Mandalay Resources Corporation Announces Financial Results and Quarterly Dividend for First Quarter 2017
(Thomson Reuters ONE) -
TORONTO, May 10, 2017 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation
("Mandalay" or the "Company") (TSX:MND) today announced revenue of $45.4
million, adjusted EBITDA of $11.4 million and consolidated net loss of $2.3
million, or $0.01 loss per share, for the first quarter of 2017.
In accordance with the Company's dividend policy, Mandalay's Board of Directors
declared a quarterly dividend of $2.7 million (6% of the trailing quarter's
gross revenue), or $0.0060 per share (CDN$0.0083 per share), payable on June
1, 2017, to shareholders of record as of May 22, 2017.
The Company's condensed and consolidated interim financial results for the
quarter ended March 31, 2017, 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 first quarter of 2017 results, Dr. Mark Sander, President and CEO
of Mandalay, noted, "Mandalay's financial performance in the first quarter of
2017 was a marked improvement over performance in the fourth quarter of 2016 and
follows on as expected from the production and sales report previously issued
for the quarter (see Mandalay April 12, 2017 press release). These improved
results reflect a combination of continued strengthening of our operations and
improving metal prices. We expect to see production continuing to increase
throughout 2017, with a consequent improvement in unit costs going forward. We
reiterate our previous full-year guidance for consolidated production, cash
cost, capital spending and exploration spending. The Company's balance sheet
remains in a strong position with near-zero debt net of cash."
Dr. Sander continued, "Looking at the Company's operations, at Björkdal, we are
pleased that the grade control program continues to function well and we are
implementing several incremental operational improvements to increase the rate
at which our higher-grade ore is mined and delivered to the plant. These
improvements are expected to increase the average grade of processed material
going forward, increasing production of saleable gold and reducing cash cost per
ounce of saleable gold.
"The operational improvements that we have implemented at Björkdal include the
following:
* At the end of the first quarter of 2017, we added underground loading and
haulage capacity to increase the haulage of stope ore, which is the highest-
grade material delivered from the mines. This is expected to result in an
increased rate of delivery of high-grade underground ore throughout the
remainder of the year.
* We have ordered longer booms for our jumbos, which will increase the rate of
development underground at minimal incremental additional cycle time or cost
increases.
* The Lake Zone mining concession is fully granted at this point. We can now
process previously mined and stockpiled high-grade development ore from the
concession, providing a short-term boost to second quarter production, and
we can resume development and stoping in the concession in the longer-term.
* We have eliminated the emerging bottleneck due to the slow blast hole
drilling rate in the open pit by changing contractors in the first quarter.
The new contractor has increased both the number of drills and the number of
crews; it has successfully mobilized and ramped up to our target rate of
drilling. This will have the effect of increasing the rate of delivery of
open pit ore to the plant going forward.
* We implemented 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 in early January for zero
capital expenditure. Initial indications from the first months of operation
have been very positive. The process will be optimized throughout the second
quarter in an attempt find the optimum screen size to maximize the grade of
fines processed immediately while crushing the B-ore to 100% minus 100 mesh
so that it can be fed without further re-handling (and cost) to the
anticipated optical sorting plant planned for construction later this year;
and
* The construction of the flotation expansion, expected to improve gold
recoveries by approximately 1.7%, continues on time and on budget toward
commissioning later this year."
Dr. Sander continued, "Costerfield continued to deliver dependable performance
in the first quarter of 2017, producing 12,891 gold equivalent ounces at a very
sound cash cost of $719 per ounce, and an all-in cost of $1,033 per ounce.
Capital development commenced in the Cuffley Deeps area during the quarter,
which will access higher-grade areas of the lode, the benefit of which we expect
to see in increased production of gold equivalent ounces and lower cash cost per
gold equivalent ounce as the year progresses.
At Cerro Bayo, the operation has noticeably stabilized after the difficult third
and fourth quarters of 2016. Safety has shown a marked improvement and the ore
reserve model on which the revised guidance of February 16, 2017 was based is
performing well. Financial results for the quarter closely adhered to the
revised mine plan underlying that revised guidance. Grades began to lift towards
the end of the first quarter as more stopes became available in Coyita North. We
expect grades to continue to lift the remainder of the year as production from
Coyita North grows."
