Mineros Reports Second Quarter 2023 Financial and Operational Results
newswire.ca
Mineros S.A. 03 Aug, 2023, 17:30 ET
(all dollar amounts (other than per share amounts) are expressed in thousands of U.S. dollars unless otherwise stated)
MEDELLIN, Colombia, Aug. 3, 2023 /CNW/ - Mineros S.A. (TSX: MSA) (MINEROS:CB) ("Mineros" or the "Company") today reported its financial and operational results for the three and six months ended June 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 Mineros' profile on www.sedar.com.
Andrés Restrepo, President and CEO of Mineros, commented, "We have had positive results in the second quarter of 2023, mainly due to managing our costs and administrative expenses, that offset a 6% decrease in gold production. During the second quarter of 2023 we continued our exploration campaign at the Porvenir Project in Nicaragua, where the metallurgical drilling campaign is expected to be completed by the third quarter of 2023 and we hope to share additional information in this regard soon."
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE SECOND QUARTER 2023
Gold Production
69,254 ounces of gold produced.A 6% decrease in gold production compared to the same period in 2022 (Q2/22: 74,062 ounces of gold produced). Cost of Sales, Cash Cost1 and All-in Sustaining Cost ("AISC")1
Cost of sales of $99,801, similar to the same period in 2022 (Q2/22: $99,487).Cash Cost per ounce of gold sold2 of $1,207 (Q2/22: $1,131), a 7% increase relative to the same period in 2022.AISC per ounce of gold sold1 of $1,388 (Q2/22: $1,388), similar to the AISC per ounce of gold sold during the same period in 2022. Dividend Payment
$5,213 in dividends paid.A decrease of 34% in dividends paid compared to the same period in 2022 (Q2/22: $7,875), explained by an extraordinary dividend of $0.01 per share paid in April of 2022.
__________________________________
| 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 (stated in dollars), 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 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
|
Revenue
Revenue of $138,826.Revenue increased by 1% compared to the same period in 2022 (Q2/22: $137,286). Profitability
Gross profit up by 3% to $39,025 compared to the same period in 2022 (Q2/22: $37,799).Net profit for the period up 10% to $12,552 ($0.04/share) compared to the same period in 2022 (Q2/22: $11,399 or $0.04/share). Net Debt to Adjusted EBITDA ratio3
Net Debt to Adjusted EBITDA ratio2 of (0.02)x as at June 30, 2023.The Company continues to have a low Net Debt to Adjusted EBITDA ratio, with a 119% decrease compared to 0.11x as at June 30, 2022. FINANCIAL AND OPERATING HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2023
Gold Production
129,502 ounces of gold produced.An 8% decrease in gold production compared to the same period in 2022 (six months ended June 30, 2022: 140,071 ounces of gold produced). Cost of Sales, Cash Cost and All-in Sustaining Cost ("AISC")1
Cost of sales of $185,621, a 3% decrease when compared to the same period in 2022 (six months ended June 30, 2022: $191,492)Cash Cost per ounce of gold sold of $1,183 (six months ended June 30, 2022: $1,152), a 3% increase relative to the same period in 2022, explained by the 8% decrease in gold production.AISC per ounce of gold sold1 of $1,398 (six months ended June 30, 2022: $1,383), similar to the AISC per ounce of gold sold during the same period in 2022. Dividend Payment
$10,050 in dividends paid.A 19% decrease in dividends paid compared to the same period in 2022 (six months ended June 30, 2022: 12,473), explained by an extraordinary dividend of $0.01 per share paid in April of 2022.
__________________________________
| 3 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 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.
|
Revenue
Revenue of $256,916. Revenue decreased by 2% when compared to the same period in 2022 (six months ended June 30, 2022: $261,936). Profitability
Gross profit increased by 1% to $71,295 compared to the same period in 2022 (six months ended June 30, 2022: 70,444). Net profit for the period up 28% to $27,956 ($0.09/share) compared to the same period in 2022 (Q2/22: $21,871 or $0.07/share). Financial and Operating Highlights.
