Mineros Reports First Quarter 2024 Financial and Operating Results (all dollar amounts - other than per share amounts - are expressed in thousands of US dollars
Mineros Reports First Quarter 2024 Financial and
Operating Results
(all dollar amounts - other than per share amounts - are expressed in thousands of US dollars unless otherwise stated)
MEDELLIN, Colombia
,
May 9, 2024
/CNW/ - Mineros S.A. (TSX: MSA) (CB: MINEROS) ("
Mineros
" or the "
Company
")
today reported its financial and operating results for the three months ended
March 31, 2024
. For further information, please
see the Company's unaudited condensed interim financial statements and management's discussion and analysis filed under its
Mineros' profile on
www.sedar
plus.com
.
Andrés Restrepo, President and Chief Executive Officer of Mineros, commented: "We had a strong first quarter from both a
financial and an operating perspective. Our cash cost and all in sustaining costs were at the lower end of guidance for our
operations. Our gold production from Company owned mines was largely as expected and we processed more artisanal
material in
Nicaragua
showing the tremendous flexibility of our operations to compensate for unanticipated downtime in our
processing plant at our Hemco operations. We're pleased with our progress in 2024 and are maintaining our cost and
production guidance."
On
September 21, 2023
, Mineros sold all of the outstanding share capital of Mineros' subsidiary, Minas Argentinas S.A.,
which holds a 100% interest in the Gualcamayo Property in
Argentina
, to Eris LLC. Accordingly, the financial and operating
results of the Company herein are presented for continuing operations comprising the Hemco Property and the Nechí Alluvial
Property and omit the discontinued operations composed of the Gualcamayo Project. Certain results set out below have been
restated to reflect only the continuing operations of the Company by removing amounts pertaining to the discontinued
operations from previous totals. These restatements are reflected in all first quarter 2023 results in order to more
appropriately compare the results from the first quarter of 2024 with the first quarter of 2023.
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE FIRST QUARTER OF 2024
Revenue increased by 15%:
revenue totaled
$114,148
during the first quarter of 2024, compared with
$98,869
in the
first quarter of 2023, with sales of gold of
$106,962
at an average realized price per ounce of gold sold from continuing
operations
1
of
$2,067
, during the first quarter of 2024 compared with sales of gold of
$94,960
at an average realized
price per ounce of gold sold from continuing operations of
$1,876
in the first quarter of 2023. The increase in revenue in
the first quarter of 2024 is mainly explained by a 10% increase in average realized price per ounce of gold sold from
continuing operations, a 2% increase in ounces of gold sold from continuing operations and a 87% increase in sales of
silver of
$2,606
;
Cost of sales increased by 19%
to
$80,678
during the first quarter of 2024, compared with
$67,971
in the first quarter
of 2023. This increase was primarily due to: (i) the higher price of gold increasing the costs related to artisanal mining to
$4,969
; (ii) greater depreciation and amortization relating to our operations of
$1,117
; and (iii) the 17% revaluation of the
Colombian peso against the US dollar and higher prices across the Company's operations, thus creating increased
maintenance and materials cost of
$1,915
, and service and labour costs of
$1,804
and
$2,751
respectively;
Gross Profit from continuing operations increased by 8%
to
$33,470
in the first quarter of 2024, compared with
$30,898
in the first quarter of 2023, mainly due to higher revenue as explained above;
Profit for the period from continuing operations up 0.14%,
to
$16,774
or
$0.06
per share during the first quarter of
2024 compared with
$16,751
or
$0.06
per share during the first quarter of 2023. The modest increase in profit is mainly
explained by higher revenue and gross profit as explained above. Profit for the period was impacted by higher foreign
exchange differences of
$2,157
, higher administrative expenses of
$778
related to employee benefits and services, higher
taxes of
$469
and less other income of
$3,236
;
Adjusted EBITDA
1
up 8%:
Adjusted EBITDA was
$40,654
during the first quarter of 2024 compared with
$37,754
during
the first quarter of 2023, mainly explained by higher revenue as explained above;
ROCE
1
was 32%
as at
March 31, 2024
compared with a ROCE of 26% as at
March 31, 2023
. The increase is mainly
explained by 10% higher Adjusted EBITDA for the last 12 months, along with a 8% decrease in average capital
employed, mainly explained by the sale of Gualcamayo and the disposal of its assets and liabilities;
Net cash flows generated by operating activities up 305%,
totaling
$10,105
