Mineros S.A.

Bienvenidos a la presentación de resultados del tercer trimestre de 2024 de Mineros. Mi nombre es Karen y seré su operadora para la llamada de hoy. En este momento todos los participantes están en modo escucha. Tenga en cuenta que esta teleconferencia se está grabando. También tenga en cuenta que la conferencia de hoy se realizará en español con interpretación simultánea al inglés. Al final de la presentación, habrá una sesión de preguntas y respuestas solo en la plataforma web. Le recordamos que si tiene dificultades para ver las diapositivas en la plataforma web, deberá maximizar la ventana llamada diapositivas. With this, I give the floor to Mr. Juan Camilo Obando, Director of Relations with Investors. Mr. Juan Camilo, you may begin.

Thank you very much and good morning. Welcome to our presentation of financial and mining operations results corresponding to the third quarter of 2024. My name is Juan Camilo Obando and I am the Director of Relations with Investors. El idioma original de esta llamada es español. Sin embargo, si desea escucharla en inglés, por favor siga estos dos pasos. To listen to this call in English, please follow two steps. First, identify the box that says English and click on Start. Then, to avoid listening to both languages at the same time, identify the box that says Media Player and click on Mute. Before starting, it is important to warn the listeners that this call and this presentation can contain prospective information about the future results of the company and that, for various reasons, including the nature of mining activity itself, these predictions can be made or not, as planned. For this reason, we warn investors to be careful when making investment decisions and not to base themselves exclusively on the information presented here. It is also worth mentioning that this presentation contains measures and non-conventional indicators according to the NIF, such as the Cash Cost and All In Sustaining Cost per ounce of sold gold, the average price per ounce sold, the adjusted EBIT and net debt. Additional information about these measures can be found in section 10 of our MD&A published in Canada and which can be found in CEDAR under the Minerals profile. Today we have in the room Alan Wancier, Vice President of Financial and Administrative, Ana Isabel Gaviria, Vice President of Legal and Sustainability, Santiago Cardona, Vice President of Colombia, and Luis Fernando Villa, Vice President of Nicaragua. Today we are accompanied by Andrés Restrepo, who is on a work trip and therefore cannot be connected. With this, I give the floor to Alan Wancier.

Thank you, Juan Camilo, and good morning everyone, and thank you for joining us today in our report on the results of the third quarter of 2024. In today's conference we will present the most outstanding aspects of the third quarter, followed by the financial results of the third quarter and the first nine months. our operational results, a review of each operation and, finally, our challenges and opportunities. As for relevant facts, in the third quarter we produced about 54,000 ounces of gold and 190,000 ounces of silver. In the first nine months of 2024, the gold production is close to 160,000 ounces. These operating results reported 28.5 million net utility dollars in the quarter. Our adjusted EBIT was 62.9 million dollars and we had a free cash flow of 38.8 million dollars. Additionally, in July we paid 7.5 million dollars in dividends to our shareholders. Now let's look at the behavior of the gold price. During the three months ended on September 30, 2024, the price of gold moved sharply up, breaking several historical maximum levels during the period. The closing price of the quarter was $2,635 per ounce, 13% higher than the closing price on June 30, 2024, which was $2,332. The average price recorded in the quarter was $2,476 per ounce. According to analysts, one of the main catalysts of the gold rush was the expectation and subsequent confirmation of the beginning of an expansive monetary policy by the Federal Reserve of the United States. The decision to reduce interest rates to 50 basic points reaffirms the appetite of metal investors. which contributed significantly to the demand for gold during the quarter. Additionally, there are still persistent geopolitical tensions in the Middle East, along with the demand for investment vehicles in the asset. This has supported the historically high levels of prices observed during this quarter. With this, I return the floor to Juan Camilo, who will explain our financial results. Thank you, Alan.

