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Mandalay Resources Delivers Strong First Quarter 2024 Financial Results

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Mandalay Resources Delivers Strong First Quarter 2024 Financial Results

 

 

 

 

 

Mandalay Resources Corporation (TSX: MND) (OTCQB: MNDJF) is pleased to announce financial results for the first quarter ended March 31, 2024, supported by solid production results, disciplined capital allocation, and favorable metal prices.

 

The Company’s condensed and consolidated interim financial result for the quarter ended March 31, 2024, 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.

 

First Quarter 2024 Highlights:

  • Significant strengthening of Balance Sheet with cash balance of $47.1 million;
  • Growing net cash position1 now at $19.4 million;
  • Generated $29.5 million and $16.1 million in cash flow from operating activities and free cash flow1, respectively;
  • Consolidated revenue up 32% and 10% as compared to Q1 2023 and Q4 2023 respectively, reaching $55.5 million;
  • Björkdal recorded its highest ever quarterly revenue of $24.9 million;
  • Costerfield generated $30.6 million in quarterly revenue, its highest since Q2 2022;
  • Consolidated quarterly adjusted EBITDA1 of $26.7 million, two-fold increase as compared to corresponding quarter last year;
  • Consolidated cash operating cost1 per gold equivalent ounce produced decreased 15% to $1,039 per ounce in Q1 2024 compared $1,222 in Q1 2023;
  • All-in sustaining cost decreased to $1,430 per gold equivalent ounce produced in Q1 2024, compared to $1,612 in Q1 2023; and
  • Consolidated net income was $5.9 million ($0.06 or C$0.09 per share).

 

Frazer Bourchier, President, and CEO commented:

 

“Our strong production results, coupled with a stable cost structure, led to strong cash generation in the quarter. As compared with the previous quarter, Mandalay significantly bolstered its cash balance by over $20 million, resulting in $47.1 million in cash with a net cash position of $19.4 million in Q1 2024.

 

“At Björkdal, the site achieved its highest quarterly revenue yet, nearing $25 million. This was primarily driven by increased tonnage processed and a 9% increase in average gold head grade in Q1 2024, as compared to the same period last year. Meanwhile, at Costerfield, the site recorded its second consecutive quarter-over-quarter revenue increase, reaching $30.6 million.”

 

____________________
1 Gold equivalent production, adjusted EBITDA, free cash flow, net cash, cash operating costs and all-in sustaining costs are non-GAAP financial performance measures with no standard definition under IFRS. Refer to “Non-GAAP Financial Performance Measures” at the end of this press release for further information.

 

Hashim Ahmed, CFO commented:

 

“On a consolidated basis, the Company generated $16.1 million in free cash flow during Q1 2024, equating to approximately $636 per ounce of gold equivalent sold. This was supported by a twofold increase in cash flow from operating activities during the same period, amounting to $29.5 million by the end of Q1 2024.

 

“Our consolidated cash and all-in sustaining costs per ounce of gold equivalent produced during Q1 2024 were $1,039 and $1,430, respectively, marking a decrease compared to the corresponding quarter last year, primarily due to increased gold equivalent production and a stable cost base.

 

“Mandalay remains committed to a disciplined approach towards capital expenditure, prioritizing projects and initiatives that offer significant returns that align with our long-term growth objectives. In line with this commitment, exploration expenditure is anticipated to remain on course, with an expected full-year spending of $12 – $15 million across both operational sites. Additionally, we have successfully renegotiated an extension to our Revolving Credit Facility with Scotiabank, now until 2027, bolstering our financial flexibility to further support these objectives.

 

Mr. Bourchier continued: “The Company looks forward to building upon its established track record of success by maintaining operational controls and disciplined capital allocation at both mines. This approach will solidify the Company’s position for sustained cash flow generation and value creation for its stakeholders. A stronger balance sheet also enables the Company to continue to look for M&A opportunities in the sector.”

 

First Quarter 2024 Financial Summary

 

The following table summarizes the Company’s consolidated financial results for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023:

 

($ thousands, except where indicated) Q1 2024 Q1 2023
Revenue 55,511 42,179
Cost of sales 27,031 26,606
Adjusted EBITDA (1) 26,735 12,945
Adjusted net income (1) 12,152 518
Consolidated net income 5,888 554
Capital expenditure 13,145 8,776
Total assets 300,354 279,413
Total liabilities 106,049 94,907
Adjusted net income per share (1) 0.13 0.01
Consolidated net income per share 0.06 0.01
1. Adjusted EBITDA, adjusted net income and adjusted net income per share are non-GAAP financial performance measures with no standard definition under IFRS. Refer to “Non-GAAP Financial Performance Measures” at the end of this press release for further information.

 

In Q1 2024, Mandalay generated consolidated revenue of $55.5 million, 32% higher than the first quarter of 2023. The increase in revenue was due to an increase in gold production contributing to higher gold equivalent ounces sold of 25,277 ounces in Q1 2024 as compared to 21,769 ounces in Q1 2023. Another contributing factor to the increased revenue was the higher average realized prices: $2,200 per ounce for gold and $13,823 per tonne for antimony in Q1 2024 compared to $1,943 per ounce and $12,823 per tonne in Q1 2023. In Q1 2024, Mandalay sold 3,508 more gold equivalent ounces than in Q1 2023.

