Mineros S.A. press release
Mineros Reports Third Quarter 2023 Financial and Operational Results
TSX - Toronto Stock Exchange · Gold · Silver · Zinc · Colombia
Canada NewsWire
(all dollar amounts other than per share amounts are expressed in thousands of U.S. dollars unless otherwise stated)
MEDELLIN, Colombia , Nov. 9, 2023 /CNW/ - 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, 2023 . For further information, please see the Company's unaudited condensed interim financial statements and management's discussion and analysis ("MD&A") filed under its Mineros' profile on www.sedarplus.com .
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Andrés Restrepo, President and CEO of Mineros, commented, "During the third quarter of 2023 we sold the Gualcamayo Property in Argentina , in line with our strategy of actively managing our portfolio and focusing management's efforts on high margin, long-life and lower cost assets. We have full confidence that Eris LLC, the new owner, will leverage their experience and knowledge to maximize and enhance the future of the operation."
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE THIRD QUARTER 2023
Gold Production
50,196 ounces of gold produced. A 12% decrease in gold production compared to the same period in 2022 (Q3/22: 56,930 ounces of gold produced), explained by a two-week suspension of the main processing plant at the Hemco Property in Nicaragua .
Cost of Sales, Cash Cost 1 and All-in Sustaining Cost ("AISC") 1 from continuing operations
Cost of sales of $75,658 , a 9% increase when compared to the same period in 2022 (Q3/22: $69,691 ). Cash Cost per ounce of gold sold 1,2 of $1,222 (Q3/22: $1,007 ), a 21% increase relative to the same period in 2022. AISC per ounce of gold sold 1,2 of $1,427 (Q3/22: $1,177 ), a 28% increase relative to the AISC per ounce of gold sold during the same period in 2022.
Dividend Payment
$5,241 in dividends paid. A 7% decrease in dividends paid compared to the same period in 2022 (Q3/22: $5,655 ), due to foreign exchange differences.
Revenue
Revenue of $101,371 . Revenue increased by 2% compared to the same period in 2022 (Q3/22: $99,727 ).
| _ | | 1 Cash Cost and AISC are non-IFRS financial measures, and Cash Cost per ounce of gold sold and AISC per ounce of gold sold 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. 2 Stated in dollars. |
Profitability
Gross profit down by 14% to $25,713 compared to the same period in 2022 (Q3/22: $30,036 ). Profit for the period from continuing operations up 36% to $13,284 ( $0.04 /share) compared to the same period in 2022 (Q3/22: $9,771 or $0.03 /share). Loss for the period from discontinued operations up 539% to $45,791 compared to the same period in 2022 (Q3/22: $7,161 ).
Net Debt to Adjusted EBITDA ratio 3
Net Debt to Adjusted EBITDA ratio 3 of 0.00x as at September 30, 2023 . The Company continues to have a low Net Debt to Adjusted EBITDA ratio, with a 96% decrease compared to 0.11x as at September 30, 2022 .
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023
Gold Production
157,669 ounces of gold produced. A 5% decrease in gold production compared to the same period in 2022 (nine months ended September 30, 2022 : 166,308 ounces of gold produced).
Cost of Sales, Cash Cost and All-in Sustaining Cost ("AISC")
Cost of sales of $219,225 , a 2% increase when compared to the same period in 2022 (nine months ended September 30, 2022 : $212,241 ) Cash Cost per ounce of gold sold of $1,124 (nine months ended September 30, 2022 : $1,050 ), a 7% increase relative to the same period in 2022, mainly explained by the 12% decrease in gold production. AISC per ounce of gold sold 1 of $1,311 (nine months ended September 30, 2022 : $1,234 ), a 10% increase relative to the AISC per ounce of gold sold during the same period in 2022.
Dividend Payment
$15,291 in dividends paid. A 16% decrease in dividends paid compared to the same period in 2022 (nine months ended September 30, 2022 : $18,128 ), explained by an extraordinary dividend of $0.01 per share paid in April of 2022.
Revenue
Revenue of $316,863 . Revenue increased by 2% when compared to the same period in 2022 (nine months ended September 30, 2022 : $309,878 ).
| | | 3 Net Debt to Adjusted EBITDA ratio is a non-IFRS ratio, with no standardized meaning under IFRS, and therefore it 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. |
Profitability
Gross profit from continuing operations remained stable, standing at $97,638 compared to the same period in 2022 (nine months ended September 30, 2022 : $97,637 ). Net profit for the period from continuing operations up 36% to $51,730 ( $0.17 /share) compared to the same period in 2022 (Q3/22: $37,961 or $0.05 /share). Loss for the period from discontinued operations up 318%, to $56,281 compared to the same period in 2022 (nine months ended September 30, 2022 : $13,480 ).
