Aris Mining Corporation (ARIS) Q4 2025 Earnings Report, Transcript and Summary

Good morning, everyone, and welcome to the Aris Mining Fourth Quarter and Full Year 2025 Earnings Call. We will begin with an overview from management. [Operator Instructions] The conference is being recorded. [Operator Instructions] 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 aris-mining.com. Also, Aris Mining's fourth quarter 2025 financials have been filed on SEDAR+ and EDGAR and can also be found on their website. I would now like to turn the conference over to Mr. Neil Woodyer, Chief Executive Officer. Please go ahead.

Thank you, operator, and welcome to our Q4 and full year 2025 earnings call. Joining me today are Doug Bowlby, Oliver Dachsel, Cam Paterson, Dustin VanDoorselaere, Corne Lourens 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. Secondly, Corne Lourens, SVP, Projects, has worked with me for decades, including Endeavour Mining and Avnel Gold. He now leads our expansion and growth projects in Colombia and Guyana. Dustin and Corne bring complementary expertise as mining engineer and metallurgists and are working closely together across our operations and project portfolio. Before we begin, please note the forward-looking statement disclaimer on Slide 2. Looking now at Slide 3. 2025 was a pivotal year for Aris Mining. Gold production increased 22% year-over-year and gold prices increased 48%, resulting in $909 million gold revenue, up 82%. $464 million adjusted EBITDA, up 185%; $241 million adjusted net earnings, $1.28 per share, up 265% Importantly, we transitioned to generating free cash flow while continuing to invest in growth. Operations generated $322 million of cash flow after sustaining capital and taxes, fully funding our growth initiatives and $127 million 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. Marmato Gold mining zone development ahead of schedule with the new CIP plant on track for its first gold pour in Q4 of this year. Toroparu pre-feasibility study targeted for H2 of this year and Soto Norte environment license application is planned for Q2 of this year. Turning to Slide 4. We delivered on 2025 guidance, producing 257,000 ounces of gold, above the midpoint of guidance. Segovia production increased 21% year-over-year. Marmato delivered steady performance and exceeded guidance. Segovia owned mining all-in sustaining cost $1,534 per ounce, up just 3% year-over-year. CMP source gold all-in sustaining margin, 44%, above our 35% to 40% guidance range. Turning to Slide 5. 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 Marmato are fully ramped up, we expect 500,000 ounces of annual production. At 4,400 gold, Segovia is expected to generate $650 million in all-in sustaining margin this year. Marmato 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 6. 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 $909 million, up 82% from $499 million in 2024, driven by higher realized gold prices and increased sales volumes. Adjusted EBITDA after normalizing for noncash and nonrecurring items of $464 million compared to $163 million in 2024. The 185% increase demonstrates the substantial leverage to higher gold prices, adjusted net earnings of $241 million or $1.28 per share, up from the $56 million 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 million, up from the $252 million at the end of 2024, further enhancing our strong liquidity position. Please turn to Slide 7 for a discussion of the key cash flow drivers. As Neil mentioned in his initial remarks, we transitioned to generating free cash flow in 2025 after our significant investments in growth. For the full year, we generated $127 million of free cash flow, which reflects $322 million of operating cash flow after sustaining capital and income taxes, which was partially offset by $196 million invested in growth capital, which included $128 million at Marmato 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 million at Segovia for underground mine development, completion of the mill expansion, new equipment to support the ramp-up and other activities and $17 million at Soto Norte and $12 million at Toroparu for the technical studies delivered last year and other site-specific expenditures. In addition to free cash flow generation of $127 million, our cash position was further increased by $150 million of proceeds from the exercise of warrants, which expired in July last year, and $13 million of proceeds from the sale of the Juby Gold Project. This was partially offset by $77 million of debt service and repayment and $60 million in cash used for our acquisition of the remaining 49% interest in Soto Norte in Q4 of 2025. 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 to generate robust cash flows to organically fund all growth initiatives. I'd now like to hand the call over to Dustin to discuss our operating results.

