Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Tahoe Resources (NYSE:TAHO)

Q2 2013 Earnings Call

August 09, 2013 11:00 am ET

Executives

Ira Mark Gostin - Vice President of Investor Relations

C. Kevin McArthur - Chief Executive Officer, President and Director

Mark Sadler - Chief Financial Officer and Vice President

Ronald W. Clayton - Chief Operating Officer and Executive Vice President

Edie Hofmeister - Vice President, General Counsel and Corporate Secretary

Analysts

Stephen D. Walker - RBC Capital Markets, LLC, Research Division

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

Andrew Kaip - BMO Capital Markets Canada

Chris Thompson - Raymond James Ltd., Research Division

Michael J. Gray - Macquarie Research

Operator

Hello. This is the Chorus Call conference operator. Welcome to the Tahoe Resources Corp. (sic) [Inc.] Second Quarter 2013 Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Ira Gostin, Vice President, Investor Relations. Please go ahead, sir.

Ira Mark Gostin

Good morning, and greetings from Vancouver, and welcome to the earnings call for the second quarter. We will present our second quarter results, followed by a brief question-and-answer session as time allows.

On the call from Tahoe, we have Kevin McArthur, President and CEO; Ron Clayton, Executive Vice President and Chief Operating Officer; Mark Sadler, Vice President and Chief Financial Officer; Brian Brodsky, Vice President of Exploration; and Edie Hofmeister, Vice President and General Counsel.

There is no webcast with this call. However, our August corporate presentation and updated photographs are available at our website, www.tahoeresourcesinc.com. This call will contain forward-looking information within the meaning of applicable Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995.

Tahoe's actual results could differ materially from a conclusion, forecast or projection made or referred to in this call. You are cautioned that material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included or referred to on this call. Additional information about the applicable risk factors and assumptions are contained in our press release of August 8, 2013, which is on SEDAR and our Annual Information Form for the 2012 fiscal year, which was filed on SEDAR, March 8, 2013. Additional information is available on the Tahoe website at www.tahoeresourcesinc.com.

Investors are cautioned that our May 2012 Preliminary Economic Assessment, or PEA, is considered preliminary in nature and includes mineral resources, including inferred mineral resources, that are considered too speculative geologically to have the good economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to mineral resources, it cannot be assumed that all or any part of the mineral resource will be upgraded to mineral reserves. Therefore, there is no uncertainty -- pardon me, there's no certainty that the results concluded in the PEA will be realized. Please familiarize yourself with the entire disclosure at our website, www.tahoeresourcesinc.com.

And with that said, I now turn the call over to Kevin McArthur.

C. Kevin McArthur

Okay, thanks, Ira, very thorough. I'm going to start with a couple of introductory remarks and then I will ask others in our organization to chime in.

First of all, things are going very well with the company. As you know, we are very well financed, the project's fully permitted, early commissioning at the mill has now started. We expect to be producing initial concentrates in late 3Q as wet commissioning begins and expect to be in full production at the 3,500-tonne-per-day rate in early 2014, just like we laid out in the plan all the way back in 2010.

Also, as we told you, we're doing business in Guatemala, and doing business in Guatemala comes with a few issues and a lot of noise. The business environment and the government support, is actually very sound, I might add, our community support also. But the NGO activity and a very creative Guatemala press, makes for very interesting things in any given year and we have many years of experience in Guatemala. And we are not immune to these things. And I would only ask that as investors, you read our disclosures, watch our press releases and continue to monitor our results.

We will comment on material news and events, but we will not and cannot, address news headlines that are dead wrong and blogs that are nontransparent as to sources and are quite slanted, to put it as nicely as possible. And our results are very good. The project risks have been dealt with, and we are very close to production.

So with that, I'd like to turn the mic over to a financial update from our Chief Financial Officer, Mark Sadler.

Mark Sadler

Thanks, Kevin. We are extremely pleased with the financial condition of the company at this point in time. We closed a $50 million bank loan facility with a large international bank during the quarter. This loan was designed to provide us with working capital and a cushion to ensure that we won't run out of money during our commissioning, if anything were to go wrong.

The following are the financial highlights for the second quarter of 2013 and are stated in U.S. dollars. Net loss for the quarter come out to $15.6 million or $0.11 per share. The cash outflow from operating activities amounted to $15.9 million. Corporate G&A expense amounted to 14 -- or excuse me, $4.1 million, excluding noncash, share-based compensation of $2 million. Exploration spent a total $1.4 million during the quarter. And project-to-date, $316 million of the $326.6 million budget, has been spent towards construction of the 3500-tonne-per-day mine. In addition, $13.5 million has been spent towards the $46.2 million, 4500-tonnes-per-day expansion.

