Mangazeya Mining Announces Filing of 2016 Year-End Financial Statements, MD&A and Financial Results for 2016
TORONTO, ONTARIO, April 27, 2017 – Mangazeya Mining Ltd. (“Mangazeya” or the “Company”) (NEX: MGZ.H) announced the filing of its annual audited financial statements (“Financial Statements”), management’s discussion and analysis (“MD&A”) for the Company’s financial year ended December 31, 2016 as required by National Instrument 51-102 Continuous Disclosure Obligations. All figures are quoted in Canadian dollars unless otherwise indicated.
Highlights for 2016 include:
- In 2016, Mangazeya produced 27.3 Koz of gold (-19% year-on-year) on the back of decreased volumes of ore stacked (-1%) and low grades in ore stacked (-17%); in Q4 2016, gold production decreased by 53% to 6.1 Koz compared to 12.8Koz in Q4 2015;
- Revenues decreased to $45.4 million for 2016, a 10% decline year-on-year (YoY); in Q4 2016, revenue decreased by 42% to $13.1 million from $22.7 million in Q4 2015;
- Adjusted EBITDA for 2016 equals $13.8 million compared to EBITDA of $31.6 million in the corresponding period of 2015. For Q4 2016 adjusted EBITDA decreased to negative $1.4 million compared to positive $16.0 million in Q4 2015. Adjusted EBITDA margin was 30.4% for 2016 and -10.9% for Q4 2016;
- For 2016, the total cash costs (TCC) per ounce of gold sold equals $834 (US$ 630) compared to $648 (US$ 508) in 2015, а 29% increase YoY on the back of mining of new areas and increase of stripping ratio (4.95 m3/t compared to 3.11 m3/t YoY); TCC for Q4 2016 was $1,226 compared to $659 for Q4 2015;
- Cash flow from operating activities before changes in working capital amounted to $14.1 million for 2016 and negative $2.2 million for Q4 2016;
- In 2016, property, plant and equipment expenditures amounted to $14.5 million. Exploration and evaluation assets investments on Nasedkino, Zolinsk-Arkiinsk and Savkinskoye properties were
$5.8 million. In 2016, the Company capitalized $1.8 million of deferred stripping costs.
Roman Kashuba, CEO commented, “In 2016, the Company experienced the degradation of extracted ore characteristics at Savkino (increased stripping ratio and reduced gold grades), which resulted in loss in financial and operating results. Preparation to launching the development of new deposits at Nasedkino and Zolin-Arkiinskaya area is the priority in the Company’s ongoing activities that will enable the improvement of the Company’s performance within a number of years.”
Financial Results for 2016
The Company reported a net income of $0.67 million for Q4 2016 compared to a net loss of $6.78 million for Q4 2015. The gross profit margin decreased from 54% in Q4 2015 to 13.5% in Q4 2016 due to increase of expenses because of lower grading and increased stripping ratio.
The net profit for 2016 was $10.79 million comparing with the net loss of $15.76 million in 2015. The gross margin decreased to 44% in 2016 from 47% in 2015 due to increased stripping ratio and decreased grading.
Administrative costs for Q4 2016 decreased by 80% to $0.5 million from $2.5 million in Q4 2015. In total for 2016, administrative costs decreased by 52% compared to 2015.
The finance expense for 2016 decreased by 92% ($1.77 million in 2016 and $22.22 million in 2015) due to restructuring of loans during 2015 and the beginning of 2016.
For 2016, cash received from operating activity (before changes in working capital) was $14.1 million in comparison with cash used in 2015 of $22.9 million. Cash used in investing activities in 2016 was $22.5 million as compared to $13.6 million in 2015. Cash provided by financing activities in 2016 was $1.7 million compared to cash used in financing activities of $1.8 million in 2015.
About Mangazeya Mining Ltd.
Mangazeya Mining Ltd. is a NEX-listed mining and exploration company, focused on the development of mineral resources in the Russian Federation.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Chief Executive Officer
Mangazeya Mining Ltd.