Earnings call transcript: Aris Mining Q2 2025 sees revenue growth, stock dips

Aris Mining Corp reported a strong second quarter in 2025, with net adjusted earnings reaching $48 million, or $0.27 per share. The company saw a 30% increase in gold revenue compared to the first quarter, amounting to $200 million. According to InvestingPro data, the company’s market capitalization stands at $1.4 billion, with a P/E ratio of 25.2x. The stock has demonstrated remarkable strength, posting a 69% return over the past year. Despite these positive financial results, the company’s stock price fell by 1.82%, closing at $10.97. The market’s reaction may be influenced by broader industry trends and future guidance expectations.

Key Takeaways

• Aris Mining achieved a 30% increase in gold revenue in Q2.
• The company’s stock fell by 1.82% post-earnings announcement.
• Aris aims to double annual gold production to 500,000 ounces.

Company Performance

Aris Mining demonstrated robust performance in the second quarter, marked by a significant rise in gold revenue and production. The company produced 58,700 ounces of gold, reflecting a 7% increase from the previous quarter, and 113,000 ounces in the first half of 2025, a 13% rise from the same period in 2024. The installation of a second ball mill at Segovia has increased processing capacity by 50%, positioning the company for future growth.

Financial Highlights

• Revenue: $200 million (30% increase from Q1 2025)
• Net adjusted earnings: $48 million ($0.27 per share)
• Free cash flow from operations: $38 million
• Cash reserves: $310 million

Outlook & Guidance

Aris Mining is targeting gold production of 210,000 to 250,000 ounces in 2025, with plans to publish technical studies for the Soto Norte and Toro Peru projects by the end of Q3. The company aims to start producing ore at the Mamato Complex in 2026, which could contribute over 200,000 ounces annually.

Executive Commentary

Neil Woodier, CEO of Aris Mining, stated, "We’re well positioned to deliver on our guidance with increased production capacity, solid operating momentum, and even stronger balance sheet." Richard Thomas, Operational Lead, highlighted the potential of the Mamato Complex, saying, "Once completed, the Mawata Complex has the potential to produce more than 200,000 ounces of gold per year."

Risks and Challenges

• Potential fluctuations in gold prices could impact revenue.
• Execution risks associated with the expansion projects at Segovia and Mamato.
• Regulatory challenges in new project developments like Soto Norte and Toro Peru.

Q&A

During the earnings call, analysts raised questions about the production ramp-up at Segovia. The company confirmed a gradual increase in production for the third and fourth quarters. Discussions also covered margins with contract mining partners and capital spending for the Mamato expansion.

Full transcript - Aris Mining Corp TO (ARIS) Q2 2025:

Conference Operator: Good morning, everyone, and welcome to the Arris Mining Second Quarter twenty twenty five Results Call. We’ll begin with an overview from management followed by a question and answer period. As a reminder, all participants are in a listen only mode. The conference is being recorded. Please also note that the accompanying presentation that management will refer to during today’s call can be found in the Events and Presentations section of Arris Mining’s website at arismining.com.

Also, Arris Mining’s second quarter twenty twenty five financials have been filed on SEER plus and EDGAR and can also be found on their website. I would now like to turn the conference call over to Mr. Neil Woodier, Chief Executive Officer. Sir, please go ahead.

Neil Woodier, Chief Executive Officer, Arris Mining: Thank you, operator, and welcome, everyone. Thank you for joining us for our second quarter twenty twenty five earnings call. I’m joined today by other members of the management team, including our new CFO, Kem Pettison, who joined us last month as well as Richard Thomas, Oliver Dreschel and Alejandro Jimenez. We’ll all be available to answer your questions at the end of the call. Before we begin, please take note of the disclaimers on Slide two as we will be making forward looking statements throughout today’s presentation.

Starting on Slide three, I’m pleased to report that we delivered another strong quarter with record adjusted earnings and significant increase in our cash position. After a strong start to the year in Q1, our Q2 performance has further increased our momentum, keeping us firmly on track to meet our 2025 guidance. The quarter’s financial highlights can be summarized as follows. Q2 net adjusted earnings were $48,000,000 or $0.27 a share, a highest quarter since the formation of Arris Mining in September 2022. Q2 gold revenue totaled $200,000,000 up 30% over Q1.

Our trailing twelve months adjusted EBITDA was $264,000,000 We ended the quarter with $310,000,000 of cash, including 54,000,000 from warrants exercised in the quarter. After June 30, we received an additional $61,000,000 of exercise warrants, which expired on July 29. In total, 9% of the warrants were exercised, generating $150,000,000 of cash proceeds. Combined with a strong operating cash flow, the warrant proceeds have further strengthened our liquidity and reinforced our strong financial position. As reported in late June, we also completed the installation and commissioning of the second ball mill at Segovia.

