Peter Marrone - Chairman and CEO Daniel Racine - EVP and COO Henry Marsden - Senior Vice President, Exploration Jason LeBlanc - Senior Vice President, Finance & Chief Financial Officer Yohann Bouchard - Senior Vice President, Operations Gerardo Fernandez - Senior Vice President, Southern Operations

Josh Wolfson - Desjardins David Haughton - CIBC Steven Butler - JMP Securities Mike Parkin - National Bank Dan Rollins - RBC Capital Markets Andrew Kaip - BMO Anita Soni - Credit Suisse Carey MacRury - Canaccord Genuity

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 2018 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 12:00 pm 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 to Mr. Peter Marrone, Chairman and CEO. Please go ahead.

Thank you very much. It has been another really good quarter for us. And I would like to thank Daniel Racine, Jason LeBlanc and Henry Marsden who are here with us today and presenting and their teams for their efforts. I should also mention that here with us and we would like to thank as well are Yohann and Gerardo and Barry, who manage our operations in technical services, while not formally presenting, they will be available for any questions that you might have. Moving into the presentation. It's been another quarter of production and costs that are better than planned. Precious metals production is expected to exceed our 2018 guidance were above plan to the mid-year. As I mentioned, we expect to exceed guidance for precious metals. Gold is expected to be above guidance. Silver has begun the year more slowly, but higher grade silver areas will be mined in the second half of the year at El Penon and Cerro Moro contributed very modestly to production at the end of the quarter and will contribute more significantly to gold and silver production all in the second half of the year. Overall, then precious metals production is ahead of plan and tracking to above guidance and gold and silver individually will track and are tracking well to meet our guidance. On the copper side, copper production is well above planned and on track to exceed our guidance. And our costs are tracking to the low-end of the range of guidance for our costs. We continue to advance in the quarter the phased approach evaluating the opportunities to maximize value at Chapada, with optimizations for further recovery improvements and a progressing feasibility study for our expansion. We announced commercial production at Cerro Moro late in the quarter. The mill throughput rates are now approximately 90% of capacity. Gold and silver recovery rates are at 95% of design rates. But more interestingly, in the course of the last week or so we have begun to see our mill capacity coming closer to 90% to 95% and recoveries as much as 94%. We are transitioning into a cash flow harvest cycle with a focus on longer term cash flow growth and maximizing our return measures mostly our return on invested capital. And on the exploration side, we continue to advance several discoveries that existing operations in particular. We are expecting more ounces in inventory at Jacobina and better grades. We have an improved plan on the expansion of Chapada with better grades and more resources coming from Baru and Sucupira, which improves the life of mine plants. New higher grade discoveries here at [indiscernible] a new discovery that is adjacent to the existing open pit at Chapada. We are expanding the sulphides at Suruca with significant opportunity to improve strip ratios on that project, more ounces in inventory at Minera Florida, more ounces in inventory at Cerro Moro and the replacement of the pre-did ounces at El Peñón. I won’t spend a lot of time on this page of our presentation other than to say it again that gold production and metals production generally were better than our plans and we’re tracking very well to our guidance. On the costs side by product all in sustaining cost of $682 per ounce for gold and just over $11.20 per ounce on silver. Strong production across the board and in line or better costs across all measures. We are -- we have a significant number of assets in this portfolio that has strategic value to this company have longer term value to this company. They include Agua de la Falda, La Pepa, Monument Bay, our investment in Leagold to name some. We are highlighting some of them here that are significant and I’d like to spend just a few moments before passing the presentation to Daniel and others to discuss these. Agua Rica is an impressive project that is not so well known, it is reminiscent to me, Chapada 15 years ago. It was a known project, but it had been known for 25 to 30 years until we came along to -- with a development plan and ultimately put that into production. We believe we should be engaged in its development while finding responsible and quality and qualified partners. This requires multi-lateral discussions and time to get it right and we will take that time to get it right. These discussions are advancing and in the meantime we are advancing the project including now with a study on a scalable project that require significantly less initial capital. Gualcamayo, Jason had clarified certain aspects of Gualcamayo and what we are doing on the aspect of asset held for sale versus the management of that asset, on our conference call for the last quarter, let me touch on some of that. We develop a plan that extends the operations for a three year period plus production coming from the heaps after the mine life of the open pit expires. This gives time for exploration to catch up. There is significant exploration potential in our oxides but the train is difficult and it will mean that there has to be a longer term exploration plan, there is further potential in Deep Carbonates and that is advancing and yes we are considering, we have been advancing discussions, we were overages remain to us on a possible sale and any possible sale if anything, if any should recognize this. We need to be sensitive also to market conditions, we aware that market conditions are where they are in the precious metals industry and in respect of the balance sheet and ability to finance the purchase of this asset amongst the various interested parties. So while this is a small asset for us, it has value and we will take our time to manage it well, both operationally and on a possible sale. And finally let me touch a little bit on Suyai. There is a new paradigm in the local and provincial engagement relating to this project. It has significant value for us, it has significant value for our stakeholders. It is one of the richer deposits certainly in the Americas. It is a multi-million ounce deposit and we continue our commitment with local stakeholders to work with them on the possibility of developing a development plan for that project. And with that ladies and gentlemen let me pass it to Daniel, on our operations.

