Business Enquirer Issue 111 | Andean Precious Metals | March'23

TRANSFORMATIONAL GROWTH IN BOLIVIA AND THE WIDER AMERICAS ANDEAN PRECIOUS METALS

TRANSFORMATIONAL GROWTH IN BOLIVIA AND THE WIDER AMERICAS

Andean, which is a Canadian publicly-listed company, wholly owns Manquiri, the operator of the largest commercial silver oxide processing plant in the Cerro Rico in Bolivia - San Bartolomé. Responsible for operations on the ground at Manquiri is Humberto Rada Gómez, President of Manquiri.

Business Enquirer speaks to both leaders about the transformational growth opportunities of the Company and how people are at its core.

Bringing the Asset Back to Life

Purchased in 2017 from Coeur Mining when the asset had eight months of mine life remaining, Andean has continued to invest in San Bartolomé and extending its mine life. Now, it has two to three years left, with the potential to further extend by up to 10 years, and beyond. Since its inception in 2009, San Bartolomé has produced over 65 million ounces of silver equivalents.

The asset has also generated significant cash from its operations, and by the end of Q3 2022 boasted a cash balance of around $90 million with zero debt.

“Our strong balance sheet is a standout at a time when many junior mining companies need capital,” explained Alberto, “We are able to control our destiny. Andean has a strong foundation and a two-pronged growth strategy:

ANDEAN PRECIOUS METALS PROJECT

DIRECTED BY: GARY

SMITH

WRITTEN BY: LAURA WATLING

Led by Founder and CEO, Alberto Morales, Andean Precious Metals is a growth-oriented precious metals company with heart.

ANDEAN PRECIOUS METALS

organic growth in Bolivia and growth via

M & A”.

Like many industries the world over, the last 12-18 months has seen global inflation. For the mining industry, Andean included, this has been compounded by by volatility in precious metals prices arising from the interest rates across the globe as they impact the sliver investment demand where the metal is considered as an alternative asset class for investment purposes.

“Despite the ups and downs, we achieved our 2022 annual production guidance and maintained our strong, and importantly, debt-free balance sheet,” shared Alberto. But, with challenge comes opportunity, and Andean foresees several opportunities to optimise production, reduce its costs, and grow organically in Bolivia and beyond.

The San Bartolomé plant treats ore from the Company’s Cerro Rico deposits and its ore sourcing business. As well, it is looking at ways to extract the silver from its fines disposal facility and process it.

“One of our most exciting and tangible organic growth initiatives involves our wet tailings, which has a significant silver and tin content. Currently, we are conducting metallurgy tests to assess the best way to extract the silver and are reviewing the financial feasibility,” said Alberto.

A Two-Pronged Approach

Andean is focussed on transformational growth, following a two-pronged strategy: organic growth in Bolivia and M&A in the wider Americas.

Within Bolivia, on top of its wet tailings initiative, it will look to secure new

Metalci S.A. is one of the principal suppliers of spare and wear parts for Bolivia’s mining, cement, sugar, oil, and construction industries. Almost three decades in the game give us the necessary technology, specialized staff, and expertise to serve Bolivia and other regions with export-quality products.

We invite you to visit our website or get in touch to learn more about the company and the services we offer.

CyPlus. Value explorers. Sustainable innovations beyond cyanides.

CyPlus is a regional leader in cyanides that offers strong technology services. For almost 70 years, CyPlus has dedicated itself to the manufacturing and supply of cyanides (sodium and potassium cyanides) to their customers worldwide in the precious metals mining, metals surface treatment, and chemical & pharmaceutical industries. Employing more than 100 staff and running production sites in Europe and Mexico (the CyPlus Idesa joint venture) and sales offices worldwide allows CyPlus to ensure proximity to their customers and a reliable supply chain setup.

CyPlus was a proactive member of the multistakeholder steering committee developing the International Cyanide Management Code (ICMC). The ICMC is a voluntary certification program of best practices for the management of cyanide in gold and silver mining. CyPlus plant in Germany is certified as per the cyanide producers' protocol of the ICMC since July 2006 and passed its sixth re-certification in September 2021. Our

contracts third-party material sources which meet its criteria.

“If we can find the right opportunity we may seek to acquirea new mining operation in Bolivia. I am hoping to see significant advancements in Bolivia over the next one to two years,” shared Alberto. A vision for Andean is to become a multiasset producer, and it is actively reviewing potential M&A targets.

Whilst the processor is focussed on silver and gold producing assets, it isn’t opposed to stepping into green and other base metals.

“Ideally, it would be a producing asset, or one close to production, in the wider Americas,” explained Alberto, “Because most of our team members are from a Spanish culture, we’re particularly interested in jurisdictions such as Bolivia, Mexico and Peru”.

JV CyPlus Idesa in Mexico is also successfully certified. In addition, their supply chains to their worldwide customers are certified. CyPlus is known for the safe and responsible management of cyanides throughout their lifecycle, from production, transport and handling, to application and disposal. Yet CyPlus goes beyond simply being a supplier to their customers.

The CyPlus Environmental, Safety and Health team provides training sessions for customers, distributors, and transporters worldwide to ensure the safe handling of cyanides. The training focuses on security, quality, and environmental protection measures. In addition, CyPlus offers guidance on the proper use and storage of cyanides to ensure the safety and well-being of their customers. The CyPlus experienced Innovation and Applied Technology team can provide the CyPlus® CET with the customer benefit of a specific process design solution for the effluent treatment of cyanides. Thank you for your interest! CyPlus would be happy to receive your inquiry.

