Mineros Reports Third Quarter 2022 Financial and Operational Results
Mineros Reports Third Quarter 2022 Financial and Operational Results
(all amounts expressed in U.S. dollars unless otherwise stated)
Medellin, Colombia – November 14, 2022 – Mineros S.A. (TSX:MSA, MINEROS:CB) (“ Mineros” or
the “Company”) today reported its financial and operational results for the three and nine months
ended September 30, 2022. For further information please see the Company’s condensed interim
consolidated financial statements and management’s discussion and analysis filed under Mineros’
profile on www.sedar.com.
Andrés Restrepo, President and CEO of Mineros, commented , “The Company has had a nother
strong quarter with respect to operational and financial results and remains on-track to achieve its
annual guidance. Y et, net profits were affected by an impairment of assets related to the
beneficiation plant that overturned on May 28 and severance provisions in Argentina. In the third
quarter of 2022, Mineros produced 74,513 ounces of gold, a 17% increase from the same quarter
in 2021. Along with increased production, the Company has seen reductions in both the all-in
sustaining cost per ounce of gold sold and the cash cost per ounce of gold sold compared to the
same period in 2021. The Company has a long track record and continues paying a strong quarterly
dividend with a very attractive yield.”
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE THIRD QUARTER 2022
Gold Production
• 74,513 ounces of gold produced.
• A 17% increase in gold production compared to the same period in 2021 (Q3/21: 63,758
ounces of gold produced).
• A steady increase in gold production over the last five quarters.
Cash Cost1 and All-in Sustaining Cost (“AISC”)1
• Cash Cost per ounce of gold sold 1 of $1,120 (Q3/21: $1,235), representing a 9% decrease
relative to the same period in 2021.
1 Cash Cost, AISC, Adjusted EBITDA, net free cash flow 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, ROCE and Net Debt to Adjusted EBITDA ratio are n on-IFRS
ratios, with no standardized meaning under IFRS, and therefore they may not be comparable to similar measures presented by ot her
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.
• AISC per ounce of gold sold 1 of $1,338 (Q3/21: $1,476), representing a 9% decrease in the
AISC per ounce of gold sold relative to the same period in 2021.
Dividend Payment
• $5.7 million in dividends paid.
• An increase of 4 0% in dividends paid compared to the same period in 2021 (Q3/21: $4.0
million).
Revenue
• Revenue of $135.9 million.
• An increase of 13% compared to the same period in 2021 (Q3/21: $120.2 million).
Profitability
• Net profit for the period down 68% to $2.6 million ($0.01/share) compared to the same
period in 2021 (Q3/21: $8.1 million ($0.03/share)).
• Gross profit up 27% to $32.4 million compared to the same period in 2021 (Q3/21: $25.4
million).
Net Debt to Adjusted EBIDTA ratio2
• Net Debt to Adjusted EBIDTA ratio2 of 0.10x as at September 30, 2022.
• The Company has continued to have a low Net Debt to Adjusted EBITDA ratio, with a 53%
decrease compared to 0.22x as at September 30, 2021 , following repayment of project
acquisition loans.
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022
Gold Production
• 214,584 ounces of gold produced.
• A 9% increase in gold production compared to the same period in 2021 (nine months ended
September 30/21: 196,634 ounces of gold produced).
2 Cash Cost, AISC, Adjusted EBITDA, net free cash flow 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, ROCE and Net Debt to Adjusted EBITDA ratio are non-IFRS
ratios, with no standardized meaning under IFRS, and therefore they may not be comparable to similar measures presented by ot her
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.
• On-track to achieve 2022 production guidance.
Cash Cost and AISC
• Cash Cost per ounce of gold sold of $1,140 (nine months ended September 30/21: $1,162),
representing a 2% decrease in the Cash Cost per ounce of gold sold relative to the same
period in 2021.
• AISC per ounce of gold sold of $1,3 67 (nine months ended S eptember 30 /21: $1,502),
representing a 9% decrease in the AISC per ounce of gold sold relative to the same period
in 2021.
