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Aris Mining (ARMN) - 2024 Q3 - Earnings Call Transcript
ARMNAris Mining (ARMN)2024-11-13 16:50
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Financial Data and Key Metrics Changes - In Q3 2024, the company produced 53,600 ounces of gold, a 9% increase over Q2 2024, with all-in sustaining margins at Segovia rising 37% to 44millioncomparedto44 million compared to 32 million in Q2 [5][19] - Adjusted EBITDA for the 12 months ending September 30, 2024, was 147million,withadjustednetincomeof147 million, with adjusted net income of 43 million [5][35] - Gold revenue increased by 15% quarter-over-quarter to 131.6million,drivenbyahigherrealizedgoldpriceof131.6 million, driven by a higher realized gold price of 2,447 per ounce and gold sales of approximately 54,000 ounces, up 9% [19][20] Business Line Data and Key Metrics Changes - Segovia produced 136,106 ounces of gold in the first nine months of 2024, with a projected full-year production between 185,000 and 195,000 ounces [10] - Marmato Upper Mines contributed 17,485 ounces of gold, with construction of the Lower Mine on track and reaching a 25% spend level milestone by the end of September [7][15] Market Data and Key Metrics Changes - The realized gold price increased by 6% in Q3 to 2,457perounce,whileall−insustainingcostsdeclinedby22,457 per ounce, while all-in sustaining costs declined by 2% to 1,540 per ounce, resulting in an all-in sustaining cost margin of 918perounce[11][12]CompanyStrategyandDevelopmentDirection−Thecompanyistargetinganannualgoldproductionrateofapproximately500,000ouncesbythesecondhalfof2026,withongoingexpansionsatSegoviaandMarmato[8][35]−TheexpansionatSegoviaisprogressing,withPhase1completedandPhase2scheduledforcompletioninQ12025,aimingtoincreaseprocessingcapacityfrom2,000tonsperdayto3,000tons[6][14]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthegrowthstrategy,highlightingastrongcashpositionof918 per ounce [11][12] Company Strategy and Development Direction - The company is targeting an annual gold production rate of approximately 500,000 ounces by the second half of 2026, with ongoing expansions at Segovia and Marmato [8][35] - The expansion at Segovia is progressing, with Phase 1 completed and Phase 2 scheduled for completion in Q1 2025, aiming to increase processing capacity from 2,000 tons per day to 3,000 tons [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth strategy, highlighting a strong cash position of 266 million post-Q3, which supports ongoing expansion projects [28][33] - The company is actively engaging with local communities and stakeholders regarding the Soto Norte project, aiming to secure a social license for development [42] Other Important Information - The company refinanced 300millionnoteswithanewfive−year300 million notes with a new five-year 450 million note at 8%, extending debt maturity to October 2029 [8][29] - A net cash outflow of 41.4millioninQ3resultedinacashbalanceof41.4 million in Q3 resulted in a cash balance of 80.3 million at quarter-end, which has since increased to $266 million due to recent financing activities [26][28] Q&A Session Summary Question: Update on mill expansion at Segovia - Management confirmed readiness to receive extra tonnage from both Aris site and CMP mining, with 46 contracts in place and 41 awaiting approval [37][40] Question: Planned tonnage from CMP once reaching 3,000 tons - The plan is to pull in 1,800 tons from Aris and the remainder from CMP, indicating an increase of 400 tons per day from CMP [38][39] Question: Update on Soto Norte project discussions - The Country Manager reported ongoing engagement with local communities and stakeholders, with positive alignment on the company's vision for Soto Norte [42]