Hi everyone, thank you for joining us. Today, we have an update from Santacruz Silver, who just put out their Q3 results last week.

With me, I have Arturo and Andreas Madrigal, CFO. From Adelaide Capital, we have Magda Gardner.

The format for today's webinar will be a Q&A, and we'll start off with the questions submitted in advance. You are welcome to submit a question during the webinar in the question box below.

We may be making some forward-looking statements, 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 Andres.

Thank you, Olenka. Thank you for having us here.

It's always a pleasure to be here and hearing to our investors' questions around the company.

Thank you, Olenka.

Of course. Let's get into the questions.

Q3s showed notable financial developments. We had revenues increase slightly year over year, adjusted EBITDA up 30%, but net income declined 7%.

Andres, could you walk us through the key operational and financial factors that explain the strong EBITDA growth alongside the softer net income performance?

Yes, of course. I think it is important to understand this 30% year-over-year was driven primarily by three factors.

The first factor was a favorable metal price environment, especially for silver, as we all know, that supported our revenue. The second factor was a cost reduction or cost optimization, as you is a better term for us.

Then also the depreciation of the Bolivian currency compared to last Q3 last year. Those three things supported this revenue increase, although that we have been having some issues with the Bolívar mine into our veins.

However, our EBITDA, as you can see, has been very strong. The difference between the EBITDA and the net income comes from basically deferred income taxes, which was done because of restatement that we had in 2024.

That's it. Basically, better prices, cost optimization, and also the depreciation of the Bolivian boliviano, of course with some major improvements in, for example, Caballo Blanco, not only cost optimization, but better recoveries and a more stable production.

Got it. You slightly covered the all-in sustaining cost and the boliviano appreciating, but can you explain the main factors behind the all-in sustaining cost spike, and how does the FX revaluation impact margins, and when do you expect all-in sustaining cost to revert back to the mid-20s range?

Okay. There are, again, three factors here.

The first, since we're discussing unit costs, the water inflow event in Bolívar had a direct impact in our cost per ton. Remember that we are recovering these areas, we are doing some investments there, and we are not getting metal.

In terms of unit costs, that brings your all-in sustaining cost higher. The second part is that Zimapan is doing a lot of investment in underground equipment, but especially in our milling facility in Mexico.

As this sustaining capex goes into the all-in sustaining cost, and we are doing this investments because we are trying to get better recoveries from that milling facility. Remember that Mexico is a high-volume mine, even getting 2, 3, or 4% higher recoveries in that mine could be very significant in terms of revenue for us.

Third, remember that I was saying that the Bolivian boliviano currency had depreciated against last year, however, from Q2 to Q3, there has been a big appreciation of the currency. Basically, this appreciation is largely driven by improved confidence in the new administration, the government in Bolivia, because the macro fundamentals itself have not changed in Bolivia, and remember that most of our costs are in boliviano here.

The macro fundamentals have not changed, but there's a lot of hope in this new government, which is really good because it's a government that is very inclined to private investment and foreign investment. This appreciation between Q2 and Q3, which was very relevant, it was 30%, reflects that.

We expect that our all-in sustaining cost will revert back to the mid-20s, I think March or maybe the beginning of second quarter next year.

Got it. Thank you.

Arturo, if you could answer this one, what measures is the company taking to reduce the cost of production and increase profitability?

Absolutely, Olenka. On a daily basis, we're trying to achieve efficiencies across all of our operations.

Things that we do on a daily basis is we review our mine plans, we also correct them if the case is needed. Sometimes depending on the metal prices, we go and mine in some different areas when different from the our weekly budget or monthly budget.

We try to get that flexibility across all of our mines. In addition to that, we're working today on a standardization process to have all of our underground equipment being the same brand and having the most utilization of this equipment, which are expensive equipment.

Just to give you an idea, this past year, we just bought around 12 underground equipments in Bolivia in Mexico for the Zimapan mine and around six underground equipments in Bolivia. Overall, we're changing our equipments to new equipment, and that will give us efficiencies and more utilization time of our equipments.

