Andean Precious Metals Reports 2021 Earnings; Delivers on Silver Production and Cost Guidance Company reports positive fourth quarter and full year results and provides guidance for 2022
Andean Precious Metals Reports 2021
Earnings; Delivers on Silver Production and
Cost Guidance
Company reports positive fourth quarter and full year results
and provides guidance for 2022
Toronto, Ontario--(Newsfile Corp. - March 17, 2022) - Andean Precious Metals Corp. (TSXV: APM)
(OTCQB: ANPMF) ("Andean" or the "Company"), today reported its positive financial results for the
fourth quarter and year ended December 31, 2021 ("Q4" and "FY" respectively). All currency amounts
are expressed in U.S. dollars unless indicated otherwise.
"2021 exceeded all expectations in our inaugural year as a public company," said Simon Griffiths,
President and CEO of Andean. "We met our full year guidance but most importantly, we accomplished
this while completing another year without a lost time or environmental incident. We also advanced our
exploration drill programmes at our prospective San Pablo porphyry gold target."
Mr. Griffiths went on to say, "As a result of our operational and financial performance in 2021, we entered
2022 with a clean balance sheet that provides us a strategic advantage for negotiating mergers and
acquisition transactions. We will build on this success through executing on plans to expand the life-of-
mine at San Bartolomé, and supported by consistent production and cashflows, this continues to
position Andean well as a consolidator of assets."
FY 2021 Operational and Financial Highlights
Production of 5.8 million silver equivalent ounces
1
, compared to FY 2021 guidance of 5.8 to 6.1
million ounces, and includes 1.4 million ounces in Q4 2021;
All-in sustaining costs ("AISC")
2
per silver ounce sold of $18.17, compared to FY 2021 guidance
of $17.50 to $19.50 per ounce;
Processing plant throughput increase of 16% to 1.7 million tonnes, compared to 1.5 million tonnes
in FY 2020;
Revenues of $144.2 million from sales of 5.8 million silver equivalent ounces, compared with
$130.7 million from sales of 6.0 million silver equivalent ounces for FY 2020;
Free cash flow
2
("FCF") of $30.0 million compared with $35.3 million for FY 2020.
Adjusted EBITDA
2
of $34.4 million, compared with $39.7 million for FY 2020;
Completed over 5,700 metres of drilling in 2021 at San Pablo and Rio Blanco gold exploration
properties;
Increased measured and indicated resource estimate to 27.5 million ounces of silver and 11.9
thousand tonnes of tin. Inferred resource estimate is 3.8 million ounces of silver and 1.3 thousand
tonnes of tin. Mineral resource estimates are effective December 31, 2021.
Operational and Financial Results
Q4 2021
Q4 2020
FY 2021
FY 2020
Financial Performance
3
Revenue
$
31,131
$
55,568
$
144,207
$
130,672
Cost of sales
$
21,382
$
32,830
$
95,013
$
82,697
Income from mine operations
$
6,587
$
20,462
$
38,806
$
37,615
Net income
$
74
$
39,014
$
4,268
$
45,959
Net cash from operating activities
$
5,569
$
23,908
$
33,615
$
37,436
Free cash flow
2
$
4,772
$
23,211
$
30,009
$
35,257
Adjusted EBITDA
2
$
5,411
$
20,999
$
34,429
$
39,672
Ending cash and cash equivalents
$
87,276
$
38,537
$
87,276
$
38,537
Capital expenditures
$
797
$
697
$
3,606
$
2,179
Cash operating costs (by-product)
2
$
15.34
$
13.68
$
15.77
$
13.06
All-in sustaining costs (by-product)
2
$
18.47
$
15.18
$
18.17
$
14.75
1
.
Silver equivalent ounces include gold ounces and are converted to a silver equivalent based on a ratio of realized silver and gold prices
during the periods discussed. Refer to the "Non-IFRS Measures" section of this release for details on realized silver and gold prices.
2
.
Free cash flow, Adjusted EBITDA, Cash operating costs ("COC") and AISC are measures of financial performance with no prescribed
definition under IFRS. Refer to the "Non-IFRS Measures" section of this release for further details.
3
.
Figures in this table are presented in thousands except for COC and AISC.
Revenue for FY 2021 was $144.2 million compared to $130.7 million for the previous fiscal year.
