What you need to know: • Santacruz reported Q2 revenue of $73.3M (+4% YoY) vs. our estimate of $72.1M on a 15% decline in produced ounces. • However, cost reduction was a theme for the quarter, with cash costs coming in at $19.48/oz vs. our estimate of $22.6/oz. This led to adjusted EBITDA of $26.8M compared to our estimate of $21.0M and $16.0M reported in Q2/24. • SCZ ended the quarter with $52.0M in cash and $55.0M in debt. Yesterday, Santacruz Silver (SCZ:TSXV) announced Q2 financial results that largely beat our estimates due to major cost reduction across its assets. Cash costs came in at $19.5/oz compared to our $22.6/oz estimate, and AISC came in at $23.0/oz compared to our $28.1/oz estimate, led by the Caballo Blanco Group. SCZ ended the quarter in a slight net debt position of $3M, an impeccable improvement when looking back at the $176M net debt in Q4/23. We are maintaining our BUY rating and our C$1.80/share target price on SCZ. Financial Highlights • Revenue for Q2 came in at $73.3M (+4% YoY) vs. our estimate of $72.1M. This was led by the increased silver price ($32.37/oz) as production declined during the quarter (see below). • Gross margin for Q2 came in at 34.5% compared to 22.5% in Q2/24. • Cash cost for the quarter was $19.48/oz vs. our estimate of $22.6/oz and $21.66/oz in Q2/24. SCZ saw a YoY cost reduction across all of its assets, but the major standout was the Caballo Blanco Group, which had a cash cost of $10.85/oz compared to $12.66/oz last quarter and $21.15/oz in Q2/24. • AISC for the quarter was $22.95/oz compared to our estimate of $28.1/oz. All assets saw a YoY AISC decline aside from Zimapan. • Adjusted EBITDA in Q2 was $26.8M, well ahead of our estimate of $21.0M and $16.0M in Q2/24. • OCF (before WC) was $21.7M for Q2 compared to our $15.4M estimate. OCF (after WC) was $32.2M. • Net income for Q2 was $21.0M, smashing our estimate of $8.4M, benefitting from a $3.1M FX gain. • SCZ ended the quarter with $52.0M in cash and equivalents and $55.0M in debt, nearly placing the Company in a net cash position.