In addition to that, we're working closely at each and every of our milling facilities to try to get the best recoveries out of the ore that we're processing. One case, for example, is our Zimapan mine.

We're just building a new flotation circuit at Zimapan. We're installing a flash circuit.

The flash circuit will allow us to recover silver better than what we have been recovering in Zimapan. Just to give you a reference, Zimapan today's recoveries are in the high 70s, but with this new circuit, we expect to go to north of 85 84% recoveries for the silver.

That single improve will allow us to have better revenues at Zimapan and achieve better efficiencies. We're working on a daily basis on all areas, even at on our SG&A administrative departments, we that's a constant for us, Olenka, so.

Great, thank you.

I just point out some areas that we were working at. [laughter]

Appreciate it. [laughter] And now looking in Q3, you fully settled the cash consideration to Glencore for the Bolivian assets, and you still finished the quarter with an impressive $69 million in working capital and $59 million in cash and marketable securities.

Arturo, are you able to share what plans you have to deploy this liquidity in 2026 across development capex, drilling, operational improvements, and do you have any post-Glencore obligations?

That's a very good observation, Olenka. Actually, as you point out, this year, we have paid Glencore more $40 million.

Even though in Q3 we close with $60 million in cash. Now as we keep going, we're building our treasury is stronger, and we expect to close with a very solid full-year cash from a cash point of view.

Definitely, as we keep going with today's metal prices and with the efficiencies that we're budgeting for next year, we keep increasing our treasury. That will allow us to keep exploring, to keep preparing our mines for the future.

Also we're in parallel, as you may recall, getting Soracaya fully permit, so that we can eventually start building that mine by next year. Today at today's metal prices, together with the efficiencies that we have in place helping us to build our treasury.

In addition to your question, what else do we have pending with Glencore? We have the conditional value rights, the CVRs, which, as you may recall, they are capped at $77 million, $1.3 million a month, and they are triggered if and only if zinc goes north of $3,850 per ton.

We would love to pay those because just as a reference, for every million dollar we paid Glencore, we're making down to the bottom line down to our bottom line around $9, $10 million with today's metal prices. Those are the only pending payments that we have, which are conditional.

Thank you. Given the company's diversified multi-metal rebel revenue profile, Arturo, could you explain how volatility in commodity prices influence overall profitability, and which metals currently play the most significant role in driving margin performance?

That's a good question, Olenka. I think definitely silver and zinc are the most important metals that we have or that we produce.

We produce a little bit of copper and lead, but it's not significant. We feel that being a diversified metal producer help us in a significant way.

At least it diminished the volatility that silver has. As you may know, silver, that's why they call the devil's metal, cuz it's high volatility, it help us to plan throughout the years.

It help us to bring to have more concise budgets and revenues in the company as zinc is a more stable than silver. In addition to that, as you might be aware, producing zinc as well broadens the amount of refineries across the optionality of refineries that are out there.

We always find a good report for our metal and our concentrates.

Perfect, thank you. Now looking at your inventory, I have a question for you, Andres.

There is a jump from Q2 to Q3 from around $38 million to $50 million. Does that mean you didn't sell all the mined material and that the earnings per share could have been higher, but you selected to wait by expecting higher silver prices?

Look, yes, inventory increased Q from Q2 to Q3, but not because we were waiting for higher prices. We don't like to speculate into price.

We are producers. It was basically meant to two operational reasons.

First, we built up our inventory, especially because of this Bolívar issue that we have having. We are keeping this plant producing at full capacity while this Ñan Ñan and Pomabamba veins recover.

We need extra ore available so the plant won't stop. That's so it was a strategic decision in that term, in the ore side.

Second, the increase in the concentrate inventory was mostly a logistics issue. Most of the excess that we have in inventory is lead concentrate.

People can understand, we sell lead concentrate, we deliver at the vessels. Zinc concentrate, we deliver them at the port.

We have some logistical issue with some vessels this quarter, but that has been taken care of. Yes, since lead concentrate is more valuable than zinc concentrate, our inventory has gone up.

We are doing everything so we can go back to our normal levels of inventory. Yes, this Q3, we're going to have more revenue due to that, and also Q1 2026.

