Q1 2025 Andean Precious Metals Corp Earnings Call
Speaker Change: Good morning. Welcome to Andean Precious Metals' first quarter, 2025 Results Conference Call. As a reminder, our participants are in listen only mode and the conference is being recorded.
Speaker Change: After the presentation, there will be an opportunity to ask questions. So join the question queue, you request star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator for pressing star then zero.
Speaker Change: Who now like to turn the conference over to Dom Kaisa, like VP Finance, please go ahead.
Speaker Change: Thank you operator, and good morning everyone. Fortunately, Amanda Mallough was office morning due to an Alice, and I'm filling in as host for this call.
Before we get started...
Speaker Change: I would like to point out that today's, during today's call, we make forward-looking statements as defined under Canadian securities law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and risk factors pertaining to
Speaker Change: Our press release, MDNA, and financial statements are available both on Cedar Plus and on our Hoper website, AndeanPM.com.
Speaker Change: What's up on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO , Johann Bouchard, Andean's President, and one Cardinal Sandoval, our Chief Financial Officer.
Manningham: Following management's formal remarks, we will then open the call to questions.
And now, over to Alberto.
Thank you, Dom, and welcome everyone.
Alberto Morales: I am pleased to report that Andean delivered a strong start to 2025, in the first quarter we generated consolidated revenue of 62 million, a 44% increase over Q1 of last year.
Alberto Morales: driven by higher realized gold and silver prices and a solid production performance across both of our operations.
Alberto Morales: We produce 21,361 gold equivalent ounces in the quarter, slightly ahead of Q-1,2024.
Alberto Morales: And more importantly, our growth operating income grew significantly to 23.1 million compared to just 0.3 million in the same period of last year.
Alberto Morales: These strong perforating performance flow through the bottom of the line resulting in a net income of 14.6 million, or 10 cents per share on a diluted basis.
Alberto Morales: Our balance sheet remains a real strength. We ended the quarter with 75.7 million in liquid assets.
Up from 61.4 million a year ago.
Alberto Morales: while also reducing total liabilities compared to end of the year 2024 by $8.9 million.
Alberto Morales: In addition to these financial achievements, we continue to deliver on several strategic initiatives.
Alberto Morales: We completed our graduation to the TSX main board in January , reflecting the growing scale and maturity of our business.
We also announce positive exploration results at Golden Queen.
Alberto Morales: which we are already shaping our 2025 exploration plans as we work to extend the mine life, which we will touch on later on the school.
Alberto Morales: Finally, we strengthen our leadership team with the incorporation and appointment of Joanne who saw it as present of the conference.
Alberto Morales: Overall, it was a very strong start to the year, and we are well-precision to continue building on this momentum.
Alberto Morales: With that, I will now turn this over to Johan to walk you through the operational resource in more detail.
Well, thank you, Alberto, and good morning all.
Johan: So goal-de-colon production in Q1 was 21,261 ounces, a slight increase from the same period of last year.
Alberto Morales: The production increase is driven by higher production at San Bartolome, which is partially upset by slightly lower goal equivalent production at Golden Queen.
Alberto Morales: Revenue for Q1 2025 is $62m, a significant increase in comparison to $43.1m in Q1 2024, large speed driven by higher average realized gold and silver prices and increased sales volume.
Alberto Morales: Debert Cash, Gross Operating Margin at San Guadalu me is driven by a favorable foreign exchange currency, better processing recovery, and higher throughput.
Alberto Morales: Lower operating cash costs at Golden Queen in comparison to the same period of last year is due to the differ stripping, which is allocated to the sustaining capex and cost allocation
Alberto Morales: to Grote, Capital, for the construction of an optimized main all-roader.
Alberto Morales: Iyer only to thank us in comparison to the first quarter of last year is Ducida Stacter Replacement Cost, Improvement to the Crusher Circuits, and overall on production equipment.
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Alberto Morales: Looking at our operations, I will begin by sharing some, by sharing an update on Sandoval where we see notable increase of production and better costs.
Alberto Morales: Historically, Q1 is the slowest quarter for San Barcelona due to the seasonal weather condition impacting the operations.