 

Consolidated cash operating cost per ounce of gold equivalent produced decreased 15% to $1,039 per ounce in the first quarter of 2024 compared to $1,222 in the first quarter of 2023. The decrease in cash operating cost was due to a 25% increase of gold equivalent production in Q1 2024 to 24,936 ounces produced compared to 19,986 ounces in Q1 2023, partly offset by 6% increase in cash operating costs. Cost of sales including change in inventory during the first quarter of 2024 versus the first quarter of 2023 were $0.2 million higher at Costerfield and $0.2 million higher at Björkdal. Consolidated general and administrative costs were $0.9 million lower compared to the first quarter of 2023.

 

Mandalay generated adjusted EBITDA of $26.7 million in the first quarter of 2024, twice as high compared to the adjusted EBITDA in the first quarter of 2023. The increase in adjusted EBITDA was due to higher revenue in the current quarter. Adjusted net income was $12.2 million in the first quarter of 2024, which excludes a $6.0 million loss on financial instruments and $0.3 million of write-off of assets, compared to an adjusted net income of $0.5 million in the first quarter of 2023.

 

Consolidated net income was $5.9 million for the first quarter of 2024, versus $0.6 million in the first quarter of 2023. Mandalay ended the first quarter of 2024 with $47.1 million in cash and cash equivalents.

 

First Quarter Operational Summary

 

The table below summarizes the Company’s operations, capital expenditures and operational unit costs for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023:

 

($ thousands, except where indicated) Q1 2024 Q1 2023
Costerfield
Gold produced (oz) 11,976 7,368
Antimony produced (t) 404 544
Gold equivalent produced (oz) 14,566 11,017
Cash operating cost (1) per oz gold eq. produced ($) 780 921
All-in sustaining cost (1) per oz gold eq. produced ($) 1,005 1,101
Capital development 854 865
Property, plant and equipment purchases 853 508
Capitalized exploration 1,948 2,151
Björkdal
Gold produced (oz) 10,370 8,969
Cash operating cost (1) per oz gold produced ($) 1,403 1,592
All-in sustaining cost (1,3) per oz gold produced ($) 1,868 1,937
Capital development 2,681 1,809
Property, plant and equipment purchases 1,408 2,583
($ thousands, except where indicated) Q1 2024 Q1 2023
Björkdal continued
Capitalized exploration 599 794
Consolidated
Gold equivalent produced (oz) 24,936 19,986
Cash operating cost (1) per oz gold eq. produced ($) 1,039 1,222
All-in sustaining cost (1,3) per oz gold eq. produced ($) 1,430 1,612
Capital development 3,535 2,674
Property, plant and equipment purchases 7,007 3,091
Capitalized exploration (2) 2,603 3,011
1. Cash operating cost and all-in sustaining cost are non-GAAP financial performance measures with no standard definition under IFRS. Refer to “Non-GAAP Financial Performance 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 in the current year includes tailings dam amortization, accordingly the 2023 comparative figures have been updated.

 

Costerfield gold-antimony mine, Victoria, Australia

 

Costerfield produced 11,976 ounces of gold and 404 tonnes of antimony for 14,566 gold equivalent ounces in the first quarter of 2024. Cash operating and all-in sustaining costs at Costerfield of $780/oz and $1,005/oz, respectively, compared to cash and all-in sustaining costs of $921/oz and $1,101/oz, respectively, in the first quarter of 2023.

 

During Q1 2024, Costerfield generated $30.6 million in revenue and $18.6 million in adjusted EBITDA, which resulted in net income of $10.0 million. Head grades during Q1 2024, which averaged 12.4 g/t gold and 2.2% antimony. Compared to Q1 2023, Costerfield’s gold equivalent production increased significantly, primarily due to the higher milled gold head grade during the quarter.

 

Björkdal gold mine, Skellefteå, Sweden

 

Björkdal produced 10,370 ounces of gold in the first quarter of 2024. Cash and all-in sustaining costs at Björkdal were $1,403/oz and $1,868/oz, respectively, compared to cash and all-in sustaining costs of $1,592/oz and $1,937/oz, respectively, in the first quarter of 2023.

 

Björkdal continues to show improvement in production and sales figures. During Q1 2024, Björkdal generated $24.9 million in revenue and $9.8 million in adjusted EBITDA, which resulted in net loss of $0.6 million. The production of 10,370 ounces was higher than the 8,969 ounces produced in the first quarter of 2023 primarily due to higher throughput and higher milled gold head grade.

 

Lupin, Nunavut, Canada

 

Care and maintenance spending at Lupin was less than $0.1 million during Q1 2024 and Q1 2023. Reclamation spending at Lupin was $0.1 million during Q1 2024 and Q1 2023. There will be increased reclamation spend in the remaining year 2024 at Lupin relative to the 2023 year, but the majority of this reclamation work to achieve the majority of closure obligations, is expected to take place in the 2025 calendar year. Lupin is currently in the process of final closure and reclamation activities, which are partly 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 Q1 2024.

 

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 regional exploration programs, at both its Costerfield and Björkdal mines. Currently, the Company’s main objectives are to continue mining the high-grade Youle and Shepherd veins at Costerfield, and to extend Mineral Reserves. At Björkdal, the Company will aim to increase production from the Eastern Extension area and other higher-grade areas in the coming years, in order to maximize profit margins from the mine.

 

Posted May 9, 2024

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