Thank you, Peter. Good morning, everyone. In the second quarter we continue to delivered operationally. We produced 224, 000 ounces of gold for Yamana’s mine plus over 24,000 ounces for Gualcamayo. The strong performance included year-over-year increases of 19% at Chapada, 12% at El Penon, 11% at Canadian Malartic and 10% at Jacobina. Despite the lower production at Minera Florida, we are still on target to achieve our 2018 guidance. We also produced 1.3 million ounces of silver and 31.1 million tonnes of copper. Globally we are tracking to exceed our gold production guidance. We are also ahead of plan for copper production. While we are slightly lower than plan in relation to silver, our strong gold production has a position to exceed total precious metal production. For silver, we are expecting production to increase in the second half as we mine higher grade areas at El Penon and Cerro Moro will contribute more significantly. We continue to expect a strong second half, so all-in-all we are well positioned based on our first half production. Turning to cost. We are well positioned compared to guidance through the first half of the year. We are already in line or below the midpoint of our guidance range for gold and copper for both cash costs and all-in sustaining costs. We expect full year cost to be at the low end of our guidance. Our costs are benefitting from higher production, operational efficiencies and the weaker local currencies, which begin to positively impact costs late in the quarter. At Chapada, we began exceeded -- we again exceeded quarterly expectation for both gold and copper. This contributed to our higher revenue and operating earnings. Modification to the floatation circuit that were made in 2016 and 2017 continue to drive process improvement. Most notably with plant recoveries and circuit stability across the range of all types present in process material at Chapada. In terms of average recoveries, we achieved the highest quarterly level in over six years for both metal. Gold and copper recoveries were 66.5% and 86.2% respectively. The higher production of gold and copper plus operational efficiencies and the weaker Brazilian real positively impacted costs in the quarter. With Q1 result we presented and multi phased plan for Chapada in Q2, we advanced Phase 1 which target an additional 2% increase in gold and copper recoveries. We have begun to prioritize engineering for long lead time equipment and we are on track for commissioning on this phase in mid-2019. At El Penon, gold production exceeded expectation in the quarter and we are on track to exceed annual expectation. We expect second half gold grades to be higher than Q2, which should support strong production in Q3 and Q4. Silver production increased compared to Q1, although was slightly lower than planned for the first half. We are expecting higher silver production in the second half as the Dorada and Providencia veins contribute higher grade ore. Overall unit costs were in line with our plan. The allocation of cost are proportional with revenue contribution. So we did see higher gold and lower silver costs compared to plan. It is worth noting that the weakening of the Chilean pesos occurred late in the quarter, so we got some of the benefit of that as well. Our infill drilling program continues to replace production by upgrading mineral resources and the exploration program is indentifying structures in the core mine area, which are expected to increase the mineral inventory and ultimately we see the potential to extend the mine life. At Canadian Malartic we had another record quarterly production. Strong production was again drive by higher mill feed grade and tonne processed. The strong production is positively impacted costs and we are tracking below guidance year-to-date. The extension project is advancing according to plan and is on budget. We expect to begin blending ore from Barnat with its higher grade in late 2019. The contribution from Barnat should increase and be more significant starting in 2020. Jacobina also delivered record quarterly production, which reflect the strong momentum we have at that operation. Increased production was driven mainly by higher processing rate. The flexibility provided by staying on top of underground development and the 60,000 tonne surface stockpile we have built are supporting the strong operational performance and position us to potentially exceed full year guidance for the mine. Costs are benefitting from the increased production in addition to the benefit of ongoing cost optimization initiative and the weaker Brazilian real, we experience late in the quarter. Plant optimization initiative continue and the commissioning of the advanced control system planned for the third quarter is expand to enhance plant stability. We continue to target the objective 150,000 ounces per year and we think we can get there with minor modification to the plant. Minera Florida continues to transition to higher grade zones at Pataguas and PVS. This is impacting short-term production as efforts are redirected to development and exploration activities. We expect both of these zones to contribute to higher production in the second half of the year, grade are expected to increase to 4 grams per tonne for the second half. Development access has reached the central position in the Pataguas vein and at PVS development in the main vein progress, with stope production commencing by the end of Q2. The sequence of mining has been adjusted due to the discovery of several secondary structure around the PVS main vein. We expect this discovery to increase the mineral inventory. As mining transition to more productive area we see grade increases this will continue to improve costs. At Cerro Moro we have our first doré pour report in May and declare commercial production on June 26, 2018. With the declaration of the commercial production our attention has turned to operational optimization in support of delivering guided metal production of 85,000 ounces of gold and 3.75 million ounces of silver in 2018. Presently mill throughput rate are around 900 tonnes per day equivalent to 90% of capacity. Recoveries are also tracking well with gold and silver recoveries at 91% and 86% respectively. Those levels are approximately 95% of design rate. The gravity circuit was commissioned in late July and is expected to increase recoveries for both metal. Since the gravity circuit has been operational we have been getting days with tonnage and recoveries in line with design rates. I will now turn the call to Henry.

