Andean Precious Metals Reports First Quarter 2024 Results

Consolidated Production of 1.8 million AgEq oz. 2024 Guidance Reaffirmed

Andean Precious Metals Corp. (TSXV: APM) (OTCQX: ANPMF) ("Andean" or the "Company") is pleased to report its operating highlights and financial results for the three months ended March 31, 2024. All amounts are in United States Dollars unless otherwise stated. This news release should be read together with Andean's management discussion and analysis ("MD&A") and condensed interim financial statements for the three months ended March 31, 2024 (the "Financial Statements") which are available under the Company's profile on SEDAR+ (www.sedarplus.ca).

First Quarter 2024 Highlights

• The Company produced a total 1.8 million silver equivalent ounces ("AgEq oz")¹, an 82% increase from Q1 2023

• Golden Queen production exceeded the Company's expectation by producing a total of 11,490 AuEq oz or 1.0 Moz AgEq despite the fire incident that occurred during Q4 2023. Operating cash costs ("OCC") per ounce sold and all-in sustaining costs ("AISC") per ounce sold for the quarter was $1,936/oz and $1,627/oz, respectively¹

• $43.1 million of revenue reported for Q1 from the sale of total 1.8 million AgEq oz at an average realized silver price of $23.64 per ounce

• Higher gross operating income. The Company recorded gross operating income of $3.2 million for Q1 2024 compared to $0.4 million for the same period of 2023

• Net loss after tax of $0.1 million compared to net income of $0.2 million in Q1 2013

• Strong liquid assets maintained to support ongoing strategic growth, totaling $72.8 million as of March 31, 2024

• The Company reaffirms 2024 guidance of 60 Koz AuEq at Golden Queen and 5.0 Moz AgEq at San Bartolome (see Company news release dated March 27, 2024)

• Share buyback continued. In the first quarter of 2024, The Company repurchased 5,333,291 common shares for $2.8 million through its normal course issuer bid (NCIB) program

• Strengthened management team with the addition of Marcos Holanda joining the Company as Chief Operating Officer

Executive Chairman and Chief Executive Officer, Alberto Morales stated, "Our acquisition of Golden Queen represents a significant transformation, effectively doubling our Company's size across critical metrics such as revenue, production, reserves, and workforce. As we integrate Golden Queen into our operations this quarter, our team has been focused on streamlining processes to enhance efficiency and performance, in alignment with our annual plan for 2024. We anticipate the upcoming quarters will reflect this integration, with improved production and enhanced operational efficiencies."

Mr. Morales continued, "Despite the fire incident setback at Golden Queen and unusual weather conditions in Bolivia, our consolidated production for Q1 2024 reached 1.8 million AgEq oz, displaying resilience and adaptability. Golden Queen's performance exceeded expectations with 11,490 AuEq oz, while San Bartolome experienced lower production due largely to a historic rainfall season that affected road transportation. However, we anticipate a significant production increase, revenue growth and margin improvement in the upcoming quarters reaffirming our guidance in accordance with our year plan. With a strong financial position, we continue to prioritize strategic growth initiatives to enhance value to our shareholders, as exemplified by our ongoing share buyback program, and are continuing to look into other growth opportunities. Welcoming Marcos Holanda as Chief Operating Officer, we're strengthening and broadening our operations team. This will position us well to pursue new growth opportunities and support the integration and optimization of our operations."

Summary of Financial and Operating Results

2024 Outlook and Guidance

Production guidance

The Company is maintaining the 2024 annual gold and silver equivalent production guidance for Golden Queen and San Bartolomé.

Quarter-to-quarter gold production in 2024 is expected to fluctuate during the year, with production continuing to be weighted towards the second half of the year.

Cost guidance

The Company is maintaining the 2024 cost guidance for Golden Queen and San Bartolomé as shown below:

In line with 2024 guidance, capital investment is expected to total $24.0 million (+/-5%), largely due to the $9.5 million included in the growth capital for the procurement of six new 785-8 haul trucks, as part of the Company's strategic mobile fleet replacement and mine optimization. Included in the sustaining capital at Golden Queen is the capitalization of the major overhaul maintenance/rebuild of equipment costs of $8.3 million. As at March 31, 2024, two new trucks out of the planned additional six have been commissioned.

Capital expenditures guidance

Q1 2024 Conference Call and Webcast

Management will host a conference call and webcast on Tuesday, May 14, 2024 at 9:00 am ET to discuss the results.

