Hochschild Mining (LSE:HOC) Q2 2026 Earnings Call

0:01 Hello and welcome to the Hochschild Mining's twenty twenty six Interim Results Presentation. Call.

0:16 I would now like to hand the call over to Eduardo Landy, Hochschild Mining's CEO to begin. Please go ahead, sir. Good morning, everyone, and welcome to our presentation of our H1 results. Here with me is Eduardo Noriega, our CFO, and Charlie Gordon in London. Charlie, please, if we can go to page three. Okay, well, first, let me say that we have, on H1, the strongest ever half year is financials. We have produced 150,000 ounces, a little bit more. Revenues went up 62%, up to $844,000,000 Our adjusted EBITDA went up 119% to $492,000,000 The EPS went up 208% to $0.37 Our attributable all in sustaining cash cost was $2,448 per ounce gold equivalent.

1:32 We end up with $3.00 $9,000,000 in cash and our net cash position is of $51,000,000 The dividend that we have established following our policy is $04 equivalent to $21,000,000 What do we have to do with the rest of the second half? Well, Mana Rosa reorganization is on track. We'll talk about it during this presentation. Rueirocata, the environmental permit was submitted to the Peruvian government at the date that we planned to do so.

2:18 We continue working on Monte Carlo on engineering and the decision or the FID will be at the end of the year. We continue having strong ESG metrics, and we have also reviewed our all in sustaining cash cost for the end of the year, and the new range is between $2,380 to $2,500 per ounce. Basically, the reasons for this review is being FX in the different countries that we operate and also the price, the gold and silver price that affect directly to work profit sharing and royalties, for example.

3:12 So I mean, the guidance stay in terms of production, stay as it was defined at the beginning of the year. The all in sustaining cash cost is the figures I just gave to you. Okay. I'll pass the presentation to Eduardo Noriega to go through the financial results. So Charlie, if you can go to Page five, please.

3:38 Go ahead, Eduardo. Thank you very much, Eduardo, and good morning. So this strong set of financial results, as Eduardo described as a report, the half year results, are mainly characterized by strong metal prices, but also strong operations and the recovery of our operational capabilities in Brazil. Revenue was up 62% and it was mainly driven by higher prices, gold and silver prices. That was partially offset by scheduled lower ounces produced. Cost of sales went up 11%, mainly due to, as I said, scheduled higher tonnage, including waste movement in Manarossa to recover our operational capabilities.

4:29 We also had the impact of higher prices in royalties, workers' profit sharing, export tax in Argentina and other items directly correlated to prices. And also, we saw local currencies in Peru and Brazil and net inflation in Argentina. I would say all those effects are closely tied to the stronger gold and silver prices. In terms of administrative expenses, the increase is versus last year is mainly driven also by the performance of the company prices impacting LP, but also over profit sharing and bonus provisions. In others, we recorded a higher adjustment to our mine closure provisions of $6,000,000 and also the impact of higher prices on some items in other expenses like the contribution that we have in Argentina.

5:27 Finally, a tax rate effective tax rate was 35%, mainly

5:35 including special mining taxes and the FX appreciation in Brazil and Argentina special mining taxes and royalties are in Peru, sorry, and also the impact of FX movements in Brazil and Argentina. Excluding these effects, our effective tax rate would have been 32%. We didn't record any exceptional items in the first half of the year. If we can go to the next page, please, Charlie. Here, we have the cash evolution, and I would just like to start saying that free cash flow was very strong in the year and accounted for around $156,000,000 in total.

6:22 You can see that the cash that we were able to generate in Inmaculada and San Jose, very strong. The first one is $288,000,000 the second one is $149,000,000 In Manarosa, we used $18,000,000 to fully recover our capabilities and build a thickener, inculse a thickener, and open the pit. We invested $16,000,000 in Brownfield exploration. Our corporate overhead was $30,000,000 In terms of tax paid, we paid $129,000,000 from which most of it is in went to Peru and Argentina. We reduced debt by $80,000,000 We paid $84,000,000 in dividends, dollars 26,000,000 to HOCUSE shareholders and the rest, dollars 58,000,000 to our joint venture partner in San Jose, Massimo Mining.

