Andean Precious Metals (TSE:APM) reported second-quarter results shaped by a decision to defer sales of a portion of its gold and silver production, while management said operating performance remained strong and reaffirmed its full-year production, cost and margin guidance.
The company ended the quarter with approximately 732,000 ounces of finished silver inventory and 2,585 ounces of finished gold inventory, carried at a cost of $37.6 million. Executive Chairman and Chief Executive Officer Alberto Morales said the company held the metal for strategic treasury-management purposes rather than selling it during late-June market conditions.
“The strategy did exactly what it was designed to do,” Morales said. “It gave us the flexibility to monetize our production on better terms.”
Quarterly Results Reflect Deferred Sales
Revenue for the second quarter was $67.6 million, down about 8% from $73.7 million a year earlier, primarily because of deferred silver and gold sales. Gross operating income fell to $23.6 million from $29.4 million, while adjusted EBITDA declined to $15.7 million from $28.9 million in the prior-year quarter.
The company reported a net loss of $14 million, or $0.09 per share, for the quarter. Chief Financial Officer Juan Carlos Sandoval said the loss also reflected a mark-to-market decline in marketable securities and a foreign-exchange loss primarily related to the Bolivian boliviano.
For the first half of 2026, however, Andean said revenue rose about 70% to $230.8 million. Adjusted EBITDA increased to $86.6 million from $50.8 million in the first half of 2025, while net income totaled $34.2 million, or $0.22 per diluted share. Morales described the first-half revenue and adjusted EBITDA results as company records.
Average realized prices during the quarter were $4,453 per gold ounce and $76.82 per silver ounce, increases of approximately 34% and 124%, respectively, from a year earlier. About 60% of quarterly revenue came from silver and 40% from gold.
Free cash flow was an outflow of $55.5 million during the quarter and an outflow of $16 million year to date. Sandoval attributed the quarterly outflow to the buildup of finished metal inventory and a $15 million repayment on the company’s revolving credit facility.
San Bartolomé Output Rises, Golden Queen Production Declines
Consolidated second-quarter production totaled 25,388 gold-equivalent ounces, up approximately 4% year over year. Year-to-date production of 52,730 gold-equivalent ounces was about 15% higher than the comparable 2025 period, according to the company.
At the San Bartolomé operation, second-quarter production was approximately 16,820 gold-equivalent ounces, equal to about 1.43 million silver-equivalent ounces. Silver production reached approximately 1.32 million ounces, up about 28% from a year earlier.
The production increase reflected ore purchase volumes that rose about 32%, average purchase grades of 170 grams per ton, throughput of roughly 4,400 tons per day and improved head grades, Sandoval said. Cash gross operating margin rose to $25.56 per silver-equivalent ounce sold, compared with $15.79 a year earlier.
San Bartolomé sold approximately 461,000 ounces of silver during the quarter, representing about 35% of its quarterly silver production. No gold ounces were sold at the operation during the period.
At Golden Queen, production was approximately 8,568 gold-equivalent ounces, including roughly 7,800 ounces of gold. Production declined from the prior-year period due to mine sequencing and grade timing, with average stack rates of 0.51 grams per ton versus 0.73 grams per ton a year earlier.
Golden Queen generated approximately $32 million in revenue. Operating cash costs were $1,779 per ounce sold, and all-in sustaining costs were $2,159 per ounce sold during the quarter. Year-to-date all-in sustaining costs were $1,970 per ounce, within the company’s full-year guidance range of $1,850 to $2,150 per ounce.
Management said Golden Queen’s sustaining and growth capital expenditures are expected to increase during the second half as the company advances a leach pad expansion, mobile fleet investments and operational optimization projects. The company reiterated its 2026 guidance, noting that its production profile remains weighted toward the second half.
Liquidity, Buybacks and Technical Report
Andean ended the quarter with just under $171 million in liquid assets, including approximately $52 million in cash and cash equivalents, about $55 million in short- and long-term marketable securities, and approximately $54 million in finished metal inventory measured at cost.
The company repaid $15 million on its revolving credit facility during the quarter, reducing the facility balance to just under $15 million and leaving $25 million of undrawn capacity. Total debt, including equipment financing, was approximately $30 million. Total assets rose to $453.3 million, while total equity increased to $301.3 million from $263 million at year-end.
After the quarter ended, the company repurchased approximately 2.1 million shares for roughly C$12.7 million under its normal course issuer bid. Morales said the company has authorization to buy up to 4 million shares under the current tranche, with further purchases dependent on market conditions.
Andean also said it expects to complete a New York Stock Exchange listing within 2026. The company expects to announce an updated Golden Queen technical report by Sept. 30, with the full document planned for release in mid-November.
Victor Flores, senior vice president of exploration, operations and growth, said the report will incorporate drilling completed through the end of 2025 and is expected to show an extension of Golden Queen’s mine life. The company has previously indicated that production could continue through approximately 2035.
About Andean Precious Metals (TSE:APM)
Andean is a growing precious metals producer focused on expanding into top-tier jurisdictions in the Americas. The Company owns and operates the San Bartolome processing facility in Potosí, Bolivia and the Golden Queen mine in Kern County, California, and is well-funded to act on future growth opportunities. Andean’s leadership team is committed to creating value; fostering safe, sustainable and responsible operations; and achieving our ambition to be a multi-asset, mid-tier precious metals producer.