Participants may join the conference call via webcast or through the following dial-in numbers:

• Participants may listen to the webcast by registering on our website at www.andeanpm.com or via the following link http://www.gowebcasting.com/13321

• Participants may also listen to the conference call by calling North American toll free 1-844-763-8274, or 1-647-484-8814 outside of the U.S. or Canada

• An archived replay of the webcast will be available for 90 days at http://www.gowebcasting.com/13321 or the Company website at www.andeanpm.com

About Andean Precious Metals

Andean is a growth-focused precious metals producer that owns and operates the San Bartolomé project located in the department of Potosí, Bolivia. San Bartolomé has been operating continuously since 2008, producing an average of 5 million oz of silver equivalent per year. The Company is seeking accretive growth opportunities in Bolivia and the wider Americas. Andean is committed to fostering safe, sustainable, and responsible operations.

Qualified Person Statement

The scientific and technical content disclosed in this news release was reviewed and approved 8 by Donald J. Birak, Independent Consulting Geologist to the Company, a Qualified Person as defined by National Instrument 43-101 – Standards for Disclosure for Mineral Projects, Registered Member, Society for Mining, Metallurgy and Exploration (SME), Fellow, Australasian Institute of Mining and Metallurgy (AusIMM). Mr. Birak has visited Manquiri's various sites frequently, most recently in September 2023.

For more information, please contact:

Amanda Mallough
Director, Investor Relations
amallough@andeanpm.com
T: +1 647 463 7808

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution Regarding Forward-Looking Statements

Certain statements and information in this release constitute "forward-looking statements" within the meaning of applicable U.S. securities laws and "forward-looking information" within the meaning of applicable Canadian securities laws, which we refer to collectively as "forward-looking statements". Forward-looking statements are statements and information regarding possible events, conditions or results of operations that are based upon assumptions about future economic conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "estimate", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "may", "could", "would", "might", "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.

Forward-looking statements in this release include, but are not limited to, statements and information regarding: the Company's production and cost outlook and capital expenditure expectations for 2024. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited to: the Company's ability to carry on exploration and development activities; the Company's ability to secure and to meet obligations under property and option agreements and other material agreements; the timely receipt of required approvals and permits; that there is no material adverse change affecting the Company or its properties; that contracted parties provide goods or services in a timely manner; that no unusual geological or technical problems occur; that plant and equipment function as anticipated and that there is no material adverse change in the price of silver, costs associated with production or recovery. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct, and you are cautioned not to place undue reliance on forward-looking statements contained herein.

Some of the risks and other factors which could cause actual results to differ materially from those expressed in the forward-looking statements contained in this release include, but are not limited to: risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations; results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; risks relating to possible variations in reserves, resources, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined; mining and development risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development; the potential for delays in exploration or development activities or the completion of feasibility studies; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; risks related to commodity price and foreign exchange rate fluctuations; the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates; risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental or local community approvals or in the completion of development or construction activities; risks related to environmental regulation and liability; political and regulatory risks associated with mining and exploration; risks related to the uncertain global economic environment; and other factors contained in the section entitled "Risk Factors" in the Company's MD&A dated March 31, 2024.

Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking statements, you are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Furthermore, the Company undertakes no obligation to update or revise any forward-looking statements included in this release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures

This news release "specified financial measures" within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure, specifically the non-GAAP financial measures, non-GAAP ratios and supplementary financial measures described below. Management believes that the use of these measures assists analysts, investors and other stakeholders of the Company in understanding the costs associated with producing silver and gold, understanding the economics of silver and gold mining, assessing operating performance, the Company's ability to generate free cash flow from current operations and on an overall Company basis, and for planning and forecasting of future periods.

The specified financial measures used in this news release do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers, even as compared to other issuers who may be applying the World Gold Council guidelines. Accordingly, these measures 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.

The following is a description of the non-GAAP financial measures, non-GAAP ratios and supplementary financial measures used in this news release:

1. OCC includes total production cash costs incurred at the Company's mining operations, which form the basis of the Company's cash costs, less by-product revenue.

2. AISC on a by-product basis per ounce is a non-GAAP ratio calculated as AISC on a by-product basis divided by ounces of silver equivalent ounces sold for San Bartolomé operations. For Golden Queen operations, AISC on a by-product basis per ounce is calculated on a by-product basis divided by ounces of gold equivalent ounces sold. AISC on a by-product basis is a non-GAAP financial measure calculated as the aggregate of production costs as recorded in the consolidated statements of income (loss), refining and transport costs, cash component of sustaining capital expenditures, lease payments related to sustaining assets, corporate general and administrative expenses and accretion expenses. When calculating AISC on a by-product basis, all revenue received from the sale of gold at San Bartolomé or silver at Golden Queen are treated as a reduction of costs incurred. The Company believes that AISC represents the total costs of producing silver and gold from current operations and provides the Company and other stakeholders of the Company with additional information relating to the Company's operational performance and ability to generate cash flow.

3. AIC represents AISC plus growth capital and non-sustaining exploration and evaluation costs.
   
   Non-sustaining exploration and evaluation costs represent costs associated with the Company's exploration portfolio, primarily relating to activities at the FDF and DSF. Certain other cash expenditures including tax payments, debt payments, dividends and financing costs are also not included in the calculation of AIC. The Company reports these measures on a per silver or gold ounce sold basis.