Cash and equivalents at quarter end were $99.2 million, including proceeds from the $50 million loan we received in June. This amount is expected to be plenty to complete the project and bring us into full production, which is still expected in early 2014. We're essentially on budget, as we projected back in 2010, which is pretty remarkable given the size and scale of this operation.

I just wanted to add just a few comments about our marketing efforts surrounding the lead zinc concentrates we expect to produce at Escobal. Most of my career has been spent in mine operations and the concentrate marketing side of the business, and rarely do you see such high-quality and high-grade lead and zinc concentrates as those produced by our hundreds of metallurgical tests and by our bulk sample on pilot plant test completed earlier this year. The pilot plant was a significant activity for the company, because it allowed us to produce some concentrates on larger scale and actually provide samples to the smelters to confirm the quality of the concentrate that we expect to sell. The response from smelters has been outstanding, and we're now in the process of negotiating terms with those smelters. We expect to finalize the concentrate sales contracts before year-end and we believe that we've been slightly conservative in both the recoveries and the smelter terms that were contained in our PEA. This is one of the last derisking exercises that we had to complete and we're very pleased with the progress.

And with that, I'll turn the time over to Ron Clayton, our Chief Operating Officer, for an Escobal update.

Ronald W. Clayton

Thanks, Mark, and good morning. I'd like to start off by congratulating our Escobal team, contractors and our EPCM contractor, M3, on reaching a number of very significant achievements recently. In July, we reached the safety milestone of 2 million man hours without a lost time accident. The mine has achieved the development goals that we set in order to start -- be ready for production. And we began the commissioning process in the crushing plant in the first part of the mill. So congratulations to this team of professionals. Very well done.

At the end of the second quarter, as I mentioned, development advanced to the point that the underground mine was ready to begin production. Access to 18 primary and 18 secondary transverse stopes from the 1,290, 1,265 footwall lateral was completed at the end of the quarter. On-vein development had been completed in the first 5 stopes and production and drilling in the first 3 stopes was done. Training in production drills has progressed extremely well, and productivity and accuracy have both been quite high. So we're in good shape to start production. We expect to have 8 stopes ready to go by the time we start commissioning in late August or early September. And we'll have approximately 60,000 tonnes of mill feed stockpiled from that stope development. Each of the stopes contains about 30,000 to 50,000 tonnes. The grade is as we expected in the PEA and from the resource estimate, so we should have plenty of feed for commissioning and the foundation for reaching the full production of 3,500 tonnes per day by the first of next year.

In addition we've started development for the next production level, the 1,350 level and we expect to be developing a lower mining front by the end of the year. So I'm really quite pleased with the progress in the underground mine. And the operations team is doing quite well and ready to go for feeding the mill with ore.

At the end of the second quarter, the EPCM was 85% complete on the construction activities. And in the third quarter, we're going to be focused on remaining piping, electrical and programming stuff in the flotation, filtration and backfill areas. As well as finishing installation of conveyors from the tailings filtration building to the paste plant and the dry stack. The power generation plant was nearing completion at the end of the second quarter and is now operational.

In the crushing plant, we began the commissioning at the end of the second quarter, and in fact, that plant's been turned over to the operating people. We're currently conducting training runs so that the operation team has some hands-on experience with the crushing plant, and we've had a chance to begin the fine-tuning of that plant.

Remember, this crusher is capable of 7,000 tonnes a day so we don't foresee any problems in reaching our production design of 3,500-tonnes-per-day mill feed. Commissioning also started in the grinding area during the second quarter as the 3-hour motor run-in on the ball mill was completed in June. We expect to be well into the wet commissioning by the end of the third quarter and remain on target to reach our production goal -- full production goal in early 2014.

The project continues to remain on schedule and budget and, as you all know, there's always a few hick ups when commissioning a new mine and mills, so we've built in some flexibility and some belt and suspenders to aid us through that commissioning process. We also have a nice financial cushion and a very strong project team and operating team in place that's well into their training for production. So we expect to continue to hit all of our targets and make the transition to an operating company as planned.

With that, I'll turn it back over to Kevin.

