Lundin Gold Inc.

Thank you, Michelle, and good morning, everyone from Quito. Thank you for joining us on Lundin Gold’s 2021 third quarter conference call, where Alessandro Bitelli, Executive Vice President and Chief Financial Officer and myself are going to take you through our results for the third quarter and year-to-date.

To begin with, I’ll provide an overview of several key milestones achieved in the third quarter and give an update on operations at Fruta del Norte and our exploration programs. I’ll also discuss several important value driving catalyst to keep an eye out for as we enter 2021 and move into 2022.

After that, Alessandro will discuss our financial results more detail. Before I finish things off with my concluding remarks, we will then open the call for questions.

Please note, Lundin Gold’s disclaimers on this slide. This discussion includes forward-looking information.

Actual future results may differ from expected results for a variety of reasons described in the caution regarding forward-looking information and statements section of our press release. Lundin Gold is a U.S.

dollar reporting entity and all amounts in this presentation refer to U.S. dollars, unless otherwise indicated.

I would like to kick off this conference call today by focusing on the vaccination campaigns, led by Ecuador’s Ministry of Public Health. Vaccinations began in late June and ramped up quickly.

As of today, over 99% of Lundin Gold’s employees and onsite contractors are vaccinated and only seven employees are un-vaccinated out of a total of 2,856. Of these seven employees, the majority are unable to get vaccinated as a result of underlying health issues.

Since Guillermo Lasso sworn in as Ecuador’s President in May of this year, his vaccination plan has been efficient and successful. Reaching his full of vaccinating over 50% of the country in his first 100 days in office.

As of today, 68% of Ecuadorians are partially vaccinated and 58% are fully vaccinated. The health and safety of personnel at site, we’ll always be paramount and as such stringent procedures remain in place to minimize the impact of COVID-19 on the workforce.

I’m pleased to announce that in the past month, Lundin Gold is recognized by IESS, the Ecuadorian Social Security Institute for the development and implementation of strict COVID protocols, which provided excellent protection for our workforce during the height of the pandemic. As an integral part of its sustainability program, Lundin Gold has long prioritized actions to improve the quality of local education, particularly Fruta del Norte’s area of influence.

As such, I’m pleased to report that our initiative to provide critical access to online education for students in rural communities close to Fruta del Norte was completed in October. With this milestone achieved, teachers now have high speed internet connection in the school.

Students in local communities are equipped with a tablet and interconnection – internet connection in 21 communities has been established or upgraded using fiber optic infrastructure. Now let’s turn our attention to Lundin Gold’s results for the third quarter.

Operating results continue to be strong, highlighted by production of 107,663 ounces of gold, consisting of 76,837 ounces of concentrate and 30,826 ounces as doré. Sales were 111,605 ounces during the quarter, consisting of 78,251 ounces in concentrate and 33,354 ounces as doré.

These robust operational results were achieved at a cash operating costs of $650 per ounce sold and all-in sustaining costs of $804 per ounce sold. In the third quarter, the mine up maintained it’s strong operating performance.

Mining a total of 382,667 tons, underground mine development also continue this plan with a total of 2,148 meters of development completed with development rates being 23.3 meters per day during the quarter. On the processing side, Fruta del Norte’s advanced construction of the mill expansion and progressively increased mill throughput to an average of 3,971 tons per day, during the third quarter.

365,316 tons of ore were processed in total. The average grade of ore milled was 10.3 grams per tonne and average recovery was 88.8%.

We continue to fine tune the processing plant to improve recoveries as we mined and processed different types of ore. Year-to-date, Lundin Gold has produced 320,599 ounces of gold at an average head grade of 10.9 grams per tonne, and average recovery of 80.2%.

The company’s year-to-date average all-in sustaining costs is $778 per ounce sold. With the completion of the mill expansion early in the fourth quarter, the company remains on track to end the year at the upper end of the stage at 2021 guidance of 380,000 to 420,000 ounces of gold produced and the lower end of the AISC guidance of between $770 and $830 per ounce of gold sold.

Within the scope of our original construction plan, the south ventilation raise or SVR is the last remaining item. As previously disclosed, we decided early in the third quarter to revise the approach for the SVR.

