Mako Mining Provides Q1 2023 Financial Results

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05/29/2023 - 09:00 AM

VANCOUVER, BC / ACCESSWIRE / May 29, 2023 / Mako Mining Corp. (TSXV:MKO)(OTCQX:MAKOF) ("Mako" or the "Company") is pleased to provide financial results for the three months ended March 31^st, 2023 ("Q1 2023"), which is the seventh full quarter of financial results since declaring commercial production on July 1, 2021 at its San Albino gold mine ("San Albino") in northern Nicaragua. For detailed Q1 2023 operating results, please see the Company's press release dated May 12^th, 2023. All dollar amounts referred to herein are expressed in United States dollars unless otherwise stated.

Q1 2023 Highlights

Financial

$15.9 million in Revenue
$7.6 million in Adjusted EBITDA⁽¹⁾
$8.3 million in Mine Operating Cash Flow ("Mine OCF") ^{(1) (3)}
$1.4 million in Net Income after $3.7 million of depreciation, depletion⁽⁴⁾ and amortization and $0.7 million in exploration expenses
$793 Cash Costs ($/oz sold) ^{(1) (2)}
$852 Total Cash Costs ($/oz sold) ^{(1) (2)}
$1,410All-In Sustaining Costs ("AISC") ($/oz sold) ^{(1) (2)}which includes the largest and final full quarter of deferred stripping cost (436 $/oz sold) to access the high-grade portion of the West Pit (Phase 3)
Three monthly repayment installments totaling $1.1 million were made on the Sailfish Loan during Q1 2023

⁽¹⁾ Refers to a Non-GAAP financial measure within the meaning of National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). Refer to information under the heading "Non-GAAP Measures" as well as the reconciliations later in this press release.
⁽²⁾ Refers to a Non-GAAP ratio within the meaning of NI-52-112. Refer to information under the heading "Non-GAAP Measures" later in this press release.
⁽³⁾ Refer to "Chart 1 - Q1 2023 - Mine OCF Calculation and Cash Reconciliation (in $ millions)" for a reconciliation of the beginning and ending cash position of the Company, including OCF.

Growth

$0.7 million in exploration and evaluation expenses ($0.3 million in areas surrounding San Albino and $0.4 million at Las Conchitas). Exploration expense was lower than previous quarters as the Company has entered the resource estimation phase at Las Conchitas while preparing a discovery drilling program at La Segoviana which began in Q2 2023.

Subsequent to March 31^st, 2023

On April 5, 2023, and on May 3, 2023, the Company delivered 16,328 and 16,552 oz of silver in lieu of $0.4 million and $0.4 million cash, respectively.
On May 12, 2023, the Company granted 540,000 stock options to certain directors, officers, employees and consultants of the Company. Each stock option is exercisable at a price of C$2.13 for one common share in the Company for a period of five years, vesting in four equal installments over a period of three years, with the first 25% vesting on the date of grant.

The Company also granted 38,829 restricted share units ("RSU") to officers of the Company. Each RSUs will vest 50% on the grant date, 25% on the sixth month anniversary of the grant date and 25% on the second anniversary. Once vested, each RSU is exercisable into one common share entitling the holder to receive the common share for no additional consideration.

On May 25, 2023, the maturity date of the Wexford Loan was extended from March 31, 2024 to March 31, 2025.
On May 25, 2023, the Company entered into a silver stream agreement with Sailfish, whereby Sailfish will advance $6 million for the delivery of 13,500 ounces of silver, produced at the San Albino mine, per month for a period of 24 months. Sailfish also has the option to purchase all remaining future silver production from all of the Company's concession for an additional $1million.

Akiba Leisman, Chief Executive Officer, states that "Q1 2023 was the seventh full quarter of financial results since declaring commercial production at San Albino. Adjusted EBITDA of approximately $7.6 million (Q1 2022 $7.8 million) was relatively consistent year over year despite selling 859 ounces less than Q1 2022, as the Company was transitioning to high-grade Phase 3 mining of the West Pit, which commenced at the end of April 2023. Cash Costs of 793 $/Oz sold (Q1 2022 797 $/Oz sold) and Total Cash Costs of 852 $/Oz sold (Q1 2022 862 $/Oz sold) were also consistent year over year despite inflationary trends in the industry. AISC was higher at 1,410 $/Oz sold (Q1 2022 1104 $/Oz sold) as Q1 2023 was the last full quarter of accelerated waste development to access the high-grade portion of the West Pit Phase 3. Deferred Stripping costs were 432 $/Oz sold (Q1 2022 42 $/Oz sold), which will be coming down significantly now that high-grade Phase 3 mining has commenced. We are also excited that we are nearing completion of our maiden resource estimate at Las Conchitas, and that we have begun discovery drilling at La Segoviana, with initial results expected to be disclosed this week."

Table 1. Impact of Deferred Stripping on AISC

Since Q1 2022, the Company has been investing in accelerated waste development to access the high-grade portion of Phase 3 of the West Pit, which commenced at the end of April 2023. The impact per quarter on AISC has increased from 42 $/Oz in Q1 2022 to 436 $/Oz in Q1 2023 as a higher percentage of mining was allocated to waste development. The impact of deferred stripping cost on AISC will be substantially lower now that the high-grade extraction of Phase 3 has commenced.