Mexico as a Mining Jurisdiction

0:10 Hello everyone and welcome to today's live panel discussion focusing on mining in Mexico as hosted by 6. I'm joined today by Doug Ramshaw, Monera Alamos' President and Director, Monica Ospina, Monica Marinerals' Director for the Board, and Marcio Fanesca, GR Silver Mining's CEO, President and Director. Today's panelists are going to have a discussion about the nuances and specifics of what it means to be a mining company in Mexico. And after we'll move on to a live Q&A session, where we'll be accepting and answering some questions. You can submit your questions using the Q&A panel found on the right hand side

0:41 of your screen at any time. As always, the summit is being recorded and will be available to watch afterwards on SIX.com. So to begin with, I'd like to start with a few minutes given to each panelist to introduce themselves and their company before we begin in earnest. And Marcio, I'd like to pass the horn to you to begin and start us off. Thank you again for having me here. So I'm the CEO, president, and one of the larger shareholders on GR Silver Mining. We are here in Sinaloa, Mexico. We are developing silver gold assets, pest producer mines, and trying to increase the resource. You can see here on the first slide is the location of the portfolio. It's a large portfolio in Sinaloa. The Pomozos project that has 2 best producer mines, Pomozos Mine in Vatrinidad, is the core project. We are drilling at the moment, 7 drill rigs, trying to expand the silver, gold ounces in the project.

1:34 So we are not newbies in Mexico. We've been doing mining business in Mexico for more than 15 years. So we are familiar with the country. I'm very attractive as a mining jurisdiction with a lot of opportunities for mine investors. Today we have a large resource. Together, they combine 4301 of the Plomozas and San Juan and San Marcial, give us close to 80 million ounces of silver equivalent. And we believe that we are going to increase this more as we are drilling and looking towards potential development of these sites, because they are past past producer mines having permits to go back into operation.

2:15 So important to say here that the company has been very successful in consolidating a district. Mexico is a wealth country from a perspective of minerals. It's the largest silver producer in the world, probably the number 9 in gold. This is an example of how we can have a lot of opportunities in Mexico. This district was controlled by different companies. Even though we have a lot of discussions we can discuss in this panel about money concessions, how difficult it is to get money concessions in Mexico, we've been able to consolidate, to acquire, to create a business in Mexico. And today we control together what no company has ever controlled in Sinaloa, most of the Rosario mining district. All these red lines you see on this line are veins. We are drilling 5 of them. We still have more 24 to drill. So that's what we are very excited about being in Mexico.

3:09 Thank you. Thank you, Marcio. And with that, Monica, I'm going to hand things over to you. Well, hello. My name is Monica Ospina. I'm part of the board of directors at Monarca Minerals. Monarca, we are a junior exploration company with operations in Mexico. Now our flagship project is San Jose. Next slide, Please, Tamara. Well, Monarca, one of the things is that we are very close to the border of the U.S., which is a very much controversial area for many people. But guess what? It is still Mexico, and it's a fantastic opportunity to work there. And one of the things that we learn is that communities in that area and people in that area are highly supportive of mining activity.

3:56 And not only it represents stability for them, but at the same time, it's just they know that it's a legal activity and there is people that they can work with and collaborate. So next slide.

4:09 As you can see here, we are, as I mentioned, very close to the border and we have been collaborating as a key point. We learned that working very closely with the HIDOS, which is the communal land concept in Mexico, that is communal land in other regions in the world, it is one of the pieces that everybody questions about the quality of working in Mexico, and the challenge of working with Mexico, but the complete full engagement process with them and working around what does it mean for the region and what does it mean for them to work in collaboration with a mining company, It is an opportunity. Being in the border represents an opportunity for us, contrary to what many people will say is the opposite. As I mentioned, we can work very closely on bringing materials and components from the US, but working with a local labor force.

5:02 Next, Cameron. Well, values around what we are doing and we learned in our experience that transparency, responsibility and communication as high level and simple as they sound, it is critical for building that relationships and is highly appreciated in regions where normally none of them exist. So when we bring that and that is actually a good harmonious relation and right now San Jose is going through really and it is very promising the results that there are there.

5:35 Next. I have that, I have this thing because when we were working in the region, and I mentioned this as I come from the social perspective, more than the technical perspective, is that we identified that the region understands industries and that was critical for the development of Monarca and San Jose. The fact that they understand industry that they know that we process things, so they do process things and in this region there is, Chile is the last production and they have important facilities that they are exporting the Chile sauce for hot, picante sauce. And the fact that they understand processes, it was critically important for us in terms of communication and at the same time to gain acceptance locally, because it was not different what we do in mining, we also process, we are also a big infrastructure around that. So that was a key element for us in terms of building that collaboration and relationship.

