 4 years. And when I say we, it's actually not us, but it's the government of Guatemala that has to do the consultation, and we just [ party ] to it.

So of course, we are -- I'm working hard on it as well because there's so much value that we can provide to Guatemala and the communities around with that asset, which is state-of-the-art, ready to go, very little working capital to get the mine started. But I don't know when, and I know I get the question all the time. So while we know La Colorada can producing nearly 20 million ounces in the peak years, we know when it's coming, how much it's going to cost. All I know here is that it's not going to cost a lot of money. We think about $80 million to $100 million working capital to actually get it going because all the infrastructure is built but I don't know when it's happening. But when it happens is other produced about 20 million to 21 million low-cost ounces that I think are largely not valued in our share price yet. So keep working on it, for sure. You see that the reserve resource statement is what is about nearly 400 million ounces of high-grade silver and that asset to wait.

Just quickly on the silver market. I mean, we can talk about the silver market for probably the whole afternoon. Silver market is very interesting. There's obviously 2 pieces to it, the industrial demand, which is growing very, very quickly. And it's one reason why we see these floors stepping up from the $4 to the $8 to the $14, $20, $25, $36, $40. Now I think that floors, it's probably somewhere in the $60 to $70. And then you get these peaks on top of it, which is really the investment demand that jumps in, that comes in and out a bit. But when you look at the industrial demand, it's now 60% to 65% of the silver that is used up. And when you look at the users of [indiscernible], which is mostly electronics, clean energy production, water treatment, electrification, AI, fast Internet, fast networks, cars, I can make a long list because it's really used in electronics. It's very easy to see that the silver use is going to increase over time. And it doesn't really matter for most of this application, what the silver price is going to go because when you look at your phone, your computer, it's a few grams of silver in there. It's just many, many phones in the world, but it's not dictating the purchase price of your electronic device because silver price goes up, it's really -- but it gives you and allows you to get the fastest connection because silver is fastest electric conductor in the world.

So a lot of demand on the silver side for the industrial side, we are in a shortfall now for like 6 years. But then you see on the right side, also ETFs, of course, as I said, when the investors come in. And sometimes, the silver market is very small. So when a lot of investors come in at the same time, the silver price, as we've seen in January goes up to $122 while you have dinner, very strange situation. And we know when that happens, it's not sustainable. And it comes back and silver dropped $30, I think, 2 days later. But it is -- has very nicely consolidated right now, somewhere in the $75 to $85 which obviously phenomenal price for us, a company that made a lot of cash flow and strong earnings already at $35.

So a very strong market for us. So as I said, mostly electronics, cars, you name it a lot of users of silver and just get more and more users by the day. A very, very modern metal. It's a critical metal now in the U.S. and in other jurisdictions. I think it will be declared critical metal in most countries in the future just because it's so versatile. And just to show you a little bit, this is the use of silver in photovoltax. Of course, there's a lot of thrifting. I think photovoltax is probably the one aspect of silver where, the silver price really has an impact just because it uses up so much silver. So less and less silver is used in each panel but more and more panels are installed with the fact that it's now very stable or quite stable there around probably 200 -- let's call it, 200 million to 250 million ounces of silver needed for clean energy production in photovoltax are an important part of the silver use. But we can go through other there are cars. You see EV is obviously growing quickly, hybrid but also combustion engine, electric cars need more silver because you have more computer power in there to control your battery charges, et cetera. But the more computer power you have in a car the more screens, the more radios, the more fancy cameras the more silver is needed. And as we know, every car now has that. And it's not just the luxury cars like it was before, but now you see the [indiscernible] and that really drives that demand. And then, of course, electronics on the right side, I think none of us will plan here to have less electronics in their lives in the coming years.

Well, what does make the story so interesting is when you actually look at the mine supply, it's not increasing because -- and remember I said and you have it there, 71% of the silver production is a byproduct. And you see there from what it comes from gold production, copper production, let zinc production. It's a very small amount of silver, you can have 1 gram, 0.5 gram, 2 grams of silver per tonne of rock in a big copper mine. But when you mine 1 million tonne a day, you produce a lot of silver, and that's what's happening. But it's not driving the behavior of the copper miner where the silver prices because they're mining with the copper. Not only that, we're already shorting copper, copper is in huge demand. So we cannot just produce more silver in the world. There's not an abundance of primary silver mines and all the producer that produces a byproduct mostly gold and base metals. They already see that record metal prices.

So they already produce as much as they can. So I really don't see that picture to change a lot. And I think on the producing side of silver, you're going to see a very flat or declining picture. While obviously, at the demand side, we're going to see an increase and that's what you saw there over the last few years. We are in a deficit. Of course, there's silver above ground available that people are happy to sell at a certain price, there's pulling available. People selling today, I didn't look at $74, $75. So there are people to sell to fill that gap in. But of course, that has increased from like $4 20 years ago to now $75 today, and we'll continue to increase at what price people are willing to sell their bulling into the market to fill that demand.

Just one more slide I'm done because I'm already a minute behind. But -- that's an interesting slide. When you look at the production, of course, for [indiscernible] is still bigger than us. Remember, we do 25 million to 27 million ounces. You had 19 million ounces from La Colorada in the peak years. If we could get Escobal back at 20 million or 21 million ounces, obviously, very easy to see that we will be the biggest silver producer in the world. We have already the biggest silver reserve. You need the biggest silver reserve if you want to be the biggest producer. But already now, and you see there, we actually have the best correlation to the silver price. And I think it's obviously based on the assets we have, the projects we have and the large reserve base that we hold.

So it just makes a lot of sense that we have the strongest correlation to the silver price. Well, we produce still about 730,000 ounces of gold. I wouldn't call that the byproduct because actually, at the moment, when you look at the revenue because gold is so highly priced. It's probably about 38% silver right now. Gold is probably closer to 58 to 60, then the rest is base models. So while La Colorada comes saying this will flip, at 1 point, it will be probably about mid-50s to high 50% silver, and then the rest will be gold, depending on the silver gold ratio, of course, as I said at the beginning, Silver doesn't occur alone.

So you can't go to like you can't produce 80% or 90% silver of your revenue that you could do that maybe on a very small mine, but not as a sizable big company.

So with that, my introduction is done, and I thank Sam. You will do [indiscernible] the acquisition.

Good afternoon, everybody. I'm Sam Drier, business SVP for Business Development and Human Resources. I'm still clocking up my years here, not quite at the Michael and the Steve and Martin level, but I've been with Pan American for 7 years and continuing this journey.

Today, I'd like to share our perspectives on M&A on our current execution, what we've achieved to date and some perspectives thereon. So what you'll see in this graph here is over the last 7 years, a series of well-timed transformational M&A acquisitions. It started off in 2018 with the acquisition of Tahoe Resources, followed by the acquisition of Yamana Gold in 2023. And then late last year, we closed on the MAG Silver acquisition, which led us to acquiring the 44% interest in [indiscernible].

So what you'll see is following each of these transactions, we've really been able to really reap the benefit of the commodity price increases -- with the most happening after our last acquisition with MAG with the silver price increasing of 132%. And what's really been key to the success of this is really maintaining our strong financial flexibility. We've been able to be opportunistic when situations arise, and we've been able to react fairly quickly. And this has put us in a really strong position.

So not only have we been opportunistic on the M&A front. But we've also been really diligent in being able to pursue portfolio optimization. Since we acquired Yamana over the last 2 to 3 years, we've been actively looking at our portfolio and really divesting of noncore properties. We've been very successful on this front. And over the last all of these various divestments, we've accumulated over $1 billion in cash. What this has allowed us to do is we were able to redeploy $500 million of cash from those noncore divestments and redeploy that into the investment in a very meaningful silver acquisition by way of the [indiscernible] mine in the MAG Silver portfolio.

The MAG Silver acquisition is really solidified and continued to strengthen our position in the silver producer space. Michael just alluded to it in his slides, which showed that he mentioned it as well, like if you were to think about adding Escobal, we add La Colorada scan, we really are continuing to increase our silver exposure to -- sorry, we're continuing to increase our position as a silver producer. And for 2026, we're looking at 25 million to 27 million ounces, and we're looking to continue to grow that.

So not only did [indiscernible] really help continue to strengthen our position on the silver production front. It's really made a meaningful contribution to lowering our overall cost profile. The Finacepia all-in sustaining cost is expected to be between $2.25 and $4.25 per ounce in 2026. And you already have seen in the first quarter of 2026, we've really been able to reap the benefit of that by having a total all-in sustaining cost for our silver segment of $6.63.

So really being able to contributing higher significant silver production, but with really high-margin answers. And with that, I'm going to hand over to Guido to walk you through our approach to M&A. I was very fortunate to have Guido join our business development team last year. Guido is a young veteran of Pan American and have been with us for over 17 years. And he's really touched a number of parts of our business. He's been in finance, treasury, commercial, marketing, insurance, financial planning and analysis.

So really great breadth and depth and very excited to have him on my team. And with that, I'm going to hand over to you, Guido.

Thanks, Sam, and good afternoon to everyone. Yes. So as Sam mentioned, my name is Guido Mastropietro. I've been in the company for my 17th year, and I've just about a year ago, joined Sam and the business development team. In terms of -- as we go to the next slide, I'm going to first talk about our approach to M&A and then talk about some of the work that we've done over the last few years.

So in terms of our approach to M&A, and as Sam noted, we've been really busy over the last 7 years, transforming the company. We've really strengthened that silver segment. We've built out our gold segment. We've replaced assets like [indiscernible] and Morococha and now declining [indiscernible] that's in residual leaching with assets like Corning CPO, Jacobina, El Penon, really, this battleship assets that are higher margins, large scale.

So really focusing on that high-margin large-scale production. That's our -- that's the overriding factor and what we're looking for in our M&A. We're looking for gold and silver, of course, in the right jurisdiction in Latin Americas. Americas is where Pan American has got a large footprint, a growing footprint. We've got a really strong base knowledge from our team that's operated in LatAm for over 2 decades.

So I really feel that that's where we can leverage our expertise as well as leveraging our ESG, right? We have a really strong reputation in ESG. We bring that to the table in every jurisdiction, really try to incorporate that into how we think about acquisitions and how we think about incorporating those acquisitions into the Pan American fold. As we -- in this last 6, 7 years, what we've shown is a really creative approach at leveraging transactions and finding ways to unearth and unlock value through acquisitions. With Tahoe, we use the contingent value rights as part of the acquisition. We wanted to avoid diluting shareholders for Escobal, which was a nonoperating asset within that portfolio.

So we issued 15.6 million -- the equivalent of 15.6 million shares and contingent value rights for that acquisition and then effectively really deferring the cost of Escobal in that transaction. Same thing with Yamana. We looked at the creative approach to an earth value. In that case, it was a joint acquisition with Agnico, where we really split up the assets in a way that made sense for both companies and leveraging our expertise and our history in Lat Am and then Agnico getting the other half of Canadian Malartic.

Throughout this last few years and as Sam noted, there was quite a bit of cash proceeds that came in from the -- the sale of noncore assets. We really built out this very large royalty portfolio of high-quality assets. in the copper, gold, silver, really providing more exposure and long-term exposure to rising metal prices and really another catalyst in the portfolio that's listed here. We also hold a very -- a number of limited strategic investments. There's 3 right here that we're going to talk about.

In 2017, we acquired shares in New Pacific Metals. New Pacific is advancing to very promising silver deposits in Bolivia, Silver Sand and Kangas. We also have 14.7% interest in gallium gold. Gallium Gold has about 1.5 million ounces of gold adjacent to our Timmins West Mine in Timmins. And then recently, we -- there's been an announcement on Cadillac mines. We turned our ownership interest in the larger property that came as part of the MAG transaction into what at close will be a 6% interest in the Cadillac mines. Cadillac mine is advancing the Koradison project, the restart of that mine, which has around 3.7 million ounces of indicated, 4.7 million ounces of inferred. So another very prominent gold development stage opportunity.

So with that, I just wanted to say that as we go through the next few years here, we're really looking to build out on that strategy, build out in our history of executing this growth trajectory that Michael showed earlier, this increase in silver production, maintaining our gold production. So we're really anchoring that with the projects, this brownfield projects that Scott and team are going to talk about. This is the La Colorada [indiscernible] development. La Colorada has the potential to be a world-class mine on the silver side, 19 million ounces of silver in the 2030s that could put it very much in the largest silver mine in the world, primary silver mine in the world at that time. And then anchored with on the gold side with Timmins, the Timmins camp project that we press released about earlier today. There is the integration of those satellite deposits really building out what we think could be a long-term production profile here in the Timmins camp. The Jacobina optimization study, which Michael talked about, it's really a lot of studies. And then this rounding it up with brownfield exploration success, continuing the history of brownfield exploration success in our portfolio that Michael also talked about, while retaining this large-scale silver optionality. I mean we have Navidad, we have Ascoval. Those assets are in the portfolio still. They provide that optionality long term on our silver side and complementing that with opportunistic M&A.

And with that, I will -- yes, I will -- before I pass it on to Scott, questions?

Just a quick question on -- you mentioned you've had great success in terms of M&A over the last couple of years. You have all this optionality. Question keeps coming up, is Pan American done in terms of M&A? Do you see more M&A in the future, more noncore asset sales? Any color on that?

If you look at the leadership of this organization over is, I think you'll notice that transformational M&A is pretty much one of the pillars of our overall strategy. We have -- our team has -- we've been able to build out our team and we continue -- we continuously look at M&A opportunities. I think you'll notice through the presentation, we have all these different pillars, pillars of growth, pillars of return to shareholders like M&A is a key one. And it's not -- I mean, we yield -- on the solver space, I mean, you know very well opportunities are scarce. We've been very disciplined in making sure that we execute on quality. You'll see we've over over the last 7 years, we've really sort of been building cornerstone assets here through Jacobina want to continue to be opportunistic, but we want to be really disciplined and really look at the quality M&A, for sure, is definitely a core part of our strategy, and it's something that we will continue to execute on in addition to looking at our portfolio and optimizing it in ways and Michael would like to add a few words.

For sure, and a very important point. But Look, I'm a very firm believer to build stronger, bigger companies in the mining space. The future will require that. Mining is complicated. There's not a lot of people out there that that can successfully doing it. Capital is not scarce right now, but it will be again. And it's not easy to build these big assets at over time because the capital numbers will increase substantially here because everything is going to go underground, but in 20 years, we probably mine most of the open pits or at least discover them in the world, and you're going to have to build very, very large underground operation like the La Colorada skarn. So very productive mining methods, et cetera. So a lot of technical knowledge needed. That's 1 point. You can't just count on shareholders continuously injecting money in this business. I know that the exploration business works like that, but I think it's getting harder and harder there as well. And We, as a company, a large company have a responsibility. And these are some examples there to inject money as well to make sure that these projects get discovered and developed for the future. And the last point is the last time we had to go to our shareholders to actually build 1 of our assets was in 2009.

I have no intention to go back to our shareholders for financing of a project, I have a firm belief that we generate enough cash to build any kind of size of projects that fit to Pan American. So that's really my belief. So how do we achieve that? -- is obviously to have better, higher quality assets that have longer mine lives. And we can find them. And I think it's amazing that we found the world class asset at La Colorado, but just finding it in your portfolio. I'm a geologist, but I've never seen that before. that you just discover a huge deposit below your existing mine. So then M&A really comes in there. Now you have to be very picky. We only did 3 large transactions over the last 10 years. they have to be accretive.

So it can structure them in certain ways. And -- but we look at in dozens and dozens and dozens of opportunity and we'll let them go pretty quickly when we don't see what we are looking for like long mine life assets that make money at way lower metal prices. And the most important, we need to see the exploration upside because everything that is already discovered, you're going to have to pay full price for it. And so that's what we do. And when you put that all together, it's not possible without M&A to continue that trajectory. But you cannot just become a deal chunky here and do whatever and by whatever, just to increase the those ounces. So it's a lot of work, and it's kind of a slow grind to go through all these opportunities. And not a me wrong, the market doesn't really appreciate when you announced a big transaction that [indiscernible], but I think we have shown now again what it can do when you do it at the right time with the right assets and definitely try to continue that trajectory.

Any jurisdictions you would stay away from?

Those many jurisdictions, I would stay away from luckily many of them don't have silver. So we've done -- we don't have to go there. Look, I think we are obviously very comfortable in the Americas, and that's really what it will be for us. I mean, just the fact that you have hardly any time difference that we know the places for many decades now. It just makes it so much simpler. There is -- as I said, there's no silver in West Africa. So it's no places -- and it's not because there's lots of people that have been very successful in those places, too, because they know the places. We don't know the places. We're not going to go there. And it just doesn't make any sense, right? So of course, we -- so when you look where silver is, there's only a little bit in Australia, tough to get our hands on that. Russia produces a lot of silver. Obviously, it's a no go. China is difficult. There lots of really small mines on the silver side. So at the end, when you look at really Lat Am, so it will be the Americas for us.

In terms of future strategic development, where will the emphasis be in terms of gold versus silver? I know that from a revenue perspective, gold outweighs silver. But from an ounces perspective, it seems most of the activities on the silver side. Again, just curious.

Yes. Look at the end, obviously, like us. We need a lot of silver we show that in the slide in the world. And it's 1 of our responsibility to deliver that server to the world so that the world can advance and continue the way we should go and we can produce that clean energy and electrification that we need. So but you can't find your silver as I showed. So for me, it was always the step change. Sometimes we added more silver than it came with a bit more gold. La Colorada will bring in a bit more thing, by the way, as well, a critical mineral or metal for steel production. And maybe there's again to be more gold come a bit more silver. So it's just a picture in time, really. We are a silver company. We are the biggest silver reserve and resource, and we have it in our name. I think it will always be there. But for me, if we had profitability is really what I'm looking at, at the end. If there's a bit more gold coming in right now or be more base metal later on. The big picture, yes, will be a silver company. When you look at a certain time, the picture, it will be maybe a little bit different. And we went as low as probably silver revenue on Leven. Silver was underperforming gold 2 years ago, and we had more gold production. That happened. It's not where I want to be. But if we are somewhere between this 35% to 55% silver, I'm very comfortable there.

Michael, just wondering if you think back to the Yamana transaction, when you guys consummate that deal, you guys kind of cleaned up the portfolio a bit shelve some of the shorter life assets. Now as we think a few years later, if you look at some of those Yamana assets, they're also becoming a bit short life as well. When you look at Cerro Moro, Florida, Penon stockpiles depleting. As the portfolio kind of consolidates around some of these larger cornerstone assets like Juancipio, Cara, Skarn Jacobina, how are you thinking about just those shorter life assets? And how are you managing the resource consumption within the firm around those -- the bigger portfolio?

Yes. Look, we have -- this year, we spent, I think, $135 million in exploration. Most of our exploration is brownfield or within the district, so we can track it to our operations. And so you mentioned a few names that are shorter life and not in agreement with all of them. I don't think that [indiscernible] always like 4, 5 years historically of reserves, but I had that 20 years ago. I think hopefully, it will still have it in 20 years from now.

Of course, it gets harder later on, but you just have to spend more money. There is definitely the the opportunity there to get to such a long mine life. So when you look at Florida or especially CareMore, that's a bit harder because the assets in Argentina, and that part of the world don't go that deep like we see in Peru or in Mexico or some in Chile. So you don't have that extension. There we find satellites in different distance. And of course, metal prices will help there for a while. But definitely, that's one that generates nice cash flow, but not that many ounces anymore. Of course, Jacobina is going to be a battle shape asset for us for a long, long time. And one of the main reasons why we wanted to buy Yamana Gold.

So I think it's not just from that acquisition, it's just a continued quest to expand assets that we already have, maybe acquire another big asset but then sell off to smaller assets. If we can't find a much, much bigger resource base there. But as I said, look, I'm together with Steve and Martin, we thought in 2006 that we have to shut down La Colorada in 2008, and now it's 1 of the biggest discoveries on the planet. So you can't give up too early neither. Geology has been and will be always very important in our company.

I know earlier you touched on the royalty portfolio. Its grown to quite a big size. And I know, Michael, you've talked about how Pan American is a producer, not necessarily a royalty company. Eventually, there could be opportunities there. I'm wondering how should investors think about the royalty portfolio and maybe push a little bit further, what kind of value should we look at it from that perspective as well?

Yes. I mean I think if you look at the list, it's back up here. This is something we've been generating over the last 3 years. I mean we've added a few others. So as you can see, 5 others, the transaction details are not public, like we're continuing to add royalties to this portfolio. not really in a rush to necessarily sell it. We don't need the funds right now. But we think that the right time is going to come when it will add a lot of value to our stock. These are copper gold Silver time has worked really well in our favor. Some of the royalties have been going through additional permitting and additional progress on the technical reports and the progress on the studies that -- to build those assets. So we think that there is time is on our side on this portfolio. But really, it's just building out the portfolio before we do monetize it.

Just quickly and then we have to keep going if not, we still here by 7. But the last time we had a royalty portfolio, which we always create the same way, by the way, they are not royalties from our producing assets that are royalties when we sell up and as. We always keep a royalty. And before I was CEO, I did the business development and I capped royalties the same way. And [indiscernible] portfolio, we started [indiscernible], if you remember. And I think that got finally sold 2 triple flag. When you look at the value from the beginning to the end, I think we did about 12 on our money with that transaction. So there's very smart ways to deal with that, that it can create value, especially if we don't need the money right away. And I think they are [indiscernible] on just selling it to a large royalty company. And I'm sure Sam and Guido will come up with a way to generate way more value from those.

Good afternoon, everyone. And it's great to see you again here after a couple of years. My name is Scott Campbell, I'm the Chief Operating Officer. I was named COO in October of last year. Before that, I was the Senior VP of Operations and Projects. Mike at the onset mentioned, gray here. I've grown a couple of gray hair since I became COO. But it's all good. I'm a firm believer that the best years of Pan American Silver are yet to come. And it's a great company, as you'll see today.

So let me get to my slides here. A big part of my job is safety. A big part of my job is to make sure -- to ensure to do the best that I can that our 17,000 employees and contractors have the tools, the equipment, the training and the opportunity to work and execute their tasks safely safe as possible.

I don't think you can declare victory when it comes to safety until they get to zero incidents. It's a long road. It's relentless follow-up and training and communication. I'm encouraged by our safety results in the graph that we are getting better. There's ways to go yet. A big part of our culture that we're trying to change upon American Silver, this continuous improvement. Quest has to do with what we call doing safety differently. It's a school of thought -- it's really a new language developed by Dr. Sydney Decker and others who try to -- the message has doing safety differently has to do with humans are going to make mistakes, regardless of training, humans are imperfect.

The objective there is to fail safely. So humans will drop the ball from time to time, but the objective is to really ensure that you've got other safeguards built into your system. So if and when a human does fail, you don't get an accident, nobody gets hurt. So this is part of a plan that we implemented about 2 years ago. We're rolling out safety differently this culture of this language across all of our sites, and we're about 80% complete in rolling that out. We've also implemented a number of initiatives across the company to improve our safety performance.

Some of them -- I'll just mention a few of these critical risks, critical risks have to do with those risks that could result in severe injury or a fatality. We're focusing on these critical risks. We've established 10 across the company. And every mine site has the latitude to expand on that list. There are some risks that are site-specific. And so from corporate, we've established 10 and every site contributes. Some of those fall into the sites, [indiscernible] and some of them do not.

We're working on collision avoidance systems. We've got thousands of pieces of mobile equipment in this company, in every country, the 8 countries where we operate on our 10 or 11 mine sites, we were implementing fatigue management systems. We've got a lot of success with that. Another thing that we're pretty proud of and which should be completely rolled out by the end of this year has to do with electronic detination of blasting. We're getting away from the manual use of tape fuses to detonate blasts. And we've also implemented centralized blasting where everyone underground of [indiscernible] to the surface we set off the blast and the [indiscernible] underground at the end of the shift or at the end of the blast. So a lot of success with that. It's a long road, but we're getting there. We strengthened our corporate safety team. I can tell you that of all my direct reports. If I don't spend more time with him, it's very close.

I spent a lot of time with our VP of safety. We have a corporate team -- and we have a safety team at every single site, which reports solid line to the Operations Manager or GM, but there's a dotted line to the corporate VP of Safety, and he has strengthened his team. He sits in Brazil, and I spent an awful lot of time with him just within last weekend, visiting our sites in Mexico. So root cause analysis, again, trying to find out why things happen, trying to find out why people did what they did. We've -- every mining company has had incidents or accidents around conveyor belts, if I could just take a recent example that's happened to us. We had an injury where a worker was cleaning a conveyor belt where the convert is still in motion. But if you bother to take the time to ask the questions, why was a conveyor motion? Why did that really happen? He did that for a reason, maybe the conveyor belt was going too quickly or maybe the shut was too small. These are all engineering improvements that we have to, as owners look at and really evaluate and correct before it becomes an accident. So I'll walk through the guidance slide.

So 2024 and 2025 are thrilled that we brought our silver and gold production in within guidance. Those are successful years. So far this year, Same story, happy you with that gold and silver and from a production perspective and from a cost perspective, too. We're within guidance. So very encouraging results, and we'll continue that through to the end of the year 2026. This is really -- our guidance, of course, is a function of our budgeting exercise that we do company-wide Q3 and Q4 every year, where the regions get together and look at lessons learned from share opportunities, look at past success and then right the formula for the future.

So, so far, so good in 2026. I'll go through the operations quickly, some colleagues will give some deeper color commentary here regarding oneoCPO Colorado, Jacobina and Timmins here after I stepped down. So with Colorada, tremendous success from an exploration perspective, from an operations perspective to improve ventilation that we implemented a couple of years ago, La Colorada has really paid dividends. We've renewed our fleet at the La Colorada strengthen the team. We've got a capital allocation request approved for 5 billion to get the 580 decline going on the Skarn project work starts in Q3 on that effort. So we're really, really optimistic. Of course, 1 we published our PEA short a while ago that that Michael already mentioned. And yes, we're on track to produce 6 million ounces of silver this year from La Colorada. So it's going to be a fantastic year.

One a CPO, new a new deal for us. We've been operating in the neighborhood as I could take us for 30 years. I want to CPOs about 2 hours down the highway from our La Colorada project, we call it out of mine. And we've really established a constructive relationship with the Fresnillo management team. We've got a safety community going operations committee, regular site visits, cooperation happening, and it's going really, really well. It's outperforming as you can see from the numbers. They've got a conveyor project of 4.2 kilometer long ore transportation underground cover. And that's progressing on budget and on schedule, and it hasn't interrupted day-to-day operations. So it's very encouraging, we're happy with how that project is being executed.

Jacobina on track to produce 185,000 ounces of gold this year. So our first mine in Brazil and a young workforce, very motivated workforce in an attractive jurisdiction, fairly easy to recruit people to work there. And we're really happy with how that's going. A lot of opportunities that Steve will elaborate on -- and it's just a fantastic asset in a fantastic jurisdiction. So we're really, really excited about that and leveraging our experience in the Annie's and the Cordero to implement best practices at Jacobina. When I think about El Penon, I think in my career, I can't remember a team, a more cohesive team that I've ever worked with. El Penon 2 hours from Antofagasta there in the middle of the auto Canada does one of the driest places on earth, really surrounded by giants. We've got the Escondida copper mine open pit copper mine up to highway a little bit beside that, the Zaldivar open pit copper mine. We've got a team that's been working together for for a couple of decades through the amount of acquisition and they've stayed on with Pan American Silver. They've really signed on to the Pan American Silver culture they work together. It's a really good blend of young talent with experience and 2 hours from Seaport, good land link, industrial tertiary education available in Antofagasta, the next generation we're hiring.

So it's really, really great. Year after year, reserves get replaced, successful exploration programs and just a great team and a great place to work out some innovative technology in the tailings management system there. Of course, the dry air environment really helps at El Penon. In Timmins, again, Timmins a fantastic Q1 this year. We've -- the Timmins has become robust, the operational leaders will talk about that here in a bit. But there's a lot of potential there, a lot of upside to Timmins. I'm really, really happy with how that's going. The team, the technology, the improvements and just a real success story so far this year.

So I'm really, really glad and really proud of what we're doing at Timmins. [indiscernible], I was lucky enough to be the GM as said a number of years ago, and it's a really -- it's a very, very special place. It's pretty -- it's our only major open pit. We do have satellite open pits and other operations, but showing those exclusive the open pit, leach pad and pretty simple flow sheet, there's no crushing or screening. There's just run of mine stocked on the pad. And really the key to [indiscernible] has to do with synergies associated with building waste dumps, leach pads and closing the pit.

So we're trying to minimize our footprint. We've got a bunch of creative engineering solutions to do that, that are saving us a lot of money and that will continue to follow us into the next few years. So some good creative geotechnically sound solutions to reduce our footprint and to shorten haul distances and really maximize our recovery in gold production. So the window is about 3 hours in the city of Kaho market, 2,500 meters above sea level. Florida, down in Chile, we leveraged a lot of the Chilean culture. Of course, we -- there are siblings. I mean Florida and El Penon, ceilings. Of course, Florida, it's mainly a gold producer, not a lot of silver being produced at Florida. 2 hours from the capital city stents, I want to pay pit.atracaf location for people to work. I am really happy with how -- the -- Chile is a pretty demanding jurisdiction when it comes to collective bargaining agreements. And we've got a total of 7 unions between Florida, the Florida mine and the Elton online, who generally expire every 3 years. So we got 7 units on average, we have to negotiate these every 2 or 3 per year. And we've got an incredibly strong team to do that, who really knows the rules where the goalposts are in terms of these negotiations. And they've got a lot of success renewing these timely, punctual and constructively between the union members and ourselves. So that's been going really well the last few years. not easy. Cerro Moro, some good news. We've got -- pretty proud of our discovery of the Nai-Condor satellite open pit, which we started development of about 1 month, 1.5 months ago. We blend or from that open pit with the underground resource in the process plant. We also completed a small expansion, having to do with our tailings discharge system that grew up by about 10% last year.

So yes, the Nadi Condor, the road is constructed, some very good conditions in all weather road, some good engineering extend engineering behind that. and that will prolong the life Nation and other deposits will prolong the life of the asset or by about 18 months, hopefully longer. Moron. Horan polymetallic underground mine located about 4 hours from Lima, Peru up in the Andes, about 4,500 meters above sea level. It's been producing since before World War I -- and we acquired this is 1 of our longest held assets over 25 years, close to 30 years. We had a lot of success there. The thick and tailings plant is working as per design, costs are aligned with expectations there and there's exploration upside to it that we're on, a lot of knowledge, a lot of local knowledge in that part of Peru, Central Peru has been, of course, mining silver for many -- for centuries. So it's all good, and we're on. And then finally, San Vicente, arguably our most remote mine in lactin Bolivia also at 4,500 meters of [ oselevel ]. Really proud of the safety there 1.5 years since the last lost time accident sent got WiFi underground drones, very motivated workforce, good relationship with the unions. And just very predictable, steady state production, just Semicenter continues to deliver -- it's the smallest operation, but it's pulling its way -- punching above its way, maybe. And finally, just a couple of comments about the team before I run out of time. So the 3 people on your screen here, 3 regional operations, vice presidents. And so we've divided this up based on geography, based on operational similarities and based on other factors. There are a number of ways that we could have divided this up, and this is how it is, and I'm really happy with how this is we're just about where I want to be with this. they've got underneath them country managers and -- sorry, country managers reporting to these VPs and then general managers underneath those I travel a lot, I spend a lot of my time on the road to me to really develop this team, and I'm really proud of how things are turning out. So that's -- it's a very, very strong team, world-class team from the left, Misterio has been with the company for a couple of decades. Christian in the middle down in Chile and Argentina. He spent a long time at Yamana and really leads that team his 3 mines were the 3 used to belong to Yamana. So he's really perpetuated the Pan American Silver culture, and he's really he's got -- he's taken it to heart. Kelly is a new hire heading up our efforts here in North America.

So that's it for me. I'll hand off to Chris Emerson for a deep dive in La Colorada.

Hi, everyone. I think you can all hear me. That's great. Yes, we've got a bit of technology. I think you -- some people may have been here a couple of years ago and saw this. So we'll get straight into it. We're going to be talking about La Colorada. Chris Emerson, Senior Vice President of Exploration and Geology, been with the company on my 11th year now. So as and what a journey has been. So we're going to look at La Colorada first, and we're going to bid the geology. Of course, we're here in Zacatecas, we're going to zoom in. You've got Durango to the north Sakatecas is probably about 155 kilometers from from La Colorada. Of course, now we've got a new one there, inacipio, which we're going to talk about in a bit.

But really, I'm just going to swing around and I'm going to look at Zacatecas such. Obviously, we're going to be zooming in La Colorado. And we'll look at the regional context first, where really we're on the Sierra Marja, and this is the silver belt or silver belts, starts up in the Southwest comes down through Mexico here. And we're right on the edge here. You've got Fresnillo, a big camp, which we'll talk about in a bit. But really, yes, we're on the structural Northwest, Southeast, and you can see all of these major deposits, which line up on that trend. You've got San Martin sitting 30 kilometers as the crow flies from La Colorada. That's the scan deposit, by the way. So we're zooming a little bit. We've got more of a district kind of geology. The green is limestone and then you've got these browns, which are the volcanics.

Now the volcanics are where the main silver deposits sit in the Sierra Madre which is the lower and upper botanics, we'll get into a little bit more detail on those as well. But now nearly 9,000 hectare sitting in and around this area and La Colorada sitting right in the center there, we're going to zoom in and take a real look at the local geology now. And that's going to -- here's a surface map here we have it. The red are the main veins that we have from Recompensa, Amelio, the HC and Christine and over the last 6 months, we've been releasing press releases on the discovery, and we're going to go into more detail through the video here. And the green outline is the scam which sits below all of these veins in the limestones very quickly, we'll give a quick overview of the site layout. We got the tailings down in the south. [indiscernible] at the main plant in the middle there and the shaft -- the main operating shaft in the center of the new Guadalupe shaft, which is now giving us that ventilation, which is the -- Scott was talking about the return back to that 6 million-ounce of production.

So here we are again. Again, we've got those red lines, which are the main veins. And really the success story which were released in March are these new veins that sit over here to the south and to the east. Drilling has been ongoing now. We're doing around 80,000 meters a year. which is giving us these discoveries that we'd be seeing here, we've got all the silver grades. We are the main mines and you see the HW NC2 and the new Mariana, the extensions of NC2 going east -- and really, all of this is still open as we go further east to the South Cristina, which are these larger regional -- larger structural plays in there, as I think moved out, gave extension and allowed the fluids us to come in. So here, we have the silver grades.

Here are now just putting on the current principal vein reserves and resources, the shapes there, Mariana, we've got someone that Christina and then we're going to move into showing some more of the principal or the secondary structures, which we've been coming out with recently for the [ MENA ] Santa Renamo systems where we've got some inferred. And that's where really a lot of the success has happened, as I was mentioning, kind of south of that NC2. And then the blue, which -- and we're looking above that, was the scan, and we're going to, again, come into a bit more detail.

Here's a very quick slide to show you how successful we have been through the drill bit here, up to nearly 80,000 meters of drilling. We're sitting at around million ounces of silver. And certainly, the inferred resource in midyear 2025, we had another 50 million ounces of those southerly structures and to the east on the NC2 and Mariana. So success definitely, again, there the those both blue shapes of the scam, which sits below in the limestones and then all of these different structures which make up that reserve resource for the veins. Here we're showing the new veins that we've discovered. So these are not in the midyear 2025 resource -- these are new structures that we've now defined, and they will certainly be coming into the 2026 midyear, which we're working on at the moment with the Technical Services team. So lots of upside from what we've been releasing at the moment.

So December 25, March, September, we're coming out with some really nice results. Here's just a few examples of those results. Looking at the Mariana is still a long section. And we're looking at multi-kilo 0.5 kilo and so really, really strong as we look across there. And we're going to be showing that the exploration potential as we even push further outside of that long section to the east is there as well. This is the NC2, Again, just showing you some of those examples of some of those drill results that we've been releasing up to 10 kilos over 20 centimeters and multi-kilo meters at 10 ounces, which is -- and with the lead zinc as well at over 10%, 15%. I -- so now we've backed out. Again, we're looking at that vein rate.

Now we're going to focus a little bit on that new veins that we have been finding and multiple veins -- we're going to flip and give you just a quick cross-section across that are, and I'll just stop it here so I can explain it a little bit more. So here we have the NC2 and the Mariana. They're in the reserve and resource. Here, we have the 2 galleries that we are currently exploration galleries that we're currently developing south on the 588 and the 488 level. And actually, Elenavein, which was a new vein, a blind vein that we found as we developed through that on this deeper gallery. And then we're heading towards the file minas, the microliters and all of those structures to the south. The largest structure, the Christina again, is still open to the east, and that's where we're heading to on those exploration. That's going to bring all of this potential resource into production.

So we'll flip back out. We'll zoom into just 1 of those, which was Filomena which had some very good results, which we released -- as I mentioned, again, this is a new vein that we hope to bring into a resource. I've got 2 machines just drilling on this at the moment with over 15 drill machines going La Colorada. So I'm going to pause it there. highlight the 5 meters over a kilo silver and a combined 10% lead and zinc. Just 1 of these areas that we've been drilling -- and this is actually specifically very good because it's this contact between the limestones and the volcanics, where we've started to see more of a replacement style mineralization, which is great for us. And all of these others, we've been releasing over over the past year.

