Q4 2024 Andean Precious Metals Corp Earnings Call
Julien: Good morning, everyone, and welcome to the Andean Precious Metals 4th quarter and year end 2024 results conference call. As a reminder, all participants are in a listen-only mode, the conference is being recorded.
Julien: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star and then one on your telephone keypads. Should you need assistance during the conference call, you may sing on operator by pressing star and then zero.
Julien: At this time, I'd like to turn the comments call over to Amanda Mallough, Director and Investor Relations. Please go ahead.
Amanda Mallough: Thank you, operator, and good morning, everyone. Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under the Canadian security's law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements.
Amanda Mallough: Our press release, MD&A, and financial statements are available on both Cedar Plus and on our corporate website, andeanpm.com.
Speaker Change: With us presenting on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO , and Juan Carlos Sandoval, our CFO .
Speaker Change: In the room with me, I have our new president, Johann Bouchard, Dom Kizak, our Vice President of Finance and Corporate Controller, and Alex Pasqual, our Director of FPNA, who will be available during the Q&A period.
Speaker Change: Following management formal remarks, we will open the call to questions and with that, I'll turn it over to Alberto.
2024 was a transformative year for Andean Precious Metals.
Speaker Change: It marked our first full year with Golden Queen in our operating portfolio, and despite operating at close to the lower end of our production range.
Speaker Change: We achieved record revenues of 254 million and a record adjusted every day of 62.9 million.
Speaker Change: Despite our capital expenditures in 2024 or 32 million, the company generated record-free cashflow of 35 million.
We've delivered consolidated production of 106,287 Gold Equivalent Houses.
Speaker Change: which was just below the lower end of our gold and silver guidance, mainly due to a temporary suspension of the crushing and stacking activities at Golden Queen and lower production than expected from our tailings recovery program at Sambatolum.
Speaker Change: We'll discuss the production in greater details later in this call.
As well as our 2025 guidance.
Speaker Change: A keen milestone was our successful uplifting to the Toronto Stock Exchange.
Speaker Change: This achievement marks an important step in elevating Andean's profile within the investment community and enhancing our access to capital markets and strengthening our position among leading mining companies.
Speaker Change: I'd like also to welcome our new president, Johann Bouchard, to our Executive Team.
Speaker Change: Joven brings with him a significant operational and strategic experience reinforcing our commitments towards improving our technical and operational excellence.
Thank you.
Speaker Change: Lastly, during the fourth quarter of 2024, no lost time injuries have been reported at cold and clean or some are told of me.
Speaker Change: As of the end of the fourth quarter of 2024, San Bartolome reached 118 days without lost time injuries and Golden Queen reached 561 days without lost time injuries.
Speaker Change: We look forward to sharing further details on these results and answering your questions. With that, I will handle this over to Juan Carlos, who will walk you through our financial
Andean Precious Metals
Thank you, Alberto. Good morning, everyone.
Speaker Change: As we turn to our financial performance this year, I'd like to emphasize the strength of our financial position and continue to focus on value generation and growth.
Speaker Change: On a consolidated basis, Andean had record revenues of 254 million with cross operating income of 68.6 million and net income of 19.2 million dollars.
Speaker Change: and 12 cents per share and adjusted EBDA of 62.9 million and 41 cents per share on a diluted basis.
2024 with a strong year for task load generation.
Speaker Change: which can be seen with our strong balance sheet, which reported 62.4 million in cash and cash
and Liquid Assets of $81.6 million as of December 2024.
Speaker Change: We had a very strong period of free cash regeneration, despite significant and cappix, particularly a bold and queen.
Speaker Change: We have 31.6 million in capital expenditures in 2024, which included a 4.7 million at Sambar and 27 million at Golden Queen.
Speaker Change: The majority of our caps was incurred cold and green, particularly on the upgrade of our mobile fleet.
Speaker Change: We believe this upgrade will provide for operational efficiencies in 2025 and thereafter.
