Andean Precious Metals Reports First Quarter 2024 Results
Andean Precious Metals (TSXV: APM, OTCQX: ANPMF) reported a robust Q1 2024, with significant production and revenue gains despite some operational challenges. The company produced 1.8 million silver equivalent ounces (AgEq oz), an 82% increase from Q1 2023, with Golden Queen contributing 11,490 AuEq oz. Q1 revenue was $43.1 million, nearly double the $23.0 million from Q1 2023. Gross operating income increased to $3.2 million from $0.4 million. However, the company recorded a net loss of $0.1 million. Operating costs per ounce sold were $1,936, with all-in sustaining costs at $1,627. Andean reaffirmed its 2024 guidance, with expected annual production of 60 Koz AuEq at Golden Queen and 5.0 Moz AgEq at San Bartolome. A share buyback program continued, repurchasing 5.3 million shares. The company maintains strong liquid assets of $72.8 million to support strategic growth initiatives and has strengthened its management team with new COO Marcos Holanda.
- Q1 2024 production of 1.8 million AgEq oz, an 82% increase from Q1 2023.
- Golden Queen produced 11,490 AuEq oz, exceeding expectations.
- Revenue for Q1 2024 was $43.1 million, up 87% from Q1 2023.
- Gross operating income rose to $3.2 million from $0.4 million in Q1 2023.
- Strong liquid assets of $72.8 million as of March 31, 2024.
- Share buyback program repurchased 5.3 million shares for $2.8 million.
- Reaffirmed 2024 guidance, expecting significant production and revenue growth.
- Addition of Marcos Holanda as Chief Operating Officer.
- Net loss of $0.1 million in Q1 2024, compared to net income of $0.2 million in Q1 2023.
- Operating cash costs per ounce sold at $1,936.
- All-in sustaining costs per ounce sold at $1,627.
- San Bartolome's production decreased due to unusual weather conditions.
- Free cash flow was negative at -$8.1 million.
- Ending cash and cash equivalents decreased by 45% to $41.5 million.
- Total cash and short-term investments dropped by 12%.
Consolidated Production of 1.8 million AgEq oz. 2024 Guidance Reaffirmed
Toronto, Ontario--(Newsfile Corp. - May 13, 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 months ended March 31, 2024. All amounts are in United States Dollars unless otherwise stated. This news release should be read together with Andean's management discussion and analysis ("MD&A") and condensed interim financial statements for the three months ended March 31, 2024 (the "Financial Statements") which are available under the Company's profile on SEDAR+ (www.sedarplus.ca).
First Quarter 2024 Highlights
The Company produced a total 1.8 million silver equivalent ounces ("AgEq oz")1, an
82% increase from Q1 2023Golden Queen production exceeded the Company's expectation by producing a total of 11,490 AuEq oz or 1.0 Moz AgEq despite the fire incident that occurred during Q4 2023. Operating cash costs ("OCC") per ounce sold and all-in sustaining costs ("AISC") per ounce sold for the quarter was
$1,936 /oz and$1,627 /oz, respectively1$43.1 million of revenue reported for Q1 from the sale of total 1.8 million AgEq oz at an average realized silver price of$23.64 per ounceHigher gross operating income. The Company recorded gross operating income of
$3.2 million for Q1 2024 compared to$0.4 million for the same period of 2023Net loss after tax of
$0.1 million compared to net income of$0.2 million in Q1 2013Strong liquid assets maintained to support ongoing strategic growth, totaling
$72.8 million as of March 31, 2024The Company reaffirms 2024 guidance of 60 Koz AuEq at Golden Queen and 5.0 Moz AgEq at San Bartolome (see Company news release dated March 27, 2024)
Share buyback continued. In the first quarter of 2024, The Company repurchased 5,333,291 common shares for
$2.8 million through its normal course issuer bid (NCIB) programStrengthened management team with the addition of Marcos Holanda joining the Company as Chief Operating Officer
Executive Chairman and Chief Executive Officer, Alberto Morales stated, "Our acquisition of Golden Queen represents a significant transformation, effectively doubling our Company's size across critical metrics such as revenue, production, reserves, and workforce. As we integrate Golden Queen into our operations this quarter, our team has been focused on streamlining processes to enhance efficiency and performance, in alignment with our annual plan for 2024. We anticipate the upcoming quarters will reflect this integration, with improved production and enhanced operational efficiencies."
