Aura Minerals Inc

TSX:ORA

Q2-2025 Earnings Call

[Operator]

Good morning, ladies and gentlemen. Welcome to Second Quarter 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at auraminerals.com/investidores. The presentation will also be available for download. This call is also available in Portuguese. [Operator Instructions]

Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur.

Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in their respective forward-looking statements.

Present at this conference, we have Mr. Rodrigo Barbosa, President and CEO; and Mr. Kleber Cardoso, CFO. Now I will turn the conference over to Rodrigo Barbosa. You may begin the conference.

[Rodrigo Barbosa, executive]

Good morning, all. Good morning, all the investors, and good morning, investors from Brazil, Canada, Europe. And also, I welcome the new investors that recently joined us, the IPO we had NASDAQ a couple of weeks ago.

As we all do in the earnings call, we divided this in two separate presentations. First, myself, I will present and give an overview about the company, about the progress we made during the quarter and some of the highlights of the results. And then on the second phase, Kleber, our CFO, is going to go more in detail about our results and cash flows and also the net debt levels and dividends.

So this was, again, an extraordinary quarter as the fourth consecutive quarter that Aura has reaching record high results in terms of EBITDA. We started with a production of 64,000 ounces of gold equivalent ounces, which was -- it's more than we produced in the first quarter, the same as we produced a year ago, but with the constant price, it's higher than we produced also a year ago.

When -- another important factor is that not only we are growing production, our cash costs are being stable along the last quarters and higher production, stable cost and also higher gold prices, we've been able to reach a record high EBITDA at $106 million on Q2, understanding that this quarter, we had a gold price of $3,185 that also drove us our last 12 months EBITDA to $344 million with a gold price of $2,800.

So that means that we still -- if gold continues at this price now hovering around $3,400, we continue to have room to improve our EBITDA by only gold price. On the top of that, as we will see, we should have increased production along the third quarter and then in the fourth quarter, which could push even further our last 12 EBITDA to finish the year with a very strong results.

As we will see, our all-in sustaining cash cost on the quarter was $1,449 very much in line with our guidance, very much in line with the performance on Q1 and very much in line with 12 months ago if we use constant prices. One thing that I would highlight is that we have a copper production, around 20% of the production comes from -- the revenues come from copper and then we convert that copper production into gold equivalent. So basically, we divide the sales, the revenues of copper through the gold price. So that would mean a gold equivalent. So we published all-in gold equivalent ounces. The higher the gold prices, the lower is the conversion. So that's what we see as some of numbers being stable on the screen.

But as you use constant price, you see that we are increasing production and also being able to maintain the same all-in sustaining cash cost. And despite some higher gold prices that we have to adjust to market-to-market on our collars that Kleber is going to explain in details. We finished the quarter with $8 million of net profit, while the adjustment -- the net income adjusted is $37 million, and Kleber is going to go more in details about this.

Very importantly, on the strategic agenda, we are also moving very strong on the growth of the company. Just a quick reminder, we started the year with the construction on the final phase of Borborema and also pending to close the acquisition of Bluestone. We closed in the first quarter the acquisition of Bluestone. We finished the construction of Borborema. We are now in the first -- on the ramp-up phase. And in this second quarter, we already produced 2,500 ounces of gold.

Of course, now we are gradually increasing production, gradually increasing capacity and gradually increasing grades. So we should see on the third quarter higher production to declare commercial production expected now to September this year. And then after that, also a higher production on Q4. Also on the strategic agenda, we made the other 2 significant progress. One, we signed the contract to acquire MSG [Foreign Language] that is planning to close during Q3 this year.

We also published the PEA of Era Dorada, the former Cerro Blanco. It's a high-grade underground mine in Guatemala that can provide us additional 95,000 ounces of production per year on the first 4 years with a CapEx of $265 million, returns at 24% per year with the gold price $2,400, while from the PEA 2 the feasibility study, which we expect to finish by the end of this year or early next year.

We see also room for improvement in terms of cost production and then returns.