Let's start with the state of the results of the quarter and remember that the figures are expressed in millions of US dollars. Income grew by 39%, at 142 million, due to an increase in the average price of gold sales of 29%, an increase of 7% in the ounces of gold sold and an increase of 74% in silver sales, which rose to 2.35 million. The cost of sales increased due to higher prices of gold, which increases the cost of buying material from artisan miners, greater depreciations and amortizations, and greater operating costs, driven by inflation, which increased the costs of maintenance of materials and services and gold hands. On the other hand, the adjusted gross utility and levy increased by 113% and 88%, respectively, thanks to the increase in income. The net cash flow was $38.8 million, mainly due to the change in the date of payment of the income tax in Colombia for lower payments to providers for goods and services for $17.8 million due to the sale of the property of Hualcamacho. In terms of income, these grew by 23% due to the fact that the price of gold rose by 19% since the sales of silver were 82% higher. On the other hand, the cost of sales increased by 18% due to higher costs of buying artisanal material for the higher prices of gold, higher labor costs and higher costs of services and higher taxes and royalties. The gross utility increased by 33% thanks to higher revenues that were partially compensated with higher sales costs. On the other hand, the continuous operations utility increased due to the increase in gross utility, partially compensated by an increase in costs. Now let's move on to the box. The box of the quarter increased 30 million dollars, closing at 57 million, and the flow of operations is mainly composed of income from gold and silver sales for 139 million, payments to providers of 69 million, payments for benefits of employees of 12 million and payment of taxes for 6 million. The flow of cash used in investment activities is mainly explained by the purchase of equipment property of 13 million and the purchase of intangibles and exploration projects for 1 million. On the other hand, the flow used for financing activities was largely composed by the payment of dividends of 7 million and the payment of financial obligations for 5 million. Now let's look at the adjusted EBITDA. The adjusted interest rate had an increase of 88% compared to the third quarter of 2023 due to a greater number of ounces sold, added to an increase in the average price of gold sales. To close the financial part, we move on to net debt. The reduction of net debt is mainly explained by a significantly higher balance in cash. with a balance in cash and equivalents of cash of 57 million and a balance of loans and loans for 29 million. This reflects a solid position of the company and as we have mentioned before, as part of our financial strategy, we permanently monitor the market in search of opportunities in order to be prepared when cash needs require it. And what we see is that this box position ratifies our availability to meet our obligations and growth projects. With this, I return the floor to Alan, who will talk to us about operational indicators.

Thank you, Juan Camilo. In this chart, as you can see, the operational performance of the last five quarters is summarized. The production of the third quarter had an increase of 7% compared to the same quarter of 2023. The increase in production is mainly due to a higher production of 25%. In JEMCO, where we observe an increase in the processed tons and an increase of 2% in recoveries. This partially compensated by a lower production of 15% in our alluvial mine, which is mainly explained by a decrease in the volume of processed material and a lower law of approximately 13%. The cash cost had an increase of 5%. explained in great measure by the increase of 14% in the cost of sales, due to the higher prices of gold that lead to a higher cost of artisan mining, given the increase in the price of gold, as well as the strong revaluation of the Colombian weight that influences some of our costs incurred on this currency. All of this partially compensated by an increase of 7% in the ounces of gold sold. For its part, the AISC had an increase of 5%, explained by the increase in costs already mentioned and by the increase of 13% in maintenance CAPEX. The average sales price of the quarter had an increase of 29%, at $2,327 per ounce. Now let's look at the operation in Colombia. The production of the third quarter was 19,700 ounces, which represents a decrease of 15% compared to the third quarter of 2023. This is due to a modest decrease in the processed material with laws 13% lower. The above partially compensated by 12% better recoveries. In comparison with the third quarter of last year, the AISC increased by 30% due to the higher labor and service costs and the increase in maintenance costs and materials. This was partially compensated by a slightly lower maintenance CAPEX. The gross utility increased by 8%, at $ 16 million, due to the increase in income due to higher gold prices and partially compensated by higher labor costs, depreciations and amortizations. Now let's move on to Nicaragua, the production of the quarter in Jemco was 34,000 ounces, 26% higher than in the third quarter of last year, due to an increase of 37% in the tons of processed mineral, with a 2% better recovery. All this compensated by a slightly lower law mineral. The comparative increase in the tonnage was largely due to the fact that last year we had a stop of the plant for almost 15 days as preparation for an intense rainy season. The AISC decreased by 10% due to the higher gold production, which despite the purchase of artisanal materials were more expensive due to the high price of gold. The gross utility increased by 496%, mainly due to higher income due to the higher price of gold and more ounces of gold and silver sold. Now let's move on to challenges and perspectives. Our alluvial property is below the production projections and will probably remain below the original guidance, given the modestly lower laws, since we have fewer formalized drugs than we originally estimated. Additionally, we experienced delays in the reception and service of a new draga, which delayed the expansion of our production capacity. As a result, we are reviewing our guidance for the Nechi Aluvial mine. In our property in Jemco, the production continues to be within the range provided for our mines and, consequently, we are maintaining our guidance for the Jemco property. With respect to our production coming from artisanal miners, we are narrowing our guidance range since production is approaching the upper end of it. Given this combination of operational results, we are updating our production guidance for 2024 to a range between 203,000 and 218,000 ounces produced per year. In terms of costs, the cash cost per ounce of gold and the AISC per ounce of gold sold were initially projected at an average price of gold of 1,980. with an inflation of 10% in Colombia and 6% in Nicaragua, and a $4,300 exchange rate. However, in the course of the year, the average selling price has been $2,477, almost $500 per ounce higher than the price assumed when preparing the initial guidance. Additionally, the average TRM in Colombia is around 3,980. This is the average year, not the last one of the day, but the average year. Due to this and to our production review in Colombia, we have also decided to adjust our guidance in terms of cash cost and AISC, as you see in the presentation. At the consolidated level, our Cash Cost and ISK estimate to close the year go from 1,180 to 1,270 and 1,430 to 1,530 go to 1,250 to 1,330 and 1,480 to 1,570 dollars per ounce respectively. In the third quarter of 2024, a total of 2,536 meters of diamond drilling were completed in 46 wells, achieving approximately 72% of the 2024 drilling plan. The objective of this campaign is to increase resources and reserves in the Panama and Payoneer mines. We have intensified perforations in the reform, a beta recently discovered in the Pioneer mine. We are advancing with the preparation of an initial estimation of mineral resources for the reform with scheduled publication for 2025. As for our future project, in view of the conditions of the raw materials market, The Administration is in the process of improving the resources and reserves of the project and adjusting the possible development approaches described in the Pre-factibility Study completed in 2023, aiming to maximize the value of the asset and the expected returns. As a result, we have adjusted the preparation of the optimization of the prefactibility study for the next year. With this I end today's presentation. Thank you very much for joining us and I open the space for questions.

