Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our second quarter 2018 conference call.

Before we begin the presentation, please note that certain statements to be made today by the management team will contain forward-looking information. So please refer to our detailed cautionary note in today’s press release and MD&A.

We have in the room Fred Stanford, President and CEO; Jason Simpson, COO; and Steve Thomas, CFO. 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 welcome to all on the line. I’ll start with an update on safety and environmental protection.

The lost time injury frequency in Q2 tracked slightly above the goal of less than two injuries per million hours worked. After July, it was back on target.

There were no reportable environmental incidents in the quarter. We are now in the latter half of the rainy season and water management has been well conducted.

Turning to the restart of operations, the restart has gone very well across the board. The employee turnover as a result of the blockade has been managed and recruitment of local employees has progressed well.

Morelos is high and the performance of the employee team was evidenced in the numbers. The open pit mining team has wrapped up and delivered plan numbers for ore and waste stripping in June and above plan performance in July.

The processing plant steadily improved performance throughout the quarter. And afterwards, they have demonstrated what the plant can do with a record breaking day of 16,500 tonnes process and performance at design levels of 14,000 tonnes per day for the latter half of July.

They’re well on their way to being able to meet the year-end goal of consistent production of 14,000 tonnes per day. The underground operations are also advancing well.

In Q2, as planned, the bulk of the mining activities in Sub-Sill were focused on excavating for infrastructure in waste. Subsequent to the quarter, the full Sub-Sill mining permit was received and the second portal to access the mine was collared.

The two portals are expected to be connected by year-end, which will facilitate flow through ventilation and enhanced logistics. Ore production in Q2 from Sub-Sill was minimal and will ramp up significantly in the second half.

Exploration and infill drilling continue in El Limón De and Sub-Sill. There will be drilling results to share in the second half and an updated resource estimate is expected by year-end.

Turning to the SART plant. As scheduled, the first copper precipitate was produced by the SART plant in late Q2.

The team has ramped up the plant quickly, and by the end of July, an excess of 24 tonnes of copper was shipped offsite. This is copper that we’re very, very happy not to have circulating through our plants.

We’re seeing meaningful reductions in reagent usage. There’s only been operating for a little over a month and there is more to learn about how it deals with differing inputs.

By the end of Q3, we should have a good sense of the cost reduction performance and can report on it then. Turning to Media Luna.

The infill drill program has resumed with the goal of updating 25% of the current inferred resource to the measured and indicated categories. There are 175 targets to be hit to achieve the desired drill density.

There are currently four diamond drills working on the project and 19 targets have been intersected to-date. More drills will be added as water supply becomes available.

Results will be made available periodically, as assays are received and interpretations completed. It is good to be back working on this project as a platform for our next stage of growth.

Now turning to the technical reports. A technical report is being prepared that deals with all of the deposits on the property and it is a bit of a handful that over 500 pages long.

It is undergoing the final reviews now and publication is expected before the end of August. The technical report will include an updated PEA for Media Luna.

None of the recent drilling will be incorporated in the design. The resource will be identical to that use in the previous PEA.

There will be proposed changes in how the deposit is accessed and serviced. There are also the updates to the processing flow sheet.

The PEA economics will be based on conventional mining methods; however, included in the PEA, is an assessment of the benefits to Media Luna of an innovative new underground mining system that Torex is developing. The new mining system is called Muckahi and not yet tested and proven underground, it has the potential to materially reduce CapEx, OpEx and mine build schedule.

Manufacturing of the first of the prototypes for the Muckahi system is expected to get underway in Q3 of this year, but testing at ELG underground scheduled for early next year. These are exciting times as we test the mining system/technology that has the potential to disrupt an industry and provide Torex with many strategic advantages on the Morelos property and elsewhere.

The floor will now be turned over to Steve Thomas, our CFO, who will review the numbers and can tell you everything that you might want to know about the foreign exchange impact and deferred tax expense and the subsequent impact on IFRS earnings. Steve?

Thank you, Fred, and thank you for the opportunity. Good morning, ladies and gentlemen.

I’m pleased to be able to present our results for the three and six months ended 30 of June 2018. This has been a significant quarter for the company with the operation ramping up after cessation of the blockade and the company exceeding financial performance seen in previous comparable periods.

