Q4 2024 Andean Precious Metals Corp Earnings Call
Speaker Change: Good morning everyone and welcome to the Andean Precious Metals 4th quarter and year and 2024 results conference call. As a reminder, all participants are in a listen only mode,
Speaker Change: 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.
Speaker Change: At this time, I'd like to turn the conference call over to Amanda Mallough, Director and investor relations. Please go ahead.
Thank you, operator, and good morning, everyone.
Speaker Change: 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 Securities Law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements.
Speaker Change: With us presenting on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO , and Juan Carlos Sandoval are 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 FPNI, who will be available during the Q&A period.
Speaker Change: Following management's formal remarks, we will open the call to questions and with that, I'll turn it over to Alberto.
Thank you, Amanda, and welcome everyone.
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 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 delivered consolidated production of 106,287 gold-equivalent ounces.
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 for more tailings we covered 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, 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, Johan Bouchard, to our Executive Team.
Speaker Change: Morgan brings with him a significant operational and strategic experience reinforcing our commitments towards improving our technical and operational excellence.
Speaker Change: Lastly, during the fourth quarter of 2024, no lost time injuries have been reported at more than queen, or some were told of men.
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
Thank you, Alberto. Good morning, everyone.
Juan Carlos: 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.
Juan Carlos: 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.
Juan Carlos: 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.
Juan Carlos: which can be seen with our strong balance sheet, which reported 62.4 million in cash and cash equivalent and liquid assets of 81.6 million as of December 2024.
Juan Carlos: We had a very strong period of free cash regeneration, despite significant and Capix, particularly a golden queen.
Juan Carlos: We have 31.6 million in capital expenditures in 2024, which included a 4.7 million at Sambar and 27 million at Golden Queen.
Juan Carlos: The majority of our Capix was incurred cold and cold, particularly on the upgrade of our more about this.
Juan Carlos: We believe this upgrade will provide for operational efficiencies in 2025 and thereafter.
Andean Precious Metals
Moving on to our operating financial performance.
Juan Carlos: Q42024 Silver Equivalent Production of 1.4 million ounces, and increase over the prior year due to higher ore tons mill, improved average head grade, and higher silver recovery rates.
Full Year 2024 Silver Equivalent Production of 4.5 million ounces.
Juan Carlos: A small decrease from 2023, primarily due to lower or toned milk, partly offset by the improved grade and recovery rates.
Juan Carlos: Revenue increased in Q4 and for the full year to talk to 42.2 million and 126.9 million respectively.
Juan Carlos: Primarily driven by the high average realize over prices and higher recovery, partly offset by lower sales volume.
Juan Carlos: Overall, Bolivian operational expenses have decreased on a quarter and a year over a year basis due to the strengthening of our US dollar relative to the Bolivian Bolivian.
Juan Carlos: We continue to seek cabral conditions in the Bolivian-Boliviano relative to the US dollar and expect this conditions to continue in 2025.
Juan Carlos: Mining and or purchase expenditures, increasing 2.4 and for the whole year.
Juan Carlos: Reflecting the transition to exclusive or purchasing and processing activities, which traditionally have lower margins as compared to typical mining activities.
Andean Precious Metals
Increased in Q4 and for the full year.
Juan Carlos: Supported by higher realized silver prices, a lower cost of sales per silver equivalent ounce.
Juan Carlos: Capital expenditure decreased in Q4 and for the full year, primarily due to the commissioning of the Fine Deposit Facility in Q224, reducing capital outlays for the reminder of the year.
Moving on to Golden Queen.
Q4 2024 Gold Equivalent Production 11,774 Gold Equivalent Ounces
Juan Carlos: 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 in the Q4.
Juan Carlos: Revenue Decreased in Q4 2024, compared to Q3 2024, primarily due to lower goal the qurival in production, part fleet offset by higher average real-life school prices.
Juan Carlos: Mining and processing costs decreased in Q4 2024 due to lower consumable site-to-reduced production.
Juan Carlos: Operating cash goes to Mullin, sustaining close both the client in Q4, 2024, compared to Q3, 2024.
Juan Carlos: Primarily due to lower cost of sales and lower sustaining capital, partly offset by lower
Juan Carlos: Capital Expenditures declined in Q4 2024, as most of the companies 2024 Capital Expenditure Program was incurred in the first nine months of the year, particularly in Q3.
Juan Carlos: Capital expenditure program included the replacement of most of the company's ultra fleet and the overhaul of existing Morales and fixed equipment.
Mobbing or moving on to our 2025 games.
Consolidated Corruption
Juan Carlos: We anticipate consolidated gold equivalent production to being the range of 102.9 to 117.2 thousand ounces of gold equivalent.
Juan Carlos: This represents a small increase to our 2024 Gold Equivalent Production.
Juan Carlos: representing higher recovery in San Barcelona, and a more steady production environment, less equipment downtime at Golden Queen.
