Mineros Reports 2021 Year-End and Fourth Quarter Financial and Operational Results

(all amounts expressed in U.S. dollars unless otherwise stated)

MEDELLIN, Colombia, Feb. 28, 2022 /CNW/ - Mineros S.A. (TSX: MSA) (MINEROS:CB) ("Mineros" or the "Company") today reported its financial and operational results for the fourth quarter and year ended December 31, 2021. For further information please see the Company's Consolidated Financial Statements and Management Discussion and Analysis filed under Mineros' profile on www.sedar.com.

Andrés Restrepo, President and CEO of Mineros, commented "2021 was a historic year for Mineros, as we became the first Colombian-based company to be listed on both the Toronto Stock Exchange and the Colombian Stock Exchange (Bolsa de Valores de Colombia). While we are new to Canadian investors, Mineros has a long and profitable history of gold mining in Latin America, initially in Colombia, and more recently in Nicaragua and Argentina. In all of the jurisdictions in which we operate, we have built mutually beneficial relationships with stakeholders, to contribute to the socio-economic development of the local communities and establish a strong social licence."

"Mineros continues to pay one of the highest dividends in the gold mining industry, with a total of $17.7 million paid in 2021. This past year we produced over 260,000 ounces of gold, achieving production guidance, and continuing to strengthen our overall capital position.  While our cash costs per ounce of gold sold¹ were within guidance, our all-in sustaining costs per ounce of gold sold¹ were slightly higher than forecast."

"We enter 2022 with a focus both on continued solid production from our existing mining operations and growing annual production to approximately 500,000 gold equivalent ounces by 2025 through a combination of greenfield development, brownfield expansions, joint ventures, and potential complimentary acquisitions." added Restrepo.

YEAR-END FINANCIAL AND OPERATING HIGHLIGHTS

• 2021 annual production guidance achieved: Gold production totaled 261,767 ounces in 2021, within the upper half of the Company's 2021 production guidance range of 250,000 to 267,000 ounces and a 4% decrease from the proceeding year (2020: 271,647 ounces).
• Strong dividend payment: $17.7 million in dividends paid in 2021, a 33% increase from the previous year (2020: $13.3 million).
• Solid revenue from gold sales: Gold sales of 265,806 ounces generated $479.3 million in revenue, with an average realized price per ounce of gold sold² of $1,803 (2020: gold sales of 270,898 ounces generated $479.1 million in revenue, with an average realized price per ounce of gold sold of $1,769).
• Continued strong financial liquidity: Net debt to Adjusted EBITDA² ratio of (0.05x) in 2021 (2020: 0.06x).
• Continued cash flows from operating activities: $87.3 million in cash from operating activities in 2021 (2020: $142.2 million).
• Cash costs³ & all-in sustaining costs³ ("AISC"): cash costs per ounce of gold sold in 2021 were $1,178, (2020: $1,018; 2021 Guidance: $1,151 to $1,225) and AISC per ounce of gold sold³ was $1,492 (2020: $1,226; 2021 Guidance: $1,390 to $1,473). While cash costs per ounce of gold sold³ were in line with guidance, the AISC per ounce of gold sold³ was slightly higher than forecast.

FOURTH QUARTER 2021 FINANCIAL AND OPERATING HIGHLIGHTS

• Gold production: Gold production totaled 65,133 ounces in the fourth quarter of 2021 (fourth quarter 2020: 64,908 ounces). The Company does not provide quarterly production guidance.
• Dividend payment: $4.0 million in dividends paid in the fourth quarter of 2021, a 4% increase from the previous year (fourth quarter 2020: $3.8 million).
• Revenue from gold sales and average realized price per ounce of gold sold: Gold sales of 64,969 ounces generated $117.1 million in revenue, with a realized price per ounce of gold sold³ of $1,802 (fourth quarter 2020: gold sales of 64,453 ounces generated $119.2 million in revenue, with a realized price per ounce of gold sold of $1,850).
• Continued strong financial liquidity: Net debt to Adjusted EBITDA² ratio of (0.05x) in the fourth quarter of 2021 (fourth quarter 2020: 0.06x).
• Cash flows from operating activities: $19.6 million in cash was generated from operating activities in the fourth quarter 2021, a 74% decrease from the previous year (fourth quarter 2020: $75.4 million).
• Cash Cost⁴ & AISC⁴: cash costs per ounce of gold sold⁴ in the fourth quarter of 2021 were $1,227, (fourth quarter 2020: $1,162) and AISC per ounce of gold sold⁴ was $1,463 (fourth quarter 2020: 1,454). The Company does not provide quarterly guidance.