Thank you, Daniel. Good morning, everybody. Yamana is having a good year in exploration and I would like to briefly introduce five sites where I see significant progress in the first half of the year. We’ll start with Jacobina this is a long life assay that already has over a decade of reserves in place. So our focus at Jacobina has been on grade. We’re looking for new inferred resources with higher grade, our most successful program this year has been inserted in Serra do Corrego. This is the up dip portion of our active mining area Canavieiras. And we’re seeing good results at Serra do Corrego, we’re seeing higher grades and we expect to see substantial new inferred resources by the end of the year at higher than life-of-mine grades. We also own a very large land package at Jacobina. We cover almost 80 kilometers of strike of the favorable formations the hose formations and we’ve been reviewing that package in defining new targets and we think we have a very significant new target to south of João Belo which we call João Belo Sur. And we will be working on that later in the year. We’ve also reinvigorated our generative program and elsewhere in Bajais [ph] State, about 180 kilometers South of Jacobina. We’ve returned to the lever of Lavra Velha project. This is another district scale project that host some copper gold mineralization similar to IOCG deposits and we have a modest surface resource that excel in grades that is impart oxidized and potentially amenable to heap leaching. We’re currently drilling about 6,000 meters on this project this year and we’re going to try to find an overall mineral envelop for the potential of about 1 million ounces at over 2 grams in the pittable scenario. At Chepada we’ve been focusing on improving life of mine plans essentially. So we’ve been focused in the first two quarters looking at expanding resources in Suruca and in Sucupira areas. At Suruca we’ve been targeting the sulphide deposit underneath the known oxide deposit and we’ve also been expanding down dip. The deeper parts of the deposit are significantly higher grade than the overall deposit and the most significant development was [indiscernible] when targeting the deep proportions we cut a new hanging wall zone this gave us a wide zone at over a gram of gold in the near surface. And we expect this to really help us with the open pit design in the long-term. At Sucupira we’ve also been focusing on improving the mine planning for a proposed pit expansion that will be designed to try to access the high grade with deeper Sucupira deposit. We successfully expanded the high grade at Sucupira for about 150 meters to the Northwest. And we’ve also been intersecting shallower lower-grade material in the Baru area that we think will help reduce potential waste and improve the overall economics of the pit design. Current exploration in the next two quarters is going to focus on additional near-mine resources with higher grades to improve the long-term production plants. At Cerro Moro we’ve seen major advances in 2018 and we’re getting well positioned for a strong exploration push in 2019. We built a very active and successful exploration team that through the years of extensive soil sampling, mapping, rock sampling have defined numerous new surface targets. We’ve set the 13 of these targets in Q1, Q2 on two areas Tres Lomas and Michelle areas have yielded good intercepts that are potentially economic. Infill drilling on Veronica, a vein that we discovered in 2017 has also been successful. We expect by the end of the year to have measured and indicated that will at least replace 2018 production, adding another year to the profile of the mine. We expanded our budget in 2018 by about $2 million and look forward to seeing further exploration success on this project. At Minera Florida we’ve focused our efforts on the new Agua Rica concessions that we acquired in late 2016. We have previously reported significant success in this block with the discovery of the Pataguas vein. And we’re now defining measured and indicated resources at Pataguas, at PV Sur and we’re growing new resources on this play of Pataguas called Don Leopoldo. The attached figure shows a portion of the PV Sur vein. And we’d like to emphasize how these veins tend to splay into wide, higher-grade zones near the North-South faults like the Mackie fault and applying this model should give us much better defined targets in order to look for higher-grade and concentrated resources within the mine. Ongoing surfaces work this year has defined five new veins and we’ll be testing those through a combination of surface and underground drilling. All of the new resources that we have in 2018 are well above the average mine grade, demonstrating the potential of the Iva Frie [ph] block to significantly enhance the mine operation in the long-term. Thank you.

