Mineros S.A. Growth Plan to 300,000-400,000 oz/year Through Organic Projects and M&A

• Mineros SA is a profitable, dividend-paying gold mining company with operations in Colombia and Nicaragua. The company has a strong track record of financial performance and has consistently paid dividends to shareholders for over 20 years.
• In Colombia, Mineros uses unique alluvial mining techniques, operating a large-scale dredging operation that extracts gold from an artificial pond along a path with over 10 years of drilled reserves.
• In Nicaragua, the company has organized more than 6,000 artisanal miners into cooperatives, providing ore purchasing and processing services while fostering a collaborative relationship with local communities.
• Mineros is on track to deliver record financial results in 2024 and is pursuing an ambitious growth strategy aimed at increasing its annual gold production from the current level of 200,000 ounces to 300,000-400,000 ounces in the coming years.
• A key competitive advantage for Mineros is its strong social license to operate, which is built on a foundation of environmental stewardship, community development, and local employment and procurement practices.

Mineros S.A., a Colombian gold mining company with a 50-year history and operations in Colombia and Nicaragua, presents a compelling investment opportunity. The company combines unique mining techniques, a strong social license to operate, and a proven track record of profitability and dividend payments. With record financial results expected in 2024 and clear plans for production growth, Mineros is well-positioned in the current gold price environment.

Unique Mining Operations in Colombia and Nicaragua

Mineros' mining operations are differentiated in both Colombia and Nicaragua. In Colombia, Mineros operates an alluvial mining operation, one of the largest of its kind in the world. Using a fleet of suction and bucket dredges, Mineros extracts gold from an artificial pond, moving methodically along a well-defined path with 10+ years of drilled reserves.

CEO Andres Restrepo Isaza explained the process, "The alluvial deposit is huge and we have drilled holes every 50 to 100m. The dredges are like trapped in an artificial pond and that pond moves north. The dredges take the rich material, the separation is done there, and we end up with a few buckets of rich sands."

In Nicaragua, Mineros works with artisanal mining cooperatives, providing ore purchasing and processing services. The company has organized over 6,000 artisanal miners into cooperatives, pays them based on recovered gold content, and provides transparency throughout the sampling and assaying process. This has helped Mineros establish a strong social license in the country.

"In Nicaragua we saw an opportunity - we have them organized in co-ops, there is life and accident insurance for them, they pay taxes, they have their own SG programs. We're slowly turning them into small scale miners," said Isaza.

Financial Strength and Growth Plans

Mineros is on track for a record year financially in 2024. In the third quarter, the company generated $62 million of EBITDA, putting it on pace for over $200 million for the full year. Net income more than doubled compared to 2023. Mineros ended the quarter with nearly $60 million of cash, a net cash position of $30 million, and relatively minimal debt. The company has consistently paid dividends for over 20 years, currently yielding around 10%.

Isaza elaborated on the company's strong results, "This year is going to be golden for us - it's going to be great. Our net profit is more than double the profit of last year even though our stock price has doubled in the past year, it's still a great opportunity."

Mineros is looking to deploy its financial strength into growth initiatives. The company aims to expand from its current 200,000 ounce per year production level to 300,000-400,000 ounces per year over the next several years. In Nicaragua, Mineros is advancing a polymetallic project with 600,000 ounces of gold reserves that could add 60,000-70,000 ounces of annual production through a $160 million investment.

The company is also considering M&A opportunities to reach its 400,000 ounce per year goal. With its cash balance and additional debt capacity, Mineros is actively evaluating producing or near-production acquisition targets and expects to have news on this front in the next six months.

Interview with President & CEO Andres Restrepo Isaza

Social License to Operate

A key differentiator for Mineros is its strong social license to operate in both Colombia and Nicaragua. The company puts a major emphasis on environmental protection, community development, and local employment and procurement.

In Colombia, Mineros progressively rehabilitates land after mining, either returning it to local communities or developing conservation areas. The company has shown it can leave the land in better condition than when mining started. Mineros also allocates its tax payments to community infrastructure projects in Colombia, including paving a key access road. Regarding its environmental programs, Isaza explained:

"We operate very cleanly. We use only water, no sediments go to the river. We plant native trees, we recover the land for cattle farming and agriculture, we create wetlands. We're very proud of our ESG programs - we have generated a lot of well-being in the region."

In Nicaragua, Mineros has earned trust with artisanal miners by providing transparency and investing in community facilities. Mineros also works cooperatively with government to ensure all stakeholders benefit from its presence. Over 80% of the company's procurement is with local contractors.

The social license has helped Mineros avoid business interruptions, operate in a secure environment and gain access to prospective areas for future growth.

Conclusion

Mineros SA presents a unique investment opportunity in the gold sector. The company's differentiated mining approach, strong financial performance and social license to operate provide a solid foundation. With a clear path to production growth, both organically and through M&A, Mineros appears well-positioned to create shareholder value in the coming years. As the gold price environment remains constructive, investors would be well-served to take a closer look at this emerging mid-tier producer.

The Investment Thesis for Mineros S.A.

• Proven 50-year operating history: 20+ year dividend track record in in Colombia with unique alluvial mining operation on 10+ years of drilled reserves, and innovative artisanal mining cooperative model in Nicaragua ensuring social license
• On track for record 2024 financial results with over $200M EBITDA: Strong balance sheet with $60M cash, net $30M cash position to fund organic and M&A growth
• Clear path to grow from 200,000 oz/year to 300,000-400,000 oz/year gold production: Polymetallic project in Nicaragua to add 60,000-70,000 oz/year through $160M investment and actively evaluating producing gold asset M&A opportunities to reach 400,000 oz/year goal
• Leading social license to operate through environmental rehabilitation and community investment
• Undervalued with market cap despite doubling stock price in past year
• Compelling investment opportunity in constructive gold price environment

Macro Thematic Analysis

Gold has reasserted its role as a safe haven asset and portfolio diversifier in the current macro environment. With rising inflation, geopolitical instability and economic uncertainty, investors have turned to gold for its history of wealth preservation. Spot gold prices have remained comfortably above $1,800/oz, providing a constructive operating environment for gold mining companies.

For gold miners, the current backdrop provides an opportunity to generate significant free cash flow, pay down debt, increase dividends and fund growth projects. Companies that can demonstrate financial discipline, production growth and a strong social license should be well rewarded by the market. In this context, mid-tier producers like Mineros SA offer compelling risk-reward propositions for investors seeking gold exposure. As

"This is a good time to incorporate new operations - we're looking for in production or close to production companies or projects. There are a few still in the market and we're hoping we will be able to give good news to the market in the next six months."

Mineros SA offers investors a differentiated way to gain exposure to the gold sector. The company's unique mining operations in Colombia and Nicaragua, combined with its strong financial performance and growth outlook, make it an attractive opportunity. With a proven management team, social license to operate and path to significant production growth, Mineros appears well-positioned to create shareholder value in the coming years.