Despite Q1 seasonality challenges, Atrium Research reported that Andean Precious Metals Corp. (APM:TSX; ANPMF:OTCQX) maintains strong 2025 production guidance with a robust balance sheet fueling acquisition growth and shareholder returns.
On April 15, 2025, Atrium Research analysts Ben Pirie and Nicholas Cortellucci maintained a Buy rating and CA$3.50 target price on Andean Precious Metals Corp. (APM:TSX; ANPMF:OTCQX), despite Q1 production results coming in below expectations, citing the company's typical first-quarter seasonality and management's reaffirmation of full-year 2025 guidance.
Andean Precious Metals reported Q1 2025 gold equivalent production of 21,361 ounces across its Golden Queen and San Bartolome operations. Golden Queen produced 11,189 ounces of gold equivalent (-3% year-over-year), consisting of 10,309 ounces of gold and 79,000 ounces of silver, which fell short of the analysts' estimate of 14,642 ounces of gold equivalent but exceeded Q1 2024 on gold production. San Bartolome produced 10,172 ounces of gold equivalent (+11% year-over-year), comprising 769 ounces of gold and 846,000 ounces of silver, below the analysts' estimate of approximately 11,523 ounces of gold equivalent.
Despite the lower-than-expected Q1 production, the company stated it remains on track to achieve its 2025 guidance of 102,900-117,200 ounces of gold equivalent production across both operations. Management noted that Q1 is typically its weakest production quarter, with approximately 40% of annual production expected in the first half of the year and the remaining 60% in the second half, leading the analysts to adjust their 2025 estimates accordingly by pushing revenue into H2.
For the upcoming Q1 2025 financial results, scheduled for release on May 6, 2025, with a conference call on May 7, the analysts are forecasting sales of US$53.6 million (+24% year-over-year), adjusted EBITDA of US$2.9 million (5% margin), and operating cash flow of negative US$1.2 million compared to negative US$4.7 million in Q1 2024.
The analysts highlight Andean Precious Metals' strong balance sheet with US$101 million in cash and US$70.3 million in debt, enabling the company to pursue growth through acquisitions and return capital to shareholders through share buybacks. They also point to the company's track record of successful acquisitions, including Golden Queen and San Bartolome, and its robust cash flows driven by strong gold and silver prices. The stock exhibits a 1.3x beta to silver and 2.4x beta to gold, offering investors strong exposure to rising metal prices.
With the share price at the time of the report at CA$1.80, the CA$3.50 target price represents a potential return of 94%. The company trades at just 2.6x 2025E EBITDA, which the analysts consider undervalued given its long-term growth track record and successful acquisition history.
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Disclosures for Atrium Research, Andean Precious Metals Corp., April 15, 2025
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