Earnings call transcript: Ormat Q4 2024 EPS beats forecasts, stock up 3%

Ormat Technologies Inc (NYSE:ORA) reported its financial results for the fourth quarter of 2024, showcasing a notable earnings per share (EPS) of $0.72, surpassing the forecast of $0.51. This significant beat was accompanied by a revenue of $230.7 million, which fell short of expectations set at $236.45 million. The company’s trailing twelve-month revenue stands at $890.25 million, with a healthy revenue growth of 12.18%. Despite the revenue miss, Ormat’s stock rose by 3.09% in premarket trading, reflecting a positive investor response to the earnings announcement.

Key Takeaways

• EPS of $0.72, beating forecasts by 41.2%.
• Revenue of $230.7 million, slightly below expectations.
• Stock price increased by 3.09% in premarket trading.
• Ongoing projects and exploration signal potential future growth.

Company Performance

Ormat Technologies demonstrated strong financial performance in Q4 2024, with a significant EPS beat that suggests effective cost management and operational efficiencies. The company’s strategic focus on project expansion and exploration is poised to drive future growth, despite the revenue shortfall this quarter.

Financial Highlights

• Revenue: $230.7 million, below the forecast of $236.45 million.
• Earnings per share: $0.72, exceeding the forecast of $0.51.
• Cash position: $270 million, supporting further investments and shareholder returns.

Earnings vs. Forecast

Ormat’s actual EPS of $0.72 exceeded the forecast by 41.2%, marking a strong performance in terms of earnings. However, the revenue miss of approximately 2.4% could indicate challenges in sales growth or market conditions. The EPS beat is significant compared to previous quarters, highlighting improved profitability.

Market Reaction

Following the earnings announcement, Ormat’s stock rose by 3.09% in premarket trading, reaching $70.4. This positive movement is indicative of investor confidence, driven primarily by the strong EPS results. The stock trades at a P/E ratio of 35x, with analysts setting price targets ranging from $71 to $106. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value. The stock remains within its 52-week range of $59.41 to $84.30, suggesting room for further movement.

Outlook & Guidance

Ormat continues to focus on expanding its project portfolio and exploring new opportunities, with the Borborema project set for commercial production in the second half of 2025. With an overall Financial Health Score of 2.25 (FAIR) from InvestingPro, and particularly strong scores in cash flow management (2.62) and price momentum (2.54), the company appears well-positioned to maintain its competitive position in the industry, despite potential challenges from market conditions and gold price volatility. For detailed analysis of Ormat’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

Rodrigo Barbosa, CEO of Ormat, emphasized the company’s commitment to growth and operational excellence, stating, "We doubled the EBITDA... with the gold price slightly below $2,400." Barbosa also highlighted the importance of safety standards in achieving these results.

Risks and Challenges

• Revenue growth challenges due to market conditions.
• Volatility in gold prices affecting future earnings.
• High all-in sustaining costs impacting profitability.
• Potential supply chain disruptions affecting project timelines.
• Regulatory and environmental challenges in new project developments.

Q&A

During the earnings call, analysts focused on Ormat’s liquidity position and capital allocation strategies. The company addressed concerns about gold price sustainability and detailed its exploration and project development plans, underscoring its commitment to long-term growth.

Full transcript - Ormat Technologies Inc (ORA) Q4 2024:

Conference Moderator, Aura Minerals: Good morning, ladies and gentlemen. Welcome to fourth quarter and full year twenty twenty four earnings call. This conference is being recorded and the replay will be available at the company’s website at auraminerals.com/invesiodoris. The presentation will also be available for download. This call is also available in Portuguese.

To access, you can press the globe icon on the lower right side of your Zoom (NASDAQ:ZM) screen and then choose to enter the Portuguese room. After that, select mute original audio. We would like to inform you that all attendees will only be listening the conference during the presentation, and then we will start the question and answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company’s business prospects, operational and financial projections, and goals or the beliefs and assumptions of Aura executive board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur.

Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in their respective forward looking statements. Present at this conference, we have Rodrigo Barbosa, President and CEO and Klebert Cardoso, CFO. Now I will turn the conference over to Rodrigo Barbosa. You may begin the conference.

Rodrigo Barbosa, President and CEO, Aura Minerals: Good morning all. I’m glad to be here again with all of you. We are now presenting the Q4 and the year end of 2024, which we’ll see was extraordinary year in terms of results. And also not only that, but also setting the stage for us to continue to grow in 2023 and then 2026 and so on. But I’ll cover as usual, I will cover the main results and what advancements we made during the year and then Kleber will step in in more details on the results.