So lovely upside in all of those new veins that we've been discovering and looking at where this potentially could go. So back in September 2025, we released S-10 25. Now as you can see, that went through the veins. It also hit CRD, which is carbonate replacement style deposit and also went into scan. That's sitting 450 meters over from 903, which is one of the skarns in the current resource reserve. That's over 450 meters to the east. We found skarn again. So for an exploration geologist, this is really good news. So I thought it was worth highlighting to really show you that we have an expansion and we're hitting veins, and we're heading skarn further out to the East. So now we're back to that overview. Looking down at the the deposits. And now we're going to talk a little bit about skarn and give you some details as to where we are with that, and then Martin will come in and give you some more details on the recent PEA.

So blue, the skarn, the update -- the resource sits around 2024. We've got over 45,000 meters of new drilling that's got to come into here. The dimensions of this, I mean, the skarn is 1.6 kilometers, 700 meters by over 900 meters in depth. We've got drill -- I'll show you some dual results with over 300 meters of sulfide. It's an exceptional discovery from 2018, going to swell that around and show you those 3 different deposits that we have, we call the 901, 902 and 903. Martin is going to touch on this a lot more, but then that new -- although new vein inventory that we find that resource that we're finding over at the top has really changed our viewpoint on how to mine this in the future. So we're going to zoom come back around. We're going to show you where all the new drilling is, that's the magenta here or this new drilling that's been happening, infill drilling, the current resources to bring some of those inferred up into indicated and doing some exploration slightly off to the east at -- and when we look at the scan, we've described this as you've got the volcanics, the pink at the top. And below that, you've got the limestones the blue. Now when we get intrusives coming up, we then -- the hot fluids go into that limestone, create alteration, these garnet, the green scans around these intrusives, and that causes the porosity and it allows all of the sulfides to come in afterwards and mineralize. And that's what we have here. We have a very classic mineralization intrusive the pink in the middle the deposits sitting in and around these hot intrusives, which have been mineralized and giving us the sort of resource that we have to date.

Here's a little example of some of those drill holes from 2018 that we've been releasing over these years. I mean when you're drilling 380 meters with a combined 54%, 2% lead and nearly 3.7% zinc, I mean that's pretty phenomenal. 439 meters of sulfide 250 meters of sulfide with exceptional lead, zinc and silver results. So it's been a real pleasure to work on this deposit. Again, mentioning we got those 45,000 meters that are going to come into that resource reserve. That's going to give us over 360,000 meters of drilling into this. So we've got a lot of confidence in what we have here and in true weatherman style, the sun is always shining in La Colorada.

Over to you, Martin.

Thank you very much, Chris. Okay. Hi, everybody. Welcome. Good afternoon, let's go advance a little bit. This is the 2024, what we had in 2024 with the sub-level caving idea, and we thought we had a really good plan. caving operations, caving mines create subsident zones and then we found all these fabulous veins that are above that in the East. So we realized that we needed to take another look.

So we're going to long-haul stoping as being the mining method, and you can I'm just going to pause it quickly here. Okay. So this is the La Colorado, the expanded project. We have the orange color, which is the existing mine, the reserve. We have the lighter blue or the turquoise color which is the vein resources that are in the East. And then underneath that in the blue is this much more massive skarn deposit with hundreds of meters of width as we go. And you can see the total resources that are in the table at the bottom. So that's what the overall project looks like as we go forward. And is it moving. Yes, here we go.

So this is a bit of a time line of how the development of the La Colorada skarn is going to look. And you can see here that we've got this ramp that Scott mentioned that's coming down, this quota 588 ramp that the Board of Directors just approved and talk a little bit more about that later. These 2 blue vertical lines in the -- on the right-hand side, those are the shafts. It's a production shaft and a ventilation shaft that are going to come down. We're calling them the East shafts, and we're going to go to our board for approval for those later in the year when we've done a bit more work on it. And you're going to see down here in the bottom left-hand side of the screen, the cumulative silver production of the whole expanded project as it goes forward and the time line on this horizontal red and green bar.

So I'm just going to go forward. And you can see that we're mining mostly the reserves right now as we go and we're developing the mine. And now we're just starting production. We're in the sort of preproduction ramp-up phase of the skarn long-hole stoping. You can see some turquoise color coming in the vein mine above, and you can see these stoping blocks. Now each one of these little blocks for reference are about 30 meters high, where they are. They're 30 meters high by 30 meters by 20 meters. So they're roughly 50,000 tons every time 1 of those comes out. And you'll see as we advance forward. We're going into the green area now, which is the higher grade payback period, and we've already got over 100 million ounces of cumulative silver production as we're rolling this forward. And we're now right into the green squares. Those are the high-grade areas of the skarn deposit that we're going to take out to get our payback in the initial phase of the mine production. So keeping ongoing, you can see that the vein mine above is going. We're developing the -- continuing to develop the mine, and we're now into what I call the full production period. And the full production period, we take about 8 stopes are in full production at any 1 time being marked of 24 stopes in this full cycle between drilling, blasting, backfilling that type of thing.

So that's 24 stokes, 500 tonnes a day roughly per stope. We get to 12,000 tonnes a day of scar and stope production plus 1,000 tonnes a day of skarn development production, plus 2,000 tonnes a day from the combined vein mine reserve and the Van mine resource, which is above. And that's the -- that's how you get to 15,000 tonnes a day for the skarn. And you can see that cumulatively for the whole mine since 2026, the cumulative production has now gone above 200 million ounces of silver.

So now we're running forward. We're sort of finalizing the vein mine production. The reserves are mined out essentially, and we're finalizing the resource above, and we're continuing to very sequentially mine out stope by stope the vein. And you can see the silver production going up to 300 million and on the way to almost 350 million ounces throughout this life of project that's going to go all the way out to to 2068. And that's just -- I'm not going to be worrying about that. that's kind of how it goes as we go forward. And then we're going to do a little bit of a spin around here just to see just how massive the skarn deposit is, hundreds of meters across compared with the little veins that we're mining above.

And there's little veins are small, but they're super high grade. So that's kind of the idea of what this project looks like. And we see the sort of material handling system coming up here now with the production shaft and the haulage levels, and lots of ventilation required has got deep opine. So we need big shafts to get all that air down. We're going to need a refrigeration plant on surface. And then we're going to spin it around and you can see the topography coming in now, what it looks like and we're going to spin it up to see what the surface of the mine looks like.

So now we're up on surface, and we have the East production shaft and the East ventilation shaft there together. And the yellow ribbon that's stretching across, that's the overland conveyor that will go to the process plant. And now we're just going to go past the south ventilation shaft and the paste backfill plant that are there. And we're going to come now continuing on the overland conveyor. We're going to go past the new electrical substation that we'll need. It's going to need a lot more power to run this big operation. and we're into a 24-hour live coarse ore stockpile storage.

So part of the underground development, there's going to be a garitory crusher underground that's going to take it down to 80% minus or 82 millimeters. And then on to this Corso storage. And then from there, it's going to go into the grinding circuit which is SAG mill ball mill with a pebble crusher, and that's coming right up. We see inside the plant building here now and then from grinding into selective flotation concentrate thickeners, concentrate filtration, concentrate storage and into the tailings thickener and then some were the tailings off to the tailings, some to the pace backfill plant. And now we're going into the the camps and the other sort of surface infrastructure that we'll need and I'll just stop it there quickly. That's a 1,000-person camp that we're going to install for now. with the infrastructure, the truck shops and the offices that are all associated with that.

So we'll just let that 1 run out. Treste storage facility. It's actually in the south part of the property, even though it's showing in the top part of the page.

Great. So we'll now go back to the slides. And if we go to the slides, this 1 -- this slide is in your package, but Chris covered it. as is the next slide, so I won't dwell on that. The next slide is essentially showing the comparison between the PEA, which I said was a much larger 50,000 tonne a day sublevel caving operation versus the sort of revised approach that we had much more conventional, lower-risk mining method, lower initial capital, higher NPV, higher IRR. And you can see see the financial metrics of the operation on that slide. And also on this slide, as you saw, very long life, still large-scale very low cost because the credits, the zinc credits are incredible.

The zinc and the leg credits really bring the silver ace down $5.2 billion NPV 5% at our upside case metal prices, which is 75 silver and $45 base case, it's a 2.6% -- $2.6 billion NPV 5. So moving on to the -- so the profile, the silver production profile is in the top chart and the zinc production profile in the bottom chart. And the opportunity here is to extend that higher-grade payback period for the project. And that is going to be a combination of the high-grade vein discoveries and more exploration in that area that Chris talked about as well as continuing to explore for more and more skarn mineralization which is looking extremely [indiscernible] right now.

Zinc production, very large zinc mine, 240,000 tonnes a year zinc mine in the initial period. This slide is a bit of a demonstration of where we think those discoveries are going to come. And if you draw your attention to the right-hand longitudinal section where it says new vein discoveries that's going to the East -- we think there's a great opportunity in that area and also to the east and the skarn as we move along there to draw more at depth. There is some optionality to do -- still do some caving, which may be in new discoveries or maybe deeper below where we are right now. So we'll retain that optionality.

So La Colorada right now, if you look at it on a reserve and resource basis, it's already one of the world's largest silver deposit is right up there with Fresnillo. Graph chart shows it. And also the expanded La Colorada mine, if you look forward into the future and compare it with other operations current would be the largest primary silver production in the world. That's right up there with Wanicipio that we also own 44% of. So this kind of shows the evolution of La Colorada as a major primary silver mine going from where we are right now to a very low cost large production silver mine in the future, a complete transformation of the mine -- and also, as I mentioned, a very large zinc producer as well. We talked a little bit about long-haul stoping. Certainly, one of the opportunities that that we're looking at right now. We're working hard on advancing our engineering studies.

We're working on a geotechnical domain model right now. There may be some potential to expand the sub-level interval beyond 30 meters -- that would mean a lot less sublevel development or some less sublevel development depending on how far we can go with that. That's certainly one of the things that we're looking at. Yes, some different engineering studies. We're doing a lot of test work on pace backfill as well right now, looking at cement contents and strengths and what we can do in terms of sequencing, there's probably some opportunities in that area as well. The other opportunity would be when the vein -- sorry, when the skarn infrastructure is in place to look at expanding the high-grade vein production so that it will be a higher percentage of the overall production. And that could increase the silver output or at least maintain that silver output for a longer period of time beyond [indiscernible] few years. This is the very conventional flow sheet that we have that we saw in the video for the skarn. A few of the things we're studying right now. One of them would be whether or not we should use the existing plant to process the vein material. There is an opportunity to perhaps get higher accountability for some of the payables by putting the vein material through the existing plant, particularly for gold because the gold gets quite diluted. But the skarn doesn't -- or has very little gold in the vein mines, as we looked at the East are quite interesting, becoming more interested in terms of the gold content. So that's a trade-off as well as whether or not it justifies having a copper circuit in the flotation plant that we would switch on from time to time.

Not a big addition to the overall NPV of the project, but it could be worth doing and switching on and off depending on where we are. And this is the capital estimate, 1.95 million that we've been working on with Worley as well as a lot of other help from really fresh rate engineering companies, sorry. And I probably should have mentioned on the capital side of things that we intend to delay the expenditures on the plant. The critical path is always through the mine in this project. So all the mine development decline shafts, that's all critical path. The plan we've got time to defer those expenditures to just in time so that we help our overall rate of return in NPV on the project. And just on the decline, the Board approved $265 million to do this decline. It's going to be a large skis decline, 6-meter by 5.5 meters, we're going to be able to use 65-ton trucks, articulated mining trucks in that decline. The rest of the development will be 55. And the we'll also put in the permanent dewatering infrastructure. That's why there's so much money there. There's a lot of dewatering infrastructure that needs to go in as well as the power upgrades that we're going to need to be able to power all of that and the ventilation.

So that essentially concludes my presentation Q&A.

Matt Murphy with BMO. The first question, just you sound like pretty excited about the opportunities to find additional skarn material. So is that something that's being actively drilled right now? And -- and is that mainly as the diagram shows life extension potential? Or like is there a scenario where this mill ultimately gets even bigger if you find another skarn?

Absolutely. I mean, really at the moment. And certainly, the recent press releases has really focused on the new vein drilling, and that's where we've really prioritized over the last year, I would say. We have been doing some scout like S10 where we showed deep skarn hits, et cetera. We haven't -- and certainly, we'll be moving towards once we've got all of these veins. We're going through the mid-year at the moment, so our priorities to really get a lot of that resource, potential resource into the statement at midyear. Then I think we'll then switch to maybe looking at some more of that dedicated scan exploration further east.

So yes, it's a priority, but not at the moment, our priority is to get that vein resource to a good enough category so it can enhance the production profile in the future.

And in terms of the production rate, you do run into some limits on what you can do with long-haul stoping and the pace with the assumptions that we have and the turnover time for the stopes and the pace backfill because remember, we're not just mining stope sequentially along strike. We're also mining them across dip as well. So -- by adding more strike length, yes, there is option that you could incrementally increase that production, but there is a long development scenario on this. And I think if you go further east, we probably would need another ventilation shaft in the East as well. But yes, the other 1 is maybe you do sub-level caving out there. The reason we don't want to do some level caving and the other deposits is because we don't want that subsidence to impact our -- losing our vein mine.

So it depends on how far east the veins go and our infrastructure for the veins as well. But continue with long [indiscernible], yes, maybe not massively, Peter.

And then just one on the CapEx doing the mill purchasing just in time. I mean a lot of companies, when they decide they want to do something, try and lock in get those -- get the equipment ordered because there's inflation risk -- so how do you think about bouncing that off?

One of the trade-off studies we're doing right now is we're looking at equipment that we have already in the company. We bought a fairly big plan to see if that makes sense to use that. But that's certainly something we're working through. No, we think that the right approach is to delay that plant as long as we can. There's no point having it there sitting around doing nothing.

Steve, do you want to weigh in on that?

A quick question. Sorry, a quick question. You talked about not looking to increase the amount of skarn that you're going to be taking out -- but in terms of the 15,000 tonnes per day, I think you've allocated about 2,000 tonnes per day for the veins -- high grade veins and this continues to find more and more wins -- is there an opportunity to increase that tons from the vein side? And is there any constraint there?

Well, the constraint right now is the infrastructure that we have in place and the plan that we have in place, we think we can increase the existing plant. But we would need more ventilation because we're going to use quite a bit of ventilation for developing the skarn.

So probably the best opportunity is when the skarn infrastructure is in place. I could see quite a decent size increase in the vein production. That's one of the studies that we've got coming up for the remainder of this year as to how that would look. We haven't completed it yet. We're going to wait until we get the resource update done as of midyear, and then we'll go through the process of looking and seeing what we could possibly get out of that. There's probably room to increase the current plan a little bit, but where our shaft right now is pretty much maxed out. We are holding some waste up the ramp.

All that 588 decline waste is going to go up the ramp, so we could maybe get some extra ore up the ramp too, but not a real big amount for the time being. When there's skarn infrastructure is in place with the big -- those big shafts, then that's a game changer. So yes, definitely, we can.

But it's not just about extending the high-grade or the 20 million ounces across it's looking to maybe increase that amount as well.

Yes, absolutely. And we do have the option as well of if you built the other plant to keep the existing plant going. It's a beautiful plant. I mean there's a pretty much a new plant, and it's a beautiful plant. So it was just an efficiency thing in operating cost that we decided to go to the 1 plant, but there is that potential there to keep that on running as well.

Can you mention it on the mice just [indiscernible] We're taking a break for 5 minutes and come back at 2:40. Thank you.

Good afternoon, ladies and gentlemen. We're back. We're going to be looking at the Timmins and just introductions first.

My name is [indiscernible]. for Canada, here been with the company for 9 years, sorry.

Excellent, excellent. So we're going to tag team a little bit. So [indiscernible] is going to come in with some more specific information as we run through the video. So let's get started. We've now -- we're now in Canada. So we're going to be looking at Timmins operation. We were 560 kilometers north in Timmins, specifically, we're in the Abitibi Greenstone Belt.

So stretch across Quebec and Ontario and really, the takeaway from this slide specifically, don't be scared of all the colors is the black Porcupine Destor which is the big structural control, which comes across 400 kilometers, and that's where all the main gold deposits sit along this structural -- regional structural control. And Timmins were sitting right over here on the western edge, that's produced around 80 million ounces, the Timmins camp alone, over 300 million ounces coming from the Abitibi so far.

So -- let's -- we're going to zoom into timing specifically, talking more about where we sit, Pan American and the major deposits within the Timmins camp McIntire Dome, Palmer, Bell Creek sitting over there; and Timmins West down here. Obviously, we came out today with the press release on the exploration potential. We're going to be looking at -- some of those projects, which will fit into this larger idea that we have now for Timmins. And Al is going to also pitch in with some of those details.

So Timmins, right in the middle, you've got Bell Creek, which is the main center where our processing plant is for -- and we ship all our or from Timmins across and up into Bell Creek. So looking very quickly at the reserve at Timmins we're sitting currently at 850,000 ounces. We've maintained that over certainly since we've had the project in 2019 through the purchase of and really maintaining that with constant drilling. And obviously, the press release today talked about the deep drilling that we're doing at Bell Creek, which is I'm sure deposit, let's face it. So really good success there. And we continue to drill and got 120,000 meters to drill over this year in the mine and the projects themselves.

So here we are zooming in. We've got the tailings over there on the left-hand side, Bell Creek mine, the processing plant there. And now we're going to strip that away and look at where the actual Bell Creek, which is an orogenic gold deposit. Now orogenic gold deposits, they need structure, which we've got the Porcupine Destor. That's the main control on is you need that fluid way for all those fluids to come up from this bigger tectonic events.

And you need rock, you need the right rock type. So these are all being cooked, the metamorphic and also very characteristic of these orogenic are very deep. Generally, there are 2 kilometers plus. And if you can now look from that recent drilling that we released today, we're talking about 2.6 kilometers down.

We're around our current resource and reserve sits at around the 1925, and now we're down to 2,600, another 700 meters of mineralization, which we've now been able to define, put in that deep drilling, I mean, almost 17,000 meters specifically on just that really deep stuff and being able to release today. We're just going to zoom in there and chose some of those drill results, sort of 18, 19 meters at 3 grams a tonne gold, 6 meters at 3.5 meters at 5.65 grams a tonne gold. So yes, some good information for us to then make that decision that we wanted to deepen that ramp. So -- that's certainly been going on since 2023. So nearly 50,000 meters in the whole project totally.

Good. So yes, I'll elaborate a little bit on the Bell Creek shaft extension. So just a bit of background, 2020, 2021, as the resources were getting deeper and deeper, we've kind of realized the current infrastructure that we have, which the shaft goes down to 1080 level would be a constraint. The whole business would be quite far to get to below 2,000.

So as Chris explained, to justify any shaft, we would need to demonstrate that the resource will continue depth, which, with the success that we've seen with the exploration, we kind of show that. And based on that success, in May on 6, the Board did approve the shaft extension. It will be a 625-meter extension of the shaft which will bring the shaft down from 1080 down to the 1,705 level. And we will talk about that in more details in the slide deck to follow in a few minutes.

So also in the press release today, we came out with 1 of the so-called satellite deposits, which was the Vogele. Vogl veins we call them, set over here close to the current infrastructure of the Bell Creek. This was explored in 1968, actually. It was found in 1968, several of the companies in the history, drilled it, bits here and there. Currently, on the resource reserve book, we have 60,000 ounces in indicated with around 130,000 ounces of gold inferred. So sitting here, we already have an inventory of potential ore.

And from that, we came in again around 2023 and started to drill some holes and really showed we had good continuity. We had better grade than we actually thought was going to be there. And now this appears to be a set of veins, which we believe there's more potential at depth. Some really good grades here, looking at nearly 20 meters, 8 grams, certainly, 12 meters. We've got 9 meters at 8 grams, 8.73 grams a tonne gold. So some really, really nice, nice intercepts with good gold grade.

Okay. And I'll talk about the plan for 2026. So -- we started drilling on surface in 2025. In April of this year, 2026, we will be extending the current drift on 610 at Bell Creek, which is an exploration drift. So we'll start extending that. It's an 814-meter extension. What this will do is it will allow us to drill the deeper part of the Vogel from underground. It's getting too deep to drill from surface.

So by having that underground exploration drift will allow us to basically infill the lower part of Vogtle. And that's shown in the green lines there that would be the drilling over -- for the rest of this year and into 2027. And the green lines from surface is the completion of the surface exploration program that's planned for the rest of this year.

So that's essentially going to be 2026 and into 2027. We should have the infill drilling program pretty much complete in the next 1.5 years to 2 years.

It's probably worth mentioning that, that exploration access, Griff, will also drift tools have helped the production in the future. Yes. So we're going to flip across go southwest of Timmins sitting in the center there. We're now going to be in the Timmins mine area, where we've got a large -- a good package and 14,000 hectares and Timmins, the Timmins Mine is really a success of discoveries, multi-different deposits on a structural trend, the $144 million. We're going to strip away the surface here and have a look at those actual -- those deposits, which have been constantly being found as they've moved Southwest. And again, in the release today, we were talking about Samsung, which was discovered a few decades ago. We had a lot of drilling the 60,000 meters of drilling on it. What's called the 144 South. And it was while lower grade, it's still going to add 120,000 ounces of gold and hopefully, we'll be building that out in the future.

We do have an access exploration gallery here drift. And again, the green line showing the potential drilling that's going to happen over over the next 6 months to a year as we build it out. And also that exploration gallery will give access for production as well.

All right. And last but not least, Gold River. So Gold River sits about 3.5 kilometers to the south of Timmins West, it's a 1,100 hectare parcel. So Gold River has 2 main deposits, the Gold River West on the right side and the Gold River East. That's where most of the 1.1 million ounces of resource hits. So the Gold River is a refractory deposit -- we are doing some mine design work, as you can see there in blue. That's the mine design work. And we're also starting to do milling studies. We actually started that in 2025 to get some metal report so that we have a better understanding of Gold River. And the mine design work that we -- we'll talk about the milling and the mining design work a little bit more with when Eric joins me in a minute. But this is to support a refreshed resource estimation coming into the 2026 midyear.

Thanks, [indiscernible]. Yes. Again, it was in the resource, sitting there over 1 million ounces of inferred. With the current environment, yes, we're finding additional value within the portfolio and really build to that Timmins camp strategy as such. So yes, as Al was saying, there's a mine design. We're building towards that resource for the mid-year '26 and certainly good things to come from that project, which again was in the release with some additional results from the previous company. We're now going to shoot back across to Bell Creek. We're sitting -- we're going to have a look at the Whitney project, which again has been in some of our press releases over the last several years in the exploration updates on a yearly basis. Whitney is a joint venture, we have 86% of this. It's right on strike from Palmer, which sits over to the East.

So again, we're on the structural trend, which has controlled all of these different deposits from brew land to Bone [indiscernible]-- and don't forget, Holnomine was historically 1 of the highest-grade gold mines in the Timmins camp itself. Just doing a little 360 there. We're going to show the old workings. And I mean this produced nearly takes 2.6 million ounces of gold at around 10 grams a tonne. You can see here those old working sitting deep. But really, our focus of our exploration has been on the top portion. We've drilled and have been drilling [indiscernible]. And now we've moved across into [indiscernible] we're finding within those old stopes in the hanging and footwall, there's obviously remnant gold that wasn't mind because it was deemed low grade in that particular point. So it's really been -- the idea has been going in and drilling and updating the current resource, which sits at around 0.5 million ounces of gold as it is.

So certainly, [indiscernible] is -- we released this in December 25 and some of the results here. I mean you're looking at 2.9 at 36 grams gold, certainly 3 meters at 11 grams gold. Certainly, very good grades, which shows you this historic area has still got mineralization. So we're looking forward to building out, doing additional work. We've got a program to drill this towards the back end '26 and into '27 really as we're focused more on our current projects of Vogtle, which is obviously very close to our current infrastructure. As the plan as mentioned. And I think that's over to you to you, [indiscernible] and the more technical side.

So soon as the EU finishes up, we'll start off with the slide deck next, and I'll welcome Eric Lachapelle, he's Director of Operations for Timmins operations. So -- yes, okay. So yes, just to reset things here. Timmins West operations that's Timmins West complex. That's on the Southwest. It's about 20 kilometers southwest of the city Timmins. You can get to see Timmins sits almost in the middle of both operations. And then we have our Bell Creek mine complex and mill complex on the top right side of things.

So right now, our -- all the ore from Timmins West get struck through the city of Timmins, about 42 kilometers to our Bell Creek mine and mill. And we will talk about a few projects that we have, one being a new haul road that will be very beneficial, not only on the cost side of things, but also on the safety side of things because it does bypass some of the cities.

So I'll turn it over to Eric.

Thank you. Good afternoon, everyone. Kicking off with the Bell Creek shaft. So at Bell Creek, our current mining centroid is 300 meters below the existing shaft. And that Century continues to deepen as we progress with mining. This stretches our capacity to deliver the ore to surface for the mine. With the approval of the shaft extension, we will be deepening to a final shop depth of 1,705 meters from the original current 1080 level. This will be resulting in an additional 625 meters of the shafts total depth. This will help to reduce operating costs. by reducing the trucking requirements for the market or will also help extend the life of the mine by allowing access to deeper resources. It helps as well to reduce greenhouse gas emissions by consuming less diesel overall for the hauling.

The time line on the bottom left shows how the diamond drilling, the geological modeling, the mine design as well as the shaft engineering work has all been completed for this project. Now the construction and development work will begin with the commissioning targeted for 2029. Speaking to the challenges of ground stability at Bell Creek. Many measures have been taken to address these as we have experienced some challenging conditions at the mine. Pace backfill is now fully integrated into the mining process. This is allowing us to reaccess certain areas of the mine, including the Central Zone, which we have now reintegrated into the mining plan. Specialized ITH drills, borehole stabilizers -- sorry, Bohol stabilizer products, enhanced stress modeling are all measures that have been taken to tackle these challenges at Bell Creek. Moving on to our soon-to-be completed haul road. With the goal of reducing costs for every ton of ore that comes -- that is hauled to the mill from Timmins West. We reduced 14 kilometers for every round trip for the trucks hauling to Bell Creek. We also bypass areas of the city of Timmins, reducing the strain on the city's infrastructure and improving overall safety. Also shown here besides the haul road -- you see our tailings facility, just midsection to the East. The current life of our tailings facility carries us to 2035 and we have acquired adjacent land for other expansion potential of the tailings facility. Gold River, as mentioned, is located 4 kilometers south of the Timmins West Shaft.

We advanced metallurgical testing and engineering studies for processing the refractory material at Gold River. We've completed scoping level assessments on flotation, pressure oxidation, additions to the existing Bell Creek processing circuit. Here at the bottom of the slide, you see the planned view of the Gold River mine design as it sits today. Now flipping to our long section. Down below, we see the planned time line, sorry, for the development of the Gold River project. In 2026 and 2027, we're focusing on the PEA work for Gold River as well as infill drilling, which carries us to 2028 and 2029, where we'll be focusing more on permitting towards achieving a bulk sample in 2029. I readying us for production or a target date of the 2030s.. -- mill capacity at Bell Creek. As you can see from this graph here, we do have a gap from our total milling capacity of 5,600 tonnes per day from what is currently being fed from both of our mines. We're looking to shorten that gap with the addition of all the satellite deposits that we've been discussing in this presentation as well as continuing to extend the life and the reserves of the existing deposits. We're also looking at toll milling potential for our neighboring deposits within the Timmins camp area.

All right. So I think the main story here is that when Pan American acquired TA acquired the Timmins operations. when Pan American acquired Talon and Timmins operation in 2019, we were actually supposed to be closing this year. as you can kind of see with the long-term vision in the project pipeline, where we have reserves being mined into the 20s -- the Bell Creek a deep extension. You can kind of see they're kicking in into the 2040s. We have Vogtle that's coming in, again, basically on top of the Bell Creek, Gold River, Samson. These are all projects that are right there in front of us that we will be allowing us to go into the 2040s. So not a bad story, right, going from 2026 to 2040s. And that's basically the Timmins operations story.

So and jumping to from Canada, we're going back down to Mexico. We're going to talk about Manacipio, which really is the sister deposit, very close to La Colorada. We've been here before -- but really, I mean, talking about Fresnillo and the district of Fresnillo, where we could -- where anisipio sets, 60 kilometers from Zacatecas City, 6 kilometers from from Fresniatown itself. And I mean this is a historic mining camp, plus $3 billion. I think Mike, you said $4.5 billion has been mined from the [indiscernible]. It depends how the district, how far you project that because -- this really is world-class. We see all of those deposits again sitting on that Northwest Southeast sort of Sierra Madre on the edges of that that tectonic break. And so really zooming into what is Fresno, the town Saucito, which is a Fresno operation sitting directly east of Winnicipio itself. Over 7,680 hectares sitting really on that corner there. And Yes, from the purchase of Max Silver and the discovery that they made right in this historic camp cannot be underestimated. And Well, when we zoom into that district and sort of closer in geology, you see the main veins right on the corner and we're going to show that in a bit more. But really, I wanted to -- and this -- just in this image here is the historic mines per annual and San Luis are all sitting over there, and they were higher up and due to tectonics and block shifting when isipiosit undiscovered down here in the Southeast. And as we move through the silica cap, you've got the whole system preserved -- and really, that's the story for the exploration that I'll be talking about in a little bit. Here, we have the strike of the main structures from public information on the Saucito side. And of course, that corner where when acipio sits is where all the resources and the exploration and the discovery was made.

So there's the portal where they're currently developing the ramps, et cetera. And really, we're going to strip away the surface now, and we're going to focus on the silver grades. And this is all the silver grades from that drilling and channel sampling from the database. Here, we have the solids of the resources -- and you can see this funny structure sitting out 90 degrees to the main structures. We'll talk a little bit about that. That's Vanadis, which was a recent discovery several years ago. But really, you've got the dark lines of the infrastructure. I'm going to flip that around looking northeast. And really the takeaway here is that you've got all of these different stacked veins along the principal Northwest Southeast and then there's 90-degree Vanadis, which is in current resource at the moment. he was just going to list out all of those different parallel structures to the main structure of Valdecanas. In the footwall, the Raman and 2 and in the hanging wall anticipate pre-anticipate -- not forgetting that 85% of the current reserve sits in Valdecanas, which is really the mainstay of this at the moment of the mine at the moment. And with 50 million ounces of inferred resources still sitting at anacipio, that's certainly something that we can see being drilled out as we move through in the production cycle. Also, you've got nasipio. Not to be confused by Winsipio mine. This is the encipiovein. Remember that Valdecanas is where the main structure and supports all of the current production, when a sip sits 800 meters to the south and Venetas at that 90-degree coming out from the main structures. We're sitting about 300 meters below surface -- and as I mentioned, that was a blind discovery. Just looking at the reserve replacements at the moment. Recently, Fresnillo released the current resource and reserves for Wonacipio. We're at 132 million ounces of silver, having started off in 2023, we're at 122 plus you've had the production.

So yes, there is a positive increase in reserves in silver ounces. Having said that, the average grade of that silver is decreasing. They're starting to drill further down structure, which is more polymetallic rich, which has been described in the past about the enasipio mine. So we are moving out of that Bedanone, should we say, which goes around around 1,600 -- then below that, you get more base metal. But it's still -- I mean you're averaging average width that we cipro6meters, but it goes up to 30 meters wide, which is quite incredible for this deposit. And of course, we're still sitting on 1 million ounces -- almost 1 million ounces of gold. So stripping away all the others and Valdecanas. And let's just talk a little bit about that great distribution that I just spoke about. Here, we have all of those silver-rich blocks over 0.5 kilo sitting still at upper portion of the Valdecanas -- and as we move down and depose those pinks come down, and that's where all of the base metal rich is -- so it really is a story of that Bonanza at the top and that deep sulfide mineralization towards the bottom.

Going back to the silver and we'll just flip it around, so you kind of get a good idea of that bank structure itself. And the sort of the great traces are all of that drilling that's happened. Here we have that the measured indicated and inferred resource shapes around it and obviously, further down at depth, you've got all that inferred resource, which still has -- still can be drilled further and add it into reserves in the future. So where next? I mean, certainly, from an exploration point of view, converting that inferred resource into reserves will be certainly a priority -- and that's on the current structures we note at the moment. Also, we have the anacipio vein, 800 meters south. There's only a small portion of this, which has been defined in inferred resource that's still A lot of work to be done on drilling that structure south. And then we're obviously sitting on a good area where we've got the structure that we need -- and this is all deep. Remember, I mentioned that if we look at the historic and look at per annual, et cetera, which were eroded down and they were exposed at surface, when we look at Winicipio and then further to the south, west, certainly, everything is at depth. So that is going to take some time there's the Canada under structures and also Metranet, sitting 7 kilometers south of currently the anasipios vein and mine. So still, I mean it's prime exploration areas and certainly a lot of work that I know Fresnel are working on, and it's been a pleasure to work with them. Thank you very much.

Thanks, Chris. Again. Just we'll quickly run through some slides on [indiscernible] Well, we won't One of the other -- now here we go. This is just a planned view of the mine area. You can see the vein system that Chris has just been describing. As well as the conveyor project that comes from the mine up towards -- I'm working from the bottom up here, actually up towards the surface, the underground portal, processing facilities, tailings down mine offices and entrants there.

So just a planned view of the site layer. This one, Chris just covered Worth mentioning that the silver reserve and gold reserves, they're maintaining the grade is coming off a bit, but the total contained answers are being maintained and replaced. And I think, as Sam mentioned earlier and Michael mentioned, this was an opportunity to buy 44% of the Neves mine in the best silver district in the world. Two of the other bubbles on the top graph on the left, Saucito and Fresnillo are neighbors in the same district current operations by Neal. And the facilities really are first class. And Fresnillo has got very good at building this facility. This is a multiple version of the same thing they've built -- but this time around, very state-of-the-art good stuff.

This circuit that is very conventional [indiscernible] mill, underground crusher. A lot of what we were talking about from the La Colorada skarn on a smaller scale, selective flotation -- it's a very similar type of thing, more gold in this circuit in this deposit. And the 1 thing that would be different to the skarn is that this has a pyrite circuit and the pyrite concentrators sold off to a smelter.

And then in terms of operating performance, anycertainly, we're seeing a bit of a bit of a trend of outperformance relative to guidance. And certainly, we're tracking very well relative to guidance this year after the first quarter from what we're seeing. And the the guidance that we have for all-in sustaining costs were way below that. We guided $225 million to $425 million, and we're at negative 3% in Q1.

So tracking extremely well from that perspective because of the higher metal prices -- so in terms of -- just in terms of both production and As, we're in good shape there. And then some of the initiatives that we're trying to work with First Neil with and working with Frist Neil with on continued safety performance, as Scott detailed, we've got a specific set of safety initiatives that we have in the company, and we certainly have some good discussions with them, similarly minded company on safety, continuing with some of the cost reduction initiatives that we've been talking about -- the development is very important to get that and maintain it not just for the production now, but for the deepening of the mine as we go forward the conveyor belt. I'll talk about in a minute.

And then as Chris mentioned, we need to keep on on the exploration, trying to find more -- find more resources and convert them into reserves. And this is a slide on the conveyor belt. It's mostly complete. It's 4.2 kilometers long. It's a $37.5 million project with estimated savings by not having to run small trucks up the ramp of $8.4 million a year. So it takes -- it will take ore from the underground crusher and run it up to the plant. So that's -- it's a little bit unique with that big curve in it. So it will be interesting to see when that's in operation. And that's essentially it. And I'll pass off to Jacobina.

Now I can tell you, in Brazil in Jacobina, it is always sunny. Sorry let's get start with Jacobina. By state, over in Brazil, 350 kilometers away from Salvador over on the coast, on the East -- we look at the regional story of Jacobina and it's a pelioplatia deposit. So imagine billion years ago, there were big streams and that was a big deposit over to the east, and that was eroding down and all these -- this goal was coming down through the streams and it was depositing.

So then that all got over billions of years sunk cooked, tectonically overturned, et cetera, et cetera. And then all of a sudden, we have the Jacobina Sarada Corrigo formation, which houses all of our gold, and that's free gold. -- in these conglomerate packages, we call them reefs. And they stretch over 155 kilometers where we have 60,000 hectares stake -- and Jacobina mine sits here and so all the way up across this, we call the Jacobina region, and we are doing exploration there at the moment. We've got some projects going. We've done some drilling last year and we continue to try and advance some of those projects in that northern north of the Jacobina mine. And it's worth mentioning that the pink here is the basement rock and everything dipping to the east.

So again, we're going to look at, though, the red are these conglomerate packages that house all the gold in the metric. So it's all free gold or essentially. Jacobina is slightly different from the other Palio pluses in the world. There's been a lot of hydrothermal and intrusive events. There's been a lot of remobilization of that gold, which does make it slightly more complex than others over in South Africa. But the green here is these intrusives, I just mentioned, made it more complex. And really, we're looking at 7 to 8 mining zones across a 10-kilometer stretch -- and all of this is connected underground. So we're going to show that in a minute. Here we have the concessions in yellow. We've got those -- the basement rock at the back. These are all of our different deposits different mining zones kind of eras over in the north, Joelle Sul in the south. Here, we have the modeled reefs, which are these conglomerates, which houses all the gold. We're going to give that -- as I mentioned, 10 kilometers, cadavers is really the higher grade zone that we have and has been mined successfully over the years.