It was basically just a good coincidence that the prices went up. It's not because we are speculating on prices, it's just what happened.

Got it. I'm going to pass it on to Magda now.

She has some technical questions.

Thank you, Olenka. I see some audience questions here on the Bolívar flooding.

Following the mid May 2025 water inflow, can you remind us which areas were directly affected, and can you give us a bit of an update on how the recovery work is going, and do you have a sense of whether it will return to full capacity this quarter?

Yes, Magda, absolutely. I'll take that question.

Bolívar flooding started in May, and it actually affected two of the veins, Pomabamba and the Ñan veins out of five veins in Bolívar. The Pomabamba and Ñan veins are the highest silver-grade veins at Bolívar, no?

As we speak, we once experienced that flooding, we immediately act upon that. We start acquiring the necessary equipment to dewater the mine.

Actually it's in budget right now, it's in process, and it takes two steps. The first step would be to dewater the mine.

That step is under ongoing, and an important milestone will be now in December January, where we will be reaching level 235. At that moment, we'll start being able to access Pomabamba and Ñan veins at the upper levels.

the second stage would be to start making sure that these mines, the this underground development work, in in a safe in in in in good shape to have our miners coming in and to work again. That will take another a few months' time to make sure that we reinforce those areas that were weakened.

More important, the integrity and the accessibility to these veins has been untouched, it's intact. It's just a matter of making sure that all the reinforcement and all those areas that require additional reinforcement are stable before making or having one of our miners coming into those areas.

That will take time. We believe that by April, we'll start seeing more and more silver coming out of Bolívar, and definitely by Q4, silver production at Bolívar will be at full capacity.

By then, we should be recovering the 200,000 ounces of silver on a quarterly basis that were not producing or that we didn't produce in Q3 due to these water problems, no?

Got it, thank you. Just to confirm, that's Q4 20...

26.

26. Got it.

Thank you. I see an audience question here, this is a lot of water that came into one area of the mine and you had to stop production.

Was it sudden? Did it kind of start to subside, and where did it come from?

It came from Pomabamba, actually the area at Pomabamba, the south of Pomabamba, where we experienced an inflow of water significantly higher than what we were used to, no? We today we're preparing the mine, and it's ready for that inflow of water.

we can process today four times the water amount that we were in the beginning of the year, no? We can bring and dry the mine relatively fast.

The problem is that we need to treat the water as we send it outside the mine, no? The water comes with some acidity, we need to treat it properly before discharging it.

That's what slows down the process. If it was pumping the water out, we will have no problem of a month problem or the bottleneck here is treating the water properly before discharging it outside of the mine.

That's what's bottleneck at this moment.

Got it, thank you. I think that may have addressed the other audience question I had lined up for you, which was are there any more significant production challenges that are kind of showing up as time passes.

Is that kind of having to treat the water before it can be discharged?

No, generally speaking, across all of our assets, we get the assets to keep producing in line and in budget, other than this Bolívar situation. I think the worst of this situation is behind us, and the dewatering process is well under control, and we see, as I was pointing, by April, silver coming up slightly and improving silver output from Bolívar slowly and at full capacity or at full production by Q4.

Got it, a ramp-up.

Yeah. Magda.

I think it is important to your question, it is not just only pumping? It's dewatering, treating the water, but also safety issue?

Once we dewater the mine, we have to take steps to bring this mine into safety again? For us, we are a company that we value life more than anything, we have to take care of those things first, and then you are recovering, gradually recovering the mine?

You need to take care of those things? You need to implement some safety measures, environmental issues, etc.

It's not just a thing to bring a water out. We have to follow our strict procedures in order to get back into this mine.

Got it. Thank you both.

Then there's a question, did that water inflow impact the economics or the accessibility or anything for the other silver deposits at Bolívar?

No, no, no. It was only Pomabamba and Ñan veins, and we have that very under control as we speak.

The integrity was not we had nothing to do with the integrity. I think the structure is very solid, accessibility, we're going to get there eventually.

The economics, with these prices, the cost of the mine is going down, etc., the economics will not affected at all.