So if we go to the executive summary on the highlights of the year, there was a busy year that we accomplished significant milestones. But before I go to the milestones, let’s go quickly on the results. We doubled the EBITDA from achieving now $267,000,000 with the gold price slightly below $2,400 Today, gold price is already $500 per ounce compared to what we achieved the last year. So you can imagine that if gold continues to perform at this level, we will have a significant impact on the EBITDA for the twenty twenty fifth, not considering also the startup of Borborema. In terms of our in sustaining cash costs, we finished the year of $13.73 dollars per ounce.

We will also we are disclosing and sharing the guidance for the year. We’ll see the guidance for 2025 slightly above what we performed in 2024, but mostly because for Apoena, we will go through two years of pushback and investment on the pit so so that we can after two years resume to the normal levels and that will also bring our well in sustaining cash cost below our average. And as we could see, ALMA was a full production, extraordinary year for ALMA despite the challenges we had when we changed the contractor and already with always sustaining cash costs significantly below the average of the company. In terms of Borborema, the year we also made significant progress in 2024, continue to do in 2025. We are 100% already committed with the budget and investments.

So we do not expect any overrun and we are very much in line to start the ramp up now in March and then commercial production to the second semester. So we performed well in the operations. Of course, we did have challenges in Apoena. Mostly comes from the delay on environmental permits that was already granted early this year. But also Minosa was a very interesting year where we could continue to improve our operations.

The pads. In Alma’s, during the second semester, we also expand capacity so we could increase production. You will see on Q4, we reached a record high production for ALMUS with over close to 17,000 ounces of production and that Aranzazol are very much in line with our expectations. More important as important as the good results go back, we also made one slide back. We also made significant progress in exploration.

We are now thinking and already budgeted to start investing in the underground for ALMUS. We made that acquisition in Bluestone, which we closed in January. We also invest in exploration and we will release our new resources and reserves by the March on the AIF with good progress in most of the operations except Minosa where we are not yet investing much in exploration, but Serra Da Estrella, Apoena, Resazo and Almas, we will see progress in all of those assets. We are also announcing for dividends, now we are paying quarterly basis $0.25 per share. And if you look what we’ve done in 2024, it’s very much in line with what we’ve been promised with the market that we would grow, we would pay dividends and we would unlock value in three different areas.

We will unlock value through execution of the projects or greenfield projects, putting new projects online on time. We would do improvements in resource and reserves and also grow in M and A so that we can continue to grow and narrow the gap of discount of NAV. So we did all. We could increase production. We could increase resource and reserves that we will see on the AIF.

And then third, we also performed an M and A. All of this while we continue to pay dividends, which put Aura as one of the highest dividend yield companies in the gold sector in the world. So it was a very important year that now sets the stage for us to continue to grow in twenty fifth with a larger than ALMA’s project, Bod Borrema, coming online during the year. As we always disclose and as we also believe, good results always come with good safety standards. We are super proud to have been within two years building one mine ramping up, building two mines and ramping up one production along with the other operations with only one slightly lost time incident during two years, which is a benchmark in the sector in the world.

So our safety standards are very much in line with our good results. Good managed companies do both. Good results always come with good safety standards. And also on the structures of geotechnical, the pits, the underground, the tailings dam, all in line with the satisfactory stability conditions. So during the year, we achieved 267,000 ounces of gold equivalent production.

It would have been above that, but the conversion for copper to gold decreases the gold equivalent as the gold price has increased significantly. But that if we were not this would put us on the high end of the guidance, although the February is also very much in line with the guidance meeting what we promised to the market since early twenty twenty four. On the quarter basis, and as Azum very much in line with the previous quarter, very much in line with the mine plan also affected by which is good higher gold prices. So that’s why you see a decrease in gold equivalent production. Apoena, this is where we faced most of the challenges during the year with delays on the environmental permit to enter in a higher grade area.

Then we had to divert to a lower grade. Now we got this permit. We will prepare the mine, but with the combination with the mine plan, we will see the next two years on the investment process so that we can resume to the normal level of operations after two years by 2027. Minosa, another very important quarter with 19,000 ounces of production compared to 2021 in Q3. That is Q3, we had below expectations range and Q4 very much in line with expectation range.

So that is slightly variation that will happen and it happens in Minosa along the quarter, but very important that we could produce above 18,000 ounces on every quarter during the year. And what we were glad to see also Alma’s performance extremely very well and actually above our expectations and now are reaching 17,000 ounces of production with a very with below our average all in sustaining cash costs as we will see them. Cloud is going to show, AMAs already given an important part on the EBITDA of Aura. And as you can imagine, Boardwalk Emery is coming online with a similar project, but bigger, but it’s open pit CIL, average grades and strip ratios about the same. So we can see that now Borborema coming in online with very important results bringing to our during the second semester and then more importantly next year.