in the first quarter of 2024, compared
with
$2,498
in the first quarter of 2023, primarily explained the sale of Gualcamayo which resulted in lower payments to
suppliers of
$13,897
, and lower payments to employees and social security agencies of
$5,626
, lower payments for
premiums and claims of
$1,438
partially offset with higher income tax payments of
$2,156
and lower receipts from sales
for
$11,424
;
Net Debt
2
was
$(14,215)
as at
March 31, 2024
, compared with
$12,612
as at
March 31, 2023
; explained by 25% higher
cash and cash equivalents, along with 48% lower loans and other borrowings, reflecting strong cash position for the
company and significant decrease in debt levels;
Dividends Paid up 8%:
Dividends paid during the first quarter of 2024 were
$5,239
, compared with
$4,837
in the same
period of 2023, explained by an 8% higher dividend approved at the General Shareholders' Meeting in
March 2023
;
Cash Cost & AISC:
Cash Cost per ounce of gold sold for continuing operations in the first quarter of 2024 was
$1,202
and AISC per ounce of gold sold from continuing operations
1
was
$1,429
, compared with Cash Cost per ounce of gold
sold from continuing operations of
$1,055
and AISC per ounce of gold sold from continuing operations of
$1,252
for the
first quarter of 2023. The 14% increase in Cash Cost per ounce of gold sold from continuing operations is mainly
explained by the 19% increase in cost of sales, due to higher gold prices and the effects of the COP:US$ exchange rate,
which was partially offset by the 2% increase in ounces of gold sold. The increase in AISC per ounce of gold sold from
continuing operations is explained by the increase in cost of sales, along with a 20% increase in sustaining capital
expenditures, partially offset by the 2% increase in ounces of gold sold; and
Capital investments down 4% to
$14,363
:
during the first quarter of 2024 capital investments of
$14,363
were made
into existing mines, and exploration & growth projects, compared with
$14,982
in the first quarter of 2023; the decrease is
explained by the sale of Gualcamayo.
____________________________________
1
Average realized price per ounce of gold sold from continuing operations, Adjusted EBITDA, Net Debt, Cash Cost per ounce
of gold sold, and AISC per ounce of gold sold are non-IFRS financial measures, and Cash Cost per ounce of gold sold, AISC
per ounce of gold sold and ROCE is a non-IFRS ratio, with no standardized meaning under IFRS, and therefore they may not
be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-
IFRS financial measures to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in
this news release.
2
Cash Cost, AISC, Adjusted EBITDA, net free cash flow, Net Debt and average price realized per ounce of gold sold are
non-IFRS financial measures, and Cash Cost per ounce of gold sold, AISC per ounce of gold sold and ROCE are non-IFRS
ratios, with no standardized meaning under IFRS, and therefore they may not be comparable to similar measures presented
by other issuers. For further information and detailed reconciliations of non-IFRS financial measures to the most directly
comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release.
Financial and Operating Highlights
Three Months
Ended March
31,
Change
2024
2023
$
%
Financial
Revenue
114,148
98,869
15,279
15 %
Cost of sales
(80,678)
(67,971)
(12,707)
19 %
Gross Profit
33,470
30,898
2,572
8 %
Profit for the period from continuing operations
16,774
16,751
23
0 %
Basic and diluted earnings per share from continuing operations
($/share)
$0.06
$0.06
$0
0 %
Loss for the period from discontinued operations
—
(1,347)
1,347
(100) %
Basic and diluted earnings per share from continuing and
discontinued operations ($/share)
$0.056
$0.051
$0.005
9 %
Adjusted EBITDA
1
40,654
37,754
2,900
8 %
Net cash flows generated by operating activities
10,105
2,498
7,607
305 %
Net free cash flow
1
(1,897)
(10,232)
8,335
(81) %
ROCE
1
32 %
26 %
6 %
22 %
Net Debt
1
(14,215)
12,612
(26,827)
(213) %
Dividends paid
5,239
4,837
402
8 %
Operating
Average realized price per ounce of gold sold from continuing
operations ($/oz)
1
2,067
1,876
191
10 %
Total Gold Produced from continuing operations (oz)
51,741
50,609
1,132
2 %
Silver sold (oz) from continuing operations
242,649
131,523
111,126
84 %
Cash Cost per ounce of gold sold from continuing operations
($/oz)
1 2
$1,202
$1,055
$147
14 %
AISC per ounce of gold sold from continuing operations ($/oz)
1
2
$1,429
$1,252
$177
14 %
1.
Adjusted EBITDA, Net free cash flow, Net Debt, Cash Cost per ounce of gold sold, AISC per ounce of gold sold and average realized price per ounce of gold sold, are non-IFRS financial measures, and ROCE is a non-IFRS
ratio, with no standardized meaning under IFRS, and therefore they may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-IFRS financial measures
to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release.
2.
