Earnings call transcript: Santacruz Silv Q2 2025 sees strong EPS beat, stock surges

Santa Cruz Mining, operating under the name Santacruz Silv, reported its second-quarter earnings for 2025, revealing a strong performance that exceeded earnings per share (EPS) expectations. The company’s actual EPS of $0.06 significantly outpaced the forecasted $0.02, marking a 200% surprise. Despite a slight revenue miss, with actual revenues at $73.3 million compared to the forecast of $79 million, the company’s stock saw a notable pre-market increase of 17.89%, reflecting positive investor sentiment. With a market capitalization of $10.82 billion, Santa Cruz Mining has demonstrated impressive momentum, achieving a year-to-date return of 27.49% according to InvestingPro data.

Key Takeaways

• Santacruz Silv reported a 200% EPS surprise, significantly exceeding expectations.
• Revenues fell short of forecasts, reaching $73.3 million against a $79 million prediction.
• The stock surged 17.89% pre-market, driven by strong EPS performance.
• The company experienced a 1300% year-over-year increase in net income.
• Operational challenges at the Bolivar mine are being addressed with strategic measures.

Company Performance

Santa Cruz Mining demonstrated robust performance in Q2 2025, with net income soaring by 1300% year-over-year. The company continues to focus on its operations in Bolivia and Mexico, maintaining a competitive edge as the largest underground mining company in Bolivia. Despite operational challenges at the Bolivar mine, efforts to resolve water inflow issues are underway, with full production expected to resume in Q4.

Financial Highlights

• Revenue: $73.3 million, below the $79 million forecast
• Earnings per share: $0.06, exceeding the $0.02 forecast
• EBITDA: $27 million
• Net Profit: $20 million
• Cash on hand: $65 million

Earnings vs. Forecast

Santacruz Silv’s Q2 2025 EPS of $0.06 surpassed the forecast of $0.02, resulting in a 200% earnings surprise. However, revenue came in at $73.3 million, falling short of the expected $79 million, marking a -7.22% surprise. The significant EPS beat overshadowed the revenue miss, contributing to the positive market reaction.

Market Reaction

Following the earnings announcement, Santacruz Silv’s stock price surged by 17.89% in pre-market trading, reflecting investor enthusiasm over the EPS beat. Currently trading at $76.94, the stock is near its 52-week high of $76.75, with average daily trading volume of 1.01 million shares. InvestingPro analysis indicates the stock is in overbought territory, with 13 additional ProTips available to subscribers. The strong EPS performance appears to have mitigated concerns over the revenue shortfall.

Outlook & Guidance

Santa Cruz Mining projects an EBITDA of $110 million and an operating cash flow of $80 million. The company plans to invest $45 million in capital expenditures over the next 18 months, focusing on organic growth initiatives, particularly the Suracaya project. Targeted all-in sustaining costs at the Simapan mine are set at $24-$25 per ounce. InvestingPro data reveals the company operates with a moderate debt level and maintains sufficient cash flows to cover interest payments, supporting its ambitious growth plans. For detailed analysis of Santa Cruz Mining’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

CFO Andreas Rendergal emphasized the company’s growth strategy, stating, "We are a growth company looking for investments that could be very accretive to our stockholders." CEO Arturo Restamo highlighted Bolivia’s geological potential, noting, "Bolivia’s geology has a lot of upside potential."

Risks and Challenges

• Operational issues at the Bolivar mine due to water inflow, though mitigated by new dewatering lines.
• Political transitions in Bolivia could impact operations, though the company remains flexible.
• Market fluctuations in zinc and silver prices could affect revenue.

Q&A

During the earnings call, analysts inquired about potential uplisting to the TSX, with the company indicating no immediate plans. Questions also focused on the company’s acquisition strategy in Latin America and its response to the Bolivian political transition, with executives expressing confidence in navigating these challenges effectively.

Full transcript - Santacruz Silv (SCZ) Q2 2025:

Olenka, Moderator/Host: Hi, everyone. Thanks for joining us. Today, we have an update from Santa Cruz who just put out strong q ’2 results. With me, I have Arturo Restamo, CEO and Andreas Rendergal, CFO. And from Adelaide Capital, we have Magda Gardner.

