Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our second quarter 2026 results. This call includes forward-looking statements and information and references non-GAAP measures.

Please see the cautionary statements in our MD&A, Q2 news release, and presentation slides for the period ended June 30th, 2026, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Good morning, everyone, and thank you for joining us today for our Q2 2026 conference call. Q2 delivered strong financial results, strong silver production, and meaningful progress on our growth projects.

We generated $344 million of attributable free cash flow, returned a record of $300 million to shareholders, and reached an important milestone at La Colorada in early August with the first cut of the 588 decline to access the skarn deposit. Attributable silver production of 6.5 million ounces in Q2 was at the high end of our quarterly guidance range, driven by continued strong performance at La Colorada and Juanicipio.

We remain on track to achieve our full-year silver production guidance of 25 to 27 million ounces. Q2 silver segment all-in sustaining costs were $17.80 per ounce, primarily reflecting higher cost ounces from the inventory drawdown that had accumulated at La Colorada in the first quarter of 2026, higher royalties at La Colorada from mining more tonnes than initially planned from the adjacent third-party concession, unfavorable currency exchange rates, and higher labor-related costs.

Attributable gold production was approximately 166,000 ounces, which was below the quarterly outlook issued in February. We expect Q2 to be the weakest gold production quarter of the year, with production more heavily weighted to the fourth quarter, as we indicated in Q1.

Gold segment all-in sustaining costs were $1,984 per ounce in Q2, slightly above our quarterly outlook due to the lower-than-forecasted production as well as labor and materials inflation. Importantly, for the first half of the year, all-in sustaining costs were below the low end of our guidance range for silver and in line with our guidance range for gold.

Based on performance to date, we are reaffirming our full-year 2026 operating outlook ranges for silver and gold production, silver segment and gold segment all-in sustaining costs, and sustaining capital. Within that outlook, we now expect full-year gold production to be at the low end of the 700 to 750,000 ounce guidance range.

We have also revised our third quarter gold outlook to approximately 3 to 6,000 ounces below the low end of the quarterly guidance range of 178,500 to 192,000 ounces of gold. The change in our near-term gold outlook primarily reflects lower-than-expected production at Jacobina and El Peñón.

At Jacobina, gold production is now expected to be approximately 10,000 ounces below the low end of the original annual guidance range of 181,000 to 191,000 ounces, reflecting changes to mining sequencing. The mining method employed at Jacobina over the last 40 years has been open stoping with very few of the stopes backfilled.

Over the last several years, Jacobina has experienced seismic events. While these events have not resulted in any injuries or infrastructure damage, after reassessing the risk associated with seismicity, we have implemented measures in Q2 that include leaving larger pillars, reducing production rates in some higher-grade areas, and increasing development rates to open more mining zones.

These measures will result in overall mining grades coming in closer to average mineral reserve grade. Longer-term, we are evaluating alternative Avoca-type mining methods in certain areas with waste rock backfill and cemented backfill as part of the optimization of the Jacobina operation.

Jacobina continues to be a standout performer in generating cash flow with a long reserve life and significant optimization potential. We are advancing several process plant upgrades, including installation of new carbon-in-pulp tanks and electrical control system, both of which are expected to be commissioned this year.

We're also advancing conceptual engineering to streamline and simplify the process plant flowsheet, which will feed into a trade-off study to evaluate whether upgrading the existing process plant circuitry and removing obsolete equipment or building a new state-of-the-art processing facility is the optimal choice for this long-life asset. At El Peñón, silver production is expected to remain within the original annual guidance range of 3.65 to 3.95 million ounces.

Gold production is now expected to be approximately 10,000 ounces below the low end of the original annual guidance range of 104 to 111,000 ounces, reflecting lower-than-expected continuity in certain secondary structures. Across the portfolio, we expect gold production to improve over the balance of the year, weighted to the fourth quarter as previously indicated.

Second-half production is expected to benefit from higher gold grades and higher throughput at Timmins and Shahuindo. We're also managing the effects of El Niño at our operations in Chile and Argentina.

Extreme rainstorms have affected site access for key personnel in July and into August. Our teams are actively managing these conditions with safety remaining the top priority.

Turning to our financial results, revenue was $1.1 billion and attributable revenue, including our 44% interest in Juanicipio, was $1.3 billion. Net earnings were $305 million or 72 cents per share, which includes a tax expense of $179 million.