So therefore, all in sustaining cash cost, we finished the year at $13.20 per ounce. And then we are now which was very much in line with the guidance, actually was on the bottom of the guidance as the production was above was on the top end of the guidance, then the all in sustaining cash cost was also at the bottom level bottom end of the guidance. Next (LON:NXT) one. So now together with the results, we are also releasing the guidance for the year. So we saw the production of the year February.

Again, if it were not by the increase of gold prices during the year, we would have produced 276,000 ounces. And then now the guidance with the new projections of gold will be two sixty six thousand and three hundred. That’s the bottom of the guidance at the same level of 2024. That’s mostly because we see Apoena, as I mentioned to you, we will have a lower than the average production during this phase of investment while Borborema is coming online and producing mostly in the second semester. But the upper range we also continue to see improvement in our production.

In terms of our in sustaining cash costs, I would highlight that the all in sustaining cash costs, the guidance is above what we performed in 2024, which is not intuitive. We also mentioned that we can our new project that’s coming online has a below average all in sustaining cash costs, but that mostly because in Apoena in which we will go through an investment phase and that investment goes to all in sustaining cash costs, which we will then amortize those investments after we push back the pit and then resume to normal levels of production. If we were not, the impact of Apoena, our guidance would be December to 1353 in line what we performed at ’24 with a possibility also to decrease compared to 2024. Understanding that in Borborema, we will have only part of the second semester in commercial production. In terms of our CapEx, as we could see in 2024, we were the year that we’ve mostly spent building Borborema.

There are remaining expenses, the remaining investments that we already did, but new payments that should be done in the upcoming months for Borborema in 2025. So that we’ll see also a decrease in the CapEx or in the guidance. Yet it’s important to share with you that we’re not including yet here Matupa and other expansion or Bluestone, other investments. Once we are now narrowing down the details of the investments and once we approve any of the new investments, then we will include the CapEx in our projections and then also disclose with the market. As I mentioned to you, Borborema, it’s very much in line with budgets, very much in line with the schedule.

We should be starting the ramp up now in March and then commercial production during the second semester. The economics as this project gets better every day, of course, when the gold prices increase, we increase the NPV. But not only that, but also we continue to have very close conversations with the government authorities to relocate the road, which will be able then to practically double our reserves, but yet only with what we have of reserves as of today at 812,000 ounces. With a gold price of 2,600, this project is already generating $540,000,000 of NPV with gold prices already above the 2,600 and we have strong reasons to believe that the road will be relocated soon so that we can also increase and put all those numbers in our feasibility studies. So with that, I will pass to Kleber that we will go through all the results and then we come back with a Q and A and a brief summary.

Kleber Cardoso, CFO, Aura Minerals: Thanks, Rodrigo. Good morning, everyone. We can go to next page. We start, as usual with a summary of our main financial KPIs, both for the current quarter, the previous few quarters, and accumulated for the last twelve months of each reporting period. On this quarter, we achieved a hundred $72,000,000 in revenues, significant improvement compared to the previous quarter.

That’s main mostly because we are able to keep, the amount of shipments in gold equivalent ounces. And because of the average gold price in the fourth quarter was higher than, on the third quarter. Was both we achieved both a record high, both in the net revenues for the quarter and for the year that we’re closing at $594,000,000 the revenues for 2024. When we move it to the adjusted EBITDA, it’s, was also a part of records. For the second quarter in a row, we achieved our highest quarterly EBITDA ever recorded at $79,000,000 and closed 2024 at $267,000,000.

Moving to the bottom, KPIs on the net income, we’re we’re reporting a profit of $17,000,000 on this fourth quarter, reverting losses that we had in the last previous four quarters, losses which were were mostly associated with, non cash losses related to the gold hedges market to markets. As the gold prices, fortunately increase, since, the end of twenty twenty three. We had those no cash losses throughout the quarter. And in this fourth quarter of twenty twenty four, although the average gold price increased in the quarter, the gold price remains mostly stable between the beginning of the quarter and the end of the quarter. So I’m gonna show more detail.

We even had a noncash gain associated to this. And then in terms of cash and net debt, we see significant increase in our cash position by the end of the quarter. We closed with $270,000,000 in cash. That’s mostly because of the Aura Omas debenture that we showed in October. We issued a billion reais about, close to a hundred and $80,000,000 in the fourth quarter.

A portion of that cash, what it is used to pay other credit lines with shorter duration and higher costs, improving our debt profile, and a portion we remain in cash at the company. Our net debt achieved $188,000,000 by the end of the year, and I’d like to highlight, which is, was a very positive performance. It was our net debt over EBITDA. We see that it has remained stable for the whole year. We closed at 0.7 times despite the fact that in 2024, we’re spending most of the cash to build the Bergwodema project, and it also kept paying dividends and doing share buybacks.