• On-track to achieve 2022 cost guidance.
Dividend Payment
• $18.1 million in dividends paid.
• An increase of 33 % in dividends paid compared to the same period in 2021 (nine months
ended September 30/21: $13.7 million.
Revenue
• Revenue of $397.8 million.
• An increase of 6% compared to the same period of 2021 (nine months ended S eptember
30/21: $374.0 million).
Table 1. Financial and Operating Highlights.
(All numbers in $000’s unless otherwise noted)
Three Months Ended
September 30, Change
Nine Months Ended
September 30, Change
2022 2021 $ % 2022 2021 $ %
Financial
Revenues 135,873 120,188 15,685 13% 397,809 374,029 23,780 6%
Cost of sales (103,511) (94,769) (8,742) 9% (295,003) (275,678) (19,325) 7%
Gross profit 32,362 25,419 6,943 27% 102,806 98,351 4,455 5%
Net Profit for the period 2,610 8,150 (5,540) (68%) 24,481 32,327 (7,846) (24%)
Basic and diluted
earnings per share ($) 0.01 0.03 (0.02) (67%) 0.08 0.12 (0.04) (33%)
Adjusted EBITDA (1) 43,126 32,359 10,767 33% 130,983 119,254 11,729 10%
Net cash flows generated
by operating activities 22,849 35,066 (12,217) (35%) 46,005 67,697 (21,692) (32%)
Net Free Cash Flows (1) 7,752 23,727 (15,975) (67%) 2,207 8,714 (6,507) (75%)
ROCE (1) 23% 27% (4%) (13%) 23% 27% (4%) (13%)
Net Debt / Adjusted
EBITDA (1) 0.10X 0.22X (0.11X) (53%) 0.10X 0.22X (0.11X) (53%)
Dividends Paid 5,655 4,035 1,620 40% 18,128 13,656 4,472 33%
Operating
Average Realized Gold
Price (oz) 1,722 1,778 (56) (3%) 1,810 1,804 6 0%
Gold Produced (oz) 74,513 63,758 10,755 17% 214,584 196,634 17,950 9%
Gold Sold (oz) 77,745 65,319 12,426 19% 215,429 200,837 14,592 7%
Silver Sold (oz) 90,862 115,057 (24,195) (21%) 285,863 291,603 (5,740) (2%)
Cash Cost per ounce of
gold sold (USD/oz) 1,120 1,235 (115) (9%) 1,140 1,162 (22) (2%)
AISC per ounce of gold
sold (USD/oz) 1,338 1,476 (138) (9%) 1,367 1,502 (135) (9%)
(1) The definition and reconciliation of these non-IFRS financial measures and ratios is included in the section on Non-IFRS and Other
Financial Measures in this news release.
Table 2. Operational Highlights by Material Property.
(All numbers in ounces unless otherwise noted)
Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 ounces % 2022 2021 ounces %
Nechí Alluvial Property
(Colombia) 24,720 17,085 7,635 45% 67,399 57,605 9,794 17%
Hemco Property 10,918 9,949 969 10% 30,849 25,032 5,817 23%
Artisanal Mining 21,292 22,579 (1,287) (6%) 68,060 69,918 (1,858) (3%)
Nicaragua 32,210 32,528 (318) (1%) 98,909 94,950 3,959 4%
Gualcamayo Property
(Argentina) 17,583 14,145 3,438 24% 48,276 44,079 4,197 10%
Total Gold Produced (oz) 74,513 63,758 10,755 17% 214,584 196,634 17,950 9%
Total Silver Produced (oz) 90,862 115,057 (24,195) (21%) 285,863 291,603 (5,740) (2%)
CORPORATE HIGHLIGHTS FOR THE THIRD QUARTER 2022
Luna Roja Deposit – initial Mineral Resource estimate
On July 7, 2022, the Company announced an initial Mineral Resource estimate for the Luna Roja
Deposit, which included 1.164 million tonnes of indicated Mineral Resources averaging 2.46 grams
of gold per tonne (“g/t Au”), for approximately 92,000 ounces of gold and 0.504 million tonnes of
inferred mineral resources averaging 2.31 g/t Au, for approximately 37,000 ounces of gold. The
initial Mineral Resource estimate assumes both open pit and underground mining and extends from
surface to a depth of 200 metres. See the Company’s July 7, 2022 press release entitled, “Mineros
Announces Initial Mineral Resource Estimate for the Luna Roja Deposit, Nicaragua”.