While the original plan involved the 5.1 meter raise, the new plan involves a smaller 2.1 meter raise, followed by slashing to 5.1 meters, then concrete mining of the raise. The risks of continuing to 5.1 meter approach were too great, and this alternative plan will reduce construction risks and longer term maintenance of the raise.

During the third quarter, the SVR progressed in accordance with the revised work plan and the expected completion remains in the second quarter of 2022. Raise boring of the 2.1 meter raise is completed near the end of the quarter.

And shotcrete mining was completed shortly thereafter. The contractor has been selected and mobilization is underway.

Importantly, there’s no anticipated impact on production forecast for the remainder of 2021 or 2022, as a result of the revised work plan. Operational excellence is only one of our four pillars of value creation.

And as such during the third quarter, we continue to advance the throughput expansion project, resource expansion and our regional exploration programs. Throughput expansion project to increase the mill throughput from 3,500 ton to 4,210 ton per day continued on schedule and on budget during the quarter.

During the third quarter, the mine generally operated at the higher 4,200 ton per day. And the mill expansion advance and was substantially completed early in the fourth quarter.

Sustaining capital during the third quarter of 2021 mainly focused on the second raise of the Fruta del Norte tailings dam and the resource expansion drilling program. The second raise of the dam was completed shortly after quarter end the plan 10,000 meter resource expansion drilling program continued to progress during the quarter, targeting conversion of a portion of the inferred resource at the south end of the deposit.

The company’s regional exploration drilling began at the end of March of this year. This program focused on two high priority targets Barbasco and Puente Princesa to test for very mineralization in a geological setting similar to that Fruta del Norte.

Drilling in the Barbasco target ended during the third quarter with the six holes plan completed totaling 5,387 meters. And initial interpretation results suggested the drill holes intersected the late Fruta del Norte andesites, Suarez basin fill sediments and the Santiago Formation andesites and sediments, which are all the host rock for Fruta del Norte.

Zones of epithermal related alteration were intersected in all three rock types and multiple narrow, widely spaced epithermal quartz-carbonate-sulphide veins and some broader intervals of epithermal crackle brecciation were intersected. Most of the veins are mildly anomalous in gold, silver and the epithermal pathfinder elements arsenic and antimony.

The frequency of the veining and the intensity of the epithermal alteration increases to the south into an area completely covered by post-mineralization rocks. Drilling at Barbasco will continue in 2022 once new access tracks are treats to more remote and steep southern area of the target.

In line with our original plan the regional exploration program is now focused on the Puente Princesa target two drill holes have been completed on this target and further two are currently in progress. At Puente Princesa, a significant sheer structure has been intersected at depth along the Santiago Formation and there’s [indiscernible].

This structure contains epithermal, silica, illite alteration and some quartz-carbonate-sulphide veins within mixed sediment and andesite. As a result of the initial findings from the drilling obtained at Puente Princesa, a decision is made to expand the 9,000 meter expiration program to 11,000 meters, and drill an additional two holes at Puente Princesa.

After the results for these holes are expected in the first quarter of 2022. Now, I’m going to turn the call over to Alessandro for more detail look at the financial results.

Alessandro?

Thank you, Ron, and hello everyone. I wanted to begin by referring to a couple of additions to our quarterly financial reporting.

As a result of Lundin Gold’s in our well-established operations, we are beginning to report two additional non-IFRS measures. Earnings before interest, taxes, depreciation, and amortization or EBITDA and free cash flow.

Not only will the company start paying taxes, but Lundin Gold is also generating significant amount of free cash flow. And we believe that these metrics allow for more insight into both our earnings and cash flow.

I will comment on these two metrics a bit later. And now to our results.

We achieved strong financial results this third quarter, and it is a result of sustained strong production and efficient operations. In the third quarter of 2021, the company recognized revenues of $191 million from the sale of 111,000 ounces of gold.

Consistence of over 78,000 ounces of concentrate and over 33,000 ounces of doré at an average realized gold price of 1,769 per ounce. This is offset by cost of goods sold of $101 million, which is comprised of operating expenses of $61 million, royalties of $11 million, and depletion and depreciation of almost $29 million, resulting in $89 million of income from mining operations.

During the same period in 2020, following the restart of activities from the temporary suspension due to COVID revenues over $119 million were recognized from the sale of 62,000 ounces of gold. And we were offset by cost of goods sold of 56 million.

