Good day ladies and gentlemen, and welcome to the Fortuna Silver Mines, Third Quarter Financial and Operational Results Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Carlos Baca, Director of Investor Relations. Sir, the floor is yours.

Thank you, Cate. Good morning, ladies and gentlemen, I would like to welcome you to Fortuna Silver Mines and to our financial and operations results. Call for the Third Quarter of 2021. Hosting the call today on behalf of Fortuna will be Jorge Alberto Ganoza, President and Chief Executive Officer, Luis Dario Ganoza Chief Financial Officer, Cesar Velasco, Chief Operating Officer, Latin America, and Paul Criddle, Chief Operating Officer, West Africa. Today's earnings call presentation is available on the featured presentation box on our homepage at Fortuna silver.com. As a reminder, statements made during this call are subject to the reader advisories included in yesterday's news release and in the Earnings Call Presentation. Financial figures contained in the presentation and discussed in today's call are presented in U.S. dollars, unless otherwise stated. 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 a conclusion forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing our 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, and MD&A which are publicly available on SEDAR. The Company assumes no obligation to update such forward-looking information in the future, except as required by law. I would now like to turn the call over to Jorge Alberto Ganoza, Co-Founder of Fortuna.

Thank you, Carlos. In the quarter, we delivered record sales of $153 million, adjusted Net income of $22.5 million, EBITDA of $75 million with a strong consolidated EBITDA margin of 46%. These solid financial performances are on the backlog records gold production driven by the Lindero Mine. And this being the first quarter where we incorporated results from our West Africa business. As of the end of the quarter, we have liquidity available $136 million and run the business with a conservative debt to EBITDA ratio of 0.2. Also during the quarter, we announced the start of construction of our Seguela mine in Cote d'Ivoire. We plan for Seguela to start production and continue driving growth for the Company by mid-2023. We concluded successfully our 100-day integration plan with Roxgold. Integration of our combined business has been a smooth process and the main reason of course, is the quality of people and shared values. We always said that in combining our business, we were not only acquiring quality assets, but a team of seasoned professionals with whom we shared a similar view of how you create value in your business. After the end of the quarter on November 5th, we renewed our credit facility and expanded it to $200 million. Out of this amount, $120 million is currently available with the full amount to become available upon the San Jose permit issue being resolved. In the quarter, we also managed to successfully settle, for $9.6 million, the disputed royalty claim with the Geological Survey and Secretary of Economics of Mexico on 1 of our main concessions at this San Jose mine. This has been a protracted complex negotiation where we achieved an arrangement to the satisfaction of the Company and the sale authorities. Now, what has painted a good quarter…

Thank you, Jorge. Yes our 3 mines in Latin America are performing in line with management's expectations and are on track to meet annual guidance. COVID-19 related restrictions in the 3 countries where we operate have been considerably eased and double-dose vaccination rates at all operations are now well above 80%. The Lindero Mine is operating within design parameters and delivered record gold production of 26,235 ounces in the third quarter. It is important to highlight the solid performance of the operation. Good mechanical availability, and then increased gold production trend. A syndicated mean data is on track to meet annual guidance and management looks forward to an even stronger performance in the fourth quarter. Back to you, Jorge.

Thank you. Paul, you want to go ahead?

Thank you, Jorge. Operations in West Africa are progressing well against our plan. a Cote d'Ivoire COVID impact to lousy mitigated now with little or no impact on operations today, the 90% of employees vaccinated in . Production in is in line with the plan for Q3 and similarly remains the case for the year. I would like to highlight the excellent progress made by the team on the ground at our Seguela project in Cote d'Ivoire. Within the third quarter, which is highlighted by the Board’s approval of the construction decision for the project ? As per the project execution plans, both the schedule and the costs remain on track with approximately of the project completed. This has allowed us to advance in both the third and now fourth quarters, projects . Of executing and commencing the process planning agreement with . We commit the plants on contract. We executed the substation supply contract. We continued to expedite the critical part of mechanical items such as segments crushed in transformers. In conceit with the works on gathering in the field, becoming footprint capacities in ground with the establishment of the West African regional office in Abidjan which will support the Seguela development effort now and ultimately up rational needs of Seguela and Yaramoko. In addition, dialogue is ongoing with the mines, but -- Mines and budget Ministry in Cote d'Ivoire, with sessions planned in the coming weeks to advance the conclusion of the projects planning convention. Thank you, Jorge.