Thank you, Henry, and good morning everyone. Turning now to financial performance for the second quarter. We delivered over $430 million of revenue, up $3 million compared to last year. However, despite the flat revenue year-over-year, our gross margin before DD&A was up $30 million or 18%. With our first quarter results, we highlighted the expectation that gross margin in both dollar and percentage terms would increase as the year progresses, which was the case in Q2. We’re up about $7 million quarter-over-quarter and expect further improvement from the contribution of Cerro Moro starting now in the second half. Net earnings attributable to Yamana equityholders for the quarter was $18 million or $0.02 per share. Included in earnings are certain non-cash and other items not reflective of ongoing operations. And most notable being nearly $112 million effect of non-cash foreign exchange losses in the calculation of deferred income taxes. Earnings per share would be impacted positively by $0.04 after taking into account this and other adjusting type items during the quarter. Operating cash flows before net change in working capital was approximately $157 million during the quarter. And after working capital, outflow of $55 million, operating cash flow was approximately $102 million. The largest working capital impact was the anticipated inventory build-up and lower payables at Cerro Moro that accounts for about $26 million of the total. This was roughly in line with what we laid out in Q1. The remaining impact is from smaller movements across a number of mines. I’d like to point out that since the start of the year, our trade tables are down about $110 million, which now reflects a more normalized run rate for our operations. As I mentioned on our Q1 call, we partly reversed the working capital movement in the second half of the year. I would expect something in the range of $30 million to $50 million through year-end with our seasonality effects in considering Cerro Moro as a new operation. During Q2 we spent approximately $41 million on expansionary CapEx, which was down to its lowest level in over a year. This mainly reflects the completion of construction at Cerro Moro. Going forward, we expect expansionary CapEx to normalize around a future annual run rate of between $50 million to $75 million. With the stronger cash flow generation on the back of Cerro Moro and the lower CapEx, we are transitioning to a cash harvesting phase that we’ve been anticipating. With that, I will now turn the call back over to Peter.

So, ladies and gentlemen, thank you very much for participating on the call this morning. And at that point -- at this point, perhaps we can open the call up to any questions.

Thank you. We will now take questions from the telephone lines. [Operator Instructions] Our first question is from Josh Wolfson of Desjardins. Please go ahead.

Thank you. Couple questions on Cerro Moro, just with respect to the stockpile grade, which I believe was over 20 grams as reported in May. Was that processed in the second quarter or is that still available on surface for the second half of the year?

Good morning, Josh. The current graded about 20 grams per tonne gold, another thousand silver. So we've been replenishing the high grade from the mining during the quarter.

But it wasn't processed Josh in Q2, it started to be processed in Q3. Q2 was lower grade.

Got it. Okay.

To start the mill, we have to process lower grade.

And what was the -- what's the current volume of that stockpile?

A month, 30,000 tonne.

Okay. And looking at costs is there any sort of guidance you can provide on expectations for unit costs at the current time for Cerro Moro?

Our costs are in line with what the guidance we provided earlier this year. So, we don't see any increase in costs there right in line what we expect.

Got it. Okay. And lastly, for Cerro Moro for capital costs going forward, what should we expect to be a reasonable sustaining capital rate with the development I guess, ramping up?

Hey Josh, it's Jason. I think it's -- I’d assumed something like $15 million for the balance of the year.

Okay, that's all my questions. Thank you.

Thank you. Our next question is from David Haughton of CIBC. Please go ahead.

Yes, good morning, Peter and team. Thank you for the update. Just looking at Chapada, very strong results when it came to mining, but the processing rate was below the run rate that we've seen recently. I'm not sure when there's maintenance involved there. But thinking forward what sort of throughput rate should we be expecting of the mill at Chapada?

Yohann here. Chapada I would say in the second quarter, we process harder rock than we anticipated, because we mine most I would say good portion of the Corpu Sul [ph]. In our budget, we have about 24.3 million tonnes. And it seems like this year we're heading through, we're going to be about 1 million tonne below that. To mitigate that we decided to use about the same strategy in the Canadian Malartic and use pre-crushing. So that pre-crushing will be installed. Sometime I would say, I think during the first week of August and the plan is to go up to about 70,000 tonne for the process with that we setup.

Okay. So that's quite a step-up going forward. So should we be anticipating a forward rate of more like 70,000 tonnes per day, when we go into the fourth quarter and into 2019?

This is what -- we use slightly lower will be about 68,000 tonnes on our model just to be cautious.

Okay. And that's before you even introduce the Phase 2 expansion. So moving in the right direction.

Yes, exactly. Yes.