In Q4 of 2023, the Company restated AISC and Cash Cost to capture cash outflows related to asset retirement obligations and environmental and rehabilitation costs.
Operational Highlights by Material Property
(All numbers in ounces unless otherwise noted)
Three Months
Ended March
31,
Change
2024
2023
Ounces
Ounces
Ounces
%
Nechí Alluvial Property (Colombia)
19,212
17,988
1,224
7 %
Hemco Property
8,182
10,221
(2,039)
(20) %
Artisanal Mining
24,347
22,400
1,947
9 %
Nicaragua
32,529
32,621
(92)
— %
Total Gold Produced from Continuing Operations
51,741
50,609
1,132
2 %
Gualcamayo Property (Argentina)
—
9,639
(9,639)
(100) %
Total Gold Produced from Discontinued Operations
—
9,639
(9,639)
(100) %
Total Gold Produced
51,741
60,248
(8,507)
(14) %
Total Silver Produced
242,649
134,669
107,980
80 %
Gold production increased by 2%
: Excluding the results of the discontinued operations at the Gualcamayo Property
(disposed of in 2023), 51,741 ounces of gold were produced during the first quarter of 2024, compared with 50,609
ounces in the first quarter of 2023. The increase in production is mainly a result of 7% higher production at the Nechí
Alluvial Property, explained by higher volumes.
Exploration and Evaluation Expenditures:
for the three months ended
March 31, 2024
, the Company incurred
$2,228
in exploration and evaluation ("E&E") expenditures, an increase of 20% compared with the first quarter of 2023. The
increase is mainly explained by higher exploration expenditures which were capitalized in the Hemco Property, related to
the Porvenir Project. The increase in exploration expenses is mainly due to higher regional exploration in the Hemco
Property and the sale and subsequent disposal of the Ataco project mining rights in
Colombia
. The following table
summarizes E&E expenditures for the current and comparative periods.
Three
Months
Ended March
31,
Change
2024
2023
$
%
E&E expenditures capitalized
1, 3
624
525
99
19 %
E&E expenditures expensed
2
1,604
1,338
266
20 %
Total
2,228
1,863
365
20 %
1.
Capitalized E&E expenditures are reflected in E&E projects in the consolidated statements of financial position.
2.
Figures in the table reflect expenditures capitalized from continuing operations. E&E expenditures capitalized from discontinued operations as discussed in this MD&A are nil.
3.
Expensed E&E expenditures are reported in the consolidated statement of profit or loss for the respective period under "Exploration expenses".
CORPORATE HIGHLIGHTS FOR THE THREE
MARCH 31, 2024
Dividends declared
On
March 26, 2024
, the General Shareholders Assembly approved the distribution of the Company's profits by way of: (i) an
annual ordinary dividend of
$0.075
, in respect of each common share, payable quarterly, in four equal installments of
$0.01875
, and (ii) an extraordinary dividend of
$0.025
, in respect of each common share issued and outstanding, payable
quarterly, in four equal installments of
$0.00625
, representing a total distribution of
$0.10
per share per annum, or
$29,973,740
in total for the year, calculated based on the number of shares issued and outstanding as at
March 31, 2024
.
This represents a payout increase of 42.8% compared with last year's dividend.
The Canadian record dates and Canadian/Colombian payment dates for the ordinary and extraordinary dividends are set out in
the table directly below:
Amount per share
Record Date
Payment Date
($)
(COP$)
Ordinary Dividend
April 11, 2024
April 18, 2024
0.01875
74.1
July 11, 2024
July 18, 2024
0.01875
74.1
October 9, 2024
October 17, 2024
0.01875
74.1
January 9, 2025
January 16, 2025
0.01875
74.1
Extraordinary Dividend
April 11, 2024
April 18, 2024
0.00625
24.7
July 11, 2024
July 18, 2024
0.00625
24.7
October 9, 2024
October 17, 2024
0.00625
24.7
January 9, 2025
January 16, 2025
0.00625
24.7
Change in Board of directors
At the General Shareholders Assembly, six new members were appointed to the board of directors, being: Mr. Juan Esteban
Mejía, Ms. Sofía Bianchi, Mr.
Michael Gregory Doyle
, Mr.
Mauricio Toro
, Mr.
Daniel Fernando Henao Villamil
and Mr.
Marco
Izquierdo
, and three members were reelected, being: Mr. Eduardo Pacheco Cortés, Mr. Alberto Mejía Hernandez, and Ms.
Lucía Taborda. All nine members of the board of directors shall hold office until they resign or until the next General
Shareholders Assembly.
GROWTH AND EXPLORATION PROJECT UPDATES
The two key growth and exploration projects the Company is advancing are the Porvenir Project and the Luna Roja Deposit,
both located at the Hemco Property.
