Peter Marrone - Chairman and CEO Daniel Racine - EVP and COO Jason LeBlanc - SVP, Finance and CFO Barry Murphy - SVP, Technical Services

Dan Rollins - RBC Capital Markets David Hudson - CIBC Tanya Jakusconek - Scotiabank Steven Butler - GMP Securities

All participants please standby, your conference is now ready to begin. Thank you all for joining us this morning. 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 or 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 2017 results, as well as the Management’s Discussion and Analysis for the same period and other regulatory filings in Canada and the United States. I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 P.M. Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana’s website at yamana.com. I'll now turn the call over to Mr. Peter Marrone, Chairman and CEO.

Good morning ladies and gentleman. As is our practice I will provide a bit of an overview. We have here with us this morning Daniel Racine who is our Chief Operations Officer to provide some further insights on operations, Barry Murphy who manages our technical services with a focus on Cerro Moro to talk about a project update on Cerro Moro, and of course Jason LeBlanc our Chief Financial Officer to provide some input for you on our financial results. If we begin this presentation I refer to these six pillars in our six pillar approach to the management of this business. I would like to emphasize the four that are highlighted, these are the focus that I'd like to emphasize this morning. Clearly we’ll provide more information on exploration and the next phase of growth that will follow later in the year. If we begin with improvements to operations and quarter-over-quarter, we had a strong Q2 over Q1. We expect to have a stronger second half of the year over the first half of the year and at lower costs. Our gold production from Q1 to Q2 was up 13%. And if you look to the left side of this page comparing the first half of last year to the first half of this year, while production is slightly below where we were in the first half of last year that is accounted for El Peñón with the approach that we've taken, the new mine plan that we've taken. And clearly there is a strong performance in the first half of this year not only from El Peñón but accounting for that new mine plan almost all of our operations have performed better than expectations. We expect to have a stronger second half of the year as I mentioned and we expect that second half of the year to be as strong or stronger than the second half of 2016 coming from our six mines and we expect that, that production will continue to show into the years to follow. If we look at copper production, that increased 10% over the first quarter, silver increased 22% over the first quarter, and most of that coming again from the over performance and a better approach has been taken at El Peñón. We are above budget on our production and below on costs in total at our six mines. And on a mine by mine basis we are above budget and below on cost of five out of six mines. Daniel will speak more to that in a moment. We have significant over performance at Jacobina, El Peñón, Canadian Malartic, and Chapada. I want to spend a moment on the cost side. We're on track with costs. Now one of the things that we have highlighted on this page is a copper credit. Now while we don't apply a by-product cash cost, we know that several of our peers do and we wanted to at least give a comparison. So the copper credit would reduce our cash costs and our all in sustaining costs by a full $70 per gold ounce and $43 per gold ounce respectively. That's comparing cost to peers who applied these credits as I mentioned and if we took that approach then our cash cost would be reduced to $601 per ounce and our all in sustaining costs would be reduced $826 per ounce. And these will trend lower on upcoming gold production and stronger credits coming with higher copper price and as you may have noticed of late copper has been improving significantly over the course of the year and certainly over the course of this last quarter. If we move to the next page we had indicated as you see at the bottom of the page that 54% of our production will come in the second half implying that 46% would come in the first half. So if you look a bit above that at the 2017 production, we're running above plan on our gold production for the first half of the year. We had assumed 46% in the first half and we've achieved 49%. So we're positioned to meet or exceed our guidance on production and on costs and as I mentioned before we’re above budget on production and below on costs. Now we will aim for a stronger performance in the second half as we performed in the first half. That would be on our production and our cost beats. Our run rate in the first half of the year gives us a leg up on the second half of the year which under our budget and traditionally is our strongest half. And that leads to cash flow and as you see at the bottom of this page we had a strong operating cash flow in the second quarter of just over $124 million and as we move up the page this drives an increase -- an increasing net free cash flow. Now I know that we do not deduct expansionary capital to determine net free cash flow. So that $51.1 million number for the second quarter is before the deduction of expansionary capital and that's fair enough. Some people say that we should and that's just an impression of what is the definition for net free cash flow. It is easy to determine where we would be. We're building a mine and we're spending our net free cash flow on that mine. We're not trying to say that this is a definitive explanation and definition for net free cash flow. We're trying to show a pattern here, a pattern of improvements. And as our growth kicks in, our production increases, our cost decrease that would be into Q3 and Q4, and then more significantly into 2018 and the years to follow net free cash flow will increase. And the increase will be asymmetric, modest increases in production will create disproportionate cash flow increases. So let's spend a few moments then talking about where we're spending that money and on our growth. And our clear focus of this company, an important part of our plans is Cerro Moro and Barry will speak to the detail on this. But the important message here is that we're on schedule, we are on budget, and with the deterioration of the Argentine Peso recently while inflation has not increased that gives us a bit of a tailwind on our CAPEX as well with possible improvements. We've taken an approach over the course of a couple of years. 2016 was a strategic planning year. With several contractors in contracts we commenced underground development, we advanced detailed engineering to above 85%. We were at the end of the year at just about 87.5%. 