Mandalay Resources Corporation Announces Fourth Quarter and Full-Year 2019 Financial Results | Financial Buzz

Mandalay Resources Corporation Announces Fourth Quarter and Full-Year 2019 Financial Results

TORONTO, Feb. 20, 2020 (GLOBE NEWSWIRE) — Mandalay Resources Corporation (“Mandalay” or the “Company”) (TSX: MND, OTCQB: MNDJF) today announced its audited financial results for the year ended December 31, 2019.

The Company’s consolidated financial results for the year ended December 31, 2019, together with its Management’s Discussion and Analysis (“MD&A”) 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.

For the fourth quarter of 2019, the Company generated revenue of $22.7 million, adjusted EBITDA of $4.7 million and an adjusted net loss before special items of $4.2 million, or $0.05 loss per share.

For the full-year 2019, Mandalay generated revenue of $107.8 million and adjusted EBITDA of $18.8 million. The Company reported a consolidated net loss for the year of $18.6 million, or $0.23 loss per share. Of this consolidated net loss, $5.0 million was related to the non-cash write down of several of the Company’s non-core assets.

Commenting on the results, Dominic Duffy, President and CEO of Mandalay, noted, “As previously reported, 2019 was a challenging year for the Company and a year of transition. We have been building the future of the Company and creating the foundation for upcoming periods of sustainable growth and profitability as we enter high-grades areas of each mine.”

Mr. Duffy added, “The Company’s 2019 financial performance was adversely impacted by operational challenges from the Brunswick vein at Costerfield. Despite this, the fourth quarter of 2019 saw significant improvements in processed grades as production from the Youle vein increased, averaging 6.9 g/t gold and 3.6% antimony over the quarter and 8.5 g/t gold and 3.9% antimony over December. As a result, the fourth quarter of 2019 generated $10.4 million in revenue, a 46% improvement relative to the previous quarter. The Company is encouraged with the grades encountered at Youle to date, confirming the vein to be extremely high-grade, and able to be the catalyst for substantial improvement at Costerfield.”

Mr. Duffy added, “At Björkdal, the site maintained its stable production and sales, generating $23.0 million in adjusted EBITDA for 2019. The increase in revenue year-over-year was aided by the higher levels of ounces sold and stronger realized gold prices. Considerable strides were made at site in reducing overall costs. Full year 2019 cash and all-in costs were $945 and $1,205 per ounce of gold produced, a reduction of around 18% for both, as compared to 2018. This was accomplished mainly through increased production and realized cost savings.”

Mr. Duffy added, “In addition, the Company successfully completed transactions on its non-core assets in 2019 with the aim to add value and minimize or eliminate care and maintenance costs, including option agreements for Cerro Bayo and Challacollo, the sale of Challacollo concessions to third parties, and the sale of the Ulu project in Nunavut. Lupin remains on a path to full closure, funded by the existing reclamation security.”

Mr. Duffy concluded, “Mandalay ended the year with a cash balance of $24.5 million. The Company continues to be committed and actively working towards long-term debt restructuring options in order to alleviate the short-term repayment obligations on its current facilities. The Company has advanced discussions with lenders in respect of a potential new senior credit facility. We are expecting to have an announcement to the market on this in due course.”

Fourth Quarter and Full-Year 2019 Financial Summary

The following table summarizes the Company’s financial results for the three months and year ended December 31, 2019 and 2018:

  Three months
ended
December 31,
2019
Three months
ended
December 31,
2018
Year
ended
December 31,
2019
Year
ended
December 31,
2018
  $’000 $’000 $’000 $’000
Revenue 22,737   22,711   107,795   112,168  
Cost of sales 17,034   23,799   83,623   92,990  
Adjusted EBITDA* 4,732   (1,893 ) 18,804   13,311  
Income from mine ops before depreciation, depletion 5,703   (1,088 ) 24,172   19,178  
Adjusted net loss before special items* (4,224 ) (11,475 ) (10,403 ) (20,523 )
Consolidated net loss (5,328 ) (31,299 ) (18,649 ) (63,718 )
Capital expenditure (10,225 ) (15,997 ) (37,969 ) (51,284 )
Total assets 258,592   237,703   258,592   237,703  
Total liabilities 146,840   141,567   146,840   141,567  
Adjusted net loss per share* (0.05 )  (0.25 ) (0.13 ) (0.45 )
Consolidated net loss per share** (0.07 )  (0.69 ) (0.23 ) (1.41 )

*Adjusted EBITDA, adjusted net loss before special items and adjusted net loss per share are non-IFRS measures, defined at the end of this press release “Non-IFRS Measures”.
**As a result of share consolidation on July 2, 2019, the Company has restated its number of common shares and the income (loss) per share for all periods presented.

In the fourth quarter of 2019, Mandalay sold 2,171 fewer gold equivalent ounces than in the fourth quarter of 2018. The Company’s realized gold price increased by 12% as compared to fourth quarter of 2018, while the realized price of antimony declined by 26%. The net effect is that Mandalay’s revenue of $22.7 million in the fourth quarter of 2019 was in line with the fourth quarter of 2018.

Cash cost per ounce of $1,128 decreased by 14% in the fourth quarter of 2019 compared to the prior year quarter, mainly due to the cost of sales. Cost of sales during the fourth quarter of 2019 versus the fourth quarter of 2018 were $2.6 million lower at Costerfield and $4.3 million lower at Björkdal. Consolidated general and administrative costs were broadly in line between the quarters.

Mandalay generated adjusted EBITDA of $4.7 million in the fourth quarter of 2019, versus negative adjusted EBITDA of $1.9 million in the fourth quarter of 2018. This led to a consolidated net loss of $5.3 million for the fourth quarter of 2019, versus a loss of $31.3 million in the fourth quarter of 2018.

Mandalay ended 2019 with $24.5 million in cash and cash equivalents (including $15.0 million of restricted cash).

Fourth Quarter and Full-Year 2019 Operational Summary

The table below summarizes the Company’s capital expenditures and operational unit costs for the three months and year ended December 31, 2019 and 2018:

 

 

  Three months
ended December 31, 2019
Three months
ended December 31, 2018
Year
ended December 31, 2019
Year
ended December 31, 2018
$’000 $’000 $’000 $’000
Björkdal          
  Gold produced (oz) 10,990 10,482 51,498 45,721
  Cash cost* per oz gold produced 1,071 1,497 945 1,159
  All-in cost* per oz gold produced 1,314 1,794 1,205 1,452
  Capital development 1,441 2,229 6,939 10,199
  Property, plant and equipment purchases 3,408 7,906 10,162 15,844
  Capitalized exploration 768 266 1,472 1,823
Costerfield          
  Gold produced (oz) 4,749 4,948 15,258 21,610
  Antimony produced (t) 684 561 2,032 2,173
  Gold equivalent produced (oz) 7,604 8,691 25,161 35,849
  Cash cost* per oz gold eq. produced 1,083 962 1,313 961
  All-in cost* per oz gold eq. produced 1,453 1,391 1,742 1,407
  Capital development 3,776 2,478 13,967 10,243
  Property, plant and equipment purchases 349 1,498 3,422 6,959
  Capitalized exploration 461 1,141 1,776 5,243
Consolidated          
  Gold equivalent produced (oz) 18,594 19,173 76,659 81,568