Thank you, Steve, and good morning, everyone. On behalf of the Torex team, welcome to our second quarter 2017 conference call.

Before we being the presentation, please note 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, CFO; and Jason Simpson, COO. 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 on SEDAR.

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

I will now turn the call over to Fred.

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

Starting with safety, a very unfortunate single-vehicle accident resulted in the death of a contractor employee. The six wheeled loaded haul truck climbed a safety berm and the load shifted, which pulled the truck over the berm.

The driver did not survive the fall to the lower level. Gravity in the steep terrain is a powerful force and efforts continue to upgrade the risk assessment and risk mitigation precautions taken by our contractor workforce.

The control of less powerful energy sources has continued to be effective and has resulted in a low lost time injury frequency. On an environmental front, protection has continued at a very high level of performance, there were no accidences in the quarter and the heavy rainfall run-off has been well managed.

On the community front, relationships continue to be excellent and productive. Shifting to plant throughput, the rapid improvement in the performance of the tailings shelters have started in Q1, continued in Q2 with a 26% improvement over Q1.

In June, the teams effectively achieved design throughput rates. Additional filters that are being installed will provide low-cost optionality for future production increases.

With the plant now capable of running at design capacity, attention is shifted to the grinding circuit for opportunities to increase throughput in the future. Current efforts include shifting more of the grinding work from the SAG mill to the ball mill, and there are good prospects for increasing plant throughput to above design levels.

Mines, the mines kept pace with improvements in the processing plant. Total tonnage moved increased by 30% over Q1 and total ore tonnage moved increased by more than 60%.

El Limón and El Limon Sur continued to open up and promised increased flexibility for ore sources in the future. For safety reasons, the mining team was not able to access some high-grade tonnes in the Guajes pit that we had planned to mine in Q2.

The rockslide of late 2016 eliminated the safety benches above the high grade. The absence of the safety benches meant that anything dislodged by the rain falls down to the working bench.

So far this rainy season, the rainfall has been 180% of average and out of an abundance of caution we have deferred this mining until later in the year, when the rains diminish. Grades and recovery.

As a result of this deferral, the grades mined in the quarter at 2.37 grams per tonne were below reserve grade. With throughput tracking to plan, cost per tonne, processed tracking to plan and recoveries tracking to plan, the lower grade was the factor that impacted cost per ounce.

Reconciliation of the reserve model was a positive factor for grade at 113% of expectations. Apart from the deferral of the high grade, Guajes high grade, the grades of the tonnes mined were just a factor of the normal variability of the skarn deposit.

That variability is quite pleasant when the grains are variable high and less sold when they are variable low and such is life for this sort of deposit. During the second half of the year, to anticipate mining and the deferred high grade Guajes tonnes and the grade in El Limón pit is scheduled to increase as well.

Guidance. Plan grade for the year was effectively at reserve grade, and we expect to average that grade by year-end.

Recovery and cost per tonne are both very close to planned levels. However, it is unlikely that before the end of the year, we can increase throughput enough to process the tonnes that were not processed in Q1.

As a result, we expect to achieve the low end of guidance on ounces and given our fixed costs this will push our cost per ounce towards the high end of the guidance. A bit more on reconciliation to the reserve model.

In Q2, the reconciliation against the reserve model was 113% for grade and 102% for ounces. This led to a modest increase in the mine-to-date curve for both metrics, fueled with the grade reconciliation moved up from 93% to 97% and cumulative ounces reconciliation moved up from 95% to 96%.

This is an excellent performance against the model that predicts to be within plus or minus 15%. Looking forward, reconciliation will get more complex, as the highly variable grades Sub-Sill tonnes are introduced.

At some point in the near future it may not be meaningful to continue with reconciliation metrics. Comfort can be taken from the close proximity to 100% from the first six quarters of production.

Processing plant investment. The SART plant construction team made excellent progress in Q2 with most of the tankage and equipment now installed.

Commissioning is expected to commence on schedule in Q4 and in Q1 of 2018 we expect to realize $100 per ounce in cost savings from this project. The construction of the additional filtration capacity also proceeds on schedule with commissioning expected in Q4.

Sub-Sill investment. The Sub-Sill ramp recently deposited on schedule in late June.

The first round was close to 100 grams per tonne, which was quite spectacular. A few more rounds were processed in June and then for most of July mining was stopped while crews did repair work to the slopes above the portal that had been damaged by the heavy rainfall.

