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Mandalay Resources Announces Financial Results for the Third Quarter 2023 and CFO Transition

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Mandalay Resources Announces Financial Results for the Third Quarter 2023 and CFO Transition

 

 

 

 

 

Mandalay Resources Corporation (TSX: MND) (OTCQB: MNDJF) is pleased to announce its financial results for the quarter ended September 30, 2023.

 

The Company’s condensed and consolidated interim financial statements for the quarter ended September 30, 2023, together with its Management’s Discussion and Analysis 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.

 

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 and adjusted EBITDA1 of $9.0 million for 2023;
  • Consolidated quarterly adjusted EBITDA of $15.4 million; and
  • Consolidated net income was $4.1 million ($0.04 or C$0.06 per share).

 

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 $1,084 and $1,436, respectively. These figures represent a decrease from the previous quarter mainly due to higher metal production and lower capital expenditure.

 

“As at the end of Q3 2023, the Company maintained a healthy balance sheet, closing with $21.7 million in cash on hand and a net debt position of $2.4 million. Our financial stability was further supported by $40.9 million in revenue and $15.4 million in adjusted EBITDA1, resulting in net income of $4.1 million.

 

“The month end cash balance and temporary dip into a net debt position, were negatively influenced by a delayed receipt of $5.5 million at Björkdal due to a shipment which was received after quarter end. Cash was also impacted during the quarter by an expected one-off reclamation increased bonding requirement at Costerfield of $3.5 million.”

 

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 $40.9 million, 11% lower than the $46.0 million in the third quarter of 2022. The decrease in revenue was due to lower gold equivalent ounces produced and therefore sold at Costerfield. The Company’s realized gold price in the third quarter of 2023 increased by 15% compared to the third quarter of 2022, and the realized price of antimony decreased by 9%. In Q3 2023, Mandalay sold 5,983 fewer gold equivalent ounces than in Q3 2022.

 

Consolidated cash cost per ounce of $1,084 was higher in the third quarter of 2023 compared to $846 in the third quarter of 2022. Cost of sales during the third quarter of 2023 versus the third quarter of 2022 were $1.4 million lower at Costerfield and $1.0 million higher at Björkdal. Consolidated general and administrative costs were $0.7 million lower compared to the prior year quarter.

 

Mandalay generated adjusted EBITDA of $15.4 million in the third quarter of 2023, 21% lower than adjusted EBITDA of $19.4 million in the third quarter of 2022, the decrease in adjusted EBITDA was due to lower revenue in the current quarter. Adjusted net income was $3.7 million in the third quarter of 2023, which excludes a $0.4 million unrealized gain on financial instruments, compared to an adjusted net income of $2.5 million in the third quarter of 2022.

 

Consolidated net income was $4.1 million for the third quarter of 2023, versus $9.3 million in the third quarter of 2022. Mandalay ended the third quarter of 2023 with $21.7 million in cash and cash equivalents.

 

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, Victoria, Australia

 

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 $975/oz and $1,265/oz, respectively, compared to cash and all-in sustaining costs of $669/oz and $838/oz, respectively, in the third quarter of 2022.

 

During Q3 2023, Costerfield generated $19.1 million in revenue and $7.7 million in adjusted EBITDA, which resulted in net income of $3.5 million. Head grades during Q3 2023, which averaged 9.6 g/t gold and 2.2% antimony, were below expectations as processed grades were adversely affected by a delay in stope progression into the higher-grade core of the Youle orebody and lower throughput which was due to temporary challenges encountered with the hardness of the ore during transition from the Youle to the Shepherd zone.

 

Björkdal gold mine, Skellefteå, Sweden

 

Björkdal produced 11,224 ounces of gold in the third quarter of 2023 with cash and all-in sustaining costs of $1,189/oz and $1,474/oz, respectively, compared to cash and all-in sustaining costs of $1,139/oz and $1,397/oz, respectively, in the third quarter of 2022.

 

Björkdal continues to show improvement in production and sales figures with $21.8 million, $9.0 million and $2.1 million in revenue, adjusted EBITDA and net income, respectively, in Q3 2023.  Production of 11,224 ounces was higher than the 10,291 ounces produced in the third quarter of 2022 due to the higher processed head grade.

 

Lupin, Nunavut, Canada

 

Care and maintenance spending at Lupin was less than $0.1 million during the third quarter of 2023, which was same as in the third quarter of 2022. Reclamation spending at Lupin was $0.1 million during the third quarter of 2023 compared to $1.2 million in the third quarter of 2022. The majority of this reclamation work is expected during 2024 as Lupin is currently in the process of final closure and reclamation activities which are mainly funded by progressive security reductions held by the Crown Indigenous Relations and Northern Affairs Canada.

 

La Quebrada, Chile

 

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 Australia for personal reasons. Mr. Dwyer will continue to serve as Mandalay’s CFO in a full-time capacity until then in order to ensure an orderly completion of the Company’s 2023 year end reporting and a smooth transition of duties. The Company will be commencing a search for Mr. Dwyer’s successor.

 

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.”

 

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 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.

 

Posted November 9, 2023

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