Porvenir Project,
Nicaragua
:
Mineros finished the 2023 drill campaign achieving approximately 100% of its original plan,
totaling 11,088 metres of diamond drilling in 60 holes. The analysis of the metallurgical campaign is ongoing, and the Company
expects to receive analytical results, metallurgical test outcomes and also complete the update of the geometallurgical model
in the second half of 2024.
The infill drilling campaign is confirming Mineros' view that mineralization extends below the current resource estimate and that
mineralization remains open at depth.
Luna Roja Deposit,
Nicaragua
:
Mineros continues to work on an internal Mineral Resources update of the Luna Roja
Deposit. In 2024, the Company plans to carry out geological mapping with a focus on geophysical anomalies and conduct
internal metallurgical testing at the Hemco lab. No drilling activities are scheduled for the Luna Roja Deposit throughout the
year.
OUTLOOK
The following section of this news release represents forward-looking information, and readers are cautioned that actual
results may vary. We refer readers to the risks and assumptions contained in Section 14 – Cautionary Notes and Additional
Information - Cautionary Statement on Forward-Looking Information in the Company's MD&A for the interim financial period
ended
March 31, 2024
.
Gold production guidance
The following table presents the Company's gold production guidance for 2024 and actual production for the three months
ended March 31, 2024. The production guidance includes production from the Company's Nechi Alluvial, and Hemco
Properties and from artisanal mining.
Actual (oz)
Guidance (oz)
31 March
2024
2024
Colombia (Nechí Alluvial)
19,212
86,000 - 96,000
Nicaragua (Hemco)
8,182
33,000 - 35,000
Total Company Mines
27,394
118,500 - 131,000
Nicaragua (Artisanal)
24,347
90,000 - 98,000
Total gold production (ounces)
51,741
209,000 - 229,000
Given the operating results for the period ended
March 31, 2024
, the Company maintains its production guidance for 2024.
Cost outlook
The following table outlines the Company's Cash Cost per ounce of gold sold and AISC per ounce of gold sold for the three
months ended
March 31, 2024
, and cost guidance 2024. The cost guidance includes the Company's two Material Properties
and production from artisanal mining.
Actual
Cash Cost
($/oz)
Cash Cost
Guidance
($/oz)
Actual
AISC
($/oz)
AISC ($/oz)
Guidance
($/oz)
Country (principal mine)
31 March
2024
2024
31 March
2024
2024
Colombia (Nechí Alluvial)
1,262
$1,090 - $1,190
1,389
$1,280 - $1,390
Nicaragua (Hemco)
1,273
$1,240 - $1,320
1,463
$1,450 - $1,520
Consolidated
1,202
$1,180 - $1,270
1,429
$1,430 - $1,530
Cash Costs per ounce of gold sold and AISC per ounce of gold sold outlooks were prepared assuming an average selling
price of gold of
$1,980
/oz and inflation of 10% in
Colombia
and 6% in
Nicaragua
. Cash Costs per ounce of gold sold have
been trending at the lower end of the guidance; however, given the strength of the Colombian peso we are monitoring this
metric closely. We maintain our guidance at this time.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call on
Friday, May 10, 2024
, at
8:00 am EST
(
8:00 am
COT) to discuss the results. The
conference call will be in Spanish with simultaneous translation in English.
A live webcast of the conference all will be available at:
https://app.webinar.net/yRqkbmzw260
The live webcast requires previous registration, and interested parties are advised to access the webcast approximately ten
minutes prior to the start of the call. The webcast will be archived on the Company's website at
www.mineros.com.co
for
approximately 30 days following the call.
ABOUT MINEROS S.A.
Mineros is a gold mining company headquartered in
Medellin, Colombia
. The Company has a diversified asset base, with
mines in
Colombia
and
Nicaragua
and a pipeline of development and exploration projects throughout the region.
The board of directors and management of Mineros have extensive experience in mining, corporate development, finance and
sustainability. Mineros has a long track record of maximizing shareholder value and delivering solid annual dividends. For
almost 50 years Mineros has operated with a focus on safety and sustainability at all its operations.
Mineros' common shares are listed on the Toronto Stock Exchange under the symbol "MSA", and on the Colombia Stock
Exchange under the symbol "MINEROS".
QUALIFIED PERSON
The scientific and technical information contained in this news release has been reviewed and approved by
Luis Fernando
Ferreira de Oliveira
, MAusIMM CP (Geo), Mineral Resources and Reserves Manager for Mineros S.A., who is a qualified
person within the meaning of NI 43-101.
