ANDEAN PRECIOUS METALS REPORTS Q1 2023 RESULTS Reaffirms 2023 guidance
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ANDEAN PRECIOUS METALS REPORTS Q1 2023 RESULTS
Reaffirms 2023 guidance
TORONTO, ON – May 24, 2023 – Andean Precious Metals Corp. (“Andean” or the
“Company”) (TSX-V: APM) (OTCQX: ANPMF) reported its operating and financial results for the
three months ended March 31, 2023. All amounts are expressed in United States dollars, unless
otherwise noted (C$ refers to Canadian dollars).
Q1 2023 Highlights
Three months ended March 31, 2023 vs. three months ended March 31, 2022
• The Company achieved zero lost time injuries (“LTI”) and achieved a significant safety
milestone of 1.158 million operating hours with no LTI.
• Produced 1.0 million silver equivalent ounces 1 compared with 1.2 million silver
equivalent ounces1.
• Revenue decreased by 23% to $23.0 million due to an 18% decline in production
volume and a 6% reduction in the average realized price of silver per ounce.
• Cost of sales of $21.2 million increased by 3% from $20.6 million.
• Income from mine operations was $0.4 million compared with $6.4 million.
• Net income was $0.2 million compared with net income of $2.3 million in the prior year.
• Earnings before interest, taxes, depreciation and amortization(“EBITDA”) 2 and adjusted
earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)2 of $1.5
million and $1.4 million, respectively, compared with $8.1 million and $ 6.6 million,
respectively, in Q1 2022.
• All-in sustaining costs (“AISC”)2 per silver ounce sold of $24.27 compared to full year 2023
guidance of $19.50 to $20.30 per ounce. Planned production increases anticipated for the
second half of 2023 are expected to decrease average AISC during 2023.
• The Company continues to expect silver equivalent production for 2023 to be between 4.8
million and 5.2 million ounces at a total average AISC2 of $19.50 to $20.30 per ounce.
1 Silver equivalent ounces include gold ounces and are converted to a silver equivalent based on a ratio of average realized silver
and gold prices during the periods discussed.
2 EBITDA, Adjusted EBITDA and AISC are non-IFRS measures. Refer to the “Non-GAAP Financial Measures, Ratios and
Supplementary Financial Measures” section of this press release.
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• Debt-free balance sheet with c ash and cash equivalents of $7 5.8 million and marketable
securities of $6.1 million.
• Net cash flow used in operating activities for Q1 2023 was $4.3 million, primarily due to the
working capital movements arising from timing of some vendor payments.
• During Q1 2023, pursuant to its normal course issuer bid, the Company repurchased and
cancelled 627,100 shares totaling $0.4 million.
• The Company continues to advance the silver recovery project at its fines disposal facility.
• The Company recently received the Responsible Minerals Initiative Certification and the
Environmental Management System Standard ISO 14001:2015 Certification. The
Company is committed to working to achieve high environmental, social and corporate
governance (“ESG”) standards and is implementing several community programs, while
continuing to develop a broader framework and policies. The Company will continue to
develop a broader ESG program, including reporting aligned with definitions from the World
Economic Forum, and identifying its contributions to the United Nations Sustainable
Development Goals over the remainder of FY 2023.
“The market volatility and inflationary pressures experienced in 2022 persisted throughout the
first quarter and is expected to continue during the current year. We are nonetheless reaffirming
our 2023 guidance based on the progress we are making at site and our planned strategies to
increase operational efficiencies. Our industry consultants continue to review our operations for
the purpose of further optimizing production and improving recoveries throughout the course of
the year,” stated Alberto Morales, Executive Chairman and CEO of Andean.
Mr. Morales continued, “Moreover, our top priority is to extend the mine life at San Bartolomé by
both pursuing contract opportunities with new third-party feed material providers and bringing
the tailings material into production. After some delays, the tailings review is advancing and,
subject to completion of the final feasibility studies and Board approval, we could be targeting to
begin production of the fines deposit facility material in the first half of 2024. Simultaneous with
improving the performance of our flagship asset in Bolivia, our focus is growth. We continue to
evaluate potential acquisition targets in the wider Americas, and have narrowed potential targets
to a short list, diversifying our geographic and production risk as we look to achieve our vision of
becoming a multi-jurisdictional mid-tier producer.”