 

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1 Cash costs and all-in sustaining costs (AISC) are non-IFRS financial measures, and cash costs per ounce of gold sold and AISC per ounce of gold sold are non-IFRS ratios, with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release.

2 Non-IFRS disclaimer

3 Cash costs and all-in sustaining costs (AISC) are non-IFRS financial measures, and cash costs per ounce of gold sold and AISC per ounce of gold sold are non-IFRS ratios, with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release.

4 Cash costs and all-in sustaining costs (AISC) are non-IFRS financial measures, and cash costs per ounce of gold sold and AISC per ounce of gold sold are non-IFRS ratios, with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release.

Table 1. Quarterly and Annual Financial and Operating Highlights
(All numbers in $000's unless otherwise noted)

	Three Months Ended Dec. 31,		Change		Year Ended Dec. 31,		Change
	2021	2020	#	%	2021	2020	#	%
Financial
Revenues	122,218	121,480	738	1%	496,247	485,301	10,946	2%
Sales of gold	117,053	119,210	(2,157)	(2%)	479,363	479,128	235	0%
Gross profit	26,612	33,169	(6,557)	(20%)	124,963	162,961	(37,998)	(23%)
Net Profit for the period	11,060	14,155	(3,095)	(22%)	43,387	63,655	(20,268)	(32%)
Basic Earnings per Share ($)	0.04	0.05	(0)	(20%)	0.16	0.24	(0)	(33%)
Adjusted EBITDA(1)	35,449	40,210	(4,761)	(12%)	154,703	187,751	(33,048)	(18%)
Cash from Operating Activities	19,643	75,427	(55,784)	(74%)	87,340	142,244	(54,904)	(39%)
ROCE(1)	24%	37%	(13%)	(35%)	24%	37%	(13%)	(35%)
Net Debt to Adjusted EBITDA	(0.05x)	0.06x	(0.11x)	(190%)	(0.05x)	0.06x	(0.11x)	(190%)
Dividends Paid	4,014	3,849	165	4%	17,670	13,303	4,367	33%
Operating
Average realized price per ounce of gold sold(1) ($/oz)	1,802	1,850	(48)	(3%)	1,803	1,769	35	2%
Gold produced (oz)	65,133	64,908	225	0%	261,767	271,647	(9,880)	(4%)
Gold sold (oz)	64,969	64,453	516	1%	265,806	270,898	(5,092)	(2%)
Average realized price per ounce of silver sold(1) ($/oz)	23	25	(2)	(7%)	25	21	3	15%
Silver produced (oz)	108,959	64,921	44,038	68%	400,562	298,088	102,474	34%
Cash Cost per ounce of gold sold(1) ($/oz)	1,227	1,162	64	6%	1,178	1,018	160	16%
AISC per ounce of gold sold(1) ($/oz)	1,463	1,454	9	1%	1,492	1,226	266	22%

(1) The definition and reconciliation of these non-IFRS financial measures and ratios is included in the section on Non-IFRS and Other Financial Measures in this news release.