FORWARD-LOOKING STATEMENTS
This news release contains "forward looking information" within the meaning of applicable Canadian securities laws. Forward
looking information includes statements that use forward looking terminology such as "may", "could", "would", "will", "should",
"intend", "target", "plan", "expect", "budget", "estimate", "forecast", "schedule", "anticipate", "believe", "continue", "potential",
"view" or the negative or grammatical variation thereof or other variations thereof or comparable terminology. Such forward
looking information includes, without limitation, statements with respect to the Company's outlook for 2024; estimates for
future mineral production and sales; the Company's expectations, strategies and plans for the Material Properties; the
Company's planned exploration, development and production activities; statements regarding the projected exploration and
development of the Company's projects; adding or upgrading Mineral Resources and developing new mineral deposits;
estimates of future capital and operating costs; the costs and timing of future exploration and development; estimates for
future prices of gold and other minerals; expectations regarding the payment of dividends; and any other statement that may
predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.
Forward looking information is based upon estimates and assumptions of management in light of management's experience
and perception of trends, current conditions and expected developments, as well as other factors that management believes
to be relevant and reasonable in the circumstances, as of the date of this news release including, without limitation,
assumptions about: favourable equity and debt capital markets; the ability to raise any necessary additional capital on
reasonable terms to advance the production, development and exploration of the Company's properties and assets; future
prices of gold and other metal prices; the timing and results of exploration and drilling programs, and technical and economic
studies; the accuracy of any Mineral Reserve and Mineral Resource estimates; the geology of the Material Properties being
as described in the applicable technical reports; production costs; the accuracy of budgeted exploration and development
costs and expenditures; the price of other commodities such as fuel; future currency exchange rates and interest rates;
operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner;
political and regulatory stability; the receipt of governmental, regulatory and third party approvals, licenses and permits on
favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements
under applicable laws; sustained labour stability; stability in financial and capital goods markets; inflation rates; availability of
labour and equipment; positive relations with local groups, including artisanal mining cooperatives in
Nicaragua
, and the
Company's ability to meet its obligations under its agreements with such groups; and satisfying the terms and conditions of the
Company's current loan arrangements. While the Company considers these assumptions to be reasonable, the assumptions
are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and
uncertainties, contingencies and other factors that could cause actual actions, events, conditions, results, performance or
achievements to be materially different from those projected in the forward looking information. Many assumptions are based
on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.
For further information of these and other risk factors, please see the '"Risk Factors" section of the Company's annual
information form dated
March 25, 2024
(as it may be updated or replaced from time to time), available on SEDAR+ at
www.sedarplus.com
.
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or
circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied
by, the forward looking information contained herein. There can be no assurance that forward looking information will prove to
be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward looking information.
Forward looking information contained herein is made as of the date of this news release and the Company disclaims any
obligation to update or revise any forward looking information, whether as a result of new information, future events or results
or otherwise, except as and to the extent required by applicable securities laws.
NON-IFRS AND OTHER FINANCIAL MEASURES
The Company has included certain non-IFRS financial measures and non-IFRS ratios in this news release. Management
believes that non-IFRS financial measures and non-IFRS ratios, when supplementing measures determined in accordance with
IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS financial
measures and non-IFRS ratios do not have any standardized meaning prescribed under IFRS, and therefore they may not be
comparable to similar measures employed by other companies. This data 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. For a
discussion of the use of non-IFRS financial measures and reconciliations thereof to the most directly comparable IFRS
measures, see below.
In the fourth quarter of 2023, in order to accommodate the transactions that occurred during the period, the Company aligned
its definitions of non-IFRS measures to more accurately reflect the economic reality of its operations. Management
implemented certain changes including the removal of the non-IFRS financial measure Net Debt to Adjusted EBITDA ratio and
included Net Debt instead. This change aligns the non-IFRS financial measures to those used by the business to evaluate the
performance of the Company. AISC and Cash Cost have been restated to capture cash outflows related to asset retirement
obligations and environmental and rehabilitation costs. No other changes to the determination of the remaining non-IFRS
financial measures have been made.
EBIT, EBITDA and Adjusted EBITDA
The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use the
earnings before interest and tax ("
EBIT"
), earnings before interest, tax, depreciation and amortization ("
EBITDA
"), and
adjusted earnings before interest, tax, depreciation and amortization ("
Adjusted EBITDA
"), which excludes certain non-
operating income and expenses, such as financial income or expenses, hedging operations, exploration expenses, impairment
of assets, foreign currency exchange differences, and other expenses (principally, donations, corporate projects and taxes
incurred). The Company believes that Adjusted EBITDA provides useful information to investors and others in understanding
and evaluating our operating results because it is consistent with the indicators management uses internally to measure the
Company's performance and is an indicator of the performance of the Company's mining operations. Certain amounts under
each set of results have been restated to reflect continuing operations of the Company (removal of amounts pertaining to
discontinued operations in Gualcamayo). The first quarter of 2023 has been restated to this effect.