The expansion increases Segovia’s processing capacity by 50%. And I’d like to take the opportunity to congratulate the project team and operations team for delivering this project on time within budget while maintaining strong operational performance. So our focus now shifts to ramping up production in the second half of the year with a target of 300,000 ounces next year for Segovia. In addition, we continue to make good progress on the construction of the Mamato bulk mining zone. Earthworks for the substation are completed.

Earthworks for the CIP platforms are nearing completion. Equipment deliveries of key components are underway. And the project remains on schedule with the first ore being processed and production ramp up commencing in the 2026. With increased production capacity, a supportive gold price environment and strong operational momentum, we’re well positioned to deliver a successful 2025. We anticipate completing technical studies on both the revised So To Norte project and the revised Toro Peru Guyana by the end of this third quarter.

And finally, I have the pleasure of introducing our new CFO, Cam Pettison. Cam delighted to welcome Cam to the team. He brings highly relevant experience from his previous roles where he worked closely with regional teams across South America, Canada and Mexico, supporting both operational and financial performance. And with that, welcome, Cam, and over to you.

Cam Pettison, Chief Financial Officer, Arris Mining: Thank you for that introduction, Neil. It certainly is an exciting time for Arris Mining, and I’m absolutely thrilled to be part of the team. With that, I’m pleased to update you on our financial performance in the second quarter. Moving on to Slide four, our AISC margin increased by 43% compared to Q1, the result of strong production, higher realized gold prices and solid cost controls. Importantly, we generated free cash flow from operations of $38,000,000 this quarter.

That’s after investing $37,000,000 in expansion projects and paying our 2024 taxes. Bad cash inflows were $31,000,000 in the quarter compared to $12,000,000 buildup in Q1, which reflects the timing of bad refunds. Taxes paid totaled $42,000,000 in Q2, up $37,000,000 from Q1, primarily due to the timing of annual 2024 Colombian income tax settlements. Financing activities recorded a cash inflow of $32,000,000 mainly from the $53,000,000 in proceeds from the warrant exercises that Neil mentioned earlier. As a result, we added $70,000,000 to our cash position during Q2, closing the quarter with a cash balance of $310,000,000 Subsequent to quarter end, we received an additional $61,000,000 from the final warrant exercises.

Now moving to Slide five. While the warrants have been a significant source of cash, they’ve also introduced significant non cash earnings volatility from mark to market revaluations. This slide reconciles the reported net loss in Q2 with our adjusted earnings of $48,000,000 for the quarter. The most significant adjustment being the $51,000,000 non cash loss on financial instruments, which was primarily from the warrant revaluation. Our share price increased by 38% during Q2, which increased the fair value of the underlying warrants.

This resulted in the $45,000,000 non cash loss in the quarter from that warrant revaluation. These warrants expired on 07/29/2025. And with that, the associated warrant liability was fully extinguished, thereby removing the significant source of non cash earnings volatility from future earnings results after Q3. I’d now like to hand over the call to Oliver to discuss our capital structure.

Oliver Dreschel, Executive Team Member, Arris Mining: Thank you, Cam. Moving to Slide six. The key takeaway from our cap table is that our balance sheet has improved significantly since we refinanced our senior unsecured notes in October. Our liquidity position has increased to $310,000,000 as of June 30 this year. Total and net leverage stood at one point eight and zero point seven times respectively.

It is worth noting that we have decreased total leverage by 1.2 turns and net leverage by 0.8 turns since Q4 twenty twenty four. And our market capitalization has increased to $1,500,000,000 as of August 4, resulting in significantly more equity cushion below our debt when compared to our market cap of circa $820,000,000 around the time of the notes offering. With no meaningful debt maturities until October 2029 and stable credit ratings at B1, B plus, B plus, Our balance sheet is in great shape to support our growth strategy to increase annual gold production to more than 500,000 ounces. With that, I’d like to hand over the call to Richard, who will provide an update on our operational performance in Q2 and our growth projects.

Richard Thomas, Operational Performance Lead, Arris Mining: Thank you, Oliver. Let’s move on to Slide number seven. In the second quarter, we delivered a total gold production of 58,700 ounces across our operations, an increase of a full 7% from the first quarter in 2025. In the first half of this year, our operations produced 113,000 ounces, an increase of 13% compared to the 2024. As gold production for 2025 is expected to be weighted in the second half of the year, reflecting an increased milling capacity and production ramp up at Segovia, we are well positioned to deliver on our production guidance for the full year.