6:35 So next, and that is Monarca, as I mentioned, it is different spectrum

6:42 than GR with Varsium, but we are in the early stage. We want to make sure that we are the first part in the supply chain of mining industry and exploration, that we do things the best we can to pass the torch to developers to have a healthy project ahead of the process. Thank you. Thank you Monica and with that Doug I'm going to hand things over to you to round us out. Well, thank you. And actually, just listening to Monica there, it's great that we've got a variety of companies here, because it all actually starts with exactly what Monica was talking about. And Monera is a little bit more advanced in that we're building mines in Mexico. We built

7:25 our first mine this year in the middle of a pandemic, wise or not we got it done. And we've been operating in the country for the best part of 14-15 years with a team that's largely Mexican nationals. We placed 4 mines into production during that time, the fourth being Santana that we had our first blast in May and we'll have our 1st gold production eminently from. But yeah it all it all starts with the community and we we love Mexico and the permitting environment because it places such an importance on community relationships right at the start of that. And it's made for a great jurisdiction for us.

8:12 It also, and one of the things I think as a soon to be emerging gold producer.

8:20 Permitting timelines are so important and Mexico does permitting right. It allows us to look to build a sequence of mines rapidly, which can allow us to escape from a typical junior producer that is caught up in 5, 6 years of permitting in one of those tier 1 jurisdictions you see in the top of the Fraser rankings. Mexico does things properly but efficiently when it comes to permitting. So we've been very fortunate in that regard. We operate in kind of the same parts of Mexico as my colleagues here, my peers here in northern Mexico, and I think we're all going to discuss how Mexico is often pooled as 1 country, but there are very big differences depending on where you are in the country. We like the north of the country. That's where we're focused on.

9:12 That's what we'll continue to focus on as We build out a sequence of mines which we look to support both the government's intent to have operators in

9:22 the country that are actually advancing the natural resources of the country to the benefit of the government, you know, and federal tax receipts. Importantly, the communities that can get well-paying jobs and supported by minds such as ours, and obviously our investor stakeholders as well. And it's that kind of marrying of all 3 of those which is really important in everything we do. So I think we're gonna have a lively discussion and very happy to be a part of it today. And with that, I guess let's get ready to rumble. I couldn't agree more, Doug. Thank you, Doug. Thank you, Monica. Thank you, Marcio, for those great introductions. I think now everyone in the audience might have a better idea of any one that they weren't quite sure about beforehand.

10:09 But to kick things off, why don't we begin with what does ESG and for that matter CSR mean to companies in Mexico, including your own but also others. Monica, maybe you could start.

10:20 Well, what is ESG in Mexico? That is quite a good question to start this panel. And I'm very happy. And as Doug says, I think this is amazing that we have, we come from different perspectives as companies. ESG simply summarizes and simplifies the good work of companies are doing in the field. And I think investors and the financial community can really get a full picture by understanding that the 3 of them are truly interconnected. So in the context of Mexico, environmental is very highly regulated. The government is on top of permitting processes. And communities have a say here. So it is already, you have the 3 EFGs connected already in the way of permitting in Mexico.

11:09 Because communities have the possibility to present complaints and access authorities if they have some sort of questioning, information is publicly available,

11:18 and the permitting process is very strict. In terms of the social for the communities, I think that the beauty of being Canadians working there is that we bring all of these good practices from Canada in terms of the interaction and the consideration of see them beyond being just workforce. We see them as the neighbors, we see them as partners, as a way we collaborate and integrate them in our workforce and partnering. And in terms of governance, the critical element of good practices on governance, transparency, accountability, the cause of ethics and actions like that, it just integrates that. It's not perfect for every company, but we have to see this with the lens of the operation that every order facing the mining cycle that each company has But that's crazy

12:10 Absolutely, thank you for that Monica. Doug, I'd love to hear your thoughts Yeah, you know it's I thought that was a fantastic explanation of it. The thing I've always liked about how Mexico almost forces you to approach social license, because the whole permitting process starts with community agreements.

12:35 There are a lot of Latin American countries where the permitting process is handled by the federal government, as it is in Mexico. But there isn't the same emphasis on ensuring you've got social license from the start. So I know it's a bit of a hackneyed expression, but you know, the governments give permits, but the communities get permission.

12:57 So it's really important not only to have a process in place where the communities are at the forefront of the decision-making, but also 1 where you have to maintain that. And I think that's where good, good effort by companies such as ours to show the benefits of what we can do in communities which often are the very rural communities that need the support of good paying jobs and everything else happen well. I think yeah coming from Canada We do have a very strict kind of ESG approach up here, which I think makes us very good partners in Mexico. And when I say partners, we really have to become part of the communities that we operate within.

