Mineros SA 3Q 2019 Net Income Triples Year-on-Year

Medellin-based multinational gold mining giant Mineros SA on November 13 reported a 227% year-on-year boost in third quarter (3Q) 2019 net income, hitting COP$64.7 billion (US$18.7 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise jumped 122%, to COP$127 billion (US$37 million), while EBITDA margin also rose to 35.8%, from 31% in 3Q 2018.

Gold production also jumped by 44% year-on-year – mainly because of additional output via the December 2018 acquisition of Argentinian assets (Gualcamayo).

In its financial report, Mineros noted that at the end of 3Q 2019, “the [global] price of gold had a positive behavior” at US$1,485 per ounce, up 5.41% over 2Q 2019 and up 15.8% over end-2018.

Meanwhile, Colombian peso depreciation against the U.S. dollar hit nearly COP$3,500/US$1 during 3Q 2019, Mineros noted. However, “for the remainder of the year, we expect interest rate reductions by the U.S. Federal Reserve and [investor] appetite for risk in emerging countries will strengthen the Colombian peso.”

Corporate-wide production in 3Q 2019 hit 73,078 ounces of gold-equivalent, of which Colombia accounted for 15,213 ounces, Nicaragua at 33,843 ounces and Argentina at 24,021 ounces.

Colombian output will rise again as long-pending environmental permits finally were approved at end-August, with production levels beginning to show a rebound in September, the company noted.

For the rest of 2019, Mineros projects a 20,000-ounce boost in production, likely delivering a full-year range of 300,000 to 320,000 ounces of gold-equivalent.

As explained in a separate November 12 presentation here at the annual Colombia Gold Symposium by Eduardo Flores, Mineros SA business development vice-president, Mineros continues to enjoy its best EBITDA results in relatively low-cost, low-environmental-impact alluvial mining in Colombia.

Over the next five years, Mineros aims to expand production in its four operating countries (Chile debuting last), boosting prospects for an envisioned US$1-billion market cap by 2025. Such a jump from “junior” to “intermediate” size will help attract more capital and hence better liquidity, Flores added.

Five projects in the pipeline eventually would enable another 10 million ounces of gold-equivalent production, he said. Resources and reserves likewise would hit around 18 million ounces by 2025, he estimated.