Hello and thank you for joining the Hycroft Second Quarter 2020 Financial and Operating Results Call. At this time all participants are in listen-only mode. Please note this call may be recorded. [Operator Instructions] It is now my pleasure to turn today's conference over to Tracey. Please go ahead..

Thank you, Bree. Good morning, everyone. Thank you for joining us today. Today Steve Jones, Interim President and CEO will be discussing our second quarter 2020 results for which we found our 10-Q and issued a press release this morning. The press release can be found on our website at www.hycroftmining.com.

We urge you to read the Press Release and listen to this call in conjunction with reviewing the 10-Q which contains additional disclosures. Also, please note that some information provided during this call may include forward-looking statements that involve risks, uncertainties and assumptions.

Even if these risks or uncertainties have been materialized or the assumptions proven correct, these results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking.

A discussion of some of the risks uncertainties and assumptions are set forth in more detail in our press releases and SEC filings including the most recently filed 10-Q. We assume no obligation and did not intend to update any such forward-looking statements. I will now turn the call over to Steve Jones who will discuss the year-to-date results..

people, our mobile equipment, the process side, which includes both the crusher as well as the oxidation on the leach pads and then the infrastructure and capital that supports that.

While focusing on this initial restart and continuing to focus in the future, our goal is to maintain a high level of discipline in our health, safety, environmental practices. Specifically this year, we've added a new Safety Manager and a new Environmental Manager.

Like most businesses, we believe the first step to success is finding the right people. Our focus in 2020 has been building a strong team with talent and knowledge to build our plans to reality. Specifically, we've increased the workforce 35% year-to-date. We've identified an added key management roles that we need to operate the mine.

In February, we brought on a new General Manager and he's quickly come up to speed on the operation and proven to be a very effective operator. We've recently split the Process Manager role into two to get better focus on the key process area around the oxidation of leach pads.

Specifically, we now have one Process Manager, whose responsibility is purely technical and that is managing the oxidation and the second Process Manager who is focused on the operations and that is implementing what needs to take place.

We've recently added a highly experienced HR person, that's helped us to bring on some of these additional people as well as a number of technical folks to our maintenance teams, both on the equipment side as well as the crushing side.

Specifically, we've found a couple of strong electrical and instrumentation technicians, which are critical to maintaining the crushing system. Supporting us we have an excellent procurement team and they've managed to put in place long term contracts for our soda ash, or lime and our cyanide our three primary reagents.

Today we have a complement of 216 employees. And as we continue to grow our manpower, we have a goal of 275 employees by the end of the year. On the mining side, we've improved our mobile equipment maintenance team to transition to self-perform maintenance and begin to discontinue the contractor led maintenance that we've relied on since start-up.

Best part of the increase in manpower overall as we're trying to wean ourselves from relying on contractors, bringing that expertise in house, and then developing it further so that we maintain the expertise long term.

In April, we increased our mining fleet through the rental of 7, 240 ton haul trucks in a loader that replaced a smaller fleet that we had with a contractor. Net overall that more than doubles the note the number of trucks that we have, we have -- we own six, 200 ton trucks in addition to the 700 rental. On mining we started out in stockpiles.

We're now actively drilling and blasting in pit. Overall, we've increased our monthly mining rate from January to June by 55%. Moving downstream to the crusher. The crusher was really the focus of 2019 and into early 2020. The crusher headset for several years as I mentioned, we had to replace to comb crushers which we knew before start-up.

And it took us a while to get that crusher up in operating efficiently. We've seen significant improvement in the first quarter we average 338,000 tonnes through the crusher and in the second quarter 459,000 tonnes.

Part of the reason for that improvement as we put in place a comprehensive preventative maintenance program, we've added a trainer on site to do operating training.

The crusher is designed to be running in automatic mode, and the only way to truly do that is to have very knowledgeable operators and we've seen huge improvement on the operator side in the last few months. We continue to improve the crusher.

And we have plans in the fourth quarter to further upgrade the automation and process controls, improve the overall electrical infrastructure and perform a final OEM review with FL Schmidt who is the manufacturer of the crushers to prepare to step up the tonnage in 2021.