Mr. Morales continued, "Despite the fire incident setback at Golden Queen and unusual weather conditions in Bolivia, our consolidated production for Q1 2024 reached 1.8 million AgEq oz, displaying resilience and adaptability. Golden Queen's performance exceeded expectations with 11,490 AuEq oz, while San Bartolome experienced lower production due largely to a historic rainfall season that affected road transportation. However, we anticipate a significant production increase, revenue growth and margin improvement in the upcoming quarters reaffirming our guidance in accordance with our year plan. With a strong financial position, we continue to prioritize strategic growth initiatives to enhance value to our shareholders, as exemplified by our ongoing share buyback program, and are continuing to look into other growth opportunities. Welcoming Marcos Holanda as Chief Operating Officer, we're strengthening and broadening our operations team. This will position us well to pursue new growth opportunities and support the integration and optimization of our operations."
Summary of Financial and Operating Results
| (In thousands except for net income per share and oz) | Q1 2024 | Q1 20232 | Change | ||||||
| Financial Performance | |||||||||
| Revenue | $ | 43,070 | $ | 23,045 | |||||
| Cost of sales | 37,279 | 21,217 | |||||||
| Depreciation and depletion | 2,630 | 1,454 | |||||||
| Gross operating income | 3,161 | 374 | |||||||
| Net (loss) income after tax | (76 | ) | 219 | ( | |||||
| Net income (loss) per share | |||||||||
| -Basic | (0.00 | ) | 0.00 | ||||||
| -Diluted | (0.00 | ) | 0.00 | ||||||
| Net cash provided from (used in) operating activities | (4,699 | ) | (4,323 | ) | (9)% | ||||
| Free cash flow3 | (8,091 | ) | (4,874 | ) | ( | ||||
| EBITDA3 | 3,601 | 1,516 | |||||||
| Adjusted EBITDA3 | 2,939 | 1,373 | |||||||
| Capital expenditures | 3,392 | 563 | |||||||
| Inventories | 77,846 | 12,215 | |||||||
| Ending cash and cash equivalents | 41,495 | 75,793 | ( | ||||||
| Marketable securities and investments | 29,853 | 5,162 | |||||||
| Total cash and short-term investments | 71,348 | 80,955 | ( | ||||||
| (In thousands except for metal price per oz) | Q1 2024 | Q1 20231 | Change | ||||||
| Operating highlights | |||||||||
| Production | |||||||||
| Golden Queen | |||||||||
| Silver (koz) | 105 | - | |||||||
| Gold (oz) | 10,259 | - | |||||||
| Total AuEq ounces produced (oz) | 11,490 | - | |||||||
| San Bartolomé | |||||||||
| Silver (koz) | 812 | 978 | ( | ||||||
| Gold (oz) | 174 | 234 | ( | ||||||
| Total AgEq ounces produced (koz) | 827 | 997 | ( | ||||||
| Consolidated | |||||||||
| Golden Queen AgEq ounces (koz) | 1,009 | - | |||||||
| San Bartolomé AgEq ounces (koz) | 827 | 997 | ( | ||||||
| Total Consolidated AgEq ounces produced (koz) | 1,836 | 997 | |||||||
| Sales | |||||||||
| Golden Queen | |||||||||
| Silver (koz) | 108 | - | |||||||
| Gold (oz) | 11,121 | - | |||||||
| Total AuEq ounces sold (oz) | 11,343 | - | |||||||
| San Bartolomé | |||||||||
| Silver (koz) | 811 | 982 | ( | ||||||
| Gold (oz) | 170 | 215 | ( | ||||||
| Total AgEq ounces sold (koz) | 826 | 1,000 | ( | ||||||
| Consolidated ounces sold | |||||||||
| Golden Queen AgEq ounces (koz) | 996 | - | |||||||
| San Bartolomé AgEq ounces (koz) | 826 | 1,000 | ( | ||||||
| Total Consolidated AgEq ounces sold (koz) | 1,822 | 1,000 | |||||||
| Average realized silver price ($/oz) | $ | 23.64 | $ | 23.04 | |||||
| Average market silver price ($/oz) | $ | 23.35 | $ | 21.73 | |||||
| Average realized gold price ($/oz) | $ | 2,074 | $ | 1,930 | |||||
| Average market gold price ($/oz) | $ | 1,942 | $ | 1,801 |
2024 Outlook and Guidance
Production guidance
The Company is maintaining the 2024 annual gold and silver equivalent production guidance for Golden Queen and San Bartolomé.
| 2024 AuEq ounces Guidance4 +/- | 2024 AgEq ounces Guidance4 +/- | |
| Golden Queen (koz) | 60 | 5,429 |
| San Bartolomé (koz) | 55 | 5,000 |
| Consolidated (koz) | 115 | 10,429 |
Quarter-to-quarter gold production in 2024 is expected to fluctuate during the year, with production continuing to be weighted towards the second half of the year.
