Q1 2025 Aris Mining Corp Earnings Call
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Speaker Change: Good morning, everyone, and welcome to the Aris Mining First Quarter 2025 results call.
Speaker Change: We will begin with an overview from management followed by a question and answer period to join the queue you may press star then one on your telephone keypad. As a reminder, all participants are in listen only mode and the conference is being recorded.
Speaker Change: Should you need assistance during the conference call, you may signal an operator by pressing
Speaker Change: Also, Aris Mining's first quarter of 2025 financials have been filed on Cedar Plus and Edgar and can also be found on their website. I would now like to turn the comments over to Mr. Neil Woodyer, Chief Executive Officer. Please go ahead.
[inaudible]
Speaker Change: Thank you operator and welcome to everybody and thanks for joining us on our first course is 25 Burning School.
Speaker Change: I'm joined by management team, including Richard Thomas, Richard Orazietti, and Oliver Dachsel. But before we go to the results, please note the customer statements on slide two as we will indeed be making forward-looking statements.
Speaker Change: Starting on Slide 3, I'm pleased to report you that we had a best quarter results since the formation of Aris Mining in September 2022.
Speaker Change: These roles are supported by solid operational execution and record goal prices, generating strong cash flow to fund our key growth initiatives.
Speaker Change: In the first quarter we reported adjusted net earnings of 27 million, which is 16 cents a share of highest quarterly EPS.
Speaker Change: Gold revenue turned to 154 million in Q1, representing an increase of 47% over the same quarter last year.
Speaker Change: We've deleted, sorry, our 12-month trading-adjusted EBITDA was 200 and 1 million.
Speaker Change: By the end of March, our cash balance is still at 240 and that debt at 250, resulting in a net leverage ratio of 1.2 times, providing us flexibility and balance sheet strength as we continue to invest in our organic growth.
Speaker Change: Turning to our growth initiatives, last week I had the opportunity to visit both Sigervia and Mammato to assess what was going on and see the progress on the plant expansion and on getting the development to the lower nine.
Speaker Change: and I'm very encouraged to see the strong performance made on the ground, as well as our team's operational discipline and focus on efficient execution. But Richard, we're talking a little bit more about those projects shortly.
Speaker Change: But first I'll pass over to Oliver to talk about the highlights from our first quarter.
Thank you now, moving on to slide four.
Oliver Dachsel: During the first quarter we delivered total goal production of 55,000 ounces across our operations an increase of 8% from Q1 2024.
Oliver Dachsel: This accounts for 22% of the midpoint of our full year 2025 production guidance range of 230 to 275,000 ounces.
Oliver Dachsel: This is the solid start to the year as we expect production rates to progressively increase in the second half of the year following the Commission of the Segovia Plant Expansion in June .
at Segovia.
Oliver Dachsel: We produced 47.5 thousand ounces of gold during the quarter, supported by an average gold grade of 9.4 grams per tonne and gold recoveries of 96 percent.
Oliver Dachsel: We generated a total on-sustaining cost margin from Sagovia, $61 million, more than doubling our on-sustaining cost margin from Q1 2024 of $28.59.
Oliver Dachsel: Honour Mining Oil and Sustaining Cost was $1,482 per ounce and remains at the lower end of the company's full year 2025 guidance range of $1,450 to $1,600 per ounce.
Meanwhile, Gold delivered from our contract money partners O C and P's.
Oliver Dachsel: Generated a 41% on-and-sustaining cost sales margin, outperforming the top end of the company's full year 2025, guidance range of 35% to 40%.
Oliver Dachsel: As shown in the chart on the ride, rising realize goal prices and discipline cost control have expanded on and sustaining cost margins on a crowned basis by 105% at Segovia when comparing Q1 2025 to Q1 2024.
Oliver Dachsel: Sir Goliath's ability to generate cash draw is expected to expand significantly once the Mill expansion project is completed and gold production increases.
Oliver Dachsel: Turning to slide five, as Neil mentioned at the beginning of the call, we closed the quarter with a cash balance of 240 million.
Oliver Dachsel: dollars, and a low net leverage of 1.2 times, demonstrating the strength of our balance sheet.
Oliver Dachsel: Since the issuance of our $450 million senior unsecured bonds in October last year, we have steadily reduced both total and net leverage ratios.
Oliver Dachsel: As of March 2025, total leverage was 2.4 times and net leverage was 1.2 times [inaudible]
Oliver Dachsel: I'd also like to take this opportunity to provide an update on our TSX listed warns, expiring on July 29, 2025.
during the quarter and through early May.
Oliver Dachsel: We've continued to see strong participation in the exercise of these deeply-in-the-money warms.
Oliver Dachsel: We've received over $19.99 in proceeds from born exercises so far.
Oliver Dachsel: If the remaining warns get exercised, we expect an additional cash inflow of up to $96 million.
