TORONTO, Feb. 18, 2015 /PRNewswire/ -- Mandalay Resources
Corporation ("Mandalay" or the "Company") (TSX: MND) announced
today revenue of $67 million,
adjusted EBITDA of $21.5 million and
net profit of $7.6 million or
$0.02 per share for the fourth
quarter of 2014. The Company's audited consolidated financial
results for the three months and year ended December 31, 2014, 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.
In accordance with the Company's dividend policy, Mandalay's
Board of Directors declared a quarterly dividend of $4,018,360 (6% of the trailing quarter's gross
revenue), or $0.0098 per share
(CDN$ 0.0121 per share), payable on
March 9, 2015 to shareholders of
record as of February 27, 2015.
Brad Mills, Chief Executive
Officer of Mandalay, commented, "Record production and sales during
the quarter and the year has translated into strong financial
performance even with the lower commodity prices in 2014 compared
to 2013. Cash operating costs continued to improve during the
quarter: Cerro Bayo's cash and all-in sustaining costs ("AISC") in
the fourth quarter were $3.95 and
$10.37 per ounce ("oz") of silver
("Ag") net of gold ("Au") by-product sales; Costerfield achieved
cash costs and AISC of $608 and
$884 per gold equivalent ("Au Eq.")
oz in the quarter; and Bjorkdal achieved cash costs of $901 per oz Au and AISC of $1,051 per oz Au. Overall the Company produced
52,601 Au Eq. oz in the fourth quarter at a cash cost of
$737/Au Eq. oz and AISC costs of
$990/Au Eq. oz. For the year we
produced 154,810 Au Eq. oz at a cash cost of $756/ Au Eq. oz and AISC cost of $1,019/Au Eq. oz.
"The Company's year-end cash balance increased to $49 million after spending $53.9 million on capital and exploration,
$7.8 million for the acquisition of
Challacollo, $23.2 million for the
acquisition of Elgin and paying
dividends of $9.5 million. Our
balance sheet remained very healthy with net assets growing to
$218 million. Our current asset
ratio, excluding the $60 million gold
convertible note due in 2019, was a very strong 3:1, with cash
exceeding all current liabilities."
Mr. Mills concluded: "Our exploration and acquisition programs
achieved significant success in growing our Mineral Reserves and
Resources. Proven and Probable Au Reserves grew by 136% to 709,000
oz as a result of the Elgin
acquisition, while Ag Reserves declined slightly and antimony
("Sb") Reserves grew slightly. After excluding La Quebrada, which
has been reclassified as an asset held for sale, our Measured and
Indicated Resources grew to 1,135,000 oz Au (a 144% increase),
50,785,000 oz Ag (a 70% Increase) and 35,900 t Sb (a 12% increase).
We are pleased to reiterate our guidance for 2015, which includes
the first full year of production from Bjorkdal. The Company's
focus in 2015 will be on continuing to grow reserves and resources,
continuous improvement in our operations and the assessment of
opportunistic value adding acquisitions."
Fourth Quarter and Full Year 2014 Financial
Highlights
The following table summarizes the Company's financial results
for the fourth quarter and full-year of 2014 and 2013:
|
Three months
ended
December 31,
2014
|
Three months
ended
December 31,
2013
|
Year
ended
December 31,
2014
|
Year
ended December 31,
2013
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Revenue
|
66,973
|
39,058
|
184,629
|
166,906
|
Adjusted
EBITDA
|
21,463
|
13,920
|
64,435
|
67,699
|
Income From Mine
Operations Before Depreciation and Depletion
|
25,721
|
15,798
|
75,446
|
75,608
|
Net Income
|
7,588
|
4,435
|
17,576
|
29,442
|
Total
Assets
|
365,101
|
196,772
|
365,101
|
196,772
|
Total
Liabilities
|
146,323
|
43,190
|
146,323
|
43,190
|
Earnings per
Share
|
0.02
|
0.01
|
0.05
|
0.09
|
The increases in revenue, adjusted EBITDA and profit during the
fourth quarter of 2014 over the same quarter in 2013 were
principally due to the higher volumes sold and the addition of
Bjorkdal mine from September 10,
2014.