Moving on to our operating financial performance.
Speaker Change: Q42024 Silver Equivalent Production of 1.4 million ounces, and increase over the prior year due to a higher or tone smell.
Improved Average Headgrave, and Higher Silver Recovery Rates.
Full Year 2024 Silver Equival and Production of 4.5 million ounces.
Speaker Change: A small decrease from 2023, primarily due to lower or toned milk, partly offset by the improved grade and recovery rates.
Speaker Change: Revenue, Increasing Q4, and for the full year to 42.2 million, and 126.9 million respectively.
Speaker Change: Primarily driven by the high average realize over crisis and higher recovery, partly offset by lower sales volume.
Speaker Change: Overall, Bolivian operational expenses have decreased on a quarter and year-over-year basis due to the strengthening of our U.S. dollar relative to the Bolivian-Bolivian.
Speaker Change: We continue to seek favorable conditions in the Bolivian-Boliviano relative to the US dollar and expect these conditions to continue in 2025.
Speaker Change: Mining and or purchase expenditures, increasing 2.4 and for the whole year, reflecting the transition to exclusive or purchasing and processing activities which traditionally have lower margins as compared to typical mining activities.
Speaker Change: Mailing processing and indirect cost decline, benefiting from favorable foreign exchange conditions.
Andean Precious Metals
Cash Cross Operating Margin and Gross Margin Gratial, both.
Increased in Q4 and for the full year.
Speaker Change: to 11.09 and 43.26% and 9.15 and 38.41% respectively, supported by higher realized silver prices, a lower cost of sales per silver equivalent ounce.
Speaker Change: Capital expenditures decreased in Q4 and for the full year, primarily due to the commissioning of the Fine Deposit Facility in Q2, 2024, reducing capital outlays for the reminder of the year.
Moving on to Golden Queen.
Q4 2024 Gold Equivalent Production 11,774 Gold Equivalent Ounces
Speaker Change: A decrease from Q3 2024 due to a temporary suspension of operations of the crushing and stacking activities in September 2024, which impacted goal production of the Q4.
Speaker Change: Revenue Decreased in Q4 2024 compared to Q3 2024, primarily due to lowered gold, equivalent production, part-flee offset by higher average realized gold prices.
Speaker Change: Capital expenditures declined in Q4, 'twenty 'twenty for us.
Most of the companies 'twenty 'twenty four capital expenditure program washing cured in in the first nine months of the year.
Speaker Change: Particularly in Q3.
Speaker Change: Capital expenditure program included the replacement of most of the companies hold for fleet and the overhaul of existing mobile and fixed equipment.
Speaker Change: Mobi, we're moving onto a 2025 guidance.
Speaker Change: Solid data corruption.
Speaker Change: We anticipate consolidated gold equivalent production to be in the range of 102 nine to 117.2 thousand ounces of gold.
Speaker Change: Equivalent.
Speaker Change: This represents a small increase to our 2024 gold equivalent production representing higher recovery in some months to allomap.
Speaker Change: On a more steady production environment less equipment downtime at Goldman.
Speaker Change: Consolidated production.
Speaker Change: We expect Golden Queen operating cash cost of 1500 to $1800 and all in sustaining cost of 1950 to 21 50.
Somebody told Oh, My Gosh gross operating margin of six five and $8 four.
Speaker Change: Gross margin ratio of 29 to 36 person.
Speaker Change: Total capital expenditures expected to range between $28 2 million and 32 milligram.
Speaker Change: This includes sustaining capital of $18 3 million to $20 2 million and growth capital of $9 nine to $11 8 million.
Speaker Change: On somebody Colamine sustaining.
Speaker Change: Sustaining capital between $5 6 million to $6 2 million drill.
Speaker Change: Driven by tailings expansion and processing upgrade projects.
Speaker Change: Golden Queen.