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Summary of Operating and Financial Results
Operating Results Summary
Q1 2023 Q1 2022 % Change
Tonnes mined (1) k dmt 433 478 (9%)
Average mined grade Ag g/t 53 96 (45%)
Tonnes purchased (2) k dmt 89 117 (24%)
Average purchased grade Ag g/t 214 212 1%
Tonnes milled (3) k dmt 375 406 (8%)
Daily average throughput dmt 4,461 4,608 (3%)
Average head grade Ag g/t 106 117 (9%)
Silver recovery % 79 78 1%
Silver production k oz 978 1,151 (15%)
Gold production oz 234 898 (74%)
Silver equivalent production (4) k oz 997 1,221 (18%)
Silver sales k oz 982 1,173 (16%)
Gold sales oz 215 671 (68%)
Silver equivalent sales (4) k oz 1,000 1,225 (18%)
Financial Results Summary
$'000s, except per ounce and per share metrics Q1 2023 Q1 2022 % Change
Revenue 23,045 29,888 (23%)
Cost of sales 21,217 20,647 3%
Income from mine operations 374 6,423 (94%)
Net income 219 2,274 (90%)
Net income per share
- Basic 0.00 0.01 (100%)
- Diluted 0.00 0.01 (100%)
Net cash (used in) from operating activities (4,323) 2,703 (260%)
Free cash flow(5) (4,886) 2,212 (321%)
EBITDA(5) 1,516 8,071 (81%)
Adjusted EBITDA(5) 1,373 6,586 (79%)
Ending cash and cash equivalents 75,793 89,541 (15%)
Capital expenditures 563 491 15%
Operating cash costs per ounce (by-product)(5) 21.18 16.51 28%
All-in sustaining costs per ounce (by-product)(5) 24.27 18.86 29%
(1) Ore mined during 2023 and 2022 includes material mined from the Company’s permitted areas, including Santa Rita, Huacajchi, Antuco, El
Asiento, Monserrat and Tatasi-Portugalete. Mined ore is reported as Run-of-Mine (“ROM”).
(2) Purchased material includes oxidized material purchased from local mining cooperatives as well a s through the Company’s contract with RALP
Compañia Minera S.R.L., a private Bolivian mining company.
(3) Tonnes milled are reported as +8 mesh.
(4) Silver equivalent production and silver equivalent sales include gold production and sales, respectively. Equivalen t ounces are calculated using
the Company’s average realized gold and silver prices during the referenced period. Refer to the “Non -GAAP Financial Measures, Ratios and
Supplementary Financial Measures” section of this press release for further detail.
(5) FCF, EBITDA, Adjusted EBITDA, operating cash costs (“OCC”) and AISC are measures of financial performance with no prescribed defin ition
under IFRS. Refer to the “Non -GAAP Financial Measures, Ratios and Supplementary Financial Measures” section of t his press re lease for
further detail, including a reconciliation of these metrics to the financial statements.
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FY2023 Guidance
The production outlook for 2023 is based on the Company’s historical performance and
experience. The 2023 outlook is forward looking and based on certain estimates and
assumptions which involve risks and uncertainties and is predicated on global economic
conditions. The Company believes the ongoing conflict in Ukraine and political and social unrest
in Bolivia is having no material impact o n its production and costs. Actual results may vary
materially from management’s expectations. For further information, p lease refer to the
Company’s “Forward-looking Statements” later in this press release and the “Risks Factors”
section in the Company’s management’s discussion and analysis (“MD&A”) for the three months
ended March 31, 2023.
The following table sets out Andean’s first quarter results against its full year 2023 guidance:
YTD 2023 Actual 2023 Guidance(1)
Silver equivalent production 1.0 million oz 4.8 million oz to 5.2 million oz
AISC (by-product) $24.27/Ag oz $19.50 to $20.30/Ag oz
Capital expenditures $0.5 million $8.0 million to $10.0 million
(1) Andean’s commodity price assumptions supporting this estimate are $21.00/ounce silver and $1,650/ounce gold.