The following table provides a reconciliation of the Adjusted EBITDA for the three months ended
March 31, 2024
and 2023:
Three Months Ended
March 31,
2024
2023
Profit for the Period
16,774
15,404
Less: Interest income
(487)
(282)
Add: Interest expense
2,039
1,192
Add: Current tax
1
10,007
11,563
Add/less: Deferred tax
1
(953)
(2,978)
EBIT
27,380
24,899
Add: Depreciation and amortization
12,048
10,942
EBITDA
39,428
35,841
Less: Other income
2
(1,963)
(5,199)
Less: Finance income (excluding interest income)
(6)
(27)
Add: Finance expense (excluding interest expense)
48
840
Add: Other expenses
3
1,680
1,635
Add: Exploration expenses
1,604
1,338
Less: Foreign exchange differences
(177)
1,979
Add: Loss for the period from discontinued operations
4
—
1,347
Adjusted EBITDA
40,654
37,754
1.
For additional information regarding taxes, see Note 14 of our unaudited condensed interim consolidated financial statements, for the three months ended March 31, 2024 and 2023
2.
For additional information regarding other income, see Note 10 of unaudited condensed interim consolidated financial statements,unaudited condensed interim consolidated financial statements for the three months ended
March 31, 2024 and 2023.
3.
The reconciliation above does not include adjustments for (impairment) reversal of assets, because there would be a nil adjustment for the three months ended March 31, 2024 and 2023.
4.
Composition of Adjusted EBITDA has been revised to include loss for the year from discontinued operations.
Cash Cost
The objective of Cash Cost is to provide stakeholders with a key indicator that reflects as closely as possible the direct cost of
producing and selling an ounce of gold.
The Company reports Cash Cost per ounce of gold sold which is calculated by deducting revenue from silver sales,
depreciation and amortization, environmental rehabilitation provisions and including cash used for retirement obligations and
environmental and rehabilitation. This total is divided by the number of gold ounces sold. Production Cash Cost includes mining,
milling, mine site security, royalties, and mine site administration costs, and excludes non-cash operating expenses. Cash Cost
per ounce of gold sold is a non-IFRS financial measure used to monitor the performance of our gold mining operations and
their ability to generate profit, and is consistent with the guidance methodology set out by the World Gold Council. Certain
amounts under each set of results have been restated to reflect continuing operations of the Company (removal of amounts
pertaining to discontinued operations in Gualcamayo). The first quarter of 2023 has been restated to this effect.
The following table provides a reconciliation of Cash Cost per ounce of gold sold on a by-product basis to cost of sales for the
three months ended
March 31, 2024
, and 2023:
Three Months Ended
March 31,
2024
2023
Cost of sales
80,678
67,971
Less: Cost of sales of non-mining operations
1
(195)
(107)
Less: Depreciation and amortization
(11,684)
(10,567)
Less: Sales of silver
(5,594)
(2,916)
Less: Environmental rehabilitation provision
2
(1,186)
(987)
Add: Use of environmental and rehabilitation liabilities
142
—
Add: Use of Retirement obligations
25
—
Cash Cost from continuing operations
62,186
53,394
Gold sold (oz) from continuing operations
51,741
50,609
Cash Cost per ounce of gold sold from continuing operations ($/oz)
$1,202
$1,055
Cash Cost from discontinued operations
—
15,710
Gold sold (oz) from discontinued operations
—
10,084
Cash Cost per ounce of gold sold from discontinued operations ($/oz)
$0
$1,558
Cash Cost
62,186
69,104
Gold sold (oz)
51,741
60,693
Cash Cost per ounce of gold sold ($/oz)
$1,202
$1,139
1.
Refers to cost of sales incurred in the Company's "Others" segment. See Note 7 of our unaudited condensed interim financial statements for the three months ended March 31, 2024 and 2023. The majority of this amount
relates to the cost of sales of latex.
2.
For additional information regarding environmental rehabilitation provision, please refer to Note 19 of the consolidated financial statements for the three months ended March 31, 2024 and 2023.