The format for today’s webinar will be q and a. We’re gonna start off with a question submitted in advance. But if you’d like to submit a question during the webinar, please do so in the question box below. And 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.

And with that out of the way, welcome Artur and Andreas, and congratulations on yet another strong quarter.

Arturo Restamo, CEO, Santa Cruz: Thanks, Elenka. Thanks for having us here. It is a pleasure, and it’s been the result of a great team work. So we’re glad to see the results as they are coming along. Thank you for your time.

Olenka, Moderator/Host: Before we get into the questions, can you first summarize how the second quarter went?

Arturo Restamo, CEO, Santa Cruz: Absolutely. Well, we report north a little bit north of $70,000,000 in revenues with an EBITDA consistent to q one, dollars 27,000,000 in that range, a net profit of $20,000,000. So the company is doing really good financially speaking and very solid. I mean, from our balance sheet, we have diminished our debt as well. We keep making these Glencore payments as as we are meant to be doing as we agree with Glencore.

So today on our treasury, we have north of $65,000,000. So, yeah, things are going along in the right direction.

Olenka, Moderator/Host: Now the first question is net income increased more than 1300% year over year. What were the key drivers and how sustainable are these margins going forward?

Andreas Rendergal, CFO, Santa Cruz: Thank you, Olenka. I believe this is an excellent question and the answer is highly relevant for all our investor and stakeholders, particularly as it relates to the key drivers and the sustainability of our results. When addressing this, it is important to remember that for any mining company, there are two sets of critical factors here, external factors and internal factors. Within the external factors, of course, is our international metal prices. And in our case, we need to look into silver and zinc.

Silver has been following a positive trend. It has been supported by a strong macroeconomic fundamental, given its unique dual role, first as an industrial metal and also as a safe haven asset. So we believe this will continue in the future. Zinc, same thing. We have to remember that zinc now is being considered a critical metal in The US, and that the inventory stock of zinc, it’s low right now.

That’s on the external factor. Another thing to consider is where we are working, the countries we are working, the macroeconomic factors of the countries where we’re working. Remember that most of our costs are in the local currencies. So the valuation and all those things are very relevant when we are discussing our profits. So that’s on the external factors.

On the internal factors, we need to consider production levels. We need to consider also the quality of the concentrates we sell, the cost optimizations that we do, the sustaining CapEx and also the growth CapEx. On that front, and that is what management do, we believe that production level will remain stable this year. We might increase a little bit in 2026. We are doing a lot of things on the cost optimization part, and also on the quality of our concentrates.

Remember that in Q3 and 2024, we did some things in Caballo Blanc operation, which allow us to get more revenue from that operation, more metal from that operation. So we are working towards that too. Also doing that in a safe manner, sustainable, etcetera. So to summarize and to answer the question directly, the sustainability of our results, given both external factors and internal factors, we are confident our performance will continue at the current levels that we are achieving. That means 110,000,000 EBITDA, operating cash flow of around $80,000,000 So that’s what the investors should be expecting.

Olenka, Moderator/Host: And revenues are up modestly, but profitability jumped sharply. Was this mainly due to higher silver prices or to cost saving measures?

Andreas Rendergal, CFO, Santa Cruz: No, it’s a combination. If we look if we see the numbers Q1 and Q2, and if we look into the gross profit or operating profit, numbers have not changed significantly. If we look at the net profit level, yes, there is a big difference. But that has happened basically because of a onetime deferred income tax expense, which is related to the application of IAS 21. This adjustment was introduced in Q1 to properly reflect the market exchange rate in Bolivia.

But we are keeping the gross profit, operating profit. We are on the levels of 27,000,025 million dollars So in Q1, there was just one time expense. So basically, there are some price adjustments, cost adjustments, but that’s not the main reason here.

Olenka, Moderator/Host: Perfect. Thank you. So Zymepan reported high cash costs and all in sustaining costs this quarter, but there wasn’t substantial CapEx like in Q1. Can you clarify the drivers behind this and whether costs are expected to normalize?