2017 is a mechanical completion year. We expect to be at 90% complete by the end of this year and we are on track. And 2018 is a year of commissioning, ramp up, and then going to commerciality on our production at Cerro Moro. Operations is now fully involved. We expect to reach peak construction in the period of September, October, November and we have a reasonable contingency for start up into the second quarter of 2018 and to meet our planned 2018 production. Now one of those items on the pillars or the six pillar approach is rationalizing and creating value with non-strategic assets. We've taken a similar approach to our non-strategic assets as we have to our strategic assets. The most important and first thing to do is to evaluate the technical merits fully, improve the technical understanding of the project, then in the case of a non-strategic assets mostly these that you see here, there are others, these are the more significant. Our approach is to determine where the fit would be in our pipeline. Next is to determine the alternatives for realization of value which include communication of what we have seen in the technical reviews and possible monetizations. Now we're not planning to sell anything unless we get the right value and we compare that to what would be the case in a development plan. So let's talk very briefly about some of these projects. Kirkland Lake is a land package, we own 50%. It probably comes as a surprise that we have more than 6 million ounces in total resources in this land package. One deposit is already a pre-feasibility level as a standalone project. We've now completed a conceptual study for an operation that would produce in excess of 250,000 ounces per year. We think there was significant value here that should reflect itself in the value that one assumes for this company. Next on the list is Agua Rica. Agua Rica is one of the better, ex development stage copper gold projects. We have completed now a conceptual study for a potential underground mine with a smaller footprint. But that is on the back of a previously completed feasibility study for a larger open pit. To say it differently, the conceptual study has taken significant components of a feasibility study that demonstrates the viability of a smaller underground mine with a CAPEX that is substantially below the estimate that is in the feasibility study for the larger operation. This makes this project eminently more doable and it makes the opportunity for possible monetization, possible joint ventures, we will look at all options significantly better. Suyai. Suyai is one of the highest grade gold deposits in the Americas. We own 100% of it. We have more than 2 million ounces in resources. We anticipate that the proven and probable reserves would be in the range of 1.9 million to 2 million ounces. It is open in several directions. We have completed a study that supports the economic potential of two options for ore processing. One, to process at site, the other is to produce a high grade concentrate that is transported by overland to an offsite facility for the production of gold. This can be fast tracked to visibility study. It is an underground configuration with the potential to average an annual in excess of 200,000 ounces of gold and 200,000 ounces of silver per year. Clearly our preference is to develop this as a mine as we alone or with a likeminded partner work with the local community to evaluate and toward permitting. Now as an underground project with offsite processing of concentrate all historical reasons given by local community for objection are gone. And this is at a time of improved proving geopolitical, socioeconomic events in Argentina and improving support for mining. Agua De La Falda is a rich gold and copper project in Chile. A portion of it can be brought with very modest CAPEX to production to produce a significant amount of gold production. But it has the potential to become significantly larger than that. Our heranomo [ph] project which is a feasibility stage project, we've already completed the feasibility study, is in Agua De La Falda area. So you can see that there are significant opportunities here for the improvement to the production profile of this company over an intermediate to longer-term but, also for value creation. And we'll look at all options for that value creation. And let me conclude this part of the presentation by saying the following. In the past several quarters I’ve talked about the importance of management and the changes that we've made not only to the managers of this company but also to the quality of the management construct and the key performance indicators. And we're seeing the benefits of those management changes in our operations and in our technical services and our exploration and on our financial performance. Last night we also indicated that we’ve augmented our Board of Directors and will continue to augment that Board of Directors. We're looking to increase and we've already increased the operational strength and our diversity program. We have improved and continue to improve the predictability and sustainability of our operations. We have improved our balance sheet and on our balance sheet let me make a couple of observations. Part of those improvements should include and do include reducing or eliminating risk and contingencies and one of those risks in contingencies was uncertain tax issues in Brazil. We have elected to participate in a new program in the country that would eliminate the certain Brazilian tax issues. This was a choice to participate. We considered something that could be at risk if the matter were to proceed given the current in country situation and the risk of compounding interest should the case become perforacted. We weighed a very strong legal case, President which is on our side and prior victories against the manageability of payments and the certainty of results. And Jason will speak a little bit more to that when we present the financial performance of the company. I want to make one final observation on our balance sheet. I believe that we are uniquely positioned because we are advancing growth and that requires spending money. While we are also improving that balance sheet and we have done that quarter-over-quarter and year-over-year and certainly since 2014 that has been a focus of ours but we have not taken our focus away from the advancement of growth of very high quality projects. And that leads to the final point which is that we are preparing for an eminent step change in our production, in our cash flow, and in our free cash flow that will come from Suruca at Chapada, the Barnat extension at Canadian Malartic, the increases of production at Jacobina, the increases in production and efficiencies at El Peñón, and of course that big step change that occurs with the start up of operations early next year at Cerro Moro. And with that ladies and gentlemen let me pass it to Daniel for operations.

