Aura Minerals Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 21, 2024

There are 6 speakers on the call.

Operator

Good morning, ladies and gentlemen. Welcome to Q4 2023 Earnings Call. This conference is being recorded and a replay will be available at the company's website atoraminerals.com/investidores. The presentation will also be available for download. This call is also available in Portuguese.

Operator

To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select mute original audio. We would like to inform that all attendees will only be listening to the conference during the presentation, and then we will start the question and answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the Company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur.

Operator

Investors should be aware of events related to the macro economic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward looking statements. Present at this conference we have Rodrigo Barbosa, President and CEO and Klebert Cardoso, the CFO. Now, I'll turn the conference over to Rodrigo Barbosa. You may begin your conference.

Speaker 1

Thank you. Good morning. We are here to talk about the Q4 results and the year end 2023 and also share our guidance for the year 2024. First, the year 2023 was not only important for achieving important financial results, but we did that under the highest ESG standards. First and foremost, we achieved during the year 2023 0 lost time incidents in all operations.

Speaker 1

We now have 4 operations. We finished building Almas. We started building Borborema and we could achieve significant results by not having any lost time incidents and making sure that one of the most value that we have, which is safe first for our employees, we are taking care of everybody that works with us, not only our own employees, but the third parties that comes to our operations. We have an excessive training for them to achieve these goals. This is a long term goal that we've been working across the operations for 3, 4, 5 years significantly on a daily basis that could result in this zero lost time incidents for the year.

Speaker 1

And we aim to maintain this is challenging, but we aim to maintain 0 lost time. Until today, we are at the 0 lost time. Also incidentally, we may want to achieve this at the 2024 as well. On the again, on the SG and A, we also innovated 1 initiatives to help and to bring to Honduras a new source of income. That area in Honduras that we operate is very similar to only one area in Sao Paulo that's producing high quality wines.

Speaker 1

We brought some experts and that we could test the soil and the weather that in the mine where we operate in Honduras could also provide a chance for the people that work around that area to produce high quality wines. We did that. This initiative is we planted as we're going to show those grapes in the area that we already mined And then instead of planting trees, we are now planting we will plant grapes and see if that could become a new source of income for the communities around us. They already produce coffee, so transition into wines could be important for them. In terms of production in Q4 and also results, we achieved the highest production for the quarter at 69,200 gold equivalent ounces in the quarter.

Speaker 1

This is 7% higher than Q3 last year. We were projecting to be the last part of the highest one, and we did that. And that generated $88,000,000 for the whole year in terms of free cash flow recurring. Going operations, for the year so, we achieved the 235,000 of gold equivalent ounces. And as we're going to see for 2024, we are aiming to continue to grow and achieve higher production as we will share guidance as we now have Minosa is on a running rate in the last quarter.

Speaker 1

We are ready to implement initiatives to increase production in Apoena. Aranzazu continued to be stable and now we have full year almost so we should be continue to grow in 2024. And as Azul in the quarter, very much in line with expectations, very stable. We will see a minor reduction in production that comes from mine planning, but that's not meaningful in terms of changes, continuing to achieve a very, very strong results in ADRESA ZO. What we will see for the year 2024 in ADRESA ZO in terms of cost, we will see some increase in cost for other words, basically for 3 different variables.

Speaker 1

1, it's the exchange rate. So the Mexican peso is appreciating compared to the dollar, so that push our cost up. Now there's some inflation. We are fighting against inflation, but some inflation is going to our costs. And then third is mine sequencing also, but that will not be significant.

Speaker 1

In Minoassa, we achieved 17,900, 18,000 ounces of production in the quarter, a new 2% increase compared to Q3, remembering that we started the year in Mimosa very challenging. If you compare last quarter of 2022 to the last quarter of 2024, this is 47%, 50% increase. So during the whole year of 2023, as we were disclosing to the market, we were gradually improving the operations, fixing the reduction productivity and this will every quarter, we will be we were able to increase production. Now I believe that we are reaching some running rate and we're already starting the year of 2024, very strong at the running rate that's supposed to be aiming awesome. In Apoena, again, we were expecting to increase production due to going to Ernesto pit, so we increased to 15,000 ounces of gold produced.