Table 2. Quarterly and Annual Operational Highlights by Material Property
(All numbers in ounces unless otherwise noted)

	Three Months Ended Dec. 31,		Change			Year Ended Dec. 31,		Change
	2021	2020	#	%		2021	2020	#	%
Colombia
Nechi Alluvial Property	15,524	17,561	(2,037)	(12%)		73,129	69,940	3,189	5%
La Ye Mine(1)	0	0	0	0%		0	6,785	(6,785)	(100%)
	15,524	17,561	(2,037)	(12%)		73,129	76,725	(3,596)	(5%)
Nicaragua
Hemco Property	5,885	6,839	(954)	(14%)		30,917	34,679	(3,762)	(11%)
Artisanal Mining	26,316	19,821	6,495	33%		96,234	87,816	8,418	10%
	32,201	26,660	5,541	21%		127,151	122,495	4,656	4%
Gualcamayo Property (Argentina)	17,408	20,687	(3,279)	(16%)		61,487	72,427	(10,940)	(15%)
Total Gold Produced	65,133	64,908	225	0%		261,767	271,647	(9,880)	(4%)
Total Silver Produced	108,959	64,921	44,038	68%		400,562	298,088	102,474	34%

(1) Colombia's production in the full year ended Dec. 31, 2020, includes ounces from La Ye underground mine. The La Ye underground mine was sold in 2020 and effective control of operations passed to the new owners on or about May 31, 2020.

CORPORATE AND PROJECT HIGHLIGHTS FOR THE QUARTER AND YEAR-ENDED DECEMBER 31, 2021

• Initial public offering ("IPO") on the Toronto Stock Exchange ("TSX") and closing of Canadian and Colombian Offerings: On November 19, 2021, the Company completed a public offering in Colombia for gross proceeds of approximately $11.5 million. On the same date, the Company also completed its IPO in Canada (the "Canadian IPO") with gross proceeds close to $20.0 million and common shares of Mineros were listed for trading on the TSX under the stock symbol "MSA". On November 25, 2021, the co-lead underwriters for the Canadian IPO partially exercised their over-allotment option, resulting in additional gross proceeds of approximately $2.8 million. Total proceeds of the Canadian IPO and the Colombian concurrent offering, net of underwriting fees and various issue cost, were $29.8 million.
• Consolidation of 100% ownership of the Luna Roja Exploration Target: On May 21, 2021, Mineros acquired Royal Road Minerals Limited's ("Royal Road") 50% interest in the Luna Roja Exploration Target, bringing the interest of Hemco-Nicaragua S.A. ("Hemco"), a subsidiary of the Company, to 100% for consideration consisting of $24.5 million (including withholding taxes of $3.7 million) and a 1.25% net smelter return royalty on all future mineral production from the Luna Roja Exploration Target, starting from commercial production. On December 7, 2021, the Company repaid debt of $15 million incurred to fund a portion of the cash consideration for Royal Road's interest in the Luna Roja Exploration target, with net proceeds of the Canadian IPO.
• Initial 20% interest earned in La Pepa Project: On June 25, 2021, the Company announced it had exercised its first option to earn a 20% beneficial interest in the La Pepa Project.
• Receipt of environmental permits at the Nechí Alluvial Property: On October 22, 2021, the Company announced that the National Authority of Environmental Licences (Autoridad Nacional de Licencias Ambientales) of Colombia ("ANLA") approved a previously submitted application to amend the Nechí Alluvial Property environmental management plan ("EMP") and granted environmental permits sufficient to support planned operations at Nechí Alluvial Property within the 141 hectare area covered by the environmental management plan amendments.
• COVID-19 Pandemic: Mineros continues to focus on the well-being of its employees, contractors and the communities in which it operates, and mitigating risks associated with operating during the ongoing COVID-19 pandemic. There have been confirmed cases of COVID-19 at each of our material properties. The affected individuals have all followed local protocols and the Company's operations otherwise remain unaffected.