7:24 We had temporary movements in working capital, negative of $37,000,000 We executed our current maintenance and mine closure budgets and invested $17,000,000 and we paid interest net interest of $8,000,000 In addition to all segments, we invested in Montego Carbon, dollars 9 in permitting process sorry, in our engineering process in RotoPasta, 6,000,000. In Aqara, we made a cash contribution of $9,000,000 in Q1, and we had other investments in $3,000,000 mainly the expenses that our the Tiernan company invested in the HOCAN projects.

8:09 So with that, our ending balance of cash and short term investments was $3.00 $9,000,000 Again, a very strong free cash flow generation in the first half of the year despite having temporary movements like the working capital and also, I didn't mention in the tax line, around $80,000,000 were taxes that belong to the previous year, 2025, that were paid in March and in May, the regularization of 2025 taxes. If we can go to the next page, please, on cost drivers. The all in sustaining cost at the HOC operation was $2,448 per ounce.

8:58 In Inmaculada, the cost was $19.53 dollars per ounce, and that cost included the impact of the scheduled lower grades, but also the impact of higher prices in worker profit sharing and other items of that cost. We also had a stronger sol, a local currency in Peru, which had an impact. And we had scheduled sustained CapEx increases, mainly to develop new areas and to execute our increased revenue program. In San Jose, our all in sustaining cost was $2,944 and those that cost includes the impact of lower grades from the border area that we're mining and also the impact of higher prices in royalties and export tax.

9:55 We also observed a local inflation in Argentina. We were expecting more a devaluation, but we saw in this first half a net inflation of around 7%. In the case of Mararosa, the all in sustaining cost of $3,551 per ounce includes all the efforts and investment that we have made to recover to successfully recover operational capabilities in the country. And also in Maranosa, we also had the impact of the stronger BI versus the U. S. Dollar. I would like to highlight that the company has made strong efforts implementing a cost reduction and efficiency project that has helped us mitigate the impact of general inflation in the mining industry associated to higher metal price.

11:02 Again, a very good performance. And as Eduardo pointed out, just would like to reiterate that the adjustment that we have done to our volume cleaning cost guidance is mainly associated to higher prices and the direct impact in our oil and sustaining costs and also the impact of stronger FX rates locally and net inflation in Argentina. All the rest of the inflationary pressures have been offset by our efficiency projects. You can go please to the following page on capital expenditures. We have maintained our guidance of between $210,000,000 and $225,000,000 for the year. In the first half, we invested $105,000,000 in sustaining CapEx on a consolidated basis.

11:54 In Inmaculada, we invested $69,000,000 and this number mainly includes mine developments and projects like the expansion of the Tailings Dam where we invested $10,000,000 We also executed our infill drilling campaign and other support CapEx. In the case of San Jose, our CapEx was $15,000,000 mainly related to mine development. And in the case of La Rosa, the $21,000,000 invested in the first half is mainly associated to all the programs that we explained before to recover the mine operational capability, mainly the thickener but also the opening of the pit. On the following page, please, on the balance sheet, we have $3.00 $9,000,000 in cash and short term investments, as stated before, and the cash generation of $156,000,000 free cash flow is reflected in our the transformation of our net debt position by the end of twenty twenty five of $20,000,000 to a net cash position of $51,000,000 The interim dividend went up 300% to $04 per share, and our net cash to last twelve months EBITDA was minus

13:24 sorry, the net cash was 0.1x, much below our target of between 0.5x and 1.5x net debt to EBITDA in preparation for the investments where we are scheduled to do in Monte Del Carmen and Royal Lopata. Back to you, Eduardo. Thank you very much. Charlie, we can go to page 11. Okay, just to remember what we defined two years ago, it was a strategy that pursued the delivery and to reach the growth.

14:15 Basically, we defined four pillars. The first one was brownfield to bring long term value, basically expanding our life of mines in each of the sites that we operate. Also, to be focused on resources that would end up minable, you know, it's important to bring mineable resources, and also to continue expanding our land packages in all the countries that we operate to maximize the chances to bring new resources. On the operational excellence, of course, we have a lean philosophy across the company, looking for cost efficiencies. Also, we like to go by the book on the project development, that's why we are working on Monte Carlo at the moment.