Arturo Restamo, CEO, Santa Cruz: Absolutely, Olenka. Well, actually we did have a significant CapEx during Q1. We received pre underground equipments, which we classify them immediately as a as a purchase for the for that quarter. So that increased our CapEx during q one. We definitely see normalizing our all in sustain and and our CapEx for the mine, and we should start seeing CapEx coming down in the next coming quarters.

Let’s remember that we have been preparing Level 960, and this is a big area, big mineralized area where most of the future of the mine is aiming. So there’s a lot of investment as as we speak that has been done. And, but we expect that the most important CapEx investment has already been done in Q1 for sure. We invest more than $5,000,000 just in that quarter. So generally speaking, we should see all in sustaining cash costs coming down at Simapan.

Olenka, Moderator/Host: And what’s the outlook for maintaining the lower all in sustaining levels on a consolidated basis? And could cost trend back up in the 2025?

Andreas Rendergal, CFO, Santa Cruz: Our projection is that the all in sustaining cost should remain in the range of the $20 to $22 per ounce for the mining operations. For San Lucas, as you know, San Lucas is a margin based business, so it will depend on the prices of the metals. So but that’s not the important part. The cost is not the important part for San Lucas, the margin. So yeah, we expect to have this $20 to $22 of all in sustaining cost.

We do not anticipate any material changes to the cost in the second half of the year, other than a minor possible increase in Bolivia related to imported materials because of this devaluation that we are currently experience. But that shouldn’t be any the materiality of that shouldn’t be much.

Olenka, Moderator/Host: Thank you. Next question. You made an additional 7.5 debt repayment to Glencore in q two. So how much remains outstanding? And what’s your expected repayment timeline?

Arturo Restamo, CEO, Santa Cruz: Right. Well, we have been working this early repayment schedule on time, Malenka. Our next payment is now during the September, and our last payment is on the October. Maybe very likely, we’ll do both at the same time during this September, and we’ll get rid of this or get this behind us very shortly. So, we’re on time, and we we will deliver on time.

Olenka, Moderator/Host: And after you finish the Glencore payments, how do you plan to allocate the capital given your $58,000,000 liquidity in q two?

Arturo Restamo, CEO, Santa Cruz: That’s a good question. We will be and remain disciplined with our treasury management. We’ll be disciplined with our operations at our mines. Our approach will be always to look for more efficiencies technically on a daily basis. So for the time being this year, we will remain just accumulating and getting our balance sheet stronger and and ready to get any opportunities in the future.

But that will be the models of Verandi in terms of our treasury.

Olenka, Moderator/Host: And how much CapEx will the company spend in the next eighteen months?

Andreas Rendergal, CFO, Santa Cruz: We should be looking at around $45,000,000 of sustaining CapEx. That should be our normal. It’s basically 30 to 35 every year, but we are expecting in the next eighteen months around $45,000,000.

Olenka, Moderator/Host: What marketable securities are you holding?

Andreas Rendergal, CFO, Santa Cruz: We have made some investments in US treasury bills and bonds with an average maturity of one year. We don’t like our money to be sleepy. Perfect,

Olenka, Moderator/Host: thanks. So given that Santa Cruz’s stock is already up more than 500% year to date, what kind of further upside should investors consider?

Arturo Restamo, CEO, Santa Cruz: That’s a good question, Olenka, and maybe not for us to respond properly. Investors have a better feeling than what we have. We will do our part. We’ll do our work. We’ll keep delivering operationally speaking and financially speaking on the health of the company.

But if we refer to certain, let’s say, analysts out there or or or what we hear out there, I mean, today, we have a 4.2 times cash flow valuation on the company where our peers are north of 10 times. I think there’s still room to go and more so as our investment community will see that we keep getting the company stronger and stronger. And also with some initiatives to keep growing organically that maybe next early next year will be taking place.

Olenka, Moderator/Host: Got it.

Andreas Rendergal, CFO, Santa Cruz: I think think Ovenka management job is to keep the fundamentals strong. Investors do their analysis on a comparative basis with the other countries, with other companies, sorry. What we need to do as management is to keep our fundamentals strong, and our fundamentals We believe that what is coming is still good for the company. So we believe there’s still room to go.

