Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our fourth quarter 2016 conference call.

Before we being the presentation, I want to remind everybody that certain statements to be made today by the management team may contain forward-looking information. So please refer to our detailed cautionary note in today's press release.

We have in the room Fred Stanford, President and CEO; Jeff Swinoga, Chief Financial Officer; and Jason Simpson, Chief Operating Officer. Following the presentation, they will be available for the question-and-answer period.

This conference call is being webcast and will be available for replay on our website. This morning's press release and the accompanying financial statements and MD&A are posted on our website and have been filed with SEDAR.

Also, note that all amounts mentioned in this call are U.S. dollars unless stated.

I will now turn the call over to Fred.

Thank you, Gabriela and good morning to all. I'll start off by reporting on safety, the environment and the community.

We finished the year with a lost time injury frequency of 1.36 injuries per million hours worked, significantly better than the objective of two lost time injuries per million hours worked. That success is overshadowed by the fatal accident we spoke about in the Q3 call.

Environmental protection has continued at a high level. There were no exceedances in the year and water was well managed with very heavy rainy season.

Community relationships continue to be excellent and productive; however, not all community members benefit equally from our operations and blockades continue to be a tactic of a small minority that believe they should get more from the company that they do. We have contingency plans in place for these intermittent incidents and have continued to operate until access is restored.

We continue to work with the government to improve social services in the area and to provide consequences for those that choose to pursue these illegal blockade actions. On the production front, we had an excellent first year with 280,000 ounces produced and over 275,000 ounces sold.

The mine ramped up well as did the crushing, grinding, lesion and carving and pulse circuits, grading recovery where we had a plan and has all contributed to low cash cost of $543 an ounce and low all-in standing cost of $733 per ounce, both lower the budget and the net result was a yearend cash position of $127.4 million. As with all wrap-ups we had to solve many challenges and the solutions to the last two material issues are at hand, higher than expected levels of soluble copper will be solved with a $25 million startup plant that is under construction now.

This plant has been designed by a team that have designed many of these plants and construction is on schedule. The second critical issue is tonnage for the tailings filtration plant.

When we designed the filtration plant, we knew that we needed six operating filters to produce 14,000 tons per day. The question was, do we need one spare or two in order to keep six operating at all times.

We bought one spare and built the building large enough for a [spec] second spare if we needed it. We needed -- an additional filtration capacity will be installed in commission this year.

The Scar ore body has provided the anticipated grade reconciliation variability. Q1 and Q2 of '16 provided positive reconciliation.

Q3 and Q4 were the opposite. Q4 of '16 was marginally better than Q3 and early indications are that Q7 continues the upward trend.

As of the end of the year the reconciliation for Guajes since the start of mining is 102% on tons, 94% on grade resulting in 96% on total ounces. In Q4 we restarted our exploration activities and had immediate success in the Sub-Sill area and what promises to be an exciting new source of high-grade ounces.

Our maiden resource estimate for this area is expected in Q2 of '17. The initial discovery area is open in three directions and a depth.

A drill program to test for extensions to the mineral life of this area is being planned out and will commence in the next couple of months. An access ramp to the Sub-Sill and the El Limon deep zone is being excavated according to schedule and is expected to reach a Sub-Sill target area by midyear.

315 meters of advance have been completed to date with 235 meters of linear advance towards the target and the remaining for infrastructure excavations. Currently they're excavating the intersection with the two ramps diverge.

We are looking forward to the resource estimate, additional drill results and the mine plans over the next few months. I'll now turn it over to Jeff for a comment on the financials.

Great. Thank you, Fred.

We sold 83,259 ounces of gold in Q4 at a realized price of $1,232 per ounce, resulting in revenues of $102 million. Now versus Q3, where we sold about 3,000 less ounces, our revenue was higher since realized gold price was at $1,308 per ounce.

2016 net income was $41 million or $0.51 per share since the commencement of commercial production. 2016 adjusted net earnings, which excludes unrealized derivatives and foreign exchange losses, totaled $51 million or $0.65 per share.

Cash flow from operations totaled $167 million in 2016 as Fred mentioned. Our Q4 operating cash flow after changes in non-cash working capital was $52 million.