And when we look at over the years, I think it was in 1982, it started producing. I mean this whole region has been mined since the 17th century with Artisan miners, et cetera. And we've had 1.4 million meters of drilling on this over these 10 kilometers. And we continue to find and continue to expand the resources, which is quite incredible. So let's -- we are looking west here. And we're going to show you -- so yes, here's all the infrastructure, over 400 kilometers. It's all connected underground and we still retain a large resource base of nearly 8 million and proven and probable 3 million ounces of gold. And really, it's been success through the drill bit. And just going to freeze it here. And yes, literally, I mean, over from the '80s, you had Anglo American and you had the Williams and then Yamana took it over in 2006 and really they started to ramp up this drilling and started to expand the resource here. and the production, and it as the real game changer here in terms of what those guys did.

And certainly, we are produce 10 -- nearly 190,000 ounces of gold, and we continue to constantly find additional mineralization within these conglomerates down dip, infill drilling. So MoraVento, we released in December 25. We were just drilling up and around filling in different areas of that resource. And certainly, came up with some very nice results, which is going to add in the midyear sort of grades of 5 meters at 3.75, including 1.9 at 8.2 million meters at 339 grams a tonne gold. So some really nice results. And this is all infill drilling above closer to surface, which is good because certainly, the mine deepens. And this is all open at depth these conglomerate packages just go down and down. So that's certainly something for the future and a future target. With these reefs, we do call them stacked because we do have multiple REITs.

So that certainly gives us the advantage of doing that bulk mining to get the tonnes out which Steve is going to talk to more. Gabella, certainly in -- when we came in and started working with the operation, Joe Belair was just being drilled, and we brought that into a resource. And certainly, some of the results, again, the 3.68, at 4.95 grams gold. 7 meters at 3.42 grams gold. This is just the drilling from that infill drilling and converting info into measure and indicated resources and as mentioned, open down dip and in localized areas where these reefs are we've got access coming across to job Bellas, which will bring that into production in the coming years. And again, you got the basement rock over to the West, North is to the right and we continue to just infill and certainly between Gabelo north and south, we're in filling and bringing in more resources. So -- certainly -- and again, in December, we mentioned the Maricotta exploration discovery. There's been several years now. We've put in 800,000 ounces of new inferred resource in the midyear 2025. And -- that sits on the western limb or western portion of the conglomerates Canavera sits in front of it. And that as mentioned, that's the higher grade and the good -- and the positive that we've seen is that Marcos starting to give us that higher grade that could replace the kind of [ ARRIS ].

So we've stripped away kind of [ Aris ]. We're looking west -- and I'm just going to go through that cycle of the Marcotte and how it has come to having 800,000 ounces of gold in inferred resource and that constant infill drilling, which adds to the confidence of these deposits. So we've had around 60,000, 60,000 meters of drilling in total at the moment. We're going to take you back. This is -- we had around 10,000 meters between 75 and 2021 and some historic holes sitting over here to the north. And then '23 program came in 12,000, increasing the confidence and the 24, again, bringing in additional 4 meters at 4 grams gold over there. And it's just adding confidence to these conglomerate packages, which then increases the the classification. And then December 25, we came out with some more results, which we got 4 meters at 7 grams gold in that infill drill hole sitting there.

And so Markota has been a success story. It's a new deposit that we found. And as we now look to the exploration for the next deposit, we will certainly be targeting the northern portion of Markota going into Lagatixa, which we're going to show you now. Here's just an example of one of those cross-sections, the drilling, the read of these conglomerates and how we start to infill and bring up confidence of the content of gold sitting there. That's the program for 2026, projection still open at depth. And really, it's this northern portion where Legartixa sits. And we've released results in -- again, in December '25. which shows at least a couple of kilometers further north on the western side.

We also have the Canaverus extension North, which is on the eastern side of these conglomerates. And there's some artisanal miners mining over here even further north. So that gives us certainly some confidence that gold sits within these conglomerate packages. Some of the results that we released, as I mentioned, in December and really Jacobina is, as we've mentioned, a fantastic deposit and built for success.

Good afternoon, everyone. My name is Steve Busby. As Michael indicated, I'm part of that elite group that was here for 23 years. 17 of my years, I was Chief Operating Officer with the company. And I had the fortune to turn over the Chief Operating Officer to Scott Campbell, as he mentioned earlier in October of last year. And Scott has done a marvelous job of structuring this company for the next generation. This company is going to be around for quite a long time. You see a lot of young faces here, a lot of highly talented people, and it's really a pleasure to be part of this group and be part of the successes that we've seen. I've been very privileged. I've been given a new assignment as a special adviser to the company. And that allows me to do the things I love, the things I really love about this industry, working on new projects, working with accomplished teams at many of our sites and looking at the future, strategizing how we're going to take these assets to the next generation.

As Sam and Ignacio mentioned, when we acquired Yamana, really Jacobina was the attraction to that acquisition. This is a long-term multigenerational asset with lots of upside. And as you saw, Yamana did a marvelous job, successful job of expanding production there. When we got our feet on the ground at Jacobina, we really started to sense there's even more value at Jacobina to look at this in terms of an optimization. How do we optimize the mining, the processing, the infrastructure, the community relations, the government relations, how do we optimize all aspects of this operation and capture the most value we can.

So we wanted to kind of step back, cool our jets, if you will, on expansion for today, look at how we can secure longer mine life at this operation, really bring in efficiencies to this operation and then also later down the road, start to bring additional expansions into this operation. That's what we call the Jacobina optimization study. And we launched into that study soon after acquisition. We've been working very hard at looking at all aspects of this operation.

And certain projects start to fall out as we do that. And that's what we suspect is going to happen over the next 5 to 10 years as you're going to see a number of projects fall out of this optimization. And the first one is going to be a filter plant and a tailings stack facility. We do see a limitation to conventional tailings handling at the site. We're probably by the mid-2030s, we're going to be out of conventional tailings capacity.

And given the topographic constraints, the land constraints, dealing with the communities in and around the operation, we really see an opportunity to bring tailings filtration, which we're quite familiar with into this operation, go to a stacking facility, which opens up a vast life, if you will, for future tailings.

Secondly, supplemental to that and complementary to the filter plant is going to a paste backfill underground. We're seeing limitations with open stope mining without backfill, which is the way historically it's been mined at Jacobina from day 1. And we really want to stabilize the mining. We really want to go -- you saw Chris showed opportunities at depth in order to access that depth, we really need to secure the stope areas we're mining and paste backfill will bring that to us.

Paste backfill also, if you notice, there's a significant amount of gold ounces contained in measured and indicated resources that didn't make reserves. And a lot of that is coupled with this open stope mining method. Using paste backfill for the same primary developments we do for our current mining, we'll be able to access much more resource mining, much more reserve and production coming from the same development. So it brings a lot of efficiencies. It's complementary to the filter plant. That's kind of the second project.

These projects are moving from conceptual engineering through basic engineering at the completion of basic engineering late this year, we'll come out with the details of those projects, what's the capital, what's the return rate on those projects, and we'll launch into those projects.

Over and above all that, we see tremendous opportunities in the process plant. This plant was built 50 years ago, and it's been expanded tremendously through the years. And through those expansions, there's a number of obsolete equipment sitting in and around the current plant footprint. And we want to kind of find a way to modernize, streamline the circuitry. We see significant opportunities. When you look at today's technology for processing gold-rich ores like Jacobina, free milling ores, if you will.

We see tremendous opportunities to go into that plant, make some significant investments in modernizing and removing a lot of the obsolete equipment that's currently in the way of the operation there. That will drive some cost efficiencies that will offset the cost of filtering and paste backfill. And it will also bring us higher gold recoveries in the long term.

We see the ability to get above 96% gold recovery. by improving those efficiencies. After we get all that done, now we can really start to talk about expansion in an opportunistic way where we're capturing optimally all the value that we can from this very, very interesting large resource that we have here. Sorry, I missed the slide. Yes. So during 2026, we're committed to -- we're estimating expenditure for this growth projects, for these optimization projects between $53 million to $57 million. This is over and above the sustaining capital estimate that we put out for the operation of $67 million to $70 million. And we divide up what we're doing in '26 into both studies. We've got about $10 million of studies that we're doing this year, which is that plant optimization, kind of conceptual engineering and layout work.

We're working on how can we sequence construction to upgrade and modernize that plant. The filtration plant and the paste plant, as I mentioned, we moved through conceptual engineering. We're deep into basic engineering, and we're just finalizing those projects. We have some power increases that we foresee in the future. The power supply has been a little bit weak from our perspective. We do get power bumps, particularly during the rainy system -- rainy season that disrupts our operations. So we've been working with the power supply companies to upgrade our power sources and give us much more stable, reliable power into the future. So about $10 million on studies.

All the while, we're spending about $57 million to $60 million on projects this year, some of which is upgrading some of the work that Yamana had started in the leaching and carbon and pulp circuits, we need to get those stabilized in the near term, and we're spending some money in there. The exploration that Chris showed us, we're seeing fabulous results on exploration. We keep pushing that. We have increased development rates.

We do have a permit today that will take us up to 10,000 tonnes per day production capacity. We're currently running about 8,500 tonnes a day. So we see an opportunity once we get the filtration plant running, the paste plant running, some of these optimization projects completed, we can take that up to the permitted level of 10,000 tonnes a day and continue those studies that then will lead to a permitting effort to look at future expansions beyond that in the next decade or 2. So really, the overall study of optimization of Jacobina is an ongoing effort to capture all the value we can of this operation.

First and foremost, looking at extending its life. This thing is going to be around for multi-generations, and we want to be sure it's capable of doing that in a clean and responsible way. We want to improve the efficiencies of the operations and really look to offset the cost increases we're going to apply with the filter plant and the paste fill plant, capture more of the reserve production reserve recovery and increase the ultimate recovery that we expect to get through the plant and then ultimately bring the expansion to this great operation that we have at Jacobina. And I think that's it for Jacobina, and I think we got a bit of a question-and-answer session at this stage.

I just had 2 quick questions. One, just going back to the CapEx at Timmins, was the $146 million for the shaft plus the 2-kilometer plus of decline development?

That's correct. Yes. The $146 million includes the $131 million for the shaft plus the development to Samson and the development to Vogtle.

Okay. So that's like $15 million to develop to do like over 2 kilometers of underground development.

Yes. And it includes some drilling as well, right? Yes. It's not just development, it's drilling also.

Okay. And then just wondering on the exploration at Juanicipio, as you guys are kind of at that corner of the boundary line, like what's the -- like how much say do you guys have in terms of the discussions with Fresnillo on where the meters are drilled off and kind of what's the risk that at some point, they continue to drill further into their property and then the operations becomes kind of more like 100% attributable to them?

Well, I mean, I don't foresee them drilling and producing off the edges of this claim into the Juanicipio claim. The Juanicipio is a true joint venture. So what they do on the other side of the concessions is their business, we don't get involved. We get involved directly with what's inside the concession. So the exploration efforts that Chris mentioned is inside the concession. Whatever is discovered there and produced there is processed through the Juanicipio plant, which is a joint venture plant.

Okay. But how far is the current operation from like that boundary line?

Well, you mean the plant site itself or what -- I'm not sure I understand.

Mining on the underground.

Yes. I mean right now, we're mining up to the concession boundary. We're not mining beyond. There is a buffer. There is a small buffer.

So then if you cross the boundary line, doesn't that become 100% Fresz?

We don't cross the boundary line. We do not mine across the boundary line with the Juanicipio production plant. We stop at the boundary.

It is dipping south. It does dip back into the -- it's in the Juanicipio and it dips further into Juanicipio. It's not dipping the other way, which is...

But whatever continuation of mineralization that may occur beyond the concession, that's Fresnillo's business. That's not our business.

No, I understand. But what I'm saying is like Fresnillo's operator, at some point, if they kind of choose to do more development into that side.

They can't do it at the expense of Juanaceipio production plant.

Any other questions? Yes.

Just a question on -- maybe with Juanaceio. You have been -- or the mine has been getting positive reconciliation for the last couple of years now in terms of grade. Is that just conservative modeling assumptions, top cuts that they've used? I mean what's going on there that continues? And is there more potential for this positive reconciliation to continue?

I mean, certainly, we see -- I mean, they've only just released the 2025 resource and reserve. So we're a year plus behind drilling and development, et cetera. The bonanza zone that they are in is exceptional, and we've certainly seen that positive reconciliation. Is there further upside? I mean we have to remember that we are going deeper and the silver grades do start to reduce as the polymetallic starts to increase. However, year-to-date, it's still positive reconciliation. So it's part of the cycle of getting that resource and reserve in as well as the current production and the development into those areas.

Just few additions to Wayne's question as well. First of all, this is not like Fresnillo against Panama or Panama against -- this is a joint venture, right? And Fresnillo owns 56%. So 2 things. This is the best operation that Fresnillo has when you look at in the whole district. It's obviously even more in their interest and in our interest to do this the best possible way as they get $0.56 of every dollar we make out there, we get $0.44. That's just a general statement. So there's a lot of effort, obviously, joint effort to go in further do even more, drill more, get more out of that operation. I forget, this is the newest of the mines they build there in the district as well.

And then to the reconciliation, I mean, we see higher grade month after month, I think we still see it as of right now, I didn't look this month, but last month for sure, continue. But don't forget, and I said that many times, when you look like at La Colorada, you see exactly the same, right? Geologically, you go deeper down into more base metals. And hence, you explore for those parallel structures to keep kind of a mix of the higher grade silver from the top with the more base metal deeper down.

But at the moment, for sure, it still looks like that we probably get more -- a bit more tonnes out of it and a bit more grade. I can see quite an aggressive top cut that probably caused that. But over time, when you look at the next 10 years or so and you go just follow one structure down, there's no -- you can't avoid that you're going to get into more base metals on that one. But every parallel structure that you explore and you start developing higher up will again start in gold and silver and then go into the base metal. So nothing different than what we see at La Colorado.

I mean on the tech report, I mean, you guys were supposed to be at 300 grams per tonne.

We're much higher.

Yes. Just kind of moving on to Jacobina. I mean, it looks like the 10,000 tonnes per day, it looks like that's pretty much in the bag.

It's in the bag. It's just a matter of timing. So we have to get these projects up and report it. We'll release those projects and the results of the project and when the timing of when we'll achieve that 10,000 tonnes per day, but it is in the bag, you're right.

And then, I mean, Yamana was looking at all the way going to, I think, 150.

Yes. We're not prepared to suggest that we can get to that level yet. I think that kind of potential exists, but it might be a decade down the road here.

And then just last question on Timmins then. In terms of Timmins, obviously, lots of exploration upside success going on there. At one point, I mean, we have just discussion, Michael, earlier that Timmins was almost a noncore asset at one point. So now it looks like it's going to complete 180. You're looking at production going all the way out to 2040 from what I understand. Yes. Is there upside not just in terms of extension of mine life, but also an increase in production profile? Or is it just a steady production profile all the way to 40?

We actually had a good discussion on that this morning. With Gold River, I have to say there is some opportunity to look at maybe expanding production rates. But it is a great result that we're seeing production beyond 2025. As Al mentioned, we -- when we bought this asset, we thought 2025 was it, and that's why we declared it noncore. That was our mistake. That was wrong.

This is a core asset. This is a very long-life asset from what we're seeing. So that's kind of our first focus is extending life. But with Gold River, with some of these external Whitneys, there may be opportunity to expand production as well as those projects get better defined.

I have a quick question just on Jacobina. You as the special adviser to CEO, can you let us know how you split your time among the different operations, the fact you come up here today to talk about Jacobina. Can you let us know what are -- can we see Jacobina as one of the strongest growth assets for Pan American Silver? I'm sure there are other projects as well, but how should we look at the future?

Yes, great question. What's great about my position is I get to focus on what I love, which are these projects and strategizing these projects. I think I am spending a significant amount on Jacobina right now because it's -- I guess I would describe it as it's a fairly intensive project and trying to bring the team in Brazil together with ourselves in defining what the vision is of where we're going. We're trying to find alignment. They've been working so hard for so many years at expansion, expansion, expansion.

And this concept of optimization is new to them. So trying to bring that team up to speed with what our vision is and adjusting our vision to what the reality that they deal with is, that's really where the focus is, and that's where I spend a lot of my time. But I also have the great fortune to work a lot with the Timmins teams, a lot with the La Cara skarn development teams. So yes, all the things that I love to do, which are projects, I get to spend my time on.

Charles from Jefferies. So just when I think about the Siemens assets, like it does seem like you guys are moving to like a regional processing. And I wonder if any thoughts have been given to like if Pan American want to do that regional consolidation? Or is there scope for it to be done by another operator just given the location of the assets?

Do you want to take that one on, Mike?

I mean it's obviously a great district. We've seen that, and it's a great Canadian district, which is very hard to find. And when you add all the satellites, when you add what else we do in Timmins and you saw a few other things that we're working on, it definitely starts to shape out like that everything together will build a great platform for us in Canada. I think we are not completely there yet technically to show you exactly how that production profile will look like because you saw there's still some drilling to be done. There's still some technical study, and we need still like another scoping study. But once we have it all together, I think it's going to look very interesting for us where this is going. I don't have the final answer to your question, obviously, because it's maybe 5, 6 months a bit too early. But I think your thoughts are going in the right direction for sure.

One more question.

Sorry, maybe just one follow-up on the Gold River. Do other operators in the region have refractory processing capabilities? And like what would that kind of look like for you guys?

Great question. Yes, the answer is we do believe there's an opportunity is whoever builds the first refractory circuit there is going to be able to access some additional resources in the camp that are refractory. So we see that as a potential opportunity for sure. Okay. With that, I'm going to turn it over to Brett Bergeron for the sustainability ESG. Thank you.

Thank you, Steve, and good afternoon, everyone. My name is Brent Berg, and I'm the Head of Corporate Affairs, Sustainability and Security for Pan American Silver. Don't be fooled by the color of my hair. We do have a lot of challenges on the sustainability side. I guess the pressure just hasn't reached me yet, but it's -- I know it's on its way.

So anyway, I just wanted to talk a little bit about our approach to sustainability and just to mention that sustainability at Pan American really starts from the top, and it goes through the different levels to the executive team, to the people at the corporate level that supports the different countries where we operate and also integrating it into the country managers and the mine general managers to make sure that they are operating at the level that we're expecting from them and that we're actually committed to based on the commitments that we have with different organizations or associations across the world.

We make sure to actually -- sorry, I need to mute my slide -- there we go. We make sure to actually discuss and talk quite a bit with our stakeholders, and we integrate that also with the surveys that we do internally with our senior management team, just to make sure that we are consistent in terms of what we're doing on the ground which is an important part of what we do to make sure that the contributions that are leading to our workers, the contributions that are going to our communities are always consistent with the expectations that are there.

So we do have our policies and standards and our guidelines going forward. We do conduct quite a bit of risk assessments also in terms of making sure that we understand what's happening at our mine sites. And also, we try and integrate that in terms of all the work we do, whether it's the auditing part, whether it's the budgeting part, we try and put that in to make sure that we are responding to the right pressures and making sure that we are trying to overall alleviate the risk at our operations so that our operations can do what they do best in terms of safe production. Michael mentioned it at the beginning of his presentation in terms of our jurisdictions of where we operate and it's through the Americas.

And sustainability doesn't only happen during the time that we're operating our mines. With the corporate development team, we work quite a bit in terms of really understanding the countries and the opportunities that we're going in and making sure that -- we look at the sustainability aspects of any type of new opportunity or new project before we actually take the decisions, not just on the financial and operational side, even though those are very important.

In terms of remuneration for our executives, 30% of the remuneration is actually based on sustainability factors. So it's one way that we try and really make sure that we ensure that our team is focused on doing things right going forward. When we take a look at how we perform with our sites, we have now what we call our integrated sustainability audits. And the real reason for doing this was to -- we want to make sure that the sites are operating at the levels that we're asking, we're committing to. But we also want to do this in a way where we're not going to the site continuously every year to be able to bother the sites from the actual work that they need to be doing.

So we stagger that over different amounts of gears with respect to different sites that we go to, but we try and integrate the different disciplines together to make sure that we do this once a year. We actually work with the sites in terms of their remediation plans, and then they move forward with their decisions in terms of how they want to handle it, which is part of the decentralized structure that we currently have.

And also, as Scott mentioned, in terms of the safety audits, very important to us, and we also do that on a continuous basis. The different standards that we adhere to, of course, being a member of the Mining Association of Canada and having our assets here in Canada. We use the -- towards Sustainable Mining standard, which is extremely important in terms of our commitment to the mining association here. But we took a conscious decision about 5, 6 years ago to not just implement TSM at our Canadian operations, but do it throughout our portfolio.

And that was a very important decision just to make sure that all of our our operations are operating at the same standard, but also to alleviate some of the pressures that we hear sometimes from different organizations say, well, you operate very well in Canada, but you not necessarily do the same in other countries. But here, we actually do. We perform the audits, internal and external audits on our operations, which is very important in terms of our disclosure that we do on a continuous basis. After the Yamana transaction, we continued as a member of the World Gold Council. Therefore, we are also implementing the responsible gold mining principle, which helps us in terms of the breadth of the standard. TSM is focused quite a bit on Canada.

The responsible gold mining principle opens up in terms of some of the international standards that we also need to adhere to. Of course, the voluntary principles on human rights and security, especially in the Latin American countries where we operate. This can be very important in terms of training our people, training our suppliers, training our suppliers of security teams at site to make sure that they're reacting the proper way when some type of incident actually occurs.

And finally, the conflict-free standard, which is also part of our membership at the World Gold Council. Very important for us in terms of our refiners who want to make sure that we really have a clear understanding of our entire supply chain and knowing our customers in the end so that they have more -- they're more comfortable in terms of knowing what we're actually shipping to them in terms of concentrate or also in terms of doré bars.

In terms of the ratings that we're -- I know that some of you and some of our investors actually use some of these services sometimes. We monitor this on an ongoing basis. We feel that our scores are quite well placed right now in terms of the percentiles that we are in. We do interact with some of our investors, and they do have their own ESG analyst team. So we do it both ways.

But I think that when I take a look at, for example, what we've done with S&P Global in terms of being ranked now in the top 5 percentile of the metals and mining industry, I think it's really indicative in terms of how we take sustainability and our operations very seriously, but also in terms of trying to be very high in terms of our scores with our peers. So this year, we actually were added to the North American index for best-in-class.

So a very good achievement by all of our team and all of our sites that are implementing a lot of the standards that we're actually doing at this point. Some of the important aspects of what we're currently doing right now, mine closure and rehabilitation. Of course, we have 3 mine sites that are under closure operations at this point. Alamo Dorado in Mexico, which you see a picture of it here.

Also the Dolores mine, we're still producing off the heap leaches at that mine, but it's in closure operations at this point in Chihuahua and also the Manantial Espejo mine in Argentina. that's the physical part of what we do in terms of complying with our permits, but there's also a social closure aspect, which is extremely important in terms of transitioning the mine from being an operation and all the workers there to being an operation that's going into closure activities.

So we do quite a bit of work in terms of participating with the communities and defining some of the future priorities that they have and establish programs to be able to do the conversion once the mining operation stops. One good example of this in terms of what we do on the social side is our socioeconomic contributions, which reached in 2025, $2.8 million. Very important for us that we look at this in terms of community investments, in terms of the pillars that I've listed here, simply because we do consider a lot of these activities to be part of the social closure plan because we're investing in activities or businesses that are not necessarily directly related to the mine site, but we look at these projects in terms of how they will be surviving once the mine site goes into closure.

So very important in terms of what we're doing and moving forward with these. As we all know, the price of gold, silver and other metals is very high. And in the jurisdictions where we operate, that can be a challenge sometimes. So we want to make sure that our security practices are up as high as we can in terms of making sure that when some type of violent event does happen in the communities or around our mine site that our #1 priority is to protect our people and protect the asset, but just to make sure that the overall reaction of our people is done the correct way.

And I always find that the training that we do provide to our teams, to our providers, security providers in terms of the voluntary principles is really integral in terms of making sure that our teams really know how to react in certain situations. So we keep concentrating in those areas in terms of what we're doing with our security teams. And finally, as you probably know, we published our sustainability report last week on Wednesday.

Congratulations to my team that is here today. It -- sorry, it will show you a lot of the highlights in terms of our performance, sustainability performance in 2025 and some of our goals going forward. We're happy to answer any questions. And it was only out last week, so I doubt that a lot of people have gone through it completely.

But it is very comforting for us that when we do our one-on-ones with our investors, we feel that they do read our sustainability report. They do ask questions on very specific topics and also give us quite a bit of feedback in terms of how our investors are feeling towards how Pan American is actually handling sustainability across all of its portfolio.

So with that, I'll pass it over to Ignacio to do the finance, and thank you very much.

Thank you, Brent. I'm Ignacio Couturier, Pan American Silver's Chief Financial Officer. This will be my 24th year at the company and my fourth year as Chief Financial Officer. So been in that small group with Michael, Steve and Martin seeing the company grow. So yes, I oversee the finance function. The main responsibilities are financial planning, financial reporting, capital allocation, some financial risk management, IT, yes, and supporting the capital allocation decisions that we do.

Today, I'll look at the financial position of the company, what our performance has been in the last couple of years. as well as looking at our costs. I know there's lots of questions what's going on with our costs, what's been going on all over the world and then review some of the capital allocation topics that we've discussed with special focus on the new enhanced shareholder return framework that we announced earlier in May.

So starting off with our financial position. So today, we have around $2.6 billion of available liquidity made up of $1.6 billion in cash and short-term investments plus $750 million of undrawn credit and $200 million that's sitting in the Juanicipio JV. So a very strong position for the company to be in. If you look at our debt, we always had a very conservative approach to debt management. The bulk of the debt on our balance sheet today is made up of the Yamana bonds. Those were issued by Yamana prior to our acquisition of Yamana. They were issued at very favorable interest rates.

The $500 million tranche was issued at 2.6% coupon and the one that's due next year in 2027 was issued at 4.6%. So we're not in a rush to pay those back given everything else that is going on in the company and the current interest rates as well. In terms of our financial performance, I think this graph really tells a story. You can see both the realized price per ounce on gold and silver as well as our all-in sustaining costs. So you could see that we've had a very disciplined approach to our costs. We've maintained our costs throughout a lot of pressures that we've seen throughout the industry.

On the silver side, it is worth mentioning a couple of items. Number one is that, that decrease that you see over the last couple of quarters is mostly driven by the byproduct from the gold. We reported all-in sustaining costs on a byproduct basis. And offsetting that is quite a bit of variable costs going in the opposite direction. With the higher prices, we are seeing higher royalty payments at La Colorada, at San Vicente, some workers' participation in Peru as well, specifically in Lauren.

So yes, there's pressures going on in different directions. But overall, the byproduct credits have been offsetting and it's been decreasing. Our guidance for this year is around, I think, $15.75 to $18.25, and we're coming in lower, but that's mostly based -- that's mostly driven by the high gold prices.

Moving on to direct operating costs. This is a breakdown of our Q1 cost around $381 million. You can see the bulk of it is salaries, which is around 30% contractors, which includes labor portion also an equipment usage and consumables, that's 25% then direct consumables and reagents, 20% maintenance and parts, 10% and fuel at 5%. So we're getting a lot of questions what's going on with our fuel prices given everything that's going on in the world.

So luckily, none of the countries where we operate, are we seeing any interruptions to our fuel supply. However, we are seeing increased fuel costs. In general, we're seeing -- between 30% and 50% higher fuel costs, mostly driven by diesel. The biggest consumers of diesel in our portfolio of assets are Shahuindo, which is open pit as well as Cerro Moro, where our electricity is generated by diesel as well.

Now I'd say that apart from the direct fuel exposure, we are seeing increasing costs with some transport costs as well as explosives. We are expecting further inflationary pressures coming. As we've seen in other inflationary cycles, LatAm can be slow. The good news is that a lot of our supplies are sourced locally. We don't import that many supplies. But given if these fuel prices remain high, we are expecting fuel -- general inflationary pressures later in the year.

Moving on to risk management. This is mostly on the financial side. So first of all, I'd say that we do not hedge either gold or silver, which are our primary products. We do hedge some of our financial inputs, including foreign exchange and base metals.

You can see there on the right-hand side, there's a sensitivity, plus or minus 10% swings on the FX, with how that affects our operating costs. as well as base metals, how that affects our consolidated revenues. We do have an active hedging program where we try to manage these risks, reduce the volatility.

At the end of the day, the goal of those programs is to make sure that we make budget and some of the assumptions we make for our cut-offs are being met. So you can see the track record we've had in terms of gain and losses from those -- from that risk management programs we've had over the last few years.

So as I mentioned, we've had an outstanding track record of financial performance over the last 8 or 9 quarters, $1.3 billion of revenue over the last 2 quarters, plus or minus $500 million of attributable free cash flow over the last couple of quarters, adjusted earnings of over $1 per share for the last 2 quarters and return on investment of around 30% for the last 2 quarters as well. So outstanding results.

So in terms of capital allocation, Michael mentioned this in the beginning of the presentation. I would say when we think about capital allocation, we think of 3 big buckets. One is financial strength. I mentioned the balance sheet, our strong financial position. Ideally, we want to maintain that to give flexibility to Sam and Guido when we're looking at potential targets to know that we can react quickly. So that's having a strong cash balance, have availability of credit when we need it, maintaining sustainable levels of debt on our balance sheet.

Then next thing is making sure that we have the ability to fund all of our growth projects. As Steve and Scott have mentioned, we have lots this year with the Timmins shaft extension. all the projects in Jacobina with the optimization and of course, getting started with the skarn. -- around $265 million of the full $1.9 billion project has now been approved by our Board. That's the early works for the decline. This year, we plan to spend around $90 million on that or $93 million in total for the skarn projects. So once those are taken care of, then we can talk and think about how we return value to our shareholders.

So in early May, we announced a plan to return between a target of 35% to 40% of our attributable free cash flow back to our shareholders in the form of dividends and share buybacks. As Michael mentioned, the dividend is around $300 million and the balance will be share buybacks. From a financial perspective, I think it's a good balance between the 2.

As Michael mentioned, increasing shareholder returns through buybacks has an anti-dilutive effect. So for the remaining shareholders, they hold more and more value in the company. When I mentioned that 35% to 40% of return to shareholders that we have targeted this year, that's very much in line with what we've done historically. When we look at the last 16 years, we returned $1.3 billion of value to shareholders and that represents around 34% of our free cash flow generated, 34% for dividends and 8% for shareholder buybacks or share buybacks.

So very much what we've announced this year is in line with what we've been doing historically. It's just that we have a very recent increase in our free cash flow, and we decided to formalize that in this enhanced shareholder return framework.

On the right-hand side, you can see our plans for capital. So I just -- this is on the project side, so around $240 million to $250 million consolidated project capital. That's on top of $320 million to $340 million of sustaining capital planned for this year. So we have ample capital to fund all these projects to maintain a very strong balance sheet and then still target up to $1 billion of returns to shareholders.

In terms of leverage, this is a graph of the last 6 or 7 years of our debt levels. So the line there is the gross leverage ratio, that's our debt-to-EBITDA. As an investment-grade issuer, we have the target of maintaining less than 1x debt to EBITDA. We saw those numbers go up after acquisitions, specifically the Tahoe acquisition, the Yamana acquisition, where there was a large cash component of those acquisitions that was funded through debt. We're very disciplined in repaying the debt as soon as we could. As you can see, now we're in around 0.5. So this gives us ample room to extend to get -- to extend our debt if we needed to.

Moving on to the skarn. In Martin's presentation, you saw the capital requirements around $1.9 billion. Here is the spread year-to-year with around $93 million in the current year. Given today's financial position of the company plus its cash flow generation, we don't foresee looking for external funds to fund this. We think that we can fund this completely internally. So it's a great position to be in to advance one of the most important projects the company has just with internal resources.

And this is my last slide. This just highlights the track record the company has had in terms of financial management, return to shareholders. We actually to make this graph kind of proportion, we had to cut off the $1 billion. So as I mentioned, $1.3 billion over the last 16 years of return to shareholders. And this year, we're targeting $1 billion. So an enviable position to be, and I think this is a great value proposition for the company.

And in general, I'd say the goal of the financial management of this company over the years has been to support its growth as well as returning the maximum amount of shareholder value.

So with that, I'll pass it along to Michael for closing remarks.

Well, great. A lot of information. And I know, obviously, it's recorded, so you can revisit. I think there are copies of the presentation outside as well if you would like to take one home. But just quickly, and we had that slide before. But for me, these are actually -- if somebody would ask me how you build a successful mining company in the world, there's a lot to do -- a lot to do that, but those are like the building blocks that you need, right? You need long reserves, you need a very solid management team. You've seen here, there's a lot of that.

Obviously, this is only a small group worldwide between employees and contractors. We have about 17,000 people running these operations for us, and there's a lot of experience, a lot of experience, obviously, on the technical side. Mining is a very technical job, and you really need to understand how that works, not only to run it, but to build it and to find new one and replace it and do it again and again and again because at the end, we're dealing with depleting resources, and we have to find new resources all the time. And that brownfield exploration is absolutely crucial for us.

We will never save money on that. We always spend and we always did in the hardest times, we always spend our money on exploration because when you do that, you obviously start running down your reserve base or resource base, which is kind of the beginning of an end for a mining company, of course, because that's all really we have to work to work with. But you want to have those besides your strong operations that generate the cash flow, and you saw it with Ignacio slide, the strong position we are in, we also need those projects, those catalysts going forward that really make a difference for the company in the future. I think you have seen a few of them.

There's a few more. They're not all completely ready yet to share. And please stay connected with us during the rest of the year and early into next year because there will be a lot of news flow, as you can imagine. There will be reserve update, exploration updates. There will be more results coming from Timmins, more results coming from Jacobina. Of course, La Colorada will update you how that goes not only with the exploration, but also with actually the building of the ramp and additional projects of La Colorada that are going to get approved by the Board this year and next year to move that project forward. So there's obviously a lot of news flows coming in all those projects.

And pretty soon, you will have, I think, really the full picture, especially I can't wait from the Timmins side to have the full picture and see and share with you how that looks like and how that district looks like for the next, what it's now 20 years or more at Timmins, a district that we kind of thought when we purchased will close down in short order. Of course, metal prices help. metal prices help for every mining company or should, but you saw the strong discipline to keep our cost low is absolutely crucial for that.

So keeping those big margins and harvesting those margins and use that those results, that cash to advance our project that we have and be able to finance our largest build ever at La Colorada, obviously crucial for us and will yield very good returns for our shareholders. I think with that, we can have another round of questions if there are still questions.

Michael Lawson Winder from Bank of America. It's been super helpful. Thank you to your team for all your presentation. Very much appreciated. I wanted to ask you, and please, if your team would like to weigh in, your thoughts on capital return and not to diminish by any way the $1 billion you plan to return to shareholders in 2026. But acknowledging there's a lot of different drivers of the free cash flow that's available for capital return, but also recognizing that historically, there were periods where you returned far above the 42% historical average. How should investors in the investment community think about potential upside in capital return from what you've now set today?

Look, it's a great question. And I think if everything continues like that, I think our cash position under the current metal prices will still continue to grow even though we -- that $1 billion is really returned in 3 quarters mostly and not in 4 quarters because I think we only did about a $25 million share buyback in Q1. Don't forget, it only got approved when we announced the Q1 results, so in Q2. So there's quite an accelerated program here for share buyback that we are very active in right now and dividend payments for the rest of the year. But when you look forward and Lawson, if obviously, metal prices stay in similar levels, absolutely, I think there's more room.

I mean this is a single situation that not only us, but the mining industry has to actually substantially reduce their share count. But for the first time in my career, there has been share buybacks all the time historically by companies, but they were tiny, very small, included by Panm. At the same time, every mining company in the world used their use their shares, use their currency to purchase new projects, which obviously only goes into one direction when you deal with depleting assets.

So having the chance now to actually significantly reduce that share count, hopefully, over the next few years is a single opportunity for us and a large part of the mining industry. And they absolutely want to use that opportunity to not only do it this year, but to continue doing that, hopefully over many years. And as I said, reduce the share count that Pan has out there, while we can still finance internally the biggest projects we ever endeavor to build.

And if I could ask a follow-up. Your team spent quite a bit of time focusing on the 4 key growth projects you have within the portfolio, Juanacicipio, Jacobina, Timmins and La Colorada Skarn. Nevertheless, your introductory slide and your closing slide highlights the optionality from Navidad and Escobal that we haven't spent a lot of time on those and completely understand that the Escobal process is out of your control and then in a way, the Navidad process is as well. But is there anything you're seeing right now that would -- that you might point to that would give you incremental confidence that those assets could come into the portfolio on a relatively near-term basis?

Yes. And obviously, the team didn't spend a lot of time on it because right now, there's no capital project for those projects or mines, although those would obviously make besides La Colorada, the biggest impact to the company. And look, in Guatemala, definitely, there's no capital or hardly any capital needed to move that forward. And I spend a lot of time on that.

I spent a lot of time in Guatemala right now and having discussions to see how we can finalize that consultation and move forward with the mine. It's a great mine. It's another 20 million ounces a year sitting there at today's metal prices. The costs that we show are all other costs from 2017, '18, I think it was about $8. For sure, costs will be higher right now. I don't know exactly where. But even if they will be 50% higher when you fast forward to production, huge return, obviously, on a project like that or in a mine like that. And of course, there's a lot of time that goes in there.

