ANDEAN PRECIOUS METALS REPORTS SOLID Q2 2023 RESULTS SUPPORTED BY STRONG PRODUCTION AND IMPROVING COSTS Reaffirms 2023 production guidance; adjusts AISC and capex guidance
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ANDEAN PRECIOUS METALS REPORTS SOLID Q2 2023 RESULTS
SUPPORTED BY STRONG PRODUCTION AND IMPROVING COSTS
Reaffirms 2023 production guidance; adjusts AISC and capex guidance
TORONTO, ON – August 15, 2023 – Andean Precious Metals Corp. (“Andean” or the
“Company”) (TSX-V: APM) (OTCQX: ANPMF) reported its operating highlights and unaudited
condensed interim financial results for the three and six months ended June 30 , 202 3 (the
“Financials”). All amounts are expressed in United States dollars (“U.S. dollars”), unless otherwise
noted (C$ refers to Canadian dollars). This news release should be read together with Andean’s
Financials, which are available under the Company’s profile on SEDAR+ (www.sedarplus.ca).
Q2 2023 Highlights
Three months ended June 30, 2023 vs. three months ended March 31, 2023
• Produced 1.2 million silver equivalent ounces (“ AgEq oz”)1, an increase of 22%. The
Company is reaffirming its full year 2023 production guidance of 4.8-5.2 million AgEq oz.
• Recovery rates improved with an average of 79% in each of the first two quarters of 2023.
For the first half of 2023 compared to the first half of 2022 , the average recovery rate
improved from 76% to 79%.
• Of the 1.2 million ounces produced, 0.6 million AgEq oz were sold at an average realized
price of $24.65 per ounce for Q2 2023 revenue of $15.3 million. The 38% decrease in ounces
sold in Q2 2023 vs. Q1 2023 was due to the sales deferral of approximately 540,000 AgEq
oz, which was classified as inventory and valued at $11.3 million. Subsequent to June 30,
2023, the bullion was sold for total revenue of $13.3 million based on an average realized
price of $24.70 per ounce.
• Cost of sales decreased by 45% to $11.8 million predominantly due to lower ounces sold
and a decrease of $1.2 million in mining and material purchasing costs.
• Operating cash costs (“OCC”)2 per ounce of silver produced, net of by-product credits, was
$19.15, a decrease of 11%.
• All-in sustaining costs (“AISC”)2 per silver ounce sold, net of by-product credits, was $23.69,
a decrease of only 2% despite lower ounces sold.
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, OCC and AISC are non-IFRS measures. Please refer to the “Non-GAAP Financial Measures, Ratios
and Supplementary Financial Measures” section of this press release.
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• General and administrative (“G&A”) expenses of $3.1 million were $0.7 million higher quarter-
over-quarter due to increased corporate development activities as well as a stronger Mexican
peso relative to the U.S. dollar. G&A decreased by $0.4 million and by $0.8 million ,
respectively, compared to Q2 2022 and H1 2022.
• Income from mine operations increased to $2.4 million from $0.4 million.
• Net income attributable to equity holders remained unchanged at $0.2 million.
• For Q2 2023, earnings before interest, taxes, depreciation and amortization (“EBITDA”)2 and
adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)2
was $3.7 million and $4.9 million, respectively, compared with $1.5 million and $1.4 million,
respectively, in Q1 2023. EBITDA improved by $0.7 million and Adjusted EBITDA improved
by $0.9 million in the first six months of 2023 compared to the first six months of 2022.
Liquidity and Capital Resources
• Debt-free balance sheet with cash and cash equivalents of $70.4 m illion. Cash was lower
due to the sales deferment of approximately 540,000 AgEq oz, which were sold in July 2023
at an average price of $24.70 per Ag oz, representing revenue of $13.3 million.
• Positive working capital of $90.3 million as at June 30, 2023, including liquid assets of $89.9
million, comprised of $70.4 million in cash, silver bullion of $13.3 million, marketable
securities of $4.7 million and VAT certificates receivable of $1.5 million. Liquid assets were
$91.8 million as at December 31, 2022.
• Pursuant to its normal course issuer bid (“NCIB”), the Company repurchased and cancelled
1,430,500 shares at an average purchase price of C$0.77 per share for a total of $0.8 million
(C$1.1 million). Since the inception of the NCIB in the fall of 2022 to the end of June 2023,
a total of 2,379,600 shares have been repurchased and cancelled at an average purchase
price of C$0.80 for a total of $1.4 million (C$1.9 million).
• During Q2 2023, the Company entered into silver sales forward contracts for the delivery of
1,025,000 ounces of silver at an average price of $25.75 per ounce. As a result of the
decrease in the silver price in May, the forward contracts were unwound, and net cash
settled in May 2023, resulting in a realized gain of $2.3 million in Q2 2023.
• To mitigate silver price fluctuation risks and its impact on revenue , the Company entered
into zero-cost 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 from August 2023
to December 2023. As at June 30, 2023, the Company recognized an unrealized gain of
$1.0 million on the fair value of the contracts.
