Aura Minerals Inc

Good morning ladies and gentlemen, welcome to the third quarter 2026 earnings call. This conference is being recorded and the replay will be available at the company's website at eurominerals.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 Originate Audio. We would like to inform that all attendees will be only listening to the conference during the presentation and then we will start the question and answer sections 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 our 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 and 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 CAO, Kleber Cardoso, CFO and Glauber Luvizotto, COO. Now I turn the conference over to Rodrigo Barbosa. You may begin the conference.

Thank you very much for all participating in this earnings call for the third quarter. Good morning all. And before I get started, just a quick reminder that you have here in your screen, scan the QR code. We have our Aura Day happening in New York at NASDAQ on October 30th afternoon. We'll have an important updates about how we are running the operations. We're gonna have important updates about the turnaround on MSG, how we are developing Era Dourada. Then we are also thinking and doing now this year a zero-based budget. We're going to walk you through how we are planning the budget also for next year. There's also the transition of the mine fleeting sources that we recently announced. So there will be several updates, including important advancements, exploration that we would like to share with the market on October 30th. So please put in your agenda and if you have availability, be there with us. That will be an important opportunity to have a more broad conversation and deep conversation about how Aura is performing and how we will perform on the next three to five years. Let's get started. If I could put the first slide in terms of the production and results. As a quick summary, and as we all do at the same time, same structure, I'm going to go through the main results and how major events that happened during the third quarter, and then Kleber is going to go more in detail about our results and cash flows. So as we disclose to the market, we had an important Improvement in operations as I mentioned in the last quarter. First and second quarter was the weaker of the year and we could see that production was pushed towards the second semester. So this is an important improvement on Q3 and we project another improvement to Q4. So we should continue to grow in terms of production as we are now reaching higher grades or higher productivity. in most of our mines. So we reached the production of 96,000 gold equivalent ounces. This is a 27% increase compared to the last quarter. I'm gonna walk you through mine by mine the two slides ahead so we can understand what is going on and project what can happen on the fourth quarter. So when we see the nine month, it's 253,000 ounces gold equivalent that we reiterate our guidance. to be between 340 and 390,000 ounces until the end of the year. This higher production means also the record high, slightly above the first quarter of this year's $386 million in revenues, another 15% improvement quarter by quarter. That also translated and EBITDA, $237 million. When we see the last 12 months, the last nine months of EBITDA, it's $677 million. This is already above what we performed the full year of 25. And if you look at the last 12 months, it's $886 million. Understanding that in the fourth quarter, we should have an improvement in terms of our production. In terms of our in-sustaining cash costs, we are now at 19%. 153 Now we start to have improvements on MSG. There are also improvements that I'm going to walk you through that's going to happen on the other operations. So although if you compare to the guidance of this year, you're going to see that we are above the guidance, but the improvements that we see happening in the fourth quarter give us a comfortable zone to meet the guidance for the full year in terms of our in-sustaining cash costs. Recurring free cash flow is strong, $124 million. and many more. Thank you. Develop Greenfield Projects, Invest in Exploration to Extend Life of Mine, and do M&As while keeping an important dividend yield and low leverage. So this is another quarter that we show the market that this is possible due to the very high return, the strong cash flows we have from our operations. We also declared another strong dividend, $0.72 per share. And when we add that with the $10 million of buyback that happened during Q3, it's a yield of 4% on the last 12 months. We continue to be one of the highest dividend yield in the industry while we are growing. Additional important events, and I'm going to have a slide about this. I don't want to give details now, but at another project, On time, on budget, developing according to the plan. Kleber also, we raised additional $200 million of syndicated loan that happened during this quarter and improved our cash position above $400 million. We also announced the mine fleet in sources that will provide us an important opportunity to continue to reduce are all in sustaining cash costs and control inflation bravely. The inflation, as we will walk you through the industry, all in sustaining cash costs is going up. We are going up slightly, but yet way below the average of the industry, which put us in the first semester of this year as on the first quartile in terms of all in sustaining cash costs. Important event also is capital world with investors. continued to buy more shares on Aura during the third quarter and reached recently about 10% of all the capital structure of Aura. So now they have 10.2% of the Aura shares. Next slide. In terms of safety, we had no lost time incident during quarters, a very important another quarter without any lost time incident. I always mentioned that it's important to combine, always not important to combine, but strong results comes along with also strong Incidents and low incidence level. Important also that as we are implementing artificial intelligence all over our company, there's also important improvements that we are doing on safety standards going through artificial intelligence so that we gather more information and start acting way above when we predictively So we can predict when and where the next event can happen or incident can happen and prevent that. So that's all the team is working on to have these advanced tools so that we can improve even further our safety standards. In terms of stability of structures, all of them has been gone through due diligence and inspections and all of that are under the safety levels. and according to the Brazilian regulations and all the international regulations. On the left side of this slide, I would highlight the continuous growth that we've been growing since Q3 25th, actually since Q2 25th on the last 12 months. So now we are performing 335,000 ounces of production on the last 12 months, as you can see record high production on Q3. while we continue to see improvements that's happening on a Q4 that will replace the Q4 last year with 82,000 ounces with a stronger so that will continue to be important upward trends in terms of production for our minerals. And when we go mind by mind, we had a going from the bottom to the upper important improvement in Aranjo Azul. We could see that the higher grades would