I just don't have any timing to share with you when that production will be back. Similar situation, Navidad, probably a bit longer out and obviously, capital required because the mine isn't built. But there's really a law change needed first in the province of Chubut that actually would allow open pit mining before we can go into a permitting phase. We all hear about the great things, and we feel it as well at Cerro Moro, the great things that Mr. Mile is doing in Argentina and the positive changes and big projects that are coming to Argentina over the next, I would say, 10 or 20 years.

And obviously, it would be great to add Navidad there. But obviously, a political change that we need to to wait for that approval of -- or change of that open pit law in Chubu before we can advance. Navidad is ready to go in that sense. I mean we have the feasibility really in the draw. All the work, technical work is done there. It will be a longer process, as I said, because it needs to go to permitting and then construction. So longer than, obviously, when you look at Guatemala.

Yes. Just one last question for me. So how do you think about noncore, how do you qualify noncore assets at this time? And should we think about any potential rationalization down the line?

Yes. Look, I mean, I'll be always very careful just to name one asset and say it's noncore. -- first of all, we just showed 2, 3 cases here that changed completely around, and I don't want to have a demotivated workforce thinking that they're not important to us. They all do great work. And even if a smaller mine like in Bolivia has created and generated really, really valuable cash flow for us and production in the past. And in many cases, give us maybe a stepping board to something bigger, right?

We have investments in Bolivia and other companies, for example. So I don't want to just call one asset out there and say that's -- we want to sell that or it's noncore because lots of things can happen until it's there. But of course, the longer picture that you saw that Sam showed to go for longer life, bigger assets over time and then sell off or find a solution for the smaller one will be always the goal here to build this even bigger and stronger Pan American silver. But I will be very careful just to call one out because I don't think it's the right way to think about it. I think it depends. It's not only the asset. It's obviously a political situation. It's how much other -- how many other projects we have, maybe we have great exploration success in the same country somewhere else.

As I said, we can use the workforce and the knowledge to advance a project like an additional exploration discovery. So lots of other issues we need to think about before we would like make that call, sell something of. What we sold so far were all nonproducing assets, except La Arena in Peru, which we mined out the gold side and it went into a copper porphyry, and that was not our business. But everything else we sold was nonproducing so far.

Okay. Well, thank you very much for coming. Thanks, everybody, on the call. There has been a lot of information, as I said. You can listen to the recording. I think there's some refreshments out there. Maybe we can continue and have a few Q&A sessions out there as well. And please feel free to ask all the team here about what they think, what they know and what they have to tell about this great company. I'm pretty sure you share with me or you understand why I'm so happy where the company is right now. a very motivated team here, not only good projects, but you need a motivated team actually to get there and to push those projects forward.

There are a lot of work, not only capital, but a lot of work. But the company is in a very, very exciting position right now, for sure, the most exciting place we've ever seen it, Steve, in our time and really looking forward to look at the next stage of growth that Pan American is going to go into. So thank you very much for coming.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver First Quarter 2026 Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our first quarter 2026 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, Q1 news release, shareholder return framework news release and presentation slides for the period ended March 31, 2026. All of which are available on our website.

I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Good morning, everyone, and thank you for joining us today. I'm pleased to report another solid quarter of operating performance, delivering strong operating earnings, Attributable silver production of 6.4 million ounces and Attributable gold production of 169,000 ounces were in line with our outlook. Silver Segment all-in sustaining costs of $6.63 per ounce came in well below guidance while Gold Segment all-in sustaining costs of $1,851 per ounce were consistent with expectations. The performance on Silver Segment costs was driven by the contribution of low-cost ounces from Juanicipio and the impact of higher gold prices.

Revenue of $1.2 billion was impacted by the buildup of approximately 644,000 ounces of silver in inventory, primarily at La Colorada due to the timing of concentrate shipments. Net earnings were $456 million or $1.08 per share and adjusted earnings were $1.09 per share.

We continue to generate strong levels of free cash flow, reflecting both our operating performance and favorable metal prices. In the first quarter, we generated $488 million of Attributable free cash flow. This has further strengthened our balance sheet, and we ended Q1 with a record cash and short-term investment balance of over $1.8 billion, including cash Attributable to our interest in Juanicipio. The strength of our free cash flow generation and balance sheet has enabled us to introduce an enhanced shareholder return framework.

The new framework targets the return of 35% to 40% of annual attributable free cash flow to shareholders through a combination of dividends and common share repurchases under our Normal Course Issuer Bid of up to $1 billion. We expect to pay aggregate dividends of approximately $305 million during 2026, equivalent to a quarterly dividend of $0.18 per common share based on the current share count and use approximately $700 million for share repurchases.

By accelerating share repurchases, we aim to enhance long-term per share value by increasing each shareholders' exposure to our high-quality portfolio and supporting sustainable growth in dividends over time. This enhanced shareholder return framework reinforces our disciplined approach to capital allocation while maintaining sufficient cash for growth and M&A activities, while providing resilient shareholder returns across commodity cycles.

Focusing on growth, the release of the revised PEA of the La Colorada expansion in March provides greater clarity on the capital requirements and long-term potential of this important organic growth project. The expansion is expected to produce an average of 19.1 million ounces of silver annually during the peak 5 years following construction and ramp-up. The revised PEA represents a huge improvement over the original study with higher grades, lower capital intensity, stronger overall returns and reduced technical risk due to the use of a conventional long-hole open stope mining method.

The project improved as a result of continued exploration success, which identified new high-grade veins east of the current mining area. Exploration drilling continues to intersect mineralization beyond current resources, highlighting the potential to further expand the resource base and extend peak production. The Board approved $265 million in project capital over the next 5 years to support development of a ramp to access the skarn mineralization. We now expect to spend between $92 million to $95 million on the La Colorada's Skarn project in 2026, increasing consolidated 2026 project capital guidance to between $240 million and $255 million.

We're also making progress at our Jacobina optimization project. During Q1, we completed construction of two new carbon-in-pulp tanks and implemented improvements to the tailings pump system. One of the most significant opportunities we see at Jacobina is simplifying and optimizing the process plant flow sheet. Conceptual engineering is nearing completion, and we will transition to basic engineering in the coming months. We also expect detailed engineering for a filtration plant, filter tailings stack and the temporary mine paste backfill plant within the coming months.

At Escobal, the government of Guatemala is continuing the ILO 169 consultation process and engagement has been ongoing, including recent site visits to review care and maintenance activities, and confirm compliance with the court order suspension. At this time, there is no time line for the conclusion of the Escobal ILO 169 consultation or for the restart of operations at the mine.

Given our strong operating performance in the first quarter, we are maintaining our full year outlook for production, all-in sustaining costs and sustaining capital. We expect some gold production to shift into the fourth quarter of 2026. We are monitoring potential cost pressures, particularly related to fuel prices.

Due to most of our mines being underground, our direct exposure to fuel is relatively limited, approximately 5% of total operating costs. Higher fuel prices can have broader inflationary effects including on labor and consumables. We remain focused on managing these pressures proactively.

To recap, 2026 is off to an excellent start. We delivered another strong quarter. We are generating robust free cash flow, production and costs are in line with our guidance, and we have introduced an enhanced shareholder return framework that reflects the strong cash generation.

And with that, I'll turn the call over for questions.

[Operator Instructions] Our first question is from Fahad Tariq with Jefferies.

You mentioned just now the impact of higher diesel potentially on consumables and labor. Can you maybe just mention have you started to see any consumable prices started to go up or anything that you're hearing from your suppliers?

Yes, Scott, can you take that, please?

Yes. Not significantly, no. We've seen some increases in the cost of geosynthetic and [ reagents at our ] mines and cost of staff transportation, where the increase in fuel cost has been passed on to us, but nothing significant in any of our operations.

Okay. Great. And then maybe just one more for me. On the Silver Segment AISC, which was very low this quarter, in part because of the byproduct credits at Cerro Moro. Can you maybe just talk about -- it would have to trend quite a bit higher to get to the full year guidance. Maybe just talk about the -- like how that's going to happen and whether it's possible for AISC to come in lower than the guidance range?

Yes, great quarter on the silver cost, as you say, mostly driven, I think it's pretty clear with Juanicipio strong production there. As you recall, that was one of the attraction of that mine that we have a strong silver production at Juanicipio compared with very low cost. And then as you mentioned, the byproduct credits at Cerro Moro that been very strong this quarter. Look, this is one quarter of the year. We'll obviously reassess midyear if we're going to re-guide our cost. But after one quarter, we just decided to leave it where it is. But a great start for the year on the cost side for sure.

The next question is from Ovais Habib with Scotiabank.

Pan American really congrats on a good quarter, again, especially on the silver segment costs. Also, the shareholders return program was a nice positive surprise as well, so that was great to see. A couple of questions from me. Maybe starting off with Juanicipio. Juanicipio consistently has been showing some positive grade reconciliation over the last couple of quarters. How do you guys see this kind of grade kind of shaping up throughout the year? And then how should we look at things kind of moving on more in the future?

Yes. I will start, and we will have the technical team giving a little bit more detail on that. Absolutely. Look, we have seen this great outperformance at Juanicipio for many quarters, even before we purchased the asset. It's a great mine, as you know. And we -- I think one of the main reason is that we find some more tonnes higher up with higher grades. But just to remind me, these are very similar systems than what we see at La Colorada. So very high-grade silver, some gold, high-grade gold, higher up to surface.

The deeper down you go in the mine, the deeper and higher grade you get into base metals. And that's why like at La Colorada and the same will be valid for Juanicipio will be when you do exploration, you discover additional veins that you blend in and you start mining higher up again, you bring in higher silver grades. So that's kind of the system. That's the geology of all these systems in that silver belt of Mexico, same for Juanicipio. So as I said, the main structure, the grade will go into more base metals, more zinc and lead-rich when you go deeper down. But as you see, very strong outperformance on the silver side up to now. And I think we'll see that decrease coming at one point, obviously, or decrease just on silver. And as I said, very strong increase on base metals. But at the moment, we are enjoying these high grades. And I think that, that slight decrease will be quite a bit slower than we probably anticipated.

And just maybe quickly moving on to La Colorada. In regards to the PEA that you announced, obviously, a lot of drilling was left out on that PEA. And there were some very high-grade results and good structures that you guys had delineated. Are you expecting to release some sort of an updated study incorporating these results or any sort of optimization work that you've been doing in the background in the next couple of quarters?

Definitely, we'll put that exploration updates and then we'll include, obviously, this data in our midyear reserve and resource update that we normally publish somewhere in August. So there, you will get a new idea how it looks like. Just you said left out, we didn't really leave them out. It's just -- it's a lot of work to obviously come up with an updated PEA and the whole mine plan and everything, while our geologists are very excited on that project and keep drilling a lot and create a lot of data.

So there's always quite a long -- I wouldn't call it lag, but backup of data that comes in a bit later on. So that will continue as we have many drill rigs working at La Colorada, and there will be constantly new data coming in. So again, we will come out with updated exploration results and then include that in our updated reserve resource estimation.

Steve has some more additional comments to that.

Yes. Sorry. I'm Steve Busby here. I just wanted to add. So we won't -- we will delay the next report in terms of like a PFS update because we have such a long schedule for this initial development of the ramp and eventually the shaft, those are kind of taking precedents of the development schedule. So we want to get those early-works projects going and get those moving along, and then we'll go back and start doing additional engineering and such for the plant and surface infrastructure. So as Michael said, we'll update resources along the way, but we won't come out with a new mine plan right now for a couple more years, at least.

But just to add to that, so Ovais, you probably saw in the press release that Board approved the first tranche of capital for the La Colorada Skarn. That's a great milestone for this really, really important and large project for us. La Colorada is going to be one of the biggest and lowest cost silver mine in the world. And we approved the first $265 million to advance a ramp down from the existing mine to the skarn. That's a long -- it's about a 5-year project to build that ramp.

So you can imagine that's in ground conditions that we are very familiar with. We drive many ramps, but this ramp will be very special for us as it will access the shaft is the first important part of capital spend on the La Colorada Skarn project. And it was important to get that started because that's really kind of one of the slowest piece of the puzzle, if you want to say so, to put it all together, as Steve said, building the new plant and surface infrastructure, there is a plenty of time later on.

The next question is from Cosmos Chiu with CIBC.

Congrats on a strong start to 2026. Maybe on skarn again, good to see that you've committed $265 million for the initial internal ramp. Could you remind us in terms of the dimensions of the internal ramp? Is it going to be sufficient for production? Will it eventually be used for production? Or most of the hoisting is going to be coming from the East Hoisting Shaft. Could you maybe help us picture it in terms of how this is going to eventually work?

Sure. Yes, it's Martin Wafforn here. Yes, the decline we're driving at 5.5 meters by 6 meters. So a big decline with the intention of putting big-size trucks in there in the order of 50-tonne capacity trucks and we'll use those to haul up to the 588 level, and then we'll use other trucks to take the waste that we're generating from this. It's actually 12.4 kilometers of development that we're going to do over the next 5 years. That will all go up to surface via the other decline. Our long-term production will go up the East production shaft. That's the plan, but we will have this ramp that's available as well. But the long-term plan, as I said, that is to use the shaft for hoisting the ore to surface.

Great. And then the other part of capital return Michael, as you mentioned, great to see the new enhanced shareholder return framework now in place. I guess my question is, is it as simple -- when we try to figure out how many shares you might buy in each quarter, should I -- for example, in Q1, you generated $488 million in free cash flow. As an estimate, can I multiply that by like 35% or 40%, subtract out what you would normally kind of divvy out in each quarter to figure out how many shares you could buy -- of course, it's going to be dependent on the levels of Pan American Silver shares. But is that kind of like the sort of how we would execute on that framework?

Yes. Look, I mean, what we announced is up to $1 billion of return. One part is dividend and the dividend is kind of fixed at a total amount of $305 million for the year. So while we're buying back shares, the return on the dividend per share will slightly and slowly increase with more buybacks in place. So that's another additional interesting addition here to our capital return framework.

We looked at the past returns we had. Of course, we increased the dividend 3x over the last quarter, but our cash flow generation is so strong right now and the big projects that we are building, there is enough capital for our growth as well. And you probably saw we are already at about $1.8 billion between cash and short-term investments. So the Board believes that we can return up to $1 billion. I believe that, obviously, too, we are right on track for that. And that's kind of the plan. So how many shares we can buy? Well, that, as you said, will depend on the share price for that, but we'll really try to aim for the $1 billion return this year.

It's great to hear, Michael. And then I guess on that, I noticed that in Q1, you utilized not a lot of it. You bought back about 460,000 common shares in Q1, which is not a lot given that if you want to hit those -- some of those numbers that you just mentioned, you might need to kind of buy back 10 million shares for the rest of 2026. So I guess my question is, in Q1, why were there not more shares being bought back? Was it due to a level in terms of where you were trading at? As you mentioned in the press release, the share buybacks were $54.04 a share in Q1 or was it just due to the fact that in Q1, you did not have this enhanced shareholder return framework put in place just yet?

Yes, really a combination of the framework wasn't in place. And very important to remember, we put out updated PEA, and there was quite a while we were in a blackout and couldn't really repurchase shares for a while. So until we had all that information out as soon as that happened, we started repurchasing shares. So that was the reason for that kind of delay. But as you can imagine, we will step up that repurchase pretty strongly to get to that total $1 billion return for the year.

Of course. Maybe one last question. In the same press release, you talked about other projects, including the Timmins project, the extension of the Bell Creek shaft, not -- didn't really get a lot of airtime, but I think it could be important. So maybe if you can touch on that a little bit as well as some of the exploration opportunities that you have mentioned for that area.

Yes, definitely important. And there's only so much room in the press release. We will, of course, give a lot of details on that during our Investor Day, but very exciting to lower the shaft and add many, many years of future production to Timmins. So maybe, Martin, you want to give us some more color on the shaft extension?

Yes, absolutely. Yes, it's a great project. Delighted that it's announced. Actually, the idea is that we're going to extend the shaft by another 625 meters from the current 1080 level down to 1705 level. It's actually going to be developed using Alimak raises. So we're coming Alimak up from 2 levels as we go. It's $131 million total investment. And it allows extension of Bell Creek well into 2040. Actually, we think right now around about -- depending on how the reserves go, but well beyond 2040 -- 2046 is what we used in the economics of the shaft extension. So exciting project. It definitely helps as well with the haulage costs because we're mining right now quite a bit below the ramp. So that's going to help us with the cost there as well.

That's great to hear. And I agree, Michael, not enough room in the press release. That's why you have people like me asking questions. Congrats again, Michael, Martin and team.

The next question is from Jeffrey Hume with Ingalls & Snyder.

I apologize. I don't have a question at this time.

The next question is from Don DeMarco with National Bank Financial.

Maybe just continuing on the discussion on the skarn. Of course, we saw the Board approve the 12-kilometer decline over 5 years. Does this represent a formal go forward on the project? Or would that be something that we might expect after the PFS update that was mentioned maybe in a couple of years from now?

Yes. Look, this is a very -- it's a project that needs quite a few years, but this is definitely the start of our skarn development. This is not just an exploration ramp down to see how that skarn looks like. We obviously have a lot of information we drilled on the skarn since 2018, when we did the discovery. And you just heard Martin saying that we're driving down a ramp of 5.5 meters to 6.5 meters, which will fit 50-tonne trucks. So this is definitely the first spend of a great project and the great big mine that we're going to build here for Pan American.

Okay. And of course, like the revised PEA came out a couple of months ago and showed CapEx of $1.9 billion. Just can you remind us, I think at this point, you were talking about funding this within Pan American exclusively. Is that right?

That's correct. As I said, our cash and short-term investment balance right now is $1.8 billion. Of course, it's -- there will be a lot of cash flow coming in over the coming quarters and years while we build this asset. There is plenty of funds available for us to fund this project and continue with our return to our shareholders at the same time.

Yes. And I guess that's a good segue into my next question. I mean the shareholder return program is very timely. I mean it's a real step-up in the share buybacks and coincides with the discounted valuation. But I see it is weighted to buybacks. That's pretty common in the sector. Can you share your thoughts on how you decided on the allocation between shares and dividend amounts?

Yes. When we -- I mean, when we look at the historic returns we have between share buybacks and dividends, we returned somewhere around mid-30% of our free cash flow to shareholder. Historically, probably higher weighted to dividends. Now we achieved such a high level of cash flow and as I said, increased our dividend already 3x every last past 3 quarters. So we all believe that at this point, the strong share -- the share repurchase is a better and stronger use of our cash and return to our shareholders than just continuously increasing the dividend. So it's a great mix, I think. I think it -- was a great day when we approved the $1 billion return to our shareholder yesterday.

The next question is from John Tumazos with John Tumazos Very Independent Research.

Congratulations on all the cash and good things. In the updated Skarn PEA, the CapEx fell by about $1 billion, the upfront capital. Could you describe the subzones of skarn, where I'm presuming that the updated PEA accesses a higher grade perhaps less deep part of the skarn that needs less capital, has more revenue, maybe it's lower temperature, maybe it needs a little less ventilation. But my sense is that some parts of the skarn are richer and easier than other parts of the skarn.

Yes. Thanks for the question, John. Absolutely, you're right there. The big decrease in capital between the 2 PEAs was really that initially, it was a way, way bigger sublevel caving project. Remember at the beginning, we envisioned up to 50,000 tonnes a day. During the years -- following years, we discovered more and more high-grade material, not only in the skarn, but also closer to surface in some additional veins. And I would like to refer everybody to a number of press releases that we put out over the last 2 years on those high-grade wide intercepts that we encountered within the skarn ore bodies and this really high-grade structures that we discovered close to surface.

So when you put all that high grade together that we discovered over the last few years, we had the chance to build a smaller, higher grade starter, if you want to call. I'm not sure starter mine is the right word because the project we put out is at least 37 years long, but we will definitely mine first those higher silver grades. And that's why the tonnage decreased from that kind of initially around 50,000 tonnes to about 15,000 tonnes a day and just uses conventional long-hole open stoping. So with that change, obviously, it's a smaller mine to build, smaller plant to build and less development for the underground, much simpler straightforward mining method that we apply in most of our underground operations. That combination brought the capital requirement down by $1 billion.

This concludes the question-and-answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Thank you, operator, and thanks, everyone, for calling in. Another great quarter, strong production, low cost, especially in our silver mines, a great combination, obviously, combined with very high metal prices as well and as a result, very high cash flows. So in light of those strong free cash flows, as you saw in the press release, we adopted a new shareholder return framework, targeting to return up to $1 billion between dividends and share repurchases for 2026.

We also approved some really important capital spending, as we just discussed here with the people on the call for Jacobina, Timmins and of course, most importantly, for La Colorada, which really marks the first large approved capital spending to develop our great skarn deposit at La Colorada with the first $265 million approved to sink or lower that access -- large access ramp to the deposit.

We will be hosting our Investor Day in Toronto on June 1. So there will be ample time there with lots of maps and cross-sections to explain and dive really deep into all this project, La Colorada, Jacobina and Timmins together with many other exciting projects that Pan American has on the development and exploration side and really looking forward -- if you could join us for that event. And again, it's on June 1 in Toronto that will be available, obviously, in person if you're in Toronto or via webcast.

Looking forward to talking to everyone at that event. Have a great time until June 1. Thank you very much.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Yes. Good morning, everyone. A pleasure to be here again in Zurich and give you an update on Pan American. Just see if we can get the presentation going. And a lot has changed with PanAm over the last 12, 24 months. Of course, last year, we did the acquisition of MAG, I would probably call it a very timely acquisition when silver was still somewhere around $30. That worked out very well for us. And now we own 44% of one of the best silver mines in the world, which is Juanicipio, but we also announced an updated PEA for our discovery at La Colorada skarn, which actually will become the largest and lowest cost silver mine in the world here over the next few years.

And I want to spend quite a bit of time with you to explain what has changed there and how we see that project developing and how we're going to add another 20 million ounces of silver production at La Colorada to our portfolio. You see there where we work, it's all in the Americas. The reason we are there is really a geological reason. When you want to be a silver producer, you have to work in the Cordero. That's where the silver is, Mexico, the biggest silver producer in the world, of course, closely followed by Peru, a lot of silver production in Bolivia historically. And of course, Argentina even has it in its name. So if you want to be a big silver producer, that's where you have to be. That's where we are working, and that's where we are always growing and look at. So I'm not really interested to go to many other different places. That's really where the silver is. That's the places we know and where we're working and me personally already for over 35 years.

But let's spend a little bit more time on La Colorada because La Colorada, it's with PanAm for quite a while now. Actually, I joined the company 23 years ago and the project was already there. I think Ross Beaty at that time bought it about 2 years back, before it was a small silver mine. The whole system now obviously, we understand how the geology is in place. We have very narrow veins, high grade on the top all the way down to a porphyry, which is really deep down and was feeding the whole system. We had a discovery hole in 2018. And just think about La Colorada, what we're mining right now are narrow structures, high-grade veins that maybe 2, 3 meters wide.

Our discovery hole hit 372 meters as an intercept of high grade or relatively high-grade zinc, lead and silver mineralization and turned out to be one of the biggest base metal discoveries in the world that we drilled out over the years. And when we put out the first PEA, it was a very, very large base metal development program. It would have been the biggest zinc mine in the world, still producing a lot of silver at that time. But the idea at that time, what we knew about the project was to build first a sublevel cave and a block cave later on, 50,000 tonne a day, very large zinc production. We're probably about in the 15 million ounce silver range, somewhere around there. So a very large project in the mining method that we are not really familiar with.

Now fast forward over the years, we kept drilling. We have probably about 18 rigs drilling at La Colorada right now. We probably have all -- at any time in all our active sites and projects about 85 to 90 drill rigs drilling. We're drilling over 600,000 meters a year in exploration. And this is obviously one of the results of this exploration effort. And you see there are just the big numbers where it's going to go. There's La Colorada, the vein mine. Over the years, it will become smaller. Right now, we're still producing over 6 million ounces there, but it will go down as an average to about 3.3 million ounces just from the veins. And then we're going to add an average of nearly 16 million ounces to that from the skarn mineralization.

And then you see there on the zinc, it's still going to be a big zinc producer as well together about 250,000 tonnes. And as a result, it's going to be about negative $20 from -- for our silver per ounce production cost. But it will be about 52% or 53% of revenue will come from silver. So it's going to be clearly a very, very big silver mine. Just a few numbers there. So it has changed now. So with the exploration over the last few years, we have discovered and I will show later on in this section, we have discovered a lot of more high-grade structures. We have discovered a high-grade core inside the skarn. And that brought us to a place where we can go into -- we call it Phase 1, where we go for the high-grade structures and the high-grade part of the skarn.

But Phase 1 is pretty long. You see there are 37 years. I think there's always the chance to go bigger later on and do that block cave for the big deposit. I think that this deposit has a chance to be in production for 50-plus years. But at the moment, those economics are just for the first 37 years. I think that's long enough to start with. It will be only 15,000 tonnes a day underground. So similar, a little bit bigger than our Jacobina mine in Brazil.

And it's the normal mining method that we apply everywhere else as a long-haul open stope mine. And you see there the return at 2 different metal prices. One is analyst consensus, 17% return, $2.6 billion NPV and then at more current prices, about $5.2 billion and a 25% return. So very strong project. The capital now has been reduced from the big project, which was close to $3 billion to $1.9 billion that we can fully fund from our cash flow and cash on hand. And that's how the production profile looks like.

When you look at the top is silver production, you see the red bars there, the hatch part, that's the current La Colorada production. It's obviously winding down over the years. We discovered new high-grade structures, which are the green ones. And then the blue is the added production from the skarn. You see there the core production is just around 20 million ounces a year. We, at the moment, have about 60,000 meters of new drilling that we did not publish yet. It's not yet in our reserve and resource update. So there's continuously data coming in. We just put the press release out about a month ago with some really stunning high-grade additional veins that we discovered at La Colorada with silver grades around 10 kilos per tonne. So that's still to come in.

And I think we'll obviously smoothen out the production at the beginning and increase our production faster. And then we keep finding more skarn mineralization as well, which will continue that big production further into the future. But you see there, 37 years, and you see below the zinc production, very strong zinc production as well that comes. By the way, La Colorada is producing one of the world's best zinc concentrate right now. It's running about 61%. It's a very clean concentrate with no iron in it. And this will produce a very similar product, very easy metallurgy. We already produced, obviously, for a decade that concentrate and nothing new to us on the metallurgy, no nasties in the concentrate. So great product, a lot of interest, as you can imagine, from the traders in the world when you can produce about 0.25 million tonnes a year of that kind of quality of concentrate.

Getting a bit technical here, but just to show you see on the -- on your left side, the map, you see those big red circle, that's the skarn and the plan view, you see some of the main structure. And then on this side, you see a cut through the mountain, and you see on top, the gray is the surface. You see the blue block, which is our current La Colorada vein mine. And then you see in red, the skarn below. And you see here the new discoveries, which are some of these new very high-grade veins that helped us to go into this mix of high-grade structures, high-grade part of the skarn, which will bring us to that first phase, 37-year production increase at La Colorada. So pretty straightforward. We're going to run a ramp from the existing mine down to the skarn. We're going to start doing that probably in the next 2 months.

And then we have to think 2 shafts. It's pretty detailed, but there's already 2 shafts that we built at La Colorada in the past, 2 shafts, 1 for ventilation and 1 for extraction of the 15,000 tonnes in the future. So great project that we're going to start here. And that's how it's going to look like. Right now, when you look at the silver mines in the world that's looking at the resource and reserves, Fresnillo is still a bit bigger. But as I said, we still have a lot of drilling that we are doing and a lot of drilling that will be included here. And I think La Colorada will grow bigger and will be one of the biggest silver deposits in the world.

And when you look at production, it's going to be the biggest silver mine in the world. You have to add, obviously, the 2 up, La Colorada vein and skarn, and it will just be closely followed by Juanicipio, which is obviously the addition to our portfolio from last year. So a great place to be and a huge leap that La Colorada is going to make from the current 6 million ounces all the way in front of the biggest silver mines in the world. And as I said, it's going to be the lowest cost one. And you can see that here, Juanicipio is a very low-cost producer. Very happy to have that in our portfolio. As you know, we own 44%. The mine is run by Fresnillo. The La Colorada, with the expansion and then the addition of the high-grade structure will leapfrog Juanicipio and will be bigger and lower cost producer of all these big names of silver producers there in the world. So a great place to be.

We have discovered that in our portfolio, brownfield discovery and a great project for us to build out over the next few years. So yes, to that, Juanicipio, just a few words. Obviously, I think most of you are familiar with it. We added that last year, the 44% by buying MAG Silver. And that was before La Colorada was out with the study. You see that Juanicipio was the lowest producing silver mine in the world and largest one as well. So now we have the 2 biggest ones in the world. So a great spot to be when you want to be the biggest silver producer in the world, and we are definitely on the way and there.

There's other projects as well that we're working on, and we're working on an expansion and optimization of our biggest gold producing mine, which is Jacobina that came to us through the acquisition of Yamana Gold. Actually, up to now, it's still the biggest cash flow we have in the company that will be replaced with our big silver production in the future, but a great asset to have. Again, a very long-life asset at the moment, we have a mine plan until 2053 at Jacobina, and we're looking to increase our production here. We started at 8,000 tonnes a day when we bought it. We surpassed 9,000 tonnes a day, and we try to get to 10,000 as a first step. And then with the optimization, see how much further we can push that, get a new permit because our current permit allows us only to mine 10,000 tonnes a day and another like multi-decade operation that we have in our portfolio in Brazil in this case.

Just a few words on Escobal. Obviously, there's a few other projects we have. And Escobal, we're working quite a while on this under consultation. I think we are at a spot now where we exchanged all the information, everything has passed on. And we are obviously very open to discuss any kind of participation on that project together with the indigenous group and the government. You see this very, very small footprint. That's the entire mine, by the way, and Escobal produced 21 million ounces of silver when it was in production. The mine is ready to go. We would need about $80 million to $100 million working capital to start it up about 6 months to bring it back into production.

And obviously, I couldn't think in a better metal price environment to start up a big silver mine in the world. And if you look at having communities and governments participating in a project at this metal price, obviously, will make a lot of sense. That would be the other 20-plus million ounce producing asset for us that is already there. It doesn't need a lot of capital, but it's obviously not under our control right now because the consultation is done between the indigenous group and the government of Guatemala.

So thanks to the addition of Juanicipio, we see a nice increase in our silver production. We guided 25 million to 27 million ounces and still very strong gold production as well, up to 750,000 ounces at a very good cost profile. I just want to show this quickly because a lot of people, especially like the generations a bit older like me that remember very well earlier runs in metal price and remember 2010, 2009, where we had a huge -- we generated a huge inflation in the mining space really and the metal prices were running a while and then the cost curve actually crossed over and it ended in a big disappointment.

I just want to show you when you looked at silver on the left side and gold on the right side, and you see here the metal prices for the last 8 quarters that we achieved for each of these metals. and in green, our all-in sustaining costs. And you see how actually remarkably flat those costs stay, especially on the gold side because we don't have a lot of byproduct credits. Silver is a bit more variable, but you see actually our costs are coming down, and that is the effect of the addition of Juanicipio, really low-cost producer. So you can imagine when we add La Colorada to that with the skarn at a negative cost of about $20 and nearly doubling our output of silver is going to look very, very interesting. But obviously, very, very large margins that we generated.

Hence in Q4 alone, about $553 million free cash flow generation. Metal prices are way higher in Q1. As you can imagine, we have over $2 billion liquidity. At the moment, we're returning about $100 million a quarter to shareholders between share buybacks and dividend. And together with the cash in Juanicipio over $1.4 billion of cash on our balance sheet at the end of 2025. So there's enough money here to obviously build the big expansion at La Colorada, and there will be more money coming in as we speak to do that. So no problem on the financial side with very little debt, there is a very, very, very cheap money that we have.

So we're paying dividends since 2010, we've returned off the free cash flow about 36%, 35% between dividend and share buybacks. We increased the dividend every quarter over the last 3 quarters. And this is not the reason we're not giving more money back to shareholders because we don't have anything else to do with it. I just showed you the big projects we have, but there's just so much excess cash that we are happy giving dividend and share buybacks back to our shareholders as part of this big bull run in metal prices. And then when you look at per share, it's really interesting, obviously, when you look at earnings, you look at return on invested capital, you look at margins on cash flow, of course, huge increases over the last -- that's like, I think, 10 years on per share base. Part is obviously metal prices and the other part is just the increased quality of assets that we purchased and then we tend to sell off the smaller assets at the end or the other end of our portfolio.

Obviously, very strong commitment to sustainable production. It always has been. It was always part of Pan American. And maybe just to end quickly because silver is a very complex story, much more complex than gold because silver has 2 uses and the use right now on the industrial side is growing so fast that we are already at about 65% of the world's silver production that is used up. And you can imagine with further electrification, not only with clean energy production alone, but self-driving cars, data centers, AI, the use of silver is increasing very, very fast. But we can't really produce much more silver. We have the biggest projects. We have the biggest reserve, the biggest resource in the world of silver already. But 75% of the production comes actually as a byproduct from copper production and copper is already at an all-time high nearly. And so there's not many big copper mines coming on in the next few years. So hence, not much more silver production.

And I really can see only like La Colorada and Escobal as kind of meaningful addition to the silver. But until then, we see a big deficit. You see there in green, the production is actually declining, but we see increased demand on the silver side now from both sides, obviously, from the industrial side and from the investment side, hence, the silver price where it sits right now. So with that, I'm at my end. So open for a question if you have time.

Are there any questions from the audience? Gentleman over here.

That $283 million of debt that's due at the end of next year, will you be paying that off entirely or reprice it?

Yes, that's -- so it's one part of the 2 bonds that came to us from the Yamana acquisition. You see the big one, $500 million is only due in 2031. That one runs at about 2.6% interest. So the one that is due, yes, I think we're just going to pay that back. At the moment, we don't need additional money. As I said, there's enough cash coming in. So that will be due in like a bit less than 2 years.

If there aren't any questions, maybe, Michael, I can ask, and I always ask this, I have to come back to Escobal and what's happening with the indigenous consultations. Maybe just give us an update on where are we exactly with that? Do the indigenous people want something from you? And does it look like we can resolve this, this year?

Well, look, I never -- I mean, I never gave you like timing or whenever that will happen. I always maintain the mine in great shape. So when it comes back, we can restart it quickly. As I said, within 6 months, we could have production. I think I have made very clearly that we are very open and sharing wealth from that project with communities, but also with the government of Guatemala, which obviously jobs are very important, especially now as a lot of kind of jobs getting brought back from the U.S. to Guatemala. Look, as you said, the transfer of information on the consultation is finalized now, and that kind of decision, how we split this up will be the next part of it.

Okay. And then if I could, listening to you talk about La Colorada, you've got your $1.9 billion CapEx. You showed us you don't need money to build it. But do you have within your portfolio noncore assets? I thought Timmins might be noncore. You've got a royalty portfolio. Maybe just share your thoughts on that.

Yes. Look, we sold assets for probably about $1.4 billion cash over the last few years. And that will definitely continue. I like to have, as I said, something big on one side before I sell the other ones. But when you look at selling assets right now because it's such a short time frame that we saw so far with these very high metal prices, there's quite a difference between the buyers' expectation and the sellers' expectation on metal prices.

And I think we have to get a bit closer before we can look at divesting an asset. To get there, I guess, later this year, if we have another 10 months of more stable prices, then I think we will find better spot that works for both of.

Okay. Thank you so much. We've run out of time.

Thank you.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver conference call to discuss the Revised PEA for the La Colorada Skarn project. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Siren Fisekci, VP, Investor Relations. Please go ahead, Ms. Fisekci.

Thank you for joining us today for Pan American Silver's webcast and conference call to discuss the revised preliminary economic assessment for our La Colorada Skarn project. Please note this call includes forward-looking statements and information, and you are advised to see the cautionary statements to the slides that accompany this call and in our news release issued on March 24, 2026, announcing the results of the revised PEA. A copy of an updated technical report on Pan American's La Colorada property, including the Revised PEA on the La Colorada Skarn project will be filed with Canadian securities regulators. The report will be available under the company's profile on SEDAR+ and on our website within 45 days of today.

I'll now turn the call over to Michael Steinmann, President and CEO of Pan American Silver.

Thanks, Siren, and thanks to everyone for joining us today. We are very pleased to share the results of our revised preliminary economic assessment, or PEA, for the La Colorada Skarn project. Since issuing the original PEA in early 2024, we have continued to advance an active exploration program across the La Colorada property. Over the past 2 years, we have reported a series of high-grade drill results, most recently in our March 5, 2026 news release. Those results include exceptional intercepts and have led to the discovery of multiple new high-grade silver zones along with replacement-style mineralization to the east and southeast of the current defined mineral resource at La Colorada.

In September 2025, we also announced the addition of 52.7 million ounces of silver to inferred mineral resources located in veins northeast of the current operation. With the benefit of those exploration results, we have taken a fresh look at the development plan for La Colorada. Yesterday, we shared that updated vision to our Revised PEA. The Revised PEA outlines a new development plan for the La Colorada property. While we continue production from the existing La Colorada mine using current facilities and infrastructure, we plan to begin developing the higher-grade portion of the Skarn deposit simultaneously with the newly identified high-grade silver veins.

