Thank you for standing by. Good afternoon. My name is Lesser and I will be your operator for today. At this time, I would like to welcome everyone to Silvercorp's Third Quarter Fiscal 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Lon Shaver, President of Silvercorp Metals. Please go ahead.

Thank you, operator. On behalf of Silvercorp, I'd like to welcome all of you to this call to discuss our third quarter fiscal 2024 financial results. They were released yesterday after market. Copy of the news release, the MD&A and the financial statements for today's call are available on our website and on SEDAR+. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information as it relates to applicable securities laws. Please review the cautionary statements included in our news release and presentation as well as the risk factors described in our most recent 10-Q and Form 40-F and AIF. So turning to the quarterly financial results. With respect to the quarter, we delivered a strong Q3, good financial results, which were underpinned by revenue of $58.5 million, in line with the prior year quarter. And this number did reflect a number of changes in different parameters. With respect to pricing, we had increases of 11%, 17% and 2% in gold, silver and lead respectively and a decrease of 15% in the realized zinc price. Switching to volume. We had increases of 22% and 3% in gold and zinc sold, respectively, but offset by decreases of 8% and 16% in silver and lead sold. Based on production levels and realized prices this quarter, silver was 59% of revenue on a net realized basis. This is up from 54% in Q3 of fiscal 2023 and almost hit our record in recent years of 60% of revenue. Third quarter net earnings attributable to equity shareholders were $10.5 million, or $0.06 per share, as compared to $11.9 million, or $0.07, for the same period last year. The main contributors to the slight decrease were the aforementioned factors impacting revenue, an increase of $5 million…

Thank you, sir. Ladies and gentlemen, we will now conduct the question-and-answer session. [Operator Instructions] Your first question comes from Lucas Pamatat from Canaccord Genuity. Your line is now open.

Hey, Lon, and thanks for taking my question. Just curious about the bid process so far, I mean, you're about halfway through the bid period for OreCorp. How has the uptake been so far? Can you comment on that at all?

Yes. We've been gaining momentum. Obviously, the board with their recommendation also led to them going through and tendering. And as it currently stands and this is publicly reported filings, we're currently at 20.1%, which includes the shares that we already owned prior to commencing.

Great. And then what strategies are there if you don't get to that 50%, just there being two weeks left. Do you guys intend to obviously extend it or what other opportunities do you have on the table?

Well, there's a number of considerations, as you said, two weeks to go. A lot can happen in two weeks. And with a positive response in our share price, like, we're experiencing today certainly changed the dynamic. We like the fact that we've got the only open and actionable offer on the table and it's got full board support from OreCorp. A number of shareholders have indicated they're going to be following the board's recommendation and we're in touch and in regular dialogue with a number of the key shareholders and understand what their intentions are with respect to tendering and timing leading up to that expiry.

Makes sense. Thank you.

Thanks, Lucas.

Your next question comes from Joseph Reagor from ROTH MKM. Your line is now open.

Hey, Lon and team, thanks for taking my questions.

Hi, Joe. Good to have you.

So on the commentary you guys made about the shrink stoping resulting in higher than anticipated like impact on grade, can you quantify it? Like, what was the percentage of dilution expecting?

It's not that that's necessarily playing in right now. This is sort of a gradual process and it's not like we're flipping a switch and saying that we're going from shrinkage, sorry, from cut and fill 100% to shrinkage. It's going to be sort of a stope by stope, area by area decision and it's going to be happening over time. So it's not as though this has been factoring in to the results to date that much.

Oh, okay. I must have misunderstood. But what is the expected difference though, if you're on any given stope for dilution, if you use shrinkage instead of long haul?

Well, yes, and it's not long haul, so it's cut and fill. And I have to…

Sorry, cut and fill.

Check my memory and go back to what was published in a previous technical report because it is in there as it relates to how it's operated in the past. If I recall, it's sort of going from a five to 10 for cut and fill to sort of 15 to 20 for shrinkage. But forgive me, I'll have to go back and pull the exact numbers from the technical report. So it is an uptick. But the tradeoff is that from a labor intensity standpoint and productivity, there are gains to be made on the cost side in terms of unit costs for delivering that. And then, as mentioned, where you might have that higher dilution from shrinkage. We look to address that with the XRT sorters that are going in at Ying.

Okay. And then as far as the growth at Ying, the 1,500 ton per day new processing line and the timing of that. when do you guys – you said next fiscal year, but is there a more precise timing, Q4, Q3 that we should expect? And then what do you think the total time to ramp up the additional capacity might look like?

Well, it's expected that the full increase could be completed over the course of the next fiscal year. In terms of the timing for sort of each additional tonne, we don't have that in a plan to provide currently? But we'll have more details in the next couple of months and as well with the reporting for the guidance for fiscal 2025.

Okay.

But I think what I would add is just that from a – looking back at what we were contemplating before and just recall that we're looking at building an entirely new mill at a $30 million cost, this increase will be significantly less in terms of cost. And on a net basis, we're going to get to 5,000 tonnes per day here based on this increase, keeping mill number one running and adding this capacity, we would be running at 4,000 tonnes at a much less cost for that increase.

Okay. Fair enough. I'll turn over. Thank you.

Thanks, Joe.

Your next question comes from Felix Shafigullin from Eight Capital. Your line is now open.

Hi Lon. Congratulations on a good quarter.

Thanks Felix.

So one thing that really jumped out on me in yesterday's release is how much mining and milling costs dropped to GC sort of quarter-over-quarter? Could you just provide a comment on that like how does that drop in just one quarter achieved?

Well, if you're referring back to Q2, I mean, obviously, GC has had some hiccups this year and hasn't been running either at full capacity or optimally. And so when you've got that sort of law of small numbers here in place, any kind of changes in that throughput rates have a big impact when you look at the fixed cost allocation. So now that we're back up running at a more normal and sustainable level, we're seeing the kind of cost that we would look to realize.

Got you. I understand. And regarding the tailings storage facility. So I think there's been about $15 million spent in it so far. And how much – what's the total budget allocated to construction on this thing?

Well, that's a really good question. We previously reported $38 million as the number. And as of today, we are into it to the tune of about $9.9 million. It's a little premature, but some of the early indications are that we will come in – I don't want to get hung out here, but I would say meaningfully below that $38 million number. That'd be a positive surprise.

Okay. All right. Looking forward to it. Well – Thank you, Lon, Thanks again and congrats on a good quarter again. Thank you.

Thanks, Felix.

This concludes the question-and-answer session. I would now like to turn the conference over to Lon Shaver for any closing remarks.

Well, that's great. Thank you, operator, and thanks, everyone, for joining us today. We'll wrap up the call here. Please if anyone has any additional questions. I’ll like always feel free to call or e-mail us. Happy to take your questions and respond in due course. Look forward to updating you in a few months on our fiscal 2024 results. Have a great day.

This concludes today's conference. You may now disconnect your lines. Thank you for participating, and have a wonderful day.