Alberto Morales: Gold equivalent production for Q1 2025 was 10,172 ounces driven by iron mill throughput.
Alberto Morales: Iyer Silver Recovery, and Iyer Gold-Grey, partially upset by lower civil-grade income present to the same period of last year.
Alberto Morales: All pretty expenses were positively impacted by several foreign, foreign exchange, reflecting lower cost of sales.
Alberto Morales: Revenue increased significantly compared to Q1 2024, largely due to higher average relies over price and the gold and silver production increase.
Alberto Morales: Net and ventoring movements in Q1 2025 can be explained by the timing of gold and silver sales at the beginning and the end of the period.
Alberto Morales: Capital expenditure or lower due to the completion of the fines, deposits, facility, construction in the first half of 2024.
Alberto Morales: Overall, we continue to demonstrate a strong cash operating performance with an increase in cash growth operating margin and growth margin ratio, reflecting higher civil price and better operating costs.
Now turning to Golden Queen.
Alberto Morales: So Gold equivalent production for Q1 2025 was 11189 ounces, which is aligned with the first quarter of 2024.
Alberto Morales: On an operational perspective, Tooltun's mind is lowered in the center of last year, while the stacking rate is higher, which is due to the mining sequence and the stacking capacity.
Alberto Morales: The stacker was replaced at the end of the quarter and increasing stacking performance is anticipated over the next couple of quarters.
Alberto Morales: In the first quarter, Golden Ventory increased at the Leach Pad, which is expected to be recovered in the upcoming quarters.
Alberto Morales: Revenue increased over Q1 2024, driven by higher average-realized gold and silver prices, more than upsetting higher capital expenses in comparison to the first quarter of last year.
Alberto Morales: As mentioned previously, lower operating cash cost can be explained by different stripping costs and costs allocated to grow capital regarding the construction of the optimized all its road, which should be complete in the second water.
Alberto Morales: The new all-road will significantly decrease the cycle time and subsequently the all-in cost.
Alberto Morales: The higher orange is seen in costs is used at a starter replacement cost, and pining relative to the maintenance on six and mobile equipment with the objective of decreasing operating costs.
Alberto Morales: On the following slide, I would like to touch on our 2024 Exploration Activities at Golden Queens in our plans for 2025.
Alberto Morales: As we share on May 1st, 2025, we're pleased with the progress on our exploration programs as we look to extend the lives of mine at our Golden Queen Operation.
Alberto Morales: Or, expression-focused remains on expanding the current mining zone on the south side of the open pit with the ultimate objectives of increasing the life of mine.
Alberto Morales: The TI lights from a 2024 Exploration Program for the following.
We complete.
Alberto Morales: 29 Shuttle in Field Reverse Recreation Drill Oles, totaling 4,617 meters, disincluded, worked in the Silver Queen, South, East, Trent, and Alpha Sun.
Alberto Morales: confirming the surgical model and validating or approach for the next phase of court drilling.
Alberto Morales: We drill 23 core holes totaling 4123 meters and successfully intersect gold and silver in all 23 holes.
Alberto Morales: The objectives were to increase mineral resource and reserves in the silver queen solidist and alpha-sanaria, as well as to test the ill-top geological continuity.
Here are some notable results.
Alberto Morales: At Silver Queen Saudis, 12-cold-old extended demoralization by 100 meters on strike, including O.S. Q24-06, with 1.67 ground-button of gold over 5.5 meters.
Alberto Morales: Atausa Sun, Sedan Corolls, including AL-24O-02, intersecting 0.88 gram of gold over 93 meters.
Alberto Morales: And finally, At Hilltops, Folkall Oles, Inc., SQ-24-12, which returned 1.67 gram per ton of gold over 6 meters, starting at only 18 meters from surface.
Alberto Morales: These results confirm our positive view on Golden Queen's expression potential.
Alberto Morales: We are very pleased with the IlToperia which provides short-term mining flexibility. In fact, we anticipate first or from hilltop in 2, 3, 20, 25.
