Aura Minerals - Gold and Copper Producer with Near-Term Growth Potential

• Aura Minerals is a gold and copper producer focusing on the development and operation of gold and base metal projects in the Americas. Their producing assets include the San Andreas mine in Honduras, the Epp operation in Brazil, and the Aranzasu copper-gold mine in Mexico.
• The company has development-stage assets including the Almas school project, set to start production soon, as well as the Matupa and Barbara Michael projects in Brazil.
• Clever Cardozo, the Chief Financial Officer at Aura Minerals, provided an update on the company's plans for 2023. Aura Minerals is listed on the TSX, B3 Stock Exchange in Brazil, and OTCQX in the United States.
• Aura experienced significant growth, with production increasing by nearly 78% since 2018. They expect further growth of 86% by 2025. Despite this growth, the company also prioritizes dividends, boasting a 13.5% dividend yield in 2021.
• Key upcoming catalysts for investors include the announcement of production commencement at the Almas project and further developments at the Matupa and Barbara Michael projects.

Aura Minerals is a mid-tier gold and copper producer focused on the Americas. With three producing mines generating strong cash flows and a pipeline of near-term development projects, the company is poised to grow production by approximately 80% by 2025. Despite this robust growth outlook, Aura trades at a discounted valuation compared to peers, presenting an attractive investment opportunity.

Ranks #1 on TSX30 in 2021 and 2022

Aura Minerals was ranked the top-performing stock on the TSX30 in both 2021 and 2022. The TSX30 highlights the 30 best-performing stocks traded on the Toronto Stock Exchange across all sectors over a one-year period. Aura’s #1 ranking in back-to-back years demonstrates the company’s standout performance.

Steady Production Growth and Healthy Margins

Aura has grown gold equivalent production every year since 2018, with 2022 output reaching 242,000 ounces, a 78% increase over the past four years. The company's all-in sustaining costs (AISC) are in the second quartile of the industry cost curve. This steady production growth at reasonable costs has allowed Aura to generate strong operating margins and cash flows to fund growth projects and shareholder returns.

Near-Term Growth Projects Advancing Rapidly

Aura has three key development assets that are expected to drive a further 80% increase in production by 2025:

• Almas Project (Brazil): Construction is 99% complete on this high-return 50,000 oz/year gold mine, with first production imminent in Q1 2023.
• Borborema Project (Brazil): Feasibility study update underway on this 1.2 million oz gold deposit, with development decision expected in Q1 2023.
• Matupa Project (Brazil): 300,000 oz gold reserve base with exploration upside. Development expected to start in 2024, first production in 2025.

The projects require relatively low upfront capital and have rapid payback periods, ensuring returns even in lower gold price environments. Centralized location in Brazil provides potential synergies.

Strong Balance Sheet to Fund Growth

Despite investing significantly in growth initiatives and shareholder returns, Aura maintains a strong balance sheet with a net debt to EBITDA ratio of just 0.5x as of Q4 2022, below the company's 1.0x limit. A healthy balance sheet provides flexibility to fund organic growth.

Increasing Resources Through Exploration

Aura has boosted exploration spending from $8 million in 2018 to over $20 million in 2022/2023. This investment is paying dividends, with gold reserves up 6% and measured & indicated resources up 197% since 2018. Ongoing exploration across the company's 650,000 hectare land package provides significant resource expansion potential.

Dividends - Attractive Shareholder Returns

Aura has provided industry-leading shareholder returns, with dividends plus share buybacks totaling 6% of the market cap in 2022. The company is committed to providing sustainable returns to shareholders.

Trading at a Discount to Peers

Despite Aura's sector-leading operational and financial performance, the stock continues to trade at a discount to intermediate gold producer peers. Successful execution of the near-term growth plan and increased investor awareness should help close this valuation gap.

Key Upcoming Catalysts

With commercial production at Almas expected by mid-2023 and development decisions on Borborema and Matupa over the coming months, Aura has several near-term catalysts that could drive a re-rating. The company also expects to provide exploration updates and potentially new discoveries across its portfolio during the year.

Aura Minerals offers a rare combination of strong existing cash flows, significant near-term production growth, and exploration upside. The company is executing well operationally and maintaining a solid financial position. With a clear path to 80% production growth by 2025 and increased investor recognition, Aura appears undervalued at current levels.

The Investment Thesis for Aura Minerals

Significant production and cash flow growth potential - With several projects advancing quickly that are expected to drive a ~80% increase in production by 2025, Aura offers strong growth potential. Higher production and cash flows typically translate into share price appreciation.

Attractive project economics - Aura's near-term growth projects require relatively low capital costs and have rapid payback periods even at conservative gold prices. This provides resilience in the event of weaker gold markets.

Strong balance sheet to fund growth - With a net debt/EBITDA ratio of just 0.5x, Aura has the financial capacity to fund its growth projects organically without excessive dilution or risk. A strong balance sheet is especially important during market downturns.

Trading at a discounted valuation - Despite its operational and financial outperformance, Aura continues to trade at a discount to similar intermediate gold producers. As the company meets key milestones and gains greater investor recognition, there is room for multiple expansion and share price upside.

Sector-leading shareholder returns - Aura has consistently delivered industry-leading dividends and buybacks, signaling management's commitment to creating shareholder value. This shareholder focus is attractive to investors.

Asset diversification - Aura's portfolio includes assets in Brazil, Mexico and Honduras, providing diversification across multiple quality mining jurisdictions in the Americas. This lowers geopolitical risk.

Aura Minerals offers an attractive risk-reward profile, with upcoming catalysts, high margins, a solid balance sheet and an attractive valuation. Despite the current uncertain gold market for equities, For investors looking to gain longer-term exposure to gold production growth in the Americas, Aura Minerals warrants a closer look.