At Segovia, we produced 51,500 ounces of gold during the quarter, supported by an average gold grade of 9.85 grams per tonne and gold recoveries nice and high at 96.1%, whilst maintaining a strong throughput of close to 2,000 tonnes per day. We generated a total all in sustaining cost margin from Segovia of CAD87 million, an increase of 43 compared to our quarter one this year. Our all in sustaining margin for the 2025 was CAD148 million, which compares favorably to the GBP 168,000,000 for the full year into 2024. So it is a year of cash flow inflection as a result of strong operational performance in the first half of the year and production ramp up in the second half against the backdrop of elevated gold prices. Ola mining all in sustaining cost was $15.20 dollars per ounce in quarter two and fifteen oh three ounces for the first half of the year, trending towards the lower end of the company’s full year 2025 guidance of $14.50 to $1,600 per ounce.

Meanwhile, gold produced from contract mining partners, Millfeed, generated a 42% all in sustaining cost sales margin in quarter two and forty one percent in the first half of the year, above the top end of the company’s full year 2025 guidance range of 35% to 40%. Turning your attention to the chart at the bottom right. Realized gold prices and continued cost discipline have more than doubled the all in sustaining margins on a per ounce basis at Segovia when compared to the 2025 to 2024. Segovia is a cornerstone asset for Eris Mining and the commissioning of the second bore more further strengthens its role as a key cash flow generator for Eris Mining. If we could please move on to Slide number eight.

I’d like to provide an update on our growth and expansion projects. As Neil mentioned at the beginning of the call, commissioning of the second ball mill at Segovia was completed in June, on time and well within budget. We are very proud of this project, and we look forward to the increased production it will bring. The new normal increases production throughput from 2,000 tonnes a day to 3,000 tonnes per day. As underground development advances and mill feed from contract mining partners increase, Segovia remains on track to achieve annual production of between 210,000 ounces to two and fifty thousand ounces this year, further ramping up in 2026, and we are targeting 300,000 ounces next year.

To get a better idea of what it took to increase the throughput capacity to 3,000 tonnes per day, we have created a short video. You can find the link at the bottom of the slide. If we could please move on to Slide number nine. At Mamato, the construction of the bulk mining zone continues to advance as shown in the picture on the right hand side of the slide. The earthworks for the main substation are completed.

Earthworks for the carbonate pulp plant platforms are nearing completion. Equipment deliveries continued through the quarter, including key component equipments such as crushers, mills and tailings filters. While we are very pleased with the pace of construction on surface, we did encounter some challenges with the decline development as advanced rates slowed down due to poor ground conditions combined with a large ingress of water. We are handling this at the moment, and we expect similar conditions to continue until we have crossed the fault zone, which is 200 meters in front of the current development phase. To address this, we are transitioning this work to our highly skilled owner team, and already we have seen results from this.

I want to emphasize that the decline development is not on the critical path for delivering the first ore. The reason is that we already have access to the bulk mining zone from the existing narrow vein zone, which allows us to carry out early development works needed to keep the project on track. As a result, the overall project timeline remains unaffected with the first ore and production ramp up still expected in the 2026. Once completed, the Mawata Complex consisting of the bulk mining zone and the narrow vein mining zone has the potential to produce more than 200,000 ounces of gold per year. For those interested in seeing our progress firsthand, I encourage you to watch the latest video on our website or use the link at the bottom of the slide.

Now moving on to Slide 10. As previously discussed, we continue to make progress with our two major technical studies for our development projects, Sato Norte and Toro Peru. At Sato Norte, a prefeasibility study is underway with the completion expected in quarter three twenty twenty five. This study incorporates a smaller scale development plan and includes processing options designed to support local small scale miners. Once the PFS is complete, we intend to finalize and submit the required studies to apply for an environmental license for development.

At Toro Peru, a new preliminary economic assessment is also in progress to evaluate updated development options in the context of the current coal price environment. The PEA is also expected to be completed in the third quarter of this year. We look forward to providing a comprehensive update in the coming months once these studies are completed. With that, I’d like to hand over the call back to Neil.

Neil Woodier, Chief Executive Officer, Arris Mining: Thank you, Richard. Turning to Slide 11. As announced on July 16, Harris Mining signed a memorandum of understanding with the Ministry of Energy and Mines, the National Mining Agency, the Governor of Caldos, the Mayor of Mamato, Corporal Caldas and other key stakeholders to accelerate the formalization of artisanal and small scale miners in Mamato. This is a significant milestone, not just for our opportunity to increase production, but the responsible mining in Colombia. It reinforces the strong institutional support Arris Mining has received from the Colombian government and aligns us with our long term commitments to inclusive, sustainable development in our host countries.