Adjusted earnings were 73 cents per share. Cash flow from operations was $320 million after $205 million of income tax paid and $17 million used for working capital.

Attributable cash flow from operations was $418 million and attributable free cash flow was $344 million, including our share from Juanicipio. Q2 is expected to be the highest period for taxes paid in 2026 due to final settlement of taxes for 2025.

Higher metal prices have increased profitability and tax payments. As a result, we have increased our 2026 guidance range for income taxes paid to be between $585 million to $635 million.

Our financial position remains very strong. We ended the quarter with $1.8 billion of cash and short-term investments, including cash attributable to Juanicipio.

In July, we renewed and amended our 5-year senior unsecured revolving credit facility, doubling its size to $1.5 billion and adding a $750 million accordion feature. The facility remains undrawn and our total available liquidity is approximately $3.2 billion.

This financial strength gives us substantial flexibility to invest in our operations, advance organic growth projects, and return capital to shareholders. At La Colorada, development of the 588 decline to access the skarn deposit is underway.

This is a key step in advancing the planned expansion outlined in the revised PEA released in March. Engineering for the material handling system and ventilation shaft is also progressing, with the design, cost, schedule, and recommendation expected before year-end.

At Timmins, we are advancing the first phase of the Timmins Camp project, including the Bell Creek shaft extension and two exploration drifts to access Vogel and Samson deposits. We plan to release updated mineral resource and mineral reserve estimates in the third quarter and a preliminary economic assessment for the Timmins Camp project in the first half of 2027.

At Escobal, the ILO 169 consultation process continues. Government representatives visited the mine in May.

We met with representatives of the Ministry of Energy and Mines and the Vice Minister of Sustainable Development in June, and a bilateral meeting between the government and the Xinka representatives was held in July. There remains no timeline for conclusion of the consultation process and no date for the restart of Escobal.

Our strong free cash flow is translating into meaningful shareholder returns. In Q2, we returned a record of $300 million in share repurchases and dividends.

To date in 2026, we have repurchased over 7 million shares under our normal course issuer bid. We have also declared a Q2 dividend of 18.4 cents per common share.

The enhanced shareholder return framework we announced in May is operating as intended. Repurchases reduce the share count, increasing dividends per share and each shareholder's exposure to our asset base and future free cash flow generation.

That free cash flow generation remains robust, and we will continue to balance shareholder returns with investments in our growth portfolio. With that, I will turn over for questions.

Thank you, operator. Good morning, Michael and team.

Thanks for today's update. I'd like to start, I guess, with the elephant in the room, which is Jacobina and the production issues at that asset, and what that has meant for 2026 guidance, your expectation to now be at the lower end of the gold production range.

When you think about what's happened and what you've provided the market with today, what does it mean for sustaining gold production at that mine into '27 and beyond, at that just under 200,000 ounce per year range? Does it impact 2027 at all?

Good morning, Lawson. Look, when you look at Jacobina and of course this seismic activity, and just want to make very clear, this seismic activity has not created any damage to our infrastructure or anything like that, but this is something that is going on for many years at Jacobina as the mining is an open stoping method with pillars.

Of course, if you go on mining for a long time, you see activity. That's if you recall, was always our plan to put, as part of our optimization study, a backfill plant in place.

For several reasons: obviously, we want to move over this tailings dam, the conventional tailings dam into a dry stack tailings dam over time, and then use some of that tailings as backfill in the mine. That was always the plan.

Consulting with a lot of our specialists and our systems we have in place, we decided to move on this faster, relieve a little bit the main zones and develop faster into other zones that we have in the mine. That requires a bit more development right now, obviously, and as you saw, impacted that gold production—I think we guided down about 10,000 ounces less production.

Not a massive impact to it this year. There's a lot of mitigation that we have.

As we described, we leave larger pillars at the moment as a short-term mitigation. Don't forget, once we have paste backfill in place, we will be able to recover large part of those pillars.

These reserves are not lost. We just go into some other areas.

Some of them have a little bit lower-grade gold than what we mined right now, hence the difference. This is really just a postponement of the production in the future and investment in the future stronger and larger Jacobina.