Next page. Yeah. Here we we bring a bridge explaining, the main items between the adjusted EBITDA and net income, and adjusted net income of the quarter. On this quarter, the big star was Almas, which achieved the $31,000,000 EBITDA was our highest EBITDA among all the business units. Again, as Rodrigo said, it’s a big accomplishment considering ’24 was the first year of full operation.

Close behind the Aransas Oeiminoza with a strong performance as well, dollars 25,000,000 million dollars EBITDA. And Apoena, as we go through this transition, had a weaker EBITDA of $6,000,000 in the quarter. When we see amortization depletion at $14,000,000 those expenses came according to our expectations. The financial expenses on this quarter was lower than we saw on the previous quarter was $10,000,000 Again, because we didn’t had market to market losses. We had to go to derivatives in this quarter.

The biggest item below the EBITDA on this quarter was the income tax expenses. We we are recording $40,000,000 in expenses, most of which are deferred taxes, $16,000,000 current income tax expenses and 24 are deferred tax expenses. And most of those deferred tax expenses are what is called the deferred tax offer. No monetary items, which is is is basically an accounting pact with no current or future cash impact, basically following accounting rules every time the the Brazilian Real Mexican pays appreciates or depreciates. We have to record the gain or losses in our P and L.

And, as we all know, the Brazilian Real depreciated significantly throughout the fourth quarter and then created $60,000,000 in noncash losses, in your P and L. With that, we closed the quart with $17,000,000 in net income. And then between the net income and the adjusted net income, we exclude the items that have no cash impact. First, as I mentioned, we had a market to market gains with gold to derivatives, then we exclude it from the net income. The effects, this quarter was smaller than we saw in the past, despite the depreciation of the reais.

It impacts working capital between assets and liabilities. The impact was immaterial, and we bring back those non monetary items of deferred taxes, bringing the adjusted net income to positive $25,000,000 in the quarter. Looking at the same analysis for the year, so for the year, three, Aransas, Minoz, and Almas, all three with consistent and strong performance generating EBITDA, amortization depletion, $62,000,000 expenses, on average, dollars 15,000,000 per quarter, pretty much stable. When we look at the year, the main item below the EBITDA was the financial expenses, 3,000,000. But, yeah, for the year, that is explained with the, more than half of that $80,000,000 is explained by the noncash losses with the gold derivatives.

In the income tax expenses, dollars 82,000,000, about third is deferred. When we look for the year, we have about 50,000,000 income tax expenses as a result of having strong results from our operations, bringing the net income to a loss of $30,000,000 in the year. But doing the same analysis, bringing back the market to market losses of the gold derivatives, the effects that for the year had a bigger impact. And again, the non monetary items on the deferred taxes. We closed the year with $82,000,000 in adjusted net income.

Now moving from P and L analysis to more cash analysis. Here we bring a detailed analysis on the changing our cash position throughout the fourth quarter of the year. Here on the left side, far left side of the page, a bar in red, it’s, our cash position at the beginning of the fourth quarter, a hundred and $96,000,000. Then to this left half side of the page, we have what we should call adjusted free cash flow to firm, which is the free cash flow to firm and denominated by the four minus in production, not including at the investments to grow the company. We see was a strong partner.

We generate $67,000,000 in the mines in production. Here, you might notice there is an item called realized losses with gold hedges. So out of the six to seven, we already we had $5,000,000 realized losses. So when we saw the EBITDA, we excluded no cash impact and here in the cash, we’re including the cash impact. Those $6,000,000 to $7,000,000 more than enough in the quarter to pay for an investment for growth, which consumes $64,000,000 mainly the final phase of construction of Reborama.

And more to the right side of the page, the financial items, the one that’s the biggest one is the net proceeds from debts and loans. Again, it’s, is the cash that was remaining after we issued the the the almost debentures and prepaid some credit lines. Yeah. And, I would highlight as well that in fourth quarter, we returned to our shareholders twenty one million dollars between dividends and share buybacks. And then the same view for the whole year, we see the mine is generating $195,000,000 comfortable more than enough to pay for all the investment for growth that consume a hundred $6,000,000 in this.

Of course, Berbodem is the main item, but also invested it to continue developing carajas and exploration in your business units. And then here to the right side, the same items, proceeds from that also explained by the the AURAM as the Bantry. And also we returned the shareholders fifty six million dollars in the whole year of 2024 between dividends and buybacks and closed the cash at $2.00 $7,000,000 And this week, end our presentation open up to questions. Thank

Conference Moderator, Aura Minerals: If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking on put hand down. Our first question comes from Ricardo Monengaglia with Safra. You can open your microphone.

