Peter Marrone - CEO Darcy Marud - EVP, Enterprise Strategy Daniel Racine - EVP, Northern Operations Gerardo Fernandez - SVP, Southern Operations Butch Wulftange - SVP, Exploration Chuck Main - EVP, Finance and CFO

Phil Russo - Raymond James Patrick Chidley - HSBC David Haughton - CIBC Don McLean - Paradigm Capital Taniya Jakusconek - Scotia Bank

All participants please stand by your conference is ready to begin. Thank you all for joining us this morning for Yamana Gold's conference call. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information, and actual results could differ from the conclusions and projections in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new projects. For a complete discussion of the risks, uncertainties and factors which may lead to actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Yamana's press release issued yesterday announcing second quarter 2015 results, as well as our Management's Discussion and Analysis for the same period and other regulatory filings in Canada and the United States. I would now like to remind everybody that this conference call is being recorded and will be available for replay today at 12pm Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana’s website at yamana.com. I will now turn the call over the Mr. Peter Marrone, Chairman and CEO, please go ahead.

Ladies and gentlemen thank you. As always I'm here with our management team our senior most management team. Chuck is here, Chief Financial Officer, Darcy who is our Executive Vice President of Enterprise Strategy; Daniel, Senior Vice President of Northern Operations; Gerardo, SVP of Southern Operations and of course William Wulftange who is our SVP managing Exploration. Ladies and gentlemen I thought I would begin this morning by a look at our value chain. We undertook a reflective and deliberate change in our approach to our business in light of some of the challenges that we faced at several development stage projects last year. We're now one year past that point and our business model is much improved. Now we’ve gotten feedback that we should better describe our strategy and the value proposition. So I thought I would begin this morning with that value chain firm strategy through the planning and execution. So this is how we see the value chain. To get the value creation we must take you through our inner plans. That implies that we should be developing high quality plans to get to which we must have a solid and clearly defined strategy, that is also well articulated and understood by all of our stakeholders. So in part we want to better articulate that strategy, that plan and that ability to execute so that we can demonstrate our confidence in our business plan and the strong reasons for that confidence. There're four parts to our strategy. We first focus on our core assets. We define core assets as those that provide the best opportunities for quality production and low costs, for the generation of sustainable cash flow with opportunities to increase that cash flow. They also provide our best opportunities for exploration successes, operational efficiencies and improvements. There are seven producing mines in our core assets and they include our cornerstone mines of Chapada, Canadian Malartic and El Penon. The corollary to the identification of core assets is that we should and we are treating and we will continue to treat our assets as a portfolio, and taking that into account we will take advantage of opportunities to more efficiently manage noncore assets and over time monetize all or some portion. We have assets with considerable value that do not fit our definition of core assets, and in part this maybe because of size and scale disparities of one mine to another, higher costs through lesser returns or sometimes because it's just better to find creative ways to realize alternative means for value surfacing. They are quality assets, although they do not fit into our strategy of treating assets as a portfolio and concentrating on the core as I just described that. Our strategy includes improving our balance sheet through capital and operating cost reductions where appropriate and making overhead more efficient. That component of our strategy includes reducing our debt by improving our performance, mostly through increased cash flow and EBITDA. It includes taking other initiatives, some of which we have been taking, have already been taken and some such as monetizing the noncore portions of our portfolio are pending. Finally, we are committed to growth opportunities but that is in a methodical way after full evaluation of what are our best prospects, respecting our objectives of focusing on core assets and ensuring a solid balance sheet. So to implement that strategy we developed a plan. Quality plans need time to develop although we have done so. The initial component of our plan was to improve the quality of operational management, eliminate redundancies and streamline our organizational and management structure. That plan included a valuating our asset quality to determine our core assets and see what opportunities for improvement could be developed. We set out to improve our models and life of mine plans along with production and cost targeting, relying on that higher quality management, particularly on the technical side and streamlining the management structure. Now as I said, this takes time and now one year in we are at that point. And finally our plan included a review of where we could drive operational efficiencies after all of that and Chuck in his portion of this presentation will provide some additional comments and some of the current initiatives in that regard. Throughout we have been executing against that plan and we knew we needed time to execute efficiently. So one year in I would like to provide a brief score card of how we have executed to date, and what we will do going forward. On our core assets, those assets are Chapada, El Penon, Canadian Malartic, Gualcamayo Mercedes, Minera Florida and Jacobina. We will add to that several more once it is in production. In that portfolio of core assets, we have Chapada's, Canadian Malartic, and El Penon as cornerstones. These are the highest quality assets in any portfolio and in any Company. These mines and projects represent quality production at comparatively low cost with significant optimization and exploration opportunities. In that year we have added to our management more depth, breadth and experience. We promoted Gerardo to one of our senior most operations roles as Head of South American Operations. We promoted Darcy to the pivotal role to better integrate the mining disciplines of exploration operations and development; and we promoted Bill Wulftange to replace Darcy as Head of Exploration. We have demonstrated our bench strength, and in that year we also hired Daniel Racine into one of our other senior most operations roles as Head of North American Operations. We've brought on Barry Murphy to manage our development plans and most recently Las Ballenger to manage sustainability, health and safety. They have impressive experience and add to our bench strength. We have streamlined our management structure and in the process reduced our overhead costs with further improvements to come. We have improved our explorations efforts life of mine plans and production forecasting. We created the Brio Gold division, took on a dedicated management for that division and improved the quality of those assets and prepare for our ongoing going public event. We have demonstrated that the producing mines in Brio perform and we have advanced Brio's exploration and development prospects. Brio Gold was formed as one of our divisions to manage several mines and a project that are not core assets, although they are still high quality. Our first course was to manage the assets more efficiently. We have done that without disrupting management from its primary objective of focusing on the Company's core assets. We have done that and then improved their performance and we are demonstrating that. Now we are at the point of our valuating the various going public alternatives. Our strategy is to realize initial cash value while maintaining an economic interest for future value. We are on track for that final stage as we evaluate the various going public alternatives still in Q3. That has not changed. We have reduced our debt, we have reduced our overhead costs, we have continued to demonstrate robust cash flow and thereby improved our balance sheet and continue to do so. So for Q2 and H1 if this year we have increased production over last year to approximately 299,000 ounces of gold in the quarter and 604,000 ounces of gold for the half year. In my view, the later number clearly carries more weight. Since this is a long term business, this is long gain and the best number to date. The best number we will provide you is the number at the end of year. We have meaningfully improved [Indiscernible] and Jacobina. We have significantly improved Chapada. We have maintained an expect the quality production at Canadian Malartic, El Penon, Gualcamayo]and Minera Florida. We have faced delays at our plans for Jacobina and Mercedes in Q2 which was temporary and all of which is now behind us, having implemented plans to drive higher production going forward. This is not reflected in our Q2 production, although we have implemented the fixed dilution at Mercedes and now enter the high grades zones at Jacobina. Jacobina and Chapada were always expected to improve in the second half of the year and in Q4 in particular. For Jacobina our challenge was always the speed at which we can develop into high grade areas. And while delayed, we are in those areas now and as we reported last night our exploration shows extensions and additional structures of these high grade areas supporting larger ore bodies, more high grade ounces, higher grade than our reserve grade. We compare Q2 grade of 1.89 grams per ton with July grade of 2.6 grams per ton. For Chapada, our production performance comes from mining efficiency at the new gold [Indiscernible] pit, process improvements with the in-pit crusher that began operations only in Q2 and higher grades. We now have even better prospects at Sucupira discovered only last year, which is deeper and much higher way is advanced. For Gualcamayo, production is at a steady state although with improving grades as the proportion of ore from underground increases. For Canadian Malartic, the second half of the year and improvements in production, it will be a mix of grade, recoveries and processing. We are today seven months into the year and one month in to Q3. Everything forecasted is as occurring with higher production in July over the average of all of Q2, all of Q1 and the first half of the year. We are on target for production and tracking full year gold production guidance, with an expected production increase of approximately 15% in the second half of the year over the first half of the year with the biggest production improvements expected from Jacobina and Mercedes along with Gualcamayo and Canadian Malartic and Chapada for the reasons given. And a large increase in Q4 which is consistent for us for many-many years. As an example in 2014, Q4 gold production was 25% higher than it was in Q1 of last year in terms of the legacy mines not including Canadian Malartic that was acquired only in mid-year. We have demonstrated low cost from our core assets of $763 per gold ounce in Q2 as compared to $896 per gold ounce for our total portfolio, which positions us for our cost guidance of all in of $830 per gold ounce. Now we noted that several comments -- several of those who carry reports on the company commented this morning, if our cost guidance is increased. No, our cost guidance assumed a corporate credit. Corporate price is below that assumption, although copper production is higher, and if we maintain that steady state of increased copper production from Chapada, that will balance out the copper price and we will be within our guidance. We have shown significant decrease in overhead costs of approximately $20 million on an annualized basis with further decreases expected. We have advanced Cerro Moro in a deliberate steady state prudent manner. We will have completed almost all of the detailed engineering before formal construction begins late this year, with predevelopment work, showing very high grade continuity and high margins. We have a modest plan for significant low cost production. We have significant exploration successes and continue to advance our development stage projects in Canada and around Gualcamayo mine. We plan to deliver preliminary economic assessments for upper beaver in Canada and the Deep Carbonates project at Gualcamayo in Q4. We have demonstrated our ability to generate cash flow and improve our cash flow to revenue despite a lower metal price environment. We generated $0.16 of cash flow per share in Q2 being estimates with lower metal prices than last year. We have reduced our debt from end of last year and will continue to do so. We have reduced our debt by approximately $130 million from the end of year and we expect our net debt to remain flat or improve by end of this year, remaining flat at lower metal prices and decreasing at current or higher metal prices. And we expect our net debt to further decrease as we execute on our plans to monetize non-core assets still planned in Q3. We have modest debt obligations with an amount of stating on our revolving credit facility of $260 million due in five years. That is mid-2020. But we will reduce it to zero, much sooner than that. And we have only $180 million of scheduled repayments in the next two years. We have and expect to have sufficient cash and cash flow generation to meet all of these obligations and increase our cash balances. Now as to our value drivers, we see them as these. We'll continue to deliver on guidance, we will demonstrate the quality production and prudent growth, we're effecting actual and planned debt reductions, we're demonstrating increasing cash flow and EBITDA with optimizations, production increases and cost improvements mostly from our primary portfolio and very significantly from our cornerstone assets. And with that ladies and gentlemen, Brad if I can pass it to Darcy for a continuation of this presentation.