Speaker 1

This is a 36% higher than Q4 2023, but also a reduction compared to Q4 on 2022, mostly because we are Q4 of 2020 2, we were full quarter on very high grade of Ernesto. Now we work passionately on this high grade of Ernesto. With delayed entering the Ernesto pit due to the heavy rains during Q3 of the year. And so some of this high grade, it was pushed through the Q1, which we are now mining during the 2024. Alma, we reached close to 10,000 ounces of production of gold.

Speaker 1

That is a 1st full quarter in production, remaining that the Q3, we had a partial quarter once we declared commercial production during the quarter. Almas, we as we shared during our day, we were very high production during Q3. Once we reached fresh rock, more hard rock, we had a reduction productivity that also affected the Q4 production, which was although an increase compared to Q3, it was below expectations and below the running rate. I would highlight that this reduction in productivity during Q4 is already addressed and we finished December already at above 1,000,000 tons on the mine. So we are very strong in the running rate as we're supposed to be.

Speaker 1

So starting the year of 2024 very strong according to our plan. In terms of how we're in sustaining cash cost, we saw a cash cost at $13.11 It's a 9% decrease compared to Q3 as we were projecting very much in line with our guidance that we gave to the market. And this reduction comes from the high production in Apoena, high productivity also in immunoassa. And we can we expect the year for 2024 to be very much in line of the year of 2023, perhaps a little bit below or a little bit higher depending on the situations according to the operations during the year. In terms of adjusted EBITDA, we had $41,000,000 of EBITDA, the strongest EBITDA for the year as we were projecting to have a stronger EBITDA during the Q4.

Speaker 1

This is a 37% increase compared to Q3, and that is a result of increased production in operations, as I mentioned, in the household, higher gold prices and lower cash costs. In terms of growth, I would highlight the company continued to cement our path to the production of 450,000 ounces of gold equivalent. That will as I was sharing with the as we shared, it comes from the development of 3 projects, ALMS, Borborema and then Matupa. ALMS, first greenfield project that we built on time, on budget. We finished the construction during 2023.

Speaker 1

We ramped up in 5 months. We built in 16 months, setting new benchmark in the market compared to the other mines that's being built on budget, on time and is already in full production. Borborema, we updated during the year feasibility study. We published the feasibility study. We raised the capital to fund Borrema and we already started the construction and we are already at 18% of the whole construction complete and very much in line with our expectations in terms of so far on deadlines and also budget.

Speaker 1

So we continue to path our way to continue to grow during the year 2024, 2025 and 2020 6. Again, in terms of safety, that's something that we are very proud and it's an achievement that belongs to the whole team that's working on a daily basis to achieve those numbers. In AMAZ, we achieved this in June 2023, Apoena July, Aras Azul, September and then Minas, October. So we are now four of operations with a zero lost time incidence over a year because we finished the year and we continue to be at the 0 loss time incident until now. On OpEx stability and the structures, as we share with our Board, as we share with our employees and as we share with our investors.

Speaker 1

We have a strong management of all geotechnical structures that is being analyzed on the monthly basis by external parties, by a consultant. So the and now we have the online monitoring system all across our operations. And we are with gelconsutoria, which is one of the most well known consultant firms for checking stability of Agile technical structures, and we are with anticipatory level all across Agile technical structures, which means on the Thales Dam, on the leach pads, on the pits, and on the ground also developments. As I also mentioned, we had a significant coverage by the national press in Honduras with these new initiatives to bring high quality wines, which in the end of the day, what we want is to bring a new source of income for the communities around us so that they do not depend so much on the mine so they can have other initiatives to have other sources of gains. We know that mining and gold mines has one day we will finish mining there.

Speaker 1

We will replant 100 percent of the areas and then instead of leaving them with only trees, we would like to leave them also with a new source of income that they can benefit from these new initiatives. Of course, this is a 3, 4 year test that we need to understand if it is going to work, but we are very positive that this can help significantly not only then the area, but it can grow the whole country of Honduras and other countries around Honduras. And the picture that we saw in the corner right, this area that has already been mined in the past. So we are now using this area for planting grapes and test if they can be a source of high quality wines. In terms of production, I'll go in details here, but on the left chart, I would highlight on the bars is the production by quarter.