| Three Months
Ended June 30,
| Change
| Six Months Ended
June 30,
| Change
| 2023
| 2022
| $
| %
| 2023
| 2022
| #
| %
| Financial
|
|
|
|
|
|
|
|
| Revenue
| 138,826
| 137,286
| 1,540
| 1 %
| 256,916
| 261,936
| (5,020)
| (2) %
| Cost of sales
| (99,801)
| (99,487)
| 314
| 0 %
| (185,621)
| (191,492)
| (5,871)
| (3) %
| Gross Profit
| 39,025
| 37,799
| 1,226
| 3 %
| 71,295
| 70,444
| 851
| 1 %
| Net Profit For The Period
| 12,552
| 11,399
| 1,153
| 10 %
| 27,956
| 21,871
| 6,085
| 28 %
| Basic and diluted earnings per
share
| $0.04
| $0.04
| $0.00
| 10 %
| $0.09
| $0.07
| $0.02
| 28 %
| Adjusted EBITDA1
| 47,965
| 46,710
| 1,255
| 3 %
| 88,568
| 87,857
| 711
| 1 %
| Net cash flows generated by
operating activities
| 30,154
| 17,853
| 12,301
| 69 %
| 32,652
| 23,156
| 9,496
| 41 %
| Net free cash flow1
| 17,116
| 234
| 16,882
| 7215 %
| 4,441
| (5,545)
| 9,986
| (180) %
| ROCE1
| 28 %
| 22 %
| 6 %
| 29 %
| 28 %
| 22 %
| 6 %
| 29 %
| Net Debt to Adjusted EBITDA
ratio1
| (0.02)x
| 0.11x
| (0.13x)
| (119 %)
| (0.02)x
| 0.11x
| (0.13x)
| (119 %)
| Dividends paid
| 5,213
| 7,875
| (2,662)
| (34) %
| 10,050
| 12,473
| (2,423)
| (19) %
|
|
|
|
|
|
|
|
|
| Operating
|
|
|
|
|
|
|
|
| Average realized price per ounce of gold sold ($/oz)
| 1,948
| 1,837
| 111
| 6 %
| 1,918
| 1,859
| 59
| 3 %
| Total Gold Produced (oz)
| 69,254
| 74,062
| (4,808)
| (6) %
| 129,502
| 140,071
| (10,569)
| (8) %
| Gold sold (oz)
| 68,570
| 73,147
| (4,577)
| (6) %
| 129,263
| 137,684
| (8,421)
| (6) %
| Silver sold (oz)
| 152,027
| 93,528
| 58,499
| 63 %
| 286,696
| 195,001
| 91,695
| 47 %
| Cash Cost per ounce of gold sold ($/oz) 1
| $1,207
| $1,131
| $76
| 7 %
| $1,183
| $1,152
| $31
| 3 %
| AISC per ounce of gold sold ($/oz) 1
| $1,388
| $1,388
| $—
| 0 %
| $1,398
| $1,383
| $16
| 1 %
|
1.
| Average realized price per ounce of gold sold, Adjusted EBITDA, and net free cash flow are Non-IFRS financial measures, and ROCE and Net Debt to Adjusted EBITDA ratio 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
June 30,
| Change
| Six Months Ended
June 30,
| Change
|
| 2023
| 2022
| ounces
| %
| 2023
| 2022
| ounces
| %
|
|
|
|
|
|
|
|
|
| Nechí Alluvial Property
(Colombia)
| 24,648
| 23,394
| 1,254
| 5 %
| 42,636
| 42,679
| (43)
| — %
|
|
|
|
|
|
|
|
|
| Hemco Property
| 7,517
| 10,808
| (3,291)
| (30) %
| 17,738
| 19,931
| (2,193)
| (11) %
| Artisanal Mining
| 24,699
| 23,330
| 1,369
| 6 %
| 47,099
| 46,768
| 331
| 1 %
| Nicaragua
| 32,216
| 34,138
| (1,922)
| (6) %
| 64,837
| 66,699
| (1,862)
| (3) %
| Gualcamayo Property
(Argentina)
| 12,390
| 16,530
| (4,140)
| (25) %
| 22,029
| 30,693
| (8,664)
| (28) %
| Total Gold Produced
| 69,254
| 74,062
| (4,808)
| (6) %
| 129,502
| 140,071
| (10,569)
| (8) %
| Total Silver Produced
| 152,027
| 93,528
| 58,499
| 63 %
| 286,696
| 195,001
| 91,695
| 47 %
|
For the three months ended June 30, 2023, gold production was down 6%, with 69,254 ounces of gold produced, compared to 74,062 ounces in the second quarter of 2022, summarized in the table above. The decrease in production relative to the comparative quarter in 2022 is a result of lower production achieved at the Hemco Property due to unscheduled maintenance stoppages at the milling area and lower production at the Gualcamayo Mine as it nears the end of its life of mine.