Recent Developments
In April 2023, the Company entered silver collar contracts with an average put strike price of
$23 per ounce and an average call strike price of $30 per ounce, for 200,000 ounces per
month beginning August 2023 through to December 2023.
This news release should be read together with Andean’s MD&A and condensed interim
consolidated financial statements (“Financials”) for the three months ended March 31, 2023 and
222, which are available on Andean’s website or under Andean’s profile on SEDAR
(www.sedar.com).
Q1 2023 Webcast
Management will host a webcast tomorrow morning to discuss the Company’s Q1 2023 financial
and operating results. A question -and-answer session will follow management ’s prepared
remarks. Details of the webcast are as follows:
Date and time: Thursday, May 25, 2023 at 9:00 a.m. ET
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Registration: Please preregister for the webcast by following this link:
https://webinars.theassay.com/andean-precious-metals-webcast.
Registration is open now and will be available up and until the date and
time of the webcast.
Webcast access: Upon registration, participants will receive an automatic email from
Zoom with a link to access the webcast.
To access the live webcast of the earnings call, please connect at least
15 minutes prior to the start time to ensure adequate time for any
software download that may be required to join the webcast.
Replay: A replay of the webcast will be available within approximately 48 hours
after the live event at www.andeanpm.com.
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 National Instrument 43-101 – Standards for Disclosure for Mineral Projects ,
Registered Member, Society for Mining, Metallurgy and Exploration (SME), Fellow, Australasian
Institute of Mining and Metallurgy (AusIMM).
About Andean Precious Metals
Andean is a growth-focused precious metals producer that owns and operates the San
Bartolomé project located in the department of Potosí, Bolivia. San Bartolomé has been
operating continuously since 2008, producing an average of 5 million ounces of silver equivalent
per year. The Company is seeking accretive growth opportunities in Bolivia and the wider
Americas. Andean is committed to fostering safe, sustainable and responsible operations.
For more information, please contact:
Trish Moran Anna Speyer
VP Investor Relations NATIONAL Capital Markets
[email protected] [email protected]
T: +1 416 564 4290 T: +1 416 848 1376
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.
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Caution Regarding Forward-Looking Statements
Certain statements and information in this release constitute “forward-looking statements” within
the meaning of applicable U.S. securities laws and “forward -looking information” within the
meaning of applicable Canadian securities laws, which we refer to collectively as “forward -
looking statements”. Forw ard-looking statements are statements and information regarding
possible events, conditions or results of operations that are based upon assumptions about
future economic conditions and courses of action. All statements and information other than
statements of historical fact may be forward-looking statements. In some cases, forward-looking
statements can be identified by the use of words such as “seek”, “expect”, “anticipate”, “budget”,
“plan”, “estimate”, “continue”, “forecast”, “intend”, “believe”, “predict”, “potential”, “target”, “may”,
“could”, “would”, “might”, “will” and similar words or phrases (including negative variations)
suggesting future outcomes or statements regarding an outlook.
Forward-looking statements in this release include, but are no t limited to , statements and
information regarding: the Company's production outlook for 2023, potential contract
opportunities with new third-party oxide providers and the Company’s plans for growth through
exploration activities, acquisitions or otherwise. Such forward-looking statements are based on
a number of material factors and assumptions, including, but not limited to: the Company's ability
to carry on exploration and development activities; the Company's ability to secure and to meet
obligations under property and option agreements and other material agreements; the timely
receipt of required approvals and permits; that there is no material adverse change affecting the
Company or its properties; that contracted parties provide goods or services in a timely manner;
that no unusual geological or technical problems occur; that plant and equipment function as
anticipated and that there is no material adverse change in the price of silver, costs associated
with production or recovery. Forward -looking sta tements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or achievements,
or industry results, to differ materially from those anticipated in such forward-looking statements.
The Company believes the expectations reflected in such forward -looking statements are
reasonable, but no assurance can be given that these expectations will prove to be correct, and
you are cautioned not to place undue reliance on forward-looking statements contained herein.
