Aris Mining Corp Annual Report - A Year in Review

This summary provides a clear, concise overview of Aris Mining Corp's performance and strategic direction, drawn directly from their annual report (Form 40-F and Annual Information Form) for the fiscal year ended December 31, 2025. We aim to demystify the financial jargon, offering retail investors a straightforward understanding of the company's operations, financial health, and future prospects.

The Annual Information Form, officially dated March 11, 2026, offers crucial context, including detailed financial insights from the Management's Discussion and Analysis (MD&A).

Important Note for Investors: Aris Mining is a Canadian company. They prepare their financial statements using International Financial Reporting Standards (IFRS), not U.S. Generally Accepted Accounting Principles (GAAP). This means their financial reporting may differ from U.S. companies. Additionally, their mining terms, such as "mineral reserve," adhere to Canadian standards, which vary from SEC definitions. Investors should keep these differences in mind when comparing Aris Mining to other companies.

1. Business Overview: What Aris Mining Does

Aris Mining Corp focuses on gold exploration, development, and mining, primarily in South America, specifically Colombia and Guyana. This report covers their performance for the year ending December 31, 2025.

The company's key operations and projects include:

• Producing Assets: The Segovia Operations and Marmato Mine in Colombia.
• Development-Stage Projects: The Soto Norte Project (Colombia) and Toroparu Project (Guyana).

In 2025, Aris Mining achieved significant operational growth:

• Gold Production: They produced 256,503 ounces of gold, marking a 21.6% increase from 210,955 ounces in 2024.
• Gold Sales: The company sold 260,023 ounces, up 23.5% from 210,616 ounces in 2024.

Strategic decisions during the year included:

• Asset Divestment: On September 29, 2025, Aris Mining sold its Juby Project to McFarlane Lake Mining Ltd., streamlining its focus on core South American assets.
• Operational Expansion: A major operational achievement was the completion of the second mill ramp-up at their Segovia mine in June 2025, which significantly contributed to the increased production.

2. Financial Performance: A Story of Growth

Aris Mining's financial results for 2025 demonstrate remarkable growth:

• Sales (Gold Revenue): Sales surged to $909.1 million in 2025, an 82.1% increase from $499.3 million in 2024. This substantial growth primarily resulted from a higher average realized gold price, which jumped from $2,371 per ounce in 2024 to $3,496 per ounce in 2025—a nearly 47.4% increase.
• Profit (Net Earnings): The company's net earnings more than tripled, reaching $78.3 million in 2025, a 218.3% increase from $24.6 million in 2024.
• Adjusted Profit (Adjusted Net Earnings): Reflecting core business performance, adjusted net earnings climbed from $55.9 million in 2024 to an impressive $240.9 million in 2025—a staggering 331% increase.
• Profit per Share (Basic Net Earnings per Share): This metric also saw a significant rise, from $0.16 per share in 2024 to $0.42 per share in 2025.
• Operating Profit (EBITDA): Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which measures operational profitability, grew from $147.5 million in 2024 to $288.1 million in 2025, an increase of approximately 95.3%. Their "Adjusted EBITDA" reached $464.4 million in 2025, up 184.7% from $163.1 million in 2024.

3. Risk Factors: Navigating Potential Challenges

Aris Mining outlined several potential risks that could impact its operations and financial performance:

• Operational Risks: Gold exploration and mining inherently involve risks such as managing tailings and water, potential operational and technical problems, and securing necessary licenses. There is also a risk that actual gold production may fall short of estimates due to geological variability.
• Governmental & Regulatory Risks: Changes in local environmental regulations, government legislation, taxes, or political stability in operating countries (especially Colombia and Guyana) could significantly affect the company.
• Economic Headwinds: Broader economic factors like tariffs, trade disputes, supply chain disruptions, and general economic slowdowns could impact profitability.
• Financial Market Risks: Fluctuations in gold prices, foreign exchange rates, and interest rates can all affect earnings. The company also faces risks related to securing additional funding for growth plans and managing existing debt.
• Human Capital & Competition: Maintaining positive relationships with employees and unions, attracting and retaining key personnel, and competing with other mining companies for capital and new properties remain ongoing challenges.
• Environmental & Social Risks: The company highlights risks related to environmental, social, and governance (ESG) practices, climate change, and the costs associated with eventually decommissioning its properties.
• Legal & Cybersecurity Risks: Like any large corporation, Aris Mining faces litigation risks and the persistent threat of cybersecurity issues.
• Corruption Risks: The company specifically notes risks related to corruption and its compliance with regulations like the Extractive Sector Transparency Measures Act (ESTMA), emphasizing the importance of transparent dealings in its operating regions.
• Reporting Differences: As mentioned, reporting under Canadian standards and IFRS can make direct comparisons with U.S. companies challenging for investors, potentially posing a minor risk of confusion.
• Future Project Uncertainty: For projects like Toroparu, the company explicitly states that production estimates are "preliminary in nature" and include "inferred mineral resources," which are speculative. There is "no certainty" that these plans will materialize, and they still require all necessary permits. This means ambitious future production targets are not guaranteed.
• Market Trends & Regulatory Changes: External factors significantly influence the company. The ongoing outlook for gold prices remains a critical market trend. Regulatory shifts, such as new environmental regulations, evolving sustainability and governance practices, and the broader impacts of climate change, could increase compliance costs or necessitate operational adjustments. Global trade issues like tariffs or trade disputes could also affect the business, particularly concerning equipment and material sourcing. Compliance with acts like ESTMA represents a specific regulatory trend the company must manage.