Thank you, Alan. We are going to give a couple of seconds while a little more questions arrive and we will open the response space. Well, let's start with the first question that comes to us from Mr. Eduardo Mejía. He asks us, in the hypothetical case that the government prohibits mining in Colombia, how would Mineros continue operating in Nicaragua?

How? Well, first of all, we do not believe that the government will prohibit mining in Colombia. Mining gives many income and many benefits to the country. We do not believe that this would happen. But to answer the question more directly, each mine is handled individually. A mine in a different country is handled individually, it is not directly related to the alluvial mine in Colombia. And especially our operation, our operation in Colombia is mainly alluvial and our mining in Nicaragua is mainly underground. They are two completely different mines.

Perfect, we move on to the next question from Mr. Santiago Mazo. He asks us, do you expect a price per ounce in silver and gold in 2025 higher than the current one or do you expect a correction in the price in both?

Santiago, it is difficult to estimate the price of gold in the future and as we all know in the world there are many coincidences, there are a couple of big wars taking place in the Middle East, in Ukraine, we have a new president in the United States and all these actions will surely affect the price of gold in the future. We believe that the price of gold has also increased due to what is happening in the world and that it is possibly at an adequate price. It already depends on more macroeconomic decisions that we do not dominate to see if the price will continue rising or falling. We saw a small price correction in the last, let's say, 10 days since the new president in the United States was elected. This is also very correlated with the increase in the stock market in the country, in the United States. Many times when actions in the United States go up, the price of gold decreases a little and vice versa, and also due to the expectation of interest rates in the United States, which were going down and now they have become more stable. We have to wait and see what happens next year, but at these levels the price of gold is very beneficial for any gold mining.

Thank you. We have another question related to the price of gold from Mr. Santiago Rosso. And he says, as they showed, it has been observed that the price of gold has reached its upper limit, which has resulted in a recent drop. What has resulted in a recent drop. How does this decrease impact the operation and the projected future costs?

Well, obviously any increase in the price of gold impacts us positively and any negative decrease. In the particular case of miners, we do have a large operation in Nicaragua of artisanal mining. and the cost of the artisanal mining goes tied to the price of gold. So, decreases in the price of gold, although they decrease our income, they also decrease our costs by a percentage. In a way, we have a natural hedge against gold price variations in Nicaragua.

Thank you, Alan. We have another question from Juliana Usique. She asks, do you have any perspective for 2025?

