Mandalay Resources Corporation Announces Fourth Quarter and Full-Year 2020 Financial Results
Mandalay Resources Corporation (MNDJF) announced its financial results for Q4 and full-year 2020, reporting strong growth. Q4 revenue reached $45.3 million, marking a 99% increase year-over-year. Full-year revenue hit $179.0 million, the highest since 2016. Adjusted EBITDA in Q4 was $25.3 million, a 436% surge from the previous year. Consolidated net income for Q4 was $14.7 million, with adjusted net income of $12.1 million. The cash cost per gold equivalent ounce produced improved by 21% to $843. The company ended 2020 with $34.2 million in cash, suggesting a robust financial position going into 2021.
- Q4 2020 revenue increased by 99% to $45.3 million
- Full-year 2020 revenue of $179.0 million, highest since 2016
- Q4 adjusted EBITDA reached $25.3 million, a 436% increase
- Full-year record adjusted EBITDA of $94.2 million
- Q4 consolidated net income of $14.7 million vs. prior year loss
- Adjusted net income for full-year 2020 was $34.7 million
- Cash cost per gold equivalent ounce produced improved by 21% to $843
- Ended 2020 with a cash balance of $34.2 million
- Cost of sales increased at Björkdal, affecting overall profits
- Q4 cash cost per ounce at Björkdal increased to $1,251
TORONTO, Feb. 25, 2021 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) is pleased to announce its financial results for the fourth quarter and full-year ended December 31, 2020.
The Company’s consolidated financial results for the year ended December 31, 2020, 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.
Fourth Quarter 2020 Highlights:
- Revenue of
$45.3 million ; - Adjusted EBITDA of
$25.3 million , third-highest quarterly result in Company history; - Consolidated net income of
$14.7 million , or$0.16 per share; and - Adjusted net income of
$12.1 million , or$0.13 per share.
Full-Year 2020 Highlights:
- Revenue of
$179.0 million , highest full-year result since 2016; - Record adjusted EBITDA of
$94.2 million ; - Record adjusted net income of
$34.7 million , or$0.38 per share; - Consolidated net income of
$9.3 million , or$0.10 per share; $25.3 million in free cash flow and$72.2 million in net cash flows from operating activities; and- Consolidated cash cost of
$843 per Au Eq. oz produced, a21% year-over-year improvement.
Dominic Duffy, President and CEO of Mandalay, commented:
“Mandalay’s fourth quarter 2020 capped off a tremendous year, one in which the Company demonstrated four consecutive quarters of dramatically improved operational and financial performance. These strong results demonstrate the sustainability of the Company’s turnaround.”
Mr. Duffy continued, “In 2020 the Company generated
“Our consolidated cash cost for 2020 was
Mr. Duffy added, “Costerfield’s operational and financial improvements are a direct result of the high-grade Youle deposit becoming the primary source of ore feed throughout 2020. Processed gold grades averaged 11.6 g/t gold and
“Björkdal maintained stable production and sales, generating
Mr. Duffy continued, “Mandalay ended 2020 with a cash balance of
Mr. Duffy concluded, “2020 was a transformative year for the Company. Our results demonstrate the continued commitment of our employees and contractors to execute on our strategic initiatives and the underlying long-term value and cash-generating potential at both sites. This hard work has translated into strong financial performance and increased shareholder value. Looking ahead, we expect continued strong free cash flow generation, which will set the Company up for an exciting 2021 year and beyond.”
Fourth Quarter and Full-Year 2020 Financial Summary
The following table summarizes the Company’s financial results for the three months and year ended December 31, 2020 and 2019:
| Three months ended Dec 31, 2020 | Three months ended Dec 31, 2019 | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | |||||
| $’000 | $’000 | $’000 | $’000 | |||||
| Revenue | 45,320 | 22,737 | 178,974 | 107,795 | ||||
| Cost of sales | 18,798 | 17,034 | 78,782 | 83,623 | ||||
| Adjusted EBITDA (1) | 25,346 | 4,732 | 94,247 | 18,804 | ||||
| Income from mine ops before depreciation, depletion | 26,522 | 5,703 | 100,192 | 24,172 | ||||
| Adjusted net income (loss) (1) | 12,065 | (4,223 | ) | 34,704 | (10,403 | ) | ||
| Consolidated net income (loss) | 14,722 | (5,328 | ) | 9,309 | (18,649 | ) | ||
| Capital expenditure | 14,194 | 10,225 | 46,878 | 37,969 | ||||
| Total assets | 301,284 | 258,592 | 301,284 | 258,592 | ||||
| Total liabilities | 165,505 | 146,840 | 165,505 | 146,840 | ||||
| Adjusted net income (loss) per share (1) | 0.13 | (0.05 | ) | 0.38 | (0.13 | ) | ||
| Consolidated net income (loss) per share | 0.16 | (0.07 | ) | 0.10 | (0.23 | ) | ||
1. Adjusted EBITDA, adjusted net income (loss) and adjusted net income (loss) per share are non-IFRS measures, defined at the end of this press release “Non-IFRS Measures”.
In the fourth quarter of 2020, Mandalay generated consolidated revenue of
Consolidated cash cost per ounce of
Mandalay generated adjusted EBITDA of
Fourth Quarter and Full-Year 2020 Operational Summary
The table below summarizes the Company’s operations, capital expenditures and operational unit costs for the three months and year ended December 31, 2020 and 2019:
| Three months ended Dec 31, 2020 | Three months ended Dec 31, 2019 | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | |||||
| $’000 | $’000 | $’000 | $’000 | |||||
| Björkdal | ||||||||
| Gold produced (oz) | 12,252 | 10,990 | 45,296 | 51,498 | ||||
| Cash cost (1) per oz gold produced ($) | 1,251 | 1,071 | 1,112 | 945 | ||||
| All-in sustaining cost (1) per oz gold produced ($) | 1,616 | 1,416 | 1,435 | 1,203 | ||||
| Capital development | 2,337 | 1,441 | 9,341 | 6,939 | ||||
| Property, plant and equipment purchases | 4,832 | 3,408 | 12,025 | 10,162 | ||||
| Capitalized exploration | 586 | 768 | 1,929 | 1,472 | ||||
| Costerfield | ||||||||
| Gold produced (oz) | 12,236 | 4,749 | 44,958 | 15,258 | ||||
| Antimony produced (t) | 858 | 684 | 3,903 | 2,032 | ||||
| Gold equivalent produced (oz) | 15,099 | 7,604 | 58,148 | 25,161 | ||||
| Cash cost (1) per oz gold eq. produced ($) | 668 | 1,083 | 634 | 1,313 | ||||
| All-in sustaining cost (1) per oz gold eq. produced ($) | 1,077 | 1,640 | 1,010 | 2,024 | ||||
| Capital development | 3,599 | 3,776 | 14,231 | 13,967 | ||||
| Property, plant and equipment purchases | 1,886 | 349 | 4,951 | 3,422 | ||||
| Capitalized exploration | 937 | 461 | 4,245 | 1,776 | ||||
| Consolidated | ||||||||
| Gold equivalent produced (oz) | 27,351 | 18,594 | 103,444 | 76,659 | ||||
| Cash cost* per oz gold eq. produced ($) | 929 | 1,076 | 843 | 1,066 | ||||
| All-in sustaining cost (1) per oz gold eq. produced ($) | 1,350 | 1,568 | 1,254 | 1,549 | ||||
| Capital development | 5,936 | 5,217 | 23,572 | 20,906 | ||||
| Property, plant and equipment purchases | 6,718 | 3,757 | 16,976 | 13,584 | ||||
| Capitalized exploration (2) | 1,540 | 1,251 | 6,330 | 3,479 | ||||
1. Cash cost and all-in sustaining cost are non-IFRS measures. See “Non-IFRS Measures” at the end of this press release.
2. Includes capitalized exploration relating to other non-core assets.
Björkdal gold mine, Skellefteå, Sweden
Björkdal produced 12,252 ounces of gold in the fourth quarter of 2020 with cash and all-in sustaining costs of
Costerfield gold-antimony mine, Victoria, Australia
Costerfield produced 12,236 ounces of gold and 858 tonnes of antimony for 15,099 gold equivalent ounces in the fourth quarter of 2020. Due to the higher gold equivalent ounces produced, cash and all-in sustaining costs at Costerfield decreased to
Cerro Bayo silver-gold mine, Patagonia, Chile
In the fourth quarter of 2020, the Company spent
During the first quarter of 2021, the Company is planning to restart the processing facility at Cerro Bayo to begin trial processing of waste dumps located at site containing silver and gold mineralization. During 2020, a sampling program was carried out to establish areas within the waste dumps that contain sufficiently-graded mineralization that could be processed profitably. The current plan is a three-month trial period that could be extended if the project is found to be economically profitable.
Lupin, Nunavut, Canada
Care and maintenance spending at Lupin was
Challacollo, Chile
In the fourth quarter of 2020, Aftermath Silver Ltd. (“Aftermath Silver”) completed the second payment of CAD
La Quebrada, Chile
No work was carried out on the La Quebrada development property during 2020.
COVID-19
The coronavirus (“COVID-19”) pandemic is present in all countries in which the Company operates, with cases being reported in Canada, Australia, Sweden and Chile. At this time, the Company has activated business continuity practices across all sites. Management will continue to monitor developments across all jurisdictions and will adjust its planning as necessary.
The Company is not able to estimate the duration of the pandemic and potential impact on its business if disruptions or delays in our operations occur or our ability to transfer our products to market. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor operating conditions in the countries we operate and respond accordingly. More details are included in the press release dated March 20, 2020, and on the Company’s website.
Conference Call
Mandalay’s management will be hosting a conference call for investors and analysts on February 26, 2021 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: | 13716917 |
A replay of the conference call will be available until 11:59 PM (Toronto time), March 12, 2021 and can be accessed using the following dial-in number:
| Encore Toll Free Dial-in Number: | (877) 660-6853 |
| Encore ID: | 13716917 |
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and Sweden, care and maintenance and development projects in Chile. The Company is focused on growing production at its gold and antimony operation in Australia, and gold production from its operation in Sweden to continue being a significant cash flow generating Company.
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 2021. 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, 2020, 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 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 Corporation’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 and depletion. Sustaining capital reflects the capital required to maintain each site’s current level of operations. The sites the 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 and depletion. Sustaining capital reflects the capital required to maintain each site’s current level of operations. The sites the 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.
For Further Information:
Dominic Duffy
President and Chief Executive Officer
Edison Nguyen
Manager, Analytics and Investor Relations
Contact:
(647) 260-1566
FAQ
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