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

MEDELLIN, Colombia, Nov. 15, 2021 /CNW/ - Mineros S.A. (MINEROS: CB) ("Mineros" or the "Company") today reported its financial and operational results for the third quarter ended September 30, 2021.

"Mineros is on track to meet its production guidance for 2021. However, the Company experienced increased costs as a result of purchasing more material from artisanal miners in Nicaragua and higher production and sustaining costs at the Gualcamayo Property in Argentina. We saw an expected increase in capital expenditures this quarter, as we continue to invest capital both to extend the life of mine at the Gualcamayo Property, and advance the future organic growth of the Company within our robust property portfolio." said Andrés Restrepo, President and CEO.

"Subsequent to quarter end, we had two significant and positive advancements for the Company. Firstly, we received all outstanding environmental permits for the Nechí Alluvial Property in Colombia. With these permits in place, the Company intends to move forward mining in new, higher grade areas of the mine in 2022. Secondly, Mineros entered into an underwriting agreement and filed the final prospectus for an initial public offering in Canada." Restrepo continued.

OPERATIONAL HIGHLIGHTS

  • Gold production down 1% in the third quarter of 2021: 63,758 ounces of gold were produced in the third quarter of 2021, compared to 64,225 ounces in the third quarter of 2020;

    Total gold production was in line with the Company's updated guidance for 2021. We do not provide guidance for silver production as we treat it as a by-product.

  • Cash Costs(1) and All-in-Sustaining Costs ("AISC")(1) in the third quarter of 2021: average cash costs in the third quarter of 2021 were $1,235 per ounce of gold sold and AISC was $1,476 per ounce of gold, compared to an average cash cost of $1,020 per ounce sold and an AISC of $1,225 per ounce for in the third quarter of 2020. The increase in average cash cost and AISC was a result of purchasing more material from artisanal miners at the Hemco Property and higher production and sustaining costs at the Gualcamayo Property as the mine nears end of life.

FINANCIAL HIGHLIGHTS

  • Revenues decreased by 1%: revenues totaled $120.2 million in the third quarter of 2021 compared to $121.3 million in the third quarter of 2020, with an average realized price per ounce sold of $1,782 in the third quarter of 2021 compared to $1,896 in the third quarter of 2020. Key drivers were a decrease in average realized price of 6% partially offset by 4% higher ounces sold;
  • Gross Profit decreased by 40%, to $25.4 million in the third quarter of 2021 compared to $42.7 million in the third quarter of 2020; mainly due to higher costs from purchases of artisanal material and higher operating costs in Argentina;
  • Net Profits for the period down 67%, to $8.2 million or $0.3 per share in the third quarter of 2021 compared to $24.8 million or $0.09 per share in the third quarter of 2020; this decrease is explained mainly by higher costs (as mentioned above), higher exploration expenses in the Deep Carbonates Project and regional exploration in Argentina, the Luna Roja Exploration Target and regional exploration in Nicaragua ($3.4 million) and lower income from hedging operations valuation ($2.7 million);
  • Adjusted EBITDA(2) down 38%: Adjusted EBITDA was $32.4 million in the third quarter of 2021 compared to $51.9 million in the third quarter of 2020;
  • ROCE(3) of 27%: a decrease of 26% in the third quarter of 2021 relative to the third quarter of 2020 of 36%;
  • Net Debt to adjusted EBITDA ratio(4) was 0.22x in the third quarter of 2021, compared to a ratio of 0.18x in the third quarter of 2020;
  • Dividends Paid up 36%: Dividends Paid for the third quarter of 2021 totaled $4.0 million, compared to $3.0 million in the third quarter of 2020; 
  • Net Cash provided by operating activities up 36%: totaling $35.1 million in the third quarter of 2021, compared to $25.8 million in the first three months of 2020. The Company's net free cash flows(5) for the third quarter of 2021 totaled $23.7 million, up from $16.1 million in the third quarter of 2020 due to higher cash from operating activities;
  • Capital investments up 35% to $25.7 million: during the third quarter of 2021, capital investments of $25.7 million were made into existing mines, and exploration and evaluation projects, compared to $19.1 million in the third quarter of 2020.

