Andean Precious Metals Reports Solid Q2 2023 Results Supported by Strong Production and Improving Costs

2023-08-15

NYSE - New York Stock Exchange · Gold · Silver · Zinc · Lead · United States · Production & Operations

Reaffirms 2023 production guidance; adjusts AISC and capex guidance

Toronto, Ontario--(Newsfile Corp. - August 15, 2023) - Andean Precious Metals Corp.(TSXV: APM) (OTCQX: ANPMF)("Andean" or the "Company") reported its operating highlights and unaudited condensed interim financial results for the three and six months ended June 30, 2023 (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")2per ounce of silver produced, net of by-product credits, was $19.15, a decrease of 11%.

All-in sustaining costs ("AISC")2per silver ounce sold, net of by-product credits, was $23.69, a decrease of only 2% despite lower ounces sold.

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")2and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")2was $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 million. 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.

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, the 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, filing 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."

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

| (In 000s except per oz numbers) | | Q2 2023 | | | Q1 2023 | | | % Change | | | Q2 2023 | | | Q2 2022 | | | % Change | | | H1 2023 | | | H1 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%) | | | 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, Ratios 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 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:

(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.

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 VP Investor Relations tmoran@andeanpm.com T: +1 416 564 4290

Anna Speyer NATIONAL Capital Markets aspeyer@national.ca 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. securities 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, conditions or results of operations that are based upon assumptions about future economic conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "estimate", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "may", "could", "would", "might", "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.

Forward-looking statements in this release include, but are 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 exploration activities, acquisitions or otherwise. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited to: the Company's ability to carry on exploration and development activities; the Company's ability to secure and to meet obligations under property and option agreements and other material agreements; the timely receipt of required approvals and permits; that there is no material adverse change affecting the Company or its properties; that contracted parties provide goods or services in a timely manner; that no unusual geological or technical problems occur; that plant and equipment function as anticipated and that there is no material adverse change in the price of silver, costs associated with production or recovery. Forward-looking 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 forward-looking statements contained herein.

Earlier from Coeur Mining Inc.

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