Mandalay Resources Corporation Announces Record Financial Results for the Fourth Quarter and Full-Year 2021
Mandalay Resources Corporation (MNDJF) announced its financial results for Q4 and full-year 2021, marking significant milestones. The company achieved record revenue of $229.4 million for the year and $72.9 million for the fourth quarter, with adjusted EBITDA of $115.0 million for 2021. Consolidated net income reached $54.9 million or $0.60 per share. The Costerfield site contributed $88.9 million in adjusted EBITDA, demonstrating strong operational performance. Mandalay ended 2021 with a cash balance of $30.7 million, which grew to $47.2 million by January 2022.
- Record revenue of $229.4 million for 2021, a 28% increase year-over-year.
- Achieved highest-ever quarterly revenue of $72.9 million in Q4 2021.
- Adjusted EBITDA of $115.0 million for the full year, representing a 50% margin.
- Costerfield's operational strength generated $33.0 million in quarterly adjusted EBITDA.
- Consolidated cash cost increased to $873 per saleable gold equivalent ounce in 2021, up 4% from 2020.
TORONTO, Feb. 24, 2022 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) is pleased to announce its financial results for the quarter and year ended December 31, 2021.
The Company’s audited consolidated financial results for the year ended December 31, 2021, 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 2021 Highlights:
- Consolidated quarterly revenue of
$72.9 million , highest ever quarterly result; - Adjusted EBITDA1 of
$40.6 million , highest ever quarterly result; and - Consolidated net income of
$15.3 million ($0.17 or C$0.21 per share).
Full-Year 2021 Highlights:
- Record revenue of
$229.4 million ; - Record adjusted EBITDA1 of
$115.0 million ; - Consolidated net income of
$54.9 million ($0.60 or C$0.75 per share); $18.2 million in free cash flow1 and$62.0 million in net cash flows from operating activities; and$30.7 million in cash on hand at the end of December 2021,$47.2 million in cash on hand at the end of the January 2022.
Dominic Duffy, President and CEO of Mandalay, commented:
“Mandalay’s strong results this quarter and for the full-year 2021 provides further evidence of the successful execution of our strategy. We achieved significant financial milestones in 2021 including a
“The main driver behind this is Costerfield’s continued operational strength, making it a lynchpin to Mandalay’s success today and going forward given its growing Mineral Reserves and Resources as indicated in our February 16, 2022, press release. Costerfield generated
“In 2021, the Company also generated a consolidated
“Mandalay ended 2021 with a cash balance of
“Our consolidated cash cost for 2021 was
“2021 was a statement year for Mandalay, we’ve now demonstrated 24 months of operational execution and look to carry this momentum throughout 2022 by obtaining higher production numbers and better cash flows, which ultimately should lead to better shareholder returns.”
____________________________
1 Adjusted EBITDA and free cash flow 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.
Fourth Quarter and Full-Year 2021 Financial Summary
The following table summarizes the Company’s financial results for the three months and year ended December 31, 2021, and 2020:
| Three months ended December 31, 2021 | Three months ended December 31, 2020 | Year ended December 31, 2021 | Year ended December 31, 2020 | |
| $’000 | $’000 | $’000 | $’000 | |
| Revenue | 72,904 | 45,320 | 229,396 | 178,974 |
| Cost of sales | 30,609 | 18,798 | 108,853 | 78,782 |
| Adjusted EBITDA (1) | 40,648 | 25,346 | 114,960 | 94,247 |
| Income from mine ops before depreciation, depletion | 42,295 | 26,522 | 120,543 | 100,192 |
| Adjusted net income (1) | 21,992 | 12,065 | 49,203 | 34,704 |
| Consolidated net income | 15,334 | 14,722 | 54,879 | 9,309 |
| Capital expenditure | 12,250 | 14,194 | 50,303 | 46,878 |
| Total assets | 317,843 | 301,284 | 317,843 | 301,284 |
| Total liabilities | 141,156 | 165,505 | 141,156 | 165,505 |
| Adjusted net income per share (1) | 0.24 | 0.13 | 0.54 | 0.38 |
| Consolidated net income per share | 0.17 | 0.16 | 0.60 | 0.10 |
- Adjusted EBITDA, adjusted net income and adjusted net income per share are non-IFRS measures, defined at the end of this press release “Non-IFRS Measures”.
