Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Q2 2021 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference over to Siren Fisekci, Vice President of Investor Relations. Please go ahead. Welcome to Pan American Silver's Q2 2021 conference call. Media and other participants on the call are invited to participate in listen-only mode. We released our results after yesterday's market close, and a copy of the news release, MD&A, and presentation slides for today's call are available on our website. That material and today's call contain certain statements and information that constitute forward-looking statements and information. Please review the cautionary statements included in our news release and presentation, as well as the risk factors described in our most recent Form 40-F and annual information form. Joining the call today from Pan American are President and CEO, Michael Steinmann, Steve Busby, Chief Operating Officer, Rob Doyle, Chief Financial Officer, Martin Wafforn, Senior VP Technical Services and Process Optimization, and Chris Emerson, VP Business Development and Geology. I'll now turn the call over to Michael for a brief overview of the results before opening the call for questions. Thank you for joining us today to discuss our Q2 results. We produced 4.5 million ounces of silver and 142,300 ounces of gold in Q2. Silver production was reduced by the ventilation constraints at La Colorada, mine sequencing at Dolores into higher gold with lower silver grades, as well as the timing of heap leach sequencing at Dolores and Shahuindo, and COVID-19 related protocols, which limit workforce deployment levels. The ventilation constraints at La Colorada have been impacting silver production for the past 18 months, following some ventilation infrastructure failures. As previously reported, we had completed construction of a new primary ventilation race from surface to 345-meter level on the higher grade Candelaria East deposit. The race became blocked in the bottom 42 meters during commissioning in Q1 2021. We are very pleased that we successfully cleared the blockage in July, shotcreted, and fully commissioned this important ventilation race at La Colorada that reestablishes quality ventilation into the most valuable portion of the deposit. Mine development is now underway to enable throughput rates to increase. The completion of this project, along with several other improvements to the ventilation circuit, means that overall ventilation flow rates will be similar to the levels we had in 2019. During Q3 2021, we plan to rehabilitate two other key ventilation races, which will further increase overall ventilation flow rates to 50% higher than 2019 levels. In early 2022, we also expect to advance early construction of a refrigeration plant for the eventual Skarn deposit development to further enhance current working conditions in the deep, high-grade areas of the mine by increasing overall ventilation flow rates to a 180% compared to 2019 levels. As we look forward to expansion of the La Colorada mine and development of the Skarn deposit, our board yesterday approved the new concrete-lined ventilation exhaust shaft for the eastern portion of the La Colorada mining area and above the northern edge of the new Skarn deposit. We believe this will be a robust, durable solution for ventilation through the challenging ground conditions that exist in the area of that mine, providing added insurance against future premature ventilation infrastructure failures. This shaft can be extended in the future to provide ventilation infrastructure to development of the deeper Skarn project. We estimate the cost to construct a 5.5-meter diameter and 560-meter deep shaft to be approximately $47 million, which should be completed in early 2023. Gold production in Q2 was 142,300 ounces, benefiting from mine sequencing into higher grades at Dolores and La Arena. We also had a buildup of 23,800 ounces of in-heap gold inventory at Dolores and Shahuindo. We expect most of this will be recorded in production over the second half of the year. At Bell Creek, we continue to mine at lower rates and grades while we adjust the mining methods and ground support system to adapt to the wider ore extensions in this section of the mine plan, expecting increased production rates during the second half of the year. At Shahuindo, as we discussed last quarter, we are in a section of the pit that has more fine-grained host rock with higher clay contents. We stockpiled approximately 857,000 tons of this fine-grained material during Q2, equivalent to 23% of the ore we mined during the quarter, which will be blended with coarser ores to be mined later this year and into 2022 for placement on the heaps, supporting higher production during the second half of 2021, in line with our annual estimates. We are also evaluating the potential of operating the agglomeration plant to process this fine grain material beginning in late 2022 and 2023, which could increase gold production rates from San Vicente, but incur additional costs for operating the plant compared to our blending and run-of-mine heap leaching. Overall, we do expect a stronger second half of 2021, and we have reaffirmed our production guidance as revised in May 2021. Silver segment cash costs in Q2 were $12.71, and all-in sustaining costs were $16.36 per silver ounce sold. The cash costs reflect lower silver production, lower gold by-product credits from the move of Dolores into the gold segment in 2021, an increase in treatment and refining charge due to increased contribution from concentrate mines, and an increase in royalty, primarily at San Vicente Mine. Silver segment all-in sustaining costs included $4.19 per ounce of sustaining capital, which includes increased spending on the critical ventilation work at La Colorada. Gold segment cash costs in Q2 were $857, and all-in sustaining costs were $1,163 per gold ounce sold. The cash costs reflect the benefit of the move of Dolores into the gold segment and