So we are working on that, and we should be releasing the feasibility study by the end of the year, early next year. Very importantly, also, we acquired -- we have signed the agreement to acquire MSG, published the PEA. We also very important, we did our IPO in NASDAQ. This was strategic for us once we always share with the market that on the third avenue for us to deliver value to our shareholders, we had to tackle the multiple and the multiple that we are discounted compared to our peers comes from basically 2 main reasons.

Number one, we need to continue to increase and be in the higher production. And second, we had to address also our daily trading volume. So moving to the United States and NASDAQ, we could increase the float of the company and tackle a market that can provide a better liquidity to our shares, and we should continue to see this improvement along the year.

Recently, we also announced the decision to start the process to delist from TSX so that we can focus and concentrate all our daily trading volume in NASDAQ from now on. We also -- we made progress on the 3 avenues. Most of our investors and analysts know that we have 3 avenues to deliver value to our shareholders. Number one is to deliver the greenfield projects to build them on time on budget. Borborema is there, almost we built on time on budget. That's why we fully production. Borborema is now in ramp-up -- final ramp-up phase.

We made acquisition of Bluestone. We made acquisition of MSG. We also increased our investment in exploration. We released the new AIF by March of this year, increasing our resources and reserves. And then on the third avenue to continue to address our multiple we did the deal listing. So we are moving very diligently in the 3 avenues that we disclosed to the market since 2020.

And on the top of that, why we would be able to pay dividends. So if you see the track record in terms of paying dividends, we are among the top dividend yield in the world in the gold sector. And this dividend that we announced today of $0.33 per share put us on the last 12 months of a dividend yield of 7.4% when you add also the share buybacks, guaranteeing us also a top dividend player in the world without jeopardizing our growth story.

Next slide. So on this slide, we always like to share our safety records. We are very glad also that we are now over 2.5 years with only one single lost time incident that happened in Apoena slightly over a year ago and also finishing the construction of Borborema without any lost time incident.

We now are over 1,000 days in Borborema, building the project and now ramping up without having a lost time incident, which is underscores our focus to guarantee safety standards to our employees. And also on the geotechnical structure, we also monitor them with external parties and audited them on a constant basis and recently did a new auditing.

So all the geotechnical structures are in satisfactory levels. So we have no issues with any of them. So guarantee that the safe operation for everybody. So in terms of production, as we can see on the bars on the left side of the slide, we are the quarter production on the top of the line, we have the last 12 months of production. We see that in Q2, we produced 64,000 ounces compared to 60,000 ounces on Q1.

When you compare to Q2 to '24, as I was mentioned, it seems the same, but there is a negative effect of production because of the higher gold prices, the lower conversion of copper into gold equivalent. If we were not by this, we would be over close to 10% higher and outperforming the 260,000 ounces of gold equivalent production in the last 12 months, understanding that now we should see an increase in production due to Borborema and some better production also in the second half in some of our operations.

In Q1 and Q2, when compared to operations, you see Almas very much the same and very much also in line with our projections. Minosa, same, very much in line with the projections as well, internal projections. Apoena, slightly below the Q1, but yet slightly even above our expectations during the quarter. And, Aranzazu an increase compared to Q1 despite a negative effect of a higher gold price -- on constant price, that increase would have been even higher.

So with that, we're also now adding a small part here, which we are very proud to show to the market at 3,000 ounces from Borborema during Q2. And of course, now we are progressing on the ramp-up, we should see an incremental production during Q3 and then also in Q4.

In terms of all-in sustaining cash cost, also as I was mentioned in the beginning, very strong management concern and focus on containing any kind of inflation and any kind of price pressure. As we can see in Q2, we reached $1,449, very much in line to Q1. And then also when you compare to Q2 last year and you use constant prices, we will see that we are also in the same level of all-in sustaining cash cost of last year, understanding that this year, we also -- we have a pressure up on all-in sustaining cash cost because of the investment phase that we are going through Apoena, pushing back the pit, creating a super pit so that we can resume higher productions after 2026.

So with that, we can also see our all-in sustaining cash cost going down. And then we now have Borborema coming online that have below our average all-in sustaining cash cost, of course, almost the same as we've been able to show the market.