For the six months ended June 30, 2023, gold production was down 8%, with 129,502 ounces of gold were produced during the six months ended June 30, 2023, compared to 140,071 ounces in the same period of 2022. The lower production relative to the comparative period in 2022 is as a result of lower production from the underground mine at the Hemco Property due to unscheduled maintenance stoppages at the milling area during the second quarter and a decrease in production at the Gualcamayo Mine.
CORPORATE HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
New collective agreement in Colombia
On June 8, 2023, Mineros signed a collective agreement for operations at the Nechí Alluvial Property in Colombia, covering a two year period, starting May 1, 2023.
Termination of strategic alliance with Royal Road Minerals Limited
Effective May 29, 2023, Mineros terminated and, where applicable, settled all outstanding obligations under all of its agreements with Royal Road Minerals Limited ("Royal Road").
Mineros and Royal Road have terminated their strategic alliance agreements for exploration of their respective properties in Nicaragua and Colombia, and related joint ventures in respect of the Caribe Exploration Target, located on the Hemco Property in Nicaragua, and the Guintar-Niverengo-Margaritas ("GNM") Exploration Target, located in the Anzá Province, Colombia.
Royal Road has relinquished its 50% joint venture interest in the Caribe Exploration Target to Mineros' subsidiary Hemco Nicaragua S.A. ("Hemco"), which now owns 100% of the Caribe Exploration Target. The 1.25% net smelter returns royalty applicable to the two concessions that host the Luna Roja Deposit, which was granted to Royal Road in May 2021 in connection with Mineros' acquisition of Royal Road's 50% joint venture interest in those concessions, was terminated, and provisions under the related asset purchase agreement in respect of exploration expenditures to be incurred at the Hemco Property have been released. Mineros has also relinquished its 50% joint venture interest in the GNM Exploration Target to Royal Road. Mineros and Royal Road have also annulled a cooperation agreement relating to Mineros' Gualcamayo Project in Argentina.
Subsequent events
Temporary suspension of the main processing plant at the Hemco Property in Nicaragua and Review of 2023 Guidance
On July 31, 2023, Mineros determined to temporarily suspend operations at its main processing plant, which processes 89% of the material and disposal of tailings at its Hemco Property in Nicaragua. The suspension is precautionary in nature and is designed to allow for the swift completion of the expansion of its detoxification capacity at the tailings facility prior to hurricane season in Nicaragua. This work had been planned for earlier in 2023 but had been delayed by post-pandemic equipment supply constraints. Given the shutdown, the Company has taken this opportunity to perform certain plant maintenance work which was originally scheduled for later this year. During the suspension period, which is estimated to last for approximately 20 days, industrial and artisanal mining activities will continue and the Vesmisa and La Curva plants will also continue to operate. This precautionary suspension is expected to reduce the Hemco Property's output by approximately 5,000 to 10,000 ounces of gold for the month of August. Mineros is currently reviewing its mining plan for the Hemco Property for the second half of 2023 with a view to minimizing the impact, if any, on our production guidance for 2023.
In light of the recent temporary suspension of operations at the main facility at the Hemco Property, the Company's 2023 guidance is currently under review. Mineros will keep the market informed of further developments.
GROWTH AND EXPLORATION PROJECT UPDATES
Porvenir Project, Nicaragua: A total of 4,957 metres of diamond drilling in 36 holes was completed in the second quarter of 2023, achieving 85% of the program, with the objective of providing material for metallurgical test work. The metallurgical drilling campaign is expected to be completed by the third quarter of 2023.
Luna Roja Deposit, Nicaragua: In the second quarter of 2023, the Company has been working to update the geological model for the Luna Roja Deposit and is continuing to interpret the results of its 2022 drilling campaign.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call on Friday, August 4, 2023, at 9:00 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://c212.net/c/link/?t=0&l=en&o=3936380-1&h=4037587993&u=https%3A%2F%2Fapp.webinar.net%2FalmDxXWGv8W&a=https%3A%2F%2Fapp.webinar.net%2FalmDxXWGv8W
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.