Ricardo Monengaglia, Analyst, Safra: Hello, everyone. Rodrigo, Calabrio, Natasha, thank you for taking my questions. I have I have three actually if I if I may. The first one, is it too soon to anticipate what will come from the new reserves and resources report, in the end of next month or or the April? It’s my first question.

And if there’s any news on on any area that you’re expecting a license that could add to your reserves. My second question, if possible, I want to get more color on the expansion of CapEx guidance or maybe a clarification. So how much of the figure is represented by the development of NASD phase three? And maybe how much investments coming from us, the phase three as well, could we expect, in 02/1926 since the completion is expected for, the February. Right?

And and my last one on on on MINOSA, You you said that the cash cost guidance, which is higher than the levels of 02/2024, were driven mainly by lower grades, but also by reduced mine movement. So I I wonder if rains come at similar levels to 2,024, where would, Minosa cash costs reach? At what level within the guidance would Minosa cash costs reach if rains are similar to 02/2024? Thank you.

Rodrigo Barbosa, President and CEO, Aura Minerals: Very well. So thank you, Ricardo. Glad you’re here. I will take the first and third question, then Kleber can take the second one. So about the resources reserves, as you mentioned, yes, it’s too soon to anticipate.

We made progress in all our mines except in Minoassa where we are now planning to intensify more exploration, but yet we have not intensified. But all of those information is going to be on the AIF report that should be released by the March. In terms of then increasing reserves in Borborema that depends a lot on the ongoing conversation with the government and authorities, which we expect to be able to move forward and get the initial permits during this semester by until the mid of the year. And we are important to mention that yet we are not including our resource reserves, but we at this moment, the reserves of Bluestone is not in any of our reports that we are analyzing, reassessing. And as we finish this, then we will include on the AIF.

Kleber Cardoso, CFO, Aura Minerals: Okay. I can take the second question on the CapEx, the expansion CapEx. We don’t give detailed guidance on the breakdown on the expansion CapEx, but it can guide you based on information that is already in our MD and A. Out of that expansion CapEx, about half of that should be to complete the Burbotema project. And then the remaining is gonna be both to open NOSI and also to invest in some continued expansions or Carajas.

But most excluding Burberryma, most of that should be to open the NOSI deposits.

Rodrigo Barbosa, President and CEO, Aura Minerals: And the third one about, I mean, not where you would expect the all in sustaining cash costs, it would be slightly if we have the same rainfall as a 02/2024, will be slightly above what we performed in 2024 due to slightly decrease on the grades. But that’s where we should be if we have the same rainfall as 2024.

Ricardo Monengaglia, Analyst, Safra: Excellent. Thank you.

Conference Moderator, Aura Minerals: Our next question comes from Edgigar Pintuges Souza with Itau BBA. You can open your microphone.

Edgigar Pintuges Souza, Analyst, Itau BBA: Hello, everyone. Hello, Rodrigo Klebernatch. Thank you for the questions. It was a great year for for Aura. And we we have been receiving a lot of more questions on the name.

We think that visibility is increasing for the company. So my my first question maybe for you, Rodrigo. We saw this this solid performance over the last few months for Aura and also for gold prices. But the main pushback for investors remain the liquidity. So I wanted to hear from you, what is in your hands to increase liquidity?

Anything on the leasing side, and how do you balance that with the buyback program? That would be great. And my second question on EPP, we know that EPP is the main drag of your operations in 2025, and it will also be in 2026 due to the the the open of the pit there in in NOSGI. I want to understand how should we think about EPP after you reach the the high grade? So how should we think about cost, production, etcetera, in in EPP in 2025 and going forward?

And the the the last question here, we see a lot of small triggers for the company in the short term, the the the release of the reshaping of the Matopa projects, the licensing process of of Bluestone, and also the approval of the roads at Borborema. If you could give any color on any update you have on those three fronts, it would be great. Thank you very much.

Rodrigo Barbosa, President and CEO, Aura Minerals: Okay. Thank you, Greg. Nice to have also you here and glad to hear that investors are paying more and more attention, all of which they should because we are progressing very fast with our long term project. So the first question you made is about liquidity. Yes, I think this is our major point that we are paying attention.

We also receive same feedback. While the story is good, very few companies can do what we can, which is growing, reduce cash cost and pay dividends. But yet the liquidity avoids major shareholders to come in and out at the speed that they would like. So this is a well known issue for us. We are taking initiatives to address share buyback.

I think it’s a small portion and there’s no other there’s no better investment that we can do yet than buying back our shares. But buying back the shares is not what is going to either jeopardize the liquidity or also are safe. I think we need to think broadly and how to address the liquidity. And as you know, we continue to look M and As. We have significant projects that to build on Matupa, perhaps, say, Joplinco.

