Hi everyone, thank you for joining us. Today, we have Santacruz's Q2 results webinar.

I am joined by CEO and Executive Chairman Arturo Préstamo and CFO Andrés Fierro. We're going to get started right away with pre-submitted questions.

We will be taking some live ones at the end, feel free to submit a question in the question box below. Also, we may be making some forward-looking statements today, and if you'd like to know more about those, you can find them on the company's website.

With that out of the way, welcome Arturo and Andrés, and thank you for being here today.

Thank you, Olenka. Thank you for having us.

It's a pleasure for us to be here.

Always a pleasure, Olenka. Thank you very much.

Of course. Let's get started with the first question.

Arturo, I'll give this one to you. How would you characterize Santacruz's operating performance in Q2 and the first half of 2026, including the drivers behind higher silver and zinc production, the continued recovery of Bolívar, the strong improvement at San Lucas, and the opportunities for further production and growth through the balance of the year?

Olenka, from an operating perspective, Q2 was a strong quarter for Santacruz, and the first half of 2026 has continued to show solid progress across all of our assets. We increased production at all of our operations with a consolidated silver production increase of 17% and a zinc production increase of 7% quarter-over-quarter.

The main driver behind the increase in silver production was Bolívar, which once again delivered a very strong quarter. Silver production at Bolívar alone increased by 84,000 ounces, supported by an 11% increase in tonnes milled and a 17% increase in the silver head grades as we run more ore from the dewatered area of Pomabamba and Ané.

It's important to mention that the dewatering process is going on budget and on time, we continue to do progress with the dewatering of the mine and the rehabilitation of the main ramp towards the lower levels. We're also preparing producing stopes at those levels where we feel comfortable and confident that our miners can work safely.

That the dewatering program remains on schedule towards a full recovery by Q4, as we have previously communicated. It is also important to mention, Olenka, the improvements was not limited to Bolívar.

We saw meaningful progress across the entire portfolio. At Zimapan, for example, silver recoveries improved 10%.

Caballo Blanco as well. Caballo Blanco increased silver production by 6% with a 5% improvement in silver head grades, while Porco at the same time increased tonnes processed by 15% and silver head grades by 21%.

San Lucas also had a particular and encouraging quarter, processing 22% more tonnes than in the previous quarter and increase its silver production by 20%. Overall, consolidated mining throughput increased by 7%, demonstrating the broad-based improvement across all of our operations.

On the zinc side, the increase mainly was driven by Zimapan. Zinc head grades improved 9%, while zinc recoveries also increased by 9%.

Given that Zimapan is a high-volume operation, this improvement had a significant impact in our consolidated zinc production. I would also like to highlight the continued progress at San Lucas.

The 20% 22% increase, 20 more than 20% increase in process tonnes demonstrates the opportunity that San Lucas keeps building. Improving this operation and making it a more meaningful contribution for overall production was an important milestone as well for San Lucas.

Looking ahead, we see additional opportunities throughout the balance of 2026, particularly as Bolívar continues its recovery. Also, as we advance the dewatering process, we have identified two additional high-grade areas that we have now incorporated into our mining plans for next year's budget.

These two areas are two areas that were left back in the years, and they have very high-grade silver contents. We believe that that is going to help us to start the year in a very strong way for Bolívar.

This gives us confidence that the Bolívar mine has the potential not only to return to its previous production levels, but to come back even stronger. When we look at the first half of the year and the opportunities ahead, what is particularly encouraging is that the improvements is broad-based.

Each of our operations is becoming more efficient, whether throughput, high-grade throughput, better grades, or improved recoveries. In every field, our operations are improving, and those efficiencies are translating directly into higher production and stronger operating performance.

Finally, I would like to add that by Bolívar continuing its recovery, further opportunities at San Lucas, and ongoing improvements across Zimapan, Porco, and Caballo Blanco, we believe we're well-positioned to continue building on this momentum throughout the balance of 2026. I don't know if that was an appropriate or the response that you were looking for, Olenka.

Yes, it was. Thank you for the thorough response and update.

I'm sure lots of investors appreciate that. I have here a question.

Let's move on to the next one for you, Andrés. Q2 delivered strong underlying operating performance, but reported net income was significantly affected by non-operating items, including Bolivia's FX, inflation environment, and the $15.8 million non-cash fair value loss on the Glencore CVR.

Can you explain the impacts and how they may affect earnings, costs, and taxes going forward, and the potential cash and valuation exposure associated with the CVR?

