Impact: Slightly Negative
Aura reported Q3/22 production results which missed our estimates. Total production for the quarter was 58,175 oz AuEq (+5% QoQ) and was lower than our estimate of 69,279 oz AuEq (Figure 1) primarily due to poor weather and lower productivity at San Andres. While 2022 guidance remains unchanged (260k-290k oz AuEq at cash costs of $771/oz-$845/oz AuEq) we expect the company could potentially issue revised guidance based on these production results – Aura has only produced ~175k oz AuEq YTD. Additionally, earnings for Q3/22 are anticipated to be lower due to a 19% drop in the Cu price during the quarter, thereby affecting Aura’s offtake agreement. We currently estimate EPS of $0.30/sh (was $0.48/sh) for Q3/22 after making certain adjustments to our model but expect production to improve in Q4/22 with higher-grade ore processed at EPP and operational efficiencies realized at San Andres.