C. Kevin McArthur

Thanks, Ron. And I'd like everybody to hear this that Ron and the entire team have done an amazing job of delivering this on time and on budget. But we can't declare victory yet. We're very, very close. We see the finish line. And this is without any variance from our original 2010 estimates, which is very impressive.

I'd like to make one more comment and that's on corporate social responsibility, or CSR. We've set up a new CSR division in the company. This has equal emphasis to operations, exploration and finance. Eddie Hofmeister heads up CSR from a corporate standpoint, but the majority of the work happens in the field and we're seeing very good results from our efforts. These are results happening in Guatemala, headed up by a very strong Guatemalan team. And you'll be hearing much more of this in the coming months, but I want to assure our listening audience, we are doing amazing things in the field and in our communities.

We're very humbled by the support our locals are providing to us. I'd like to describe the San Rafael communities as a zone of prosperity. This is with over 700 full-time and high-paying jobs, and this doesn't include the people in the construction; over 100 new businesses opening up in the area, this is independent of the mine; and a developing middle class in the district. And this is a middle-class that did not exist before our project. We will be -- we are expected to be the largest single taxpayer in Guatemala by next year and our local community budgets will significantly multiply with the royalties that mining brings into these local community coffers. Once again, truly amazing results.

So with that, I'd like to turn it back to the operator, and start on any questions we may have. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] The first question today comes from Stephen Walker of RBC Capital Markets.

Stephen D. Walker - RBC Capital Markets, LLC, Research Division

Just a couple of questions, maybe the first one for Mark, with respect to the negotiation of the concentrate offtake agreements. You said that, obviously, the assumptions for the feasibility were fairly conservative. Where are you seeing potential improvements and in, I guess, in the TCR [ph] is the TCR [ph] season on the treatment or refining and -- or on the financial terms that are associated with, say, a line of credit? If you could, maybe, give us a little more detail on that number, that'll be helpful.

Mark Sadler

Just briefly. I mean, we haven't finalized those agreements yet. So I won't mention too much. But certainly, the market for refining charges is changing slightly. And particularly for high-grade materials. So we've seen a little bit of an improvement there and in the payable metal, but we will realize.

Ronald W. Clayton

And Stephen, this is Ron. I'll jump in. I think our assumptions on timing of payments in the PEA are probably a bit conservative as well.

C. Kevin McArthur

Stephen, also some just minor percentage points, improvements in the recovery. And we're not really budgeting or doing anything with that. We like to leave that as operator's choice, so the operators get a chance to do a little better. So Ron set the standard early on to stick with very conservative numbers so that once again, if something goes wrong, we've got enough cushion. But also, we've got the ability to just -- I'm only talking minor percentage points, but we've got the ability to do a little better.

Stephen D. Walker - RBC Capital Markets, LLC, Research Division

Tweak it -- right. And just are there plans to put some sort of other line of credit or financing in place in conjunction with that agreement, the offtake agreement?

C. Kevin McArthur

The only thing that we intend to do is negotiate earlier payment terms in the beginning and that's just, let's call it, 90% provisional payments that ships rail, that kind of thing.

Stephen D. Walker - RBC Capital Markets, LLC, Research Division

Okay. And just a question on the expansion to 4,500 tonnes a day. You spent $14 million of the $46 million budget. I've just 2 questions, I guess, has there been any estimate to with the upside or is there any there escalation expected on the $46 million? And the timing on that for startup in 2017, I'm just curious, what work has been done and what work has yet to be done to get up to the 4,500 tonnes a day and just is that timeline out to 2017 very conservative? Or has a potential to have that startup brought back or brought in more recently?

Ronald W. Clayton

You asked a bunch of questions there so I'll -- if I miss any of them, come back to me here. But the bottom line is, is by the time we start the mill up or end of this year, let's say, all of the stuff on the surface to support the expansion to 4,500 tonnes a day will be completed. All the mining equipment to support that expansion is already on site and being used. So basically, what's going to be left to do over the next 2 years or so is the mine development. At this point, Stephen, I wouldn't expect that to happen any earlier, but I don't see any reason why we can't achieve that goal without any problem, so the goal that was in the PEA.

In terms of cost, I'm not seeing anything right now that would say that we're seeing any escalation. And again, the bulk of the money yet to spend is labor on development.