Juan Carlos: Consolidated Productions. We expect Golden Queen operating cash cost of $1,500 to $1,800 and all in sustaining cost of $19.50 to $21.50.
Juan Carlos: Sambar Tolome, Cash Gross Operating Margin of 6.5 and 8.4, and Gross Margin Ratio of 29 to 36%.
Juan Carlos: This includes sustaining capital of 18.3 million to 20.2 million and growth capital of 9.9 to 11.8 million.
Juan Carlos: on San Bartolome, sustaining capital between $5.6 million to $6.2 million, driven by caling expansion and processing upgrade projects.
And Golden Queen.
Juan Carlos: Sustaining Capix between 12.7 million to 14 million, focused on stacking system and process planned equipment replacement, overholes of existing equipment, upgrades to crushing equipment.
and Growth Capital between 9.3 million to 11 million.
Juan Carlos: focused on initial capital outlets for a new phase of the hip-leach path.
Precious Avril Holdfrucks
Juan Carlos: An investment into a new production water well for future mine production.
Juan Carlos: With this concludes the financial review of our Q4 and 2024 results.
Juan Carlos: I will turn the call back over to Alberto for closing remarks.
Thank you for joining us.
As mentioned in my initial remarks,
Juan Carlos: 2024 was truly a transformation of year for Andean. We fully integrated Corvand Green into our operation for Cecilia.
Juan Carlos: Generated Record Revenue, Adjusted Evie Dunn, Generated Significant Free Casual and Strengthening
Juan Carlos: We double the size of our company in many metrics such as revenues and production. All of these would zero dilution to our shareholders while increasing our liquid assets.
Juan Carlos: We look forward ahead for 2025. We remain focused on operational efficiencies.
Juan Carlos: Continuing our regional exploration efforts at Golden Queen, securing more old purchases
And Inorganic Growth Opportunity as well.
Juan Carlos: I am excited about the journey we're on and we thank you for your continued support.
Juan Carlos: We look forward to sharing more updates on our progress in the coming waters. With that, I will hand it, I will hand the call back over to the operator for Q&A.
Thank you. Operator.
Speaker Change: Thank you. At this time, we'll begin the question and answer session.
Speaker Change: Ask a question. Please press star and then one on your telephone keypads. You'll hear a tone acknowledging your request.
Speaker Change: If you are using a speaker phone, we do ask you please pick up the handset prior to pressing any keys.
It was to all your questions you may press star and two.
Speaker Change: Once again, that is Starrim N1 to join the question to you.
Speaker Change: Our first question today comes from Justin Chan from FCP Resource Finance. Please go ahead with your question.
Andean Precious Metals
Justin Chan: Hi guys. Thanks a lot for taking the questions and congratulations on another really strong quarter in a strong year. My first one is on Sen Bartholomey. If I may, I think guidance after 23 was updated to.
to $7 CGO admin, 30% margin, and you did $11.
Justin Chan: $11 $CGOM, 43% margin Q4, and you're well above guidance for the years, so I'm just looking at...
Justin Chan: This year's guidance, it's from margins to come down a little bit. I'm just curious what are the moving parts and if prices don't change, kind of what to expect.
Juan Carlos: Yeah, hi Justin, thanks for being in the call. Good morning, it's Jay-C. Quickly with respect to the CGOM, the main drivers, obviously the solar price.
Juan Carlos: And with respect to the cross-margin ratio, the main driver is the Bolivian effect.
Those are the main drivers for those two parameters.
Yeah.
Speaker Change: Gotcha. So I guess if prices and effects don't change, you know, how would your margins look first to say that the guidance that you put out today of?
of $6.50 to $8.40 and 29 to 36 percent.
Again, I think the all depends on the Boliviano.
Speaker Change: As you know, it has been distancing itself from the official exchange rate. If that continues to be the case, we will continue to see the benefits from our local operating expenses.
Speaker Change: And then on the gross margin ratio, well, it'll depend on where silver prices end up
Speaker Change: Gotcha, I can see that guidance is probably conservative, but for example, if we say as we are now, would your numbers look more like they did in Q4 than maybe your guidance?
Andean Precious Metals
Speaker Change: Yes, I think you're right, just in a separate approach, but with the caveat, so we're the silver price and the volume annual currency rate will be.
Speaker Change: Okay, thanks. No, that's helpful just because it's yeah, I mean, you definitely surprised the upside quite a lot last year, which is great. Just want to make sure that we're kind of aware of what to expect.
Speaker Change: Thanks. And then I guess on on Golden Queen, if I could ask on on your exploration plans and thoughts on when you might be expecting to update your resources in your mind plan.
Speaker Change: Let's go on here. I'm going to take that question. So I think I wasn't involved in Queens last week and I see tremendous potential first with Gensfield Rilling to transfer maybe.
Speaker Change: Some stuff that we're mining now into research and after that into research. So this is great news, I think.