That work is now completed and mining has resumed. Of the 50-hole infill drill program, 43 holes have been completed and the results have been released for the first 26.

25 of those holes hit high grade and the one that didn't - was looking for the edge of a granite - granodiorite inclusion and was successful in finding it, so it was planned miss. Results are starting to come in for the remaining 17 holes that have been drilled and will be published when all the results are in and interpreted.

The Kolar [ph] locations for the seven remaining infill drill holes are not optimal for the rainy season. So these will be deferred until later in the year.

Instead, attention is turned to the drilling of the step out holes and we anxiously await results from that program. Simultaneously a great deal of work is being performed by the mine design team and this work continues to be informed by the drill results that are coming in.

It will be late in the year before this work is advanced to the stage that can be used for public guidance. Mining over the next 12 months will be a combination of ore extraction and waste development to establish the required infrastructure for ventilation and other services.

It is the credit to the team that they started exploring for Sub-Sill in Q4 of 2016 and produced ore in Q2 of 2017. Shifting to mid-term growth at Media Luna, the effort to develop Media Luna continues to advance and surface drill rigs for the infill drill program will be mobilizing to site this quarter.

In the meantime, a feasibility study is being a - study team is being assembled. Their first order of business will be to update the PEA, followed by the design work to a level of detail required to support the permit application and now onto a full feasibility study.

We look forward to results of their work and the results of the infill drill program. I'll now turn it over to Jeff for comment on the financials.

Great. Thank you, Fred.

As Fred mentioned, in this quarter the average grade processed was below our reserve grade. We also had approximately 7,000 ounces of dory [ph] in transit or at the refiner at quarter end which were ultimately sold in July.

In addition we had a further 3,000 ounces of gold in carbon fines at the refinery waiting to be processed. As a result 68,398 ounces of gold were sold in the second quarter.

The lower number of ounces sold this quarter had an overall impact on revenue, net income, cash flow, cash costs, and all-in sustaining costs per ounce. Q2 net income was $5.1 million or $0.06 per share, a decrease in from the first quarter, largely due to higher expiration expenses of $3.6 million, primarily related to the Sub-Sill opportunity, as well as a lower deferred tax recovery.

Operating cash flow before it changed to non-cash working capital was $30 million. This quarter we spent $32 million on capital expenditures, $16 million was used to repay almost all of the VAT loan, as well as regular financed lease, equipment loan repayments as well.

$10 million of cash was held up in inventory, as I just mentioned. $8 million was spent for interest payments on our loans and leases, VAT paid was $14 million and VAT refunds received were $13 million and other change in working capital were $5 million, all of which resulted in a $32 million decrease in our cash to $62 million.

Mining costs in Q2 were better compared to last quarter and averaged approximately $2.14 per tonne mined. Processing costs were comparable to Q1 and averaged $28 per tonne processed.

With the addition of the SART plant, as Fred mentioned, we expect to reduce our reagent consumption and brining - and bring down our processing costs down to $18 per tonne starting in 2018. Total cash costs per tonne of ore processed averaged approximately $52 per tonne in Q2, and which is slightly higher than Q1.

With more tonnes being processed this quarter, production costs overall were $1 million higher than the previous quarter. On a per ounce basis, our Q2 cash cost were $706 per ounce, and all-in sustaining costs were $991 per ounce.

Depreciation of the peso of this quarter impacted our financial results in a number of ways. Our peso contracts used to hedge approximately 50% of our peso-based operating expenses had non-cash unrealized gain of $2.2 million in the quarter.

We also experienced a foreign exchange gain of $4 million consisting of a realized gain of $1.4 million and unrealized gain of $2.6 million on peso denominated accounts, such as, pesos in cash on hand, VAT receivable, prepaids VAT loans and accounts payables. In Q2, we recognized non-cash deferred tax recovery of $1.9 million.

Depreciation of the peso and the Mexican inflation rate increased the size of our taxable as expressed in US dollars and reversed a portion of the $15 million deferred tax we expensed in Q4 last year. Now with regard to our gold hedges, we had approximately 4,000 ounces of gold hedges remaining at the end of Q2, which were settled in July.

Therefore, our future gold production is now fully exposed to gold price fluctuations. With regard to our peso hedges, the company had approximately $850 million in pesos hedged contracts which for $47 million of US.

And the contract price is 18.7 Mexican pesos per $1. Approximately 600 million in pesos will be settled over one year and 250 million in pesos settled until March 2019.