Of course, Olenka, and thank you for the question. I think it is an important one because reported net income this quarter does not fully reflect the strength of our financial performance.

It might take a while. Let me start with the financial results.

By almost every measure, this was one of our strongest quarters. Revenue increased 55% year-over-year, gross profit nearly doubled, adjusted EBITDA increased 74%, and our realized mining margin per silver ounce sold increased from approximately $16, 1-6, a year ago to just over $50, 5-0, this quarter.

We also ended the quarter with $73 million in cash and highly liquid marketable securities. It is also worth noting that these results were achieved despite a temporary timing difference between production and sales.

As Arturo explained, production continued normally during the road blockades in Bolivia, but concentrate exports were temporarily constrained. Kudos to our team in Bolivia, to our COO Eduardo Torrezillas, because I looked first-hand into that and they have done an amazing job.

As a result, sales volume during the quarter were meaningful below production volumes, but that's just a temporary thing. If you look at this from a financial standpoint, that means a portion of what we produced during Q2 remained in inventory at quarter-end rather than being recognized in revenue and operating profit, of course.

As exports normalized, we expect, as Arturo was mentioning, that inventory to be sold and related revenue and earnings to be recognized in the subsequent periods. Now let's turn to what affected net income, and I think that's something that all investors are very focused on right now.

Despite those strong financial results, reported net income was approximately $2 million, compared with approximately $28 million in the first quarter. The difference is largely explained by two major items, Olenka.

First, a non-cash fair value adjustment related to the Glencore CVRs, which are the Contingent Value Rights. I'm going to explain a little bit more about them later.

Second, an unusually high income tax expense, primarily associated with changes in the Bolivian exchange rate regime and the inflation environment. Let me take those one at a time.

First, the first item will be this $15.8, let's say $16 million non-cash expense associated with the revaluation of the Contingent Value Rights, the CVRs held by Glencore. We have had some questions, and I think it is important to establish that this payment is basically in the income statement under loss on change in fair value of consideration payable.

It's the only consideration payable that we have left with Glencore. It's a Contingent Value Right consideration payable.

From a financial standpoint, investors can very easily isolate this adjustment from the rest of our financial results. We have done that on a recent news release.

The key point here is that this is a fair value accounting adjustment, Olenka. It's not a cash payment.

Just as a reminder to our investors, under the terms of the CVR, a payment is only triggered in a month when the average LME zinc prices exceed $3,850 per tonne. That threshold has not been reached yet.

For example, for Q2, zinc averaged approximately $3,400 per tonne during the quarter. Nevertheless, and this is very important, under IFRS, we are required to remeasure the fair value of that potential obligation at each reporting date.

The valuation is performed by an independent third-party valuation specialist using a Monte Carlo simulation methodology. Put it in simple terms, the model evaluates a large number of potential future zinc prices scenarios using market-based assumptions such as forward zinc prices, historical volatility, mean reversion, interest rates, and credit risk.

As zinc prices and forward expectations increase, the model assigned a higher value to the potential future obligation. That increase in the estimated liability resulted in this $15.8 million non-cash expense recognized through the income statement.

I think it is particularly useful to put the balance sheet liability, not only the income statement expense, into perspective. Look, at quarter-end, we had approximately $35 million recorded as a CVR liability, or as a contingent payment.

Actual contractual payment are capped at approximately $1.33 million per month. That's correct, Arturo, huh?

That is correct. Yes, 1.33.

Yeah. A few threes afterwards.

Yes. That's

$1.3 million, round it.

$1.3 million. If you think about it, those $35 million recorded in our liabilities that are already recognized on our balance sheet are the equivalent of approximately 26 months of maximum monthly CVR payments.

Correct.

In other words, approximately 26 months of potential payments are already reflected in our liabilities and have already flowed through our income statement through this fair value accounting. Even though zinc prices threshold required to make an actual tax payment only if it passes the $3,850.

Let's look at another way. Remember, we already have the liability, but if those prices stay above $3,850, we will see the revenues afterwards in the next following months.

There's an important economic point here. If zinc prices remain above that for a sufficient period to trigger this CVR payment, those higher zinc prices would also flow directly through our zinc revenue margins.

The scenario in which we make CVR payments is also a scenario in which the company would be generating materially higher revenue from zinc. I don't know if you remember, Olenka, but we have always said we would love to pay those CVRs because that's a good thing to have.

Second, a second major thing affecting net income was the income tax expense of $36.1 million. I want to make a difference.

