Mineros bought 137.3 million dollars (195.7 million Canadian dollars) of bullion in the third quarter and expanded its borrowing against physical gold, the Northern Miner reported on November 13, drawing on the company’s quarterly filings. The purchases pushed reported quarterly operating cash flow below zero, to negative 21.6 million dollars after bullion buying. Mineros ended September with 54 million dollars in cash and 127.7 million dollars in borrowings.
The structure is what draws the scrutiny. Mineros already had 15,601 ounces of gold tied to repurchase agreements at September 30. Its Swiss subsidiary then posted a further 20,000 ounces of gold on October 16 for net proceeds of 73.2 million dollars, after an 8.7 million dollar cash collateral deposit. The repurchase obligations fall due in February 2027 and October 2027. Separately, the gold exposure includes a forward contract to buy 18,650 ounces at 4,740 dollars an ounce, on which Mineros had recorded a 10.5 million dollar liability at September 30 and posted 12.5 million dollars in cash margin.
Red Cloud mining analyst Alina Islam said in a note on Friday that the firm continues to view the treasury strategy negatively and now adds margin call exposure to the risks, because gold that cannot be sold or repledged, and that may require margin calls in a falling market, is better viewed as collateral, not liquidity. The strategy increases Mineros’ exposure to the metal beyond the gold it produces: higher bullion prices benefit the holdings, but a decline could create calls for cash at the same time weaker prices reduce mining revenue.
The operating business underneath is performing. Mineros’ full year production forecast stands at 235,000 to 245,000 ounces, following an increase announced in October, and its Hemco plant expansion in Nicaragua is due for completion by year end. The question the filings raise is balance sheet design, not mine performance: how much of a gold producer’s treasury should itself be a leveraged gold position.