And then we have Matupa and Era Dorada, both also has below the average that we have all-in sustaining cash costs, while MSG -- MSG, should start with a higher than our average all-in sustaining cash cost, but we believe that we can gradually decrease the all-in sustaining cash costs from MSG after we close the transaction.

As we are moving very much in line with expectations, we have no changes in our guidance to the market since we released early this year. Production in the first half of 124 when you compare to 266, 300 seems that we are behind, but of course, on the second semester now enters in commercial -- higher production, commercial production for Borborema, so that will put we are very keen to achieve and be between the guidance that we gave to the market.

In terms of cash costs, on the other hand, you'll see that we are very much close to the low level of our guidance. And a second semester, we expect to have a better production in some of our operations and also Borborema coming online. So we should be very much in line with the guidance, if not slightly below the guidance either on the cash cost, but also on the all-in sustaining cash cost. And as also, we performed and we finish the construction of Borborema, we think the budget, we also maintaining the same guidance for the market in terms of CapEx for sustaining exploration and also new projects.

I've highlighted that we believe it's important to share with the market is the successful ramp-up of Borborema, we're still, of course, 2 months, 1.5 months before we can declare commercial production. That's very in structural things we think the mine has been proving, has been successful.

Number one, the mine is conciliating very well. The grades are there. The grades are consistent. We're also utilizing very strong capacity from the crusher, very strong capacity also from the mill. We used also the CIL. The recovery has been very much also in line without we projected.

CIL has been -- this is where we've been lower performance than we projected since the beginning. So we are now going more lower grade than expected. But at the same time, all the adjustments at the CIL has been already done, 4 CIL tanks already adjusted and a few other more to adjust in the next couple of weeks, so -- and the performance are going up as we continue to have expected commercial production to the September.

Also, the future is working very well. So the humidity of the tail has been very much a 16%, 18%, very much in line with the project. So all the process of the gold or the way the gold performs around the plant has been well proven, checked. And now we just need some adjustments at the plant so that we can continue to increase capacity and declare commercial production by September.

Just a quick, there was the slide of Era Dorado can go back on slide as we released the PA, the information is a wide available for our shareholders. This is a very important project that we are now adjusting the PA. We released the PA without reviewing all the mine sequencing that what we are doing right now and also detailing all the engineering and the mine sequence so that we can have the feasibility study.

Nevertheless, these projects are already generating $0.5 billion of NPV discount at 5% with the gold price of 2,400 without any improvement with 24% internal rate of return at 2,400 gold price why we believe we can also improve those results to the feasibility study that we expect to release by the end of this year, early next year.

And the CapEx, approximately $264 million. That's one important thing about Aura that we've been able to increase our capacity and to have right returns through a project that has contained in a very -- not that large NPV, which means a higher risk. So almost we built for $80 million. Now we built a volume of $188 million now and Era Dorado, we expect to be at $260 million.

That continued to move our production up without compromising a lot of CapEx. That's what also allow us to continue to pay dividends.

[João Cardoso, executive]

Okay. Thanks, Rodrigo. So good morning, everyone. Now we're going to jump a little bit more in details on the summary of the main financial results for the second quarter. So we start with a page that brings a summary of the main financial KPIs for the second quarter, the less fewer quarters and accumulated last 12 months of this financial KPIs at the end of each reporting period.

We start on the top left with the net revenues. We see a significant increase in the net revenues in the second quarter of 2025. Net revenues achieving $190 million on this quarter, benefiting from the increase in production compared to the previous quarter and the increasing in gold prices. And we see a very positive trends in the last few quarters, our correlated last 12-month of revenues increasing quarter after quarter.

Moving to the right side to the adjusted EBITDA, a significant improvement in adjusted EBITDA, new record high as well, as Rodrigo pointed out. our adjusted EBITDA increasing by close to 30% compared to the previous quarter as a combination of increasing production as we saw additional 4,000 ounces. Second, we saw a slight decrease also in the all-in sustaining cash costs. And third, of course, the increase in gold prices.

Now our last 12 months adjusted EBITDA, also we see a similar trend of increasing quarter after quarter, achieving $344 million at the end of the second quarter with an average gold price of about $2,800 the market price for these last 12 months, which means that only considering gold prices, we should see a similar trend going forward, not putting on top of that, expect increasing production from the new projects.