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Growth
• The Company signed a mineral purchase agreement with Empresa Minera Bedrock S.R.L
(“Bedrock”) for 170,000 metric tonnes over the next 24 months from Bedrock’s Alta Vista
project, located 420 km from San Bartolomé. The materials from the Alta Vista project have
an expected head grade of approximately 350 g/t. The first material delivery is expected in
late Q3 2023.
• The silver recovery project at the Company’s fines disposal facility (“FDF”) continues to
advance. Production is expected to commence in the first half of 2024.
Environment and Health & Safety
• During Q2 2023, t he Company achieved a lost time injury frequency rate of zero per one
million hours worked and attained a significant safety milestone of 1.452 million operating
hours with no lost time injury.
• There were zero significant environmental incidents and zero reportable spills for the three
and six-month periods ended June 30, 2023.
"This quarter we increased production and operational efficiencies and maintained recoveries
compared to the first quarter. These upward trends continued in July,” stated Alberto Morales,
Executive Chairman and CEO of Andean.
Mr. Morales continued, “We remain focused on extending the life of San Bartolomé and are
making significant progress on the tailings silver recovery project at our fines disposal facility. We
anticipate publishing a mineral resource estimate shortly, filin g a technical report, and
commencing production in the first half of 2024. In parallel, we are actively engaged in acquisition
activities in the Americas, aiming to become a multi-jurisdictional mid-tier producer.”
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Summary of Operating and Financial Results
Operating Results Summary
Q2 Q1 % Q2 Q2 % H1 H1 %
Units 2023 2023 Change 2023 2022 Change 2023 2022 Change
Operational Performance
Tonnes mined (1) k dmt 468 433 8% 468 540 (13%) 901 1,019 (12%)
Average mined grade Ag g/t 43 53 (18%) 43 102 (58%) 48 99 (52%)
Tonnes purchased (2) k dmt 167 89 88% 167 117 43% 256 234 9%
Average purchased grade Ag g/t 186 214 (13%) 186 221 (16%) 196 216 (9%)
Tonnes milled (3) k dmt 385 375 3% 385 407 (5%) 760 813 (7%)
Daily average throughput dmt 4,561 4,461 2% 4,561 4,769 (4%) 4,511 4,714 (4%)
Average head grade Ag g/t 119 106 12% 119 126 (5%) 113 121 (7%)
Silver recovery % 79 79 0% 79 75 6% 79 76 4%
Silver production k oz 1,189 978 22% 1,189 1,236 (4%) 2,167 2,387 (9%)
Gold production oz 396 234 69% 396 902 (56%) 630 1,800 (65%)
Silver equivalent production (4) k oz 1,221 998 22% 1,221 1,310 (7%) 2,218 2,530 (12%)
Silver sales k oz 620 982 (37%) 620 1,225 (49%) 1,602 2,398 (33%)
Gold sales oz - 215 (100%) - 900 (100%) 215 1,571 (86%)
Silver equivalent sales (4) k oz 620 1,000 (38%) 620 1,299 (52%) 1,620 2,526 (36%)
AgEq Production Breakdown by Source
Pallacos k oz 403 388 4% 403 329 22% 791 842 (6%)
Mine reclamation stockpiles k oz 38 165 (77%) 38 305 (88%) 202 395 (49%)
Cachi Laguna k oz 125 120 5% 125 242 (48%) 245 414 (41%)
Oxide purchases k oz 655 325 101% 655 434 51% 980 879 11%
Total k oz 1,221 998 (7%) 1,221 1,310 (7%) 2,218 2,530 (12%)
Financial Results Summary
Q2 Q1 % Q2 Q2 % H1 H1 %
(In 000s except per oz numbers) 2023 2023 Change 2023 2022 Change 2023 2022 Change
Financial Performance
Revenue $15,284 23,045 (34%) $15,284 $28,892 (47%) $38,329 $58,780 (35%)
Cost of sales 11,771 21,217 (45%) 11,771 24,532 (52%) 32,988 45,179 (27%)
Income from mine
operations 2,448 374 555% 2,448 3,613 (32%) 2,822 10,037 (72%)
Net income (loss) 169 219 (23%) 169 (6,184) (103%) 388 (3,909) (110%)
Net income (loss) per
share
-Basic 0 0 (100%) 0 (0.04) (100%) 0 (0.02) (100%)
-Diluted 0 0 (100%) 0 (0.04) (100%) 0 (0.02) (100%)
Net cash (used in) provided
from operating activities (5,293) (4,323) 22% (5,293) 45 (11862%) (9,616) 2,748 (450%)
Free cash flow(5) (5,588) (4,886) 14% (5,588) (633) 783% (10,474) 1,579 (763%)
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EBITDA(5) 3,657 1,516 141% 3,657 (3,597) 202% 5,173 4,474 16%
Adjusted EBITDA(5) 4,928 1,373 203% 4,928 (715) 789% 5,527 4,653 19%
Ending cash and cash
equivalents 70,427 75,793 (7%) 70,427 88,449 (20%) 70,427 88,449 (20%)
Capital expenditures 295 563 (48%) 295 634 (53%) 858 1,169 (27%)
OCC (by-product)(5) per oz
produced $19.15 $21.55 (11%) $19.15 $18.86 2% $20.24 $18.02 12%
OCC (by-product)(5) per oz
sold $18.99 $21.18 (10%) $18.99 $18.68 2% $20.33 $17.62 15%
AISC (by-product)(5) per oz
sold $23.69 $24.27 (2%) $23.69 $21.38 11% $23.89 $20.15 19%
(1) Material mined during 2023 and 2022 includes material from the Company’s permitted areas, including Santa Rita,
Huacajchi, Antuco, El Asiento, Monserrat and Tatasi-Portugalete. Mined material is reported as Run-of-Mine (“ROM”).
