Mineros SA Full-Year 2020 Net Income Drops 42%, but 4Q Shows Rebound

Medellin-based multinational gold mining giant Mineros SA announced March 8 that its full-year 2020 profits fell 42% year-on-year, to US$37.5 million, but fourth quarter (4Q) 2020 rose 54% year-on-year, to US$13 million.

Full-year 2020 earnings before interest, taxes, depreciation and amortization (EBITDA) dipped 32%, to US$128 million, while gross revenues fell 16%, to US$411 million.

“During the fourth quarter of 2020, the price of gold had a stable behavior with a slight increase of 0.7%, with an average price for the quarter of US$1,876 per ounce,” according to Mineros.

Corporate-wide 4Q 2020 gold production fell 19% year-on-year, to 64,908 ounces of gold, of which Colombia accounted for 17,561 ounces, Nicaragua 26,660 ounces and Argentina 20,687 ounces.

The 4Q production decline resulted from “a drop in production from Nicaragua due to hurricanes ‘Iota’ and ‘Eta’ and by lower production in Argentina, explained by the natural ending of a deposit of the open pit mine,” according to Mineros.

Cash cost of production rose 14% while all-in sustaining costs (AISC) rose 24%, “mainly explained by the lower production, by the purchases of artisanal material in Nicaragua given the high price of gold and by investments in maintenance that had been delayed because of the [Covid-19] pandemic,” according to the company.

However, the average selling price of gold in 4Q 2020 rose 28% year-on-year, boosting total revenues despite the production decline.

At the end of 4Q 2020, net debt — total debt less cash and equivalents — fell 82% year-on-year, to US$11 million. “This decrease is mainly due to the increase in cash and cash equivalents totaling more than US$57 million, along with a US$13 million decrease in debt,” according to the company.

In Colombia, 4Q 2020 production fell 14% year-on-year, to 18,000 ounces, “explained by a lower average grade, by the sale of Operadora Minera [underground mining] and by delays in some environmental permits during the quarter, given the difficulty of coordinating visits with the authorities due to Covid,” according to the company.

Future Plans

Mineros now foresees 2021 production in the range of 257,000 to 282,000 ounces of gold.

Its 2021 plans also include exploration programs aiming to increase the life of the Gualcamayo mine in Argentina, as well as “completion of internal technical studies for the Porvenir and Luna Roja mines in Nicaragua, the DCP mine in Argentina and the La Pepa mine in Chile,” according to the company.

Mineros also aims to “develop new alluvial mining methods in Colombia, to increase annual production and diversify operations. We are currently at the final stages of an internal project that uses suction dredges to reach new areas. Also, we have been working on a formalization model, bringing third parties that operate within our mining titles, in areas that our dredges cannot access,” the company added.