The following table provides a reconciliation of Cash Cost per ounce of gold sold on a by-product basis to cost of sales,
before and after the change of definition of this metric, modified to capture cash outflows related to asset retirement obligation
and environmental rehabilitation provisions, for the three months ended
March 31, 2023
:
Three Months
Ended March
31, 2023
Cash Cost per ounce of gold sold ($/oz) - Previously reported
1,155
Adjustments ($/oz)
Less: Environmental rehabilitation provision
(16)
Add: Use of environmental and rehabilitation liabilities
—
Add: Use of Retirement obligations
—
Cash Cost per ounce of gold sold ($/oz) - restated
1,139
All-in Sustaining Costs
The objective of AISC is to provide stakeholders with a key indicator that reflects as close as possible the full cost of
producing and selling an ounce of gold. AISC per ounce of gold sold is a non-IFRS ratio that is intended to provide investors
with transparency regarding the total costs of producing one ounce of gold in the relevant period.
The Company reports AISC per ounce of gold sold on a by-product basis. The methodology for calculating AISC per ounce of
gold sold is set out below and is consistent with the guidance methodology set out by the World Gold Council. The World Gold
Council definition of AISC seeks to extend the definition of total Cash Cost by deducting cost of sales of non-mining operations
and adding administrative expenses, sustaining exploration, sustaining leases and leaseback and sustaining capital
expenditures. Non-sustaining costs are primarily those related to new operations and major projects at existing operations that
are expected to materially benefit the current operation. The determination of classification of sustaining versus non-sustaining
requires judgment by management. AISC excludes current and deferred income tax payments, finance expenses and other
expenses. Consequently, these measures are not representative of all the Company's cash expenditures. In addition, the
calculation of AISC does not include depreciation and amortization cost or expense as it does not reflect the impact of
expenditures incurred in prior periods. Therefore, it is not indicative of the Company's overall profitability. Other companies
may quantify these measures differently because of different underlying principles and policies applied. Differences may also
occur due to different definitions of sustaining versus non-sustaining, Certain amounts under each set of results have been
restated to reflect continuing operations of the Company (removal of amounts pertaining to discontinued operations in
Gualcamayo). The first quarter of 2023 has been restated to this effect.
The following table provides a reconciliation of AISC per ounce of gold sold to cost of sales for the three months ended
March 31, 2024, and 2023:
Three Months Ended
March 31,
2024
2023
Cost of sales
80,678
67,971
Less: Cost of sales of non-mining operations
1
(195)
(107)
Less: Depreciation and amortization
(11,684)
(10,567)
Less: Sales of silver
(5,594)
(2,916)
Less: Sales of electric energy
(1,435)
(961)
Less: Environmental rehabilitation provision
2
(1,186)
(987)
Add: Use of environmental and rehabilitation liabilities
142
—
Add: Use of Retirement obligations
25
—
Add: Administrative expenses
4,864
4,086
Less: Depreciation and amortization of administrative expenses
3
(364)
(375)
Add: Sustaining leases and leaseback
4
2,942
2,114
Add: Sustaining exploration
5
44
132
Add: Sustaining capital expenditures
6
5,705
4,972
AISC from continuing operations
73,942
63,362
Gold sold (oz) from continued operations
51,741
50,609
AISC per ounce of gold sold from continuing operations ($/oz)
$1,429
$1,252
AISC from discontinued operations
—
21,268
Gold sold (oz) from discontinued operations
—
10,084
AISC per ounce of gold sold from discontinued operations ($/oz)
$0
$2,109
AISC
73,942
84,630
Gold sold (oz)
51,741
60,693
AISC per ounce of gold sold ($/oz)
$1,429
$1,394
1.
Cost of sales of non-mining operations is the cost of sales excluding cost incurred by non-mining operations and the majority of this cost comprises cost of sales of latex.
2.
For additional information regarding environmental rehabilitation provision, please refer to Note 19 of the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024, and 2023.
3.
Depreciation and amortization of administrative expenses is included in the administrative expenses line on the unaudited condensed interim consolidated financial statements and is mainly related to depreciation for corporate
office spaces and local administrative buildings at the Hemco Property.
4.
Represents most lease payments as reported on the unaudited condensed interim consolidated financial statements of cash flows and is made up of the principal component of such cash payments, less non-sustaining
lease payments. Lease payments for new development projects and capacity projects are classified as non-sustaining.
5.
Sustaining exploration: Exploration expenses and exploration and evaluation projects as reported on the unaudited condensed interim consolidated financial statements, less non-sustaining exploration. Explorations are
classified as either sustaining or non-sustaining based on a determination of the type and location of the exploration expenditure. Exploration expenditures within the footprint of operating mines are considered costs required
to sustain current operations and so are included in sustaining costs. Exploration expenditures focused on new ore bodies near existing mines (i.e. brownfield), new exploration projects (i.e. greenfield) or for other
generative exploration activity not linked to existing mining operations are classified as non- sustaining.
6.