13:49 You know, and they have to be open to integrating us within their lives as opposed to, I think it's not the other way around, that you integrate them into what you want to do. You really

14:01 should value your participation within that community. That's true. Absolutely. Marcio, I was wondering if you could also contribute to the conversation. For sure. ESG is, of course, has been, will be always important. Even although it's very popular today, being a money investor in Mexico, like all our colleagues and like Monica working in Mexico, is important, but

14:30 It's important also to adjust, understand the country, understand the communities. We have the names of stakeholders. They can be stakeholders, but stakeholders are a very broad name. Try to make them understand what's the meaning of ESG. It's not only them, everybody together. And having good representations of the company of nationals so they can help you to work together to benefit everybody.

14:54 And try to provide the best you can to those communities and those involved in the business. And when I say understand the country, because each country, Latin America, any country in the planet, have their own specifics. And I particularly find surprising sometimes that people don't understand the word herridos. Nobody knows that there was a nationalization of the land in Mexico decades ago. And communication with them is super important. Make them part of your group. All these specifics are important. So as GR Silverlight, We are very serious about this. We are not outsourcing any employee, because this you need to employ locals. And although there was a law recently controlling outsourcing, companies, when they arrive in the country, they need to try to provide as much as they can. Employment is the first impact, I believe, in the region. So that's pretty much my comment on this topic.

15:54 Yeah, well, if you allow me, I'm very happy that you mentioned the idea of ejidos and the history of ejidos here.

16:03 Because ejidos, it is one of those critical elements in dealing with communities in Mexico and in a good way if you manage to have a good relation with the Jidos and they are just looking for honest and sincere information and transparency. They put you in the line. They really put you in the line of being a good citizen and I think that is excellent. I'm sure, Marcel, you have really good agreements there that allows you to see all the operations up and running successfully. Doesn't matter which state in Mexico, they are all different, they have a different perception how to run their business, which is legal business, and they run their business. And they need to be respected, because they've been there for hundreds of years, and they have the history. And interesting to say that some of them are related to mining, because they are located in historic mining communities.

17:05 So, and they understand mining. The mining subject is not something that makes them worried about, it's about to feel that we welcome them to be part of the business, to be involved in the growth of the region. Yeah. That's great. And kind of about that, entering the regions and working, that's a great ESG CSR perspective, but from a business and permitting standpoint, what's it like?

17:33 How easy or hard is it to work in Mexico as mining companies? Doug, maybe you could start us off.

17:40 Yeah. I mean, I'll, I'll speak to mining permitting, you know, and, and leave, leave some of the, the other aspects to, to mostly and Monica perhaps, you know, we've, We've permitted and built a number of mines in Mexico over the years. Even under the new AMLO government, the permitting process didn't actually change. There's been a slowdown because there was a lot of government bureaucrats that were moved around departments so things were a little slower and then a pandemic hit but we had our permits before that and I think even with the change in government it was about a 14 month process.

18:22 You know you can have 6 month consultation periods just part during part of a lengthy 3 or 4 year permitting process in Canada so as I mentioned in my previous answer, what's great is you can't start the permitting process without having your social license in place. Having it all starts with community agreements and I absolutely believe that there are a lot of countries that should be following that approach to permitting in South America.

18:55 And so yeah, for us permitting has gone very well. 2 of our 3 projects are fully permitted. And we'll start a permitting process, hopefully around the end of this year on the third one. And the pandemic may throw it a little out of whack, but we're hoping that kind of within about 12 months, we should be in a position to start constructing something which, you know, could be up and running within 3 years of acquiring a project that just had a resource on it. And I think there are very few jurisdictions in the world where you can really say, okay, here's a project, it's got a resource, and that's about it, and could have that project up and running and providing for those very important community members

19:46 within such a short period of time. So we, I mean, personally, from our perspective, we love the permitting environment in Mexico. It's something I extol the virtues of any opportunity.

20:00 Absolutely. Marcio, maybe you could comment. For sure. I'm going just to add a bit on what Doug said. The rules in Mexico are very clear. I haven't seen any change in the mining code. I haven't seen any change in the environmental process. The timelines are clear. We can apply. We can be granted licenses. Companies have been granted drilling licenses for 100,000 meters of drilling. We just need to follow the steps. But we have bureaucracy. Bureaucracy has been in many places, in many countries, not just in Mexico. And on top of this, in the last 2, 3 years, we have 2 events in Mexico. The first was the change of the government.

20:46 It's very common in every country when they change the government, all top executives and top departments, they are changed. They delay the process. And on top of that, we had the pandemic. Everybody went back home, working online. That slowed down the process. But the system did not halt. It's still working. People are still applying. People are being granted license. Companies are making decisions to invest hundreds of millions of dollars to build mines. That's a big vote of confidence. And of course, we have the media, news about potential nationalization, but it's important for the audience to be aware that nothing is approved in Mexico if the Senate doesn't really approve the law.

21:31 And the Senate today doesn't have the majority of the party that's in power, have a good balance of the politics, the power of politics, which is very healthy. But friendly mining jurisdiction, mining country, largest civil producer in the world, I think Latin America is one of the best countries to be.