In general, of this $52 million generated by operating activity, $23 million was spent on capital expenditures, $6 million for restricted cash held for future tax payments, $5 million for VAT loan repayments, $6 million for interest payments and the remaining dollars resulted in a $10 million increase in our cash balance of $127 million. Cost of sales for Q4 were approximately $5 million higher than Q3, primarily due to the higher consumption of reagents to manage the soluble copper.

On a per ton process basis, cost of sales were $53 a ton in Q4 versus $44 a ton in Q3. Depreciation, royalties and corporate G&A online and in line and are similar to the previous quarter.

Since achieving commercial production in April of 2016, total cash cost per ton of ore processed averaged $49 per ton. Mining cost were slightly lower than planned and averaged $2.20 per ton mined.

Processing costs were higher than planned and averaged $25 per ton processed, largely due to the increased consumption reagents. With the addition of the SART plant, we expect to reduce our reagent consumption and bring our processing cost down to around $18 per ton starting in 2018.

On a per ounce basis, our 2016 total cash cost of $543 and ASIC of $733 per ounce were excellent for an operation in the ramp-up phase and were lower than the objectives established for this per share of operation. The devaluation of the Peso in 2016, impacted our financial results in a number of ways.

Consistent with the requirements of our project financing, we hedged approximately 50% of our anticipated peso-based operating expenses. These peso contracts had a realized loss of $8.3 million during the year and a non-cash unrealized loss of $4.6 million under many contracts at year-end.

We also experienced a foreign exchange loss of $13.6 million, $4 million realized and about $10 million unrealized on peso and Canadian dollar-denominated balances such as our cash on hand, VAT receivable, prepaid, VAT loan and accounts payables. In Q4, we recognized a non-cash deferred tax expense of $15 million.

The devaluation of the peso resulted in a shrinking of our tax shelter pools as expressed in U.S. dollars.

The net result was that the non-cash deferred tax expense of $15 million in Q4 was apparently four times what it would have been without the peso devaluation. These negative non-cash related expenses due to currency devaluation were more than offset by positive cash flow impacts on operating costs.

During 2016, consistent with the requirements of our project financing, we hedged the sale of 96,000 ounces of gold at $1,241 per ounce. Over the course of 2016 these hedges resulted in a realize loss of $2.1 million.

In the first half of 2017, the company had another 102,000 ounces hedged at $1,241 per ounce, for which has an unrealized loss of $26 million has been booked for December 31, 2016. At December 31, 2016, consistent with the requirements of our project financing, the company also has approximately $1.3 billion of peso-hedged contracts, which is about $63 million at a contract price of $1860 Mexican pesos per U.S.

dollar until December 2018. Approximately $780 million will be settled within one year.

$420 million will be settled in the second year and $84 million in the third year. Turning to CapEx, sustaining CapEx in the fourth quarter was $13.1 million, $5.2 million was for capitalized stripping activities at El Limón and Guajes West.

Equipment and spare parts were $4.7 million, $3.2 million was for mill, camp, labor, [lab] and tailings facility work. The remaining $9.5 million of CapEx related to the construction of the start of $2.5 million, the Sub-Sill ramp of $2.6 million, open pit development of $1.3 million, $1.2 million for ELG mine's post commercial production construction activities such as the dome over the fine ore stockpile and mobile equipment.

Now looking forward, our plan is to spend between $100 million and $130 million of CapEx in 2017 and it's on track. This spending closed $23 million for the SART plant, $11 million for El Limón mobile equipment, $10 million for an additional filter for the tailings filtration plant, $5 million for the El Limón Sub-Sill ramp and $5 million for the Media Luna axis ramp.

An increase in spending in the latter two development areas in a possibility depending on the advancement rates and further development decisions. With $127 million in cash at the end of the year, operations ramping up and generating free cash flow and per share of operation and with near-term upside from the Sub-Sill, the company is in a strong financial position.

Now I would like to turn the call back over to Fred.

Thank you, Jeff. Looking to the future, we're well-positioned for profitable growth from the high-grade mine ramping up to full production and excellent projects in the Sub-Sill, ELG deep and Media Luna.