Thank you Paul Criddle. Now, Carlos, I return it back to you.

We would now like to turn the call over to any questions you may have.

Thank you. Ladies and gentlemen, the floor is now open for questions. . Please hold a moment while we poll for questions. Our first question today is coming from Dalton Baretto at Canaccord. Your line is live. You may begin.

Yes. Thank you. Jorge, I'd like to start by saying I'm truly sorry that you continue to face these challenges in Mexico, these things happen in certain parts of the world and no doubt you will get this result, but it's going to take some time. So that said this temporary injunction that you face. When does it expire? And what do you need to do to make it more permanent?

Yes. We have different legal actions in place, and also workers have initiated actions in local courts in . So right now, we are of the view that these legal actions now that there is a negative resolution can be moved to a permanent -- a more permanent injunction because part the issue with -- for the granting or the limitation for the granting of a permanent injunction was that we did not know what were they grounds for the delay in SEMARNAT reply to us or what they were arguing. Now that we have their arguments, as I explain them in the call, we are going back to the court and based on what's being presented, which doesn't make any sense to us and our legal counsel. We're seeking a more permanent injunction. That's a process that can take several days. The preliminary measures that we have currently are preliminary in nature and I would be to me to say exactly what type of coverage we get but it's measured in probably.

Okay. And then as a follow-up -- and there's 2 parts to this question here -- should you not be able to turn this into a permanent injunction by November 20th, what is the current penalty from your lenders? And then Part B of that is, should you not be able to do it at all on you're forced to shut San Jose down, how flexible do you think your lenders are going to be?

Luis, you're speaking with the lenders. Do you want to come in?

Yes. Sure. Well in principle, the straight answer is that non-compliance would -- under a created agreement would trigger an event of default. It is our expectation however, that will work with our lenders to provide ourselves whether flexibility is appropriate and warranted given the evolving circumstances. And we're still optimistic that our legal actions have a strong likelihood of progressing, and we believe that the lenders will be working with us to, again, provide that flexibility required. That to avoid any unnecessary situation with respect to the status of our credit agreement and our covenant.

Okay. Thank you. I have more questions, but I'll jump back in queue. That's it from me for now.

Thank you. Our next question today is coming from Justin Stevens at PI Financial. Your line is live, you may begin.

Thanks. Just a couple for me here. I was just -- it's good to see obviously conveyor stocking ramping up in Q3, at Lindero. I was wondering if you could give a bit of color on how leach times are reconciling with the model, though.

Yes. Cesar, you want to provide an answer there?

Yes, okay. Reconciliation is looking pretty good. It demonstrates good relationship with the reserve . Actually for the Q3, we had less than 6% difference in the reconciliation and as of year-to-date it is even less than 3%. So it's looking pretty good and consistent.

Yes. You were asking not so much about the reserves, but the leaching and we have low rate leach columns, and right now, what we're seeing in -- we have unloaded the first columns. That we loaded, and we have final for some of those columns. And what we're seeing is that with a coarser crush at around 13 millimeters, we're achieving the similar levels of gold extraction as we planned in the engineering phase and design phase with a 6 millimeter crush. And perhaps the explanation there is that the lab work was done with a small HPER crusher and with the much larger HPER that we have in place, probably we're achieving higher communition of the rock. But so far the Metalurgica response is largely consistent with our expectations or better.

Yeah. Well, it's good to hear. We were following up on that, I guess. About how much of the material stack do then year-to-date at the end of Q3, would you say you have on actively under leach?

How much of the place material is under leach?

Yeah, just a rough percentage in terms of how much is being actively leached.

Everything.

Everything? Okay. So just following -- your leaching is following along pretty closely behind your stocking?

Yes. We started irrigating -- we allow ourselves for safety were 20 -- 40 meters from the retreat phase over the conveyor stocking and we start irrigating. We started irrigating a couple of months ago. We started with a program to irrigate slopes. We were not irrigating slope. We initiated slope irrigation, no, but basically everything is under irrigation.

Got it. And then I guess the last thing then is obviously things are trending. For the Lindero, do you have an idea of when you might expect to declare commercial production there?

We are -- we have the early adoption of -- I forget, Luis, what's the accounting term there. But the mine has been operating within -- it consistently achieved design parameters in the third quarter. And it's operating within design parameters. And everything has been flowing through down to cost since we started production in October of last year, a year ago. So we're not declaring commercial operations. You do that when you're capitalizing and then you achieve production design parameters and then you stop capitalizing and start sending things down through to cost. But we've been doing that since October of last year.

