Andean Precious Metals Reports Third Quarter 2024 Operating and Financial Results

2024-11-12

NASDAQ - Nasdaq Stock Market · Niobium · Scandium · Titanium · Rare Earth Elements · United States

ACHIEVED A RECORD $98.1 MILLION IN CASH AND INVESTMENTS DRIVEN BY _RECORD $17 MILLION IN FREE CASH FLOW_1_AND $23.4 MILLION IN OPERATING CASH FLOW _

(All amounts in U.S. dollars unless otherwise indicated)

Toronto, Ontario--(Newsfile Corp. - November 11, 2024) - Andean Precious Metals Corp.(TSXV: APM) (OTCQX: ANPMF) ("Andean" or the "Company") is pleased to report its operating highlights and financial results for the three and nine months ended September 30, 2024. This news release should be read together with Andean's management discussion and analysis ("MD&A") and condensed interim consolidated financial statements for the three and nine months ended September 30, 2024 (the "Financial Statements") which are available under the Company's profile on SEDAR+ (www.sedarplus.ca).

Third Quarter 2024 Highlights

Consolidated Results:

Consolidated revenue of $68.4 millionfrom sales at an average realized gold price of $2,413/oz and an average realized silver price of $31.40/oz.

The Company strengthened its financial position in Q3 2024 ending the period with a record position of $98.1 million in cash, cash equivalents, marketable securities, and short-term investments.

The Company generated record free cash flow1of $17.0 milliondespite additional capital expenditures ("CAPEX") incurred during the third quarter, supported by $23.4 million in operating cash flow.

Gross profit of $21.4 million, mainly due to strong average realized gold and silver prices and lower operating costs at San Bartolomé driven by lower underlying cost of production.

Net income of $8.2 million, EBITDA1and Adjusted EBITDA1were $20.1 million and $19.2 million, respectively.

Consolidated Q3 2024 production of 29,284 gold equivalent ("AuEq") ounces or its equivalent of 2.3 million silver equivalent ("AgEq") ounces.

Golden Queen Results:

Golden Queen produced 14,025 AuEq ounces compared to 16,986 AuEq ounces in Q2 2024.

Golden Queen operating cash costs ("OCC")1of $1,557/oz and all-in sustaining costs ("AISC")1of $2,300/oz for the quarter.During Q3 2024, OCC was primarily impacted by lower production due to a temporary suspension of the crusher circuit at Goden Queen which impacted AuEq production. Furthermore, to improve reliability, the Company is investing in new equipment, with additional CAPEX aimed at enhancing performance through late 2024 and 2025.

San Bartolomé Results:

San Bartolomé produced 1.2 million AgEq ounces, compared to 1.07 million AgEq ounces in Q2 2024. Achieved a strong cash gross operating margin ("CGOM")2of $12.30 per ounce of silver equivalent sold and a gross margin ratio ("GMR")2of 46.56%, based on reported costs of sales of $18.87 million. Recovery increased in Q3 2024 to 83% when compared to 79% in Q2 2024.

2024 Guidance Update:

The Company reaffirms its 2024 guidance of 60 koz AuEq at Golden Queen and 5.0 Moz AgEq at San Bartolomé (+/- 5%). The Company expects consolidated production to be close to the lower end of the 2024 guidance. In line with the Company's 2024 production guidance, the Company anticipates a decline in OCC and AISC per gold ounce sold at Golden Queen for Q4 2024, when compared to Q3 2024, primarily driven by anticipated higher AuEq production during Q4 2024.

The Company is increasing its 2024 GMR and CGOM guidance for San Bartolome to 30% and $7.00 respectively. For Golden Queen, its 2024 AISC guidance is increasing to $1,950 per ounce of gold sold arising from additional sustaining CAPEX incurred.

Corporate Update:

Strengthened management team with the addition of Dominik Kizek joining the Company as Vice President, Finance and Corporate Controller at the Toronto, Corporate office. Mr. Kizek is a CPA, CA and has 20 years of public company experience including previous roles at New Gold Inc., Battle North Gold Inc., and Agnico Eagle Mines Ltd.

Health and Safety Performance: San Bartolomé recorded one lost time injury (LTI) in Q3 2024. Golden Queen reported zero LTIs for the nine months ending September 30, 2024, achieving 503 consecutive days without an LTI.

Alberto Morales, Executive Chairman and CEO stated "Our third quarter has been marked by record financial performance, driven by strong gross margin growth and significant free cash flow generation. We ended the quarter with strong cash, cash equivalents, and investments of $98.1 million, which strengthens our balance sheet and provides a solid foundation for future growth opportunities.