Revenue for Q4 2021 was $31.1 million compared to $55.6 million in Q4 2020. The decline in revenue in
Q4 2021 was driven by a year-over-year decline in the average realized price of silver and ounces sold.
The Company sold 1.3 million silver equivalent ounces during Q4 2021 at an average realized price of
$23.21 per silver ounce and 2.2 million silver equivalent ounces during Q4 2020 at an average realized
price of $24.99 per silver ounce.
Cost of sales, which comprise the full cost of operations excluding depreciation and depletion, totaled
$95.0 million in FY 2021 compared to $82.7 million in FY 2020. The year-over-year increase was driven
by a rise in direct costs, due to the higher volume ore purchases, and a rise in mining royalty taxes, due
to higher revenues realized during 2021. The cost of sales in Q4 2021 totaled $21.4 million compared to
$32.8 million in Q4 2020. The decline in cost in sales corresponded to the decline in ounces sold.
General and administrative expenses totaled $14.7 million in FY 2021, rising from $6.0 million in FY
2020. The year-over-year increase was attributable to the Company's public listing in March 2021, new
executive management, and regulatory compliance costs. Significant components of the increased
expenses include reverse takeover transaction costs of $3.5 million, non-cash share-based
compensation of $2.0 million, salaries and office administration of $2.2 million, one-time severance
costs of $0.7 million and corporate development expenses of $0.2 million. General and administrative
expenses increased to $3.4 million during Q4 2021 compared to $2.0 million in Q4 2020 due to
increased expenses of $0.8 million for salaries and office administration and $0.6 million for non-cash
share-based compensation.
Deferred income taxes totaled $12.8 million in FY 2021 compared to a recovery of $19.0 million in FY
2020. In Q4 2021, deferred income tax recoveries totaled $0.4 million compared to $19.0 million in Q4
2020. Deferred tax recoveries were recognized in FY 2020 due to the expected usage of Bolivian tax
loss carryforwards. As a portion of these carryforwards were used through FY 2021, a corresponding
deferred tax expense was recognized.
Q4 2021
Q4 2020
FY 2021
FY 2020
Operational Performance
Mined ore
1
(k dmt)
401
647
1,768
2,235
Average ore mined grade (Ag g/t)
74
103
92
96
Purchased ore
2
(k dmt)
151
169
546
421
Average purchased ore grade (Ag g/t)
205
194
201
220
Ore milled (k dmt)
424
421
1,715
1,484
Daily average throughput (dmt)
4,840
4,725
4,942
4,667
Average head grade (Ag g/t)
112
140
115
132
Silver recovery (%)
83
84
84
87
Silver production (k ozs)
1,271
1,588
5,358
5,473
Gold production (ozs)
1,392
2,205
6,075
5,335
Silver equivalent production
3
(k ozs)
1,379
1,754
5,791
5,896
Silver sales (k ozs)
1,240
2,011
5,366
5,516
Gold sales (ozs)
1,313
2,835
5,888
6,198
Silver equivalent sales
3
(k ozs)
1,341
2,224
5,783
6,006
1
.
Mined ore includes ore mined from the Company's permitted areas, including Santa Rita, Huacajchi, Antuco, El Asiento, and Monserrat
during 2021 and 2020. Mined ore is reported as ROM.
2
.
Purchased ore includes oxidized material purchased from local mining cooperatives as well as through the Company's contract with
RALP.
3
.
Silver equivalent production and silver equivalent sales include gold production and sales, respectively. Equivalent ounces are calculated
using the Company's realized gold and silver prices during the referenced period.
Silver equivalent production by source (k ozs)
Q4 2021
Q4 2020
FY 2021
FY 2020
Pallacos
464
700
2,033
2,755
Mine waste stockpiles
51
201
788
366
Cachi Laguna
166
116
603
615
Oxide purchases
698
737
2,367
2,160
Total
1,379
1,754
5,791
5,896
2022 Outlook and Guidance
During 2022, Andean will continue to process ore from its surface deposits (termed "Pallacos") at San
Bartolomé and expects to begin reclaiming silver bearing mine waste stockpiles at Tatasi-Portugalete.
Andean will also continue to purchase ore from its community mining partners. At Cachi Laguna,
remaining tonnes under Andean's purchase contract with RALP Compañia Minera S.R.L. ("RALP") are
expected to be fully depleted in early 2022.