21:51 Yeah, I will, if you allow me to add something there, because Marcia, you can just raise a very important issue, is that we cannot discard the culture in Mexico. And Mexicans in general are business-minded, very private sector-minded.

22:08 Yes, the new government has left this approach to things and Mexicans wanted to bring a new fresh air to government, but the majority of the business community in Mexico is very, very private sector oriented. And that's why what I think, I just want to highlight what Marcio was saying. And at the same time, what Tuk is saying is that it starts from

22:36 that communities or that he does approval of that public approval but it moves into a very easily, it moves to a business component. And I think that we somehow we are discarding that probably because we give it for granted being in Mexico and working with them but they want to do business with you, they come as small businesses are in all regions, they want to be part in a business transaction and I'm sure you Doc and Marcio do you guys see that a lot? You probably have a good group of local suppliers that are small businesses.

23:08 And that is the mentality of Mexicans. They are pro-trade, they are pro-business, and they really want a good deal all the time. So we are part of that deal and that is bigger than that probably what Mr. Obrador is right now on that and that it has become something that is critical and that's why it goes to the Senate and things get go back to what the real Mexico is in terms of business.

23:37 Absolutely. Talking about that and discussing, getting into some of the broader strokes, How important is mining to the overall Mexican economy? Marcio, maybe you could start us off with this. Think about the sector of mining probably accounts close to maybe 4% of the

24:06 GDP of country. Might seem slow, but when you think about the contribution, you need to think that how the system contributes to other systems, other sectors, and they are all interrelated. It's not the sector itself. It's everything that's interrelated. Because mining might go, like Monica said, to suppliers. Now, you have employment. We have direct and indirect employment.

24:31 More than close to 2 million people in Mexico indirectly are related to mining, working for mining. So that shows the magnitude. And the optics as well, being the largest civil producing oil, place Mexico in the global arena as a silver country, as a mining country. So in putting this all together, I find that it's a very important sector in the country.

25:01 Now I think overall extractives, we cannot separate that, because in the mindset of Mexico, Mexico has been an extractive industry oriented. It's oil and gas, and mining goes together. And it's part of their history. You cannot separate that. You have regions, like Zacatecas, with more than 500 years mining tradition, non-stopping operations. So it is in the mind. One thing that it is critically important in terms of also talking about mining is that the challenges in agriculture in Mexico makes communities and makes the region appreciate mining because they understand risk. And they understand when an exploration company comes and it could be or could not be. And that is an element that, once again, goes into what is doing business in Mexico is that that piece of risk they understand.

25:48 And not many jurisdictions in Latin America understand risks as Mexicans do. And so that is a key element when you are running an operation in Mexico and they appreciate a healthy mining activity in their time. Yeah, I guess I'll go slightly off on a tangent and say it's quite funny, because right now precious metals seems to be in this battle with crypto, and gold is seen as archaic and everything else. And there is a point to this. But actually I love that history. And I think that history is personified in a country like Mexico. I think the first time I went and visited a project in Mexico was in Durango. And it was never something that a modern public Canadian company could ever have mined and made money on. But the history was there to be seen.

26:43 The old workings, narrow high grade veins And the very town that we stayed in was built around the wealth generated hundreds of years before from these silver veins. So even though it wasn't something that a modern Canadian company could do, you know, the very history and the generations that probably through families, you know, were involved in mining and everything else. There's something really that's wonderful to embrace about that part of operating in a country with such a really a storied history in metals production and I you know it's everywhere you look. Yeah absolutely and Doug before we even came online we were having a bit of a discussion about how Mexico is ranked as a jurisdiction, North America and the world. And I was wondering if you'd be willing to come back around to that conversation again and hear from the panel about how you think Mexico does compare, how it should compare.

27:55 Yeah, I mean, I look at the Fraser Institute rankings somewhat with a bit of a grain of salt, because to me, I think it's less important whether you're a number 123, or 10 spot, or whether you can actually really operate and build in a country in a timely manner because that's what your investors are going to want, that's what the communities are going to want. So you know what Mexico offers is a very good permitting framework which is beneficial for yes all manner of stakeholders from the investor through to the communities. And Mexico does rank high in those Fraser rankings relative to Central and South America.