Operationally, it hasn't been without its challenges. At Golden Queen, we faced some setbacks due to necessary maintenance on aging equipment. We have responded with a proactive CAPEX program to address historical underinvestment in property, equipment, and processes. Since acquiring Golden Queen, we have appointed a new management team and launched a comprehensive maintenance, CAPEX, and operational overhaul program. This investment in upgrading key equipment and processes is a deliberate step to drive greater reliability and efficiency, with anticipated results beginning in Q4 and throughout 2025."

Mr. Morales continued, "Our robust financial position provides the flexibility to pursue strategic initiatives and explore accretive expansion opportunities. While we expect to meet the lower end of our 2024 production guidance, optimizing operations remains a top priority. In addition, we are continuing with our goal to diversify our portfolio and expand in North America with high value assets.

I'm also pleased to report continued safety milestones, with Golden Queen achieving over 500 days without a lost-time injury and no reportable environmental incidents, a testament to our team's commitment to maintaining high safety and environmental standards.

Looking ahead, we remain committed to prudent cost management, operational resilience, and sustainable practices, which will drive both, our business growth, and the well-being of the communities in which we operate."

Summary of Financial and Operating Results

| (In thousands except for net income per share and oz) | | | Q3 2024 | | | Q3 2023(a) | | | Change | | | YTD 2024 | | | YTD 2023(a) | | | Change | | | | | | | | | | | | | | | | | | | | | | | | Financial Performance | | | | | | | | | | | | | | | | | | | | | Revenue | | $ | 68,348 | | $ | 38,174 | | $ | 79% | | | 181,197 | | $ | 76,503 | | | 137% | | | Cost of sales | | | 41,635 | | | 30,892 | | | 35% | | | 121,141 | | | 63,880 | | | 90% | | | Depreciation and depletion | | | 5,272 | | | 1,009 | | | 422% | | | 15,301 | | | 3,528 | | | 334% | | | Gross profit | | | 21,441 | | | 6,273 | | | 242% | | | 44,755 | | | 9,095 | | | 392% | | | Net income (after tax) | | | 8,210 | | | 76 | | | 10703% | | | 17,518 | | | 464 | | | 3675% | | | Net income per share | | | | | | | | | | | | | | | | | | | | | -Basic | | | 0.05 | | | 0.00 | | | 100% | | | 0.12 | | | 0.00 | | | 100% | | | -Diluted | | | 0.05 | | | 0.00 | | | 100% | | | 0.11 | | | 0.00 | | | 100% | | | Net cash provided from (used in) operating activities | | | 23,444 | | | 8,661 | | | 171% | | | 31,751 | | | (955 | ) | | 3425% | | | Free cash flow | | | 16,949 | | | 6,904 | | | 145% | | | 16,646 | | | (3,570 | ) | | 566% | | | EBITDA | | | 20,058 | | | 4,280 | | | 369% | | | 48,156 | | | 9,453 | | | 409% | | | Adjusted EBITDA | | | 19,202 | | | 6,799 | | | 182% | | | 43,872 | | | 12,200 | | | 260% | | | Capital expenditures | | | (15,937 | ) | | (1,757 | ) | | (807%) | | | (24,547 | ) | | (2,615 | | | (839%) | | | Ending cash and cash equivalents | | | 58,074 | | | 76,823 | | | (24%) | | | 58,074 | | | 76,823 | | | (24%) | | | Marketable securities and investments | | | 40,065 | | | 4,269 | | | 839% | | | 40,065 | | | 4,269 | | | 839% | | | Total cash and short-term investments | | | 98,139 | | | 81,082 | | | 21% | | | 98,139 | | | 81,092 | | | 21% | | | | | | | | | | | | | | | | | | | | | | | | (In thousands except for metal price per oz) | | | Q3 2024 | | | Q3 2023 | | | Change | | | YTD 2024 | | | YTD 2023(g) | | | Change | | | Operating highlights | | | | | | | | | | | | | | | | | | | | | Production | | | | | | | | | | | | | | | | | | | | | Golden Queen | | | | | | | | | | | | | | | | | | | | | Silver (koz) | | | 130 | | | - | | | 100% | | | 395 | | | - | | | 