Sustaining capex between $12 7 million to $14 million.
Speaker Change: Focused on stacking system and process plant equipment replacement.
Overhauls of existing equipment.
Speaker Change: Upgrades to crushing equipment.
Speaker Change: And growth capital of between $9 3 million to 11 million.
Speaker Change: Focused on initial capital outlays for a new face of the heap Leach pad.
Speaker Change: Purchase of new haul trucks.
Speaker Change: The investment into a new production water wells for future mine production.
Speaker Change: With this this concludes the financial review of our Q4 and 2024 results.
Speaker Change: I will turn the call back over to Alberto for closing remarks.
Speaker Change: Yeah.
Juan Carlos: Thank you Juan Carlos.
Speaker Change: As mentioned in my initial remarks.
Speaker Change: 2024 was truly a transformational year for India.
Speaker Change: We fully integrated Golden green into our operational portfolio.
Speaker Change: Generated record revenue.
Speaker Change: Adjusted EBITDAR generated significant free cash flow and strengthening our management team.
Speaker Change: With double the size of our company in many metrics such as revenues and production all of these with zero dilution to our shareholders, while increasing our liquid assets.
Speaker Change: We look forward. We're ahead for 2025, we remain focused on operational efficiencies.
Speaker Change: Our original exploration efforts at Goldman Queen securing more purchases agreements at San Bartolome.
Speaker Change: And inorganic growth opportunity as well.
Speaker Change: I'm excited about the journey, we're on and we thank you for your continued support.
Speaker Change: We look forward to sharing more updates on our progress in the coming quarters.
Speaker Change: With that I will hand, I will hand, the call back over to the operator for Q&A.
Speaker Change: Thank you operator.
Speaker Change: Thank you at this time, we'll begin the question and answer session.
Speaker Change: To ask a question. Please press star and then one on your telephone keypad.
Speaker Change: Hear a tone acknowledging your request.
Speaker Change: If you are using a speakerphone.
Speaker Change: Please pick up the handset prior to pressing any cues.
Speaker Change: It was all your questions you May press star two.
Once again that is star and then one to join the question queue.
Speaker Change: Our first question today comes from Justin Chan from S. C. P resource Finance. Please go ahead with your question.
Justin Chan: Hi, guys. Thanks, Thanks, a lot for taking my questions and congratulations on another really strong quarter and a strong year.
Justin Chan: My first one is on on San Bartolome.
Justin Chan: I may I think guidance after Q3 was updated to us.
Justin Chan: The $7 C G O admin.
Justin Chan: 30%.
Justin Chan: Margin you did 11.
Justin Chan: $11 to G O N, 43% margin in Q4, and you're well above guidance for the year. So just looking at.
Justin Chan: This year's guidance.
Justin Chan: It's for margins come down a little bit.
Justin Chan: I'm just curious what are the moving parts in it.
Justin Chan: Prices don't change kind of what to expect.
Justin Chan: Yeah, Hi, Justin Thanks, Thanks for being on the call. Good morning, its Tracy Ah Ah quickly with respect to the C. G O M. The main drivers obviously, the silver price and with respect to the gross margin ratio.
Justin Chan: The main driver is the the Bolivian effect.
Justin Chan: Those are the main drivers for those two parameters.
Justin Chan: Yeah.
Justin Chan: Got you so I guess, if if prices and FX don't change.
Speaker Change: Howard how would your margins look versus say that the guidance that you've put out today of.
Speaker Change: A six and a half the $8 $4, 29% to 36%.
Speaker Change: Again, I think the the it all depends on the Bolivian Boliviano as you know it has been a distancing itself from the official exchange rate.
Speaker Change: If that continues to be the case, we will continue to see the benefits from all our local operating expenses.
Speaker Change: And then on the gross margin ratio well it all depends on where silver prices end up right.
Speaker Change: Gotcha.
Speaker Change: I can see that consistent guidance, it's probably conservative but for example, if if.