In the fourth quarter of 2021, Mandalay generated consolidated revenue of
Consolidated cash cost per ounce of
Mandalay generated adjusted EBITDA of
Fourth Quarter and Full-Year 2021 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, 2021 and 2020:
| Three months ended December 31, 2021 | Three months ended December 31, 2020 | Year ended December 31, 2021 | Year ended December 31, 2020 | ||
| $’000 | $’000 | $’000 | $’000 | ||
| Costerfield | |||||
| Gold produced (oz) | 13,397 | 12,236 | 47,753 | 44,958 | |
| Antimony produced (t) | 830 | 858 | 3,380 | 3,903 | |
| Gold equivalent produced (oz) | 19,507 | 15,099 | 68,729 | 58,148 | |
| Cash cost (1) per oz gold eq. produced ($) | 557 | 668 | 593 | 634 | |
| All-in sustaining cost (1) per oz gold eq. prod. ($) | 731 | 1,077 | 866 | 1,010 | |
| Capital development | 1,415 | 3,599 | 10,426 | 14,231 | |
| Property, plant and equipment purchases | 723 | 1,886 | 4,302 | 4,951 | |
| Capitalized exploration | 1,597 | 937 | 5,940 | 4,245 | |
| Björkdal | |||||
| Gold produced (oz) | 11,190 | 12,252 | 45,236 | 45,296 | |
| Cash cost (1) per oz gold produced ($) | 1,227 | 1,251 | 1,233 | 1,112 | |
| All-in sustaining cost (1) per oz gold produced ($) | 1,700 | 1,616 | 1,609 | 1,435 | |
| Capital development | 2,803 | 2,337 | 10,015 | 9,341 | |
| Property, plant and equipment purchases | 4,512 | 4,832 | 16,095 | 12,025 | |
| Capitalized exploration | 753 | 586 | 2,376 | 1,929 | |
| Cerro Bayo | |||||
| Gold produced (oz) | 1,009 | - | 5,303 | - | |
| Silver produced (oz) | 50,556 | - | 266,596 | - | |
| Gold equivalent produced (oz) | 1,666 | - | 9,037 | - | |
| Cash cost (1) per oz gold eq. produced ($) | 1,476 | - | 1,199 | - | |
| All-in sustaining cost (1) per oz gold eq. prod. ($) | 1,604 | - | 1,246 | - | |
| Consolidated | |||||
| Gold equivalent produced (oz) | 32,362 | 27,351 | 123,002 | 103,444 | |
| Cash cost(1) per oz gold eq. produced ($) | 836 | 929 | 873 | 843 | |
| All-in sustaining cost (1) per oz gold eq. prod. ($) | 1,162 | 1,350 | 1,212 | 1,254 | |
| Capital development | 4,218 | 5,936 | 20,441 | 23,572 | |
| Property, plant and equipment purchases | 5,449 | 6,718 | 20,825 | 16,976 | |
| Capitalized exploration (2) | 2,583 | 1,540 | 9,037 | 6,330 | |
- The Company has restated consolidated all-in sustaining costs to exclude care and maintenance expenses in the comparative periods. Cash cost and all-in sustaining cost are non-IFRS measures. See “Non-IFRS Measures” at the end of this press release.
- Includes capitalized exploration relating to other non-core assets.
Costerfield gold-antimony mine, Victoria, Australia
Costerfield produced 13,397 ounces of gold and 830 tonnes of antimony for 19,507 gold equivalent ounces in the fourth quarter of 2021. Cash and all-in sustaining costs at Costerfield of
Björkdal gold mine, Skellefteå, Sweden
Björkdal produced 11,190 ounces of gold in the fourth quarter of 2021 with cash and all-in sustaining costs of
Cerro Bayo silver-gold mine, Patagonia, Chile
In the fourth quarter of 2021, the Company spent nil on care and maintenance expenses at Cerro Bayo, compared to
On December 1, 2021, the Company completed the sale of its Cerro Bayo mine to Equus Mining Ltd. The Company recognized a gain of
Lupin, Nunavut, Canada
Care and maintenance spending at Lupin was
Challacollo, Chile
On April 19, 2021, Aftermath Silver Ltd. (“Aftermath Silver”) paid C
La Quebrada, Chile
No work was carried out on the La Quebrada development property during Q4 2021.
Conference Call
Mandalay’s management will be hosting a conference call for investors and analysts on February 25, 2022, at 8:00 AM (Toronto time).
Analysts and interested investors are invited to participate using the following dial-in numbers:
| Participant Number (Toll free): | 877 407 8289 |
| Participant Number: | 201 689 8341 |
| Conference ID: | 13727325 |
A replay of the conference call will be available until 11:59 PM (Toronto time), March 11, 2022, and can be accessed using the following dial-in number:
| Encore Toll Free Dial-in Number: | 877 660 6853 |
| Encore ID: | 13727325 |
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Björkdal gold mine). The Company is focused on growing its production and reducing costs to generate significant positive cashflow. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement.
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 online the deeper Shepherd veins, both of which will continue to supply high-grade ore to the processing plant, and to extend Youle 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 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 31, 2021, 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 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 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 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 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 and depletion. 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.
For Further Information:
Dominic Duffy
President and Chief Executive Officer
Edison Nguyen
Manager, Analytics and Investor Relations
Contact:
(647) 260-1566 ext. 1
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