F-1/A: Aura Minerals Files for Nasdaq Listing, Reports Strong Operational Growth Amidst Hedging Losses and Strategic Acquisitions

Aura Minerals Inc. is pursuing a Nasdaq Global Select Market listing to enhance liquidity and shareholder diversification, while reporting significant revenue and EBITDA growth, despite a net loss driven by unrealized hedging losses on rising gold prices, and advancing key mining projects and acquisitions.

Summary

• Aura Minerals Inc. is offering 8,100,510 common shares in a public offering, with an option for underwriters to purchase an additional 1,215,077 shares, and has applied to list its common shares on the Nasdaq Global Select Market under the symbol AUGO.
• The company reported a net loss of US$73.2 million for the three months ended March 31, 2025, a significant increase from a US$9.2 million loss in the same period of 2024, primarily due to a US$80.7 million unrealized loss on derivative gold collars as gold prices increased.
• Revenue for the three months ended March 31, 2025, increased by 22.5% to US$161.8 million, up from US$132.1 million in Q1 2024, driven by a 39% increase in average net gold price (US$2,786/oz) and an 11% increase in average copper sale price (US$4.26/lb), partially offset by a 12% reduction in sales volume (60,491 GEO).
• Adjusted EBITDA for Q1 2025 grew by 54.2% to US$81.4 million from US$52.8 million in Q1 2024, with Adjusted Free Cash Flow increasing by 115.6% to US$29.1 million from US$13.5 million.
• For the year ended December 31, 2024, revenue increased by 42.5% to US$594.2 million, and Adjusted EBITDA nearly doubled to US$266.8 million from US$134.1 million in 2023, while the company recorded a net loss of US$30.3 million compared to a US$31.9 million profit in 2023.
• The company's total production for the three months ended June 30, 2025, reached 64,033 Gold Equivalent Ounces (GEO), a 7% increase compared to the previous quarter.
• The Borborema gold mine in Brazil commenced its ramp-up phase on March 27, 2025, and is expected to achieve commercial production by the third quarter of 2025, with preliminary production of 2,577 GEO in Q2 2025.
• Aura Minerals entered into a definitive agreement on June 2, 2025, to acquire Minerao Serra Grande S.A. (MSG) from AngloGold Ashanti plc for an upfront cash consideration of US$76 million, plus deferred consideration of a 3% net smelter returns participation.
• The company's dividend policy is to declare a quarterly dividend based on 20% of its estimated Adjusted EBITDA less sustaining and exploration capital expenditures, with a dividend of US$0.40 per common share (approximately US$30 million total) declared on May 5, 2025.
• As of March 31, 2025, total current loans and debentures stood at US$100.9 million, and non-current at US$366.8 million, with total shareholders' equity at US$139.9 million, projected to increase to US$325.1 million post-offering.

Sentiment

Score: 7

Explanation: The company demonstrates strong operational growth, increasing revenue, gross profit, and Adjusted EBITDA. Strategic acquisitions and project advancements indicate a clear growth trajectory. While a net loss is reported, it's primarily due to accounting treatment of gold hedges in a rising gold price environment, which is fundamentally positive for a gold producer. The company is also committed to shareholder returns and ESG. Risks are well-disclosed and typical for the industry.

Positives

• Revenue increased by 22.5% in Q1 2025 and 42.5% in FY 2024, demonstrating strong top-line growth.
• Gross profit surged by 67.9% in Q1 2025 and 99.4% in FY 2024, indicating improved operational efficiency and profitability.
• Adjusted EBITDA increased by 54.2% in Q1 2025 and 99% in FY 2024, reflecting robust underlying operational performance.
• Adjusted Free Cash Flow grew by 115.6% in Q1 2025 to US$29.1 million and by 121.6% in FY 2024 to US$178.2 million, highlighting strong cash generation.
• Cash Conversion improved to 65.0% in LTM March 2025 and 66.8% in FY 2024, indicating efficient conversion of operating profits to cash flow.
• The Almas mine achieved the lowest All-in Sustaining Cash Costs (AISC) among Aura's mines in 2024 and exceeded its 2021 Feasibility Study production expectations, with a 204% increase in GEO production in 2024.
• The Borborema Project is on track for commercial production by Q3 2025, having achieved its first gold pour in Q2 2025, and is projected to produce 83,000 GEO annually for its first three years.
• The acquisition of Minerao Serra Grande S.A. (MSG) is a strategic move to expand the portfolio in a core jurisdiction (Brazil) with potential for value creation and operational synergies.
• The company has a proven track record of expanding and building new mines on-time and on-budget, as demonstrated by the Almas project (developed in 16 months, US$77 million, 5-month ramp-up).
• Aura Minerals has consistently returned value to shareholders, distributing US$218 million in dividends and buybacks since January 1, 2021, with an 11% dividend yield plus buybacks for LTM March 2025.
• Exploration efforts have been successful in expanding mineral resources and reserves, with 113% production growth since 2018 and over 563,558 hectares of mineral rights for future potential.
• The company maintains high ESG standards, achieving zero lost-time accidents in 2023 and 2025 YTD, using predominantly renewable electricity, and receiving the Socially Responsible Company (ESR) Seal for its Mexico and Honduras operations.
• The favorable definitive injunction obtained for the Aranzazu Mine in Mexico allows mining activities to continue in protected areas, mitigating a significant regulatory risk.