Speaker Change: If we stay as we are now would your numbers look more like like they did in Q4 than maybe your guidance.
Speaker Change: [laughter].
Speaker Change: Yes, I think youre right.
Speaker Change: So whatever approach, but what oh.
Speaker Change: With the caveat, so where the silver price in the a and D. A.
Speaker Change: Believe me I know currency rate will be.
Speaker Change: Okay. Thanks, that's helpful. Just because it's yeah.
Speaker Change: I mean, you definitely surprised to the upside quite a lot last year, which is great just want to make sure that for.
Speaker Change: Kind of what you expect.
Speaker Change:
Speaker Change: And then.
Speaker Change: I guess.
Speaker Change: Our Golden Queen if I could ask on on your exploration plans and.
Speaker Change: So that's on.
Speaker Change: When you might be expecting to update your resources in your mine plan.
Speaker Change: I feel on here I'm going to take that question.
Speaker Change: I wanted to Goldman Queen last week, and I see tremendous potential for infill drilling to transfer maybe some stuff that we're mining now into results and after that into reserves. So this is this is great news I think.
Speaker Change: And on the exploration.
Speaker Change: Second we have a very very good aggregate. So we received some really premises permissive result, as well.
Speaker Change: We still are loving our exploration strategy for this year based on that making sure that we align.
Speaker Change: With business continuity at Golden week, and hopefully we're going to be able to give you some more color along that strategy in the next.
Speaker Change: Quarter call.
Speaker Change: Okay. Thanks, Ed, but in terms of I guess that exploration strategy.
Speaker Change: Is that accounted for in your in your capital guidance.
Speaker Change: Yes, it really is like.
Speaker Change: Have you allocated funds for exploration and those in this budget.
Speaker Change: We did absolutely but that means we may I mean, I'm looking at all that you may add ons I mean.
Speaker Change: We believe that the return is quite quick.
Speaker Change: Yeah.
Speaker Change: Absolutely.
Speaker Change: And conceptually what what would be I know you have to review but.
Speaker Change: Is it something that could be updated this year or is it more likely next year, just trying to get a sense.
Speaker Change: I guess when I come back to about that I mean, we still have to do some work but again.
Speaker Change: Well this is an active conversation here and the goal would be to give.
Speaker Change: Some news on exploration within the next let's say few quarters.
Speaker Change: Okay, great. Thanks, and maybe just one last one you've built a very strong balance sheet.
Speaker Change: You know it took on a bit of debt to acquire Goldman Queen you know generating quite a lot of cash and you are back in a net cash position.
Speaker Change: What's your thoughts on capital allocation I know growth is a priority.
Speaker Change: You have a share buyback just could you give us a sense of what to expect.
Speaker Change: Okay.
Justin Chan: Yeah, Justin Hi.
Speaker Change: Let me, let me tackle that one definitely we have.
Speaker Change: As you know we've been publicizing every month the month of shares that hour NCIC program is bridged zinc and the buyback it's been conservative this year.
Speaker Change: So were still using our archives, we believe that at these levels.
Speaker Change: It's a very good use or cash to start doing so well shares buyback, but some of that one.
Speaker Change: And with respect to the growth inorganic growth.
Speaker Change: We're still actively looking for inorganic and organic growth in connection with potential targets that we can try to see under the current market conditions as well. So we intend to continue building, our let's just call. It a war chest in the balance sheet for those purposes.
Speaker Change: I think the sustaining and growth capital expenditures.
Speaker Change: Basically really really good because what we would like to accomplish is.
Speaker Change: We would like to accomplish that but some of the investments this year right.
Speaker Change: In a way improve efficiencies going forward.
Speaker Change: Gotcha.
Speaker Change: Gotcha, alright, thanks, very much I'll. Thanks, Alberto you'll have an IND and J C. All the way up the line.
Speaker Change: Thanks very much.
