Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver Corp. First Quarter 2023 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Galina Meleger, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. With us on today’s call is Dan Dickson, Endeavour Silver’s CEO; Christine West, our Chief Financial Officer; and Don Gray, Endeavour’s COO. Following Dan’s formal remarks, we will then open the call for questions. Now over to Dan.

Thank you, Galina, and welcome, everyone. 2023 is off to a strong start. Not only was it a good quarter for our operating mines, but we also attained a significant milestones towards building the long-term future of the company. Consolidated Q1 silver equivalent production was up 18% year-over-year to 2.4 million silver equivalent ounces. Ultimately, this performance puts us in great shape to achieve this year's production guidance of between 8.6 million to 9.5 million silver equivalent ounces. Once again, from a production standpoint, Guanacevi had a positive quarter, driven by robust silver and gold grades. However, mill performance was impacted due to the extended maintenance of our -- on our mill liners and concentrate filter cap changes in February. While throughput returned to planned levels in March, it was down 13% quarter-over-quarter, averaging 1,138 tonnes per day for the quarter. The performance of our other operating mine, Bolañitos remained steady. There is increased silver production offset by lower gold production. We continue to evaluate opportunities to increase mine life at Bolañitos and are cognizant of Bolañitos in the current landscape. Their operating team has done a good job meeting their targets. Moving to financials. We reported top line revenue of $56 million, with cost of sales of $40 million for mine operating earnings of $16 million. After exploration and G&A, we reported net earnings of $6.5 million or $0.03 per share. At the site level, Guanacevi delivered mine free cash flow of $9 million, and Bolañitos contributed just under $1 million for the quarter. Regarding operating costs, we've seen pressures across several inputs, driven by foreign exchange and inflation. So our direct cost per ton, were up 14%. Specifically, the Mexican peso strengthened substantially, up 7% from year-end and 9% from Q1 2022, which increased our local cost in…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Craig Hutchison of TD Securities. Please go ahead.

Hey, guys.

Hey, Craig.

Just a question on the inflationary pressures. On the labor front, are there any more pressure you see there over the next sort of 12 months? Have you have any labor negotiations to come here, or is that largely wrapped up in just more of a broader inflation type theme?

Yeah. Right now, that's wrapped up. We finished that typically in February, sometimes built into March. So we gave a 5% increase to the unions that want and Bolañitos. The -- really where the impact hurting us from a labor standpoint really comes down to foreign exchange. So about 33% of our costs are incurred in Mexican pesos for labor and with the appreciation of the peso this past quarter, obviously impact us right to the bottom line. And I think short term we see some strength in the peso. But hopefully, long term, it reverts back to what we've seen for the last 20 years, and that's kind of depreciation against the US dollar.

Okay. And how about on the energy front? Are you seeing any pressures kind of coming off on that front, or is that still sort of similar to levels you guys experienced in Q1?

Yeah. I think we're going to see similar costs and most of our power obviously come through CFDs -- electric commission in Mexico. Our expectation is it's going to stay where it at from Q1. But as we've seen the last kind of five, six quarters, inflation has been a factor. And if the next government or the commission decides to increase rates that will obviously impact us for us. Most of the power costs impact us through a plant standpoint and then pumping water pumping at Guanacevi as well. So again, hopefully, we see that kind of flatten out here and maintain where the levels are.

Okay. And maybe just one last question for me. Just I wanted to be you guys look like you're tracking already kind of above the guidance. When do you kind of expect maybe a reflection downwards in terms of grades, or do you expect maybe lower throughput, I try to model to the midpoint of your guidance. I assume it comes down at some point otherwise you guys look like you may exceed. But just curious in terms of any kind of color on grades and when you might sort of even sort of you talk a little bit.

Yes. I mean, elevated grades because of El Curso for the last two years. And obviously, we've been quite conservative in our reserve estimates on El Curso. So frankly, we should see our tons per day come up, it wants. We had a tough February just with some maintenance requirements, mainly on the liner and some cost work that we had to do on the tailings dry stack tailings facility. So ultimately, our expectation is our tons come up, which hopefully drives down our cost per ton. As far as grades, like I say, we -- for the last two years, kind of exceeded what we've had in reserves. I do essentially us being conservative to that kind of come back to what we have in our plan. We just had a nice area in El Curso, and we seem to continue to get these. So maybe it stays elevated. And if it does, we'll come into the upper range of our guidance, if not maybe be, but if we revert to what is in the mine plan, then we end up being where we are. So we're not at this point really changed guidance at Guanacevi ultimately consolidate it.

Perfect. Thanks, guys.

No problem. Thanks for the question, Craig.

[Operator Instructions] Our next question comes from Matt Taylor [ph] of PI Financial. Please go ahead.

Hey, guys. Thanks. Just looking awful questions on our end. Just spending at Terronera this quarter is a little lower than expected. Are we going to -- should we expect a ramp up through Q2, or will it be likely later in the year?

No. Now that we have formal construction decision, I would expect that ramp up. Everything is kind of running now. And like I say, with the Board's approval, the quicker we can move the better, obviously. I mean I think if we can stay on time, we can stay on budget. Sometimes for things under control, we built contingencies on that time line, and I guess we'd like to spend a little bit more in Q1, meaning we moved along. But at the same time, without having that formal construction decision, we tried to be conservative with just looking at early works. As far as expenditures between now and the end of 2024 when we get into production, I would say it's going to be relatively homogenous payments over that kind of next certain quarters. And again, hopefully, things ramp up relatively quickly here in Q2.

Perfect. And then just switching over to Bolañitos. Are we going to -- should we expect an uptick in gold production later this year? I saw in Q1, it was slightly lagging. Just wondering what those are going to be?

Yeah, for sure. I mean, absolutely, Bolañitos has moved into the gold operation, our expectation was going to be more gold, less silver in this quarter, we flipped, silver grades came up and gold grades come down. Similar to Guanacevi, I mean we expect that to revert to our mine plan. So on a proportional basis, I would expect gold to come up and silver to slightly come down, partly that's going to be getting to certain areas in our mine plan. And like anything with the underground vein mining sometimes the areas that allow more ore tons to be able to come out, things that are in resources are actually not even in our mine plan that are there. But ultimately, if we follow mine plan expectations are gold comes up, sliver comes slightly down.

Perfect, cheers.

Thanks for the questions, Matt.

This concludes the question-and-answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks.

Well, thank you, operator. It's been an interesting quarter with regards to the changes in the Mexican mining laws where we're seeing silver and gold prices. I think today's reflection of questions maybe just comes down to what's happening in the marketplace. We see silver flipping all over the place. And it was up at start of the day, now it's down. And then I see some -- the results and our share price just were down. I think it's early in the year, and our goal is to get our costs in line to where our expectations and where our guidance is. And ultimately, we'll be working from that from an operation standpoint. But I think it's an exciting year for Endeavour. I think moving forward with the Terronera project are going to significantly change the profile of the company over the next two years, and it's something we're excited for and I look forward to next quarter's conference call to be able to give an update on where we're at, at Terronera and hopefully continued good performance at Guanacevi and Bolañitos. So thank you, everyone, for attending today and talk soon.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.