Lundin Gold generated net income of $67 million during the second quarter of 2021, compared to a net income of $28 million during the third quarter of 2020. Net income this quarter includes a derivative losses of $600,000 million as a result of an increase in the fair value of our gold prepay and stream loan facilities, driven by higher gold – forward gold price compared to June 30, 2021.

This is a noncash item, and the volatile nature of these derivative gains and losses, also seen in prior quarters, is expected to continue given the volatility of forward gold prices. The MD&A provides a detailed explanation of the impact of fair value accounting of these two credit facilities and the determination of derivative gains or losses.

Deducted in our EBITDA net income for the quarter are finance expense of $11 million, income tax expense of $16 million, and other expenses of $4.7 million. During the third quarter of 2020, net income was generated from inform from mining operation of $63 million offset by derivative losses of $18, million minus expenses of $13 million, and other expenses total in $3.6 million.

Income taxes of $16 million were accrued during the period, which is comprised of current income tax expense of $14.5 million and deferred income tax expense of $1.5 million. Deferred income tax expense relates to the derivative loss in other comprehensive income, I’ll explain an explanation of which can be found in the MD&A.

Current income tax expense is generated from the net income for tax purposes in Ecuador relating to the operations at Fruta del Norte. In addition to corporate income taxes in Ecuador, which are levered at the rate of 22%, current income tax expense includes an accrual for the portion of profit sharing payable to the government of Ecuador, which is calculated at the rate of 12% of the estimated net income for tax purposes for the quarter.

The employee portion of profit sharing payable calculated at the rate of 3% of net income for tax purposes is considered an employee benefit and is included in operating expenses. Together with the results for the first half of the year, the third quarter results confirmed as the company’s strong financial performance on a year-to-date basis, and can be seen on this slide showing key financial metrics, including revenues income, and all-in sustaining costs.

During the third quarter Lundin Gold generated EBITDA and adjusted EBITDA of $112.8 million and $113.5 million respectively. EBITDA is a non-IFRS metric used to better understand the financial performance of the company by competing earnings from business operations, without including the effects of its capital structure taxes or in depreciation.

Adjusted EBITDA excluding items, which are considered not indicative underlying business operations and its adjustment that consistent with the judgment made for adjusted earnings. The EBITDA and adjusted EBITDA generated in the first nine months of the year was $352.5 million and $327.2 million respectively.

Adjusted earnings exclude specific items that are significant, but not relative – but not reflected of the underline operating activities of the company. Presently for Lundin Gold these include derivative gains or losses and related income tax effects.

As a result, excluding the derivative loss of 600,000 and the related income tax recovery of $1.5 million adjusted earnings of $58.8 million were realized in the third quarter or $0.25 per share. On the same basis adjusted earnings achieved in the third quarter of 2020 were $45 million or $0.20 per share.

Off note in the first nine months of this year adjusted earnings amounted to $171 million or $0.74 per share. Cash operating costs for the quarter were $650 per ounce of gold sold.

Cash operating costs were slightly higher than the previous quarter, mainly due to decrease in grade process, which is in line with plan. That said, we’re also starting to see some pressure on costs due to the persisting worldwide supply disruptions and inflationary pressure in general.

To date, this asset little overall impact on our results, but we are monitoring this carefully as time progresses. The higher cash flow operating costs together with an increase in sustaining capital expenditures, mainly due to the tailings dam second raise resulting in a higher ASC in the third quarter, compared to the second quarter of 2021.

All-in sustaining costs achieved in the third quarter, total $804 per ounce of gold sold. Resulting in an ASC of $778 per ounce of gold sold for the first nine months of the year.

We calculate the non-IFRS measures based on gold ounces sold. For reference all-in sustaining costs include operating costs, royalties, corporate social responsibility costs, treatment and refining charges, accretion of restoration provision and sustaining capital net of silver revenue.

We believe that cash flow is now one of the key bases of Lundin Gold’s value proposition. Free cash flow is indicative of the company’s ability to generate cash from operation.

We defined free cash flow as cash flow provided by operating activities, less cash use by investment activities and interest paid. During the third quarter, Lundin Gold generated free cash flow of $47 million or $0.20 per share.

