Mineros SA 2Q 2019 Net Income Drops 41% Year-on-Year

Medellin-based socially responsible gold miner Mineros SA announced that its second quarter (2Q) 2019 net income fell 41% year-on-year, to COP$11 billion (US$3.2 million).

“The decrease in net income is mainly explained by an increase in financial expenses — close to COP$6.6 billion (US$1.9 million), derived from the acquisition of Gualcamayo [mining in Argentina], as well as [currency] exchange [costs] on the order of COP$3.7 billion [US$1.07 million) and higher exploration expenses” for proposed mining projects in Argentina and Chile, according to Mineros.

On the other hand, earnings before interest, taxes, depreciation and amortization (EBITDA) rose 47% year-on-year, to COP$94 billion (US$27 million). EBITDA margin for the latest quarter rose slightly, to 31.5%, compared to 31.1% in 2Q 2018, according to Mineros.

Revenues also rose 45% year-on-year, to COP$298 billion (US$$86.7 million), “explained by a 30% increase in production due mainly to the new ounces from our [recently acquired] operations in Argentina, at an 11.8% higher sale price of gold” as measured in Colombian pesos, according to the company.

Operating costs also rose 55% year-on-year, hitting COP$235 billion (US$68 million), “due to the operating costs (about COP$75 billion/US$22 million) in Argentina that did not exist in the prior year, as well as greater purchases of mining material in Nicaragua [at COP$9.3 billion/US$2.7 million],” according to Mineros.

Gross profit for 2Q 2019 grew 17%, reaching COP$63 billion (US$18 million), with a margin of 21.2%, versus COP$54 billion (US$15.7 million) with a margin of 26.3% in 2Q 2018.

Gold production rose 30% year-on-year, of which Colombia accounted for 15,172 ounces, while Nicaragua contributed 31,610 ounces and Argentina contributed 23,935 ounces.

Full-year 2019 gold production is now estimated in the range of 280,000 to 300,000 ounces of gold equivalent, with “expectations that gold prices continue with high volatility and with an upward tendency,” according to the company.

Colombia Permit Update

Regulatory permitting delays had been holding-up expansion of Mineros’ environmentally responsible alluvial mining in Antioquia, although “we have made some progress,” according to Mineros.

The company recently won permit approval from the Forest Directorate of the Ministry of Environment, following an environmental study on possible impacts on epiphytic species. The company also eventually convinced Corantioquia to lift a prior ban on riverbank mining.

On another front, Mineros recently completed a required impact study for Colombia’s national environmental licensing agency (ANLA) for some proposed logging near a mining site. Then, in an August 16 filing with Colombia’s Superfinanciera corporate oversight agency, Mineros announced that it has finally won crucial ANLA approvals. 

“Mineros S.A. informs the market that via ‘Resolución No. 01612’ of August 15, 2019, ANLA resolved our request to modify the environmental management plan for our alluvial operation, unifying some of the resource-use permits,” according to the company announcement. 

“Through this modification it is [now] possible to continue our alluvial operation, which had been restricted because of delays in obtaining permits,” the company added.