Mandalay Resources Corporation Announces Fourth Quarter and Full-Year 2016 Financial Results, Quarterly Dividend, and Updated Guidance for 2017
(Thomson Reuters ONE) -
TORONTO, Feb. 16, 2017 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation
("Mandalay" or the "Company") (TSX:MND) today announced revenue of $32.4
million, adjusted EBITDA of negative $2.3 million and consolidated net loss
before special items of $10.8 million, or $0.02 loss per share before special
items, for the fourth quarter of 2016.
For the full year 2016, Mandalay generated revenue of $185.5 million, adjusted
EBITDA of $50.9 million and adjusted net loss before special items of $2.5
million. After special items totaling $17.7 million (consisting of a $10 million
impairment charge at Cerro Bayo, a $4.2 million of mining interest write-off, a
$4.8 million deferred tax asset write-off at Cerro Bayo, a $1.4 million tax
recovery adjustment at Costerfield and $0.1 million for tax expense impact on
royalty purchase capitalization), the Company reported consolidated net loss for
the year of $20.2 million and $0.05 loss per share. Mandalay ended the year with
$66.9 million in cash and cash equivalents.
In accordance with the Company's dividend policy, Mandalay's Board of Directors
declared a quarterly dividend of $1.9 million (6% of the trailing quarter's
gross revenue), or $0.0043 per share (CDN$0.0057 per share), payable on March
9, 2017, to shareholders of record as of February 27, 2017.
The Company's audited consolidated financial results for the year ended December
31, 2016, together with its Management's Discussion and Analysis ("MD&A") for
the corresponding period, can be accessed under the Company's profile
on www.sedar.com and on the Company's website at www.mandalayresources.com. All
currency references in this press release are in U.S. dollars except as
otherwise indicated.
Commenting on 2016 results, Dr. Mark Sander, President and CEO of Mandalay,
noted, "2016 was a challenging year for the Company. Mandalay generated 5% lower
revenue in 2016 than in 2015 due to expected grade-related lower production at
Costerfield, offset by expected higher production at Björkdal, which continues
to demonstrate production improvements. Both of these impacts were exceeded in
significance by lower production from Cerro Bayo due to the safety-related
operational suspension in September and October. For the Company, cost of sales
rose 7% year-on-year. The combination of higher costs and lower revenue led to a
25% decline in adjusted EBITDA and follow-on reduced net income before special
items."
Dr. Sander continued, "Looking at the three operations in detail, we are pleased
with where we stand at Björkdal entering 2017. Year-over-year, our grade control
program generated higher average grade to the plant in 2016 than in 2015 (1.35
grams per tonne gold versus 1.22 grams per tonne), which led to almost 10%
higher production in 2016 than in the previous year (48,143 saleable ounces
versus 44,039 ounces). Year-over-year, cash costs increased from $884 per
saleable ounce produced to $954 per ounce as a result of increasing underground
operating development rate and open pit operating stripping to transition into a
long-term mine plan that delivers gold to the plant at a higher rate, and as a
result of incurring freight, treatment, and refining cost for 10% more product.
"At Björkdal, we expect continuing improvements in production and reductions in
cash cost going forward in 2017 for three fundamental reasons. First, we are
continuously improving our grade control program to improve grade and reduce
costs now that the concept is proved. As transition to the new mine plan is
completed, we expect to produce more gold, which will more than offset the
additional cost of increased development rates in the underground mine and
stripping rates in the open pit. Second, Phase 1 of our low-grade ore sorting
program, consisting of crushing and screening material between 0.35 and 1.00
grams per tonne gold from the active mine and historic stockpiles, was
implemented in early January for zero capital expenditure. Indications from the
first weeks of operation are that this process upgrades the less than 50
millimeter-sized fraction from an original bulk grade of 0.5 to 0.6 grams per
tonne to 0.85 to 0.95 grams per tonne. This upgrade is expected to have a large
impact on increasing average mill head grades going forward. The coarse material
is being stockpiled for later optical sorting and upgrading once the sorting
plant is constructed. Finally, construction of the flotation expansion, expected
to improve recovery by approximately 1.7%, continues on time and on budget
toward commissioning later this year."
