Aris Mining (TSX:ARIS) Q4 2025 Earnings Call

0:00 Good morning, everyone, and welcome to the Aris Mining Fourth Quarter and Full Year twenty twenty five Earnings Call. We will begin with an overview from management followed by a question and answer period. Please note that the accompanying presentation that management will refer to during today's call can be found in the Events and Presentations section of Aris Mining's website at arismining.com.

0:45 Also, Aris Mining's fourth quarter twenty twenty five financials have been filed on SEDAR plus and EDGAR and can also be found on their website. I would now like to turn the conference over to Mr. Neil Woodyard, Chief Executive Officer. Please go ahead. Thank you, operator, and welcome to our Q4 and full year twenty twenty five earnings call. Joining me today are Doug Bulby, Oliver Dashall, Cam Patterson, Dustin Van Dorsal Air, Corneille Lawrence and Alejandro Jimenez. I'd like briefly to introduce two leaders joining us on our call for the first time. Firstly, Dustin, SVP Operations, joined last year and brings decades of experience across underground and open pit mining, exploration and construction.

1:40 Secondly, Cornel Lawrence, SVP projects, has worked with me for decades, including Endeavour Mining and Leer Gold. He now leaves our expansion and growth projects in Colombia and Guyana. Dustin and Cornet bring complementary expertise as mining engineer and metallurgist and are working closely together across our operations and project portfolio. Before we begin, please note the forward looking statement disclaimer on Slide two. Looking now at Slide three. 2025 was a pivotal year for Aris Mining. Gold production increased 22% year over year and gold prices increased 48%, resulting in $9.00 $9,000,000 gold revenue, up eighty two percent $464,000,000 adjusted EBITDA, up 100 and eighty five percent $241,000,000 adjusted net earnings dollars 1.28 per share, up 265%.

2:51 Importantly, we transitioned to generating free cash flow while continuing to invest in growth. Operations generated £322,000,000 of cash flow after sustaining capital and taxes, fully funding our growth initiatives and £127,000,000 in net cash flow. Looking ahead to 2026, our operations and growth projects remain on track. Segovia second mill ramp up progressing well with further production growth expected. Mamato Gold Mining Zone development ahead of schedule with the new CIP plant on track for its first gold pour in Q4 of this year.

3:37 For approved pre feasibility study targeted for H2 of this year and Sofit Norte environment license application is planned for Q2 of this year. Turning to Slide four, we delivered on 2025 guidance, producing 257,000 ounces of gold above the midpoint of guidance. Segovia production increased 21% year over year. Armata delivered steady performance and exceeded guidance. Segovia Owner Mining all in sustaining costs, $15.34 per ounce, up just 3% year over year.

4:24 CMP sourced gold all in sustaining margin 44%, above our 35% to 40% guidance range. Turning to Slide five. For 2026 production guidance is 300,000 to 350,000 ounces. At the midpoint, this represents more than 25% growth year over year. Once Segovia and Mamato are fully ramped up, we expect 500,000 ounces of annual production. At 4,400 gold, Segovia is expected to generate 50,000,000 in all in sustaining margin this year.

5:11 MoMATO cost guidance will be provided after the CIP plant reaches commercial production. With that, I'll pass to Cam now to review our financial performance. Thank you, Neil. Turning to Slide six, Aris Mining reported record financial performance in 2025, driven by production growth, strong gold prices and solid cost controls. For the full year 2025, we reported gold revenue of $9.00 $9,000,000 up 82% from $499,000,000 in 2024, driven by higher realized gold prices and increased sales volumes. Adjusted EBITDA after normalizing for non cash and non recurring items of CAD464 million compared to CAD163 million in 2024. The 185% increase demonstrates the substantial leverage to higher gold prices.

6:02 Adjusted net earnings of CAD241 million or $1.28 per share, up from the $56,000,000 or $0.35 per share in 2024. To put this into perspective, please turn your attention to the graph on the right hand side. Aris Mining generated higher adjusted EPS in each Q3 and Q4 last year than for the full year of 2024. That is the $0.36 in Q3 and the $0.46 in Q4 were both in excess of the $0.35 per share for the full year of 2024. We closed the year with cash balance of $392,000,000 up from the $252,000,000 at the end of twenty twenty four, further enhancing our strong liquidity position.