Thank you, Peter. Good morning everyone. As Peter said, one of the cornerstones of our corporate strategy is cost reduction and revenue increases across the board and its part of the enterprise strategy. What we're looking at currently is various strategic management initiatives to realize additional cost savings at operations, G&A and also within our development stage projects. In hand with that we're looking at additional revenue increases and we see that going to our technical services team where we're advancing the Cerro Moro project, including completion of the detailed engineering before a formal construction commencement later this year. We are also looking at completing by the end of the year a PEA for our Deep Carbonates project at Gualcamayo. If you will recall, there is approximately $2.5 million ounces of higher grade resource that sits below the current operation at Gualcamayo that is going to be included that within that PEA. We're also looking at operational efficiencies at Chapada that could further add additional revenue. Those include increased throughput, increased recoveries and additional exploration successes like those highlighted at Sucupira. In the long term revenue increases and generation, we're looking at the integration of our SVP of environment, health and safety in our organization and we will do a rigorous assessment of our practices at operations, renew practices that we currently have in place to become an industry leader in health safety for our employees that will lead to better productivity and ultimate revenue at all of our operations and projects. Before passing the presentation over to Daniel Racine and Gerardo to talk in specific about our projects and our assets, I would like to give an overview of our operations for the quarter in the first half of the year. Gold production in the second quarter was a total, 298,818 ounces for a first half production of 603,692 ounces. Silver production was 2.4 million ounces and during the first six months of the year totaled 4.9 million ounces. Copper production from Chapada was 33.6 million pounds. During the first half of the year we've already produced 60.5 million pounds of copper. On the cost front, cash cost per ounce during the second half for gold were $603 per ounce and $6.59 for silver, co-product cash cost during the first half or during the second quarter of the year sorry were $701 per ounce and $8.29 for silver and our all-in sustaining cost per ounce during the second quarter of the year were $896 per ounce of gold, $10.72 for silver and during the second half of the year $895 per ounce and $10.58 per ounce of silver. Our co-product cash cost per pound of copper principally from Chapada, sorry, all from Chapada was $1.39 during the second quarter of the year and during the second half of the year it totals $1.57 per pound. With that I'd like to pass the presentation over to Daniel Racine to review our northern operations.

