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ARIS MINING REPORTS Q1 2023 FINANCIAL AND OPERATING HIGHLIGHTS
Aris Mining Corporation (TSX: ARIS) (OTCQX: TPRFF) announces financial and operating results for the three months ended March 31, 2023 (Q1 2023). All amounts are in US dollars unless otherwise indicated.
Aris Mining CEO Neil Woodyer stated: “Following the merger of GCM Mining and Aris Gold, we launched initiatives to improve the health and safety performance at our operations. We have also captured cost reduction opportunities including reducing G&A expenses to $2.2 million in Q1 2023, as compared to $6.1 million in Q1 2022. During Q1 2023, we produced 50,903 ounces of gold to generate $38.6 million of adjusted EBITDA1, and $27 million of free cash flow1 from the Segovia Operations contributed to funding $12 million in growth investments and the $50 million payment owing to complete the purchase of the 20% joint venture interest in the Soto Norte Project. Our current focus is on completing the final steps for permitting the Marmato Lower Mine expansion project, and planning for construction expected to commence in mid-2023. As part of our commitment to building responsible and profitable partnerships with artisanal and small-scale miners in Colombia, we are very proud of a new agreement signed in April 2023 for the Marmato Upper Mine that will include formalization of approximately 260 miners. Just two weeks after signing the agreement, we commenced mining in Level 16 of the Marmato Upper Mine under this new partnership model.”
Q1 2023 Operational Highlights:
- Produced 50,903 ounces of gold from the Segovia Operations and the Marmato Upper Mine, with 18% of total contained gold sourced from the purchase of mill-feed through partnerships with artisanal and small-scale miners around the Segovia Operations
- Sold 49,158 ounces of gold, at an average realized price of $1,869 per ounce
- The Segovia Operations processing facility was expanded to 2,000 tonnes per day (tpd) in late 2022, but a small fire caused by a maintenance procedure reduced throughput to an average of 1,785 tpd in Q1 2023, causing a short lag in gold production. The required repairs have been completed and throughput averaged 2,097 tpd in April 2023, and the Segovia Operations remain on track to achieve 2023 production guidance of 200,000 to 230,000 ounces
- Free cash flow from Segovia Operations of $27 million1
- Total cash costs of $922 per ounce1 and all in sustaining costs (AISC) of $1,214 per ounce1
- Announced the updated mineral resource and reserve estimates for the Segovia Operations, effective December 31, 2022, which include full replacement of gold ounces mined during 20222
- Aris Mining is on track to meet annual production guidance of between 230,000 – 270,000 ounces at an AISC/oz1 of between $1,050 to $1,150
Financial and Growth:
- Income from mining operations of $33.2 million
- EBITDA of $21.1 million1 and adjusted EBITDA of $38.6 million1
- Expenditures of $11.9 million on non-sustaining capital, including $2.6 million at the Segovia Operations, $4.6 million at the Marmato Upper and Lower Mines, and $4.7 million at the Toroparu Project
- Net loss of $5.4 million or $0.04 per share and adjusted earnings of $11.2 million or $0.08 per share1
Responsible mining and shared value:
- On April 20, 2023, the Company signed, with the Colombian Minister of Mines and Energy in attendance, an association agreement with artisanal and small-scale miners to purchase ore mined by these groups within Level 16 of the currently operating Marmato Upper Mine
- Paid social contributions of $2.4 million, structured under a transparent social investment policy that aligns with government development plans and Aris Mining’s stakeholder engagement policy
- Continued working to create new partnerships with artisanal and small-scale miners throughout the Segovia Operations, the Marmato Mine and the Soto Norte Project
| _____________ |
| 1 Total cash costs per ounce, AISC ($ per oz sold), adjusted earnings and adjusted net earnings per share, EBITDA and adjusted EBITDA and free cash flow are non-IFRS financial measures and non-IFRS ratios in this document. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Refer to the Non-IFRS Measures section below for more details. |