Dr. Sander continued, "Costerfield produced slightly fewer saleable ounces of
gold equivalent in 2016 than 2015 due to the anticipated lower grades from the
mine. Mining and processing costs per tonne were well-controlled year-on-year,
while we mined and processed more tonnes in 2016 than 2015. The lower head
grades resulted in less metal produced and consequently higher unit cash cost
per ounce. 2016 was a low-capital year for Costerfield, therefore Costerfield's
adjusted EBITDA translated into significant positive free cash flow for the
Company. Going forward in 2017, we plan to restart capital development to access
new lodes in 2017 and construct the next phase tailings dam to support the next
several years of production.
"At Cerro Bayo, operations have recovered from the safety-related interruptions
in September and October and development has returned to planned rates. As
previously disclosed (see press release of January 27, 2017) detailed
development sampling has refined our understanding of gold and silver
distribution in the Delia SE vein at Cerro Bayo. While the limits of ore grades
at shallow development levels of the vein approximated the drilling-based block
model, the deepest three levels have exposed more internal waste in the
mineralized shoot than was previously expected. This finding is being
investigated as part of the updated Mineral Resources and Reserves estimate for
year-end 2016, expected to be released later in the first quarter of 2017. At
this time, the impact of the reserve overestimation appears largely restricted
to the Delia SE mine and is not expected to affect either the Coyita SE or
Marcela vein reserves. The Coyita SE vein has much better grade continuity in
the drilling and the Marcela vein has historic development sampling that gives
us greater confidence in the estimates there. Although the reserve update is
still a work-in-progress, we believe it is prudent to write off Cerro Bayo's
mining interest by $10.0 million to account for the expected decline in
reserves. This write-off has been treated as a special item in the fourth
quarter. Due to recent changes in Chilean tax rules prohibiting carrying back of
tax losses to offset against profits of prior years, we have also written-off
the Cerro Bayo deferred income tax asset of $4.8 million related to the
rehabilitation provision at the mine."
"The impact on the 2017 production plan at Cerro Bayo has been fully evaluated
and is the basis for the reduced production guidance for Cerro Bayo given later
in this press release. In responding to these challenges, we have implemented an
approximate 10% reduction in headcount. This reduction was focused on reducing
the amount of exploration drilling consistent with our November 2, 2016,
guidance, and reducing operating shifts in the processing plant to balance mill
throughput with the reduced mine output now expected in 2017. As well,
optimization of the Coyita development plan in 2017 has led to reduced capital
and faster access to higher-grade ore."
Dr. Sander concluded, "Mandalay is committed as always to delivering strong
shareholder returns through dividends and increasing net asset value per share
to its investors. I am heartened by our resilience as an organization-the speed
at which Cerro Bayo regained its operating balance after the fatality-related
interruption is inspiring. And, as the reality of the actual lower metal
endowment encountered in Delia SE emerged late in the year, the velocity with
which the staff re-estimated reserves, adjusted the Coyita plan to accelerate
compensating production and reducing capital, and eliminated a shift in the
plant to match the new plan for mine production to lower total spend is
reassuring. Also impressive was the agility and innovation demonstrated at
Björkdal in 2016 as the operation: substantially increased reserves;
transitioned to an optimized Life of Mine plan (delivering increased grade to
the plant with increasingly dependable rolling short-term production plans);
completed our ore sorting investigation and implemented the Phase 1 crushing and
screening for no capital; and launched construction of the flotation expansion.
Meanwhile, all through 2016, Costerfield generated dependable performance,
substantial free cash flow, and no surprises. I look forward to the performance
the Mandalay team will deliver in 2017 and beyond."
