What you need to know: • Santacruz reported Q1 results displaying QoQ growth in revenue and adjusted EBITDA driven by higher realized prices and stable costs. • The quarter was highlighted by an impressive $31.70/oz silver margin, which has increased 134% QoQ, facilitating strong cash generation. • SCZ ended the quarter in a solid position with $64.9M in cash and marketable securities despite paying $31.5M in taxes in Q1. • We continue to forecast incremental production growth through 2026 from ongoing operational improvements and full recovery at Bolivar. Friday, after market close, Santacruz Silver (SCZ:TSXV, SCZM:NASDAQ) reported Q1 results, which was followed by a conference call yesterday afternoon, and was mixed vs. our forecast. Despite silver production being roughly flat QoQ and zinc and lead production down ~9% and ~10%, which was pre-reported (see our note here), higher realized silver prices provided a tailwind for earnings, with revenue and adjusted EBITDA increasing 24% and 38% QoQ. Importantly, AISC stabilized during the quarter, driving impressive silver margins of $31.70/oz, representing a 221% YoY improvement, and enabling strong cash generation. OCF (pre-WC) of $47.5M allowed SCZ to pay $31.5M in taxes during Q1, while exiting the quarter with $64.9M in cash and highly liquid securities. We are maintaining our BUY rating and have revised our target price to C$27.00/share (previously C$34.20/share) on SCZ. Financial Highlights • Revenue for Q1 came in at $127.5M (+81% YoY, +24% QoQ) vs. our estimate of $124.0M, driven by higher realized prices. • Gross profit for the quarter was $42.9M (+54% YoY), implying a gross margin of ~34%, which was below our $74.9M on higher cost of sales. • Adjusted EBITDA of $42.6M (+55% YoY, +38% QoQ, vs. our estimate of $67.9M) displayed strong growth. • OCF (before WC) was $47.5M ahead of our $42.8M forecast. Non-cash working capital resulted in OCF of $8.8M, and FCF of ($1.1M) after $9.9M in capex. • Net income for Q1 was $28.5M (+201% YoY) or $0.31/share basic. • Q1’s silver AISC of $31.60/oz declined 13% QoQ, resulting in a 134% QoQ increase in silver margins to $31.70/oz in combination with higher realized prices. SCZ has moved to co-product cost reporting vs. AgEq previously. • Zinc AISC of $2,729/t increased 32% YoY, and margins decreased 46% YoY to $387/t, which also reflected lower realized zinc prices. • SCZ ended the quarter with $64.9M in cash and marketable securities.