15:13 And of course, it's very important for us to be on the site and to have a leadership that is present with the people. On ESG, we need to continue to focus on safety. Safety is the most important thing for us. But of course, as you know, water is something that is very delicate today in the world, so we like to focus on water management. As you know, three years ago, we implemented a new community approach, especially in Peru. Mean, the result has been that no blockages whatsoever during the three years.

15:59 And of course, talent management. And on the four pillar is the discipline capital allocation, where we are looking to produce capital returns to our shareholders, But of course, through our balance sheet, we need to funding organic growth, so also to be able to pay debt. And of course, if we do any M and A, this M and A has to be value accretive. If we can go to the next page, please. Three years ago, also, we classified the assets on core assets and non core assets.

16:45 So today we are focused on our three core assets, which is Inmaculada, Mana Rosa and San Jose. We also focus on the projects that we have on the near term, Monteo Carmen, Royal Opata, and also we have been working very hard on getting value out of those non core assets. And the best samples you have is Ciaran Gold today and Atlara has a value of $300,000,000 Cres Patuca and Arcata was sold. If we go to the next page, please. As Eduardo Norguera mentioned, we need to be very focused on cost and looking for efficiencies.

17:39 Today, we have more than 50 initiatives in place to be able to control or to offset the inflation that we are living in the mining industry.

17:53 And that inflation has been able to set off with these initiatives. So the only reason why we have reviewed the new guidance, cost new guidance, is because we have the FX effects and also the price related costs. In this page, you can see different top initiatives that they have been implementing

18:26 in each site. We believe that we will be able to achieve the guidance in terms of cost and also in terms of production applying these programs. Going to Maguada, on Page 14, please, Charlie. Maguada, as you know, is our flagship operation. The guidance for 2026 is between 174,000 to 185,000 ounces of gold.

19:03 We are in that path to be able to achieve these results. Sadly, I have to say that we have a contractual fatality in June, but we have done an extensive investigation on what happened and applied all the lessons learned from this situation.

19:29 Also, I would like to mention that, as you can see, the production profile, it goes a bit down, but I have to say that this is the results of having higher prices that let you pass through the plan lower rates.

19:52 If we go to the page 15, I mean, is Inmagulla has been a fantastic story. We started Inmagulla back in 2015, and if you remember, we used to have 1,000,000 ounces of gold equivalent. It was 80,000,000 ounces of silver equivalent.

20:15 In the last ten years, we have been able to discover eight veins and bring a total resource of 5,200,000 ounces of gold.

20:27 What is next in Inmaculada? Well, Inmaculada, we are trying to do exploration at the south of the deposit. That is something that we haven't tested yet. Also, Minascucho, we just got the permit and we are waiting for social permitting, that's at the northwest of the deposit. We have found at Eduardo Bell some new veins that could be potential resources in the next years. And also, we believe that we will be able to bring around 250,000 ounces this year on inferred resources. But as you can see, I mean, this year, our focus is to try to bring potential resources, potential new areas to be able to expand again the resource at Inmaculada.

21:24 Going to page 16, we have Ruralopata project. We have a great new here, and it's that we have been able to file the environmental permit with the new Peruvian government.

21:47 Also, as you know, I mean, we have been able to build this document. We have worked with specialist consultants. We closed our agreement with the communities back in 2024. And today, we believe that we have a year of revision, and we could be seeing the permit granted next year around August.

22:22 That's the plan. I mean, thing about Rolopata is that we have 3,300,000 ounces of gold equivalent. As you can see, the grade is four twelve grams of silver and 1.5 grams of gold, and the average width of the deposit is 30 meters.

22:45 Also, you know that we have a plant of 3,000 tons ready to receive this material at our Selene plant that is in current maintenance since 2023. So we believe that we have a huge value to bring to the company developing this new project. And also, if we can go to the next page, you can see that we brought a lot of resources from 2007 to 2025. But between 2027 and 2030, we believe that we can look for new resources to extend Marco Vein.

23:34 Good news for the company is that we just got the semi detailed permit that let us drill from 40 platforms, and we are going to target the extension of Pallancata vein and also the new areas that we believe that we can bring new resources. So I believe that

24:00 in a couple of years, we can have a new fantastic asset that will complement the production in Peru with at least 500,000 ounces per year. If we go to page 18, you can see our land package between Inmaculada, Pallacarta and Selene. It's 152,000 hectares. It's a huge land package. We have been able to add 6,000,000 ounces of gold equivalent to date.

