Americas Gold and Silver (USA) 2024 Precious Metals Summit Beaver Creek summary

Strategic transition and production outlook

• Transitioning to a primary silver producer, targeting over 80% silver revenue by July next year, with copper and lead making up the remainder.

• Cosalá Operations shifting from base metals to silver-copper, with the EC120 project set for commercial production by July and full production expected by Q3 2025, aiming for 2.5–3.0 million ounces of annual silver output for 4–5 years.

• Galena Complex ramping up capital to increase silver production from 1.6 million ounces to around 6 million ounces by end of 2027, with 60% ownership and shaft repair as the last major expense.

• Silver production expected to reach 1 million ounces per quarter by Q2 2025, with significant growth projected through 2027.

• All growth is based on existing, permitted resources, requiring only capital investment, not further exploration or permitting.

Financing, operations, and cost management

• Secured non-dilutive financing from Trafigura with an 11% coupon, enabling project development without equity issuance.

• New offtake agreement with Trafigura improves cash flow by increasing silver recovery rates and reducing exposure to volatile base metal terms.

• Mexico operations fully funded, generating $1.3 million monthly, covering corporate and interest expenses; Galena generates $600,000 monthly, reinvested into capital.

• Plans to refinance convertible debt due in April to accelerate Galena production ramp-up.

• Market capitalization at CDN $87M, with 263.7M basic shares and 310.4M fully diluted shares as of September 2024.

Exploration and resource development

• Cosalá district holds 19,000 hectares with multiple undrilled targets; new drilling planned with Trafigura funding.

• San Rafael and EC120 provide seven years of reserves; Costilla Norte, a large undrilled target, will see 17 holes drilled in Q4.

• Galena Complex resources increased by over 600% since 2018, now exceeding 200 Moz silver, with high-grade results at depth.

• Phase 2 drilling at Galena focuses on upgrading resources to reserves and identifying new brownfield targets.

• Cosalá Operations identified multiple new exploration targets, with a drill campaign planned to extend mine life.