Mineros SA Delivers Record Performance While Advancing Multi-Jurisdictional Growth Strategy

• Mineros SA reports record revenues, earnings per share, and adjusted EBITDA with over $100 million cash on hand, providing substantial financial flexibility for growth initiatives
• The Nicaragua project's preliminary feasibility study shows significant capital cost reductions from over $250 million to the mid-$100 millions, with a planned 2,000 TPD plant scalable to 5,000 TPD targeting 4-5 g/t gold plus payable copper, silver, and zinc byproducts
• The company is investing $45 million to expand the Hemco plant capacity from 1,800 to 2,300 tons per day, expected to deliver quick payback and increase production from 120-130k ounces to 200k ounces annually
• Mineros acquired a Chilean exploration property for $40 million cash, containing 2 million ounces at 0.56 g/t average grade near Copiapó in an established mining district, with plans for production within five years
• The company maintains its $30 million annual dividend policy while reinvesting excess cash flow into growth projects, with dividend yield decreasing from 10-15% to below 5% due to share price appreciation

Mineros SA (TSX:MSA) has emerged as a noteworthy investment opportunity in the Latin American gold mining sector, combining strong operational performance with an aggressive growth strategy across three countries. Under the leadership of CEO David Londoño, the Colombian-based company is leveraging record financial results and a robust cash position to advance multiple development projects while maintaining shareholder returns through consistent dividend payments.

Exceptional Financial Performance

Mineros SA's financial metrics demonstrate strong operational execution across its portfolio. The company reports record revenues, earnings per share, and adjusted EBITDA, supported by favourable gold pricing and consistent production delivery. The balance sheet strength is particularly notable, with over $100 million in cash providing substantial financial flexibility for growth initiatives without requiring external financing .

The dividend policy reflects management's commitment to shareholder returns while balancing growth investment needs. 

"The plan right now is that we keep paying the same dividends that we're paying right now- around $30 million." 

Londoño noted that while the yield has decreased from 10-15% to below 5% due to share price appreciation, the absolute payment remains consistent .

Porvenir: Flagship Development Project

The Porvenir project in Nicaragua represents the company's primary growth catalyst, with recent engineering work delivering significant capital cost reductions. The preliminary feasibility study has been updated to reduce initial capital requirements from over $250 million to the mid-$100 millions, substantially improving project economics .

The technical specifications outline a 2,000 tons per day processing plant with built-in scalability to 5,000 TPD capacity. The deposit grades average 4-5 grams per ton gold with valuable byproduct credits from copper, silver, and zinc. 

"We're looking at how to recover our copper concentrate first, our silver concentrate and then recover all the precious metals and then the zinc."

Recent exploration success around the main Porvenir deposit has identified additional mineralization that could extend mine life and support earlier expansion to the 5,000 TPD capacity. 

"With these new deposits that we're also finding around the perennial, that expansion is probably being done sooner rather than later." 

Operational Optimization and Capacity Expansion

The company's current operations center on the Hemco plant, where a $45 million expansion program will increase processing capacity from 1,800 to 2,300 tons per day. This investment targets quick payback through processing higher-grade material from artisanal miners combined with company-owned ore .

The expansion strategy leverages the company's unique relationship with artisanal miners, who provide both high-grade feed material and valuable geological intelligence. 

"We're getting a lot of free information. We getting a lot of high-grade gold from them too, and with that way, we're getting some areas with triple digit grams per ton, which is great." 

Production targets anticipate growth from current levels of 120-130,000 ounces annually in Nicaragua to 200,000 ounces upon completion of expansion programs. This represents approximately 55% production growth from the Nicaragua operations alone .

Interview with David Londoño, CEO of Mineros SA

La Pepa Project: Strategic Chilean Acquisition

Mineros SA's geographic diversification strategy includes the recent acquisition of a Chilean exploration property, La Pepa for $40 million cash. The transaction, scheduled to close September 22nd, adds 2 million ounces of gold resources at 0.56 grams per ton average grade to the company's portfolio .

The Chilean property benefits from location within an established mining district near Copiapó, providing access to experienced personnel and existing infrastructure. 

"Chile is pro-mining. Over 30% of the economy is mining in Chile. There is a lot of mining experience and geology experience in Chile."

Development timelines target production within five years, supported by shallow, oxide-dominated mineralization suitable for heap leach processing. The proximity to Rio2's advancing development project provides additional validation of the district's mining potential and infrastructure accessibility .