This high lease prospective property also has many other attractive excellent exploration targets that remain to be tested. Standard MIA and ETJ permit applications are being finalized for our Media Luna expiration access ramp and this ramp is expected to be called out in Q4 of '17.

In parallel with that process, we will be investing energy to optimize the designers for Media Luna and to advance the engineering to higher levels of detail. The large scale of this deposit and the synergies with ELG make this an exciting growth opportunity and we look forward to rapidly advancing this opportunity and all the other ones into future phases of exploration on the property.

In closing, a personal thanks to all of our teams and partners who have delivered so admirably during our first year ramp-up year while we transition from developers to intermediate producer. I look forward to a successful completion of the last part of the ramp-up and for the company to continue to grow and mature as the gold mining of choice for all stakeholders.

The floor will now be turned over the operator for the question-and-answer portion of the agenda.

Hi, everyone. Jeff, I am just wondering if you could just talk a bit more about the restricted cash balance at year end and how you would expect that to change that balance to change over the next 12 months or so?

Sure. Thanks Rahul.

It's Jeff here. Yeah, the restricted cash balance that we have $23 million is made up of two components.

One is $13.7 million, which relates to cash held for if there is a temporary stoppage of work at the site. So, it's held there in reserve for the lenders benefit.

The second component is money held for future tax payments. So, as we accrue and tax that maybe payable in the future, that account will grow and once we pay that tax, that account will shrink.

So, what you'll there as we pay our taxes, it will shrink, but as it will also will incur tax associated with of course the 7.5% mining tax and the 0.5% royalty and the 2.5% royalty.

Okay. Thanks Jeff and then just following with Media Luna as well as the exploration and development of the Sub-Sill resource I assume you might want to invest some of the free cash flow back into the asset.

So, aside from scheduled principal repayments, is there a preferential cash sweep as well at the loan facility that might reduce the amount of money you could divert to its growth?

Yeah, the loan facility was supported by the development of the ELG Mine and some cash can be diverted towards Media Luna. However, that has to come from corporate funds or a release from the project financing basket if you will with the lender's approval.

After the final completion test is achieved, money can be released, so that's a possibility.

Rahul its Fred, in the short term, we'll find Media Luna from our $30-plus million we have at the corporate level and so at this stage, we are just working on engineering and permitting work, so the spend is not particularly intense.

Okay. And then just to clarify, do you expect to finish the ramp up in Q2 of this year, would you be able to divert more of that free cash flow towards your growth project to that point or is it going to take longer?

We can’t start diverting free cash flow to the external projects until we complete the completion test for the banks. We will start that in Q4 of this year and its a 90-day test and then so I would expect that will be accomplished in Q1 of next year.

Okay. Fair enough.

Thanks a lot Fred and Jeff.

Thanks, and good morning. I was just wondering on the filter tailings, initially you tried a number of different cloth types and we're working to get cycle times to design rates.

Can you just talk a little bit more about the factors that led to the decision to add an additional unit?

Hi, Andrew, it's Jason here. Yes, as you described, we are improving our operating and maintenance practices, but the uptime has not been what it's needed to be and that's largely a function of what you describe, specifically the filtrate getting on the wrong side of the cloth.

So, we're working with the OEM and suppliers to resolve this issue through a combination of cloth design as well as installation practices on the machine. So, that will get us there and then the additional capacity will also help as we need to change out cloths at certain points of their life cycle.

Okay. So, switching to the blockades, which I think Fred mentioned at the start.

Can you maybe quantify the impact a little bit more of how that affects the operations and are you comfortable with current level of stockpiles that provides enough of a buffer if that were to occur in the future?

I prefer not to quantify the impact. I'm not sure that I want to share that information with everybody at the other end of the blockade.

We are comfortable with the amount that we stockpile on site and we had an opportunity we could have run considerably longer than we did this time.

Okay. And then lastly just on the Media Luna access ramp, can you just talk about the approvals needed to start that and the next steps in terms of how that'll help you advance the project?

The approvals are standard MIA and ETJ given the increased activity in the region. The regulators asked us to combine couple of permits together.

So, we're just finalizing that action now. Should have those submitted late this quarter, early next quarter, but is a six-month process to get it completed at which point we can mobilize to start to ramp into Media Luna.