Participants may also dial in (charges may apply):
US:
| +1 720-527-5937
| Colombia
| +57 601-485-0334
| Pin for English:
| 10178681#
| Pin for Spanish:
| 87924011#
|
The list of all local and international dial in numbers can be found at the end of this document or at c212.net.
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, Nicaragua and Argentina 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.sedar.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; the suspension of operations at the main plant at the Hemco Property, and potential impacts on the Company's 2023 guidance; estimates for future mineral production and sales; the Company's expectations, strategies and plans for the Material Properties; plans in respect of the wind-down of its open pit and underground oxide gold mining operations at the Gualcamayo Property; 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 timing and complexity of the work required to complete the expansion of the detoxification capacity at the Hemco Property's main processing plant; availability of skilled labour and equipment required to complete the capacity expansion; the orderly wind-down of its open pit and underground oxide gold mining operations at the Gualcamayo Property; 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 31, 2022 (as it may be updated or replaced from time to time), available on SEDAR at www.sedar.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.
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.
The following table provides a reconciliation of the Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30,
| Six Months Ended June 30,
|
| 2023
| 2022
| 2023
| 2022
| NET PROFIT FOR THE PERIOD / YEAR
| 12,552
| 11,399
| 27,956
| 21,871
| Less: Interest income
| (341)
| (203)
| (806)
| (518)
| Add: Interest expense
| 4,090
| 1,388
| 6,067
| 2,324
| Add: Current tax 1
| 11,544
| 11,042
| 23,107
| 20,289
| Add/less: Deferred tax 1
| (4,179)
| 4,662
| (7,158)
| 3,356
| EBIT
| 23,666
| 28,288
| 49,166
| 47,322
| Add: Depreciation and amortization
| 13,562
| 14,887
| 26,571
| 28,826
| EBITDA
| 37,228
| 43,175
| 75,737
| 76,148
| Less: Other income 2
| 352
| 46
| (4,847)
| (702)
| Less: Finance income (excluding interest
income)
| (2,203)
| (41)
| (2,231)
| (94)
| Add: Finance expense (excluding interest
expense)
| 84
| 1,357
| 1,548
| 2,739
| Add: Other expenses 3
| 6,849
| 1,949
| 8,989
| 4,153
| Add: Exploration expenses
| 4,920
| 3,611
| 7,279
| 6,296
| Less: Foreign exchange differences
| 735
| (3,387)
| 2,093
| (683)
| Adjusted EBITDA
| 47,965
| 46,710
| 88,568
| 87,857
|
1.
| For additional information regarding taxes, see Note 18 of our unaudited condensed interim financial statements, for the three and six months ended June 30 2023 and 2022
| 2.
| For additional information regarding other income, see Note 10 of unaudited condensed interim financial statements, for the three and six months ended June 30 2023 and 2022.
| 3.
| For additional information regarding other expenses, see Note 11 of our unaudited condensed interim financial statements for the three and six months ended June 30, 2023 and 2022
| 4.
| The reconciliation above does not include adjustments for Share of results of investments in associates, or (Impairment) reversal of Assets, because there would be a nil adjustment for the three and six months ended June 30, 2023 and 2022.
|
Cash Cost
The objective of Cash Cost is to provide stakeholders with a key indicator that reflects as close 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 and depreciation and amortization from Cost of sales, and dividing the difference 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.
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 and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30,
| Six Months Ended June 30,
|
| 2023
| 2022
| 2023
| 2022
| Cost of sales
| 99,801
| 99,487
| 185,621
| 191,492
| Less: Cost of sales of non-mining operations 1
| (192)
| (184)
| (299)
| (344)
| Less: Depreciation and amortization
| (13,166)
| (14,511)
| (25,800)
| (28,093)
| Less: Sales of silver
| (3,673)
| (2,045)
| (6,661)
| (4,458)
| Cash Cost
| 82,770
| 82,747
| 152,861
| 158,597
| Gold sold (oz)
| 68,570
| 73,147
| 129,263
| 137,684
| Cash Cost per ounce of gold sold ($/oz)
| 1,207
| 1,131
| 1,183
| 1,152
|
1.
| Refers to cost of sales incurred in the Company's "Others" segment. See Note 6 to the Company's unaudited condensed interim financial statements for three and six months ended June 30, 2023 and 2022. The majority of this amount relates to the cost of sales of latex.
|
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 administrative expenses, cost of sales of non-mining operations, 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 of 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.