Financial and Operating Highlights
| | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | | | | | | 2023 | 2022 | $ | % | 2023 | 2022 | # | % | | | Financial | | | | | | | | | | Revenue | 101,371 | 99,727 | 1,644 | 2 % | 316,863 | 309,878 | 6,985 | 2 % | | Cost of sales | (75,658) | (69,691) | 5,967 | 9 % | (219,225) | (212,241) | 6,984 | 3 % | | Gross Profit | 25,713 | 30,036 | (4,323) | (14) % | 97,638 | 97,637 | 1 | 0 % | | Profit for the period from continuing operations | 13,284 | 9,771 | 3,513 | 36 % | 51,730 | 37,961 | 13,769 | 36 % | | Basic and diluted earnings per share from continuing operations | $0.04 | $0.03 | $0.01 | 36 % | $0.17 | $0.13 | $0.05 | 36 % | | Loss for the period from discontinued operations | (45,791) | (7,161) | (38,630) | 539 % | (56,281) | (13,480) | (42,801) | 318 % | | Basic and diluted earnings per share from continuing and discontinued operations | $(0.11) | $0.01 | $(0.12) | (1,345) % | $(0.02) | $0.08 | $(0.10) | (119) % | | Adjusted EBITDA 1 | 33,379 | 37,403 | (4,024) | (11) % | 118,782 | 116,039 | 2,743 | 2 % | | Net cash flows generated by operating activities | 4,324 | 22,849 | (18,525) | (81) % | 36,976 | 46,005 | (9,029) | (20) % | | Net free cash flow 1 | 911 | 7,807 | (6,896) | (88) % | 12,441 | 3,401 | 9,040 | 266 % | | ROCE 1 | 28 % | 21 % | 7 % | 31 % | 28 % | 21 % | 7 % | 31 % | | Net Debt to Adjusted EBITDA ratio 1 | —x | 0.12x | (0.11x) | (96 %) | —x | 0.12x | (0.11x) | (96 %) | | Dividends paid | 5,241 | 5,655 | (414) | (7) % | 15,291 | 18,128 | (2,837) | (16) % | | | | | | | | | | | | Operating | | | | | | | | | | Average realized price per ounce of gold sold from continuing operations ($/oz) 1 | 1,921 | 1,719 | 202 | 12 % | 1,922 | 1,817 | 105 | 6 % | | Total gold produced from continuing operations (oz) | 50,196 | 56,930 | (6,734) | (12) % | 157,669 | 166,308 | (8,639) | (5) % | | Silver sold from continuing operations (oz) | 135,776 | 84,427 | 51,349 | 61 % | 416,329 | 269,455 | 146,874 | 55 % | | Cash Cost per ounce of gold sold from continuing operations ($/oz) 1 | $1,222 | $1,007 | $215 | 21 % | $1,124 | $1,050 | $74 | 7 % | | AISC per ounce of gold sold from continuing operations ($/oz) 1 | $1,427 | $1,177 | $249 | 21 % | $1,311 | $1,234 | $77 | 6 % |
| 1. Adjusted EBITDA, net free cash flow, and average realized price are Non-IFRS financial measures, and ROCE, Net Debt to Adjusted EBITDA ratio, Cash Cost per ounce of gold sold, and AISC per ounce of gold sold are Non-IFRS ratios, with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release. |
Operational Highlights by Material Property
(All numbers in ounces unless otherwise noted)
| | Three Months Ended September 30, | Change | Nine Months Ended
September 30, | Change | | | | | | | 2023 | 2022 | ounces | % | 2023 | 2022 | # | % | | | | | | | | | | | | Nechí Alluvial Property (Colombia) | 23,201 | 24,720 | (1,519) | (6) % | 65,837 | 67,399 | (1,562) | (2) % | | | | | | | | | | | | Hemco Property | 5,514 | 10,918 | (5,404) | (49) % | 23,252 | 30,849 | (7,597) | (25) % | | Artisanal Mining | 21,481 | 21,292 | 189 | 1 % | 68,580 | 68,060 | 520 | 1 % | | Nicaragua | 26,995 | 32,210 | (5,215) | (16) % | 91,832 | 98,909 | (7,077) | (7) % | | Total Gold Produced from Continuing Operations | 50,196 | 56,930 | (6,734) | (12) % | 157,669 | 166,308 | (8,639) | (5) % | | Gualcamayo Property (Argentina) | 9,032 | 17,583 | (8,551) | (49) % | 31,061 | 48,276 | (17,215) | (36) % | | Total Gold Produced from Discontinued Operations | 9,032 | 17,583 | (8,551) | (49) % | 31,061 | 48,276 | (17,215) | (36) % | | Total Gold Produced | 59,228 | 74,513 | (15,285) | (21) % | 188,730 | 214,584 | (25,854) | (12) % | | Total Silver Produced | 138,853 | 90,863 | 47,990 | 53 % | 425,549 | 285,864 | 139,685 | 49 % |
For the three months ended September 30, 2023 , gold production from continuing operations was down 12%, with 50,196 ounces of gold produced, compared to 56,930 ounces in the third quarter of 2022, summarized in the table above. For the nine months ended September 30, 2023 , gold production from continuing operations was down 5%, with 157,669 ounces of gold were produced during the nine months ended September 30, 2023 , compared to 166,308 ounces in the same period of 2022. In each case, the decrease in production relative to the comparative quarter in 2022 is mainly due to a two-week suspension of operations at the Hemco Property in Nicaragua .