Fourth Quarter and Full-Year 2016 Financial Highlights
The following table summarizes the Company's financial results for the three
months and year ended December 31, 2016 and 2015:
+-----------------+---------------+--------------+--------------+--------------+
| | Three months | Three months | Year | Year |
| |Ended December |Ended December|Ended December|Ended December|
| | 31, 2016 | 31, 2015 | 31, 2016 | 31, 2015 |
+-----------------+---------------+--------------+--------------+--------------+
| | $'000 | $'000 | $'000 | $'000 |
+-----------------+---------------+--------------+--------------+--------------+
|Revenue | 32,391 | 43,646 | 185,543 | 194,500 |
+-----------------+---------------+--------------+--------------+--------------+
|Adjusted EBITDA* | (2,321 ) | 13,997 | 50,865 | 67,989 |
+-----------------+---------------+--------------+--------------+--------------+
|Income from mine | | | | |
|operations before| | | | |
|depreciation and | | | | |
|depletion | (421 ) | 17,409 | 59,989 | 77,408 |
+-----------------+---------------+--------------+--------------+--------------+
|Adjusted net | | | | |
|income before | | | | |
|special items* | (10,768 ) | 343 | (2,526 ) | 18,985 |
+-----------------+---------------+--------------+--------------+--------------+
|Consolidated net | | | | |
|income | (25,542 ) | (3,105 ) | (20,233 ) | 14,665 |
+-----------------+---------------+--------------+--------------+--------------+
|Cash capex | 11,637 | 12,186 | 42,535 | 50,552 |
+-----------------+---------------+--------------+--------------+--------------+
|Total assets | 350,232 | 346,573 | 350,232 | 346,573 |
+-----------------+---------------+--------------+--------------+--------------+
|Total liabilities| 147,195 | 138,879 | 147,195 | 138,879 |
+-----------------+---------------+--------------+--------------+--------------+
|Adjusted net | | | | |
|income/share* |$ (0.02 ) |$ 0.00 |$ (0.01 ) |$ 0.05 |
+-----------------+---------------+--------------+--------------+--------------+
|Consol. net | | | | |
|income/share |$ (0.06 ) |$ (0.01 ) |$ (0.05 ) |$ 0.04 |
+-----------------+---------------+--------------+--------------+--------------+
* Adjusted EBITDA, adjusted net income before special items and adjusted net
income per share are non-IFRS measures. See "Non-IFRS Measures" at the end of
this press release.
During 2016, Mandalay produced 13% fewer ounces of gold equivalent versus
2015. At the same time, average gold and silver prices rose 8% and 9% year-
over-year, respectively, while the average antimony price fell 10% year-over-
year. The net effect is that Mandalay's revenue declined 5% from $194.5 million
in 2015 to $185.5 million in 2016.
Total cost of sales across the Company rose $8.5 million (7%) from $117.1
million in 2015 to $125.6 million in 2016. Approximately $7.0 million of
increased cost of sales was incurred at Costerfield, where more tonnes at lower
grade were mined and processed to produce fewer gold equivalent ounces than in
the year-ago period. Per tonne mining and milling costs at Costerfield remained
nearly constant through this expected decline in ore grades. Approximately $10.9
million of increased cost of sales were incurred at Björkdal, where the rates of
both operating capital development and operating open pit waste removal were
increased in order to increase the rate of gold feed to the plant as Mandalay
discarded below cut-off grade material in its grade control program. As well,
the approximately 10% increase in production at Björkdal is associated with
proportionately increased product freight, treatment, and refining costs. Total
cost of sales at Cerro Bayo declined $6.9 million in 2016 relative to 2015 as
cost control measures were undertaken to offset the reduction in mined ore
volumes and concentrate freight, treatment and refining charges declined.
Consolidated administrative costs remained virtually constant, declining
slightly to $9.1 million in 2016 from $9.2 million in 2015.