Net income is inclusive of a non-cash, non-operating gain of
$87 thousand related to
mark-to-market adjustments of financing warrants, loss of
$129 thousand related to marketable
securities, gain of $1,780 thousand
for the derivative portion of five year exchangeable bonds,
$ 176 thousand related to oil
derivative and deferred tax recovery of $512
thousand. Excluding these items, gain after tax from
underlying operations for the fourth quarter was $5,514 thousand ($0.02 per share). By comparison, in the fourth
quarter of 2013 the Company's net income of $4,435 thousand ($0.01 per share) was inclusive of non-cash,
non-operating loss of $605 thousand
related to mark-to-market adjustment of an AUD/USD currency option,
non-operating gain of $28 thousand
related to financing warrants and non-cash deferred tax recovery of
$55 thousand. Excluding these items,
income after tax from underlying operations in the fourth quarter
of 2013 was $4,957 thousand
($0.01 per share).
On November 27, 2014, Mandalay
paid a quarterly dividend in the aggregate amount of $2,093,733 (CDN$
0.0058 per share). Cash and cash equivalents of the Company
were $49 million as of December 31, 2014, compared to $33.5 million as of December 31, 2013.
Fourth Quarter 2014 Operational Highlights
Costerfield gold-antimony mine, Victoria, Australia
In the fourth quarter of 2014, Costerfield produced 11,126 oz of
saleable Au and 926 tonnes of saleable antimony, versus 6,845 oz Au
and 805 t Sb in the fourth quarter of 2013.
Cash cost per Au Eq. oz produced in the fourth quarter of 2014
was $608 versus $850 in the fourth quarter of 2013. The site
all-in cost per Au Eq. oz produced in the fourth quarter of 2014
was $885, versus $1,085 in the fourth quarter of 2013.
Cerro Bayo silver-gold mine, Patagonia, Chile
During the fourth quarter of 2014, the Cerro Bayo mine produced
1,021,189 oz of saleable Ag and 9,052 oz of saleable Au, versus
878,542 oz Ag and 5,272 oz Au in the fourth quarter of 2013. The
variation in production quantities is attributable to the greater
volumes mined and processed in the current quarter.
Cash cost per oz Ag produced net of Au by-product was
$3.95 during the fourth quarter of
2014, lower than the $6.74 in the
fourth quarter of 2013. Site all-in costs were $10.37/oz versus $11.51/oz in the previous year.
Bjorkdal gold mine, Sweden
In the fourth quarter of 2014, Bjorkdal produced 11,458 oz of
saleable Au.
Cash cost per gold equivalent ounce produced in the fourth
quarter of 2014 was $870. The site
all-in cost per Au Eq. oz produced in the fourth quarter of 2014
was $1,024.
The following table summarizes the Company's capital expenditure
and unit costs for the years ended December
31, 2014 and December 31,
2013:
|
Year
ended
December 31,
2014
|
Year
ended
December 31,
2013
|
|
$'000
|
$'000
|
Capital
development
|
23,803
|
20,316
|
Capital
purchases
|
16,650
|
14,068
|
Capital
exploration
|
14,265
|
8,329
|
Cerro Bayo: Cash cost
per oz Ag produced net of Au byproduct credit
|
$5.30
|
$6.84
|
Cerro Bayo: Site
all-in cost per oz Ag produced net of Au byproduct
credit
|
$11.36
|
$12.07
|
Costerfield:
Cash cost per oz Au equivalent
produced
|
$771.56
|
$818.62
|
Costerfield: Site
all-in cost per oz Au equivalent produced
|
$1,035.52
|
$1,062.43
|
Bjorkdal: Cash
cost per oz Au equivalent
produced[1]
|
$869.99
|
NA
|
Bjorkdal: Site all-in
cost per oz Au equivalent
produced[1]
|
$1,023.61
|
NA
|
Company Average Cash
Cost per oz Au Eq. Oz
|
$755.97
|
$767.45
|
Company Average
All-in Cost per oz Au Eq. Oz.
|
$1,018.64
|
$1,012.75
|
[1] Bjorkdal year-end represents period from
September 10, 2014 to December 31, 2014.
2014 Actual Saleable Production vs Guidance
Production
|
Total 2014
Actual
Production
|
2014
Guidance
|
Silver
|
3,329,519
oz
|
3.0-3.2 million
oz
|
Gold
|
77,900 oz
|
60,000 – 70,000
oz
|
Antimony
|
3,639 t
|
3,000 – 3,300
t
|
Au Eq.
