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01/10 00:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Positive elements include steady performance at Terronera and Kolpa, expected free cash flow, and strategic expansion plans. However, lower grades, unclear guidance on Kolpa's expansion, and unresolved gold hedge issues create uncertainties. The lack of shareholder return plans and mixed financial results add to the neutral sentiment.
Silver Production 1.8 million ounces of silver, representing an 88% increase compared to Q3 2024, primarily due to the addition of the Kolpa mine and full quarter production from Guanacevi.
Gold Production 7,300 ounces of gold, contributing to a total of approximately 3 million silver equivalent ounces, an 88% increase compared to Q3 2024, driven by the same factors as silver production.
Revenue $111 million, an increase of 109% compared to the prior year, benefiting from higher precious metal prices and increased production profile.
Mine Operating Cash Flow Increased by 102%, driven by higher production and revenue, though cash costs rose to $18 per payable silver ounce due to higher royalties, profit participation, and costs of third-party mineralized material, coupled with lower grades processed at Guanacevi and Bolañitos.
All-in Sustaining Costs Increased to $30.53 per ounce, net of byproduct credits, due to elevated exploration at Kolpa, initial capital investment to upgrade facilities, and increased treatment and refining charges. Includes a $2.3 million mark-to-market charge for deferred share units.
Mine Operating Earnings Increased to $15.6 million from $12.5 million in Q3 2024, driven by higher operating earnings from Bolañitos and Guanacevi, and $3.9 million from Kolpa, offset by a $3.6 million loss from Terronera during commissioning.
Net Loss $37.5 million, primarily due to a $39 million loss on derivative contracts.
Cash Position $57 million as of September 30, 2025.
Terronera commercial production: Terronera mine reached commercial production, achieving 90% of its design capacity and projected metal recoveries during commissioning.
Kolpa mine production: Kolpa mine completed its first full quarter under production, contributing 1.3 million silver equivalent ounces in Q3 2025.
Revenue growth: Revenue increased by 109% year-over-year to $111 million, driven by higher precious metal prices and increased production.
Market positioning: The company strengthened its position as a leading mid-tier silver producer with the addition of Terronera and Kolpa mines.
Operational efficiencies at Terronera: The team is working to refine and optimize operating processes, aiming for incremental improvements in throughput and recoveries.
Kolpa mine upgrades: Investments are being made to modernize the plant and infrastructure, with permits received to increase throughput to 2,500 tonnes per day.
Exploration at Kolpa: $1.5 million spent in Q3 2025 on infill and step-out drilling as part of a $12 million exploration program to validate historical resources.
Pitarrilla project advancement: Focus on upgrading inferred resources and conducting studies for a tailings dam permit and feasibility study, expected by mid-2026.
Cash Costs and All-in Sustaining Costs: Cash costs increased to $18 per payable silver ounce due to higher royalties, profit participation, and costs of third-party mineralized material. All-in sustaining costs rose to $30.53 per ounce, driven by elevated exploration costs, initial capital investments, and increased treatment and refining charges.
Net Loss and Derivative Contracts: The company reported a net loss of $37.5 million, primarily due to a $39 million loss on derivative contracts related to gold sales agreements.
Terronera Mine Operating Loss: Terronera incurred a mine operating loss of $3.6 million during its commissioning period, despite achieving 90% of its design capacity and projected metal recoveries.
Kolpa Mine Performance: Kolpa mine experienced marginally lower grades than expected, leading to slightly higher cash costs per ounce. Investments are required to modernize the plant and infrastructure to support potential production increases.
Exploration and Validation Costs: The company is incurring significant exploration costs, including $12 million over 24 months to validate historical resources at Kolpa, with $1.5 million spent in Q3 2025.
Economic and Market Risks: The company is exposed to economic uncertainties, including fluctuating precious metal prices, which significantly impact revenue and profitability.
Terronera Production Forecast: The company forecasts throughput of approximately 350,000 tonnes over the next 6 months, with average grades estimated to be about 120 grams per tonne silver and 2.5 grams per tonne gold. Higher grade zones are scheduled to be accessed in mid-2026. During this period, the operating team will refine and optimize operating processes, incrementally improving throughput, recoveries, and efficiencies.
2026 Production and Cost Guidance: In January 2026, the company will issue annualized 2026 production and cost guidance for Terronera along with consolidated guidance.
Kolpa Exploration and Production: The company plans to spend $12 million on exploration over 24 months to validate historical resources. In Q3 2025, Kolpa produced 1.3 million silver equivalent ounces and is on track to align with historical performance benchmarks of 5 million silver equivalent ounces. Investments are being made to modernize the plant and infrastructure to support a potential increase in production. Permits have been received to increase throughput to 2,500 tonnes per day, with an evaluation of expanded operations expected to be completed late this quarter.
Pitarrilla Project Development: The company is advancing the Pitarrilla project, focusing on upgrading inferred resources to indicated resources. Engineers are working on studies to support a tailings dam permit and a feasibility study, which is expected to be published mid-2026.
The selected topic was not discussed during the call.
The earnings call presents a mixed picture. Positive elements include steady performance at Terronera and Kolpa, expected free cash flow, and strategic expansion plans. However, lower grades, unclear guidance on Kolpa's expansion, and unresolved gold hedge issues create uncertainties. The lack of shareholder return plans and mixed financial results add to the neutral sentiment.
The earnings call highlights mixed results: the Terronera project is nearing commercial production, but the company reported a net loss due to operating losses and increased expenses. The Q&A revealed concerns about integration and operating costs at Minera Kolpa, and management's unclear responses on some issues. While there is optimism about future production and cost alignment, current financials and uncertainties suggest a neutral sentiment for stock price movement.
The earnings call reveals financial instability with a net loss of $32.9 million due to hedging impacts and increased operational costs. The cash position and working capital have decreased, indicating liquidity risks. Despite slight improvements in cash costs, the lack of a share buyback program and integration risks from the Kolpa acquisition further contribute to a negative outlook. The Q&A section highlights uncertainties in project ramp-up and cash flow management, exacerbating concerns. Without a market cap, the stock's reaction is uncertain, but the overall sentiment suggests a negative impact.
The earnings call reflects several concerns: a net loss due to hedging, decreased cash and working capital, rising operational costs, and no shareholder return plan. Despite strong production goals and slightly lower cash costs, the lack of clear guidance and liquidity risks overshadow positives. The Q&A highlights uncertainties, particularly around cost management and cash flow for Terronera. These factors suggest a negative sentiment, likely leading to a stock price decline in the range of -2% to -8% over the next two weeks.
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