Olenka, Moderator/Host: Thank you. Would Santa Cruz consider an uplisting to the TSX and or New York Stock Exchange? And if so, what’s the timeline?

Arturo Restamo, CEO, Santa Cruz: Oh, absolutely. Absolutely. And we are actually from an administrative and accounting point of view, we’re getting ready for that. And and we’ll have news shortly, hopefully, soon. And definitely, that’s part of our plan.

Olenka, Moderator/Host: Okay. Great. And so last question for me before I pass it to Magda for the mining questions. Is there any share buyback programs planned in the near future?

Arturo Restamo, CEO, Santa Cruz: That’s a good question, Olenka. I mean, with the treasury as strong as we have today, that’ll be maybe one of the initial thoughts that we all have. Again, we’re rethinking the idea in the sense that what is the best capital allocation for our investors. You know? And maybe growing another of our assets organically might be a better way to go.

Maybe as we still are not in the full in the big board, maybe it’s not the right time to to, I mean, to to put into action one of these buyback programs. Maybe let’s wait until we’re in the full in the big board in the in the TSX. That will give us more room to run a broader programme. But I will say that for the time being, maybe the best use of money will be to start aligning one of our assets into production, into a production decision soon.

Magda Gardner, Analyst, Adelaide Capital: And just touching on production. Production was down 15% year over year largely due to the water inflow at Bolivar. Can you provide more detail on the remediation and the timeline

Arturo Restamo, CEO, Santa Cruz: Absolutely, Magda. Yes. We did have what they call a bucket of water suddenly. And and unfortunately, it was at two of our highest silver grade veins, the Pomabamba and Tanane Reyes. Immediately, we took action.

We implement a third line of dewatering and a pumping system. As we speak, the pumping system is going on on budget. So by q four, this mine should be up on track back on track, I’m sorry, and and and to its normal and regular production levels. We are getting the mine ready so that nothing like this might happen in the future. So we have already prepared an an additional dewatering line.

So, yeah, we the mine to respond shortly, your your answer by q four now in q four, sorry. Once once we get q four into q four, the mine will be at full production levels again.

Magda Gardner, Analyst, Adelaide Capital: And touching on San Lucas. So San Lucas played a big role in offsetting the Bolivar shortfall. Can you discuss the sustainability of that ore sourcing strategy and its long term role in your portfolio?

Arturo Restamo, CEO, Santa Cruz: Absolutely. Well, San Lucas is very strategic for us. We have more than 900 individual small miners selling ore to our company. We have three different patios strategically allocated. So as we might recall, Bolivia is a mining country by all means.

No? So we foresee San Lucas to be part of our business plan plan for many years to come. Even though our minds are already limiting the milling capacity of our own meals, we might even look in the future for an additional meal to keep San Lucas performing and growing steadily, Cause we do believe there’s plenty of opportunity to keep San Lucas growing in the future.

Magda Gardner, Analyst, Adelaide Capital: And touching on Caballo Blanco, it delivered major cost improvements. Are those efficiency gains permanent? And could this mine serve as

Andreas Rendergal, CFO, Santa Cruz: a model for their operations? Yes. The cost improvements at Caballo Blanco are structural and largely permanent. They result from a combination of better mine planning with the operations. We have done an optimization of ore blending.

So these are not one off savings, but rather an outcome of disciplined operational management, NAGDA. And in fact, Caballo Blanco is already serving as a reference for the other operations. And we believe that Mexico could be one of the operations that get most advantage of because of the recoveries and processes that we have there. So yeah, Caballo Blanco is now an example in our company.

Magda Gardner, Analyst, Adelaide Capital: And across the portfolio, do you see opportunities to expand throughput or improve grades to offset potential volatility at the individual mines?

Arturo Restamo, CEO, Santa Cruz: Well, actually, that’s a good question, Magda. On a daily basis, we’re trying to achieve efficiencies, right? We do see, for example, Simapan getting once we get to Level nine sixty at full operation, full budget, which is around 50,000 tons a month. Just to give you a reference, Simapan, we mill around 75,000 tons per month. And today, level nine sixty, it’s only adding around 8,000 tons a month.