Excellent, thank you. Can you share any details about any preventative infrastructure that was implemented after the water inflow and if you've made any changes to be and prepared for unforeseen disasters moving forward?

Absolutely. First and foremost, we have already a technical team, and a very experienced technical team which came out of Mexico to Bolivia.

They are experts in water-control situations, and they have also they are doing different activities to delineate the water flows, where are they coming, what will be the best way to mitigate them, and where should we prepare certain of our developments to get or to be outside of those areas. Definitely, that's let's say from a technical point of view.

In addition to that, in a practical way, we have already installed pumping capacity that will allow us to manage this situation and even in a, four times the water that we're experiencing today. We do not expect this happen again, and we are taking every steps first of all, for the safety of our people, and second, to recover those important areas for us in Bolívar.

We are also doing, Magda, a hydrological studies there for all the mine, and I think that's key as well.

Got it, thank you. Moving to Caballo Blanco, Zimapan, and San Lucas, they all delivered solid production results this quarter or in Q3.

Do you expect this positive performance to continue into Q4 and into 2026?

Yes, Magda, we do expect this positive trend to continue. We have a very committed team in place, and the improvements that we have been doing in this operations.

I don't know if you recall, but in Q3 2024, we have done some major improvements in Caballo Blanco, being trying to bring more silver into the lead concentrate where we get paid more. These improvements are taking place also in Zimapan in Mexico, and we are going to do the same thing in our milling facilities, both at Bolívar and Porco.

San Lucas has been always a very good company for us, its business model has proven very successful, as you can see with this Bolívar issue, you know? San Lucas was able to bring ore to support this production decline.

Of course, what San Lucas brings more zinc-oriented than silver-oriented, but still that brings revenue into the company, and that's the good thing to have a multi-asset company, Magda. Since you have that, you are able to recover from this hiccups, as you can say, but we have learned a lot from it, and I think that's the value that Santa Cruz brings to the table.

We have different methods of production, multi-asset, multi-jurisdictional, all those things are very helpful in terms of our revenue and production stabilization, no? Agreed.

Thank you. Touching on San Lucas for a minute, can you, Andres, touch on what overall role did San Lucas play in the results of the portfolio?

Of course. Remember that the objective of San Lucas is to keep our mill milling facilities running at 100%.

That's the first objective that it has. With this May water event that we have in Bolívar, San Lucas stepped in and was able to provide ore, our milling facility, especially in Bolívar, kept running at full capacity.

Yes, San Lucas have been performing really well, also because with this metal prices and the business model that we have had, our margins have been consistent and even increased at this quarter.

Got it, thank you. Then Soracaya, I see lots of audience questions here.

Are there any updates here on the development schedule and a potential expected timeline for advancing to initial production?

I'll take that one, Magda. Yes, definitely, Soracaya, as we announced back then, we're in the process of getting that mine fully permitted for production.

We have already the social permit, which is the most important or more, let's say, time-consuming permit to get. With that already in hand on hand, we feel that before summer or let's say by summer this 2026, we should have that mine fully permitted.

In parallel to that, we're making metallurgic studies, we're reviewing the mine plan, we're reviewing the mine plan and the milling facility that will be required in detail for Soracaya. Once we have full permits on hand, we'll make a decision, and at that moment, if we're moving forward building that mine, and it will be the case, [laughter] indeed, it will take a year and a half to have that mine in full production.

That's where we are standing today in Soracaya.

Got it, thank you. Do you have a sense of a capex range needed to bring Soracaya into the first phase of production, and do you have a sense of how you would structure these costs with cash flow, debt, financing?

That's a good question, Magda. Actually, the capex is relatively manageable, it's around $50 million, $5-0, that will allow you to get that mine into commercial production.

We'll be funding those moneys from our own cash flow. Today, as you saw, we closed the Q3 with $60 million and building as we speak.

Even with the same cash flow that we'll be generating throughout the year, we'll be building that mine, and at the same time, we will always keep a very strong treasury. We'll support that growth with our own cash.

