Andean Precious Metals Corp.

Hello and welcome to the Andean Precious Metals third quarter conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. And if you would like to ask a question during this time, please press star 1 on your telephone keypad. I would now like to turn the conference over to Amanda Melo, Director of Investor Relations. You may begin.

Thank you, Operators, and good morning, everyone. Thank you for joining Andy and Precious Metals for the conference call to discuss our financial and operating results for the three and nine months ended September 30th, 2025. Our press release, MD&A, and financial statements are available on both CDAR Plus and our corporate website at andyandpm.com. Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under the Canadian securities law. Please refer to our cautionary statements and forward-looking information and risk factors contained in our MD&A and other filings. With us on today's call are Alberto Morales, Executive Chairman and CEO, Johan Bouchard, President, Juan Carlos Sandoval, Chief Financial Officer, and Dom Kizak, Vice President, Finance and Corporate Controller. Following management's prepared remarks, we'll open the line for questions. And with that, I'll turn the call over to Alberto.

Thank you, Amanda, and good morning, everyone. The third quarter was a strong period for Andean, marked by record revenue, record earnings, record liquid assets, and record earnings per share. We delivered revenue of 90.4 million, adjusted EBITDA of 36.8 million, net income of 43.7 million, or 29 cents earnings per share, the highest in the company's history. These results reflect a combination of strong metal prices, disciplined cost management, and higher consolidated production versus the previous quarter. Importantly, we generated 11.2 million of free cash flow and increased liquid assets to 121 million, up from 82 million a year ago. Operationally, San Bartolome delivered another excellent quarter, benefited from higher silver production, higher silver prices, and continued efficiency. Golden Queen faced a short-term production impact related to the leach cycle timing, and the team moved quickly to recondition the cell and optimize the process. Looking ahead to year end, we expect San Bartolome's silver production to be within the high end of its guidance, offsetting the lower production at Golden Queen, which was impacted by the leach cycle timing, although showing improvements into the initial part of Q4. On a consolidated basis, production is expected to finish near the lower end of the guidance with a solid costs and margins performance at both assets, maintaining a robust financial performance despite production variances. Our focus on cost and capital discipline continued to pay off. Total capital was just 0.6 million in the quarter. and we expect our year-end CAPEX to be in line with our guidance. In November, we also filed a VASE shelf perspective, qualifying up to 200 million of securities over 25 months, giving us the flexibility to access capital markets efficiently when needed. This is a strategic step that strengthens our long-term optionality. Overall, this was a very strong financial quarter despite production variances, highlighting the resilience of our portfolio, our financial discipline, and the capability of our people across both jurisdictions. With that, I will hand it over to Johan to review operational and explorational performance.

Well, thank you, Alberto, and good morning, everyone. So, let's start with production. NBN delivered just under 25,700 gold equivalent ounces in Q3, bringing year-to-date production to about 71,400 gold equivalent ounces. That's a 6% increase over the previous quarter, thanks to a strong contribution from San Bartolome. At San Bartolome, the operation continues to perform extremely well. Mill throughput averaged roughly 4,100 tons per day, with 85% silver recovery. Production totaled 1.4 million silver ounces, or about 15,600 gold equivalent ounces. Cost performance was strong. Cash growth operating margin came in at $16.13 per silver equivalent ounces, and our growth margin ratio was 43.8%, both near the upper end of guidance. Increasing oil purchase volumes and consistent processing supported these healthy margins. At Golden Queen, production was slightly below 10,100 gold equivalent ounces. This reflects the impact of leaching cycle timing, which temporarily slowed recovery in one of our leach cells. The team act quickly, reconditioning the cell, optimize our blending, and lower the solution application rate to mitigate fine particle migration. The five lower ounces produced are cash costs, or $1,623 per ounce, and autumn sustaining costs was $1,807 per ounce, both well within our guidance range. As we move into Q4, We expect consolidated production to finish near the lower end of our four-year guidance with all financial metrics trending within our guidance range. We also made strong progress in our exploration program at both operations. At Golden Queen, the phase three program has been extended to 8,100 meters after encouraging drilling results at the hilltop and area. Recent assays include intersections of up to 1.67 gram per ton gold and 20 grams per ton silver over 5.9 meters, confirming continuity and potential extension along the strike. This program is focused on extending mine life by extending main pit two and defining new near-mine resources. At Sun Delta domain, we advance our partnership with CommuVol. securing exploration permits and social licenses across multiple target. The shallow core drilling program of 5,500 meters started earlier in 2004. The goal is to test roughly 800,000 tons, grading 150 to 250 grams per ton silver. Ultimately, this will help extend mine life and fully supply The plant's 5,000 tons per day capacity without major capital investments. Operationally and strategically, we're in strong position with exploration adding meaningful future potential. With that, I will pass it over to JC for financial review.

