Mineros reports third quarter 2021 results

MINEROS REPORTS THIRD QUARTER 2021 RESULTS

(all amounts expressed in U.S. dollars unless otherwise stated)

Medellin, Colombia – November 15, 2021 – Mineros S.A. (MINEROS:CB) (“Mineros” or the “Company”) today reported its financial and operational results for the third quarter ended September 30, 2021.

“Mineros is on track to meet its production guidance for 2021. However, the Company experienced increased costs as a result of purchasing more material from artisanal miners in Nicaragua and higher production and sustaining costs at the Gualcamayo Property in Argentina. We saw an expected increase in capital expenditures this quarter, as we continue to invest capital both to extend the life of mine at the Gualcamayo Property, and advance the future organic growth of the Company within our robust property portfolio.” said Andrés Restrepo, President and CEO.

“Subsequent to quarter end, we had two significant and positive advancements for the Company. Firstly, we received all outstanding environmental permits for the Nechí Alluvial Property in Colombia. With these permits in place, the Company intends to move forward mining in new, higher grade areas of the mine in 2022. Secondly, Mineros entered into an underwriting agreement and filed the final prospectus for an initial public offering in Canada.” Restrepo continued.

OPERATIONAL HIGHLIGHTS
• Gold production down 1% in the third quarter of 2021: 63,758 ounces of gold were produced in the third quarter of 2021, compared to 64,225 ounces in the third quarter of 2020;

Total gold production was in line with the Company's updated guidance for 2021. We do not provide guidance for silver production as we treat it as a by-product.

• Cash Costs(1) and All-in-Sustaining Costs (“AISC”)(1) in the third quarter of 2021: average cash costs in the third quarter of 2021 were $1,235 per ounce of gold sold and AISC was $1,476 per ounce of gold, compared to an average cash cost of $1,020 per ounce sold and an AISC of $1,225 per ounce for in the third quarter of 2020. The increase in average cash cost and AISC was a result of purchasing more material from artisanal miners at the Hemco Property and higher production and sustaining costs at the Gualcamayo Property as the mine nears end of life.

FINANCIAL HIGHLIGHTS

• Revenues decreased by 1%: revenues totaled $120.2 million in the third quarter of 2021 compared to $121.3 million in the third quarter of 2020, with an average realized price per ounce sold of $1,782 in the third quarter of 2021 compared to $1,896 in the third quarter of 2020. Key drivers were a decrease in average realized price of 6% partially offset by 4% higher ounces sold;
 
• Gross Profit decreased by 40%, to $25.4 million in the third quarter of 2021 compared to $42.7 million in the third quarter of 2020; mainly due to higher costs from purchases of artisanal material and higher operating costs in Argentina;
 
• Net Profits for the period down 67%, to $8.2 million or $0.3 per share in the third quarter of 2021 compared to $24.8 million or $0.09 per share in the third quarter of 2020; this decrease is explained mainly by higher costs (as mentioned above), higher exploration expenses in the Deep Carbonates Project and regional exploration in Argentina, the Luna Roja Exploration Target and regional exploration in Nicaragua ($3.4 million) and lower income from hedging operations valuation ($2.7 million);

• Adjusted EBITDA(2) down 38%: Adjusted EBITDA was $32.4 million in the third quarter of 2021 compared to $51.9 million in the third quarter of 2020;

• ROCE(3) of 27%: a decrease of 26% in the third quarter of 2021 relative to the third quarter of 2020 of 36%;

• Net Debt to adjusted EBITDA ratio(4) was 0.22x in the third quarter of 2021, compared to a ratio of 0.18x in the third quarter of 2020;
 
• Dividends Paid up 36%: Dividends Paid for the third quarter of 2021 totaled $4.0 million, compared to $3.0 million in the third quarter of 2020; 
 
• Net Cash provided by operating activities up 36%: totaling $35.1 million in the third quarter of 2021, compared to $25.8 million in the first three months of 2020. The Company’s net free cash flows(5) for the third quarter of 2021 totaled $23.7 million, up from $16.1 million in the third quarter of 2020 due to higher cash from operating activities;

• Capital investments up 35% to $25.7 million: during the third quarter of 2021, capital investments of $25.7 million were made into existing mines, and exploration and evaluation projects, compared to $19.1 million in the third quarter of 2020.

CORPORATE HIGHLIGHTS 

• On July 12, 2021, Mineros announced that it has received a positive response from the National Authority of Environmental Licenses of Colombia (“ANLA”) to its appeal filed on April 23, 2021; 

• On July 19, 2021, Mineros announced the filing of its Best Corporate Governance Practices report with the Superintendence of Finance of Colombia; 

• On July 27, 2021, Mineros announced the acquisition, through its subsidiary, Hemco-Nicaragua S.A. (“Hemco”), of shares representing a 15% equity interest in Vesubio Mining, S.A. (“Vesmisa”) for $1.5 million. Vesmisa owns one of two mineral processing plants dedicated exclusively to processing material mined by artisanal miners at the Hemco Property in Nicaragua. Following such acquisition, Hemco holds a 100% interest in all processing infrastructure at the Hemco Property;

• On September 16, 2021, Mineros filed updated technical reports prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) for all of the Nechí Alluvial Property in Colombia, the Gualcamayo Property in Argentina, and the Hemco Property in Nicaragua, including updated Mineral Reserves and Mineral Resources estimates effective June 30, 2021;

• On September 16, 2021, Mineros announced filing and receipt preliminary prospectus with securities regulators in each of the provinces of Canada, except Quebec (initial public offering) and Colombia (concurrent public offering of common shares).

Subsequent to September 30, 2021:
• On October 19, 2021, ANLA approved a previously submitted application to amend the Nechí Alluvial Property environmental management plan (“EMP”), and granted environmental permits sufficient to support planned operations at Nechí Alluvial Property within the 141-hectare area covered by the EMP amendments.

• On November 12, 2021, Mineros announced that it entered into an underwriting agreement and filed its final prospectus dated November 11, 2021 in respect of its initial public offering in Canada and Colombia.

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