Thank you Peter. Good morning everyone. We continued to deliver operationally in the second quarter. We produced over 244,000 ounces of gold from our six mines for a total of 460,000 ounces in the first half, which is ahead of where we had expected to be. In the quarter we also produced just over 1.3 million ounces of silver and approximately 29 million pounds of copper. As Peter mentioned, Yamana has an established trend of back loaded production and this year we expected to continue that trend. The first half positioned us very well to deliver on production expectations for the full year. Looking across Yamana's six mine produce each ounces of gold at a cash cost of $671 and an all in sustaining cash costs of $869 for the quarter. That doesn't take into account what Peter mentioned about the copper credit. These are lower than the first quarter and in the case of all in sustaining cost already within our guidance for the full year. With that planned production increase and other operational improvements we expect in the second half of 2017, we are confident that the positive cash trend will continue through the second half. Similarly when we look at silver and copper we see cost either already in line with full year guidance or slightly above. These are also expected to improve over the rest of 2017. I would like to briefly go through each of our six operations. At Chapada we continued to implement initiative with the objective to improve processing stability and increase gold and copper recoveries. Production in Q2 was higher than our plan. The advanced control system and retrofit to the flotation circuit are providing stability to the process and are supporting an increase in recovery and lower power consumption per ton. Gold recoveries were up quarter-over-quarter to 54.5% from below 50% for gold. And copper recovery increased to 79.3% from 73%. The cleaning circuit will positively impact recovery. It is scheduled to be completed in Q2 -- in Q4. In the quarter we also built out our stock pile as mining rate were above what we've put through the mill. Chapada is very well positioned to achieve production guidance for both gold and copper. At El Peñón the right sizing and optimization continued in the quarter. Gold production increased 28% over the first quarter and mine management continues to focus on further optimization. Controlling costs and increasing our efficiency of mining than our overall range. Gold and silver grade were above that, contributing to the strong production in the quarter while also contributing to improved costs across all metrics compared to the first quarter. The objective is to ensure a positive cost trend and we are confident that the right sizing of the operation will allow us to achieve this goal. El Peñón is well positioned to meet this 2017 production target. Canadian Malartic continues this strong performance with another record quarterly production. Production benefited from higher throughput and grade. We are also seeing an improved stripping ratio which is positively impacting production. The Canadian Malartic expansion project is advancing according to plan. Before restoration was begun, work has begun in preparation for the formal start of construction which we expect to begin once the relevant CAs are received. Expansionary capital in the order of 16 million to 22 million on a 50% basis for the role deviation and mine expansion has been brought forward into this year from 2018. Overall production at Gualcamayo was in line with the first -- was planned in the first half. In the quarter the operation experienced a small localized failure that impacted cost. The impact on cost was because the mine source or from a higher cost stockpile, to provide feed to the mill and relative volume of voice mine increase. Remediation work is advancing and we are expecting it to be completed in the third quarter. The completion of remediation work and the plant feed rate increases in the second half, are expected Gualcamayo to meet its full year production target. We are continuing to transition at Minera Florida to an exclusive feed or from the underground as the retreatment of historic dating has been exhausted. Gold grade and recoveries increased for both silver and gold compared to the first quarter and we are expecting to see this trend continue in the second half. Grade more than doubled for both metals while recovery also increased significantly. Our effort this year is our focus on preparing the operation for the future. Second half production is expected to exceed what we delivered in the first half although we are trending below full year guidance. The development into Las Pataguas is already underway and we are doing this work according to an accelerated plan that is consistent with our approach to transition this mine. We’re getting a quantum contribution from the new zone by the end of this year or early in 2018. Production through 2018 will be in line with what we are trending in 2017. Our strategic objective remains 130,000 ounces of gold per year. Jacobina again had a very strong quarter with better than planned production increasing nearly 7% compared to the first quarter. The strong production in the quarter was due to an increase in throughput and feed grade which reflects improved operation efficiencies and mining from the higher grade areas as we are, as per our plan. Primary development is striking ahead of plan while the amount of capital per ton of ore extracted has been reduced. We are continuing with efficiency improvement and cost control initiatives which we expect will sustainably decrease our operating costs. Thank you, I will now turn the call over to Barry.