So we would continue to monitor the market to see if there is any chance to do to put more shares in the market as long as it’s accretive to all the shareholders. I think that would address significantly the liquidity and then also can help narrowing the gap. But to do that, we need to make sure that we will be at the right price and that the investments of the capital use that we’re going to do, it’s on average of our price per NAV. So we don’t have a dilution to our shareholders in the terms of not generating end value. So but we are considering also, which is no news for any, where should we be better located, where should we focus, is Toronto, Brazil, is perhaps New York a place that we should be in The United States or not.

So all those conversations are ongoing because we want to address this. Right? But the challenge we have is that we have excess of cash as of now. So we don’t need to issue new shares. But if we have and we have a good user proceeds, that is something that would really address this problem.

So that was the first question. The second one was

Edgigar Pintuges Souza, Analyst, Itau BBA: On EPP.

Rodrigo Barbosa, President and CEO, Aura Minerals: How’s On EPP. Yeah. On EPP, we will be releasing on the AIF the new mine plan, the new production level that we can achieve after the pushback. But we already performed in average grades in the past. So if you look at what how we performed in 2021, ’20 ’20 ’2, ’20 ’20 ’3, It can give you some guidance in what kind of our in sustaining cash we can perform at the company, but we’ll be running all of those numbers on the long term and disclosing to the market as we finish these projections.

And the last one?

Edgigar Pintuges Souza, Analyst, Itau BBA: If you had any update on the moving of the road in Boroborema, Matupa, when you expect to release the reshaping of the Matupa projects And any news on Sabo Blanco?

Rodrigo Barbosa, President and CEO, Aura Minerals: Matupa, we are I think we have a very and you touched a very interesting point. Matupa is a project that we are finalizing now in terms of understanding the influence of Pezo, Paqueche, Sahin as we still need to advance more that the state of Mato grew also changing the procedures of the environment license, more digitalized, which is good, but during this process has been some of the permits has been delayed and Sahin has been delayed. We are but we are continue to do exploration, but slower speed because we have to access in different areas. But we expect to be more mature in Matupa by mid of this year between second and third quarter. And that would be good because we are also assessing and progressing, understanding how to unlock Cerro Blanco.

We project that it might take several years, but yet we need to really understand how to address the issues. Cerro Blanco has already fully permit for underground. The permit for Open Pit is being challenged by government authorities. There is important discussions that needs also to happen with the communities, but we are assessing this. I’ve already traveled a few times to the country.

We are understanding more and more about the project and then we will have a good sense about when to start construction and the strategy of that also by mid of this year. And then Borrema, I think, will be the same. I think I would say that until mid of the year, we will have a very good view on the strategy to move forward the company in the upcoming years. And I would also invite investors to really pay attention during the semester because we have important milestones that we are achieving. It’s initial ramp up of Borborema, then we can also have this situation of getting the permits to relocate the roads.

There is important assessment that we are doing in Cerro Blanco. So the big picture and the big strategy that we project to Aura has important milestones happening in the upcoming month, plus the AIF with progress in all the assets including also Serra De Estrella.

Edgigar Pintuges Souza, Analyst, Itau BBA: Thank you. Thank you, Rodrigo.

Conference Moderator, Aura Minerals: Our next question comes from Guillermo Nippis with XP (NASDAQ:XP). You can open your microphone.

Guillermo Nippis, Analyst, XP: Good morning, Rodrigo, Clavier and Natasha. Can you hear me?

Rodrigo Barbosa, President and CEO, Aura Minerals: Yes. Loud and clear. Okay.

Guillermo Nippis, Analyst, XP: Yeah. Thank you. So thanks for the opportunity, and congratulations on another great quarter. So I have two questions here. My first one, is for Alma.

So regarding the guidance, we were expecting lower cash costs because considering that the issues that you had, with the contractor during the February. So and the data for q four was close to $700, which compares to the $1,000 in the lower range, of your cost guidance for 02/2025. So, I I would like to hear, if there is any anything specific re regarding this guidance for AMOS for 02/2025? So this is my first question. And just a follow-up on on capital allocation.

So with with the the projects that you have now on your pipeline, it seems like you are going to prioritize, Matopan now rather than than BoostOn. Is that correct? Or if, we can we can see any other, news on on Bluestone by the end of the year so you you would go on this project throughout the the next years? So these are my two questions. Thank you.

Rodrigo Barbosa, President and CEO, Aura Minerals: Thank you, Guilherme. I will let, Kleber to answer the first question of ALMA’s and then I will jump back and answer the blue stone.

