Toronto, Ontario–(Newsfile Corp. – November 22, 2021) – Andean Precious Metals Corp. (TSXV: APM) (OTCQB: ANPMF) (“Andean” or the “Company“), a Latin-America focused, precious metals production and exploration company, today reported its operational and financial results for the three and nine months ended September 30, 2021 (“Q3” and “YTD” respectively). All amounts are expressed in U.S. dollars unless indicated otherwise.
Operational and Financial Highlights
- Q3 2021 production of 1.5 million silver equivalent ounces(1), YTD production of 4.4 million silver equivalent ounces(1), on track to achieve 2021 production guidance of 5.8 – 6.1 million ounces;
- Q3 2021 all-in sustaining costs (“AISC”)(2) per silver ounce sold of $17.94, compared with AISC of $18.04 per silver ounce sold during Q3 2020. YTD AISC of $18.08 on track to achieve 2021 guidance of $17.50 – $19.50 per ounce;
- Achieved significant safety milestone with zero lost incidents reported for over 900 days;
- Q3 2021 revenues of $36.7 million from sales of 1.5 million silver equivalent ounces(1), compared with $38.1 million from sales of 1.7 million ounces in Q3 2020;
- Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)2 of $7.8 million, compared with $11.3 million for Q3 2020.
“During the quarter we continued to demonstrate the strong, sustainable nature of our cash flow from operations in Bolivia; adjusting for the timing of sales collections deferred to the fourth quarter, our Q3 free cash flow generated was approximately $7.2 million,” said Simon Griffiths, President and CEO. “While solid operating and financial performance are key to our success, nothing is more important than the health and safety of our employees and we are especially proud to reach the milestone of over 900 days with zero lost time incidents.” Mr. Griffiths went on to say; “Andean remains focused on re-investing our capital in accretive growth opportunities both internally – through exploration and project redevelopment – and externally through corporate M&A.”
Operational and Financial Results
|Financial Performance3||Q3 2021||Q3 2020||YTD 2021||YTD 2020|
|Cost of sales||$||24.6||$||27.5||$||73.6||$||49.9|
|Income from mine operations||$||9.7||$||7.8||$||32.2||$||17.2|
|Net cash from operating activities||$||5.3||$||12.1||$||28.0||$||13.5|
|Free cash flow(2)||$||4.0||$||11.3||$||25.2||$||12.0|
|Ending cash and cash equivalents||$||83.1||$||16.1||$||83.1||$||16.1|
|Cash operating costs (“COC”)(2)||$||15.34||$||16.24||$||15.90||$||12.70|
|All-in sustaining costs on a by-product basis (“AISC”)(1)||$||17.94||$||18.04||$||18.08||$||14.50|
1 Silver equivalent ounces include gold ounces and are converted to a silver equivalent based on a ratio of realized silver and gold prices during the periods discussed.
2 Free cash flow, EBITDA, Adjusted EBITDA, COC and AISC are measures of financial performance with no prescribed definition under IFRS. Refer to the “Non-IFRS Measures” section of the third quarter 2021 MD&A for further detail, including a reconciliation of these metrics to the Company’s Financials.
3 Figures in this table are presented in millions except for COC and AISC.
Revenue for the nine months ended September 30, 2021 was $113.1 million compared to $75.1 million during the same period last year. Revenue for Q3 2021 was $36.7 million compared to $38.1 million in Q3 2020. The decline in Q3 2021 was driven by lower sales of silver equivalent ounces, and offset by higher average realized prices compared to Q3 2020. The Company sold 1.5 million silver equivalent ounces during Q3 2021 at an average realized price of $24.13 per silver ounce and 1.7 million silver equivalent ounces during Q3 2020 at an average realized price of $22.48 per silver ounce. Lower sales volumes drove lower cost of sales of $24.6 million in Q3 2021 compared with $27.5 million in Q3 2020, and together with the changes in revenue described, income from mine operations was $9.7 million, up from $7.8 million in Q3 2020.
General and administrative costs for the quarter increased to $3.3 million compared to $1.9 million in Q3 2020 due to higher expenses following the Company’s public listing in March 2021, which include the costs of salaries and office administration, management fees, share-based compensation, severance, public company costs and community relations expenses. Deferred income taxes of $0.4 million were recorded during Q3 2021, relative to none during Q3 2020. Overall, net income and comprehensive income for Q3 2021 totaled $1.8 million.