Once the ore is crushed, and it's moved out to the leach pads we're focused on oxidation. The most important thing we've done today is for test pads, one and two, the initial two pads that we stacked out there. We've been able to show that we can actually, in a true commercial setting, obtain recoveries greater than the feasibility level.

Specifically, on test pad one for the Brimstone, which represents 80% of our reserves, we achieved a recovery level of 82% versus what's in the feasibility of 65%.

On the second initial pad, which is central or which is 19% of our reserves, we achieved a recovery of 91% versus 70% in the feasibility study, demonstrating that we can indeed in a commercial setting, get the recoveries that we've identified in the feasibility study.

We've also improved the solution management system what we call the reagent Island, that increases the solution distribution to our leach pads. We initially started up, it was a little bit under sized and we needed to increase that size, so that we could properly manage all the leach pads as we continued to stack out onto the leach pads.

In terms of the reagent Island itself, we've got further improvements online for the third quarter.

We're going to add new tankage with an agitator that will allow us to better dissolve the soda ash into solution, which will improve the kinetics in the leach pads, specifically increasing, the oxidation results and increasing the PH so that we're seeing better overall recoveries.

If we move further downstream to the process, the actual processing of the solution flows, once we put them under leach, we've got the infrastructure in place to be able to ramp up our operations. We're currently operating the Brimstone Merrill-Crowe facility and refinery.

We've added a carbon in columns, or a CIC circuit to capture metal from a low grade solution, and we've begun planning the restart of the 21,500 gallon per minute, North Merrill Pro plant, which we'll utilize later on in 2021, when our solution flows achieve about 9,000 gallons per minute. Currently, we're at about 5,000 gallons per minute.

We've set our second half targets for mining, crushing and oxidation at levels we believe that can be successfully achieved and further demonstrate the success of our two-stage oxidation and leach process.

We expect the second half crushing and production levels to be consistent with, or a little bit above our first half levels, and our focus is on getting prepared for ramping up mining, crushing and production in 2021 with the new leach pads in place.

We've made significant progress on the new leach pad that new leach pad the first phase is 4 million square feet along with the necessary ponds, pipe and electricity that will be required to operate that new pad. That new pad is critical to our ability to ramp up.

We've spent $9.7 million through June on the new leach pad, and we would expect to spend about $36 million in total. And we would expect in the fourth quarter to begin stacking on the new leach pad.

We did have some struggles in the second quarter related to leach pad processing activities, which resulted in the write-off of about 6,500 ounces of gold. We did not properly execute our processing plans and had delays in getting our pads under leach.

This is directly results of the lack of manpower, specifically at the manager level and the under-sized reagent Island that I mentioned. With the addition of manpower that we've made now is specifically around processing, we believe, we have the team in place.

The two managers that I already discussed as well as a senior metallurgical engineer, and we believe, we can execute our plans properly, moving forward. To enable us to be in position for the ramp up in 2021, we've begun the process of speaking with financial advisors and stakeholders about options and timing related to securing additional financing.

Additionally, we've received a letter of support from our two largest stakeholders that is Muderick and Whitebox and that letter was filed this morning in our 10-Q as an exhibit.

The Board of the company intends to evaluate our options to ensure the necessary capital rate is raised on terms favorable to and in the best interest of all its shareholders. We have no commitment at this time, but as I said, we've begun work with our financial advisors and stakeholders about potential options.

We're very excited about improvements we've made to date. We're excited about those plans for the second half of the year. And really excited about getting ourselves to the place where we can significantly begin the ramp up of crushing -- mining, crushing, oxidizing, and ultimately production in 2021.

The new leach pads are key to us being able to do that. And it's exciting to go out there and see the progress that's already been made on those. We look forward to updating everybody on future calls of continued progress. If you have any questions about the quarter please contact Tracy Thom. Her contact details are on the website.

We want to thank everyone. And we look forward to updating you in the future..

This does conclude today's program. We appreciate your participation. And you may now disconnect..