When the lower 2016 revenue is combined with the increased total cost of sales,
the result is adjusted EBITDA in 2016 of $50.9 million, reduced from $68.0
million 2015. Full-year consolidated net income swung to a $20.2 million loss
from 2015 net income of $14.7 million. Included in the consolidated net income
numbers are: special items ($17.7 million in 2016 versus $4.3 million in 2015);
normal course write-offs of unsuccessful exploration expenditure ($3.7 million
in 2016 versus $2.8 million in 2015); mark-to-market adjustments of derivative
instruments (loss of $0.3 million in 2016 versus gain of $1.5 million in 2015);
and share-based compensation expense ($0.9 million in 2016 versus $0.9 million
in 2015).
Production, Cost and Capital Expenditure Guidance for 2017
Mandalay is providing revised guidance for production, cost, and capital
expenditure in 2017. The principal differences between revised and original
guidance originate in adjustments to the 2017 plan at Cerro Bayo in response to
the anticipated declines in resource and reserve along the Delia SE vein, the
planned source of a large part of 2017 production. Guidance for production of
saleable gold and silver ounces from Cerro Bayo has significantly declined
relative to original guidance and unit costs have significantly risen.
Production and cost guidance for the other sites is nearly unchanged. To
partially compensate for the reduced adjusted EBITDA, Mandalay has reduced
capital spending plans across all sites with minimal production and operating
cost impacts.
+----------------+-------+-------+----------+-----------+--------+-------------+
| | | Total |Cerro Bayo|Costerfield|Björkdal| Challacollo |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Saleable Au | | | | | | |
|produced |oz '000| 94-111| 12-16| 30-37| 52-58| |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Saleable Ag |oz | | | | | |
|produced |mill. |1.7-2.0| 1.7-2.0| | | |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Saleable Sb | | | | | | |
|produced |t '000 |3.2-3.7| | 3.2-3.7| | |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Total Saleable | | | | | | |
|Au Eq produced* |oz '000|138-163| | | | |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Cash Cost per Au| | | | | | |
|Eq. oz* |$/oz |860-950| 920-1,120| 690-780| 820-910| |
+----------------+-------+-------+----------+-----------+--------+-------------+
|Capital |USD | | | | | |
|expenditure** |mill. | 48-61| 18-22| 9-13| 20-25| 1|
+----------------+-------+-------+----------+-----------+--------+-------------+
| |USD | | | | | |
|Exploration |mill. | 7| 2| 3| 2| |
+----------------+-------+-------+----------+-----------+--------+-------------+
*Assumes full-year 2017 prices: Au $1,185/oz, Ag $16.72/oz, Sb $7,701/t
**Total cash cost per Au Eq. oz includes corporate overhead spending. Cash
cost per AU Eq. oz is a non-IFRS measure. See "Non-IFRS Measures" at the end
of this press release.
In comparison, the original guidance released on November 2, 2016, included:
+----------------+--------+-------+---------+-----------+--------+-------------+
| | | | Cerro | | | |
| | | Total | Bayo |Costerfield|Björkdal| Challacollo |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Saleable Au | | | | | | |
|produced |oz '000 |104-121| 22-28| 30-35| 52-58| |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Saleable Ag | | | | | | |
|produced |oz mill.|2.2-2.5| 2.2-2.5| | | |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Saleable Sb | | | | | | |
|produced |t '000 |3.2-3.7| | 3.2-3.7| | |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Total Saleable | | | | | | |
|Au Eq produced* |oz '000 |155-175| | | | |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Cash Cost per Au| | | | | | |
|Eq. oz* |$/oz |820-890| 720-780| 710-780| 860-910| |
+----------------+--------+-------+---------+-----------+--------+-------------+
|Capital |USD | | | | | |
|expenditure** |mill. | 58-66| 21-24| 12-14| 24-27| 1|
+----------------+--------+-------+---------+-----------+--------+-------------+
| |USD | | | | | |
|Exploration |mill. | 7| 2| 3| 3| |
+----------------+--------+-------+---------+-----------+--------+-------------+
*Assumes full-year 2017 prices: Au $1,258/oz, Ag $17.00/oz, Sb $6,505/t
**Total cash cost per Au Eq. oz includes corporate overhead spending. Cash
cost per AU Eq. oz is a non-IFRS measure. See "Non-IFRS Measures" at the end
of this press release.