Then moving to the net income on the bottom left of the page, as some of you who follow the company in longer time you might remember, we have seen no cash impacts in the last few quarters in our P&L related noncash losses related to the gold hedges derivatives, which we have into account for market to market at the end of each accounting period.

On this quarter, we also -- we're going to show later in more detail, we -- fortunately gold prices continue increasing, which is very positive. We are going to see also a nonrealized loss with the gold derivatives despite of that, in this quarter, the operation -- the operating results more than offset those losses, and we are reporting a profit of $8 million on this quarter.

And when we look here at the bottom to the adjusted net income, we see a similar trend. Our net income also making progress this quarter reaching $37 million. And then moving to cash, net debt and financial leverage of the company. In the bars, we see our net debt remained almost stable in the quarter. We closed the quarter with $280 million in net debt, which means that cash flows from operating activities were enough to pay for both the expansion of CapEx that we're going to see in more detail. Some annual income tax payments that were significantly mostly in Honduras and dividends that we paid in the second quarter as well.

As a combination of mostly stable net debt and an increase in the last 12 months adjusted EBITDA, we see that our net debt over the last 12 months adjusted EBITDA ratio reduced from 0.9% to 0.8x and not including yet the proceeds from the NASDAQ IPO, which was in July. So as we -- when we factor in the proceeds of the IPO, of course, all these KPIs improved, our cash increases, net debt reduces and also the financial leverage also reduces.

Now moving to understand in more detail the main items between the adjusted EBITDA and the adjusted net income for the quarter. Starting with the adjusted EBITDA going in more detail how was the contribution by each business units. We see Aranzazu and Minosa with very strong results, about $36 million and $34 million, each contributing to our adjusted EBITDA in the quarter, almost a strong quarter as well, $25 million. Apoena despite being in an investment phase, contributed with $16 million adjusted EBITDA in a quarter, pretty decent number. Borborema, of course, a small number as we have just shipped 1 shipment in the quarter, but also a positive, and it's -- we are proud of already reporting EBITDA from Borborema.

Amortization and depletion of $50 million came consistent with what we are seeing in the last few quarters, no surprise on that in terms of financial expenses of $60 million is most explained by the losses with our outstanding derivative gold collars that we generated an expense in the quarter of about $35 million, of which $24 million are unrealized, which are, as I mentioned before, the market-to-market recognition we have to do in our balance sheet for outstanding old collars that expires between 2025 and 2028.

In $11.7 million were realized losses that did impact our cash mostly related to the final outstanding collars of the Almas hedging program. Then income tax expenses of $23 million, that's most explained by the strong results from the operations, bringing our net income to $8 million. And then here to the right side, we bring back to build the adjusted net income, certain items that have no cash impact.

First is the nonrealized losses within the gold derivatives, $24 million. FX was a smaller number this quarter, $2 million. FX impacts in Brazil, Honduras and Mexico also have no cash impact in our deferred tax assets and liabilities. On this quarter's the FX fluctuations, they benefited our deferred tax assets in $7 million.

So here, we excluded this impact. And finally, this quarter, we had a onetime item loss in our P&L. That was this loss on settlement of liability with equity instruments.

This is basically the company when we acquired Bluestone. We received a Bluestone with a debt of $20 million outstanding debt with the Lundin family and that $20 million was mostly settled. We paid $15 million out of those $20 million in the second quarter with the shares of our minerals.

And then this $90 million is the appreciation of our shares between the date we signed the agreement and with the date we closed the agreement. Then excluding these items, then our adjusted net income achieved $37 million in the second quarter.

And then finally, here, we bring a detailed analysis on the change in the cash and cash equivalents of the company throughout the second quarter. We start here on the left side of the page, the cash position at the beginning of the quarter. Then on this half left side, it's the free cash flow that's generated by the mine is in commercial production not including the investments we are doing to grow the business. So it's basically only the investments to keep the current level of production of those mines, we can see was a strong quarter in terms of free cash flows. That part of the business generated $60 million in cash.

