Mineros Targets Early 2027 Porvenir Decision, Adds Gold to Balance Sheet

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0:28Department of State. years. Moneros has been selected as a top performer on the TSX. The company is now looking ahead to its poor veneer expansion in Nicaragua, a new project in Chile, and it's even starting to build up gold on its own balance sheet. Daniel now is president and CEO of Moneros. Daniel, welcome to Money Stock Daily. Thank you. Thank you, Michael. It's a real pleasure to be here with you today to share what we're building in this platform with your audience. Although we are 50 plus year old gold producer, most investors, particularly in North America and in Europe, are hearing about Mineros for the first time.

1:12So thank you for providing this platform to share what we're building, the transformation that this company is going through. And yeah, looking forward to share our strategy. Let's start with an introduction first. You have operations in Nicaragua, Chile, but I believe headquartered in Colombia. Talk about the current operations that you have right now and where you're getting that gold from. Perfect. Yes, we are a Latin American gold producer. We operate in Nicaragua, in Central America, in Colombia, But we also acquired an asset in Chile late last year. And most recently, we acquired a remarkable 28 million ounce gold deposit in Colombia as well, which now is part of our exciting pipeline of growth opportunities.

2:06So Latin American producer, we've been producing gold for a long time, 50 plus years of operational performance, paying dividends for several decades. But now adding buybacks and a lot of operational improvements to this platform, unlocking a lot of value for the benefit of our shareholders. So as you mentioned, great share price performance since Sun Valley Investments started investing in Mineros. Share price has gone up from about 56 cents or so to about$8 Canadian these days. despite that share price performance because the business has been performing so well and so much value is being unlocked, we're still one of the cheapest gold producers out there from a peanut point of view and from pretty much most metrics we compare remarkably well with our peers.

3:08We're trading at about 0.5 times price to NAV while our peers are trading Junior producers are trading at about 0.8 and 1 times net asset value. And there's a ton of net asset value that we don't yet have officially as part of our NAF, including about 30 million ounces of these assets that we've recently acquired that don't yet have economic studies, but are further catalysts for growth. So a lot of things happening at Mineros, profitable operations for decades, growing operations, a lot of values being unlocked for the benefit of shareholders. Let's talk about some of that growth and let's talk about Nicaragua.

3:57Now you're building Povenir. The plan is for early 2027. That's going to be a standalone underground operation with its own processing plant. You did put on your site that the plant is going to have an after-tax NPV at 5 % of$460 million, IRR of 37.9 % in a two-year payback, CAPEX at about$206 million. Talk about now you're looking at the decision to go ahead in early 2027. What work do you have to do right now before you get to that decision? Great. Thanks, Michael. Yes. So all those very positive numbers that you were just mentioning, 38 percent IRR and like, you know, 200 million dollar capex were done at 3150 gold price.

4:54So the asset is certainly a very interesting growth opportunity for Minero. So it's a PFS stage, but in many ways it's way more advanced than that. We've been working all this year doing gap analysis with major engineering firms, doing detail engineering already, working on the permitting. So the project already is permitted for the mine, for the plant, for the tailings facility. We're waiting for two relatively minor permits, forestry and water disposal permits, for the project to be fully permitted. And that would be the major catalyst for that construction decision. We would love to take that construction decision as soon as possible because the project is just looking very attractive.

5:44It's immediately southwest of our two producing mines, Port Vanilla and Panama. and it's got a lot of growth opportunities. Michael, we're seeing, we're taking, you know, this as a phase one type development, but we're already thinking in phase two because beyond the current resource envelope, which is about a million ounces, including 200 ,000 ounces of M &I resources, we're seeing a lot of exploration upside. Some of that upside already has resources in place beyond those million ounces. So it's going to be a 2 ,000 tons per day type processing infrastructure that can double in capacity to support a higher production profile.

6:32So exciting growth opportunity immediately southwest of our two producing mines in Nicaragua that we would love to start building as soon as we get all permits. So, you know, it's in the Gantt chart schedule for Q1 or Q2 next year. But as soon as possible is the answer. We're building the team. We're starting to do some early works on site, just preparing for construction because it's certainly an exciting project in terms of growth for this company. Do you have an estimate in terms of when the construction decision is made? How long until first pour? Yeah, so I would say, I mean, it's sort of like not in our control.

7:26We've been told by the government that we should expect final permits by the end of the year. Oh, sorry, no, outside of the permits, I was meaning when you make a construction decision, like how long would it take to build the mine until it's operational? Yeah, okay, thank you. So two years, it's going to take us to build a mine and then rump up. But that's why we're starting to do some early works, preparing everything on site. So we try to shorten that. But yes, it's going to take around two years to be operational there. let's turn to the other opportunity talking about Chile La Pepe is often mentioned alongside your path you're talking about 500 ,000 ounces by 2030 can you bring us up to date on that right now like where you have in terms of drilling permitting in terms of also getting your paperwork like feasibility studies yes so we acquired these acids from Pan American silver very late last year.