The first step in that plan is the construction of a decline from the 588 level of the existing mine to access the Skarn deposit. We expect preliminary work on that to begin in 2026. Also in 2026, we plan to start the engineering work for 2 shafts, a production shaft and a ventilation shaft, both of which will be conventionally sunk from surface. These shafts are expected to be completed by 2030 and would provide access hoisting capacity and ventilation for both the Skarn and the newly discovered vein zones. As this initial infrastructure is built and underground mine development advances, the Revised PEA contemplates the construction of a new 15,000 tonnes per day processing plant. The timing of that plant is intended to align with the start of initial production from the Skarn deposit in 2032. The new plant is expected to process all production from La Colorada, including mineral reserves and mineral resources from the vein system as well as the high-grade portion of the Skarn mineralization.

Total capital investment for that project is estimated at $1.9 billion. We expect that spending to occur over approximately 6 years with the heaviest spending in the final 3 years as the plant is constructed. Importantly, we currently expect to fund this capital through cash flow generated by Pan American's operating mines. We do not require additional permitting for the 588 level ramp decline that will provide initial access to the Skarn deposit. Permit applications would, however, need to be submitted for other components of the proposed expansion project, including the mine shafts, the new processing plant and tailings facility expansion.

Taken together, this overall development plan, which we are referring to as the expanded La Colorada mine has the potential to position La Colorada as one of the largest and lowest cost silver mines in the world. During the peak 5 years following construction and ramp-up, silver production from the expanded La Colorada mine is expected to average 19.1 million ounces annually. Silver production would then average 11 million ounces per year for another 10 years after this peak period before declining for the remainder of the 37 year of life. There is substantial exploration upside at La Colorada, highlighted by the discovery of 4 new high-grade veins to the southeast of the current mine.

Additional mineralized material from those and other new structures could further extend the peak silver production levels. We expect to use conventional long-hole open stoping with paste backfill, a mining method we already apply across our underground operations, which would lower the technical risk for this large project. By contrast, the original PEA contemplated developing only the Skarn deposits using a sublevel caving method. Cave mining would only be considered as part of an additional potential expansion in the distant future.

Let me now turn to the economics of the Revised PEA, which are specific to the development of the vein mineral resource and Skarn mineral resource. While the existing La Colorada mine is expected to continue operating during construction, commissioning and well into the future operation of the La Colorada Skarn project, the mineral reserves associated with the current operation that are scheduled to be mined over its life are excluded from the Revised PEA mine plan and economics. As a result, they do not contribute to the economics of the La Colorada Skarn project presented here as required by NI 43-101 reporting standards.

On a stand-alone basis, the La Colorada Skarn project offers attractive returns. The Revised PEA estimates an incremental after-tax net present value discounted at 5% of approximately $2.6 billion with an after-tax internal rate of return of 17%. These estimates are based on our long-term base case metal prices of $45 per ounce of silver, $2,800 per tonne of zinc and $2,000 per tonne of lead. At higher metal prices, specifically $75 per ounce of silver, $3,400 per tonne of zinc and $2,000 per tonne of lead, the incremental after-tax NPV discounted at 5% increases to approximately $5.2 billion and the after-tax IRR rises to 25%. Additional sensitivities for NPV and IRR across the range of silver and zinc prices are included in the news release we issued yesterday.

Based on our base case metal price assumptions, the payback period of the initial $1.9 billion investment is estimated at 4 years. Under the higher metal price scenario, that payback period improves to approximately 3 years. The La Colorada Skarn project is expected to generate strong free cash flow, averaging $653 million annually over the initial 5 years following construction and planned ramp-up at the base case metal prices. Under the upside price scenario, annual free cash flow increases to $988 million. Again, this is incremental to the free cash flow generated by the La Colorada mine reserve during those periods. Those strong free cash flow expectations are supported by strong operating margins. Silver all-in sustaining costs are expected to average negative $22.67 per ounce over the initial 5-year period, reflecting significant zinc and lead byproduct credits.

At the base case prices, the initial 5-year period revenue contributions is approximately 42% silver, 39% zinc and 19% lead, while at the upside price scenario, the silver revenue increases to 51%. We are very pleased to present this development concept, which could meaningfully expand low-cost silver production at La Colorada while also derisking the project through lower capital intensity and the use of a conventional mining method. As mentioned, we are anticipating beginning some preliminary work on the development of the ramp from the 588 level in the coming months. We will also continue exploration and definition diamond drilling in both the Skarn and the eastern portion of the vein mine as we believe there is significant potential for further mineral resource growth.

Also in 2026, we plan to begin detailed engineering work for the production and ventilation shafts. And finally, we are preparing the scope and schedule required to advance towards a pre-feasibility study. We are excited to be advancing this large-scale silver project, which we believe offers investors exceptional long-term exposure to silver, a metal that will remain increasingly critical in the future. The expanded La Colorada mine has the potential to become one of the largest and lowest cost silver producing mines in the world.

And with that, together with the rest of our management team, I'd be happy to take your questions.

[Operator Instructions] The first question comes from Fahad Tariq with Jefferies.

Just on the change in the development approach, how much of that was driven by maybe technical factors or even financial factors versus not being able to find a suitable partner for the larger bulk caving operation?

Fahad, not a reason about partners. There was plenty of interest to look at this project. But when you look at this time the risk to develop a 50,000 tonne underground block or sublevel cave mine compared to the higher grade part in the first step, as we indicated in the call, there is still a possibility in the future to go to a way bigger mine if we would decide to do so. But that was really the reason. I mean, a higher grade, lower capital, way lower risk way forward here that actually produces quite a bit of more silver for us than we had anticipated in the original PEA. So as a combination, obviously, a way more attractive project for us. And as I said, with the higher silver production, a project that is way more in line with Pan American's goals here.

Okay. And then just maybe a housekeeping item. But on the plant CapEx specifically, I think it's $277 million in the Revised PEA. Do you know what it was in the 2023 PEA, just so we can compare because the plant size is quite a bit smaller now, obviously.

Yes, we'll have to get back to you on that. I don't have that at my fingertip.

The next question comes from Ovais Habib with Scotiabank.

Congrats on releasing the really robust PEA. Just a couple of questions from me. And number one question that I've been getting since last night when you released the PEA has been on the potential partner. Based on the CapEx as well as the size of the project now, it certainly feels like you don't need a partner. Are you still looking to bring in a partner? And if so, is there a stage that you would consider bringing in a partner?

Thanks, Ovais. Look, I think this is a great outcome right now. We continue to work and bring this project forward. As you pointed out, we can easily do this project on our own. So at the moment, there's still some discussions going on and maybe a smaller piece of it. We're looking at potential to deal with the zinc offtake and things like that. But this is a project well in our reach to build from the capital side, from the size, from the technical requirement from the team that we have in place, both here in Vancouver and in Mexico. So this is now moving forward as it is, and we'll see how it advances in the future. But at the moment, I'm very comfortable doing it alone.

Sounds good. And just moving on to the exploration upside. And I believe about 90,000 meters of drilling has been completed but not included in the PEA. Could these additional zones that have been discovered improve the front end of the mine plan? Or are you looking to maintain the production profile kind of around that peak levels that will be reached around that 2036 level?

Yes, you're absolutely right. And there's a lot of drilling not included. And just I refer again to the press release, I think we put it out about 2.5 or 3 weeks ago, where we discovered another at least 4 major structures at La Colorada, really high-grade silver. So that, you're right, will probably come in and extend at the front or after the peak years, can extend those peak years on the silver production, so making that period of way higher silver production longer. Just to remind everyone, this is like any deposits in the silver belt of Mexico, when you go deeper, you have a summation.

So you go deeper down in the deposit, you go from high-grade silver and some gold in higher levels down to more lead and then more zinc. And if you will continue deeper down, you will get into higher grades of copper. That's just the normal geology and this kind of structure. So when we discover new veins higher up closer to surface, we find this incredible high bonanza grade silver and gold grades that we published, as I said, 2.5 weeks ago. And looking for more of those, we're already drilling a lot on those. We're finding more and there's more and more success. And yes, that, by all means, will extend that peak production -- silver production period by more years.

And just one last question. So again, just on that -- on the exploration side, the PEA seems to be kind of a base case based on the exploration upside. Are there any other optimization work we can keep an eye on to further improve the production or cost profile?

Yes. This is Steve. And that gets back to your earlier question, as Michael alluded to, as we expand those vein resources, that does offer some interesting opportunities for us to look at taking even more advantage of the infrastructure we need for the Skarn. It's quite large infrastructure necessary for the Skarn. It might allow us to look at increasing production on those veins. That's one of the areas we want to target as we move into PFS pretty clearly. And then, of course, the longer term is that, that optionality of the cave mine. There is still a very attractive low-grade component to the deep Skarn mineralization. So that cave mine does offer additional upside opportunities, albeit more favorable to the zinc production than the silver per se. But those are 2 key ones that I think will be interesting to watch as this develops.

The next question comes from John Tumazos with John Tumazos Very Independent Research.

Congratulations on a plan to build 2 mines, the high-grade gold, silver and the Skarn for $1.9 billion down from $2.8 billion. I'm pinching myself it's so good. Trying to understand the lower CapEx -- in the lower grade deeper zones that you're bypassing or delaying or deferring, are those the higher rock temperature areas that require more ventilation? And is that part of the contribution to a lower CapEx?

Yes. John, let's -- I have Martin, I think, out of -- he's traveling on the call. Martin, can you take the ventilation question, please?

Yes, absolutely. John, I think the biggest component in the lower capital is the smaller plant size. There was a question before about what the capital was for the 50,000 tonne a day plant that was there before, which was around the $1 billion mark. I can't remember exactly, but it was around that. And that plant cost has come down a lot. Now it's about $270-something million. And on top of that, you have to add 25% indirect and then you add another 25% contingency on top of that. So I think the biggest component on the capital is just the size.

Now in terms of the ventilation, we're still going to be faced with some hot areas in the mine that there's a fairly high geothermal gradient. So as we get deeper, it certainly gets hotter. We've done a lot of work on that and the capital includes a lot of ventilation actually, it's 905 cubic meters per second of ventilation that we need, and we need an additional 21 megawatts of refrigeration power. So we've done a lot of calculation and simulation to make sure we're going to keep working temperatures in a good range for our people there. But the lower production rate does reduce it a bit for sure.

In the old plan, there were zones with 104-degree Fahrenheit rock temperature. What are the typical rock temperatures that you expect to encounter in this PEA?

The actual rock temperatures, I couldn't tell you off the top of my head, John. Yes, our key is that we control the working environment to keep it below 30 degrees C wet-bulb temperature. I think 28.5 degrees C wet-bulb temperature is our control and that we're pretty happy with having people working full shifts underground. We'll also make sure that the equipment that we buy has air conditioning and those types of things to make it more comfortable -- as comfortable as we can for the people there. And we're also doing a lot of work looking at remote operation to take people away from the actual working environment and have them operating machinery from surface. That's another thing we're doing, although not totally needed because of the ventilation we're providing.

The next question comes from Cosmos Chiu with CIBC.

Maybe my first question is on the mining cost. As you mentioned, with the new PEA, you're changing the mining method from what was previously more bulk mining sublevel caving to now long-hole stoping. So what's the difference in terms of cost per tonne in terms of mining? And how does that compare to the current mining cost for the vein mine?

Yes, Cosmos, this is Steve. We did report a combined Skarn and the additional mineral resources of the vein of $54.50 per tonne mining cost, direct mining cost. That compares to closer to $160 to $180 a tonne today. Now again, because the Skarn has such larger stopes, we're getting a big benefit from that bulkiness of those stopes. So if you looked only at the vein, you'd be close to the vein cost and then it's diluted down with the lower cost from the Skarn for an overall $54.50.

Yes, that was my next question, Steve. I guess with the new resources that you're now mining for the vein deposit, you're not changing the mining method compared to...

Today, we're not. No.

Okay. Is there an opportunity to do so or no?

Well, it gets back to Ovais' question. If we could somehow expand the production of those high-grade silver veins, that could lead to some benefits on the cost side depending on what that infrastructure may or may not look like. So we're excited to look at that opportunity as we move into the trade-off studies for the PFS. But as of today, we're kind of keeping it all steady state, similar mining to what we're doing on the veins today.

Yes. And then I guess my next question is, as you mentioned, the $2.6 billion is incremental NAV, which includes your additional vein and additional -- and the Skarn deposit. So I guess my question is, when we get the full study, will we be able to kind of separate out how much of that is related to the vein deposit, additional vein deposit versus the Skarn? Or does that really not matter? I guess my question is, would those additional vein ounces be mined even without the 15,000 tonne per day mill that's being built?

Yes. If I could answer that, Cosmos. We do rely heavily on the infrastructure we'll be putting in for the Skarn to mine those veins. We're a fair distance away from those veins with our current operation, those newly discovered veins. And so that's why we've rolled that into this overall project is because we're sharing that infrastructure. So without those investments, it just doesn't -- we don't see it as robust an opportunity, and that's why we roll it together. And the technical report, I think you'll be able to dissect what portion of production is coming from the veins and what portion is coming from the Skarn. Dissecting that economically is a lot more difficult because of that shared infrastructure.

Understood. Maybe switching gears a little bit in terms of the time line. As you mentioned, the Revised PEA was reported -- summary of it was reported yesterday night. There is -- it seems like a pre-feasibility study that's underway. So when would we expect sort of that pre-feasibility study? And when could we potentially expect a formal go-ahead decision on this project here? And then also maybe permitting. As you mentioned, the 588 level decline doesn't need any permits, but you need to file permits for the shaft, the new mill, the tailings expansion. And so maybe you can walk us through the additional permitting that's needed? And would you need to like apply for some kind of amended MIA? Or is this not that in-depth in terms of needing a kind of revised permit given how brownfield it is? So time line, also permitting.

Yes. I think the important thing is as we move into the PFS, and we're working today on defining in detail what the scope of the PFS is and what the schedule of that PFS is. We don't know exactly when, we're not targeting the date to produce that yet. It likely will come in or after 2027, depending on exactly what we need. So because of the long lead time to do these access developments, we want to get those started sooner. And so this 588 decline extension provides that opportunity if we can get started right away to get down and access into the Skarn as we start to develop some of the shafts and things like that.

Relative to the permitting, we need to provide kind of the detailed designs as we move into PFS, kind of the basic engineering designs. We're in discussion with the regulators now. We haven't really formulated exactly whether we need to update an EIA or not. That's not been decided yet. We anticipate all these permits, we can probably get done in a timely basis according to the schedule that we need for the overall project. But that's a discussion that we're having with the authorities at this moment and don't have a time line on those.

Our next question comes from Lawson Winder with Bank of America Securities.

If I could just ask a few questions on the CapEx. The release notes that the existing plant will be decommissioned. I was just curious, is the decommissioning cost included in the $1.9 billion? And how much is that deconditioning cost? Yes, so I'll leave it there. And then a couple of more questions on CapEx.

Yes, Lawson, this is Steve. The actual decommissioning of that plant is really negligible cost. It doesn't cost as much to shut it down. The real question is what do we do with the equipment and the facility. We think there's opportunities to sell that. That's typically what we do when we shut down one of our plants is we'll select the best equipment to use at our other plants, and we'll look to sell some of the other equipment. And then we typically bring in a scrap dealer, if you will, to tear the rest down and basically do that for nothing. So overall, that's a very negligible cost.

Okay. Fantastic. And then with the CapEx, you included a contingency. How did you arrive at that contingency? And what are kind of the key items that are creating that uncertainty? And then there's a note about an additional contingency contained within the underground access and development. What is that number within the $622 million?

Yes. Maybe I can address the first part of that, and then I'll let Martin talk specifically on the contingency for the underground access. The contingency, that's a debate that's gone on with all the engineers involved. We've got a third-party engineering firm that's helped put this PEA together [ Worley ]. So we go through that debate. and it's appropriate for a PEA level estimate, which is what this is. So that's where we come up with that kind of overall 20% contingency. Specifically to those underground developments, which are less contingency, I'll let Martin address that.

Yes. We've got some different contingencies on the underground. There's some additional allowance in the number of measures that we've sort of included in the design because we have to allow for some things that aren't foreseen as well as all the typical things that we don't exactly design in right away, and these include safety bays and refuge stations and bypasses, electrical substations, all that kind of thing. That's all sort of lumped in. I think there's about $25 million of that, that's included in there. And then there's different amounts of contingency on the shafts because they were done by a different consulting group.

And we did quite a bit more work on that, and we've got a lot of experience, recent experience of how much it costs to sink shafts there. We just completed the Guadalupe shaft. So we pretty much know how we think that's going to go. And there's a contingency as well on the dewatering, which is more difficult to predict what that overall cost of dewatering is going to be. So overall, I think if you take the whole project in that sort of $323 million and some of it that's in the mine, it's just over 20%, the total contingency percentage.

Okay. And so if we are thinking of the underground contingency, it would just be 20% of the $622 million. Is that correct?

Yes, roughly speaking. I think because some of it is actually included in the $323 million. It's possibly a bit misspoken. And then some of it is included in the $622 because we had different people do the mining infrastructure. [indiscernible] was involved in the mine infrastructure. So that was included in their contingency.

Okay. Understood. Maybe just 2 more for me. Just the recoveries for the Skarn/high-grade vein area are slightly different than the current and historical recoveries for the reserve in the vein deposit. Would you expect any material difference in the payabilities with the Skarn going forward?

Yes, Lawson, this is Steve. And we've done quite some extensive metallurgical work in the laboratory looking at co-mingling of the veins with the Skarn, and we don't see any detriment to either of those sources to commingle it, and both of them are producing high-quality zinc and lead concentrates. In general, you're seeing a little bit different recovery because it's a weighted average basically recovery of the 2 sources. And there is a grade relationship to recovery that's applied in the models. So that's where you get a little bit of difference. But generally speaking, the concentrate qualities and payabilities look very favorable and similar to what we're seeing today.

Okay. Fantastic. And then just finally, could you confirm that there are, in fact, no third-party nongovernmental royalties or streams attached to the Skarn or the new resource-based vein deposits?

There's no royalties -- third-party royalties on the Skarn or the veins. There are some of the veins that cross over into an adjacent concession that we do have an agreement to mine and share the profits that come off of that mining of those veins. That forms part of these mineral resources of the veins, but there are no additional royalties.

Okay. And do you have a sense of the proportion? Like if you look at the total Skarn plus vein resource, do you have a sense of what proportion would be applicable to that profit sharing?

Yes. It's not a large source when you look at the overall economics of the project. It doesn't have that big of impact to the project economics. It's really a matter of accessibility. It gives us a lot cleaner access to our concessions to move through this third-party concession.

And Lawson, if I may to add, this has a bigger impact right now this year and next year while we're mining through those structures. So it's a more shorter term than a long-term effect.

[Operator Instructions] The next question comes from Don DeMarco with National Bank.

So first question just has to do with the mine plan. I see that in 2036, silver production just touches above 20 million ounces a year. That's just silver. And does the exploration upside as you see it -- as you understand it now, does it show potential for this mine, La Colorada, that's both the existing mill plus the 15,000 skarn addition to be a consistent 20 million ounce a year mine?

Well, right now, we show the plan with what we have available to us from that combination of high-grade Skarn and high-grade veins. As you know, we have a lot of drilling going on there. We have constantly a lot of drill meters that are not public yet, and we indicated that in the press release. And of course, from time to time, we'll put our press release with updated results from both continuous and extended Skarn drilling and high-grade vein drilling closer to surface. So absolutely, there's a lot of potential there. There's a lot to continue here and to come in over the coming years.

And as I mentioned, that will continue -- that will expand that high production profile until we have all these results out and finish the drilling there. I can't give you obviously an exact number of years that we could extend potentially that pretty large silver production, but there's definitely a huge amount of geology potential that we are tapping into right as we speak. And as I said, when you look at the press release we put out 2.5 weeks ago, there are very impressive results that we hit on those new structures, brand-new structures further to the South and Southeast that we just discovered, and we'll continue to drill on those as well.

Okay. And then just shifting over to the funding of Skarn. With the Skarn considered as internally funded, how does this impact your capital allocation priorities across the company versus other growth buckets -- growth projects or competing buckets over the development period?

Well, really not a lot of competing issues here, if you want to call it at this kind of prices, as you can imagine, just for everybody to remember, we generated $553 million free cash flow in Q4 alone, and that was at substantial lower metal prices than what we see as an average for Q3 or what we see today over the number of years that we produce, hopefully, similar cash flows if metal prices stay, obviously, a lot of cash flow coming in into the company, while we finished the year with about $1.4 billion in cash. We increased the dividend 3x in 3 quarters. So 3 increases over the last 3 quarters.

And there will be continued focus on returning capital to shareholders as well. There is obviously enough cash flow available for us to continue looking at our optimization at Jacobina to continue looking at whatever other potential expansion or addition to mine life we have in our other operation to continue all our really big exploration program. I think we spent about $130 million in exploration lots of it in brownfield this year and still build internally this project to finance it with internal cash flow. So I don't see any -- really any competing issues here. There's enough cash flow generation to do all of it together.

Okay. And then just last question. I see the base case IRR is estimated at 17%. So this is an improvement over the prior PEA in '23, which is 10%. Of course, that was with different metal prices. But does this new estimate, 17%, does that comfortably clear your hurdle rate threshold?

Yes, absolutely. And don't just focus only on the IRR. Of course, it's a very long life project here. We showed like a 37-year life. I have no doubt that this will be longer than that at the end, as I explained when we look at the exploration potential. So that's -- obviously, when you look at the capital and you look at the calculation of those numbers, those later years don't have a big impact anymore to the numbers, but I'm very comfortable with the 17% at those lower metal prices.

Just to remind, don't just look only at the IRR, look at the derisked project as way less technical risk. It's a smaller project to build at least in the first very long-term stage here. And so smaller tonnage, different mining method, way less technical risk. And obviously, don't forget that the original PEA, we are already 2, 2.5 years later. So there has been, of course, inflation to that capital estimate there as well. So a markable improvement for sure on many, many fronts on this project now.

This concludes the question-and-answer session. I would like to turn the conference back over to Michael Steinmann for closing remarks. Please go ahead.

Thanks, operator, and thanks, everybody, for calling in. This is a great step forward on our La Colorada project or mine, really showing the way forward here to develop one of the largest and lowest cost silver producer or silver mine in the world. It's just right down our alley. It's a great fit for Pan American to establish us as the go silver company in the world here, adding a lot of really low-cost production. Keep in mind, just what I mentioned before, way less capital intensity, way less technical risk, more silver production and the long life. Just a great solid project that we continue to work on here over the coming years.

I mentioned the huge exploration potential and for sure, Chris and his team will share his results on a regular basis with you, so you can keep kind of track how we advance those exploration projects. And the last point, really looking forward to share with you way more details on our Investor Day that will happen on June 1. We'll have way more time and also more 3D models and technical opportunity here to show you exactly what our idea is for this great project and how we're going to intend to move forward. So thanks, everybody, for calling in, and looking forward to give you an update soon.

This brings to a close of today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Okay. We are going to kick off the Pan American Silver session. Pan American Silver is a world-leading silver producer, providing enhanced exposure to silver with a diversified portfolio of assets, large reserves and growing production. And today, we're joined by President and CEO, Michael Steinmann.

Thanks, and good afternoon, everyone. Always a pleasure to be here. Normally, it's the nice warm day out there. It's colder here than Vancouver looks like, but I'm sure the sun will come back. Great to give you an update on Pan American Silver. A lot has changed over the last year, of course. And let me just step in there and show you on the plan. Of course, I will use forward-looking statements in my presentation. And we can spend some time here on the map at the moment, 10 producing asset all across the Americas, that's really our -- there's 2 reasons for that. One of it is the main one. That's where the silver is. I know there are some silver assets, other places in the world. But the big silver projects are all in the Cordillera, and that's where we are. We have a few assets further to the east. Jacobina and Timmins are there and they're obviously producing no silver, they're producing only gold.

So they came to us through different transactions. But with Mexico being the biggest silver producer, Peru right now, I think, #3 in the world. Of course, our activity is focused really on the silver side, active in 8 different countries. And the second reason why we are there is because that's the places we know. I think it's incredibly important that you're very aware where you're working. I'm working all my career in Latin America, I lived and worked there for about 37 years. And I think it's incredibly important when you look at places that have a bit of higher political risk than others that you really know where you are and where you're working. So very comfortable with all the jurisdictions I present here.

And A few interesting changes, as Matt said, we acquired MAG Silver last year. I will call that just in time. Metal price started running literally after we closed the deal in September. And you can imagine that, that transaction, which was a great transaction actually at $22 to $24 silver. That's what we used for the analysis. I think when we agreed on the transaction, silver was somewhere in the low 30s. Of course, it's a great transaction at $85 silver. And you've seen there some numbers in our full year numbers in the circle. I will show a few on the quarter where you see the really big impact of Juanicipio on that slide.

But it's not only what you see there, but it's really what's coming after, right? I mean we all look at growth and we already have it there, and we have it internal. And I'm sure Matt and I will have a bit of time to talk about La Colorada Skarn later on, which is one of our biggest development project that will add a lot of silver for a very long time to our production profile. La Colorada Skarn going to be one of this really, really hard to find 40-, 50-year mine life project and very, very hard to find, especially on the silver side.

I won't go into details. It's quite small to see on Juanicipio, but you just see the green dot there, making very clear Juanicipio is at the moment, one of the best or the best silver producing asset globally on the planet, especially when you look at the cost. And it actually brought the cost down corporate-wide for us quite a bit, and I have a slide showing you that.

Great year in 2025, provided all the data that we promised we will do and actually had even lower costs than what we guided, especially on the silver side. So a great combination. And I'm just thinking, I think that's a better slide to show you, and I love that slide. And you see here the last, what is it, 8 or 9 quarters coming back. And you see on your left side silver, on your right side gold, and the bars show the average metal price achieved for the quarter and the green bar shows the average cost, all-in sustaining cost, either for the silver segment or the gold segment. And you see this huge margin increase.

Let's first talk a little bit about the gold. It's a bit easy to explain. You see quite flat costs over really a long time. Of course, they're increasing. Of course, we're seeing some cost inflation on our side, 5%, 6%, 7%, depending on what good or service you're looking at, but remarkably flat when you compare actually the strong increase in the gold price and that really big margin increase. And when you look at the silver side, it's even more so there. Of course, last quarter, with the big run on silver finally, we were all waiting for, and it was really timid for a long time. And that silver normally does, it pops and it goes and a really high -- well, not that high actually, $58 silver price was the average for the quarter. Right now, we're sitting at about $85, $87 and the way higher average for Q1, so buckle up for Q1 when the result comes out.

But you see our costs actually declining on the silver side. And that's the last 2 quarters. The biggest decline, the biggest reason for that is really the addition of the Juanicipio mine to our portfolio. So great addition. When you have a combination of an increase of even this year, again, 14% production on the silver side at the highest silver prices and at lower prices than the years before. Very, very happy to see that, of course. And something that the market has been very critical in the past where we saw other runs and doing this for a long time, where we saw other runs in metal prices. And suddenly, the costs would just cross over and the whole run was over. And this time, it's very, very different, and I'm really happy to show this big margin expansion.

I think with that, I'll just leave a few numbers there, and I'm sure it will be more interesting to go through some questions, but a very strong Q4. As you can imagine, we generated over $550 million (sic) [ $553 ] of free cash flow just in 1 quarter. And again, keep in mind that gold is about $900 to $1,000 higher and the silver price over $25, probably higher in average than what we saw in Q4. So we're looking forward to the Q1 numbers.

And with that, I'm happy to answer your questions.

Okay. So also with your results early this year, you put out your guidance and production is a bit weighted to back half of the year last year. Can you just talk through some of the key drivers of the ramp-up in production over the course of 2026? And what are the biggest risks to achieving guidance this year?

Yes, right. And look, it happens every year. If you look, Q4 was by far our strongest quarter. It's really mostly related to the weather in South America with our open pits, depending on the rainy season. There's not much we can do. There is a seasonality to our production profile. We have more and more underground operation, of course, and the addition of Juanicipio with a big underground production as well.

So it's not that prominent anymore. When you look -- but we, for that reason, actually put the quarterly guidance in our MD&A, just to avoid that people just divide the production by 4. You're going to -- you're going to outguide really your -- as an analyst, where you think we're going to be for the first 2 months, and then we will outperform on the second 2 months of the year always. So not much we can do, having less open pits in the future, more underground, which I think the mining industry will mostly go, but that will be 10, 20 years from now, and then the seasonality obviously won't be an issue anymore.

And how are you feeling on the cost front? We've seen a little bit of cost creep in the sector. How much of that is structural versus temporary? And in particular, I know in the Pan American profile, there's some more development tonnes in the mine plans. So how do you think about the cost progression?

Well, one part of the cost is what we all see, right? There is clear inflation out there. And that's -- with a big push really on inflation on food costs -- and you can imagine if that happens, we're going to see a big push on our wages. So that's really what we see flowing through right now. So we assume probably about an average of 8% increase or so in our wage costs. That will depend a little bit. If it's open pit, our labor costs are probably around 30%, 32%. In an underground mine, it's probably more like 40% to 42%, 43%. So the 8% will translate in anything like 3% to 4%, 4.5% cost increase across a certain operation. Definitely, that's what we're going to see. I think we can't avoid that.

As I said, if you go out and do your grocery, you notice that -- the whole world noticed that, and it's very prominent in Latin America. On top of that, we see increase in diesel fuel costs. The more we are underground, this is all electrified most of it. So -- and we are working the [ Andes ], so most of it is hydro, so that's very low-cost power. But of course, we see translated into explosive cost increase from the diesel cost increase. So that's another kind of a driver for higher cost. But we also see lower costs like cyanide costs are lower, grinding media is lower for steel balls, et cetera. So it's kind of a bit of give and take.

But just one thing of cost, and there's 2 big drivers that are out of our hands really on the cost. One is by-product metal prices. So silver does not occur on its own. So you find it together with gold or you find it with copper, lead and zinc. And we never show equivalent ounces. I can't sell an equivalent ounce of silver. So we use those by-products to reduce our cost as a by-product credit. And obviously, the higher those prices are, the lower our cost for the silver and vice versa. So it's kind of out of our control. And the last important one are exchange rates. A good one on the exchange rate, obviously, with the weaker dollar, we're going to have higher local currencies, which will push our cost up, but a weaker dollar means higher gold and silver prices, which is what we see right now. And I'd rather show a little bit higher cost and a big margin to the gold and silver price than the other way around.

And on the CapEx front, I mean, maybe we can take it from the angle of the organic growth opportunities in the company. You did increase the project CapEx spend this year. So maybe you can take us through just some of the near-term initiatives there.

Sure. And when you look at the total capital number, the number is actually remarkably similar to last year, just with the addition of Juanicipio. Of course, we had another great mine, and there's some sustaining capital there. But the other increase that we showed is all in project capital. The biggest one will be La Colorada Skarn. Amazing change really over the years on that project and maybe I go a little bit into detail on that. La Colorada is our biggest silver producer, makes about just a bit north of 6 million ounces a year, narrow structures, veins, 2 to 3 meters wide, high up. And we explored deeper down and in 2018, actually hit the first discovery hole, which hit about 370-meter wide ore body. It's a Skarn ore body mineralization below the main mine. We drilled probably about 450,000 meters since then, have a resource of about 450 million tonnes, depending on the metal price and obviously, depending on the mining method that can grow all the way to about 600 million or 700 million tonnes.

So it's one of the biggest base metal and biggest zinc discovery on the planet right now with a very big silver credit to it. That's why it's so large. The initial idea was to mine that with a caving method and go very big, 50,000 tonnes, if you recall. And put the PA out there a number of years ago. It was a big capital number, close to $3 billion. And we always try to find a way to actually mine the high-grade part of it first and then go to the big cave. We couldn't find for a long time enough high grade, but then the last 2.5 years have been very successful in discovering new structures higher up, some wider replacement ore bodies as well with grades up to multi kilo of silver and now have -- really have a chance to integrate the current mine plan and the Skarn together for a Phase 1 high-grade version of the Skarn.

So just keep in mind, this is going to be quite a while that we mine in Phase 1. I would guess anywhere between 15 to 20 years at least that will be Phase 1. It really depends a bit on the metal prices and how long you want to push out that big zinc ore body later on that no doubt has to be a block cave at one point. So Phase 1, great project, a lot of silver coming out. It's going to be somewhere in the 10,000 to 15,000 tonne production profile per day. So you can imagine it's going to increase substantially the silver production from La Colorada, but it's also going to be way less than the original $3 billion capital.

So great start for that project. Stay tuned. We will put out an updated PA in Q2 this year. So it's only maybe a couple of months away to show you the results of that study, and that will be our biggest -- at the moment, biggest silver mine and biggest brownfield addition that we have. Again, great timing with the silver price, and we're looking forward to show the results and share them with everybody.

And that Phase 1, is it a selective mining approach? Or could it be more bulk mining?

It's going to be very productive, but it's going to be a long-haul open stoping at the moment. So it's nothing new for us. It's our normal kind of bread and butter mining method that we apply. And then it will go, as I said, no doubt in maybe 25, 20 years. I don't know when that will happen into a Phase 2, which will be a cave. When that change happen really depends as much on the silver price as it does on the zinc price at that point, right? If zinc will run earlier, maybe somebody wants to go to that block cave later. If happens what I will -- what I think will happen that silver will outperform substantially over the coming decades here, then I think you can just stay in a selective method for way, way longer. The resource really varies so much between the mining methods that you use, as I said, maybe from 400 million to 420 million tonnes to more than 700 million tonnes depending how selective you go. And -- so I think it will just -- it will be an economic decision at that point when we're going to go to big cave, but that decision is pushed out quite a few decades here.

It sounds like a really interesting project. So I look forward to learning more about it. But what are you telling people about the capital intensity of it?

Well, so it's deep down, right, to Skarn. Right now, we are mining all the way down to about 650 levels, so that's 650 meters below surface. The Skarn starts at about 750. So we're going to start an internal ramp to reach the top of the Skarn. We'll start in a couple of months, on work on that. The Skarn goes all the way down to about 2,100 levels. So that's a long, long way to the bottom. You can imagine if you want to build a block cave, if you have to develop everything down, that's why it will cost about $3 billion or more to do that. At the moment, we're going to access it with 2 shafts. They're going to be a ventilation shaft, big -- big shafts and an extraction shaft and this is an internal ramp to bring the equipment down there.

I don't have the final number, but it will be somewhere around maybe half than what the original idea was. There's still quite a big number in the sense we need to build those shafts and the ramps you have to do that anyway for any of the mining method you apply. So that will be in place, but way, way less than the original $3 billion, yes.

The other big catalyst that people are always aware of on Pan American is Escobal. So maybe we could get an update just on what steps remain in the ILO 169 process.

Yes. It has been a very slow process. But when I look at -- right now, we are done with all the information exchange. We discussed all the details. We have all the reports and all the technical information. And it's really down now to look how we would do this. This is a consultation with an indigenous group. It's between the government and the indigenous group, not between us. We are obviously party to it. And for me, these high metal prices I think, hopefully, we'll unlock this because when you look at the potential return to both the indigenous population and the government through any kind of participation that we still need to identify at this kind of price is obviously staggering because you look at, at least 22 million ounce a year producer at very low cost. When it was in production last time in 2018 or '17, the cost was about $8 all-in cost. Of course, when you look forward to now, that would probably increase somewhere in, I don't know, maybe $13 -- $12, $13, very productive, big mine with a 45-meter wide main structure.

So it would make a really big change, not only for our production profile, but a very big change for Guatemala and its population. And that really got kind of put on the map, I think, for a lot of people with the high metal prices that we're seeing right now. So I really hope that the possibility to have a participation in this project to bring it to a place where we could move forward with it.

So do you kind of take that meeting by meeting? Or what are the milestones that we could see on it?

Yes. No, this is really meeting by meeting. So I don't know when that will happen. And I always said I can't give really a guidance. This is the big upside for Pan American. Keep in mind, when we purchased Tower Resources, we really didn't pay for the asset. What happened was, it was always shut down, and I couldn't ask the PanAM shareholders to pay for a shutdown asset. We issued a CDR, a contingent value right for that asset. And if it comes back into production and is derisked, we will exchange those for PanAM shares. We would issue about 15 million PanAM shares. So it would be about less than a 4%, I call it dilution. It's not really a dilution of PanAM shares to increase our production by about 22 million ounces a year. So a great place to be where you don't have a financial downside, but you have a really gigantic production upside.

Absolutely. Maybe one on capital allocation. You finished 2025 with $1.3 billion in cash, over $1.3 billion. How are you balancing incremental asset investment needs versus shareholder returns?

Yes. Look, I mean, number one always -- and always has been for us, you have to spend the money on the exploration, right? You have to replace your reserves, very important to spend your money on your sustaining capital. Of course, you can see even with all the project capital, we're not even making a dent in the current cash flow generation. So there's no debt to repay. We have about $800 million in debt and long-term bonds. The biggest one, $500 million is only due in 2031. The interest rate is 2.6% on that. So no hurry to pay that back neither, which leaves us with the only bucket left, which is obviously return to shareholders. And we just increased our dividend for the third time in 3 quarters, consecutive quarters. Last week, we increased it by 29%. I think each quarter before we increased the dividend by about 15% or 16%. And very happy to make the returns to shareholders. I think -- just leaving it where it is, it would return about $350 million to shareholders in dividend. We have a share buyback program in place and buyback shares as well.

