Andean Precious Metals Signals Stronger Growth Path

Andean Precious Metals Corp ((TSE:APM)) has held its Q1 earnings call. Read on for the main highlights of the call.

Andean Precious Metals delivered a notably upbeat earnings call, highlighting record revenue, strong profitability and solid free cash flow. Management emphasized robust performance at San Bartolomé, disciplined costs at Golden Queen and a balance sheet that supports both growth and resilience, while acknowledging timing risks around CapEx and exposure to volatile silver prices.

Record Revenue and Profitability Surge

Andean reported record Q1 2026 revenue of $163.1 million, up about 163% year over year, underscoring a sharp step‑up in scale. Adjusted EBITDA reached roughly $71 million and net income came in at about $48.2 million, or $0.32 per diluted share, marking one of the company’s most profitable quarters to date.

Free Cash Flow Power and Ample Liquidity

The company generated around $40 million in free cash flow in the first quarter, reinforcing its ability to fund growth internally. Andean ended Q1 with more than $204 million in liquid assets, including about $115 million in cash and $90 million in marketable securities, providing flexibility for investment and potential M&A.

Consolidated Production Momentum

Consolidated production increased roughly 28% versus Q1 2025, highlighting operational momentum across the portfolio. Output also improved sequentially compared with Q4 2025, pointing to a positive trajectory as both core assets ramp up.

San Bartolomé Drives Margin Expansion

San Bartolomé delivered about 15,847 gold‑equivalent ounces in Q1, including roughly 1.23 million ounces of silver, representing strong double‑digit growth. Average daily throughput rose to about 4,500 tonnes per day and head grades increased around 28% year over year, pushing cash gross operating margin above $36 per silver‑equivalent ounce and gross margin above 45%.

Golden Queen Output and Cost Discipline

Golden Queen produced about 11,500 gold‑equivalent ounces, or roughly 10,600 ounces of gold, and generated around $55 million of revenue on higher realized gold prices. Operating cash cost was approximately $1,596 per ounce sold and all‑in sustaining cost about $1,859 per ounce, with management noting operations tracked expectations and delivered strong cash flow.

Sharp Financial Improvement Versus Last Year

Gross operating income climbed to roughly $75.6 million from about $23 million in Q1 2025, underscoring substantial year‑over‑year improvement. Finance costs declined modestly due to lower use of the revolving credit facility, while long‑term bank debt remained stable at around $39 million, leaving leverage contained.

Strategy, NYSE Listing Plan and Growth Initiatives

Management outlined a growth agenda that includes a planned NYSE listing by late September and a completed non‑dilutive secondary by PMB Partners to boost trading float. The company also named Victor Flores as SVP of Exploration, Operations and Growth, advanced a roughly 10,000‑meter Phase 1 drill program toward mid‑June completion and targeted an updated Golden Queen technical report by the end of the third quarter.

Second‑Half‑Weighted Production and Cash Flow

Andean reiterated that 2026 production and cash flow will be weighted toward the back half of the year, with about 45% of output in the first half and 55% in the second. This skew means early‑year results, despite a strong Q1, may not fully reflect the expected annual run‑rate, which could influence quarter‑to‑quarter comparisons.

CapEx Timing and Spending Ramp

Sustaining and growth CapEx came in lower than expected in Q1, largely due to timing rather than project cancellations or deferrals. Management reaffirmed full‑year CapEx guidance but cautioned that spending will ramp later in 2026, particularly at Golden Queen for leach pad expansion, fleet investment and optimization work, affecting near‑term cash deployment.

Heightened Exposure to Silver Price Swings

Roughly 64% of Q1 revenue came from silver, amplifying the benefit of recent price strength but increasing sensitivity to future price moves. The company noted that ore purchase costs also rose with silver prices, although realized prices outpaced cost inflation in the quarter, supporting margins.

Golden Queen Costs at Low End, With Caveats

Management highlighted that Golden Queen’s AISC landed at the lower end of guidance in Q1, but said this was helped by temporarily lower sustaining CapEx. As capital spending at the mine rises later in the year, AISC is expected to move higher, reminding investors that current cost levels may not be fully representative.

No Direct Cash from Secondary Offering

The non‑dilutive secondary offering by PMB Partners was framed as a liquidity and float enhancement for the TSX listing rather than a capital‑raising event. Andean did not receive cash proceeds from the sale, meaning the balance sheet’s strength stems from operations and existing resources, not new equity capital.

Guidance and Outlook Remain Intact

Management reaffirmed full‑year 2026 guidance on production, costs and margins, pointing to Q1’s record revenue and robust cash generation as a strong start. They reiterated expectations for higher CapEx later in the year, stable tax expense patterns, completion of Phase 1 drilling by mid‑June, a potential second drilling phase, an updated Golden Queen technical report by late Q3 and a targeted NYSE listing to broaden market access.

Andean’s latest earnings call painted a picture of a miner entering a higher‑growth phase with stronger margins, a healthier balance sheet and expanding optionality. While investors must weigh timing‑related CapEx, second‑half‑weighted output and silver price volatility, the company’s execution and reaffirmed guidance suggest management is confident in sustaining its current momentum.