Production
|
154,810 oz
|
130,000 – 143,000
oz
|
Production, Capital and Cost Guidance for 2015
Mandalay reiterates the following production, cost, and capital
expenditure guidance for 2015.
|
Total
|
Cerro
Bayo
|
Costerfield
|
Bjorkdal
|
Saleable gold
production
|
101,000 – 116,000
oz
|
23,000 – 27,000
oz
|
32,000 – 37,000
oz
|
46,000-52,000
oz
|
Saleable silver
production
|
2.7 – 3.1 million
oz
|
2.7 – 3.1 million
oz
|
|
|
Saleable antimony
production
|
3,200 – 3,500
t
|
|
3,200 – 3,500
t
|
|
Gold equivalent
production
|
167,000 Au Eq.
ozs.-185,000 Au Eq. ozs.
|
|
|
|
Cash cost $/oz silver
net by-product
|
|
6.00 –
8.00
|
|
|
Cash cost $/oz gold
or gold equivalent
|
|
|
625 – 750
|
850-950
|
Capital expenditure
($ million)
|
38-44
|
12-14
|
16-18
|
10-12
|
Exploration ($
million)
|
7
|
3
|
1
|
3
|
Conference Call
Mandalay Management will be hosting a conference call for
investors and analysts on February 18,
2015 at 8:00 am (Toronto time). Analysts and interested
investors are invited to participate using the following dial-in
numbers:
Participant Number
(International/Local):
|
(416)
764-8688
|
Participant Number
(Toll free North America):
|
(888)
390-0546
|
Conference
ID:
|
53222930
|
A replay of the conference call will be available until
23:59 pm (Toronto time), March 4,
2015 and can be accessed using the following dial-in
numbers:
Encore Toll Free
Dial-in Number:
|
1-888-390-0541
|
Local
Dial-in-Number:
|
(416)
764-8677
|
Encore ID:
|
222930#
|
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 in
future year or years. 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 28, 2014 and its final prospectus dated
September 2, 2014, copies of which
are 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,
cash cost per ounce of gold equivalent produced, cash cost per
saleable ounce of silver produced net of gold credits, site all-in
cost per ounce of gold equivalent produced, site all-in cost per
saleable ounce of silver produced net of gold credits and all-in
sustaining costs, which are all 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 measures of operating
performance to assist in comparing the Company's ability to
generate liquidity through operating cash flow to fund future
working capital needs and fund future capital expenditures and to
assist in financial performance from period to period on a
consistent basis. 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 our 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 earnings before interest,
taxes, non-cash charges and finance costs. For a detailed
reconciliation of net income to adjusted EBITDA, please refer to
page 12 of management's discussion and analysis of the Company's
financial statements for the fourth quarter of 2014.
Equivalent gold ounces produced is calculated by adding to gold
ounces produced, the 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 equivalent ounces produced in the period is
then divided by the equivalent gold ounces produced to yield the
cash cost per equivalent ounce produced. The cash cost excludes
royalty expenses. Values for 2013 have been recalculated
accordingly. Site all-in costs include total cash operating costs,
royalty expense, depletion, depreciation, accretion and write-off
of exploration and evaluation. The site all-in cost is then divided
by the equivalent gold ounces produced to yield the site all-in
cost per equivalent ounce produced.
The cash cost per silver ounce produced net of gold byproduct
credit is calculated by deducting the gold credit (which equals
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 silver ounces produced in the period. The
cash cost excludes royalty expenses. The site all-in cost per
silver ounce produced net of gold byproduct credit is calculated by
adding royalty expenses, depletion, depreciation, accretion and
write-off of exploration and evaluation to the cash cost net of
gold byproduct credit dividing the resultant number by the silver
ounces produced in the period.
All-in sustaining costs per gold equivalent ounce includes total
cash operating costs, royalty expense, depletion, depreciation,
accretion, and write-off of exploration and evaluation. Equivalent
gold ounces produced is calculated by adding to gold ounces
produced, the antimony tonnes produced times the average antimony
price in the period divided by the average gold price in the
period. The cost is then divided by the equivalent gold ounces
produced to yield the all-in cost per equivalent ounce
produced.
CONTACT: Bradford Mills, Chief
Executive Officer; Greg DiTomaso,
Director of Investor Relations; Contact: 647.260.1566