Some investors are saying, "Okay, you had a big payment also in Q1." That was a cash payment related to last year's all income tax.

This one is a provision, and I will explain why. There are two components within that number.

First and the largest relate to the change in the Bolivian exchange regime. A little bit of background.

For many years, Olenka, Bolivia maintained an official exchange rate of 6.96 bolivianos per US dollar. In June this year, Bolivia moved away from that fixed regime toward a floating, market-based exchange rate, and the official exchange rate was approximately 9.77 at the end of the quarter.

Now it's a floating rate. There's an important distinction here between our IFRS financial statements and the local statutory books in Bolivia that I want to point out.

For our consolidated IFRS financial statement, those that we see that we are reported in NASDAQ, in the TSXV, etc., we were already using a market-based exchange rate. At a consolidated level, the economic value of, for example, our dollars in our accounts balances was already being reflected appropriately.

However, the local statutory financial statements of our Bolivian subsidiaries, which are based on the generally accepted accounting principles, were using the official exchange rate because that's the way you have to do it, and these financial statements are the ones that give you the basis for determining taxable income in Bolivia. When the official exchange rate changed, the US dollars that we have in our accounts held by our Bolivian subsidiaries were immediately remeasured at the new official rate, in boliviano terms.

That generated a significant foreign exchange gain in the local statutory financial statements. Under Bolivian tax rule, that gain is taxable, even though that is unrealized yet.

Let me explain you a little bit with an example. If we had $50 million in our accounts, and let's say remember the official rate was 6.97, but let's say it was 7.

If you multiply that, you have 350 million bolivianos in your account. Suddenly, this official exchange rate changes.

Let's say it was 9.7 something. Let's say 10.

You multiply those $50 million by 10, you have 500 million. 500 minus 350 is 150 million bolivianos.

That divided by 10, that's basically 20

15

million US dollars, and you have to pay 37.5 of income tax of those $50 million. That's on local books.

That's why this was not reflected on IFRS, but the tax that now has become a liability, it has to be in our IFRS. That's basically it, in that matter.

Also, we used to pay this benefit before, but it was gradually. Whenever we brought money into the country, for example, $5 million, we sell it at a market rate, we get the gain and we pay the taxes, or we provision those taxes.

This time it happened all at once, no? Something that is important now is that going forward, this reference point now has been reset.

Future exchange rates movements will be measured from this new official exchange rate, which now moves. Therefore, foreign exchange movements can continue to affect, of course, taxable income, but would also help us in our costs.

From now on, we shouldn't see this hit in our income statement. Despite the short-term impact on our tax expense, Olenka, we view the change in Bolivia exchange rate framework as a positive development.

It represents an important normalization of the country's monetary and foreign exchange framework, price transparency, and should contribute to a more sustainable foreign exchange environment over time.

Actually, if you allow me, let's remember that about 85% of our costs in Bolivia are in bolivianos, this will be beneficial for us in the working capital requirements based in US dollars,

right? You're 100% right, Arturo.

Of course, we were doing this for the last quarters, but this component, this big component, which is the cash that we have in US dollars, is the one that hit one time. You are completely right, Arturo.

If the devaluation hits again, we benefit in our costs. Of course, we will be paying taxes, but we benefit on an equilibrium, okay?

Right.

Of course.

There was also a second component within the tax line related to the mine closure provision. Since January 2026, the Bolivian Central Bank has established a restricted monetary policy that resulted in a significant decline in inflation.

It was about 20% last year, and it came down now below 5%. Lower expected inflation reduces the estimated future costs, in bolivianos, of our mine closure and remediation obligations.

As a result, the accounting value of that mine closure provision decreased, generating a gain. That gain is also taxable under the local tax framework.

Given the magnitude of the decline from 20% to 5%, we considered this as an extraordinary adjustment. I would not expect an impact of this size to occur in the future periods.

The remainder of the tax expense is much more straightforward. Basically, stronger profitability resulted in higher taxable income.

To bring it all together, the key message is simple. Our financial performance was very strong: revenue, gross profit, adjusted EBITDA, realized margins, etc.

Those were achieved despite a temporary mismatch between production and sales that deferred a portion of revenue and earnings into subsequent periods, as Arturo mentioned before. The other are non-cash or either a one-time tax event.

I hope with that I know I expanded a lot my answer, but I think investors were looking for that message. I don't know, Olenka, if we have responded that.

Arturo, I don't know if you want to say something about this special items that we had on our financial statements.