CORPORATE HIGHLIGHTS 

  • On July 12, 2021, Mineros announced that it has received a positive response from the National Authority of Environmental Licenses of Colombia ("ANLA") to its appeal filed on April 23, 2021;
  • On July 19, 2021, Mineros announced the filing of its Best Corporate Governance Practices report with the Superintendence of Finance of Colombia;
  • On July 27, 2021, Mineros announced the acquisition, through its subsidiary, Hemco-Nicaragua S.A. ("Hemco"), of shares representing a 15% equity interest in Vesubio Mining, S.A. ("Vesmisa") for $1.5 million. Vesmisa owns one of two mineral processing plants dedicated exclusively to processing material mined by artisanal miners at the Hemco Property in Nicaragua. Following such acquisition, Hemco holds a 100% interest in all processing infrastructure at the Hemco Property;
  • On September 16, 2021, Mineros filed updated technical reports prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") for all of the Nechí Alluvial Property in Colombia, the Gualcamayo Property in Argentina, and the Hemco Property in Nicaragua, including updated Mineral Reserves and Mineral Resources estimates effective June 30, 2021;
  • On September 16, 2021, Mineros announced filing and receipt preliminary prospectus with securities regulators in each of the provinces of Canada, except Quebec (initial public offering) and Colombia (concurrent public offering of common shares).

Subsequent to September 30, 2021:

  • On October 19, 2021, 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 EMP amendments.
  • On November 12, 2021, Mineros announced that it entered into an underwriting agreement and filed its final prospectus dated November 11, 2021 in respect of its initial public offering in Canada and Colombia.

Quarterly Financial and Operating Results


Three Months ended Sept. 30,

Change


Nine Months ended Sept. 30,

Change

2021

2020

$

%


2021

2020

$

%

Financial










Revenues

120,188

121,263

(1,075)

(1%)


374,029

363,821

10,208

3%

Gross Profit

25,419

42,715

(17,296)

(40%)


98,351

129,792

(31,441)

(24%)

Net Profit for the period

8,150

24,795

(16,645)

(67%)


32,327

49,500

(17,173)

(35%)

Basic Earnings per Share

0.03

0.09

(0.06)

(67%)


0.12

0.19

(0.07)

(37%)

Adjusted EBITDA(2)

32,359

51,889

(19,530)

(38%)


119,254

147,541

(28,287)

(19%)

Net Cash from Operating Activities

35,066

25,754

9,312

36%


67,697

66,817

880

1%

Net free cash flow(5)

23,727

16,133

7,594

47%


8,714

41,170

(32,456)

(79%)

ROCE(3)

27%

36%

(9%)

(26%)


27%

36%

(9%)

(26%)

Net Debt to Adjusted EBITDA(4)

0.22x

0.18x

0.04x

20%


0.22x

0.18x

0.04x

20%

Dividends Paid

4,035

2,966

1,069

36%


13,656

9,454

4,202

44%











Operating










Average Realized Gold Price (oz)

1,782

1,896

(114)

(6%)


1,793

1,736

57

3%

Total gold produced (oz)

63,758

64,225

(467)

(1%)


196,634

206,739

(10,105)

(5%)

Gold sold (oz)

65,319

63,020

2,299

4%


200,837

206,445

(5,608)

(3%)

Silver produced (oz)

115,057

69,769

45,288

65%


291,603

233,167

58,436

25%

Total cash costs per ounce of gold sold ($/oz)(1)

1,235

1,020

215

21%


1,162

973

190

(19%)

AISC per ounce of gold sold  ($/oz)(1)

1,476

1,225

251

20%


1,502

1,154

347

30%

 

Quarterly Operational Highlights by Material Property


Three Months ended Sept. 30,

Change


Nine Months ended Sept. 30,

Change

2021

2020

ounces

%


2021

2020

ounces

%

Colombia










Nechí Alluvial Property

17,085

15,496

1,589

10%


57,605

52,379

5,226

10%

Underground*

0

0

0

0%


0

6,785

(6,785)