Turning to our financial results for the second quarter of 2018. The key financial themes for the company are that; year-to-date we have sold 141,000 ounces in line with full year guidance; earnings from operations for Q2 was $23.5 million a strong and grown steadily throughout 2017 and 2018 reflecting continued maturing of the operation.

The net loss in Q2 compared to net income in Q1 is driven in large part by the 8% depreciation in the value of the peso compared to U.S. dollar, as the Q2 period end compared to Q1.

So to cash costs of $680 per ounce for Q2 are lower than the previous four quarters. During Q2 investment in sustaining capital increased by $20 million and in respect of our growth projects by $7 million across ELG, Sub-Sill, Media Luna and the SART plant.

During quarter two and quarter three year-to-date significant receipts have been received in respect of the that receivable balance at Q1 end. The company met the covenant tests per the term loan throughout the period and is paid down $25.5 million of debt principal under the term and equipment loan and finance.

Lastly, our audit review has confirmed that there are no going concern issues or impairment triggers arising as our financial outlook remains strong. I would expand upon the impact of the 8% depreciation in the closing rate of the Mexican peso, as this explains the deterioration in our half the tax position between the quarters despite having similar pretax balances.

So now returning to earnings from operations. Quarter two earnings from operations at $23.5 million or 25% about quarter one, reflecting the continued ramp up towards full production.

G&A exploration and evaluation and low interest expense to get a totaling $13.8 million in Q2 are similar to that incurred in quarter one at $13.4 million. Where a difference arises within other expenses across the quarter is, is in respect of foreign exchange loss and loss on derivative contracts, which equal $4.3 million in quarter two compared to a combined gain of $5 million in quarter one.

Of this $9 million swing, $5.5 million is due to the 8% depreciation in the value of the peso at Q2 closing rate compared to Q1. Where this 8% depreciation has had a further and more significant impact on the company’s results, is in calculating the deferred tax liability for quarter two which is $35 million compared to net $21 million for quarter one.

This increase in the calculated liability results in an equivalent $14 million deferred tax expense for quarter two. This $14 million expense quarter two compares to a deferred tax recovery of $6 million arising in quarter one.

That recovery arose in large part due to the strengthening of the peso closing rate by 7% in quarter one compared to its opening rate. As a result, despite a similar pretax position in quarter two and quarter one, the swing in the tax charge largely driven by FX, explains the net loss of $12.3 million in quarter two, this is the net income of $10.2 million in quarter one.

It’s worth noting, that if we’ve reported results at the end of July given that the peso U.S. dollar exchange rate at [indiscernible] had returned to where it was at the end of Q1.

This deferred tax would be substantially eliminated. Recognizing the sensitivity of the company’s earnings deforming change issue, we have now incorporated this adjustment into our adjusted earnings calculation.

This approach results in a Q2 adjusted net income figure of $10.6 million, compared to quarter one revised adjusted loss of $11.7 million. Now turning to consider the company’s liquidity position.

Excluding restricted funds the company’s cash near cash balance at Q2 end is $91 million compared to $111 million at Q1 2018. And the cash balance is since grown to approximately $118 million.

During Q2, cash generated from operating activities was $37 million enabling our investment in sustaining capital growth capital and debt repayment. During Q2, we made the second tranche of debt repayments paying a further $14.5 million in addition to the $11 million paid in Q1 towards the total of $57 million in 2018.

Has mentioned the company has continued its positive progress with the Mexican tax authorities receiving $9 million of VAT during Q1 and $10 million in Q2. A further $18 million was received in quarter three year-to-date, effectively having the current that receivable balance at the end of 2017 compared to now.

The company also submitted an updated life of mine plan to the lender based on 1,100 gold as required under the credit agreement. The plan was compliant with all covenants and met the cash flow available for debt service threshold test.

In closing, quarter two operational performance has delivered increased earnings from operations and a strengthened balance sheet compared to quarter one, was successfully delivering on the ramp up to full capacity. Thank you for listening.

And with that, I’ll turn the mic back to Fred.

Thank you, Steve. In summary, the team has done us a superb job of managing the many challenges of ramping the operations back up after the blockade.

From a standing SART, they produced 80,000 ounce of gold, our second last quarterly production to date. They’re also finished the SART plant and successfully brought it online, exploration programs and technical report work were also successfully restarted and advanced.