24:35 And we are using the most advanced exploration tools that are available in the market. The latest thing that we are doing is microgravity surveys, and we are testing current veins with these models, and we believe that there is a very good correlation. So

24:59 between this microgravity and also the long haul drilling, we believe that we have the tools to explore all this area and continue bringing resources to our plants at Inmaculada facility. Okay. Going to Page 19, we fly to Brazil, to Mararosa.

25:24 Mararosa, as you know, it was an asset that we acquired in Brazil, our first asset. During 2025 and 2026, we have been working on a reorganization. And finally, we have finished that.

25:43 We have solved all the filtering issues. We have a new contractor in place. And our guidance we keep our guidance for 2026 between 67,080 ounces. If we go to the next page, I believe that the most interesting thing is the graph down at the bottom of the page, the run rate performance. And as you can see in August, we have the crushing, milling and filtering plans nearly to our nameplate capacity. The good news is that we were able to implement the thickener that now is fully commissioned and working in record time in three months.

26:40 And the most important thing is that today we come with a very competent mining contractor and we are doing many, many improvements at the mine. So I believe that the second half of Marrosa is going to be very good for the company. I mean, we have finished all this work.

27:03 If you can go to page 21, Charlie, please, you can see the OpenPE there, you can see the filters, you can see the dry stack on the right upper corner of the page.

27:18 That is, I mean, state of the art in terms of stability and everything. The thickener in place, you see the ore stockpile full of ore and also the filtering plan with the ceilings ready for I mean, with the roofs ready for the rainy season. If we go to Page 22, we can see the Maranorosa near mine program, 12 new resources. As you know, the place where HOC, which is Mararosa, is placed is an originic trend that extends for 20 kilometers.

28:07 And we have many mining concessions along this trend. Currently, are evaluating a structural corridor with three structures: POSE, Araras and STETTI. We believe that we have promising results from drilling at the North of Pose. I mean the idea is to continue bringing, as we establish in our strategy, is continue bringing new resources to current assets. If we can go to Page 23, we can see Monte De Ocarmo. Monte De Ocarmo is our new project in Brazil that we acquired in 2024 for $60,000,000 It's 1,000,000 ounces of gold.

28:58 It's located in a very mining friendly Tohrantins state, which is North of Goias. I mean, project is fully permitted, and I have to say that has an excellent infrastructure in terms of paved highways, hydropower plants, airports, cities, big cities, that I'm sure you will attract very good talent once we start the operation. Today, we are working on waste rock facilities and pre stripping engineering, going to detail engineering, The planned engineering done by Ausenko is nearly finished. Of course, we continue doing some pipe reading, and of course, we have been able to talk to suppliers in order to talking about the orders for milling, crushing, power lines and filtration to make sure that the lead times of those equipments are ready for us.

30:03 We expect to present to the market an updated economic go to our Board of Directors for FID at the end of this year. And at that point, we will have finished 100% of our basic engineering and through H1 twenty twenty seven, we will go to perform the detailed engineering of all the components. Basically, once you have basic engineering, you can apply a fast track construction strategy, developing detailed engineering during construction.

30:50 That's the idea. But believe that the first thing is to make sure that based on basic engineering, we have a very strong project even at very conservative prices. Also is established on our strategy to make sure that any M and A has to be value accretive. I'm going to San Jose. San Jose is doing very well in terms of production. Unfortunately, I mean, inflation has went down in Argentina. Today, we have up to 16%. But unfortunately, we didn't have any valuation. So I mean, cost is increasing.

31:38 And it's incredible how many efficiency projects we have done in order to control those costs, but I mean, 16% of cost increase is a lot. So I mean, we believe that we will be able to finish the year inside the new ranges that we have presented to the market and of course, be able to accomplish with our guidance. In terms of exploration, if we can go to page 25, we believe that San Jose still has a lot of potential in terms of new resources.

