Aris Mining's Expenses are on the Rise: Will It Affect Margins?

Core Insights - Aris Mining Corporation (ARMN) is facing significant cost pressures, with an all-in-sustaining cost (AISC) per ounce of $1,641 in Q3 2025, up from $1,540 in the same quarter last year, marking a 6.6% year-over-year increase [1][8] Cost Analysis - The rise in costs is attributed to higher volumes of purchased mill feed from Contract Mining Partners, increased royalty and social contribution expenses due to higher gold prices, and greater mining costs from increased throughput and the ramp-up of operations at Segovia [2][8] - The Segovia Operations, a key asset for ARMN, reported AISC of $1,641 per ounce, reflecting the impact of higher sustaining capital expenditures [1][8] Profitability and Margins - Despite rising costs, ARMN's profitability remains strong, with AISC margin improving by 36% sequentially and 42% year-over-year in Q3, driven by higher realized gold prices and increased sales volumes [3][4] - The company is well-positioned to maintain healthy margins and execute its long-term growth strategy, supported by rising gold prices and disciplined cost management [4] Peer Comparison - Among peers, Agnico Eagle Mines Limited reported AISC of $1,373 per ounce, a 7% increase year-over-year, while Newmont Corp. reported AISC of $1,566 per ounce, down 2.8% year-over-year, but expects an increase in 2025 [5][6] Stock Performance and Valuation - Aris Mining's shares have increased by 65.3% over the past three months, outperforming the industry growth of 22.3% [7] - The company is trading at a forward price-to-earnings ratio of 7.30X, significantly lower than the industry average of 13.56X, indicating potential undervaluation [10] Earnings Estimates - The Zacks Consensus Estimate for Aris Mining's earnings has risen by 32.5% for 2025 over the past 60 days, reflecting positive market sentiment [12]