The Cerro Borough area where these artisanal and small scale miners operates sits above the Mamato Narrow Vein Zone and represents a meaningful mutual benefit growth opportunity. Through this agreement, we have committed to work with the government to streamline permitting for artisanal and small scale miners, promote environmental stewardship and safety standards, while also providing technical training for those artisanal and small scale miners. Arris Mining has also offered its milling capacity from our existing Importantly, the areas covered by this MOU are entirely separate from the titles where Arris Mining operates its Narrow Bay mining zone and its developing the bulk mining zone at the Mamoto Complex. The bulk mining zone will remain 100% owner operated.

In closing, moving to Slide 12, we’re well positioned to deliver on our guidance with increased production capacity, solid operating momentum and even stronger balance sheet supported by a favorable gold price environment. I’m encouraged by the meaningful progress we’re seeing across our growth initiatives and I’m excited about our near term catalysts. We expect to publish Sotto Nauta’s PFS and Toropru’s PEA in the third quarter. We’re looking forward to that as we will be the first time that Aras Mining management team will be able to articulate in great detail its plans for how those assets should be designed, built and operated. At Segovia, we expect gold production to gradually increase in the second half of this year, targeting 300,000 ounces in 2026.

Lastly, at Mamato, construction for the bulk mining zone continues to advance. Our first ore and ramp up of production is expected in the 2026. Looking ahead, we remain focused on sustaining this momentum as we work towards more than doubling annual production to over 500,000 ounces, while advancing key projects with potential to unlock longer term growth. Thank you for your time today and we look forward to addressing your questions. I’ll now turn the call back over to the operator to open the line.

Conference Operator: Ladies and gentlemen, we will now begin the question and answer session. And our first question today comes from Carey MacKury from Canaccord Genuity. Please go ahead with your question.

Carey MacKury, Analyst, Canaccord Genuity: Hey, morning guys and congrats on the strong quarter. Just wondering if you could give us a bit more color on Segovia. So you’ve done 100,000 ounces in the first half and we’re expecting this to ramp up. Just thinking about your guidance, I mean 210,000 seems like that wouldn’t be much of an uptick here. And 250, it sounds like that would be consistent with exiting at 3,000.

So I’m just wondering how do we think about the second half at Segovia and if you can give us any color on that.

Richard Thomas, Operational Performance Lead, Arris Mining: Yeah. Yeah, Carrie. I mean, as we as we open up our new so if you do get a lot of development at the moment, opening up our new stoping areas and yeah. So and and and and getting access to surface. So all that combined should get us well within that guidance range.

Think if you had to get to we’d be spec that in the middle of it.

Carey MacKury, Analyst, Canaccord Genuity: So should we expect a pretty modest increase in Q3 and then a bigger increase in Q4? Is that sort

Richard Thomas, Operational Performance Lead, Arris Mining: That be appropriate.

Carey MacKury, Analyst, Canaccord Genuity: Then on the contract mining partners, it’s trending above your guidance. I’m just wondering, are there any factors that are driving that? Or is that more reflective of maybe conservative guidance? Or I guess another way to put it is what factors would make that margin range go lower versus going higher?

Richard Thomas, Operational Performance Lead, Arris Mining: That could be that’s always linked to gold price, and it’s quite hard to predict what they’re going to be. So as the gold price fluctuates, so does the margin. So that’s pretty much fixed margin. And we’ve got it on the way we pay those guys is on a sliding scale according to the grade they deliver and the gold price at the time. So it’s quite hard to predict what you’re going get versus what the gold price is.

But yes, I think our guidance is a good guess for what’s going be at the end of the year.

Carey MacKury, Analyst, Canaccord Genuity: Okay. And then maybe one last one for me. Just on Armada, what should we be expecting for capital spending in the second half on that expansion?

Richard Thomas, Operational Performance Lead, Arris Mining: I know our our estimate to completion is still in the in the $283,000,000. What it would be for the for the second half of the year, I’d have to work that out and get back to you.

Carey MacKury, Analyst, Canaccord Genuity: Okay. Fair enough. Thank you.

Conference Operator: And ladies and gentlemen, at this time, I’m showing no additional questions. Like to turn the floor back over to Mr. Woodier for any closing remarks.

Neil Woodier, Chief Executive Officer, Arris Mining: Well, thank you, operator, and thank you everybody for attending our call today. We appreciate it very much. And if you have any questions, I’m sure that Oliver will be only too pleased to supply you with information either straight from his brain or by looking things up. But anyway, we will supply whatever information you need. And thank you very much for attending today.

Thank you.

Conference Operator: Ladies and gentlemen, that does conclude today’s conference call and presentation. You may now disconnect your lines. Thank you for participating and have a pleasant rest of the

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