SUBSEQUENT TO DECEMBER 31, 2021

• On January 6, 2022, Mineros announced that the payment date for the final quarterly installment of the ordinary dividend approved by the Company's shareholders at the Ordinary Meeting of Shareholders held on March 25, 2021 in an amount of $0.0154 per common share, was to be paid on January 20, 2022.
• On February 16, 2022, Mineros announced 2022 production guidance of 262,000 to 285,000 ounces in 2022, an increase of between 0% and 9% from 2021 production, cash costs per ounce of gold sold⁵ for 2022 between $1,090 and $1,180 and AISC per ounce of gold sold⁵ in 2022 between $1,350 and $1,450.

GROWTH PROJECT UPDATES

The Deep Carbonates Project at the Gualcamayo Property in Argentina refers to undeveloped mineral resources below the existing oxide gold mineralization at the Gualcamayo Mine which are not amenable to the heap leach processing method being used currently on the property. The Company previously announced that it anticipated completing a preliminary economic assessment ("PEA") of the Deep Carbonates Project by the end of the first quarter of 2022. Mineros is currently advancing with additional drill testing of the Deep Carbonates Project and is re-evaluating the anticipated timing for completion of the PEA.

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5 Cash costs and all-in sustaining costs (AISC) are non-IFRS financial measures, and cash costs per ounce of gold sold and AISC per ounce of gold sold are non-IFRS ratios, with no standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other issuers. For further information and detailed reconciliations of non-IFRS financial measures to the most directly comparable IFRS measures, see Non-IFRS and Other Financial Measures in this news release,

The Porvenir Project is an advanced-stage gold-silver-zinc project on the Hemco Property in Nicaragua. Ongoing studies are being completed to assess processing and mining scenarios and additional work is underway to complete a feasibility study. Initially, this study was expected to be complete by the end of the first quarter of 2022. However, as a result of delays and refinement of project parameters, this work is now anticipated to be completed in the second half of 2022.

The La Pepa Project is located within Chile's Maricunga Gold Belt, which is known worldwide for important gold, copper, and other mineral deposits. At the La Pepa Project, the Company is focused on exploring a porphyry-style gold system, similar to other gold systems in the Maricunga Gold Belt. A mineral resource estimate and a PEA at the La Pepa Project was initially scheduled to be completed in the first quarter of 2022. However, as a result of the Company's internal strategic analysis, the progress and timeline for completion of the PEA is under review.

CONFERENCE CALL AND WEBCAST DETAILS

The company will host a conference call Thursday March 3, 2022 at 8:00 am (GMT -5), where senior management will discuss its financial and operational results for the fourth quarter and year ended December 31, 2021. The conference call will be in Spanish with simultaneous translation in English.

Please dial in:
Canada Toll Free:	1 [phone]
US Toll Free:	1 [phone]
Pin for English:	50285031#
Pin for Spanish:	50285030#

The list of all local and international dial in numbers can be found at:
http://web.meetme.net/r.aspx?p=12&a=UxrYUvQXMwFYoq

A live webcast of the conference all will be available at:
https://onlinexperiences.com/Launch/QReg/ShowUUID=FC3D0D32-EE93-435C-9474-9B51CF66FAAF&LangLocaleID=1034. 

Live webcast requires previous registration, it is advised to access the webcast approximately ten minutes prior to the start of the call. The webcast will be archived on the Company's website at www.mineros.com.co.

ABOUT MINEROS S.A.

Mineros is a Latin American gold mining company headquartered in Medellin, Colombia. The Company has a diversified asset base, with mines in Colombia, Nicaragua and Argentina and a pipeline of development and exploration projects throughout the region.

The board of directors and management of Mineros have extensive experience in mining, corporate development, finance and sustainability. Mineros has a long track record of maximizing shareholder value and delivering solid annual dividends. For almost 50 years Mineros has operated with a focus on safety and sustainability at all its operations.

Mineros' common shares are listed on the TSX under the symbol "MSA", and on the Colombia Stock Exchange under the symbol "MINEROS".