| 2 See section entitled Qualified Person and Technical Information for the reference to technical information |
Q1 2023 Financial and Operating Highlights
| Three months ended March 31, | ||||
| 2023 | 2022 | |||
| Gold sold (ounces) | 49,158 | 53,645 | ||
| Average realized gold price ($/ounce sold) | 1,869 | 1,860 | ||
| Cash costs ($/ounce sold)1 | 922 | 786 | ||
| AISC ($/ounce sold)1 | 1,214 | 1,072 | ||
| Income from mining operations ($’000) | 33,152 | 44,033 | ||
| Net cash provided by operating activities ($’000) | 19,768 | 24,209 | ||
| EBITDA ($’000)1 | 21,105 | 34,918 | ||
| Adjusted EBITDA ($’000)1 | 38,646 | 45,129 | ||
| Net earnings (loss) ($’000) | (5,401) | 5,238 | ||
| Adjusted earnings ($’000)1 | 11,176 | 15,428 | ||
| Earnings (loss) per share – basic ($) | (0.04) | 0.05 | ||
| Adjusted earnings per share – basic ($)1 | 0.08 | 0.16 | ||
| Balance sheet, as at ($000s) | March 31, 2023 | December 31, 2022 | ||
| Cash and cash equivalents | 229,350 | 299,461 | ||
| Total assets | 1,212,688 | 1,242,120 | ||
| Total debt2 | ||||
| Senior Notes | 300,000 | 300,000 | ||
| Gold Notes | 64,159 | 66,006 | ||
| Convertible Debentures | 13,300 | 13,300 | ||
| Shareholders equity | 513,104 | 501,375 | ||
| 1. | Refer to the Non-IFRS Measures section below for full details on cash costs ($ per oz sold), AISC ($ per oz sold), EBITDA, adjusted EBITDA, and adjusted earnings. Comparative cash cost and AISC values have been adjusted from amounts disclosed prior to Q3 2022 following a change in the methodology used to calculate total cash costs ($ per oz sold) and AISC ($ per oz sold) in Q3 of 2022. | |||
| 2. | The principal of current and long-term debt as at March 31, 2023 are as disclosed in Note 10 to the Interim Financial Statements. | |||
Quarterly Cashflow Generated
| Three months ended March 31, | ||
| ($000s) | 2023 | 2022 |
| Gold Revenue | 91,864 | 99,783 |
| Total cash cost1 | (45,333) | (42,185) |
| Royalties1 | (3,410) | (3,229) |
| Social contributions1 | (2,404) | (3,100) |
| Sustaining capital1 | (8,523) | (9,009) |
| All in sustaining cost (AISC) 1 | (59,670) | (57,523) |
| AISC Margin | 32,194 | 42,260 |
| Taxes paid2 | – | (14,411) |
| General and administration expense2 | (2,235) | (6,140) |
| Change in receivables related to timing of metal sales | (6,978) | (4,942) |
| Change in working capital and other | (12,037) | 634 |
| Impact of foreign exchange losses on cash balances2 | 70 | 1,916 |
| Free cash flow from operations | 11,014 | 19,317 |
| Toroparu non-sustaining capital1 | (4,690) | (6,736) |
| Segovia non-sustaining capital1 | (2,641) | (4,999) |
| Marmato Upper Mine non-sustaining capital1 | (681) | – |
| Marmato Lower Mine non-sustaining capital1 | (3,881) | – |
| Free cash flow from operations after expansion capital | (879) | 7,582 |
| Dividends paid and share buy backs2 | – | (4,611) |
| Proceeds from warrant/option exercises | 417 | 397 |
| Settlement of Soto Norte deferred payment2 | (50,000) | – |
| Repayment of Gold Linked Notes2 | (3,154) | – |
| Interest and financing costs2 | (14,234) | (10,553) |
| Free cash flow after expansion capital and financing costs | (67,849) | (7,185) |
| Contributions to investment in associates2 | (2,262) | (1,316) |
| Net change in cash2 | (70,111) | (8,501) |
| Opening balance at beginning of period2 | 299,461 | 323,565 |
| Closing balance at end of quarter2 | 229,350 | 315,064 |
| 1. | Refer to the Non-IFRS Measures section for full details on cash costs ($ per oz sold), AISC ($ per oz sold), and additions to mining interests split by nature and site. Comparative cash cost and AISC values have been adjusted from amounts previously disclosed following a change in the methodology used to calculate total cash costs ($ per oz sold) and AISC ($ per oz sold) in Q3 of 2022. | |
| 2. | As presented in the Interim Financial Statements and notes for the respective periods. | |
Aris Mining’s Q1 2023 interim financial statements and related MD&A are available on SEDAR and in the Financials section of Aris Mining’s website here.