Despite, as I anticipated before, $23 million in income taxes paid in most annual income taxes paid in Honduras, which should be, of course, a lower number in Q3 and Q4, in already deducting $12 million, the realized losses with the gold derivatives. So that $6 million was used mostly to fund the investment for growth in dividends in the quarter.

We see investment for growth consuming $38 million. Of which most of that was Borborema, which includes both some outstandable payables related to the construction and capitalization of some costs of the ramp-up phase. As a ramp-up is expected to complete now in September, this number also the expansion with Borborema is expected to reduce from Q3, Q4 onwards.

And then here to the right side, how much of the cash was used in financial items, highlighting mainly the dividends we paid in the second quarter, $30 million. Bring you the cash at the end of the quarter to $168 million and again, not including the proceeds from the NASDAQ IPO. Then with this, we end the presentation and open to your questions. Thank you.

[Operator]

[Operator Instructions] Our first question comes from Edgard de Souz with Itau BBA.

[Edgard de Souza, analyst]

Congrats on the solid quarter results and all the best luck in this new phase following the NASDAQ listing. So Rodrigo, I understand that the highlights of the first half of the year was the strong M&A activity and also the delivery of Borborema. But moving forward, now that you have even a stronger balance sheet position, all as of the investors will be on the development of your growth projects. So I need to start discussing a little bit about Borborema -- sorry, Guatemala and Matupa. You have been mentioning that the final investment decision between Matupa and Guatemala would be made by year-end, probably if you are able to move with the licensing, the social licensing in Guatemala, you will bring Guatemala forward.

But I wanted to hear from you, which is the time line or the best time line that you expect in terms of having this final decision and when starting building one of the projects. When will be the deadline, for example, if you're not able to get all the social licenses in Guatemala that you will decide to move with Matupa maybe before. So I want to hear about you how are you seeing the time line for those 2 growth projects?

And then the second question on MSG, we understand that the asset is running at very low efficient rates. I don't know if Glauber is connected, but I know that Glauber has worked there before, so maybe he could help answering this question. But I want to understand which were your first impressions from the site visit you had? What are the low-hanging fruits? You mentioned that there is need for equipment upgrades, CapEx that you could put there to improve efficiency rates. When do we expect to deploy that CapEx, how long it might take to improve the plant utilization and also on the cost side, which the company is running at very high cost? What are the opportunities in SG&A, sustaining CapEx optimization and so on and so forth. So those would be my questions.

[Rodrigo Barbosa, executive]

Thank you, Edgard. So first question about Guatemala or Matupa. I think we are progressing understanding, assess -- making interesting assessments at the communities starting conversation also with the federal authorities. Things are progressing well yet. We need a few more time to make sure that once we push the button to start, we will guarantee that we will be able to operate in a very smooth way.

So yet we are still up toward the end of the year, maybe a little bit sooner. There's no exact date. It's just about information that we get from the local team and from the local assessment that we have, right? So I would expect something by the end of the year or slightly earlier than that. But that's not a super scientifical with a lot of sensibility that we need to gather at a local level.

But I think for your projections, and I would say that we would like to make a decision until the end of the year. The second on MSG, we cannot yet go in details. Of course, after we close, we will share with the market our plan. We will have to include the guidance of the production for the year. We will talk about our plan for 2026. What I can say at this moment that we did our analysis based on the 2024 numbers, where Anglo, Serra Grande produced 80,000 ounces at close to $2,000 per ounce following sustaining cash costs.

And from that numbers, we see room to increase production, increase productivity and, of course, decrease our all-in sustaining cash costs. And it comes from a few variables. Number one, and perhaps we even slow a little bit the production in the first month that we are there so that we can focus on underground development. We need to advance a lot of underground development to start mining from bottom to up, not top to down.

That will increase productivity, but that takes 6 months to 1 year for us to be exactly what we need in terms to have the right productivity. There's also of course, other assessment that we are doing to increase availability of the equipments, increased maintenance. And all of that combined, we believe we'll be able to reduce the all-in sustaining cash cost, perhaps between what it was last year and what is all at the moment. We don't believe yet that we'll be able to bring all-in sustaining cash cost to the current level that we perform in the other mines. But if we can have in between with increased production, I think that will be a very good outcome for the mine. But of course, more details will disclose after we close the transaction.