Oliver Dachsel: Following the expiry of the warrants at the end of July , the company will have no convertible securities outstanding other than stock options issued under the stock option plan.
Oliver Dachsel: with this strong and streamlined capital structure and supported by solid operation performance generating robust cash flow.
Oliver Dachsel: Aris Mining remains well positioned to responsibly fund our organic growth initiatives.
Speaker Change: Morning to slide six, I'd like to hand over to Richard Thomas to provide an update on our growth projects.
[inaudible]
Richard Thomas: Thank you Oliver. I'd like to start with Sugervia where the plus processing plant expansion remains on track to increase capacity from 2000 tons a day to 3000 tons a day. Installation of a second warmer will be completed in May with the commissioning expected in June this year.
Speaker Change: The new ball-mobile will increase the throughput capacity and hence call production.
Speaker Change: Following a ramp-up period, you are targeting a production rate of 3000 times per day. Once you are able to full the more than 3000 times per day, you are expecting an annual gold production in the range of 300,000 answers per year.
Speaker Change: As 2025 is a transition year, a growth production guidance to produce between 210 and 250,000 answers and quote to one production of 47,549 answers is a strong start and in line with internal plans.
Speaker Change: We're going across to my motto, the construction of the lower mine is gaining momentum in March we announced a design change which will increase the processing capacity to 5,000 tonnes per day.
Speaker Change: During the quarter and in April , the decline development progressed steadily with 323 meters as completed of the 41700.
Speaker Change: Earthworks for the main substation platform is complete and the earthworks for the process plan platform continues in progress.
Speaker Change: In parallel, the site has seen an ongoing delivery and staging of key equipment and materials, including filters, cyclones, some pumps, some mining equipment, supporting the ramp up construction, momentum across several of the project areas.
Speaker Change: Once completed, upper and low amount of water combined will have the potential to abuse of a 200,000oz of cold per year.
Speaker Change: As of March 2025, we updated the estimated cost to complete the construction of the lower
Speaker Change: to $290 million, considering the 25th-thousand expansion to 5,000 times per day of throughput capacity. And we have a further 82 million remaining funding to be received from the Wheaton Precious Metals under the Precious Metals streaming agreement.
Speaker Change: The net construction capital balance of 208 million is thus fully funded as Art L'Arn-Barnio and Oliver Barweye of Cash on Hand and ongoing cash flow generation from Cigovia.
Speaker Change: I'd like to take this opportunity to encourage you to visit our website, to view the latest developments in the low mind construction. A link to the most recent video is available at the bottom of the slide, or you can visit us directly at eris-mining.com.
Let's move across to floor number seven.
Speaker Change: and we are pleased to highlight progress on our two major technical studies currently underway at Sator Norte and Toru Peruvian Giona.
Speaker Change: Starting with such a naughty project located in the Santander Department of Columbia, where Aris holds a 51% joint venture interest and serves as a project operator. We continue to advance environmental and technical studies and expect to complete a new feasibility study in the third quarter of this year.
Speaker Change: This is a revised, smaller-scale underground development plan, incorporates several optimizations, including improvements to the processing design, tailing storage, mining methods, auto and sport, auto usage, all of which contributes to reducing the project's environmental impact.
Speaker Change: We look forward to providing a comprehensive update once the PFS is complete.
Speaker Change: If we go over to Toronto Peru, a 100% and open pit Gold Copper project located in Guyana, we've commissioned a new preliminary economic assessment to assess updated development options. Completion of the study is also expected in the third quarter of this year.
Speaker Change: Since updating the Menor Resource Estimate for Terror Peru in March 2023, Aris Mining has also completed important infrastructure optimisation studies. With that, I'd like to pause back to Neil.
and many more. Thank you. Thank you.
Thank you for watching!
Oh, what's happened?
Um...
Speaker Change: Maybe let me step in here. Did I disappear? No, no, I can still hear you. I think Neil has maybe some kind of activity issues.
So...
To wrap up.
and looking at slide eight here.
Speaker Change: We delivered a strong start to the year and we will remain focused on sustaining this momentum as we work towards more than doubling our goal production to over 500,000 ounces per year.
Speaker Change: and we are encouraged by the meaningful progress we are seeing across our both initiatives.
Speaker Change: At Cigovia, the processing plant expansion remains on track with commissioning schedule for next month.
Speaker Change: This will support increased production rates in the second half of the year.
At my motto,
Speaker Change: Construction of the law mine continues to advance steadily, with ramp up of production expected in the second half of 2026.
Speaker Change: And finally, we're progressing two major technical studies, the PFS at Sort de Norte and the PEA at Torre Peru.
Speaker Change: Once completed, these two major studies create strategic flexibility to unlock value.
Speaker Change: We are looking forward to having the difficult decision of how to prioritize our next growth project.