The following table provides a reconciliation of AISC per ounce of gold sold to cost of sales for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended
June 30,
| Six Months Ended June
30,
|
| 2023
| 2022
| 2023
| 2022
| Cost of sales
| 99,801
| 99,487
| 185,621
| 191,492
| Less: Cost of sales of non-mining operations 1
| (192)
| (184)
| (299)
| (344)
| Less: Depreciation and amortization
| (13,166)
| (14,511)
| (25,800)
| (28,093)
| Less: Sales of silver
| (3,673)
| (2,045)
| (6,661)
| (4,458)
| Less: Sales of electric energy
| (1,195)
| (1,010)
| (2,156)
| (1,802)
| Add: Administrative expenses
| 4,622
| 5,976
| 9,298
| 11,413
| Less: Depreciation and amortization of administrative expenses 2
| (396)
| (376)
| (771)
| (733)
| Add: Sustaining leases and leaseback 3
| 3,166
| 2,876
| 6,821
| 4,547
| Add: Sustaining exploration 4
| 160
| 2,844
| 292
| 4,304
| Add: Sustaining capital expenditures 5
| 6,018
| 8,435
| 14,417
| 14,058
| AISC
| 95,145
| 101,492
| 180,762
| 190,384
| Gold sold (oz)
| 68,570
| 73,147
| 129,263
| 137,684
| All-in sustaining costs per ounce of gold sold ($/oz)
| $1,388
| $1,388
| $1,398
| $1,383
|
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.
| Depreciation and amortization of administrative expenses is included in the administrative expenses line on the unaudited condensed interim financial statements, and is mainly related to depreciation for corporate office spaces and local administrative buildings at the Gualcamayo Property and Hemco Property.
| 3.
| Represents most lease payments as reported on the unaudited condensed interim 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.
| 4.
| Sustaining exploration: Exploration expenses and exploration and evaluation projects as reported on the unaudited condensed interim 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.
| 5.
| 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 June 30, 2023 are primarily related to major projects at Hemco Property, Nechí Alluvial Property and Gualcamayo 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.
|
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.
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 June 30, 2023 and 2022:
|
| Three Months Ended June 30,
| Six Months Ended June 30,
|
|
| 2023
| 2022
| 2023
| 2022
| Net cash flows generated by operating activities
|
| 30,154
| 17,853
| 32,652
| 23,156
|
|
|
|
|
|
| Non-discretionary items:
|
|
|
|
|
| Sustaining capital expenditures
|
| (6,018)
| (8,435)
| (14,417)
| (14,058)
| Interest paid
|
| (1,807)
| (1,309)
| (3,744)
| (2,170)
| Dividends paid
|
| (5,213)
| (7,875)
| (10,050)
| (12,473)
| Net free cash flow
|
| 17,116
| 234
| 4,441
| (5,545)
|
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. The following table sets out the calculation of ROCE as at June 30, 2023 and 2022.
|
| June 30,
|
|
| 2023
| 2022
| Adjusted EBITDA (Last 12 months)
|
| 177,680
| 155,665
| Less: Depreciation and amortization (Last 12 months)
|
| (55,025)
| (53,934)
| Adjusted EBIT (A)
|
| 122,655
| 101,731
|
|
|
|
| Total Assets at the beginning of the Period
|
| 569,543
| 580,046
| Less: Total current liabilities at the beginning of the Period
|
| (134,581)
| (110,601)
| Opening Capital Employed (B)
|
| 434,962
| 469,445
|
|
|
|
| Total Assets at the end of the Period
|
| 605,354
| 603,477
| Less: Current Liabilities at the end of the Period
|
| (164,024)
| (135,161)
| Closing Capital employed (C)
|
| 441,330
| 468,316
|
|
|
|
| Average Capital employed (D)= (B) + (C) /2
|
| 438,146
| 468,881
|
|
|
|
| ROCE (A/D)
|
| 28 %
| 22 %
|
Net Debt to Adjusted EBITDA Ratio
Net Debt to Adjusted EBITDA ratio is a non-IFRS ratio that provides 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 to Adjusted EBITDA ratio as at June 30, 2023 and 2022.