Really part of the program, coming in a bit quicker because we just want to really be on the safe side, but I don't see any impact really over the long-term program. Jacobina has a reserve life that goes way into the 2050s right now.

We have continued strong success in exploration. When you look at the big picture here at Jacobina, I don't see really a major impact of that, but for sure short-term, that's what we just reported with that about 10,000 ounces lower production this year.

Thank you for that perspective on the short-term nature of these issues. You also described in the MD&A that El Niño impacts may continue to cause disruptions through the remainder of 2026.

Will those potential impacts have been factored into the updated language around the gold production guidance?

Look, the El Niño impact we've seen mostly in Chile so far. I'm sure most of the people on the phone have heard about the big impact to some of the copper production in Chile.

We had very, very strong rains, especially in the south in Florida, and actually carried over all the way to Cerro Moro, where we have lots of rains. Obviously, when it gets very wet, there's some daily challenges in moving your ore to the plant and pushing it through the plant when it's really wet.

Nothing of a major impact there. I think the biggest impact we've seen was not actually rain-related to our operation because the biggest impact was at El Peñón.

Obviously, we are far in the north. It's a very dry area, but a lot of the roads, major highways in Chile, have been interrupted, which made it quite challenging to fulfill at 100% our shift changes and bring all the people in.

We are mitigating that with different transport routes, with flying people in and out to Antofagasta, et cetera. That's all included in our plan.

Remains to be seen how the Niño effect advances this year. It looks like it's going to be quite a strong phenomenon this year.

Temperatures are quite high in the water, and that will move up further north, obviously, and will normally effect closer around Christmas or so Peru, hence the name El Niño. It actually comes from there that it happening normally closer to Christmas.

We would expect more rains in this area, and then later on, the effect of Niño obviously goes all around the globe. You're going to see effects in Australia and Europe, et cetera.

We are prepared and preparing further at our operation, making sure that all our diversion channels and holding ponds are ready for bigger rain events at the moment. We'll see how that advances.

Obviously, if it has a bigger impact, then we will inform the market. At the moment, as I said, it was more a secondary impact so far at El Peñón just due to a lot of infrastructure damage in the road system of Central and South Chile.

Great. It sounds like that is well factored in.

Then just finally, not a lot of direct discussion about the plan to return one up to $1 billion of cash to shareholders this year through both buybacks and dividends. Could you just confirm that remains the target despite that it hasn't been really clearly highlighted this quarter the way it was last quarter?

We put out the press release last quarter with the plan, and I think it's very clear that we're following on that plan. Actually, you probably saw we returned $300 million this quarter.

Obviously, that puts us kind of ahead in the plan, but you recall, we put the plan in place really after Q1. We had to catch up some on Q1, where we paid obviously the normal dividend, but I think we only spent about $25 million in share buybacks in Q1.

Hence the catch up. We're right on track, obviously, right now.

I think the idea that we published was about 35 to 40% of cash to be distributed to our shareholders. That's still absolutely still in place.

I think we continued. Maybe Ignacio, how many shares did we buy back so far this year?

Above 7 million.

How much is there already now again? We continue obviously to buy back shares in July.

In July, I think it's over 2 million. 2 million shares.

We continue obviously that program very strong. Obviously, the total amount, Lawson, if it's exactly a billion or less, that depends on the share price of our buyback.

I'm very focused on the amount of shares and number of shares that we buying back. Absolutely, that program is stronger than ever.

If you look, we're quite a bit ahead of the plan.

Thank you very much.

Thanks. Morning, guys.

Maybe just Morning. Just following up at Jacobina, back a couple months ago at the Investor Day, the discussion had still centered around the potential to increase production and the efficiencies at Jacobina.

I was just curious, was there a seismic event that occurred in the past couple months to kind of prompt this reevaluation of the mining method underground? In light of changes here in potentially moving to more selective mining, is there still potential to scale that production at Jacobina going forward as per some of the optimization work that you're undertaking?

Yeah. Absolutely.

As I said before, this this is, as I see, more a short-term impact. There there's ongoing activity on the seismic side.

As I said, it's it's it's really the precaution we wanted to do, and we looked at this with our microseismic system to make sure that everything is safe for our people, for our infrastructure, as as we pointed out. There has been no damage to it.

Over mid and long term, absolutely the the the potential for expansion of Jacobina is exactly the same. We're working at full speed on the optimization.