Kleber Cardoso, CFO, Aura Minerals: Okay. Sure. Yeah. When we look at the all in sustaining cash cost of ALMA’s, it’s, you’re gonna see it’s stable when compared year to year. So if you take the range, it’s very similar to what Thomas, produced, in 2024.

So there is no increase, of course. If you compare it to to the fourth quarter, there is an increase, but fourth quarter was exceptionally high. You know? We always say that we we need to be careful analyzing just one quarter results. So when you take the full year that we had some problems in the the the beginning of the year as well, but then we had exception exceptional performance in the second half.

In the fourth quarter, specifically, due to minor sequencing, we were able to reduce significantly the strip ratio. So I would I would I would say it’s stable when you look year after year. Also, there is no no increase in when you see in terms of inflation. It it it is being yeah. It’s being basically stable, we see, the cash costs.

Rodrigo Barbosa, President and CEO, Aura Minerals: So for, Cerro Blanc, which Bluestone has two projects, one gel terminal project that can produce up to 50 megawatts and Cerro Blanc, which is the gold mine. It’s not that we are preferring in terms of capital location, Amatopa, it’s just that we need time to assess when would be we would be able to build Cerro Blanco. Cerro Blanco is a much bigger project and higher grades. So we are of course, we are updating feasibility studies, we are updating the CapEx, but it’s intuitive to think that Cerro Blanco has a significant higher return compared to Matopas. So if both are fully available to start construction, we probably would prefer Cerro Blanco, but we need to assess, we need to do a lot of social work and to understand when that would be clear to start construction.

So if we see that, say, Jobelanco might take a few years to start construction, then we would start the construction of Matupa First and then sequence Sejoroblenko right after. And again, in between and along the next years, it’s still part of our plan to continue to pursue M and As.

Guillermo Nippis, Analyst, XP: Very clear. Thank you.

Conference Moderator, Aura Minerals: Our next question comes from Marcelo Arasi with BTG. You can open your microphone.

Marcelo Arasi, Analyst, BTG: Hey, guys. I have two questions on my side as well. I was wondering if you could share your thoughts on the strong growth performance we are seeing. Do you believe these price levels are sustaining sustainable in the, in the long term? And my second question, regarding capital allocation as well, and given out a slow leverage and solid cash position, should we expect any, additional dividend distribution or or eventually any any form of project or share buyback acceleration?

Thank you.

Rodrigo Barbosa, President and CEO, Aura Minerals: Okay. On the On the dividend, I think we are paying above what we expected. What is 20% what the guidance is 20% of EBITDA and recurring CapEx, we’ve been paying more than this. And we should continue to pay this according at least to the guidance. Every time that we feel we have excess of cash, we will pay more.

So if we see the company performing above expectations and that forecasting that we will have excess of cash, then we might consider some extraordinary dividends as well or even above what we’ve been paying as a normal level. In terms of gold prices, I think it’s been interesting to see what is happening and more and more I think gold has been discussed in different investors, not anymore, only investors that are looking for hard assets, but a lot of diversified investors are now including gold or gold companies in their portfolio. There is a big I think there’s a big movement that is happening in the world, which is central banks is being a long longer while that is being buying a lot of gold. China, of course, is the largest producer of gold, the largest importer of gold. They do not disclose exactly what they are buying and how much they are putting in their reserves.

We see also a movement very interesting and that I think there’s no yet a conclusion what why. There’s some clues why this has happened, but I would invite all investors. This is a major physical gold movement around the world, unprecedented, right? So a lot of gold that is coming from going out of the vaults in London, going to United States, going to China. And that might be related to eventual tariff that Trump might put on import goals, which I don’t believe that will happen, but some investors want to anticipate to that.

But that might be also another reasons, right? You see more and more the Trump economists talk about gold, the importance of gold, putting more reliability on the finance. You see now the Trump administration trying to audit the gold reserves. Trump just mentioned that he would go with Elon Musk on the votes, for nots and other ones to to audit the gold. So there’s interesting movement happening around the the gold that can even push higher prices to go there as it is today.

So what is happening in the world is what we also were discussing along the last years is a debasement of the fiat currency, dollar and all the other currencies. Gold is all time high for in all perpetual currencies and people understanding that gold does have intrinsic value more than any currency because the world has kind of got addicted to printing money. That started with the pandemic, but nobody stopped. So you see United States with record high deficits having to print more money. You see Europe also with deficit having to print more money and gold is a hedge for everybody that wants to escape from excess of printing money, which is a devaluation of the currency.

So what will happen, it’s not gold is appreciated, but the currencies are devaluated for excess of printing. And if you think that it’s going to stop very soon, then maybe gold will be in the same price as of today or even decrease. But if you see that the situation can continue, we’ll see gold continue to appreciate compared to other currencies.

