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Mangazeya Mining Announces Filing of 2Q 2020 Financial Statements, MD&A Quarterly Highlights

Publish date: 31.08.2020

Print version

TORONTO, ONTARIO, August 31, 2020 – Mangazeya Mining Ltd. (“Mangazeya” or the “Company”) (NEX: MGZ.H) announced the filing of its unaudited interim condensed financial statements (“Financial Statements”) and the interim management’s discussion and analysis (“MD&A”) – quarterly highlights (“QH”) for the second quarter and six months ended June 30, 2020. All figures are quoted in Canadian dollars unless otherwise indicated.

Second quarter and six months 2020 highlights:

2Q 2020 2Q 2019 Change % H1 2020 H1 2019 Change %
Operational highlights
Gold production, ounces 9,129 6,826 2,303 33.7% 12,515 9,085 3,430 37.8%
Refining gold, ounces 9,378 5,077 4,301 84.7% 11,972 6,794 5,178 76.2%
Gold sales, ounces 10,279 4,212 6,067 144.0% 13,522 6,026 7,496 124.4%
Ore mined, tones 382,584 348,215 34,369 9.9% 661,989 538,248 123,741 23.0%
Stripping ratio, m3/t 2.14 1.34 0,80 59.5% 1.87 1.86 0.01 0.5%
Ore stacked, tones 426,193 411,738 14,455 3.5% 452,856 411,738 41,118 10.0%
Ore grade in ore stacked, g/t 1.48 1.62 (0.14) (8.5%) 1.50 1.62 (0.12) (7.7%)
Financial highlights
Revenue 22,115 7,478 14,637 195.7% 29,528 10,591 18,937 178.8%
Adjusted EBITDA 8,047 (592) 8,639 (1459.3%) 11,053 (3,501) (14,554) 415.7%
Total cash cost per ounce Savkino (TCC), CAD 987 1,557 (570) (36.6%) 1,145 1,400 (255) (18.2%)
Total cash cost per ounce Kochkovskoye (TCC), CAD 1,818 2,797 (979) (35.0%) 1,187 2,708 (1,521) (56.2%)
Average gold price, CAD 2,151 1,775 376 21.2% 2,184 1,757 427 24.3%
Cash balance 24,360 4,000 20,360 509.0% 24,360 4,000 20,360 509.0%
Cash flow from operating activities before changes in working capital 8,997 (5,015) 14,012 (279.4%) 9,673 (7,898) 17,571 (222.5%)
Cash flow from financing activities 23,831 27,533 (3,702) (13.4%) 45,546 53,216 (7,670) (14.4%)
Cash flow from investing activities (3,297) (18,469) 15,172 (82.1%) (23,380) (32,087) 8,707 (27.1%)
  • The revenue for the 2Q and 6 months of 2020 increased by 196% and 179% respectively compared to 2019 due to higher sales price as well as increase in sales volume as a result of increased production at Kochkovskoye deposit and sales of volumes produced in 2019 at Savkinskoye deposit.
  • Gold production in 2Q of 2020 increased from 6.8k ounces to 9.1k ounces YoY, and in 6 months from 9.1k ounces to 12.5k ounces YoY due to active works at Kochkovskoye deposit.
    Savkinskoye deposit
    Despite the decrease in production in 2Q and 6 months of 2020 by 48% and 29% YoY respectively, sales volumes were higher by 66% and 76% YoY respectively due to sales of ore produced at the end of 2019.
    Kochkovskoye deposit
    Gold production increased from 3.3k ounces in 2Q 2019 to 7.3k ounces in 2Q 2020, and from 4.8k ounces to 9.5k ounces due to higher volumes of ore mined and stacked
  • Savkinskoye deposit
    TCC for 2Q and 6 months of 2020 decreased by 37% and 18% respectively in comparison with 2019, mainly due to decrease of fixed cost share in the cost of sales structure and depreciation of ruble.
    Kochkovskoye deposit
    TCC for 2Q and 6 months of 2020 decreased by 35% and 56% respectively in comparison with 2019 mainly due to decrease of fixed cost share in the cost of sales structure and depreciation of ruble.
  • The gross profit increased from $1.9 million in 2Q 2019 to $12.3 million in 2Q 2020 and from $2.7 million in 6 months 2019 to $16.1 million in 6 months 2020 due to higher revenue and decrease in TСC. The gross profit margin increased from 26% in 2Q and 6 months of 2019 to 55% in 2Q and 6 months of 2020.
  • Administrative expenses in 2Q 2020 decreased by 20% compared to 2Q 2019.
  • The company had a positive adjusted EBITDA of $8.0 million and $11.1 million for 2Q and 6 months of 2020. The adjusted EBITDA margin in 2Q and six months of 2020 was 36% and 38% respectively, mainly driven by higher sales.
  • The finance expenses in 2Q and 6 months of 2020 increased compared to 2Q and 6 months of 2019 by $31 million and $72 million respectively, mainly because of the loss on repayment of the loan in gold, bank commissions on early debt repayment to VTB Bank (PJSC), as well as fair value measurement of the derivative financial instrument within the agreement with PJSC Bank “Finance Corporation “Otkrytie” (PJSC).
  • The company had a net profit for 2Q 2020 in the amount of $2.2 million compared to the net loss of $2.7 million for 2Q 2019, and a net loss for the six months of 2020 of $57.1 million compared to net loss for the six months of 2019 in the amount of $3.4 million.

Cash flow and capital resources:

  • For 2Q and 6 months 2020 the company had a positive cash flow received from operating activities before changes in working capital of $9.0 million and $9.7 million respectively in comparison with cash used in 2Q and 6 months of 2019 of $5.0 million and $7.9 million respectively.
  • The Company invested $3.3 million in 2Q 2020 and $23.4 million in 6 months of 2020 in property, plant and equipment and exploration and evaluation assets.
  • In 2Q and 6 months of 2020 the company had a net positive cash flow from financing activities in the amount of $23.8 and $45.5 million, representing settlement and receipt of funds under bank loan agreements.

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