GOLD (USD): 1468.10 0.06%
SILVER (USD): 16.6900 0.18%
RUB | USD: 63.5788 0.1456
CAD | USD: 0,7568 0,0013
NEX: MGZ.H
SPOT (CAD):

Mangazeya Mining Announces Filing of 2018 Year-End Financial Statements, MD&A and Financial Results for 2018

Publish date: 29.04.2019

Print version

TORONTO, ONTARIO, April 29, 2019 – 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, 2018 as required by National Instrument 51-102 Continuous Disclosure Obligations. All figures are quoted in Canadian dollars unless otherwise indicated.

FOURTH QUARTER AND TWELVE MONTHS 2018 HIGHLIGHTS

4Q 2018 4Q 2017 Change % 12m 2018 12m 2017 Change %
Operational highlights
Gold production, ounces 8,523 5,474 3,049 56% 27,672 24,317 3,355 14%
Gold sales, ounces 10,233 6,511 3,722 57% 22,245 24,111 (1,866) (8%)
Ore mined, tones 171,863 103,925 67,938 65% 1,172,458 951,412 221,046 23%
Stripping ratio, m3/t 7.2 11.88 (4.68) (39%) 4.81 4.78 0.03 1%
Ore stacked, tones 57,743 150,411 (92,668) (62%) 869,582 998,679 (129,097) (13%)
Ore grade in ore stacked, g/t 1.36 1.19 0.17 15% 1.37 1.17 0.2 17%
Financial highlights
Revenue 16,996 10,729 6,267 58% 37,211 40,246 (3,035) (8%)
Adjusted EBITDA1 (5,892) (6,111) 219 (4%) (17,027) 108 (17,135) (15,866%)
Total cash cost per ounce (TCC), CAD1 1,119 1,458 (339) (23%) 913 988 (75) (8%)
Cash balance 2,291 3,850 (1,559) (40%) 2,291 3,850 (1,559) (40%)
Cash flow (used in)/received from operating activities before changes in working capital (6,754) (6,758) 4 0% (20,065) (534) (19,531) (3,657%)
Cash flow (used in)/provided by financing activities 20,187 10,105 10,082 100% 60,410 36,300 24,110 66%
Cash flow (used in)/provided by investing activities (18,425) (3,886) (14,539) 374% (32,372) (31,877) (495) 2%

Highlights for 2018 include:

  • For 12m2018 the Company produced 27.7 koz of gold compared to 24.3 kOz, 14% increase for
    12m 2018 compared to 12m 2017; in Q4 2018, gold production was 8,5 kOz compared to 5,5 kOz,the production increased by 56%;
    Savkinskoye deposit.
    Gold production reduced to 19.7 koz from 24,3 koz or by 19.1% in 12m 2018 compared to 12m
    2017. The difference has been caused by the decrease in ore stacked for heap leaching compared
    to prior year. Gold production in Q4 2018 reduced by 3.0% compared to Q42017.
    Kochkovskoye deposit
    From April 2018, mining operations started at Kochkovskoye deposit. Gold production of Ore gold
    was 6.56 koz, placer gold production was 1.44 koz.
  • For 12m2018 revenue decreased to $37.2 million by 8% compared to 12m 2017, the company
    sold 22.2 koz of gold and 18.2 koz of silver (2017: 24.1 koz of gold and 13.2 koz of silver). The
    difference mainly resulted from the performance of the contractual obligations under the gold
    loan agreement. In the Q4 of 2018 revenue was 58% higher than the comparative quarter of
    2017, the company sold 10.2 koz ounces of gold (the Q4 of 2017: 6.5 koz of gold). The average
    gold price decreased from $1,657 per ounce in 2017 to $1,528 in 2018 or by 8% (from US$1,268
    to US$1,179 per ounce or by 2%);
  • In 2018, the total cash costs (TCC) per ounce of gold sold equals $913 (US$ 705) compared to
    $988 (US$ 756) in 2017. TCC decreased by 8% in 2018 compared to 2017. TCC decreased by 23%
    in Q42018 compared to Q42017;
    Savkinskoye deposit.
    TCC ($1,314 per ounce) increased by 33% in 12m 2018 compared to TCC for 12 m 2017 ($988 per
    ounce) as a result of a decrease in gold production and in gold sales. TCC increased by 16% in the
    Q4 of 2018 compared to the Q4 of 2017 due to the same reasons.
    Kochkovskoye deposit
    TCC for 12m 2018 was $814 per ounce of gold sold.
  • The Gross profit margin increased from 33% for 12m 2017 to 36% for 12m 2018;
  • Administrative expenses increased by 45% in 12m 2018 compared to 12m2017 due to active
    construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas and resulting
    increase in management service fee. Administrative expenses increased by 14% in Q4 2018
    compared to Q4 2017;
  • Other operating expenses increased by 218% for 12m 2018 compared to 12 m 2017 because of
    the mining operations start at Koryakmining LLC in 2018 year. Mangazeya Mining LLC production
    team participates in the trial development of the Koryakmimg LLC and provides the mining
    operational services. Other operating expenses increased by 22% in Q4 2018 compared to Q4
    2017;
  • The Company increased the negative effect of adjusted EBITDA for 12m 2018 ($17,027k)
    comparing with the positive adjusted EBITDA for 12m 2017 $108k.;
  • The finance expenses for 12m 2018 increased by 80% ($2.2 million in 2018 and $1.2 million in
    2017) as result of growth in the debt load;
  • The net loss for 2018 was $26.2 million comparing with the net loss of $3.5 million in 2017.

Cash flow and capital resources:

  • For 2018, cash used in operating activity before changes in working capital was $20.1 million in
    comparison with used in 2017 of $0.5 million. Cash used in investing activities in 2018 was $32.4
    million as compared to $31.9 million in 2017. Cash provided by financing activities in 2018 was
    $60.4 million compared to cash provided by financing activities of $36.3 million in 2017;
  • For Q4 2018, cash used in operating activity before changes in working capital was $6.7 million
    in comparison with cash used in Q4 2017 of $6.7 million. Cash used in investing activities in Q4
    2018 was $18.4 million as compared to $3.9 million in Q4 2017. Cash provided by financing
    activities in Q4 2018 was $20.2 million compared to cash provided by financing activities of $10.1
    million in Q4 2017;
  • The Company invested $36.4 million in 2018 compared to $33.97 million in 2017. In PPE – $29.8
    million ($29.8 million for 2017); in Mine properties – $5.5 million ($1.3 million for 2017); in
    Exploration and evaluation assets – $1.1 million ($2.7 million for 2017).

The Financial Statement and MD&A are available on Mangazeya’s website at http://mangazeyamining.ru/ and have been filed on SEDAR at www.sedar.com.

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.

Contact:
Anton Grigoryev
Corporate Secretary
Mangazeya Mining Ltd.
a.grigoryev@mangazeya.ru