About Aris Mining
Aris Mining is a Canadian company led by an executive team with a track record of creating value through building globally relevant mining companies. In Colombia, Aris Mining operates several high-grade underground mines at its Segovia Operations and the Marmato Mine, which together produced 235,000 ounces of gold in 2022. Aris Mining also operates the Soto Norte joint venture, where environmental licensing is advancing to develop a new underground gold, silver and copper mine. In Guyana, Aris Mining is advancing the Toroparu Project, a gold/copper project. Aris Mining plans to pursue acquisition and other growth opportunities to unlock value creation from scale and diversification.
Aris Mining promotes the formalization of artisanal and small-scale mining as this process enables all miners to operate in a legal, safe and responsible manner that protects them and the environment.
Total cash costs
| Three months ended March 31, 2023 | Three months ended March 31, 2022 | ||||||
| ($000s except per ounce amounts) | Segovia | Marmato | Total | Segovia | Marmato1 | Total | |
| Total gold sold (ounces) | 44,908 | 4,250 | 49,158 | 53,645 | – | 53,645 | |
| Cost of sales2 | 44,083 | 9,622 | 53,705 | 46,953 | – | 46,953 | |
| Less: royalties2 | (2,660) | (750) | (3,410) | (3,229) | – | (3,229) | |
| Less: by-product revenue2 | (4,877) | (166) | (5,043) | (1,539) | – | (1,539) | |
| Less: other adjustments | – | 81 | 81 | – | – | – | |
| Total cash costs | 36,546 | 8,787 | 45,333 | 42,185 | – | 42,185 | |
| Total cash costs ($ per oz gold sold) | 814 | 2,068 | 922 | 786 | – | 786 | |
| 1. | The Marmato Mine was purchased as part of the Aris Mining Transaction on September 26, 2022, as such prior year comparatives are not applicable to the Company. | ||||||
| 2. | As presented in the Interim Financial Statements and notes for the respective periods. | ||||||
All-in sustaining costs
| Three months ended March 31, 2023 | Three months ended March 31, 2022 | ||||||
| ($000s except per ounce amounts) | Segovia | Marmato | Total | Segovia | Marmato1 | Total | |
| Total gold sold (ounces) | 44,908 | 4,250 | 49,158 | 53,645 | – | 53,645 | |
| Total cash costs | 36,546 | 8,787 | 45,333 | 42,185 | – | 42,185 | |
| Add: royalties2 | 2,660 | 750 | 3,410 | 3,229 | – | 3,229 | |
| Add: social programs2 | 2,404 | – | 2,404 | 3,100 | – | 3,100 | |
| Add: sustaining capital expenditures | 7,332 | 535 | 7,867 | 8,522 | – | 8,522 | |
| Add: lease payments on sustaining capital | 656 | – | 656 | 487 | – | 487 | |
| Total AISC | 49,598 | 10,072 | 59,670 | 57,523 | – | 57,523 | |
| Total AISC ($ per oz gold sold) | 1,104 | 2,370 | 1,214 | 1,072 | – | 1,072 | |
| 1. | The Marmato Mine was purchased as part of the Aris Mining Transaction on September 26, 2022, as such prior year comparatives are not applicable to the Company. | ||||||
| 2. | As presented in the Interim Financial Statements and notes for the respective periods. | ||||||
Additions to mineral interests, plant and equipment
| Three months ended March 31, | ||||
| ($’000) | 2023 | 2022 | ||
| Sustaining capital | ||||
| Segovia Operations | 7,332 | 8,522 | ||
| Marmato Upper Mine1 | 535 | – | ||
| Total | 7,867 | 8,522 | ||
| Non-sustaining capital | ||||
| Segovia Operations | 2,641 | 4,999 | ||
| Toroparu Project | 4,690 | 6,736 | ||
| Marmato Lower Mine1 | 3,881 | – | ||
| Marmato Upper Mine1 | 681 | – | ||
| Juby Project1 | 33 | – | ||
| Total | 11,926 | 11,735 | ||
| Additions to mining interest, plant and equipment2 | 19,793 | 20,257 | ||
| 1. | The Marmato Mine and Juby Project was purchased as part of the Aris Mining Transaction on September 26, 2022, as such prior year comparatives are not applicable to the Company. | |||
| 2. | As presented in the Interim Financial Statements and notes for the respective periods | |||
Earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA
| Three months ended March 31, | ||
| ($000s except shares amount) | 2023 | 2022 |