No? So once it reached full capacity, the budget for for Level 960 is 45, 50,000 tons. So once we get there, we’ll see our head grades increase increasing slightly north of 80 grams of silver, 85 grams of silver, and zinc increasing as well north to the 2%. In copper, you’ll see copper, a slight increase in copper in the range of 0.40%. And those even though they are very small changes, let’s remember that Simapan is a high volume operation.

So those changes will make a significant improvement to the financial statements of that mine.

Andreas Rendergal, CFO, Santa Cruz: Magda, it’s important to understand that to expand production and improve grades and to offset the volatility of the individual mines, that’s what we do every day. That’s our purpose as management. We are working towards doing that, increase production, getting less dilution, increasing recoveries. And that’s why Arturo was mentioning this, San Lucas. San Lucas has been proven a very strategic company for us.

I know that what happened in Bolivar is not something that we want to happen, But if you think about it, it has shown our investors what San Lucas can do, which is to offset when something of these things happen. So yeah, that’s our main purpose as management.

Magda Gardner, Analyst, Adelaide Capital: Thank you. And just taking a bigger picture at the production. You know, looking at your production goals for this year, given that first half silver equivalent production is down about 10% and Bolivar is not expected to fully recover from Q2 until the final quarter, do you expect that you’ll be able to meet your production goals for this year?

Arturo Restamo, CEO, Santa Cruz: Well, always q four is the strongest quarter for for the company, especially in Bolivia, Magda. We we definitely have been, let’s say, didn’t met Q2’s production properly or as we would like to even because of the Bolivar situation. But we believe that we’ll be close to our budget from a production point of view. But from our financial point of view, we’ll be definitely in budget and we’ll be meeting the cash flows that we are planning and budgeted for this year. So for us, that is an important objective.

Andreas Rendergal, CFO, Santa Cruz: And we have to remember that although San Luca has been proven to be very successfully in trying to offset what has happened in Bolivar, The characteristic of the ore are different. Bolivar, the Bolivar mine is more silver oriented. And San Lucas, although it has silver, it is more zinc oriented. So even though it offsets some of the metal, it’s kind of difficult. But we aiming to do that, as Arturo is mentioning.

We are working towards that, you know.

Magda Gardner, Analyst, Adelaide Capital: And with the capital spend currently going into the Zemapa mine at level nine sixty, roughly what grade of silver would expecting to mine compared to the current 79 grams a tonne?

Arturo Restamo, CEO, Santa Cruz: Well, we expect a slight improvement there, Magda, in the range of eighty, eighty five grams, which should be in that neighborhood. But even though it’s a slight improvement, volume wise, I mean, actually has a very positive impact in your financials.

Andreas Rendergal, CFO, Santa Cruz: Got it. And there is also important relationship between health grade and recovery. So those small increases are also very important.

Arturo Restamo, CEO, Santa Cruz: Yes, as we speak, we’re working very closely in the metallurgic area here at Simapan. We have already bought and installed some flat cells that will help us recover better the silver. So those were bought in q one as well. And as we speak, are in the final stage of being installed and properly getting to the commercial production of the milling facility. So we’re doing these kind of initiatives on a daily basis.

Magda Gardner, Analyst, Adelaide Capital: And then touching on growth, you mentioned you’re planning organic growth going forward. Would this involve the Suracaya project or any other Bolivian mines or San Lucas? And then I see an audience question here, yeah, about, whether you have specific plans to start developing Surakaya?

Arturo Restamo, CEO, Santa Cruz: Good question, Magda. Definitely Surakaya is is a very important mine, very silver oriented. So we’re going to start making more, let’s say, important works into this mine actually in a few weeks’ time. We have already prepared the team. We have a budget for that for this year.

So our idea is to start aligning that mine to get fully permit next year. And and very soon we’ll have more news in that regards, but definitely in our plans is to get that mine into production. And that’s, as I was pointing out, a very silver oriented mine with a historical PEA that was done in that property. Once it reached full production, is around 850 tons per day, that mine should contribute around 4,000,000 ounces of pure silver. So that’s why it is an important asset for us and one that we’re going to start making very significant works in the next coming weeks.