The total free cash flow generated in the first nine months of the year was $194 million or $0.84 per share. The company has generated a strong free cash flow during 2021, and we expect to continue to do so for the remainder of the year, and further into the future based on our production and ASC guidance and current gold prices.

The strong free cash flow will support that repayment, regional exploration and underground expansion drilling at Fruta del Norte as well as planned capital expenditures and future growth. On September 30, 2021 Lundin Gold had cash of $222 million and our working capital balance of $136 million compared to cash of $192 and our working capital balance of $109 million at the beginning of the quarter.

The changing cash during the third quarter of 2021 was primarily due to the cash generated from operating activities of $92 million and proceeds from the exercise of option and anti-dilution rights of $2.6 million. This is offset by principal and interest repayments under the loan facilities totaling $40 million and cash outflows of $24.7 million for capital expenditures, including costs for the remaining initial construction activities, the expansion project, and sustaining capital.

Monthly payments under the stream facility are based on the 7.75% and a 100% of gold and silver ounces sold respectively. Calculated recurrent gold and silver prices at the end of each month; less $404 per ounce respectively.

Stream payments are calculated in view based on final assets from smelters and the refinery. Therefore, there is not necessarily a direct correlation between stream repayments and ounces and gold ounces produced or sold in a given period, which are based on mine site assays.

Quarterly payments under the gold prepay facilities based on the current value of 9,775 ounces of gold at the end of each quarter. Scheduled variable quarterly principle repayments of the senior debt facilities will total $23.5 million during the fourth quarter of 2021.

The company is working towards achieving construction completion as defined under the senior debt facility before the end of 2021. Upon achieving this milestone, additional quarterly principal repayments based on 30% of Fruta del Norte’s excess cash flow will commence.

The current portion of long-term debt includes an estimate of additional quarterly principal repayments due in a next 12 months as a result of reaching completion in 2021. In summary, yet another record quarter of production towards underpinned our expectation of robust financial results for the full year.

We are generating significant free cash flow and expect to continue to do so in the fourth quarter and for many years to come. A more detailed discussion of our financial results can be found in the MD&A, and I refer you to this document for more information.

Now, I’d like to turn the call back over to Ron.

Thank you, Alessandro. Fruta del Norte continues to perform well, and I’m especially delighted that the throughput expansion project has now been substantially completed safely on time and on budget.

I’d like to take this opportunity to recognize the very significant efforts by all involved in this expansion project. Enabling the achievement of this milestone, a vital component of our growth strategy.

It’s higher throughput will help to ensure our production profile remain strong for many years to come. I’m also particularly pleased about our continued strong free cash flow generation.

In the first nine months of 2021, we generated $194 million of free cash flow and ended the quarter with a cash balance of $222 million, which supports debt repayments, exploration, and plan capital expenditures. The resulting strong treasury will also provide the opportunity to evaluate increased exploration activities, future potential expansion, and other growth opportunities.

As we move into the fourth quarter, you’re already looking ahead to 2022 with a focus on continuous improvement in our operations. Increased exploration activity and evaluation of future growth opportunities.

As Alessandro alluded to earlier, we believe that one of the elements of Lundin Gold's investment proposition is its free cash flow potential. This free cash flow, it gives a company flexibility from a capital allocation standpoint and will be used to generate continued shareholder returns, begun to form of dividends, M&A or organic growth.

For quite some time, now I’ve highlighted that we at Lundin Gold had identified four key pillars to drive shareholder value in 2021. One of those throughput expansion project has now been substantially completed.

And now we will begin evaluating metrics [ph] to increase throughput further. The next pillar is operational excellence.

Our guidance for 2021 remains unchanged. And with that, we continue to anticipate achieving gold production in the upper range of our 2021 guidance.

While also expecting our 2021, all-in sustaining costs at the low end of guidance of $770 to $830 per ounce sold. We do continue to target areas that can be improved and continue pushing and striving to be better.

The company is also continuing with its planned 10,000-meter underground resource expansion program. This program began in the first quarter and the second rig and started drilling in May.

Initial results for this program are expected during the first quarter of next year. And finally drilling for this year, ended at Barbasco target in the third quarter and our regional exploration program, which we have increased to 11,000-meters is now focused on Puente Princesa target.

