GOLD (USD): 1254.40 0.13%
SILVER (USD): 14.7850 0.61%
RUB | USD: 67.1121 0.3667
CAD | USD: 0,7797 0,0008
NEX: MGZ.H
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Mangazeya Mining Announces Filing of its Q3 and nine months 2018 Financial Statements and MD&A Quarterly Highlights

Publish date: 29.11.2018

Print version

TORONTO, ONTARIO, November 29, 2018 – 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 third quarter and the nine months ended September 30, 2018. All figures are quoted in Canadian dollars unless otherwise indicated.

THIRD QUARTER AND NINE MONTHS 2018 HIGHLIGHTS

3Q 2018 3Q 2017 Change % 9m 2018 9m 2017 Change %
Operational highlights
Gold production, ounces 12,177 10,486 1,691 16% 19,149 18,843 306 2%
Gold sales, ounces 8,391 11,405 (3,014) (26%) 12,012 17,600 (5,588) (32%)
Ore mined, tones 503,375 327,128 176,247/td>

54% 1,000,595 847,487 153,108 18%
Stripping ratio, m3/t 3.38 2.74 0.64 23% 4.40 3.91 0.49 12%
Ore stacked, tones 455,835 331,330 124,505 38% 811,839 848,268 (36,429) (4%)
Ore grade in ore stacked, g/t 1.39 1.14 0.25 22% 1.37 1.17 0.20 17%
Financial highlights
Revenue 13,906 18,978 (5,072) (27%) 20,215 29,517 (9,302) (32%)
Adjusted EBITDA (181) 7,538 (7,719) (102%) (11,135) 6,219 (17,354) (279%)
Total cash cost per ounce (TCC), CAD 553 654 (101) (15%) 738 814 (76) (9%)
Average gold price, CAD 1,593 1,602 (10) (1%) 1,665 1,668 (3) 0%
Cash balance 1,523 1,558 (35) (2%) 1,523 1,558 (35) (2%)
Cash flow (used in)/received from operating activities before changes in working capital (126) 7,544 (7,670) (102%) (13,311) 6,224 (19,535) (314%)
Cash flow (used in)/provided by financing activities 18,688 (965) 19,653 (2,037%) 37,493 25,464 12,029 47%
Cash flow (used in)/provided by investing activities (6,261) (10,865) 4,604 (42%) (13,947) (27,991) 14,044 (50%)

  • Gold production was 19.15 koz for 9m 2018, the increase of 2% YoY (Savkinskoye – 14,36 koz, Kochkovskoye – 4,79 koz). In Q3 2018, gold production was 12.18 koz (Savkinskoye – 7,60 koz, Kochkovskoye – 4,58 koz), the increase of 16% YoY;
  • Revenue was $20.2 million for 9m 2018, the decrease of 32% YoY, the difference mainly resulted from the performance of the contractual obligations under the gold loan agreement. The company sold 12.01 koz of gold (Savkinskoye – 8,27 koz, Kochkovskoye – 3,74 koz) and 10.57 koz of silver (Savkinskoye); for 9m 2017 the company sold 17.60 koz of gold and 7.50 koz of silver at Savkinskoye deposit. Revenue decreased by 27% for Q3 2018, the company sold 8.39 koz of gold (Savkinskoye – 4,65 koz, Kochkovskoye – 3,74 koz) and 1.9 koz of silver at Savkinskoye deposit; for Q3 2017 the Company sold 11,4 koz of gold at Savkinskoye deposit. The average gold price was on the same level $1,665 for 9m 2018, $1,668 in 9m 2017 per ounce (increased from 1,276 USD for 9m 2017 to 1,293 USD per ounce or 2% for 9m 2018);
  • The total cash cost (TCC) per ounce of gold sold equals to $738 per ounce (US$ 573) for 9m 2018 compared to $814 per ounce (US$ 632) for 9m 2017, the decrease by 9% YoY (8% in US$ YoY). TCC in Q3 2018 decreased by 15% YoY.
    TCC at Savkinskoye deposit for 9m 2018 ($1,038 per ounce) increased by 28% as compared to TCC for 9m 2017 ($814 per ounce) as a result of a decrease in gold production and in gold sales. TCC in Q3 2018 increased by 44% compared to Q3 2017.
    TCC (ore gold) at Kochkovskoye deposit for 9m was $648 per ounce of gold sold.
  • Gross profit margin was 45% for 9m 2018 and stayed on the same level as for 9m 2017. The gross profit margin in Q3 2018 was 57% comparing to 55% in Q3 2017. Gross profit was $9.1 million for 9m 2018, decreased by 32% YoY, the reduction was caused mainly by the decrease in revenue and gold sold;
  • Administrative expenses were $8.8 million for 9m 2018, the increase by 62% YoY. The difference was due to active construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas and resulting increase in management service fees;
  • Adjusted EBITDA for 9m 2018 decreased to negative $11.13million compared to positive adjusted EBITDA $6.2 million in 9m 2017. Adjusted EBITDA for Q3 2018 equal to negative $0.2 million compared to positive adjusted EBITDA $7.5 million in Q3 2017;
  • The finance expenses for 9m 2018 increased by 134% YoY ($2 million for 9m 2018 and $0.9 million for 9m 2017) mainly because of the financial obligations under the loan agreement with VTB Bank (PJSC). The finance expenses for Q3 2018 increased by 33% YoY ($0.4 million in Q3 2018 and $0.5 million in Q3 2017);
  • The net loss for 9m 2018 was $13.9 million comparing with the net income of $3.5 million in 9m 2017. The net loss for Q3 2018 was $2.0 million comparing with the net income of $5.4 million in Q3 2017.

Cash flow and capital resources:

  • For 9m 2018, cash used in operating activity before changes in working capital was $13.3 million in comparison with cash received from operating activities 9m 2017 of $6.2 million. Cash used in investing activities in 9m 2018 was $13.9 million as compared to $27.9 million in 9m 2017. Cash received from financing activities in 9m 2018 was $37.5 million compared to cash received from financing activities of $25.5 million in 9m 2017;
  • For Q3 2018, cash used in operating activity before changes in working capital was $0.1 million in comparison with cash received from operating activities Q3 2017 of $7.5 million. Cash used in investing activities for Q3 2018 was $6.3 million as compared to $10.9 million for Q3 2017. Cash received from financing activities in Q3 2018 was $18.7 million compared to cash used in financing activities of $1 million in Q3 2017;
  • For 9m 2018 the Company invested $18 million ($27.3 million in 9m 2017). In property, plant and equipment – $14.5 million ($24.9 million in 9m 2017); in Mine properties – $2 million ($0.2 million in 9m 2017); in Exploration and evaluation assets – $1.6 million ($2 million in 9m 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 Grigoriev
Corporate Secretary
Mangazeya Mining Ltd.
a.grigoryev@mangazeya.ru