Thank you, Darcy. Good morning everyone. Canadian Malartic achieved its fourth consecutive quarterly production record. Production in the quarter was higher at a lower cost than the first quarter due to the higher grade partially offset by lower throughput and recoveries. An unplanned maintenance shutdown related to the conveyor explained the lower than expected throughput in the first half of the year. Throughput for the second half of 2015 and through 2016 is now planned at an average of 53,000 tons per day. However, production expectation are unchanged. At Mercedes production in the second quarter was below target. Lower production was driven by excessive mining dilution that lead to lower processed grade, lower recoveries and higher costs. Results are expected to improve significantly beginning in the third quarter with further increase in the fourth quarter. Improved design, engineering and blasting are all expected to contribute to improve dilution control. In addition, production is expected to benefit as mining transition into the higher grade area of Lagunas and Barrancas. I will now turn the call over to Gerardo.

Thank you Daniel, good morning everyone. At Chapada the strong year continues as gold and copper production increased compared to the first quarter by 35% and 25% respectively. The production increases were due to higher gold and copper grade mostly from substitution of ore from Corpo Sul as well as higher recoveries for both gold and copper. Cash cost were also down significantly compared to the first quarter with gold and copper cash cost declining approximately 29% and 23% respectively. The in pit crusher is now commissioned and expected to result in a stable throughput higher level due to more efficient [indiscernible] material going forward. Also effort to optimize operations continue to advance. In the quarter improvements to the [indiscernible] resulted in better than expected recoveries, offsetting the impact of throughput due to high increase in processing of harder ore. At Jacobina, while production was higher a lower cost in the first half compared to the first quarter 2014, we saw a 15% quarter-over-quarter production increase. Production in the first six months of 2015 was below target due to lower than planned shared rate at approximately 1.9 grams per ton. Grades increased significantly in late June and continued at higher levels in July at an average of approximately 2.56 grams per ton. We expect this trend of improved grade to continue going forward with an average of 2.4 grams per ton for the remaining of the year as the billable work now has reached higher grade areas and all controlled procedures continue to improve. Our expectation is that increased grades will result in further improved production and cost through 2015 with production in the second half meeting or exceeding targets like exceeding production of the [indiscernible]. At El Penon the planned mining of ore from areas with more variable grades on the fringes of the veins resulted in lower gold production compared to the first half of 2014. Cash costs were also higher related to the increasing ore development of these areas. However, production in the second quarter of fiscal 2015 was in line with targets, despite heavy rains in Northern Chile occurred late in March. We expect production and cost to improve in the second half of the year mostly driven by an expected strong fourth quarter. Production increases and cost decreases in the fourth quarter are expected due to planned production contribution from higher grade areas in both the north and south mine, as well as limitation and cost reduction initiatives started earlier in the year. [indiscernible] we delivered a strong second quarter which follow a strong first quarter both in line with targets. Higher gold and silver production compared to the second quarter of 2014 was due to increased throughput and recoveries, partially offset by lower grades that we mine in lower grade areas as per the mine sequence. We're well positioned to meet or exceed our other target, Minera Florida. At Gualcamayo production in the first half was consistent with targets, although production in the second quarter was below target. During the quarter we encounter a localize also will increase play levels on slower reaching timers which impacted the recovery during the period. This is one off event. We expect production to increase sequentially in the third quarter and fourth quarter due to improved recoveries as materially expect on the leash pad more recently and going forward is expected to perform normally. Also the expansion of the ADR pan remains on track for completion during the third quarter and expected to further increase a performance of the side begins in later 2015. Second quarter was soft for the producing mines and the Brio Gold portfolio continued to demonstrate the ongoing progress of the operations and the value of these assets. Our pillar production looks higher than the first quarter and 9% lower cost due to increase rates and recoveries. During the quarter production averaged approximately 7,000 ounces per month or 10% of all the 6,300 ounces per month base line that was established in the first quarter. A percent of our Celerio production increased 16% over the first quarter and cost continue to decrease. Improved production and lower cost whatever sold was higher throughput and rates. At Q1 Santa Luis the same metal we gave this work continue to further evaluate the identified options to modify the process continued. Then ongoing progress would be in the Brio Gold portfolio continues to support are going public events. I'll the call now over to Butch.

Thank you, Gerardo. And good morning everyone. In the second quarter we advanced our 2000 exploration program -- 2015 exploration program as we continue to focus on finding high quality ounces. At Chapada we continue to advance the Sucupira deposit covered last year. Exploration as defined as 1.5 kilometers northeast to southwest turnings on of high grade copper and gold mineralization with the lower grade halo that is now interpreted to be the southwest extension of mineralization exploited in the [Indiscernible] pit. This deposit remains open to the southwest. Sucupira will be evaluated as both bulk tonnage open pit mine and possibly an underground exploitable high grade deposit that will provide long term optionality to the Chapada life of mine plan. At Jacobina exploration is focused on executing and infield drill program at more of [Indiscernible] and began a program to test for deep extensions of that high grade main reef in the aforementioned mines. Composites of assets results today include very mineable risk at or above reserve grade as listed in the Brazilian -- the Brazil exploration update press release on Thursday. The results are being integrated in support of improving the geologic model and mine predictability and development of these higher grade zones which has planned to begin in the third quarter of this year. That present the Brazil year, our new discovery remained E388 has been made with risks and grades above current mine averages. The discovery is located at a relatively shallow depth shallow and adjacent to a mine current mine haulage ramps. It is worth noting that the results so far are similar in grade and thickness to those that we saw in the early years of the mine. I ask you to please refer to Brio's press release of July 16, 2015 for additional detail. In the quarter we also advanced our exploration efforts at some of our other operations. Some highlights include El Penon infill drilling of the recently discovered Ventura vein continues to support the economic potential risk target and at Minera Florida positive results to date included identification of three new structures at the Amanda target within Amina [ph] mine complex that appear have economic mineral intercepts. In the second half of the year exploration will advance our recently acquired Monument Bay property in Canada as well. The program will for the high grade potential at the West end of deposit during this fall season. I will now turn the call over to Chuck Main.