Thank you, Johan, and good morning, everyone. From a financial standpoint, Q3 2025 was the strongest quarter in the Indian's history. Revenue reached 90.4 million, driven by higher silver production and strong realized prices of 3,448 pounds of gold and $40.09 per ounce of silver. Gross operating income increased to 36.8 million, and income from operation was 30.7 million. We generated EBITDA of 58 million and adjusted EBITDA of 36 million, net income of 43.7 million, and earnings per share of 29 cents fully diluted, each a record for the company. Free cash flow was 11.2 million, supported by strong operating performance and lower capital spending. CAPEX stole 1.1 million in the quarter. Our balance sheet significantly strengthened this quarter. Total assets grew to 370.8 million, while total liabilities fell to 145.2 million, reflecting debt repayment and higher working capital. Liquid assets rose to a new record high of 121 million. up from 82 million at the same time last year and 81.6 million at year-end 2024. Our financial position remains strong. We continue to have a negative net debt position and significant cash reserves. Combined with the recently file-based SHELF prospectus, Indian has the flexibility to pursue further growth opportunities. With that, I'll turn it back to Alberto for closing remarks.

Thank you, JC. To close, I want to highlight that Q3 reinforced everything that we have been building on, a resilient gas generating business, a clean balance sheet, and a clear path to pursue transformative initiatives. As this slide shows, we are well positioned for continued growth with robust financial, maintaining financial flexibility, evaluating selective opportunities to build further growth and value creation through advancing exploration programs across both of our assets. We deliver record financial results and meaningful exploration progress. San Bartolome continues to perform consistently. Golden Queen is returning to normal production parameters. And both assets are well positioned for a stronger fourth order. We look ahead. We remain focused on executing safety, maintaining cost discipline, and advancing our organic growth pipeline. With our financial flexibility, exploration upside, and a disciplined team, Andean is well positioned for continued success into 2026 and beyond. Thank you all for your continued support. Operator, please open the line for questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Please ensure that your phone is not on mute when called upon. Thank you. The next question comes from Omit Singh with SCP Resource Finance. Your line is open.

Hi, everyone. Congrats on the quarter. I had a question on CapEx. You were mentioning that, you know, CapEx will be hitting roughly guidance for the year. I know Q3 was a lot lower than the prior two quarters. Could you speak to what types of CapEx spending you envision for the fourth quarter? Because I think at this run rate, correct me if I'm wrong here, but they'll come in significantly below guidance.

Thanks for your question. So, this quarter, it was just, you know, in relation to our Catholics, you know, sending command. But as we've said, our plan is to, we will be within the guidance, within the average, you know, of our guidance by the end of the year.

Okay, appreciate that. And if I may, I'd like to ask another question. The second one would be in relation to inventory, which increased significantly, obviously, quarter on quarter. I'm assuming that's related to the percolation issue this quarter, and should we expect that to come off in Q4 early next year? Is that the right way to be thinking about it?

Yeah, I want to hear, and thanks for the question. Yes, you're absolutely correct. I mean, with the, I would say the issue that we had in our, in our, in our 11, I mean, the inventory is still there. And we really use a prudent approach to resume leaching. So, I mean, the main contributor to that is we leach using really a slower rate applying solution. And for sure, I mean, and we see and saw it that our production is coming back slowly but sustainably. And we're expecting it to, I mean, we're pretty much came back at this moment to the production rate that we have in Q1 and Q2. And we're setting the tone to increase further in the beginning of next year. And as you know, I mean, those ounces cannot be recovered over a single quarter, but it can be recovered over a number of period of time. So, you're absolutely correct on your assumptions. Appreciate it. Thanks, Elon.

Yeah. Okay. Bye.

The next question comes from Allison Carson with Desjardins. Your line is open.

Thanks. Good morning, Alberto and team, and thank you for taking my questions this morning. My first one's a bit of a follow-up with the CapEx. I think there was a negative growth capital expense this quarter. Could you just give more color on what that was?

Yeah. Hey, Allison. Don here. We adjusted our CapEx metrics this quarter to be on a cash flow basis, so that was just a catch-up. And then just to further JC's comment, we are expecting to be within the guidance range at the end of Q4, and some of those projects are going to be including our new ePleach path that we're starting to build up.

Okay, great. And then it sounds like everything is working well back at Golden Queen and the leech cycling is improving. If this issue arises again, do you think you'll be able to resolve the issue with less of an impact to production?

I'm not so sure to understand the question, sorry.

Sorry, it sounds like everything, leech cycling is improving, you know, following the issues that you have in Q3. If you have more issues with the fine particles and clay again, you know, based on going through this this time, do you think that you should be able to resolve the issue quicker with less of an impact to production, or could this still have another big impact to production in the future?