First Quarter 2017 Financial Highlights
The following table summarizes the Company's financial results for the three
months ended March 31, 2017; December 31, 2016; and March 31, 2016:
Three Three Three
months months months
Ended March Ended Ended
31, 2017 December March
31, 2016 31, 2016
$'000 $'000 $'000
Revenue 45,373 32,391 50,442
Cost of Sales 31,988 32,812 31,426
Adjusted EBITDA(*) 11,412 (2,321 ) 17,262
Income from mine operations before 13,385 (421 ) 19,016
depreciation and depletion
Adjusted net income before special (2,349 ) (10,768 ) 1,020
items(*)
Consolidated net income (2,349 ) (25,542 ) 1,149
Cash capex 12,092 11,637 9,057
Total assets 349,790 350,232 357,117
Total liabilities 147,046 147,195 142,190
Adjusted net (loss) income per share(*) $ (0.01 ) $ (0.02 ) $ 0.00
Consolidated net (loss) income per share $ (0.01 ) $ (0.06 ) $ 0.00
(*) Adjusted EBITDA, adjusted net income before special items and adjusted net
(loss) income per share are non-IFRS measures. See "Non-IFRS Measures" at the
end of this press release.
During the first quarter of 2017, Mandalay produced 19% fewer ounces of gold
equivalent versus the first quarter of 2016. At the same time, average gold and
silver prices rose 3% and 17% quarter-over-quarter, respectively, while the
average antimony price rose 51% quarter-over-quarter. The net effect is that
Mandalay's revenue of $45.4 million in the first quarter of 2017 was $13.0
million higher than in the fourth quarter of 2016, and $5.1 million lower than
in the first quarter of 2016.
Total cost of sales across the Company rose by $0.6 million to $32.0 million in
2017. Approximately $0.9 million of the 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 $3.2 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. Total cost of sales at Cerro Bayo
decreased $3.6 million in the first quarter of 2017 relative to the first
quarter of 2016 as a result of cost control measures being undertaken to offset
the reduction in mined ore volumes and decreases in concentrate freight,
treatment and refining charges. Consolidated administrative costs remained
virtually constant, increasing slightly to $0.8 million in the first quarter of
2017.
Mandalay generated $11.4 million in adjusted EBITDA in the current quarter,
$13.7 million higher than in the previous quarter, and $5.6 million lower than
the first quarter of 2016. This led to a consolidated net loss of $2.3 million
in the first quarter of 2017 versus a loss of $25.5 million in the fourth
quarter of 2016, which was burdened by the end-of-year write-offs at Cerro Bayo.
Mandalay ended the first quarter with $58.9 million in cash and cash
equivalents.
First Quarter Operational Highlights
The table below summarizes the Company's capital expenditures and operational
unit costs for the three months ended March 31, 2017, December 31, 2016 and
March 31, 2016:
Three Three Three
months months months
ended ended Dec. ended March
March 31, 2016 31, 2016
31, 2017
$'000 $'000 $'000
Costerfield
Gold produced (oz) 7,987 7,523 12,433
Antimony produced (t) 741 792 1,000
Gold equivalent produced 12,891 12,403 16,966
(oz)
Cash cost(*) per oz gold $ 719 $ 837 $ 512
equivalent produced
All-in cost(*) per oz gold $ 1,033 $ 1,096 $ 724
equivalent produced
Underground capital devel. & 777 Nil Nil
open pit prestrip
Capital purchases 1,024 1,033 305
Capital exploration 988 1,010 958
Cerro Bayo
Silver produced (oz) 435,076 365,214 515,216
Gold produced (oz) 2,735 2,807 4,336
Cash cost(*) per oz silver $ 14.04 $ 17.48 $ 9.76
net byproduct credit
All-in cost(*) per oz silver $ 22.54 $ 25.99 $ 18.78
net byproduct credit
Underground capital devel. & 3,228 2,014 1,399
open pit prestrip
Capital purchases 417 260 1,427
Capital exploration 519 762 519
Björkdal
Gold produced (oz) 10,648 10,934 12,185
Cash cost(*) per oz gold $ 1,150 $ 1,160 $ 821
produced
All-in cost(*) per oz gold $ 1,431 $ 1,374 $ 1,059
produced
Underground capital devel. & 2,923 2,144 2,767
open pit prestrip
Capital purchases 1,764 2,000 992
Capital exploration 411 948 485
Consolidated
Gold equivalent produced 32,481 31,293 39,965
(oz)
Average cash cost(*) per oz $ 987 $ 1,101 $ 751
gold equivalent
Average all-in cost(*) per $ 1,326 $ 1,385 $ 1,042
oz gold equivalent
Underground capital devel. & 7,175 4,158 4,136
open pit prestrip
Capital purchases 3,317 3,317 2,724
Capital exploration 2,191 4,179 2,305
*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's production of 12,891 ounces gold equivalent in the first quarter
of 2017 was slightly more than in the fourth quarter of 2016 and approximately
25% less than in the year-ago quarter. Lower current production in the first
quarter of 2017 compared to the first quarter of 2016 was expected, as a year
ago Mandalay was mining in the heart of the highest-grade portion of the Cuffley
lode and currently is mining lower-grade parts of the deposit. Absolute
operating costs continued to be well-controlled at Costerfield. Lower production
arising from lower grades translated into higher cash cost per ounce of gold
equivalent than in the year-ago quarter.