Alberto Morales: Alpha 2025, we have allocated an initial budget of $2.8 million to continue with the Exploration Strategy, focusing on the reserve and resources development.
The Programming Toots
Alberto Morales: 4,267 meters of drilling in the Silver Queen Solidities Extension, Hilltop and Alpha Sonaria.
Alberto Morales: We plan to release more exploration results in the second half of 2025 and we will update our Golden Queen Technical Report in the second quarter of 2026.
JC: With that, I will not turn the call over to GSC to teach you through the financial highlights, do you see?
JC: Thank you, Johan. Good morning, everyone. Let's go over the key financial highlights for the first quarter of 2025.
Speaker Change: Revenue for Q1 2025 total $62 million, a 44% increase from 43.1 in Q1 2024, driven by higher average realized golden silver prices, and the increased production.
Speaker Change: Cost of sales decreased by 10% to $36 million from $40.1 million in Q1 2024, mainly due to the disciplined cost management, improved productivity, and favorable exchange rates at
Speaker Change: Gross operating income increase significantly to 23 million from $312,000 in Q1 2024, reflecting the higher revenue and improved cost structure.
Speaker Change: Net income for the quarter was 14.6 million, or 10 cents per share, compared to a net loss of 76,000, or $0 per share in Q1, 2024.
Speaker Change: Adjusted EBDA was 21.9 million up from just 1 million in the prior year, reflecting strong, operating performance.
Speaker Change: Capital Expenditures were 9.4 million, up from 3.4 million in Q1 2024, as we continue to reinvest in our operations, particularly at Golden Queen.
We continue to demonstrate a very strong balancing.
Speaker Change: During Q1 2025, we made improvements in our net asset and net liability positions with significant accounts payable and tax payments, all while maintaining a strong cash and liquidity position.
Speaker Change: Liquid assets are metric when looking at our total cash and investments less our line of credit with $75.6 million as of Q1 2025 versus $61.4 million at the end of Q1 2024.
Olverta: And now I'll hand it over to Alberto for closing remarks.
Thank you, JC.
Olverta: As we discussed earlier, exploration remains a critical pillar of our strategy
Olverta: We are encouraged by the progress of our 2024 drilling campaign at Goldenfreen, where we've seen promising results that could significantly expand our resource space and enhance the
Olverta: Our exploration team continues to target high potential areas and we are committed to advancing this efforts 2020-25.
Our approach to capital allocation remains disciplined.
Olverta: with a clear focus on investments that drive long-term growth and improve operational efficiency.
Olverta: who are prioritizing the continued development of cold and green in San Bartolome, as well as key exploration projects that present the highest return potential.
Olverta: Looking ahead, we expect production to ramp up in Q2 with steady and sustainable production levels in the second half of the year.
I've previously communicated.
Olverta: We are maintaining our full-year guidance and we anticipate stronger results in the later half of 2025.
Olverta: A key part of our growth strategy includes seeking strategic M&A opportunities to further enhance our portfolio.
Olverta: We are evaluating potential acquisitions that align with our long-term goals and can add significant value to the company.
Olverta: This opportunity could enable us to expand our resource space and improve our operational footprint.
Olverta: All while continuing to maintain our discipline approach to capital allocation.
Olverta: With that, I now would like to turn the call over to the operator and open the floor for questions.
Operator
Speaker Change: Thank you. To join the question, Q, you make a star than one on your telephone keypad. You'll hear it on acknowledge and you request. If you're using a speaker phone, please pick up your handsets before pressing any keys. So, to draw your question, please press star, then two.
Speaker Change: The first question comes from Justin Chan with SCP Resource Finance. Please go ahead.
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Justin Chan: Hi guys, thanks very much for the update. My first question is just regarding, so I think this year, this Q1 was pretty in line on operating metrics. It's just
Justin Chan: Some difference between, let's say, EBITDA and operating cash largest on working cap. Could you could you talk us through, I guess, the changes there on inventory and pay abilities, and do you expect that to unwind through the year or is your current working capital levels where you expect them to stay?
