Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX:
MND, OTCQB: MNDJF) announced today its production and sales results
for the third quarter of 2022.
Third Quarter Production
Highlights:
- Consolidated saleable gold
equivalent production and sales of 27,287 and 26,551 ounces
respectively.
Revised 2022 Guidance:
- Revised 2022 production guidance to
106,000 – 115,000 gold equivalent ounces, from 118,000 –
130,000;
- Cash and all-in sustaining cost
guidance remains unchanged due to cost savings and the stronger US
Dollar; and
- Reduction in capital expenditure
guidance by $9 – $13 million to a consolidated $41 – $45
million.
Dominic Duffy, President and CEO of Mandalay,
commented:
“The Company had previously expected full-year
2022 production to be between 118,000 to 130,000 gold equivalent
ounces, however, due to COVID-related labour shortages at both
operations and temporary lower grades, Mandalay is revising its
2022 production guidance to 106,000 – 115,000 gold equivalent
ounces. Despite this lower production, our cost per ounce metrics
have stayed comparatively in line with the previously stated
guidance and will remain unchanged due to tight cost controls and
the strengthening of the US Dollar relative to the Australian
Dollar and Swedish Krona, both of which help offset the lower
consolidated production rates. We also expect to reduce capital
spending by approximately $9 – $13 million due to cost saving
measures and delaying purchases of capital items. For a more
detailed breakdown, please refer to Table 3 in this press
release.
“At Costerfield, the site experienced a
significant increase in sick leave year-over-year as flu season was
in effect and any personnel with flu or COVID-like symptoms were
not permitted to be on site. Unfortunately, this impacted our
underground production rates, consequently resulting in a
higher-than-expected utilization of the lower grade stockpile in
the processing feed. This trend increased during the second quarter
and has continued since; however, we expect this to improve as we
leave the flu season in Australia and the Australian government
moves towards reducing the mandated COVID self-isolation
period.
“Additionally at Costerfield, mined gold grades
during the third quarter were below budget, mainly due to several
development drives continuing further than expected in the Youle
ore body at lower but still profitable grades. Whilst the decision
to continue the development in these drives is causing a short-term
reduction in grades, it improves the long-term economics of the
mine and expected future cash flows.
“For the fourth quarter, we expect grades to
lift as sickness absenteeism stabilize and additional development
on the extremities of Youle is completed, allowing us to focus on
developing the higher-grade central area of the deposit.
“At Björkdal, we were pleased to see a major
increase in production in the third quarter as compared to the
second quarter of this year as we continue to work on overcoming
some operational issues mainly related to reduced haulage rates
from COVID absenteeism, resulting in more of the lower grade
stockpile material being processed. Underground grades have also
been slightly below expectations as we continue to improve dilution
controls.
“For the remainder of the year, we expect
Björkdal’s production to continue increasing as compared to the
third quarter as we will continue mining the lower levels of Aurora
and initiate development in several higher-grade areas of the
Eastern Central zone.
“We are very pleased that despite the lower
production forecast, our continued focus on cost controls are
expected to ensure that we will remain on track to achieve our
previously stated unit costs guidance.
“Expected fourth quarter operational
improvements, combined with operational and capital cost controls
will ensure that the Company continues with the trend of generating
positive free cash flow for 2022.”
Saleable Production for the Quarter
Ended September 30, 2022:
- In the third
quarter of 2022, the Company produced a total of 22,817 ounces of
gold and 582 tonnes of antimony representing a total of 27,287
ounces of gold equivalent, versus 26,328 ounces of gold, 860 tonnes
of antimony and 85,279 ounces of silver in the third quarter of
2021, representing a total of 33,121 ounces of gold
equivalent.
- Production at
Björkdal was 10,291 ounces of gold in the third quarter of 2022 as
compared to 11,250 ounces of gold in the third quarter of
2021.
- Production at Costerfield was
12,526 ounces of gold and 582 tonnes of antimony in the third
quarter of 2022 versus 13,315 ounces gold and 860 tonnes antimony
in the third quarter of 2021.