4. Management Discussion and Analysis (MD&A) Highlights

The Management's Discussion and Analysis (MD&A) section of the 40-F offers management's perspective on the company's financial condition and operational results. Key highlights from Aris Mining Corp's MD&A for the fiscal year ended December 31, 2025, are integrated throughout this summary, particularly in the sections discussing:

• Operational Achievements & Strategic Shifts: Detailing how the company executed its business plan.
• Financial Performance Drivers: Explaining the factors behind revenue, profit, and other financial metrics, including the impact of gold prices and production increases.
• Major Wins and Challenges: Management identified significant events, operational successes, and ongoing challenges.
  • Major Wins: Included massive financial growth, increased gold production, the Segovia expansion, a strong cash flow turnaround, debt management (paying off US$300 million "2026 Unsecured Notes"), and the strategic sale of the Juby Project.
  • Ongoing Challenges: Included permitting processes, managing inflationary pressures, and ensuring strong community relations.
• Financial Health: Discussing liquidity, capital resources, and debt management strategies.
• Future Outlook: Outlining management's plans, strategies, and capital expenditure intentions for future growth.
• Leadership and Strategy: The sale of the Juby Project and significant investments in expanding Segovia and developing Marmato, Soto Norte, and Toroparu clearly represent a strategic shift towards focusing on a concentrated portfolio of high-potential gold assets in South America. Management and KPMG LLP, the auditor, deemed the company's internal controls and procedures for financial reporting "effective," indicating a stable and well-managed financial reporting environment.

The MD&A further elaborates on the company's critical accounting estimates, financial instruments, and risk exposures, which are also summarized in the "Risk Factors" section.

5. Financial Health: Debt, Cash, and Liquidity

Aris Mining confirmed it was not involved in any "off-balance sheet arrangements," which is a positive sign for transparency and financial stability.

Regarding debt management:

• The company fully redeemed (paid off) US$300 million in "2026 Unsecured Notes" (with a 6.875% interest rate) during the year.
• However, they also issued US$450 million in new "2029 Unsecured Notes" (with an 8.000% interest rate) on October 31, 2024, likely to fund ongoing operations and ambitious development projects.
• As of December 31, 2025, US$27.7 million remained outstanding on their "2027 Aris Holdings Notes" (with a 7.5% interest rate).
• This places their total debt outstanding at year-end 2025 at approximately $477.7 million ($450M + $27.7M). With an Adjusted EBITDA of $464.4 million, their debt-to-Adjusted EBITDA ratio stands at a healthy ~1.03x, indicating manageable leverage.

Cash Flow: A Significant Turnaround Aris Mining's cash flow generation was a major highlight for the year:

• Operating Free Cash Flow (after sustaining capital and taxes): This cash, generated from core business operations after paying for ongoing expenses and taxes, surged from $59.6 million in 2024 to a remarkable $322.1 million in 2025—a massive 440.5% increase. This demonstrates the company's strong ability to generate cash from its mines.
• Free Cash Flow (after growth and expansion capital): Even more impressively, after funding both maintenance and new growth projects, the company transitioned from a cash outflow of $108.8 million in 2024 to generating $126.5 million in cash in 2025. This significant turnaround indicates robust financial health and the ability to self-fund growth initiatives.

The company also substantially increased its capital spending:

• Sustaining Capital (funds to maintain current operations): Increased from $27.0 million in 2024 to $49.1 million in 2025.
• Growth and Expansion Capital (funds for new projects and growth): Increased from $168.4 million in 2024 to $195.6 million in 2025.

The ability to significantly increase capital spending while simultaneously turning free cash flow positive is a very strong indicator of financial health.

6. Future Outlook: Ambitious Growth Plans

Aris Mining has ambitious plans for the future, supported by strong cash generation and a strategic focus on high-potential assets in South America:

• Production Targets:
  • They expect expansion projects at Segovia and Marmato to boost annual gold production to approximately 500,000 ounces per year.
  • Their longer-term objective is to reach approximately 1 million ounces of annual gold production. Specific timelines for these targets are not provided in this summary.
• Key Project Developments:
  • Marmato Expansion: Construction of the new Marmato bulk mine and processing plant is underway, with first gold expected in the fourth quarter of 2026.
  • Soto Norte Project: The company is finalizing environmental studies, with plans to submit them in Q2 2026 to initiate the licensing process.
  • Toroparu Project: A Prefeasibility Study is in progress for this project in Guyana, and Aris Mining expects to make a construction decision in early 2027.
• Capital Expenditure: The estimated capital expenditures for the Marmato, Soto Norte, and Toroparu projects are not detailed in this summary.

The strong free cash flow generated in 2025, alongside the new debt issuance, indicates a strategy to self-fund a significant portion of these growth initiatives. It is important to remember the company's own cautionary note: these future production estimates, especially for Toroparu, rely on preliminary assessments and include speculative resources. There is no guarantee these targets will be met, and the company still needs to secure all necessary permits and significant capital investment.

7. Competitive Position

Aris Mining's strategy appears centered on acquiring and developing high-grade gold assets in established South American mining jurisdictions. They aim to leverage operational efficiency and expand existing operations. Their strong financial performance in 2025 suggests they are effectively competing within their chosen niche.

This year's results show Aris Mining Corp growing production, significantly benefiting from higher gold prices, and generating substantial cash to fund its ambitious future plans. However, like any mining company, it faces inherent risks, particularly concerning the successful execution and funding of future projects, and the intrinsic volatility of the gold market.