Our projections are usually published in the second half of January, so please be aware of that. However, we have not communicated anything substantially different from what we have today. Our two operations are still operating almost at full capacity, and that is our expectation for next year, that we continue to operate positively as we are operating today.

Thank you, Alan. Julian also asks us about regulatory risks in Colombia, such as mining districts, among others. And to answer this question, I give the floor to Santiago, who will help us with this answer.

Good morning, everyone. We are constantly monitoring the regulatory and legislative issues. Today, we have on the table the Decree 044 of the Ministry of the Environment, with a general view on some environmental restrictions, but not particularly on the Baja Cauca. And the issue of mining districts mentioned in your question, It is being implemented, it is on work tables with all sectors and we believe that this can also be an opportunity to work from the hands of the government in formalization processes, as we have been doing, because without a doubt the Baja Cauca has been a territory of mining vocation and as those who The news also follows the mining strike of a couple of weeks ago, because what it seeks is to strengthen that mining vocation. So we believe that that agro-mining district can be an opportunity to interact with the government and the miners to continue our operation. So we don't take it at risk. Of course, we continue to work hand in hand with the institutions to be able manage and manage this type of possible regulatory changes.

Thank you Santiago. The next question comes from Ajax Delgado and asks us about the optimal ratio of gold reserves versus annual production for a mining company. In that sense, how are miners?

Ajax, the more gold reserves you have, the better. Generally, medium or subterranean companies have reserves for 3, 4 or 5 years and they renew every year to continue mining. We, for example, in Colombia have mine life for about 10-11 years only in reserves, and that is much higher than the average for an alluvial mine or an open pit mine, so we are very good. In Nicaragua we have five or six years, however, a large part of our production is artisanal mining and as you know, artisanal mining is not measured by reserves. It is mining that we buy from artisanal mines that is not measurable under the NI 4301 methodology. Thank you, Alan. The next question is from Mr. Juan Antonio Mejía.

He asks us about coverage. Are they currently covered in gold or are they exposed to the commodity? In the same way, why not propose a resumption of shares in Colombia in the next assembly to increase the floating in Canada and be able to enter the Canadian mining indices?

Juan Antonio, today we do not have gold coverage, we are 100% exposed to the commodity. And as for the other, the second half of the question, we are always studying what will be the best way to benefit our investors. What you ask is definitely an option, but there are many ways to benefit them and all the options are under study.

Thank you, Alan. Next question from Joana Rivera. In fact, she asks us several questions. A year ago, during the call, it was mentioned that there were three years left for the concession. What is the current status? To what date does Nechi have a license to continue exploring the mining title? And on the other hand, she asks us, what is the risk that with the current government a new environmental license is not approved to continue operations in Colombia? Santiago answers this question.

Well, Joana, thank you very much for your question. Indeed, we have, I remind you all that the mining operation in Colombia, which yesterday was 50 years old, has some periods of regulatory transition where we are governed by an environmental management plan that is approved for the whole project, for the whole operation. We have some concession titles where we also require environmental licenses that at the moment we will manage them. And this expansion of the environmental management plan that I talk about the title is the one that you mention that last year we reiterated the three years of coverage. That implies that every time we need permits for the use of resources such as the use of water, the use of forestry and so on, we must expand or modify our environmental management plan, which, I reiterate, is approved for the entire project. So, in that sense, we are already working today on a new expansion for one of our operational stages to be able to continue with that Fourth year, as you mentioned, and that is a recurring issue and part of our operation. We must make it viable due to the particularity it has of mobility. This is not a fixed operation like an underground operation where there is the PID and the mine mouth, but every year we are moving. Therefore, part of our business is to make it viable in the future. The other point you talked about, about continuity or risk, we are working with local and national authorities, with Antioquia and ANLA, to manage these processes in the future. We are also working, as I mentioned, in new modalities of viability through formalization processes, which gives flexibility to other areas and another flow of process to give continuity to the business. We are working on that. In the next three years that we mentioned, we have more updates of that environmental management plan and other licenses in other areas that also allow us give it flow and continue the business.

Thank you Santiago. The next question comes from Freddy Machado. He asks us, according to the results of exploration and production in the upcoming Panama and Pioneer projects in Nicaragua, will the production perspective be good for next year?