Marcelo Arasi, Analyst, BTG: Very clear. Thank you, guys.

Conference Moderator, Aura Minerals: Our next question comes from Ricardo Monengaglia with Safra.

Ricardo Monengaglia, Analyst, Safra: Hello, guys. Me again. Just a follow-up. So, Rodrigo, I wonder if you maybe could give us, your perception of auto price to NAV and how that compares with comparable peers? Because I imagine that even with the strong share performance, Aurora’s valuation continues discounted.

So it would be great to have a sense of that gap to comparable peers. Thank you.

Rodrigo Barbosa, President and CEO, Aura Minerals: Thank you, Ricardo. Yes, it’s frustrating for us to see that we are still discounted compared to our peers and that we should change the peers in the future. But if the Bloomberg and some the reports of analysts says that we are close to 0.5 times NAV, not including in our NAV, the NAV for Cebuenco, which is a major. I’m talking about a multimillion ounces project with high grade, so that will translate in a high also NAV. So we are around now 0.5 as of the information that we have received from the market.

NAV not including in the NAV the Sejor Blanca project, which should be included anytime during this year. I think the main reason that we are now at this situation as it was well asked before is our daily trading volume. Major investors cannot, they like the story. We meet with them. They say, well, put this daily trading volume double or triple this and then come back.

We like the story, we would like to invest in the company, but if we don’t have a speed in or out, we can’t invest, which makes a super good opportunity for those investors that can get in and out our shares because as we continue to grow, as we believe that we can build Borborema now put online on time on budget, that we will build Matopad, that we will build, say, Joplinco, we will increase daily trade environment, we will narrow a lot of the gap. On average, the companies that can be similar to us, I would say that is now at 0.6, 0 point 6 5 price per NAV. But those, if we go beyond 600,000, seven hundred thousand ounces, then we get close to 0.8 to 0.9 NAV and above 1,000,001 time or even more one more time NAV. So that’s kind of the range of the market. We will fight furiously to narrow this gap, but not only this, to change the peers.

And we have projects to change the peers. With Matupa and then Apoenaca recovering after this investment phase and improvements we are doing now in Almas, we will reach 450,000 ounce of gold equivalent production per year, not including Cerro Blanco. Cerro Blanco as an underground can produce close to 150,000 ounces as an open pit close to two fifty thousand ounces, 300,000 ounces. So we have projects that if delivered and built, it’s already putting Aura at 600,000 ounces, 700,000 ounces and we continue to do monitor the market for M and A. So I believe that the following years we will not only narrow the gap compared to our peers, but we will change the peers and access significant higher price per NAV compared to what we are today.

Ricardo Monengaglia, Analyst, Safra: Great. Thank you, Rodrigo.

Conference Moderator, Aura Minerals: The Q and A section is over. We would like to hand the floor back to mister Rodrigo Barbosa for the company’s final remarks.

Rodrigo Barbosa, President and CEO, Aura Minerals: Well, thank you all for participating. It was a extraordinary year for us. Just a quick reminder, record high production, record high revenues, record high EBITDA, record high cash generation in the year that we made a good progress in Almas, stabilized and proved that Almas is a super interesting project. We built Borborema. We made an acquisition of, Asejo Blanco.

We are advancing exploration. We paid all of these paying world highest dividend yield in the world for the gold industry. All of these with benchmark, with safety, all of this setting out a benchmark how to build new mines. Almas was an example and ramp up as well. Borobodaema very much also in line on time, very short term to build it to start ramp up.

So, Borob continue to perform well, as I mentioned to you and then we were discussing here. Still discounted compared to our peers, projects that will even take us to change their peers. Of course, we have a lot of work to do. We have to address daily trading volume. We have to address the projects and deliver them on time, on budget.

We have to continue exploration, expand our resource and reserves, but there are many things that’s happening very soon that can free us to start narrowing this gap of our price per NAV. And gold prices continue to be important. I would invite investors to do a quick mathematics. Last year, dollars $267,000,000 of EBITDA. Now with 270,000 gold equivalent production, now gold prices are already 500 above what we performed last year.

So that would add only for this $130,000,000 of EBITDA not included what’s coming from Borborema and then later from other projects. So we are very much doing record high results and we should continue to break record high results along the next years. So I thank you all. We will work hard to continue to deliver the project on time, to continue to deliver stable operations and also to address the daily trading volume, which for those that can enter in and out again very fast, it’s a very good window and opportunity because once we address those issues, the gap of NAV will be narrow. So thank you all and see you on the next part.

Conference Moderator, Aura Minerals: Thank you. Ara’s conference is now closed. We thank you for your participation and wish you a nice day.

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