On July 18, 2025, Atrium Research analysts Ben Pirie and Nicholas Cortellucci maintained a Buy rating on Andean Precious Metals Corp. (APM:TSX; ANPMF:OTCQX) while raising the target price to CA$4.50 from CA$3.50, representing 29% upside from the current share price of CA$3.50.
The analysts cited rising gold and silver prices, multiple expansions across the sector, and strong operational momentum despite slightly weaker-than-expected second-quarter production results.
Andean Precious Metals Inc. reported second quarter 2025 operational results producing 24.3 thousand ounces of gold equivalent between its Golden Queen and San Bartolome assets, which was softer than analyst estimates primarily due to seasonality factors. The company sold 23.0 thousand ounces of gold equivalent during the quarter, declining year-over-year due to a shift production cadence.
Golden Queen production came in at 12.2 thousand ounces of gold equivalent, down 28% year-over-year, compared to Atrium's estimate of 14.4 thousand ounces. This consisted of 11.2 thousand ounces of gold and 89 thousand ounces of silver, with 11.8 thousand ounces of gold equivalent sold, including 10.9 thousand ounces of gold and 87 thousand ounces of silver.
San Bartolome production totaled 12.1 thousand ounces of gold equivalent, declining 9% year-over-year compared to the analyst estimate of 12.2 thousand ounces. This comprised 0.7 thousand ounces of gold and 1.0 million ounces of silver, with 11.2 thousand ounces of gold equivalent sold, including 0.5 thousand ounces of gold and 1.0 million ounces of silver.
Seasonal Production Profile and Guidance
Management reiterated that 60% of annual production will be mined in the second half of the year and confirmed the company remains on track for the top end of guidance.
Pirie and Cortellucci noted they "have now adjusted our model to better reflect the seasonality at San Bart" following the variance between their estimates and reported results due to the 40% first half, 60% second half production split.
Updated Financial Projections and Commodity Assumptions
The analysts updated their commodity price assumptions to US$2,700 per ounce for gold and US$31 per ounce for silver, increased from previous assumptions of US$2,400 per ounce and US$30 per ounce, respectively, though remaining "conservatively below spot prices."
The revised assumptions result in forecasted adjusted EBITDA of $98 million for 2025, with the company trading at 3.7x 2025 estimated EBITDA.
For second quarter financials scheduled for release on August 12, 2025, after market close, the analysts expect sales of US$64.7 million (down 7% year-over-year), adjusted EBITDA of US$17.0 million, representing a 26% margin, and operating cash flow of US$13.0 million or 20% of revenue.
Valuation Methodology and Target Price Increase
The analysts increased their target multiple from 6.0x to 6.5x for 2025 estimated operating cash flow due to "multiple expansion across gold and silver producers" and strong operational results. The CA$4.50 target price equates to 5x 2025 estimated EBITDA, 8x 2025 estimated earnings, and an 8% free cash flow yield.
Andean Precious Metals stock has risen 130% since the analysts' initiation of coverage, driven by higher gold and silver prices and operational execution. The company exhibits a 1.3x beta to silver and a 2.4x beta to gold, "offering investors strong exposure to rising metal prices."
Financial Position and Strategic Advantages
The company maintains a strong balance sheet with US$101 million in cash and US$70 million in debt, providing flexibility for growth through acquisitions and capital returns via share buybacks. Andean Precious Metals has demonstrated a track record of successful acquisitions, including Golden Queen and San Bartolome properties.
The company benefits from aligned management with CEO Alberto Morales bringing over 30 years of merger and acquisition and finance experience, while owning 53% of shares, and Eric Sprott holding 15%, creating strong alignment with shareholders.
Near-Term Catalysts and Outlook
Key catalysts include ongoing operational improvements, exploration results, new contracts, and debt paydown or refinancing expected in the fourth quarter 2025. The analysts emphasized that APM "remains set up to generate large cash flow in the quarter, growing into H2" based on the seasonal production profile and current commodity price environment.
The company's conference call is scheduled for August 13, 2025, at 9:00 AM Eastern Time to discuss second quarter financial results and provide operational updates.
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Disclosures for Atrium Research, Andean Precious Metals, July 18, 2025
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