C. Kevin McArthur

Remember, our primary goal here, Stephen, is to produce 20 million ounces of silver per year. And of course, I want to be very careful. But that's not what really counts. It's the bottom line performance. But that's the -- our standard that we're setting. And so this is all about mine planning and we want to have the 4,500-tonne-per-day capacity available when we, in the next few years, see the grade fall and we can make up for that through more tonnage and maintain the 20 million ounces per year.

And you're last or your very first question was, do we see something larger than that in the future. And the answer is, yes, we have a lot of resource work to do. The exploration results are looking good. We've got to move to a new resource, get feasibility study done, we -- there's a fair amount of work yet to do. But we're affecting the latter half of the mine life with that future work and so that's ongoing.

Operator

The next question comes from Chris Lichtenheldt of Dundee Capital Markets.

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

First, can I ask, is too early to give some sense of what sort of mining costs you're seeing underground as of you've done all that work?

Ronald W. Clayton

Chris, I think generally, it is a bit too early but I can make these comments that are the things that make me feel comfortable. First off, the development costs have been -- are now in lines, particularly once we got the water taken care of, are now in line with what we expected to see. So the cost to break a tonne of rock is in line with our estimates. In terms of things like purchase of reagents, all the reagents that we need to get through the end of the year are on site already. We're not seeing anything near that's out of line with our original estimates. Labor costs appear to be right in line with our estimates. So the answer is, it's probably too early to tell you for sure because we haven't tested any of this stuff. But in general, the inputs that we have purchased or we've seen in action, are in line with our expectations.

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

Okay. That's very helpful.

C. Kevin McArthur

Yes, Chris, we haven't started any of the stopes yet. I mean these are big stopes that will open up a lot of ground and until the mill is ready to ago, we just haven't done the big blasting and mucking from these big stopes yet. So mining cost per tonne is -- as Ron said, all of the indications are we're going to be in good shape but we don't have a mining cost per tonne yet.

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

With the drilling, I think you said you've done some drilling. So the blasting will be happening very soon, I imagine?

Ronald W. Clayton

We were debating right now when to take the first blast. And really –-we're really trying to time that around when we think the mill's going to be ready to take some ore and how fast it will chew through what's stockpiled from the on-vein development and things like expect that. Because we don't just want to leave a huge hole standing open for months, right?

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

Right. So a lot of the stockpile you intend to have will be from development?

Ronald W. Clayton

That original 60,000 tonnes that we talked about is all going to be from...

Chris Lichtenheldt - Dundee Capital Markets Inc., Research Division

Okay, that's great. Secondly, I just wanted to ask on the pilot plant work that you, I guess, completed earlier this year. Can you talk a little bit about that? How that went in general and then maybe some idea of what sort of scale and throughput you were using and any unresolved issues or anything to note there?

Ronald W. Clayton

Yes, so it was about an 8-tonne test. In terms of any issues, we made a really high-quality concentrate with probably higher grade silver in it than we'll do. We didn't encounter any issues that are -- that alarmed us or are significant. We probably tightened up a few criteria, like which collector to use or some reagent adjustments and things like that. Overall, Chris, I think it was a great confirmation of our previous testing and our circuit and our plan.

The bigger thing, probably, than anything is it gave us a huge opportunity to make a bunch of tailings that we then have been able to get out into the filtering manufacturers. So we've got a jumpstart on the on commissioning of the filters because a lot of times, picking the right filter clause is really the big issue with getting the filters commissioned. So particularly from the tailings side, we got a jump start on that. We also went out with a bunch of tailings and we redid all of our backfill testing and kind of had an opportunity to really fine tune some things there that we wouldn't normally have gotten without that or that you would've done after we started the plant up. So I think we actually -- it actually helped us get a jump start on some commissioning things. But as far as the product and issues with the plant, it really confirmed where we were headed and gave us some opportunity to get a little bit ahead of the commissioning.

Operator

The next question comes from Andrew Kaip of BMO.

Andrew Kaip - BMO Capital Markets Canada

Kevin, look, I've got a couple of questions just regarding when you go to the point where you're contemplating starting up the plant and beginning production. And, just to give us a sense of how much working capital are you going to need, can you give us a sense of how much it's going to cost to run the plant and the mine on, say, a daily basis, just based on what you know?

