Volcan: Liquidity runway and elevated silver prices support growth capex cycle

Research evidence excerpt

Volcan: Liquidity runway and elevated silver prices support growth capex cycle

J P M O R G A N Latin America Credit Research

24 July 2026

Neutral

Volcan VOLCAN

Liquidity runway and elevated silver prices support Moody's:Fitch: B1B+ Outlook:Outlook: STABLESTABLE

The above agency ratings are at the corporate levelgrowth capex cycle

EM Latin America Corporate

Research

Ian B Snyder AC

(1-212) 834-3798

ian.b.snyder@jpmchase.com

J.P. Morgan Securities LLC

Volcan delivered solid core results in 2Q26, with EBITDA expansion driven by

sharply higher silver prices even in the face of sales volume weakness, elevated

unit costs, and a hedging loss on silver positions. Despite the strong EBITDA, the

company consumed cash as growth capex accelerated, though the cash position

grew substantially following the opportunistic US$220mm tap of the 2032 bonds

intended to support various brownfield projects. Net leverage remains at a

conservative 1.0x but should deteriorate modestly as proceeds are deployed.

Looking ahead, we expect production to normalize through 2H26 as operational

headwinds at Yauli prove temporary, Romina ramps up, and Chungar continues to

reorient toward higher silver-content zones. Capex will remain elevated as the

company advances its brownfield and catch-up program, and we expect modest

cash burn through this period; we are nonetheless comfortable given the strong

liquidity position, conservative leverage starting point, flexibility to scale back

capex should the macro environment deteriorate and the fact that expenditures are

directed toward projects we view as value-accretive.

That said, despite our constructive view on the credit and on its ability to navigate

this elevated capex period, we believe the 2032 bonds are fairly priced at current

levels.