Thank you Daniel, and good morning everyone. I'm going to be talking briefly on Cerro Moro as Peter mentioned. The project continues to track against the plan in terms of scheduling cost with the focus now on the receipt of chemical equipment and piping. The mill building and refinery are now enclosed allowing work in these areas to continue in the event of adverse weather conditions during the mid season. The steel work is progressing well with approximately 500 tons [indiscernible] out of a total of 1600 tons. Activities on sites have been steadily ramping up since the start of the year. For the next three to four months being the peak of construction activities. The next slide, mechanical completion is scheduled to be achieved by the end of this year. And commissioning will start some of the early systems in quarter four and will then continue through to the end of quarter one next year at which time we will begin the ramp up activities. The underground mine development is also progressing well with a total of 439 meters advanced to date in 2017. This is in addition to the 617 meters developed in 2016. In terms of costs we’ve spent approximately $77 million year-to-date of a full cost cash expenditure of $178 million for 2017 which remains in line with our expenditure plan. To-date we have committed approximately 70% of the total initial capital without any significant surprises in contract costs. With that I will hand over to Jason.

Thank you Barry and good morning everyone. Turning now to our financial performance for the second quarter. We delivered revenue of $428 million down slightly from last year. Net loss for the quarter was $34.8 million or $0.04 per share. Lowering earnings year-over-year were driven mainly by income tax which included unrealized foreign exchange losses of $25 million. Mine operating earnings were $55 million for the quarter up slightly on lower cost of sales and depreciation. Cash based G&A excluding Brio Gold was $18.6 million for the quarter which is tracking to our full year guidance and in line with the first quarter. Depreciation was approximately $112 million for the quarter. We have been running a little ahead of what we guided for depreciation. As we have mentioned at midyear we are slightly ahead of our anticipated first half production levels Furthermore we upgraded our production guidance by 20,000 ounces back in Q1 so depreciation have been a little higher as well. Expansionary capital has increased since last year due to the construction progress that Cerro Moro. This pace will continue for the rest of the year where we expect about $100 million of spending on Cerro Moro over Q3 and Q4. On the exploration front we are tracking to budget with approximately $30 million of total spending in the quarter. The movement in operating cash flow year-over-year was mainly due to the inclusion of stream payments received in 2016 without a comparable item this year. Operating cash flow was up from Q1 this year and we expect higher cash flow generation during Q3 and Q4 as these will be our strongest production quarters. In the quarter we increased the cash balance by approximately $26 million and we did that through cash flow supplemented by the monetization of approximately $57 million of Brio Gold Shares. Net debt from the Yamana operations decreased by approximately $22 million during the quarter. During the quarter we also provided an update on our Brazilian tax assessments. We continued to maintain the legality of certain deductions that have been disallowed by Brazilian tax authorities. However, we have determined that the opportunity to settle these outstanding income tax matters on reasonable commercial terms that eliminates financial and legal risks is preferable to a potentially long horizon of uncertainty as we would continue to challenge these assessments through a strong legal position. The currently contemplated payments are manageable for the financial capacity of the company both in the short and especially the longer-term. From my perspective, the potential elimination of the financial uncertainty sets the company up for some impressive and unencumbered financial performance starting in 2018 with our Cerro Moro project among other mine contributions. I believe that this approach is most right and conducive to positioning the company for success. Chicago's long life exploration opportunity and placement as one of our most significant cash flow contributors is completely unaffected by the commercial decision we have made. Picking up on something Peter and Daniel have mentioned. The company has a long track record of backend loaded production and 2017 will be no different. This increase in production will also be supported by lower costs to drive financial performance during the second half of the year. As you can see we've been generating strong cash flows that have supported the CAPEX spending on our Cerro Moro project namely over the last 12 months. We expect continued strong cash flow generation and liquidity to fund our growth until we see a step change in cash flows from Cerro Moro starting shortly in 2018. To finish up I'd like to reiterate a few key points on how Yamana is positioned today. As we turn the corner mid-year with our Q2 results we're very pleased with the execution of our business plan so far this year. Production and costs are better than our plan and we see the opportunity to increase production and lower cost for the balance of the year. Cerro Moro is on time and budget. Our new management construct and team centered at our corporate office along with improvements to our planning and coordination are paying off this year. We intend for this to continue. We set objectives for balance sheet improvements several years ago and we have been successful in reducing net debt significantly since 2014. More recently we have been targeting a further improvement of $300 million of debt reduction over 2016 and 2017. When we set balance sheet improvement targets before, we saw them through, this time it is no different. While building Cerro Moro we've been pursuing options to unlock value on our balance sheet with the many monetization opportunities within the company that don't fit into our development pipeline. On Cerro Moro we're spending now for a robust new production and cash flow contributor starting in 2018. This will provide the opportunity to further strengthen our balance sheet, our discretionary capital will decrease significantly. I believe strongly in the strategy to continue with our debt reduction efforts in years to come even when we're through with our current target. Our growing free cash flow profile will provide this opportunity. In closing thank you for your participation today and we will now open the line for questions.