Okay. So I think that's being up to nearly 25 million tonnes per annum. The other question that I had there was in relation to recovery. So recoveries in Q2 still Chapada very good, Daniel, as you'd pointed out in your slide. And I'm just wondering what we should be thinking about going forward and what the implication is for your Phase 1 improvement on recovery? So, what should we be thinking about recoveries going for the balance of this year and ahead into 2019, et cetera?

I would like to start first with the gold result in the second quarter was mainly due by ability of blending of material. So basically we really have to manage our power content and level of oxidation. So by doing so, we can really like increase our recovery. The other thing is for sure is the expansion that -- or the optimization that we did in 2016 and 2017, which we plan really result as you know we were targeting like 2% recovery. But it seems like it was more better than that. And the third, I mean, I need to give credit to the people that we have onsite they did a really good job and we have a -- they really look at innovation and really proactive to always seeking for opportunities to increase recovery. I would say for the Phase 1 that we undertook is the idea is to install four new cells on the rougher, flotation circuit on the back-end. And by doing so we believe that we are going to be able to increase recovery by 2% for all type of material. You are going to see these changes happening in the second half of 2019. The last part question really is for the total year. We expect to have an average recovery on copper and gold of 82% and 62% percent respectively.

Okay. So, stepping down a little bit from your success brief blending in Q2, but then moving into 2019, you’d expect for each phase to move up by another 200 basis points say another 2%. So, 64%, 65% for gold is that achievable and 85% copper?

It’s always based on the blend we’ve gone have based on the mining sequence, but this is exactly the target, yes.

Okay. And I have just got another question, If you don’t mind. Looking at Jacobina, pretty good results stare on your throughput heard about the commentary that you’ve made of getting your stope them to replace. Can you see Jacobina getting through potentially the 6,000 tonnes a day kind of level.

This is the gold there is no doubt about it, I mean, you know, you look at our mill throughput this is an average for the quarter. We are peaking way above 6,000 tonne per day at this moment. So, we in the process to install expert system that going to give some transparency to the operation. But furthermore we started a study with very, very low investment to bring that processing plan at an average of 6,500 tonnes per calendar date.

And when would you expect for the 6,500 tonnes a day to be achievable and what kind of cost is required to get there?

It’s under study at this moment in time. So, we believe that we’re going have these numbers by the end of this year. But as I said, the mill is already doing really good and the gold is ready to gain some consistency in that throughput at that processing rate.

Okay. One last question, I know I have asked a few, perhaps for Peter, we saw from the Gold Corp release that Alumbrella is going to go to an underground possibly sub-level cave [ph]. What’s the implication of that on Agua Rica do you think?

Well, first, I’m not aware of what Gold Corp has said. We’re aware certainly of that underground plan for Alumbrella. These underground developments will be difficult, it would be substantially smaller scale and not for particularly long period of time. I don’t think it has an impact on our efforts in Agua Rica as I touched on. David, we’re looking at scenarios that do not require, I said that Agua Rica is not well understood project and I stand by that. Again, it reminds me of Chapada with 25 years, 30 years of history until we came along in 2003 and then progress the development and production by 2007. And people had talked about how there were challenges with that operation. And, one of the challenges, I think with Agua Rica is an impression that the only scenario that is available for is an integration with Alumbrella. And part what we’ve been doing what we say in our MD&A, what we’ve said in our prior quarter what will continue to advance is that we think that there is an option here that is not necessary the big larger open pit with multi-billion dollars of capital, but a scalable option that starts with a smaller pit a smaller plant. Substantially reduced CapEx that allows that project to be developed overtime and then it would scale to large -- on a smaller CapEx and then it would scale to a larger size. So I don’t believe that it will have any impact on what is the intermediate and longer term prospect and perhaps even a shorter term prospect for any activity relating to Agua Rica. What will have an impact is how we evaluate potential partners in that project. We think that it should be developed, we think that we should be in a partnership on this development, we’re not a copper company and so we don’t believe that we should be operating it, we don’t believe that we should have the lion share of the project, but there are lots of options available to us in terms of how we continue to advance that. What we are doing right now is we are saying who are the viable parties, the responsible parties, the parties that are light minded, we like partnerships as you are aware, and we are looking at how we can advance those discussions.

Alright, thank you everybody for the information today.

Thank you. Our next question is from Steven Butler of JMP Securities. Please go ahead.

Well, good morning, guys. Good looking quarter overall and particularly the recoveries at Chapada. And I guess coming back to that, Chapada was a particular a good quarter I guess you’re saying on the ore blending front and one that was maybe a perfect -- more of a perfect storm of mill feed is that what you are saying?

Yes, Steve.

Okay. The -- thank you for the elaboration.

