Andean Precious Metals Reports Strong Second Quarter
Andean Precious Metals Reports Strong
Second Quarter
Toronto, Ontario--(Newsfile Corp. - August 24, 2021) - Andean Precious Metals Corp. (TSXV: APM)
("
Andean
" or the "
Company
"), a Latin-American focused, precious metals production and exploration
company, today reported its operational and financial results for the second quarter ended June 30,
2021. All amounts are expressed in U.S. dollars unless indicated otherwise.
Q2 2021 Highlights
Revenues of $38.0 million, an increase of $25.4 million compared to Q2 2020;
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")
(
1)
of
$10.3 million, an increase of $8.1 million compared to Q2 2020;
Net income of $3.9 million;
Free cash flow
(
1
,
2
)
of $10.3 million;
Ending cash balance of $79.0 million, compared to $38.5 million as at December 31, 2020;
Silver equivalent production
(
3
)
of 1.4 million ounces and sales of 1.3 million ounces at an all-in
sustaining cost of $18.97 per ounce of silver.
Luis da Silva, the Company's President and CEO, stated,
"Our strong financial results continue to
enhance Andean's treasury position whilst maintaining a clean capital structure. During such time as
we review sector diversification opportunities, we shall build on our strong cash position, which is rather
unique among junior producers.
For the second half of 2021, we will continue to advance our
exploration program and the evaluation of the tailings reprocessing opportunity at the San Bartolomé
plant."
Operational and Financial Results
Financial Performance
(
4
)
Q2 2021
Q2 2020
Revenue
$
38.0
$
12.6
Cost of sales
$
24.4
$
7.6
Income from mine operations
$
11.3
$
2.9
Net income (loss)
$
3.9
$
(0.3)
Operating cash flow
$
11.4
$
(0.1)
Free cash flow
(
1,
2)
$
10.3
$
(0.2)
Adjusted EBITDA
(
1
)
$
10.3
$
2.2
Ending cash and cash equivalents
$
79.0
$
9.4
Capital expenditures
$
1.1
$
0.2
Cash operating costs ("COC")
(
1
)
$
16.47
$
13.35
All-in sustaining costs ("AISC")
(
1
)
$
18.97
$
15.65
Revenue for the second quarter of 2021 was $38.0 million compared to $12.6 million in the second
quarter of 2020. Revenue growth was driven by a year-over-year increase in silver equivalent sales
volumes of 92% to 1.4 million silver equivalent ounces and higher realized prices of $26.71 per ounce of
silver in the second quarter of 2021 compared with $17.00 per ounce of silver for the second quarter of
2020. Cost of sales, including direct costs and mining royalty taxes, were $24.4 million compared to
$7.6 million in the second quarter of 2020, corresponding to the increase in sales. As a result, income
from mine operations increased to $11.3 million from $2.9 million in the first quarter of 2020.
General and administrative costs increased to $2.2 million compared to $1.2 million in the second
quarter of 2020. The significant components of these expenses include the costs of salaries and office
administration, management fees, and community relations expenses. Deferred income taxes of $7.1
million were recorded during the second quarter of fiscal 2021, relative to none during the second
quarter of fiscal 2020. Overall, the net income for the second quarter of 2021 totaled $3.9 million.
Operational Performance
Q2 2021
Q2 2020
Mined ore
(
1)
(k dmt)
473
342
Average ore mined grade (Ag g/t)
96
102
Purchased ore
(
2)
(k dmt)
136
18
Average purchased ore grade (Ag g/t)
198
283
Ore milled
(
3)
(k dmt)
430
271
Daily average throughput (k dmt)
4,888
4,670
Average head grade (Ag g/t)
115
111
Silver recovery (%)
84
92
Silver production (k ozs)
1,326
888
Silver equivalent production (k ozs)
1,415
886
Silver sales (k ozs)
1,334
703
Silver equivalent sales (k ozs)
1,424
740
(1)
Mined ore includes ore from permitted mineral reserve areas, including the Pallacos areas (Santa Rita, Huacajchi and Antuco) and mine waste
stockpile areas (El Asiento and Tatasi-Portugalete). Mined ore is reported as +8 mesh.
(2)
Purchased ore includes ore purchased at Cachi Laguna and oxide purchases from local mining cooperatives.
(3)
Ore milled includes ore processed from mined, purchased, and stockpiled ore.