the current mine sequencing at La Arena, resulting in higher throughput and grades that were partially offset lower grades at Bell Creek and increased waste mining rates and ore stockpiling at San Vicente. The COVID-19 pandemic continues to impact our operations. The protocols we are maintaining to protect health and safety continue to hinder our workforce deployment levels, reducing normal throughput rates by about 5%-10%, disproportionately affecting our underground mines. These protocols also incur additional costs and delay execution of certain projects from 2020 into 2021. During the first half of 2021, we have seen higher than expected cost escalations in energy, wages, and consumables, along with the stronger Canadian dollar. These appear to have leveled off in July 2021, leading us to maintain our cost guidance for the year. We expect the impact of COVID-19 will diminish over the next Q2, and we are encouraged by the higher levels of vaccination that are occurring in many of our operating jurisdictions. Vaccination programs are, of course, critical to combating this virus. In Q2, we committed our support to UNICEF Canada's Give A Vax campaign. The campaign is aimed at providing global equitable access to COVID-19 vaccines through the distribution of 2 billion doses of COVID-19 vaccines to low and middle income countries by the end of 2021. Turning to our financial results. Revenue in Q2 totaled $382.1 million. Revenue has been impacted by a $45.1 million buildup in the ore and concentrate inventories, and a $47 million buildup of heap leach inventories in the first half of the year, both of which are anticipated to normalize and improve revenue for the second half of 2021. Inventory buildup made up the majority of the $37 million used of cash from working capital, resulting in operating cash flow of $87.1 million in Q2. After funding all of the sustaining requirements of our business, project capital and dividends, cash and short-term investment rose to $240 million at June 30th. This includes the sale of non-core assets totaling $14 million. We sold a portfolio of royalties to Maverix Metals and received non-refundable deposits for the sale of the Waterloo exploration stage asset. The Waterloo transaction closed in early July, when we received an additional $22.7 million, which will be recorded in Q3. We also retained a two percent net smelter royalty on any future production from this asset. Net income was $71.2 million, or $0.34 per share in Q2, driven largely by strong mine operating earnings of $103 million. Adjusted income in Q2 was $46.6 million, or $0.22 per share. Based on the strong operating cash flow in Q2, our solid financial position, and improving outlook for our operations, we announced a 43% increase to the quarterly dividend to $0.10 per common share. This marks the third dividend hike in the past 18 months. I will now provide a brief update on the catalyst in our portfolio. At La Colorada, we are continuing with the work to provide a preliminary economic assessment for the Skarn deposit late in 2021, which will include an updated resource model. At Escobal, two pre-consultation meetings have now been held as part of the ILO 169 consultation process for the mine. A third meeting originally scheduled for July 17th, 2021, has been postponed to August 2021 due to the COVID-19 situation in Guatemala. The main agreement reached during the first two meetings is the requirement to prepare a cultural and spiritual impact study of the Escobal Mining project. We are encouraged that the court-mandated Dialogue 169 consultation process has started with broad participation, but we are unable to provide any timing on the consultation process or potential restart of the Escobal mine as the details of the process have not yet been determined. At our Navidad project, the legislator in Chubut, Argentina, has not yet voted on the modification to the mining law to allow open-pit mining in certain zones of the province, and we do not know when that bill may be debated. However, the legislator has rejected a bill that would have prohibited mining activity in the entire province. After yesterday's market close, we also reported our estimated mineral reserves and resources as of June 30th, 2021. silver mineral reserves are estimated at 529 million ounces, and gold mineral reserves at 4.2 million ounces. The exploration program over the past year was reduced by 50% due to the COVID-19 restrictions. We completed the planned exploration program for Timmins and the La Colorada Skarn. At La Arena, we replaced 141% of the ounces mined, extending mine life by another year. Mine life was also extended by another year at Timmins through the discovery of 209,000 ounces of gold of new mineral reserves, replacing 147% of ounces mined. At La Colorada, the ventilation restrictions impacted exploration activities. The recent improvements to the ventilation circuit would allow us to ramp up exploration drilling at this long-life mine, where we have over 100 million ounces of silver mineral reserves and 192 million ounces of inferred resources, including the large Skarn deposit. For the 12 month period ending June 30, 2021, Pan American's producing mines replaced 8 million ounces of silver mineral reserves and 98,000 ounces of gold mineral reserves. Total reserves were impacted at Chalino from containing gold production of 193,000 ounces and the reclassification of 146,000 ounces of gold mineral reserves to resources, which contributed to a total depletion of 339,000 ounces of gold based on geological interpretation, cost estimates, and cut off grades. The reclassification of the La Bolsa project from mineral reserves to resources reduced gold mineral reserves by 315,000 ounces and silver mineral reserves by 4.5 million ounces. La Bolsa is a non-core project that the company intends to divest. Pan American holds one of the largest silver mineral resources and reserves in the world. With that, I would like to open the call for questions. Thank