Thank you, Butch. Good morning to everyone. In the second quarter results we constitute to deliver financial performance as our portfolio was on track to achieve annual production guidance. Revenues in the second quarter were approximately $455 million, up approximately $311 million from the second quarter of last year. Higher revenues were the result of higher sales, partially offset by 8% lower gold prices and 18% lower silver prices. Mine operating earnings before depreciation was $182 million and after depreciation was $58 million representing a 46% improvement from the first quarter. Our adjusted loss for the quarter was approximately $8 million or $0.01 per share. This is a $0.3 per share of improvement from the first quarter. We continued with our aim of generating sustainable and increasing cash flow. In the second quarter we generated approximately $149 million or $0.16 per share in operating cash flow. Despite the lower metal prices this represents a 56% increase over operating cash flow generated in the first quarter of this year. When we look at our cost structure, we are seeing continued stability and low levels as we focus on delivering on production expectations. Our all-in sustaining cost on a buy product basis for gold were in line with the lower cost structure we established last year and the level seen in the first quarter. When we look at our core operations we are able to deliver each ounce at an all-in sustaining cost of $763 per ounce. For Silver, our all-in sustaining cash cost on the by-product basis declined approximately 9% compared to last year to $10.72 per ounce. Our cash costs in the quarter were impacted by lower grades at some mines and lower by-product credits due to the decrease in corporate prices offset by cost reductions, favorable exchange rate and higher copper production. We expect cost levels to improve in the second half as production increases and we implement operational efficiencies and other improvements at our cornerstone assets. In addition, we will continue to pursue opportunities to further reduce our G&A and other expenses. As I mentioned earlier, we're able to increase the per share level of cash flow we generate in the quarter compared to the first quarter. Another way to look at this is to consider how much cash flow we generate per dollar of revenue. On this metric, we improved significantly over the first quarter. In the second quarter we generated $0.33 for every dollar of revenue, representing a 57% increase. As the metal prices have declined, there has been a need for us to increase the margin we generate on that lower revenue. As production increases over the second half we will continue to focus cash flow and cash flow generation. We maintained a stable balance sheet in the second quarter. At the end of the quarter our cash balance was $119 million which is flat compared to Q1 and available credit of approximately $740 million. Our net debt at the end of the quarter stood at approximately $1.7 billion. Depreciation depletion in the quarter increased compared to last year to approximately $124 million. Increased DDNA represents the addition of Canadian Malarticand the inclusion of commercial ounces from POR [ph] which completed commissioning in the third quarter of last year. Corporate G&A was approximately $32 million in the quarter representing a 13% decrease from the second quarter of last year. This translates to approximately $20 million in savings on an annualized basis and we continue with efforts to further reduce our G&A levels. Our exploration expense for the quarter was $4 million. Total capital spent in the quarter was $102 which represents a 46% decline from the previous year. The continued stability of our balance sheet reflects the achievements to-date on our cost containment initiatives. I would like to take time now to focus on our balance sheet and more specifically our debt and debt repayment obligations. We've implemented a strategic plan to pay down the balance on the revolver credit facility to zero. In the first half of 2015, we have decreased the balance owing on our revolver by approximately $150 million. Overall we are flat on net debt in the second quarter but we are on track to continue advancing our strategic plan for repaying the revolver balance. As Peter mentioned, we expect net debt to remain flat over the second half of the year. I would like to run through the change in our net debt position in a bit more detail. At the end of 2014, we had approximately $2.1 billion of debt which included debt assumed from the acquisition of Canadian Malartic that is neither corporate nor guaranteed by Humana. We had approximately $191 million in cash giving us a net debt at the end of last year of $1.9 billion. In the first six months of 2015, as I mentioned we paid down approximately $115 million of the balance owing on the revolver. In addition, we reduced the debt assumed on our acquisition of Canadian Malartic by approximately $50 million. I would like to highlight that the year-to-date change in our cash position is largely a result of normalizing the working capital position since the beginning of the year with a first quarter reduction of accounts payable of $93 million. And despite the weak metal price environment in the second quarter, we are able to hold our debt levels flat. This means at the end of the quarter, our net debt position was approximately $1.7 billion, an improvement of over $125 million. To better understand our debt position and the strength of our balance sheet, it’s important to look at our debt repayment schedule to specifically the modest repayments over the short term. Over the next two years, we have $118 million in principle repayments due. We expect this very manageable amount to be funded to our cash flow generation. And that we note that we do not have any significant debt repayments due before 2020. You have heard us mention our EBITDA enhancement initiative and I would like to provide some more color on that plans and what they will mean for our business. We have undertaken a thorough review on our business to ensured we are aligned with the new economic environment and the prevailing metal prices. Our plan has laid the foundation for a stronger and more agile organization that is more effective. We are looking forward and are focusing our resources on the most strategic opportunities. Those opportunities could provide the best potential for value creation. We are doing this by focusing on margin improvements to efficiency, innovation cost reductions. This includes improvements to our operating and technical teams, dilution controls, headcount reductions, improvements, recovery rates, to enhancement, to our milling plants and procurement savings through the improvement returned to our contractors. We are streamlining and redesigning our processes to make a more effective organization. This includes eliminating redundant and non-value added activities across all operations and back office functions. We are cutting the waste out of the system and process, ensuring we're able to achieve our objective for more efficiency using the minimum amount of resources. We are right sizing the organization to better reflect our portfolio and this includes downsizing, relocating regional offices and reviewing our organizational structure at every level. We are planning a going public event for Brio Gold which is an opportunity for monetization, an example of our focus on cornerstone assets and looking at creative way to unlock value from noncore assets. Our EBITDA enhancement initiatives are geared towards freeing up additional funds to fuel our future growth and making us a leaner organization that has eliminated potential barriers to accomplishing our targets and goals. On that note I would like to turn to what to expect in the second half of the year. We have established a strong second half that is characteristic of our portfolio. In past years first half production has been in line with where we are tracking in terms of 2015 full year guidance. We expect second half production to increase approximately 15% over the first half and we expect the largest jump in the fourth quarter. This has us well positioned to achieve full year production guidance. To reiterate, we expect to produce 1.3 million ounces of gold, 9.6 million ounces of silver and a 120 million pounds of copper in 2015. All-in sustaining forecast at $830 per ounce of gold, $10.50 per ounce of silver on a byproduct basis. In order to achieve targeted costs, we are focusing on operational improvements with a particular objective of the increasing average grade of the ore process. We are expecting some improvements relating to the foreign exchange. We noted that today's spot prices compared to the average in the second quarter for Argentina has devalued 3%, the Real 9%, CAD by 6%, Chilean peso 9%, Mexico by 6%. So we continue to see improvements relating to exchange rates. Production in the first half is tracking well to guidance and with the planned increases over the second half we expect to deliver on expectations as the focus remains on operational execution. I'll now turn the call back to Peter.