come during the second semester. Management's also working. In higher throughput so improving also the plant the combination of higher grades and better performance lead us to a higher production and small part of this is also unfortunately due to the lower gold prices than in the higher copper price so that conversion happens and then it's favorable but most of the improvement comes from productivity and grades Apoena, we saw a slight improvement on Q3, and again, Q4 is the quarter that we're going to have a very strong production on Apoena. In Arenas Azul, we should continue to see small improvements for Q4. Apoena will see a significant improvement in terms of production on Q4. This is just about grades that we are already reaching on the pit that we're going to go through the plant. Minossa, as I mentioned to the investors on last quarter, we had some challenges on piling and stacking. during Q2 that we know that the lag, it's a leaching pattern, so the lag of why you stack and produce happens to have 30, 40, 60 days, so we knew that the production would decrease during Q3, and now we know that's going to increase during Q4 because all the challenges has been overcome, and now we are stacking as we projected even a little bit above our projected, so that will result in an improved Production on Q4. Almas, we knew also that we were hitting lower grades. The mind plan is not, as I mentioned, gold. We are now sometimes in very thin veins or straight veins, and grades goes up, grades goes down. So it's normal for you to have stronger and weaker quarter. What cannot be is not predictable, right? So we know that the Q3 would be weaker, and now we know that Q4 can also be slightly better than Q3. Borborema? That's how, again, we hit strong grades now. So now we have already implemented two new filters, de-bottlenecking the plants. So we should continue to see strong production in Borborema during Q4. MSG, the turnaround is still going on, but it's important to see the first signs of what we were talking about the gain in productivity and gain in production once you invert the top down to bottom up and put more and develop more on the ground. So we are now starting to have a small percentage of ore coming from underground on the methodology bottom up. So that improves the grades of the plant. And then you on Q4 will gradually improve because then we mix low grade that is on the top as an open pit. with a higher grade underground and as we go and turn around as we advance on the development of the underground tunnels we will be more gradually to more and more increase the underground ore which will increase average grades to the clad and also management has been doing Significant cost savings, cost restructurings, and also the bottlenecking the plant so that we can gain even more efficiency for next year, putting us in the position to be able to produce close to 80,000 ounces and close to $2,000 per ounce of in-sustaining cash costs. So in terms of all-win sustaining cash costs, we had a slightly decrease from Q2 to Q3 that came mostly by MSG that showed some significant improvements. Also, Aranjo Azul going through higher grades. If it were not the MSG, all-win sustaining cash costs would be at 1,673. which is already the first quartile in the industry, although yet we see room to improve. When we look at the next quarter, we will have improvement in MSG, Aranjo Azul will continue to perform well, we will see a significant improvement in Apoena, good improvement in Minossa, Almas slight improvement due to the higher grades, Borborema stable to the fourth quarter, perhaps lower cash cost as well, So we will see fourth quarter coming down in terms of how we're sustaining cash costs, putting us on the comfort position to meet the guidance, perhaps closer to the top end of the guidance, but yet in the guidance. And I would also highlight that When we projected the guidance, the exchange rate was different than what happened during the nine months. For Brazil, that's more important. It was 5.5, while the performance was close to 5. Now we are back to 5.5. So only this is $80 per ounce in terms of unsustaining cash costs. If we were... and the same exchange rate of their budget. So during the fourth quarter, we have improvements in grades, improvements in performance and also a better exchange rate in Brazil. Era Dorada, we already reached over 13% of physical progress. The earth moving of the operational plateau is completed. We started the civil works and as we can see on the picture in the middle, the CIL tanks start to be built. On the right side, all the infrastructure for cooling the underground as we are advancing on the underground, it will be more and more important gradually to improve The infrastructure and also cooling machines in order to keep the temperature low. This is a geothermal area that has and we are pumping already water out of the underground while cooling so that we created the right environment for everybody to work. On the left side, on the pictures, we continue to have a very strong support from the community. It's now over 1500 hours of dialogue with the community members, constant dialogue, open table with each of them. We have a Era Dourada house at the main city that people can come and make questions. So it's a full transparency project. We're hiring local people. We're motivating new suppliers to form, we think, very close to the operations. And while we are investing on the purified water to provide them first municipality in Guatemala to have access to purified water will be the communities around Aradourada once we finish the investment along next year, then we'll be able to provide purified water to the communities. and the Geothermal Plant. We continue to advance on the engineering. We are now looking for potential partners to invest in geothermal with us that can bring the know-how and operate and do the partnership with water. So this project will be fully sustainable with renewable energy. Renewable Water, and also a very strong community relations and focusing on hiring and training local people. We now have 795 people employed as of September, 89% are Guatemalan, understanding that during the construction sometimes you have a very specialized skills, do it for the underground development and also for building the plants, and that we should increase, gradually increase this percentage hiring local people. MSG, again, a very important first quarter with just the beginning of the results of the turnaround. We already generated $24 million on EBITDA. and we continue to do advanced development on the underground activities so that we now can gradually invert top down to bottom up and mix more high grade from underground instead of a low grade that is on the top. So we'll see improvements going to the Q4 and of course major improvements going to come during 2017. We will go through in more detail on our day. Please participate and go directly there in New York or see the video or see the live video that we will walk you through. Major achievements happening also in safety standards. So there'll be important updates in the exploration. So please attend that we can walk you through what's going on in MSG that can become vary and has the potential and will become a very important mine for our aminers from 27 and so on. With that, I turn the floor to Kleber to walk you through all the financial results.