32:26 In 2026, we have been drilling Ungos Perdes West in Agnellena and Maura. We are also doing microgravity survey that has been complete 70% in areas that we believe that it could have new resources. And of course, also we are working at the San Jose Province, where we have some mining properties and we believe that we can bring more value to the company. Okay, changing the subject, if we go to page 26, I believe that we need to talk to new Peruvian government. As you know, we have elections on July 28, and Keiko Fujimori was appointed as the new president in Peru.

33:19 I have to say that a new cabinet has been appointed, and I would say that it's technical and investment friendly. At the inaugural address, it was centered basically on restoring stability, confidence and growth. We believe that these early moves that give us signals of continuity and pragmatic market oriented tone. On the economic team, we are very happy because Julio Velarde has been reappointed to the Central Bank. You know that the Peruvian soul has been the most established effects in Latin America.

34:17 Julio Valade, who will continue as a governor of the Central Bank, has decided to extend his leadership until 2031. Also, as a ministry of economy, Elmercuba has been appointed. He's a macroeconomist, very well regulated, respected macroeconomist, and also former Central Bank Director. We expect to have a growth of 3.5% GDP in 2026. At the Mining and Energy Minister, Guillermo Chino, has been appointed as a minister. He used to be vice minister of mines, and he's a person that has a lot of experience on the private sector also.

35:13 And I believe that the Fujimori's platform for our sector is trying to formalize mining, tackle illegal mining, and also simplify permitting. So I believe that why it's important, this news for investors, is that because we have an improvement sentiment with renewed expectations to have faster permitting, and I'm sure that the country is going to be attracting new investments. And so, I I know that permitting remains challenging overall because we to implement a lot of changes on regulations that the Fujimori government has presented.

36:11 But I mean, of course, we have the Royal Opata permit now with this government, and I believe that's very good news for the company. I insist that Ruyupada is it could be the new flagship of Hochschild Mining, and we need to continue developing this project. If we go to page 27, again, I mean, this slide is always on our presentation, and it's that we believe that we have a valuation opportunity. Now we have Manarossa that I believe that on H2 is going to perform.

36:57 Inmaculada continue having a very strong performance. And today, Royal Opata, have already present the permit. And Monte Del Carmen, we believe that at the end of the year, we are going to be able to present the FID. So with all these news, if we compare ourselves with our peers, we have still very low value, so that's an opportunity to buy our share, and the expectation is that the value is going to grow in the future. If we go into page 27, that's a conclusion. Well, twenty twenty six H1 has been, as we said, a record performance in terms of financial.

37:49 I'm extremely happy with the execution that we have been able to implement at Mararosa in its turnaround. We have very strong Peruvian and Argentina in cash flows. The dividend is going to be $21,000,000 And also, as we established in our strategy, Chiron and McLaren's investments now are valued at more than $300,000,000 I mean, what is coming is Monte Del Carmen project advancing with FID, as I explained. We believe that our Brown 50 program will deliver new additional ounces.

38:38 Royal Opata project will deliver more than 100,000 ounces gold equivalent starting production in 2028. And of course, we will be keeping our disciplined capital allocation strategy to make sure that we pay debt, that we have the cash to continue investment, and for sure, to gain returns to our shareholders. With this, I have finished the presentation. And of course, please, I would like to open the Q and A session. Thank you so much for being here today. Thank you. If you wish to cancel your request, please press 2.

39:31 And please make sure the misfunction on your phone is switched off to allow your signal to reach our equipment. Again, please press 1 to ask a question. The first question is from Richard Hatch from Berenberg. Please go ahead. Hi, thanks. Thanks for your call. I've just got three financial questions for Eduardo. The first one is just Eduardo, on the administrative costs they picked up because of bonus provisions, what should we expect those costs to rise at as we go into the second half of the year? That's the first one. Second one is just on the working capital. So you built working capital over H1 to achieve about $45,000,000 I just wonder if you could help us how we should think about working capital in H2. And then thirdly, just on cash tax, what kind of cash tax number should we be modeling for H2 twenty twenty? Thanks very much.

40:37 Thank you, Luis. On admin expenses, I would expect a similar amount for the second half. Would say that the most important impact here is workers' profit sharing. You know that in Peru, around 8% of the profit before income tax is shared among employees. So that has a direct impact on admin expenses. And then the rest of the items are pretty much should be pretty much similar to what we saw in H1 this year. In terms of working capital, certainly, towards the end of the year, we typically see an improvement on working capital. You see that we had a negative movement of $37,000,000 in the slide that I presented. So I think that amount should be offset in the second half of the year.