Thank you. Thank you for that. I mean, I think that we took a lot of action to make sure that it will not happen again, but I would say that That was more related to an operational problem, and for sure, I mean, we questioned the way that we blend and everything that we did upstream of leaching. But all the extra measure that we took, and also, I mean, we're considering that we're going to also commission a new agglomeration drum in December. And looking at also a fine bypass next year to mitigate that project further before the clay-hit DHBGR. I believe that we're going to be in really good shape to mitigate such a problem going forward. So absolutely. But again, we took many actions, and we still have many other actions to take, not only like improving our processes, but also improving the equipment and also doing proper investment to mitigate such issues.

That's great. No, thanks for the color on that. And then my last question is just, I was wondering if you could talk a little bit about the election results in Bolivia and how you expect that to impact San Bartolome, if at all.

Yes, Alison, good morning. The elections in Bolivia, as probably you have read on some of the editorials, the new president is more center-driven than the previous governments. We believe that there will be, or at least the rhetoric that they've been using is that they are basically changing the tone of the philosophy that it's been ruling the government from being more of a stream left towards the center and welcoming further investments. Under that tone, if that was to materialize, certainly, I think that the international markets will view very favorably if they were to be opening themselves up for further investments. And most importantly, that may also, or at least in order to pursue further initiatives to promote that, it may include some initiatives on legal reforms, tax reforms. But it's too early to tell. But we're cautiously optimistic. But I will still keep the word cautious.

Well, thank you very much. It's great to get that additional information. And I think that's all the questions I have today. So, congratulations on a great quarter.

Thank you. Thank you, Alison.

The next question comes from Ben Peary with Atrium Research. Your line is open.

Hi, Alberto, Johan, JC. Congrats on another good quarter. Just a couple of quick questions. Most of mine have been answered, but Johan, I guess given the improvements you've been making and are continuing to make to the leaching system and the grinding circuit, can you talk about potential increases in recovery? Is there any opportunity there? And that goes with the new leach pad as well.

I would say I mean, the recovery is mostly based, is directly related to the way that, I mean, we apply solution and making sure that the solution reach all of the little corner, I would say, of the leach path. So, and again, I mean, it took some time, I think, to recover from, I would say, the shortfall that we had because of the prudent approach and sustainable approach that we have undertook to apply the solution again. And we see it, like, week after week, production is increasing, and it's still increasing at this moment in time. So, don't forget that the last two or three quarters, we put really high grade on the leach path. And, I mean, we start to see some benefits out of it. And, basically, the other thing that I have to add to that, we're also completing the project to increase our capacity to do Merrill Crowe. With very little investment, we can increase from treatment of 3,000 to 4,000 gallons per minute. And we're looking into it. So we would like maybe instead of deviating some of the solution to the low-grade pond, we'd like to leverage that and send that to more crew that would also increase production. And that can be done within months, basically. But overall, I mean, be certain that it's increasing. Production is increasing. Recovery is increasing as well. And you know by the nature of the leach fab that recovery is not like you're losing gold. It's just like postponing, I would say, the recovery of some gold in the following quarters. But for sure, our goal is to catch that water within a certain amount of time. And we'll get to that for sure. Right.

Right. Understood. Thank you. And I guess in terms of drilling at Golden Queen, is everything progressing as planned? And are you guys still on track to report the updated resource in H1-26?

No, it's progressing really well, actually. I mean, as you know, I mean, we decided to invest furthermore. I mean, we increased to 8,100 meters total drilling for this year. I mean, you saw the drill. We have that drill. That team is performing really, really well. We're looking to have a third drill before and at this moment, and we're going to keep drilling, I mean, nonstop until, I mean, we see some significant results. But everything at this moment is still aligned to deliver, like, a technical report and reserve upgrade by the end of next, of this year. So everything is going according to plan in that aspect.

Perfect. Thank you. And I guess just my last question, just given the higher gold prices over the last couple quarters, is there any changes? Are you seeing any issues with the ore sourcing at San Bart? I think on that aspect, it's interesting.

We're doing a lot of progress with our 7 million tons agreement, and we start to do some drilling in one of those places like a few weeks ago. which is quite encouraging. We secure a lot of, I would say, agreements with the local community, and so it's going really well. And on top of that, and outside of that 7 million agreement, we are also negotiating with our community, and it's really encouraging to see the momentum that's been created. But we're not publishing everything, all the new agreement that we're having up there. But, I mean, I feel really good with the continuity of standards based on the, I would say, the expertise that we get at sourcing all from third parties. So it's, and we have a solid reputation there. So it's going really well for us. I'm very pleased. Perfect.

Okay, that's all I had today. Thanks, and congrats. Thank you.

This concludes the question and answer session. I'll turn the call to Alberto for closing remarks.

Well, thank you, everyone, for joining. And we certainly look forward for Q4 and end of the year. And my thanks to all of you for your continued support.

This concludes today's conference call. Thank you for joining.