Hello, and welcome to Virtual Investor Conferences. My name is Cecilia, and on behalf of OTC Markets, we're very pleased to have joined us with the Clean Energy Metals Conference. Our next presentation is from Sierra Metals. Please note you can submit questions for the presenter in the box to the left of the slides. You can also view a company's availability for one-on-one meetings through the Schedule Meetings tab found on the conference platform. At this point, I'm very pleased to welcome Ernesto Balarezo, Chief Executive Officer of Sierra Metals, which trades on the OTCQX Best Market under the symbol SMTSF, and on the TSX under the symbol SMT. Welcome, Ernesto. Thank you very much, Cecilia, and thank you everyone for attending this webinar. Let me start by explaining a little bit about my background. I have been in the mining industry for 30 years, almost 30 years. I worked at Hochschild Mining for 17 years. My last position there was COO in charge of three countries with their operations. I then moved to Gold Fields, the fourth largest gold mining company in the world. I was the VP for the Americas at that point, and also with some responsibility overseeing the operations of Ghana, Australia, and South Africa. So always on the operation side of the business. That's me. And then now moving on to Sierra. It might help if I give you a little background on Sierra Metals. Sierra Metals has been a company in a sell process for many, many years. Previous managers were running the company, but always with a view to sell the company. When you do that, and you are a seller, you lose track of what's important on the medium term, long term for a company, and this happens in every industry. That happened, the consequence of that we saw it in twenty twenty-two. I joined the company in January first, twenty twenty-three. In twenty twenty-two, everything went south for the company. The three mines that they had at that time got flooded. Pumping systems were not working properly. Ventilation systems were not working properly. The company didn't have any cash on hand, any cash at all. A debt of $85 million was due in the next 18-24 months, so you can imagine the amount of problems this company had to face in 2022. On top of that, the board of directors at that time put out a press release saying that this company was probably gonna be broke in a few months, so you can imagine what happened with the stock price. It went from $4 and something to $0.13 in a year. That's talking about losing value and destroying value, so why I joined the company then in January of 2023? Because I say I saw a great opportunity here. Out of the three assets that this company had at that time, two, I believe, are world-class assets, and I'm gonna show you why. So that's why I decided to take the challenge and join the company with the condition that I was gonna be able to change the management team. I do believe that it's better and faster when you run into these kind of problems, to bring people with your same mindset of operating a business, than to try and change the mindset of previous managers that were on a sell mood for quite a while. That requires time, money, which we didn't have at that time, so coming into Sierra Metals, we're a copper producer with precious and base metal byproducts, especially precious. Gold and silver are 26% of our revenues. As you can see here, gold and silver, 12% and 14%, but mainly a copper producer. Now, we don't have three operations, we only have two. In Mexico, one, Bolivar, and in Peru, one, Yauricocha. We have been focused the first half, the first year, I mean, in 2023, we have been focused on the first two pillars: safety, health, environment, and communities. We needed to reestablish the culture on these non-negotiables. It's what I call non-negotiables and operational excellence. We needed to put back on track Yauricocha and Bolivar. Right now, we're thinking a little bit, I dedicate probably 15, 20% of my time to think about growth. What's next for the company? What have we been able to accomplish last year? Look at the right-hand side of the slide. Bolivar was only treating 2,000 tons per day in January of last year. Now, Bolivar, it's around 5,000 tons per day. We did do and invested a little bit of money on ventilation shafts and put the right people on the job in Bolivar to manage the mine. So starting probably August, September of last year, we were able to reach around 5,000 tons per day, and we continue to do so. We now have an updated 43-101 that shows and tells the market what we have in terms of resources and reserves. I'm gonna show you that. It's amazing. We were able to refinance our debt last year. Actually, we did refinance it this year, but we started the negotiations last year. Now, we don't have to pay $85 million in less than two years. Now, we have a five-year term loan, 35% balloon on year five. The first year, we only pay interest, and we can pay this debt out anytime without any penalties. It's a little bit expensive, SOFR plus 6.5 right now, so we are planning on refinancing it again, because we're showing and giving good results to everyone. This is something that blows my mind still. We didn't have a permit. Let me go to that slide. Hold on a minute, please. Oh, I think I need to double-click. Yeah. We didn't have a permit to mine below the Level 1,120. Look at the left-hand side of the slide. 