Contact: www.cyplus.com, webteam@cyplus. com

Working for the Community

Whilst transformational growth is a key strategy for Andean Precious Metals, itis clearthat the value it adds toits community is extremely important. Since its commissioning in 2008, San Bartolomé has established its importance to the economy in Bolivia, Potosi in particular.

With about 250 employees and almost an equal number of indirect contractor jobs from Potosi, Andean positively impacts the economy of the city of Potosi by ~25%, via wages, royalties and taxes. Annually, it contributes (both directly and indirectly) close to $75 million to its local economy.

“Manquiri has created an identity for itself in Bolivia, offering attractive wages, continual training and worldclass facilities. We empower the local

contracts third-party material sources which meet its criteria.

“If we can find the right opportunity we may seek to acquirea new mining operation in Bolivia. I am hoping to see significant advancements in Bolivia over the next one to two years,” shared Alberto. A vision for Andean is to become a multiasset producer, and it is actively reviewing potential M&A targets.

Whilst the processor is focussed on silver and gold producing assets, it isn’t opposed to stepping into green and other base metals.

“Ideally, it would be a producing asset, or one close to production, in the wider Americas,” explained Alberto, “Because most of our team members are from a Spanish culture, we’re particularly interested in jurisdictions such as Bolivia, Mexico and Peru”.

Working for the Community

Whilst transformational growth is a key strategy for Andean Precious Metals, itis clearthat the value it adds toits community is extremely important. Since its commissioning in 2008, San Bartolomé has established its importance to the economy in Bolivia, Potosi in particular.

With about 250 employees and almost an equal number of indirect contractor jobs from Potosi, Andean positively impacts the economy of the city of Potosi by ~25%, via wages, royalties and taxes. Annually, it contributes (both directly and indirectly) close to $75 million to its local economy.

“Manquiri has created an identity for itself in Bolivia, offering attractive wages, continual training and worldclass facilities. We empower the local

community, which in turn allows us to secure our social licence,” discussed Humberto.

As well as its relationship with employees, Andean has secured itself as a pillar of the community too, by working with the locals to developing initiatives that benefit the Potosi surrounding communities.

“We work with many cooperatives and local businesses, supporting the artisanal miners, fish farms and the education, health and sanitation sectors,” shared Humberto. “Whilst we support them in developing their business, we allow them to thrive without overpowering their autonomy”.

Throughout the last 15 years of operation, Andean has been able to provide one of the best examples in the world of an

effective working relationship between a large-scale miner and artisanal small-scale miner (ASM)s.

As the largest commercial silver oxide processing plant in Bolivia, San Bartolomé is playing an important role in formalising Potosi’s ASM sector.

“Andean works on the principles of trust, dignity and respect, and ultimately aims to create enduring partnerships and a future for the people of Bolivia,” said Humberto. Surpassing the Standard

ESG is inherent to Andean’s business model. In addition to social initiatives, Andean is implementing several measures to meet the environmental objecives of reducing its carbon footprint.

Currently, it's working with InnovaSol, a Bolivian solar power business.

The center word of our company name is VALUE, and this principle has been our purpose and our way of living for more than a decade. Value unifies the other two words of our business name, where MULTI means that we are not limited to a single view but are flexible. We understand the importance of creating different, diverse, and not single solutions for our customers. We believe in providing the best experience to customers, suppliers, and associates, which translates into great personalized SOLUTIONS with

Our supply portfolio includes products from top global manufacturers and industry leaders. Our list includes, but is not limited to, sodium cyanide, collectors, frothers, depressants, flocculants, coagulants, antiscalants, sulfites, sulfates, caustic soda, grinding media, lime, geosynthetics, HDPE piping, pumps & parts, antidote kits, storage

EXCAVADORA 330

21 LTS/HR

PESO: 30 TONELADAS CUCHARÓN: 2.1 M3.

Our primary advisory services are related to improving the efficiency of the Supply Chain function. We can help our clients assemble and train teams, design and implement purchasing procedures and strategies, implement the ERP logistics modules, and appraisal, sell, or disposal of materials and equipment.

At MultiValue Solutions and MVS International, we take “Value” seriously. That is why we are committed to delivering unique experiences that create valuable results for your operations, your bottom line results, and your ultimate goal or legacy.

www.multivaluesolutions.com

Contact us: info@multivaluesolutions.com

Tel/WA: +591 7203 3866, +502 4216 0247

ANDEAN PRECIOUS METALS

“We are working with Innovasol to develop the use of renewable solar energy at our mining facilities in Bolivia. We’re working in partnership to develop a business model for using solar energy without the need to make an initial investment. The first stage is focused on the implementation in our ancillary facilities,” explained Humberto.

Andean also has a state-of-the-art drystack tailings facility.

“Our tailings management is a key example of how we apply sustainability best practices,” the CEO continued. Additionally, the Company has been focussing on receiving ISO45001 and IS014001 certifications, which are awarded for meeting environmental and health and safety targets, respectively.

“Our staff is fully committed to supporting the business in receiving this accreditation, a testament to their commitment to the business, and also reflective of our internal policy around preservation of life,” said Humberto.

Transformational Growth Plan

Over the course of the next 12-18 months, Andean has its sight firmly set on its strategic transformational growth plan. A combination of factors means that the outlook is particularly strong for Andean. Firstly, it is believed by the business that the current geopolitical climate, and the worldwide monetary policies followed by the central banks around the world will be supportive of the mining sector in the near term.

This is compounded by the data around supply and demand for silver, showing that demand for the metal is currently outweighing supply.

“With this in mind, it’s an interesting time for those looking to invest in our industry, on an asset diversification or allocation basis, and our business is a well-positioned investment,” said Alberto in finishing.

www.andeanpm.com