Initial interpretation of results of paying for Barbasco, suggest broad culturation and narrower zones of proximal, epithermal, alteration intersected. Multiple narrow, low grade thermal veins for intersected in the Southern part of [indiscernible].

And our team will not further analyze results before deciding on our next steps on this target. Building continues at Puente-Princesa and we expect to see results in the first quarter of next year.

Fruta del Norte continues to show what a remarkable and world-class asset it is, at current gold prices, we expect to generate significant amounts of free cash flow for years to come. And I’m confident that our strategy is the right one to continue growing long-term value to all of our stakeholders.

Thank you for your continued support. With that operator, I’ll now open the call to questions.

Good morning guys. Congrats on the results for the quarter and thanks for the time.

Thanks for taking the time to answer a couple of questions I have. So to start off with this, now that raised on track to be completed in Q2, 2022, what’s the next critical step to push that forward?

Is it the contract is being mobilized. And do you guys see any risks in the remaining project timeline that could push this further?

Yes. Thanks for the question.

Yes you are right, so the key thing right now is mobilization of a contractor. They essentially are already stacking stuffing containers.

We have started putting in plants. A lot of the material was being fabricated in Canada, that’s needed or pulled together.

So we are booking or already have some containers moving by land to Houston or Miami versus kind of using both parts so that there, we don’t have to worry about trans shipments and we already have sailing spots booked. So we’re doing everything we can, but yes, we all know what’s going on in the global shipping industry today.

And so that is the risk of globalization, but both teams are doing everything they can to stay on track for that.

Okay, perfect. That sounds good.

And then the second question is on annual guidance. So you guys would be on the top end of guidance for the year, while SDN output should be guidance by about 10,000 ounces as Q4, would it deliver flat growth quarter-over-quarter display average throughput increasing?

So we note that grades are supposed to decrease towards reserve levels and a 9.5 grams per ton assumption gets us to the top end of your guidance. Is that aligned with like the step-down in grades that you’re seeing to date in Q4?

Or is there a bit of conservatism built into that guidance?

No, that we always have Q4 results was always going to be a bit closer to a resource reserve grades and, we’re a good chunk of the way through the quarter and that’s what we are seeing. So we always knew this Q4 where it’s going to be in some different areas with closer to reserve grades.

So yes, there’s no conservativism in the guidance we push ourselves, but this is what we expected for Q4.

Okay, perfect. Thanks for that.

And I’ll leave it there.

Hi, Ron and Alessandro. I thank you for hosting the call.

I’ve noticed that your mining rates have been above the 4,200 tons a day kind of level for the last couple of quarters. And in fact for the last four quarters for mining has exceeded your processing rates.

So you have a stockpile built there when you do get to the 4,200 tons per day of the mill capacity, where do you expect to see the mining rates still to exceed them the mining rates to exceed the milling rates?

Yes, Nope. Yes, the mines are really well, David.

Yes, we do anticipate, the key is for us to get the self that raised on, it’s, once we get that self that raise, that opens up a number of areas at depth for us. And as I mentioned a little bit earlier, the next we are look, we have many hours, let’s see a deep bottlenecking to see whether we can push a little bit more both in the plant and the mine.

But the key for us is getting that hope, that race down to really see what the mine potentially could do.

Yeah. That’s kind of where my thinking was going because with the SPR, I would have imagined that your mining rates could step up even from where we are today.

So that the whole process would be mill constraint rather than mine constraint. Is that a fair way to look at it?

Yes, but even with the expansion, when we seen in what the guys have done in the mill prior to getting the last few pieces of equipment, and we still think we have room to push in the mill as well.

Okay. So in our modeling where assuming for instance, without any additional disclosure from you guys that your mining rates, mine grades are similar to your milling grades, and they’d given that we’ve have had excess of mining over a milling, we’re kind of looking at a stockpile that would be over 120,000 tons at the moment and 10 grams to 11 grams.

Is that sort of in the right ballpark for where you see the stockpile?

Yes, that’s pretty well in the right ballpark. Yes.

All right, I’ll leave it there for now. Thank you, Ron.

Thanks, David. Good to hear from you.

I just wanted to follow up with regard to the mining rates and the potential opportunities for rather the throughput rates and any further optimization opportunities. Do you see visibility to now go beyond 4,200 tons per day in the future?