You probably heard during the call that we're did quite some investment in the plant and are actually looking at alternatives there as well. Let me pass it on to Martin, who will give us a bit more details on on on that plan.

Hi Wayne. Absolutely.

As we sort of look at this optimization project going forward, we're looking at really completely revamping the plant as one thing, and the tailings facility is, as Michael mentioned, we need to go with the filtered tailings there and we're being looking for some time at the paste backfill underground, and we've completed a lot of the test work that we need to do on that in terms of the strength and the rheology of the paste backfill. All these things are advancing.

The plant is going to take a bit of time. The current facility is maxed out, but yeah, we'll be looking at increases to the size of that plant as we go forward, and we haven't really arrived at what can the mine do to provide the plant in the future, but that's some of the things that we're working on as we advance this study.

We do expect because of this that we'll go backwards to a bit more towards the mine reserve average grade as we open up new areas in the mine.

Then it sounds like there's work being done to increase the mill capacity, but you haven't quite done all the work to see whether the mine can sustain the expanded mill capacity?

Nothing has changed on that program and what we showed, obviously, at the Investor Day. This is ongoing work, and it's not completed yet.

Yes, we are obviously still working on that optimum size of mill, and as you saw there in the press release, we're looking at either increasing productivity in our current mill, and we're working right now on increasing recoveries, or looking at a completely new mill in the future. As I mentioned before, we're looking at a mine plan here way into the 2050s.

With probably strong reserve replacement for many, many years to come. At one point, having a larger, state-of-the-art plant at Jacobina would probably make a lot of sense, but Martin and his team are still working on the technical side of that.

All going ahead as planned on that side and going ahead at full speed.

Thanks, got it. Moving to Peñón, we've discussed in the past the fact that the mine has always had a pretty short reserve life that has been continually extended out.

With the depletion of the stockpiles, I was just curious what the proportion of production that had been historically. Then do you see this phase of lower continuity mineralization as transitory, or is that something we should be kind of modeling on a go-forward basis, and is that going to be reflected in the upcoming reserve update?

Just want to better understand how we should think about it going forward.

Of course, we're going to put our reserve update out in early September for the mid-year reserve. Of course, all this changes and discoveries on the exploration side, et cetera, will be included in that reserve update.

When you look at those smaller structures, there are smaller parallel structures to the main structures that have less continuity and need more drilling. We removed them from the reserves for the time being.

Some of them have follow-up programs with Chris and his team on exploration to add in additional drilling. We replaced them with material from other structures that, in this case, have been higher silver grade and lower gold grade, hence we are right on track on the silver production, but we're tracking a bit lower on the gold production.

There's still enough places, obviously, to go. We're still drilling and exploring a lot at Peñón.

It has been, and it still is, a very, very large cash flower for us and has been an amazing deposit over the years. There's still a lot to discover there, but at the moment, as I said, that move into higher-grade silver will probably continue for the foreseeable future this year.

Hence we made that cut back a little bit on the gold and confirmed the silver production for the year.

Great. Thanks.

Maybe just last one, just at Timmins, can you give us a bit of context or a bit more color on the guided increase in production in the second half? Just with the planned increase in the mining rates, can you give us an update on the ground condition issues that you had encountered last year?

Sure. Things going quite well at Timmins.

Right now, we've had some ups and downs in our production rates. In terms of the geotechnical seismicity, we're not getting any real big events recently.

The paste backfill that we implemented at Bell Creek is really helping from that regard in terms of the overall recovery and controlling things. Obviously, still the same plan, Wayne, here.

Probably earlier, latest mid next year, we will present a new PEA on Timmins with the, as we call, the new Timmins with all the additional satellites that we are developing right now towards two and exploration. We'll have the new plan for Timmins, something that we gave you an idea at the Investor Day, but obviously, the PEA will have all the details in there then with updated resources, updated mine plans, cost, capital requirements, et cetera, to add a probably substantial mine life to our Timmins deposits.

Great. Thanks for taking my questions.

Thank you.

Thanks, Michael and team, for taking my questions. Maybe my first question is on the financial side.

You missed earnings compared to consensus this quarter, in part due to higher taxes. Could we maybe talk about higher taxes?