C. Kevin McArthur

Oh wow. Of course, that's all budgeted out. And I'm just kind of looking around the table for some help here. Just -- you asked about the schedule and we're not -- we don't want to get in the business of guiding exactly when that schedule is other than 3Q. By the numbers and from our input from our EPCM contractor, late this month is the theoretical start. But we don't ever say that to you because then you parse -- start putting those in the numbers and then always something happens and it might start to 2 weeks later, and then we've lead you into the wrong place. But I'm just trying to hint that it's very close and that startup will happen, by the numbers and by -- the most critical factor for this company right now is cash balance, and we are tracking that extremely carefully. And we've got a rolling forecast of what that number is and we have plenty to spare. But now that I've said all those words and given time for people to think, do we have a number for anybody, for Andrew here, on what our burn rate is on a daily basis?

Ronald W. Clayton

Andrew, daily -- I've never thought about it in terms of daily. We're between $15 million and $18 million a month right now. All right? And I don't -- the makeup of that's going to change from development and construction to operations costs, okay? But the number, the total number isn't going to change very much from that point.

C. Kevin McArthur

The big wild factor here, Andrew, is the revenue.

Ronald W. Clayton

How quick we get paid.

C. Kevin McArthur

And I just -- I always like to say this, so I'm going to say it. And I don't mean to be demeaning to anybody, but we are not a Sysco. And when the time comes, and this -- then mill is running, right? First of all, it's 3,500-tonne-per-day mill. Small mill, small problems. But the big thing is, we've got a stope that has 2 kilos in it. And when this is running right, we'll be pouring some grade through this operation to get that cash balance moving. So we feel very confident that we're in good shape there.

Andrew Kaip - BMO Capital Markets Canada

No, I completely understand. I look at it -- it's just a desire to get a sense of what that burn rate is on period basis. So the numbers Ron gave were great.

Operator

The discussion comes from Chris Thompson of Raymond James.

Chris Thompson - Raymond James Ltd., Research Division

A couple of sort of high-level questions more than anything else. Kevin, can you give us an idea on the timing of the feasibility and the first stab you're going to take at, say, tabling a reserve estimate?

C. Kevin McArthur

Yes. We want to revise our resource next year in time for our budgeting. And that would be midyear, sometime. And along with that, we plan on posting a feasibility study. So we are aiming at third quarter for the feasibility study. That's -- I'm looking over at Ron, and he's -- I'm getting a nod from Ron so that -- we're still on track for that.

We expect visibility study to be pretty much a confirmation of what we already know.

Chris Thompson - Raymond James Ltd., Research Division

Okay, perfect. Just looking at, I guess, my assumptions for sustaining capital for next year and that, obviously, taken from the technical studies would've been delivered to market it. Are you seeing anything, any difference, any costs creep there?

Ronald W. Clayton

No, I don't see anything different that when we put in the PEA. With the possible exception of timing, maybe a little bit, but that's pretty minor issue.

Chris Thompson - Raymond James Ltd., Research Division

Excellent. And I don't want to labor the point, but, Kevin, I know I've spoken to Ira about the appeals court ruling but have you got anything to add there? Just I think maybe catch to the essence of the significance to this and maybe comment on it?

Edie Hofmeister

This is Edie. There were 248 oppositions that were filed and only 1 of those kind of got up on appeal. The rest have expired under their statute of limitations there. So this one is -- was filed against the minister -- ministry of mine. And the court of appeal said that a hearing should've taken place. MEM, the ministry of mines, is appealing that to the Constitutional Court and we anticipate that the court would rule in our favor. But you can never really predict these things. But if it ruled against us, what the ruling would be and the issue before the court is whether MEM should've had a hearing. And so even if it goes against it, MEM will conduct that hearing and presumably find what it found in the first place, which is that the petitions had no merit.

C. Kevin McArthur

Might add also, and we've been very clear about this. We've put this in our press releases that this court of appeal decision does not have any impact on our license and we continue to operate and move forward.

Chris Thompson - Raymond James Ltd., Research Division

Excellent. And the -- so the timing for the appeal?

Edie Hofmeister

Well, it's hard to predict in Guatemala, but I'm going to -- 2 to 4 months, I'd say, we'll hear from the Constitutional Court.

Operator

The next question comes from John Tumazos [ph] of -- private investor.

Unknown Attendee

My question is sort of a general one about the political system in Guatemala where the president strongly supports you. How long is his term of office? Is he eligible to sit for reelection? You know how, for example, in Peru, the opposition political candidate opposes the Conga mine and it's highly politicized election issue of sorts. And I was just wondering if your support is as strong as the president? Or how it succeeds the president?