Speaker 1

In the line, it is the last 12 months of production. So on the quarter, we had the highest quarter in the year, even highest than the Q4 of 2022, once we have now almost in production. But very importantly is that from Q2 to Q3, we inverted the curve that we were having reduction in production over the last 12 months due to the challenge that we had in Honduras in the beginning of the year than the rain we had in the in Apoerena. But now we could start to increase production again with the 65 gold equivalent ounce of production in Q3 and 69 in Q4. So reaching the bottom of 2028, 228 gold equivalent ounces produced on the last 12 months on the Q2 2023 increased to 234,236 and it's very to grow along the year of 2024.

Speaker 1

Once we are now we should not we're entering the 20 year with a strong production all across our operations plus now we have almonds that is contributed to production increase during the year. And I would invite you also to look if you want to see 2 years ahead, then in 2025, we will see Bor Borrema also production kicking in along the year. We should continue to grow during the year 2025 as well. Next one, I already explained. So in terms of cash cost, Q2, we had an increase compared to Q1.

Speaker 1

Then in Q3, another increase mostly because we passed, as we explained, a low grade and stockpile in Apoena. They had although we made cash doing that, the cash costs increased. Now we started having a higher grade in Apo and again, we don't expect to have that low grade that we had in Q3. We don't have this in the stockpile anymore. So in Q4, this up mostly apoena that we could decrease our cost and somehow Minoza to 1311, which is as we expected to the market.

Speaker 1

In terms of guidance, so we saw the year of 2023 production of 236 gold equivalent ounces. Now we projected the market to be 244 to 292. We're entering the year with Minoza at the running rate Apoena. Also, we will do some improvements in the plant. We will reach a hard rock ore that has impact over productivity in the plant.

Speaker 1

And to compensate that, we are expanding a little bit the plant in order to achieve higher production that we had in the year of 2023. Now we and also continue to be very stable in almonds is kicking in the year, so we should have full production in the year for ALMA that already started the year very much in line with our expectation at the running rate that is expected that we finish the year of 2023. In terms of cash costs, very much in line with the year 2023. There is difference between the mines. As I mentioned, there will be a decrease in MINOSAP.

Speaker 1

There is a decrease in almonds. There is an increase in others as well due to the exchange rate and some inflation. All in sustaining cash costs also very much in line with the year of 2023. And then when we project the CapEx for the year 2024, we see sustaining very much in line with 2023, but now we need to add ALMUS that also needs to do its sustaining CapEx and operations. Exploration was slightly below the year of 2023.

Speaker 1

And then when you see the new projects and expansion that we are now including Borborema that is under construction. That's why you'll see this increase from $56,000,000 to $144,000,000, 169,000,000 Most of the CapEx of Bolborema go through the year of 2024 and some remaining for the year of 2025. In terms of development of the project, again, we not only finished ALMA's on time on budget, but we did that setting new benchmark in the sector. We are now slightly over between 17%, 18% of completed in Borrema and we expect to start the ramp up in Q1, twenty nineteen with 5. Most of the land work has already been done and we are already initiating civil works.

Speaker 1

We have more than 350 people at the project. And most as we have as we did also with AMOS, we focus hiring people locally. So we have about 70% of the employees working at the site coming from the city that's nearby, Cahuaios Navios, which is the closest city to operations. Also, very importantly is that as we are progressing in the project, although it is built 18%, 17%, we already have negotiated or have a very strong already information about the total CapEx, over 61% of the total CapEx, we are already under contract. So we are very much in line with what we were projecting.

Speaker 1

So yet there's no deviation. We continue to be on time, on budget in this project and then hopefully we'll be able to start the ramp up by early 2025. In parallel, I would highlight very importantly to the investors is that this project starts with reserves around 815,000 ounces of reserves, but we have over 2,000,000 ounces of resources. You cannot say that you have for reserves, the areas need to be fully licensed As one road crosses close to the pit, we are limited on the feasibility study to have only 850,000 gold equivalent ounces of reserves, but as we move one road that reserves can be more than doubled and reach close to 2,000,000 ounces after we get the license for moving this road and all the process of moving this road, which is already regulated by law is in place. It takes time, but we already initiated all the conversations with the NIT, the National Department for roles in order to change.