Freddy, as for the future, as I mentioned before, we are in the study to improve the project to make it more profitable. As for Panama and Pioneer, we do not see great changes next year versus this year. We in Nicaragua we produce between 33,000 and 38,000 ounces of our underground mines and we believe that this is a good estimate for next year as well. We don't see big changes. Thank you, Alan.

Another question from Mr. Santiago Mazo. Do you see the possibility of having operations in other countries that are different from the current ones to diversify the portfolio and the risks of Latin America, for example, Canada or the United States?

Santiago, of course, and that is one of the tasks that we do continuously in Mineros, we are always looking for new assets, colloquially we say that we are looking for assets from Alaska to Patagonia and we are always having conversations with different companies to to acquire them. A specific transaction has not yet been fructified, but we are always looking at it. That is one of the mining strategies. Thank you.

We move on to a question from Eric Domínguez. What additional information can investments in Chile provide us with?

Eric, we have 20% of a project called La Pepa, it is a project in very early stages. Our partner, Pan American Silver, has 80%. We have obviously had conversations with partners in recent months to see how to advance it, but beyond that, I don't think we have additional information about it. It is an interesting project, it is a big project and it is still in early stages.

Thank you. Next question, Esteban Echavarría. With the current prices of gold, have you considered using futures to make coverage and guarantee a good margin in the part of projected extractions for the coming years? Esteban.

As I mentioned before, we do not have live coverage today, but we are following the price of gold very closely to see if we have a chance. Our coverage is almost always done to mitigate risks, to ensure cash flows in case an operation is difficult or very expensive and these operations today are quite bound in terms of costs versus the price of gold, but it is something that we continue to monitor, specifically with this last rise that we find very interesting.

Thank you, Alan. We move on to a question for Santiago, Mr. Camilo Álvarez asks us. Given the situation of a few weeks ago in the Bajo Cauca and the recent publication of various articles in different newspapers about the shocking situation of the Uritica gold mine, I would like to know if there is a presence of illegals in the mining titles and what level of risk exists.

Well, Camilo, thank you for your question. The latest publications and news that have spoken, I mentioned it right now, the mining strike that took place a couple of weeks ago, has to do with the decision of the government to expand a decree that gives competence to the different forces to be able to intervene in the illicit extraction of minerals. The government in all its forces, the army, The police and the army are in charge of it, and the miners are raising their voices to not pursue them. For that, as I mentioned earlier, one of our management and risk management strategies is to work with these miners and the government to formalize them and also be able to continue our operations and that we can all, let's say, coexist in the mine to be able to work, a bit like the model we have in Nicaragua, where we work with artisanal mining. We see risks of invasions. The price of gold is always going to be attractive because it makes any operation more profitable, then the illegality increases. There is that risk, that is part of this operation. and we have the mechanisms of mitigation and administration of that risk always in the hands of all institutions and authorities.

Thank you Santiago. The next question will help us with the answer. Manuel Rodríguez asks us. In CDAPNOS Canada, approval is published by the OPA's financial superintendency at the beginning of the acceptance period on November 20th. There is no information about this in Colombia. Do you know about the draft and the pre-agreement? What is the difference between the information published in Canada and Colombia?

Hello, Manuel. Thank you for the question. The information corresponding to the OPA, according to the Colombian regulation, must be issued or published directly by the operator. In this sense, all the obligation, all the information related to the OPA is available in the daily bulletin of the Colombian Stock Exchange and you can also find it for greater ease on the Mineros website or on the Zonvalle website, where both the notebook and its annexes are.

Thank you very much. Next question from Mr. Santiago Rosso. Given the current price, could you provide an approximate estimate of the intrinsic value of the share?

Thank you very much. Santiago, the intrinsic value is the wealth divided by the number of shares, which in a stock market is not the value of the share. With these gold prices, I do believe that our share should be a little stronger. We are having fantastic results. If we annualize the current EBITDA, we should be around more or less 200 million dollars in EBITDA and the capitalization of the stock market of miners today does not reflect that reality. My expectation is that I believe that the action of miners should be at some better levels. Well, at the moment the questions are over, we give a few more seconds for you to write us a few more and in the meantime we thank you for your participation in this conference. We are very happy with our results and we hope to continue bringing you good news in the following quarters. Well, thank you all very much and we will talk again in approximately three more months.

Thank you very much, we conclude today's call. Thank you all for your participation and we hope to see you next time.

Happy day to all.

Thank you for your assistance, ladies and gentlemen. With this we can conclude today's teleconference. Now you can disconnect.