Can you highlight the significant developments at Argonaut Gold in 2023?

The primary highlight for 2023 has been the completion of construction at Magino and the subsequent ramp-up. The success of the drill program in 2022 positively impacted reserves and resources within the main pit at Magino. Building on this success, we initiated an infill drill program at Magino and concurrently explored the expansion of the mill, potentially doubling its size. This expansion could increase throughput at Magino to 200,000-250,000 oz/y.

The second noteworthy development is Florida Canyon. Initially facing discussions about potential closure due to financial challenges, the new management team undertook a strategic review, resulting in its best quarter in nearly two decades. A profitable long-range plan, including both oxides and a significant sulfide resource, is now in place. We are awaiting assay results from a proof-of-concept drill program, exploring the possibility of developing sulfides alongside oxides to further enhance Florida Canyon's status as a gold producer. How has Argonaut Gold performed in 2023, and what challenges have you faced ramping up production at Magino?

Our ongoing operations in Mexico and at Florida Canyon have surpassed budget expectations and exceeded the upper range of our guidance, resulting in the generation of free cash flow, showcasing a strong operational performance this year. As for Magino, we successfully adhered to the revised estimate for construction capital cost, and the overall operating and sustaining costs align closely with our initial projections at the beginning of the year. However, a notable challenge we encountered was recruiting personnel, particularly in Ontario, significantly impacting the ramp-up process both in the mine and the mill. While we believe we have largely overcome this hurdle, the hiring process proved to be more challenging than anticipated. Have inflation and rising costs affected the Magino ramp-up?

While it likely impacted Magino during its construction phase, the situation has evolved. Since May 2022, the company disclosed an updated cost of C$920 million. After a 45-day delay and incorporating some modifications, the revised figures came in at C$980 million. Despite these adjustments, it is crucial to note that inflation has not emerged as a significant concern from that point onward. Although there may have been some inflation earlier in the process, a broad analysis of our operations reveals recent increases in diesel prices, cyanide, consumables, and power costs. This trend extends to Mexico, where the stronger peso has also influenced costs. However, inflation no longer poses the same level of challenge in the mining industry as it did two years ago. With the recent proposed changes to the Mexican mining code, do you foresee any impact on your operations in Mexico?

The proposed changes to the Mexican mining code are unfortunate. Mexico has a rich mining culture, and we hope that any modifications to the code will support the industry's significant contribution to jobs and government revenues. Presently, the proposed changes have not impacted our two current operating mines, and the state government continues to be supportive. We believe there are still avenues to obtain permits and approvals from the federal government, especially if jobs are at stake. How do you plan to allocate the C$80 million you raised in December 2023?

Our focus will be to efficiently deploy this capital into projects with the highest returns. Our Mexico operations have been a pivotal element of our company for over a decade. At present, these assets necessitate further investment. However, upon comparing the return on capital between Mexico and the potential opportunities at Magino, including the mill expansion, and Florida Canyon with the sulfides redevelopment, Mexico appears to offer a comparatively lower return. Given our recent completion of a significant project, our balance sheet is not currently positioned to advance in that direction.

Consequently, we are exploring avenues to optimize value for our shareholders while preserving jobs for our Mexican team. Various options for our Mexican asset base are being considered. Looking beyond this, the capital raise is instrumental in enhancing the company's liquidity, aiding us in the forthcoming refinancing of our existing debt facility. The objective is to align the new facility with our organic growth prospects, encompassing both Magino and Florida Canyon. This capital will facilitate the execution of our vision to establish a low-cost, mid-tier North American gold producer.