Ladies and gentlemen that's our presentation for this morning, for the quarter and for the first half of the year and with that perhaps if we can open up the call to questions.

Thank you, [Operator Instructions] our first question is from Phil Russo from Raymond James. please go ahead.

Thanks, good morning Peter and the team. Thanks for taking my questions. Just maybe just quickly here on Mercedes, if someone could expand a bit on the measures here to tackle the dilution, are you changing to use mining method there or is it that the vein sort of narrowed and what you're modeling. Is that unanticipated.

Yes, you're absolutely right. As we were getting on the mining sequence of the second quarter we were getting on the edge of some of the zones and they were narrower. So we're changing the mining method, the drilling pattern and then we are already seeing in this quarter improvement in dilution or grade.

What's the mining method now that you're changing to?

It's the same mining method but we changed the diameters of the drill holes and then we changed the pattern of drilling.

Okay, then in Jacobina then, okay I understand [indiscernible] in a way to get in some high grade areas here, but I guess what about beyond that getting into 2016 like? I know getting the development ahead of the mining was a challenge in the past here. How you guys doing looking beyond simply just the remaining part of this year.

We're optimistic on the performance and looking forward Jacobina. There's a change in the approach we are advancing the development and doing the elimination drilling. With that information we are able to better design ore mining and preferred degree, however resource in confirmation drilling are showing that they have high dig rates in the kind of year advance they are already lower complicated in terms of geometry. With information ahead of time, ahead of mining we've been able to improve our designs, be more selective and also control dilution and operation to bring the grade to the plant.

So Is 2016 development largely done right now or you still got some meters ahead.

For the next year were still working on development.

Okay. And maybe lastly on the financials, Peter, I appreciate the comments at the start of the call here. The net debt projections is flat for the remainder of the year. Is that using your budgetary proxy?

As I mentioned we expect the debt not to increase. At lower metal prices we expect the debt to decrease at or above the current level prices and now it's always difficult to predict gold prices, up now, was down before earlier. It’s difficult to predict where gold prices are and what would be sort of those inflection points but I'm comfortable thank you of debt. If we keep gold price were it was last night when we formulated this view, so to not be up $8 where it seems to be now but where it was last night and if we keep the other metal prices where they are, then our debt would likely so decrease by the end of the year. If metal prices go up, then our debt would decrease further.

Okay. So you talk about a thing flat for the remainder of the year. It was slowly down. Does it put extra pressure here on -- especially with the 100 million due next year, I'm not sure if this plans to refinance that or not but if you’re targeting the revolver to zero and plus this 100 million, does it put extra pressure on getting excited about Brio outcome or what are your comments around that?

No there is no pressure on Brio. The pressure on Brio in my view so it was last year. You have to show that assets perform and that you've got a confident management to make them perform. And with the large performance and as Gerardo said with 7,000 ounces plus per month, that mine is beginning to perform and its costs are improving. And there are significant prospectus for further improvement with errors like Maria Lazarus [ph] and Tris Buracos [ph] which is better oriented ore body at or above the current grade. And so we think [Indiscernible] will continue to perform and continue to demonstrate that performance into the balance of 2015 and into 2016. But then the Brazil real [ph] is performing. Q2 is better than Q1 on production and on cost and there is an entirely new discovery that in our view and in Brio's management’s view has the potential to reposition that mine. [Indiscernible] is the last leg of that stool, and [indiscernible] flowsheet has been determined and the final metallurgical tests are now being, the Is are being dotted and Ts are being crossed. Once that’s occurred, and Brio management alone with our over sight is able to demonstrate that there is quality to those assets, then I think the question you are asking is, is there pressure to sliver on a next expedited basis and to get the -- in other words to risk a lower price in order to fast track a sale, and I would say the answer to that is no, there is no pressure. The pressure was to make sure that these assets perform, that these assets can generate cash flow, they can demonstrate and improvement to production and to costs. And as that has been unfolding as we anticipated that it would, then I think the pressure is off in terms of the ability to surface significant value from those assets. And as you have noted we haven’t said that a going public event is an initial public offering of reverse takeover. It is the panoply, the shopping list of all possibilities that includes a merger with other companies, it includes an outright sale to a public company and our preference. Our preference would be to take cash but our preference should also be to take some additional value that will provide further surfacing of value, a share position, a royalty. These are all the things that we’re contemplating and I think implicit in that and why I can answer your question that the pressure is off is that pressure is off, because there is a significant amount of support for these assets and encouragement for any of these going public events as a result of the improvement in the assets.

Thank you. The following question is from Patrick Chidley from HSBC. Please go ahead.

Hi. Good morning, everybody. Just a question going back to Sucupira. I wonder if you could just outline -- you said that it's at about 200 meters’ depth and there is a low grade halo around it. I'm just wondering, does that that low grade halo come to surface. And what sort of rates would be in that and therefore here is it something that could be open pit mined and what sort of strip ratio would you imagine for it?