Fourth Quarter and Full-year 2016 Operational Highlights
The table below summarizes the Company's capital expenditures and operational
unit costs for the three and twelve months ended December 31, 2016 and 2015:
+------------+-------------+-----------+-----------+-------------+-------------+
| | | Three | Three | | |
| | | months | months | | Year |
| | |ended Dec. |ended Dec. | Year ended | ended Dec. |
| | | 31, 2016 | 31, 2015 |Dec. 31, 2016| 31, 2015 |
| | +-----------+-----------+-------------+-------------+
| | | $'000 | $'000 | $'000 | $'000 |
+------------+-------------+-----------+-----------+-------------+-------------+
|Costerfield |
+------------+-------------+-----------+-----------+-------------+-------------+
| |Gold produced| | | | |
| |(oz) | 7,523| 11,528| 41,310| 42,491|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Antimony | | | | |
| |produced (t) | 792| 937| 3,597| 3,712|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Gold | | | | |
| |equivalent | | | | |
| |produced (oz)| 12,403| 16,335| 60,076| 65,675|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Cash | | | | |
| |cost* per oz | | | | |
| |gold | | | | |
| |equivalent | | | | |
| |produced |$ 837|$ 540|$ 640|$ 559|
+------------+-------------+-----------+-----------+-------------+-------------+
| |All-in | | | | |
| |cost* per oz | | | | |
| |gold | | | | |
| |equivalent | | | | |
| |produced |$ 1,096|$ 760|$ 890|$ 773|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Underground | | | | |
| |capital | | | | |
| |devel. & open| | | | |
| |pit prestrip | Nil| Nil| Nil| 7,699|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |purchases | 1,033| 1,339| 3,407| 6,075|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |exploration | 1,010| 1,000| 4,551| 2,434|
+------------+-------------+-----------+-----------+-------------+-------------+
|Cerro Bayo |
+------------+-------------+-----------+-----------+-------------+-------------+
| |Silver | | | | |
| |produced (oz)| 365,214| 725,243| 1,731,031| 2,545,984|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Gold produced| | | | |
| |(oz) | 2,807| 6,901| 13,792| 22,572|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Cash | | | | |
| |cost* per oz | | | | |
| |silver net | | | | |
| |byproduct | | | | |
| |credit |$ 17.48|$ 4.58|$ 12.29|$ 7.50|
+------------+-------------+-----------+-----------+-------------+-------------+
| |All-in | | | | |
| |cost* per oz | | | | |
| |silver net | | | | |
| |byproduct | | | | |
| |credit |$ 25.99|$ 11.75|$ 20.87|$ 14.69|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Underground | | | | |
| |capital | | | | |
| |devel. & open| | | | |
| |pit prestrip | 2,014| 2,203| 8,260| 8,575|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |purchases | 260| 1,272| 3,292| 4,992|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |exploration | 762| 866| 3,040| 2,987|
+------------+-------------+-----------+-----------+-------------+-------------+
|Björkdal |
+------------+-------------+-----------+-----------+-------------+-------------+
| |Gold produced| | | | |
| |(oz) | 10,934| 10,465| 48,143| 44,039|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Cash | | | | |
| |cost* per oz | | | | |
| |gold produced|$ 1,160|$ 940|$ 956|$ 884|
+------------+-------------+-----------+-----------+-------------+-------------+
| |All-in | | | | |
| |cost* per oz | | | | |
| |gold produced|$ 1,374|$ 1,224|$ 1,190|$ 1,128|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Underground | | | | |
| |capital | | | | |
| |devel. & open| | | | |
| |pit prestrip | 2,144| 3,014| 9,611| 7,948|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |purchases | 2,000| 758| 4,917| 4,188|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |exploration | 948| 1,060| 3,980| 3,464|
+------------+-------------+-----------+-----------+-------------+-------------+
|Consolidated|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Gold | | | | |
| |equivalent | | | | |
| |produced (oz)| 31,293| 43,393| 145,497| 166,679|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Average cash | | | | |
| |cost* per oz | | | | |
| |gold | | | | |
| |equivalent |$ 1,101|$ 751|$ 899|$ 764|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Average all- | | | | |
| |in cost* per | | | | |
| |oz gold | | | | |
| |equivalent |$ 1,385|$ 1,034|$ 1,189|$ 1,030|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Underground | | | | |
| |capital | | | | |
| |devel. & open| | | | |
| |pit prestrip | 4,158| 5,217| 17,871| 24,222|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |purchases | 3,317| 3,442| 11,821| 15,328|
+------------+-------------+-----------+-----------+-------------+-------------+
| |Capital | | | | |
| |exploration | 4,179| 3,164| 13,805| 11,356|
+------------+-------------+-----------+-----------+-------------+-------------+
*Cash cost and all-in cost are non-IFRS measures. See "Non-IFRS Measures" at
the end of this press release.