95% of our resources are below the 1,120 level. We had a permit to drill. That's why we know we have a bunch of mineral. But on top of this 1,120 level, which we have mined the last seventy-five years, there is little mineral left. Now, in February twenty-first of this year, we got the permit to mine below the 1,120 level. So now we can access all that immense amount of resources that we have. Our share price has increased a lot, 200%. I think we're doing great on this front. We did an equity financing on October of last year. We wanted to show the market that management and shareholders believed in this management team again. Just to let you know, almost all the top 40 managers in this company are new to the company. They have been poached from very good companies like Gold Fields, Hochschild, Volcan, here in Peru. But we wanted to show the market that we believed in this company. 10% of this, CAD 16 million, came from us, from managers. So that's great. Cusi. Cusi, that's the. This is the mine that we got rid of, in the sense that we sold it. We didn't want it in our portfolio. It needed money. It's a good mine, but it needed a lot of money, a lot of exploration money, so we decided just to take it and to let it go. We kept a 2% NSR, just in case the new owners start producing and do very good. Excuse me. Now, let's move on to Yauricocha. Not to take much time, but look at the amount of resources that we have in Yauricocha. Measured and indicated, 10 million, inferred, 13 million, and this is our 43-101 saying it. It's not us saying it only. The capacity of this mine is 1.26 million tons per year, 3,600 per day. Because remember I told you, we didn't, we don't have enough mineral on top of the level 1,120, which we are developing right now. We started last year at 2,000 tons per day only. We didn't have 3,600 tons a day to extract from above the 1,120. Starting February twenty-second, one day after we got this permit, of this year, we have started to develop that part of the mine. Now, we're at 2,800 tons per day, and by the end of the year, we'll be at 3,600 tons per day, which is full capacity. With this amount of resources, 23 million tons of resources, and at this capacity, at full capacity, we have a life of mine of more than 13 years. That, for underground mining, is very, very good. That means that if we don't do any exploration, we have 13 years of life, but we will do some exploration every year. In terms of copper equivalent production, as you can see, because we didn't have any mineral, production went low, went down. In 2023, we were able to maintain the production of 2022. This year, it's gonna be a little bit more than 2023, but not much. Remember, we are developing below the 1,120 level, and costs reflect what I just told you. It started going up. Next year, at full production, hello, are we back again? I believe so. John, can you just put your thumbs up if everything is okay? Oh, you are back. Okay. Thank you. Okay, so bear with me one minute. I need to put a little bit bigger. Okay, so the costs next year, when we'll be at full production, will come down, probably in the high twos. Again, we will be producing next year between 75 and 60 million pounds of equivalent copper. If we go to Bolivar, the same. We have 30 million tons of Measured and Indicated Resources, and Inferred Resources, 30 million. At 5,000 tons per day, we have a 13 years mine life, life of mine. This, again, is amazing. That's when I first said that we have two amazing deposits, world-class underground deposits. I mean it. I mean, And we will continue to develop them. This is a very shallow mine, only 300 meters in depth, and it's open. Both deposits are open, along strike and in depth. So looking forward to find new and exciting things. This mine, Bolivar, we can very easily take it to 7,500 tons and 10,000 tons. The caveat here, the problem here is that we don't have enough tailings capacity. So we are in the process of building a new tailings dam in the next 2 to 3 years, and then we'll go to 7,500 and then to 10,000 tons per day. 2020 is not a reflection of the mine. I mean, you can see here, because of this all-in sustaining cost of $188, that no CapEx was done. They really high-graded the mine, they de-sequenced the mine, and look at 2021, 2022, production started coming down, obviously, and costs started going up. Last year, we fixed a lot of things in the mine. We were able to produce 37 million equivalent pounds of copper at a very decent cost, $3.29. We did this only with 3 stopes available. This year, we want to have, by the end of the year, 9 stopes available, just to prepare the mine to ramp up to 7,750 tons and 10,000 tons per day. That's why our cost is not coming down yet, but it will come down in the next years as we increase the capacity of our mine. I'm gonna go. I'm not gonna talk about this. It's just how we're producing in each metal. We're doing very good. This is very important. Look at the EBITDA numbers that we're generating, $32 million in the first half of the year. Look at the bottom left graph. In 2020, 2021, we were producing around $100 million in EBITDA. Most of this number, 60%-70% of this number, came from Yauricocha at full capacity, at 3,600. So next year, we'll be at full capacity, and we, Yauricocha, will be generating very, very decent cash flows and EBITDA numbers. Bolivar, it's a $50 million EBITDA operation, probably $60 million, until we increase the capacity. So you can see how we inherit these operations with a $13 million EBITDA number in 2022. We were able to accomplish $46 million last year. This year is gonna be around $60-$70 million, and 2025, it's where the good stuff is coming. The net debt to EBITDA ratio is not an issue anymore for us, 1.56, and for the banks as well. We were at 5.86 times net debt to EBITDA ratio, so now it's not an issue. What's next for Sierra Metals? Where do we see ourselves? As I explained, Bolivar, to increase capacity in the next few years, and this is gonna be an amazing... It is an amazing deposit. It's gonna be another cash cow for us in the next years. Yauricocha, as I explained, we are ramping it