The Company has been granted an exemption from the individual voting and majority voting requirements applicable to listed issuers under TSX policies, on grounds that compliance with such requirements would constitute a breach of Colombian laws and regulations which require the directors to be elected on the basis of a slate of nominees proposed for election pursuant to an electoral quotient system. For further information, please see the Company's final prospectus dated November 11, 2021 (the "Final Prospectus"), available on SEDAR at www.sedar.com

QUALIFIED PERSON

The scientific and technical information contained in this news release has been reviewed and approved by Jorge Aceituno, a Registered Member of the Chilean Mining Commission and the Planning Manager, Resources and Reserves for Mineros and a qualified person within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes statements that use forward-looking terminology such as "may", "could", "would", "will", "should", "intend", "target", "plan", "expect", "budget", "estimate", "forecast", "schedule", "anticipate", "believe", "continue", "potential", "view" or the negative or grammatical variation thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, statements with respect to the Company's outlook for 2022; the Company's plans and expectations with respect to production, exploration, development, and expansion at its properties and projects; timing, receipt and maintenance of necessary approvals, licenses and permits from applicable governments, regulators or third parties; timing, completion and results of mineral resource estimates and mining studies; our goal of growing annual production to approximately 500 koz of gold equivalents by 2025; estimates of future capital and operating costs; future financial or operating performance and condition of the Company and its business, operations and properties; and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.

Forward-looking information is based upon estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this press release including, without limitation, assumptions about: favourable equity and debt capital markets; the ability to raise any necessary additional capital on reasonable terms; future prices of gold and other metal prices; the timing and results of exploration and drilling programs, and technical and economic studies; the accuracy of any Mineral Reserve and Mineral Resource estimates; the geology of the Material Properties being as described in the applicable NI 43-101 technical reports; production costs; the accuracy of budgeted exploration and development costs and expenditures; the price of other commodities such as fuel; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; political and regulatory stability; the receipt of governmental, regulatory and third party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; availability of equipment; positive relations with local groups, including artisanal mining cooperatives in Nicaragua, and the Company's ability to meet its obligations under its agreements with such groups; and satisfying the terms and conditions of the Company's current loan arrangements. While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual actions, events, conditions, results, performance or achievements to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.  Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended. For further information of these and other risk factors, please see the ''Risk Factors" section of the Company's final long form prospectus dated November 11, 2021, available on SEDAR at www.sedar.com. For clarity, mineral resources that are not mineral reserves do not have demonstrated economic viability and inferred resources are considered too geologically speculative for the application of economic considerations.

The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information contained herein. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information contained herein is made as of the date of this press release and the Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

NON-IFRS AND OTHER FINANCIAL MEASURES

The Company has included certain non-IFRS financial measures and non-IFRS ratios in this MD&A. Management believes that non-IFRS financial measures and non-IFRS ratios, when supplementing measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS financial measures and non-IFRS ratios do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. These data are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For a discussion of the use of non-IFRS financial measures and reconciliations thereof to the most directly comparable IFRS measures, see below.

EBITDA and Adjusted EBITDA

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use the earnings before interest, tax, depreciation and amortization ("EBITDA"), and adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA"), which excludes certain non-operating income and expenses, such as financial income or expenses, hedging operations, exploration expenses, impairment of assets, foreign currency exchange differences, and other expenses (principally, donations, corporate projects and taxes incurred). The Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results because it is consistent with the indicators management uses internally to measure the Company's performance, and is an indicator of the performance of the Company's mining operations.

The following table sets out the calculation of EBITDA and Adjusted EBITDA for the three months and years ended December 31, 2021 and 2020:

	Three Months Ended Dec. 31,		Year Ended Dec. 31,
	2021	2020	2021	2020
Profit for the Period	11,060	14,155	43,387	63,655
Less: Interest income (1)	(445)	(441)	(1,392)	(1,030)
Add: Interest expense (2)	1,346	1,686	4,950	6,239
Add: Current tax (3)	4,843	6,648	28,355	38,149
Add/less: Deferred tax	327	2,523	5,385	4,221
Add: Depreciation and Amortization	13,502	11,404	49,108	40,947
EBITDA	30,633	35,975	129,793	152,181
Less: Other income (4)	(465)	(1,008)	(2,506)	(3,735)
Less: Results investments in associates (5)	(5,287)	-	(5,287)	-
Less: Finance income (excluding interest income)	(31)	(31)	(172)	(64)
Add: Finance expense (excluding interest expense)	1,110	742	4,238	2,467
Add: Other expenses (6)	7,887	9,818	19,140	23,447
Add: Exploration Expenses(7)	4,972	2,032	12,523	9,977
Less: Impairment of Assets, net (8)	(1,901)	(9,139)	(1,901)	(1,192)
Less: Hedging Operations(9)	-	(463)	-	2,027
Less: Foreign currency exchange differences (10)	(1,469)	2,284	(1,125)	2,643
Adjusted EBITDA	35,449	40,210	154,703	187,751

(1)	For additional information regarding interest income, see Note 15 of our Consolidated Financial Statements.
(2)	For additional information regarding interest expense, see Note 16 of our Consolidated Financial Statements.
(3)	For additional information regarding taxes, see Note 22 of our Consolidated Financial Statements.
(4)	For additional information regarding other income, see Note 12 of our Consolidated Financial Statements.
(5)	Results in investments in associates was included in the Adjusted EBITDA calculation, as a recognition of the value of the acquisition of a 20% interest in La Pepa Project. For additional information regarding results in investments in associates, see Note 27 of our Consolidated Financial Statements.
(6)	For additional information regarding other expenses, see Note 13 of our Consolidated Financial Statements.
(7)	For additional information regarding exploration expenses, see Note 14 of our Consolidated Financial Statements.
(8)	For additional information regarding impairment of assets, see Note 8 of our Consolidated Financial Statements.
(9)	For additional information regarding hedging operations, see Note 5 of our Consolidated Financial Statements.
(10)	For additional information regarding foreign currency exchange differences, see Note 3.4 of our Consolidated Financial Statements.

Cash Costs & All-in Sustaining Costs

The Company reports cash costs per ounce of gold sold which is calculated by deducting revenues from silver sales and depreciation and amortization from costs of sales, and dividing the difference by the number of gold ounces sold. Production cash costs include mining, milling, mine site security, royalties, and mine site administration costs, and exclude non-cash operating expenses. Cash costs per ounce of gold sold and AISC per ounce of gold sold are non-IFRS financial measures used to monitor the performance of our gold mining operations and their ability to generate profit.

The objective of AISC is to provide stakeholders with a key indicator that reflects as close as possible the full cost of producing and selling an ounce of gold.

The Company reports AISC per ounce of gold sold on a by-product basis. The methodology for calculating AISC per ounce of gold sold is set out below and is consistent with the guidance methodology set out by the World Gold Council. This non-IFRS ratio provides investors with transparency regarding the total costs of producing an ounce of gold in each period.

Cash Costs and All-in Sustaining Costs on a Consolidated Basis

The following table provides a reconciliation of cash costs per ounce of gold sold on a by-product basis for the three months and years ended December 31, 2021 and 2020:

	Three Months Ended Dec. 31,		Year Ended Dec. 31,
	2021	2020	2021	2020
Costs of sales	95,606	88,311	371,284	322,340
Less: Cost of non-mining operations	(145)	(114)	(567)	(253)
Less: Depreciation and amortization	(13,221)	(11,649)	(47,729)	(40,200)
Less: Sales of silver	(2,526)	(1,623)	(9,873)	(6,070)
Cash costs	79,714	74,925	313,115	275,817
Gold sold (oz)	64,969	64,453	265,806	270,898
Cash cost per ounce of gold sold ($/oz)	1,227	1,162	1,178	1,018

The following table provides a reconciliation of AISC per ounce of gold sold for the three months and years ended December 31, 2021 and 2020:

	Three Months Ended Dec. 31,		Year Ended Dec. 31,
	2021	2020	2021	2020
Costs of sales	95,606	88,311	371,284	322,340
Less: Cost of sales of non-mining operations	(145)	(114)	(567)	(253)
Less: Depreciation and amortization	(13,221)	(11,649)	(47,729)	(40,200)
Less: Sales of silver	(2,526)	(1,623)	(9,873)	(6,070)
Less: Energy sales revenues	(1,134)	(1,216)	(4,495)	(3,793)
Add: Administration expenses	4,665	4,363	19,368	16,157
Less: Depreciation and amortization of Adm. Expenses	(281)	245	(1,379)	(747)
Less: Administration Expenses of non-mining operations	(8)	-	(33)	(21)
Add: Sustaining leases and leaseback	3,612	2,561	12,260	12,272
Add: Sustaining exploration	2,286	1,933	9,495	9,333
Add: Sustaining capital expenditure	6,173	10,875	48,309	23,105
AISC	95,027	93,686	396,640	332,123
Gold sold (oz)	64,969	64,453	265,806	270,898
All-in sustaining costs per ounce of gold sold ($/oz)	1,463	1,454	1,492	1,226

Return on Capital Employed

The Company uses ROCE as a measure of long-term operating performance to measure how effectively management utilizes the capital it has provided. This non-IFRS ratio is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The calculation of ROCE, expressed as a percentage, is Adjusted EBIT (calculated in the manner set out in the table below) divided by the average of the opening and closing capital employed for the 12 months preceding the period end. Capital employed for a period is calculated as total assets at the beginning of that period less total current liabilities.

		As at Dec. 31,	As at Dec. 31,
		2021	2020
Adjusted EBITDA (Last 12 months)		154,703	187,751
Less: Depreciation and amortization (Last 12 months)		(49,108)	(40,947)
Adjusted EBIT (A)		105,595	146,804
Total Assets at the beginning of the Period		542,235	492,219
Less: Total current liabilities at the beginning of the Period		(128,813)	(108,175)
Opening Capital Employed (B)		413,422	384,044
Total Assets at the end of the Period		580,046	542,235
Less: Current Liabilities at the end of the Period		(110,601)	(128,813)
Closing Capital employed (C)		469,445	413,422
Average Capital employed (D)= (B) + (C) /2		441,434	398,733
ROCE (A/D)		24%	37%

Net Debt to Adjusted EBITDA Ratio

Net Debt to Adjusted EBITDA ratio is a non–IFRS ratio that provides the liquidity position of the Company. The calculation of net debt shown below is calculated as nominal undiscounted debt including leases, less cash and cash equivalents. The following sets out the calculation of Net Debt to Adjusted EBITDA ratio for the periods indicated.

		Year Ended Dec. 31,
		2021	2020
Loans and other borrowings		55,110	74,458
Less: Cash and cash equivalents		(63,130)	(63,598)
Net Debt		(8,020)	10,860
Adjusted EBITDA (Last 12 months)		154,703	187,751
Net Debt to Adjusted EBITDA		(0.05x)	0.06x

Average Realized Price

The Company uses "average realized price per ounce of gold" and "average realized price per ounce of silver", which are non-IFRS financial measures. Average realized metal price represents the revenue from the sale of the underlying metal as per the Statement of Operations, adjusted to reflect the effect of trading at holding level (parent Company) on the sales of gold purchased from subsidiaries. Average realized prices are calculated as the revenue related to gold and silver sold divided by the number of ounces of metal sold. Reconciliations of average realized metal prices to gold revenues and silver revenues are provided below:

		Three Months Ended Dec. 31,		Year Ended Dec. 31,
		2021	2020	2021	2020
Sales of gold		117,053	119,210	479,363	479,128
Sold gold ounces (oz)		64,969	64,453	265,806	270,898
Average realized price per ounce of gold sold ($/oz)		1,802	1,850	1,803	1,769
Sales of silver		2,528	1,623	9,875	6,070
Sold silver ounces (oz)		108,959	64,921	400,562	298,088
Average realized price per ounce of silver sold ($/oz)		23	25	25	20

 

SOURCE Mineros S.A.

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