Speaker Change: Looking ahead, Aris Mining's well-positioned for a strong remainder of 2025 and beyond.
Speaker Change: Back by a solid capital base in cash regeneration, we're confident in our ability to deliver on our growth strategy and unlock meaningful long-term value.
Speaker Change: With that, we'd like to thank you for your time today and we look forward to your questions. We'll now turn the call back over to the operator to open the line for questions.
Speaker Change: Certainly. To join the question queue, you may press star then one on your telephone keypad. You will hear a tonic knowledge in your request. If you were using a speaker phone, please pick up your handset before pressing any keys.
Speaker Change: The first question comes from Carey MacRury with Canacor Genuity. Please go ahead.
Carrie McRory: Good morning, everyone. Maybe first on the Segovia ramp up the extra thousand times a day. How much of that is expected to come from contract mining partners and do you have all those agreements in place to ramp that up?
Carrie McRory: Carey, so the way we've planned this art is that at the end of the day, we will have a 60, 40, but 60, 40, 60 being the Aris Mining and 40 coming from the contract mining partners.
Carrie McRory: Most of those contracts are in place and we are finding another five contracts in this week so as we ramp up for years it would be a slow ramp up it's not going to be immediate but at the end of the year we will be in a position to be close to the 3000 times per day
Carrie McRory: Should we assume it's sort of a steady ramp up through Q3 and Q4? Yep, yep, steady We're going to do a ramp up.
Speaker Change: Okay, great. And then just on Toro Peru on the P.E.A., can you just talk about what the development options you're looking at there?
Speaker Change: Well, since we lost the studies, you know, there was a really large open pit with a double stage plant, so it would be initially an oxide plant and then going to a sulfide plant.
Speaker Change: So some of the development options we are looking at with
Speaker Change: because when we just read the resource, the resource is shranked to close to 5 million tons, so you need to resize that and make sure that the economics work.
Speaker Change: I'm putting up the second plant, so we're thinking maybe there's an opportunity for a heap leach, but that work is under way. We also need to do some clever thinking about transport of a concentrate, or maybe do a doorway, which is easier to transport.
Speaker Change: and the other options we are considering are power options, so how do we get power to that sort that's not going to be runestly expensive, so there are a number of issues we're looking at.
Speaker Change: Thanks for that and maybe one last one I think you pay most of your cash taxes in Q2 just wanting if there's any guidance on what we should expect for Q2 of this year. Richard Orazietti, I leave it to you.
Richard Orazietti: As I move myself, you could expect a similar amount. The cash taxes are related to Sagovia and the, you know, as the obviously more income is being generated from Sagovia.
You can do the math at 35%
Richard Orazietti: Once again, if you have a question, please press star then one.
Don Demarco: The next question comes from Don DeMarco with National Bank Financial. Please go ahead.
Thank you, operator, and good morning, Neil, Oliver and team.
Don Demarco: When do you expect the underground mining rates to be scaled up?
to feed this up size 5,000 ton per day, Neil.
Don Demarco: I think that also occurred, like, without a line with H2 of 26 or the taste to follow that.
Don Demarco: There's a steady ramp up from the second half of 2026 into 2027 so we should be up at the full far thousand in the second half of 207. But we do have an exhilaratory ramp up because we're doing those stoat preparations right now through our access on the eager on ramp.
Don Demarco: So, to get to 4000 is going to be relatively quick and then the 5000 will take a few moments off to that.
Okay, good.
Dagger, I think you are best. Place, you want that one.
Don Demarco: I think that really depends on the results of the study done. We are, we'll look at all options, but you know, our
Don Demarco: I guess the best value for us is likely to consider building it, but let's see what the results tell us and we'll try it then.
Speaker Change: Okay, well, certainly look forward to that. It's a country where there's been a lot of positive activity and with the pending info from Warren's.
Speaker Change: What is your pecking order for capital allocation beyond the ongoing MarModel development?
Speaker Change: I would say that would also depend on the two studies because you know we've got also so to Northay moving forward so we're going to be in a very strong cash position we already are so it just strengthens us and then it opens up opportunities for how we move either of those
Speaker Change: Okay, great. Thank you. That's all for me. And congratulations again on the strong quarter and good luck with Q2.
Speaker Change: I would like to turn the conference back over to Oliver Dachsel for any closing remarks.
Thank you, Megan, unless there are any further questions.
Speaker Change: We certainly appreciate your interest. Thank you for joining today's call.
Speaker Change: Yeah, please don't hesitate to reach out to me and Lilian if you have any further questions. We're looking forward to discussing our results in more depth over the coming days and weeks.
Dr. Orazietti, Neil Woodyer,
Speaker Change: This brings a close to today's conference call. You may disconnect your lines.
Thank you for participating in a half a pleasant day.