Thank you, Rodrigo. Good morning, everyone. We're going to start, as we always do, with a summary of the main financial KPIs for the reporting quarter, for the previous quarters and accumulated last 12 months at the end of each reporting period. Starting with the net revenues, we're reporting net revenues of $306 billion is a record high that we're reporting for a single quarter. That's driven by the increase of production that Rodrigo was showing. And when we look into the last 12 months, our revenues are exceeding $1.4 billion. and we see there has been a steady progress quarter over quarter aligned with our growth story. When we go to Adjust EBITDA, it's a similar story. We're reporting a strong EBITDA, $237 million at this quarter, also driven by the increase in production. The last 12 months now, it's $886 million and is already the 13th increase in a row of our last 12 months EBITDA, again, consistent with our growth story. Moving to the bottom of the page, in terms of net income, our net income this quarter, $135 million, coming down from previous quarter. But that's mainly because on the previous quarter, we had no cash, no recurring gain related to the gold hedges because of the decrease of gold prices during the second quarter. If we exclude that non-cash gain, which was much smaller this quarter, I'm going to show later, we see also an increase in net income. On the bottom of the page, we see we're coming from $97 million. Adjusted net income on Q2 to $120 million now on Q3, consistent with what we see increasing EBITDA. And in terms of cash and debt, we remain in a very comfortable position in terms of cash and balance sheets. Our net debt basically stable throughout the quarter ending close to $180 million by the end of Q3. Our financial leverage also basically stable in a couple of quarters already at 0.2 times net debt over EBITDA. And we see a significant improvements in our cash balance and cash position now close to $420 million at the end of the quarter. With the proceeds of the syndicated loan that we closed in September, $200 million, and now we're in a good position to continue funding the growth of the company, especially Era Dourada from now on. Now looking at the main items that explain the adjusted net income in the quarter. Out of the $237 million that was the highlights, we saw It was very strong in terms of production. Barborema is our lowest cash cost as well, so contributing with $7 million in EBITDA. Aranza Azul, also a very strong performance on Q3, combined with favorable corporate prices, adding another $60 million. Always also coming strong, Almas and Minoza for $135 million. And we highlight as well as Rodrigo mentioned, MSG already reporting $24 million EBITDA in the quarter is still in the turnaround phase. Moving to the next items we see depreciation amortization 30 million dollars basically consistent with our expectation if we compare to same period of last year there is a important increase but that's mainly related to the growth of the company so the same period of last year we didn't have MSG, Borborema was not in commercial production yet so not depreciating so that explains the increase in depreciation Financial expenses, we would highlight, as I mentioned before, the no cash gain with the market-to-market of the gold hedge. It was much smaller this quarter, it was only $13 million. And we had realized losses with gold hedges. We paid $34 million for the gold colors that were settled and paid during Q3. From now on, if you take November, from November 26 to June 2028, we still have about 141,000 ounces in gold colors that is going to expire remotely now until mid of 2028. Income tax expense is pretty much consistent with the results of our operations. Then we had some smaller items in other incoming provisions. bringing the net income to $135 million. And then here on the right side of the page, the conciliation that we always show excluding some non-cash items, mainly the unrealized gain, in this case, OE for the gold hedges, bringing our adjusted net income to $121 million at the end of the quarter. And now here we have all the details that explains the change in cash position throughout the quarter. So we see on the left side of the page, we start with $248 million in cash at the beginning of the quarter. On this left half of the page is what we call the recurring free cash flow to firm, which is a free cash flow to firm generated by the six minus in production, not including the investment for growth. Not including what we paid for the hedges, we show $158 million on the top of these pages. Those six miners that generated $158 million in recurring free cash flow. Deducting $34 million that we paid in hedges comes to the $124 million recurring free cash flow that we're reporting, although the realized losses we had is including the recurring free cash flow. We remind you that it expires in the middle of 2028, so that's going to go away after 2028. Then here in the middle of the page, we see investment for growth $63 million, mainly expansion of CapEx and now mainly is sketching up, ramping up the investments, cash out investments in Era Dourada. And to the right side is more the financial like items, mainly the proceeds, net proceeds from that. We received $200 million from the syndicated loan and some debt amortization. So we have net proceeds of $182 million. Dividends and share repurchase, $71 million in Q3. And then Rodrigo highlighted at the beginning, if you take the $158 million recurring free cash flow that was generated for the quarter that paid both for the losses with the hedges, also the dividends and share buybacks and also paid entirely for the expansion of CapEx we had in the quarter. So with this we end the presentation and I'll answer your questions. Thank you.