8:32It's an exciting fair jurisdiction for us. We're surrounded by producing mines. Companies like King Ross, like Goldfields are operating around us. And we're seeing nice development projects like Rio 2 building the Fenix Gold Deposit immediately north to us. So great neighborhood in general. and we're starting with a good base, two and a half million ounces in resources. But it's got a lot of exploration upside as well, Michael, to the north and to the south. We have Adli and Amalus ground. So the exploration teams are busy prospecting what we have already there. But at the same time, we would love to take this to production.

9:23So we're working on a preliminary economic assessment to be released hopefully in the first half next year to start putting together what a mine would look like, starting with this 2.5 million ounce resource that we have already, but preparing also for growth. We know that this asset has potential, but it doesn't make sense to continue working on exploration. In exploration, we would love to have an exploration approach, but at the same time, a heavily engineering and permitting approach, taking advantage also of a very positive political environment in Chile right now. So I think hopefully within five years or so, we could have a project that will be ready to build.

10:19One interesting aspect of the business is that you have what you're calling the Bonanza model. that's where you're working hand in hand with artisanal cooperatives. Talk about how that relationship came about and what is the business plan there? Yeah, for sure. So it's a great business model. It's basically just for the audience to understand. It's a royalty-like or a stream-like instrument. We get to buy the production from our partners at about a 55 % discount to spot, to gold price. So it's a great financial business, and it gives us a great social license as well. These are miners that operate within our concessions.

11:11They don't have any conflict with our own mining operations that happen underground, at that. But these are guys that are operating sort of like in the first 30 meters of our portfolio. And they deliver very significant amounts of mineral. It's a great business overall. The community is thriving. It's one of those few examples of coexistence with local miners and a company operating together. They're unlocking a lot of value for them, for us. The government is also very happy because they see the community advancing. But that was sort of like the focus of the previous version of Mineros. This company was owned mostly by banking families.

12:01They understood very well that side of the business. It's a stream on a lot of minerals. So who doesn't like that? But it was coming also at a big cost to our own mining operations because the whole asset was constrained by processing capacity. So the company was in a situation where it was telling its own mining operations, guys, your goal next year is to produce less gold, less mineral. And that makes no sense in our view. So what we're doing to solve that problem is that we're expanding processing capacity this year by 40%. It's already happening. We're going from 1 ,750 tons per day to 2 ,500 tons per day by the end of the year.

12:47We're at around 2 ,200, 2 ,300 tons per day today. And so unlocking a lot of value, very simple bottleneck to solve. I mean, sure, it's an engineering project, and there's nothing really, really simple in our industry, but it's a problem that can be solved and it can be solved with relatively low capex. We're at the point of about$25 million to add 40 % processing capacity to our plant. So that's unlocking a lot of value. That's why we had to revise our production guidance for this year, increasing it to 240 ,000 ounces as the operand of the guidance because we were going way beyond the operand of our previous guidance.

13:33We have produced in the first half of this year 122 gold equivalent ounces, and the upper end of our current guidance is 240 ,000 ounces. The biggest contributor to that increased throughput is this expanded processing capacity, but there are many other initiatives that are unlocking significant value for our shareholders, improving recoveries for gold, improving recoveries for silver. Silver was just simply flowing through the process, And it was then being wasted in our tailings of facilities because it was just too much of a comfortable situation before. As soon as we saw that, we started putting effort into recovering the silver.

14:15And now, H1, 2026, we had almost 500 % more silver revenues compared to the same half the year before. So very significant operational improvements happening, particularly right now in our Nicaragua platform. Nicaragua, short term, is the focus. That's where we've seen most of the immediate operational gains, what we call the quick ounces initiatives. Those are the extra ounces that we can produce next week, next month, this year. And that's delivering great returns for our shareholders. So that financial performance is underpinned certainly by operational performance. In your last financial statement, you're talking that you're adding physical gold and gold-backed receivables to your balance sheet by the move.

15:08yes so it's look as as mining companies and gold mining company ceos we're always like talking how you know good and constructive we see the environment for the mantle that we produce but the first thing we do when we produce our gold is go and change it for paper um which is something that we like fundamentally disagree with we're in a such a constructive situation right now operationally that we don't have to sell all the gold that we produce. We can keep part of that gold and provide that extra exposure to our shareholders that invest in Mineros because they want to have exposure to the metal.

15:50So we see that as a very logical step. It's a step, we think, in the right direction for sure, but it has created significant noise were doing something relatively unusual. Very few mining companies do that. But if more gold mining companies had done that, they would have created a lot of value. Think of a new one having such a massive cash position in their balance sheet. If they had kept some of that in form of gold, we're talking hundreds and hundreds of millions of dollars of extra value that could have been created for shareholders. So all banks, all major banks at least, have a very constructive view on gold.