Thank you. Just touching on drilling before I hand it back to Olenka, given the current reserve base, do you have sufficient mineral or inventory with to sustain operations long term, and how will the 2026 drilling program support mine life extension and future reserve updates?

That's an interesting question, Magda. Very important to mention that narrow vein systems are very challenging to inventory when you do those from drilling diamond drilling campaigns, no?

We always keep in mind 4 years of reserves and 10, 12 years of resources. If you consider both, your mines have around 10 to 12 years in resources, no?

We always replenish those resources that are mined by the mining department. If you go back to our original resource estimates, we're always keeping that in place.

There are reasons for that, no? As I was pointing out, bringing your resources or increasing your resources in narrow vein systems is expensive.

In both in Mexico and in Bolivia, it's very clear where the mineralization goes all of us across all of our the portfolio of assets are open along strike and at deep. We believe these mines will keep growing and will run for generations to come.

Just as a reference, let's don't forget Bolívar has been running for 200 years non-stop, Porco has been running for 500 years non-stop, and the continuation of those veins are very clear and very accessible for exploration and for development eventually,

no? We are also doing, Magda, a reserves update.

Remember that our National Instrument 43-101 was performed in 2023, the beginning of 2023. With current prices and our current costs, our reserve base, not only resources, going to go up substantially.

Right.

Thank you both. Great,

thank you, Magda. I have a few more questions to cover.

We've seen incredible performance from your stock this year. The market cap has grown from just over $100 million at the start of the year to now just being over a billion market cap.

Now based on overall performance and current catalyst, do you see room for further upside?

Yes, Olenka, we do see further upside, but we have to look this into two areas. First, it relates to the type of company we are building.

We have said that we are a multi-jurisdictional, multi-asset, multi-metal, but also multi-method company. We believe that Santa Cruz is very well positioned not only to increase the production of our current assets, our organic growth, we believe that we can also bring other projects into our portfolio.

Since we are miners, that what we do, we believe that we have a lot of potential to increase our asset base, our revenues, and even our net income. That's our role as management.

There's also the other issue which is related more to the valuation of our peers. For example, that's more an investor's thing, but if we compare to our similar peers, basically, for example, whether Enterprise Value through EBITDA or other type of measure, we are still behind of our peers.

For example, we might be five times where our peers would be 12 times EBITDA, you know? I think in both terms, we have a lot of upside, but we are more focused on what we do, increasing our production, increasing our productivity.

I think the know-how that Santa Cruz now brings to the table is very important, not only in the Americas, for example, also in Bolivia. Remember that we are producers, we are currently doing that, and we have been doing that in our different group, both in Mexico and in Bolivia, for several years now.

Just tying on to Andreas' comments, let's remember we have no royalties, no streamings, no technically no debt, the company's very healthy, every dollar that comes into our treasury is accretive to our investors. Perfect,

thank you. Now touching based on the Nasdaq uplisting, we have a few audience questions on this.

First one is, has the company decided what is the ratio for the reverse split, when will it be, and what is it?

Oh, yes, absolutely. We're going to go with a 4 to 1 split or consolidation.

With that, we feel comfortable that we'll be meeting, of course, the minimum standards of $4 US in the Nasdaq, right? Olenka, the second question was?

What the timeline is to complete the Nasdaq uplisting.

We think it's going to be in mid-January or late January next year, 2026.

Perfect. What were the key reasons for choosing the Nasdaq over the New York Stock Exchange for that US uplist?

We feel Nasdaq is a better fit for us. This is a growing company, this is a company that we still have a few years more to go to grow and to keep.

We felt that the NYSE represents a better fit for us and our investment community will be more likely in the NYSE than in the Nasdaq, where you have more mature companies and companies are at different stage in their development. We believe that NYSE is the best option for us.

We have also done and review different sensitivity analysis, and we are convinced that the NYSE will give us the trading and the volumes that we need. We're very pleased to be shortly in the Nasdaq, so that many more US investors can have access to our company.

Nasdaq for us is the perfect fit.

Perfect. Is a TSX main board uplisting still under evaluation for 2026?

That's a good question, Olenka, but it comes let's say in parallel with the Nasdaq listing. Once we list in the Nasdaq, we'll be automatically graduating to the main board at TSX.