100% | | | Gold (oz) | | | 12,366 | | | - | | | 100% | | | 37,661 | | | - | | | 100% | | | Total AuEq ounces produced (oz) | | | 14,025 | | | - | | | 100% | | | 42,501 | | | - | | | 100% | | | San Bartolomé | | | | | | | | | | | | | | | | | | | | | Silver (koz) | | | 1,118 | | | 1,190 | | | (6%) | | | 2,981 | | | 3,357 | | | (11%) | | | Gold (oz) | | | 680 | | | 640 | | | 6% | | | 1,128 | | | 1,270 | | | (11%) | | | Total AgEq ounces produced (koz) | | | 1,176 | | | 1,242 | | | (5%) | | | 3,077 | | | 3,459 | | | (11%) | | | Consolidated | | | | | | | | | | | | | | | | | | | | | Golden Queen AgEq ounces (koz) | | | 1,081 | | | - | | | 100% | | | 3,464 | | | - | | | 100% | | | San Bartolomé AgEq ounces (koz) | | | 1,176 | | | 1,242 | | | (5%) | | | 3,077 | | | 3,460 | | | (11%) | | | Total Consolidated AgEq ounces produced (koz) | | | 2,251 | | | 1,242 | | | 81% | | | 6,536 | | | 3,460 | | | 89% | | | Golden Queen AuEq ounces (oz) | | | 14,025 | | | - | | | 100% | | | 42,501 | | | - | | | 100% | | | San Bartolomé AuEq ounces (oz) | | | 15,259 | | | 15,426 | | | (1%) | | | 37,784 | | | 42,690 | | | (12%) | | | Total Consolidated AuEq ounces produced (oz) | | | 29,284 | | | 15,426 | | | 90% | | | 80,285 | | | 42,690 | | | 88% | | | | | | | | | | | | | | | | | | | | | | | | Sales | | | | | | | | | | | | | | | | | | | | | Golden Queen | | | | | | | | | | | | | | | | | | | | | Silver (koz) | | | 134 | | | - | | | 100% | | | 394 | | | - | | | 100% | | | Gold (oz) | | | 12,018 | | | - | | | 100% | | | 37,581 | | | - | | | 100% | | | Total AuEq ounces sold (oz) | | | 13,174 | | | - | | | 100% | | | 42,405 | | | - | | | 100% | | | San Bartolomé | | | | | | | | | | | | | | | | | | | | | Silver (koz) | | | 1,080 | | | 1,552 | | | (30%) | | | 2,948 | | | 3,154 | | | (7%) | | | Gold (oz) | | | 512 | | | 200 | | | 156% | | | 920 | | | 415 | | | 122% | | | Total AgEq ounces sold (koz) | | | 1,119 | | | 1,568 | | | (28%) | | | 3,026 | | | 3,188 | | | (5%) | | | Consolidated ounces sold | | | | | | | | | | | | | | | | | | | | | Golden Queen AgEq ounces (koz) | | | 1,057 | | | - | | | 100% | | | 3,455 | | | - | | | 100% | | | San Bartolomé AgEq ounces (koz) | | | 1,119 | | | 1,568 | | | (29%) | | | 3,026 | | | 3,188 | | | (5%) | | | Total Consolidated AgEq ounces sold (koz) | | | 2,176 | | | 1,568 | | | 39% | | | 6,479 | | | 3,188 | | | 103% | | | Golden Queen AuEq ounces (oz) | | | 13,174 | | | - | | | 100% | | | 42,405 | | | - | | | 100% | | | San Bartolomé AuEq ounces (oz) | | | 14,600 | | | 19,476 | | | (25%) | | | 37,021 | | | 39,333 | | | (6%) | | | Total Consolidated AuEq ounces sold (oz) | | | 28,314 | | | 19,476 | | | 45% | | | 79,426 | | | 39,333 | | | 102% | | | | | | | | | | | | | | | | | | | | | | | | Average realized silver price ($/oz) | | $ | 31.40 | | $ | 24.34 | | | 29% | | | 27.97 | | $ | 24.00 | | | 17% | | | Average market silver price ($/oz) | | $ | 29.43 | | $ | 23.57 | | | 25% | | | 27.23 | | $ | 23.40 | | | 16% | | | | | | | | | | | | | | | | | | | | | | | | Average realized gold price ($/oz) | | $ | 2,413 | | $ | 1,960 | | | 23% | | | 2,278 | | $ | 1,945 | | | 17% | | | Average market gold price ($/oz) | | $ | 2,474 | | $ | 1,952 | | | 27% | | | 2,296 | | $ | 1,931 | | | 19% | |

2024 Outlook and Guidance

Production guidance

The Company reaffirms its 2024 annual gold and silver equivalent production guidance for Golden Queen and San Bartolomé with production expected to be close to the low end of the guidance ranges:

| | 2024 AuEq ounces Guidance3+/- 5% | 2024 AgEq ounces Guidance3+/- 5% | | Golden Queen (koz) | 60 | 5,429 | | San Bartolomé (koz) | 55 | 5,000 | | _Consolidated_(koz) | 115 | 10,429 |

Cost guidance

The Company revises its full-year 2024 cost guidance for both San Bartolomé and Golden Queen.