No, I think it was well-explained, and very clear. Thank you for that, Andrés.

Thank you, Andrés. Very helpful context on the impact on net income, overall performance.

I think people hopefully will understand. Let's move on to the next question.

Arturo, maybe you can answer this one. As Andrés touched on, revenue declined quarter-over-quarter in Q2 as road blockades in Bolivia affected concentrate exports for approximately 53 days.

This resulted in a significant buildup in concentrate inventory at quarter-end. With that inventory available for sales as exports normalize, how should investors think about the potential benefit to sales and revenue in Q3, and how much of that inventory has been monetized to date?

That's a good question, Olenka, especially with as you see, our treasury remaining pretty much flat from last quarter. There's a reason for that, no?

The affected stock or inventory totals a little bit more of 7,800 tonnes. Approximately of those 7,800, we have around 6,000 tonnes of zinc and 1,700 tonnes of lead, where let's remember, the lead holds the silver contents in our concentrates, right?

The value of these two concentrates is around $24 million. Those were $24 million that we were not able to ship out and to collect those monies at that time, no, during Q2.

As of today, 97% of that stock has been sold, meaning that we have recovered around 22, close to $23 million, and the remaining 1.5 will be sold now during the third quarter. Q3, I would like to say that Q3 is normalized.

Our concentrate inventory is normalized now. We're in the process of getting into the 2,500, 3,000 tonnes on our warehouses.

That's our normal inventory, as well as we have already normalized our warehouse, no? Before these road blockades, and that was merit to the risk assessment team and our management, which I really commend for doing such a great job.

We see this risk was coming and that some blockades might take place throughout the country. Our risk assessment team and the procurement department bought all the consumables that we required to run our operations for the following 2 months before this road closures or blockades begin.

That and being ahead of that at that moment allows us to run our operations smoothly. Of course, the roads were experiencing some blockades, our exports or our shipments, all of them, especially the ones being by truck, were not able to leave our patios, no?

That's the main reason. Now, as I was pointing out, our concentrate inventory is normalizing, and our warehouse inventory in consumables as well is normalizing.

Let's remember that the warehouse and consumables required significant capital. Normalizing them is very important for us.

On top of that, our Mexican operation has also closed the final settlements of the shipments related to prior months, collecting this week, as we speak, more than $22 million, taking our treasury today beyond the $100 million, marking definitely a new milestone for our company in terms of our treasury management. We're good now and getting back on track in the shipments and collecting the accounts receivable.

That's great to hear. Congratulations, and thank you for the response.

I have another question for you, Arturo. As we saw, silver all-in sustaining costs declined 24% quarter-over-quarter to $21.87 per ounce.

What were the key drivers of the improvement, and how should investors think about the underlying cost run rate going forward?

That's important. I want to spend a moment on our all-in sustaining costs this quarter, because it's a good story and I want to be clear about what's really driving it, no?

Our all-in sustaining per silver ounce came down 24%, as we see on our financials. It is indeed a big improvement in a single quarter.

It's the kind of improvements we're looking to achieve in the company, no? This was not about squeezing the mills.

This was really about changing how much silver we pull out of each of those tonnes we process. We improve our silver head grades and of course, our recoveries and the treatment, our milling facilities.

Those were the two main drivers. We saw better head grades in Bolívar.

We saw better head grades in Porco. A real step-up in silver recovery at Zimapan.

We put about 7% more material through the milling facilities across all of our five operations, no? More payable silver ounces over a steady cost base, that's what brought our costs down.

That's technically the main driver. On top of that, our byproduct credits were stronger.

These are polymetallic mines, Olenka, let's remember, and the higher copper and lead production through this quarter offset more of the costs we carry on each silver ounce. Then there is the sustaining side, no?

The lower sustaining capital and general cost per ounce, which is why our all-in number came down even further than our cash costs did. Now, if you allow me, I want to flag one thing that actually makes these results more impressive.

This quarter, as we have been discussing, we dealt with road blockades in Bolivia. These lasted more than 50 days.

They lasted actually 50 53 days. Production keep running as if nothing was happening, but those blockades, as we discussed previously, held back some of our concentrate shipments and pushed roughly $17 million into inventory.

In plain terms, we produced the silver, but we were not able to ship and sell all of these concentrates right away, especially our lead concentrate, where we have most of our silver. This is what we discussed in the previous question, I think.