Silver equivalent production by source (k ozs)
Q2 2021
Q2 2020
Pallacos
526
711
Mine waste stockpiles
200
35
Cachi Laguna
128
-
Oxide purchases
561
142
Total silver equivalent production
1,415
886
2021 Outlook Update and Guidance
The Company produced 2.9 million silver equivalent ounces from its operations during the first half of
2021 from its mineral reserves and its third-party ore sourcing business. During the remainder of 2021,
the Company will focus mining production at the Santa Rita Pallacos area. Mining will also continue at
the Company's high-grade mine waste stockpile areas. In July 2021, production commenced at the
Monserrat mine waste stockpile area, which contains higher grade material than the Company's
Pallacos areas.
The Company has commenced sonic drilling of the tailings facility which will inform a mineral resource
estimate followed by a technical study on the economic viability of reprocessing approximately 10 million
tonnes contained in its tailings facilities. Manquiri's production records suggest potentially economic
quantities of recoverable silver and tin exists in the tailings.
The Company continues to expand its third-party ore sourcing business from locations outside Cerro
Rico. As the San Bartolomé operation contains the only large-scale commercial oxide plant in the
country, the Company is leveraging this advantage with its strong working capital position and actively
reviewing additional purchasing opportunities throughout Bolivia. The Company currently purchases ore
from 32 out of approximately 1,700 mining cooperatives within Bolivia.
The following table sets out Andean's first half 2021 results against its full-year 2021 production and cost
guidance:
YTD 2021
Actual
FY 2021
Guidance
(
1)
Silver equivalent production
2.9M oz
5.8M to
6.1M oz
AISC (by-product)
$
18.15/Ag
oz
$
17.50 to
$19.50/Ag
oz
(1)
Andean's assumed commodity prices supporting this estimate are $24.00/ounce silver and $1,750/ounce gold.
Growth Program
In addition to Andean's production profile and ore sourcing business, the Company also has an active
exploration program for two highly prospective properties that Andean owns: Rio Blanco and San Pablo.
At Rio Blanco, Andean began a diamond drilling campaign comprising 22 holes over 5,500 metres with
three drill rigs in July 2021. The Company also advanced reconnaissance geological work including
trenching totaling 1,500 metres replicating the historic work performed in 1998. This work programme is
intended to supplement the drilling campaign.
At San Pablo, Andean completed the first phase of a 10,000 metre diamond drilling campaign, drilling
12 holes totaling 3,580 metres at varying depths in May 2021 with multiple gold bearing zones
encountered. The Company also seeks to complete ground-based geophysical surveys in its second
phase. The Company expects to release results on the first phase in due course.
Qualified Person Statement
Donald J. Birak, Registered Member SME and Fellow AusIMM and independent qualified person as
defined under NI 43-101, has reviewed and approved the scientific and technical information presented
herein.
About Andean Precious Metals Corp.
Andean Precious Metals (TSXV: APM) is a Canadian, growth-focused silver producer operating in
Bolivia. The Company produced 5.9M silver equivalent ounces in 2020 at an all-in sustaining cost of
$14.75 USD per ounce from its own mineral claims, contracts with the state mining company of Bolivia
(COMIBOL), and from a high margin third-party ore sourcing business. All processing takes place at the
Company's 1.65M tonne per year San Bartolomé plant which has the capacity to produce silver doré
bars. Andean Precious Metals is committed to fostering safe, sustainable and responsible operations.
For more information, please visit
www.andeanpm.com
.
Company Contact
Luis da Silva
Chief Executive Officer
T: +44 7788 640696
Investor Contact N.A.
Daniel Weinerman
NATIONAL Capital Markets
T: 416 848 1715
Media Contact Eur.
Oliver Lamb
Consultant
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.
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.
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 do not assume any obligation, to
update the forward-looking statements except as otherwise required by applicable law.
____________________
(
1
)
Free cash flow, Adjusted EBITDA, COC and AISC are measures of financial performance with no prescribed definition under IFRS. Please refer to
the Company's Management Discussion and Analysis for the three months ended June 30, 2021 and 2020 filed at
www.sedar.com
for a
reconciliation of these items to the Company's financial statements.
(
2
)
Free cash flow is defined as operating cash flow less capital expenditures.
(
3
)
Silver equivalent ounces include gold ounces produced or sold and are converted to a silver equivalent based on a ratio of realized silver and
gold prices during the periods discussed.
(
4
)
Figures are presented in US millions, other than COC, AISC and per share figures.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/94248