Mangazeya Mining Announces Filing of its Q1 2017 Financial Statements and MD&A Quarterly Highlights
TORONTO, ONTARIO, May 29, 2017 – Mangazeya Mining Ltd. (“Mangazeya” or the “Company”) (NEX: MGZ.H) announced the filing of its unaudited interim condensed financial statements (“Financial Statements”), management’s discussion and analysis – quarterly highlights (“QH”) for the first quarter ended March 31, 2017. All figures are quoted in Canadian dollars unless otherwise indicated.
Highlights for 1Q include:
- In Q1 2017 the production of gold was 1,599 ounces comparing to 1,850 ounces in the corresponding period of 2016, the sale of gold was 1,354 ounces comparing to 1,127 ounces in Q1 2016 (all production came from Savkinskoye mine).
- Revenues for the period made up $2,383k and $2,026 for Q1 2016. The average gold price in 1Q 2017 didn’t change significantly comparing with the average gold price for 1 Q 2016 from $1,632 to $1,636 per ounce (from 1,190 USD to 1,226 USD to per ounce or by 3%);
- Total cash cost (TCC1 ) for Q1 2017 ($1,032 per ounce) increased by 9% comparing with average TCC for 1Q 2016 ($943 per ounce) as a result of mining new areas;
- The Company reached negative adjusted EBITDA in Q1 2017 in the amount of ($2,313k) comparing with positive adjusted EBITDA in Q1 2016 in the amount of $481k;
- Cash flow from operating activities before changes in working capital amounted to ($2,313k) for 1Q 2017 compared to cash flow received from operating activities of $744 in Q1 2016;
- Capital expenditures for 1Q 2017 amounted to $11,639k with $11,284k spent for the Nasedkino on capital investments – $4,436k, advances for PPE – $6,313k and others $215k and for the Savkinskoye mine – $320k mainly on production equipment, transport and other capital expenditures; on M&A – $112k on alluvial deposit of Zolinsko-Arkiinskaya area; and $238k spent on EEA (Nasedkino – $76k and Zolinsko-Arkiinskaya area – $162k). For the same period of 2016 the capital expenditures were $2,224k including $1,753k spent on mining equipment for the Savkinskoye mine; on M&A – $199k on alluvial deposit of Zolinsko-Arkiinskaya area; and $230k spent on EEA (Savkinskoye – $100k and Zolinsko-Arkiinskaya area – $86k);
- In April 2017 the Group entered into the agreement with Sberbank PLC on revolving credit lines for US$ 4 million to finance the Group’s operational activity.
Sergey Yanchukov, CEO of Mangazeya, stated: “First quarter 2017 was in line with our annual production plan. The Company is on stable production phase and we are looking forward to stable mining operations at Savkinskoe and further progress with our Nasedkino and Zolinsko-Arkiinskaya projects.”
Financial Results Q1 2017
The Company reported operating loss of 2,389k in Q1 2017 compared to income of $401k in Q1 2016. The operating loss was mainly the result of the increase in total cash cost and increase in administrative and other expenses in 1 Q 2017.
Administrative costs for Q1 2017 increased by 231% to $1,926k from $581k in 1Q 2016 due to changes in agreements of services as a result of the active construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas.
During Q1 2017, the Company incurred finance expenses of $216k compared to $1,260k in Q1 2016 due to conversion of loans to equity in March 2016.
Cash used in operating activity (before changes in working capital) in Q1 2017 was $2,313k as compared to inflow of $744k in Q1 2016. Cash flow used in investing activities in Q1 2017 was $13,346k as compared to inflow of $5,207k in Q1 2016. The outflow was mainly due to acquisition of property, plant and equipment, exploration and evaluation assets. Cash from financing activities in Q1 2017 was $21,075k compared to cash used in financing activities of $30k in Q1 2016. In Q1 2017 the Company received $21,222k loan under the loan agreements with Sberbank PLC and paid interest of $147k. As at 31 March 2017 year the Company had two agreements with Sberbank PLC. The first non-revolving credit line agreed for US $8 million with maturity December 31, 2017, the second non-revolving credit line agreed for US $10 million with maturity December 31, 2018.
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.
Mangazeya Mining Ltd.