Yes. So just to clarify, though, that doesn't have any effect with regards to the -- we have to do in terms of the Argentinean PESO on the export sale for your dory, right?

No, nothing to nothing.

Okay. Great. That's it for me. Thanks so much.

Thank you. Our next question today is coming from Don DeMarco at National Bank Financial. Your line is live. You may begin.

Thank you, Operator. And hello, Jorge and team. I suppose my 1st question for Jorge or perhaps Paul, Yaramoko was impacted by unplanned downtime on SAG maintenance and re-sequencing of production stopes in the 55 zone. What's the situation -- what's the outlook for Q4? And can we expect a rebound perhaps with some higher throughput in grades?

Paul, do you want to go ahead?

I don't -- we suffered an outage on the due to an unplanned. which sources have at the same time, we -- sorry, we did all this we had a requirement to re-sequencing the which is very, which is largely prescribed the Yaramoko, just given the nature of the deposit. We just saw some . Push get in Q4. So you see there is if you like in the fourth quarter. But we don't haul -- we currently hauling the concern are for Q4 or the guidance numbers and intend to recover those in this current quarter.

Okay. Thanks for that, Paul. Shifting to Lindero, I see that in Q3, sustaining CapEx was about $10.6 million. Do you expect to spend a similar amount in Q4 or should we model this to start easing?

Cesar?

Okay, I had a problem with the audio. Can you please repeat your question?

Yes. Sure Cesar. I was just asking about the Lindero sustaining CapEx. Should we continue the run rate of about $11 million that we saw in Q3 or would -- should we model something lower than that?

It should be in line with that, so you should be modeling same as we had some delays in the ADR expansion plant in scheduled to be commission in Q4, so you should be modeling same number.

Okay. Great. And then finally, Jorge, on this -- the situation at San Jose, now, what I hear from your comments, I understand its 2 issues that SEMARNAT has put forward. They're not -- they've alleged that they haven't received request and then they're pointing to some ancillary infrastructure, 73 works. You're going through the proceedings providing proof and whatnot and defending your position. Just building on a previous caller's question and what should we look to next the? I understand that the timing maybe uncertain, may take days for the courts to review what you've submitted. Well, should we look for a press release in a week maybe, or how will you keep the markets updated on this as new information becomes available?

Yes. And I want to go back to something I said. No, we have not shutdown dialogue with SEMARNAT. We're still trying to solve these administratively, which is having SEMARNAT reassess their position based on the fact that we have presented proof that we are in compliance with the issues they raised in the denial or cited in the denial. There are meetings scheduled with high-ranking SEMARNAT officials and there is dialogue going. We have a degree of expectation that something positive can come out of that dialogue. We have to recognize that the Mexican government has made significant budget cuts across all government offices and SEMARNAT, is sometimes shorthanded to deal with the complexities of their business. Unfortunately, that's a reality. Because there are some things here that we just fail to understand how can -- someone is not doing their work there. If they cannot identify themselves, we have submitted on at least 3 occasions dating back to 2019, the document they're requesting for. So dialog continues and through dialog perhaps we can have a breakthrough with them sooner than later. But our to that we have to continue advancing with our measures in Court. This is something similar to what we did when -- 2 years ago we had an issue with their royalty claim. As you guys might recall, the Mexican government issued a cancellation procedure on 1 of our main claims, siding a royalty dispute. Eventually we were able to solve this. It was been a protracted process, but there is an administrative path of dialogue with the government and then the legal path in the court. We're pursuing both. And I believe that, as I explained to a previous caller as well, some of these legal measures which we are taking now that we have more information. We're feeding the courts that -- this additional information that we believe strengthens our position in court should lead to responses from the court so that can be measured in days.

Right. And so you're pursuing this on 2 avenues. And the avenue -- the court avenue could lead to an outcome could be a permanent injunction, whereas the administrative avenue perhaps could lead to an extension of the permit perhaps. So but -- my last question then just going to that permit, maybe the preferred outcome here is an extension of the permit. How often is this permit renewed? Is it on an annual basis, every couple of years? And SEMARNAT presumably would have granted it. When did SEMARNAT last renew it?

