Second Quarter

2021 Second Quarter Report

Compañía Minera Autlán, S.A.B. de C.V.

2021 Second Quarter Report

San Pedro Garza García, N.L., Mexico, July 21st, 2021.- Compañía Minera Autlán, S.A.B. de C.V. and Subsidiaries (Autlán o the Company) presents its second quarter 2021 (1Q21) financial and operating results in accordance with the International Financial Reporting Standards (IFRS). Figures may vary due to rounding.

Results and Relevant Events

• Positive operating results, in line with the recovery trend
• Strong demand keeps ferroalloy prices at high levels
• Ferroalloy Sales volume resulted 14% higher compared to 2Q20
• Quarterly Net Sales at its highest level in 5 quarters and 17% higher than 2Q20
• EBITDA increased by 45% compared to the immediate previous quarter
• Financial strength and net debt level of 2.2x
• Progress in the planning and new precious metal exploration projects

Industry and Operations

Autlán Manganese and EMD

At the end of the second quarter, the World Steel Association estimated that the global production of liquid steel increased by 14% compared to the same period in 2020, showing growth in all regions.

Accordingly, the US steel industry exhibited important signs of recovery by accumulating annualized increases of more than 250% in the prices of hot rolled sheet at the end of the first half of the year. This led to an unexpected environment with restricted supply and higher levels of steel consumption, as well as rebounds in prices of various raw materials - including manganese ferroalloys.

In North America, the progress in vaccination rates and the recent announcement of a new infrastructure plan has allowed a progressive economic recovery in the United States, showing increases of around 16% in steel production during the first half of the year. The utilization of installed capacity in the US steel industry reached a level of 83% in June, well above that registered in the same month of the previous year when it fell to 53% due to the pandemic. As

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2021 Second Quarter Report

for Mexico, the production is also estimated to strengthen by approximately 16% by the end of the first six months of 2021.

During the second quarter of the year, the international price of manganese ore grew by 11% compared to the first quarter of 2021. Part of this price boost can be explained by the high maritime freight rates and a decrease in supply due to logistic problems in some South African1 mines. In this same context, manganese ferroalloys maintained an upward trend even greater than those observed in previous months. The prices increased 55%, 70% and 60% for High Carbon Ferromanganese, Medium Carbon Ferromanganese and Silicomanganese respectively, over the previous year. In this scenario, the stringency of supply in the US market, coupled with strong demand, put the prices of manganese ferroalloys at levels not seen since 2008. These price levels are solid and it is expected that, together with strong demand, maintained during 3Q21 and the rest of the year.

The EMD (Electrolytic Manganese Dioxide) market continued to show stability in consumption levels within the European community with a positive performance in the price, in line with the world trend of manganese ore. Therefore, EMD market conditions are expected to remain favorable in the second half of the year.

Autlán Energy

In 2Q21, the power generation of the Atexcaco Hydroelectric Plant in Puebla decreased by 5% compared to the 2Q20 due to the low rainfall during the period. This extreme drought condition continues affecting a large part of the Mexican territory; therefore a system has been implemented for an optimal use of the precious liquid. However, during the month of June there were above-average rains and as a result, during the quarter, 15% of the total electrical energy requirement of the ferro-alloy plants was satisfied. This represented cost savings of $ 2.3 million dollars which, cumulative, the benefit from own sources of clean energy totaled $ 3.7 million. CONAGUA's forecasts of precipitation in the region for the rest of the year are favorable.

In addition, the Power Purchase Agreements (PPA's) with different private providers represented 16% of energy consumption with savings over $320 thousand dollars during the quarter.

Autlán Metallorum

The price of gold showed a slight increase of 1% during the 2Q21 due to the uncertainty by the global performance after the increase in infections caused by the Delta variant of the Coronavirus. On the other hand, global measures aimed at promoting economic reactivation, as well as the growing inflation in the United States that increases the possibilities that the FED raises interest rates in the future, pushing down the price of gold which, year to date, has decreased by -6.7%.

1 South Africa is the world's leading producer of manganese ore.

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Taking advantage of the positive situation in the manganese market, Autlán Metallorum started a plan to slow down the mining operation by temporarily suspending the extraction and crushing of the mineral. The mineral that was already deposited in the leaching yards was being processed and sold, so the sales volume for the quarter decreased, reaching 7.7 thousand ounces sold year to date.

This reduction in the operation will allow us to focus the priority of this Division towards the formulation of its new life-of-mine plan with more certainty and better performance. We are working along with specialized experts to read the ore bodies according to our potential mining pits, with the natural risks of this activity, which will lead us to an optimal design of this mineralized deposit.

In addition, the adjacent areas to our current operation space have been studied and, due to the positive results obtained in surface sampling, we have started geology and diamond drilling works to verify the inferred resources. With this, we intend to work on several potential mining fronts and have greater flexibility to resume operations.