As we heard before, there's obviously different tax realities in different places in the world for our shareholders. So some prefer share buybacks, some preferred dividend. I like to do both, and there's obviously enough cash available to do that. A very similar situation in the mining space that normally, we never had that luxury, but we would talk about quite relatively small dividends. Some people did some share buyback and then we saw the cycle go away again and nobody would do anything.

And for me, it has been always very important to continue paying a dividend. We pay uninterrupted dividend since 2010. That's very important to us. I see it as part of our cost structure really. That has to be possible to deliver something to our shareholders in the downturn as well. It's easy to do it now, but in the downturn as well, very important. But for sure, the share buyback is an important tool as well. So you will see the combination of the two. And if metal prices stay where they are or keep climbing, we will accelerate that return as well.

And then just one on your asset portfolio. I think there might be some interesting opportunities. You've got a diverse group of assets. Do you think there's still optimization potential in the portfolio? How are you feeling about the current mix?

Definitely. I mean, look at Jacobina in Brazil. It's 100% gold producer, but it's a great mine to have. And -- right now, we have a mine plan until, I think, 2053. We still add every year 3 to 4 years of additional production. And we really look at now with different eyes of this asset. When we bought it, it was 8,000 tonne a day underground operation. I think we are close to 9,000 permanent. I think there's a way for us to go to 10,000 tonnes a day. But I think there's a way to go way higher than that as well. But that will need to -- we will need to make some investment there in the plant, make it more efficient, get a different extraction method. This is actually not an asset that goes deeper, but it's actually a very long asset. So you have another problem, right? So you don't have to take deep ramps, but you have to have a very efficient way to bring the ore to your mill. So we're looking at conveying methods. At the moment, everything is done by trucks. And then we look at a dry stack tail and a backfill option there.

So a lot of engineering going on right now. So this will take a number of years to get there. But I think there are so many years of resources ahead for us at Jacobina that really want to see what's the maximum we can bring that asset at the moment. It's a low-cost 200-plus thousand ounce a year gold producer, and that's a great place to be, but I think we can do quite a bit better at Jacobina over time.

I also saw a mention on your conference call on Timmins satellites. Are there any other things in the portfolio that people may not be aware of that are interesting?

Timmins is an interesting one because it looked when we bought it, it was kind of made a little bit of money, but not a lot. Obviously, gold was at $1,100 when we bought it. You can imagine that now it's a very attractive asset. And over the years with the exploration, we found quite a few very interesting satellites that we -- one, we're going to develop now and the other ones we're going to drill out in detail, and I think that's going to add substantial value to Timmins. And really looking forward where we can bring that asset as well. It has been kind of there, chugging along and people didn't really pay a lot of attention to it, but I think there's way more upside to that, that anybody thinks right now.

And we are out of time. But thank you very much, Michael. That was great.

Thank you very much.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Fourth Quarter and Full Year End 2025 Results Conference Call. [Operator Instructions]

At this time, I'd like to turn the conference call over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, ma'am.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our fourth quarter and full year 2025 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for the period ended December 31, 2025, all of which are available on our website.

I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Good morning, everyone. I'm glad you could join us to discuss Pan American's 2025 results and our outlook for 2026. I'll start with the headline. We delivered record financial results across the board in Q4 and for the full year 2025, reflecting strong execution of our business and meaningful margin expansion from higher metal prices.

Net earnings were a record $452 million in Q4 or $1.07 per basic share, which included $61 million of income from our investment in Juanicipio. For the full year, net earnings were a record $980 million or $2.56 per basic share. On an adjusted basis, earnings were $470 million in Q4 or $1.11 per share, and for the full year, $959 million or $2.54 per share. The record financial results reflect both the operating strength of our assets and the leverage we have to metal prices. Importantly, that translates into record attributable free cash flow of $553 million in Q4 and $1.2 billion for the full year.

Cash and short-term investments increased by $408 million from Q3, totaling $1.3 billion at year-end or $1.4 billion, including our 44% interest in cash at Juanicipio. To allow shareholders to participate directly in rising net cash levels, we declared a dividend of $0.18 per common share, our third dividend increase in a row.

Turning to operating performance. Attributable silver production of 22.8 million ounces in 2025 exceeded the top end of the guidance range we have increased in November, while attributable gold production of 742,200 ounces was within guidance. Silver segment all-in sustaining costs, excluding NRV inventory adjustments, were $9.51 per ounce in Q4 and $13.88 per ounce for the full year. Silver all-in sustaining costs in 2025 were below the decreased guidance. The key contributor here is Juanicipio, which has been performing better than expected since we acquired the mine in September 2025 through the MAG Silver transaction.

For the gold segment, all-in sustaining costs, excluding NRV inventory adjustments, were $1,699 per ounce in Q4 and $1,621 per ounce for the full year, which was within our guidance for 2025. It's worth noting that both silver and gold segment costs in Q4 were impacted by higher royalties and worker participation expenditures reflecting the increase in metal prices. The silver segment is also affected by additional royalties at La Colorada related to mining and adjacent concession, where we paid the concession owner a share of net profits earned on ores from their concession, which we treat as a royalty expense. Royalties are also impacted at San Vicente to reflect profit sharing with the state-owned mining company, COMIBOL.

In 2025, we made good progress on our major projects, investing $94 million, in line with our guidance, to advance several major projects. Most notably, at La Colorada, where the discovery of multiple high-grade silver zones and the segment expansion of mineral resources have led us to reevaluate the development plans for the Skarn project. We now see an opportunity to integrate the mine plans and infrastructure of the La Colorada vein mine with this current project to a phased approach to development.

The phased approach would allow us to focus on higher grade, lower tonnage and less capital-intensive initial stage with the option to target lower grade material in a future expansion. We are aiming to release an updated technical report for La Colorada in the second quarter of 2026 to include a preliminary economic assessment of the new development approach for the Skarn project. There are also continuing discussions with our potential partners on this project to include the proposed changes.

At Jacobina, our investment in 2025 were directed at strengthening operational reliability and to advance long-term growth initiatives. We have provided more details on these initiatives in our MD&A, so I won't run through them item by item. But at high level, they include plant upgrades, tailings filtration and filter stack and paste backfill plant.

At Escobal, the Guatemalan Ministry of Energy and Mines continued meetings in Q4 2025 to advance the ILO 169 consultation process, and in December 2025, posted an update on progress for the October 2024 to November 2025 period. The ministry also conducted an inspection in Q4 and confirmed our activities are compliant with the court order and suspension of operations. As we have said previously, there is no time line for completion of the consultation process and no date for restart.

Turning to 2026 guidance. For silver, we are guiding attributable production of 25 million to 27 million ounces and silver segment all-in sustaining costs of $15.75 to $18.25 per ounce. The year-over-year increase in silver production reflects, in part, the full year contribution from Juanicipio, along with mine sequencing into higher silver grade at Cerro Moro.

For gold, we are guiding attributable production of 700,000 to 750,000 ounces and gold segment all-in sustaining costs of 1,700 to $1,850 per ounce. We expect higher grades at Timmins, plus the full year of production from Juanicipio, offset by a lower contribution from Dolores as residual leaching declines and at El Penon from the exhaustion of low-grade stockpiles and lower ore tonnes processed. Our all-in sustaining cost guidance for both the silver and gold segments reflects higher metal price assumptions, which flow through to royalties, worker participation payments and increased smelting and refining costs due to price participation. Needless to say, increased metal prices far outweigh these additional royalties and provide superior return to our business, as seen with record earnings and cash flow in Q4.

Sustaining capital is expected to be similar to 2025 with the addition of capital for Juanicipio. We also plan increased project capital to advance La Colorada Skarn and Jacobina and at Timmins, with part of the increase directed toward satellite deposits, reflecting positive drill results and continued work on exploration and preliminary engineering. Please refer to our MD&A for further detail on our 2026 outlook, including an operating outlook by quarter.

As we look ahead, we see several meaningful catalysts for 2026. First, with metal prices currently well above Q4 and last year's average, we see potential for strong free cash flow and high returns of capital to shareholders while also funding an expanded exploration program, internal growth projects and further strengthening of our balance sheet. Second, we expect to release an updated La Colorada Skarn PEA in Q2 2026, which we believe will demonstrate higher risk-adjusted returns than the original PEA for the project. And third, the Jacobina optimization study is advancing well, and we look forward to sharing findings and opportunities as the engineering work progresses.

Before I wrap up my prepared remarks, I would like to provide a few thoughts on the metal price environment. This is an exceptionally fortunate period for Pan American Silver and our investors, as the increase in metal price coincides with increased silver production, driving higher levels of free cash flow. Gold strength has been driven by sustained Central Bank purchases and renewed investor interest and volatile geopolitical backdrop, U.S. policy uncertainty and weakening confidence in fiat currencies, particularly the U.S. dollar. Those underlying drivers are similarly supportive for silver, in addition to supply/demand fundamentals, with the silver market expected to remain in a deficit for the sixth consecutive year in 2026. We are well positioned in this environment, remaining unhedged on both gold and silver, and with a focus on delivering margin expansion.

To close, 2025 was a record year for Pan American: record revenue, earnings and free cash flow, paired with strong operating execution and a stronger balance sheet. We are entering 2026 from a position of strength with a clear plan: Execute safely and reliably, generate strong cash flow, advance our high-quality growth pipeline and return capital to shareholders in a disciplined way.

And with that, I'd like to open the call for questions.

[Operator Instructions] Our first question today comes from Cosmos Chiu from CIBC.

Maybe my first question is on Juanicipio. Michael, as you mentioned, very strong results so far. So it's been about half a year now. How would you describe your overall experience with the asset so far? And what has exceeded expectations? Is it throughput? Or is it grade? Or is it both? And is that sort of outperformance sustainable?

Yes, it's a bit less actually than half a year. I think we took over mid of September, somewhere around that, from MAG. Great experience so far. And as you can see in the results, I'm very, very happy, but I see -- continuously very happy, but I see what Juanicipio is producing. Of course, when you look at long-term production profiles and the geology of this kind of deposits -- and by the way, that's the same for like a deposit of La Colorada -- when you look at that geology, there's a clear zonation with metals. So you go from precious metals to more base metals. Lead, zinc, and deep down, you would go into copper really, really deep down. So that's kind of the geology of this kind of deposits.

So over long term, that's change as you see, but exploration, of course, a good example is La Colorada [ again ] for that or the neighboring mines of Juanicipio as well. With exploration, you keep finding new veins as well, which, again, have higher precious metal content on the top and then go deeper down into base metals. So over the long term, you should obviously expect that the silver grades will be reduced and the base metal grades increase, but that's -- you can look that up in the technical report for it. But as you said, last year, this year, it looks like a very strong silver producer for us and very low cost.

Perfect. And then good that you brought up La Colorada. I wanted to ask a question about La Colorada Skarn. As you mentioned, new technical report is coming out sometime in Q2 2026. But ahead of it, I don't know how much you can share with us, Michael. But what kind of -- in terms of that phased approach, what kind of different tonnages are you sort of evaluating? What kind of size are you sort of evaluating at this point in time? What's kind of like the cost/benefit analysis are you considering right now? And what can we expect when that comes out?

Sure, Cosmos. And yes, you need to be patient a little bit more. In a few more months here, it's coming soon. And it's a very exciting project. And that phased approach really has changed the project quite a bit. If you recall, the original PEA, that called for up to 50,000 tonnes a day. Very, very large bulk minable ore body. Of course, that's still the case. It's still a very, very large, even bigger now, bulk minable ore body. But over the last 2 years, we have discovered a lot of high-grade material inside the Skarn and also between the Skarn and the surface in additional structures. And that's really what we're going to mine in Phase 1.

So it's going to be quite a long time for Phase 1. It's going to be way more than a decade. And when you look at tonnage, I don't have to file the numbers yet, but you should probably expect somewhere in the 10,000 to 15,000 tonne kind of range for Phase 1, but substantially higher grades than what we showed in the very large bulk kind of cave method in the first PEA. So it will be higher grade, less capital, and really, a focus on silver production for quite a long time before it will go to a more bulk minable, much bigger tonnage and more base metal rich production after that.

And then maybe one last question. When I look at your 2026 guidance, I look at the asset level production compared to 2025 guidance. One asset that is expected to increase year-over-year is Cerro Moro. I guess this is your only asset in Argentina, but Argentina looks to be getting better as a country for mining. So I guess my question is, is this a country or an asset where you might be willing to commit more time and resources into it? Or how should we look at it?

Well, Cosmos, in general, I'm always happy to commit time on exploration to any of our assets. We have been incredibly successful over the last 20 years in replacing reserves and adding additional value through our brownfield exploration programs, and La Colorada Skarn is the best example in the company's history with a potential huge value creation through the drill bit. So I'm always happy to continue to drill and exploring our assets. And of course, in the current metal price scenarios, that's even more so.

So you've probably seen that we assigned quite an increase of capital to our exploration programs for 2026, and that includes, for sure, Cerro Moro as well. So as you say, lots of positive changes in Argentina and a place that we are active and working for many, many years. And yes, looking forward to more positive exploration results from Cerro Moro as the year goes on.

Our next question comes from Francesco Costanzo from Scotiabank.

I just wanted to ask a follow-up on one of Cosmos' questions actually, just on La Colorada Skarn. Have discussions on a potential partner progressed in the last quarter? And is there any update you can provide us on what the economic terms might look like given the new phased approach or timing of when we might see a deal signed?

Yes. Look, the discussions have progressed. But as you can imagine, with the change we made here on this phased approach compared to the single approach we had before, there has to be quite some changes, how we look at that partnership and in that discussion on how that would fall out. So discussions are in full swing. So I don't really want to share right now, details yet on it. But we included that change on the approach and are in full discussions.

Okay. Fair enough. And then just switching gears slightly. With record silver prices, there's obviously a lot of value sitting in the ground at Escobal. So I'm just wondering if you're able to provide us any insights on your view of how the consultation process has progressed in recent months? And whether you feel that things are beginning to reaccelerate compared to this time last year?

Well, in general, of course. And we see it worldwide, right, that there is much stronger emphasis on mining and mining projects. High metal prices, of course, helping that. A lot of declaration of critical minerals across the globe and countries that try to secure future metal production for their own use. So that will accelerate from now on, and I'm sure about that. And we'll bring additional projects into production across the globe. Let me have Sean giving us some more details on Escobal, especially.

Yes. We've been meeting with the Ministry of Energy and Mines through Q4 and a few times earlier this year. And we're standing by for the next updates for meetings and schedules for activities. So there's not a change in the activity that we've seen in the past. But certainly, the engagement continues. And I think the report that was published by the Ministry of Energy and Mines at the end of the year is encouraging, that they are providing some information from the government on their commitment to the process and the status of the process and the fact that it's ongoing. So we're looking forward to meetings here in the coming months and progressing with the process.

[Operator Instructions] Our next question comes from Don DeMarco from National Bank.

Just a couple of financial bookkeeping questions. First off, how often are the Juanicipio dividends paid? I mean, I see that there was a line item in the Q4 financials, full year financials, but none on the Q3 financials. And I remember back in the MAG Silver days, where there were some agreements at the JV level just to pay out those dividends once a year, although there were some discussions to maybe change that more quarterly. But I'm just wondering what the current arrangement is at this point?

Don, it's Ignacio here speaking. The dividend -- the payments from Juanicipio come in the form of dividends, and there was a payment in Q4. Pan American's share of that payment was around $44 million. Right now, the dividends are being paid out of tax paid retained earnings, and we're currently waiting for Juanicipio to pay its taxes and [ back ] and book its tax return, which will happen sometime in Q1. So soon after that, we're expecting another dividend from Juanicipio, which would be higher than the one we received in Q4. So right now, it's just being driven by just the regular cycle, the financial statements and the tax returns in Mexico.

Okay. Got it. And Ignacio, also -- looking at -- you've got the senior notes maturing, $278 million at a 4.6% coupon. Obviously, with your free cash flow and cash balance increasing, would this be a consideration to potentially repay early? I mean, obviously, the August 31 have a very favorable interest rate. There'd be no motivation there, but wondering about these 2027s?

Yes. So that's something that we look at from time to time. They are -- as you mentioned, they are coming up in 2027. The bonds aren't very liquid, we know that. So if an opportunity came where a bondholder was interested in potentially some, we would consider it for sure. But this comes down to bigger capital allocation questions which are coming up this year. So look, if the opportunity came up to buy some of those bonds back to 2027, we would consider it for sure. But as I said, our bonds have not been trading very -- with a lot of liquidity in the market.

And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Michael Steinmann for any closing remarks.

Thanks, operator. Strong production and cost control in Q4 in combination with high metal prices resulted in record financial results across the board, as you have seen in the press release. And I'm really proud of what we have achieved in 2026, including the very swift and quick integration of the 44% of the low-cost Juanicipio mine.

So please keep in mind that the average metal prices in Q4 were only around $58 for silver and I think a bit more than $4,100 for gold. So we have seen substantially higher metal prices in the new year so far. And additionally, we will be increasing our silver production again by about 14%, largely driven again by the low-cost production of Juanicipio. And to top that, we'll release the updated PEA in La Colorada Skarn in Q2 and further information on the Jacobina optimization as the year advances.

So you can imagine, I'm really looking forward to 2026, and I'm looking forward to give you an update on Q4 in our May call. Until then, have a good time. Thanks, everyone, for calling in.

This brings to a close, today's conference call. You may now disconnect your lines. Thank you for participating. Have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Third Quarter 2025 Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our third quarter 2025 results.

This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for the Q3 2025 results, all of which are available on our website.

I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Good morning, everyone. I'm glad you could join us to discuss Pan American's Q3 2025 results. Over the past quarter and into Q4, we have benefited from the increase in silver and gold prices and a solid performance on cost. As a result, we achieved record attributable free cash flow of $251.7 million in Q3.

On September 4, we completed our acquisition of MAG Silver. While we have had only a 1-month contribution from our 44% interest in the Juanicipio mine in Mexico, we're already seeing the impact on lowering costs and improving margins, underscoring the strategic rationale for this transaction. We account for Juanicipio using the equity method, but report production, cash cost, all-in sustaining costs and capital expenditures on an attributable base to reflect our 44% interest.

I'm pleased to say that we have delivered another quarter of strong financial results. Attributable revenue in Q3 was a record of $884.4 million. Net earnings were $169.2 million or $0.45 basic earnings per share. This includes a $21.7 million loss from the sale of a subsidiary and $16.3 million of income from Juanicipio. The loss from the sale of a subsidiary is primarily due to a $28.6 million reduction to the $137.4 million gain we had previously booked on December 2024 of the sale of La Arena related to net working capital adjustments. This was partially offset by a $6.8 million gain on the sale of our 80% interest in La Pepa, a noncore development stage project in Chile, which we've sold for $40 million in cash proceeds in September 2025.

Adjusted earnings were $181 million or $0.48 basic adjusted earnings per share. Attributable cash flow from operations was a record of $323.6 million. Cash and short-term investments at the end of Q3 totaled $910.8 million, plus $85.8 million of cash at Juanicipio for our 44% interest. This is after spending a net of $409.3 million on the MAG acquisition, including transaction costs. With $1.7 billion of total available liquidity, we remain in a very strong financial position.

Given the strong financial position and cash flow generation, I'm happy to report that the Board has approved an increase to the dividend to $0.14 per common share with respect to Q3 2025. Despite the cash balance at the end of the quarter, reflecting the impact of the cash paid for the MAG acquisition, the Board exercised its discretion with respect of the dividend this quarter given the strong cash flow being generated.

While we did not repurchase any shares in Q3 due in part to the blackout associated with the MAG acquisition, we remain prepared to act opportunistically. During the first 9 months of 2025, we have returned $146.9 million in dividends and share repurchases to shareholders, and we will add another $59.1 million with the dividend payment approved yesterday. Turning now to operations.

Attributable silver production in Q3 was 5.5 million ounces, including 580,000 ounces from Juanicipio's 1-month contribution. We continue to be pleased by the performance at La Colorada, where the improved ventilation conditions are allowing mine rehabilitation and development rates to accelerate, thereby increasing the number of production areas, particularly in the deep high-grade zones of Candelaria East. Silver production was impacted by lower silver grades at Huaron, reflecting increased development and reduced stope ore mining rates in order to grow the inventory of prepared high-grade stopes, which are expected to enhance future production stability and reliability beginning in mid-2027.

Silver segment cash costs were $10.41 per ounce and all-in sustaining costs were $15.43 per ounce. These costs are lower than Q2 2025, already demonstrating the positive impact Juanicipio is having on reducing silver costs and improving margins, even though it has only been in our portfolio since early September. The quarter also benefited from low all-in sustaining costs at Cerro Moro due to high by-product gold production and prices compared to Q2.

Partially offsetting these factors was the lower silver production at Huaron and the royalty expense at La Colorada of $8.3 million in Q3, largely payable to a third party as part of a profit-sharing agreement for mining on an adjacent concession.

Attributable gold production was 183,500 ounces. As we mentioned during our Q2 call, various technical issues at Cerro Moro, Peñon, Timmins and Minera Florida, as described in our MD&A, were expected to linger into Q3, consistent with our expectation of a back-end weighted gold production. The technical issues at Cerro Moro and El Peñon also reduced silver production in Q3. Gold segment cash costs were $1,325 per ounce and all-in sustaining costs, excluding NRV inventory adjustments were $1,697 per ounce.

Overall production and cost across both the silver and gold segments remain in line with our 2025 operating outlook. However, we have raised our attributable silver production guidance to 22 million to 22.5 million ounces and lowered Silver segment all-in sustaining costs to $14.50 to $16 per ounce to incorporate Juanicipio's contribution. All other cost and production guidance remain unchanged.

We invested $35.3 million in capital projects this quarter, mainly at La Colorada and Jacobina. At La Colorada, we continued exploration and equipment investments to further expand access to high-grade zones in the deeper eastern extents of the Candelaria ore zone. In September, we announced new high-grade drill results and added 52.7 million ounces of silver to inferred mineral resource, which substantially extend resource potential to the East and Southeast beyond our current mining areas. This is an exciting development that offers significant synergies through a potential 2-phase development approach to our large La Colorada Skarn project.

The first phase would combine development of the Skarn with the vein mine, which is expected to result in a higher grade, lower tonnage and less capital-intensive development to what was described in our 2024 PEA. The second phase would involve the cave mine expansion. This phased development approach allows an enhanced vein mine to operate in parallel, utilizing shared infrastructure synergies and enhancing overall project value. A PEA for this 2-phase development approach combined with enhanced vein mining is underway and is expected to be issued in Q2 2026. Furthermore, we are well advanced on partnership discussions that consider this enhanced development approach.

At Jacobina, results from the extensive optimization study have identified a number of opportunities to relieve constraints that could potentially benefit mine life, production and operational efficiencies. These opportunities include, but are not limited to: a tailings filtration and filter stack project to relieve existing long-term tailings capacity limitations; mine paste backfill plant project to take advantage of the tailings filtration circuit, thereby enabling an increase in ore recovery in selective high-grade ore zones; and a significant process plant streamlining project to improve reliability, release throughput constraints, reduce mine operating costs and enhance gold recovery.

We have recently commissioned a pilot plant on site to demonstrate the benefits that can be obtained by streamlining a planned flow sheet, which has been defined through branch scale metallurgical laboratory testing. We have also engaged a leading engineering firm to develop detailed designs, schedules and cost estimates for completing these optimization projects. We will continue to provide updates on implementing these exciting projects as these engineering efforts advance over the next year.

At Escobal, the Guatemalan Ministry of Energy and Mines has held several separate working meetings with the ministries involved in the ILO 169 consultation process, representatives from the Xinka Parliament and the company. The Ministry of Mines has also made several appointments of key personnel to oversee and continue activities for the Escobal consultation process. The ministry has not provided a time line for the completion of the ILO 169 consultation, but discussions remain active and respectful.

Before closing, I would like to recognize Steve Busby for his remarkable contributions to Pan American Silver over the past 22 years with 17 years spent as Chief Operating Officer. Steve is transitioning to the role of Special Adviser to the CEO, and I'm grateful we will continue to benefit from his deep technical expertise.

I also want to welcome Scott Campbell as our new Chief Operating Officer. Scott brings 25 years of operational experience in Latin America, and I look forward to continuing to work closely with him as we advance our strategy.

I will now be happy to take your questions together with the other members of our management team.

[Operator Instructions] First question is from Wayne Lam with TD Securities.

Just curious on the guidance increase. Would it be safe to assume that the prior guidance for Juanicipio has remained the same as under MAG previously? And just wondering if there's been some modest tweaks for within the Silver segment on the guidance. Just given the deal closing in September, I would have thought the pro forma silver guide would have been slightly higher. So just wondering if there are any other offsets from the other operations in the portfolio?

No, it's pretty similar to what MAG had. Obviously, as you can imagine, this is -- we're only in the second month really of having that operation with us. But we assume that the production should be pretty similar to what we've seen in September for the remaining months of the year.

Okay. Great. And then maybe at Huaron, just on the grades and the increase in the development ore being processed. It's been a couple of quarters now where you've encountered a bit higher dilution on the mining front. And just wondering if that maybe has also a bit a function of the reduction in the cutoff grade just in terms of the process grades come down a bit? And just curious if we should expect a bounce back in grades over the coming quarters or if that's more of an active strategy that you guys are employing to lower the cutoffs to bring in a bit more economic material?

Wayne, this is Steve. I can address that one. Yes, the initiative we started last quarter was to accelerate developments, trying to get ahead, trying to get some high-grade stopes prepared and develop an inventory of stopes to give us more reliability on production. This initiative is going to take us through all of '26 into '27. And so what you're seeing is a lot more contribution of ore from development, which is more diluted than from stope mining. And it's really an initiative to try to build inventory of stopes in the mine that will give us more flexibility in the future once we get all this development ahead of ourselves. That's what you're seeing.

Okay. Great. And then maybe just last one, just at Jacobina on the optimization studies that are being undertaken. Can you give us a bit more detail on what's being optimized on the mine or at the plant and how that might impact the future operations, if that will be on additional tonnage or lower costs and when we might be able to see the results of that?

Yes, great question. And there's a lot of work going on at Jacobina. I'll pass it on to Steve. As you heard there, Steve will retire here as the COO, but he will stick around with us with his incredible wealth of knowledge. Steve will be very important for that kind of expansion work at Jacobina.

So Steve, maybe if you want to answer that question?

Sure. I'd be happy to, Wayne, great question. It's very exciting what we're seeing there. The mine itself, the -- it's pretty flexible because we're really mining 7, we'll be bringing on an eighth mining area with Maricota, and it gives us a lot of flexibility in terms of how the mine delivers ore to the plant in terms of throughput expansion, tonnage and that sort of thing.

The main focus of the optimization is around the plant itself. This is an old plant. It was originally built in the '80s as a less than 4,000 tonne a day plant. And it's been piecemealed over the years. A lot of components have been added. A lot of circuits have been added to the flow sheet. And it's kind of a complex network of flow, if you will.

So we see an opportunity to go into the plant and streamline that plant, remove some of the circuits we don't need, clean up some of the circuitry, try to go to bigger machines, less numbers of them, reduce maintenance costs, improve reliability, improve efficiencies and reduce costs overall, coupled with -- when we look long term at Jacobina, we really see an opportunity to go to a filter stack tailings facility. That opens up a lot of disposal space for us. Conventional tailings, we're going to run out of capacity here probably in the mid-2030s.

So we want to bring a filter plant into this flow sheet. We've been working hard. We're looking at vacuum filters like we run at El Peñon. They look quite favorable, and we're kind of proposing a vacuum filter plant that would be situated down at the tailings facility, and it allow us to put a stack that we're designing down below the B2 dam, we call it. And the location of this also provides benefits to us because we can add a modular temporary paste plant and use some of the tails to build cemented paste that we can pump into the north part of the mine where some of our higher-grade mining areas are, and it allows us higher recovery of some of the higher-grade stopes that we wouldn't get without some type of cement at backfill. So that's where all this optimization is coming together.

I hope you can appreciate it's a significant brownfield project in and around the plant. So it's going to be -- it's going to require some very careful planning, very careful sequencing of how we make these modifications. And that's where we're working intensely with an engineering company. And as we start to get the designs and the sequencing and the costing sorted out, we'll start to deliver truly what the value of this project is going to be overall. But we're very excited about it.

Okay. Great. That's a lot of good detail. And best of luck to you, Steve.

Thank you, Wayne.

The next question is from Fahad Tariq with Jefferies.

Maybe just on the gold guidance, which didn't change. Can you talk about how you're thinking about the fourth quarter in the context of some of the dilution that you cited at Timmins, El Peñon, some of the development delays you cited at Minera Florida? Just trying to get a sense of kind of the confidence in the fourth quarter on the gold side?

Yes. Scott Campbell here. We had our challenges certainly in Q3, but we're maintaining the guidance for Q4, and we're confident that, that will be achieved. We did have some dilution in Peñon, and we had some challenges and slight delays when it comes to ground support at both of our mines in Chile, but we're maintaining guidance and things in November have already started to look up for gold production in the southern countries.

Okay. And then maybe just switching gears to the updated development approach at La Colorada Skarn. Just in the opening remarks, you talked about the partnership discussions are well advanced. Maybe just any detail you can provide would be helpful.

Yes. Look, it's a bit -- well, the discussions are very advanced, but it's too early to share them here publicly. It's looking very interesting. I think that new approach, which we had an eye on, obviously, for a long time to see how we can advance the really high-grade part of our Skarn ore bodies. If you recall, we published a few press releases over the last couple of years with some very impressive long, very wide high-grade intercepts in 2 of the 3 Skarn ore bodies that we discovered.

Really the discovery of those high-grade structures in addition that we found during 2025, and we published in September and increased our resource there by, I think, about 53 million ounces already. Really that combination of that high-grade discovery close to surface together with the high-grade wide intercepts of the core part of the Skarn really allow us to go to this phased approach and look forward here to 2 phases, as we said, smaller tonnages will still be an impressive mine, very similar silver output than the original plan we had envisioned, but obviously, higher grade, less tonnage, less capital and then go to the larger cave mine later on in time. So very interesting advances.

As we indicated, we'll come out with the PEA in Q2 next year, but a very positive advance on La Colorada and looking forward here to look at those partnership agreements and involve a very strong partner for this really exciting project as well.

Okay. Great. And then maybe just lastly, is it fair to say that the partner would only be really for Phase 2? Or are you envisioning them also contributing to the CapEx and being involved in Phase 1?

I could very well envision a phased approach there, too, with a more reduced partnership option in Phase I and a larger one in Phase 2, but that still remains to be determined.

The next question is from John Tumazos with John Tumazos Very Independent Research.

We know that you produce a little bit of base metals, too. And a large differential exists with zinc at $1.44 and lead at $0.93. Why do you think the zinc price outperformed where world steel output is down a couple of percent this year? And why do you think lead lags when world auto output is strong, China trending towards 33 million cars record, et cetera?

John, look, obviously, the base metals -- and by the way, it's I think, at the moment, only about 8% of our revenue. That will, for sure, increase once we have the La Colorada Skarn in production, but it's a small part of our revenue.

When you look at the base metal, I'm sure zinc is pushed and outperforming as being included in several countries in their list of critical minerals. By the way, I'm sure you have noticed that silver got included in the U.S. as well on that list. But as you know, the base metal prices really reflect the outlook on the world economy and where that's moving. And I guess there's still some people worried about where this is going over the next few years, and that's reflected in those prices. But for sure, the inclusion of zinc and critical minerals helps the price.

The next question is from Ovais Habib with Scotiabank.

Michael and Pan American congrats on a good quarter, leading to a good free cash flow as well. Scott, congrats to you on your new appointment as well. Michael, a lot of my questions have already been answered, but some follow-ups to those questions. Starting off with the question on Cerro Moro, El Peñon, Timmins and I think Minera Florida as well. Obviously, they've had some issues in terms of reconciliation, geotech issues. Do you see these issues lingering into Q4? Or have most of these issues now been resolved? Just to clarify on that front.

Ovais, and you recall in Q2 and actually some of those technical issues started, we already mentioned that they will linger into Q3, which we see. So that's obviously the reason why our production profile, especially on the gold is more back-end loaded. As Scott mentioned, we see already an uptick on those grades. So looking forward to meet those guidance goals that we have.

And maybe, Scott, do you want to add a bit more color to this?

Sunil (sic) [ Ovais ], thanks for the kind sincere words. Regarding Timmins, some of the issues -- some of the geotechnical challenges we have involved the squeezing of our production drill holes in the deep central mining zone at the Bell Creek operation. We've been mitigating that through the use of casings, PVC casings and in some cases, we use a sealant or a polymer, and we've had some success with that. We're also installing additional ground support in development headings as we pass through high strain and stress areas using dynamic support.

The paint backfill system at Bell Creek recently commissioned is also becoming more and more utilized. We're getting better utilization and the learning curve has really flattened out on that facility. And so we're getting some -- we're seeing a lot of success. And again, the numbers are looking favorable as we head into November, sort of halfway through Q4.

And just going into 2026, I mean, is this more in terms of getting -- obviously getting ahead of production and development and accelerating development going into 2026?

Yes. Generally, yes. At several of our operations, we've initiated additional development programs in Q4 to really give us more optionality as we head into 2026. In a couple of cases, we got behind in our development. So we had to acquire new equipment, in some cases, hire external third-party contractors to do that. Huaron and Timmins included. But yes, it's all in our best interest to really ensure our success coming up in later in -- at the end of 2025 and really into 2026.

Okay. And then just moving on to Juanicipio on the closing of the MAG transaction. Michael, is everything progressing according to your expectations? I mean, are you looking -- how involved are you with operations? And is there a push to get more exploration started around the area?

I'm incredibly happy where it stands. I think we all saw a glimpse here what Juanicipio will do for us with only 1 month in Q3, and you see the strong production, strong cash flow coming out of that operation. You can imagine that even higher metal prices right now, how well that asset is doing. Actually, I was just there like last week, and it's just again an impressive operation. And a lot of involvement on the operational teams here on all levels really from operation to metallurgy to geology to exploration, a lot of exploration going on as well.

So I'm really, really happy how this has worked out so far. I'm really looking forward to see a full quarter of Juanicipio in Q4, as I said, with a combination of very favorable metal prices as well. Obviously, we come out in early January or mid-January normally, mid- to late January with the forecast for next year, which will include also our -- in our budget, our exploration spending. So you will see all the details there, Ovais, how it looks like for the production profile. But yes, it's -- I would guess it's -- I would say it's at least met or quite a bit exceeded my expectations at Juanicipio.

And my last question is on La Colorada Skarn. You're looking to announce the PEA in Q2 of next year. Is the announcement of the partnership exclusive of this event? Or you will need to see the PEA before you kind of come to some sort of terms with the partner?

No, I think we will be able to announce the partnership earlier. I think as soon as we have a document executed on that, we will release that information.

The next question is from Cosmos Chiu with CIBC.

Michael. Thank you, Steve as well, and congratulations, Scott. Maybe my first question is also on the Skarn technical report that's potentially coming out next year or not potentially, it is coming out next year. As you mentioned, Michael, you got to take a phased approach now with a higher grade lower tonnage deposit upfront. I seem to remember the Skarn deposit is centered around some high-grade centers, the 901 zone, 902, 903. So is there one particular zone that is higher grade? I don't know if you have that answer yet. Are we looking at higher-grade portions from all 3 areas? Are we looking at the upper portions of all 3 areas? How should we incorporate what I know about 901, 902 and 903 into what we can see next year?

Yes, Cosmos. The high-grade core zones are mostly 901 and 902. We are actually doing quite a bit of drilling still on 903 and some pretty interesting success here with the Skarn seems to even further extend by quite a good distance. So I think on 903, it's still out there to see if there is a high-grade zone there as well. But when you look at the press releases we put out over the last 2 years on those high-grade intercepts of the Skarn, they're all of them located in 901 and 902.

But as I said, it's really the combination together with those high-grade closer to surface structures that we published in September. And then after that showed in a big increase in resources with our reserve and resource update. It's really that combination that allowed us this phased approach. As you can imagine, we were trying for a phased approach from the beginning on it with -- obviously, a very strong project, if you can do it in a phased approach, less capital upfront and increase later when you really understand an underground and you know the orebody well.

And as I said earlier on, that doesn't mean that our production profile of silver will be much lower than what we had envisioned in the full large cave option. So there's less execution risk, less capital, probably faster in bringing the project on. And overall, just an exciting development at La Colorada Skarn.

Yes, that sounds great. Maybe a follow-up then. Michael, as you mentioned, with this phased approach, the possibility is that the vein mine could run parallel with both Skarn phases. So is there some thinking in terms of some of that ore from the Skarn could actually go through the current mill?

No. The current production mill capacity is around 2,000 to 2,500 tonnes a day. I mean we're talking here about a multiple of that. So we will build a new mill much larger and then have that mill build with the potential to expand down the road way bigger to the Phase 2. But yes, the current operation, the current mill is too small. But the metallurgy is very, very similar mineralization of the Skarn and the veins. So it's an easy project for us to kind of commingle the veins and the Skarn and put that through the same mill. So it's not -- the metallurgical difference is just the current mill is too small for that.

