Good day, ladies and gentlemen, and welcome to Fortuna Silver Mines' Third Quarter 2017 Financial And Operational Results Conference Call. All lines have been placed on a listen-only mode and the floor will be opened for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Investor Relations Manager, Carlos Baca. Sir, the floor is yours.

Thank you, Kathy. Good morning, ladies and gentlemen. I would like to welcome you all to Fortuna Silver Mines and to our third quarter 2017 financial and operational results call. Today, we will be using a webcast presentation, which will be controlled by us. You can download the presentation at our website. Please click on the Investors tab and then click on Financials under Q3, click on Earnings Call webcast. Jorge Alberto Ganoza, President, CEO and Director; and Luis Dario Ganoza, CFO, will be hosting the call from Lima, Peru. Before I turn over the call to, Jorge, I would like to indicate that this earnings call contains forward-looking information that is based on the Company's current expectations, estimates and beliefs. This forward-looking information is subject to a number of risks, uncertainties and other factors. Actual results could differ materially from our conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection, as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, as reflected in the forward-looking information, is contained in the Company's Annual Information Form, which is publicly available on SEDAR. I would now like to turn the call over to Jorge Ganoza, President, CEO and Co-Founder of Fortuna.

Thank you, Carlos and good morning to all. I'll give you a brief introduction to the third quarter results and then turn the call to Luis, who will take you through the financial statements results. After that we'll open the call for questions and answers. Our result in the third quarter showed strong performance when compared to what was our historic record quarter in Q3, 2016. Production was 2 million ounces of silver and 13,400 ounces of gold, 4% or 5% below the same quarter prior year as we show in slide 4 of the presentation. On a consolidated basis, 9 months production is 6.2 million ounces of silver and 41,200 ounces of gold well in line with our annual guidance. On slide 5. 71% of traditional sales were comprised by precious metal, while 29% were base metal byproduct. We're seen an increased contribution of byproduct lead and zinc compared to 19% to contribution a year ago, which is mainly explained by 32% higher zinc and 24% higher lead prices. On slide 6. We show a strong financial performance. Sales were $64 million, net income $10 million with earnings per share of $0.06. In terms of cash generation, cash flow from operations changes in working capital was $26.2 million with the marginal sales of 41%, highlighting the strong margins of our business. In slide 7. We achieved a consolidated all in sustaining cash cost per ounce of silver net of byproducts created of $6.10, a reduction of 20% compared to the same quarter of prior year and also a reduction of 38% compared to 2017 guidance. Our all in sustaining cost benefited mainly from higher byproduct based metal prices. Our business operates within the bottom cost quartile for primary precious metals producers. Moving on to capital investments in slide 8,…

Thank you, Jorge. So on Slide 12 for the third quarter of 2017, we recorded net sales of $64 million, down 2% from the prior year, driven mostly by lower silver prices and slightly lower silver and gold sales. We've reported net income of $10.3 million, compared to $10.2 million in 2016 and earnings per share of $0.06 compared to $0.08. Adjusted net income was $13.1 million compared to $10 million in 2016. Cash provided by the operating activities was $20.4 million, 30% below the comparative period in 2016, mostly as a result of changes in working capital items. Cash provided by operating activities before changes in working capital, as Jorge had mentioned was $26.2 million, just 1% below the prior year. Cash equivalents and short-term investments as of the end of September 2017 was $195.8 million. While most of the increase over year-end 2016 comes from the proceeds from the equity financing closed on February 9, 2017. On slide 13. When breaking down our sales performance. We see the negative price effect from silver was offset to a large extent by the positive effect on zinc and lead prices. Lower sales related to lower silver and gold sold, was $2.6 million and the volume effect in our draft. Worth highlighting is the impact year-over-year of improved treatment and refining charges of $3.2 million. We expect returns to continue into 2018. On slide 14. Our operating income was $18.9 million, 11% below Q3 of 2016, as a result of slightly lower sales, higher unit costs at both our operations when compared to 2016. And the higher depletion at our San Jose Mine, in spite of lower operating income, adjusted EBITDA of $30.6 million showed no variation over 2016, as a result of lower share base compensation charges. Adjusted EBITDA margin…

Thank you, Luis. We would now like to turn the call over to any questions that you may have.