Some of the risks and other factors which could cause actual results to differ materially from
those expressed in the forward-looking statements contained in this release include, but are not
limited to: risks and uncertainties relating to the interpretation of drill results, the geology, grade
and continuity of mineral deposits and conclusions of economic evaluations; results of initial
feasibility, pre -feasibility and feasibility studies, and the possibility that future exploration,
development or mining results will not be consistent with the Company’s expectations; risks
relating to possible variations in reserves, resources, grade, planned mining dilution and ore loss,
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or recovery rates and changes in project parameters as plans continue to be refined; mining and
development risks, including risks related to accidents, equipment breakdowns, labour disputes
(including work stoppages and strikes) or other unanticipated difficulties with or interruptions in
exploration and development; the potential for delays in exploration or development activities or
the completion of feasibility studies; risks related to the inherent uncertainty of production and
cost estimates and the potential for unexpected costs and expenses; risks related to commodity
price and fore ign exchange rate fluctuations; the uncertainty of profitability based upon the
cyclical nature of the industry in which the Company operates; risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or delays in obta ining
governmental or local community approvals or in the completion of development or construction
activities; risks related to environmental regulation and liability; political and regulatory risks
associated with mining and exploration; risks related to the uncertain global economic
environment; and other factors contained in the section entitled “Risk Factors” in the MD&A and
the Company’s Management Discussion and Analysis dated March 17, 2023.
Although the Company has attempted to identify important factors that could cause actual results
or events to differ materially from those described in the forward -looking statements, you are
cautioned that this list is not exhaustive and there may be other factors that the Company has
not identified. Furthermore , the Company undertakes no obligation to update or revise any
forward-looking statements included in, this release if these beliefs, estimates and opinions or
other circumstances should change, except as otherwise required by applicable law.
Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures
Operating Cash Costs (“OCC”), All-in Sustaining Costs (“AISC”) and All-in Costs (“AIC”)
OCC, AISC and AIC are non-GAAP financial measures set out under a guidance note released
by the World Gold Council in September 2013 and updated in November 2018. 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 mea sures of
performance prepared in accordance with IFRS.
(i) OCC includes 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.
(ii) AISC on a by-product basis per ounce is a non-GAAP ratio calculated as AISC on a by-
product basis divided by ounces of silver sold. AISC on a by-product basis is a non-GAAP
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financial measure calculated as the aggregate of production costs as recorded in the
consolidated statements of (loss) income, refining and transport costs, cash component
of sustaining capital expenditures, lease payments related to sustaining assets, corporate
general and administrative expenses and accretion expenses. When calculating AISC on
a by-product basis, all revenue received from the sale of gold is treated as a reduction of
costs incurred. 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.
(iii) AIC represents AISC plus non-sustaining exploration and evaluation costs.
(iv) Non-sustaining exploration and evaluation costs represent cost s associated with the
Company’s exploration portfolio, primarily relating to activities at Rio Blanco and the FDF
and DSF. Certain other cash expenditures including tax payments, debt payments,
dividends and financing costs are also not included in the cal culation of AIC. The
Company reports these measures on a silver ounce sold basis.
OCC
The following table provides a reconciliation of OCC per silver ounce sold on a by-product basis
to the Financials:
Q1 2023 Q1 2022
Costs of sales, as reported $ 21,217 $ 20,647
Total OCC before by-product credits 21,217 20,647
Less: by-product gold credits (415) (1,283)
Total OCC $ 20,802 $ 19,364
Divided by silver ounces sold (k oz) 982 1,173
OCC per silver ounce sold, on a by-product basis $ 21.18 $ 16.51
AISC
The following table provides a reconciliation of AISC per silver ounce on a by -product basis to
the Financials:
Q1 2023 Q1 2022
OCC, net of by-product credits $ 20,802 $ 19,364
General and administrative expenses 2,455 2,872
Sustaining capital expenditures (1) 563 447
Lease payments - 44
Accretion for reclamation provision 318 282
Less:
Business development included in G&A (173) (307)