Negatives

• The company reported a significant net loss of US$73.2 million in Q1 2025, a 695.7% increase from Q1 2024, primarily due to unrealized losses on gold derivative collars.
• Finance expense increased by 256.6% to US$121.6 million in Q1 2025, largely due to US$100.2 million in unrealized losses on gold derivatives and US$6.0 million in realized losses from gold hedges, reflecting rising gold prices that negatively impacted hedging positions.
• Cash costs per gold equivalent ounce sold (US$1,149) and All-in Sustaining Cash Costs (AISC) (US$1,461) increased in Q1 2025 compared to Q1 2024 (US$1,003 and US$1,287 respectively).
• Sales volume of gold equivalent ounces decreased by 12% in Q1 2025 compared to Q1 2024, impacted by production decreases in Aranzazu, Minosa, and Apoena mines.
• Apoena Mine's production decreased by 27% in Q1 2025 and 19.2% in FY 2024, primarily due to mine development activities, pre-stripping, and delays in obtaining permits for the Nosde pit expansion to access higher grades.
• The company's net debt increased to US$271.9 million as of March 31, 2025, from US$188.1 million as of December 31, 2024.
• The acquisition of Bluestone Resources (Era Dorada project) in January 2025 involved a challenge from the Guatemalan Ministry of Environment regarding the open pit mining method approval procedure.
• The Aranzazu Mine's production of GEO decreased by 18% in Q1 2025 and 8.1% in FY 2024 compared to prior periods, despite higher metal prices.
• The Minosa Mine's production decreased by 8% in Q1 2025 compared to Q1 2024 due to mine sequencing and lower plant ore feed.

Risks

• Market fluctuations, including in gold and copper prices, can significantly impact profitability and the feasibility of production or new mine development.
• Actual costs may significantly exceed estimated costs and economic returns from preliminary economic assessments and feasibility studies may not be realized.
• Failure to achieve production estimates due to factors like inaccurate mineral reserve/resource estimates, ground conditions, industrial accidents, or regulatory changes could materially impact cash flows and profitability.
• Mineral reserve and resource estimates may be materially lower than actual recoverable volumes, and estimates of mine life may be shorter, potentially rendering certain reserves uneconomical.
• Inability to replenish mineral reserves through discovery, development, or acquisition could hinder the company's ability to maintain or increase annual production.
• Delays in obtaining governmental approvals and permits, or in the performance of contractors and suppliers, could delay or prevent the construction and start-up of new mines.
• Global financial conditions, including credit crises, inflation, and geopolitical conflicts, may adversely affect operations, sales, and profitability.
• Increases in production costs (e.g., contractor costs, materials, personnel, energy) due to unforeseen events or supply chain issues could significantly impact profitability.
• Inability to secure financing on favorable terms, or at all, could delay or postpone exploration, development, or production activities.
• Increased or changing laws and regulations, including environmental, health, and safety standards, or changes in their enforcement, could result in higher costs, delays, or operational interruptions.
• Disruption to current trade practices, such as tariffs or import/export restrictions, could adversely affect the ability to market products and procure inputs.
• Epidemics, pandemics, or other public health crises could negatively impact workforce mobility, productivity, supply chains, and overall economic conditions.
• Disagreements with local communities and other stakeholders could adversely impact business operations and reputation, potentially leading to roadblocks, injunctions, or lawsuits.
• Failure or unavailability of critical assets or infrastructure (e.g., roads, power, water supply) could adversely affect operations.
• Cyberattacks, including unauthorized disclosure or disruption of IT systems, could harm business and reputation.
• Mining operations involve significant inherent hazards and risks, such as unusual geological formations, seismic activity, and equipment failures, which could lead to damage, injuries, or liabilities.
• The MSG Acquisition is subject to conditions (e.g., anti-trust approval, tailings dam decommissioning) that may not be satisfied, and anticipated benefits (e.g., cost synergies) may not be realized.
• Significant presence in Latin America exposes the company to adverse economic or political conditions, including instability, changes in laws, and exchange rate volatility.
• Illegal activity in operating countries (e.g., illegal mining, corruption, blackmail) could negatively impact reputation and results.
• The company's foreign private issuer status means it has different disclosure and corporate governance requirements than U.S. domestic registrants, which may make its shares less attractive to some investors.
• The company may lose its foreign private issuer status, requiring compliance with more extensive U.S. domestic reporting requirements and incurring significant additional costs.
• As an emerging growth company, the company has reduced disclosure requirements, which may limit information available to shareholders and affect share price volatility.
• The market price of the company's equity securities may be volatile due to various factors unrelated to operating performance, including commodity prices, economic conditions, and analyst coverage.
• The economic value of investments may be diluted by future issuances of common shares for growth or acquisitions.
• Shareholders may not receive dividends, as declaration is subject to Board discretion, solvency tests, and potential limitations from debt covenants or subsidiary dividend restrictions.
• Enforceability of U.S. civil liabilities and judgments against the British Virgin Islands-incorporated company and its non-U.S. resident directors/officers may be difficult.
• The company may be or become a passive foreign investment company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. Holders.