Speaker 1

There was a not significant change, but we required some time to reach that. So that's the overview. I will come back with the question and answers, and I will pass the floor to Kleber that will share and highlight more the financial results.

Speaker 2

Thank you, Rodrigo. Good morning, everyone. We're going to start with sharing a page with the main financial KPIs the company is reporting with the market. In terms of starting with net revenues, we reported $124,000,000 in revenues on Q4. As Rodrigo explained, it's following the same trend as we saw for production.

Speaker 2

So it's the 3rd increase in a row, increasing faster than production because of more favorable gold prices during Q4. In the year, we are exceeding our revenues are exceeding $415,000,000 increasing 6% compared to 2022. When we go to adjusted EBITDA, it's a similar trend, the strongest EBITDA in the year at $41,000,000 at Q4. We also see the strength of the adjusted EBITDA improving over the last two quarters as a combination, as Rodrigo presented of both stronger production, more favorable gold prices, but also reduction in the cash cost in the last quarter. And then in Q4, we're reporting more or less the same EBITDA.

Speaker 2

We were reported the same quarter last year, $41,000,000 And also for the year, we're closing stable compared to 2022 at $134,000,000 for the year. When it comes to net income, we're reporting this quarter a loss of $6,000,000 which derives mainly from a nonrecurring and noncash item related to the market to market adjustments of Burberry made out the Alma's project Gold Collars of $28,000,000 I'm going to go at the end of my presentation, I mean, more details of this number, but again, the non cash cannot expect to be in the future a cash loss. Excluding that impact, our net income for the quarter would have been 20 $2,000,000 positive, also would have been the strongest in the year. And then finally, in terms of cash and net debt, we closed the year strong, an important reduction in the net debt position coming from $112,000,000 by the end of Q3 to $85,000,000 at the end of the year, despite the fact that we paid CAD80 1,000,000 in dividends in December. And we finished the year also with a strong cash position of $237,000,000 Now understand the main items impacting between adjusted EBITDA and net income for the quarter.

Speaker 2

As we saw on the previous page, adjusted EBITDA of $41,000,000 of which Sharon Zazu once again is our strongest business unit, reporting EBITDA of $80,000,000 during Q4. I would highlight also the improvements in Minoza and Apoena. Minoza, we're seeing for the Q4 in a row increase in production, but also especially in the last quarter reduction, significant reduction in cash costs and therefore improvement in EBITDA exceeding $10,000,000 in the quarter. Up when I also with important improvements of EBITDA compared to the last quarter, dollars 9,400,000 and now despite the challenges reported $5,000,000 EBITDA positive EBITDA in the quarter. Amortization depletion, once again, it's been consistent over the quarters at $11,000,000 Finance, we required the finance expenses of $37,000,000 of which, as I said, dollars 20,000,000 is non cash related to the gold collars Berbovenin Almas, which I'm going to go over more in detail later.

Speaker 2

On this quarter, we are reporting income tax gain of $4,000,000 This is mainly due to the recognition on this quarter of a deferred tax assets of $70,000,000 at Almas. And this is because Almas before it reached commercial production, it incurred in losses for a couple of years as it had no revenues. Those losses in Brazil, they generated income tax assets, which could not be recognizing our balance sheet before Almas declared commercial production and was profitable. So we see that as also positive news. We're going to have this $7,000,000 which are going to become cash savings in the future.

Speaker 2

Then other items, dollars 3,000,000 expenses, bringing the net loss in the quarter at $6,000,000 But again, the pro form a excluding those market to market items would be positive at 2022. Then on stage, we bring a detailed analysis showing the changes in the cash and equivalents positions of the company throughout the Q4 of the year. Here on the far left side of the page, we see we started the quarter with $179,000,000 in cash. Then more to this left side of the page is what we call just free cash flow to firm, which is the free cash flow to firm and generated by the 4 miners in production, excluding the investments we do to expand our operations and exploration. So we see it was a strong quarter.