Saleable Production for the Nine Months Ended September
30, 2022:
- The Company
produced a total of 66,793 ounces gold and 1,788 tonnes antimony,
representing a total of 80,223 ounces of gold equivalent
production, versus 72,696 ounces gold, 2,550 tonnes of antimony and
216,040 ounces of silver in the corresponding nine months of 2021,
representing a total of 90,640 ounces of gold equivalent.
- Production at Björkdal was 30,991
ounces gold.
- Production at Costerfield was
35,802 ounces gold and 1,788 tonnes antimony.
Table 1 – Third Quarter and Nine Months Saleable
Production for 2022 and 2021
Metal |
Source |
Three months endedSeptember
302022 |
Three months endedSeptember
302021 |
Nine months endedSeptember
302022 |
Nine months endedSeptember
302021 |
Gold (oz) |
Björkdal |
10,291 |
11,250 |
30,991 |
34,046 |
|
Costerfield |
12,526 |
13,315 |
35,802 |
34,356 |
|
Cerro Bayo |
- |
1,763 |
- |
4,294 |
|
Total |
22,817 |
26,328 |
66,793 |
72,696 |
Antimony (t) |
Costerfield |
582 |
860 |
1,788 |
2,550 |
Silver (oz) |
Cerro Bayo |
- |
85,279 |
- |
216,040 |
Average quarterly prices: |
Gold US$/oz |
|
1,730 |
1,790 |
|
|
Antimony US$/t |
|
13,286 |
11,720 |
|
|
Total Gold Eq.
(oz)(1) |
|
|
|
|
|
|
Björkdal |
10,291 |
11,250 |
30,991 |
34,046 |
|
Costerfield |
16,996 |
18,946 |
49,232 |
49,222 |
|
Cerro Bayo |
- |
2,925 |
- |
7,372 |
|
Total |
27,287 |
33,121 |
80,223 |
90,640 |
- Quarterly gold
equivalent ounces (“Gold Eq. (oz)”) produced is calculated by
multiplying the saleable quantities of gold (“Au”), silver (“Ag”)
and antimony (“Sb”) in the period by the respective average market
prices of the commodities in the period, adding the amounts to get
a “total contained value based on market price”, and then dividing
that total contained value by the average market price of Au in the
period. Average Au and Ag prices in the periods are calculated as
the average of the daily LME PM fixes in the period, with price on
weekend days and holidays taken of the last business day; average
Sb price in the period is calculated as the average of the daily
average of the high and low Rotterdam warehouse prices for all days
in the period, with price on weekend days and holidays taken from
the last business day. The source for Au and Ag prices is
www.transamine.com, and Sb price is www.metalbulletin.com.
Sales for the Quarter Ended September 30,
2022:
- In the third
quarter of 2022, the Company sold a total of 22,273 ounces of gold
and 557 tonnes of antimony, representing a total of 26,551 ounces
of gold equivalent, versus 23,886 ounces of gold, 677 tonnes of
antimony and 87,396 ounces of silver in the third quarter of 2021,
representing a total of 29,509 ounces of gold
equivalent.
- Björkdal sold
10,001 ounces of gold in the third quarter of 2022 versus 11,297
ounces of gold in the third quarter of 2021.
- Costerfield
sold 12,272 ounces of gold and 557 tonnes of antimony in the third
quarter of 2022 versus 10,717 ounces of gold and 677 tonnes of
antimony in the third quarter of 2021.
Sales for the Nine Months Ended September 30,
2022:
- The Company
sold 67,845 ounces gold and 1,832 tonnes antimony, representing a
total of 81,612 ounces of gold equivalent, versus 71,633 ounces
gold, 2,293 tonnes antimony and 177,420 ounces of silver in the
first nine months of 2021, representing a total of 87,337 ounces of
gold equivalent.
- Björkdal sold 31,111 ounces
gold.
- Costerfield sold 36,734 ounces gold
and 1,832 tonnes antimony.