28:46 However, I still also think that it should be treated like Fraser Institute does Argentina, where because there are certain provinces and states of Argentina which are completely anti-mining, they kind of break Argentina out. And I think Mexico is a diverse country in terms of where 1 operates. The types of mines that we would build in northern Mexico, We couldn't build the same way in southern Mexico. You need a certain scale down there because there's certain additional security impacts that need to be taken into account that I think a smaller scale operation that can grow out of that smaller scale to something larger would struggle with it in the south. So that's why I always say that you know we are very happy in the north of the country but we probably wouldn't operate in the south of the country. We'll leave that to people that are more seasoned in operating down there and understand. And this gets back to having teams and having operational experience and Mexican nationals that know exactly how to operate in these different parts of the country. So, when it comes to the Fraser Institute rankings, I don't care how high up Finland or Sweden is, you know, relative to Mexico, I think it's important for all stakeholders to actually be where you can build

30:18 and add value in the exploitation of a country's natural resources for all. Yeah, I mean, one thing is when you just say that there are 2 Mexicos, I totally agree with you. And the point is that we have, no, we cannot separate Mexico from the reality of Latin America. And that's how the Mexico is basically dealing with the challenges of what is happening in Central America. And the cases of it in a lot of issues around indigenous territories and indigenous peoples and a lot of what is happening with the massive migration coming from the south. And for a mining company is a very center in going for an operation like that. That it is a great deal of social phenomena happening in the South that distract the activities and the efforts that should be happening. And The north of Mexico is a mining town in general. They understand the industry and minerally. I mean, you guys know more than me on this, geologists and mine engineers.

31:28 So I was wondering if maybe while we figure out if Monica can get brought back on, if you could take over from there. Important activity happening. Sorry, we lost you there for a moment. I have 2 points. One is about the comment about the Fraser Institute. It's a valuable piece of statistics to understand what's going on and sentiment of the investment community all over the planet. But in some ways can be biased about who is attending the survey. Sometimes I wonder how many nationals were assessed in that survey, because when you have companies like Grupo Mexico, Penoles, Fresnillo, operating for decades, almost a century in the country, They are the full history of mining in this country. How many of their top executives have been approached, or the diversity of the interviews.

32:26 That's the only thing I want to say. But the other point is, Monica Milakon, that's very important because it's part of the social license, the ESG indigenous community. And we need to recognize and we need to respect that Mexico has been in place for thousands of years, even before the Spanish arrived here. There's a history. Even though some states do not have the occupancy of these indigenous, there's some historical traces. This needs to be taken into account. What is very important here about this point about indigenous communities, probably have 3 or 4, I would say 4, clusters of mining in Mexico. Sonora, Chihuahua, let me, Nayarit, not much, Durango, Tinaloa is becoming.

33:17 Most of the indigenous communities where areas that must be protected in some way are more to the south of Mexico. And the geology of Mexico is really well in these 4 clusters. So there's plenty of space for mining companies to invest, explore, develop, and build mines in these clusters without even touching areas that can be occupied by indigenous communities, in my opinion? Absolutely. I think we've been kind of talking about this the entire time. But I think it'd be important for the panel to share their views on what factors they think that make junior mining companies successful in Mexico. Monica, maybe you could share some of your key points, your key thoughts on that. Well, I think that number 1 is a friendly jurisdiction to start exploration.

34:05 As I mentioned before, and I'm sure my colleagues in the panel will agree, that it's doable. It is – the work in there is doable. It's possible for a junior mining company to start their work in Mexico. The permitting process is straight. I know it is complicated as everything in the permitting process is not easy, but it's a straight line somehow. And there is a step by step that has to be followed. So you can jump in that. Concessions are not easy to say and Marcio said beautifully within his introduction, like you are, I mean you really work really hard to get those concessions happening and that and even more in the government like the government that we are living right now, but it is, it is, and somehow it's manageable. And you, as a junior company, you will know what is the next step.

34:56 And this is when you just look at Mexico and the entire picture of Latin America, you compare with other jurisdictions. It will be much more advanced in understanding the industry, much more advanced in understanding the next steps of what is expected from a junior mining company than other countries in Latin America. Communities are familiar with risk and they are familiar with mineral activities. So it is in the engagement process is manageable. And I think that this is a healthy environment. And at the same time, Mexico as a country itself is a stable economy. It has its batches, ups and downs, all the countries in the world are living that. But at least it's a safe jurisdiction without seeing on the private sector, which it just reduces the risk for a junior mining operation starting, and obviously becomes bigger when exploration is successful and can pass the torch to a developer.

35:48 So I think it's a very healthy decision for mining. And on the other hand, in terms of comparing Mexico with the rest of Latin America, the opportunities for Canadian companies in Mexico through the trade agreement and in collaboration with Canada and Mexico is very strong and that helps a lot to work in Mexico for Canadians. Doug, Marcio, do either of you want to share? You didn't leave as much there, I'd say, Monica. Oh, come on. Do you have more experience than me? No, but I mean, it's true. There's a rule of law, there's a structure to permitting. There's an acceptance of mining, a history there. I mean, I think you covered it better than I've ever done when I've listed off everything before and a few other ones on top. I throw in also, I mean, we're a slightly bigger company, so maybe it wouldn't matter, but I love the fact that operating in in Mexico I'm working on the same time zone as my colleagues down there.

