Interview with Oliver Dachsel, SVP Capital Markets of Aris Mining Corp.

Recording date: 3rd December 2024

Aris Mining, a Canadian gold mining company, is positioned for significant expansion with plans to double its production within two years through a fully funded and permitted growth strategy. The company, formed in September 2022 through the merger of Gran Colombia Gold and Aris Gold, operates under the leadership of CEO Neil Woodyer, known for his successful track record of growing Endeavour Mining into a multi-billion dollar producer.

The company's growth strategy centers on two key Colombian assets. The Segovia mine, recognized as the world's highest-grade underground gold mine with a reserve grade of 10.8 g/t Au, is undergoing a major expansion. The project will increase throughput from 2,000 to 3,000 tonnes per day by Q1 2025, boosting annual production to 300,000 ounces by 2026, up from 190,000 ounces in the last quarter. This expansion, costing just $15 million, is already more than 50% complete.

Simultaneously, Aris is developing a new lower mine at its Marmato property, which will transform the operation into a modern, large-scale mine producing 162,000 ounces annually over a 20-year life span at an all-in sustaining cost of $1,200 per ounce. The company's long-term pipeline includes the high-grade Soto Norte project, which hosts 8.5 million ounces of gold at 5.5 g/t, potentially pushing total production beyond 500,000 ounces per year.

Financially, Aris Mining maintains a solid position with $266 million in cash and $233 million in net debt following a recent $450 million senior notes issuance at 8% interest. The company's leverage ratio of 1.6x last twelve months EBITDA ($147 million) is expected to improve significantly as expansion projects come online, with analyst consensus forecasting EBITDA to exceed $300 million in 2025 and $500 million by 2026.

Despite its strong growth prospects, Aris trades at a significant discount to peers, with a market capitalization of US$630 million representing just 4x projected 2025 EBITDA, compared to mid-tier peer multiples of 8-12x. This valuation gap could close as the company executes its growth strategy and benefits from favorable gold market conditions, supported by persistent inflation, geopolitical risks, and central bank buying.

The company's low-cost operations, with all-in sustaining costs in the lowest industry quartile at approximately $1,200 per ounce, position it to benefit significantly from current gold prices around $2,500 per ounce, potentially driving substantial margin expansion and free cash flow generation as its growth projects come online.

View Aris Mining's company profile: https://www.cruxinvestor.com/companies/aris-mining-corp

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