Justin Chan: Thank you, Justin. I think from a work in capital perspective, I think for pretty much in line. I think that's what we expect to see throughout the year. And I guess with respect to the inventory levels, I guess the same, same, same pretty much stable. We can get back to you on that, but I would assume they would remain pretty much stable as they are right now.
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Justin Chan: Okay, gotcha, thanks. And then just in terms of the improvement through the year.
Justin Chan: I guess because you just maybe talked through, I guess it's then, San Bartolome, is that, um, are there any key factors driving that there or is San Bartolome more steady through the year, and then at Golden Queen? Is that mainly driven by the great profile?
Speaker Change: Yeah, I got answered that Justin at at at Sunbart the increase in production is mostly driven by grade over the water over quarter and at Sunbart is by I would say stacking.
I think performance.
Speaker Change: Gotcha, so Sandoval's already in the last few months. Yeah, so it's our start about that. Sandoval does going to be, it's more about about about great and golden queen, it's my both stacking performance. No, I want to stick. Sorry, I'm about that.
Speaker Change: Okay, yeah, that makes sense. I was trying to mentally wrap up. It's like stacking at St. Bart as maybe any sort of rethink the operation. Okay, so it's going to be volume-driven, essentially more volume through the air-cooling queen and at St. Bart, more great driven.
That's correct.
Speaker Change: Gotcha. Thanks. And then in terms of in terms of updating your resource and your mind plan, what's for it? I guess, you know, based on your current exploration budget, what's your thinking on timing there?
Speaker Change: Yeah, so what's with this basically is we compiled the drilling campaign of 2024 in our new model. It's all both done by relating it now.
Speaker Change: Hopefully we're going to do, we're going to try to fast track all expiration campaigns this year to ink to I would say add much more as we can in formation for the new reserve and resources update.
Speaker Change: that were planning to start beginning of September to have it ready by year end.
Speaker Change: But yeah, overall, everything is advancing well and based on that, we're looking at producing a technical report.
Speaker Change: So, but yeah, I'm really pleased with everything that we have. So, I mean, the vehicle aspect is certainly really well. And actually, on the operational aspect as well, we're making good progress at going quick.
Speaker Change: Gotcha, so effectively the cutoff date for drilling will be maybe something like September and then
Speaker Change: We're planning to close the data based on September 1st and after that do the work and have everything ready to have everything with the technical report aligned with our UN Reserve and Resources.
Speaker Change: Gotcha, and from what you see, how sensitive is it to pricing and how much for consideration is that as you kind of look at what the update?
Speaker Change: We're not there yet, but we're not there yet. We're still working on what we're doing now. We're using the pretty much the same gold and silver price that we had before. And we're going to just hold that in time.
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Speaker Change: The next question comes from Alison Carson with Desjardins, please go ahead.
Allison Carson: Thanks. Good morning, everyone and thanks so much for taking my questions today. My first question is on topics that golden clean. In terms of spending for the remainder of the year, as topics expect to be lighter in age two or should it be pretty even over the remaining three quarter?
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Speaker Change: Yeah, we're sticking out of that dimension. We're sticking to our guidance which is between 28 and 32 million dollars. Most of it will be headed to Golden Queen.
Allison Carson: of which around 12 to 14 on sustaining and 9 to 11 on growth.
Allison Carson: Yes, it's mostly front-ended as you've probably seen. We already invested $9 million this quarter. So I think for specifically on Golden Queen, it'll be roughly around $4 million in sustaining Capix per quarter for the rest of the year.
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Speaker Change: Okay, great. And then in terms of exploration at Golden Queen, are there any areas you're particularly excited about for the 2025 program and because your initial budget be increased based on drilling success?
Allison Carson: And then just finally, how are you thinking about exploration beyond the revised technical report next year? Will drilling be focused more on reserve replacement or do you expect to do more exploration based drilling as well on an annual basis?
Allison Carson: I think that's what the idea is ready to focus on Alpha Sun and the, I would see all the south, the south and section to extend the deposits in that direction.
Allison Carson: We saw that the hilltop zone is expanding the current pit tube by about 100m in strike.
All the all, I mean it.