Future Outlook

Aura Minerals expects to achieve commercial production at its Borborema gold mine by the third quarter of 2025. The company plans to use proceeds from the offering to strengthen its business, including funding the upfront cash payment for the MSG Acquisition and providing incremental liquidity for strategic growth initiatives such as advancing Era Dorada, Matup, and Carajs projects, and expanding mineral reserves and resources through exploration. The Apoena Mine anticipates regaining access to higher volume and higher grades by the end of 2026 through ongoing pre-stripping activities. The Almas mine's updated Feasibility Study projects an average annual production of 61,248 ounces of gold per year between 2025 and 2034, totaling 612,000 ounces of gold, with an after-tax net present value of US$393 million. The company intends to conduct a definitive feasibility study for the Era Dorada project in 2025 to evaluate all operational options. Aura also plans to continue exploration drilling campaigns on targets like Carajs in 2025.

Management Comments

• "Our mission is to deliver long-term value by unlocking operational efficiencies, responsibly growing our portfolio with a focus on return on invested capital, responsible mining practices and a commitment to sustainability."
• "We believe that our success as a gold and copper mining company is the result of a combination of strategic acquisitions, mine expansions and development and efficiency improvements."
• "Backed by a traditional Brazilian family of seasoned gold-focused entrepreneurs and mine developers, as well as a new management team, we have undergone a significant transformation since 2016, enhancing our profitability, replenishing resources and even extending the life-of-mine (LOM) across our operating assets, while also facilitating inorganic expansion – consistently guided by a disciplined commitment to value creation and sustainable growth."
• "We have a track record of expanding and building new mines on-time and on-budget, with ramp-up capabilities, consistent cash flow generation and dividend payments while delivering an attractive return on investment."
• "Our disciplined cost management ensures efficiency in reserve development while we strive to serve as the benchmark for operational security and excellence in project development."
• "Strategically, we prioritize high-IRR (Internal Rate of Return) growth opportunities, balancing capital appreciation with reliable dividend distributions."
• "We believe that operating in several geographies, each of which are located within democratic countries, provides us with the advantage of diversifying our political, social and macroeconomic risks."
• "We believe that Aura distinguishes itself as a fast-growing, cost-competitive, efficient and high cash generation miner when compared to the largest companies in the gold mining sector, resulting from our unique combination of disciplined capital allocation, operational excellence and our focus on value creation across all stages of our portfolio."
• "Aura believes that the Borborema Project remains on track to declare commercial production by the end of the third quarter of 2025."
• "We believe that MSG has a rich resource base, which we believe we can exploit in a profitable manner."
• "We believe there is potential intrinsic value, which we could unlock given our focus on operations of similar scale in one of our core jurisdictions, Brazil, our proven turnaround history (e.g., Apoena and Aranzazu) and our team with previous knowledge of the Serra Grande gold mine."
• "We believe that this is the right time to incorporate MSG into our portfolio, after the conclusion of Almas operation ramp-up and Borboremas construction completion, joining our recently acquired asset in Guatemala, Era Dorada, and reinforcing our agenda to identify and acquire strategic assets with potential of value creation and return on capital."
• "Aura is evaluating the alternatives for future potential development of Era Dorada."
• "We value safety and has robust management systems in place to ensure the prevention of workplace incidents."
• "We are in our third and final year of voluntary certification under the Responsible Gold Mining Principles of the World Gold Council, and are committed to the 10 principles addressing Environmental, Social, and Governance issues."
• "In 2024, Aura commenced the process of joining the United Nations Global Compact. This signifies our dedication to aligning our operations with universally accepted principles in the areas of human rights, labor, environment, and anti-corruption."