C. Kevin McArthur

Yes. A lot of -- thanks John. First of all, yes, the president strongly supports the resources industry and we're one of many that he's shown support for. And that's because, as I mentioned in my comments, in our area, we're seeing a middle-class developing and when this happens, this is good for the country, and a very poor country. So we don't want to rely on, basically, on a very strong president providing backing to our project. And we've seen the politics of Guatemala over the years, there's always been a very good democracy in place and there's been a peaceful transfer of power every 4 years from president to president.

This president cannot stand for reelection. You can only be president for 4 years. We're into year 2 already of his 4-year term right now. So we'll have another 2 after this year. And then, the politics will be politics. We don't know who will be elected next. And we're ready and willing to work with whatever comes in the next couple of years. But we've seen this. We saw it when we built Marlin, and we saw the different parties come in. And the thing about Marlin was that we were, at that time, the largest taxpayer in the country and a very strong economic force for the country, not only in taxes, but also in the businesses that has developed in the area and a very strong business climate in Guatemala. And I'm sure we'll see the same thing here. In fact, we expect we will be surpassing Marlin as the largest taxpayer in the country, and we will be a very strong business interest. And the political will to change that, or to move that in a different direction, just doesn't exist in Guatemala. So we feel very confident about our long-term sustainability in the area.

I mentioned the CSR programs that we have put into place. We're seeing an expansion of support for mining in the country due to a lot of the things we're doing and the other mining companies are doing. But it's not just mining, it's businesses that are doing very well in Guatemala under this current administration. And we see this as a very positive, ongoing thing. We'll participate in the next election process and see what comes.

Operator

[Operator Instructions] The next question comes from Michael Gray of Macquarie capital.

Michael J. Gray - Macquarie Research

Just on the CSR programs. I may have missed it, apologies, but can you comment on progress being made given that you established the division in -- at the AGM, and how it's resonating in the community, and how you are trying to get your message, trying to cross to both those interested in the project in the community and those that are somewhat not so interested? How are you communicating that effectively?

Edie Hofmeister

Well, we've done a number of things, both on the ground and then kind of at a higher strategic level. We've hired the Business for Social Responsibility to help us do some stakeholder engagement mapping; in addition to hiring a new very high-level CSR manager, who's from Guatemala and has a lot of experience with Guatemala's business; and working with communities in Guatemala. So that's been a huge help, Michael. And he's kind of dove in and started working with our team on the ground there, putting together some procurement programs so that we can take full advantage of helping to support local businesses that are impacted by our mines. In addition, we're doing some review of international standards and human rights assessment review so we can kind of formalize our adherence to these principles. And we -- we're just going full steam ahead on a bunch of different fronts. And I think that on the ground, people are really welcoming this concerted effort to engage them. And we're having ongoing regular dialogues. But we've continued our dialogues with them, we're just kind of enhancing that effort to have more regular dialogues with our employees, with people impacted at this site, and including the outlying areas that are going to be receiving some of the royalty money. So we're trying to build some capacity there as well.

Michael J. Gray - Macquarie Research

And is the contrast in terms of the small footprint and so-called green mine, is that starting to resonate or is it just viewed as another mine? Is that part of the communication message?

Edie Hofmeister

Well, I think we have a lot of environmental communications going out. And as construction is winding up, I think that the community is going to see how the mine is running, going forward, in a different context rather than just being constructed. In terms of the footprint, I think that it's just an ongoing effort at communicating with our communities about our very high North American standards in the environmental area. And we're also starting some education forums among the press so that we can teach them a little bit more about mining. Because basically mining is relatively new to Guatemala.

Operator

There are no more questions at this time. I will now turn the call back over to Mr. Gostin in for closing comments.

C. Kevin McArthur

Well, I'm just going to jump in here and say that before we close, it's worthwhile reiterating our mission. That is, that we are singularly focused on building our first mine here at Escobal to world standard. And as Michael just touched on, we want to operate the mine professionally and responsibly. Our goal here is to produce that 20 million ounces of silver per year over a very long period of time. And thus, produce the best earnings per share, free cash flow per share and eventually, the best dividend yield in the sector. And we're very, very close to achieving these goals.

So I want to say, thank you, everyone, for attending. This is our inaugural quarterly call. We look forward to the next quarter when I hope we'll be talking about some of the nuts and bolts and perhaps answer those questions, I think for Chris, on what our cost per tonne is and the rest. So we look very much forward to that. So with that, we'll be signing off. Thank you.

Operator

Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Tahoe Resources Management Discusses Q2 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts