Mandalay Resources Announces Financial Results for the Third Quarter 2023 and CFO Transition
- Solid financial performance with 13th consecutive quarter of profitability
- Encouraging results at Björkdal with highest revenue and EBITDA in six quarters
- Improving gold head grades at Costerfield
- Healthy balance sheet with $21.7 million in cash on hand
- Consolidated revenue down 11% from Q3 2022
- None.
The Company's condensed and consolidated interim financial statements for the quarter ended September 30, 2023, 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
Third Quarter 2023 Highlights:
- Generated consolidated quarterly revenue of
$40.9 million - Björkdal had its strongest quarter since Q1 2022 generating revenue of
$21.8 million $9.0 million - Consolidated quarterly adjusted EBITDA of
$15.4 million - Consolidated net income was
$4.1 million $0.04 C per share).$0.06
Frazer Bourchier, President, and CEO commented:
"Mandalay delivered solid financial performance during the third quarter, resulting in the Company's thirteenth consecutive quarter of profitability. Characterized by stable production and improving grades, the strategic initiatives undertaken at Björkdal are yielding encouraging results allowing the site to achieve its highest revenue and EBITDA in the past six quarters. At Costerfield, milled gold head grades improved to 9.6 g/t gold in Q3 2023 and, as earlier 2023 underground mining delays are progressively overcome, we expect these underground grades to further improve in Q4 2023.
"As we look ahead to the final quarter this year, with anticipated further improvements at Costerfield with higher-grade areas at Youle and improved mill throughput, as well as another consistent quarter of production at Björkdal underpinned by higher-grade Eastern Extension ore, the Company expects to achieve the lower end of its production guidance range of 88,000 – 100,000 gold equivalent ounces."
_________________________ |
1 Adjusted EBITDA, adjusted net income, cash costs and all-in sustaining costs are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to "Non-IFRS Measures" at the end of this press release for further information. |
Nick Dwyer, CFO commented:
"Our consolidated cash costs and all-in sustaining costs1 per saleable gold equivalent ounce produced during Q3 2023 were
"As at the end of Q3 2023, the Company maintained a healthy balance sheet, closing with
"The month end cash balance and temporary dip into a net debt position, were negatively influenced by a delayed receipt of
Mr. Bourchier concluded: "As we move forward, our primary focus remains delivering operating cashflow and executing our growth plan to become a mid-tier gold producer. We are steadfast on our path to transformational growth, and every step we take is aligned with this strategic objective while also delivering optimal performance to our valued shareholders and stakeholders."
Third Quarter 2023 Financial Summary
The following table summarizes the Company's consolidated financial results for the three months and nine months ended September 30, 2023 and 2022:
Three months ended September 30, 2023 | Three months ended September 30, 2022 | Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | |
$'000 | $'000 | $'000 | $'000 | |
Revenue | 40,907 | 46,048 | 122,756 | 150,318 |
Cost of sales | 24,245 | 24,690 | 80,087 | 74,932 |
Adjusted EBITDA (1) | 15,422 | 19,408 | 37,257 | 71,042 |
Income from mine ops before depreciation and depletion (1) | 16,662 | 21,358 | 42,669 | 75,386 |
Adjusted net income (1) | 3,654 | 2,512 | 943 | 21,769 |
Consolidated net income | 4,068 | 9,275 | 5,146 | 22,463 |
Capital expenditure | 10,018 | 9,094 | 32,889 | 29,658 |
Total assets | 273,548 | 278,359 | 273,548 | 278,359 |
Total liabilities | 91,669 | 105,038 | 91,669 | 105,038 |
Adjusted net income per share (1) | 0.04 | 0.03 | 0.01 | 0.24 |
Consolidated net income per share | 0.04 | 0.10 | 0.06 | 0.24 |
1. | Income from mine operations before depreciation & depletion, Adjusted EBITDA, adjusted net income and adjusted net income per share are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to "Non-IFRS Measures" at the end of this press release for further information. |
In Q3 2023, Mandalay generated consolidated revenue of
Consolidated cash cost per ounce of
Mandalay generated adjusted EBITDA of
Consolidated net income was
Third Quarter Operational Summary
The table below summarizes the Company's operations, capital expenditures and operational unit costs for the three months and nine months ended September 30, 2023, and 2022:
Three months ended September 30, 2023 | Three months ended September 30, 2022 | Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | |
$'000 | $'000 | $'000 | $'000 | |
Costerfield | ||||
Gold produced (oz) | 8,377 | 12,526 | 23,041 | 35,802 |
Antimony produced (t) | 395 | 582 | 1,456 | 1,788 |
Gold equivalent produced (oz) | 10,808 | 16,996 | 32,278 | 49,232 |
Cash cost (1) per oz gold eq. produced ($) | 975 | 669 | 942 | 629 |
All-in sustaining cost (1) per oz gold eq. produced ($) | 1,265 | 838 | 1,215 | 840 |
Capital development | 943 | 1,205 | 2,791 | 2,843 |
Property, plant and equipment purchases | 1,030 | 1,085 | 2,627 | 5,113 |
Capitalized exploration | 1,962 | 1,500 | 6,081 | 4,673 |
Björkdal | ||||
Gold produced (oz) | 11,224 | 10,291 | 30,590 | 30,991 |
Cash cost (1) per oz gold produced ($) | 1,189 | 1,139 | 1,375 | 1,308 |
All-in sustaining cost (1,3) per oz gold produced ($) | 1,474 | 1,397 | 1,781 | 1,652 |
Capital development | 1,959 | 1,357 | 6,529 | 6,178 |
Property, plant and equipment purchases | 3,195 | 2,997 | 11,522 | 7,765 |
Capitalized exploration | 929 | 950 | 3,273 | 2,771 |
Consolidated | ||||
Gold equivalent produced (oz) | 22,032 | 27,287 | 62,868 | 80,223 |
Cash cost (1) per oz gold eq. produced ($) | 1,084 | 846 | 1,153 | 891 |
All-in sustaining cost (1,3) per oz gold eq. produced ($) | 1,436 | 1,124 | 1,583 | 1,208 |
Capital development | 2,902 | 2,562 | 9,320 | 9,021 |
Property, plant and equipment purchases | 4,225 | 4,082 | 14,149 | 12,878 |
Capitalized exploration (2) | 2,891 | 2,450 | 9,420 | 7,759 |
1. | Cash cost and all-in sustaining cost are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to "Non-IFRS Measures" at the end of this press release for further information. |
2. | Includes capitalized exploration relating to other non-core assets. |
3. | All-in sustaining costs now includes tailings dam amortization, accordingly the 2022 comparative figures have been updated. |
Costerfield gold-antimony mine,
Costerfield produced 8,377 ounces of gold and 395 tonnes of antimony for 10,808 gold equivalent ounces in the third quarter of 2023. Cash and all-in sustaining costs at Costerfield of
During Q3 2023, Costerfield generated
Björkdal gold mine, Skellefteå,
Björkdal produced 11,224 ounces of gold in the third quarter of 2023 with cash and all-in sustaining costs of
Björkdal continues to show improvement in production and sales figures with
Lupin,
Care and maintenance spending at Lupin was less than
La Quebrada,
No work was carried out on the La Quebrada development property during Q3 2023.
CFO Transition
Mandalay also announces today that Nick Dwyer will be leaving the Company in the first quarter of 2024 as a result of his decision to resign and relocate to
Commenting on Mr. Dwyer's departure, Frazer Bourchier said, "Nick has been a key part of Mandalay's management team for over eight years, including as CFO since 2018. He played a significant role in Mandalay's 2019 financing transaction that was crucial to the Company's turnaround that followed, and the refinancing of various senior credit arrangements while leading the finance function over his tenure. On behalf of Mandalay's board, management and shareholders, I'd like to thank Nick for his invaluable contributions and wish him every success in his future endeavours."
Conference Call
Analysts and interested investors may join by using the following dial-in number:
Participant Number ( | 1-877-270-2148 |
Conference ID: | 10183607 |
Alternatively, please register for the webcast here.
A replay of the conference call will be available until 11:59 PM (Toronto time), November 16, 2023, and can be accessed using the following dial-in numbers:
Encore Number (Canada Toll free): | 855-669-9658 |
Encore Replay Code: | 3729475 |
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in
Mandalay's mission is to create shareholder value through the profitable operation and continuing the regional exploration program, at both its Costerfield and Björkdal mines. Currently, the Company's main objectives are to continue mining the high-grade Youle vein at Costerfield, bring the deeper Shepherd veins into production, both of which are expected to continue to supply high-grade ore to the processing plant, and to extend Youle's Mineral Reserves. At Björkdal, the Company will aim to increase production from the Aurora zone and other higher-grade areas in the coming years in order to maximize profit margins from the mine.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's anticipated performance in 2023. 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, 2023, a copy of which is available under Mandalay's profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. 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 Income from mine operations before depreciation & depletion, adjusted EBITDA, adjusted net income, free cash flow, cash cost per saleable ounce of gold equivalent produced and all-in sustaining cost 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 and free cash flow as measures 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. The Company defines adjusted net income as net income before special items. Special items are items of income and expense that are presented separately due to their nature and, in some cases, expected infrequency of the events giving rise to them. A reconciliation between adjusted EBITDA and adjusted net income, on the one hand, and consolidated net income, on the other hand, is included in the MD&A.
The Company defines free cash flow as a measure of the Company's ability to generate and manage liquidity. It is calculated starting with the net cash flows from operating activities (as per IFRS) and then subtracting capital expenditures and lease payments. Refer to Section 1.2 of MD&A for a reconciliation between free cash flow and net cash flows from operating activities.
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 sustaining costs include total cash operating costs, sustaining mining capital, royalty expense, accretion of reclamation provision and tailings dam amortization. Sustaining capital reflects the capital required to maintain each site's current level of operations. The site's all-in sustaining cost per ounce of saleable gold equivalent in a period equals the all-in sustaining cost divided by the saleable equivalent gold ounces produced in the period.
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. Site all-in sustaining costs include total cash operating costs, sustaining mining capital, royalty expense, accretion of reclamation provision and tailings dam amortization. Sustaining capital reflects the capital required to maintain each site's current level of operations. The site's all-in sustaining cost per ounce of saleable gold equivalent in a period equals the all-in sustaining cost divided by the saleable equivalent gold ounces produced in the period.
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. Consolidated cash cost excludes royalty and corporate level general and administrative expenses. This definition was updated in the third quarter of 2020 to exclude corporate general and administrative expenses to better align with industry standard. All-in sustaining cost per saleable ounce gold equivalent in the period equals the sum of cash costs associated with the production of gold equivalent ounces at all operating sites in the period plus corporate overhead expense in the period plus sustaining mining capital, royalty expense, accretion, depletion, depreciation and amortization, divided by the total saleable gold equivalent ounces produced in the period. A reconciliation between cost of sales and cash costs, and also cash cost to all-in sustaining costs are included in the MD&A.
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SOURCE Mandalay Resources Corporation
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