At San Bartolomé, Andean is advancing its recently announced Expansion Study, targeting completion
of a Preliminary Economic Assessment ("PEA") on the FDF by Q2 2022. Andean has recently released
a Mineral Resource Estimate ("MRE") prepared by SRK Consulting (U.S.) Ltd. ("SRK") for San
Bartolomé, effective December 31, 2021. The MRE includes measured and indicated resource
estimates of 16.2 million ounces of silver and 11.9 thousand tonnes of tin and inferred resource
estimates of 1.5 million ounces of silver and 1.3 thousand tonnes of tin contained in the FDF, as well as
an updated Pallacos resource. A technical report on the updated MRE, in accordance with Canadian
securities law, is expected to be filed on SEDAR on or before March 26, 2022, which is 45 days
following Andean's press release on February 9, 2022. Andean is reviewing opportunities at its dry-
stack tailings facility ("DSF"), which also contains silver and tin, and will release results from the DSF
drilling program as they become available in 2022.
Andean completed geophysical surveys with Quantec Geoscience's Titan 24 DCIP and magnetotelluric
technology ("MT") at its San Pablo exploration property in Q4 2021. Low resistivity and chargeability
anomalies were identified and a second stage drilling program is planned to target the primary
anomalies. Up to 15,000 metres are budgeted based on the results. Additionally, Andean continues to
pursue exploration opportunities at its Rio Blanco property.
Andean's production for fiscal 2022 is expected to result in silver equivalent production of 5.3 to 5.8
million ounces at an AISC (by-product) of $17.25 to $18.75 per silver ounce sold. The following table
sets out Andean's production and AISC guidance for 2022 along with its results for 2021:
2022 Guidance
(1)
2021 Actual
Silver equivalent production
5.3M to 5.8M oz
5.8M oz
AISC (by-product)
$17.25 to $18.75/Ag oz
$18.17/Ag oz
(
1)
Andean's commodity price assumptions supporting this estimate are $23.00/ounce silver and $1,750/ounce gold.
Growth Program
In May 2021, the Company completed the first phase of its diamond drilling program at the San Pablo
project, drilling 3,580 metres. The Company carried out geophysical surveys on the property during Q4
2021, using Quantec Geoscience's Titan-24 DCIP and deep MT. Upon completion of analysis of the
results, the Company plans to drill the identified anomalies with deep drill holes. A program of up to
15,000 metres is planned based on the results of the final 3D geophysical model.
As part of the Company's stated growth strategy, Andean continues to assess potential acquisition
opportunities in Bolivia and other parts of South and Central America.
Notice of Conference Call and Webcast
Management of Andean will host a conference call today, March 17, 2022, at 8:30 am ET to discuss its
fourth quarter and full year financial results. All interested parties may join the conference call by dialing
416-915-3239 or 1-800-319-4610 approximately 15 minutes prior to the call to secure a line.
A live audio webcast of the call will be available at
www.gowebcasting.com/11748
. Please connect at
least 15 minutes prior to the conference call to ensure adequate time for any software download that may
be required to join the webcast. An archived replay of the webcast will be available for 90 days.
Qualified Person Statement
The scientific and technical content disclosed in this press release was reviewed and approved by
Donald J. Birak, Independent Consulting Geologist to the Company, a Qualified Person as defined by
Canadian National Instrument 43-101, Registered Member, Society for Mining, Metallurgy and
Exploration (SME), Fellow, Australasian Institute of Mining and Metallurgy (AusIMM).
About Andean Precious Metals Corp.
Andean Precious Metals is a Canadian, growth-focused silver producer that owns and operates the San
Bartolomé project located in the department of Potosí, Bolivia. San Bartolomé has been operating
consistently since 2008, producing an average of over five million ounces of silver per year. The
Company is also exploring its wholly-owned San Pablo and Rio Blanco gold projects and seeking other
accretive opportunities in Bolivia and Latin America. Andean Precious Metals is committed to fostering
safe, sustainable and responsible operations. For more information, please visit
www.andeanpm.com
.