Okay. Okay. Sounds good. So it's going to be a new mill from day 1 for the Skarn, but it could still run in parallel with the potential expansion later on?

Yes, that's the exciting advance here is that, obviously, putting the cave mining a bit later allows us to continue to mine those high-grade veins, which it seems like with the exploration, we keep finding more and more of it.

Yes. Maybe I do apologize. I do have a long accounting question here. I just want to get a better understanding of the equity method of accounting for Juanicipio. I was looking at Note #9, and I could kind of follow through. My understanding is that it's 44% of what Juanicipio report 100%. So I can understand the $72 million in revenue, $11.9 million in production costs, $15.1 million in depreciation, so $45.1 million in mine operating earnings. But then it jumps to $37.1 million in net income and comprehensive income, and that's a gap that I don't really fully understand, which drives the $16 million pickup for Pan American Silver at the consolidated level. So could you maybe help me out in terms of that little gap?

Cosmos, it's Ignacio here. And if you want, we can take this offline as well. Yes, if you want, we can take this offline because there's a lot of detail. But basically, we -- this is -- the reporting requirements are -- don't require us to put all the detail in there, but some of the lines that are missing are taxes and other items that are material. But yes, basically, there's a whole bunch of other stuff there that's not included in the income and comprehensive income.

So I work it out to about 18%. Is that a good number to kind of use in terms of that difference or each quarter is a bit different?

I think let's give it a couple of quarters here because this is only 1 month of results. So I would say let's see what the next quarter looks like. And as I said, I'm happy to take this offline with you, and we can talk a little bit about.

I do apologize before asking the question. So I knew it'd be a little complicated. Any other accounting nuances that we should be aware of in terms of Juanicipio?

No, I would say, look, this is the same method that MAG used to report Juanicipio. And yes, it's a little bit tricky because we haven't had this before. And it is difficult to talk about the company performance now given that the performance of Juanicipio is buried into the equity line or the investment in Juanicipio line, both in the income statement and the balance sheet. So we've introduced a few new non-GAAP metrics, including attributable revenue, attributable free cash flow and attributable operating cash flow to help us better understand and talk about the company performance, including Juanicipio.

And another thing to keep in mind is really the cash from Juanicipio doesn't -- that's sitting at the JV level is buried in the interest in Juanicipio -- investment in Juanicipio line in our balance sheet. That -- only once Juanicipio JV distributes dividends, will that cash appear in the cash and cash equivalent lines in our balance sheet.

And that cash distribution is somewhat discretionary, correct?

Yes. No, they're on the schedule. Given the transition between MAG and ourselves, it's been a little bit delayed. So it's been a couple of quarters since they haven't -- since the JV has not issued dividends, but there should be a catch-up in Q4 on that.

Okay. Great. And then maybe lastly, on the dividend. Great to see that you've increased it again the second consecutive quarter in terms of that increase. But in terms of the calculation, the $0.14 is a bit of a detour away from the matrix that you've given to us in the past in terms of dividend based on net cash. So I guess my question is, how should we not predict, but what should we expect for the next quarter? That's number one.

And number two, how much of the fact that you were not able to use your NCIB in Q3, does that factor into you increasing on a discretionary basis, your dividend in Q3? And will you use the NCIB again in the future?

Yes. Look, regarding the dividends, great news. And that's really -- this is kind of a departure from our dividend policy for this quarter and this quarter only. And the reason for it is a very simple one, very strong cash flow generation. You see we nearly recovered already a large part of the $500 million that we used the cash portion that we used for the acquisition of MAG. So it was the Board's view that with this incredible strong cash flow generation, it's just the right thing to depart from the dividend policy for 1 quarter and have the shareholders participate in that a bit earlier.

It has nothing to do with the blackout we were in until the transaction closed on the NCIB. We will obviously look again at the NCIB from now on and like before, make share purchases on an opportunistic way. So that is not the reason for the increase. The reason for the increase is that we look at our cash forecast. We look at a strong Q4. And it was just the right thing to have our shareholders to participate a bit earlier in that really, really strong quarter.

I agree as well. Congrats again on a very good Q3 and look forward to the rest of 2025.

The next question is from Don DeMarco with National Bank.

First off, we saw consolidated AISC guidance lowered substantially. Was there any other contributors to this other than the addition of Juanicipio?

No, it's the strong impact of Juanicipio. I mean we will be on track with what we had in our original guidance like we are on the gold side. But as we alluded to when we announced the transaction that this transaction will have a meaningful positive impact to our cash cost on the silver side. And that's really the result that you've seen only with 1 month on it, you already see that result and calculating in the advantage of having Juanicipio for a full quarter in Q4 led us to the lower guidance on our costs.

Yes. I was just going to add, Don, this is Steve. Just to a lesser extent, we are enjoying the benefit of the higher gold prices as well relative to what we use for guidance. So that is helping to offset some of the cost increases we're seeing is that byproduct gold price.

And just to remind everybody again, I said that probably every call, there's a lot of factors, important factors on our cost. There can be tailwinds or headwinds that are out of our control and one is exchange rates. Of course, when the U.S. dollar declines, normally our local currency increase and that automatically is a headwind on our cost. But as the added benefit with a lower dollar that we see higher precious metal prices. So that's kind of the system how it plays. When we see a strong dollar, we see pressure on the metal price, but we see a tailwind on our costs in local currencies and vice versa. So keep always in mind that exchange rates are an important part as well.

Okay. And we look at Minera Florida and Timmins, costs are a bit elevated in the quarter, but of course, the margins are still good. Do you have any performance criteria to identify potential divestment candidates? And can you walk us through your potential divestment pending order?

Look, I mean, we did a lot of divestments over the last few years. You probably saw we divested a project in Chile, La Pepa as well for $40 million cash in the quarter. And there's quite a few other smaller projects that are in the pipeline in the works right now by our business development team. I'm pretty happy with what we have right now on our operational side in our portfolio. So looking forward to continuing with those assets.

Okay. And then on the flip side of that, after MAG and previously the Yamana acquisition, what's a good long-term silver or gold production level that you'd like to achieve or maintain?

I think we need to see the final budget on the Juanicipio side before I can answer that question. As you can imagine, it's a very large and important part of our silver production going forward here.

Okay. Great. Well, we'll keep an eye out for guidance next year on that then. And good luck on the rest of the quarter.

This concludes the question-and-answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Thank you, operator, and thanks, everyone, for calling in. And another great quarter, record revenue of nearly $890 million, record operational cash flows of $323 million, record attributable free cash flow of nearly $252 million, very strong numbers. That obviously led us to increase for the second time in a row now since Q2 to increase the dividend. It's great to have our shareholders participate not only in increase of our share price, but also in additional return to our dividend policy. So great quarter. I'm really happy where it stands.

As I said, we saw the first glimpse of what Juanicipio is able to do here in the full quarter, which will be the first full quarter in Q4. We only had 1 month of the mine in Q3, and we see already a very positive impact.

And just to the last question there from Don, we will see an important impact to our silver production here from Juanicipio looking forward. So I'm very happy where we stand. looking forward to a great and strong Q4 and report that early next year, but also report our outlook for '26 and show you in detail how our guidance for that cost guidance and production guidance looks like.

So thanks, everyone, for calling in, and have a good rest of the year, and we'll talk in early year, I guess, February or so for our Q4 results. Thanks, everyone.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Hello, everyone. Thank you all for your attention and participation. We're so honored today to have Ignacio Couturier, if I'm pronouncing that right. I don't know if forgive it a French or Spanish pronunciation Ignacio, the Chief Financial Officer; and Siren Fisekci, the VP, Investor Relations and Corporate Communications.

Lots of things are happening at Pan Am besides $50 silver and $4,000 gold. Tell us all the changes, please.

Hi, John, and hi to all the listeners. It's a pleasure to be here again. This is -- I think this is my third year, John, doing these presentations, and I always enjoy a good conversation with you. And absolutely, it's a really exciting time to be at Pan American. And as you mentioned, yes, we're enjoying some amazing unprecedented metal prices, especially on the gold side. And silver, I think we're very close to the all-time record. So yes, it's an amazing time to be in the industry, but Pan American has been really, really busy the last few years, and it's great to see some of the results of all the hard work we've done.

So I'll start the presentation. And please, John, as usual, jump in whenever you have comments, happy to field questions as we go along. So starting off, as usual, we have the customary cautionary note. So if this presentation has been shared with your viewers, I'm sure they can read it. Okay. So this is what Pan American looks like today. So we have 10 operations in 7 different countries spanning from Timmins, Ontario, all the way down to Santa Cruz, Argentina, our Cerro Moro mine.

So Pan American has had a long track record of building, operating and even closing mines throughout LatAm and Canada. Today, our combined production from all our operations is around 20 million to 21 million ounces of silver and 735,000 to 800,000 ounces of gold. This makes us one of the biggest primary silver producers. As you can see from that pie chart on the right, we're one of the most diversified producers as well. None of the countries represent more than 25% of our exposure. And yes, political risk is definitely a consideration and having a diversified portfolio has always helped us.

We've just completed the close of the -- sorry, the MAG Silver transaction earlier this month. So with MAG Silver, we're adding 44% of Juanicipio to our portfolio. So I'll talk a little bit about that and why it's important to Pan American's growth story. And then also talk about the other big catalysts that we have in our portfolio, starting with the skarn. John, you and I have talked about the skarn in the past. I think there's some really exciting news around the skarn with these high-grade veins that we discovered about a year and a bit ago when we published some resource on it. So I think that changes the story a little bit about the skarn. So we'll talk about that.

And of course, we have Escobal and Navidad, and we'll touch upon those as well. Yes, I think when compared to our peers, you'll see that we have a very diversified portfolio, a lot of different mines in a lot of different countries. We have a long track record of operating in Latin America. John, as you mentioned, I'm originally Latin American, and I think you come to our Vancouver office, I'd say more than half the people here speak either Spanish or Portuguese. So we're very well accustomed to operating in Latin America.

But ultimately, yes, we're a great vehicle for investors who want to have exposure to silver. Despite the fact that silver doesn't represent the majority of our revenue today, it is -- we do have one of the biggest silver reserves in the world. And in terms of our peers of the primary silver producers, we do have the biggest silver reserves and resources. So a lot of potential in the ground apart from our mines that currently operate.

So first, let's talk about Juanicipio, which is really exciting. So over the last couple of years, we had a process of streamlining of the portfolio, and I'll talk a little bit more detail of that. But through that streamlining, we acquired -- we monetized about $1 billion. And the last couple of acquisitions we've done, Yamana in 2023 and then Tahoe back in 2019, they were both very transformative transactions. However, they didn't bring that much silver. And given the cash we had accumulated from those sales of assets, it made a lot of sense for us to invest back in silver.

And we got a lot of questions about when is Pan American going back into silver, given what we saw what happened in our small niche sector. We saw that Coeur, of course, bought SilverCrest and First Majestic bought Gatos. And yes, we were looking at all the silver world and the silver asset universe is pretty small. We looked at all these assets. A lot of these assets, they do have premium. So the best way for us to justify premium is looking at exploration potential. And Juanicipio for sure, is an asset, long life, low cost, huge exploration potential. So you can see from the graph here, Juanicipio is one of the biggest at 100% is one of the biggest silver producers, just around 18 million to 19 million ounces of silver with very large reserves, as you can see from the size of the bubble there on the top graph, very large reserves compared to all the other mines. And yes.

[indiscernible] ounces of the reserves on a 100% basis, Ignacio.

Siren, can you pull that up?

Yes. I can pull that up. I'll get back to you in a second.

And your reserve and production from the earlier slide include Juanicipio or not yet?

No. The 20 million to 21 million ounces of silver, that's for 2025, not including Juanicipio. So remember, we've just closed the transaction now. So it will -- we will see a pickup from that 20 million to 21 million ounces for 4 months worth of 44% of Juanicipio. For 2026, we will have a full year. So you can kind of do the math of more or less where we'll land in.

So Fresnillo always under forecast the grade.

Yes.

It's coming in 10%, 20% more than they said. So your 44% should be at least 7 million ounces. And Siren is going to tell us what the reserves are in a moment.

Yes. And then as Siren pulls that up, you'll see it's also Juanicipio. It's the lowest quartile producer as well. You can see that from the lower bar chart there.

That's spectacular. And you bought a silver mine that was permitted, not like Escobal that we bought, it shut down or Navidad without permits. So now you're not swimming against the current anymore. I'm teasing you.

No, absolutely, John. And look, this is an asset that will -- that's producing. As you said, it's been -- the grade reconciliation has been positive. It will be -- I think it will be tied for first place in terms of cash flow generation in terms of Pan American's assets. So Jacobina and 44% of Juanicipio will be our biggest cash flowing assets. So this is a huge add and a very material add to our portfolio.

And yes, for sure, as I mentioned, one of the reasons why we consider this over other assets was the exploration potential. Only 10% of the surface has been drilled, has been explored. So -- and it's located in one of the biggest silver districts in the world, surrounded by all these Fresnillo mines. And actually, La Colorada is only around 60 kilometers away. So in the world of silver, this is considered elephant country. So it's really exciting for us to be able to expand on the exploration program.

Now it is a JV. Fresnillo is the operator. So we're -- we've had a long-term relationship with Fresnillo and Pe oles in the past. MAG, of course, was more of an exploration company. We've had a long track record of not just operating mines, but a lot of positive exploration success in Mexico. So we're really hoping to leverage that in the new relationship we'll have with Fresnillo on the JV.

Proven and probable silver reserves are 122 million ounces and then measured and indicated resource of 169 million ounces.

That's 100% basis.

That is 100% basis, and it's according to -- so our share would be 44% of that, just to confirm for listeners. And that's based on MAG's technical report.

That's 54 million ounces of your pro rata reserves, excluding resources.

Correct. So we do -- we are looking forward to expanding -- working with Fresnillo and expanding the exploration programs in that concession. So yes, I think that was one of the main drivers why we picked this one as our silver acquisition versus other assets that we're also considering at the time. So really, really excited to have this now as part of our portfolio. And as I said, it's not often that you buy something that day one is going to be contributing to your cash flows, it's going to be accretive to your costs, et cetera.

And we have the extra -- we like to think that we're always very smart. But when we announced this back in May, silver prices were much lower than they are today as well. So that's been the added bonus to all this. So moving on, another comparison here is this is within the Pan American portfolio of silver assets. You'll see Juanicipio will be around 7 million ounces one, as you mentioned, at 44% and then our lowest all-in sustaining cost mines. So very, very accretive. So it's a significant increase to our production and lowering our cost. So it's a win-win for us.

So here's a summary of all the divestitures we've done over the last 2 years, adding up to just over $1 billion. Throughout a lot of these divestitures, we did retain royalties, mostly copper and gold royalties. So it's a nice way to add some upside, retain some value in these projects. None of these -- none of the ones that have royalties are operating right now. However, they all have huge potential. The biggest one being the sale of MARA back in 2023, that was around half of the amount that we sold around $475 million. And then the other large one was the sale of La Arena. La Arena improved for $245 million.

Most recently, we did announce the sale of La Pepa for around $40 million. So we get a lot of questions from investors, what's going to come next? I think there's still more noncore assets to sell from our portfolio, but these will be -- they're mostly early-stage exploration. Pan American, though was not done growing. So our general strategy is to continue to add assets and then reevaluate the existing assets and continue to optimize the portfolio as a whole. But definitely, this has been very, very important to us in our growth story.

As you can see from the graph there, $500 million of which was used for the acquisition of MAG. That was the cash portion of the consideration for MAG. The rest was done with shares. Now as I mentioned, Pan American has had a pretty outstanding growth trajectory. You can see from this graph, that's from 2018 to current, how Pan American has grown the company in terms of market capitalization. And then as the other -- the other axis, of course, is our operating cash flow.

So you could see how through acquisitions, first with Tahoe then with Yamana and now most recently with MAG, now we're just around $16 billion to $17 billion market cap with some of the strongest operating cash flows. Larger than us, of course, in the silver sector is Fresnillo. However, do keep in mind that a lot of those shares are tightly held, privately held. It's only a small portion of the Fresnillo shares are afloat in the market. So I think for investors looking for exposure to silver, we're one of the largest with the strongest balance sheet, very strong operating cash flows.

So the $1.1 billion of cash is before deducting the $500 million for MAG?

Correct. That's correct. So that's all that we accumulated through sales, which coincides more or less with our cash balance as of Q2 -- as of June 30. So when we report our Q3 results, you'll see there will be the deduction of the $500 million consideration for MAG, plus the addition of all the operating cash flows that we have been enjoying some really healthy cash flows from our operations, given our operating results and, of course, the metal price -- high metal prices.

Speaking of which here's kind of where we're seeing our margins, both on the silver segment and the gold segment. So we've had relatively steady all-in sustaining costs and our margins have been widening as silver and gold prices have been widening as well, have been increasing. Today, we are enjoying close to $4,000 gold and silver in the high 40s. So our margins have been expanding very, very healthy. And in terms of balance sheet, I think this is a differentiating factor for Pan American with a lot of our other peers is we've always had a really strong balance sheet. We've never had a lot of debt on our books.

So total available liquidity as of June 30 was around $1.5 billion. That includes the undrawn amounts. And of course, it's -- there is the $500 million being carbon production. We do have a little -- we do have some debt in our books. It's a debt that was issued by Yamana. Those are the Yamana bonds for around $821 million. Those were issued by Yamana at times of really low interest rates. So the big tranche is at 2.6% and then the lower -- the smaller tranche that's due in 2027, that's at 4.6%. So we have -- given those low coupons, we haven't been in a rush to pay back those bonds. But yes, the one that the 2027s are coming up in a couple of years, so we'll manage those at due course -- in due course.

Another question, of course, we get from investors is what's been our capital allocation approach over the years. And it's always been a balance of 3 things. Number one is return to shareholders. We have an uninterrupted track record of returning value to our shareholders since 2010 in the form of share buybacks and dividends. I think we've returned over $1.1 billion to our shareholders since then. The other one is maintaining low debt levels. I just talked about that a little bit. So we have -- whenever we have drawn on our credit facility, which has mostly been done for acquisition purposes, we've paid back our credit as soon as we can.

And the last one is growth through expansion projects and acquisitions. So around 52% of the free cash flow that we've generated has been invested back in the business. So it's -- yes, and it's helped grow and maintain the company. In terms of the dividend, we do have a dividend policy. We did increase our dividend to $0.12 a share in Q2 2025 based on our strong balance sheet. We have also been active in the share buybacks. We did -- it's done from a -- it's done on a discretionary approach. So we try to identify opportunities where we see the disconnect between where metal prices are and where our share price is doing, and that's the time when we've been active in rebuying shares. So we were active early this year. However, we were blacked out for a big chunk of the year from doing trades given the MAG transaction. The SEC doesn't allow it.

So yes, it's something that we'll be looking at going forward at what levels it makes sense for us to buy back shares. And that's in addition to our -- to the dividends that we've been paying. Now I'm going to talk a little bit about the skarn, John. So here's a little bit where the story has changed since last time we spoke. So early September, we came up with a press release on these high-grade veins that we found. So we started drilling them, I'd say, since late 2024, a huge amount of work, about 65 kilometers worth of drill holes have been put into this area.

So maybe I should have shown it differently, but these veins are located above the skarn. So we've identified around 52 million ounces of silver in inferred resources. Given the fact that it's located above the skarn and we do plan on caving the skarn, this is something that we would like to develop ahead of the skarn. So we're working right now on an updated PEA. Our last PEA on the skarn was published in, I think, January 2024. So hopefully, sometime in 2026, we can publish an updated PEA taking these veins into consideration. So this is a nice, I'd say, bridge between our current operations at La Colorada and the skarn.

Yes, 52 million ounces of silver is quite substantial. As we've spoken in the past, John, the skarn is a large zinc, lead and silver project with around 80% of the revenues coming from zinc and lead. Having this discovery come into play does give us more optionality within how to develop the skarn. This is something that's lower -- not as deep as the skarn. We can probably access it through either our existing operations or put in a shaft or a ramp of some sort. So we'll be studying this. But this is a great story to add to the skarn and now we can develop these high-grade silver zones ahead of the skarn.

Just for context, you can see there on the figure on the right, the skarn is those 3 red bodies. The high-grade silvers would be located -- the high-grade silver veins will be located above the right body, the 903. So -- so yes, we're working very hard on this. We're still -- in terms of the skarn, we're still in conversations with potential partners on that. This -- obviously, having the veins takes a little bit of pressure. One of the reasons, of course, talking to potential partners was the zinc exposure, but having now this high-grade silver zone bridge the gap to the main skarn body, which is mostly zinc gives us a lot more optionality. So we're still working on the partnership. And yes, we have been talking to potential partners now for a while. But definitely, this takes the pressure off as we'll be focusing on the silver veins before we go into the actual skarn.

[indiscernible] Ignacio, the bright blue and the right slide are the new vein shallow and the dark -- and the red is the 3 skarn blocks.

Correct. So the new area is not in this map, but it will be to the right of the blue just at the same depth as the blue.

And it's not caliente. It's not 104 degrees like the skarn.

No, no. Remember, the skarn, the heat becomes less of an issue because of the mining method. But yes, it wouldn't be as hot as the skarn. The deeper parts would be connecting to our lower parts of the La Colorada mine. But of course, we solved some of those issues with that ventilation infrastructure that we put in place last year. So that's not much of a concern now. But yes, this is a great discovery, and it really, yes, expands the story of La Colorada, which is one of our most important assets, right? It gives us a lot more optionality with what we can do there.

So anyway, I'd say I'll tell investors to stay tuned. Next year, we'll be coming out with an updated PEA taking into consideration these veins. Jacobina, this is another large catalyst for us. Of course, our most important gold asset produces just shy of 200,000 ounces of gold a year. So we've been working for the last year or so on different engineering studies for the optimization. They include ore haulage, plant upgrades, obviously, looking at the throughput, tailings dam storage. I think there's in total, like more than 30 engineering studies going on. We are aiming to come up with some -- at least some disclosure on some aspects of these studies late this year. But this is really, really exciting for us.

Jacobina, as I mentioned, with the 44% of Juanicipio will be our top cash flowing assets. This is a long-life mine with a lot of potential -- lot of potential to expand the life of mine as well. So yes, we're very, very excited about this and looking forward to sharing more information with the market once these optimization studies are more advanced.

Escobal, this is a long story now for Pan American. This is an asset that came in 2019 with the acquisition of Tahoe resources. When in production -- when this mine was operational before Pan American acquired it, it was producing around 20 million to 21 million ounces of silver a year at the time with all-in sustaining costs of below $10. So yes, this mine has -- if restarted, would have the potential to double our silver production or a little bit less now with Juanicipio, but still a really, really meaningful increase to our silver production.

The mine has been in care and maintenance since 2017, undergoing an ILO 169 consultation that's run by the Guatemalan government. So it's a long story. I'd say that at this stage, we are advancing with talking to the government and having working meetings with the government. There's been a lot of changes within the government as well, changing of ministers. We know that the government has had a lot of working meetings with Xinka as well. And there's been a lot of advances. Now we've narrowed it down to 3 important impacts of the mine that the Xinka want to discuss, and that includes mine vibrations resulting from blasting as well as water quality and quantity and participation, economic participation in the project. So these are discussions that are still ongoing.

In May -- in mid-May, just around the time we're announcing or just before we announced the MAG transaction, actually, coincidentally, there was a statement given by the Xinka saying that they don't support or they question how the government can run this process and oversee the running of the mine or the operation of the mine. Just -- and some -- a lot of investors came to us say, how does this impact? So these are statements that were done outside of the consultation process. And remember, the consultation process isn't necessarily a referendum. As I mentioned, it's more about talking about and discussing the impacts of the mine.

So we do -- the government did reach out to the Xinka. And since then, there's been some good conversations between the Xinka and the government on this. So we still don't have any type of time frame, but we continue to advance given the circumstances in Guatemala. So I would say the new government came in power in early 2024. Really, there wasn't much advance in the project until mid- to late 2024. So only in the last year has this picked up again.

But anyway, this is a huge optionality within our portfolio. So some investors ask a lot about this, and this is something we still -- is still a priority for us for sure. But yes, it has the potential to increase our production and really transform the company, hence, how much effort we put into it over the years. So speaking of investors, in terms of -- as I said, the silver space is quite small in terms of the company. So we are one of the largest in terms of market cap, you can see from this graph, as well as in terms of liquidity. Fresnillo, as I mentioned, is larger than us, but it's not as -- it doesn't have as much liquidity in the market as we do given that a big portion of their shares are tightly held.

So we are one of the biggest, if not the biggest, within the sector. And the other one is that we've run the numbers, and we do know that we -- our share price is the most highly correlated within that peer group to silver prices. So investors looking for that exposure, we are the best vehicle within the peer group, within the sector.

Now I'll shift over. We've talked a lot about the company. I'm going to talk a little bit about the silver, the silver market. So yes, this is -- I think it's in the next graph actually. This would be now -- 2025 would be the fifth year now that we're running deficits in the market. So we -- silver demand has outpaced silver supply in the last few years. The forecast is that to continue. In terms of the demand, a lot of the growth has come from photovoltaic. So you can see the increase from 2021 until today, more than double the demand from photovoltaic.

And you can see the 2 pie graphs there on the left. This is the really interesting thing about silver that not all about half of the demand comes from -- or a little bit more than half of the demand comes from the industrial side. The other demand, the coins and the jewelry and the silver wear, that's investment. So silver is really special. It has an industrial side for its demand and has an investment side to the demand. And I don't think -- there's no other metal that really has that duality.

When you look at gold, it's all investment. Silver, silver has got both sides of it. And on the mine supply side, most of the -- it doesn't appear here, but most of the silver, 2/3 to 3/4 [indiscernible] produced as byproduct. So some of the largest, biggest silver mines in the world are actually gold mines or the base metal mines. Primary silver mines are quite rare.

So yes, the silver -- silver fundamentals look really strong going forward. We also know the speculative side of silver is really strong as well. So -- and silver is a smaller market than gold. So we've seen this over and over again. I've been in the silver business for the last 20 years. So when dollars finally make it into the silver -- into the silver, into silver -- silver has -- can outperform, and we've seen that over and over again. And yes, throughout this whole year, a lot of investors are asking -- kept asking when silver is going to catch up with gold. And yes, I don't have a crystal ball. I don't know exactly when that's going to happen, but I do know that silver has the potential to increase really quickly once there's interest in the market for it.

Just rounding out the presentation. Pan American, of course, is very committed to ESG. And in the last year, you can see in this -- in this table, you can see some of the memberships that we have, the reporting standards that we have. We have a very large sustainability report that we published. I think it's -- we've been publishing it since 2010 or '11. We're one of the earliest to publish a sustainability report. It's a fundamental -- it's a cornerstone of how we operate our company.

Yes. And I think in the last 5 to 10 years, we talk about it a lot, but the reality is that it's a cornerstone of operating mines in Latin America and North America is having really good relationships with the communities that are close by, understanding what the environmental impacts of the mine are, making sure that we work very closely with our employees and understand their needs and understand all the stakeholders that are impacted by mining. So this is a cornerstone of how we do our business. We talked about it and we talk about it a lot I'd say, in recent years, but this has definitely been part of our DNA.

And with that, John, I wrap up the presentation here, some summary of Pan American and a snapshot of Pan American. But I would say if investors are interested in having that silver exposure with catalysts having a large producer with scale, please consider Pan American Silver. We've added an amazing asset with Juanicipio. We have a few catalysts in our portfolio that can add more value. And in addition to that, I'd say we're not done growing the company. If another opportunity comes up, we would definitely look at that, too. And these things take a long time and they're difficult. And yes, we're in an interesting crossroads in our industry right now where valuations are tricky.

We've seen -- we have very high spot metal prices. We see consensus prices that are much lower. So it brings some new challenges. Obviously, it's a good problem to have, but it brings up new challenges for us. But anyway, going back to Pan American, yes, I think all -- any investor looking to get silver exposure and have access to catalysts that could increase value, please consider Pan American Silver.

[indiscernible] With regard to the Escobal contingent right, is it 1/10 or 1/20 of a share?

0.0497 is the exchange ratio.

Almost 1/20. So the transaction was which month in 2019.

February.

So in February of '29, the 10-year period is up and the right is either exercised or not. Is that right?

Correct -- they expire.

Okay. So it's getting close to where you put the pedal to the metal.

Yes, and it is a priority for us. I wouldn't expect that this was going to take as long as it has, but we definitely want to make sure that -- that it isn't rushed either and that the last thing we want is the mine, us getting the permit and everything, but then there's still protests and there's roadblocks and running the mine becomes difficult. So we do want to make sure that when we get the go-ahead from the Supreme Court and we get the go-ahead from the Xinka that there is -- that we have the acceptance that we need to run an operation. So -- and it's complicated, and we've been -- and I think we've made huge advances in the process since we started in 2019.

When we started in 2019, the populations living close to the mine, the view of those local population was quite negative, we've changed that completely. One of the biggest inquiries we get at the mine site is about jobs, employment. However, we still have to resolve the consultation with the Xinka. The Xinka don't necessarily live in any -- any close village specifically around the mine, they're dispersed within the area of impact. And yes, the consultation is a really important step that we have to complete. And yes, it's taken a long time, but we want to make sure it's done correctly.

So I'm making an analogy to First Nations in Canada and the stipends they get from the government. And the amounts are different if someone's half First Nations or 1/4 or 3/4 or whatever. Is there really a significant full-blooded Xinka community nearby? Or are there people that are 1/8 or 1/4 and identify as Xinkas.

Yes. I can't comment on that. I do know that they -- these are people that identify as Xinka. What I can tell you is that -- and this is not just in Guatemala, but throughout Latin America, there's been -- over the last 20 years, there's more and more people self-identifying as indigenous. When Tahoe -- back in the day, when Tahoe did the demographic study, very few people had self-identified as Xinka. This is back when they built the mine more than close to 15 years or when they started the development of the mine 13, 14 years ago and more people self-identified as Xinka later on once the mine was operational.

Not that, that changes anything, but yes, they have self-identified. And I guess we're past that point now. We're in the middle of the consultation. And we just -- we're at the stage that we just need to reach an agreement with the Xinka about what the impacts of the mine are and how we can either compensate or mitigate. That's where ultimately what the goal is. And keep in mind is that we don't run the process, right? This is a process that's run by the Ministry of Energy and Mines in Guatemala. So we are beholden to their time schedule and how they can -- when they book the meetings, et cetera.

So I spend a month in Greece every year in the village my father left 105 years ago, and I'm indigenous. I had an infection in my eye. I went to the medical clinic in the next village and all I had to say was my father was born nearby and everything was free. But I'm draft eligible for 99 generations. So there's responsibilities of being indigenous. But the rights are not as good as in Canada or somewhere next to a mine.

So we were your guest January last year at Jacobina, and there was the central mill in many open pits going underground, different underground, maybe a 5-mile trend. The gold price has doubled. So should we assume that everything you were considering 1.5 years ago is wonderful today. And would the expansion in Jacobina be 25% in tonnes or triple in tonnes? What magnitude, what should we be dreaming about?

Yes. I'd say I think, John, at this stage, you have to have a little bit of patience when we're ready to talk about it. Now as I mentioned from a corporate development side, I think it also applies to our own operations is what long term -- and this is, I think, an industry-wide conundrum is what long-term prices should we be using for our reserves and our planning. So if you look at our -- if you look at our reserve and resource disclosure earlier in September, you said you'll see that it's now become quite unique what assumptions we take on metal prices for certain projects. So there's a big table -- following the reserve and resource table, there's a couple of tables with the assumptions, the price assumptions. And you'll see that we ultimately have to use bespoke prices.

So the shorter life mines, we used higher prices in gold and silver and then the longer life mines, we use lower prices. But I'd say, I think industry-wide, we're all waiting to see how persistent these prices are. We're also waiting to see how other people handle it, how other companies are handling it. It is unique to have such high spot prices and the consensus not catching up yet. So it's something that we've struggled with what is the right assumption.

Now for sure, we're enjoying some huge margins. So it's tough to leave behind material that we know is economic today in the price environment. And that material is lower grade. So we know that has an impact on our all-in sustaining costs. Lower grade material will bump up to all-in sustaining costs, but it's tough not to be exploiting some of this material and knowing that it has such huge margin today. So yes, Pan American is also unique in that we publish our reserve and resources midyear. Most companies, of course, publish at year-end. So we're a bit of ahead of the curve. So it will be interesting to see how other companies manage this.

Now in terms of Jacobina, there's a lot of studies going on. And yes, we're very excited about what the potential is. But I'd say we have to have a little bit of patience when we're ready to talk about it. But for sure, yes, there's lots of upside for Jacobina for either increasing production or extending the mine life, et cetera.

So Brazil is a wonderful country. I was just there a few weeks ago visiting iron ore in Minas Gerais for Vale. And you're a considerable gold producer. Aura Minerals is a considerable producer. We're hosting Jaguar tomorrow that's a smaller producer. Equinox is a significant producer. Equinox has 4 mines -- as a company, they operate in 6 regions in the Americas, 2 in Canada, California, Mexico, Guatemala, Nicaragua and Brazil. So they're all spread out. It's possible the new manager wants to sell out of Brazil to focus more on the other operations. They have Bendito issues in Mexico, problems you don't have, but they have a lot of issues here and there. If something were for sale in Brazil, would you love to grow in Brazil and make it a bigger part of your company?

Absolutely. But we -- with the Yamana transaction, that was the first time we had exposure to Brazil, and I'd say things have only been gone well for us there. We really like the jurisdiction. It's a country where we -- where people understand mining. There's a long tradition of mining. We're very happy with the people that work in the mining industry that are very knowledgeable, very well experienced. So for sure, Brazil is a country where we would like to continue to expand if the opportunity came up. It's been a very, very pleasant surprise how good operations are in Brazil. How well our mines run in Brazil.

I'm going to be [indiscernible] mala fe. Mala fe is a very expressive expression in Spanish. 40 years ago, I was at a beach and I picked up a cousin like I was hugging her and dumped her in 4 feet of ocean and rolling her hair, and she came up screaming at me and that was mala fe. So I guess it means something like bad faith or mischievous.

So once in a while in the mining business, a company gets a wonderful drill intercept. And they open up the champagne and they celebrate and they think they've hit the mother lode. And then after a few years, they do the engineering or the metallurgy and there's some costs or some issues. So 2019, we had La Colorada Skarn and there were these thick intercepts that were tremendous. Then the mine plan in December 2023 was [indiscernible]. It's 5,000 feet deep. The rock is 104 degrees Fahrenheit. You need 2 shafts for ventilation, you need 2 ramps, a lot of air, $3 billion in capital. And it seemed like it was a challenging mine, complicated, a lot of work.

But now miracle, you've got 44% of Juanicipio and you found 50 million ounces of high-grade shallow. It's no [indiscernible], normal rock. So maybe you do 5 million or 10 million ounces in the shallow zones for 5 or 10 years, and you let the hot potato sit in the ground for 10 years and you have lots of time to figure it out. Is that fair?

Yes. Well, a couple of clarifications there, John. The heat issues and the ventilation issues were in the current mine. They weren't in the -- that was -- we mine the volcanics on top. And that's something that we solved, as I mentioned, with the ventilation shaft and the ventilation infrastructure. The skarn is lower down in limestone. So it's a different rock, host rock altogether. The complication with the skarn is that these are big bulk underground mine methods, which is caving. And huge investment and time frame.

And look, the skarn by itself is a world-class deposit. It will be one of the biggest zinc mines in the world with a substantial amount of silver. It's still -- the PEA had 17 million ounces of silver coming out of it. But the challenge, of course, is that investors like yourself or people listening today don't invest in Pan American Silver for huge zinc exposure, right? So hence, where the partnership discussions have been happening.

[indiscernible] change when you filed your reserves in August while it was vacation in Greece? Or is it still 3.5% to 4% lead, zinc combined and 1 ounce silver in the skarn.

It's [indiscernible]. And the skarn, the skarn hasn't changed. The skarn is -- we increased the tonnages, but the grades are [indiscernible].

Another conceptual problem I have is that no one would build an open pit mine at those grades for zinc, 3.5%, 4% combined lead and zinc, 1 ounce silver. And this is 5,000 feet underground. So it seems complicated to me.

Yes. The skarn is technically complicated, hence, the discussions we've had with partners, but the high-grade veins are shallower, as you mentioned. [indiscernible].

They save the day.

They're a great addition to the story, right? So we're really happy that this kind of bridges the current operation with potentially what the skarn can be. So yes, it's a great find. It makes the story more digestible for typical precious metal investor like yourself, and it gives us more time to continue looking at the skarn, what the best options are for the skarn. And as I said, the partnership for the skarn is critical given the amount of zinc and the amount of capital required, et cetera.

Maybe you do the shallow high-grade silver first. And then in 10 years, you do the partnership, you do the skarn, but it's not a partnership. It's 100% whoever the new entrant is, no management committee, they're the boss. They said they're going to spend $3 billion, let them be the boss. And why don't you retain either a 50% silver stream or a revenue royalty payable in silver. But let the other guys spend all the money and have all the control and figure out all the tough engineering issues and you just get the cream off the top.