No. This is a -- this permit was granted for a 12-year period back in 2009 when we were granted our oriental environmental impact statements. So if you -- you might not recall it. When we built the mine, the mine had reserves and resources for a 5-year life of mine. So we requested a 12-year environmental permit. I am not sure right now if that is the limit that can be requested, I would have to check with council, but we requested almost double the loan we had back in 2009. The years have passed, exploration has been successful, and we get to know and knew our application was for a 10-year renewal. But again, I would have to double check with you if that is the maximum you can apply for.

Okay. Thanks, Jorge. Good luck pursuing both paths. Thank you.

Thank you.

Thank you. Our next question today is coming from Adrian Day at Adrian Day Asset Management. Your line is live. You may begin..

Thank you. Thank you, Jorge. I -- sorry to go back to Mexico again. I had a few questions, and maybe I'll just ask them all in a row, if I may. First, just a quick 1 on the royalty settlement, I just want to clarify, is that settling what they claim you owed in the past or is that actually finalizing it so there's no future royalty? And then the rest of them -- the rest of the questions are all to do with SEMARNAT. I'm just wondering if SEMARNAT had any contact with prior to their decision saying we're still looking for this, we're still looking for that? Secondly, has the local government got involved in this at all, do they have any do they have any approach to keeping the mine going and to workers. And then lastly -- I don't know -- a question you might not actually want to answer, but I've heard from several companies that getting decisions from SEMARNAT, but in their different companies' views simply don't make sense and are unprecedented. And I'm wondering if there is something going on at SEMARNAT. Is there a motive that they have in trying to forestall mining in Mexico? Okay, those are my questions.

Thank you, Adrian. With respect to royalty question, my way of background, the Mexican geological survey claimed that we owed an amount of $30 million plus for unpaid royalties on a concession. We disputed the legality of that claimed royalty and we went to court. But just like now, and we went to court to have a court decide if the royalty was legal or not and at the same time, we continued trying to broker dialogue with the Mexican Geological Survey and the Secretary of Mines and the Secretary of Economics. And eventually we did. So what we have achieved is an arrangement by which we are paying $9.6 million. And with that, we settled any past claim they have on old amounts. Again, they were claiming that the old amounts were plus $30 million. And we have agreed to a 3% royalty moving forward. And so with that, there is no royalty dispute, there is no claim, and we are actually removing from title the old royalty that was registered in historic title, which gave rise to their claim. And we are replacing that with the new agreement with the Company for a 3% royalty moving forward. So that closes the issue. And I have to say that through the process, we have gained a lot of good will with the Secretary of Economics, the sub-secretary of mine, and the Mexican jewelry . Moving forward with your questions number 2, the SEMARNAT process. The answer is no. Through the process on the extension of the permit that we initiated in May of this year, they had 1 request for information shortly after we initiated the process where they requested 3, 4 items of additional information and those were very immaterial. They were asking who was the contact person…

Okay. Okay. Thank you. And I'm sorry, Jorge, just quickly. Are SEMARNAT decisions made at the local level, regional level or are they made of the national level?

SEMARNAT is federal office, so it's a national office. And SEMARNAT has local offices, but they depend of central government. It's a national office with different subs in the different states. But it's not local -- they're not governed locally. It's -- everything is central.

Okay. Great. Thank you. Thank you. Thank you very much.

Thank you. Our next question today is coming from Michael Anthony, a Private Investor. Your line is live, you may begin.

Yes. I didn't catch it earlier. When did you say you'll get permit without

We have not provided a date for when we believe we can get the permit because we just don't know that. What we have described, these -- all the actions that we are taking in hopes that we can get a permit and the legal measures we're taking to protect ourselves in case DCs are protracted process, right?

Right. But you had like 1200 people working there, at that mine?

We employee directly, direct employees around 1,200 people. But in addition to that, there is an entire world of service providers that go from local mass hall for contractors, higher shops for the contractor trucks, and you name it. Our community support agreement at San Jose Progresso, each of the amounts of about a million dollars a year that's invested in infrastructure, sustainable development, education, health. We have, only this year, about a 160 scholarships in the town. We support many initiatives on greenhouses for tomato growers, support irrigation programs, with all of that through these structured community agreement that every year is in the amount of roughly about a $1 million. So all of that investment plus the direct employment and indirect employment, has a huge impact on an area that's not industrialized. As you know, mines are located in remote areas and this mine is not particularly remote, but there is no other -- there are no other decent jobs opportunities available in the valley where we're located. These towns are full of -- have large female population because most of the male migrate to U.S. for work. And what you're left is with single mothers and broken families because of their migration. So I believe that SEMARNAT, as they get more knowledgeable on this particular case, will also become sensible to this issue,

Right, and, again, the Mexican government, they cannot afford to hurt our people like this so they've got like going to issue a permit by their own in future that I gather because it's just too many people out of work. whale to government.