36:57 Logistically from that perspective that's less about the country you know itself over over the logistics of operating a company. But I know when I started my career in the UK, I'd work 80 hour weeks purely as a function of time zone difference between me and Vancouver. You know, now everyone's on the same, yeah I know, I don't relish ever doing that again. But so, you know, when running a company efficiently and wanting to have communications, everything, even something as simple as being in a in a nice time zone That that's cooperative is actually important because sometimes problems can arise You know in in Africa that 12 hours later you're hearing about, because just because you've been sleeping through the night or whatever it might be, there's nothing that you're gonna miss that way.

37:55 So I mean, that's literally the only thing I feel that I, as you rattled off everything else, I could add to that. So that was a fantastic response, Monica. Thank you. Thank you. I mean the time zone is good. I mean sounds simple but it's critically important. Even the fact that you can travel right away, no? You can be on site like this, it really becomes amazing. That's a good point. Thank you, Doug. Marcio, do you think that there's anything that we haven't covered? No, pretty much covered, but just to highlight that one thing that I always tell investors and I believe is very important, maybe Monica and Doug mentioned briefly, is Mexico being signatory of the free trade agreement with Canada and US is a major thing.

38:43 Most of the countries which can be ranked even above Mexico in attractiveness for mine investors do not have this special treatment. Yeah, the rule of law, there's a hard and strong document there that people derives. So that's something that gives me as investor, as a mine builder developer, very comfortable to really be here as well. Fair enough. Thanks for that, everyone. And as we kind of wrap up this conversation before we enter the Q&A, I'm wondering what the panel thinks investors should be most excited about for Mexico going forwards in the future. Marcio, I'm going to go right back to you. What's exciting? What's coming up? Okay, I'll make sure I leave a little bit for all the other panelists here.

39:34 That's sweet. That's sweet. Just as a background, I'm Brazilian. Some people think I'm Mexican. I'm not Mexican. And I'm Canadian, living in Vancouver, geology engineer. But why Mexico drove my attention when the first time I came here in 2003, how the geology is so prospective is a wealth geology. Although there's a history of mining, there's still plenty of areas to be explored, to be developed, to discover deposits, different sizes, different economics, and how the society, the mining society in the country is vibrant, is very integrated, and because mine has been part of the history of the country. That gave me always such a level of comfort to be an investor, to be operating here. And language is not a barrier, but helps.

40:21 No, but thinking about a country, the proximity with the capital markets, very couple of hours to Toronto and Vancouver, that helps. And how the system has worked for the last 20 years, 30 years, mining, coal, environmental legislation, everything makes very important for me as investor and shareholder as well to be in Mexico, comparing with other countries, particularly in Latin America. That's great, thank you. Monica, what's exciting coming up in Mexico, in your opinion? Well, Marcio, you did very well here and just leave little things. And, Doc, I hope I leave room for that. So I think that I think as an investor, if I'm an investor, I would like stability in a country that we can continue and kind of knowing that the operation is moving.

41:12 And I think that the rule of law is there, as we saw before, the permitting process is stable in terms of it is a step by step process. So I can understand what the companies are going through and when the reports come and the press releases come about the process, I can kind of rely That the government is already organizing their approach and sadly in Latin America not many countries are organizing their approach. From the concessions to the permanent and monitoring how the operation is going. I think that is critical for investors to be aware of what is happening out of what operation it is. The other piece that I will see as an investor, Marcio is saying very, very well, is that when you go for a drilling campaign in Mexico and you have a very good team of geologists working with you, it is a big chance that you can develop an opportunity in Mexico.

42:03 The other piece that is important is that Mexico understand extractive industry. And the dynamic of extractives is very different than any other industry. And that's what probably makes investors that are not familiar with mining a little bit conscious about why I'm going for a junior exploration company that obviously is not profits at any time versus a manufacturing process. So it is important because Mexico understands that. And it's not easy for a country to understand that. If you compare to countries that have great potential in terms of geology like Colombia, and well, forget Venezuela with all the political issues, but they have it, it is very difficult for a junior company to be successful in the short term and show results. And it's not because of lack of capacity of the technical team. It's because the political environment and the conditions in the countries are making it very difficult to complete permitting and to complete the process in an organized, a step-by-step way.

43:00 The other thing that I will say is that yes, there's this content like any country in the world with the government and people might disagree or agree, but you don't see a stop of operations in a country or you don't see a massive revolution or you don't see things happening like that. And somehow Mexicans are also aware that they want to protect the industries that are providing for their families. And we are an industry providing for their families. So they will take care of that too. These agreements, yes, anti-mining groups all around the world. But when you just go to what is the daily operations you see, you see that communities are backing up that. And the best part is that they're backing up Canadian operations. Canadian operations are very welcome by communities and the investor should be aware that a Canadian operation going to Mexico, it is a good combination and a good match and I will put my money on that.