| Earnings (loss) before tax1 | 6,751 | 20,790 |
| Add back: | ||
| Depreciation and depletion1 | 7,646 | 8,236 |
| Finance income1 | (2,173) | (507) |
| Interest and accretion1 | 8,881 | 6,399 |
| EBITDA | 21,105 | 34,918 |
| Add back: | ||
| Share-based compensation1 | 1,147 | 1,208 |
| (Income) loss from equity accounting in investee1 | 3,241 | 1,032 |
| (Gain) loss on financial instruments1 | 10,810 | 7,316 |
| Foreign exchange (gain) loss1 | 2,343 | 655 |
| Adjusted EBITDA | 38,646 | 45,129 |
| 1. As presented in the Financial Statements and notes for the respective periods. | ||
Adjusted net earnings and adjusted net earnings per share
| Three months ended March 31, | ||
| ($000s except shares amount) | 2023 | 2022 |
| Basic weighted average shares outstanding | 136,188,570 | 97,786,490 |
| Diluted weighted average shares outstanding | 136,188,570 | 99,961,040 |
| Net earnings (loss)1 | (5,401) | 5,238 |
| Add back: | ||
| Share-based compensation1 | 1,147 | 1,208 |
| (Income) loss from equity accounting in investee1 | 3,241 | 1,032 |
| (Gain) loss on financial instruments1 | 10,810 | 7,316 |
| Foreign exchange (gain) loss1 | 2,343 | 655 |
| Income tax effect on adjustments | (964) | (21) |
| Adjusted net (loss) / earnings | 11,176 | 15,428 |
| Per share – basic ($/share) | 0.08 | 0.16 |
| 1. As presented in the Interim Financial Statements and notes for the respective periods. | ||
Segovia Free Cash Flow
| Three months ended March 31, | ||||
| Operating Information | 2023 | 2022 | ||
| Tonnes of ore processed (t) | 149,965 | 142,818 | ||
| Average gold grade processed (g/t) | 10.11 | 12.07 | ||
| Recoveries (%) | 95.4 % | 90.1 % | ||
| Gold produced (ounces) | 46,513 | 49,864 | ||
| Gold sold (ounces) | 44,908 | 53,645 | ||
| Revenue | $ 83,943 | $ 99,783 | ||
| Mining costs | 29,720 | 31,401 | ||
| Processing costs | 4,403 | 4,354 | ||
| Administration and security costs | 5,685 | 7,297 | ||
| Inventory movement and other costs | 1,615 | 672 | ||
| By-product and concentrate revenue | (4,877) | (1,539) | ||
| Total cash costs1 | 36,546 | 42,185 | ||
| Cash cost per ounce sold1 | 814 | 786 | ||
| Royalties | 2,660 | 3,229 | ||
| Social contributions | 2,404 | 3,100 | ||
| Sustaining capital expenditures | 7,988 | 9,009 | ||
| All-in sustaining costs1 | 49,598 | 57,522 | ||
| All-in sustaining cost per ounce sold1 | 1,104 | 1,072 | ||
| AISC Margin | 39,256 | 42,261 | ||
| Taxes paid | – | (10,120) | ||
| Working capital movements and other expenses | (5,220) | (8,577) | ||
| Foreign exchange movement | (2,161) | 1,906 | ||
| Free cashflow generated from operations | $ 26,964 | $ 25,470 | ||
| Non-sustaining capital expenditures | (2,641) | (4,999) | ||
| Free cashflow after expansion capital | $ 24,323 | $ 20,471 | ||
| 1. | Refer to the Non-IFRS Measures section for full details on cash costs ($ per oz sold) and AISC ($ per oz sold). Comparative cash cost and AISC values have been adjusted from amounts previously disclosed following a change in the methodology used to calculate total cash costs ($ per oz sold) and AISC ($ per oz sold) in Q3 of 2022. | |||
Qualified Person and Technical Information
Pamela De Mark, P.Geo., Senior Vice President, Technical Services of Aris Mining, is a Qualified Person as defined by National Instrument 43-101 (NI 43-101) and has reviewed and approved the technical information contained in this news release.
Scientific and technical information concerning the mineral resource and reserve estimates of the Segovia Operations is summarized, derived, or extracted from the news release of the Company dated March 3, 2023, which is available for review on the Company’s website at www.aris-mining.com and on the Company’s profile on SEDAR at www.sedar.com, and which have been reviewed and approved by Pamela De Mark, P.Geo., Senior Vice President, Technical Services of Aris Mining, who is a Qualified Person as defined by NI 43-101.
Posted May 11, 2023
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