[Operator]

Our next question comes from Marcelo Arazi with BTG.

[Marcelo Arazi, analyst]

Two questions on my side as well. So the first one, given that the company should improve the cash position with the recent U.S. listing process, I would like to understand if there is any space for additional M&As. We know that you guys are always looking for potential acquisitions. But given that you are already focused on two major projects on the short term, I would like to hear about if there is any space for you guys should do another one, eventually developing more than one project at a time. And just an additional point here, if you guys are also looking for copper projects, we saw some developments in Serra da Estrela, but I do believe that this is something for a while. And how are you thinking about potential corporate acquisitions?

And finally, if I can make another one, just a quick one on Borborema, you guys mentioned the potential road relocation I'd like to hear you guys about how are you guys feeling if the outcome will be positive, if you have any timing on this announcement as well. So I think these are my questions.

[Rodrigo Barbosa, executive]

I think I lost.

[Operator]

No, we are hearing you, Rodrigo.

[Rodrigo Barbosa, executive]

Okay. All right. So the first question that you said M&A, of course, now we have a stronger position, but the strategy continues the same. Very clear ways to build value to our shareholders. Number one, build the project greenfield on time on budget. That's what we've been doing, and now we have two more to build, right? The Guatemala and also Matupa.

Second, continue to do exploration investments so that we can increase our resource and reserves. And we've been able to do that along the last few years and then we want to continue to build more resource and reserves while we are also increasing production. Number three is to continue to grow through M&As, right?

We disclosed to the market that without Eradorada and without the acquisition of MSG, we would reach 450,000 ounces of production. Eradorada now adds on a yearly basis in the first 4 years, additional 95,000 ounces and MSG last year produced 80,000 ounces, so that already put us on the higher level of production. But we believe we want to continue to grow through new M&As.

Of course, we have to understand how complex we are getting so that we have -- we do M&As that are creative that we understand that we can build value through that. That's one of the reasons that the acquisition of MSG. Now we gave a priority to MSG because we have two greenfield projects to build, either we're going to be on the next year, Eradorada or Matupa and MSG is not a new construction. It's a different team. It's a turnaround team that we will go there to implement efficiency, so there are two different teams that we won't compete for attention so that we can do both.

But we continue to monitor the market either in copper, as you mentioned, but also in gold. We want to continue to grow though M&As. We always look alternatives. I don't expect anything in the short term, but we will continue to monitor. We will continue to engage. We will continue to participate and monitor and see if we can do something perhaps next year or in 2027.

While -- we -- as you mentioned, we will continue also to advance on the exploration. For Serra da Estrela, we do like copper. We participated in other potential acquisitions in copper. Copper in the end has -- it's a bigger project and has fewer alternatives to grow.

And also, the prices are higher compared to what you can find in gold. Normally in gold, we've been able to receive more attractive returns and more attractive NPVs and there's more alternatives for M&A, but that doesn't mean that we will not pursue M&A also in copper.

But at the same time, as I was mentioning, that's one of the reasons it's competitive more for the copper asset. This is the only one asset that we entered in a more earlier stage is Serra da Estrela is copper, so we just finished the acquisition and made the final -- exercise the final option. So we acquired -- With additional $3 million, we acquired now fully the exploration rights for Serra da Estrela. We plan additional 10,000 meters of exploration during the second semester.

The informations have been very encouraging for us. It takes time, right? This is an earlier stage. So that's not a mine that will be able to build in the next 2 or 3 years. But with more exploration that are coming perhaps in 3 or 4 years, we can get to a closer PEA in the feasibility study so that we can build a mine from that. And also the whole area of Carajas has a very interesting potential for copper, and we will continue to monitor and see what would be the alternatives also increase from Carajas our resource base.

And then Borborema -- Borborema, things are progressing with the national authority for transportation. It's a bit slower than expected. We were expecting to have these discussions approved already by Q2 this year, however, it's not halted, right? The basic design has been approved and now we are working on more detailed design and back and forth so that they feel comfortable and then approved. And then from that, we already have the plan to expand capacity of Borborema and then also do all the road movement.