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2021 Second Quarter Report

Relevant figures

Adoption of the Dollar as Functional and Reporting Currency

According to the International Financial Reporting Standards (IFRS), the functional currency must be determined depending on the currency of the economic environment in which the issuer and its subsidiaries predominantly operate, which in the case of Autlán since 2016 is the US dollar. Due to this situation, the unaudited figures reported here have been prepared in that currency.

Earnings Report for the second quarter 2021 Income Statement for the second quarter of 2021 (figures in thousands of dollars, unless otherwise specified) (according to IFRS)

	Accumulated Figures		Quarterly Figures
	2021	20202	2T21	1T21	4T20	3T20	2T20
Net Sales	190,531	184,439	98,728	91,802	82,452	79,349	84,217
Ferroalloys (thousand MT3)	116.1	109.3	55.7	60.4	53.8	50.8	49.0
Manganese Mining (thousand MT)	45.0	95.7	28.0	17.0	41.3	56.2	69.1
Power* (GWh)	41.2	87.0	40.0	41.2	60.6	53.7	42.2
Precious metals (thousand Eq Oz)	7.7	20.1	2.7	5.0	4.9	5.3	6.3
EMD (thousand MT)	5.8	5.1	2.7	3.1	2.9	2.9	3.1
Cost of sales	-153,887	-147,228	-75,661	-78,226	-73,203	-63,453	-62,870
Gross profit	36,643	37,211	23,067	13,576	9,249	15,896	21,347
Operating expenses	-26,689	-26,127	-13,927	-12,762	-14,644	-11,460	-13,143
Operating income	9,955	11,084	9,140	815	-5,396	4,436	8,204
EBITDA	38,485	39,706	22,788	15,697	10,342	17,961	20,790
Net profit	-6,751	14,952	-4,225	-2,527	-19,437	-10,788	-7,129

* When consolidating results, Autlán Energy sales to our own manganese ferroalloy plants are eliminated.

Net sales

In 2Q21, Autlán achieved a net income of $98.7 million dollars, increasing by 17% compared to 2Q20. The reactivation of the demand for manganese ferroalloys allowed to increase the volume by 14%, reducing the sale of manganese nodules to turn them into a product with greater added value and capitalizing during this recovery prices. In contrast and taking advantage of the positive situation in the manganese market, Autlán Metallorum was extracting and refining the ounces that were deposited in the patios to focus on exploring and updating its mine plans. As for the Autlán EMD Division, it continues with stable operations, contributing with $4.9 million dollars to Autlán's consolidated sales.

2 Cifras consolidadas incluyen Autlán EMD a partir de febrero 2020.

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2021 Second Quarter Report

In cumulative terms, net sales amounted to $ 190.5 million, exceeding by 3% the amount of the same interval in 2020.

Cost of Sales

The cost of sales for 2Q21 registered a value of $75.7 million, increasing by 20% compared to the same period last year, mainly due to the higher volume sold in addition to the increase in the price of some raw materials. This item represented 76.6% of sales, decreasing against the previous quarter thanks to the rise in the prices of ferroalloys. In contrast, the slower pace of precious metal extractive activity has caused an increase in unit costs, having also an impact on consolidated profit margins.

In the first semester, the cost of sales totaled $153.9 million dollars, representing 80.8% of sales.

Operating Expenses

Operating expenses for the quarter totaled $13.9 million dollars, reducing its sales share to 14.1% from 15.6% in 2Q20.

The operating profit for the second quarter of $9.1 million implies a notable recovery compared to the two previous quarters, even exceeding that of 2Q20 by 11%. The operating margin represents 9.3% of net sales.

Similarly, EBITDA generation for the quarter recovered by 45% over 1Q21. Compared to the 2Q20, an additional $2.0 million dollars was generated, reaching $22.8 million, which represented 23.1% of total sales.

The $10.0 million dollars of operating profit for the first half of 2021 contribute the same margin of 14% as that of the same interval of 2020. On the other hand, the accumulated EBITDA generation reached $38.5 million.

Financial Income and Expenses

In 2Q21, the net financial expense remains at the same level compared to 2Q20 while the negative variation of 6% in the comprehensive financing result (RIF) is derived from the loss in foreign exchange. The weakness of the dollar was steeper in this quarter against the same of the previous year, resulting in a loss of $7.3 million from the liability monetary position in pesos (mainly debt and suppliers) whose recognition did not imply cash flow.

Cumulatively, the net financial expense of $8.0 presented a reduction of $1.3 million compared to 1S20 after the cuts in the benchmark rate in both Mexico and the United States. For its part, there was an exchange loss of $4.4 million that did not imply cash flow. The 1S21 RIF of $12.4 million dollars is compared to the net income of $15.0 million in 1S20.

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