Table 2 – Third Quarter and Nine Months Sales for 2022
and 2021
Metal |
Source |
Three months endedSeptember
302022 |
Three months endedSeptember
302021 |
Nine months endedSeptember
302022 |
Nine months endedSeptember
302021 |
Gold (oz) |
Björkdal |
10,001 |
11,297 |
31,111 |
35,505 |
|
Costerfield |
12,272 |
10,717 |
36,734 |
32,528 |
|
Cerro Bayo |
- |
1,872 |
- |
3,600 |
|
Total |
22,273 |
23,886 |
67,845 |
71,633 |
Antimony (t) |
Costerfield |
557 |
677 |
1,832 |
2,293 |
Silver (oz) |
Cerro Bayo |
- |
87,396 |
- |
177,420 |
Average quarterly prices: |
Gold US$/oz |
|
1,730 |
1,790 |
|
|
Antimony US$/t |
|
13,286 |
11,720 |
|
|
Total Gold Eq. (oz)1 |
|
|
|
|
|
|
Björkdal |
10,001 |
11,297 |
31,111 |
35,505 |
|
Costerfield |
16,550 |
15,150 |
50,501 |
45,721 |
|
Cerro Bayo |
- |
3,062 |
- |
6,111 |
|
Total |
26,551 |
29,509 |
81,612 |
87,337 |
- Quarterly Gold
Eq. (oz) sold is calculated by multiplying the saleable quantities
of Au, Ag and Sb in the period by the respective average market
prices of the commodities in the period, adding the amounts to get
a “total contained value based on market price”, and then dividing
that total contained value by the average market price of Au for
the period. The source for Au and Ag prices is www.transamine.com,
and Sb price is www.metalbulletin.com, with price on weekend days
and holidays taken of the last business day.
Mandalay’s updated guidance for 2022 production
and capital expenditures are set out below together with the
original guidance amounts.
Table 3 – Revised 2022 Full-Year
Guidance
|
2022E |
Björkdal |
Gold produced (oz) |
42,000 – 45,000 |
Costerfield |
Gold produced (oz) |
45,000 – 48,000 |
Antimony produced (t) |
2,500 – 3,000 |
Gold equivalent produced(2) (oz) |
64,000 – 70,000 |
Consolidated |
Gold equivalent(2) produced (oz) |
106,000 – 115,000 |
Capital expenditures |
$41M – $45M |
- Cash cost and all-in sustaining
costs are non-IFRS measures. See “Non-IFRS Measures” at the end of
this press release
- Assumes average metal prices of: Au
$1,750/oz, Sb $13,000/t
- Consolidated all-in sustaining
costs per Au Eq. oz includes corporate overhead spending
- Revised 2022 guidance assumes
foreign exchange rates of: AUD/USD 0.69 and USD/SEK 10.26
Table 4 – Original 2022 Full-Year
Guidance
|
2022E |
Björkdal |
Gold produced (oz) |
51,000 – 56,000 |
Cash cost(1) per oz gold produced |
$980 – $1,130 |
All-in sustaining cost(1) per oz gold produced |
$1,400 – $1,550 |
Capital expenditures |
$29M – $33M |
Costerfield |
Gold produced (oz) |
50,000 – 55,000 |
Antimony produced (t) |
2,100 – 2,700 |
Gold equivalent produced(2) (oz) |
67,000 – 74,000 |
Cash cost(1) per oz gold eq. produced |
$560 – $710 |
All-in sustaining cost(1) per oz gold eq. produced |
$830 – $980 |
Capital expenditures |
$21M – $25M |
Consolidated |
Gold equivalent(2) produced (oz) |
118,000 – 130,000 |
Average cash cost per oz gold eq. |
$700 – $900 |
Average all-in sustaining cost(3) per oz gold eq. |
$1,100 – $1,300 |
Capital expenditures |
$50M – $58M |
- Cash cost and all-in sustaining
costs are non-IFRS measures. See “Non-IFRS Measures” at the end of
this press release
- Assumes average metal prices of: Au
$1,750/oz, Sb $13,000/t
- Consolidated all-in sustaining
costs per Au Eq. oz includes corporate overhead spending
- Assumes foreign exchange rates of:
AUD/USD 0.730 and USD/SEK 8.79
For Further Information:
Dominic DuffyPresident and Chief Executive
Officer
Edison NguyenDirector, Business Valuations and
IR
Contact:647.260.1566 ext. 1
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 expected production of
gold and antimony and costs for the 2022 fiscal year. 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, 2022, 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.
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