[Operator]

Our next question comes from Ricardo Monegaglia with Safra.

[Ricardo Monegaglia Neto, analyst]

First, congrats on the IPO. I have 3 questions. So on Borborema, the first one. There was a small but positive EBITDA contribution in the second quarter with less than 2,000 ounces being sold. So could you discuss the target plant utilization or sales levels expected for this mine in Q3 and Q4 since you have the production guidance?

My second question in Era Dorada, just so you can confirm with the PEA out you expect the feasibility study to be published by the end of this year? And are there any pending licenses or discussions with local government or communities? And my third question to Kleber. So Kleber, could you give us a sense of the cash impact from gold hedges in the coming quarters?

[Rodrigo Barbosa, executive]

So I forgot the question is the expected production of Borborema, then pending license Guatemala and [indiscernible] , the more financial, right? So at Borborema, we already produced this 2,000, of course, we'll see gradual, we expect to reach around constantly over also 80% by September, which means commercial production. And then on the fourth quarter, continue to increase to reach 100% by the end of the year, early next year, but already at commercial production stable from September.

The production is what we have on the guidance as we are now running more lower grade that we expected due to this adjustment that we are doing the CIL tanks, we would expect to be more towards the lower end of the guidance on Borborema while other operations is at the high end or even above the high end. So on average, we are very much in line to add a guidance on the company.

And then you asked also Guatemala. Guatemala, we have all the license to start the construction during the second semester. There needs a final approvement from local authority but all the license is already being granted. This is more, as we say, it's a social license because we want to make sure the project is being well socialized with all the communities well socialized with the government and we feel we have the support to start the construction of this project. But there's no pending license that we need to obtain for the underground mine, right, for the open pit, then although it's already fully licensed, the license for the open pit is being questioned, that's why we are also considering the underground.

[João Cardoso, executive]

And on the gold hedges, Ricardo it varies according -- depending on the quarter, the amount of outstanding gold derivatives. But in any case, we have between second quarter of 2025 and first -- second semester of 2025 and first semester of 2028, roughly 80% of the estimated production from Borborema, hedged that can give you a good indication. In the second semester, it should be a little bit higher, not materially higher because of in July, we had a final about 4,000 ounces in the Almas program, was the last month.

And we have about 4,500 between the second semester for the 1,000 ounces for the Apoena program. But mostly materially is this hedging program going forward regarding to Borborema, so it's 80% of the project. The production varies -- again varies quarter-by-quarter. In our MD&A and the last earnings call presentation, we show like for the second semester of this year, '26, '27, '28, so you can get the precise numbers of the outstanding gold collars. The strike price is 2,400. So it's then it's just doing the math of the difference.

[Operator]

Our next question comes from Guilherme Nippes with XP.

[Guilherme Nippes, analyst]

Congratulations on another great quarter and for all the achievements during the quarter as well. My first question is regarding the current assets. So could you share more details on your ongoing exploration areas like the drilling campaign in [indiscernible] Matupa, the underground mining in Almas and the studies in Carajas as well?

And my second question is on Almas. We actually were expecting more -- slightly higher production and lower costs, but we would like to hear your thoughts on when you expect production costs returning to the levels we saw last year, perhaps returning to 15 ounces production and cash costs close to 1,000 ounces for Almas. Those are my 2 questions.

[Rodrigo Barbosa, executive]

Okay. Thank you. Just to remind me that first question the line cut off a little bit. It was...

[Guilherme Nippes, analyst]

Yes. It's regarding the current assets, details on the exploration areas.

[Rodrigo Barbosa, executive]

On exploration. Yes, those exploration, of course, we released when we have important information to disclose them. What we can say is that we've been drilling those as those targets, the results that's why we finished the acquisition of Pezão, Pé Quente and then also Serra da Estrela because we had a very positive information and perceptions, confirming in Pezão and Pé Quente what we expected and also in Serra da Estrela, confirmed the trend, confirmed the grades.

But yet, it's not mature enough for us to disclose this information to the market. We are now working on consolidating more information from Matupa, including those other targets to release a technical report early next year and also for Carajas may be something by the end of this year. But things are progressing, progressing well with a very interesting information, but not yet enough for us to do and publish a press release. It takes time, those kind of investments.