Speaker 2

The mine is in production, generates $38,000,000 We already highlighted the stronger EBITDA, also positive working capital generation in the quarter. Then here in the middle of the chart, what we call investment for growth, how much we invested, for example, in acquiring the shares of Altamira, pending exploration and expansion CapEx. The total for the quarter was $9,000,000 which is going to be much higher for the next quarters as the construction of Ruberema advances this year. And to the right side, the financial items, which I would realize the $21,000,000 we received at Werbaerema related to the royalties and the payments of dividends we made in December of $80,000,000 bringing the cash to $237,000,000 at the end of the quarter. And now looking at some analysis that we showed for the quarter, this was for the entire year of this page shows that for the entire year of 2023, we see that the adjusted free cash flow to FIRM, the mining operation generated $88,000,000 which was more than enough to pay for the investment for growth of the company.

Speaker 2

We invested $74,000,000 to grow the company, of which $25,000,000 in exploration, which are going to increase our mineral reserves and mineral resources and increase the life of mine of the company. In the final phase of ALMA's construction, ALMA's ramp up. And then to the right side, again, the items, the free cash flow from financing activities, highlighting mainly the proceeds from that that we raised to build the Buraima mainly this year and the $28,000,000 cash flow cash outflow dividends, which we paid in June December. And then to conclude, so this is the analysis as referring to the more detailed explanation about the $28,000,000,000 non cash finance expenses, which were recorded in the quarter. So to understand it, starting the explanation with the top side of the page, what happened in the business.

Speaker 2

So in September, the company had about 175,000 ounces in gold colors in its books, mostly related to the ALMA's Gold Collar Risk Management Program, which we entered a few years ago in the first phase of the Berbodemo hedging program. In December, that 175,000 ounces increased to 290,000 ounces. So it was increase of 70% because we completed the Burbodema gold hedging program coming from about 80,000 ounces of gold colors to 215,000 ounces. At the same time, during the 4th quarter, we saw a sharp increase in gold prices, which is very good for our business. Gold prices appreciated more than $200 between the end of the 2 quarters.

Speaker 2

So the combination of having more gold colors in our books and higher gold prices at closing had a different impact in our balance sheets and P and Ls in our P and L. In the balance sheets, we see the impacts of a $14,500,000 cash gain revenue, which was the premium paid by the banks to participate in the Burbotema hedging program. We collect already out of those $14,500,000 we collect already $4,000,000 in 2023 and are going to collect another $10,400,000 by June 2024. And on the other hand, following IFRS standards at the end of each quarter, we needed to do a market to market adjustments in our balance sheets of all outstanding positions. Because of the increase in gold prices, the market to market position of those open derivatives generate a liability of $43,000,000 at the end of the year, which we consider and we expect to be a non cash liability because of two reasons.

Speaker 2

First, all the open positions we have in our books, the strike prices are of these good callers. The call strike prices are way above spot prices. So spot is around 2,000, 2,030 now. And the selling prices for these derivatives are above $2,400. And the second, we expect to hold all dispositions until maturity, which means if market conditions this liability will disappear over time without cash impact to and open to questions.

Speaker 2

Thank you.

Speaker 1

Very well. So just a few summary. As you could see, a very important year for Aurum. First, we generated $88,000,000 on recurring free cash flow to firm. That was more than enough to fund the growth, but we also can leverage to fund the growth and also pay the dividends.

Speaker 1

And we did all of that under the highest ESG with the 0 loss timing incidents, doing the right thing on the ESG standards. And as important as the results is, we set the standards on the Q4. We increased production in Minoasa, in Apoena, in Amas, And we set the standards to start the year of 2024 very strong, very much in line with our expectations and now having Amazon through production and then building a board board to start the ramp up in early 2025. So it was a very important year, which we achieved important results and setting the path to 450 gold equivalent analysis by annualized by the end of 2025.

Operator

We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please press the raise hand button. If your question has already been answered, you can leave the queue by clicking on put hand down. Our first question comes from Ricardo Monengaglia with Safra. You can activate your microphone.

Speaker 3

Hello, good morning. Can you hear me?

Speaker 1

Yes.

Speaker 3

Okay. I have a couple of questions on EPP. Do you expect more volumes coming from Ernesto in Q1 relative to the Q4? And maybe what is the timeline for the plant's capacity expansion that you mentioned in the press release? Maybe some budget for this expansion would be nice.