Industry Context

The document highlights Aura Minerals' position as an Americas-focused gold and copper producer, operating in a highly cyclical commodity market influenced by global economic activity, supply/demand dynamics, and geopolitical factors. The company emphasizes its strategy of disciplined capital allocation, operational excellence, and inorganic expansion, aiming to differentiate itself as a fast-growing, cost-competitive, and high cash-generating miner. The gold industry is characterized by its role as an inflation hedge and store of value, with increasing demand from central banks and technology sectors. Copper demand is surging due to electrification and decarbonization trends, facing supply constraints from declining ore grades and long project lead times. Aura's focus on acquiring and optimizing existing mines, coupled with greenfield development, aligns with industry trends of seeking value-accretive opportunities and expanding mineral reserves amidst scarcity. The company's commitment to ESG principles and certifications (ESR Seal, GPTW, World Gold Council RGMP) reflects a broader industry shift towards sustainable and responsible mining practices to maintain social license to operate.

Comparison to Industry Standards

• Aura Minerals claims to distinguish itself as a "fast-growing, cost-competitive, efficient and high cash generation miner when compared to the largest companies in the gold mining sector." However, the document does not provide specific comparative financial metrics or operational benchmarks against named competitors (e.g., Barrick Gold, Newmont, Agnico Eagle, Freeport-McMoRan) to substantiate this claim.
• The company highlights its track record of expanding and building new mines "on-time and on-budget," citing the Almas project as an example (developed in 16 months, US$77 million, 5-month ramp-up). This suggests a strong project execution capability that could be considered competitive within the industry, but no specific project comparisons are provided.
• Aura's All-in Sustaining Cash Costs (AISC) of US$1,361/GEO for LTM March 2025 and US$1,320/GEO for FY 2024 are presented. While the document states Almas had the lowest AISC among Aura's mines in 2024, it does not benchmark these costs against industry averages or specific peer companies' AISC figures (e.g., comparing to average AISC of major gold producers like Barrick or Newmont, which typically range from US$1,200-US$1,500/oz, would provide better context).
• The company's dividend yield plus buybacks of 11% for LTM March 2025 is presented as "consistent and attractive" compared to the global metals and mining industry, but no specific dividend yields or buyback programs of comparable companies are listed for direct comparison.
• Aura's ESG performance, including zero lost-time accidents in 2023 and 2025 YTD, use of predominantly renewable electricity, and certifications like the ESR Seal and World Gold Council RGMP compliance, indicates a commitment to standards that are increasingly important in the mining industry. However, specific comparative ESG metrics or rankings against industry leaders are not provided.

Corporate Governance

Legal Proceedings

• A public civil action was filed in December 2023 by the Tocantins state prosecutors office against the Almas gold mining project, alleging failure to comply with consultation requirements mandated by ILO Convention 169 for the Quilombola community of Baio. A preliminary injunction to suspend the license was denied, and the company formally agreed to all requests presented by the prosecutors office in a conciliation hearing on March 24, 2025.
• Mineradora Apoena S.A. is a party to a criminal proceeding investigating an alleged offense against urban planning and cultural heritage related to the Complexo Arqueolgico Histrico das Runas de So Francisco. The company was acquitted by the lower federal court, but the decision is subject to appeal before the Federal Regional Court of the First Region.
• Mineradora Apoena S.A. is a party to a Civil Public Action filed by the Brazilian Federal Public Prosecutors Office (MPF) and the National Institute of Historic and Artistic Heritage (IPHAN), claiming degradation to the Arraial de So Francisco Xavier Archaeological Site. A preliminary injunction was partially granted to prohibit expansion of a waste deposit and other interventions, and the lawsuit awaits first instance judgment.
• The Mexican subsidiary, Aranzazu Holding, is contesting in court a decree from January 8, 2024, declaring the Semidesierto Zacatecano site (partially including Aranzazu exploration areas) as a protected natural area. Aranzazu Holding has obtained a favorable definitive injunction that suspends the application of the decree to its operations, allowing activities to continue, pending a final court ruling.