Costerfield gold-antimony mine, Victoria, Australia
Costerfield continued its strong performance in the fourth quarter of 2016 as
the Company continued to mine and process ore at low unit costs (38,943 tonnes
mined at $165 per tonne and 39,245 tonnes processed at $38.47 per tonne). Metal
production was lower and cash costs were higher than in the corresponding period
of 2015 due to lower ore grades in the current quarter. Spending on sustaining
capital continued at a low rate, as major capital programs necessary for the
current life of mine plan were completed in the third quarter of 2015.
In the fourth quarter of 2016, Costerfield delivered cash operating costs and
all-in costs of $837 and $1,096 per gold equivalent ounce, respectively. For the
year, Costerfield delivered cash operating costs and all-in costs of $640 and
$890 per gold equivalent ounce, respectively.
Björkdal gold mine, Sweden
In the fourth quarter of 2016, Björkdal delivered cash operating costs and all-
in costs of $1,160 and $1,374 per gold ounce, respectively. For the year,
Björkdal delivered cash operating costs and all-in costs of $956 and $1,190 per
gold ounce, respectively.
The fourth full quarter of disciplined mining according to the Company's
underground on-vein grade control protocols continued successfully. For nine of
the total twelve months of grade-controlled mining practiced so far, on-vein
development grades have averaged over 1.5 grams per tonne. As a result, the
average milled head grade of 1.28 grams per tonne gold in the fourth quarter of
2016 is significantly higher than the 1.14 grams per tonne of gold in the fourth
quarter of 2015.
Average mining costs rose from $22.40 per tonne of ore fed to the plant in the
fourth quarter of 2015 to $24.86 per tonne in 2016. Mining cost per tonne
increased in the underground mine as additional spending for grade control
mapping, sampling and assaying and selective mining were incurred, as well as
faster development spending to increase the rate of feed of high grade ore to
the plant. Mining cost per tonne moved in the open pit was well controlled,
while the increased stripping ratio led to higher cost per tonne of ore milled.
Processing costs increased slightly from $7.27 per tonne in the fourth quarter
of 2015 to $7.41 per tonne for the corresponding quarter in 2016, while the
plant recovery remained consistent at approximately 86% of contained gold.
Cerro Bayo silver-gold mine, Patagonia, Chile
Fourth quarter 2016 results from Cerro Bayo were impacted by the fatality-
related operating suspension as previously discussed. Lower production during
the current quarter relative to the fourth quarter of 2015 of 365,214 ounces of
silver versus 623,184 ounces resulted in higher cash cost of silver net of gold
credits in the current quarter relative to the fourth quarter of 2015. The net
outcome of the fewer ounces of silver produced impacted unit costs: mining costs
increased to $64.55 per tonne from $46.96 per tonne in 2015 and processing costs
increased to $20.95 per tonne from $19.94 per tonne in 2015.
In the fourth quarter of 2016, Cerro Bayo delivered cash operating costs and
all-in costs of $17.48 and $25.99 per silver ounce net of gold credits,
respectively. For the year, Cerro Bayo delivered cash operating costs and all-in
costs of $12.29 and $20.87 per silver ounce net of gold credits, respectively.