And if so, what adjustments or spending might be needed for that or are there other optimization opportunities in the processing? Thank you.

Yes. Hey, Don.

That’s a good question. We are looking at debottlenecking and based on some of the things we’re seeing in the plant and in the mine.

Yes, we do think we can further increase tonnage. We’re just finishing up the 4,200, the last tie-ins are actually happening today as we speak.

But yes, there’s opportunity, but let’s not forget recovery. We still are not happy – as you’ve seen, we’ve seen continued improvement in recovery, but we also think now with the expansion done.

And I was at site last week and the team did a very thorough presentation on a number of areas for looking at to further improve recovery. And so I think there’s a double whammy in the process plants that potential throughput, but also we still have many things we’re working on to improve recovery and continue to keep pushing to get closer to that 90% level, which obviously increased throughput to, quite a few additional ounces to be produced.

Yes, certainly. Okay.

Thank you very much. That’s all for me.

Thanks. Good morning, Ron and Alessandro.

A quick question on the vent raise, remind me Ron, is that – how many years is good enough for the volume and the depth that you you’re doing before you worry about to go on expanding it again, the vent raise?

This is a one-time thing, Terry. This will give us enough ventilation for the current estimated mine life.

And so it’s – right now, we’re using. Thank goodness we did put twin decline.

We made the decision to go to the twin declines and yes, we’re not going to need to expand or deepen this or anything else. We’ll handle the rest of it through internal raises, not which are all in our budgets.

Okay. Got it.

Thanks Ron for that. Second question is that coming back to recoveries, your tails are running about underground which is some of the mines are mining somewhere else, is that chemical still, is that the grinding, what exactly do you think the fine tuning going to happen on the recoveries?

There’s a couple of areas we’re really focusing on, Terry. Yes, and you’re right.

It pains me when I see our daily essays. So our tails are sometimes much higher than what others are mining, but these numbers – we’re really focusing on flotation and CIL and it’s a balance of the two.

The GFL is turned out to be a little bit more complex to operate, and also we’re seeing a lot more variation in ore types in what we’d anticipated. So it’s really focusing on flotation and CIL are the next steps.

Okay. Do you have a target run?

I know you talked about this before, but what would be a target that you think it’s feasibly possible, is that 92, 94 as the recovery eventually?

No, what we have based on the original feasibility study was just right around 92%. So, that’s what we’re obviously continuing to push for.

Realistically, I think what we should be targeting based on what we’re seeing in the variability in the ore now that we see, it was not anticipated is I wouldn’t say we continue to push to 90%, 91%.

Okay. Let’s come back to the exploration, Ron.

Few years ago, there was also internal discovery in the Emperador, if my memory is correct, what happened to that in the exploration budget and the sequence?

I’m not sure the discovery – do you say discovery?

Emperador.

Yes, we were the only ones that have done drilling there. We’re the only ones that have done drilling other than other Fruta del Norte, Aurelian or Kinross.

Kinross is getting ready to do some drilling, but then they pulled out. And so we have done surface work and everything and essentially Barbasco and Puente-Princesa are sort of the Emperador concessions now, Terry.

So it’s all the same area we’re working on in this. We’re very encouraged by both Barbasco but even more so on what we’re seeing at Puente-Princesa.

Okay. And there was remember jackpot, we talked about a few years ago as well.

What’s the update on that? On the exploration presentation a couple of years ago from Newcrest?

Sorry, which – yes, that’s yes, Newcrest is farming in on eight concessions, this was part of the original agreement back in 2018 and actually they’re mobilizing to start drilling on two concessions, which are north of the mine, about 30 plus kilometers north of Fruta del Norte. They’re mobilizing and anticipate started drilling this quarter.

Okay, a little activity here. That’s good.

I think by my notes here yes, treatment and refining charges. Any changes we should expect to TCRCs for next year?

No. Majority of the long-term contract, Terry that issue we are seeing is freight particularly to Europe.

We’re not seeing any increase in freight to Asia. So yes, it’s transport issues not to treatment or refining charges, just transport.

Got it. Thank you, Ron.

Thank you, Alessandro. Thank you.

Thank you, Terry.

Thanks operator. Ron, if I got this correct, you’ve got it.

You’ve added a couple thousand meters to the drill program Puente Princesa. So that’s another couple of holes.