You know mining Steven, it’s all depends where you mine it’s sequence and we were in a good sequence and good blending in the quarter. The rest of the year will be typical, but globally our recoveries are better than what we expected when we did the Phase 1 and Phase 2 optimization at the mill.

I’d like to add something Daniel if you wish. Steve what we’re doing now I mean we have -- we did all these optimizations and one after the other and we’re in the process as well to test different kind of blend. So a blend this quarter, I would say this month with that same different kind of blend between like lower grade and higher grade to see how the mill going to react to that. So it’s a learning process for us and as Daniel said it’s all about blending and the key is also to improve recovery of different kind of blends, so that’s why we need to go through this test. So I just said it was a perfect storm in the second quarter and hopefully, I mean our job -- I mean our work is really to optimize our recovery by type of material and this is one of the main points for us.

Okay, thank you. Cerro Moro -- just last question, Cerro Moro gravity recovery that you expect from Cerro Moro on both metals if you can remind us of that, and the net benefit to gold and silver recoveries for the gravity being added in. Thanks.

Okay, the expected recovery for gravity is between 30% and 35% that is on gold and silver I don’t recall on top of my mind right now, Steven. But, if we -- 91% gold without gravity, what we have seen in the last five days is that we get a kick of about 4% to 5% running the gravity throughput and for silver the impact is even higher as we get a lot of electron in the gravity concentrates. So we see a jump from 87%, 88% to over 92%, 93%.

Okay, sounds good. Thanks guys, thank you.

Thank you. Our next question is from Mike Parkin of National Bank. Please go ahead.

Hi, guys. Most of my questions got answered, but on Chapada the comment about the blending of the ore, is the different types of ore available able to sustain that blending that you’ve realized in Q2 for a longer period of time?

I would say -- I would think to that question here is for sure I mean the Corpu Sul is the ore grade pit and we have to go through a phasing of removing some moist to get access to the better ore. So there is a kind of I would say a cycle between these good recovery period. But basically for the second half of 2018 we believe that we’re going to be pretty much aligned with what you saw in the first half.

Okay. And then on Jacobina, with what you are doing there and the stope inventory, is the CapEx spend in 2Q kind of fair to assume on a go forward basis for the near-term?

I would say on a CapEx point of view, we’re going to spend a little bit more CapEx in the second half of this year, but mostly it's going to be with development and we're going to also invest in our mobile equipment underground.

Okay. I think that's it for me. Thanks guys.

Thank you. Our next question is from Dan Rollins of RBC Capital Markets. Please go ahead.

Yes, I was just wondering, just on Jacobina the cost significant improvement there and continue the trend that you've been building over the last I'd say 8 to 12 quarters, accelerating mid-last year. But the drop in cost this quarter relative to Q1, how much of that was related to currency movements, and how much of that was actually related to improved productivity at the mine site?

Yes, Dan, Jason. I'll jump on the currency component and really there was a bit of an effect late in the quarter, but the currency swing really happened in right at the end of Q2 and then we're getting a more significant effect here in Q3. So Jacobina is probably a site that is most exposed to that beneficial tailwind right now.

Most of the improvement to costs -- to pick up on what Jason said was not the result of currencies. Because we saw the currency devaluation occurred too late in the quarter for it to really have a meaningful impact on Jacobina's costs. If the currency stay at the level that is after this quarter and the balance of the year, it is more heavily geared toward depreciation of currency. We will see a more significant improvement in its costs. And so we should see an improvement in Q3 and Q4 cost as a result of currency.

Okay.

We have many cost initiatives at Jacobina that we started last year. And then we're improving each quarter. And then the main component for this quarter on cost is the production we had a record product a quarter at Jacobina.

Okay. So you're pretty comfortable this is sort of as you move quarter-by-quarter you have some fluctuation, but you're almost setting a new base every quarter.

We're doing quite good at Jacobina. We're happy we're going to trend below our target or our guidance at Jacobina for this year. The quarter was an amazing quarter. We would like to see the same costs each quarter, but it always depend on the -- where we're mining the sequence, the development that we need to do each quarter, but Q2 was a perfect again quarter at Jacobina.

And Dan, the expression about the trend being our friend, I think the trend at Jacobina with the excellent stewardship has been provided by Daniel and by Yohann and clearly the people at the operation, it shows a very positive trend on production optimizations. The impact of that on costs quarter-over-quarter there maybe fluctuations, but we're very comfortable with what we said at the beginning of the year. And now we do have the tailwinds of currencies that would likely improve the cost of that operation.

It's been a good change around that asset. Because if you look at what you've produced sort of quarter through the first half of the year. You're almost at 75,000 ounces onto level you're producing at about four or five years ago when that asset sort of came off, but it's been a great turnaround I’d like to see the cost going forward. And then just on -- one question. I know you didn't change the guidance, but you use some very positive wording around the guidance. Is this something just to see how Q3 goes and then take a look at providing an updated guidance, or are you just sort of comfortable with the 900 and sort of using wording to say we're comfortable that we will beat the top-end?