|
| June 30,
|
|
| 2023
| 2022
| Loans and other borrowings
|
| 43,595
| 56,322
| Less: Cash and cash equivalents
|
| (47,415)
| (38,805)
| Net Debt
|
| (3,820)
| 17,517
| Adjusted EBITDA (Last 12 months)
|
| 177,680
| 155,665
| Net Debt to Adjusted EBITDA ratio
|
| (0.02)x
| 0.11x
|
Average Realized Price
The Company uses "average realized price per ounce of gold" and "average realized price per ounce of silver", which are Non-IFRS financial measures. Average realized metal price represents the revenue from the sale of the underlying metal as per the statement of operations, adjusted to reflect the effect of trading at holding level (parent Company) on the sales of gold purchased from subsidiaries. Average realized prices are calculated as the revenue related to gold and silver sales divided by the number of ounces of metal sold. The following table sets out the reconciliation of average realized metal prices to sales of gold and sales of silver for the three months ended June 30, 2023 and 2022:
| Three Months Ended June 30,
|
| 2023
| 2022
| Sales of gold
| 133,569
| 134,401
| Gold sold (oz)
| 68,570
| 73,147
| Average realized price per ounce of gold sold ($/oz)
| 1.948
| 1.837
|
|
|
| Sales of silver
| 3,673
| 2,045
| Silver sold (oz)
| 152,027
| 93,528
| Average realized price per ounce of silver sold ($/oz)
| 24
| 22
|
Participant conference call dial in
Pin for English: 6918884#
Pin for Spanish: 10178681#
Americas
United States +1 720-527-5937
Argentina +54 11 5219-0376
Brazil +55 11 3042-2466
Chile +56 44 890 9168
Colombia +57 601 4850334
Costa Rica +506 4001 3572
Guatemala +502 2458 1449
Panama +507 833-6967
Perú +51 1 6429771
Dominican Republic +1 829-946-1727
EMEA
Afghanistan +93 72 989 0544
Albania +355 4 454 1728
Germany +49 221 98203406
Austria +43 1 2650591
Bahrain +973 6500 9110
Belgium +32 480 20 10 08
Bosnia and Herzegovina +387 32 911-211
Bulgaria +359 2 437 2538
Cameron +237 2 42 24 10 10
Cyprus +357 77 788645
Croatia +385 1 7757 417
Denmark +45 93 75 41 93
United Arab Emirates +971 600 521273
Slovakia +421 2/333 252 15
Slovenia +386 828 06520
Spain +34 872 50 31 69
Estonia +372 614 8067
Finland +358 9 31525040
France +33 6 44 65 85 55
Georgia +995 706 770 403
Greece +30 21 0300 6468
Hungary +36 1 323 7160
Ireland +353 1 437 2292
Iceland +354 539 0354
Israel +972 76-599-0003
Italy +39 06 4520 0640
Kazakhstan +7 727 310 0518
Kenya +254 20 7904310
Latvia +371 25 893 119
Lithuania +370 37 248948
Luxembourg +352 20 30 10 04
Malawi +265 212 342 029
Malta +356 2031 0052
Monaco +377 93 10 82 23
Montenegro +382 78 907 010
Nigeria +234 1 227 8520
Norway +47 21 93 06 47
The Netherlands +31 97 05 500 1887
Pakistan +92 21 37132336
Poland +48 12 395 08 46
Portugal +351 21 005 1199
UK +44 330 390 2135
Czech Republic +420 225 989 126
Romania +40 31 780 7009
Serbia +381 67 7892838
Sri Lanka +94 115 322 970
South Africa +27 10 109 5459
Sweden +46 70 194 00 04
Switzerland +41 44 513 30 08
Turkey +90 212 988 17 22
Ukraine +380 89 324 0681
Uganda +256 206 301003
Asia Pacific
Australia +61 2 4022 9113
Cambodia +855 96 696 7625
Indonesia +62 21 39702915
Japan +81 3-5050-5062
Mongolia +976 7049 7620
New Zealand +64 9-884 4767
SOURCE Mineros S.A.
 For further information: Patricia Ospina, Investor Relations Manager, (+57) 42665757, relacion.inversionistas@mineros.com.co; John Robert McClintock, Investor Relations, +1 (44) 7718 576395, Investor.relations@mineros.com.co
|