I noticed that the tax rate turned out to be about 37% in Q2, higher than the 32% in your first half. With commodity prices where they are today, is 37% the new normal?

Then in the MD&A, you also talked about the fact that more taxes resulting from higher commodity prices. However, for the second half of the year, for tax purposes, you're forecasting $60 an ounce and $4,000 an ounce, which is slightly lower than where spot is today.

If, again, commodity prices are to stay at the more elevated levels compared to what you're expecting, could taxes come in even higher than your revised guidance?

Good morning, Cosmos. It's Ignacio here.

Hi,

Cosmos. In terms of the taxes, yes, we definitely see variability quarter to quarter on the effective tax rate.

As you mentioned, in Q2, we saw in the high 30s. However, in Q1, we did see high 20s.

If we look at the year as a whole so far, we're in the low 30s, which is more or less where we expected it to be. Yes, unfortunately, there is some variability.

In Q2, we did see some true-ups related to previous quarter, some adjustments. In terms of the overall year, we're tracking in that low 30s area, and that's more or less where we expect to be.

Do keep in mind that unfortunately on the tax expense side, there is some variability. You'll see that in previous years as well, there was quite a bit of variability what that effective tax rate is.

When you see the year as a whole, it's more or less where we expect. In terms of the actual taxes paid, yes, we've always guided that typically in the first half of the year there's higher payments than the second half of the year, and that's to do with the true-ups that we have to pay in typically at the end of Q1 or early Q2.

A lot of it has to do with the profitability of the previous year. Specifically in 2025, we saw a spike in profitability just in Q4.

That's been the big driver for these larger true-ups that we saw at the end of Q1 and into Q2, and that's what's driving the higher tax payments that we've posted for the first half of the year. In terms of the rest of the year, yes, we have reguided to a range of $585 million to $635 million.

That's more or less where we expect where metal prices are today. Higher profitability is driving that.

The other factor, too, is that with our strong cash flows at the operations level, we are generating quite a bit of cash at the sites, and that cash has to be repatriated, and a lot of that cash that's repatriated has withholding tax attached to it. That's just frictional cost of moving money around the company.

That's another factor that's affecting the overall range of $585 to $635 million.

Great. Maybe at the operational level, maybe a question on El Peñón.

As you mentioned in the prepared remarks, also MD&A, there was some lower-than-expected [continuity?] , certain secondary structures, but you were able to maintain your silver guidance, but you had to bring down your gold guidance.

I'm just wondering, do these secondary structures, do they impact gold grades more, or gold production more versus silver? I thought that at El Peñón it's pretty consistent in terms of gold and silver grades coming together.

It's It's correct when you put it together that it's quite was quite consistent, but they're actually very very silver-rich veins and then very gold-rich veins at at Peñón. Obviously, obviously, we are blending them in the production.

What happened in these secondary structures is that some of them, as I mentioned, we we took out of the mine plan because the continuity wasn't there. In in in many of them, it's just there's still additional drilling needed, the exploration is actually back in.

While that's drilled, we move those structures into resources. If drilling is positive, they will go back from resources into the reserves.

The production, to replace that production, we went into more silver-rich and less gold-rich areas. As I said, they're they're really both.

They're not just always coming together. That's the end result is that we we have no problem to deliver on the silver, but there's a bit less gold in those structures right now that are developed.

It's a constant play really on on the blending at at El Peñón between the gold-rich and the silver-rich, and at the moment, that's just what we have developed. Hence more silver production right now and a bit less gold production at Peñón.

Great. Then maybe one last question on project capital.

I see that you were slightly below your expectations in the first half. You came in at about $84 million.

You had been expecting 103 to 110. You've maintained your guidance for the year, 240 to 255 million.

Is that just timing? Where are you going to catch up on spending on the second half, if you can just quickly talk about that?

Sure. I'll just start on the big picture here and then hand it over to Scott, but yeah, there's definitely timing in here.

Weather plays a big role. Obviously, beside the Niño events this year, obviously there's dry seasons and wet seasons, and they're quite different in different places.

As you can imagine, we stretch with operations from deep winters right now in Southern Argentina all the way up to summer in Mexico. You have different timing there, different parts of the year where we have the ideal time to spend that capital.

I'll pass it on to Scott, but I think that's just timing of spending.

Yes, exactly. Hello, Cosmos.