(2) Purchased material includes oxidized material purchased from local mining cooperatives as well as through the Company’s
contract with RALP Compañia Minera S.R.L. (“RALP”).
(3) Tonnes milled is reported as +8 mesh. The acronym “dmt” means dry metric tonnes.
(4) Silver equivalent production and silver equivalent sales include gold production and sales, respectively. Equivalent ounces
are calculated using the Company’s average realized gold and silver prices during the referenced period. Refer to the “Non-
GAAP Financial Measures, Ra tios and Supplementary Financial Measures” section of the Company’s MD&A for further
detail.
(5) FCF, EBITDA, Adjusted EBITDA, OCC, costs per tonnes and AISC are measures of financial performance with no prescribed
definition under IFRS. Refer to the “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” section
of the Company’s MD&A for further detail, including a reconciliation of these metrics to the financial statements.
2023 Guidance
• The Company’s 2023 outlook was disclosed in the MD&A for the year ended December
31, 2022 filed under the Company’s profile on SEDAR+ at www.sedarplus.com.
• The Company is reaffirming its full -year 2023 production guidance of 4.8 million to 5.2
million AgEq oz. During H2 2023, the Company will continue to process material from its
surface deposits and from new material purchasing contracts, including the recently signed
one with Bedrock for the Alta Vista deposit. Additionally, the Company will continue to
purchase material from community mining partners and explore opportunities to source
additional feed from third parties and COMIBOL. As previously disclosed, approximately
54% of 2023 production is expected in the second half of the year.
• Although management continues to successfully address last year’s recovery issues and
other challenges, further work remains. While management anticipates production to
increase and costs to improve in the second half of the year , these results may not be
sufficient to offset the impact of the first two quarters. Accordingly, the Company is
increasing its full year 2023 AISC guidance from a range of $19.50 - $20.30 to $20.90 -
$21.95.
• Due to revised engineering design and procurement plans, capital expenditures are
expected to be in the range of $6.5 million to $8.5 million , lower than the range of $8.0
million to $10.0 million in the original guidance. The Company continues to work with
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consultants on the FDF project, including advanced metallurgical testing and geotechnical
studies. The Company has started assessing engineering and construction options and
expects to commence production in the first half of 2024.
The following table sets out Andean’s year-to-date results against both its original and revised
2023 guidance:
YTD 2023 Actual Original
2023 Guidance(1)
Revised
2023 Guidance(2)
Silver equivalent production 2.2 million AgEq oz 4.8 million to 5.2 million oz 4.8 million to 5.2 million oz
AISC (by-product) $23.89/Ag oz $19.50 to $20.30/Ag oz $20.90 to $21.95/Ag oz
Capital expenditures $0.9 million $8 million to $10 million $6.5 million to $8.5 million
(1) Andean’s commodity price assumptions supporting this estimate are $21/oz silver.
(2) Andean’s commodity price assumptions supporting this estimate are $22/oz silver.
Q2 2023 Webcast
Management will host a webcast tomorrow morning to discuss the Company’s Q2 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: Wednesday, August 16, 2023 at 9:00 a.m. ET
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.
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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 oz of silver equivalent per year. The
Company is seeking accretive growth opportunities in Bolivia and the 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.
Caution Regarding Forward-Looking Statements
Certain statements and information in this release constitute “forward-looking statements” within
the meaning of applicable U.S. secur ities laws and “forward -looking information” within the
meaning of applicable Canadian securities laws, which we refer to collectively as “forward-looking
statements”. Forward -looking statements are statements and information regarding possible
events, con ditions 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 wo rds or phrases (including negative variations) suggesting
future outcomes or statements regarding an outlook.
Forward-looking statements in this release include, but are not limited to, statements and
information regarding: the Company's production outlook and capital expenditure expectations for
2023, the timing of production at the FDF and delivery of materials pursuant to the mineral
purchase agreement with Empresa Minera Bedrock S.R.L and the Company’s plans for growth
through explorat ion activities, acquisitions or otherwise. Such forward -looking statements are
based on a number of material factors and assumptions, including, but not limited to: the
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Company's ability to carry on exploration and development activities; the Company's abi lity 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 pro duction or recovery. Forward -looking statements 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 forwa rd-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 un certainties 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 fu ture 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, 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 exploratio n 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; r isks related to commodity price and foreign
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 a nd on acceptable terms or delays in obtaining 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 th e MD&A and the Company’s Management
Discussion and Analysis dated August 15, 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.