16:35We were aligned with that view. We are not necessarily worried about the short-term noise that this can create. We're really focused on the long-term value that this can unlock. So we're building that Boolean position because we don't have the necessity to sell all the gold that we're producing. We're selling the gold that we need to sell, and we have a healthy cash situation. But at the same time, we're going to have a bullion position as gold sitting in both in the U.S. and Switzerland. And it's providing that extra exposure, is protecting us against inflation, is liquidity that we can tap for the right opportunity.

17:16So we're very happy with what we've done. We knew that it would create a certain noise because simply the system is not prepared for that. So when you look at free cash flow generation, that's an accounting metric and it's not prepared for Boolean generation, which we think it's actually better than gold, better than cash, but it's simply not a metric. So we have to pioneer metrics that take into account our boolean position, not just the pre-cash flow that we're generating, but the goal that we're generating and explaining that to the market that, yes, this is novel, but we are convinced that it's the right decision.

18:04So, yeah, we think it makes sense. We expect more mining companies to follow. and so far it's been paying to have that strategy. So it's a long-term one, it's not a short-term one. Lastly, Daniel, I have to ask, you are building a lot of projects right now. You did mention your new leadership group with a 50-plus-year-old company. What are you kind of seeing right now that is kind of most impactful to operations? Don't you take it anywhere? Is there concerns about labor or input costs? Because you are working towards the projects in Nicaragua as well as in Chile. Is there also any other trends that you're seeing regarding automation, electrification, air, which are kind of larger industry trends kind of worldwide right now?

19:04So I would say, overall, the biggest constraint that we've been facing in terms of growth is actually finding creative deals, Michael. And our industry historically has destroyed a lot of value doing non-creative M &A and going nuts when gold prices are high. So we're staying very disciplined when it comes to underwriting for acquisitions, adding new assets. And we're seeing already transactions that don't underwrite well to us and all the companies are doing those sort of deals. It's fine. The reality is that we're staying busy, as you pointed out, we have a lot of organic growth opportunities.

19:52So the Nicaragua platform is growing on its own. We're adding assets like Port Venir, Colombia. The Colombia platform has like 2.3 million ounces in resources, 1.3 million ounces in reserves and an extra million ounces in resources. And it's all at surface. So having such a long life of mine makes no sense. So we're working on a growth strategy for our Colombian platform as well. But then we have Chile. We have this Tolima asset that is remarkable. So we're staying busy. We have the team. and we're bucking up that team to be able to deliver on these growth opportunities. A big, big challenge is finding a creative, inorganic opportunity right now in such a competitive environment.

20:46And then from automation, AI, all of that, it's just very, very exciting times. In our industry and broadly, like in the world, A lot of value can be unlocked using these technologies. It goes beyond giving cloud to your employees, your teams. We're taking that very seriously, creating digital twins for processing infrastructure to save on power, for example, or optimize the throughput. Those are things, that's where we're seeing the biggest operational gains, not necessarily where the news are coming from in terms of getting rid of people and stuff like that. We're seeing more gains, like operationally speaking, like saving power, increasing productivity, but then starting also to invest in research, trying to solve the bigger questions in our industry.

21:55And we're taking that very seriously. Our vice chairman and our major shareholder, Vikram Soti, for example, just funded the Vikram Soti Center of Excellence for AI in the Indian Institute of Technology of Kharapur, IITK. that to give you some context that's like the MIT of India that's where guys like Sundar Pichar the CEO of Google went to uni and they are we are pioneering with them this research center for AI enabled geological and mining systems trying to solve the bigger questions in our industry and it's just very exciting times to be able to add those assets, those capabilities to our industry that is, generally speaking, slow-moving, and we're not in front there taking advantage of the most innovative solutions in the world.

23:05So that's what we're trying to do with this AI project with IITK. It's a project that was funded by VEC for the next five years. We'll be trying to solve some of the biggest questions in our industry. We tend to work as silos. So connecting geology with geophysics, with mining engineering, metallurgy, data science, connecting all those silos with AI and proper data science could unlock a lot of value for shareholders and broadly for industry. So exciting times overall in the space. Daniel, congratulations on the run-up and thank you for speaking with Mining Stock Daily. Pleasure. Always a pleasure, Michael.

23:56Thanks for providing this platform. It's great to be here and share what we're building. We're certainly very excited about it. We think there's a lot of value that we can unlock here. We've been doing that. Sure, price is reflecting that, but there's still a lot of work ahead of us. And I hope this is just the first one and we can continue communicating what we're doing through you. So thanks a lot for this opportunity, Michael.

24:23Daniel Henao: The information presented should not be considered investment advice. Mining Stock Daily and its affiliates are not responsible for any loss arising from any investment decision. in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.