Turning to CapEx, sustaining capital in the second quarter was roughly $15 million and consist of $8.5 million for the cash component of capitalized stripping activities at El Limón-Guajes, $4 million for spare parts and overhaul, and $2 million for Hydrology, Giotech and techno-services. Q2 sustaining CapEx was $2.8 million higher than Q1 due to the additional spare part purchases and hydrology work.

Remaining $17 [ph] million of CapEx related to $6.2 million for ongoing construction at SART $7 million for plant improvements, additional filters, decoupling project between the SAG and the filters and $1.8 million for deferred project capital. In summary, with $62 million in cash at the end of this quarter, mill throughput ramped up near-term upside from the Sub-Sill, a new loan facility we executed in July that strengthens our balance sheet and increases flexibility for funding our growth opportunities.

The company remains in a strong financial position. Now I'd like to turn the call back to Fred.

Thank you, Jeff. In closing, I like to offer a special thanks to all of our teams and partners, who have delivered so admirably on our ramp up and with the exploration of success.

I look forward to a successful completion of the last bits of the ramp-up and to continue to grow and mature as a gold-mining company of choice for all stakeholders. Floor will now be turn over to the operator for the question-and-answer portion of the agenda.

Fred, I think you spoke about this a little bit, but now that you're gaining mill throughput, design mill throughput, even LOM [ph] throughput even with additional tailings filtration capacity, at what throughput levels are you seeing other bottlenecks coming into the system? Or at this stage, is it more about reducing downtime?

Basically, I'm wondering if you have an idea as to how much high to push throughput and the additional filtration capacity comes online in Q4?

Thanks, Rahul. The plant routinely runs at 14,000 tonnes a day, at some days it runs at 15,000, sometimes it runs at 16,000.

The bottleneck circuit at the moment is the grinding circuit. It has been, I would say choked back over the last many months, so that we didn't flood the filters.

We're now in the process of wearing out the liners that were installed to restrain its production. And as that works and the grades expand, we'll have a better chance of getting a sense of what that circuit can move to.

Looking down the road, the Media Luna ores are only about two thirds as hard. So they will go through the grinding circuit quite quickly.

And that additional filtration capacity will then be very much in demand. So we see capacity has increased at the grinding circuit, but we need to prove it up before we comment on.

Perfect. Thanks.

That's helpful. And then with respect to the area that you had limited access to, can you quantify the impact a bit, i.e., how many ounces in that area or tonnes increased?

And is that something that you expect to mine out in Q4 or is that something that's going to be mined at over the longer period of time?

I think it can be - the rate of mining is largely dependent on the rainfall. We've had a very heavy first half of the rainy season, if that's slows off in the second half, we'll get some in Q3 and the rest in Q4.

If it pushes into Q1, it's because we couldn't get it in Q3. It's probably in the range of 75,000 ounces in there, but it has the ability to kick our grade up to around the three numbers.

Okay. That's really helpful.

And on the rainfall in particular, if I look at the total tonnes mined Q1, frankly, I mean you had a really good quarter from a mining standpoint, just looking at the amount of tonnes mined. Did the - was there an impact, was there a rainfall-related impact as well in terms of how many tonnes you could have gotten on a pit [ph] just certainly didn't see that with the Q2 results?

Is that something that I should be - we should be expecting with Q3?

Yes, there's no question, the mines are negatively affected by the heavy rainfall. The roads have to be graded, sometimes it is very difficult to see in heavy rains at night shift, so sometimes things to slowdown for that.

There is potential to increase further once the roads dry out.

Fair enough. But if I look at total tonnes mined, from Q3 of last year to Q1 of this year, you've been, I mean all around you've been averaging sort of 67 million tonnes…

Yeah.

And then in Q2, you did 8.4, should I expect that to dip in Q3?

I think it - I wouldn't think it's going to - it should actually increase a little bit in Q3. Like the performance has been ramping up fairly steadily.

Q1, of course, was affected by the blockade.

Okay, okay. Thanks.

That's all that I had.

Thanks, Rahul.

Yeah. Fred, just had a question about the Sub-Sill and how that's contributing to the grade profile.

You talked about the area in the pit that was impacted that you're not able to access right now in the pit wall that if you had that, it would take your grade up to three grams. And I think you also said that towards the end of the year you'd be trending back towards reserve grade, is that incorporating any contribution from the Sub-Sill or are those numbers just based solely on what you're pulling out of the pit?