Magda Gardner, Analyst, Adelaide Capital: And are you still focusing on maximizing silver production and recoveries at Bolivar, Porco and Caballo Blanco? And if so, what work has been done today and what are the results that you’re seeing?

Andreas Rendergal, CFO, Santa Cruz: Yes, of course. Silver remains our core focus for the group, for the entire group in terms of productions and in terms of recoveries. That’s why we are aiming, as Arturo was mentioning, not only in Mexico, but in our other operations, trying to recover more of these silver content, especially in our lead concentrates. So yes, we are prioritizing that. We started this process in Bolivar.

However, because of this floating, we have to stop those initiatives. We are going to keep doing it after Q4. But yes, the silver remains our core focus. Our mining plan is basically related to the silver high grade areas. So yeah.

Arturo Restamo, CEO, Santa Cruz: And as a reference, Magda, I was just referring at Simapan that we have just installed a flat cell into the flotation circuit. And that flat cell, those cells are specially aligned to recover more silver into the lead. So definitely, that’s something that we are working on a daily basis across all of our assets.

Magda Gardner, Analyst, Adelaide Capital: And looking at the outlook, how should we think about silver equivalent production trends going forward into H2 and 2016 specifically? And I see kind of a question here from the audience. Does or how do you plan to increase production kind of on this year over year type basis?

Arturo Restamo, CEO, Santa Cruz: There’s a relationship as we know from zinc and silver, the formulas and the metal prices that we use. So some sometimes those those not play in favor. When you use in favor, I mean, to the to the overall silver equivalent production. Zinc remains at these levels and silver goes higher, your silver equivalent ounces will go lower. Our main focus is in what we compete on daily basis on our own is production on a per mine basis or per metal basis.

Our objective is to increase our production both in zinc and silver, in copper in the case for Mexico. So we, that’s our main focus. There are elements that we cannot control such as metal prices, which come into the formula of silver equivalency. But also important to mention, this is one of the reasons as well why Soracallia is coming into our portfolio of producing assets, hopefully in the next coming well, the midterm, let me me put it that way, we’ll have more more news and more detail later. But Pozora Calle will be a great contributor for your silver equivalent production.

Andreas Rendergal, CFO, Santa Cruz: Yeah, I think, Mark, that’s important. This point is very important because we have received many questions about this silver equivalency. As Arturo was mentioning, we should focus on the production. When we’re talking about metal, yeah, we’re going to increase production, not because of organic growth that Arturo was mentioning, also including, say, sort of cayenne into this mix, but also on the productivity of our mines. We’re trying to get as much more metal from the ore as we can.

But this is very relevant. When we are talking about silver equivalent ounces, just to give you an example, for example, if right now prices of silver go down, our silver equivalents can go up because of the zinc component there. So it’s better to see our company in terms of the metals we produce. Of course, our silver equivalent is very high as well, And we have very good numbers, but sometimes it’s better to refer it as production itself, not the silver equivalent part.

Magda Gardner, Analyst, Adelaide Capital: And touching on that, what are the underlying supply and demand trends in the zinc market?

Arturo Restamo, CEO, Santa Cruz: That’s a good question, Magda. Well, we see zinc strong and mainly one of the reasons as Andres points out at the beginning of this meeting, there’s the inventory of zinc nowadays is literally in line. It has not grown. It actually, I think it’s going to remain in those levels for the time being. That’s why we see the TCFs coming down this year and hopefully sustaining for the coming years.

So we see sync steady and maybe slightly increasing in the next coming years.

Andreas Rendergal, CFO, Santa Cruz: And the demand is coming, you know, it’s always construction. And I think something relevant, Arturo, here is to mention that the zinc is now a critical metal for the for The US. So remember that zinc is very it’s an industrial metal. So the demands and supply are based on that. The inventory stocks are low right now.

That’s why the treatment charges are also low. So these refineries are trying to get more zinc. So if we’re talking about probability, we believe that it’s more probable for the price to go up than down. And if that happens, that will be very good for our company as well, because we have a substantial part of our portfolio of metals zinc.