|Operational Performance||Q3 2021||Q3 2020||YTD 2021||YTD 2020|
|Mined ore(1) (k dmt)||480||654||1,366||1,588|
|Average ore mined grade (Ag g/t)||96||100||98||98|
|Purchased ore(2) (k dmt)||129||121||395||252|
|Average purchased ore grade (Ag g/t)||209||233||200||235|
|Ore milled (k dmt)||440||428||1,291||1,063|
|Daily average throughput (k dmt)||4,894||4,805||4,852||4,644|
|Average head grade (Ag g/t)||114||128||115||129|
|Silver recovery (%)||85||85||85||89|
|Silver production (k ozs)||1,375||1,502||4,087||3,885|
|Silver equivalent production(3) (k ozs)||1,512||1,526||4,410||4,142|
|Silver sales (k ozs)||1,375||1,695||4,126||3,505|
|Silver equivalent sales(3) (k ozs)||1,521||1,695||4,442||3,774|
(1) Mined ore includes ore mined from the Company’s permitted areas, including Santa Rita, Huacajchi, Antuco, El Asiento, and Monserrat during 2021 and 2020. Mined ore is reported as +8 mesh.
(2) Purchased ore includes oxidized material purchased from local mining cooperatives as well as through the Company’s contract with RALP (defined in the Company’s third quarter 2021 MD&A).
(3) Silver equivalent production and silver equivalent sales include gold production and sales. Equivalent ounces are calculated using the Company’s realized gold and silver prices during the referenced period.
|Silver equivalent production by source (k ozs)||Q3 2021||Q3 2020||YTD 2021||YTD 2020|
|Mine waste stockpiles||321||130||737||165|
2021 Outlook Update and Guidance
Andean produced 4.4 million silver equivalent ounces during the first nine months of fiscal 2021 from its own mineral reserves and from its third-party ore sourcing business. During the remainder of 2021, the Company will focus on mining production from the Santa Rita Pallacos area.
Andean continues to complete the sonic drilling of the fines disposal facility (“FDF”), which will inform a mineral resource estimate followed by a technical study on the economic viability of reprocessing approximately 10 million tonnes of material. Historical production records of our Bolivian operations suggest potentially economic quantities of recoverable silver and tin exists in the FDF and tailings.
Andean also continues to expand its third-party ore sourcing business from locations outside Cerro Rico. As the San Bartolomé operation contains the only large-scale commercial oxide plant in the country, the Company is leveraging this advantage and actively reviewing additional purchasing opportunities throughout Bolivia. Andean currently purchases ore from 20 out of approximately 113 mining cooperatives as well as a number of privately held mining companies within Bolivia.
The following table sets out Andean’s production and AISC for the first nine months of 2021 against its full year 2021 production and cost guidance:
|Silver equivalent production||4.4M oz||5.8M to 6.1M oz|
|AISC (by-product)||$18.08/Ag oz||$17.50 to $19.50/Ag oz|
(1) Andean’s assumed commodity prices supporting this estimate are $24.00/ounce silver and $1,750/ounce gold.
The Company commenced exploration activities on its 100% owned San Pablo and Rio Blanco properties in February 2021. At San Pablo, a 10,000 metre diamond drilling program is underway with an initial phase I campaign of 3,580 metres completed in May 2021. Multiple gold bearing zones were encountered, and the Company has launched phase II, which include geophysical studies with Quantec Geoscience’s Titan 24 DCIP and magnetotelluric technology. At Rio Blanco, mapping and trench sampling works were completed, while a 10,000 metre drilling program began in July 2021, with 2,150 metres of drilling completed to date. The Company expects to release results on phase I exploration at both San Pablo and Rio Blanco in due course.
In addition, the Company is assessing acquisition opportunities in Bolivia as well as South and Central America.
Third Quarter 2021 Results Conference Call and Webcast
|DATE:||Tuesday, November 23, 2021|
|TIME:||8:30 a.m. ET|
|DIAL-IN NUMBER:||416-915-3239 or 1-800-319-4610|
Qualified Person Statement
Donald J. Birak, Registered Member SME and Fellow AusIMM and independent qualified person as defined under NI 43-101, has reviewed and approved the scientific and technical information presented herein.
About Andean Precious Metals Corp.
Andean Precious Metals (TSXV: APM) is a Canadian, growth-focused silver producer operating in Bolivia. The Company produced 5.9M silver equivalent ounces in 2020 at an all-in sustaining cost of $14.75 USD per ounce from its own mineral claims, contracts with the state mining company of Bolivia (COMIBOL), and from a high margin third-party ore sourcing business. All processing takes place at the Company’s 1.65M tonne per year San Bartolomé plant which has the capacity to produce silver doré bars. Andean Precious Metals is committed to fostering safe, sustainable and responsible operations. For more information, please visit www.andeanpm.com.
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Caution Regarding Forward-Looking Statements
This press release contains statements which constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”), including statements regarding the plans, intentions, beliefs and current expectations of Andean with respect to future business activities and operating performance. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions.
Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect Andean’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Andean believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of Andean. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets. These forward-looking statements may be affected by risks and uncertainties in the business of Andean and general market conditions, including COVID-19.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Andean has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. Andean does not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.