(100%)


17,085

15,496

1,589

10%


57,605

59,164

(1,559)

(3%)

Nicaragua










Hemco Property Underground

9,949

9,370

579

6%


25,032

27,840

(2,808)

(10%)

Hemco Property Artisanal Mining

22,579

22,771

(192)

(1%)


69,918

67,995

1,923

3%


32,528

32,141

387

1%


94,950

95,835

(885)

(1%)

Argentina










Gualcamayo Property

14,145

16,588

(2,443)

(15%)


44,079

51,740

(7,661)

(15%)

Total Gold Produced (oz)

63,758

64,225

(467)

(1%)


196,634

206,739

(10,105)

(5%)

Total Silver Produced (oz)

115,057

69,769

45,288

65%


291,603

233,167

58,436

25%

* Colombia's production in the nine months ended September 30, 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.

IMPACT OF COVID-19

Mineros has actively responded to the global COVID-19 pandemic. The Company activated its crisis response team in the early phases of the COVID-19 outbreak, the members of which are the senior executives and operational leaders, to ensure that it was in a position to take quick and decisive action in what remains a fluid and fast-moving environment. Although Argentina temporarily closed its borders, this had no impact on the Company's operations.

Mineros joined the initiative of the Colombian Government called "Companies for Vaccination". Through this initiative Mineros has vaccinated 100% of its employees at the head office in Medellin and over 90% of its employees at the Nechí Alluvial Property against COVID-19. In Argentina and Nicaragua, Mineros employees are beginning to be vaccinated against COVID-19 through the respective countries' programs.

HEALTH AND SAFETY

Mineros is committed to providing and maintaining a safe and healthy work environment where all employees and contractors conduct themselves in a responsible and safe manner. The Company is committed to achieving a high standard of Occupational Health and Safety through implementation of all related policies, procedures, standards and continuous improvement of management systems, setting targets and monitoring performance. Two of our three operations are OHSAS 18001 certified.

Despite year-over-year improvements in our total recordable injury frequency rate and lost time injuries indicators, two fatal accidents occurred at operations in the third quarter, one in  Argentina and one in Nicaragua.

On July 21, 2021, an employee of the Company's Argentinian subsidiary was killed in a motor vehicle accident in the open pit on the Gualcamayo Property. Mining operations were temporarily suspended to conduct investigations by the Company and local authorities. New security measures with respect to the operation of motor vehicles were put in place to prevent future injury or loss of life.

On September 30, 2021, an employee of the Company's Nicaraguan subsidiary was killed in a rock blast underground at the Panama Mine. Mining operations were temporarily suspended and investigations were conducted by the Company and local authorities. A set of corrective actions were identified and implemented to prevent future injury or loss of life.

APPROACH TO SUSTAINABILITY

Sustainability is fundamental to Mineros' business strategy. The Company believes that maintaining strong stakeholder support for its operations is critical to success, and accordingly aims to maintain such support to create long-term value for all stakeholders. Mineros does this by embedding environmental, social and economic considerations into all of its business decisions, promoting the health, well-being and development of its personnel, maintaining strong relationships with host communities and proactively managing the impact of the business on the environment. The corporate strategy focuses on fostering the positive transformation of the communities where it operates. Throughout 2021, the Company has worked hard to implement this strategy by defining key performance indicators, implementing various programs and enhancing monitoring and reporting systems. Each operation has a community relations team that maintains a constant dialogue and engages with local communities both formally and informally.

CONFERENCE CALL AND WEBCAST DETAILS

The company will host a conference call Monday, November 22 at 8:00 am (GMT -5), where senior management will discuss its financial and operational results for the third quarter of 2021. The conference call will be in Spanish with simultaneous translation in English. Please dial in:

1 (866) 215-5508  

Canada Toll Free

1 (888) 771-4371  

US Toll Free



Pin for English 

50255414#

Pin for Spanish

50255413#

   
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=52C75708-EE20-4BC1-8BAE-3959EB27500C&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 our operations. Mineros' common shares are listed on the Colombian Stock Exchange (Bolsa de Valores de Colombia) under the symbol "MINEROS:CB".