Once we get the ramp in there, we can -- and to upgrade the quality of the resource. And we'll also look at options to maybe the directional drilling from surface to see if we can do some of that work from surface at lower cost.

Okay. Great.

Thank you.

Thanks, Andrew.

Thanks very much. Fred, Jason, just going to the 2017 guidance, just trying to get a sense of what we could see directionally throughout the year as you start to implement some changes with respect to the SART plant and then on the backend of the plant with the tailing filters\ When you did put your original guidance is 350,000 to 380,000 ounces was based on a full run rate of 14,000 ton a day, that was based also on 87% gold recoveries which you're now getting higher at 89, but then reserve grade or grade of 2.67 grade with ton.

Obviously, the throughputs not going to be a 14,000 for the full year, how do you guys see the throughput picking up through the year and maybe if you could provide a little bit of clarity on maybe some the treasure boxes as you have hidden around the mine site with respect to grades beyond the potential for under the sill mineralization in Q4?

Thank you, Dan. It's very good point.

We never expected to make 14,000 at the beginning of the year and our production will ramp up through the year. We are as you mentioned have an advantage and the recoveries have been better than planned.

Grade is variable. So, we're never quite sure where that ends up.

We have the advantage of potential for traditional feed from the underground operations in the fourth quarter and that's potentially very significant with the grades that are available there. So, we're not -- the guidance at 14,000 today takes us to the top end of guidance.

It's basically at 350 to 380. There is about a month's production variability in the guidance numbers.

So, I think we'll hit the range. We may be pulling out some stops in the fourth quarter, but I'm comfortable for the year.

Okay. But for the first half may be similar production levels as we saw on average for the last couple of quarters and then start to pick up here in Q3 as some of the efficiencies are gained and then with the under the sill in Q4?

Very much so.

And then just with respect to the cost, obviously, you didn’t have the greatest economies of scale on the throughput with the downtime on the filters in Q4. If I back out your implied mining, your unit cost at site of about $50 a ton, again there may be some errors in that versus $40 the previous quarter.

Where do you see those costs, trending going forward toward the end of this year?

I'd say the costs are effectively on track except for the reagents. The consumption of reagents, all other costs are about where they're supposed to be; some cases a little lower.

The team has been implementing some changes in reagents. This has seen some early success in reducing those costs and we will expect them to continue to trend down over the course of the year.

Okay. Perfect.

And then just a little bit of color on under the Sill obviously, you probably will drift and do that some mineralization once you get there. What are you thinking throughput wise and potentially cost wise to get under there and to take that ore out of the ground.

Are we looking at $50 a ton, 500 ton a day or are you looking at something little bit larger?

I'm going to put Jason on the spot here. But I'm generally expecting that we can -- if we can get ourselves up to four phases we can get to a 1000 a day.

It might take a little while to get four phases. We haven't fully complete -- we haven't seen the resource model yet.

Right now, at about $5,000 a meter if you work that out on a tonnage basis, that's about a $100 a ton.

Okay. That's prefect.

Great. Thanks very much.

Good luck.

Thanks, Dan.

Great. Thank you.

Question for Jeff. Going forward what's your strategy going to be on hedging the peso?

Thanks for the question. The pesos were put in place for a reason for the project financing.

We don’t have any plans to hedge in the near-term, but we are going to monitor the situation and that's what we're going to do. We need to protect cash flow for development projects.

We'll certainly look at that.

Thank you. Just getting a bit more perspective on the Sub-Sill initial resource, it sounds like the planning will be done for drilling in the first quarter and it sounds like maybe the drilling will be done later in the first quarter or early in the second quarter.

Will that step out drilling be included in the initial resource or should we expect that to be in the future resource?

Thanks Josh, the initial resource will not include any further step out drilling. We're doing the planning for some of the step out drilling now.

And doing some of the layout work underground for the definition drilling from underground which will confirm once we actually have the resource, but before we get going with the additional drilling.

Okay. And then similarly for the CapEx guidance of $100 million to $130 million, on what point would you consider I guess revising that success with the sill or is the dollar amounts you're thinking about at the sill nominal with respect to what that existing budget would be?