you. We will now begin the question and answer session. The first question comes from Tyler Langton with JP Morgan. Please go ahead. Good morning. Thanks for taking my questions. I guess to start, could you talk a little bit about sort of the impacts from COVID that you're currently seeing, especially at La Colorada and Manantial now maybe versus a quarter ago? I guess just to hit your guidance, do you need sort of, I guess, restrictions from COVID to continue to ease? I'm just trying to understand, I guess, how sensitive the guidance is to kind of COVID restrictions. Yeah. Hi, good morning, Tyler. It's Michael. I will start and pass it on for Steve to give you more details on the operations. As you recall, at the beginning of the year, we kind of assumed easing of restrictions in a straight line every quarter, with the first unimpacted quarter in Q1 2022. Of course, life is not going in straight lines. We know that. I think we saw a bigger impact for sure than we assumed still in Q1 and maybe some at the beginning of Q2. We definitely see strong improvements now with quite impressive vaccination rates in most places where we work. I think it will just follow the similar trend than everywhere else in Latin America, and it will get hopefully easier for us. There's definitely still impacts there, and maybe Steve can give us some more details. Yeah, Tyler, if I can just add to Michael. It's clearly related to vaccination rates. We see, just like in North America, if we can get vaccination rates up into the 50%, 60%, we can finally start to relax those COVID protocols and restrictions, I think at that point. Right now, we're probably roughly around 20% to our workforce in Mexico, perhaps as much as high as 40% down in Argentina. During the first half of the year, it was a very sensitive time for us, and we did see lots of cases coming to our gates that we had to turn around, and we had high levels of people that had to stay off of the workforce. It definitely had some challenges during the first half, and we're hoping the vaccination rates, as Michael said, are picking up a lot, and we're optimistic that as we move into the second half, we will see the easing that we had projected in our current forecast. Just to round it up, we see probably around a $7 million cost per quarter, right as we assumed at the beginning of the year. That really covers all our work testing, quarantines, additional transportation, all the added COVID costs that we see. I think we're pretty much on track on that side, what we assumed at the beginning of the year. Okay, great. That's helpful. Then just, I guess with Colorado and the ventilation blockage, now that's passed you, I guess, can you talk a little bit about how quickly throughput grades and production should improve, I guess, Q3, Q4, and then costs improving as well, just any color there would be helpful? Yeah, sure, Tyler. A little bit of background. We have realized that a lot of that infrastructure failures that we've seen over the last couple of years, it's really a heat and humidity issue. As we mine deeper and further to the east on this deposit, particularly in the high grade, we're seeing greater heat increases, greater humidity increases. What we find is this acidic ground that we have really starts to degrade with that higher heat and humidity, and that's what failed in those raises. We're also seeing challenges in the developments from a similar extent. What we realize is we do have some catch up to do on shotcreting our developments, just like we've shotcrested these raises to recover those. Right now, in our forecast, what we're projecting out is a progressive 10%-15% call it increase in throughput each quarter going forward from where we were in Q2, and maybe a 10%-20% improvement in silver grades each quarter as well as we move and open up and get ahead on the development into that higher grade area. That's what we baked into the forecast, and we feel pretty confident we can achieve that. Right. Perfect. Thanks so much. The next question comes from Cosmos Chiu with CIBC. Please go ahead. Thanks, Michael, Steve, and team. Thanks for taking my questions today. Maybe my first question is on Dolores. As we talked about it in the last quarter, we talked about leach kinetics. I think at that point in time, you had talked about stockpiling of high grade ore for the rainy season and also stabilizing the area of the leach pad between pad one and pad three. Could you maybe give us an update on that? I guess we're now into the rainy season in Mexico, so have you started stacking some of that higher grade material, and how has that impacted recovery? Yeah. Good morning, Cosmos. Thanks for the question. Hi, Steve. Yeah, indeed, we were successful in stockpiling the high grade during the dry season, we're continuing to run the agglomeration plant, we are deep into the wet season now, that high grade is processing through the plant quite well. Relative to the leaching kinetics, we are addressing or we have been addressing a design and construction challenge, trying to tie the valley fill leach pad three to the previous side hill leach pad one that we're reconstructing from the original Minefinders spill. We've had to limit leaching in some of those areas until we could build some buttressing and place some liners in a way that assures the stability in that area, because it's a very challenging geometry with some of the steep terrain in that area. It restricted our ability to leach in that area, that in turn grows the heap inventory. That's what's happening there. Currently, we've advanced heap loading into the non-affected areas, so we expect to move away from building those high inventories that we've seen over the last nine months or so. We're working real closely with our heap designer and expect to reactivate that leaching in that area in the next few months or so, and that'll start to draw those inventories back out. It's really just a matter that it's a bit of a tricky geometry there, and it requires