6:48 Please turn to Slide seven for a discussion of the key cash flow drivers. As Neil mentioned in his remarks, we transitioned to generating free cash flow in 2025 after our significant investments in growth. For the full year, we generated $127,000,000 of free cash flow, which reflects $322,000,000 of operating cash flow after sustaining capital and income taxes, which was partially offset by 196,000,000 invested in growth capital, which included CAD128 million in Armada for the construction of our CIP processing plant, major equipment procurement and delivery, underground mine and surface infrastructure development and additional expansion related expenditures. 39,000,000 in Segovia for underground mine development, completion of the mill expansion, new equipment to support the ramp up and other activities and $17,000,000 at So to Norte and $12,000,000 at Toro Peru for the technical studies delivered last year and other site specific expenditures.

7:48 In addition to free cash flow generation of 127,000,000 our cash position was further increased by $150,000,000 of proceeds from the exercise of warrants which expired in July last year and $13,000,000 of proceeds from the sale of the Judy Gold project. This was partially offset by $77,000,000 of debt service and repayment and $60,000,000 in cash used for our acquisition of the remaining 49% interest in Solta Norte in Q4 of twenty twenty five. With current gold prices significantly exceeding our average realized price in 2025 and meaningful expected gold production growth as just mentioned by Neil, Aris remains well positioned in a robust cash flows to organically fund all growth initiatives. I'd now like to hand the call over to Kevin to discuss our operating results.

8:39 Thank you, Cam. Turning to Slide eight. As Neil mentioned at the beginning of the call, ARIS reported consolidated gold production of 257,000 ounces in 2025, representing a 22% increase over 2024, driven by the expanded Segovia mill and above guidance performance at Vermato. For the full year 2025, gold production at Segovia totaled 228,000 ounces, an increase of 21% compared to 188,000 ounces in 2024. The improvement reflects a 17% increase in milling rates following the successful commissioning of the second mill in June 2025, on time and within budget, along with a higher average gold grade of 9.8 grams per tonne and stable steady recovery of 96%.

9:28 Segovia's strong operating performance in 2025, in conjunction with materially higher realized gold prices throughout the year delivered strong financial results. Segovia's ASIC margin totaled million, up 158% compared to 2024. Owner Mining contributed CAD $281,000,000 or 67%, while our CMP business contributed CAD 140,000,000, delivering an ARISI sales margin of 44% and exceeding the guidance range. As reflected in the chart on the bottom right, rising realized gold prices and continued cost discipline continued to drive ARISC margin expansion at Segovia. In Q4, Segovia generated an ARISC margin of A2346 an ounce compared to A1157 dollars an ounce a year ago.

10:19 Moving to Slide nine, Segovia produced 62,137 ounces of gold in Q4, approximately 4% lower than Q3 due to unscheduled maintenance in November. We experienced six point five days of total downtime due to an issue with the older mill, which reduced throughput in November to 2,244 tonnes per day. Normal operations resumed in December and throughput increased to approximately 2,600 tonnes per day. Segovia's production ramp up is back on track and continues to progress as planned. Year to date, I'm pleased to report that production at Segovia is above budget, marking a strong start to 2026. It's also worth highlighting that the mill feed gold grade has increased over the course of the last year to 10.1 grams per tonne in Q4, bringing the full year average grade to 9.82 grams per tonne, 4.4% higher than the feed grade of 9.41 grams per tonne in 2024, while recoveries remained consistent at 96% throughout the year.

11:22 Our own mining ASIC averaged $15.34 dollars an ounce for the full year, up 3% from $14.86 dollars per ounce in 2024, demonstrating solid cost control. Segovia's total ARISC comprised of owner mining and our C and P business was $17.00 $5 per ounce in 2025, up 13% from $15.00 $7 an ounce in 2024. This increase is primarily driven by higher cash costs, reflecting a 48% rise in gold prices, which elevated CMP purchases, royalties and social contributions. Sustaining capital per ounce also increased, reflecting higher development and infrastructure investments to support the ramp up of the expanded mill capacity.

12:10 These increases were partially offset by owner mining cash cost improvements from higher gold ounces sold, spreading our fixed costs over more ounces. Operationally, this year's focus is on connecting three of Segovia's four underground mines via one main underground haulage circuit, while also developing ramps to surface. These measures are expected to increase productivity through increased haulage and hoisting capacity, which in turn enables Segovia to consistently run at 3,000 tonnes per day. With that, I'd like to pass it over to Corning for an update on Marmato. Thank you, Dustin. Moving to Slide 10. At Marmato, construction of the CIP plant and development in the bulk mining zone are advancing well.