Björkdal gold mine, Sweden
In the first quarter of 2017, the average milled head grade was limited by
bottlenecks with respect to underground haulage, which limited delivery of the
higher-grade underground stope ore, and with respect to open pit blast-hole
drilling, which limited tonnage production of ore and waste from the open pit.
Both bottlenecks have now been relieved.
Lower grades in the first quarter of 2017 led to lower gold production than in
the first quarter of 2016 (but comparable to the fourth quarter of 2016).
Consequently, cash operating costs in the current quarter were higher at $1,150
per ounce gold than in the year-ago quarter.
Cerro Bayo silver-gold mine, Patagonia, Chile
Cerro Bayo production in the first quarter of 2017 was lower than in the first
quarter of 2016, approximately as expected based on the revised mine plan
implemented in response to the ore reserves downgrade at Cerro Bayo announced on
February 23, 2017 and corresponding revised 2017 production guidance of February
16, 2017. In that revised guidance, the Company stated that the Delia SE mine
would not be able to supply the previously expected volumes of high-grade
material in 2017 and that ore grades, and therefore volumes mined and processed,
would be substantially lower than previously planned for the year. Through March
31, 2017, the new reserves model is performing well in reserve reconciliations;
the mine is delivering ounces and costs in approximation to the revised plan.
While metal production is significantly lower and cash cost per silver ounce
produced is higher than the year-ago quarter, both have recovered substantially
from the fourth quarter of 2016.
Challacollo, Chile
Mandalay has received its water exploration license at the Challacollo silver-
gold project in northern Chile, and is commencing its drill program in May to
identify 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 first quarter of 2017.
Lupin
The Lupin gold mine in Nunavut, Canada, currently held for sale, remained on
care and maintenance throughout the period. Spending on care and maintenance at
Lupin and Ulu was $0.1 million during the first quarter of 2017, the same amount
as in the first quarter of 2016. 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
anticipates the transaction to close by the third quarter of 2017.
Reiteration of Previous Full-Year Guidance
Mandalay reiterates its Company consolidated guidance for full-year production,
cash cost, capital spending, and exploration spending previously issued (see
Mandalay February 16, 2017 press release). Results at individual operations may
vary up or down from guidance.
Conference Call
Mandalay's management will be hosting a conference call for investors and
analysts on May 11, 2017 at 8:00 am (Toronto time).
Analysts and interested investors are invited to participate using the following
dial-in numbers:
Participant Number: (201) 689-8341
Participant Number (Toll free): (877) 407-8289
Conference ID: 13661457
A replay of the conference call will be available until 23:59
pm (Toronto time), May 25, 2017 and can be accessed using the following dial-in
number:
Encore Toll Free Dial-in Number: (877) 660-6853
Encore ID: 13661457
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 31, 2017, 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 management's discussion and analysis of
the Company's financial statements for the first quarter of 2017.
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.
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: 11.05.2017 - 01:17 Uhr
Sprache: Deutsch
News-ID 541720
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contact information:
Town:
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Kategorie:
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