some buttressing and unique kind of liner placements and handling of the preg solutions coming through that connection between the valley fill and the old side hill heap that Minefinders had built. Mm-hmm. Then in terms of impact here. Cosmos. Yeah, Michael. I'm sorry, just to add one more thing. Yeah. The great detail that Steve gave us, but obviously, Dolores going on and on, and we're stacking already for many years, and the heap leach, the stack is getting thicker and thicker. It's going to take longer and longer, obviously, to get the gold and silver out here. Yeah. Just the time that it takes because of the thicker and more material there. Yeah. Good point. Yeah. Obviously, Steve included that all in his planning and forecast. Of course. Fully understand. That leads well into my follow-up question here. If I work it out in terms of ounces stacked versus ounces produced, I get, quote unquote, "A recovery of 65% for silver, 59% for gold for Q2. Silver actually improved from the first half average of 59.6%. Gold has stayed about the same. Should we expect that to improve in the second half? Yeah. Certainly, the gold will be the quicker to improve. It's our faster leach time, so those inventory builds affect gold more than they affect the silver because of the long leach kinetics of the silver. Yeah, it's definitely a timing thing. It's quicker to build the inventory, and it's quicker to reduce the inventory than the silver. That's what you're seeing there. Mm-hmm. Perfect. Also at Dolores as well, going through your reserve resource update yesterday, I saw that the Dolores reserves decreased year-over-year. Maybe if you can comment on that. If my numbers are correct, it looks like, in terms of tonnage, you decreased by about 9 million tons. I think in the 12 month period, you stacked about 7.6 million tons. It seems like some tonnage might be missing. Was there any kind of modeling changes? On a more positive end, is that just a function of not enough drilling due to COVID-19 impacts? Can you find more ounces here? Yeah. Hi, Cosmos Chiu, Chris Emerson here. Hi, Chris. Yeah, no. When we look at the reserve depletion, yes, you've got the depletion from production, but you're absolutely right. We had some increased costs across the underground, so we lost some reserves there. Also stockpiles, we had some low-grade stockpiles, which, due to rehandling costs and positioning where the pads are at the moment, they were actually flipped out of reserves. You're correct in saying that net-net, there was a decrease more than just production, and that really we're seeing those slight changes attributed some to cost, et cetera. Yeah, if I could add on to that, Cosmos. We did sterilize a low-grade stockpile that was up in the north part of the property. It goes back to the date of Minefinders again. It was a marginal stockpile all along, but we deemed it submarginal now because of our latest estimates, as Chris said, for the leach pad handling costs, but also the leach pad construction costs that those tons have to absorb. It's a stockpile in the far north, and depending on prices, it could come back in. It's just got a long haul to get around the pit and then the cost for constructing the pad that it's got to absorb. Of course. Maybe moving on to La Colorada. Thanks, Steve, for giving us the guidance in terms of what to look forward to in terms of Q3 and Q4. I just want to be a bit more specific here. You did about 14, 15 tons per day in Q2, I believe. Correct. It sounds like, as Michael mentioned, flow rates in terms of the ventilation could get back to the levels in 2019, 2018. I'm kind of dating myself now. I remember 2019, even though your main play capacity is 1,800 tons per day at the mill, I think you did about 2,100 tons per day in 2019, almost 2,000 tons per day in 2018. Could you actually get back to that kind of throughput? Is that what you're targeting? In terms of grade, if I were to do the math behind it, I think you would need over 300 gram per ton grade in Q3 and Q4 to get to your guidance. Is that what you're targeting for grade as well? Yeah, Cosmos, relative to throughput, our current forecast does not anticipate us averaging at that 2,000, 2,100 tons a day through any of the quarters going forward. Like I say, it's kind of a 10%-15% increase. Q3 will be over Q2, and then another 10%-15% for Q4 over Q3. That's just catching up on that development I was mentioning that we face. Relative to grades, yes, we will move up into the 300s again, 10%-20% incremental grade increases quarter over quarter, and move towards that reserve grade going into 2022. Those are factored into our forecast. Mm-hmm. That's great to hear. At La Colorada, I'm reading that there was the delay in concentrate transport at La Colorada. That was from Q1, and I thought that would've been kind of cleared out by Q2, but I don't think that's the case. Could you give us a bit more detail on that? Are we talking about a significant number here? In terms of helping out on getting to guidance, was that included as part of Q1 production, or is it going to come in in Q3, Q4 production when the sale or when the shipment of the concentrate actually happens? In that case, it would actually help you in terms of higher production in the second half. Morning, Cosmos. Rob Doyle here. Yeah. Hi, Rob. I'll take that one. Yeah. Firstly, what's been delayed is revenue. We report production as we produce. The delay that we've really had is around the commercialization of that production. In La Colorada as well as elsewhere, we have run into some pandemic-related logistical challenges. You've seen from our balance sheet that inventories of finished production increased by about $45 million over the first half of the year. The concentrate shipments really out of La Colorada have been constrained by delays in shipping and container availability is the key factor that we've struggled with there. We are seeing that normalize and have a very robust pipeline of shipments in Q3 and