Aura Minerals Inc

Good morning, ladies and gentlemen. Welcome to First Quarter 2024 Earnings Call. This conference is being recorded and the replay will be available at the company's website at oraminerals.com slash investidores. The presentation will also be available for download. This call is also available in Portuguese. 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's 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. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in their respective forward-looking statements. Present at this conference, we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, CFO. Now, I will turn the conference over to Rodrigo Barbosa. You may begin your conference.

Well, good morning, all.

We are very proud to be here. Thank you for being here with us to watch the first quarter result of 2024. We are very proud to release the results that we did yesterday. uh for a few main reasons and then we'll go to the presentation number one this is the fifth quarter in the role without no lost time and injuries in our in our operations setting that we are among the best uh companies to work related to uh accidents and that's It's interesting to see that normally, and I invite investors to see, accidents and safety come together with good production, good cost efficiency, and good results. Number two, this quarter we also increased compared to the first quarter of last year, 28% in production. We increased 45% in terms of EBITDA and yet not fully including the recent run for the gold prices and copper price. Comparing to the first quarter of last year, gold price is close to 9.8% and copper price actually has decreased by 6%. So if you include fully priced of gold and copper, you would have imagined that our results would have been even higher compared to the first quarter of last year. So Natasha, if we now go to the product. The first slides, as always, do the summary of the results, some main milestones achieved during the quarter, and then Kleber is going to step in and go more specific on the results. So again, very proud to have another quarter without any lost time in that. I thank all the team and all the leadership within our operations. That comes from a hard work for a long time. It's been years that we've been working in hand or safety standards, and the results that we have are now at 15 months without lost time incidents. In terms of production, so we increased production by 28%, reaching 68,000 gold equivalent ounces, very similar to last part of last year, significantly higher compared to first part of last year. That mainly comes from higher end recovery production, recovery production in Minossa that's now becoming stable, and also Almas that was not in production for semester last year. now at a full production, producing 12,000 ounces of gold during the quarter. So we also continue to pursue a cost efficiency in all operations. The gain of productivity in Minos, together with also gaining recoveries, that comes from hard work from the team as well, to reduce our cash cost on average. Although for Almas, for example, we still have some room to continue to decrease. In terms of organic sustaining cash costs, the results of this cost efficiency and gain of productivity, we could bring the organic sustaining cash cost to 1,287, which is below the guidance, although we believe that we will be within the guidance for the year. So strong production. Slight increase in gold prices, which will be more efficient during the second quarter. And low cash costs, a significant increase on EBITDA. And we should expect this EBITDA to continue to increase as gold and copper price has significantly increased since we finished the last quarter. Another very important milestone, which is Borborema project. As we built ALMA on time, on budget, Borborema is heading towards the same milestones, achieving production on the schedule that we believe, which is first quarter next year. and within our budget. We are now 25% advanced in the project. All the land work has already been done. We are now starting the civil works and also getting some of the parts to start building the parts within the plant. We also entered the process to move the road in Borborema, understanding that the current feasibility study and the results NPV, internal rate of return that we published, are limited only to 814,000 ounces of gold at reserves, but we can more than double that. Once we move the road and the process of moving the road has already been started, then we expect this to be granted the license within one year. And then it will take another two years to do all the construction, the process. So we believe that we can start increasing our reserves within this year, but then adding in production only in three and four years. We also during the quarter updated our mineral resources and our mineral reserves adding 2.4 million ounces of gold equivalent ounces and measure indicated and 0.9 in proven and proven which is major milestone and a result of the exploration investment that we are doing within our operations that we're now starting to harvest the first results. I would remind that For example, very important milestones that we've been sharing with the market, Apuena, where we had and we still have a shorter life of mine compared to the other operations. We started, we ramped up this mine in 2016 with three years only life of mine. We already operated six years and now we increased to five years of life of mine. So we are building life of mine in our operations as we move forward in the future. And as a subsequent event, two things. One, we have the buyback program in place, approved by the board and also by the regulator, which we could not start within the blackout period. So we should start with this process after the blackout period finished, which is right after the results were released, two days after. And we also, and Clementine will give a little bit more information, we, as gold price has rushed above our expectations, so we have heavy progress, put and calls, that we now, that will now clear all the need for margin calls in this program, relieving all the cash within our operations to benefit from the upside in the gold price, which we believe that can continue to appreciate in the near future. Next slide. Well, again, already mentioned, very proud on safety standards that we are achieving a very important milestone and precedent milestone for Aura, which is 45 partners without any lost time incident. And two, as we do a monthly monitoring by independent consultants, we're using the highest procedures and technologies. All our structures, your technical structures, are within the standards and very satisfactory level. So we continue to monitor this and