Mineros has received conditional listing approval from the Toronto Stock Exchange (the "TSX") for the listing of its common shares on the TSX. Listing remains subject to Mineros fulfilling all of the requirements of the TSX on or before December 15, 2021. In connection with its listing application, 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, available on SEDAR at www.sedar.com.

QUALIFIED PERSON

The scientific and technical information in this press release has been reviewed and approved by Mr.  Sean  Horan, P.Geo., Principal Geologist, SLR Consulting (Canada) Ltd., independent  of  Mineros. By virtue of his education and relevant experience, Mr. Horan is "qualified person" for the purpose of NI 43-101.

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 the balance of 2021 and future periods; estimates for future mineral production and sales; the Company's expectations, strategies and plans for its material properties; the Company's planned exploration, development and production activities; statements regarding the projected exploration and development of the Company's growth projects; estimates of future capital and operating costs; the costs and timing of future exploration and development; the timing, receipt and maintenance of necessary approvals, licenses and permits from applicable governments, regulators or third parties; the impact of the COVID-19 pandemic on the Company's business; future financial or operating performance and condition of the Company and its business, operations and properties; completion and proceeds of the Company's initial public offering in Canada and the concurrent public offering in Colombia; 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 FINANCIAL MEASURES

Financial results of the Company are prepared in accordance with International Financial Reporting Standards ("IFRS"). The Company utilizes certain non-IFRS measures as management believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data 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. For a discussion of the use of these non-IFRS measures and reconciliations thereof to the most directly comparable IFRS measures, see below.

(1) Cash cost and All-In Sustaining Costs on a Consolidated Basis
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 all-in sustaining costs 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 the AISC metric is to provide stakeholders (i.e. management, shareholders, governments, local communities, etc.) with a key indicator that reflects as close as possible the full cost of producing and selling an ounce of gold.

The Company reports all-in sustaining costs per ounce of gold sold on a by-product basis. The methodology for calculating all-in sustaining costs 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 measure provides investors with transparency regarding the total costs of producing an ounce of gold in each period.

The following table provides a reconciliation of cash costs per ounce of gold sold on a by-product basis for the three and nine months ended September 30, 2021 and 2020:



Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,



2021

2020

2021

2020

Costs of sales


94,769

78,548

275,678

234,029

Less: Cost of non-mining operations


(145)

(101)

(422)

(253)

Less: Depreciation and amortization


(11,242)

(12,389)

(34,508)

(28,551)

Less: Silver revenues


(2,724)

(1,802)

(7,347)

(4,447)

Total cash costs


80,658

64,256

233,401

200,778







Gold sold (oz)


65,319

63,020

200,837

206,445

Total cash cost per ounce from continuing operations ($/oz)


$1,235

$1,020

$1,162

$973

The following table provides a reconciliation of all-in sustaining costs per ounce of gold sold for the three and nine months ended September 30, 2021 and 2020:



Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,



2021

2020

2021

2020

Costs of sales


94,769

78,548

275,678

234,029

Less: Cost of sales of non-mining operations


(145)

(101)

(422)

(253)

Less: Depreciation and amortization


(11,242)

(12,389)

(34,508)

(28,551)

Less: Silver revenues


(2,724)

(1,802)

(7,347)

(4,447)

Less: Energy sales revenues


(1,246)

(1,027)

(3,361)

(2,577)

Add: Administration expenses


4,666

3,570

14,703

11,794

Less: Depreciation and amortization of Adm.Expenses


(364)

(355)

(1,098)

(992)

Less: Administration Expenses of non-mining operations


(9)

(10)

(26)

(21)

Add: Sustaining leases and leaseback


3,000

2,911

8,648

9,711

Add: Sustaining exploration


3,384

2,476

7,209

7,400

Add: Sustaining capital expenditure


6,309

5,364

42,136

12,230

Total AISC


96,398

77,185

301,612

238,323

Gold sold (oz)


65,319

63,020

200,837

206,445

All-in sustaining cost per ounce sold ($/oz)


$1,476

$1,225

$1,502

$1,154

 

(2) EBITDA and Adjusted EBITDA
The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use the all-in sustaining margin, 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 better reflects the performance of the Company's mining operations.