Thank you, the floor is now open for questions. [Operator Instructions] And our first question comes from Justin Stephens from Raymond James. Go ahead Justin.

Good morning guys and congrats on a solid quarter. Just a couple of questions from me. Things are pretty straight and narrow here in most of the operations and most of it. But just on the San Jose cash costs, those have been trending up, Luis on per tonne basis? Or should we be expecting those more in sort of low-60s range for the fourth quarter and going forward? Or should be those come back to the high-50s?

So this is Luis. We do expect to see cash costs at San Jose to remain I would say, within $58 to $62 per tonne range, that's what we expect today. As we've mentioned, we're seeing some inclination impacting mostly items like cement, fuel, energy and steel. There are other components, more of a structural nature related to operation itself. And so that is a range we should expect to see moving forward and into 2018.

Sounds good. And then just over on Caylloma, I know you guys keep bidding on zinc. Should we be expecting the zinc rates there to stay north of 4% or back into sort of the high 3s?

With respect to Caylloma for next year or two, the mining is centered on the area of reserve. We should expect similar grade. What we expect is that as we centered the mine more towards East, Northeast Zone on ore shoots 4 and 3, we can start benefiting from higher lead and zinc rates. But for 2018 and the expectation is that reaching similar towards we're today.

Okay, yeah. Sound good. And just on the Lindero side, I know you guys sort of revised your CapEx guidance there, for the remainder of 2017. Do you have a rough idea of how fast you expect to wrap things up from CapEx spending side for the next year? Or like is it going to be front waited or back waited to the year there?

In highest capital demands, we were expecting we know have capital demand for Lindero to come in Q4 2018. Now that's what's in our models.

Okay. That's very helpful. Thanks a lot guys.

Thank you.

[Operator Instructions] And our next question comes from Bragam John from Credit Investor [ph]. Please go ahead.

Hi, I'm long-term investor as you probably aware. I've been dialing in 4-5 years now. So I'm calling to again congratulate you all the team one more time for another solid quarter, all friends. So, today I wish to make few comments and ask a couple of general questions. So, first comment was, I'm very pleased to learn that the credit facility has been increased, so that's a very positive development this quarter. And another item and maybe feel extremely encouraging is Caylloma mine operations as well as the exploration there. The new discovery or the extension of the vein, so that's very, very good development. And the most interestingly all-in sustaining cost, you're budgeting like $10.80 per ounce and you claim a negative $11 per ounce. So that's an improvement of $22 per ounce from that mine alone, and that is extraordinary by any measure. And although you claim you are the low acquiring bottom 25% but I believe in my records, and whatever research. Fortuna is coming bottom up the cost curve everywhere I mean among the public company. So, that's my comments. And then on my question related to the exploration activates that all the three sites and three countries. Anything you can share exciting developments quickly really appreciated. And then I have another general question at the end of your answer about stock valuation. So, I appreciate your time. Thank you.