12:56 Development in the bulk mining zone is ahead of schedule, materially reducing execution risk. Development of the main decline to the bulk mining zone is over 1,000 meters advanced, which equates to a completion rate of 60% and is on schedule for completion in Q3 twenty twenty six. The new decline will significantly improve access and haulage efficiencies, enabling higher mining rates and lower costs as processing capacity expands. I I'm also pleased to report that the decline has advanced beyond the connection point to the underground crosscut with completion of the crosscut expected in April 2026. As illustrated in the project design on the bottom left side of the slide, the Los Indios crosscut will be connecting the upper part of the bulk mining zone with the main decline, which will establish an additional access and ventilation pathway, facilitate ore and waste storage between existing and new infrastructure and support the initial production ramp up.

14:05 We are also building a 10,000 ton mill feed storage facility at the intersection of Main Decline and Crosscut, which enhances operational flexibility as it provides two days of mill feed at our run rate of 5,000 tons per day. On surface, the main civil mechanical and electrical works are advancing with foundations for the mills, tailings signal and leach and CIP tanks completed. Major equipment for first gold including the primary crusher, sag and ball mills and filter presses are ready to be moved from storage in Cartagena and Medellin to Marmata site starting May. Subsequent to 12/31/2025, the company received a $40,000,000 installment deposit under its precious metals stream financing following achievement of the 50% completion milestone.

15:00 The proceeds will be recognized in the first quarter of twenty twenty six. The remaining 42,000,000 installment deposit is payable on achievement of the 75% completion milestone. During most of 2026, owner mining rates are expected to average approximately 900 tonnes per day, reflecting the throughput capacity of the existing flotation plant, sourced primarily from ore development and stopes in the upper parts of the bulk mining zone. Construction activities are progressing as planned and we remain on schedule for the first gold in Q4 twenty twenty six, followed by a staged production ramp up to steady state operations. Aris Mining plans to exit 2026 operating the 5,000 tonnes per day design capacity CIP plant at approximately 3,000 tonnes per day.

15:53 Production is expected to increase through 2027 with throughput increasing approximately 4,000 tonnes per day by mid-twenty twenty seven and reaching the full 5,000 tonnes per day design capacity by the end of twenty twenty seven when the paste backfill plant is fully commissioned. Turning to Slide 11. You can see the recent images of the project, which illustrate many of the activities I just mentioned. The progress reflects the tremendous effort and dedication of our teams and contractors working on-site. I would like to thank everyone involved for the continued commitment to safety in advancing the project. On surface alone, more than 2,800,000 work hours have been completed to date.

16:39 That's a significant milestone and a testament to the scale of work currently underway. We also invite you to watch the latest construction update video, which is available on our website and provides a closer look at the progress being made on the project. With that, I'd like to pass it over to Oliver for an update on our capital market activities. Thank you, Corne. Now moving to Slide 12. Last month marked a significant milestone for ARIS Mining, as we up listed our common shares from the NYSE American to the main board of the New York Stock Exchange. At the same time, we changed our US ticker symbol to ARIS, aligning it with our ticker symbol in Canada.

17:26 We believe this move to the NYSE is an important step in the company's evolution, enhancing our visibility among US and global institutional investors. It also better reflects the growing scale and quality of our portfolio, while underscoring our ambition to scale Aris Mining into a leading gold mining company in South America. We expect that the transition to the main board will also help us further enhance the trading liquidities of our shares. As shown in the photo on this slide, members of the Aris Mining management team had the the honor of celebrating this milestone by ringing the closing bell at the NYSE on February 19. Before I hand over the call back to Neil for some closing remarks, I'd like to briefly touch on our capitalization.

18:19 Our strong operational and financial performance has increased our adjusted EBITDA to US464 million dollars in 2025. As a result, total leverage has decreased further to one times, which is two turns lower compared to Q4 twenty twenty four. As Ken mentioned, we ended 2025 with a cash balance of $392,000,000 bringing our net debt to $86,000,000 With strong liquidity, low and decreasing financial leverage, no meaningful debt maturities until October 2029, and stable credit ratings at B1, B plus, B plus, our balance sheet is in excellent shape to support our growth strategy.

19:09 With that, over to you Neil. Turning to Slide 13. 2025 was a pivotal year for Aris Mining. We delivered full year guidance and completed the Segovia processing plant expansion on time and on budget. We continued advancing the Mamato expansion. We published major technical studies for Sote Norte and Toro Peru. Required the remaining 49% of Sote Norte for $80,000,000 We reached an amicable arbitration settlement with the Colombian government, the first time the Colombian government has achieved an arbitration settlement.