The following table sets out the calculation of EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020:



Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,



2021

2020

2021

2020

Profit for the Period


8,150

24,795

32,327

49,500

Less: Interest income


(235)

(316)

(946)

(589)

Add: Interest expense


1,156

1,214

3,604

4,554

Add: Current tax


6,812

10,364

23,512

31,501

Add/less: Deferred tax


(1,116)

2,457

5,058

1,698

Add: Depreciation and Amortization


11,606

12,744

35,606

29,543

EBITDA


26,373

51,258

99,161

116,207

Less: Other income


(382)

(1,647)

(2,041)

(2,727)

Less: Finance income (excluding interest income)


(30)

17

(142)

(33)

Add: Finance expense (excluding interest expense)


1,036

669

3,128

1,724

Add: Other expenses


2,272

4,678

11,253

13,629

Add: Exploration Expenses


5,033

1,645

7,551

7,945

Add: Impairment of Assets


-

-

-

7,947

Less: Hedging Operations


-

(2,725)

-

2,490

Less: Foreign currency exchange differences


(1,943)

(2,006)

344

359







Adjusted EBITDA


32,359

51,889

119,254

147,541

 

(3) Return on Capital Employed (ROCE)
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 measure 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.

The following table sets out the calculation for ROCE for the nine months ended September 30, 2021 and 2020



As at Sept. 30,

As at Sept. 30,



2021

2020

Adjusted EBITDA (LTM)


159,464

179,974

Less: Depreciation and amortization (LTM)


(47,010)

(41,258)

Adjusted EBIT (A)


112,454

138,716





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


565,107

505,760

Less: Current Liabilities at the end of the Period


(138,041)

(120,723)

Closing Capital employed (C)


427,066

385,037





Average Capital employed (D)= (B) + (C) /2


420,244

384,541





ROCE (A/D)


27%

36%

(4) Net Debt to Adjusted EBITDA Ratio
The Company reports Net Debt to Adjusted EBITDA ratio. This non–IFRS measure 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.



Nine Months Ended Sept. 30,



2021

2020

Loans and other borrowings


86,288

66,967

Less: Cash and cash equivalents


(51,776)

(34,409)

Net Debt


34,512

32,558

Adjusted EBITDA (Last 12 months)


159,464

179,974

Net Debt / Adjusted EBITDA (LTM ratio)


0.22x

0.18x

(5) Net Free Cash Flow
The Company uses the financial measure "net free cash flow", which is a non-IFRS financial measure, to supplement information in its consolidated financial statements. Net free cash flow does not have any standardized meaning prescribed under IFRS, and therefore it may not be comparable to similar measures employed by other companies. The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use this information to evaluate the Company's performance with respect to its operating cash flow capacity to meet recurring outflows of cash.

The presentation of net free cash flow is not meant to be a substitute for the cash flow information presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Net free cash flow is calculated as cash flows from operating activities less non-discretionary sustaining capital expenditures and interest and dividends paid related to the period indicated.

The following table represents the Company's net free cash flow generated in the three and nine months ended September 30, 2021 and 2020.



Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,



2021

2020

2021

2020

Cash flows from operating activities


35,066

25,754

67,697

66,817







Non-discretionary items:






Sustaining capital expenditures


(6,309)

(5,364)

(42,136)

(12,230)

Interest paid


(995)

(1,291)

(3,191)

(3,963)

Dividends paid


(4,035)

(2,966)

(13,656)

(9,454)

Net free cash flow


23,727

16,133

8,714

41,170

 

SOURCE Mineros S.A.

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