Thank you, Cam. Turning to Slide 8. 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 Marmato. 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%. Segovia's strong operating performance in 2025 in conjunction with materially higher realized gold prices throughout the year delivered strong financial results. Segovia's AISC margin totaled $421 million, up 158% compared to 2024. Owner mining contributed $281 million or 67%, while our CMP business contributed $140 million, delivering an AISC 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 AISC margin expansion at Segovia. In Q4, Segovia generated an AISC margin of $2,346 an ounce compared to $1,157 an ounce a year ago. Moving to Slide 9. Segovia produced 63,137 ounces of gold in Q4, approximately 4% lower than Q3 due to unscheduled maintenance in November. We experienced 6.5 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. Our owner mining AISC averaged $1,534 an ounce for the full year, up 3% from $1,486 per ounce in 2024, demonstrating solid cost control. Segovia's total AISC comprised of owner mining and our CMP business was $1,705 per ounce in 2025, up 13% from $1,507 an ounce in 2024. This increase was 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. 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 3 of Segovia's 4 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 Corne 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. 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 2026. The new decline will significantly improve access and haulage efficiencies, enabling higher mining rates and lower cost as processing capacity expands. 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 this 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 haulage between existing and new infrastructure and support the initial production ramp-up. We're also building a 10,000-tonne mill feed storage facility at the intersection of main decline and crosscut, which enhances operational flexibility as it provides 2 days of mill feed at our run rate of 5,000 tonnes per day. On surface, the main civil, mechanical and electrical works are advancing with foundations for the mills, tailings thickener 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 [indiscernible] to Marmato site starting May. Subsequent to December 31, 2025, the company received the $40 million installment deposit under its precious metals stream financing following achievement of the 50% completion milestone. The proceeds will be recognized in the first quarter of 2026. The remaining $42 million installment deposit is payable upon 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 2026, 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. Production is expected to increase through 2027 with throughput increasing approximately 4,000 tonnes per day by mid-2027 and reaching the full 5,000 tonnes per day design capacity by the end of 2027 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 2.8 million work hours have been completed to date. 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 uplisted our common shares from the NYSE American to the main board of the New York Stock Exchange. At the same time, we changed our U.S. ticker symbol to ARIS, aligning it with our ticker symbol in Canada. We believe this move to the NYSE is an important step in the company's evolution, enhancing our visibility among U.S. 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 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. Our strong operational and financial performance has increased our adjusted EBITDA to USD 464 million in 2025. As a result, total leverage has decreased further to 1x, which is 2 turns lower compared to Q4 2024. As Cam mentioned, we ended 2025 with a cash balance of $392 million, bringing our net debt to $86 million. With strong liquidity, low and decreasing financial leverage, no meaningful debt maturities until October 2029 and stable credit ratings at B1 / B+ / B+. Our balance sheet is in excellent shape to support our growth strategy. 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 Marmato expansion. We published major technical studies for Soto Norte and Toroparu. We acquired the remaining 49% of Soto Norte for $80 million. We reached an amicable arbitration settlement with the Colombian government, the first time the Colombian government has achieved an arbitration settlement. With 100% ownership of Segovia, Marmato, Toroparu and Soto 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 Toroparu and Soto Norte create a pathway to 1 million ounces per year. Fewer than 15 mining companies globally produce more than 1 million 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?

[Operator Instructions] The first question comes from Carey MacRury with Canaccord Genuity.

Congrats on a great 2025. Maybe just starting with Segovia. We're almost through the first quarter here. Can you just give a bit of color on how the ramp-up is going, how we should be thinking about throughput in Q1?

Carey, the 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 tonnes a day in 2025 on different occasions. Our bottleneck is mine production, which is really dependent on underground development. So as I mentioned, we're working on the haulage drifts underground, pushing them to connect the 3 main mines, Silencio, Providencia, and Sandra K and then also working on service ramps in both Silencio and Providencia, which will take the limit of 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. Is -- should we expect that to continue in the short term? Or are there reasons that might come down?

Look, our guidance this year, we're going to run about 35% contractor mining as a total 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 looking 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 for Marmato and some of the other projects? I know you're talking about moving forward with some work at Toroparu. Just any guidance on capital would be helpful.

So Carey, if I understand correctly, estimated cost to complete for Marmato.

Correct.

So just to give you a background, the total spend up to end of 2025 is approximately $180 million since construction started. Our current 2026 budget is about $220 million, and that implies a total cost -- project cost of roughly $400 million. The increase of $35 million from the March 2025 estimate of $365 million includes and it reflects an expanded preproduction mainly underground, where we include the Los Indios 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. 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 a $12 million 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 2026.

And any other growth capital at the other projects?

For Toroparu?

Both.

That remains as per the Soto Norte PFS, it's similar CapEx. There's no change there. And in Toroparu, with the Toroparu PEA, we're looking at $820 million in the PEA. And we're advancing well with the current PFS study to be completed Q3 2026, and it's tracking well in terms of CapEx.

The next question comes from Don DeMarco with National Bank Financial.

I'd just like to follow up on the last question. I didn't quite catch how much CapEx is remaining to finish the Marmato development through the end of the year. Wondering if you could just repeat that. Just how much CapEx is left to spend? I know the budget was $290 million as at March 1 last year, netting out what's been spent so far. Just wondering how much is left?

Sure. Doug Bowlby speaking. Yes, the budget amount for this year is $220 million, as Corne was mentioning. And so when we add that to the $180 million that was already spent, that got us to the grand total of $400 million from Marmato, but it's $220 million is the total capital budget for 2026.

Excellent. Okay. And so the -- we see that it's laid out the trajectory of the increasing throughput in the CIP plant. 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.

I would now like to turn the conference back over to Mr. Woodyer for any closing remarks.

Well, thank 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.