Perfect. Given the company's strengthened valuation and significant share price appreciation, are you evaluating acquisitions to enhance portfolio?

Yes, definitely. Today with as you point out, with a strong treasury and a strong cash flows coming into the company, we think it's the right moment for us to see projects or ideas outside of our portfolio of assets.

Always with the same premise of being assets or acquisitions that are very accretive to our investors and that definitely add value to us as a company and assets where we can add value as well from a management point of view, from our know-how, from our technology, or synergies So those are premises that are driving our ideas to look different alternatives outside the company. Yes, we're looking for different initiatives there.

Thank you. What is the current VAT outstanding that Santa Cruz needs to collect from the Bolivian government?

We've had a few audience questions on this.

It is currently around $60 million, and we have been collecting this value-added taxes, especially this year. Our collection process has been more efficient in our to do that.

We have done because as everyone recall, we pay a lot of taxes this year that were that before we took over this operation, were under a tax payment plan. We have been able to pay those taxes, we are in discussions with the tax authorities, our processes to bring all the information that the tax authority needs to give back this VAT, we are doing that.

We are very focused on that, and we have been very successful in doing that. I think we are one of the fewer companies here in Bolivia that has been successfully collecting this VAT.

Oh, Olenka's Wi-Fi might be...

Perfect, thank you. I think it's just a little bit glitchy right now, my apologies for that.

Another question from the audience here. Please describe any specific returning of capital to shareholders, any buybacks or special dividends.

Would $75 or $100 silver accelerate these plans?

Olenka, can you repeat? You break up there

in

Couldn't hear you as well. You Couldn't hear you well.

No worries. That's

My apologies for that. The Wi-Fi is a little bit glitchy.

Could you describe any specific returning of capital to shareholders, any buybacks or special dividends? Would $75 or $100 silver accelerate these plans?

That's a good question, Adelaide. Sorry, Olenka, sorry.

Definitely those metal prices will get us thinking about accelerating those plans, especially the share purchase, no, the repurchase program. First things first, we need to make sure that we have a and keep a healthy and strong treasury.

We need to make sure that our mines are producing at efficiencies, and that requires the capex or the budgets that we have. Then once we are able to achieve a few years or quarters of solid results as we have been doing so far, but once we're listed at the big board as well, that will allow us to have a larger amount of or a larger share buyback program in place.

That's something that we'll be doing. I don't want to say when cuz there are many ifs in place, but yes, that's something that we have in mind, and eventually we'll put hands into a share buyback program.

Remember that we are a growth company. We are aiming to become a very important player in terms of the silver industry, and also the base metal industry.

We are any extra capital that we get, we believe we're going to look for any projects, and we believe that we are good producers. We have shown that we are able to bring these opportunities into the hands of our investors?

I think we are going to keep growing to become one of the most important metal producers, and so that's our objective.

Perfect. Thank you.

Another audience question. Assuming current commodity prices and costs, what would the company earn on an EBITDA basis after the production resumes to a normalized basis?

If you're able to answer this. [laughter]

Yes, of course. With the current prices, we should be looking at an EBITDA, if we are in full production in the Bolívar again, north of $110 to $120 million US in EBITDA.

Perfect. I think I just have one more question.

Without being too forward-looking, where do you see the company in the next 5 years?

Definitely, [laughter] we see the company growing, Olenka, and we see the company producing twice as we're producing today, but always having in mind profitable ounces and with a very healthy balance sheet. We see the company twice the size that it is today and always in a good and solid with a solid balance sheet.

Perfect. Thank you so much, Arturo and Andres, and congratulations on all this success.

Just wanted to ask if there's anything else you'd like to cover today.

Not from our end, Olenka. I cannot think of anything else, just thanking our investment community, thank for the trust and confidence that you're giving to us.

We will keep working hard for to make this company a successful story in the next coming years. Thank you so much, Olenka, and thank you, Magda.

Yes, as we are boots on the ground...

Perfect. If anyone has any additional questions or for a virtual one-on-one call, please email me at [email protected].