4. CGOM per equivalent ounce sold is calculated by subtracting the average cash cost of sale (cost of sales, allocated corporate administrative costs and business unit general and administration cost) per equivalent ounce sold from the average selling price per equivalent ounce. It is a measure of financial performance with no prescribed definition under IFRS and may not be comparable to similar financial measures disclosed by other issuers.

5. GMR is calculated by subtracting the cost of sale as reported in the income statement from the revenue of equivalent ounces divided by revenue from sales of equivalent ounces. GMR is a measure of financial performance with no prescribed definition under IFRS and may not be comparable to similar financial measures disclosed by other issuers.

6. EBITDA is defined as earnings before interest, tax, depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure calculated by adjusting net income (loss) as recorded in the condensed interim consolidated statements of income (loss) for items not associated with ongoing operations. The Company believes that this generally accepted industry measure allows the evaluation of the results of income-generating capabilities and is useful in making comparisons between periods. This measure adjusts for the impact of items not associated with ongoing operations. A reconciliation of adjusted net income (loss) to the nearest IFRS measures is set out below. Management uses this measure to monitor and plan for the operating performance of the Company in conjunction with other data prepared in accordance with IFRS.

7. Free cash flow is a non-GAAP financial measure calculated as cash provided by operating activities from continuing operations less property, plant and equipment additions. A reconciliation of free cash flow to the nearest IFRS measures is set out below. Management uses this measure to monitor the amount of cash available to reinvest in the Company and allocate for shareholder returns.

8. Average realized price is a supplementary financial measure calculated by dividing the different components of precious metal sales by the number of ounces sold. Management uses this measure to monitor its sales of precious metal ounces against the average market gold price.

OCC

The following table provides a reconciliation of the OCC per ounce sold on a by-product basis to the Financial Statements:

AISC

The following table provides a reconciliation of the AISC per ounce on a by-product basis to the Financial Statements:

AIC

The following table provides a reconciliation of the AIC per ounce on a by-product basis to the Financial Statements:

CGOM

The following table provides a reconciliation of the CGOM per ounce to the Financial Statements and the most directly comparable IFRS measure:

GMR

The following table provides a reconciliation of the GMR per ounce to the most directly comparable IFRS measure:

Free Cash Flow

The Company has included free cash flow as a non-GAAP financial measure in this news release. The Company considers net cash provided from (used in) operating cash flow less capital expenditures to be a measure that allows the Company and investors to evaluate the ability of the Company to generate cash flow. Accordingly, free cash flow 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 following table provides a reconciliation of free cash flow to the Financial Statements:

EBITDA and Adjusted EBITDA

The Company has included EBITDA and Adjusted EBITDA as a non-GAAP financial measure in this news release. The Company excludes certain items from net income (loss)to provide a measure which allows the Company and investors to evaluate the results of the underlying core operations of the Company and its ability to generate cash flow. Accordingly, it 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 following table provides a reconciliation of Adjusted EBITDA to the Financial Statements:

Average Realized Gold and Silver Prices Per Ounce

The Company has included average realized prices as a supplementary non-GAAP financial measure in this news release. The Company quantifies average realized price per ounce as revenue per the Statement of Income (loss) divided by ounce of gold or silver sold. Management uses this measure to monitor sales of silver and gold ounces against the average market silver and gold prices.

The following table provides a reconciliation of average realized prices to the most directly comparable IFRS measure:

Andean Precious Metals Corp.
Condensed Consolidated Interim Statements of Financial Position
(in thousands of US dollars, unaudited)

Andean Precious Metals Corp.
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(in thousands of US dollars, except per share amounts, unaudited)

Andean Precious Metals Corp.
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of US dollars, unaudited)

¹ OCC and AISC are measures of financial performance with no prescribed definition under IFRS. Refer to the "Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures" section below for further detail, including a reconciliation of these metrics to the Financial Statements.

² Financial and operational performance results exclude Golden Queen for the period ended March 31, 2023 as Golden Queen was acquired on November 24, 2023.

³ Free cash flow, EBITDA and Adjusted EBITDA are measures of financial performance with no prescribed definition under IFRS. Refer to the "Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures" section below for further detail, including a reconciliation of these metrics to the Financial Statements.

⁴Assuming gold equivalent ounces were calculated on a consolidated basis for the Company, the expected guidance of 10.4 million silver equivalent ounces would equate to approximately 115,000 gold AuEq ounces. AuEq production and AuEq sales both include silver production and sales. Equivalent ounces are calculated using the Company's average realized gold and silver prices during the referenced period. For 2024 guidance commodity price assumptions supporting this estimate are $21 per ounce of silver and $1,900 per ounce of gold.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/208979