GOLD (USD): 1486.70 0.03%
SILVER (USD): 17.5400 0.23%
RUB | USD: 63.7606 0.1936
CAD | USD: 0,7568 0,0013
NEX: MGZ.H
SPOT (CAD):

Mangazeya Mining Announces Filing of its Q2 and six months 2019 Financial Statements and MD&A Quarterly Highlights

Publish date: 29.08.2019

Print version

TORONTO, ONTARIO, August 29, 2019 – 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 (“MD&A”) – quarterly highlights (“QH for the second quarter and the six months ended June 30, 2019. All figures are quoted in Canadian dollars unless otherwise indicated.

SECOND QUARTER AND SIX MONTHS 2019 HIGHLIGHTS

2Q 2019 2Q 2018 Change % H1 2019 H1 2018 Change %
Operational highlights
Gold production, ounces 6,826 5,781 5,781 18% 9,085 6,972 2,114 30%
Including Refining gold, ounces 5,0776 5,780 (703) (12%) 6,794 6,972 (178) (3%)
Gold sales, ounces 4,212 2,669 1,543 58% 6,026 3,621 2,045 66%
Ore mined, tones 348,215 372,537 (24,322) (7%) 538,248 497,220 41,028 8%
Stripping ratio, m3/t 1.34 4.22 (2.88) (68%) 1.86 5.44 (3.58) (66%)
Ore stacked, tones 411,738 356,004 55,734 16% 411,738 356,004 55,734 16%
Ore grade in ore stacked, g/t 1.62 1.34 0.28 21% 1.62 1.34 0.28 21%
Financial highlights
Revenue 7,478 4,591 2,887 63% 10,591 6,309 4,282 (68%)
Adjusted EBITDA (4,561) (6,054) 1,493 (25%) (9,180 (10,954) 1,774 (16%)
Total cash cost per ounce Savkino (TCC), CAD 1,557 1,044 513 49% 1,400 1,166 234 20%
Total cash cost per ounce Kochkovskoye (TCC), CAD 1,560 1,560 100% 1,505 1,505 100%
Average gold price, CAD 1,775 1,664 111 7% 1,757 1,692 65 4%
Cash balance 4,000 706 3,294 467% 4,000 706 3,294 467%
Cash flow (used in)/ received from operating activities before changes in working capital (9,005) (7,486) (1,519) 20% (13,624) (13,185) (439) 3%
Cash flow (used in)/ provided by financing activities 27,533 5,791 21,742 375% 53,216 18,805 34,411 183%
Cash flow (used in)/ provided by investing activities (18,469) (3,346) (15,123) 452% (32,087) (7,686) (24,401) 317%

  • Gold production was 9,085 k ounces in H1 2019, the difference of 30% YoY due to start of active mining works at Kochkovskoe deposit.
    Savkinskoe deposit
    In H1 2019, gold production reduced by 36.5% YoY due to processing of lower content gold (1.09 g/t) YoY (1.23 g/t in H1 2018), decrease in ore stacked from 297k tons in 2018 to 251k tons in 2019, and completion of deposit final development.
    Kochkovskoe deposit
    Gold produced increased from 0.21k ounces in H1 2018 to 4.80k ounces in H1 2019 due to gold production from ore stacked in 2018. The gold produced is mostly represented by gold from hard rock deposit.
  • Revenue was $10.6 million for H1 2019, a 68% YoY change. The Company sold 6,026 ounces of gold out of which 315 ounces of placer gold and 1,028 ounces of silver (3.621k ounces of gold and 8.6k ounces of silver in H1 2018). The average gold price increased from $1,692 in H1 2018 to $1,757 in H1 2019 per ounce or by 4% (from 1,664 USD to 1,775 USD per ounce or 7% in Q2 2019).
  • The total cash cost (TCC) per ounce of gold sold for Savkinskoe deposit equals to $1,400 per ounce (US$ 1,054) for H1 2019 compared to $1,166 per ounce (US$ 912), the difference of 20% YoY (15% in US$ YoY). The difference mainly resulted from the decrease in gold production and in gold sales. TCC in Q2 2019 changed by 49% YoY.
    Total cash cost (TCC) per ounce of gold sold for Kochkovskoe deposit equals to $1,505 per ounce (US$ 1,132) for H1 2019 is relatively high due to the fact that active production and sales started recently and did not reach normal turnover to decrease the amount of permanent costs in cost of sales.
  • Gross profit increased by 449% from $1,166 thousand in H1 2018 to $6,399 thousand in H1 2019 due to increase of volume of production and sales. In Q2 2019 gross profit was $4,387 thousand and in Q2 2018 it was $1,179 thousand.
  • Administrative expenses in H1 2019 increased by 15% compared to H1 2018 due to active construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas and resulting increase in management service fees.
  • Adjusted EBITDA for H1 2019 increased to negative $9.2 million compared to negative adjusted EBITDA $10.9 million in H1 2018. Adjusted EBITDA for Q2 2019 equal to negative $4.5 million compared to negative amount of $6.1 million in Q2 2018.
  • The finance expenses for H1 2019 increased significantly ($5.6 million in H1 2019 and $0.179 million in H1 2018 net) mainly because of the financial obligations under the loan agreement with VTB Bank (PJSC) and financial instruments related to this agreement. The finance expenses for Q2 2019 equal to $4.5 million ($0.3 million income in Q2 2018).
  • The net loss for H1 2019 was $9.1 million comparing with the net loss of $11.9 million in H1 2018. The net loss for Q2 2019 was $6.7 million comparing with the net loss of $6.6 million in Q2 2018.

Cash flow and capital resources:

  • For H1 2019, cash used in operating activity before changes in working capital of $13.6 million is in line with cash used in H1 2018 of $13.2 million. Cash used in investing activities in H1 2019 was $32 million as compared to $7.7 million in H1 2018. Cash received from financing activities in H1 2019 was $53.2 million compared to cash received from financing activities of $18.8 million in H1 2018.
  • For Q2 2019, cash used in operating activity before changes in working capital was $9 million in comparison with cash received from operating activities Q2 2018 of $7.5 million. Cash used in investing activities for Q2 2019 was $18.5 million as compared to $3.3 million for Q2 2018. Cash received from financing activities in Q2 2019 was $27.5 million compared to cash received from financing activities of $5.8 million in Q2 2018.
  • For H1 2019 the Company invested $32 million ($11.9 million in H1 2018). In property, plant and equipment – $32 million ($6.7 million in H1 2018); in Exploration and evaluation assets – $0.05 million ($2.4 million in H1 2018).

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