19:55 With 100% ownership of Segovia, Mamato, Toro Peru and So to Norte, we have a strong platform across Colombia and Guyana. We're on track to grow production to 500,000 ounces in the near term. Advancing Toro Peru and Sotto Norte create a pathway to 1,000,000 ounces per year. Fewer than 50 minuteing companies globally produce more than 1,000,000 ounces annually. With our asset base, balance sheet and cash flow, Aris has a clear path to join that group. Thank you for joining us today. And operator, could you please open for questions? The first question comes from Carey MacRury with Canaccord Genuity.

21:13 Congrats on a great 2025. Maybe just starting with Segovia. We're almost through the first quarter here. If you could just give a bit of color on how the ramp up is going, how we should be thinking about throughput in Q1? Hey, Carey. Ramp up is going very well. I mean, we're having a strong Q1, as I said in discussion. Moving forward, I think as you know, our mill has been proven and run at 3,000 tonne a day in 2025 on different occasions. Our bottleneck is mine production, which is really depending on underground development. So as I mentioned, we're working on the haulage risk underground, pushing them to connect the three main mines, Silencio, Providencia and Sandra Cave.

22:01 And then also working on surface ramps in both Silencio and Providencia, which will take the limit off the shaft haulage. So we're expecting by Q4, we should be steady into that 3,000 tonne a day run rate, and it's just a steady state push until then as this new development comes online. So any guidance on what we should expect for Q1? Is it like 2,500 or We were running around 2,600 at the end of Q4, and we're pretty much the same going through Q1. Okay. And then just on the contractor mining partner margin, obviously tracking above guidance, should we expect that to continue in the short term or are there reasons that might come down?

22:53 Look, our guidance this year, we're going to run about 35% contractor mining as a whole of our mix. And again, it's very variable on gold price and on the mix from the different types of suppliers, internal, external and third parties. But right now, everything is going to be on track and run pretty steady with the way it ran last year. Okay. And then maybe one last one. What should we be thinking about for growth capital from Ramado and some of the other projects? I know you're talking about moving forward with some work at Tor Peru. Just any guidance on capital would be helpful. So, okay, if I understand correctly, estimated cost to complete for Marmato?

23:44 Correct. So just to give you a background, the total spend up to end of twenty twenty five is approximately $180,000,000 since construction started. Our current 2026 budget is about $220,000,000 and that implies a total cost, project cost of roughly $400,000,000 The increase of $35,000,000 from the March 2025 estimate of $365,000,000 includes and it reflects an expanded preproduction mainly underground where we include the Los Angeles crosscut that connects up to the main decline that enables us to access more faces and ore for the 5,000 tonnes per day rate.

24:35 And it includes a 10,000 tonne underground storage facility that enables us to better absorb surges for the process facility at the 5,000 tonnes per day. And then and $12,000,000 input into a tailings storage facility to ensure that we have sufficient CapEx for the increased throughput rate. Overall, we remain on schedule for the CIP plant to be completed in Q4 twenty twenty six. Any other growth capital at the other projects? For Toro Peru? Or Segovia, both.

25:37 We're looking at $820,000,000 in the PEA. And we're advancing well with the current PFS study to be completed in Q3 twenty twenty six, and it's tracking well in terms of CapEx. Okay, great. I'll pass it on. Thanks, guys. The next question comes from Don DeMarco with National Bank Financial. Please go ahead. Thank you, operator, and good morning to Neil and team. I'd just like to follow-up on the last question.

26:24 I didn't quite catch how much CapEx is remaining to finish the Marmato development through the end of the year. I'm wondering if you could just repeat that. Just how much CapEx is left to spend? I know the budget was $290,000,000 as at March one last year, netting out what's been spent so far. Just wondering how much is left? Thank you. Sure. Doug Wobby speaking. The budgeted amount for this year is $220,000,000 as Corne was mentioning. When we add that to the 180,000,000 that was already spent, that got us to the grand total of $400,000,000 from Arbato. It's $220,000,000 is the total capital budget for 2026. Excellent. Okay, thank you. And so the we see that it's laid out the trajectory of the increasing throughput in the CIP plant.

27:20 You got 3,000 tonnes per day by the end of this year, 5,000 tonnes per day by the end of next year. With the development in the bulk mining zone ahead of schedule, is there any are you feeling optimistic about this ramp up of the plant? And is there any chance to maybe accelerate reaching some of those milestones sooner? We'd be very happy to achieve the milestones. We believe they're realistic and we believe they're achievable. Very achievable. Okay. Thanks for that guys. Good luck with the quarter. That's all for me. I would now like to turn the conference back over to Mr. Woodyear for any closing remarks.

28:10 Well, you, operator, and thank you everybody for attending and your questions. And if you have any additional questions, then please take them offline to Oliver, and we'll get back to you as soon as we can. And again, thank you very much for your time today. Cheers. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.