So I hope we can say -- I can say on behalf of the entire management that it's a little bit of both. We're very comfortable with the guidance we're very comfortable that we will be above the guidance. And we debated whether or not we should say. So we're comfortable think you now that we will evaluate in Q3 what we do with our guidance. And the first half of the year looks some have said should we be increasing our guidance for the rest of the year. Cerro Moro just started operations at least commercial operations late in the quarter. So we have a -- what I think is an excellent plan for the improvement to production at Minera Florida. The advancement of those two things along with what we've done with the rest of the operations should suggest that we'll be in a very good position to not only significantly increase our guidance, but then in Q3 as we get most of that quarter under our belt to be able to say this is what we expect the production platform for the company to be and to increase that production platform. So it's a little bit of both, we were trying to be more cautious more introspective. We do see very positive trend. But we'll come back to you in Q3.

Okay. And then maybe just one last question for me, just with respect to the improving free cash flow now that Cerro Moro is up and running we should see that growth through Q3, Q4 and Q1 of next year. Have you thought about -- obviously the first use of proceeds is likely to repay what’s drawn on the line of credit, is there a minimum cash balance you need as a company to run the operations smoothly without having to drawn that line of credit. And two, once you’re at that level is there any -- do you find it right now that where your bond or where your debt is sort of trading at is attractive to go out and sort of aggressively buyback some of that debt?

Yes, Dan I think consistent with what we said before, $100 million, $125 million is what we think we needed a minimum to run the business first use of proceeds are suggested would be the revolver. And again like we’ve said before we’re not going to be shy to build those cash balances though if we don’t have a use for it otherwise and given just the profile we have right now that cash harvest that would be a likely case.

Okay, great. Appreciate it and have yourself great weekend.

And Dan, may I say one of the people in the room has just commented so perhaps if I can express the point, you made the observation that several years ago Jacobina produced in the year what we’ve produced in the first half of the year. And what we did at Jacobina is we said we got the throttle back to get advanced development, to get a better understanding of proven and probable reserves to catch up on the exploration plan. We pulled back on the mining and the plant I think we were closer to 4,000 tonnes per day during that period. And now we’ve done as a result of those improvements and as you know these improvements can take years to get to the right point. We’re now at a point where we can actually not only look at the existing design, existing plant capacity, the existing mining rate, but also how we can improve on that to get to 150,000 ounces or better from that operations. So it’s a very, very good point that you made and several years later I think that that operation is now a very responsible contributor to our production, to our bottom-line.

Thanks very much.

Thank you. [Operator Instructions] Our next question is from Andrew Kaip of BMO. Please go ahead.

Hi, good morning gentlemen and congratulations on a decent quarter. Look just two questions, one, can you confirm where -- if you have or reiterate whether the 8,600 ounces of pre-production…

I'm sorry Andrew we’re having -- we’re struggling to hear you.

Sorry about that is this better?

Much better, yes.

Alright. So the 8,600 ounces of pre-production at Cerro Moro is that included in your guidance for that operation for the year?

Yes, we’ve included in our guidance as you can surmise our budget is higher than our guidance. And so we’re not yet at the point of saying that the commercial production portion is what is in our guidance, but our budget is higher than our guidance.

Okay. I just wanted to clarify that. And then secondly, can we just discuss Florida and your forecast of grade in the second half of the year. It sounds like you’re suggesting that Florida is going to be processing at materially highest grades in the back end of this year. And that there is a good chance that it’s actually going to catch up with its annual guidance. Is that the way we should be thinking about what’s happening at Minera Florida?

Yes, hi, Andrew, Gerardo Fernandez, yes, we expect increase in grades in the next quarter and then further increase in the last quarter as we progress in the new zones, particularly PVS it’s a high grade mine. We’ve faults of 6 grams per tonne as Henry described and show on the presentation and also -- but that was also why high grade. You got to think of Minera Florida like developing a new mine this new trend which is -- and PVS is a new development a new infrastructure. We are building ramps accesses, ventilation races for new zones that are away from the congested area in the core mine. So -- but we’re actually getting there we are there, we are finding more veins than we originally anticipated, we have to throttle back a little bit of the development and preparation so we can put our grades and let sub levels in the right position without compromise in the future for high grade structure. But we expect to be -- meet between 3 or 4 next quarter 3.5, 3.6 and over 4 in the last quarter this year.

Alright, thank you very much.

Thank you, our next question is from Anita Soni of Credit Suisse. Please go ahead.