into Q4. We do believe that those inventory levels will normalize over the balance of the year. On top of that, we've also had some delays in doré shipments. Specifically, there was a particularly large shipment out of Shahuindo in Peru that was withheld because of some complications around the elections in Peru in June. That was delayed and will come into revenue in Q3. These are all simply timing issues and will come out through revenue in the course of time, and of course, cash flow too. Great. Thanks, Rob. Maybe one last question just on Shahuindo here, since you brought this up. You talked about leach kinetics here. Michael mentioned part of it was the stockpiling of the fines, blending it with some of the coarser ore later on. Part of that, it sounds like it was also due to the stacking of higher grades towards the end of the quarter. We're about a month into Q3 now. Are you happy with what you're seeing in terms of leach kinetics, in terms of recovery? I guess in that context, I also worked out the recovery or the ratio of ounces stacked versus produced here. It was 59% in Q2 versus about 65% in the first half. Could we see that improve, back to the mid-60 level or even to, I guess, some of the technical report numbers of 70% or do we need the crushing and agglomeration to get to the 70%? Great question, Cosmos Chiu. This is what we're studying quite hard right now. Because of the fine grain clay ore that we're mining at high rates right now, we are trying to push those blends as hard as we can out to the heap. Net result is we do have to slow our application rates down in some sections of that heap, which do reduce the kinetics and come up with the kind of numbers you're talking about. We won't get back to our normal rates probably throughout the rest of this year. We're still trying to model and understand the distribution of this fine and clay ore. It's a bit challenging when all you have for the exploration information is RC drilling. We're not confidently able to build these kind of lithologic models that are so important to us right now. That's why we're hesitant to say we're ready to activate the agglomeration plant and that'll solve all these problems. We're not totally convinced that's the right answer yet. We're looking at that possibility. In the meantime, we do try to process as much of that fine ore by blending it as high a rate as we can with the coarse ore and offsetting that with slower kinetics through reduced application rates. That's what we're doing, and that's what we're forecasting going forward. We do believe this ore ultimately has very high recoveries in excess of the 70% that we have in the studies before. We've seen much higher extraction rates and expect to get there, and that's what we're trying to evaluate and understand and model. It's really a kinetic timing point and whether or not we need to agglomerate and whether or not even with an agglomeration, we feel we still will have to leach at lower application rates and have slower kinetics than what we had with the great coarse ore that we've seen in previous years. Great. Thanks, Michael, Steve, Rob, and Chris. Thanks for answering my questions. That's all I have. The next question comes from Don DeMarco with National Bank Financial. Please go ahead. Thank you for taking my call, operator. Good morning, gentlemen. There's a number of ventilation raises at La Colorada, from surface to 345, of course. I think there's another raise to provide ventilation to Candelaria, maybe potentially a fully lined concrete shaft further east. Could you just list the ventilation raises that you have planned at the mine over the medium term? Sure. Hey, it's Don? It's Don. Yeah. It's Martin Wafforn here. Hey. Thank you. In terms of the surface to 345, that's the one that was plugged at the bottom. We call that the Gemelos raise. That's the one that was cleared just recently. That's one raise. We have another one called La Libertad, which goes from surface to just below 400 meters down. That one we had a failure in. We're just close to getting that completely rehabilitated now in Q3. We're fully shotcreting in August, actually, the surface to 220 level portion of that raise, and then we're doing two other raises to bypass that down deeper. Another key ventilation raise for us is called La Estrella, which is in the Estrella portion of the mine. If you remember, La Colorada has two principal parts of the mine. One's called Candelaria, and the other is called La Estrella. La Estrella actually, in the early part of Q3, towards the end of Q2, sorry, towards the end of Q1 and early part of Q2, we were able to take that one out of service and fully shotcrete it all the way from surface down again. It's just over 400 meters deep. I'm sorry if I misspoke a little bit there. We were able to do that in June, July. Those are the three principal ones. We also have intake ramps and an intake shaft. The intakes are the El Aguila shaft, which we have about 200,000 CFM of intake air coming in that one. We have the Campana ramp, which we used as an exhaust route while we had the failures in the mine, and it's now reverting to being an intake airway. There's going to be a refrigeration plant on the top of that's going to be providing cool air by the end of the year. We also have the San Fermin ramp. It is a very complicated circuit. This is a very large mine that's spread out laterally over a big, long distance. As Michael and Steve have both mentioned, we have heat and humidity that we have to deal with when we're designing the ventilation flows through all of those areas. Don. Yes, Steve. Yeah What Michael had mentioned in his conference, but we have approved this new shaft we're going to call the San Jeronimo shaft, further out to the east, right in the heart of this high-grade zone that we cherish so much. We saw the opportunity, I mean, the Skarn deposit, a deep seated deposit. Clearly, we're going to have several ventilation shafts going into that deposit, regardless of the