Thank you. [Operator Instructions]. The first question is from Dan Rollins from RBC Capital Markets. Please go ahead. Your line is open.

Yeah, thanks very much. Daniel, I was wondering if you might provide a little bit more color on what to expect in H2. Obviously you've mentioned that you expect production to be higher over H1 but specifically the El Peñón, Malartic, and Jacobina you are running well ahead of full year guidance on an annual run rate and if you look back to the May 2017 Investor Day, at each of those mines you'd expected higher production in H2 and I'm just wondering is sort of the benefit in Q2, is that from bringing ounces forward from the mine plan this year or is this purely a benefit of potentially higher grade better throughput and potentially productivity gains at each of those assets?

The second part of your question you have it Dan. It's -- I think we did amazingly great in the first half, it will continue in the second half for all the mines you mentioned.

Okay and just I mean there for you obviously right now it's you have the capacity in the mill and you're developing credit loss [ph], sorry if I put you that name, but where do you sort of see throughput trending and where do you expect to be throughput in the mill by the end of the year?

For the rest of this year it will be around 75,000 ton per month, 75,000 to 80,000 ton per month. The mine will produce more than that but the mill will be limited to that until the end of this year.

Okay, great and then maybe just obviously you've done some work there at the Kirkland properties with Upper Beaver and sort of using a centralized facility, you mentioned 250,000 ounces of production annually, any sort of rough estimate of what a mine site AISC would be on that production?

No not yet Dan.

Okay and then Peter just with respect to Brazil, obviously lot of things going on there politically, you do have the Suruca deposit that you're looking to build, do you see any risk or are you looking potentially maybe to delay that build just to see -- just give the time for the political situation to sort of calm down, just given sort of the tax challenges, the political challenges and the fact that they are potentially looking to increase more of these?