Overturning of Floating Beneficiation Plant at Nechi Alluvial Property
On May 28, 2022, a storm with unusually heavy rains and strong winds hit the area where the Nechí
Alluvial Property is located and overturned the Llanuras Plant, a floating beneficiation plant
connected to the Llanuras suction dredge. Immediately following the accident, the Company’s
emergency protocols were activated, which included a rescue operation followed by a coordinated
search, and subsequent recove ry actions. These operations are now complete and accident
investigations by both the relevant Colombian authorities and independent investigators hired by
the Company are underway.
After a thorough review, as of September 30, 2022, management had not found a way to recover,
repair or perform any type of rescue or maneuver to refloat the Llanuras Plant, resulting in the
recognition by the Company of a $4.8 million impairment of asset. Mineros has filed a claim with
its insurers in respect of the damage to the Llanuras Plant. The Company has adjusted its production
plan to compensate for the loss of the Llanuras Plant, and accordingly does not expect any negative
impact on its ability to meet its 2022 production or cost guidance for the Nechí Alluvial Property.
Appointment of Vice President, Nicaragua
On July 11, 2022, Mineros announced the appointment of Mr. Luis Villa as Vice President,
Nicaragua, effective as of October 1, 2022. Mr. Villa has been with the Company and its subsidiaries
for 16 y ears, most recently in the position of Manager of Projects and Supply Chain for Mineros
Alluvial S.A.S. BIC. Mr. Villa succeeds Mr. Carlos Mario Gomez, who retired effective September 30,
2022, following 14 years of service with the Company.
Appointment of Vice President, Business Development and Strategy
On August 26, 2022, Mineros announced the appointment of Ms. Ana María Ríos as Vice President,
Business Development and Strategy, effective as of October 1, 2022. Ms. Ríos has seventeen years
of professio nal experience, of which the last fourteen have been at Mineros, most recently as
Corporate Finance Manager, where she played a strategic role in Mineros’ listing on the Toronto
Stock Exchange and initial public offering in Canada (the “Canadian IPO”) and in the concurrent
public offering in Colombia in November 2021 (the “Concurrent Colombian Public Offering”). Ms.
Ríos succeeds Eduardo Flores Zelaya.
Workforce reduction in Argentina
On September 9, 2022, Mineros announced that over the next six months, it will downsize its
operations at its Gualcamayo Property, reducing its workforce in Argentina by up to 30%, as a result
of the natural depletion of the deposit. The Company expects to incur costs of between $3.0 million
and $5.0 million in connection with the workforce reduction, but does not expect such costs to
impact its ability to meet its previously -disclosed 2022 production and cost guidance for the
Gualcamayo Property. As of September 30, 2022, a severance provision in the amount of $3.0
million was reported in connection with the downsizing of operations at the Gualcamayo Property.
Subsequent Events
OFAC Sanctions Imposed on General Directorate of Mines of Nicaragua
On October 24, 2022, the United States Department of the Treasury’s Office of Foreign Assets
Controls (“OFAC”) imposed economic sanctions on General Directorate of Mines of Nicaragua
(“DGM”), a subordinate office within the Nicaraguan Ministry of Energy an d Mines, pursuant to
Executive Order (“EO”) 13851 of the U.S. President. As such, all properties and interests in property
of the DGM are now blocked, and all transactions by U.S. persons or transiting the U.S. that involves
blocked property are prohibited . All property or interest in property of any entity that is owned,
directly or indirectly, 50% or more by the DGM are also blocked. Concurrently, OFAC issued General
License No. 4, authorizing transactions ordinarily incident and necessary to wind down an y
transaction involving the DGM through November 23, 2022.