mining method that we need. We see the opportunity to start to advance that shaft to ultimately access and provide access and ventilation into that Skarn deposit. In the meantime, provides us, I'll call it an insurance policy against any further infrastructure failures like we've seen over the last two years. We're really pleased that that project's going forward. It should be completed towards the end of 2022 into 2023. We have a great contractor that was well set up who was able to mobilize very quickly on that. We're pretty excited about that opportunity, and that'll be an insurance policy should we need another exhaust system of this moist hot air, with a fully lined concrete shaft that's 5.5-meter diameter. Okay, Steve. Yeah, I guess that's what I'm getting at, is I'm just trying to understand the risk. It's encouraging to hear that San Jeronimo will be an insurance policy sort. Trying to understand the risks of a potential repeat of what we've seen over the last couple of years with reduced grade and throughput and so on. Can you comment on that? Do you think that it's very unlikely that you would see this happen again in the future? We're very pleased with the shotcreting advances that Martin described on these raises. We're able to robotically get shotcrete into these raises now. Shotcrete seems to be the key thing in raises and developments, and sealing off the acidic ground away from the heat and humidity where it starts to degrade. There are risks with that. We haven't really done this for a long period of time yet to see how that shotcrete's going to perform. That is the reason we're really pushing this shaft as an insurance policy. We do think it's an important insurance policy. Right now, today, I think in the Gemelo shaft, we got up to six inches of shotcrete fully on that wall, and we haven't seen any degradation of that to date. We feel pretty good about it, but we're feeling really good having this insurance policy going forward, too. Okay. Thanks for that. With the ventilation restored, what is the reason, again, that you can't get back up to, say, 2,000, 2,100 tons per day? I think just to expand on what a previous caller had asked. Yeah. No, it deals with the development. Because of the ventilation restrictions, we not only restricted mining production, but also development and ground supporting. The same kind of degradation we saw in the raises, we've been seeing in some of the developments, particularly out to the east. We do have a bit of catch up on there, and that's why it's going to ramp up over the next six months or so, up back to the 2,000. Okay. Back up to 2,000. Okay. That's great. Time. For just a final question. The La Colorada Skarn resource deferred to year-end. Was there a reason not to include it in the resource update last night? The current resource is more than a year old. There's been a lot of drilling on this target. We're curious to see how it's advancing. The only reason we didn't include it there's been some great infill drilling in there, and we're really feeling good about that Skarn deposit. We also are coming out with the PEA towards the end of this year, so we thought it's best just to wait for that PEA so we have a full understanding of that new resource before it's released. As you can imagine, there is a lot of technical work going on right now on mining methods, on ventilation, on access of the area, on processing, et cetera, for the PEA. All that will ultimately impact, obviously, well, we're not at that reserve stage yet, but it will still impact our resource and how we see that Skarn being developed. It's the prudent way to wait a few more months for that resource update and include that right in the PEA. Fair enough. Okay. Well, thank you for that, Michael and Steve. Good luck in the second half. That's all from me. Yeah. The next question comes from John Tumazos with John Tumazos Very Independent Research. Please go ahead. I don't want to repeat, thank you, the earlier questions, but the resource and reserve report sort of reads like you didn't drill a hole in the last year, which I know you did. Is it fair to just summarize that the challenges of producing in Latin America with the COVID-19 epidemic were significant, and it was a big effort just to produce as much as you produced, and some of the reserve calculations and updates were less pressing than production? Maybe next year, we'll get a little more data. Then secondly, it looks like the processes are moving in Guatemala and Chubut, which is better than things were for the last several years. I guess it's impossible to predict how long the processes will take, whether it's one year more, two years more, but at least there's communications and engagement, which is better than nothing. If that's a fair summary of where we are, Michael, I'm trying not to put too many words in your mouth. Yeah. Good morning. We know that there was a big impact from COVID to our operations in Latin America. Last year, we have been shut down by governments all across the continent when the epidemic started. Of course, that had also an impact to our exploration efforts, probably more so than to our production because the logic step is when you think you're a company with one of the largest reserve base in the world, the logic step is to give priority to our production when you have interruption like we saw from COVID and not to the exploration. That doesn't really make a big difference if you deplete a little bit of the reserves for a year like this, have less people on site and give, as I said, give priority to production. That's what happened in the past. That's why we mentioned in the report that we were probably down 50% on the drilling. Of course, with less data, you got less intercepts. You got less reserve increases or replacement. I'm sure you saw that we still put the full drill programs up at Timmins and at La Arena where it was easier to do. We replaced more than one year there of production in both sites. Very good news and obviously