Yeah, and also very important to note is that we have never been signaled for environmental pollution or anything like that. The only thing they're siding is wrongly we believe the paperwork --

I have been a shareholder for over 6 months or close to probably 9 months or so, because I know you all -- you're very undervalued, . And I know everything's going to get solved because I know the type of person you all. As a matter of fact, I called you, I hope you Investor Relations and for you to return my call later on this afternoon if you get a chance or tomorrow.

We will. Thank you very much.

Thank you and good luck. I know you going to get things taken care of because I know you're good .

Thank you, sir.

Thank you.

Thank you. Our next question is a follow-up from Dalton Baretto. Your line is live, you may begin.

Thanks for taking the follow-up. Jorge, I have got a much simpler question for you and maybe this one's for Paul, actually. You've just started to building Seguela. I'm hearing from a lot of your peers that are building projects now that there's massive inflation in steel, and consumables, and labor, all that good stuff. I've also heard recently that there's a lot of congestion in the port of Abidjan. I'm just wondering -- I mean, you just took your CapEx budget up by $32 million. How much of that is already captured in the budget was to contingency and looks like and is you seeing any delays as you start to bring stuff in? Thank you.

That's a very good question and something we have addressed with the team and I let Paul provide all the details here.

Thanks Tom, , your contact a raw container that what's happening as a way. I guess the -- 1 of the key I guess features of how . Well, it's closer to 61% of the unnecessary $3 million capital budget. Its fixed costs -- it is a fixed cost. And obviously, with that, that comes at a premium to do that with the various contracting. And so the ability to improve the project in the third quarter and actually execute those agreements and allow those contracted to make the procurement decisions to make those schedules using is crucial. And sorry, at the moment, all of the schedules and cost that you see in there incorporate the current reality that we're seeing in the world. So the current critical path for equivalent perspective sits around the mill, sits around the crushing circuit, it's around transforming, all those and being expedited as per the schedule. So as we sit today, I don't have any schedule concerns. But yes, it can -- we've increased our allowances in the budget in the schedules for the current levels of congestion in Abidjan. We're closely monitoring that, but we have contemplated the current delay in application. And we are moving equipment and people in and around West Africa. We continue to operate the American margin now and became a fast. all of the equipment that is required to operate that project does come through Abidjan. So I think I feel we have a reasonable handle on that, but not the side we're not focused on going forward.

That's great, thank you for that.

Thanks Dalton.

Thank you. Our next question today is coming from Jack Bortman at Laurentian Bank Securities. Your line is live, you may begin.

Thanks very much. Jorge just so I'm clear, did you indicate earlier in the Q&A that Lindero is now at design capacity? How would you characterize the current wrap-up stage given the COVID related issues with travel restrictions? I'm just trying to get a sense of where things sit because I thought from an ore to the stock to the leach pad you were still behind and there were still some things to iron out. Go ahead.

Yes, in the third quarter, starting around mid-third quarter, we have been achieving a rate of production within 80% of design parameter. Sorry. No. Yeah, at 80% plus of design parameters. All of the equipment in isolation had been tested on our performance criteria and everything had performed. But making the entire train and bear in mind that here we have a little bit better is, has always been viewed by assets that the project with low technical challenge from the mind. We move 40,000 tons per day, between ore and waste at a strip ratio with a low decline or under 1. With 5 trucks and 2 loaders there's 40,000 tonnes per day with 5 trucks and 2 loaders and they all is with a metallurgists would call it is quite sweet, or gold leaches quite easily. And with good leaching kinetics. But the issue is that we have a primary crushing system, secondary crushing system, and the tertiary pressuring agglomeration, conveyor stocking, of course , and a third plant. And that's where the complexity is and getting that entire train working at or above 80% of the design capacity is what has been a protracted challenge through COVID for the last year. So I think we're comfortable now seeing the operation steady at rates that are at or above 80% of design.

So in July when you gave your updated guidance, you had indicated that you thought you would be at design capacity, I would assume it's 100% of design capacity early in Q4, and that I guess hasn't been achieved, and that's because of these travel restrictions. When would you guess -- what would be your best guess of when you'll be at design capacity, not simply 80% of? Do you think that's a quarter away, 2 quarters away? I don't know if you want to get that granular until you have the people on the ground that can help you achieve that with the entire train. But just your best estimate at this point, I guess.

