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:
Full-Year 2021 Highlights:
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:
|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|
|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|
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 $30.7 million in cash and cash equivalents.
Fourth Quarter and Full-Year 2021 Operational Summary
The table below summarizes the Company’s operations, capital expenditures and operational unit costs for the three months and year ended December 31, 2021 and 2020:
|Gold produced (oz)||13,397||12,236||47,753||44,958|
|Antimony produced (t)||830||858||3,380||3,903|
|Gold equivalent produced (oz)||19,507||15,099||68,729||58,148|
|Cash cost (1) per oz gold eq. produced ($)||557||668||593||634|
|All-in sustaining cost (1) per oz gold eq. prod. ($)||731||1,077||866||1,010|
|Property, plant and equipment purchases||723||1,886||4,302||4,951|
|Gold produced (oz)||11,190||12,252||45,236||45,296|
|Cash cost (1) per oz gold produced ($)||1,227||1,251||1,233||1,112|
|All-in sustaining cost (1) per oz gold produced ($)||1,700||1,616||1,609||1,435|
|Property, plant and equipment purchases||4,512||4,832||16,095||12,025|
|Gold produced (oz)||1,009||–||5,303||–|
|Silver produced (oz)||50,556||–||266,596||–|
|Gold equivalent produced (oz)||1,666||–||9,037||–|
|Cash cost (1) per oz gold eq. produced ($)||1,476||–||1,199||–|
|All-in sustaining cost (1) per oz gold eq. prod. ($)||1,604||–||1,246||–|
|Gold equivalent produced (oz)||32,362||27,351||123,002||103,444|
|Cash cost(1) per oz gold eq. produced ($)||836||929||873||843|
|All-in sustaining cost (1) per oz gold eq. prod. ($)||1,162||1,350||1,212||1,254|
|Property, plant and equipment purchases||5,449||6,718||20,825||16,976|
|Capitalized exploration (2)||2,583||1,540||9,037||6,330|
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.
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.
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We acknowledge the [financial] support of the Government of Canada.