TRANSFORMATIONAL GROWTH IN BOLIVIA

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

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

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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 contracts third-party material sources which meet its criteria.

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.

“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.

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