I just want to highlight that because I really commend our team for looking ahead, planning ahead, and having a very clear and very broad risk assessment in place that allows us to prevent a situation where we could possibly be running out of consumables, and that will definitely put our milling facilities in our mines into a standstill situation, no? That was not the case, and catching up in the shipments is I don't want to say an easy thing, but let's say it's the way to fix things and bring our treasury to where it should be, no?

Arturo?

Yes, Andrés.

Remember that we have spent a lot of CAPEX into Mexico, these flash cells, etc., and now we are seeing the results. There's better recoveries in Mexico, I don't know if you can tell our investors a little bit about it.

Yeah. Mexico definitely, as you might recall, we had been investing some CAPEX throughout the last year, especially in the new flotation circuit, the flash cell circuits, and we're starting to see the benefits of those investments, no?

They are starting to pay back, so that's why we are seeing improved recoveries at Zimapan, especially for zinc, copper, and silver as well. As we speak, we have very optimistic outlook for Zimapan.

We have arrived to Level 960, as you may recall, and some of the stopes that are budgeted for this next quarter are already into production. We expect the rest of 2026 to be a strong rest of the year or 2026 for Zimapan.

Yes, and that is important, Olenka, because remember, we have always said Mexico, our Mexico mine, Zimapan, is a high-volume mine, if we are able to increase these recoveries, that is very important for our revenue. The Mexico team did an amazing job as well.

Yes. Correct.

Got it. Let's move on to the next question.

Thank you, Arturo, but Andrés, I have one for you now. Santacruz reported a significant VAT receivable balance at June 30th.

Can you explain how the balance is affected by inflation and currency movements, and when you expect for it to be collected?

Okay. Yes.

A little bit of background. Every month, as a normal part of operating an export business in Bolivia and in Mexico, we generate a value-added tax credit within the tax authority, and that credit accumulates until it's refunded.

This is a structural feature of a tax system for exporters in the country, not only Bolivia, but also in Mexico. As of June 30th, our total value-added tax receivables stood approximately $74 million, with $42 million classified as current, which means that our target is to collect them in the next year, and $32 million as non-current.

Importantly, collections are taking place. During the year, we have already collected more than $10 million, but the reason that the overall balance does not decline in the same amount is that we continue to generate new value-added tax credits every month as part of our normal operations, and we are increasing now our production, no?

Our objective, of course, is to accelerate the pace of those collections over time so we can maintain an outstanding balance at a lower level. One thing I want to highlight here is that we are current on our tax obligations, and we have consistently met our tax payments requirements, which has allowed us to maintain a constructive relationship with the Bolivian tax authority.

We are working closely with them to identify ways to streamline and accelerate this value-added tax refund process. The process remains relatively complex because each refund is subject to an extensive review and audited by the tax authority, etc.

However, the process has been improving, and we believe there is an opportunity to continue increasing the efficiency and pace of the collections going forward. On your question regarding the inflation and currency movements, look, these are receivables that are denominated in bolivianos, there are two important effects.

Inflation actually provides some protection because the amounts owed to us are indexed to inflation, which increases the receivables over time, and it's reflected in our income statement through interest income on VAT receivables. On the other hand, currency movements can work in either direction because the balances are in bolivianos, a weaker boliviano reduces its US dollar value, a stronger boliviano will increase it.

In summary, this is structural receivable generated through our export activities. It is collected on an ongoing basis.

It benefits from this indexation to inflation. Our focus and that's something that we always discuss with our team is to continue to work with the tax authority to improve the refund process, accelerate collections, and ultimately maintain a receivable at lower normalized levels.

It's normal, Olenka. That's part of our export process, and we will try to collect it faster.

Got it. Thank you, Andrés.

Arturo, I have a question for you. Touching on Soracaya, and I do see a few audience questions on this, what is the current timeline for permitting an initial production?

What approvals remain outstanding, and has the development schedule changed from earlier guidance?

Yeah. That's an organic growth, as we have mentioned previously.

We're still on track to receive the permits for Soracaya during the third quarter, and we expect, Olenka, to begin with a small production rate of around 300 tonnes per day by the end of Q4. The underground equipment has already arrived at site, and we are now building our different teams that will be needed to develop the mine: geologist, miners, services, and so on, no?

At the same time, we're taking a very disciplined approach to the mine development, no? We want to be careful and review the best mining plan and determine the most efficient main ramp in this case.

That's what we're working at this moment, or maybe ramps. We have so many veins parallel to each other that we're still reviewing if it's one main ramp or maybe we might require an additional one to access some of the block models or mineable areas.