41:31 And finally, know, could not hear you very well on the tax note, but I'll tell you that the tax payments that we had in the first half were $129,000,000 From this $129,000,000 part of it, around 70,000,000 were regularization of twenty twenty five taxes executed in March and May this year. So it's included in here. For the second half, we may see, excluding those $70,000,000 we should see a similar amount, probably a little bit higher because there are more prepayments that are made in the second half the first half.

42:26 So pretty much a similar number, a little bit higher, excluding the $30,000,000 that I pointed out. Brilliant. Thanks, everybody. Thank you, Richard. Thank you. As a reminder, to ask a question over the phone, please seek by pressing 1. We have a question from Ian Russo from Barclays. Please go ahead. Hi, team. Yes, a few more questions from me. Can you guys hear me? Very well, yes. Thank you, Ian. Perfect.

43:14 Yes, just firstly on the dividend. Obviously, you said you paid the dividend in line with your policy. But if I look at your apply the policy that you, I guess, showed the reconciliation of the full year results, if I apply that to H1 numbers, I get dividend sort of per share significantly higher than what you declared. So how should I think about the interim dividend? It doesn't seem like you exactly applied your policy for that versus, I guess, what you did for the full year. And then the second question, just on Monte Do Carmo. It seems like you're there's obviously been a bit of a delay in the time line for the FID over the last couple of years, I guess, than a twelve month delay, but you've never really changed the first production time lines.

44:03 Eduardo, you just mentioned, I guess, perhaps fast tracking construction. But how should we think about that and the risks of that first production figure? And if you are only doing detailed engineering later than previous plan, does that sort of introduce additional risks for the project and for the scope and timelines, etcetera? Okay. Well, basically, what we need to build Monte Del Carmen, I believe that is between eighteen months and twenty four months. So, I mean, once you have basic engineering, you can go and hire contractors. That's the strategy that I used back in 2015 at the Inmaculada.

44:51 I mean, I did it with 60% basic engineering. In this case, I'm going to have 100% basic engineering. Of course, we can fast track all the civil work, mean, all the civil detail engineering. And also, I have said that we are talking with the suppliers of the main equipment also to make sure that the lead times are in line with our expectation. So I believe that taking into account all these numbers and all these data, we could be able to start production at the end of twenty twenty eight. That's the situation.

45:37 Let me address Iain's questions on this. Thank you for making that question, Iain. So our policy is an annual policy. We say that we're going to distribute between 2030% of the attributable free cash flow. So basically, you need to deduct the non attributable portion of the free cash flow of Argentina, basically. In summary, that is what this is about. And when looking at the interim dividend, we you should do is we're not expecting to pay to apply that same policy to the first half. We're actually looking at the overall the entire year, modeling for different scenarios on prices, we know prices will go up, will go down to those. So we save some room for that situation.

46:37 So that's how we discuss the H1 numbers, and of course, we listen to the market and see where we are and try to meet both objectives. The first one is important. One is follow the policy, the annual policy. And the second one is pay a dividend that will protect us from an expected situation in the second half. And but we don't apply the OLEC to the first half. It's more a smaller proportion of the full dividend expected is paid as interim dividend. Okay. All right. Yes, I guess it just creates some uncertainty about what people should forecast for the interim dividend.

47:31 But understood. And then just coming back to the cost guidance, obviously, the costs have gone up quite materially, particularly at Mar a Rosa versus, I guess, previous expectations. You've already talked about pricing and FX having the most sort of the biggest impact. How should we think about if we strip out these sort of one off impacts, prices and FX, what should we think of Mararosa on a sort of normalized basis once it reaches full production? I guess that's the first question. And then secondly, just what are you assuming for prices and FX in your in the updated guidance for the rest of the year?

48:18 Yes. Thank you, Ian. So the revised for the sustaining cost, as I said, includes the higher prices and FXlash local inflation. From the increase, around 60% has to do with higher prices at a total level and 40% has to do with FXlarge local inflation in Argentina. As you will see, guidance for the year in Mana Rosa is lower than what we had in H1. Our H1 number, as I said, include around $90,000,000 of CapEx that had to do with bringing Maranosa back into stable production, which we believe we have achieved by the end of June.