CORPORATE HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
Disposition of Minas Argentinas S.A. ("MASA")
On September 8, 2023 , Mineros announced that it had signed a share purchase and sale agreement with Eris LLC dated September 7, 2023 to sell all of the outstanding shares of Mineros' subsidiary, Minas Argentinas S.A. ("MASA"). MASA holds a 100% interest in the Gualcamayo Property, which includes the Gualcamayo Mine and the Deep Carbonates Project. The transaction was completed on September 21, 2023 . The disposed business, MASA (including its main asset, the Gualcamayo Property), has been presented as a discontinued operation in the Company's unaudited condensed interim financial statements for the period ending September 30, 2023 .
Temporary suspension of the main processing plant at the Hemco Property in Nicaragua
On July 31, 2023 , Mineros suspended operations at the Hemco Plant, its main processing plant at the Hemco Property, for two weeks. The Hemco Plant processes 89% of the material and disposal of tailings at the Hemco Property. The suspension was precautionary in nature, to allow for the swift completion of tailings detoxification capacity enhancements at the San José Tailings Dam, the primary tailings processing facility at the Hemco Property, prior to hurricane season in Nicaragua . Mineros resumed full operations at the Hemco Property on August 15, 2023 , after making significant enhancements to its tailings detoxification capacity.
GROWTH AND EXPLORATION PROJECT UPDATES
Porvenir Project, Nicaragua : In the third quarter of 2023, with the aim of increasing or upgrading the category of Mineral Resources and Mineral Reserves, the Company completed 4,433 metres of diamond drilling in 14 holes, achieving approximately 102% of the 2023 drilling plan. Analytical results and geological model updates are expected to be completed in the fourth quarter of 2023, with a Mineral Resource update anticipated for 2024.
Luna Roja Deposit, Nicaragua : In the third quarter of 2023, the Company completed the geological model update of the Luna Roja Deposit and is currently focused on an internal Mineral Resource update.
OUTLOOK
Based on the sale of the Gualcamayo Property, on September 22, 2023 , Mineros announced revisions to its 2023 consolidated production and cost guidance, as provided in the Company's MD&A for the three months and year ended December 31, 2022 , dated February 17, 2022 .
The following table sets out original and revised production and cost guidance for 2023, as well as actual results for the nine months ended September 30, 2023 .
| | | As at September 30, 2023 | Updated 2023 Guidance | Original 2023 Guidance | | Gold production | oz | 188,730 | 239,000 - 262,000 | 264,000 - 292,000 | | Cash costs per ounce of gold sold | $/oz | 1,286 | 1,170 - 1,270 | 1,160 - 1,250 | | AISC per ounce of gold sold | $/oz | 1,497 | 1,440 - 1,540 | 1,400 - 1,490 |
Mineros is not revising its 2023 guidance for the Hemco Property or the Nechí Alluvial Property. On a consolidated basis, guidance for 2023 for the Hemco Property and the Nechí Alluvial Property is as follows: total gold production is 209,000 – 229,000 oz, Cash Cost per ounce of gold sold is $1,060 – $1,150 , and AISC per ounce of gold sold is $1,310 – $1,410 . Mineros expects gold production for the Hemco Property to be close to the low end of 2023 guidance and AISC at the Nechí Alluvial Property close to the high end of 2023 guidance.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call on Friday, November 10, 2023 , 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/QMA7B586zWg
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".
The Company has been granted an exemption from the individual voting and majority voting requirements applicable to listed issuers under Toronto Stock Exchange policies, on grounds that compliance with such requirements would constitute a breach of Colombian laws and regulations which require the directors to be elected on the basis of a slate of nominees proposed for election pursuant to an electoral quotient system. For further information, please see the Company's most recent annual information form filed on SEDAR+ at www.sedarplus.com .
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 2023; 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; completion of the drilling program; 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; the timing, receipt and maintenance of necessary approvals, licenses and permits form applicable governments, regulators or third parties; estimates for future prices of gold and other minerals; future financial or operating performance and condition of the Company and its business, operations and properties, including, without limitation, expectations regarding liquidity, capital structure, competitive position and payment of dividends; expectations regarding future currency exchange rates; 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 most recent annual information form filed on SEDAR+ at www.sedar plus.c om .