We want to make sure that we get the mine design right from the beginning, no? It's always very costly to get a wrong mine design, and at the end of the day, trying to correct those designs once they were built.

With that approach, we expect Soracaya to start contributing some production toward the end of this year, but with full production targeted for next year. Exact time is yet to be determined, but our idea is to have that mine at full production, let's say, if I want to be cautious, but let's say by the end of next year, but at least running at 300 tonnes per day will be by the end of this fourth quarter.

Thank you. Roughly how much would Soracaya contribute annually on production, roughly?

That's a good question, but with today's mine plan and as we see the block models and it's still a little bit hard to say because we're designing the main ramps, but it can take us up to 3 million ounces of silver equivalent in production, where you have most of it pure silver,

right? Perfect.

Thank you. Andrés, a question for you.

San Lucas has completed additional issuances under its boliviano note program. Do you expect to expand the program beyond the current amount, and how should investors think about refinancing and interest costs as the notes mature?

Good question. Let me start with the structure of the program, because I think it explains how to think about the refinancing question that you just asked.

The San Lucas promissory note program is authorized for a total of 140 million bolivianos. That's roughly $17 million at today exchange rate, issued in the Bolivian Stock Exchange.

As of today, the full authorized amount is in use, and it operates on a rolling basis. The notes are issued in tranches of 70 million bolivianos, and as each tranches mature, it is repaid and replaced with a new one.

That's exactly what you have seen this year. The first two offerings were repaid in full at maturity, a third tranche was issued in April, a fourth one was issued just this early August.

What you have observed is not an expansion of the program. It is a normal rotation of the tranches within the authorized amount.

Now to the question if we are going to expand it or maintain it, our intention is to keep the full program in place for as long as this is beneficial for the company. To date, every one of this issuance has worked in our favor, for two reasons.

First, currency matching. These are boliviano-denominated liability, funding a business with substantial boliviano-denominated costs.

Remember, Arturo just mentioned, 85% of our costs are in bolivianos, they provide a natural hedge. Second, the devaluation of the boliviano has reduced this effective cost of this debt in US dollar terms.

Now, those conditions may or may not persist, before each new issuance, we run a prospective analysis of our funding needs and the macroeconomic environment, and we will only roll a tranche when that analysis supports this. On interest costs, the second question, nominal rates in bolivianos have risen with local monetary conditions, from 6.5%, which was our first offering, to around 11% on the most recent one.

Let's put that into perspective. The government is financing itself at 11%, we are basically getting the same as the government.

The right way to evaluate that cost is in dollar terms, net of this currency effect, of course, and on that basis, the program has remained clearly attractive for us. The notes, remember, unsecured, they carry standard financial covenants, and San Lucas is fully compliant with all of them.

Yeah.

Thank you. That's very helpful.

Arturo, I have a question for you. The Illapa joint operation agreement covering Bolívar and Porco expires in 2028.

Can you provide an update on discussions with COMIBOL regarding an extension or renewal, and explain what happens to Santacruz's investment in the assets if the agreement is not extended?

Oh, I hear you. Yeah.

The Illapa agreement with COMIBOL, let me just start to say that it has an automatic approval embedded within the agreement, no? We need to meet certain let's say steps, and for the approval, the agreement has to work its way through four, let me describe it very clearly, through four steps in Bolivia.

The first step is the Ministry of Mines signs off, and it sends the agreement, it sends the supporting reports and the draft approval over the UDAPE, the Economic Policy Analysis Unit in Bolivia. The UDAPE job is essentially to look at what the contract means or the agreement means for the state finance and whether it's in line or not with the national economic policy.

Definitely, this agreement is in line at its full extent, no? This step has also already been done and has been approved.

Then you have a second step. Let's remember, they are four steps.

The second step, UDAPE, the agreement is already in UDAPE's hands, reviews and approves the agreement. Then the package is sent and moved to the CONAPE.

The CONAPE is the council made up for the economic and social ministers. They validate the documents before anything goes to the legislature.

This step has been done as well, and also has been approved. From there, it goes to the General Assembly, no?

We're now in the third step. The General Assembly is technically mechanics where the committees review the reports from CONAPE and from Ministry of Mines, and then the Assembly votes to approve the draft law.

This will take place, by the way, in the next coming weeks. Once this is approved, it goes back to the Executive, no?

Finally, the President, Mr. Rodrigo Paz in this case, receives the approval, or the approved law, now it's already a law, and orders this to be published in the Bolivian Official Gazette, no?

