Mineros SA Posts Net Loss for 3Q 2023 on Argentina Mine Sale/Write-Off

Medellin-based multinational gold miner Mineros SA on November 10 posted a third quarter (3Q) 2023 net loss of US$32.5 million — a sharp reversal from the US$2.6 million net profit in 3Q 2022.

“The loss from discontinued operations reflects the value of the loss on the sale of the Gualcamayo property in Argentina (-US$33.5 million), added to the operating loss during the quarter (-US$12.5 million),” according to Mineros..

Despite the net losses, Mineros posted a 2% year-on-year gain in revenues, to US$101.4 million.

On the other hand, 3Q 2023 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 11% year-on-year, to US$33.4 million, according to the company.

“Gross profit and adjusted EBITDA decreased 14% and 11% respectively, due to lower gold production and increased costs,” according to Mineros.

“Net income from continuing operations for the latest quarter benefited from lower deferred taxes (US$5.4 million) and lower current taxes (US$1.7 million), which were offset partially due to higher costs (US$6 million) and exchange differences (US$4.4 million),” the company added.

Explaining the Argentina net loss, Mineros stated the following:

“On September 7, 2023, we signed an agreement with Eris LLC, to sell all shares in circulation of Minas Argentinas S.A., owner of the Gualcamayo property, which includes the Gualcamayo Mine and the Deep Carbonate Project.

“Mineros invested in Gualcamayo in December 2018 with a scenario favorable macroeconomic situation in Argentina. At the time, an operating mine was acquired that was approaching the end of its useful life and the Deep Carbonates Project (DCP) was in preliminary stages.

“The strategy during the almost five years that we were present in Gualcamayo was to use the cash generated by the mine to advance the exploration of the DCP Project. However, in 2019 a new government was elected in Argentina and with it, new measures came that were not favorable for foreign investments.

“The government increased exchange controls, inflation skyrocketed and legal and macroeconomic risk increased. All this caused the mine expenditures to increase disproportionately in relation to with income.”

As for the company’s “Nechi” alluvial mining operations here in Antioquia, Colombia, 3Q 2023 gold production dipped 8% year-on-year, while all-in sustaining costs (AISC) rose 31%, resulting in zero profits for the latest quarter.

The declines were explained by “increases in costs related to higher inter-company royalty payments and higher costs of environmental activities, a 40% increase in sustaining investments and lower production,” according to Mineros.

However, at Nechi, “gross profit remained stable, because the increase in revenue — thanks to the higher price of gold — was offset by the increase in costs,” the company added.

Rest-of-2023 Outlook

Following the poor results in 3Q 2023 — including the sale of Gualcamayo operations — Mineros at least sees better times ahead at its Nicaragua mining operations.

“At the Porvenir Nicaragua project, after obtaining positive results in the pre-feasibility study, so far this year we have exceeded our drilling goal. We are carrying out metallurgical tests and we hope to obtain results by finishing this year, and update the Mineral Resources base in 2024,” according to Mineros.

For all of 2023, Mineros now sees corporate-wide gold production in a range of 239,000 to 262,000 ounces, down from a previous forecast of 264,000 to 292,000 ounces.

Cash costs for all of 2023 are now seen in a range of US$1,170 to US$1,270 per ounce, down from US$1,160 toUS$1,250 per ounce. AISC is now seen in a range from US$1,440 to $1,540 per ounce, higher than its previous estimate of US$1,400 to US$1,490 per ounce.