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Mandalay Resources Corporation Announces Record Financial Results for the Fourth Quarter and Full-Year 2021

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Mandalay Resources Corporation Announces Record Financial Results for the Fourth Quarter and Full-Year 2021

 

 

 

 

 

Mandalay Resources Corporation (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 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 28% year-over-year growth in revenue for a record $229.4 million by year-end, resulting in over $18 million in free cash flow. The Company is now in an excellent financial position with a strong balance sheet, and I would like to thank all of our employees and contractors for their continued commitment in making Mandalay a leading junior gold producer.

 

“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 $33.0 million in quarterly adjusted EBITDA1 and $17.8 million in net income, bringing the site’s year-end totals to $88.9 million and $47.8 million, respectively. While at Björkdal, its continued production improvements over the second half of the year sets the operation up for a much-improved 2022, while also investing in what is proving up to be a very successful exploration program. The site generated $85.3 million, $27.9 million and $4.9 million in revenue, adjusted EBITDA1 and net income, respectively, in 2021.

 

“In 2021, the Company also generated a consolidated $115.0 million in adjusted EBITDA1 for a margin of 50% – another Company record. We earned $22.0 million (C$0.30 per share) in adjusted net income and $15.3 million (C$0.21 per share) in net income during the fourth quarter, marking our eighth consecutive quarter of profitability. For the full-year, the Company generated $49.2 million (C$0.67 per share) in consolidated adjusted net income and $54.9 million (C$0.75 per share) in net income.

 

“Mandalay ended 2021 with a cash balance of $30.7 million, a slight increase as compared to the third quarter of 2021, however, this does not consider approximately $15 million in cash normally scheduled to be received in December but was pushed into January 2022 due to the ongoing global logistic challenges. As a result, at the end of January 2022, Mandalay had a cash balance of $47.2 million. Moreover, during the first half of 2022, Mandalay anticipates the release of a minimum of C$3.0 million as part-compensation for worked finalized at Lupin during 2021. During 2021, the Company repaid $15.1 million towards its Syndicated Facility, leaving $43.9 million owing.

 

“Our consolidated cash cost for 2021 was $873 per saleable gold equivalent ounce produced; a 4% increase compared to the $843 for full-year 2020. This increase was mainly associated with the startup costs of the processing facility at Cerro Bayo and the higher operating expenses at Björkdal. While our all-in sustaining cost per saleable gold equivalent ounce produced declined 3% year-over-year to $1,212.

 

“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
  1. 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 $72.9 million, 61% higher than in the fourth quarter of 2020. This increase is attributable to Mandalay selling 14,162 more gold equivalent ounces combined in the fourth quarter of 2021 compared to the fourth quarter of 2020. The Company’s realized gold price in the fourth quarter of 2021 flat year-over-year, and the realized price of antimony increased by 254% compared to the fourth quarter of 2020.

Consolidated cash cost per ounce of $836 was lower in the fourth quarter of 2021 compared to $929 in the fourth quarter of 2020. Cost of sales during the fourth quarter of 2021 versus the fourth quarter of 2020 were $9.9 million higher at Costerfield due to higher production. Consolidated general and administrative costs were $0.5 million higher as compared to the prior year quarter.

 

Mandalay generated adjusted EBITDA of $40.6 million in the fourth quarter of 2021, 60% higher compared to the Company’s adjusted EBITDA of $25.3 million in the year ago quarter. Adjusted net income was $22.0 million in the fourth quarter of 2021, which excludes the $4.1 million fair value loss related to the gold hedges associated with the Syndicated Facility, $7.1 million gain on sale of subsidiary, $6.7 million loss on revision of reclamation liability and $0.7 million fair value loss related to mark to market adjustment, compared to an adjusted net income of $12.1 million in the fourth quarter of 2020. Consolidated net income was $15.3 million for the fourth quarter of 2021, versus $14.7 million in the fourth quarter of 2020. Mandalay ended the fourth quarter of 2021 with $30.7 million in cash and cash equivalents.

 

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
  1. 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.
  2. 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 $557/oz and $731/oz, respectively, compared to cash and all-in sustaining costs of $668/oz and $1,077/oz, respectively, in the fourth quarter of 2020.

 

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 $1,227/oz and $1,700/oz, respectively, compared to cash and all-in sustaining costs of $1,251/oz and $1,616/oz, respectively, in the fourth quarter of 2020.

 

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 $0.6 million in the fourth quarter of 2020. During the fourth quarter of 2021, Cerro Bayo produced 1,009 ounces of gold and 50,556 ounces of silver for 1,666 gold equivalent ounces in the fourth quarter of 2021 at a cash cost of $1,476/oz.

 

On December 1, 2021, the Company completed the sale of its Cerro Bayo mine to Equus Mining Ltd. The Company recognized a gain of $7.1 million from the sale.

 

Lupin, Nunavut, Canada

 

Care and maintenance spending at Lupin was $0.1 million during the fourth quarter of 2021, compared to $0.1 million in the fourth quarter of 2020. Reclamation spending at Lupin was $6.1 million during 2021 compared to $10.5 million during 2020. The full closure of Lupin will continue in the 2022 season funded by ongoing progressive security reductions held by the Crown-Indigenous Relations and Northern Affairs Canada.

 

Challacollo, Chile

 

On April 19, 2021, Aftermath Silver Ltd. (“Aftermath Silver”) paid C$1.5 million in cash and issued 2,054,794 common shares at fair value of C$0.73 per share to the Company on May 5, 2021, in satisfaction of a purchase price instalment. As at December 31, 2021, the Company is holding these shares for sale. Further information regarding the definitive agreement signed with Aftermath Silver for the sale of Challacollo can be found in the Company’s November 12, 2019, press release.

 

La Quebrada, Chile

 

No work was carried out on the La Quebrada development property during Q4 2021.

 

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.

 

 

Posted February 25, 2022

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