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2020-08-12

Mandalay Resources Corporation Announces Financial Results for the Second Quarter of 2020

TORONTO, Aug. 12, 2020 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) today announced its financial results for the quarter ended June 30, 2020.

The Company’s unaudited condensed and consolidated interim financial results for the quarter ended June 30, 2020, 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 second quarter of 2020, the Company generated revenue of $42.3 million, adjusted EBITDA of $21.3 million, and adjusted net income of $7.6 million, or $0.08 income per share.

Commenting on the results, Dominic Duffy, President and CEO of Mandalay, noted, “Mandalay’s strong second quarter financial performance was driven by another all-time record in quarterly adjusted EBITDA at Costerfield of $15.4 million, surpassing the $13.9 million set last quarter. The Company’s excellent consolidated financial performance was the result of another excellent operational quarter at Costerfield and improving production from Björkdal, coupled with a rise in gold prices. This helped generate a consolidated $21.3 million in adjusted EBITDA during the quarter, bringing the year to date total to $42.2 million – more than four times the amount of $9.4 million recorded during the first half of 2019. Our consolidated cash costs for the quarter were $904 per saleable gold equivalent ounce produced as compared to the previous year quarter result of $1,130. This improved performance led to a $0.08 adjusted net income per share for the quarter, the highest level since the second quarter of 2016, versus an adjusted net loss per share of $0.04 in the second quarter of 2019.”

Mr. Duffy added, “At Costerfield, the second quarter of 2020 saw another quarter of high production with averaged processed grades of 11.2 g/t gold and 4.2% antimony. The grades were slightly lower than in the previous quarter due to the development drives in Youle continuing further than we had expected moving into lower grade economic extremities of the ore body. That said, the high production rate coupled with the higher gold prices resulted in a record quarterly revenue of $22.9 million, a 12% improvement relative to the previous quarter, and an adjusted EBITDA margin of 67% during the quarter. Going forward, we expect these grades to remain constant for the third quarter and begin to lift going into the fourth quarter and 2021 as stoping is ramped up in the Youle vein.”

Mr. Duffy continued, “Björkdal delivered another steady quarter of gold production with 11,250 ounces, an improvement from the previous quarter, which led to $19.5 million in revenue and $7.2 million in adjusted EBITDA for the second quarter of 2020. With May and June being the best two production months of the year to June, we expect Björkdal to improve operationally and financially in the coming quarters as we develop the higher-grade lower levels of Aurora and benefit from the improved haulage rates we are now obtaining from the underground workings.”

Mr. Duffy continued, “The Company’s cash position of $20.9 million at the end of the second quarter was similar to the end of the first quarter, however during the second quarter we had to outlay approximately $5.0 million in net refinancing costs after drawdown from the syndication as part of the final repayment of the Gold Bonds. Also, the second quarter end cash balance excluded a $3.4 million receipt relating to a delayed shipment at Costerfield, received at the start of July, which would usually have been received in the June month. We do not foresee any delays in these shipments going forward.”

Mr. Duffy concluded, “We are excited about the results obtained over the first half of 2020, demonstrating a significant improvement in Mandalay’s overall performance and continue to be excited about the future growth still to come for this Company. The stable financial position of the Company now allows for continued exploration as we look to continue growing the Company organically.”

Second Quarter 2020 Financial Summary
The following table summarizes the Company’s financial results for the three months and six months ended June 30, 2020 and 2019:

 Three months
ended
June 30,
2020
Three months
ended
June 30,
2019
Six months
ended
June 30,
2020
Six months
ended
June 30,
2019
 $’000$’000$’000$’000
Revenue42,335 26,344 83,901 56,260 
Cost of sales19,734 20,751 38,566 44,145 
Adjusted EBITDA (1)21,271 4,105 42,174 

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