Speaker Change: And on the exploration perspective, we have very, very good targets. We received some really premises, permitted results as well.
Speaker Change: So we're still developing an exploration strategy for this year based on that making sure that we align with Business Continuity at Golden Queen and hopefully we're going to be able to give you some more color on this strategy in the next quarter call.
Speaker Change: Okay, thanks. But in terms of I guess that exploration strategy, is that accounted for in your in your capital guidance?
Speaker Change: Yes, it is like have you allocated funds for exploration in those in this budget? We did absolutely, but I mean we may I mean by looking at all that we may add formal funds. I mean if we believe that the return is quite quick.
Speaker Change: Yeah, absolutely. Okay, and it can sexually what would be, I know you have to review, but is it something that could be updated this year, is it more likely next year, just trying to get a stab.
Speaker Change: I guess we're going to come back to you about that. I mean, we still have to do some work, but again
Speaker Change: This is an active conversation here, and the goal would be to give some news and expression within the next, I would say, two quarters.
Speaker Change: Okay, great. Thanks. And maybe just one last one. You've built a very strong balance sheet.
Speaker Change: You know, took on a bit of debt to acquire Golden Queen, you know, generated quite a lot of cash and you're back in that cash position. What's your thoughts on capital allocation? I know growth is priority. You have a share buyback.
He gave us a sense of what to expect.
Andean Precious Metals
Andean Precious Metals
Justin Chan: Yeah, Justin. Hi, 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 our NCIV program is producing in the buyback, it's being conservative this year.
Speaker Change: So, we're still using archives we believe that at this level, it's a very good use of archives to start doing some shares by back that's number one.
And with respect to the growth in organic growth.
Speaker Change: to see oner-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.
I think the sustaining and growth, uh, capital expenditures.
Speaker Change: are basically really, really good because what we would like to accomplish is we would like to accomplish some of the investments this year to try it out in a way that improve the patience is going forward.
Speaker Change: Yeah, gotcha. All right, thanks very much. Oh, thanks Alberto Johan and JC, all free up the line. Thanks very much.
Andean Precious Metals
Thank you.
Speaker Change: Once again, if you would like to ask a question, please press star and one. Our next question comes from Ben Peri from Atrium Research. Please go ahead with your question.
Ben Pari: Hi guys, congrats on a great Q4 in 2024. Just a couple quick questions here. Could you just expand on the CAPEX band at Golden Queen? What impact the issues from 2024 will have on 2025?
Ben Pari: Production and Operations, and then going forward, the CAPEX then 2025, what kind of effect that will have over the long term.
Ben Pari: Yeah, this is JC Hibern, thanks for being on the call. So this is a capital expenditure program we started last year. We are fully, this year we will complete the full replacement of our whole trucks.
Ben Pari: We're also starting this year to build our new pad that will start to be used late next year.
Andean Precious Metals
Speaker Change: Okay, thank you. And then on the equipment, what kind of efficiencies can that bring to the operation and production specifically around costs or production throughput increasing?
Speaker Change: Yeah, that's a good question. For example, with respect to the whole trucks, we're getting obviously more efficient, bigger beds, more fuel efficient. We're also working the design to better improve the distance between the bed and the crusher. So we do expect some good efficiencies from getting those new trucks. Obviously, the major overhauls that the requirements and maintenance will be much.
Lower. So we do expect not only efficiencies, but cost savings down the road.
Yeah, understood, looking forward to seeing that.
Speaker Change: compared to 2023. And then, if it's anything material, what have you guys done to make sure that production remains steady through 2025?
Speaker Change: Yeah, so bear in mind that in December in the late 2023, we decided to stop mining from around the passage as you know it was the pleading and we decided to free up that
Speaker Change: Capacity in our plans for better ores that we can buy in locally in Bolivia.
Speaker Change: So, I think that had an impact compared to 2023, and also we had a, I would say, as we mentioned on our opening remarks.
Speaker Change: We had a lower production on our tailings recovery and we are working on trying to improve those, that production from the tailings is here.
Speaker Change: I think those two are the main impacts if we compare 2023 to 2024.
on production.
Speaker Change: Okay. Okay. Thank you. And then last question is around margins with
Speaker Change: with silver and gold, you know, the price being so high. Are we expecting margins to compress at all? Just given your or resources are able to send lower grade or and still be processed as profitably, are you guys maintaining a certain grade at San Bartolomew?
Speaker Change: Well, I think, you know, with respect to, you know, the strong silver prices, we might, you know, yes, see we're going to be paying more.
Speaker Change: In some cases for the OR, we buy because it's a formula based on international prices, but at the end we'll, as we have always said, some processing facility we always go and look for the refining margin.
Speaker Change: So it could happen with a little bit of margins, yes, but we will always have that spread, or we believe we'll have that spread.
Speaker Change: Yeah, understood. Okay, thanks, Jason. That's all I have for today.
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 Morales 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. 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.