Yes Dan, if you look at our MD&A we tried to sort of give a view, a geopolitical view of what's happening in Brazil. And I think we have to make sure that we're not confusing what's happening legislatively and at an executive level with what's happening at a bureaucratic level. Someone said to me years ago that in the absence of anything a vacuum gets filled and in the absence of executive oversight or where there's challenge to that it gets filled by bureaucratic action and that's what I think has been taking place in Brazil. So the more significant effort has been made for example with tax and assessments at a bureaucratic level. Our impression is that what's taking place in the country with a lot of legislative reform that includes labor reform, mining reform, tax law reform, containment of the fiscal position of the country is actually encouraging and positive. Now there will be some follow that comes from that, you mentioned the royalties and let me speak to that in a moment. But this is an attempt to say let's put discipline back into the country, let's put discipline back into the legislative process, into the executive process, and let's move forward from what has been some comparatively difficult years with a heavy recession over the course of the last several years. Now interestingly we're not seeing that impacting operations. We're not seeing it impacting permitting and interestingly if I look at the labor reforms that have been passed, again there are always pros and cons and there are going to be -- there's going to be a bit of a ying and a yang to any legislation and changes. But there is positive, the better alignment of employer and employee rights, the improving rights of employers to retraining contractors without the risk of contractors being treated as employees, the better protection of contractual rights that exist in the employer employee relationship, less risk on severance being overridden in terms of what the contractual terms are, mining law. And while I appreciate that the mining law is now passed this mining law is a derivative, maybe a little bit of a modification to what had been proposed many years ago when there was a lot of pushback many years ago under the Rousseff government to the adoption of that mining law. But, that mining law has some modest, we think modest negatives but a lot of strong positives. On the negatives, the gold royalty will go up from 1% to 2% but a different calculation methodology it will have a very modest impact on our Jacobina mine and even less impact on our Chapada mine. Copper concentrates fit in the original formulation years ago were expected to be at 4% of stated 2%. So we're very encouraged by that but what's particularly encouraging from the sustainability, ongoing management of a business is that this law also contemplates the creation of a new body. It is not the current DMBM. It is attempting to create more transparency in this administrative body in terms of how it manages permitting and claims and it creates more certainty on the process and the timing for permitting and for claims. So on balance I would say that it's very encouraging, some of these actions that are being taken in the country. There are some rough edges but I think that going forward certainly into 2018 and the years to follow I think that Brazil will be back on a very, very solid path for investment into the country.

Perfect, thanks for that clarity. And just one last question for me, just given the run up here in copper any thoughts about putting in some protective hedges to sort of lock in some of the margin with your currency hedges already in place at Chapada for 2018 and the remainder of 2017?

We will always consider that. Clearly we want to be in a position where we're close or better than our budget assumptions. So we will always consider that Dan. I think that that's something that we've done in the past. While we don't state it expressly this way, copper is -- we do treat that as a credit to our precious metals production in gold in particular. And so that is something that we would consider. But right at this juncture whether or not the short term will continue to show strong copper prices, we've seen some pretty significant improvements, almost $0.15 in literally weeks to months per pound. Copper is likely to get stronger over the course of the next number of years and that's an important point to mention here. One of the things that is driving that is an IMF view that the government in China has, sorry, that the economy in China is now more robust and continues to improve. From a personal perspective I also look at this very strong print that we're seeing in the world on the automotive side in particular with electric cars. There has to be storage capacity and you need a certain metal for storage capacity and that's copper. And so I think certainly intermediate and longer-term there is a higher potential for copper price to be well in excess of where it is today. And so we're very encouraged with where copper is today and we will continue to go but we'll continue to monitor and review whether or not we should be taking short-term or intermediate term actions to lock in some of that increase in copper price.

Great, thanks very much. Enjoy the weekend.

Thank you.

Thank you. [Operator Instructions]. The next question is from David Haughton from the CIBC. Please go ahead.

Good morning Peter and team. Thank you very much for the update. Perhaps the first question could go to Barry if it is okay, Peter, just looking at Cerro Moro, you can say the development moving quite nicely on the underground, wonder if you have touched the ore underground yet and what the ground conditions have been, are there any surprises?

David yes, we have touched ore and you may recall from some of the previous information we provided that the ore is in two distinct zones. There is the way the rock touch the surface and there is the fissure rock a little bit deeper down. Our intention this year, so we are in the way to rock and we haven’t come across any surprises. It is all according to what we expected. By the end of the year we will be forecasting total horizontal development close to 1000 meters. We will be advancing into the fresh rock as well. So before the end of the year we'll have a good understanding of the underground conditions in both of those ore zones.

Okay, so the amount of reinforcing that you had to do on your various drives there is nothing out of the norm there, it is all as expected so far?

Correct, there is nothing out of the norm at the moment.

Okay, so over to Jacobina if that is alright, quite an improvement, a nice trend there on the throughput in Q2 building on what happened in Q1 and last year. Wondering where to from here, where do you see the throughput moving to at that mine, and what's your forward expectations?

David, our target is to fill that mill at full capacity of 6,500 tons per day. So that is our target and I say difficult to achieve this year but we're trending towards that and then very good chance that will do it for next year.