It's Scott here. Morning, Cosmos.

We had a national strike in Bolivia, which delayed the mobilization of our key tailings expansion contractor. There was a bit of a lag there.

The market for large contractors in both Peru and Mexico is very competitive, and there were some delays associated with their mobilization, too. No, nothing's been postponed.

There's just a bit of a lag there, and we'll pick that up later in the year.

Just to make clear here to the listeners, that has nothing to do with the mine, obviously. It's strikes on the roads in the country, and obviously, that affected us with mobilizations, no issue on our side.

That's good to hear. Thanks again, Michael, Ignacio, and Scott for answering all my questions.

That's all I have. Thank you.

Thanks, Cosmos.

Hi, good morning, guys. Just on the royalties at La Colorada.

You're operating on that adjacent ground. Just wondering if you can give some guidance on what we should expect for that in the back half of this year and into 2027.

It was a little bit higher during Q2. That will even out during the year.

That will be a bit less tonnage coming from there later this year. It's really just in our mine plan basically to get to the other side of those claims back into structures that are fully on our claim where we operate.

It's just a short-term variability really on those royalties that were a bit higher this quarter than they will be in the future. I think in general, this year, I think we set them at what, 30

35%?

30 to 40. 30 to 40% of the production from there.

Then that will, over the years, will come off, right? We showed the mine plan as part of the PEA and all the details are in there.

Just to be very clear, 100% of all the resources of the skarn are obviously on our claims, and all the new discoveries of the veins that we continuously discuss and drill are all on our claims. This is really more a short-term variability here in those tonnes coming from there.

Great. Then maybe just a question on the credit facility.

You have a ton of cash in the balance sheet, you're generating all the cash, and you've doubled the credit facility with not a lot of near-term capital spend. Just wondering what the thinking is on the credit facility.

Hi, Carey. This is Ignacio.

Generally, this is just to make sure that the company has the financial flexibility that we need. Also, the market conditions have been quite favorable towards investment-grade issuers like Pan American Silver, we figured it'd be a good time to take advantage of those favorable market conditions.

Plus, we've learned from the past that having that financial flexibility can be very positive for the company. When opportunities come up, we can react quickly to those.

Of course, we have very strong balance sheet. You saw there liquidity of about $3.2 billion right now.

We have a lot of big projects on the go. Just mentioned the three main ones, which is obviously the La Colorada skarn, the optimization study at Jacobina, and all the work we do in our Timmins Camp.

This is a way bigger company than it was before, and it was, as Ignacio said, an opportune time and very favorable conditions to basically double our line of credit, which is undrawn, but available to us in our liquidity to be able to react to any opportunity that may arise. At the moment, it's just sitting there as we had it before, and it's great to have.

Great. That's it for me.

Thanks, guys.

Thank you.

Thank you, operator, and good morning, Michael and team. Thanks for taking my question.

I'll start off with a question on Escobal. I see you hosted the government officials at the mine during the quarter.

Can you share any incremental color on this meeting? For example, was this the first time that these particular officials visited the mine, and was there a specific purpose for the visit?

No, that's not the first time. There are continuous visits by authorities to the mine.

That can be just the authorities or together with representatives from the Xinka. There has been many, many visits from communities around, et cetera, et cetera.

This is not the first one. Normally, we host a lot of visits.

The mine obviously shows very well. It's in great shape, and you can go through the plant, you can go underground, look at the dry stack tailings facility, all the environmental work we do, and day to day.

Just great to have them there, great to have reviews and discussions with them. No additional reason for that, just normal course.

Thank you. Then shifting to Jacobina, is there any preemptive mining support or other work that requires additional capex, or would anything extra that's needed be covered within the existing sustaining capex budgets?

Or is the measurable impact from the seismicity just limited to the 10k reduction in production? Thank you.

It's really that. Obviously, we are working on that optimization study, and the additional capital that will be required for paste backfill plant, that's all in engineering phase right now.

Once we have all the details ready, we'll share that with everyone. At the moment, yeah, the impact is really on that small reduction on the production.

Once we have all the numbers together, the engineering is done, we make the final decision on size, location, et cetera, of the paste backfill plant, we will share that with everyone, of course.

Okay. Just final question then.

Year-to-date silver costs, you're tracking below the low end of the guidance range. Now, I see you've reaffirmed guidance.