Magda Gardner, Analyst, Adelaide Capital: And last question for me before I hand it back to Alenka. It’s about the elections. I see some audience questions as well, but following the end of two decades of leftist governance in Bolivia, do you plan to adjust your mining operations or growth strategies to new policies? And do you have any concerns, challenges? Do you see that it could potentially have positive impacts?

Can you speak to that?

Arturo Restamo, CEO, Santa Cruz: That’s a very interesting question, Magda. Well, we came to Bolivia years ago. Like Bolivia’s culture. Bolivia’s geology by all means. It’s a country with a lot of upside potential, geologically speaking.

From our opinion, from our end, we’re very focused in what we do. Regardless of which party is ruling or not. But definitely, when you see a right wing party coming into position, it might bring some opportunities. But for us, we can work with either parties in place. Again, I mean, we came when the country when the left wing was ruling in the country.

We’re very comfortable. We it’s a country that we feel more and more comfortable as as as the years go by. As I said, every now and then, the culture, culturally speaking, is very similar to Mexico. It’s hardworking people, lovely geologic areas, upside potential that it’s untapped by all means. So we’re very happy to be there and to be one of the largest mining companies in the country.

So that gives us as well a significant footprint in the country to review potential projects. And, I think we’re always open to new opportunities regardless whose party is ruling into the country.

Andreas Rendergal, CFO, Santa Cruz: And I think Arturo, you have said something very, very important. We are one of the biggest companies, mining companies here in Bolivia. We’re actually the biggest underground mining company in Bolivia and the second largest in the country. Bolivia needs exporting right now, so exports are going to be very relevant. Either party that comes into power needs to improve the mining sector.

That’s a key point for any of these parties because they need investment, foreign investment. So yes, of course, if market friendly policies are in place, they are more than welcome. And we are very well positioned here in Bolivia as a company. We have many years of experience. We are in the places where mining is getting more traction.

Yeah, so I think Santa Cruz is very well positioned to benefit from any market friendly policies here in the country.

Olenka, Moderator/Host: Right, perfect. I have a few more questions. Can you provide outlook for what’s in store for the second half of the year and for 2026?

Arturo Restamo, CEO, Santa Cruz: Yes, actually, well, the rest of the year, the second half, Olenka, we’ll keep our eyes closed to our disciplined approach across all the areas, operations, financially, our treasury and corporate wise. I mean, we’ll keep advancing in these projects, getting the company fully listed on the big board and some other initiatives. Always, I mean, organically speaking, we’ll start making, as I was pointing out, some advance, some progress into our Soracalla property. And and we’ll keep an eye open into opportunities that are and bring value to our shareholders.

Olenka, Moderator/Host: Thank you. And are you keen on acquisitions? And would you consider changes to your portfolio, especially given your strong presence in Bolivia? And if so, are you also staying within Bolivia and Mexico only?

Arturo Restamo, CEO, Santa Cruz: That’s a very interesting question, Olenka. I think that one of the most important assets that we have as a company, it’s our people. And by that, I mean, today we’re ready and prepared to evaluate any asset in any country. Our focus, of course, is The Americas, and we’re open to review and to see opportunities. Actually, we had been presented with different opportunities.

So we’re ready to take advantage of the strengths of the company. And as I was pointing out, our people, we have a multidisciplinary team, both in the operations, as well as in the administration and and and management. So now with a strong treasury building literally on a weekly basis, we might be able to to do something outside definitely of Bolivia and and in Mexico outside of those two countries. There are many other countries which are very interesting for us here in in Latin America. So, yeah, we’re definitely open to ideas in the future, but always, always with the same premise ideas and that we can execute and that are accretive to our investors for sure.

Andreas Rendergal, CFO, Santa Cruz: We need to remember as well, Olenka, that we have done a successful acquisition, a very big acquisition, a very successful one. We not only increase it in terms of growing Santa Cruz, but also we increase the production of these operations. And as Arturo was mentioning, and it’s very relevant, we have the team. And when you have the team, remember that I always like to say that we are not only a multi jurisdictional, multi asset, multi method, but also a multi method company, because we have different methods of production. That brings us a lot of opportunity.