43:52 Well I've got one thing that you didn't cover. Oh great! I think what Mexico actually allows, if there's the desire for companies to do so. I'm not going to get on my soapbox, but I think we have an industry that focuses so much on the front peak of the Lasonga. And Mexico can provide great discovery potential there because it's geologically, whilst it's got a storied history, there are plenty of discoveries to be made or in in the case of discovery often is come you know assets that go through multi generations of ownership each each generation providing more data to help the next one. But everything about Mexico as a jurisdiction actually gives those those companies working on the front end of the Lusanka, the opportunity and the environment and the jurisdiction and the regulatory environment and the workforce and the hospitality towards Canadian mining companies to actually make that journey to being a producer, which I think from an investor's point of perspective and trying to galvanize interest in a story, there's no better differentiator.

45:09 And everything we're talking about with ESG, the best way to really make an impact is to be in a jurisdiction where you can actually go the whole path of the Lassonde curve, because it's that back end of the Lassonde curve where you can really add value to your stakeholders. And that, I think that we have a fantastic opportunity when running companies to absolutely make a difference in our shareholders' lives, but equally importantly, make a difference in so many people's lives that will never own a share in their life in anything, but in many ways have become a direct stakeholder, shareholder in a collective operation that you can do in Mexico. And I think that to me is something which has made my experiences of operating down in Mexico something where I really feel there's that ability to enrich so many people at different layers of society and yeah Mexico offers that so I think Mexico can have a very bright future you know because it is fortunately endowed with so many things which make it a perfect country to operate in. And yes, as Monica mentioned, it absolutely has its issues.

46:39 Every country does. You know, I've been asked recently, it's like, well, are they going to play with the royalty rates there again. It's like I think every country, Canada, the US, you know, like in the past, you know, it would be West Africa and Latin America that in rising metals prices, the governments would want a little bit of a take, extra take, and you'd see those changes made. I think coming out of COVID, coming out of this pandemic, every single jurisdiction, so it's an even playing field in that regard. Would Mexico change their lottery rates? Conceivably. We're already seeing it at the state level in Nevada. It's being voiced at the federal level in the states. I'm sure that the mining sector in booming commodity times in Canada will be equally susceptible to just a little bit more of a tax grab.

47:32 You know that's that's no bad thing. And in a time of rising metal prices there should be more than enough to go around. You know. So. So yeah Mexico has its has its issues but there are many many ways to to deal with those in a responsible manner. I think it offers far more benefits than any of the kind of Bloomberg headlines that you click bait into that are often thrown up on Twitter or whatever. There's so much undiscovered benefits of operating in Mexico. Thank you for that, Doug. With the time we have remaining, I think we're going to start addressing some of the questions that have been coming in live from the audience. And very neatly, dovetailing out of what you were just speaking about, Doug Keenan, the audience asks this, some critics of mining investment in Mexico claim that taxation environment has become unwieldy and unpredictable.

48:31 And what are your thoughts, what are the panel's thoughts, if anyone wants to leap in? Well I mean there have been changes to it and I'm sure there are going to be future changes to it. But I don't think it's going to be any different. Maybe if it was just a time of rising metal prices it would be, but I think post-pandemic we're going to see lots of tax changes at all levels of industry and provincial, state, governments in whichever country you want to throw a dart at. So, you know, is it important to have a stable environment in that regard for planning purposes? Absolutely. I think we're into a very strange time in the world right now where, you know, I hate to say it, but in the last 18 months, I've hated using this word fluid in my vocabulary as much as I have, because we live in very fluid times, And that doesn't necessarily make it easy for planning.

49:34 But is Mexico going to be any different than most other countries out there? I don't think so. That's my take on it. I would like just to add one comment to Doug. I completely agree the environment is changing, but it's changing all over the planet. To address all the money that was deployed to address all the shortages and issues, something we need to help happen in every country in the planet, not only Mexico. And I find that's important for us as executives, as investors, as managers, to have that in mind when you go and explore, discover, delineate that in modern nature you need to provide something a little bit better to cope with the potential additional taxes to provide better return to the communities and the government to overcome the issues.

50:26 The SDA is going to be part of the role. The feasibility of future deposits might or might not need to take that into account. And I think 1 point that we cannot discard is that worldwide after COVID, the developing world, and Mexico is part of the developing world, not in the extreme but in other countries, it just creates a crisis in terms of the countries managing their capacity to meet the needs of others. And obviously, taxation to the private sector is the shortcut for them to find the imbalances. So it's not a reality only in Mexico. We're going to see that worldwide as that was being pointed and right now even more and even more when we are dealing with a government that is going on the social angle is that cost and that is expected.