We provided revised guidance, and that revised guidance continues to project production rates that increased slowly but steady. I will let Cesar provide, for example, some of the details regarding some of the work that we're doing on Q4. We're still doing some minor adjustments to the system in Q4, and changes. And for example, that generates downtime. That's scheduled downtime maybe well, but its downtime there it is. But the system is operating steady at or very close to design parameters. Cesar, you want to add something to that?

Just wanted to correct the third process and we did have very accurate remarks there. This is a process, and the third process, and one stage impacts the other, so it has to be balanced and aligned, and we have been able to achieve over the past few months a steady growth in delivering tonnage to the leach pad by means so far convenience tracking, close to the design capacity. So now focusing on government borrowing some of the activities planning to give them done by the third of the second quarter of 2022 the last of them, and then continues delivering according to design, at full capacity on a permanent basis instead of basis.

There was a little bit rough. Are you saying you believe you'll be at 100% design capacity by the end of Q2? Is that what I heard?

Well, we do have to process the -- we expect to have the processes ready and available at 100% capacity, although obviously we operate at lower capacity on a permanent basis. But we should be able to de -bottleneck those details by Q2.

Jorge, if you could just confirm as you heard better than I did. I'll let it go, but am I hearing Q2?.

What is -- we have some work to do to remove some bottlenecks, for example, we are making changes to the liners in agglomeration drams and what not, that will require some downtime and all of those works are going to be done by . But if we talk about run rate, the system is operating steady within 80% of the time.

Okay. Thank you very much.

Thank you.

Thank you. Our next question today is coming from Trevor Turnbull at Scotiabank. Your line is live. You may begin.

Hi, Jorge, and I apologize. This might have got touched on before, but just a really simple question going back to the royalty. Was this royalty now going to cover the entire San Jose property or is it still limited to the Progreso concession which is where this all started?

Progreso alone, Trevor.

So if that's the -- and again, I apologize I missed the first part of the call, but if that's the case, Progreso only represents something on the order of 25% of the production or how much of it going forward does Progreso and this new royalty really impact?

I don't have the breakdown of resources and reserves on the Progreso concession on my head right now, but it is a meaningful amount not of 25%, 30%. Bear in mind that all of those concessions belong to either -- to the Mexican Geological Survey and a lot of those where we've been producing since Day 1, do carry royalty commitments. But this 1, and through this dispute is that we have paid $9.5 -- $9.6 million to settle any historic claim that we have agreed voluntarily to pay on an ongoing basis a 3% royalty. I would have to double check and Carlos and can provide that to you in a follow-up on the exact amount of reserve resources that are subject to that 3% moving forward, I don't have the number in my head right now.

No, that's fine. Yeah. Carlos can concern that through that would be great. Thank you very much, Jorge.

Don, thank you too.

Thank you. Once again, ladies and gentlemen, the floor is open for questions. . Our next question today is coming from Eric McPherson of Private Investor. Your line is live. You may begin.

Hello, gentlemen. I thought the results were basically good. Obviously, the bit -- main concern is the San Jose property. A couple weeks -- you touched on it earlier in the call, but I just wanted to get your feel again. Do you feel that the Synteract actions are a personal matter for their wishes or is it just the infrastructure that it seems like you're willing to do? I don't know if there was any clarity on that. I had 3 questions, that's just 1 of them. The second one was, is there any thoughts on obviously the market cap and the stock has been pummeled over today is 20%, which seems to be a large market capital $350 million of loss. But the San Jose only brings in or at least from you’re -- from the numbers about $132 million. What’s your thought on the overselling, for lack of better term? And then with this type of price crash, is there a thought of any stock buyback program that could help support some of the momentum's shouters that are kind of hurting this Company, because some market cap does make a difference. Thank you.

