Andean Precious Metals TSE: APM reported record third-quarter 2026 revenue of $196.6 million, helped by higher realized metal prices and the sale of finished inventory held back at the end of the previous quarter.
The company generated $69.8 million in free cash flow, up from $12.4 million a year earlier, and produced 27,262 gold equivalent ounces, a 6% increase. Management cautioned that the inventory sale boosted the quarter’s results and should not be treated as recurring production or a normal cash-flow run rate.
“The sale represented the realization of previously produced inventory rather than an incremental production during the quarter,” Executive Chairman and CEO Alberto Morales said.
Inventory Sale Boosts Revenue and Cash Flow
Revenue rose 117% from $90.4 million in the third quarter of 2025. CFO Juan Carlos Sandoval said average realized prices increased 24% to $4,287 per gold ounce and 58% to $63.49 per silver ounce. Silver accounted for approximately 71% of quarterly revenue.
The company sold approximately 732,000 ounces of silver and 2,600 ounces of gold that it had held at June 30, generating roughly $56.3 million in gross proceeds. The inventory had a carrying cost of $37.6 million, and the resulting margin was recognized in the third quarter, Sandoval said.
Adjusted EBITDA increased 51% to $54.4 million, while gross profit rose to $55.5 million from $36.8 million. Net income fell to $32.3 million, or $0.21 per diluted share, from $43.7 million a year earlier. Sandoval attributed the decline primarily to lower other income and higher income tax expense, noting that the prior-year quarter included significant unrealized gains on marketable securities.
For the first nine months of 2026, revenue totaled $427.4 million and free cash flow was $53.9 million. Andean ended September with $195.8 million in liquid assets, including $93.7 million in cash and cash equivalents. The liquid-assets figure excluded $32.8 million in refiner receivables that the company collected in October.
San Bartolomé Raises Production Outlook
San Bartolomé produced 16,394 gold equivalent ounces in the third quarter, up 5% year over year. Senior Vice President of Exploration, Operations and Growth Victor Flores said higher purchased ore grades and sustained plant throughput supported output.
Higher silver prices increased the operation’s cash gross operating margin per silver equivalent ounce sold to $18.13 from $17.56 a year earlier. But its gross margin ratio fell to 28.6% from 43.8%, as purchased ore costs rose with spot silver prices. Quarterly cost of sales increased to $106 million from $32 million, including the cost of deferred inventory sold during the period.
Andean raised San Bartolomé’s full-year silver production guidance to 4.8 million to 5.2 million ounces and its gold guidance to 4,500 to 5,500 ounces. The company maintained its full-year gross margin ratio guidance of 35% to 45%.
During the question-and-answer session, Morales said the period between purchasing ore and selling refined metal can range from 60 to 75 days, leaving margins exposed to price movements. He described a quarterly dip in plant recoveries as normal variability rather than a systemic issue.
Golden Queen Costs Rise as Spending Is Deferred
Golden Queen in California produced 10,868 gold equivalent ounces, up 8% from a year earlier and 27% from the second quarter. Flores attributed the sequential improvement to better grades delivered to the heap leach pad.
Costs also climbed. All-in sustaining costs were $2,216 per gold ounce sold, compared with $1,682 a year earlier. Flores cited higher diesel and other mining input costs, partially offset by higher silver byproduct credits.
Andean lowered Golden Queen’s full-year gold production guidance to 37,000 to 40,000 ounces and raised its all-in sustaining cost forecast to $2,100 to $2,300 per ounce. The revised production outlook reflects lower full-year stack grades and tons under the current mine sequence, as well as the timing of heap leach recoveries.
Consolidated production guidance is now 101,000 to 109,000 gold equivalent ounces, within the original range of 100,000 to 114,000. The company also cut consolidated capital spending guidance to $17 million to $28 million from $38 million to $54 million.
Flores said the reduction includes deferral of the Golden Queen heap leach pad expansion and a review of the Merrill-Crowe plant upgrade. He said the company plans to begin construction of the pad expansion early next year, while the timing and cost of the plant upgrade remain uncertain. An updated Golden Queen technical report is expected in the next few weeks, he said.
Buybacks and Treasury Holdings
Andean repurchased approximately 2.35 million shares for CAD 14.5 million during the quarter. Through October 14, cumulative purchases had reached approximately 2.89 million shares for CAD 17.6 million under a program authorizing up to 4 million shares.
The company also purchased 200,000 ounces of silver for approximately $12.1 million as a strategic treasury holding. Sandoval said the silver is included in liquid assets at cost, with any margin to be recognized when it is sold.
About Andean Precious Metals (TSE:APM)
Andean is a growing precious metals producer focused on expanding into top-tier jurisdictions in the Americas. The Company owns and operates the San Bartolome processing facility in Potosí, Bolivia and the Golden Queen mine in Kern County, California, and is well-funded to act on future growth opportunities. Andean's leadership team is committed to creating value; fostering safe, sustainable and responsible operations; and achieving our ambition to be a multi-asset, mid-tier precious metals producer.
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