Alright, so that's quite a step up from where we are today.

Yes.

Because the issue there the way it’s been mine confined rather than mill confined. So I guess you're getting quite a bit of development ahead of you to be able to support that?

Yes, we have more than a year now, it's 14 to 15 month ahead, development ahead of production so that wasn't the case in the previous year. This is where we are now, this is why Jacobina is performing that well.

Okay, just flipping back to a comment that Peter had made in the opening portion about Suyai saying that the local opposition seems to have died away and I find that rather interesting and wondering where to from here and what the payment in timeline might be?

Let me make sure that we clarify. I think that was a bit of a paraphrase David. We didn't see the local opposition has died away, I think it would certainly be true that the local opposition is substantially less than it has historically been. And what we're also saying is we have to look at it and say, what have been the reasons for that local opposition. Now remember this is an asset that a predecessor of ours owned. We just kept it on the shelf and what we've been doing is improving as I mentioned the technical aspects of it. We have been engaging in the local community, we've been engaging at several levels in the country. We've been engaging with potential partners that are local partners, nationals of the country to see is there a plan to move forward, what have been the two things that have been the primary reasons for the initial opposition. We can agree to disagree on whether or not it was managed well or not managed well by that predecessor company but the two reasons were an open pit and the processing and use of cyanide. Now we as members of this community and in this industry can understand that all of that can be managed very well. But we’ve looked at it from a different perspective which is rather than trying to explain how to manage it, let's look at it from the perspective of how do we eliminate the issues. This is a 15 gram per ton deposit. It is configured to be an underground mine, it does not have to be open pit. It requires a little bit more capital to do that but it delivers excellent returns and great production. That eliminates one of the issues that has historically been raised. The second is the use of chemicals and cyanide in particular and in that regard if we can process a high grade concentrate and my recollection is we're looking at three ounces per ton or more and then over land transport that to an offsite facility that eliminates our risk as well. Clearly the preference would be to process at site. But we're not going to engage with this plan with local community, with the province, with the national government, with potential interested parties that might want to participate with joint venture. Clearly our preference is to do this on our own but, we also recognize the importance of having a national involved. And we'll look at all of those options to see how we can surface value from this asset.

Yes, I know that you been working on your social license for a very-very long time there, so perhaps I just latched on to a glimmer of hope.

And it is a glimmer of hope but, it is a very high quality project and that glimmer -- why the glimmer is -- what's interesting is the pace of the glimmer and the pace of the increase in that glimmer. And with the improvements in Argentina, the national government's effort to encourage mining in Argentina, the significantly and I mean significantly reduced local community opposition, the lack of international NGOs that had opposed this project now not being there any longer. That gives us more than a bit of a glimmer of hope that there is a future for this project. And a 15 grams per ton, 250,000 ounces per year, we should be looking at the options that are available to us for creating value from it.

Right, thank you Peter.

Thank you. The next question is from Tanya Jakusconek from Scotiabank. Please go ahead.

Yes, good morning everybody. Just congratulations on a good operating performance from your key mines. It’s nice to say that and my questions actually not so much technical cause previous speakers have asked quite a number of questions. I just wanted to come back to Jason if I could, Jason just on that working capital adjustment I think it was about 65 million or so that we saw in Q1 and we were hoping to get some reversal back in Q2, I think we had given guidance of about 75% of that reversing in 2017, how do we look on that front?

Yes, sure Tanya. If you remember back in Q1 we had that negative outflow of the 65 million you referenced. The amount of component of that was about $40 million in Q1, the balance residing within Brio. So in Q2 here we referenced an $8 million reversal from Yamana that included a buildup of GAT at Cerro Moro of about $5 million in the quarter. So without that there was about a $13 million improvement. And going back to that comment on 75% reversal that would have excluded the buildup of Cerro Moro which we said that's going to happen over the course of the mine development and really into we think early 2019 when that will reverse itself, that GAT balance now is about $27 million down at Cerro Moro.

Okay, and for the rest of the year in terms of reversals in Q3, Q4, what should we expect?

Yeah, without the exact precision I'd say it would be somewhere between flat and $10 million quarter-by-quarter here.

Okay, perfect. And then Jason just for our model to just make sure that we have that our debt calculations are right for you, what is your current leverage ratio right now as at the end of Q2, calculated now?

