Key Highlights

  • High Earnings Per Employee: The profit-per-employee figure of approximately CAD 301.3 thousand shows how rich metal prices can lift Net Income relative to a lean Mining team.
  • Two-Mine Platform: Golden Queen in California and San Bartolome in Bolivia give a mix of gold and silver revenue.
  • Balanced Outlook: Record annual results and a debt-light year-end sit alongside quarterly volatility, inventory timing and jurisdiction risk.

Company Overview and Business Model

Andean Precious Metals Corp. (TSX:APM) produces gold and silver from two operations: the Golden Queen open-pit gold mine in Kern County, California, and the San Bartolome silver operation in Potosi, Bolivia. The company reports in U.S. dollars and sells its metal at market prices.

Its output is measured in gold equivalent ounces. In 2025 it produced 99,165 such ounces, with Revenue split about 57% silver and 43% gold, so earnings follow both metals.

The shares trade at a current share price of CAD 5.06. Results also depend on grades, ore purchase costs and shipment timing.

Net Income Performance and Earnings Strength

For 2025, Andean reported net income of USD 118.2 million, or USD 0.78 per diluted share, on a record USD 359.8 million of revenue. Adjusted EBITDA also set a record at USD 133.7 million, and income from operations was USD 114.8 million.

The first half of 2026 was uneven. Net income for the six months was USD 34.2 million, or USD 0.22 per diluted share, but the second quarter produced a net loss of USD 14.0 million, versus income of USD 17.4 million a year earlier.

The company attributed the quarterly loss mainly to a deferral of sales, a fair-value decrease in marketable securities and a foreign exchange loss.

Revenue Growth and Profit Margin Analysis

Revenue reached a record USD 359.8 million in 2025. For the first half of 2026, revenue reached USD 230.8 million, about 70% above the prior-year period.

Second-quarter revenue was USD 67.6 million against USD 73.7 million a year earlier, because only about 49% of production was sold. Gross Operating Income was USD 23.6 million and income from operations USD 10.9 million.

Net income was about 33% of revenue in 2025. Margins are sensitive to silver-linked ore purchase costs, which pushed the San Bartolome gross margin ratio to 33.31% in the second quarter.

High Profit Per Employee: A Key Productivity Indicator

Andean Precious Metals' profit-per-employee figure of approximately CAD 301.28 thousand highlights the earnings power of a small producer when metal prices rise faster than its operating costs.

The standard calculation is:

Profit Per Employee = Net Income ÷ Average Number of Employees

Andean reports in U.S. dollars, and 2025 net income was USD 118.2 million. The annual filings reviewed here do not state an employee count, so no headcount-based recalculation is shown. On the basis applied here, the figure of approximately CAD 301.28 thousand per employee is read as a broad indicator of earnings intensity, not a precise audited ratio.

Contractors and third-party ore at San Bartolome may fall outside headcount, fair-value and currency effects move net income, and the metric says nothing about individual output.

The structure supports a high ratio because a modest team operates Assets that process large tonnages, while revenue is set by global gold and silver prices. When prices rise, much of the extra revenue flows to profit without added hiring.

Key Business Drivers Supporting High Profit Per Employee

Metal Price Leverage: Revenue is split between silver and gold, so rising prices of either metal lift earnings sharply against a mostly Fixed Cost base.

Production Growth: Gold equivalent output rose about 12% over nine months of 2026, with Golden Queen rebounding in the third quarter.

Ore Purchasing Model: San Bartolome relies partly on purchased ore whose cost tracks the silver price, tying margin to metal prices.

Debt Reduction: A USD 15.0 million revolver repayment in the second quarter of 2026 trims financing costs.

Risks Investors Need to Consider

Metal price risk is direct: a fall in silver or gold would reduce revenue faster than costs, hitting net income.

Bolivia carries political, regulatory and Supply risk, including dependence on purchased ore whose cost tracks the silver price.

Golden Queen costs are high, with second-quarter all-in sustaining costs of USD 2,159 per ounce, leaving less margin if grades or prices slip.

Timing of sales can shift reported results, as the second-quarter inventory build and cash outflow showed.

Fair-value losses on securities and currency moves add variability.

Bull Case: What Could Support Further Earnings Growth?

  • Sustained high gold and silver prices could keep revenue and margins elevated.
  • Gold equivalent production growth at San Bartolome and a Golden Queen rebound could raise volumes.
  • A planned NYSE listing may widen the investor base and improve market access.
  • Buybacks under the new issuer bid could support per-share earnings.

Bear Case: What Could Challenge Net Income Sustainability?

  • A drop in precious metal prices could erase recent margin gains.
  • Rising ore purchase costs and diesel prices could compress margins.
  • Operational setbacks at Golden Queen or Bolivian disruptions could cut output.
  • Inventory deferrals and fair-value losses can make quarterly earnings erratic.

Financial Strength, Cash Flow, and Earnings Quality

At the end of 2025 Andean held USD 79.2 million of cash and a record USD 166.8 million of liquid assets. Total liabilities were USD 170.3 million against total assets of USD 433.9 million.

Free Cash Flow for 2025 was about USD 59 million. In the second quarter of 2026 it was an outflow of USD 55.5 million because of a finished-inventory build, with the year-to-date outflow at USD 16.0 million.

At June 30, 2026, cash was USD 52.2 million and Liquid assets USD 170.8 million. The revolver balance had been cut to USD 14.5 million from USD 30.0 million after a USD 15.0 million repayment, and shareholders' Capital stood at USD 301.3 million.

A two-year USD 40 million Credit Facility with National Bank of Canada was signed in November 2025.

Recent Company Developments and Earnings Catalysts

On March 25, 2026, Andean released record 2025 results and issued 2026 guidance of 100,000 to 114,000 gold equivalent ounces. On March 10, 2026 it announced its intention to seek a NYSE listing, subject to approvals.

On June 28, 2026 the TSX accepted a normal course issuer bid for up to 4,000,000 shares, running from July 2, 2026 to July 1, 2027. After quarter-end the company bought 2,096,330 shares at an average of CAD 6.04.

After June 30, 2026 the deferred inventory was sold at USD 62.26 per ounce of silver and USD 4,168 per ounce of gold for gross proceeds of about USD 56.3 million.

Third-quarter production of 27,262 gold equivalent ounces rose 6% from a year earlier, and sales of 39,178 ounces were a record. Production was 79,992 ounces for nine months, with 2026 guidance reaffirmed.

What Investors Need to Watch Next

Third-quarter financial results are due after market close on November 10, 2026, with a call on November 11 at 9:00 a.m. ET. They should show the revenue catch-up from the inventory sale.

Shares fell 0.59% in the latest session. Watch costs at Golden Queen, where year-to-date all-in sustaining costs were USD 1,970 per ounce, within guidance.

The pace of buybacks, repayment of the remaining revolver balance and progress on the NYSE listing will affect capital allocation.

Any change in San Bartolome margin ratios as silver and ore costs move will indicate how durable the earnings Leverage is.