Challacollo, Chile
At the Challacollo silver-gold project in northern Chile, Mandalay has received
its water exploration license and is preparing to drill and develop the water
supply needed to support an eventual mining operation.
La Quebrada
The La Quebrada copper silver project in central Chile remained on care and
maintenance throughout the period. Spending on care and maintenance at La
Quebrada was less than $0.1 million during the fourth quarter of 2016 and less
than $0.1 million during the full-year 2016. The corresponding amounts for the
prior year quarter and full year was less than $0.1 million and less than $0.1
million, respectively.
Lupin and Ulu
The Lupin gold mine in Nunavut, Canada, currently held for sale, remained on
care and maintenance through the period. Spending on care and maintenance at
Lupin and Ulu was $0.7 million during the fourth quarter of 2016 and $1.7
million during the full-year 2016. The corresponding amounts for the prior year
quarter and full year were $0.9 million and $1.5 million, respectively. On
October 31, 2016, the Company entered into a definitive agreement for the sale
of the Lupin and Ulu gold projects to WPC Resources. On February 6, 2017, WPC
Resources announced a private placement intended to finance the acquisition and
advance the project. Mandalay currently expects the transaction to close in the
first quarter of 2017.
Conference Call
Mandalay's management will be hosting a conference call for investors and
analysts on February 17, 2017 at 8:00 am (Toronto time).
Analysts and interested investors are invited to participate using the following
dial-in numbers:
Participant Number: (201) 689-8344
Participant Number (Toll free): (877) 407-8290
Conference ID: 13655158
A replay of the conference call will be available until 23:59
pm (Toronto time), March 3, 2017 and can be accessed using the following dial-in
number:
Encore Toll Free Dial-in Number: (877) 660-6853
Encore ID: 13655158
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing
assets in Australia, Chile and Sweden, and a development project in Chile. The
Company is focused on executing a roll-up strategy, creating critical mass by
aggregating advanced or in-production gold, copper, silver and antimony projects
in Australia, the Americas, and Europe to generate near-term cash flow and
shareholder value.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
applicable securities laws, including guidance as to anticipated gold, silver,
and antimony production and production costs in the future. Readers are
cautioned not to place undue reliance on forward-looking statements. Actual
results and developments may differ materially from those contemplated by these
statements depending on, among other things, changes in commodity prices and
general market and economic conditions. The factors identified above are not
intended to represent a complete list of the factors that could affect Mandalay.
A description of additional risks that could result in actual results and
developments differing from those contemplated by forward-looking statements in
this news release can be found under the heading "Risk Factors" in Mandalay's
annual information form dated March 30, 2016, a copy of which is available under
Mandalay's profile at www.sedar.com. Although Mandalay has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking statements.
Non-IFRS Measures
This news release may contain references to adjusted EBITDA, adjusted net
income, cash cost per saleable ounce of gold equivalent produced, cash cost per
saleable ounce of silver produced net of gold credits, site all-in cost per
saleable ounce of gold equivalent produced, site all-in cost per saleable ounce
of silver produced net of gold credits, all-in costs and cash capex, all of
which are non-IFRS measures and do not have standardized meanings under IFRS.
Therefore, these measures may not be comparable to similar measures presented by
other issuers.
Management uses adjusted EBITDA as a measure of operating performance to assist
in assessing the Company's ability to generate liquidity through operating cash
flow to fund future working capital needs and to fund future capital
expenditures, as well as to assist in comparing financial performance from
period to period on a consistent basis. Management uses adjusted net income in
order to facilitate an understanding of the Company's financial performance
prior to the impact of non-recurring or special items. The Company believes that
these measures are used by and are useful to investors and other users of the
Company's financial statements in evaluating the Company's operating and cash
performance because they allow for analysis of its financial results without
regard to special, non-cash and other non-core items, which can vary
substantially from company to company and over different periods.