And then is there also another couple of holes that you’ll plan to drill at Barbasco in the New Year, I guess, to get you up to that 12,000 meters?

The original was 9,000 meters, Kerry, and yes, we’ve added a couple of holes of Puente Princesa, which we anticipate getting done this year. The 2002 program where just that’s all been put together, we’re presenting that to the board in a couple of weeks, and we are looking at a larger program and it’ll be on focusing on Puente Princesa on Barbasco further plus some other targets that we’re looking at.

So yes, we’ll keep – essentially what we’re doing, Kerry, is key for the two rates going, and then we’re going to – we’re looking at expanding the program for next year.

Okay. And Alessandro talked a little bit about the cost inflation.

Are you seeing that across the board for all your consumables, I guess diesel, and all your reagents and you’re still consumption, or is it in one particular area that you’re starting to see a bit of pressure?

It’s really across the board still drill strings, all that sort of thing and some reagents. Not too – not a little bit on fuel, but not a lot.

Nothing on wages. Wages still our inflation rates here in Ecuador is less than 1%.

So, wage inflation and things like that, we’re not seeing anything. So it’s mostly on imports.

And then the other area we’re seeing a significant increases, which we just mentioned, I mentioned to Terry is transport to – transport costs are for concentrate to Europe and Canada.

Okay. Okay.

And then just on the realized gold price, the $1,769, that was a little bit below the average, I guess that was just timing and sales. Was it?

Alessandro, do you want to take that one?

The average gold prices is really driven by our off-take agreements and as well as the final settlement under the long-term contract for concentrate and the variation in the gold price between time of sale. And the final settlement sometimes are four to five months and the variation in gold price will affect the average gold price in a given quarter under the off-take we are subject to a quotation period and that sometimes depending on the volatility of the gold price during that quotation period might affect a little bit the gold price some and so we see those elements coming into that statistic.

All right. Okay.

So the QP is sort of four to five months and that’s, so it’s really just the impact of the timing of that provisional pricing versus fund settlement then. Okay.

Gotcha.

Correct.

Yes. Okay.

Okay, great. Thank you.

Thanks Kerry.

Hey Ron, just following up on Terry’s, it sounds like you guys are going to increase your exploration and that can be another significant catalyst for you guys, but just want to hear kind of your thoughts on how much you’re thinking about M&A and obviously you can’t talk about, you being acquired, but how active are you on trying to diversify from being a single asset previous you’ve given you fully ramped up? You’re pretty much done the expansion.

Are you thinking about doing more M&A or are you focused on the exploration and kind of pushing the mill further?

Good question. Answer all of the above.

We talked about our pillars are shareholder value, so organic growth is one of them. So we have – we might keep pushing the mine and mill further, and again, I can’t focus enough recovery, 1% recovery, especially in our all-in sustaining costs, I guess the significant add to our cash flow generation, what we’re seeing at Puente Princesa and Barbasco just making us more excited now that we’ve actually got drill holes into this regional exploration.

So that’s their M&A, it’s something that we hadn’t really been focused on. We are focusing more on it now.

We’ve got to be selective though. We can’t grow for the sake of just adding ounces that, I think a lot of CEOs talk about that in this industry.

Now, we have to be selective and yes, we are looking at it and we’re looking for opportunities for sure.

Great. And just, this is an accounting question.

I normally don’t ask, but just with the amount of free cash flow you’re generating taxes are starting to become some payments now. It should we expect a tax payment quarterly, or is it going to be kind of do accrued and then they get kind of all paid in Q1?

What’s the way to think about kind of the majority of the tax. I know some of it spread out, but thinking, does it get accrued pay, call it if you wanted the next year or every quarter should we expect some?

If I can answer that question in Ecuador taxes, I paid once a year, they are paid, we are on the end of the first quarter of the year for the previous year upon filing of the tax return. And therefore we accrued throughout the year both the income taxes as well as the profit sharing and they get settled not one time of the year.

Got it. Thanks a lot.

Congrats again on continuing the successful ramp up.

Thank you.

Thank you Michelle, and thank you everyone for attending the call. And we look forward to announcing further catalysts on exploration potential and obviously our 2022 guidance and some longer term bench which will be starting to issue here soon.

So thank you everybody again. And have a great day.

Be safe. Thank you.