Hi, Patrick. This is Butch Wulftange. The Sucupira deposit is considered and extension of the [Indiscernible] pit. So it's actually being mined in that pit right now. The defined body that we have currently extends beyond beneath the pit, about 400 meters till you get to the current drilling and then we have another 1.1 kilometers of defined drilling of that mineralization. Initially we had the discovery hole of over 172 meters’ width of that deposit, and if you look at the -- in the press release from last night, you can see some other hole intercepts which we have -- 80 meters at 0.44 grams per ton and 0.5% copper with a higher grade core of 31 meters of 0.8 grams per ton gold and nearly 0.7% copper. So, those -- the essential dip of that mineralization is to -- the strike to the Southwest, the dip is probably somewhere around 10 degrees to 15 degrees. So it gets deeper as it goes to the Southwest. I think what's great about this deposit is the optionality that you do have a high grade core that could be mined and accessed from the Chapada pit. Quite simply you can mine high grade core if you want or take some of the lower grade halo. So it provides optionality. Is it going to be a big open pit, that has yet to be determined. But that will be part of the mining, what the engineers at Chapada will be looking at is how -- what the best way to extract this.

How much drilling, how much more work needs to done before you be in position to determine that? Is it end of the year sort of thing or is it end of next year or something?

I would say end of next year as far as getting it up into an indicated category. We've started off with 150 meter to 200 meter step out drilling and so there's still a significant amount of drilling to do. And we have full budget support from a corporate office here. And so it's something that we are quite excited about. As optionality to Chapada, like I said, it's still open to depth to the Southwest.

Okay, any initial resource plan for the end of the year? Inferred or something?

Yes, we will have an inferred resource planned at various copper rates. It looks quite good.

Second follow-up question, and just on the hedging, maybe Chuck if you could review the hedging positions you have in currency -- foreign currency? And what these look like in terms of policy going forward?

The Mexican Peso hedge expired at the end of June. So we won't have any further hedge positions going forward for in the Q3. And just -- so, then at the end of June, we had $259 million reals hedged at a rate of 2.28 for the second half of the year. So, then again that whole program expires at the end of the year and will have no negative impact on the reals hedge starting in 2016.

And could you say roughly how much of your costs were impacted in Q2 by those hedges and those sorts of rates?

Yes, on the consolidated basis, in absence of the hedge, our consolidated average would have been $13 less. So its $13 consolidated average.

Right, you mean 13 million real or?

No. $13 per ounce. On the per ounce base.

Thank you. The following question is come David Haughton from CIBC. Please go ahead.

Yes, good morning Peter and team. Thank you for the update. And firstly Peter, thank you for the fairly clear picture that you provided for the strategy and plans in the first few pages of your slide deck, appreciate that. I've got some questions looking at the operations that are going to be the drivers for improvement in the second half? Just going back to Jacobina, I know that Phil got some pretty interesting insight there in the previous questions. It's been a long time coming at Jacobina to get up to the kind of grades that you are now starting to encounter. And just wondering if that's really a function of the developments that you put in place or whether it's access to the higher grade ore bodies such as Canaberis [ph] what the story might be and what sort of sustained production level could you achieve at the 2.4 plus grams coming forward?

Hello David, this is Gerardo Fernandez. I think it's combination of many factors. One is having the development to the right areas. But we also have the [indiscernible] during competed to mine those high grade areas that do exist and deliver that grade to the plan and that has been the approach during this year. So, we've been competing and advancing that billing due to the sales at the end of last year and into this year. So it requires more discipline, and a different approach also for the operation, and that's being improved both on the geological modeling part but also on the geological controls during the mining, including dilution control, drilling and blasting practices and then loading and hauling of the ore and management of the stockpile to feed the plant. So we scale down with throughput as you already know to the plant so we can catch up with the development in the mine and that's what’s part of what we said in the guidance with approach. Approach is to preserve grade, not to drive tonnage to the plant. In terms of guidance for the future, we're going to be around a 100,000 ounces for this year, a little bit probably on the low end of the guidance range and going forward we're optimistic that we're going be improving that to a target of a 120,000-130,000 ounces.

Okay, so in -- over the last year or so the mill's being processing 4,000 tons a day. Really to get to that 120,000 expectation in 2016 and higher again in '17, you’ve really got to be lifting that throughput well above the 4,000 tons a day and also have an improvement in the grade. You're pretty happy with what you're seeing so far. July is -- you gave there, pretty good grade. Are you happy with the way things are progressing?

Yes, I'm happy and optimistic with the way things are progressing. Going forward the, it's mostly driven by grade, the increases into the future for Jacobina. As I said before we, we're holding up the -- that upside on throughput to have an extra capacity on the plant but until we have certainty that the grade control is streamed and everything has been improved, we will focus on grade and grade increases in the next year and very optimistic of what we're doing in Jacobina.

Okay, coming to Gualcamayo, clearly some issues there with a clay zone. Had you encountered that before and is it just this unique part of the pit or have you encountered from time to time but not to the extent that you got last quarter.

Good question. We have not encountered an area like this before. This was -- it’s actually below the [indiscernible], the big fissure, geological fissure that goes across the open pit. So we didn't have information from upper benches on this feature. So it was one off. Since the end of last year we started a campaign to delineate the bottom of the pit under phase 3 and get information on all in grades but also metallurgy. So we have now the information for the rest of the year and in the phase, the rest of the phase 3 and we have confirmation that we don't have another fissure like this that will behave like this order went into the plant in May. So it's a one off and we're confident that we're not going to have an event like this during the year.

Okay, and the last project I'll ask a question on this looking at El Penon, grade issues there you referred to being at the edge of the veins. Is that just a coincidence of sequencing? Of course you've got a number of different -- so you'd be working on and will you change that sequence going forward so you don't end up being in such a position going forward.