Cost guidance
The Company is maintaining the 2024 cost guidance for Golden Queen and San Bartolomé as shown below:
| 2024 Guidance +/- | |||
| Golden Queen | |||
| Operating cash cost ("OCC") per gold ounce sold, on a by-product credit basis5 | $ | 1,500 | |
| All-in sustaining costs ("AISC") per gold ounce sold, on a by-product credit basis5 | $ | 1,750 | |
| San Bartolomé | |||
| CGOM | $ | 3.88 | |
| GMR | |||
In line with 2024 guidance, capital investment is expected to total
Capital expenditures guidance
| In $'000 | 2024 Guidance +/- | |||
| Sustaining capital | ||||
| Golden Queen | $ | 10,300 | ||
| San Bartolomé | 3,400 | |||
| Total sustaining capital | $ | 13,700 | ||
| Growth capital | ||||
| Golden Queen | $ | 9,500 | ||
| San Bartolomé | 840 | |||
| Total growth capital | $ | 10,340 | ||
| Total capital | ||||
| Golden Queen | $ | 19,800 | ||
| San Bartolomé | 4,240 | |||
| Total capital expenditures | $ | 24,040 | ||
Q1 2024 Conference Call and Webcast
Management will host a conference call and webcast on Tuesday, May 14, 2024 at 9:00 am ET to discuss the results.
Participants may join the conference call via webcast or through the following dial-in numbers:
Participants may listen to the webcast by registering on our website at www.andeanpm.com or via the following link http://www.gowebcasting.com/13321
Participants may also listen to the conference call by calling North American toll free 1-844-763-8274, or 1-647-484-8814 outside of the U.S. or Canada
An archived replay of the webcast will be available for 90 days at http://www.gowebcasting.com/13321 or the Company website at www.andeanpm.com
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 wider Americas. Andean is committed to fostering safe, sustainable, and responsible operations.
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 September 2023.
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 and cost outlook and capital expenditure expectations for 2024. 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 dated March 31, 2024.
Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking statements, you are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Furthermore, the Company undertakes no obligation to update or revise any forward-looking statements included in this release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.
Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures
This news release "specified financial measures" within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure, specifically the non-GAAP financial measures, non-GAAP ratios and supplementary financial measures described below. Management believes that the use of these measures assists analysts, investors and other stakeholders of the Company in understanding the costs associated with producing silver and gold, understanding the economics of silver and gold mining, assessing operating performance, the Company's ability to generate free cash flow from current operations and on an overall Company basis, and for planning and forecasting of future periods.
The specified financial measures used in this news release do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers, even as compared to other issuers who may be applying the World Gold Council guidelines. Accordingly, these measures are 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 following is a description of the non-GAAP financial measures, non-GAAP ratios and supplementary financial measures used in this news release:
OCC includes total production cash costs incurred at the Company's mining operations, which form the basis of the Company's cash costs, less by-product revenue.
AISC on a by-product basis per ounce is a non-GAAP ratio calculated as AISC on a by-product basis divided by ounces of silver equivalent ounces sold for San Bartolomé operations. For Golden Queen operations, AISC on a by-product basis per ounce is calculated on a by-product basis divided by ounces of gold equivalent ounces sold. AISC on a by-product basis is a non-GAAP financial measure calculated as the aggregate of production costs as recorded in the consolidated statements of income (loss), refining and transport costs, cash component of sustaining capital expenditures, lease payments related to sustaining assets, corporate general and administrative expenses and accretion expenses. When calculating AISC on a by-product basis, all revenue received from the sale of gold at San Bartolomé or silver at Golden Queen are treated as a reduction of costs incurred. The Company believes that AISC represents the total costs of producing silver and gold from current operations and provides the Company and other stakeholders of the Company with additional inform
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