I think it's right around that 2 to 2.8 that you would've mentioned this morning.

Okay, good so our model is working. Okay and just you talked about the 75 million of Brazilian tax payments, clearly a worst case scenario Jason if would assume current metal pricing and your current production forecast for a stronger second half of the year with better production and lower cost, if we had to pay to 75 million of tax payments where do you forecast your peak leverage ratio to be?

I mean there's a lot of assumptions that would go into a single number Tanya. I think the way to look at it and I'll go back to my final comments on turning the year. We feel like we're turning the year into our best performance. So we've got some, we got a static debt number and in our minds a much improved cash flow and EBITDA generating situation which will keep that leverage in check. I think that's the way to look at it. Obviously we are making a decision to move forward with the debt payments that would have been taken into consideration and as I said that's completely manageable for the company. I think other things to consider on the back half of the year is the tailwinds that we do see in the business right now. Down at Cerro Moro Peter mentioned the currency. We've seen the currency move much weaker than our plan and we're really ramping up to a high spend period so that's going to provide a nice benefit. I think we heard about production and costs from the operating team. We do think there's upside in those numbers that's going to drive the EBITDA performance as well. And I think the smaller note to point out but as we do think it’s going to be good performance in the back half of the year.

No, no, I mean that’s what we have to in our model, we're just wondering what would be peak if we had to pay that 75 million or maybe is the 2.8 peak for you of given the better performance for the second half of the year at constant pricing?

Yes.

Yes, it is?

No, I said that I think the way to look at it is our debt levels are going to be tempered by the growing EBITDA and any cash flow outage is included in those numbers.

Okay, alright, thank you.

Thank you. The next question is from Steven Butler from GMP Securities, Please go ahead.

Thanks operator. Jason while you're on the floor there, in this provisional measure of 783 as Tanya was asking about these payments, the 75 million in 2017 and 2018, in addition would you have to make these other annual payments end of the year if they meet the exclusive, in other words you had the payments from 2018 to 2029 for 12 more years of the 9.2 million per year, is that also in addition too, correct?

No, those are two different scenarios Steve. As we've made our disclosure we have an original proposal that 783 and then the more recent joint proposal of Congress that's been put forward and that made up the payments primarily which would be made over the balance of 2017 and then that one stop payment in 2018.

Okay, so right. So time value wise they are not too different from an NPV point of view.

And then Steven the 2018 payment in the original provisional measure would be lower than its 9.2 million versus the amount that would be in the suggested amendments.

Right, okay, thanks Peter. Last question guys on Suyai was just coming back to that one whether it comes out of the woods or off the mountain eventually. But in terms of the work you've done or not, how much work has been done on concentrate in terms of sort of the application that -- would concentrate work here I guess is the question, maybe some of the maintenance of the rough metrics if you can pull them to us here?

Hi Steven, it’s a Barry Murphy again. We’re actually looking at two options for Suyai from a processing perspective. One is the production of a final product metal and the other is the concentrate which based on your assumptions that we would ship that and total refine it offshore. So it is considered to be viable to deliver the study that we've done.

So I guess Barry what would be the flotation product, is it a pirate flotation or what's the essence of it?

Correct, pirate flotation concentrate.

Okay, alright, that's good enough for now. Thank you.

Thank you. There are no further questions registered at this time. I would now like to turn the meeting back to Mr. Marrone.

Ladies and gentlemen thank you very much and good question has been asked about where we are with our balance sheet and our leverage and where we would expect to be. And part of the reason why there are moving parts is that we are on a run rate for production that is well in excess of where we are on our guidance. And that makes a huge and meaningful impact and change to the cash flow generation and the EBITDA of the company. We have a copper price that is in excess of where we are on our budget and where we were in the second quarter and the first half of the year and that will have an impact. So if we put all the building blocks together we get to a different result than we would if we take a static view of 940,000 ounces and only the realized metal prices that we have in the second quarter or the first half of the year. We're confident that we will not be at risk with our leverage ratio and we're confident that that continues to improve. And I hope we can also impart some confidence that we're not going to leave this without safety nets and part of those safety nets is making sure that we take advantage of monetization opportunities where we can, where there is the right value being reflected in those opportunities and, the first and foremost of course is making sure that we've got the technical aspects right. We now believe that we have the technical aspects right, and we're looking at all options including possible monetizations. So with that ladies and gentlemen thank you very much.

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.