Aris Mining Corporation Q2 FY2024 earnings call

Key Points - Bill Zartler: Aris continued strong momentum in 2024 driven by resilient volumes from long-term contracting customers and operational execution; substantially completed first half capital expenditure program and better leveraged asset footprint. - Amanda Brock: First half was strong; second quarter produced water volumes grew 5% YOY, adjusted EBITDA $50M up 17% YOY; second quarter volumetrically softer due to natural flowback declines; adjusted operating margin $0.46 per barrel for second straight quarter due to electrification, reduced chemical costs, etc.; increased full year adjusted EBITDA guidance; signed LOI with iodine production company for Permian Basin facility; joint industry project with ConocoPhillips, etc. completed second desalination pilot, Coterra Energy joined. - Stephan Tompsett: Second quarter adjusted EBITDA $50M up 17% YOY, down 6% QOQ due to flowback; adjusted operating margin $0.46 per barrel得益于水供应业务组合和skim回收率高于预期; first half CapEx $75M consistent with full year guidance; increased full year adjusted EBITDA guidance to $195M - $205M; ended quarter with net debt $438M, debt-to-adjusted-EBITDA 2.2 times; ERP software upgrade successful in July.

In the Water Solutions business, 362,000 barrels of water per day were sold in the second quarter, approximately flat with the first quarter. The second quarter achieved an adjusted EBITDA of $50 million, up 17% year-over-year. For the full year 2024, the adjusted EBITDA guidance range has been increased to $195 million to $205 million. The second quarter also saw an adjusted operating margin of $0.46 per barrel for the second consecutive quarter. In the third quarter, produced water volumes are expected to be between 1.06 million and 1.09 million barrels per day, with skim recoveries of approximately 1,300 barrels of oil per day. The Water Solutions business is projected to average 410,000 to 440,000 barrels per day in the third quarter.

• Increased full year 2024 adjusted EBITDA guidance to $195 million to $205 million. - Third quarter produced water volumes expected to be between 1.06 million and 1.09 million barrels per day, skim recoveries ~1,300 barrels per day. - Third quarter Water Solutions business expected to average 410,000 to 440,000 barrels per day.

• Forward-looking statements are subject to known and unknown risks and uncertainties, and actual results may differ materially from those contemplated. - Non-GAAP financial measures should not be considered in isolation; refer to SEC filings for risk factors.

Q: John Mackay asked about Permian growth into the back half and 2025, and disposal capacity strategy.

A: Amanda Brock and David Tuerff discussed Permian steady performance, rig count, and disposal capacity strategy with TPL alliance.

Q: Chad asked about leverage, capital use, and M&A landscape.

A: Stephan Tompsett and Amanda Brock talked about capital allocation focus on organic growth and inorganic opportunities, M&A landscape.

Q: Jeffrey Campbell asked about iodine extraction and Texas Tech collaboration.

A: Amanda Brock discussed iodine as first target due to available technology, and collaboration with Texas Tech.

Q: Eli asked about margin sustainability and dividend growth.

A: Stephan Tompsett and Bill Zartler talked about margin sustainability being durable, and long-term dividend growth.