51:15 Is it going to be forever? I don't think so, because they need investment as much as the communities need the opportunities and employment that is happening. So that will be the opportunity also to balance that. But it is expected worldwide. I won't say it's only Mexico, just to be fair. Right. This next question from Howard in the audience was asked of you specifically, Doug, but I think that we can kind of go around the horn going over it, but Doug, could you describe the status of your ramp-up of production? And what's next for you in 2022? Yeah, well, RAMPUP is going well. There'll be news out shortly, so for full disclosure and proper dissemination I won't talk too much about it, except to say that a typical open pit heat leap that our team have built in the past, you look at about 6 months before it starts kicking off net cash at the operations level. If we can achieve that by, you know, within that 6 months, then I will consider it a very successful ramp up of operations, especially during the current environment. And then we certainly seem on track for that. So as far as 2022, well, this wonderful permitting environment that we've talked about, we will be engaging in that again with what will be our second mine we plan to build.

52:41 So maybe we check back in a year's time and I'll tell you how that went relative to what I said the permitting environment was like in Mexico, but we've had 2 permits that have been awarded, 2 final EIAs that have come from the AMLO government. So a lot of things you hear about on Reuters or Bloomberg don't necessarily portray an accurate picture of the permitting environment in Mexico. We've permitted 2 with sign off from the current government. So, very happy to continue working with them in that regard. Thanks for that, Doug. Monica, what's coming up for Monarca in 2022? Well, we are juniors, so we are not like these 2 big guys here. So we are going for drilling and exploration in the north in San Jose. It looks very promising, I must say.

53:30 The results are starting kind of something when geology gets excited, everybody in the team gets excited. So that is what is happening at the Interior of Monarca. We hope that we can go further with the results from San Jose. Things goes well. We have Tejamen as one of our jewels that has been sleeping, it's sleeping beautifully for a long time. So we hope that we can restart the dialogue around what could be Tehamen. But right now, San Jose is offering quite promising future for Monarch. Thank you. That sounds great. And Marcio, what's 2022 hold? For sure. It's going to be continuation of the 2021 post consolidation, successful consolidation of the district. Now we have access to these 24 veins and with all the 7 drill rigs we continue to drill more and expansion of the resources.

54:25 Because our vision is to create a large deposit of eventual ounces in the company, 100% controlled by the company. Okay, great. Well, listen, I want to first and foremost, thank you, Doug, Monica, Marcio for coming on today. But I also of course, wish to extend my gratitude to everyone in the audience for coming on today. If you didn't get a chance to have your question answered or if you think of 1 after the summit, we're going to be sending out short surveys where you can leave your contact information and you can get into direct contact with any of the companies represented here. With that, though, I'd like to go around the room 1 last time and hear some closing remarks from each of our panelists before we close up shop for the day. Marcio, could you start us off? Sure. Of course, again, thank you for the opportunity and thank you for the panelists to a very intensive discussion and presentation here today.

55:19 My final remark is Mexico, mining country, like any Latin American country, we have cycles of instability, political instability, has been the history of these countries for 200 years or more, And that might create some anxiety and nervousness in the audience, in the public, investors. But it's a very stable country from a mining perspective and a wealthy country from a geological exploration perspective as well. Thank you. Monica? Well, thank you very much for the opportunity. This is even fantastic to be with Doc and Marcio with big operations and successful in Mexico. As a junior mining company, we are very, very excited about what is coming in the future. We strongly believe that the North of Mexico it is a great place for mining and exploration and we really hope that investors start taking this opportunities that all of us we're pulling together as an opportunity to build a solid portfolio.

56:21 Again, what Doug says about cryptocurrencies, I think it's still in the world we need to have gold and silver in the back, just for whatever comes around. So thank you for that. Absolutely, and Doug, you want to finish this off? Yeah, I want to thank, yeah, a really fascinating conversation with Monica and Marcio. And also thank the audience for attending because in many ways you know whether you're attending because you follow our companies or you you have an interest in Mexico well you know good I think it's a country that's worth being interested in. I hope what we've discussed today has helped you with kind of framing the country and the opportunities it presents. And it's incumbent on people such as us to now follow through on demonstrating that through what we do at the company level.

57:21 I can honestly say, and I've been involved with projects in all manner of countries over my 26 year career. The last 3 years of working with our team, with what we're doing in Mexico, and it's largely to do with the benefits of operating in this jurisdiction have been absolutely hands down the best 3 years of my career and long may that continue. So yeah I mean thank you for really entertaining for me at least and hopefully the audience conversation today and Yeah, that's that's about it Great. Well again, I want to thank you all for coming on today. But with that, we are going to unfortunately wrap this conversation up and I hope you all each have a good rest of your day.

58:08 This panel will be recorded and will be available as an on-demand video in the coming days, so you have a lot to look forward to. Thanks again everyone and Cheers. Thank you. Thank you guys. Thank you, Ken. Thank you, Marcio and Doug. Really nice. Yeah. Bye.