Those are the four steps. We're halfway there.

We're just technically in the administrative process part of the renewal, and we expect this to take place very shortly, no? Where things stand right now, the amended contract has already cleared, as I was pointing out, the first two steps.

UDAPE has approved it, and it's sitting with the CONAPE, who are expected to take it up in the following weeks to the next General Assembly. As I was pointing out, we're weeks from now.

Since the document has been already signed and the legislature has already approved, the process is on its way and consent is effectively locked at this point. There's nothing to do.

This is just an administrative process mechanism, a mechanical process, if you allow me to put it that way. We have not announced it yet because we need to be respectful with the full process and that takes in Bolivia, no?

The news about this should be out soon, and let's remember, it includes an automatic renewal clause, technically everything has been met, and we're just waiting for this General Assembly to take place and go from there. It's been going really well.

Yes. Arturo, I think that's the important thing.

Our first contract, remember, it is the only contract that is a law in Bolivia. We are the only ones who have a contract which is a law.

Embedded in that contract, it says that we can renew for another 15 years, okay? We already signed an agreement with COMIBOL, which is our counterparty, our associate, I don't know how you call that.

Our partner.

Our partner. We already have signed that.

The parties want to continue this contract. It already passed to the Mining Minister.

It already passed UDAPE, which means that the economic factors of this contract are positive. Now we just have to follow the legislative process.

It is just a process. We all know that this contract is very beneficial for the country, for the government, for the states in Bolivia, for everyone, the communities, etc.

It just has to pass the regular processes. As Arturo was mentioning, we're not saying anything yet because all of these steps have to pass in order for us to publish something or continue with this process.

We feel very comfortable with it.

Oh yeah, no doubt about it. Just as a reference, this will be renewed, Olenka, until July 2043.

Until then. Of course, it still includes an automatic renewal clause, we'll see the movie at that point in 2043.

Thank you for the update. We have one last pre-submitted question before we take some live ones.

Arturo, maybe you can answer this. What are the most important operational, financial, and strategic milestones investors should watch out for for the remainder of 2026?

Operationally speaking, getting back on track our Bolívar mine is very important. We're on track to get that in Q4.

Convert the road blockades inventory into cash, I think we're almost there, still a few thousand tonnes to be shipped out. Hold and sustain a trajectory or an all-in sustaining cost in a very good range where we feel comfortable, at $21 levels and in those ranges, no?

We'll keep working hard, we'll keep focused on getting our mines as efficient as they can be and our costs as controlled and well-managed as they can be across all of our areas. Administratively speaking, we are making sure and being diligent on every single cost that we have in the company, where as you saw from Andrés' explanation about the promissory note, those are for treasury efficiencies, no?

We are doing what we can do at every area in the company to make it as efficient as possible. Financially speaking, we want to deliver a strong Q3.

I'm sure that we, all remaining the same, will be delivering a very strong Q3. Now with our treasury today north of $100 million and still building, we will keep watching the CVR trigger, which by the way, it's a positive one.

If we see that we're paying $1.3 million to Glencore every month, that means we're making a lot of money when zinc is at $3,850 per tonne, no? We see that as a positive one, and why not to pay what it's on those CVRs, no?

We want to set as well and have always clear a clear capital allocation framework so that we can keep building the company. From a strategic point of view, Olenka, if you allow me, we'll pursue the organic growth with Soracaya.

We will keep building as well San Lucas into a larger organic growth. The company has proved to have more room to keep growing in a significant way, we'll keep pushing in that front as well.

We'll keep looking for accretive opportunities outside of our portfolio of assets. We really want to keep growing the company, of course, as always, and in a very disciplined way, with a disciplined approach across all the different disciplines in the company.

Perfect, thank you. M&A was one of the audience live questions, I'm sure they appreciate the response.

Let's just move on to a few other live questions. Could you provide an update on the share buyback program, any intention for one this year?

Absolutely. We're working, and hopefully very soon, we're going to be uplisting the company to the big board, to the TSX.

We were a bit delayed there a few weeks because we were required to update some of the technical reports. We finally accomplished those tasks.

We should uplist the company soon, and it'll be followed by an appropriate share buyback program, which we would love to put in place as soon as possible. Yes, Olenka, that's still with our plans.

Perfect, thank you. Just touching on Zimapan really quickly, it was up quarter-over-quarter after the power outages in Q1, but it was still down 2% year-over-year despite investments made.

Why are we not seeing the growth benefits?