In conclusion, if you know anyone or even a computer that might buy a gold mining stock, please put in a good word for Torex. The quality of this asset, the strong operating performance of the team, the many upcoming catalysts and the game changing potential of the new technology.

All suggested at this time for a new look at a company that has rebounded very well from a black swan event and is looking forward to a prosperous future. Thank you all and I will now open up to question.

Hi, guys, thanks for taking my question. Just a question surrounding costs in the quarter.

You expect costs to trend lower into the second half of the year. Would you attribute that to the increasing denominator, more ounces produced and sold, or more reduction in costs after – if your costs related to ramping up after the blockade?

It would be all of the above. The denominator certainly helps a great deal.

The SART plant will reduce costs as well. And then the restart activities cost some money and that will help as well.

All right, guys, thanks. That’s the only question I had.

Thanks, Matthew.

Thank you, and thanks for taking my call. Quickly, CapEx, do you expect it to increase here in the second half of the year given sort of get in line with your previous guidance?

Yes, we do. I think the CapEx is one of the latter things that wraps back up after the blockade, so that will pick up in the second half.

Okay. And then on the underground mining rates, I mean, do you see a big step up change in Q3 or more slated to the end of Q4?

So the underground mining rates, mixture of ore and waste, up over 3,000 meters a month now. But the actual production rate of ore will kick up more weighted in Q4 than Q3.

The Q3 will be helpful.

Okay. And then just finally, as you mentioned, you said the upcoming Media Luna PEA, you will have an assessment of the Muckahi system in there.

So is the idea to present, say, like the NPV and IRR both using conventional mining and the Muckahi system?

Well, the PEA – the formal PEA document will have the conventional mining as the proper case. That is we are using the opportunity to showcase the technology against that case.

So there will be economics associated with that. But the PEA formal numbers will be the conventional mining.

All right. And then just finally, when would you hope to actually have a feasibility for Media Luna?

I assume that’s the plan for financing purposes.

Absolutely. The plan is to put out a feasibility study, but we need to complete the drilling of the upgraded resources to measure indicated before we can put out a feasibility study, and that drilling isn’t scheduled to complete until late 2019, so will be after that.

All right, thank you.

Thanks, Craig.

Thank you. Just in terms of the outlook for Media Luna, I was wondering if you could comment on maybe financial resource management in light of balancing both the debt and the capital.

That’s a bit of a tricky question at the moment, Josh. At the moment, it doesn’t look like we can finance a lot of cash flow.

It all depends on what the gold price does. But that’s two or three years out before that call gets made.

Okay. And you’re saying two or three years; is that because the bulk of the capital still weighted towards the third- and fourth-year development or that’s because the decision to start the advancement is likely going to take a year or two?

Both of those are correct. But we have to finish drilling it, which goes out to the end of 2019, finish the feasibility and make all those other arrangements, so that’ll take us into 2020.

And then it’s still bulk – still loaded to the back end.

Got it. And then on the comments of the changes for the updated PA, is there any additional information you can provide on the design changes and in the process changes?

Or should we just hold steady?

The most of the access changes, if you recall in the beginning we had a tunnel coming in from the south side of the mountain that’s been changed to the north side the tunnel under the river has been removed. The access is now with twin tunnels from the north side.

Some changes like that that reduce the risks to schedule and cost – in a reduced environmental footprint and made the social environment simpler. The best place to put the portal on the south side of the mountain, exactly where the one village on that side of the mountain is.

So we’ve avoided that source of the disruption by putting the tunnel anywhere close to them, moved to the north side and got some efficiencies in the process.

Got it. That’s it from my question.

Thank you very much.

Thanks, Josh.

Good morning, Fred and Gabriela. Just wondering on the new Mexican government, are there any signs of different good, bad or indifferent or is it still too early?

Just broadly speaking or any anything you’re seeing happening differently.

Thanks, Chris. So it’s still very much too early and nothing has changed to date.

We are encouraged by the fact that the new President is very focused on increasing the economic success of the Southern half of the country. And so that would likely put mining as a way of generating wealth in that part of the country.

Mining will look very likely fit strongly into that, so we see that is encouraging.

Okay. Okay, thanks very much.

Thanks, Chris

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

Thanks all.