The Company defines adjusted EBITDA as income from mine operations, net of
administration costs, and before interest, taxes, non-cash charges/(income),
intercompany charges and finance costs. For a reconciliation between adjusted
EBITDA and net income, please refer to page 14-15 of management's discussion and
analysis of the Company's financial statements for the fourth quarter of 2016.
The Company defines cash capex as cash spent on mining interests, property,
plant and equipment, and exploration as set out in the cash flow statement of
the financial statements.
The Company defines free cash flow as a measure of the Corporation's ability to
generate and manage liquidity. This term does not have a standard meaning and is
intended to provide the reader with additional information. Free cash flow is
included as the Company believes it provides management, investors and analysts
insight in evaluating the Company's ability to generate cash flow. This measure
is comparable to, but not necessarily indicative of cash flow from operating
activities as per IFRS, therefore a reconciliation between these two measures is
included on page 13 of the Company's MD&A for clarity.
For Costerfield, saleable equivalent gold ounces produced is calculated by
adding to saleable gold ounces produced, the saleable antimony tonnes produced
times the average antimony price in the period divided by the average gold price
in the period. The total cash operating cost associated with the production of
these saleable equivalent ounces produced in the period is then divided by the
saleable equivalent gold ounces produced to yield the cash cost per saleable
equivalent ounce produced. The cash cost excludes royalty expenses. Site all-in
costs include total cash operating costs, royalty expense, accretion, depletion,
depreciation and amortization. The site all-in cost is then divided by the
saleable equivalent gold ounces produced to yield the site all-in cost per
saleable equivalent ounce produced.
For Cerro Bayo, the cash cost per saleable silver ounce produced net of gold
byproduct credit is calculated by deducting the gold credit (which equals
saleable ounces gold produced times the realized gold price in the period) from
the cash operating costs in the period and dividing the resultant number by the
saleable silver ounces produced in the period. The cash cost excludes royalty
expenses. The site all-in cost per saleable silver ounce produced net of gold
byproduct credit is calculated by adding royalty expenses, accretion, depletion,
depreciation, and amortization to the cash cost net of gold byproduct credit,
dividing the resultant number by the saleable silver ounces produced in the
period.
Also for Cerro Bayo, saleable equivalent gold ounces produced is calculated by
adding to saleable gold ounces produced, the saleable silver ounces produced
times the average silver price in the period divided by the average gold price
in the period. The total cash operating cost associated with the production of
these saleable equivalent ounces produced in the period is then divided by the
saleable equivalent gold ounces produced to yield the cash cost per saleable
equivalent ounce produced. The cash cost excludes royalty expenses. Site all-in
costs include total cash operating costs, royalty expense, accretion, depletion,
depreciation and amortization. The site all-in cost is then divided by the
saleable equivalent gold ounces produced to yield the site all-in cost per
saleable equivalent ounce produced.
For Björkdal, the total cash operating cost associated with the production of
saleable gold ounces produced in the period is then divided by the saleable gold
ounces produced to yield the cash cost per saleable gold ounce produced. The
cash cost excludes royalty expenses. Site all-in costs include total cash
operating costs, royalty expense, accretion, depletion, depreciation and
amortization. The site all-in cost is then divided by the saleable gold ounces
produced to yield the site all-in cost per saleable gold ounce produced
For the Company as a whole, cash cost per saleable gold equivalent ounce is
calculated by summing the gold equivalent ounces produced by each site and
dividing the total by the sum of cash operating costs at the sites plus
corporate overhead spending.
For further information:
Mark Sander
President and Chief Executive Officer
Greg DiTomaso
Director of Investor Relations
Contact:
1.647.260.1566
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mandalay Resources Corporation via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 17.02.2017 - 04:05 Uhr
Sprache: Deutsch
News-ID 524896
Anzahl Zeichen: 49103
contact information:
Town:
Toronto
Kategorie:
Business News
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"Mandalay Resources Corporation Announces Fourth Quarter and Full-Year 2016 Financial Results, Quarterly Dividend, and Updated Guidance for 2017"
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