Operator: The next question comes from Robert Carlson of Janney Montgomery Scott. Please go ahead.
Robert Carlson: Great. Congratulations on the quarter and quick progress made so far. But do you guys utilize hedges?
Dan Dickson: Yeah, Robert. Well, we entered into a gold hedge, which is a requirement under our lending facility. So we entered into 68,000 ounces of gold that will be delivered through 2025 and 2026, a little bit into 2027 and that was priced out at $2,325 per ounce of gold. Otherwise, we don’t hedge silver. One of our mandates is to make sure that for our shareholder holders who are investing in Endeavor Silver is to provide that upside that we expect to come on a silver price standpoint. From an inter quarter standpoint, we’ll enter into things very short term, so under 90 days, but that’s just generally trying to take advantage of spikes in the silver price.
Robert Carlson: So with your never coming on board like next year, there’s no plans to establish a hedging program for silver?
Dan Dickson: No, there is no plan to establish a hedging program for silver. I think what we’re seeing right now in the silver market is an environment that’s going to be very favorable to silver price. I mean, from an industrial standpoint, we’ve seen significant demand increase because of solar panels, the electrification of the world, obviously trying to reduce carbon, but the monetary story for silver has been lagging for the last kind of two, three years, and we’ve seen gold really take off and ultimately make new all-time highs. Silver is still well off its all-time highs of $50. Today obviously, we are sitting just above $28. So I think there’s a lot of runway there for silver over the next kind of year or couple of years, and we want to leave that upwards movement in silver price for our shareholders.
Operator: The next question comes from Jake Sekelsky of Alliance Global Partners. Please go ahead.
Jake Sekelsky: Hey, Dan and team. Thanks for taking my questions. So just building on that last question a bit, I’m going back to the tailwind from stronger gold byproduct credits this quarter and more so at current levels. I’m wondering if there’s a level in gold where you’d look at hedging out some additional gold production outside of the requirements for the Terronera facility?
Dan Dickson: I mean, that’s a fair question. I think there’s a lot of runway left in the precious metal space, but it’s not something that we’d really entertain for this year. Obviously, we want to make sure we protect the downside of the company with having so much investment going into Terronera, but we think the 68,000 ounces of gold that we’ve already hedged out for when we get into operations for Terronera provides that. For the remaining operation, the Bolanitos and Guanacevi, we’ve produced about 30,000 to 35,000 ounces of gold. I think we’re comfortable that gold is on its way upwards. Obviously, there’s always downside potential, but we use $1840 in our guidance forecast and from a cash flow standpoint. Again, maybe we get into Q3 and we sell some gold forward a little bit, but we wouldn’t get beyond the 90 days.
Jake Sekelsky: Okay, that’s fair. And then just on Terronera, can you just touch on the labor outlook there as we head towards commissioning later this year?
Dan Dickson: Yeah. I mean, from a labor standpoint, we handle all the mine development internally. So from our mining team, which will transition from development into our operations will be consistent and be fully up on labor from operational readiness standpoint for the plant. We’ve already started that process. We’ve made hires for plant operations and obviously from an indirect standpoint, we’re relatively staffed up there as well. So there shouldn’t be a significant change or a huge hiring process between now and Q4. We have people that we need to add, but we’ve already been working on operational readiness plans, so we can execute well in Q4. Again from a labor cost standpoint, everything we’ve done this year from an operational standpoint was done at 17:1 at Mexico peso to U.S. dollar.
When we go into operations for Terronera that would be a similar FX rate that we would use for Bolanitos and Guanacevi 30% of our cost is related to labor and that’s similar for Terronera. Again, when we go back and look at 2022s optimized plan that would have been done at 21:1 ratio. So now that’s at 17:1 ratio. So you’d have higher labor costs from an operational standpoint just because of the FX move. Again, when we go into 2025, we’ll provide that additional detail for the market.
Jake Sekelsky: Got it. Okay. That’s all for me. Thanks again.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks.
Dan Dickson: Thanks, operator, and thanks to everyone who’s tuned in today for our Q1, 2024 earnings release. Again, I think we’ve done an extremely good job of just executing our plan from an operational standpoint. It’s our job to execute on Terronera this year. We can execute on Terronera over the next two quarters. We should begin to commissioning for Q4 2024 and it will be nice to see that production profile come into the Endeavor production profile for 2025. Thanks everyone and have a good day.
Operator: [Operator Closing Remarks].