Yes, thank you for the 3 questions. With the first one, I would not like to think that this is a directed action or attack on the Company by any means. No. I wouldn't like to think any of -- anything like that. Now, we have to admit also that Southern Mexico is not an industrious part of Mexico. The more industrious part of Mexico is -- are the northern states where, for example, you have the congregation of mines in states like Durango, Pachuca, Zacatecas, . Sonora. So Southern Mexico is not as industrious. In Oaxaca there are only 2 operating mines, and apart from the wind farms there are only -- there's only one cement plant and a beer -- Corona beer bottling factory, and outside of that there is nothing else, right? That's all the industry that you'll find in the state of Oaxaca. So does that have something to do with us getting a bit more attention? I don't know. I can only speculate. But I -- we know that there are many companies and because we speak with them that have their environmental file's stuck in that office. We know that. What's surprising is -- to us is, in our view, the little care taken in citing the arguments they put forward in order not to extend the permit. With respect to the overselling. It's hard for us to comment on market activity. We can say that this is an issue that we take with a high degree of seriousness and consideration. I myself, being directly involved in supporting the team on in Mexico along with Cesar, we're very involved. And this is something we take very seriously. Today, the San Jose mine accounts for roughly 25% of our sales, our consolidated sales. A 25%…

Correct. I appreciate that, Jorge. I just -- like I said, I just -- because mine is still active and it seems like the market is treating you like there's nothing, no production at San Jose and even still it's only 25%. So just like an opportunity with -- it's $350 million market cap loss just in the matter of 24 hours. That was my concern at least at that point because .

I think at a personal level, it's certainly some of -- I might be in the market, certainly. Now that the blackout is removed, I personally consider buying, yes. The Company --

I appreciate --

-- weighing all those factors.

Thank you very much.

Thank you. Our next question today is coming from George Foley at Pacific Income. Your line is live. You may begin.

Hi, Jorge. Jorge, you're really dropping the ball on all of us. Number 1, you said about 18 months ago we were doing 100,000 ounces at Lindero, and we're 49 ounces for 9 months. It's not working. Why are you sitting out there in Peru when you're miles from all the action and you should be in Mexico dealing with the Mexican s or you should be out there in Lindero getting the property to work? It's not working right. And things don't work right unless the owner is there. And especially in South America. Number 2, you blew it with this merger. You bought a class C mining Company with mines in Timbuktu, the world's worst places. They have 1 decent mine and the rest of them are junk. You gave away our stock with 8 bucks, today it's 4. It's down 50%. I -- Jorge, you really need to turn in your jockstrap and find another team to play for, because you have screwed this Company horribly.

Thank you for your questions. We're on a conference call, so the cursing -- I will always address all my shareholders with a lot of respect, and I would expect the same type of respect back. With respect to your first question. Yes, I'm based in the Peru, but I leave in an airport. So I have spent the last month in Mexico, in support of the team. And today we have our Chief Operating Officer in Mexico for the last 3 weeks, Cesar. And with respect to your views on our business in West Africa. The largest silver -- gold producer in the world is China. It produces 380 tons of gold annually. The 2nd largest gold producer in the world, if we group the countries in West Africa is West Africa. It's ahead of the U.S. Russia, Australia, Canada, so we believe it's a place where you -- if you're a mining Company, you need to be there. If you are going to produce precious metals, you need to be there. And it is our view that medium long-term, this is an investment that will pay off for the benefit of us, shareholders, very handsome. That is what I can say to you and as the CEO, leader of this Company and the 1 who created this Company back 15, 16 years ago from an idea to where it is today. I can tell you that I'm very committed to the success of this Company long term. I have skill in the game. And I'm putting all of my energy and effort into the success of this Company. Now, mining is a challenging business and you need stomach for that. And Mexico is not for the faint of heart either. Wahaka (ph) is not for a faint heart and it's been a good mine for 10 years. And I expect it will continue to be a good mine for 10 years and we're doing all of our efforts to ensure that. So thank you for your question. And if you want to continue speaking with me, I am available any time.

Thank you. Our next question today is coming from Sean Bedford at Nomadic Publishing. Your line is live. You may begin.

Hi, thank you for taking my question. So on First Majestic Silver's quarters 3 reporting, 1 thing they mentioned was that they were holding back silver inventory due to suppressed silver prices in the third quarter. And here we have one of the biggest silver miners outwardly saying that the Comex silver spot price is a fiction, it's suppressed by the banks, and they're doing something about it by refusing to sell some of their Silver. And I'm just wondering if you would be willing to do the same thing.

The short answer is, not at this stage. I have to say something. I'm as bullish as anybody else on metal prices, but I have been and do subscribe to some of these ideas with respect to price manipulation, but I have been in the business for about 30 years now, over 30 years, probably getting closer to 40, if I count the 1st time I went to a mine, but I haven't seen yet the actions taken that you proposed serving a purpose of breaking those cartels. Manipulating the price. In short, we're -- at these stage not contemplated holding off silver sales. No we're not. Something we can consider evaluating. Absolutely, that's something we can revisit, but not at this stage.

Thank you.

Our next question today is coming from Rick Sherman, a Private Investor. Your line is live, you may begin.

Good afternoon. I had a question again on the royalty stream that you mentioned was going to now be 3%. Is this royalties -- was there any previous royalty stream that you were paying to the government entity or this is completely brand new after the settlement you made and do you have any quantifiable number as to what this will cost the Company on a net basis?

Yes. We have a series of concessions in and around the San Jose mine, and on a few of those, the one that called the for reserves and resources, we have royalties. But we did not have and were not paying a royalty on the Progreso 2. And starting this month of October, we are going to be paying the 3% royalty. And in order to settle any past claims the government had on the royalty, which they quantified in the amount of $30+ million, we agreed to pay $9.6 million amount.

Was that -- I'm sorry to interrupt? Was that $9.6 million based on what time frame? Was that for -- was that a settlement that was base -- or even if you were using their $30 million number, was the royalty based on 10 years’ worth of payments or 5 years, or what --

They -- to derive the $9.6 million fee year, we resorted to the time when they registered their claim to the royalty on the public mining registry. They only did that in 2017. So they claim there's been a royalty there forever. And under the quantum of $30+ million came from them, deriving a figure from 2011 onwards, which is when the mine started production. So through the negotiation, we said well, "when did you register the claim? The royalty? In 2000 -- in December 2017? Okay. Then let's use that as a basis for our negotiation. Again here, it was either get stuck in court for years with your host government or -- and I have to say again that the Mexican government today is not so fond of Canadian mining, right? So we decided to settle this.

Totally understand the settlement. I was just trying to figure out like what either going looking backwards or going forward, is it a $2 million or $3 million number that is a reduction of operating earnings net after having to pay the new royalty. Was just trying to come up with some general idea to figure out this --

Yes. I don't know -- I don't have the numbers ration on my head right now. I don't know if Luis does, but if not, we can certainly follow up on a call and provide you more color with.

Okay.

Yes. Jorge, let me help there, this is Luis. Over the life of -- over the remaining life of mine considering that tonnage that's coming out of that particular claim, the nominal amount of the 3% is approximately $6 million and that is pre -tax. So net of taxes being somewhere in range of $4 million in terms of the net impact to the bottom line. But the nominal value alarmed is around $6 million.

Is that $6 million over the life of the -- remaining life of the mine, or on an annual basis?

No. Over the remaining life of the mine.

Oh, okay. And the current projected remaining life of the mine is 10 years?

No, it's over 4.5 years. A bit over 4.5 years.

Okay, 4.5 years. So just a back of the envelope view would divide the 4.5 years into the $6 million as in basically costing you a million in a quarter a year or $1.5 million, somewhere in there?

Approximately yes.

Okay. Thank you very much for that color, appreciate it.

Our next question today is coming from Ron Jager a private investor. Your line is live.

Thank you, Operator. Thank you so much for the answers today. I've got a question on the bank and the bank covenant. I would like to know which banks are with, how much money are we talking about, and is the problem with the bank more serious than a dodling by the authorities? Thank you.

Luis, you want to help here?

Yes. So the new lenders, , comprised of syndicates that includes BNP, Bank of Nova Scotia, the Bank Montreal and So upon closing of a new facility, the total amount of outstanding debt has been restricted to $120 million. That's been the amount drawn on the new facility. And as we disclosed in the news release, the outstanding prior assumed debt from the logs of transaction with of $28 million was paid out. After the closing, the total senior secured debt outstanding is $120 million. And as we will also disclose, the additional $80 million of committed amount under the facility, will become available once this issue is resolved. In terms of the November 20 date. Again, we touched on this earlier in the call, but they really had to do originally with the expected time that a legal process to roll from our provisional injunction to a definitive junction takes. Now things are evolving, not necessarily in the same way that was planned for unexpected. So hence, our expectation that we'll work with the banks to gain additional flexibility around that date. That is all I have on that question.

Okay. Thank you.

We have no further questions in queue at this time. I will now turn the floor back over to management for any closing remarks.

If there are no further questions, I would like to thank everyone for listening to today's earnings call. We wish you a great end of the year.

Thank you ladies and gentlemen, this does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.