Speaker Change: Thank you.
Speaker Change: Once again, if you would like to ask a question. Please press star and one our next question comes from and pretty from HCM Research. Please go ahead with your question.
Pretty: Hi, guys Congrats on a great Q4 and 2024.
Speaker Change: A couple of quick questions here could you just expand on the Capex spend that Golden Queen what impact initiatives from 2020 or will have on 2025 production and operations and then going forward. The capex spend in 2025, what kind of effect that will have over the long term.
Speaker Change: Yeah. This is Jason hi, many thanks for being on the call. So this is the capital expenditure program, we started last year.
Speaker Change: We are fully.
Speaker Change: This year, we will complete the full replacement of our haul trucks were also starting this year to build are you had a that will is starting to be used late next year.
Speaker Change: And and overhauls.
Speaker Change: It's the continuation of that revamping of our most of our mobile equipment I think the majority of the Capex is being allocated this year are within those three concepts.
Speaker Change: Okay. Thank you and then on the equipment, what kind of efficiencies cannot bring to the operation.
Speaker Change: And production, specifically around around costs or production throughput increasing.
Speaker Change: Yeah. That's a good question with for example, with respect to the haul trucks, we're getting obviously more efficient oh bigger bets more fuel efficient. We're also working on the design can battery into the.
Speaker Change: The distance between the bid and the crusher. So we do expect some good efficiencies from getting those new trucks obviously.
Speaker Change: The major overhauls.
Speaker Change: Required maintenance maintenance will be much lower so we do expect not only efficiencies but cost savings.
Speaker Change: Savings down the road.
Speaker Change: Yeah, understood and looking forward to seeing that.
Speaker Change: And then moving over to San Bartolome can you explain the decrease in tons milled in 2024 compared to 2023 and then.
Speaker Change: Suddenly the material or what have you guys done to make sure that production remained steady through 2020 five.
Speaker Change: Yeah, So bear in mind that in December in late late 2023 we decided to stop mining form our own deposit that you know it was the leading and we decided to free up that capacity and our plan for better Auris that we couldn't.
Speaker Change: By in a locally in Louisiana so.
Speaker Change: Ah I I think I think that it had.
Speaker Change: And in fact, good prior to 2023 and also we had I.
I would say.
Speaker Change: And that's as we mentioned on our opening remarks, we had a lower.
Speaker Change: Production on our tailings recovery.
Speaker Change: And we are working on trying to improve those recall that those are that production from the tailings this year.
Speaker Change: I think those two are the main impacts if we compare 2023 to 24.
Speaker Change: On production.
Speaker Change: Okay. Okay. Thank you and then last question is around margins with.
Speaker Change: Silver and gold.
Being so high are we expecting margins to compress at all just given.
Speaker Change: Your ore sources are able to send lower grade ore and still be process profitably or are you guys, maintaining a certain grade at San bartolome.
Speaker Change: Well I think you know with respect to you know the strong silver prices, we might you know, yes, see we're gonna be paying more.
Speaker Change: In some cases for the or we buy them because it's a formula based on international prices, but at the end. We'll ask me have always said and semi processing facility. We always go end up for the refining margin right. So it could happen squeezed a little bit margins, yes, but we will always have that.
Speaker Change: Brett.
Speaker Change: And we believe we will have that spread.
Speaker Change: Understood. Okay. Thanks, Tracy that's all I have for today.
Tracy: Thank you Ben.
Speaker Change: And ladies and gentlemen, with that we'll be closing today's question and answer session I'd like to turn the floor back over to Alberto morality for any closing remarks.
Speaker Change: Thank you operator, and I want to thank everyone for joining us today.
Speaker Change: We remain committed to driving our business forward and look forward to sharing our progress in the quarters ahead.
Speaker Change: Thanks, again and have a great day.
Speaker Change: And ladies and gentlemen, with that we'll conclude today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Speaker Change: Yeah.