It is part of that but our plan higher consideration for Q2 to be the weakest quarter of the year. Actually Q2 was going to be in the bottom end of the high grade [indiscernible] Bonanza and the north end of Bonanza as well. So we were forecasting to have a more radical variable grade performance from that stope and some of those areas are 200 grams per ton. So with a small volume change or grade in the small volume we have, a big impact. So the plan on the life of mine is at Bonanza is going to be repeated into next year. We’re transitioning to all the higher areas in the south mine. So we have accelerated the development into those areas so we can compensate any variations that we may encounter on the edge or fringes of the high grade veins.

Thank you, the following question is from Don McLean from Paradigm Capital. Please go ahead.

Good morning guys and Patrick touched on this with his questions about the hedging in the ForEx. But just maybe a sort of a more holistic view from Chuck about your cost profile. I was looking at the, if you do a production weighted average of your exchange rate change, is, you've had about a 16% benefit year-over-year, but the cost has gone up actually. So one gets a sense there's a pent up cost benefit coming and I'm sure part of that was explained with the hedge situation, but maybe Chuck can you give us a little bit more flavor about what we might be expecting in terms of that exchange rate benefit and the fuel savings et cetera as we look through the next year or so.

Yes, I think that we have been achieving and receiving the foreign exchange benefits. I think that has been masked partially due to the impact of the grade point set we've talked about. So going forward we believe we got the great aspects under control and they going to improve in the fourth quarter. So what that does is then that allows the ForEx benefit to come through rather than being masked as a consequence of the agreed impact.

Great. So that should sort of double up then on the cost benefit?

Yes. But it won’t be hidden. And then we. With the Mexican as I said before, the Mexican the hedges are gone. So there will be no longer an impact and they reals hedges end at the end of the December. So they are no longer being impact eater.

The situation that you are seeing in terms of we are not seeing the full impact of the exchange rate changes is across the board. I think when I did my calculation this morning the group is only seeing about a 4% reduction in cost so far year-over-year. Are some of these costs kind of sticky or is it just that we’re not seeing as much exchange rate benefit flow through into the cost profile and the fuel cost savings that one might ordinarily have expected.

Well, I think that the fuel is the more complicated question. I think we have received a good size benefit in the first quarter on the fuel but when you look at Q2 compared to Q1, there is not much of an improvement in the fuel -- the diesel prices compared to Q1. But we will continue to see these foreign exchange benefits. They are there and in our case they have been muted by the impact of the dilution which we have a firm plan to deal with going forward in the second half and then will see the full impact of the benefit of the lower exchange rates.

Great. And maybe just to sort of another sort of generic type question for you Peter. Clearly the focus is sticking to the knitting and working on the existing operations. But there are acquisition opportunities out there. How would you view those as opposed to say that the opportunity for developing your own existing projects in Argentina in particular?

Really good question and the simple answer is we are not looking at any acquisition opportunities. We think that we’ve properly positioned the company last year with the acquisition last year and with the opportunities that that acquisition along with what we already had in the legacy company provide us. There is a good balance in terms of jurisdiction, there’s a good balance in terms of very high quality projects. Clearly there are more being at the top of that list because of its very high grade, very modest footprint and significant number of ounces for gold and for silver at high margin. So we are going to continue to focus on our internal organic opportunities, and perhaps if I can say to you that if we look at our share price over the course of this last year, I think the best way to reclaim all of that reduction in share price is to demonstrate that what we acquired last year and the repositioning of all the things that we discuss today are strategy or planned execution on that plan will allow us to recapture 100% of that diminution in share price. That is our obligation, that is our intention and I think the best way to achieve that is to continue to focus -- stick to the knitting and continue to focus on our organic plans.

Thank you. [Operator Instructions] The following question is from Tanya Jakusconek from Scotia Bank. Please go ahead.

Yes. Good morning everybody. I have two questions. one is on financials and one is a technical question. So maybe for Chuck and Peter, if you take on the financial one. I wanted to ask about the debt again, and I know Peter you reviewed all of these based on last night's pricing. So if we look at last night's pricing we look at the $216 million still on the credit facility. We look at the $100 million payment that is due next year. When do you actually think you can pay off your credit facility and still keep that $100 million to $150 million and minimum cash balance on the balance sheet?

Tanya. Let me being to answer your question I'll pass it to Chuck with any other observations that he has. I perhaps can ask you a question to answer your question, which is do we assume that some of these monetizations of non-core occur? My view is that it is not only Brio, it is [Indiscernible]. There are many creative things that can be done with an asset like that. It is many other projects that we have on the shelf that extend in Canada from everything from Hammond Reef all the way down to the tip of South America dealing with [Indiscernible] and [Indiscernible]

Yes. Let's assume worst case that it doesn’t happen. So just on a worst case scenario?

Than on a worst case scenario I can pass it to Chuck to determine how much of that revolving credit facility would expect to be paid into 2016, but it would not be -- certainly not be significant and we would not by the end of 2016 repaid 100% of that revolving credit facility. I would estimate that we'll probably pay something in the order of $50 million to $75 million on that revolving credit facility on the assumption of the metal price last night. If -- and that includes of course any of the improvements in the production by the end of this year and as the rate extends into 2016. That also assumes that if you make the assumption that we've sold Brio, then that assumes that we are getting that production from Pilar, [indiscernible] and C1 Santa Luz, and we are getting the full benefit of the currency improvements that are occurring between the U.S. dollar and big Brazilian Real. And these assets, because 85% of their cost structure is locally denominated, perhaps even a bit more than 85%, then we would expect to get a very significant windfall on the cost structure. So, it's that multiplier between the number of ounces in their cost structure. We have not calculated what the impact of that would be to the diminution to the outstanding credit that the company has because we've made the assumption that this is non-core and the actions that we intend to take as we've described. But if we go on your assumption then I would anticipate about $50 million and that might increase as a result of C1, Pillar, [indiscernible] continuing to perform and likely outperform because of the improvements in production and because of the improvements to their costs.

So, that would mean in that sort of rate we would pay that off over the five years and not to $50 million to $75 million?

At those metal prices, if that was sustainable at those -- throughout the year of the answer is yes. And we've already budgeted then in terms of what to do with the outstanding bonds that come due and we've already budgeted the ability to be able to repay that. The variable is how much of the revolver would be repaid. And that's what we're -- that's the variable between how much is generated through internal cash flows based on metal prices and how much generated through the sale of assets.