And then you asked about Almas, right? Almas, Well, Almas, we should see a second semester stronger than the first semester that will also translate into better cash cost and all-in sustaining cash costs. But yet, we -- the all-in sustaining cash cost we had by the fourth quarter last year was a combination of a higher grade and low strip ratio. We don't think that the mine will perform on average with that all-in sustaining cash cost, I believe this -- the average of this year and some improvements until we do new investments on the underground and our expansion should be what we will perform in the next year.

But there are 2 things that happened in Almas, as you pointed out, we are drilling and getting more information about underground confirming the veins, confirmed good grades. We already actually -- so we are now consolidating information to have a technical report. But at the same time, we are so encouraged by this, and we know that this is going to turn to be an underground mine that we already started developing the ramp to start doing the underground development and from that, do more drillings and then you also use into the mine plan.

So if everything goes according to our plan and the speed that we believe we can reach, we're still 1.5 years or maybe 2 years until we can have an underground, maybe 2 years underground production but yet, things are progressing well. Of course, once you have this production from underground is higher grade than perhaps that will also increase, production at the plant that can decrease all-in sustaining cash cost.

That is also a plan we already increasing capacity. We started this plant from 1.2 million tonnes. We are now operating close to 2 million tonnes. So there are some scenarios that we would like to reach a 2.5 and perhaps even more with minor investments capacity. That also will increase our production that can also decrease all-in sustaining cash cost. So I would say with the current capacity, the current mine plan, all-in sustaining cash cost, maybe this year is going to be the average of the next year. But yet, so many upsides that we can take from Almas either to increase production that also to reduce our all-in sustaining cash cost because we are just in the beginning of that mine exploration potential around the mine is very significant. So we believe this is a mine that not only we will significantly increase the life of mine, but also we'll be able to significantly increase capacity, increase production and keep all-in sustaining cash cost at a lower level.

[Operator]

[Operator Instructions] The Q&A session is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.

[Rodrigo Barbosa, executive]

So again, thank you all for participating. And we are super proud to be delivering on what we promised to the market. Since 2020, there's new investors now jumping in with the IPO in NASDAQ, the story and the strategy that we share with them is exactly the same story that we disclosed when we issued the BDRs in Brazil 2020 is to grow through these 3 pathways. Number one, deliver the greenfield project on time, on budget. Number two, increase exploration, increase resources and reserves. And number three, we continue to increase production through M&As and also address the daily trading form so that we can improve our multiple or multiple per NAV.

And while doing the 3, why we would be able to pay significant dividends. The track record is strong, I don't need to go all the way down to the 2020. But what you see in order what is happening is that we built Amazon time on budget. We acquired the Borborema, we updated the feasibility of Borborema. We raised the capital of Borborema, We built. We are now ramping up and now close to commercial production.

We also increased investment exploration. We could increase our resource and reserves during the next 4 to 5 years. We made acquisitions recently, we did this IPO in NASDAQ also to address the daily trade environment on the top of enhance our balance sheet so that we can continue to grow.

So we are -- and in the meantime, we paid -- we have the top dividend yield in a world that we paid in 2021, 13% in 2022 and 2023, each year individually plus the share buyback, 6% in '24, plus 9% and now on average, 7.4% with this new dividend yield, so we expect to continue. And we should expect Aura to continue to perform on these 3. We will continue to increase production. We have now Borborema coming online. September, we have the closing from MSG. Then we have the construction of Era Dorada or Matupa, but both will be built along the next years.

We will continue to increase investment in exploration to increase resources and reserves. And our daily or multiple also now gradually being addressed. We are still discounted compared to our peers. We believe now we did NASDAQ and with the results we are presented, we might be at least be on average of peers, but we are -- want to change the peers as we want to continue to grow through M&As, and we know that the sector trades price per NAV and all the multiples are also responded to the size of the company. Of course, it needs to be a very cautious growth, a very cautious acquisitions, but the size is important for us to continue to increase and then increase our daily trading volume. So thank you all.

[Operator]

Out conference is now closed. We thank you for your participation and wish you a nice day.