Related Party Transactions

• Iraja Royalty Payments: Mineracao Apoena S.A. (Apoena) pays a royalty to Iraja Mineracao Ltda., a company controlled by the same controlling group as Aura's Chairman, Paulo Carlos de Brito. This royalty is 2.0% of Net Smelter Returns on gold mined until 1,000,000 troy ounces are produced, then reduces to 1.0%. Aura incurred US$0.8 million in related royalty expenses in Q1 2025 and US$2.7 million in FY 2024.
• Royalty Agreement for Aura Almas: Aura's wholly-owned subsidiary, Almas, pays a 1.2% Net Smelter Returns royalty on all gold mined or sold to Iraja Mineracao Ltda., controlled by the same controlling group. Aura incurred US$0.99 million in related royalty expenses in Q1 2025 and US$2.64 million in FY 2024.
• Royalty Agreement for Matup: Aura's wholly-owned subsidiary, Matup, will pay a 1.2% Net Smelter Returns royalty on all gold mined or sold to Iraja Mineracao Ltda. once commercial production commences. The subsidiary is currently in care and maintenance.
• Dividends payable to Northwestern: Northwestern Enterprises Ltd., a company controlled by the Chairman of the Board, Paulo Carlos de Brito, is the majority shareholder (~54.1% ownership as of March 31, 2025). In Q1 2025, US$9.9 million in dividends were paid to Northwestern.
• Employee withholding taxes payable to the Company: Certain key executives had outstanding balances for withholding taxes associated with exercised stock options. As of March 31, 2025, the total outstanding balance was US$3.2 million, which was repaid in full as of June 6, 2025.

Stakeholder Impact

• **Shareholders**: The public offering aims to increase liquidity and diversify the shareholder base, potentially enhancing share value. Consistent dividend payments and share buyback programs demonstrate a commitment to shareholder returns. However, dilution from the offering and potential volatility in share price are noted risks. The net loss due to hedging impacts reported earnings but is explained by rising gold prices, which is positive for underlying asset value.
• **Employees**: The company emphasizes a decentralized culture, empowering local teams, and focuses on professional development and innovation. High safety standards (zero lost-time accidents in 2023 and 2025 YTD) and Great Place to Work (GPTW) certification indicate a positive work environment. Internal career growth is a key accomplishment. Labor disputes are a potential risk.
• **Customers**: The company's revenues are concentrated in a small number of large customers (e.g., Auramet International LLC, Asahi Refining USA Inc., Trafigura Mexico, S.A. de C.V.). Any reduction in business from these key customers could disrupt sales and adversely affect financial results.
• **Local Communities**: Aura Minerals emphasizes its 'Aura 360 Culture' focused on positive social impact, community engagement, and sustainable development. Initiatives like the 'Seeds of Hope' project in Honduras aim to create local employment and economic progress. However, legal proceedings related to community consultations (e.g., Quilombola community in Brazil) highlight ongoing challenges in stakeholder relations.
• **Suppliers/Contractors**: The company relies on third-party contractors for mining operations and raw materials. Deficient work or non-compliance by contractors could adversely affect business. The MSG acquisition involves assuming obligations to MSG's counterparties.
• **Creditors**: The company's indebtedness has increased, and its ability to meet financial obligations depends on cash flows and access to additional debt. Financial covenants in loan agreements must be maintained, and non-compliance could lead to adverse effects.

Next Steps

• Complete the public offering of common shares and list them on the Nasdaq Global Select Market under the symbol AUGO.
• Finalize the acquisition of Minerao Serra Grande S.A. (MSG) by the third quarter of 2025, subject to anti-trust approval, tailings dam decommissioning, and MSG Subsidiaries Transfer.
• Achieve commercial production at the Borborema gold mine by the end of the third quarter of 2025.
• Continue pre-stripping activities at Apoena Mine to regain access to higher volume and higher grades by the end of 2026.
• Conduct a definitive feasibility study for the Era Dorada gold project in 2025 to evaluate all operational options, considering existing permits.
• Advance the Matup gold project by completing environmental licensing processes, including land purchase for legal reserve and obtaining permits for gas station and power line, estimated to take 6-12 months.
• Continue exploration drilling campaigns on regional targets like Carajs in 2025 to expand mineral resources and reserves.
• Monitor and implement remedial measures for the significant deficiency in internal controls over financial reporting identified in 2024.
• Continue to comply with the World Gold Council's Responsible Gold Mining Principles and advance the process of joining the United Nations Global Compact.

Key Dates

Recommendation

Keywords

Gold Mining, Copper Mining, SEC Filing, F-1/A, Public Offering, Nasdaq Listing, Mining Operations, Mineral Reserves, Mineral Resources, Adjusted EBITDA, Free Cash Flow, Dividend Policy, Acquisition, Borborema Project, Almas Mine, Aranzazu Mine, Minosa Mine, Apoena Mine, Exploration, ESG, Latin America Mining, Hedging, Financial Performance