Yeah, so trending back, so it's not trending back the reserve grade, it was as more I would suggest trending to average reserve grade over the course of the year. And that's primarily an open pit conversation.

There will be some contribution from the Sub-Sill, but that's largely a back pocket issue. We're still working out the mine plan and sorting out how much of the development opportunities have to go into waste development to open up infrastructure for ventilation, escape ways and things like that.

So we're - the mine plan isn't far enough advanced yet to commit to how much will go in this particular half of the year. There will be some, but it's more of a back pocket issue.

Yeah, you mentioned you were able to put a couple of rounds in June, but it would be inappropriate to assume that you are to a point on development and like you say ventilation that you could take a steady contribution from the underground for the remainder of the year?

Absolutely. You know, we already announced this at the beginning of the year, so it's kind of rocket speed what Jason and the team have done there.

But they do have to put in the infrastructure to support mining for next year.

Okay. And then in next year though, we could expect guidance for 2018 would probably include - you would have a good enough handle on the Sub-Sill to know what to expect for 2018?

That's correct.

Okay. Just a quick question with respect to SART plant.

The recoveries you said have been in line with what you are expecting. In addition to all the cost savings will the SART plant help to pump up the recoveries and can you remind me what that targeted recovery, say for 2018 would be?

So the recovery for 2018 will likely be the same as 2017 at 87%. The SART plant is not expected to affect recovery.

We manage the copper impact on recovery with excessive use of cyanide. And so what the SART plant does is give us the cyanide back.

So we've managed to get recovery design levels, like is said by using reagents. This will just reduce cost of the reagents.

Okay. And then, I guess, just a final question.

I kind of think over the rainy season in Mexico more as a Q3 phenomenon less a Q2, but maybe that's because I'm thinking of Northern Mexico. Is it typical for your rainy season to really kick-off in Q2?

Is that more typical for your part of the country?

It is. It's almost the six months of both.

Okay. All right.

Thanks, Fred.

Thank you, Trevor.

Thanks, operator. Good morning, Fred.

Thanks for taking my call. My question is around the - just on some of your production for the remainder of the year.

You've done - my calculations in order to hit your sort of low end of guidance, you need to do just over 200,000 ounces between now - well for Q3 and Q4. Would we expect that to be kind of equally weighted or really more back-weighted?

Can you give us any sense of how that might - how you expect that to flush out?

So I would expect it to be back-weighted, again, to Q4, largely depending on - because we're still in a rainy season in Q3.

Right.

Again, on those tonnes underneath the rock slide.

Okay.

Again, it's 200,000, slightly over 200,000 ounces.

Okay. Right.

Okay. So - and that does, I think this was already asked, but that does include or that does include the expectation for some under the sills ore, right?

We're trying to treat that more as a back-pocket thing.

Okay. Okay.

So there's lots of variability in a number of places that are possible, variability in grade, variability in tonnes and Sub-Sill as well, so.

Okay. And just on the Sub-Sill again, so you're in the - you've reached the zone there and your planning out your mine plan, but have you put any of that materials through the mill yet or done any testing on it?

Yes. In June the first four rounds went in.

Oh, that's right.

I think all included were 1400 ounces, a little better than probably 1100 recovered. Yes, it's gone in, continues to go in little bit.

Okay. And you're happy with the results?

I think there's lots of big smiles.

Okay. Thanks.

That's all for me. Thank you.

Thanks, Matthew.

Thanks. Good morning.

Just a quick question for Jeff probably about the VAT receivables. At one point there had been a focus on reducing them and some resources allocated to trying to accelerate the processes of receiving those.

Could you just maybe update us on how that process is going and sort of what you expect or sort of to get to by year end or what the sort of consistent level of VAT receivables you expect to have outstanding might be?

Yeah. Hi, Andrew.

It's Jeff here. Yes, thank you for your question, which is back to the VAT receivables, we're working very closely with the Mexican tax authorities on this and as you can see in our numbers that we are getting refunds.

The refunds we've been receiving have been going to pay down the VAT loans. So once that's fully gone which is will be this quarter that you'll see the VAT receivable being reduced by refunds that come through.

In terms of a target balance for the VAT outstanding, we don't have a target balance. We like it to be zero.

But there's nothing that we're - we are working very hard with them, with the Mexican tax authorities, but we don't have a specific number that we're targeting for year-end.

That was great. Thanks.

Have a wonderful summer. Thanks for calling all.