Speaker 3

Second question on Borborema. I understood the project sometime and on budget, but just to get a sense of what are the key milestones in the project execution that could define if the project remains on time and budget? And lastly, a quick question. Are there any legislations under discussion in Brazil that could affect some sort your exploration works? That's it.

Speaker 3

Thank you, guys.

Speaker 1

Thank you, Ricardo. So first, in Apohena, there is a remaining ore in the NetSol that we are now mining in Q1. Not necessarily, it will be more than we mined in Q4 last year. Now and then we will be switching more to Nozde Pit. Nozde Pit has a harder rock that decreased somehow productivity of the plant, but we are doing investments to upgrade the plant and increase our capacity so that we can achieve even higher production compared to 2023 during the year of 2024.

Speaker 1

Borborema, I'm not sure if I understood the question. Can you please repeat?

Speaker 3

Yes, sure. So what are the key milestones in the project execution or construction that could that you see in 2024? Like what rules define if the project remains on time and on budget? What are the key deliveries for 2024?

Speaker 1

Yes, it's daily deliveries, but I think the first one is finishing land work and this has been accomplished, so now entering the civil works. And then during the 2nd semester, we will also start building and assembling the plant. One important milestone is the delivery of the mill, which is expected for the Q4 of 2020 24, which will allow us then to start commissioning and ramp up during 2025. So all civil works and starting assembling civil works during this quarter this semester, starting assembling during the 2nd semester and then finishing assembled with the mule to be delivered on the Q4 of the year. Our team has already visited the supplier in China, very impressed how diligent they are on schedule, on program, they are ready and the mill is being built on time, on budget.

Speaker 1

We don't expect yet any kind of delays. And then you asked about the regulation in terms of to affect respiration. I'm not aware of any regulation that would affect our exploration program for near mine. We have most of the areas that we are mining or doing exploration in this area that has a it's a farm not close in regional area, not close to highly protected areas in terms of forest. So we do not expect the regulation to interfere in our exploration program in Brazil.

Speaker 3

Thank you.

Operator

Next question from Roman Rossi with Canaccord Genuity. You can activate your microphone.

Speaker 4

Good morning, guys. Yeah, I have a couple of questions. Regarding Borboremi, Rodrigo, you mentioned that once you move the road, you will double the amount of resources. Do you have any sense on what this could represent in terms of NPV?

Speaker 1

Yes, we are upgrading the feasibility study. We will publish as we do that. Yet we cannot do all the disclosures. But you have I would invite you to understand and just make a simulation in 2 ways, right? So first is if we extend the reserve, we can do that before moving the rules.

Speaker 1

We can increase our reserves just by having the permit to do that. But of course, you can just put in production as we've moved. Either but we don't want these new reserves to be at the end of the life of mine. So that's why what we are doing, we are doing building a plant flexible enough for us to increase our capacity once we have this permit to move the roads so that we can advance those kind of reserves into the production on the year 4, 5 or 6 this of Borborema. Again, 3 years 3, 4 years to move the road and then you can start thinking about increasing production in the project going from 2,000,000 tonnes production up to 3,000,000 tonnes of production by the year of after 4 years.

Speaker 4

Okay, perfect. The second one is regarding the hedging. It's probably for clever. You have 10,000 ounces hedged at EPP with 2,100 ceiling prices. And this is expiring between March 2023 December 2025.

Speaker 4

So I just wanted to get a sense on how these derivatives are expiring because, for example, for 2025, my gold target price is above that ceiling. Right. So I just wanted to understand what could be the potential impact if gold prices go above 2,100?

Speaker 2

Yes. It's between now and the maturity, they are about straight line, Raman, expiration. So they are not concentrated in 2024 or 2025. It's on a basis there is like they are spread.

Speaker 4

Okay, perfect. Perfect. And finally regarding dividends, based on your current policy it seems like you wouldn't be paying any dividends during 2024. So what are you seeing for the

Speaker 1

year? No, we don't have this policy that would limit us to pay dividends in 2024. Our policy is 20% of the EBITDA minus recurring CapEx, and we should keep with this policy except if we find a new M and A opportunity that would require more than the cash that we project. So we continue to project dividend payments, yes, for 2024 according to our policy, which is 20% of the EBITDA and recurring

Speaker 4

Okay, awesome. Thank you guys.