Thank you for your comments and words here for the team. On the exploration front, something I can highlight today two things. One is that based on the exploration results we've been seeing and we already published a news release. It's solely on Caylloma results some weeks ago. I believe there are reason of expectation and management's priority that we never seen Caylloma with size and quality of research as we are seeing it today. We plan to release resources in January-February as we do every year upgraded resources for all of our operations. And our expectation would be that a lot of these explorations success we're seeing will translate into resources. It's not I will rate it as transformational, but bear in mind that Caylloma usually is being working for 500 years with a very short mine life ahead of it. And what we have been able to show, is that this mine continues to have exceptional potential to not only deal with depletion, but another few more year to its life-of-mine plan. So, the exploration team has been doing good job. Remember we've been short funding Caylloma of exploration dollars. As we were building San Jose and expanding San Jose, now that we are sending opening the budget for exploration once again we are seeing results. So that is very gratifying with respect to Caylloma. And with respect to San Jose, all of our exploration in this North area which is the highest priority area for San Jose exploration right now, is being carried for from the underground. Also 2016 and the early part of 2017, we've been developing the main underground added, that is access to this North zone. And we have also been developing a drilling chambers and auxiliary infrastructure that allows us and give us more flexibility to reach all our targets in this new area like the Victoria vein. So drilling from the underground, compared to surface is been painfully slow. And we've been struggling with that no doubt. But as I mentioned 95% of all the underground infrastructure that we needed to be in place is in place. We have four drill rigs turning, we are pushing to either fifth one in this North area. And with that, we expect the flow of results of the different targets, we are aiming for speeds up and we can share results with the market as they can. So with respect to exploration and our assets that's, what I can highlight to you. And with respect to our costs, we came with an all-in sustaining cost for around $6. That certainly positions the company in the lowest quartile. Yes, we are benefiting from increased prices in lead and zinc. We are primarily a precious metals producers, but we cannot deny that having a zinc and lead byproduct these days thus provide a nice hedge for, natural hedge for production or benefiting from that.

[Operator Instructions]. And we do have a question from Bragam John [ph] from Credit Investor. Go ahead.

Hi. I have another last comment, and question related to our stock evaluation. The management has been consistently performing well been doing great sort of things to grow in exploration. And prudent management cost containment in all aspect. And still our stock is not behaving top-line, this has been my complaint you all of my previous calls as well. In addition as you just alluded to, we are also a cost leader, no doubt about it. Even if you do not consider zinc and lead aspects even otherwise we were a cost leader. So in that background and you've been accumulating cash in during bad times and good times and when you're positive. We know margin was good, EBITDA margin was good all the time. So the question is, so after all the management is working for stockholders as well in addition to other constituents like employees and governments. We have been suffering like you are, because management is also holding a significant shares. So we are also suffering for so many years, and I just want to know what would you do, so that market recognizes some kind of a specific actions? Because you can see, I've been participating in this call for so long. I am not new, I'm probably one of the largest individual stockholders of the company outside of institutions and management. So definitely trusted, because we are a great company and a stock is not performing as it should. I want to know if there is anything you would contemplating in addition to doing the regular great stuff, specific to the stock price improvements? Thank you.

Thank you for the question. I believe the underperformance of a company compared to the peer group is a feature of a last year. No doubt, the company in a difficult market had to face with a delay in filing financials at the beginning of the year. We also announced an acquisition, we also carried our financing in the beginning of the year. So in a difficult market, I believe that I cannot speak for investors. But from my view, is that investors being observing how we bring about Lindero and are observing how we bring about Lindero. Lindero has been a great acquisition for the company for 11% dilution on acquisition. We are more than doubling our total resources and have the potential bringing this mine into production. Taking our current EBITDA from a $115 million, which is what you could project using the current price environment and our projected sales. We are in a position to take that EBITDA to a roughly $220 million. So, but my view is that, it is a project that demands significant capital from us in a difficult market. And investors are wanting to wake and see how we advance and achieve our construction plans and deliver the project within the timelines that we set forth. And as we move and achieve the milestone throughout the next 18 months and bring Lindero successful into production. The company will lock that value on our shareholders will be accordingly rewarded. I believe that is the catalyst the big catalyst for the company, it successfully bringing Lindero into production which on the initial years, has the capacity to double EBITDA for the company. Where, put it very simply. And in a difficult market, again in my perception is that investors are watching us to see how we advance this project and derisk it as we advance it. That will be my answer to your question.

[Operator Instructions]. And there appear to be no further questions at this time.

Thank you, Kathy. If there are no further questions, I would like to thank everyone for listening to today's earnings call. And we look forward to you joining our Q4 2017 year-end call next year. Have a good day.

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time. And have a wonderful day.