Yes. Well, these are all things that we're considering not just now, but from the beginning when we first discovered the skarn. So it's got huge value for Pan American. It's just trying to figure out what's the best way to extract that value and return it to our shareholders. And that's what we've been working for the last couple of years. So I would say stay tuned. We'll have an updated PEA. We'll be able to have better -- I think it will be -- there will be some differences from what we published in the past. We will include these high-grade veins in the story. And it will be, I think, a more digestible story for investors when they look at this updated PEA.

So Ignacio, these JVs sometimes they're complicated and there's committees and things. One time 40 years ago, Nucor built a steel mill in Arkansas for I-beams. And there were a lot of permutations and combinations of roll past designs for I-beams. And they did it as a 51-49 JV with Yamato Kogyo to get the rolling mill technology. But the way the deal -- the way the business ran, Nucor ran the steel mill, they got the start-up technology they needed. And the role of the Japanese partner was to play golf and stay out of the way.

If someone is going to spend the $3 billion to build this mine and figure it out, maybe Pan Am needs to be the partner that plays golf and stays out of the way and just take a royalty or stream off the top and let them do it any way they want. And if it has start-up delays, it's all for the other guys' account. But you guys should have the easy life and be the ones playing golf and let the other one do the hard work.

Yes. At the end of the day, we did find -- this is -- we didn't acquire it, right? We found it in our ground. So as I said, right now, it's just trying to figure out what's the best way to return value to our shareholders. It has a huge amount of silver. So what's the best way of returning that silver value back to our shareholders.

And largely not recognized in the market today. So I don't think because of the questions about time line, costs, our participation, but the project itself keeps getting better as you could see with those recent drill results that we've been announcing over the past year in the veins.

As you join the JV with Fresnillo, are you able to prioritize exploration 1, 2, 3, 5 kilometers away with Fresnillo and more fully explore the land plan?

So these are the discussions that we started having with Fresnillo, right? And I think the good news is that we're completely aligned. So anything that we find will be shared 56-44. So both parties have to benefit from this. So remember also, John, we just closed the transaction just over a month ago. It's still early days. So we're just developing that relationship with Fresnillo at the Juanicipio level.

As I said, we've had a long-term relationship with Fresnillo and Pe oles with other commercial contracts, et cetera. But in terms of Juanicipio, this is our first time discussing it. So I think there's lots of opportunities for us to leverage our experience of exploration in Mexico. It's just these things take a little bit of time. But I would say Fresnillo has been very, very friendly to us, very excited to having us as partners.

We've had a lot of good meetings with their staff. We've had some really good visits to the asset before we close the transaction and after we close the transaction. And yes, we're just developing that relationship right now. And these things take time. But I'll go back to what I said in the beginning. One of the reasons why we picked MAG and it's 44% of [indiscernible] over other potential silver targets was the exploration potential. So this will be -- this is a priority for us.

So Fresnillo is a great relationship. They're bigger than you. If you ever wanted someone to buy out of $4,000 gold and $50 silver, here you are.

I guess so. One thing I can tell you is this that Fresnillo, they've always wanted to expand outside of Mexico. We've had some good conversations sharing our experience outside of Mexico. But it is -- John, going back to what I said, it is a family -- mostly family held business, right? So they do things a little bit different than a regular corporation. So that's.

[indiscernible] top dollar, it doesn't matter.

If they did, yes, but they look at things a little bit differently.

They're very conservative, I know. Are you going to raise or lower the exploration budget for the Deer Creek property in Utah? And how much are you going to raise the budget for Larder Lake in Ontario, the gold project since you guys have so much more money than MAG Silver had?

I'd say, look, John, I think it's still also early days on those 2. For sure, I could say that Larder looks more interesting given its proximity to Timmins. So there's definitely off the get-go that caught our attention more Deer Trail, we're still evaluating. I'd say it's still early days to really say which way we're going to go with those 2 projects.

Of course, Pan American over the years, we've spent more effort on brownfields than greenfields. But these projects deserve a good evaluation. And at the end of the day, we focus most of our energy on the due diligence on Juanicipio, not on these projects. This is more of an extra that we got for that transaction. So now we're going to spend some time with our exploration group looking at these 2 projects very carefully.

I need to check the question box. You had 32 people, and there's no questions in the question box. How can that be? I must be entertaining people asking too many mala fe questions. Okay. Well, if anyone has a question, please submit it. And when next year do we expect the PEA that incorporates the shallow sweet high-grade easy silver?

Yes. We haven't put out a time frame around that yet. I know we're working on it. We've been working on it for the last year or so. We haven't put out a date. As soon as we can give an estimate of when we'll put it out, we'll let you know. But it will be sometime next year. I can't tell you -- obviously, I'm hoping that it's early in the year, but we'll see. It depends on the engineering group, not finance. So -- but sometime next year, we'll be publishing it, and we'll let you know as soon as we have any sort of foresight on when it's going to happen.

Siren and Ignacio, thank you very much for your time. Thanks for putting up with my devilish questions. And thank you, everyone, on the webcast for listening. [indiscernible] all of us.

Yes. John, if there are any follow-up questions, feel free to [indiscernible].

Now there is a question in the box. Here we go. Yes. There's -- the one question was my e-mail about Larder Lake and Deer Creek and exploration. So that's there. Okay. Thank you very much.

Thank you, John. It's been a pleasure as usual.

Have a good afternoon. Thanks for putting up with me.

Thanks, John.

Good bye, everyone.

Thank you.

Pan American Silver. Michael? All right. We're going to call [ an audible ] and run through a few slides here.

Yes. I just have a couple of slides or 3 slides because it's a bit complicated to explain with that if I -- obviously, we'll use forward-looking statements here in my presentation. But I think it's important to show the map here and show where Pan American stands. I'm sure you're familiar with the company. Lots of changes over the last few years. Of course, it's a much bigger and much stronger company now than it was probably 10 years ago.

You see there the set of assets. Of course, it's Pan American Silver. So we are in the countries that are the biggest silver producers on the planet. And we had quite a bit of gold production as well through a few M&A transactions over the last 8 years. In total there, you see the geographical diversification, which is very important to us. We are mostly located in Latin America. That's the places we know where we work already for 32, 33 years. And it's quite important to us to have that diversification geographically. You see there the biggest exposure to one country is 25%, mostly somewhere in the 19% to 20% of a very large revenue of -- those are Q2 numbers of about $812 million from our silver and gold production.

So we're running 10 assets in those jurisdictions. A few very big projects. I'm sure we're going to talk about that later on, which is La Colorada, the Skarn, a very large world-class discovery we made a few years ago below La Colorada mine. And then, of course, the big projects, Escobal and Navidad.

We are a big gold producer, but we are still obviously holding the biggest silver reserve and silver resource in the world. So the name is not just there. We are the second largest primary silver producer in the world, and we hold the biggest reserve and resources, and we hold the biggest projects in the world.

And one I'm very happy to have now, and we just closed the deal to buy MAG Silver on September 4 is the Juanicipio mine in Mexico. We are holding 44% of that asset. And you see there on the graph very clearly why we were so interested in that asset. You see how low it is on the cost curve and how large of a production it has. This year, somewhere in the 16 million to 18 million ounce production guided at a very low cost of the production. You see that the low cost curve there, the green square nearly at the bottom of the cost curve. So an incredible asset, incredible exploration potential. This is in the Fresnillo district. It's the largest silver district on the planet. It's in production as a district for over 400 years. I'm incredibly thrilled and happy to work and start working on that asset together with Fresnillo, who is obviously the operator and owns 56% of that asset. Very strong operator, an operator that is active and working and build a huge silver business on that district and some other assets in Mexico. And I'm very, very happy to be part of this now since last week. So really looking forward to our joint work together we can do on this asset.

And just the last slide before we can go into question on the financial position. Of course, the company is in a very strong position. We generated $233 million free cash flow last quarter alone, just over $1.1 billion of cash. We used $500 million of that for the transaction. So that's what you see there in the dashed piece on the pie chart. At the current cash flow generation, we'll recover that pretty quickly, I would guess, well before the end of the year.

In total, $1.5 billion available liquidity. We only have about $800 million debt, long-term bonds, very cheap bonds, somewhere ranging in 2.6% to 4.6% interest. So no hurry to pay those back. I think the longest running bond is maturing in 2031 and the interest in that bond is $500 million is 2.6%. So very attractive small debt that we have. You see them there below, but a huge cash position, growing very quickly with the metal prices as we have low-cost assets on the silver and gold side that generate very healthy margins. And I'm sure we have a chance to talk about all the other details with the questions here. So I'm ready to go to the Q&A with you.

All right. Great. That was a fantastic overview. We'll do a little bit of a fireside chat for the last half.

Just put it back on the -- so people can see when we're talking about it.

All right. Great. That was a fantastic flyby of the portfolio and the financial position. I guess a question on the portfolio as we get in here. You, Pan American Silver, do you see yourself as a diversified precious metals producer or a silver producer? And how does that guide strategy?

Look, I get the question often, obviously, if you look at the -- well, let's say, a picture in time right now, where we, of course, produce more or generate more revenue from gold than from silver. And several reasons for that. Of course, for a long time, gold outperformed silver. I think that's turning now. Silver is always a little bit later to the party than gold. And I think we have seen that over the last few weeks with silver running up to about $42. So that gold/silver ratio is changing, depending how much gold has to run as well, obviously.

But geologically, silver, you can't find silver on its own. It comes with gold. It comes with base metals, depending if it's in oxides or sulfides. You can produce the ore or concentrate. We do all of that. And the same for us. So at one part, at one time in the company's history, we have more base metals. I think when we talk about La Colorada, Skarn, there will be a lot of more base metals coming with the silver in the future. But at the moment, it's more gold-rich what comes with it. That's one reason why we produce more gold.

And then 2 of the transaction when we bought Yamana and when we bought Tahoe, we got Timmins and Jacobina into the mix. And those 2 assets produce only gold. There's no silver. They're great assets. Jacobina is our biggest cash flow. And that's what kind of skewed a little bit the gold, silver production. But when you look at the long-term reserve or the long-term resource under the big projects and assets we have in our portfolio, this is clearly a silver play. And when you actually look, even with higher gold production right now, we have the biggest correlation to the silver price of any of the producers. So I think that probably answers your question. It is called Pan American Silver. I'm happy with this high gold price to generate a nice part of our revenue from gold, but all the future will go back to where the reserve is and will be and maintain a very strong silver production.

Yes. And some additional silver optionality, which we'll touch on later as well. With Ten producing silver and gold operations now, is rationalization of the portfolio something that we might expect to see in the future? Or is this a comfortable size for the company?

Look, we rationalized quite a bit actually. We sold after the Yamana transaction, we started selling off some noncore assets, generated about nearly $1.1 billion cash from those sales. And it's continued actually, we just announced a small deal last week. And we will continue selling some smaller assets, but they're not producing assets right now. Exploration plays, maybe some a bit advanced, which are too small for us and not in the right jurisdiction. Look, there's a lot of synergies with these assets. Many are in the same country. We are a very decentralized company run by our very strong local teams. So I'm not worried really about the amount of assets. But of course, the theme will continue that we started probably 10 years ago by purchasing high-quality, larger assets and building on a bigger set of those cornerstone mines and then selling the smaller assets off at the other end of our portfolio. And I see this to continue. But right now, I think this year, we'll focus on exploration assets and smaller assets that don't really fit anymore with our size requirement.

Yes. In terms of -- actually, before I get into the growth potential within the existing assets, I guess I want to touch on capital allocation. You're in a net cash position. The cash flow outlook is strong. What's the capital allocation strategy? And how do you balance funding organic growth versus capital returns?

Yes. And I think for me, it really hasn't changed. It's really 3 buckets we allocate that cash. And the first one is to maintain a strong balance sheet. That was always our goal. I think we were -- I was running the company mostly with no debt or very low debt. You saw those bonds that came in actually from the Yamana transaction, which is very attractive debt.

So having that, I'm happy with holding those bonds, as I said, until maturity. But normally, yes, we were paying back our debt very quickly. This is obviously a cyclical business and having a strong balance sheet allows you to do things anti-cyclical that helped us a lot when we did several acquisitions in times the low metal prices. I would remember the Tahoe acquisition happened when gold was at $1,200. And even the Yamana transaction happened when gold was at $1,800. And they were both very attractive acquisitions at those metal prices. So having a strong balance sheet obviously allow us to react to opportunities quickly and swiftly and allow us to build out our assets, expand them, explore without going to our shareholders. So that's always a very important part of our capital allocation.

Next one, big return to our shareholders, obviously, is to purchase high-quality assets and build high-quality assets out. Sometimes it works out with the exploration, and we made a world-class discovery at La Colorada that will require capital. But that's obviously the biggest return we can provide to our shareholders when we find a world-class asset right below our existing mine. So that's the second bucket.

And the third one is, of course, return to shareholders. We're paying dividend since 2010 and interrupted. We do share buybacks as well. So far, we returned since 2010 about $1.1 billion. That's obviously accelerated a lot and accelerated to a pace of about $103 million in the first 6 months of this year alone. So that will continue. We just increased our dividend by 20%. And it's very important to us. I think it's very important at any part of the price cycle to have a dividend and return to our shareholders.

In terms of growth potential, you touched on La Colorada. La Colorada, Skarn, it's got big silver potential, and I understand you're exploring potential partnerships. What does the time line look like there?

Yes, really exciting development there, right? When we hit -- if you -- just for people that are not familiar with the asset, it's a kind of narrow vein, very high-grade silver mine in Mexico. Before the purchase of Juanicipio, it was our biggest silver producer. But you have to think about 1 to 3 meters, 10 feet wide structures, very high-grade silver. Now we found that Skarn mineralization deeper down where the discovery hole hit nearly 400 meters of an intercept. It's pretty amazing when you can walk along your core boxes for like 3, 4 soccer field distance of high-grade mineralization, something you don't find very often in the world. And that really changed the view on La Colorada.

We came out with a PEA a couple of years ago where we looked at a cave and mine it at about 50,000 tonnes a day. That's obviously a very large operation. It would make it one of the biggest, if not the biggest zinc operation in the world, but it will also produce about 17 million ounces of silver a year. So that has evolved a bit. That's obviously a very interesting proposition, but the partner is really -- the partner search is really geared to that zinc, which is not really our business, but we are very interested in the silver side.

But if you maybe have seen 2 weeks ago, we came out with a press release where we discovered a number of really high-grade, even higher-grade veins on top of that's gone a bit further to the east, where we hit, I would say, between 2 to 8-meter intercepts, looking at 2 to 3 to 5 kilo silver. So very, very high bonanza grade intercept. And when we looked at that, we started discovering this at the beginning of the year. It really changed our view because we cannot go into a cave and lose all that high-grade silver on the top. We want to mine that. And we did a lot of iteration and probably looking at a more phased approach here in the future and make sure that we can mine those veins. We just put the resource out on that last week, and we already accumulated over 52 million ounces of silver in those structures.

So stay tuned on the Skarn, but I think we'll see some changes in the fact that we want to mine those high-grade silver. It will be more silver at the beginning, probably 1 or 2 stages to get there and obviously split the capital spending a bit as well. So it's not going to be the whole $3 billion upfront. But there's still a bit of technical work that we need to do to finalize that, but definitely very interesting development that we see at La Colorada, Skarn.

Sticking with the organic growth theme, the Jacobina expansion study, what's the opportunity there?

Yes. Jacobina is an amazing asset. It's a paleoplacer. So it's really a conglomerate package that we follow that we mine, and it continues for probably 80 kilometers, maybe 100 kilometers along strike. Of course, we are mining it at about a length of about 10 kilometers right now in Jacobina. We replaced the reserves again. We added more gold beyond what we mined. The same happened last year. And I think we have a mine plan right now until 2049 at that asset. So a very long-life mine, a great asset for us, producing about 200,000 ounces of gold, our biggest cash flow and lowest cost producer. So a very exciting project.

But when we bought this from Yamana, it was about 8,000 tonnes. And today, we increased it to 9,000 tonnes. I think we are now beyond that, looking at ways to increase it to 10,000 tonnes. And then started working on an optimization study to really see how far we can push that asset. We don't have yet all the results. There's a number of trade-off studies, how to deal with the backfill and how to deal with the tailings, et cetera. But there's, I think, a lot of opportunity at Jacobina over the next few years to increase that production further and over a very, very long time. So another of the really big cornerstone assets that we have in our portfolio.

And if we can touch on Escobal quickly. It's a great silver asset. It's not currently producing. What's the current narrative on that one? Because it has the potential to really transform the production profile.

Yes, great asset. It came through Tahoe to us. And if you know the story, it was shut down, kind of lost the social license. We are working hard on regaining that license. I think we made big strides. A lot of work has gone in and will still go in. It's an ILO 169 consultation process together between the government and an Indigenous group that is ongoing. And I don't really have timing on that.

The really exciting part on that asset is, first of all, it produces about 20 million ounces of silver, not equivalent, just silver a year at very low cost. That's what it produced. It has a long reserve life. And we didn't really have to pay for it upfront because it was already shut down and we decided as a payment to actually issue a CVR, a contingent value right, that will get changed into PanAm shares, about 15 million PanAm shares exactly when it's derisked and running again. So it's a great option and one of the best silver play on the planet that is already built. So it doesn't require a lot of capital to restart. But it's a slow process. And unfortunately, I don't have timing for it when it's done. So it'll just take its time, but it's definitely worth the while to work -- to wait for it.

Yes, agreed. We do have time for an audience question, if there's anybody that has anything they'd like to ask.

Michael, congratulations on the MAG Silver acquisition and closing of the acquisition here. I guess my question is on Juanicipio. I know you're not the operator, but in terms of potential news flow, could you maybe share with us any kind of potential news flow that could be coming out? And any potential in terms of updated studies that could be coming out as well?

Yes. Thanks for the question. And look, I mean, we just started the joint venture a week ago. So there will be a lot of work we will do together, obviously, with Fresnillo. As I said, I'm really looking forward to be part of such a strong operator in the region. And I think we need a bit more time, Cosmos, to see. I think it's -- the exploration potential in the area is really, I think, what attracted me besides the really high-quality production that is already available there. As I said, it is the biggest district in the world, has generated a huge amount of silver for the world over the last 400 years. And I'm sure not the last ounce has been found yet. So really looking forward to spend time and money together with our partner on the exploration side. I look at the operation, it's very, very well run, very, very well built. And I'm sure there is more to do going deeper down, going lateral, there's other structures, et cetera, but give us a little bit more time, Cosmos.

Fresnillo is coming up, and talking about potential, what do you think the potential is that they would mention you in the presentation and how excited they are in terms of having you as a partner?

The potential on exploration you asked or...

Potential exploration, [ they all ] mentioning you in the presentation. How excited they might be?

Sorry, I can't hear you.

So Michael, potential Fresnillo is coming up with their presentation. What's the potential that they will mention you, Pan American Silver in the presentation? And how excited they are that you're now the new partner at Juanicipio?

Okay. Well, you have to ask that question to Octavio, who's come up and get the presentation -- give the presentation. But look, I'm pretty sure that Fresnillo is the same excited than us about this joint venture and partnership.

All right. Thank you very much, Michael. I really appreciate the time.

Thank you.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Second Quarter 2025 Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our second quarter 2025 results. This call includes forward-looking statements and information and references to non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for the Q2 2025 results, all of which are available on our website.

I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Thank you, and good morning, everyone. I'm glad you could join us to discuss Pan American's Q2 2025 results. Today, I'm pleased to report another quarter of record-setting results. Top line revenue of $811.9 million reflects solid operating performance and the benefit of supportive price environment. Net earnings were a record of $189.6 million or $0.52 per share, largely driven by record mine operating earnings of $273.3 million. Adjusted earnings were $155.4 million or $0.43 per share. Cash flow from operations before noncash working capital changes was also a record of $287.9 million after $68.3 million in cash taxes paid. After noncash working capital changes, operating cash flow totaled $293.4 million. Free cash flow was a record of $233 million, increasing our cash balance to a record high of $1.1 billion at the end of Q2.

Our capital allocation framework remain unchanged, maintain our strong balance sheet, sustain and grow the business and return capital to shareholders.

Given our strong balance sheet, we are focused on growing the business. And in Q2, we significantly advanced that objective with our proposed acquisition of MAG Silver. The top-tier Juanicipio silver asset is expected to provide an immediate uplift to Pan American silver production and free cash flow generation while meaningfully reducing our consolidated Silver segment costs. It also represents further opportunities to grow our silver production through the exploration potential of the asset. MAG shareholders approved the transaction in July, and we are now awaiting the clearance under Mexican antitrust laws. The transaction is expected to close in the second half of 2025.

In addition to the acquisition, we invested $73.7 million in sustaining and project capital in Q2. Project capital was invested in the La Colorada mine and the Skarn project and the Huaron, Timmins, and Jacobina mines. At Jacobina, in addition to advancing mine and plant optimization studies, we have invested in improvements to plant availability and equipment reliability.

In terms of the La Colorada Skarn project, our discussions around potential partnerships for the development are progressing well, and we expect to share more on our plans for the Skarn in the coming months.

We have also delivered on the third priority of our capital allocation approach, returning capital to shareholders. Yesterday, we announced a 20% dividend increase from $0.10 to $0.12 per common share with respect to Q2 2025. We also repurchased just under 0.5 million common shares at an average price of $24.22 per share for a total consideration of $11.1 million in Q2. During the first half of this year, we have returned approximately $103.5 million in dividends and share buybacks to our shareholders.

Total available liquidity at the end of Q2 was roughly $1.9 billion, affording us ample flexibility to pursue our organic and inorganic growth opportunities even after accounting for the $500 million of cash that will be paid as part of the consideration for MAG Silver.

Turning now to operations. We produced 5.1 million ounces of silver in Q2 within our guidance range for the quarter. Our Silver segment achieved all-in sustaining costs of $19.69 per ounce, excluding NRV adjustments, which was at the low end of our guidance range.

La Colorada once again led the performance in the Silver segment following the improvement to ventilation from the new infrastructure installed in mid-2024. Throughput reached an average of 2,130 tonnes per day in Q2 relative to the 2,000 tonnes per day that we were targeting. As a result, silver production at La Colorada was up nearly 50% and cash costs per silver ounce down by nearly 25% compared with the first half of 2024. We are maintaining our guidance for silver production and costs in 2025.

Gold production of 178,700 ounces in Q2 was slightly below our guidance range, while gold segment all-in sustaining costs, excluding NRV adjustments of $1,611 were within guidance. The gold segment was impacted by lower throughput and grades at Timmins, primarily as a result of additional backfill and hanging wall dilution.

At El Peñon, production was impacted by mine and development sequencing into lower gold and higher silver grades. These impacts were partially offset by stronger performance at Shahuindo from higher gold grades and positive mine grade reconciliations and at Dolores with the leach cycle delivering more production than originally planned in Q2.

Gold production in the first half of 2025 was in line with our guidance, and we are maintaining our outlook for gold production and all-in sustaining costs. However, we now expect gold production to be more heavily weighted to the fourth quarter of 2025 than originally indicated in our 2025 quarterly operating outlook.

At Escobal, the Xinka Parliament issued a statement in May 2025 with respect to the ILO 169 consultation process. The Guatemalan Ministry of Energy and Mines or MEM has now delivered a response to that statement describing the proposals to address the concerns the Xinka Parliament had raised. These documents can be reviewed on the MEM website. The MEM has indicated that they will continue to hold working meetings and maintain dialogue with the Xinka Parliament as they work towards completing the ILO 169 consultation, although a date for completing the consultation has not been specified.

As we consider the global backdrop for precious metals, we see very supportive environment for gold and silver prices. Global photovoltaic installations and electronic applications continue to drive industrial demand growth for silver, while mine supply is largely flat. The silver market is in its fifth consecutive year of structural deficit, and this deficit is expected to persist in the coming years, depleting above-ground stocks further, a very supportive backdrop for silver prices.

We view the MAG Silver acquisition as a high-quality addition to our portfolio to capitalize on this outlook for silver.

In summary, Pan American Silver has delivered record financial results in the first half of 2025. Our operating teams are focused on meeting our production targets and maintaining strong control over costs. We are on track to achieve our guidance for 2025. We look forward to continuing to deliver robust free cash flow and returning capital to our shareholders.

I will now be happy to take your questions together with other members of our management team.

[Operator Instructions] Our first question is from Ovais Habib with Scotiabank.

Michael and Pan American team, congrats on Q2 beat. A couple of questions from me. In Q2, on Cerro Moro, El Peñon, Timmins, Minera Florida, essentially all experienced either negative grade reconciliation or geotechnical issues.

First part of the question is, have these issues been resolved going into Q3? I believe you said Q3 is expected to be your weakest quarter with Q4 being your strongest quarter in terms of the gold production. And part two of the question is, do you think Jacobina can make up for the loss of ounces if it comes to that? Essentially, what I'm trying to ask, Michael, is how confident are you with meeting the gold production guidance?

Ovais, I have Steve here next to me, who will answer your question.

Good morning, Ovais. For the most part, those issues we faced in terms of grade reconciliations at most of those operations and the geotechnical issues, we are addressing aggressively. We do anticipate some of it to linger into Q3. That's why we're kind of pushing the gold guidance heavier into Q4. That's kind of where we raised that note. But we're feeling pretty confident.

Generally, what we see when we have a quarter of low reconciliations, we do generally see it come back. Our drill data on average, we're comfortable with the reserve information. It's just the swings of highs and lows quarter-to-quarter, and it kind of hit those operations you mentioned during Q2.

Geotechnically, we're having some good success. in Timmins at addressing particularly some of the production drill hole squeezing issues we've had. We're drilling larger diameter holes. We're using an additive that's been pretty unique and it's been pretty helpful in maintaining those holes open. And we've added quite a bit of ground support, even dynamic support along some of the key developments in the high-stress areas. So we're feeling pretty good that we're overcoming those issues there.

So yes, so that's why we kind of favored pushing some of the gold into Q4, but we remain incredibly confident that we'll come in within guidance on gold production and certainly on silver and cost.

And I mean, most of these operations have kind of achieved at least about 40% to 50% of production year-to-date. So in terms of kind of getting over that hump, it does seem like you guys should be able to hit those numbers. So thanks for that color.

Just wanted to see if I can move on to noncore asset sales. Michael, your team has done an excellent job in kind of selling noncore asset sales over the past couple of years. Should we expect more to come going into the second half or even the next 12 months?

Yes. Definitely, we are working on some of the deals. They are mostly smaller things. So don't expect like big, big sales like we've seen over the last 18 months. But there's quite a few smaller things that we are working on, and we'll release those, obviously, when they're done. I would expect that a few will close here from now to the end of the year.

I mean, Michael, maybe in terms of a little bit detail, I mean, are those operating assets? Or are they more exploration assets that you're looking to sell?

No, they're not operating assets. There's a lot of like mid to later stage exploration plays that we are finding new homes for all kind of different jurisdictions and also different constellations, you should expect maybe some straight out sales, some participation in other companies, et cetera, et cetera.

The next question is from Fahad Tariq with Jefferies.

On Jacobina, in the quarter, there was a comment in the MD&A about mine sequencing to lower grade gold grade ores. Can you just talk about expectations for the second half of the year on grades?

Yes, Fahad, this is Steve. We're trying to move towards mining at Jacobina at reserve grades, which are actually a little bit lower than what we saw even in Q2. With that said, we have access to some higher grades during the rest of the year that we will be tapping into.

So we won't -- that push towards lower grade will come as part of the optimization study we're working on where we'll start to push more tonnes at lower grades and kind of maintain or expand the gold production to a limited degree. But again, we remain confident that we'll deliver to our guidance at Jacobina according to what we showed there.

Okay. And then on Escobal and the consultation process, can you just give a bit more color about the types of meetings that are happening, I guess, over the coming weeks and months. Is it Pan American being involved in those meetings directly with the Xinka Parliament? Or is it the government meeting with them in Pan American providing information and where needed?

Just keep in mind that the consultation is between the government led by the Ministry of Mines and the Xinka, and it's not led by Pan American. So that's -- you have to keep that in mind.

But I have Sean here, who is leading our efforts in Guatemala, can give us more details on this.

Yes. What we're seeing now is a series of working meetings that are being planned. So we expect to see the government meet with Xinka Parliament over the coming weeks. They did have a meeting on the 29th of July. So those meetings are ongoing, and we will be called in to participate in the future. We expect that to happen. And we have ongoing meetings with the MEM and the government at the same time in parallel when they have questions and issues that they want to resolve with us. But I would expect that we would have a few meetings this quarter. And so we'll update that in the Q3 update.

The next question is from Lawson Winder with Bank of America Securities.

Thank you for today's update. Nice quarter. I wanted to ask about Skarn, something you said in your prepared remarks, Michael, and then follow up on that. Did you say that you expected an update in the -- in a month like in terms of like a singular month? Or do you mean months? And then -- because that would be a lot sooner than the prior guide for the year-end. And then what are the current permutations of monetization that look most likely at this point?

Yes. No, first, that was probably mesh with English. The several months that was plural, not singular month. I will be very soon, as you mentioned. Look, very, very interesting developments on the Skarn. I don't know if you recall, we started showing maybe late last year, first kind of intercepts on very high-grade veins above the Skarn further to the east. There were exceptional intercepts. We published a few in the press release there. And we kept drilling there very actively over the last like 8 months, 10 months. And we are looking at actually tapping into that as well and look at synergies between the Skarn and those high-grade intercepts.

And with cryptic here, that's one of the release we will put out when we have all the data together, which will happen. You should expect that coming in the next few months to discuss those results, and then that will be included in our updated resource and reserve calculation as well.

So that's probably the -- beside the infill drill and the Skarn, obviously, we know by now a lot about the Skarn, but that's definitely the most interesting and additional information that will come into the project when you look at La Colorada entirely and how we move forward with the Skarn project and with La Colorada, adding those very, very high-grade veins to the east.

So just stay tuned. Sorry, I don't have all the details that I can share right now with you, but it's definitely part of the several updates that we're going to see during the rest of the year on La Colorada and on the Skarn.

Okay. And then just to be clear, one of those updates could be some sort of monetization or partnership transaction?

Look, these discussions are ongoing. And of course, those additional veins and synergies will play into the partnership negotiations as well. So that will come after. So I can't promise yet when that will come out. But as I said, we're working hard on that. And whenever it's ready, we will share. But the first few steps here will be the reserve update, resource update on it and then the inclusion of those high-grade veins and then the next step will be to include that in our negotiations with potential partners.

Okay. Fantastic. And then just since you brought it up the reserve and resource update, could you give us an idea of the timing on when that update would come? And then thinking about gold and silver price assumptions in that update, I mean, would you say you'd have a fairly high level of confidence in replacing reserves this year? And to the extent that the change in the gold and silver price assumptions might be quite material, could we be looking at some impact on the current mine plans?

Yes. Look, I mean, if you recall, when you look at our reserve resource update, we never use just a one price fits all. I'm a strong believer that you have -- depending on the mine life, if you look at a shorter mine life, and obviously, we're sitting on a in a very high metal price environment, in order to optimize your return, you obviously should use higher prices in those assets in very long-life assets like Jacobina, for example, you would use lower prices. We have that done all the time. When you look at our reserve resource tables, there is actually a whole page with different prices that we use for different assets.

So that will remain, and we will do -- use a similar approach this year. There will be obviously a few assets where we use slightly higher prices, but I think we are still very, very conservative. I think on the price side to really maintain and take advantage of big margins that we can create with this metal price environment and the result you see obviously in our strong cash flow that we delivered last quarter.

So that kind of the same theme continues. But of course, we have probably what $1,500 higher gold price than last year. So you have to adapt a little bit not to leave really high-paying material behind. So it's an interesting year definitely to use and define metal prices for your reserve and resources. As you know, we are one of the few companies to do it midyear because we want to have a new reserve and resource when you go into the budgeting season. But you should expect a press release coming out over the next few weeks, definitely before, I would say, mid-September.

The next question is from Cosmos Chiu with CIBC.

Maybe going back to the various geotechnical mine sequencing and negative grade reconciliation issues at the various properties, El Peñon, Cerro Moro, Timmins and Florida. I seem to notice that a number of these operations came from the Yamana portfolio. I would say these are normal issues underground, but would it also be related to the fact that some of these operations were operated by a previous operator, and that's why some of these issues came up.

Yes. Cosmos, Steve here. No, I would have to say, no, there's no specific bias towards those Yamana assets. in terms of this reconciliation issue. It is a factor of narrow vein mining. I'd say we favor narrow vein mining certainly at El Peñon and Minera Florida. When you look at that Cerro Moro as well, those are pretty variable, highly variable narrow veins, and it's a characteristic of those type of deposits that we face. They are challenges that we've dealt with some of the Pan American silver operations.

So again, we're confident this is a quarterly blip, and it comes and goes. We're not concerned about our overall reserve estimates. It's just the timing and spatial locations of these estimates that we have to hone in. We're looking -- as we go into budgeting season for 2026, we are looking at potentially enhancing some of the drill density in some of these narrow vein zones. to try to reduce that variability going into next year. But I don't see any bias towards just Yamana operations there.

We have -- just to add to this, we have seen, obviously, this kind of result, as Steve said, which is often a result of high -- very high-grade narrow vein mining. You have more variability, obviously, than in a larger massive [indiscernible], for example, or porphyry. So you have more variability, and we see the same kind of results sometimes at Huaron or San Vicente or other assets, a matter of fact, obviously, more narrow structures at La Colorada in the past. So these are normally short-term issues, and we deal with them. So nothing specific to being ex Yamana assets.

We own the assets now for quite a while. I'm sure you have noticed that over quarter and quarter-on-quarter, all these assets have been our strongest cash flows in our portfolio.

I do know this. Maybe as a follow-up in terms of these issues here, are they related to like new areas that you're entering at these different assets, maybe new structures that you might not have previously been aware of that could maybe potentially lead to a more sustained impact on mining? Or am I thinking too much into it?

Yes. I think a little bit too much. I mean you're on a bit. It's more towards the extremity of the known -- of the veins that we have been mining. As we reach the extremities of those reserves and go deeper on those, we generally are seeing a bit more variability, a little less density of information which also drives a bit more variability in our results.

Okay. Maybe my next question will be going back to what I'm actually good at numbers. On that sustaining CapEx here, you've budgeted $270 million to $280 million per year. I seem to see that so far, you've done about $122 million. Certainly not hitting 50% for some of the assets like Jacobina, Shahuindo. So can you maybe talk about that CapEx budget for the year and where you're going to be planning on spending more of that CapEx in Q3 and Q4?

Cosmos, Scott Campbell here. Yes, we had a few delays starting off our capital -- our major capital projects at Shahuindo this year. Some are weather-related, permitting related and the awards process took a little bit longer to the tender process, but full speed ahead with those. And so we do intend to -- our CapEx will be in line with our forecast.

Great. And maybe one last question here on the dividend. It's great to see that it's increased. It's great to see the very robust free cash flow in Q2. I want to confirm, based on the mechanics of the dividend, how you calculate the variable component, once you use a part of your cash on the balance sheet to pay for MAG Silver, there's potential for that dividend to decrease again. Is that correct?

Well, there's obviously a dividend policy, as you mentioned, but just keep in mind that we generate a lot of free cash flow, so does MAG and there will be cash obviously coming to us when we close the transaction. So I think it's too early to say, but I don't think so that we're going to see a big impact on I look forward here.

Okay. And then on the MAG transaction, as you mentioned, it's been approved by MAG Silver's shareholders, and you're still waiting for the antitrust sort of -- not the permit, but the approval. Is that like the last hurdle? And how should we view it?

Yes, that's absolutely the last hurdle. I would expect that once we get that okay from Mexico, which is between all the transactions we did in the past that was required and was always the last piece to the transaction. And I would expect to probably close a few days later after we receive that approval.

Okay. And nothing more complicated to this transaction compared to what you've done in the past, correct, Michael?

No Everything is completely moving normal here. You saw a very clear vote of confidence by the MAG shareholders. So really looking forward to add that operation or piece of operation to our portfolio, which has very strong production there as well, very strong silver at very low cost. That's obviously the reason why we are interested in very interested in that acquisition, looking at one of the highest quality, highest grade, lowest cost silver mine on the planet with, in my view, probably one of the biggest exploration upside as well.

And then maybe a bit premature, but on the MAG Silver transaction, once it closes, have you determined how you're going to account for it, given that it is a 44% minority interest, is it going to be some kind of equity pickup, equity accounting sort of one line pickup in your income statement? Have you thought about how you're going to account for it?

Cosmos, this is Ignacio here. So yes, we're still doing the analysis, but -- nice talking to you. A good point of reference would be the way MAG accounted for the Juanicipio JV interest, which was, as you mentioned, an equity pickup. In addition to that, I can also point you to the MAG info circ, there's pro forma financial statements there, and then there is already some assumptions on what the accounting is going to look like. So yes, everything is pointing towards an equity pickup.

This concludes the question-and-answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Thanks, operator, and thank you, everyone, for calling in here on a beautiful summer day, at least here in Vancouver. Another great quarter for Pan American, beat across the board on our strong financial results. We're looking forward to the rest of this year, looking forward to add Juanicipio piece to our portfolio as well later this year. And as I mentioned, we will release the reserve and resource update as of midyear, and that should be quite an active second half or last four months, five months of the year with news flows on various topics for the company. Looking forward to that and looking forward to update you in November on our Q3 results. Until then, enjoy the rest of the summer. Thank you, anyone.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.