Mineros SA 1Q 2021 Net Income Dips 14% Year-on-Year

Medellin-based multinational gold mining giant Mineros SA announced May 10 that its first quarter (1Q) 2021 net income dipped 14% year-on-year, to US$13.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7% year-on-year, to US$45.1 million, while gross revenues rose 8%, to US$125.4 million, according to the company.

The revenue hike came from an 11% rise in average quarterly world gold prices, to US$1,707 per ounce, “partially offset by lower production,” according to Mineros.

“Total costs increased by 12%, reaching US$ 88 million, due to the increase in depreciation and amortization, a higher cost of purchases of handicraft material, the cost of material from [irregular miner] formalization contracts and the non-recurring payment of external consultancies,” according to Mineros.

“Administrative expenses had an increase of 15%, explained by the annual salary increase and external consultancy payments, partially offset by lower expenses in technology,” the company added.

Total gold production during 1Q 2021 was 65,473 ounces, of which 20,782 ounces were in Colombia (down 9%); 30,041 ounces in Nicaragua and 14,650 ounces in Argentina, according to the company.

The Colombia production dip “is explained by the sale of Operadora Minera [underground mining], since the alluvial operation showed a 10% increase in production,” according to Mineros.

All-in sustaining cost (AISC) in Colombia was US$1,108/ounce, up 26% year-on-year, “explained by the non-recurring payment of an external consultancy for US$1.5 million, due to the higher cost of the ounces generated by formalization dredges and by greater execution of investments in sustainability,” according to the company.

In the “Hemco” operation in Nicaragua, production dipped 6% “due to a lower average grade of 5%” in rock production.

“The AISC reached US$1,366/oz explained by higher cost of material from artisanal mining and higher execution of maintenance investments,” the company added.

In Argentina, 1Q 2021 production “fell by 19% compared to the first quarter of 2020, explained by the natural depletion of an open-pit mining sector,” while a “significant increase in the AISC is explained by the investments that have been made in the uncovering of a new open pit mine, in the development of the underground mine and in the expansion of the leaching piles,” according to the company.

As for the rest-of-2021 outlook, Mineros now estimates total gold production “in a range between 257,000 to 282,000 ounces,” along with continuing advances in exploration and mining life-extension projects at the Gualcamayo mine in Argentina.

In addition, Mineros will “carry out internal technical studies for Porvenir and Luna Roja (Nicaragua), DCP (Argentina) and La Pepa (Chile),” according to the company.