San Bartolomé 2024 full-year CGOM and GMR is now expected to be $7.00 and 30.00%, respectively, as the Company expects continued low operating expenses and cost savings that have been realized in the three- and nine-months ending September 30, 2024.

In line with our higher CAPEX expenditures at Golden Queen, the Company now expects 2024 full-year AISC to be $1,950 per gold ounce sold. As noted above, the Company has implemented a significant CAPEX and equipment overhaul program in 2024 and anticipates greater reliability and improved operational best practices on a go forward basis. The increase in AISC for 2024 is primarily a result of the increased sustaining CAPEX investment.

| | | Initial 2024 Guidance +/- 5% | | | Revised 2024 Guidance +/- 5% | | | San Bartolomé | | | | | | | | CGOM (per AgEq oz) | $ | 3.88 | | $ | 7.00 | | | GMR (per AgEq oz) | | 19.50% | | | 30.00% | | | Golden Queen | | | | | | | | OCC (per gold ounce sold, on a by-product credit basis) | $ | 1,500 | | $ | 1,500 | | | AISC (per gold ounce sold, on a by-product credit basis) | $ | 1,750 | | $ | 1,950 | |

Capital expenditures guidance

The Company revises its full-year 2024 CAPEX guidance to $35.5 million. As noted above, the Company has implemented a significant CAPEX and equipment overhaul program in 2024 and anticipates significantly greater reliability and vastly improved operational best practices on a go forward basis as a result of these capital expenditures.

| In $'000 | | | Initial 2024 Guidance +/- 5% | | | Revised 2024 Guidance +/- 5% | | | Sustaining capital | | | | | | | | | Golden Queen | | $ | 10,300 | | $ | 13,000 | | | San Bartolomé | | | 3,400 | | | 4,500 | | | Total sustaining capital | | $ | 13,700 | | $ | 17,500 | | | | | | | | | | | | Growth capital | | | | | | | | | Golden Queen | | $ | 9,500 | | $ | 16,000 | | | San Bartolomé | | | 840 | | | 2,000 | | | Total growth capital | | $ | 10,340 | | $ | 18,000 | | | | | | | | | | | | Total capital | | | | | | | | | Golden Queen | | $ | 19,800 | | $ | 29,000 | | | San Bartolomé | | | 4,240 | | | 6,500 | | | Total capital expenditures | | $ | 24,040 | | $ | 35,500 | |

Q3 2024 Conference Call and Webcast

Tuesday, November 12th, at 9:00 AM ET

Participants may listen to the webcast by registering on our website at www.andeanpm.comor via the following link https://www.gowebcasting.com/13704

Participants may also listen to the conference call by calling North American toll free 1-844-763-8274, or 1-647-484-8814 outside the U.S. or Canada

An archived reply of the webcast will be available for 90 days at: https://www.gowebcasting.com/13704or the Company website at www.andeanpm.com.

About Andean Precious Metals

Andean is a growing precious metals producer focused on expanding into top-tier jurisdictions in the Americas. The Company owns and operates the San Bartolomé processing facility in Potosí, Bolivia and the Soledad Mountain mine in Kern County, California, and is well-funded to act on future growth opportunities. Andean's leadership team is committed to creating value; fostering safe, sustainable and responsible operations; and achieving our ambition to be a multi-asset, mid-tier precious metals producer.

Qualified Person Statement

The scientific and technical content disclosed in this news release was reviewed and approved 8 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). Mr. Birak has visited Manquiri's various sites frequently, most recently in January 2024.

For more information, please contact:

Amanda Mallough Director, Investor Relations amallough@andeanpm.com T: +1 647 463 7808

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, cost outlook and capital expenditure expectations for 2024 and the Company's expectations regarding its CAPEX and equipment overhaul program. 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.

Some of the risks and other factors which could cause actual results to differ materially from those expressed in the forward-looking statements contained in this release include, but are not limited to: risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations; results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; risks relating to possible variations in reserves, resources, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined; mining and development risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development; the potential for delays in exploration or development activities or the completion of feasibility studies; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; risks related to commodity price and foreign exchange rate fluctuations; the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates; risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental or local community approvals or in the completion of development or construction activities; risks related to environmental regulation and liability; political and regulatory risks associated with mining and exploration; risks related to the uncertain global economic environment; and other factors contained in the section entitled "Risk Factors" in the Company's MD&A for the three and nine months ended September 30, 2024.