Hi, good morning and congratulations on the improvements and the good quarter. My questions are with regards to Cerro Moro, so now that it's going commercial, is there anything that we should be expecting in terms of residual pre-production capital will it all move to sustaining capital at this point?

Sorry, Anita I missed the last -- very last part of your question, pre-production.

Yes, so this the CapEx is it all move to sustaining now what kind of …

Yes, it’s all sustaining and there is no expansionary to speak of now.

Okay. And what do you think the budget will be for the remainder of the year at this point.

Yes, I mentioned $15 million before I think that’s a conservative number.

Okay. And then as we go forward into 2019 and 2020, what does that look like for Cerro Moro, the sustaining sort of an ongoing number?

Anita bear with me I’ll come back to you on that one, okay.

Sure. And then just in terms of the recovery rates and the throughput that you have seen at Cerro Moro is that continues to hold up right now going into the first part of Q3, right?

Yes. We mentioned before and during July and Daniel mentioned during the presentation we started the rabbit [ph] too quick the last part of July and we have been able to achieve the fine recoveries without the 100% of the processes within plant running.

And..

We’re quite happy Anita, after only two months of starting the mill, we are already at almost full design capacity on production, on tonnage and on recoveries we’re right there. So it’s quite an amazing start of the process at Cerro Moro.

That’ s why I was asking, it’s a pretty good start, I just want to make sure that it was holding up. And then just lastly on costs, we don’t obviously only had like a few days commercial production. So do costs look in line with what you were previously projecting or is that -- is there something that we should be considering in terms of sort of inflation or currency movements or anything like that?

No, like I mentioned before Anita, our costs are right in line of what we have planned at Cerro Moro. So there is no bad surprise there the costs are what we would predicted that it will be our guidance is right on the costs and on production at Cerro Moro.

And in fact Anita, the currency is -- the devaluation of the currency has become more favorable and it’s actually past that inflection point where the devaluation of the benefit of the devaluation of the currency is actually overcoming the inflationary impacts in the country. So we’re comfortable with what we have guided on costs certainly for the year. Jason do you have that…

Yes, Anita Jason back here. So I mentioned $15 million on the back half, I think it is early now, but if you annualize that number for the future I think that’s fine.

Alright, thank you very much.

And the guidance that we provided on our mine toward Cerro Moro before it was in production was in the range of $25 million to $30 million for a year.

Alright, thank you very much.

Thank you. Our next question is from Carey MacRury of Canaccord Genuity. Please go ahead.

Hi, good morning guys just one more question on Cerro Moro. Can you talk about the mining rate, is the mining rates producing enough ore now to keep the mill full?

Yes, hi this is Gerardo. We have been ramping up from both open pit and in ground, our focus since we build the stockpile since last year our focus have been to establish the practices for grade control and dilution control, which is really, really good at Cerro Moro at the moment. Through June we were over 21,000 tonnes per month ore mining and that is the high grade, we are now considering the low grade or marginal ore into that number. This month we expect to be around 25,000 and then above that getting the run rate of 30,000 per month, start in August. So we have five open pits open all of them are high grade and then around mine started the stope in production last month some of the stopes 70 grams per tonne. So we need to be -- we are being really careful on mining with selectivity, with quality obviously with safety and the team is doing an excellent job on those measures, while ramping up and using this stockpile to blend so we can achieve the recoveries different ore types and different behavior within plant, we are lending it’s a new operation, by which even a good results maybe.

Thank you very much.

Thank you. We have no further questions registered at this time. I would now like to return over to Mr. Marrone.

So, Ladies and Gentlemen, Thank you. I wanted to make some concluding comments, but I would be brief. This call is occurring in some sense, a few days early and that we celebrate our 15th Anniversary next Tuesday. In some respect, we’ve been more fitting to showcase a great quarter on such an event. 15 years ago we were a startup, with only a very small mine purchased from Vale [ph] as part of a going public event. And we had an ambitious plan to develop Chapada, grow through development and acquisition, focus on mining jurisdictions in North and South America only and become a significant perhaps even a dominant intermediate sized gold mining company with low cost of production. We set out to create sustainably and constantly improve our management. And as we begin to end our 16th year next week we are now I hope, I can say with some pride, but certainly with reflection on the quality of management and more seasoned and established company with a quality management foray. And I should have mentioned incidentally that our health and safety record is much improved over the course of the last couple of years also. And we are a firm believer of the quality operations go hand in glove with the culture that encourages health, safety and environment. And here with us, I should have mentioned them earlier is Ross Gallinger who manages our environmental safety and governance efforts. Thank you to many of the stakeholders for their encouragement and support in helping us in this comparatively brief period achieving what we set out to do from the beginning. And with that Ladies and Gentlemen, Thank you.

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