Company Contact
Fraser Buchan
Corporate Development
T: +1 647 480 1550
North America
Trevor Heisler
NATIONAL Capital Markets
Europe
Oliver Lamb
Tavistock
T: +44 20 7920 3150
Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined
in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Caution Regarding Forward-Looking Statements
This press release contains statements which constitute "forward-looking statements" and "forward-
looking information" within the meaning of applicable securities laws (collectively, "forward-looking
statements"), including statements regarding the plans, intentions, beliefs and current expectations of
Andean with respect to future business activities and operating performance. Forward-looking
statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan",
"anticipate", "believe", "estimate", "expect" or similar expressions. Forward-looking statements in this
news release include statements made under the heading Andean's 2022 Outlook and Guidance,
regarding Andean's plans to continue to process ore from its surface deposits at San Bartolomé, begin
reclaiming silver bearing mine waste stockpiles at Tatasi-Portugalete and purchase ore from its
community mining partners, Andean's expectation that remaining tonnes under its purchase contract with
RALP will be fully depleted in 2022, Andean's expectation of completing a technical report on the
updated MRE on or before March 26, 2022, Andean's expectation of releasing a PEA on the FDF in
2022, Andean's expectation of releasing results from the DSF drilling program in 2022, Andean's
production estimates for 2022 and Andean's expectation of restarting exploration work in the second half
of 2022 at the Rio Blanco Exploration Project.
Investors are cautioned that forward-looking statements are not based on historical facts but instead
reflect Andean's expectations, estimates or projections concerning future results or events based on the
opinions, assumptions and estimates of management considered reasonable at the date the statements
are made. Although Andean believes that the expectations reflected in such forward-looking statements
are reasonable, such statements involve risks and uncertainties, and undue reliance should not be
placed thereon, as unknown or unpredictable factors could have material adverse effects on future
results, performance or achievements of Andean. Among the key factors that could cause actual results
to differ materially from those projected in the forward-looking statements are the following: changes in
general economic, business and political conditions, including changes in the financial markets; changes
in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive
government regulation; the risks and uncertainties associated with foreign markets. These forward-
looking statements may be affected by risks and uncertainties in the business of Andean and general
market conditions, including COVID-19 and the ongoing conflict between Russia and Ukraine and any
actions taken by other countries in response thereto, such as sanctions or export controls.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or expected. Although Andean has
attempted to identify important risks, uncertainties and factors which could cause actual results to differ
materially, there may be others that cause results not to be as anticipated, estimated or intended and
such changes could be material. Andean does not intend, and does not assume any obligation, to
update the forward-looking statements except as otherwise required by applicable law.
Non-IFRS Measures
COC and AISC
COC and AISC are non-IFRS performance measures. COC include total production cash costs incurred
at the Company's mining operations, which form the basis of the Company's cash costs, less by-product
revenues from gold sales. AISC includes COC plus sustaining capital expenditures, general and
administrative expenses, sustaining exploration and evaluation costs and reclamation cost accretion.
Reclamation and closure costs represent the gradual unwinding of the discounted liability to rehabilitate
the area around San Bartolomé at the end of its mine life. The Company reports these measures on a
silver ounce sold basis. The Company believes that AISC represents the total costs of producing silver
from current operations and provides the Company and other stakeholders of the Company with
additional information relating to the Company's operational performance and ability to generate cash
flows. These measures are used by management to assess the Company's performance and its
expected future performance; however, these measures do not have any standardized meaning. As
such, there are likely to be differences in the method of computation when compared to similar
measures presented by other issuers. Accordingly, these measures are intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS.
The following table provides a reconciliation of the cash operating cost per silver ounce sold on a by-
product basis:
Q4 2021
Q4 2020
FY 2021
FY 2020
Costs of sales, as reported
$
21,382
$
32,830
$
95,013
$
82,697
Total cash operating cost before by-product
credits
21,382
32,830
95,013
82,697
Less: by-product gold credits
(2,356
)
(5,324
)
(10,403
)
(10,676
)
Total cash operating costs
19,026
27,506
84,610
72,021
Divided by silver ounces sold (k ozs)
1,240
2,010
5,366
5,516
COC per silver ounce sold, on a by-product
basis
$
15.34
$
13.68
$
15.77
$
13.06
The following table provides a reconciliation of the all-in sustaining cost per silver ounce on a by-product
basis:
Q4 2021
Q4 2020
FY 2021
FY 2020
Cash costs, net of by-product credits
$
19,026
$
27,506
$
84,610
$
72,021
General and administrative expenses
1
2,847
2,045
8,319
6,016
Sustaining capital expenditures
2
753
697
3,383
2,179
Lease payments
44
-
223
-
Accretion for decommissioning liability
227
254
941
1,015
Sustaining exploration and evaluation
2
-
6
31
97
All-in sustaining costs
22,897
30,508
97,507
81,328
Divided by silver ounces sold (k ozs)
1,240
2,010
5,366
5,516
AISC per silver ounce sold, on a by-product
basis
$
18.47
$
15.18
$
18.17
$
14.75
1
.