Also on October 24, 2022, the U.S. President also issued EO 14088 (together with EO 13851, the
“Nicaragua Sanctions Measures”), which authorizes the U.S. government to promptly apply further
sanctions to various sectors of the Nicaraguan economy such as the gold sector. Although EO 14088
specifically mentions the gold sector, as at the date of this document, no entity or person, other
than the DGM and one official of the Government of Nicaragua, has been designated by OFAC under
the Nicaragua Sanctions Measures.
The Company remains committed to complying with applicable legal and regulatory requirements,
including sanctions, and is evaluating the actual and potential impacts of the U.S. sanctions on its
current and planned business and operations in coordination with its advisors. As at the date of this
document, U.S. sanctions measures adopted on October 24, 2022 have not resulted in any material
impacts on its operations in Nicaragua, and the Compan y is continuing to evaluate their potential
impact on its commercial relationships.
Election Not To Exercise Second Option at La Pepa Project
On October 25, 2022, the Company determined not to exercise its second option under the
agreement executed on December 14, 2018, and effective as of July 2, 2019, between the Company,
Yamana Gold Inc. (“Yamana”), and their respective affiliates (the “La Pepa Option Agreement”) to
earn an additional 31% interest in the La Pepa Project. As a result, the Company holds a 20% interest
in the La Pepa Project and has ceased to be the operator of the project. Plans for further
exploration of the La Pepa Project moving forward remain subject to discussion and have not been
finalized at this time.
GROWTH PROJECT UPDATES
Porvenir Project, Nicaragua: Ongoing studies are being completed to assess processing and mining
scenarios for the Porvenir Project. The Company is on track of complete a pre-feasibility study in
the fourth quarter of 2022.
Luna Roja Deposit, Nicar agua: Mineral Resources for the Luna Roja Deposit are planned to be
updated as at December 31, 2022. The 3,000-metre diamond drill campaign started in October and
is planned to be completed by December 2022.
Gualcamayo Property Expansion, Argentina: In the third quarter of 2022 a total of 19,856 metres
in 111 holes were drilled, 2,856 metres over the original drilling plan. The Company decided to cover
broader areas of production with the same drilling budget by drilling more meters of Reverse
Circulation, re -balancing its original drilling plan. The drilling campaign is progressing despite
laboratory delays as a result of recent increased global demand for assay services.
Mineros reviewed its original greenfield exploration program on account of limited availability of
drilling equipment in Argentina and there is no further drilling planned in this area in 2022.
Deep Carbonates Project, Argentina: Mineros reviewed its original 7,750 meter drilling plan as a
consequence of general difficulties with deep d rilling and limited availability of drilling equipment
in the region. The Company plans to complete a total of 5,300 meters of diamond drilling focused
on expanding the current mineral resources at the Rodado deposit. Metallurgical test work to
support advancement of the Deep Carbonates Project is underway. The Company is still evaluating
the test work to make a determination as to whether it will move forward with a preliminary
economic assessment (“PEA”) in respect of the Deep Carbonates Project.
La Pepa Project, Chile: The Company is focused on developing and expanding the Cavancha deposit
and greenfield exploration is focused on new discoveries on the property with different styles of
mineralization related to veins around the main Cavancha deposit.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call on Wednesday November 16 , 2022, at 9:00 am ET (8:00
am COT) to discuss the results. The conference call will be in Spanish with simultaneous translation
in English.
Participant conference call dial in:
Canada Toll Free: 1 (866) 455-3403
US Toll Free: 1 (888) 374-5140
Pin for English: 79518832#
Pin for Spanish: 30314745#
The list of all local and international dial in numbers can be found at the end of this document.
A live webcast of the conference all will be available at:
https://onlinexperiences.com/Launch/QReg/ShowUUID=40919513-9F98-4281-8900-
5868250DB119&LangLocaleID=1034