Is that measure of conservatism, or is there anything in H2 that would suggest that silver costs might rebound higher to end the year closer to the midpoint of the range?

Very good question. Look, if you look at H1, look at the first two quarters, we are tracking very, very well on production.

We're tracking very well on costs on both metals, silver and gold. There's really these variations that we see in the quarters.

You recall really, really low costs on the silver side in Q1, higher costs. Now, there's impacts quarter-by-quarter that are not always there, right?

You have some special bonuses, special payments, true-ups of taxes, et cetera, et cetera, in some of the quarters. When you look at the cost increases that we see, and that's for both silver and gold, there's lots of different impacts.

Obviously, byproduct credits have a huge impact to our costs. When you look at Q1 with way higher metal prices, those byproduct credits helped us bringing that cost down.

Obviously, quite a reduction in metal prices in Q2, hence the costs are going up. I don't have really a crystal ball here to look forward where metal price is going to go.

Then the next biggest impact are foreign exchange impacts, which can be very, very large because all of our jurisdictions are in foreign currency, even in Canada, because we're reporting in US dollars. Strengthening of those currencies actually that we see right now, obviously have a big impact to our costs.

When you put that all together, and there's a large part of cost variations that we don't really have control over because, as I said, it's foreign exchange, it's metal prices, and then to a lesser extent, obviously, energy and diesel costs. We just want to leave the guidance right there at the moment and see how it goes into Q3.

Obviously, we'll give an update there, but very happy where costs tracking for the first 6 months for both gold and silver.

Okay. That's all for me.

Thank you again for taking my question.

Thank you, operator. Thank you, guys, for taking the follow-up.

Wanted to ask about Escobal and just note that since the approval of the construction permits for the Cerro Blanco mine in Guatemala, several indications have pointed to a much more forceful level of government support for mining generally in the country. I'd be curious to hear your thoughts on whether or not you agree with that.

Then further to that, Cerro Blanco was able to touch on a real hot-button issue at the mine, which was water purification from volcanic ash and issues from the past that had nothing to do with mining, but nevertheless they were able to generate a lot of community support through their efforts to help purify river water. I'm just curious if there's something like that at Escobal that might be one particular key issue.

Ultimately what I'm trying to get at is what are the key issues being discussed between the government and the Xinka at the current moment? Thank you.

Sure. Look, I don't think you should draw lines here between different projects and not many operations in Guatemala.

They're all in different areas with different communities and very different realities where they stand. Obviously, we have to go through that ILO 169 consultation, which is a court-ordered process that goes years back now, has been a long, long process.

I don't think that you can just draw conclusions from other projects to this one as every project in Guatemala is quite different reality. Discussions are still around very similar topics, of course.

Like any mining project, it's water. It's kind of dust in many places.

Obviously, not a big topic for in an underground mine except our tailings. It's vibration from blasting and other typical impacts that you would see from a mine operation.

Those are really the main discussion items. Don't just draw lines from one project to the other.

We really have to focus on each project in the country separate.

Michael, thanks for those comments. Then with respect to your reserve and resource exploration update timing, you mentioned third quarter.

Could we maybe try to put a bit of a finer point on it? Is it possible it could be out later in August, or would this be sort of a mid-September event?

It will be a September event, earlier September, but yeah, just a few weeks away.

Thank you very much.

Thank you.

Thank you, operator, and thanks, everyone, for calling in today. Strong silver production and strong financial results bolstered our already robust balance sheet even further and allowed us to return, as you saw, $300 million to shareholders between share buybacks and dividends, a very strong result on that plan.

Our capital allocation priorities remain the same, right? We maintain a solid balance sheet, $3.2 billion of liquidity right now together with our line of credit undrawn, invest in our high-return projects—I mentioned that, La Colorada skarn, of course, Jacobina optimization, and our Timmins project—and continue to deliver solid returns to our shareholders in form of share buybacks and dividends.

We already see metal prices recovering. I hope that will continue, obviously, from their typical summer low.

As I mentioned just now in the last question, we plan to release our mineral resource and resource update in September. We're looking forward to giving update on all that efforts and, very very nice results we had during the year on many many exploration projects in the company and giving update on that in early September.

Until then, thanks, everybody, for calling in.