I think Santa Cruz brings a lot of value into the table because it has shown the investor community that we can operate any type of mine, and we are ready if there’s any opportunities in other countries. Now, we believe that Latin America is a place that we can move very easy. We know the culture and we feel comfortable there.

Olenka, Moderator/Host: Got it. Thank you. And looking at the audience questions now, where does management see Zimmapan all in sustaining costs range should be in the medium to long term?

Arturo Restamo, CEO, Santa Cruz: Well, our objective Olenka is to get Zimmapan below $24 $25 in that range. We still have some investments that we would like to do in the future. There’s an inclined shaft that we are planning to do in the future that will go directly to Level 960. That will eliminate a lot of trucking inside the mine, which will save us a lot of money. Once we have that in place, definitely, this mine will be a very efficient mine to run.

But nonetheless, in the meantime, in the short term, ranges of $24, 25 of the highest each worth in Mapan will be.

Andreas Rendergal, CFO, Santa Cruz: There are two other main factors that we need to consider there, Olenka. Remember that in all in sustaining cost, have the CapEx, which Arturo was mentioning is going to go down. We did a lot of investments there that are already there, but also the appreciation of the Mexican peso. Remember that the Mexican peso has appreciated a lot, and most of our costs are in Mexican peso. So that plays another, it is an external factor, but we need to consider that.

Remember that a year ago, or maybe a little bit more, the peso was on the 21, 22, now it’s around 18, Arturo, 17, something. So the appreciation has affected us a little bit. That is something that we not expect that the Mexican peso should appreciate much more. So Arturo is right, we should expect to see $25 $24 all in sustaining cost for the CMA plan operation.

Arturo Restamo, CEO, Santa Cruz: Yeah. As Andres points out, if the peso devaluates a little bit or slides a little bit here, definitely will be below those levels.

Olenka, Moderator/Host: And I think this is the last question. Do you expect to distribute dividends in the near future?

Arturo Restamo, CEO, Santa Cruz: That’s an interesting question, Olenka. I think for the time being, no. I think for the time being, our idea is it’s a growing company. Not this year, we’re not going to declare anything in that line this year. But always open, as I was pointing out, every time or every decision that it’s accretive to our investors, it’s always on the table.

So that’s something to review in the future. Our main objective right now is, as we say, walking the talk. Our next step here is to pay out Glencore. It’ll be followed by our organic growth initiatives. And in always having in mind that we will keep a very strong balance sheet and technically debt free company.

But interesting question, food for thought, if you allow me to put it that way, but not for this year. We’ll review that next year.

Andreas Rendergal, CFO, Santa Cruz: But remember, Oleg, again, that when you are discussing these things, we need to put into consideration what are the best uses of cash. We believe that we are a growth company. And since we are a growth company, we’re looking for investment that could be very accretive to our stockholders and even our stakeholders as a whole. And even I know that sometimes could give that a good perception of the company. But believe me, we are always trying to see what’s best for the company in terms of fundamentals, also to our investors.

But I think if we take care of the company, if we put the money where it gets more advantages, that’s going to solve itself.

Arturo Restamo, CEO, Santa Cruz: And and and also just to add on that a little bit, Olenka, our idea is that if we start paying a dividend, it should be sustained for the years to come, no, At least. So I think we’re not prepared yet because we have still better ideas for the money to create value. But eventually, that’s something that we definitely are planning to do. Remember, as friends and family, we own a significant amount of of chairs, we would love to see that in the future. But let’s prepare the company towards a sustainable payment of a dividend payment.

And once we’re there, definitely that’ll be something to do.

Olenka, Moderator/Host: Got it. Well, that looks to be all the questions for today. Thank you so much, Rutur and Andreas. Is there anything else you guys like to cover today?

Arturo Restamo, CEO, Santa Cruz: Not from our end, just, I mean, we appreciate both of trust that our investment community is giving us, recognizing the value of the company and the results of such a great team of people with more than 3,000 employees today. We thank every one of us to our investors and we’ll keep focused and working on delivering value to our shareholders.

Olenka, Moderator/Host: Well, you so much to everyone who joined today and I hope you have a great afternoon.

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