up, and by Q4 of this year, November, December, we'll be at full capacity. So starting next year, Yauricocha and Bolivar will be at full capacity both. And that's organic growth, and we are very, very much focused these days on organic growth. Inorganic growth, M&A. It's hard to get something accretive for our company, but we have proven ourselves to be good turn-arounders, good miners. We are hands-on. We go to sites and take care of things, and we have a very engaged team, so that's what makes the whole difference. So we are metal agnostic. We're looking in the Americas. Priorities, obviously, Peru, Mexico, these are mining countries. Mining is not going away from our countries, and then the Americas, probably in the northern U.S., Canada. We also have greenfield projects. We have, in Peru, a big porphyry. We have signed some NDAs with, some major companies, and one of the major companies in the world that know a lot about porphyries. It's not for us, it's too big for us, so hopefully I'll have good news in the next months. We also have some projects, seven projects. Some are drilled in Mexico, where we are looking to JV those. We have $20 million in our bank accounts right now, but we are not gonna put money for greenfields. We rather put it in the organic growth. This is what I told you at the beginning. Look at the share price performance. In 2021, our share price was at $4, almost $4.80 or so. With one bad asset losing money, Cusi, and two assets running not so good - not so well. Look at the share price went down to $0.13. We started marketing the new Sierra Metals in August, September of last year, and things have started to. The market has started to realize that this is a different management team, and this is a different company now. It's not for sale. We are operating and generating cash flows from our operations, I'm sorry. This is the last slide, and then we'll go to Q&A. Look at the market cap of the company in US$110 million. If you add up what I told you about the EBITDA numbers, you multiply that by five, you can see that we are very, very much undervalued. So this is a good opportunity for everyone. I keep buying shares. I own 1.5% of the company, and like I said before, the management team owns around 4% or 5% of the company. So that's a good message also to the market. We are putting our money where our mouth is. So thank you very much for listening, and now we can go to Q&A. Okay. "Let us know, please, if you are looking financing at any kind of- of any kind, equity, royalty, offtake." Financing, more debt, not at this point. We are not on that arena. I think we have enough debt, and if we do go into capital projects, probably it wouldn't be with debt. But thank you for the question. "Are you okay with mining projects in Ecuador?" Ecuador is not a mining country, and it's not the best country to be in at this point. So I know there are some good projects there. There are also good projects in more friendly countries, so it's not my first choice. "Thoughts on your valuation and catalysts for a re-rating of Sierra?" I think... I mean, we are covered by CIBC. What they tell us is that we need to show that by the end of this year, we'll be at full capacity, and we are going to be at full capacity. I think that, that's gonna trigger an important re-rate for the company, and also more coverage. And we have two. I dare to say we have three interested banks to start covering our story. We are an amazing growth story. So, I think those are the to keep delivering right now. "Over the past six quarters, you and your team have really turned Sierra Metals around. What are some of the keys to your success?" Well, first, thank you for the question. First of all, safety. For me, it's my number one concern, and a safe mine is a productive mine. The change of the culture in safety in this company has been amazing. So, I would say that's number one. Then, we have stabilized and optimized our operations. They are generating now positive cash flows, both of them. We have sold Cusi, that was demanding money from us. With this improved financial position from our stronger operations, we have been able to refinance our debt and better align our ambitious growth plans while also providing Sierra with financial flexibility much needed. I would say that's another key thing that we have been able to accomplish. Most important one right now, I have to say, it's the new management team. We are all focused, we are all eager to make this a world-known and more profitable company for our shareholders. So the new management team pulling all in the same direction with a long-term view of the company, it's critical, and we have been able to accomplish that. "You mentioned that Sierra Metals is now focused on growth. Where will that come from?" Well, I think we're one of the best growth stories in the sector right now. You can see our numbers and how our share price has behaved. And like I said, Yauricocha going back to full production, that's 40% increase. Bolivar set to grow. I mean, have everything ready to grow 50%, and then 100% in the next couple of years while we expand our tailings facility. I think that's the other key issue. Greenfield explorations, this porphyry that I told you about, it's also a key something that we need to focus on. Always, we'll keep scouting M&A opportunities, but it has to be in production, close to production, metal agnostic, in the Americas. I'll let you know how we do on that front. I don't see any more questions. Okay. Well, I'd like to thank everyone for your time and for this webcast. I hope I gave you a good picture, an interesting picture of our company, and our phone number and contact information is on the screen. Thank you so much for listening, and have a good weekend.