Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aura Minerals Inc (ORAAF, Financial) reported a significant increase in production by 28% compared to the previous year.
- The company achieved a 45% increase in EBITDA, indicating strong financial performance.
- Aura Minerals Inc (ORAAF) maintained high safety standards, achieving 15 months without a lost-time incident.
- The company successfully reduced all-in sustaining cash costs to $1,287 per ounce, which is below their guidance.
- Aura Minerals Inc (ORAAF) updated its mineral resources and reserves, now reporting 2.4 million ounces of gold equivalent in reserves, reflecting a robust exploration investment.
Negative Points
- Despite the increase in production and EBITDA, the company noted a decrease in gold and copper prices which could impact future revenues if prices do not recover.
- Aura Minerals Inc (ORAAF) faces risks and uncertainties related to macroeconomic scenarios and industry factors that could materially affect future results.
- The company reported operational challenges with contractors, particularly in transitioning to new contractors which could affect production efficiency.
- Aura Minerals Inc (ORAAF) experienced some non-cash losses related to market-to-market of debt outstanding on gold derivatives, impacting net income.
- There are ongoing challenges and delays in licensing and regulatory approvals for expansion projects which could delay future production increases.
Q & A Highlights
Q: Regarding Boursorama, how should we think about CapEx for this expansion after you move the road, and how long do you think it will take until you start producing in the expansion?
A: (Rodrigo Barbosa - President, Chief Executive Officer) After obtaining the license to move the road, it will take about one year to complete the final volumes and engineering mining, and an additional two years to complete the road. The CapEx to move the road is not yet finalized, but it will be meaningful yet manageable compared to the cash generated afterward. The plant is designed to support higher production once the license is obtained.
Q: Can you provide any updates on the production and cost efficiencies at the new pits in EPP?
A: (Joao Cardoso - Chief Financial Officer) We anticipate that the new product pipeline will grow our guidance, with high-grade material driving lower cash costs. We expect to see some positive impact from this and remain within the guidance for cash costs.
Q: How do you expect the cost reductions at Alma's operations to normalize, and when will the company be on track to deliver the guidance for costs in 2024?
A: (Rodrigo Barbosa - President, Chief Executive Officer) The main initiative for cost reduction at Alma is changing the contractor, as the previous one did not meet expectations. We expect to see significant improvements in cost efficiency by Q3 and Q4 of this year.
Q: What are the main risks to reaching the high end of your production guidance for 2024?
A: (Rodrigo Barbosa - President, Chief Executive Officer) The main risks include stability of production, potential contractor problems, and operational issues such as weather conditions. However, the company is well-prepared to manage these risks.
Q: Can you discuss the initiatives to increase share liquidity and whether you have considered listing on international exchanges?
A: (Rodrigo Barbosa - President, Chief Executive Officer) The company has implemented several initiatives to increase liquidity in Canada but is also considering alternatives, including listing on international exchanges. This is due to finding cheaper capital outside Canada and the specific investor base in Canada that focuses more on exploration.
Q: Regarding the CapEx guidance, do you expect an acceleration in the coming quarters? What expansion CapEx are you expecting?
A: (Rodrigo Barbosa - President, Chief Executive Officer) CapEx is expected to be in line with guidance, with a gradual increase in Q3 and Q4, particularly for the What Emma project, which will see most of its CapEx incurred in the second semester of this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