continue to enhance all the structures when needed. Next slide. So I would call for attention from the investors and the analysts. On the slides on the left side, on the bars, you have the quarter production. On the line above the bars, you have the last 12 months of production. So as we mentioned, after Q2 and during Q3, we reflected last year. We reflected the curve after almost the start of production and also addressing the loss of productivity in Minossa, we could start increasing the production of the last 12 months, and we will continue to do that for the next quarter as well. If you see, we already have three quarters of 60,000 to 70,000 ounces of production, and the last one comes from 49. So the next quarter, you can easily think that if we manage to do the same production of Q1 2004, we will add additional 20,000 ounces on the last 12 months of production, which will put us on the running rate at 270,000 ounces of gold equivalent ounces of production. So that's very important because that will come together with the combination of higher gold prices, higher copper prices and stability on our cash costs. So when you move them to the right side of the slide, on the two bars, on the partly production per unit, we see a slight decrease in Aranza Azul. This comes very much in line with our mind sequencing. As I mentioned, and already talked to investors and analysts, the nature is not homogeneous, it varies the grades and the characteristics of the ore body, so we knew that this quarter we would have a slightly lower production in Aranjo Azul, which continues to be a significantly stable operation for us. To Apoena, also as we projected, not a significant part of Ernesto high-grade peat anymore. So now we see the production decrease to 15,000 to 12,000. And Minossa, that's also how we continue. This is the fifth consecutive quarter that we increase in production in Minossa, starting last year with 12,000, 14,000, 16,000. $18,000, now $19,000, now achieving a very stable production. And we know perhaps we continue to explore opportunities to also gain efficiency and reduce the cost. In Almas, we produced, we had a below expectation production in the last part of last year due to the low productivity from the contractor. We sold that productivity, but we sold it at a higher cost. But now we achieved the 12,000 ounces of gold on the partner. We are now focused on decreasing the cash cost of that operation. So we already in place many initiatives, including making the changing contractor with a more efficient level so that we can now reduce the cost while maintaining the production in-house. Next slide. So in terms of all the sustaining cash costs, this is the second part that we are reducing all the sustaining cash costs that comes from a combination of internal initiatives to reduce costs, but also gaining efficiency mostly in amino acids. This is, that's, we understand now, we'll continue to work on reducing our unsustaining cash costs, but I believe that we are now in a more reasonable levels and that shows Aura can control its costs and can gain efficiency in operations. And we are very much focused on that and the problems we had in the past is because we are very focused reducing our cash costs. We change the contractors, boost, and we lose efficiency then we work and we gain efficiency and then we can recover or even gain in cash costs while inflation is going up we've been able to reduce our cash costs next slide In terms of comparing the guidance, we reiterate our guidance for the year. We had a good result in the first quarter, 68,000 equivalent houses. We maintain our guidance at 244 and 292, of course, with a strong result. If we continue to have a strong result over the year, we should be more to the top level of the guidance in terms of production. In terms of cash costs, we are much within the guidance, slightly above the lower part of the guidance, and always sustaining cash costs even below the lowest part of the All In Sustaining Cash Clause, although for the year we expect to be within the guidance in All In Sustaining Cash Clause. Of course, if we move our production to the top level of the guidance, then All In Sustaining Cash Clause could be on the bottom level of the guidance. And in terms of CapEx, although the charts might indicate that we will not achieve the guidance of CapEx of the year, but that's not considering that most of the expenses of Borborema comes during the second semester where we'll be mounting the parts and finishing the construction of the project. Again, that I think highlights the importance of this project of Borborene. On the left side, you'll see pictures that we already did all the land work. It started preparing all the ground for the civil works. Actually, all the bases are already being built. and very much in line with our expectation, 25% achieved. 80% of the capex has already either been disimbursed or negotiated, and we don't expect any surprise in terms of capex for the project, neither achieving the schedule that we promised to the market, which is to start ramping up the production by the first quarter of next year. And next slide. I would highlight to investors that this is a major project for Aura. It's important, it's big, and it has very interesting margins, very interesting returns, even without considering more than doubling the reserves, which is absolutely feasible after we achieve the licensing and moving the loan. We published the feasibility study last year before initiating the construction of this port with 812,000 ounces of reserves only, $182 million of NPV, 22% internal rate of return, and 40% of leveraged internal rate of return. And that was with the gold price at $1712,000. If you use the same study that we published last year and apply the current gold price that can go even higher, the 2300, we are talking about increasing NEPV by 143%, going closer to NEPV of $440 million of this project. leveraged the return for the whole life of mine of 74% per year in US dollars, and then leveraged a payback of 2.4 years. And again, considering only 812,000 ounces of reserves in all that study, if we move the road, we can more than double the result because the gold is already there, has already been measured, has already have been studied and very similar continuation of the org audit. There's no secret. The mine plan has already been designed. It's just matter of licensing and then accessing these. So I would invite everybody to think what can happen with the NPV of this project if you add more than double of the reserves into the cash flows. Next slide. So very proud of these results. Now I'll turn the floor to Kleber that will talk more about the results, specifically in details, and then we come back for the Q&A.