Jurisdictional Environment Enables Efficient Development

Operating across Colombia, Nicaragua, and Chile provides geographic diversification while capitalising on improving regulatory environments. Particularly notable is the evolution of Nicaragua's mining jurisdiction, where David reports significant improvements in permitting timelines and government cooperation .

"Nicaragua is a very good jurisdiction to work in. You can go and apply for a permit and the government is actually improving the timing of those permits. When you're bringing $150 to $200 million investment, they want you. They want the investment. They want employment. They want to work with you" .

Resource Expansion Through Targeted Exploration Programs

The company's exploration strategy focuses on expanding resources within existing land packages rather than acquiring new properties. In Nicaragua, Mineros SA controls 151,000 hectares with significant exploration potential supported by high-grade discoveries from artisanal miners operating within the concession area .

The exploration program has been reinitiated after several years of reduced activity, with plans to expand drilling programs across both Colombian and Nicaraguan operations. This renewed focus on resource expansion aims to extend mine life and support long-term production growth beyond current development projects .

Colombian operations offer additional optimisation opportunities through equipment upgrades targeting improved ore recovery. The replacement of large dredging equipment with smaller, more efficient units is expected to recover previously lost ore from pond edges while increasing overall mining recovery rates .

The Investment Thesis for Mineros SA

• Diversified Production Base: Multi-jurisdictional operations across Colombia, Nicaragua, and Chile provide geographic risk mitigation and growth optionality in established mining-friendly jurisdictions
• Self-Funded Growth: Over $100 million cash position enables debt-free development of Porvenir project and Chilean acquisition while maintaining dividend payments
• Scalable Infrastructure: Porvenir plant design allows expansion from 2,000 to 5,000 TPD capacity with recent discoveries supporting accelerated expansion timelines
• Operational Leverage: Hemco plant expansion delivers immediate production growth from 120-130k to 200k ounces annually with quick payback period
• Unique Artisanal Partnership: Symbiotic relationship with artisanal miners provides high-grade feed material and valuable exploration intelligence at minimal cost
• Value-Accretive Acquisitions: Chilean property adds 2 million ounces at attractive valuation in established mining district with near-term production potential
• Shareholder Returns: Commitment to $30 million annual dividend provides income while reinvestment supports long-term growth

Macro Thematic Analysis

The global gold mining sector faces increasing challenges from resource depletion, rising development costs, and regulatory complexity, creating opportunities for companies with strong operational capabilities and financial flexibility. Mineros SA benefits from this environment through its focus on politically stable Latin American jurisdictions where government support for mining investment has strengthened significantly. The company's ability to reduce Port Veneer's capital requirements from over $250 million to the mid-$100 millions demonstrates effective engineering optimisation in an inflationary environment. Rising gold prices provide additional leverage to the company's growth strategy, while the inclusion of payable byproducts from copper, silver, and zinc offers downside protection and enhanced returns.

TL;DR

Mineros SA combines strong cash generation from existing operations with a diversified growth pipeline across three Latin American countries, positioning the company to increase production from 120-130k to 200k+ ounces annually while maintaining shareholder dividends. The Porvenir project's reduced capital requirements and Chilean acquisition provide multiple value creation opportunities backed by over $100 million in cash .

FAQ's (AI Generated)

Q: What are the key factors driving Mineros SA's recent share price appreciation?
A: Record financial performance including revenues, EPS, and EBITDA, combined with consistent operational delivery and over $100 million cash position demonstrating strong execution capabilities .

Q: How does the artisanal miner relationship benefit Mineros SA operationally?
A: Provides high-grade feed material for processing plants while offering valuable geological intelligence including triple-digit gram per ton discoveries within company concessions .

Q: What timeline does management expect for La Pepa, Chilean property development?
A: Management targets production within five years, with immediate exploration starting after September 22nd closing and PFS initiation for the 2 million ounce, 0.56 g/t resource .

Q: How will the Porvenir expansion impact production capacity?
A: The scalable plant design enables growth from initial 2,000 TPD to 5,000 TPD capacity, with recent discoveries potentially accelerating expansion timelines .

Q: What is Mineros SA's dividend policy going forward?
A: Company maintains $30 million annual dividend payments while reinvesting excess cash flow into growth projects, with yield decreasing due to share price appreciation .

Q: How does Nicaragua's regulatory environment support mining development?
A: Government actively supports mining investment with improving permit timelines and priority attention for major projects bringing $150-200 million investments .

Q: What capital requirements are needed for the Porvenir development?A: Updated PFS shows capital costs reduced to mid-$100 millions from over $250 million, with additional $45 million for Hemco plant expansion .