49:16 And of course, we're seeing that better that good performance in July and August. We don't provide a guidance for Maragosa in the long term, no, because we are actually fine tuning our efficiency measures, and the team is super focused on after recovery product to just make sure that we capture all the efficiencies that we can in Maranosa. I would say, Ian, to let us wait until the guidance for the next year for you to have a better idea on what would be more the run rate of Maranrosa. But certainly, by applying the full year guidance to your equation, you will see that the cost is improving materially in the second half, and we expect that to improve even more in the coming years.

50:11 Okay. All right. Thanks. Maybe just on that sort of ramp up and useful, I guess that slide was quite useful in terms of the run rates over the months. What's assumed for the rest of the year in terms of throughput? Are you assuming this 6,300 tonnes per day or 7,000 tonnes per day within that guidance? Yes. I would believe that we will be able to run rate at 7,000 tonnes per day at least. Okay. Is that range? Yes, okay. And the range of the sort of bottom end or the top end of the production guidance, I mean, is that just flexing the throughput rates and grades?

50:59 How should we think about that? No, I mean really the reach is going to depend on the grades that we will be able to reach at the bottom of the pit. But we want to make sure that we do it in a good manner to make sure that we don't take material from 2027. It's very important to keep up the planning that we have decided to have in place. So I believe that what we are trying to do is to be as close as possible to the upper end of the guidance. All right. I'll leave it at that and pass on to the other people. Thank you.

51:52 Thank you so much. Thank you. Here there are currently no further questions in the phone queue. At this, I'd like to hand the call back over to Charles for any webcast questions. Hello. Thanks very much. The first question is, what are the key changes that you have already seen and that you expect in the second half of the year with the new mining contractors at Mararosa? And my second question is, are you optimistic about potential mine life extensions at San Jose? What do you need to sustain mine operations for longer? Thanks. Well, the first question is that I met personally Fagunbez, that is a mining contractor, and I believe that we reached one of the best contractors in Brazil.

52:40 They are extremely responsible and very focused on safety, which is very important for us. The run rate for Paguldes, I mean, they have reached 70,000 tons per day, and I believe that they could reach like 75 up to 80,000 tons per day some days. So we believe that we could recover part of the material that has not been reached during the first half. So I don't know if that answers the question, but I believe that we are in very good hands, I have to say. I mean, in terms of San Jose, San Jose has very strong mining properties.

53:30 You know that all the mining properties between Cerro Negro and San Jose is a Hochschild property. We believe that with the new tools that we are using for exploration, we will be able to continue adding resources at San Jose. I mean, let's wait for the exploration results at the end of the year, but we have some promising results that they are published on the H1 report. Go ahead, John. Thank you very much. The next one is, you mentioned submitting the environmental impact assessment to the government for Roy Repatha.

54:19 What are the next steps now and when would you expect to begin operations? I mean, the environmental impact study approval has different steps and different phases during this year that we just started. The first step was to submit the whole document and upload it to the system, and that's something that was done before the August 22. Now we have a first period, which is the admissibility, that it takes between four and six weeks. So we'll have the admissibility response from the government. And then there is some sessions that we need to have with the communities that the government will be present to make sure that the communities are, that they agree with the impact study assessment.

55:23 What we believe is that we have been extremely professional working with very strong consultants to make sure that we have presented a very solid document. Together with the good relationship that we have with the communities, and I have to be very insistent on this matter, I mean, we have been able to change the way that we have a relationship with the communities. Today, what we are planning is to integrate the community asset contractors, as an employee. I believe that they are happy with this new solution for them. So that's the steps. I mean, we have this, what we call, social with them And then continue with approval, we'll have some questions from the authority on what we expect is to have the approval in a year.

56:25 Okay. Thank you. And The last question here at the moment looks like you're doing well getting on top of issues at Mararosa. Is it fair to expect a full run rate for 2027 and what might that level be? I mean, what we believe that with the current prices, I mean, the prices stay as they are today, we believe that the plan could be between 7,008 tons per day at its maximum. Of course, we will start I mean, once the plant is totally established, we will start doing some bottleneck studies in order to maximize production at our plants.