Sustaining capital expenditures: Represents the capital expenditures at existing operations including, periodic capitalized stripping and underground mine development costs, ongoing replacement of mine equipment and
overhaul of existing equipment, and is calculated as total additions to property, plant and equipment (as reported on the consolidated statements of cash flows), less non-sustaining capital. Non-sustaining capital represents
capital expenditures for major projects, including projects at existing operations that are expected to materially benefit the operation and provide a level of growth, as well as enhancement capital for significant infrastructure
improvements at existing operations. Non-sustaining capital expenditures during the three months ended March 31, 2024, are primarily related to major projects at the Hemco Property and the Nechí Alluvial Property. The sum
of sustaining capital expenditures and non-sustaining capital expenditures is reported as the total of additions of property plant and equipment in the unaudited condensed interim financial statements
.
The following table provides a reconciliation of AISC per ounce of gold sold on a by-product basis to cost of sales, before and
after the change of definition of this metric, modified to capture cash outflows related to asset retirement obligation and
environmental rehabilitation provisions, for the three months ended
March 31, 2023
:
Three Months
Ended March
31, 2023
AISC per ounce of gold sold ($/oz) - Previously reported
1,411
Adjustments ($/oz)
Less: Environmental rehabilitation provision
(16)
Add: Use of environmental and rehabilitation liabilities
—
Add: Use of Retirement obligations
—
AISC per ounce of gold sold ($/oz) restated
1,394
Net Free Cash Flow
The Company uses the financial measure "net free cash flow", which is a non-IFRS financial measure, to supplement
information regarding cash flows generated by operating activities. The Company believes that in addition to IFRS financial
measures, certain investors and analysts use this information to evaluate the Company's performance with respect to its
operating cash flow capacity to meet recurring outflows of cash.
Net free cash flow is calculated as cash flows generated by operating activities less non-discretionary sustaining capital
expenditures and interest and dividends paid related to the relevant period. As the Gualcamayo Property was sold in
September 2023
, amounts related to the metrics shown in the following table have been calculated to reflect only the
continuing operations of the Company. This restatement of net free cash flow is reflected in the first quarter of 2023 in order
to more appropriately compare the results quarter over quarter.
The following table sets out the calculation of the Company's net free cash flow to net cash flows generated by operating
activities for the three months ended March 31, 2024, and 2023:
Three Months Ended
March 31,
2024
2023
Net cash flows generated by operating activities
10,105
2,498
Non-discretionary items:
Sustaining capital expenditures (excluding Gualcamayo)
(5,705)
(4,972)
Interest paid
(1,058)
(1,937)
Dividends paid
(5,239)
(4,837)
Net cash flows used in (generated from) discontinued operations 1
—
(984)
Net free cash flow
(1,897)
(10,232)
1.
Composition of net free cash flow has been revised to exclude net cash flows used in (generated from) discontinued operations.
Return on Capital Employed
The Company uses ROCE as a measure of long-term operating performance to measure how effectively management utilizes
the capital it has provided. This non-IFRS ratio 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 calculation of ROCE,
expressed as a percentage, is Adjusted EBIT (calculated in the manner set out in the table below) divided by the average of
the opening and closing capital employed for the 12 months preceding the period end. Capital employed for a period is
calculated as total assets at the beginning of that period less total current liabilities. Certain amounts under each set of results
have been restated to reflect continuing operations of the Company (removal of amounts pertaining to discontinued operations
in Gualcamayo).
The first quarter of 2023 has been restated to this effect. The following table sets out the calculation of ROCE as at
March
31, 2024
, and 2023.
As at March 31,
2024
2023
Adjusted EBITDA (last 12 months)
175,046
159,077
Less: Depreciation and amortization (last 12 months)
(46,205)
(43,969)
Adjusted EBIT (A)
128,841
115,108
Total assets at the beginning of the period
493,757
569,543
Less: Total current liabilities at the beginning of the period
(84,765)
(134,581)
Opening Capital Employed (B)
408,992
434,962
Total assets at the end of the period
500,585
576,771
Less: Current liabilities at the end of the period
(105,075)
(134,581)
Closing Capital employed (C)
395,510
442,190
Average Capital employed (D)= (B) + (C) /2
402,251
438,576
ROCE (A/D)
32 %
26 %
Net Debt
Net Debt is a non-IFRS financial measure that provides insight regarding the liquidity position of the Company. The calculation
of net debt shown below is calculated as nominal undiscounted debt including leases, less cash and cash equivalents. The
following sets out the calculation of Net Debt as at March 31, 2024 and 2023.
As at March 31,
2024
2023
Loans and other borrowings
31,661
46,881
Less: Cash and cash equivalents
(45,876)
(34,269)
Net Debt
(14,215)
12,612
Average Realized Price