shows you that when you spend the efforts on the drilling, you get the results out of there. We really felt last year that in many of our assets where we have very long life reserves ahead of us, that we can, as I said, we can take a slight reduction on our reserves and prioritize our production. That's probably enough for the reserves. I think, obviously, we'll be open to give much more detail. There's much more detail in the press release that Chris put out this morning. On Guatemala and Chubut, I think your analysis is fair and right. The other process in Guatemala is moving with pre-consultation meetings. I think the meeting that was supposed to happen in July has been moved to August due to COVID restrictions, which are still very strong and big in Guatemala. We all have to make sure that these meetings are held in a safe environment and safe manner. They're moving ahead and progress will be reported as they move ahead. Michael Steinmann, if I could follow up on the first point of keeping up with production. We all understand that most of the mining companies had to divert workers from exploration, from CapEx, from waste stripping and underground tunnel development just to produce the current quarters during the crisis. Even Escondida cut their production forecast 200,000 tons because they were behind on waste stripping. I know you haven't introduced guidance yet for 2022, let alone 2023. If we can understand 2020 and 2021 mishaps and lower output and to a plethora of one time factors, do you think you can get back to 2019 output or original 2020 guidance in 2022? Are there so many things to get right that it won't be until 2023 or 2024 that we get back to where the trend was two years ago? Well, remember when we give the guidance for 2021, we mentioned there that our Q1 that we assume no COVID-19 impact was the Q1 of 2022. Time will tell how this pandemic evolves. As I said in prior conference calls, I don't have a crystal ball how that evolves, and we have to react to reality here. So far, I would say, so good. We see how it's going on. There are new variants. There is behavior of that virus that we don't know yet and don't understand, and we'll see. With the information we have right now and the vaccination rates we see right now, I think there's a very good chance that we can go back to more normal rates and less restrictions and less controls and protocols, et cetera, due to COVID-19 than we had this year. It's now August. It's still a bit far away, really, to make further statements on next year's behavior of the pandemic. The underground development, the waste stripping, the CapEx evolution is such that it's possible that next year you're at 7.5 million ounces of silver per quarter, and a little more than 150,000 ounces of gold per quarter again. Well, look, as I said, it's very early to make these calls. We didn't go to the budgeting yet. I don't have the numbers. I haven't, obviously, seen the numbers for the forecast. All I'm saying is that if everything continues like we see right now on the pandemic side, we should be able to go back to our normal throughputs and our normal numbers. Obviously, very high on the list, as Steve mentioned at La Colorada, when we get back to normal throughput and normal grades there as well. Michael, that's very good. There's other companies that already say they're so far behind that they lowered multi-year forecasts. That's actually better than a lot of people can fight the battle. Thank you. The next question comes from Lawson Winder with Bank of America Securities. Please go ahead. Hi, guys. Good morning. Can I ask about the cash cost, the per unit cost, per ounce rather, at Timmins? A slight increase in throughput, a relatively flat quarter-over-quarter grade, but the cash cost ticked up about five percent. What was driving that? Lawson, Steve here. One of the drivers was just the exchange rate. We had seen an increase in the Canadian dollar strength during the quarter. It has backed off since then, we're feeling better moving into Q3. Also addressing some of this geotechnical stability that we've been dealing with down in Bell Creek. It's required a lot of redrilling of holes that have moved after they drill, and a lot more elaborate support going in there. There's additional costs there, too. We move down the levels and get into these transverse stopes, it's going to relax that as well going into the second half. Do you see any impact on grades at Timmins because of what's going on at Bell Creek? I don't mean for this year, I mean just going forward. Yeah. Bell Creek clearly is where we get the best grades. We are anxious to get throughput rates up at Bell Creek, which will help produce at higher grades as well. Turning to Argentina, I was surprised to see that gold reserves, well, gold and silver reserves at Joaquin actually ticked up, 13% and 15% respectively. What was driving that? Similarly, with the pretty substantial decline at COSE, was that all driven by depletion, or were there other factors driving those large declines at COSE? Hi, Lawson. Joaquin, we were actually able to get four or five drill holes into the deposit. Obviously, we've got a lot more information geologically from the development, et cetera, in Joaquin, and we were actually able to upgrade some areas, some thicker areas. That was a net-net win based some very limited exploration that we're able to do at Joaquin. COSE, while we did deplete through production, also, again, we got a lot more geological information from development from actually being in your body from. That was a slight change to the geological model as well. We're obviously keen to get back in there and assess and review as we gain more geological information from development. Okay. No, that's great. On that point, how are you guys now thinking about the mine life in Argentina? The entire Manantial operation, including Joaquin, COSE, and what's left at the original Manantial deposit. Where I'm coming from is, on my numbers, it's still