Aura Minerals Inc. Earnings Report Q3 2024

Aura Minerals Inc. (ORA.TO) reported a significant increase in gold production and earnings before interest, taxes, depreciation, and amortization (EBITDA) during its third-quarter 2024 earnings call. The company achieved a record gold equivalent production of 270,000 ounces over the past year, marking a 10% increase from the same period in 2023.

Aura's EBITDA for the quarter was $78 million, nearly 40% higher than the previous quarter, driven by rising gold prices, which averaged $2,500 per ounce in Q3 and have since surpassed $2,700. The company's free cash flow totaled $65 million, with a considerable amount reinvested into growth projects, particularly the Borborema project, which is over halfway complete and scheduled for ramp-up in early 2025.

Key Takeaways

• Record high production of 270,000 gold equivalent ounces, a 10% increase from Q3 2023.
• EBITDA rose to $78 million in Q3, nearly 40% higher than the previous quarter.
• Free cash flow of $65 million, with $54 million invested in growth projects such as Borborema.
• Debt capital raised reached BRL1 billion due to strong demand.
• Instituted a quarterly dividend policy with a 9.3% annualized yield.
• Production guidance for the year is between 244,000 and 292,000 ounces, with cash costs at $1,022 per ounce.
• CapEx guidance set between $188 million and $219 million, primarily for Borborema.

Company Outlook

• Borborema project has an NPV of $540 million with an IRR exceeding 81%.
• 20% to 25% of expected production from 2025 to 2027 hedged at $2,400 per ounce.
• Ongoing improvements at the Almas mine and expansion plans for the Apoena mine post-2025.
• Positive outlook for gold prices, regardless of political factors.

Bearish Highlights

• Net loss of $12 million in Q3 due to non-cash market-to-market losses on gold hedges.
• Lower ore grades in Honduras operations may affect recovery rates.

Bullish Highlights

• Strong demand for debt raised, doubling the initial amount.
• Acquisitions of projects in Guatemala and Bluestone set to close in January.
• Production target increased from 200,000 ounces to 400,000 ounces and further to 450,000 ounces planned.

Misses

• Identified bottlenecks in production, though efforts to manage costs and enhance productivity are ongoing.

Q&A Highlights

• CEO Rodrigo Barbosa emphasized that Borborema construction is a priority, with plans for the Matupa project exploration starting next year.
• Aims for dual listing in Brazil while maintaining strong dividend yield history.
• Ongoing exploration efforts with new acquisitions including Pezão and Pé Quente, targeting a pre-feasibility study within 3 to 4 years.

Aura Minerals Inc. has demonstrated robust performance in Q3 2024, bolstered by increased gold production and rising gold prices. The company is focusing on strategic growth and shareholder returns along with disciplined cost management, preparing for further expansion and operational efficiencies.