Okay, and then where does the dividend stand in all of this?

Tanya, I know some of our peers have taken the step of reducing their dividend over the course of the last several days. We did that late last year. Perhaps we were wrong to have done it late last year, perhaps we're pressing because an anticipation of risk to metal prices. So dividend review is done on a quarterly basis by our board of directors. We go through a lot of discussion on the dividend, the sustainability of the divided. We look at yield, we look at yield to cash flow, to share price. We look at sustainability of cash flow, potential price increase in cash flow. Where I currently stand at the present time is what we did yesterday, which is we declared the dividend and we think that's the sustainable level of dividend that this Company can afford to pay in light of current metal prices and in light of what we anticipated last -- late last year, the decline in metal prices which we have seen, but also on the flip side of that increases in production that are forthcoming and the improvement to the cost structure as a result of inputs coming down. So, on balance my conclusion is that we think is at dividend at the current level is sustainable.

So, at $1,100 gold price then, keeping the current dividend, bearing selling of any assets and or other based on your budgets for your mine, $50 million to $75 million per annum reduction in the credit facility plus paying the dividend and keeping a minimum $100 million to $150 million in cash?

That's correct, and that just shows the 50 million is into late next year, not this year.

Okay. And nothing have changed on the three covenants that Chuck or the definitions on the credit facility?

No, the definitions are the same and then we still have a lot of headroom under all of them.

And then that looks the same?

Still that looks the same.

If it's any comfort for you and to others -- we actually extended our revolving credit facility from four years to five years and we improved the payment grade. The payment grade they we’re paying now is actually less than it was before. So, certainly someone with credit experience is taking the position that we've really-really good credit.

And maybe just on my technical question, it's got to go back to Jacobina, now that we are in this higher grade and I know we've talked about this 100,000-ounce production this year and then -- with the higher grade we're up to that 120,000-130,000. how many months of development do we have ahead of production? And sort of how many folks we have now and what do we need to sustain that higher amount?

Good question Tanya, this is Gerardo. As was declared in the MD&A, we experienced in the late into to pick up the development rate this year. We started with a new contract and we changed the contract going -- we changed the approach to reason the high grade areas. So in front of us we have about four months of production, now. The target as the definition going forward is to be between six months to a year. As we ramp up the development and continue going forward, that will improve and the final target that we have for every mine in underground mine is to have one year developed reserves. But we are not getting Jacobina. We think we can achieve that by the end of the year. One other factor there is that at the same time that we're advancing the development, we’re doing the delineation drilling. So that has to be combined and planned so we have the information and that is affecting a little bit also the performance of development. But we're sure that's the way to go. Advance development, delineation drilling and then mining. We're not in a rush to get to the areas of mining without the information, addition information coming from delineation drilling.

And how many stopes do we have today that we're drawing this production from and where do we need to get stope wise for the 120 to 130.

As a principal we're operating for four mines and each mine has a different composition of particular stopes between four and six for each but that changes with the sequence. Okay, but it is four independent mines with accesses that are independent. So we have the flexibility going forward.

Okay, and there's enough ventilation and…

Yes, good question. Over the last year and the second half of last year we improved those services for the mine, not only ventilation but also power distribution, water and drainage. And that has -- it's been now for the advance or increase in development rates in the second quarter and then in the second half of the year.

Thank you, there are no further questions registered at this time. I would like to return the meeting to Mr. Marrone.

As is our practice at the end of this meeting there are many questions, exceptional questions asked and there are perhaps some pickups on some of the questions and clarifications. First of all, the question that has been asked by several people about Jacobina, I think these are important things. Early last year we were two weeks ahead on developmental work and now we're at four months to six months and we plan to be further down that path by the end of the year. That goes to the point that I've been making about making sure that we're planning more effectively and executing on those plans. Secondly we've already, as part of those plans, we’ve risk adjusted Jacobina because of its history. So when Gerardo refers to 120,000-130,000 ounces, we are not taking into account full plants and we're not taking into account full grade. If we did take into account full grade and full plant than that number increases very dramatically and again a mathematical calculation takes it to 150,000 ounces. So our position is very clear, part of planning and then executing on that plan to take a slow and steady state and to risk adjust where there has been some historical challenge. We're dealing with all those historical challenges but that's an important way to evaluate the philosophy that we have in the Company. Another question that was asked was about the Gualcamayo and the clay zones. And one of the questions that has been asked separately then is about recoveries. Recoveries will normalize as we said in our MD&A and as Gerardo touched in his presentation. So they will normalize to historical levels, it happens to be that it goes through months and quarters where it is lower and then it normalizes over a longer period of time as the leaching percolates. Chuck, you had an observation you wanted to make on some of the…

Patrick had asked about the hedging and I should have just mentioned the copper hedge. So as at June 30th we still have 37 million pounds of copper hedged at $3, that's a continuation of a hedge we had on for the year which basically provided us an incremental $5 million in cash in the second quarter and 12 million for the first half. So that carries on for the second half of the year.

So we hedged 60% of our copper production at Chapada $3 per pound. This was before the decline in copper price and we were -- we felt that there was a risk to copper price and we took advantage of that. One of the other questions then Chuck that was asked was about the currency hedging and presently we have no intention of hedging our currencies. If one assumes that the U.S. dollar continues to be strong particularly as it relates to the emerging market currencies and currencies where there is a heavy dependence on commodities that would include the Canadian currency. Then we think that there is upside for the further devaluation of these currencies. We've been right throughout the year and we think that the prudent course for us is not to hedge any more of our currencies at the present time. And if one assumes that there's risk to go price then one should also assume that there is opportunity for improvement to the currencies, to the ForEx. That means that we should not be hedging those currencies. That's the approach that we intend to take throughout this year and into next year. So with that ladies and gentlemen, thank you very much for your participation on the call and we’ll look forward to meeting with you again throughout the course of the quarter and then on our quarterly conference call for Q3.

Thank you. That concludes today's conference call, please disconnect your lines at this time and we thank you for your participation.