Olenka, can you repeat again that question? Sorry.

Yes. Zimapan recovered quarter-over-quarter after the power outages in Q1, but was still down 2% year-over-year despite the investments made.

Why are we not seeing the growth benefits?

Actually, we saw Zimapan improving, no? We saw improvements in the recoveries.

We saw improvements in the head grades, as we point out, 9% improvement. We're not there yet.

We'll keep working. I think there's very good news to come out of Zimapan in the exploration side of the formula.

I kindly invite our investors to stay tuned. The mine is really proving to be a strong asset, and we will see, I'm very positive, we will see the fruits or the benefits of the CAPEX invested throughout the last 15 months.

Zimapan is going to be a very strong mine and a very productive one.

Olenka, I invite our investors to look at our production numbers. If you compare them to Q1 2026, I understand comparing it to last year, but if you compare Q2 against Q1, our silver head grade has improved.

Our zinc as well. We are improving our average head grades, our recoveries.

From 65% in Q1 to 72% Q2 2026. If we keep this pace for Q3 and Q4, we'll definitely be above what we had in 2025.

We're going to get there.

It's important to mention or to remember that this is a very wide ore body underground mine, very mechanized, very efficient in terms of its mining cost, what we will always try to keep is a very healthy margin, no? I think the mine is delivering, but definitely, we're not staying there.

There's a lot to be done, and I'm sure we will see that mine improving, as Andrés points out, over the coming quarters and not to say next year.

Remember, I think we have to be fair. With these prices, etc., we got cash, we have been taking care of our operations, not only to grow them, but it's to taking care of them.

Remember, 4 years ago, prices were not in that front, CAPEX has to be halted. Now we invest what we had to invest, and of course, we're doing some things in the milling facility to increase these recoveries, not all the CAPEX of course goes to increase production itself.

It's taking care of your operation, because that's a normal part of the mining industry, and the prices that we always have.

I don't want to extend in that, but that's a good point, Andrés. When I mean we have a disciplined approach toward our mines, as Andrés points out, nowadays it's the time to invest in the mines, to prepare the mines, to have stopes ready, to make those investments that will allow us to be an efficient mine when the margins for metal prices are not as good as they are today, or maybe when inflation in the industry rises and it close the margins again.

We'll have the mine ready for those times, and that's what we do. Sometimes we don't see the CAPEX coming back as a payback right away, but rest assured, we have been preparing our mines for whatever comes in the future.

Thank you for the clarification. Just have time for one more today really quickly.

It's going to be on the M&A. Just what type of asset would you be most interested in acquiring?

A producing mine, development-stage asset, or something with more operational upside?

That's a good question. Let's say we have a few premises for that, no?

The first one, and one of the main drivers, is overall it should be an accretive acquisition to all of our investors, no? An acquisition where we add value as management, where we add value because we know how to run underground mines, narrow veins, because we add value because we know the jurisdiction, we feel comfortable, and we can transition that mine into the Santacruz way of doing things, no?

Those premises, I think they are the drivers. Then from a technical point of view, mines that are in production, mines that produce more than 4, 5 million ounces of silver equivalent, and will be the preferable.

If we see something that it is mature in an exploration more than a brownfield, we might be taking a close look. Today, we're active in that front, and hopefully we can have good and successful progress in that front.

As Arturo mentions, I think it is important to understand the jurisdiction. For Santacruz, it is important to have many jurisdictions, like being in Mexico, Bolivia, and maybe another country, to get at least 5 million ounces of silver equivalent, preferable if it's precious metal, a combination between precious metals.

We have proven that we can take over operations like the ones in Bolivia that were very sophisticated to start with, and improve them. We will be looking for a reasonable life of mine, operations where we can bring value, Arturo was mentioning.

I think our teams have proven to be the right team to do that. Yes, that's the type of M&A we're looking for right now.

Yes.

Got it. Thank you so much for your time today, Arturo and Andrés.

Before we wrap up, any final questions or remarks you want to address or anything like that?

No, no. All of our investors can rest assured that we'll keep working very disciplined, we'll keep working with full transparency, and trying to get the most out of our mines, and make this a very accretive investor for all of our stakeholders, not only our shareholders, but yeah, that's thanks to everyone who is giving us their vote of trust, and we'll keep focused on what we do.

Perfect. Thank you so much again.

If anyone has any additional questions, please feel free to email me directly at [email protected]. I hope everyone has a great day, and thanks again for joining.

Thanks.