Operator

Next question from Diego Castillo. Good morning. Thanks for the presentation of Q4 2023. When are you expecting to start Matupa and how are you expecting to deliver the guidance of 450 production in 2025? Was this guidance postponed?

Speaker 1

No, it is not postponed. Matupa is in the process final process of licensing. We expect to have the license to start the construction by the end of the semester, by June, July this year so that we can start construction right after. And then we will enter in production by the end of 'twenty five. So we continue to after Matopay production and Borborema in full annualized by the end of 2025, reaching the 450,000 gold equivalent ounces of production.

Speaker 1

And again, as you could see, we did not put the construction CapEx for Matupa in our guidance because this still requires licensing, then needs to be approved by the Board to start construction. So then we will revise the guidance for CapEx, but we are now moving the process to reach those milestones.

Operator

Once again, to ask your question, you need to click on raise hand.

Speaker 1

I think if he's making a question, he's on mute.

Operator

I'm afraid he gave up. Elyaklis, you can activate your microphone. Next question from Guilherme Nippes with A40 Club Investimentos. You can activate your microphone.

Speaker 5

Hi. So this is Guilherme Niippis from IXP. So I have one question here. What do you guys expect for Alma's operations given the contractor issues that you faced during the last quarter. So just to make sure I understood, we could expect operations to be normalized in Q1 2024.

Speaker 5

So starting the year with normalized operation to be on track to deliver the production guidance ramp up for 2024?

Speaker 4

Thank you

Speaker 1

for the question, Guilherme. Yes, as we finished the year with the movement at the mine at the speed that it should be. So we already entered January and Q1 of 'twenty four at the expected speeds of production in Alma. So we are very much comfortable to be reaching the full year of production of the year 2024, our financial guidance.

Speaker 5

Thank you.

Operator

The question and answer section is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.

Speaker 1

Thank you all. As I mentioned, very important year. Important milestones, 0 lost time accidents, dollars 88,000,000 of recurring cash flow, dollars 28,000,000 of dividend paid at 6% of dividend year in the year, 3rd year in the row that we have reached the highest dividend, one of the highest dividend yields in the sector in the world. We finished construction of Alma's on time, on budget. We ramped up on time, on budget, setting new benchmarks in the world for building greenfield projects.

Speaker 1

We started construction of Borborema, fully funded already during the Q3. And we did all that with a real zero lost time action. So very proud of what the team is achieving. Yes, we had some challenges in production. I would invite you to see that we finished the Q4 without those challenges.

Speaker 1

We fixed that operations in Minoza. Almas already at a full running rate. Apuena also with a very strong plan to increase production during the year of 2024 and others as well very stable for the year of 2024. And then we continue to build Borboremo in 2025. We will add production of Borboremo along the year.

Speaker 1

So we will continue to show growth on every quarter from here until we've completed Matupa project. So I thank you all for the quarter and then invite you to also to follow-up with our updated resource and reserves that will be on the AIF, and then we will be updating the market also with the milestones as Borborema being built. So thank you again and feel free if you have any additional questions, you can send message to our Investor Relations and we'll be glad to answer our questions. Thank you.

Operator

Our conference is now closed. We thank you for your participation and wish you a nice day.

Powered by Quartr

Key Takeaways

  • In 2023 the company achieved zero lost-time incidents across its four operations, and aims to maintain this safety record in 2024.
  • Q4 production reached a record 69,200 gold equivalent ounces (up 7% quarter-on-quarter), contributing to 235,000 GEO for 2023 and generating $88 million in recurring free cash flow.
  • Financially, Q4 revenues were $124 million with adjusted EBITDA of $41 million; net debt fell to $85 million, and the company paid $28 million in dividends (a 6% yield).
  • Growth projects remain on track, with the Almas greenfield delivered on time and budget, Borborema 18% complete targeting early-2025 ramp up, and Matupa licensing underway for 2025 production.
  • Under its ESG agenda, the company launched a pilot grape cultivation program in Honduras to create post-mining income streams for local communities.
AI Generated. May Contain Errors.
Earnings Conference Call
Aura Minerals Q4 2023
00:00 / 00:00