Allison Carson: So we're going to continue to explore to have zone with the objective of increasing research. That's the main idea, increasing life of mine. And starting, ready by, I would say nearby, by the awardee, I would sort of to design ideas and extending on a south side.
Allison Carson: And I would say El Pasoani is quite interesting as well. This is kind of a of a new zone. We do have some some some resources there, but it seems like
Allison Carson: I mean, the drilling, the campaign that we design brings some really good results, so we're really happy about that but I would say to increase reserves, we're going to more focus on extending the south side of the open pits.
Speaker Change: Okay, great. Thanks so much for taking my questions and the additional color.
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Speaker Change: Next question comes from Ben Peri with Atrium Research. Please go ahead.
Ben Peeley: Hi, Alberto, and J.C., and you're up kind of great quarter, beating our estimates.
Speaker Change: coming lower than our expectations. Should we expect this to continue into Q2 and the rest of the year? You sort of mentioned it had to do primarily with the stack or being replaced. And so I would assume that that's going to continue over the next few quarters here.
Speaker Change: Yeah, I think that's correct. I think we're well within the guidance of 15 to 1800 right now. It's been on the low side of the guidance, so we were very comfortable with confirming that range.
Speaker Change: Okay, great. Thank you. And moving over to St. Bart, obviously, or Sandberg, excuse me.
Speaker Change: Obviously, the gold price is still continuing higher. How do you expect your ore sourcing to change? Will you be receiving lower grade material now that the prices are higher? And therefore, will margins compress?
Speaker Change: Or how do you expect margins to continue throughout the year as gold continues higher here?
Yes, let me respond to that.
In San Bartolome, we're actually pursuing different sites.
Speaker Change: that our exploration team is looking at so that we are trying to look for higher grade zones.
Speaker Change: So we're focusing on that. Obviously, having said that to the extent that we still find or
Speaker Change: That it's not as high as we were expecting, the higher...
Speaker Change: Current spot prices also certainly would motivate us to continue increasing the truth put in there as we can now be more flexible on getting maybe some lower grades that we wouldn't have otherwise taken.
Speaker Change: But it is our intent to focus primarily on flying secure, higher-career door by sending our exploration and geology team to search for new areas around the vicinity of the plant.
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Speaker Change: Okay, thank you. And sort of jump back to Golden Cream, but after all that's just quickly just...
Speaker Change: on what Justin sort of touched on and how production ramps pretty significantly from Q1 through into the back half of the year. You mentioned mainly volume driven.
Speaker Change: in terms of that wrap. Do we expect that to continue into Q1 of next year, or will things sort of settle back down to what we sort of saw in Q1 of this year from a production standpoint?
Speaker Change: What we see based on our mind plan is we see our ramping up in Q2 and Q3 to stabilize in Q4 and going forward. That's what we see in our mind plan.
Okay, amazing. Thank you guys, that's all I had today.
Okay.
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Speaker Change: We have a follow-up question from Justin Chan with SCP Research. Please go ahead.
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Hi, guys. Just one on San Bartolome, as is.
Speaker Change: been quite frequently the case. Your margins are running well above your guidance. I'm just curious if everything stays the same on pricing and effects. What is your thinking there? Would your current margins in Q1 be what you would expect to stay?
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Alberto Morales: Justin, it's dependent on two things, prices, and then the Bolivia has an important impact on our margins, so it will depend mostly on that, I would say.
Alberto Morales: Is your margin to you on a fairly representative number? Oh, yes. Yes, I agree. I think it's a good good average if you want to take it like that. Yes
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Speaker Change: This concludes the question and answer session. I would like to turn the conference back over to Alberto Morales for any closing remarks. Please go ahead.
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Alberto Morales: Thank you, Operator, and thanks you all for joining us today.
We are very pleased with our Q-1 2025 results.
Alberto Morales: With a strong balance sheet, an experienced leadership team now in place, and a clear growth strategy to drive the business forward, we are well positioned to pursue our vision of transformation on growth into a nature producer.
Thanks again for joining and have a great day.
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Alberto Morales: This brings to a close today's conference call. May this connect your lines. Thank you for participating and have a pleasant day.
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