looking like it's pretty much end of life in less than three years. Are you still thinking of it in those terms? Could it be expanded, or could it be less? Yeah, Lawson. As you know, both Joaquin and Cozzy have been, from the beginning, two satellite deposits, very high grade, but very small and limited in size. Really, I think nothing has changed. Obviously, as Chris mentioned, we are constantly gaining a bit more information with the development of production there, and so that will move reserves a little bit up and down. I would not expect to see there a major difference to our reserves here going forward. I think you are probably about right with your estimate on timing, bar alone that we would make our big discovery, but that's how it looks like right now. Okay, great. Just on Dolores, of course, we've already discussed the decline in the reserves there quite a bit, but just thinking about that asset as well, is that a three year mine life asset, or do you guys see potential to extend that mine life there longer term? Yeah, Lawson, Steve here. We'll be mining there through at least 2024 into 2025 perhaps. No, it's driven on the open pit, and the open pit's an economically constrained pit. There's some pretty steep, rugged terrain to the west there that we just can't afford to strip anymore. We're not really seeing a lot of upside on exploration there. There is a bit underground. The underground's pretty small relative to that open pit. I think mine wise, we're moving into 2024, maybe a little more, the processing will continue on, the trickle down leaching will go on quite a while, given that slow kinetics on the silver on that thing. Okay. That's great, Steve. just maybe one final question in terms of how you think about the gold production strategically going forward. obviously, it's been a huge contributor to the company for, well, since the Tahoe acquisition. It continues to be, it will be for two more years, but looking out to that longer term, is it a strategic imperative to keep the gold production at these levels? Are you guys comfortable seeing more silver production replace gold production on a 5 - 10 year view? Look, at the end, it's obviously dictated by geology, and I think Dolores is a very good example where over time, the deposit moved from a silver deposit with gold to a gold deposit with silver, and that's obviously reflected in our accounting for it. Remember, at the beginning of the year, we moved it over into the gold sector, in that sense, away from the silver markets, because there's much more gold for the rest of the life that are coming. It's really dictated by geology. I'm looking at free cash flow and profitability of assets. These gold assets did very well for us, and the fact that we have been able to replace, even in a difficult year, replace reserves again by more than one year at Timmins and at La Arena. They're very important assets to us for sure, and they developed very nicely. When we did the purchase model, actually, we kind of assumed that La Arena will be done by 2021, I believe. Now we even added another year. Gold production will continue, and I'm very happy with that. Yeah, La Arena has been an amazing asset for you guys. Okay, look, we're almost at the top of the hour. Thanks so much. Those were good answers. Thanks for your time and all the best. Enjoy the rest of your summer. Thanks, Lawson. Once again, if you have a question, please press star then one. The next question comes from Ryan Kazum. Please go ahead. Hey, guys. I think most of my questions have been asked, so I'll just ask one quick one. It was good to see that guidance was reaffirmed. It looks like obviously some mines are tracking higher than others, and you talked in pretty good detail about La Colorada in the second half of the year. I guess my question is, would you say that the reaffirmation of guidance, should we be thinking about that more on a consolidated basis, or are you reaffirming guidance for each mine? I guess I'm specifically referring to San Vicente, Minatitlán, and Timmins. Are you confident that you can sort of get the production up pretty significantly in the second half? Should we be thinking about some of the other mines, I guess, sort of pulling the weights for those assets to get to consolidated guidance? Yeah, Ryan, Steve here. Good question. Generally, yeah, I would say for sure it's consolidated, gives us a little more breathing room. Absolutely. There will be pluses and minuses, I have no doubt about that. With that said, I do think today we anticipate, yeah, we will see Timmins, we will see San Vicente, Minatitlán kind of move up a little bit in the second half. We do anticipate that. We think generally they'll meet the guidance, what we set out for each individual mine. Certainly, we're really targeting the consolidated basis to give us. One of the advantages of having many different mines is when one's having trouble, generally we have another one doing well. We do expect that. That's just reasonable. Got it. Okay. Thanks for clarifying that, Steve. That's all I had. This concludes the question and answer session. I would like to turn the conference back over to the presenters for any closing remarks. Thank you, operator, and thanks for everyone calling in today. I just would like to remind everyone on the call that on September 9th at 11:00 A.M. Eastern Time, we will be hosting now our second annual call to discuss Pan American's environmental, social, and governance approach. Please, if you have time, save the date and call in. Watch for further information. We'll put out a press release with the call-in details, et cetera, and you will also be able to find it on our website. Looking forward to talk to everyone, hopefully at our ESG call, and if you can't make it, that it will be prerecorded, I'm sure, and available later on. We'll talk, obviously, at the end of Q3. Enjoy the rest of the summer, everyone. Stay safe. Thank you very much. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.