The existing dollars are committed to the sub sill of $5 million. We can double guesstimate here.

What we do after that will have to be in addition to that plan. So, what exactly we do and how many crews we put on it we have to get the resource out and the mine plan laid out to be able to determine what that is.

Okay. And then in terms of the AISC cost reductions from the start plant of $100 per ounce.

Just to clarify, are you expecting that to be a reduction of the unit costs fully or is that going to be partially contributed by the copper revenue credits you'll be receiving from the start plant?

The $100 that we are reporting is basically a reduction due to the removal of the cyanide and lower use of reagents.

Okay. So, is there any potential for upside from the copper revenues or is that just -- is it not material?

No. There is upside for the copper.

Not a material number.

And then lastly just in terms of the reconciliation with another quarter of data behind you guys and some data that seems to be overall I characterize as may be erratic from our perspective, has there been any sort of additional ability for you guys to discern trends in what causes positive or negative results on bench by bench basis or is it just unpredictable at this point?

So far, the geologist would say that their model is predicting beautifully. Its plus or minus 15% is what their model calls for and is projecting at 96% of the midrange.

So, from geological terms it's working beautifully. We have not yet got any new data that would allow us to pin down a change in the geological model, never expected to before year-end, don't really know what that will do it either.

What we're expecting to have by year-end is at least statistical constant factor between what the blast-hole say and the mills actually get that's some variability in that as well but it's a well within the range as the model predicts.

Okay. And then is there maybe last question on this, any sort of perspective on how the initial mining at El Limon is tracking relative to what you've seen for the reconciliation at Guajes?

Its tracking at fairly consistent pattern. They tend to start out a little bit ready at the top and get better as you go down.

Got it. Okay.

That's it for me. Thank you very much.

Thanks Josh.

Hi, guys. Just wanted to follow-up on one of Josh's questions with respect to reconciliation, when you reported you talk about since the start of mining at Guajes now looking at grade that was about 6% below in terms of reconciliation and I think last quarter it might have been 1% above, I can’t remember, but can you tell me what it was just for the last quarter for the Q4 period?

We are transitioning through one zone of this turn in to the second zone of the scar through that quarter which we would have contributed.

Right I guess what I'm trying to understand is just how much its swinging on a quarter-by-quarter basis. We can see the long trend of what it's done for say life of mine, but quarter-to-quarter it's still fairly erratic as Josh would have put it?

It swings -- I think our biggest swings is 22% in the quarter. Q4 was trending back-off that bottom and Q1 is looking better still.

Okay. So again, like so when you talk about things like average grade or sorry gold recoveries and grade processed, you usually talk about in terms of since the start of commercial production, but with grade reconciliation you mentioned since the start of mining at Guajes.

So, when are you starting that reconciliation at time zero when is that that benchmarked against?

The geological models for the entire mine and we use the -- because we manage of stockpile that was being accumulated since we started mining, we referenced it against the beginning of time. Okay, the beginning of mining.

But we didn’t have any actual recovery data until the beginning of really commercial production and when we put the plant to bed and filled up all the nooks and crannies with the plant with gold and stabilized the in-process inventory. So, that's what the difference between the two numbers is up until we started production, we just had blast-hole assays to tell us what was there.

We found that once we put it into the mill, we get more than the blast will last, they say. On average that's been about 8% but that too is varied with about a 30% rate.

Yes. Okay.

So, moving on with respect to just guidance for 2017, do you have any sense may be Jeff on what kind of amortization we should be looking for? I notice it's obviously been trending up a bit the last couple of quarters.

Can you give us a sense of what it might look like through 2017?

Sure Trever, it's Jeff here. The depreciation number that you're asking about, does fluctuate with the amount of gold that's sold and other factors.

It roughly will be similar to the last quarter and probably maybe a little bit higher, but roughly similar.

Similar like on a per ounce basis or kind of a net, or sorry, aggregate dollar amount?

On an aggregate basis, it's going to be a little bit higher.

Okay. But roughly the same on a per ounce basis for example.

Roughly, yes.

Okay. Thank you.

Thanks Trevor.

Thank you, operator. On behalf of the Torex team, thank you for joining us today and have a great day.