57:13 But at the end, once you reach the maximum capacity, the production depends on the grades. And the grades depends on your cutoff and the cutoff depends on the cost and the price. So, I mean, we have already started the budget for 2027, and of course, we will try to maximize production, but making sure that that level of production is not a one off. What we want is to establish a level of production that will continue for several years. And we believe that at current prices, with current rates, it could be around 80,000 ounces per year. Okay. Thank you very much. That's all the questions there are from the webcast. Can I go back to the phone lines to check if there are any more there?

58:07 Yes. We have a follow-up question from Ian Russo from Barclays. Please go ahead. Thanks. Yes, just a couple of follow ups. So firstly, just, obviously, there was a bit of catch up payment at, I guess, cash up from Argentina, and you paid a $58,000,000 minority dividend to McEwen. How should we I guess, first question is, what is the cash position currently in Argentina? And then how should we think about sort of minority dividends in the second half? Thank you, Ian. The cash position is around is more than $100,000,000 In fact, it's around $110,000,000 There are so the idea is to keep a strong balance sheet in Argentina to execute on our exploration plan.

59:00 As Eduardo pointed out, the geological potential of San Jose is huge, and we want to make sure we execute on those plans. We certainly once we we certainly would like to we will distribute the excess of cash to the shareholders, but that will probably happen more towards the early next year versus when we finalize the reporting period or accounting period of 2026. Okay. Okay. So we should not expect another big one in the second half?

59:46 No. Okay. All right. Sorry, can you guys still hear me? Yes, just a follow-up. I guess it's a question I asked in February or in March at the results. Just obviously, participated in a placing at Clara in the period and obviously followed your sort of proportionate shareholding for the GBP 10,000,000 placing. What's the plan going forward for the stake? And if there are more equity raising at AdaClara, would you consider sort of following your proportional stake again? Thank you very much.

1:00:36 So we know the Alcara team is working on different strategies to finance the development of their projects, and they are very capable and that they have been very successful in doing so in the past. I think from what we have discussed with them, they are more looking on debt facilities and on asking for more money, but we'll see. They have not finalized that exercise, and we'll see how they come back to us. As Eduardo pointed out, core assets are our operating mines, and we are focused on gold and silver. We like the exposure that we have to Atclara, but we're mainly focused on gold and silver.

1:01:22 I would say we need to wait and see how the developments of the Aclara team move along, and we'll see from there. But at this point, we're not considering investing more in Aclara. Okay. And then maybe just the same question on T and N gold. Are there any other sort of movements in cash balances we can expect in the second half that might impact the consolidated numbers? No. Thank you for that question, Ian. No, there's no expected. The year that is well funded to advance a project closer to feasibility and permitting stage. So, that is the work that team led by Palo Alto de Campani is executing.

1:02:11 We are very happy with the exposure of Hacina Clara. We have a lot of value for our shareholders, and the team is doing a fantastic job. That deposit sorry, Ottieren and I said I'm sorry. That deposit is one of the largest both deposits in the region, and we have a 69% stage there. So there is a lot of value for shareholders and a lot of work, but also a lot of work to be done, as I said, from a technical perspective to move closer to a feasibility and permitting stage, but no need for additional capital contributions. Okay. But what costs or CapEx will you consolidate from them in the second half? Should we expect a similar number as in H1?

1:03:03 Well, I mean, can look at the first half and probably multiply that by two. That's rough estimate in total official guidance because we would like to move as fast as we can in all the studies that we have. It will depend on the capacity from vendors, contractors and the team to execute. No, but I think having an approach that I just described might be reasonable. Okay, brilliant. All right, thank you. That's all from my side. Thank you. Thank you. With this, I'd like to hand the call back over to Eduardo Lundin for any additional or closing remarks. Over to you, sir. Well, thank you very much for being here this morning. As we said, we presented a very strong set of results for each one.

1:03:54 Let me say something that I feel very proud. The Hochschild Mining has been named best place to work in each of our operation and also at the corporate office. So we believe that one of our main I mean, the main thing in the company is the talent. We feel very happy to receive this award. So thank you so much. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.