Apex Mining Q1: Gold, FX gains offset volume decline, Macro ramp-up pulls forward

From AB Capital's The Opening Bell: Three Moves

Event

Apex Mining reported 1Q26 revenues of P6.3 billion (+41% YoY) and net income of P2.8 billion (+94% YoY), driven by higher realized gold prices (+66% YoY) and FX tailwinds. This offset weaker gold volumes (-20% YoY) due to lower head grades, despite improved throughput and recovery rates.

View

Results reflect strong operating leverage to gold prices, with gross margins expanding to 65.1% (+6.7ppts YoY) despite grade-related volume weakness. Underlying operations improved (higher tonnage and recovery), suggesting the volume decline was sequencing-driven rather than structural, although rising power costs (+35% YoY) remain a key pressure point.

Catalyst

Key catalysts include: (1) movement in gold prices and USD/PHP (±US$100/oz and P1 impacting EPS by ~3-4%), (2) normalization of grades as mining transitions to higher-grade zones, (3) Maco ramp-up to 3,500 tpd (now targeted by end-2026), and (4) progress in Sangilo and Amacan projects supporting longer-term growth.

Action

We maintain a positive view on APX given strong leverage to elevated gold prices, improving operations, and visible production growth from Maco and pipeline assets, despite near-term variability from grades and cost pressures.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.