For the quarter and year ended December 31, 2021 and December 31, 2020, general and administrative expenses exclude RTO Transaction
costs of $nil, $nil, $3,451 and $nil, respectively; severance costs of $nil, $nil, $677 and $nil, respectively; corporate development costs of
$97, $nil, $231 and $nil, respectively; and non-cash share-based compensation costs of $494, $nil, $2,017 and $nil, respectively.
2
.
Sustaining capital expenditures and exploration and evaluation reflect costs necessary to maintain current production.
Adjusted EBITDA
The Company has included adjusted EBITDA as a non-IFRS performance measure. The Company
excludes certain items from net income to provide a measure which allows the Company and investors
to evaluate the results of the underlying core operations of the Company and its ability to generate cash
flows. As this measure does not have any standardized meaning, there are likely to be differences in the
method of computation when compared to similar measures presented by other issuers. Accordingly, it
is intended to provide additional information and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS.
The following table provides a reconciliation of adjusted EBITDA:
Q4 2021
Q4 2020
FY 2021
FY 2020
Net income
$
74
$
39,014
$
4,268
$
45,959
Add:
Income taxes
2,329
(18,983
)
15,713
(18,983
)
Finance costs
385
381
1,292
3,759
Depreciation and depletion
3,162
2,276
10,388
10,360
EBITDA
$
5,950
$
22,688
$
31,661
$
41,095
Add: RTO Transaction costs
-
-
3,451
-
Add: Severance costs
1
-
-
677
-
Add: Change in fair value of marketable securities
2
(539
)
(1,777
)
2,460
(1,731
)
Less: Santacruz Loan recovery
-
88
(3,820
)
308
Adjusted EBITDA
$
5,411
$
20,999
$
34,429
$
39,672
1
.
Severance costs relate to amounts payable to the former CEO in September 2021, including related advisory fees.
2
.
These amounts refer to mark-to-market adjustments on securities held of Santacruz Silver.
Free cash flow
The Company has included free cash flow as a non-IFRS performance measure. The Company
considers operating cash flow plus capital expenditures to provide a measure which allows the
Company and investors to evaluate the ability of the Company to generate cash flows. As this measure
does not have any standardized meaning, there are likely to be differences in the method of computation
when compared to similar measures presented by other issuers. Accordingly, it is intended to provide
additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
The following table provides a reconciliation of free cash flow:
Q4 2021
Q4 2020
FY 2021
FY 2020
Operating cash flows
$
5,569
$
23,908
$
33,615
$
37,436
Less:
Expenditures on property, plant and equipment
(753)
(697)
(3,383)
(2,179)
Lease payments
(44)
-
(223)
-
Free cash flow
$
4,772
$
23,211
$
30,009
$
35,257
Realized Gold and Silver Prices
The Company has included realized prices as a non-IFRS performance measure. The Company
quantifies average realized price as revenue per the Statement of Operations divided by ounces of silver
or gold sold. As this measure does not have any standardized meaning, there are likely to be differences
in the method of computation when compared to similar measures presented by other issuers.
Accordingly, it is intended to provide additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance with IFRS.
The following table provides a reconciliation of realized prices:
Q4 2021
Q4 2020
FY 2021
FY 2020
Silver revenue
$
28,775
$
50,244
$
133,804
$
119,996
Silver oz sold (k ozs)
1,240
2,011
5,366
5,516
Average realized silver price
$
23.21
$
24.99
$
24.94
$
21.76
Q4 2021
Q4 2020
FY 2021
FY 2020
Gold revenue
$
2,356
$
5,324
$
10,403
$
10,676
Gold oz sold (ozs)
1,313
2,835
5,888
6,198
Average realized gold price
$
1,794
$
1,878
$
1,767
$
1,723
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/117117