Mangazeya Mining Announces Filing of its Q3 and nine months 2019 Financial Statements and MD&A Quarterly Highlights
Publish date: 29.11.2019
TORONTO, ONTARIO, November 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 third quarter and the nine months ended September 30, 2019. All figures are quoted in Canadian dollars unless otherwise indicated.
THIRD QUARTER AND NINE MONTHS 2019 HIGHLIGHTS
| 3Q 2019 | 23Q 2018 | Change | % | 9m 2019 | 9m 2018 | Change | % | ||
|---|---|---|---|---|---|---|---|---|---|
| Operational highlights | |||||||||
| Gold production, ounces | 17,643 | 12,177 | 5,465 | 45% | 26,728 | 19,149 | 7,579 | 40% | |
| Refining gold, ounces | 19,521 | 12,177 | 7,344 | 60% | 26,315 | 19,149 | 7,166 | 37% | |
| Gold sales, ounces | 16,360 | 8,391 | 7,969 | 95% | 22,386 | 12,012 | 10,374 | 86% | |
| Ore mined, tones | 493,584 | 503,375 | (9,971) | (2%) | 1,031,815 | 1,000,595 | 31,220 | 3% | |
| Stripping ratio, m3/t | 1.41 | 3.38 | (1,96) | (58%) | 1.65 | 4.40 | (2.25) | (63%) | |
| Ore stacked, tones | 393,025 | 455,835 | (62,810) | (14%) | 804,763 | 811,839 | (7,076) | (1%) | |
| Ore grade in ore stacked, g/t | 1.95 | 1.39 | 0.28 | 0.55 | 1.78 | 1.37 | 0.41 | 30% | |
| Financial highlights | |||||||||
| Revenue | 32,191 | 13,906 | 18,285 | 131% | 42,782 | 20,215 | 22,567 | 112% | |
| Adjusted EBITDA | 13,895 | 3,453 | 10,442 | 302% | 10,394 | (3,400) | 13,794 | 406% | |
| Total cash cost per ounce Savkino (TCC), CAD | 1,597 | 939 | 658 | 70% | 1,520 | 1,038 | 482 | 46% | |
| Total cash cost per ounce Kochkovskoye (TCC), CAD | 1,227 | 1,427 | (200) | (14%) | 1,686 | 1,427 | 259 | 18% | |
| Average gold price, CAD | 1,968 | 1,593 | 375 | 24% | 1,911 | 1,665 | 246 | 15% | |
| Cash balance | 7,445 | 1,523 | 5,922 | 389% | 7,445 | 1,523 | 5,922 | 389% | |
| Cash flow (used in)/ received from operating activities before changes in working capital | (58,287) | 3,163 | (61,450) | (1,943%) | (66,185) | (66,185) | (66,185) | 1,001% | |
| Cash flow (used in)/ provided by financing activities | 78,940 | 18,688 | 60,252 | 322% | 132,156 | 37,493 | 94,663 | 252% | |
| Cash flow (used in)/ provided by investing activities | ((8,736) | (6,261) | (2,475) | 40% | (40,823) | (13,947) | (26,876) | 193% | |
- Gold production increased from 19.15k ounces in 9m 2018 to 26.73k ounces in 9m 2019 due to the commencement of active mining at Kochkovskoye deposit. In Q3 2019, 17.64k ounces were produced, in Q3 2018 – 12.18k ounces.
- For 9m 2019 the revenue increased by 112% comparing to 9m 2018, the company sold 22,386 ounces of gold and 6,854 ounces of silver (9m 2018 – 12,012 ounces of gold and 10,572 ounces of silver). In Q3 2019 revenue increased by 131% comparing to Q3 2018, the company sold 16,360 ounces of gold (6,852 ounces at Savkinskoye and 15,534 ounces at Kochkovskoye) and 4,950 ounces of silver (Q3 2018 – 8, 391 ounces of gold and 1,909 ounces of silver). 1,259 ounces of gold in Q3 2019 were transferred as the performance of contractual obligations under the gold loan agreement.
- TCC Savkinskoye for 9m 2019 ($1,520 per ounce) increased by 31.7% as compared to TCC for 9m 2018 ($1,038 per ounce) as a result of a decrease in gold production and in gold sales. TCC in Q3 2019 increased by 70.1% compared to Q3 2018.
TCC Kochkovskoye for ore gold for 9m 2019 was $1,686 per ounce in comparison with 9m 2018 ($1,427) due to higher rate of TCC in the first half of 2019. In Q3 2019 TCC for ore gold decreased to $1,227 from $1,427 for Q3 2018 due to growth in production and sales volume in the 2nd half of 2019 year.
TCC Kochkovskoye for placer gold where mining is performed by the contractor for 9m 2019 is in line with TCC for 9m 2018 with a slight growth of 9% and 2% in Q3 2019 in comparison with Q3 2018 due to inflation. - Gross profit margin was 47% for 9m 2019 and 33% as for 9m 2018. The gross profit margin in Q3 2019 was 54% comparing to 40% in Q3 2018. Gross profit increased by 198% for 9m 2019 comparing to 9m 2018 due to increase of revenue and gold sold.
- Administrative expenses for 9m 2019 increased by 19% compared to 9m 2018 due to active construction and exploration works in Nasedkino and exploration works in Zolinsko-Arkiinskaya areas and resulting increase in management service fees.
- As a result the Company increased the positive adjusted EBITDA for 9m 2019 ($10,394k) from negative $3,400k for 9m 2018. The positive adjusted EBITDA for 3Q 2019 increased to $13,895k from $3,453k in Q3 2018.
- The finance expenses for 9m 2019 increased by 814% YoY ($17.6 million for 9m 2019 and $2 million for 9m 2018) mainly because of the payment of obligations under the loan agreement with VTB Bank (PJSC) by Mangazeya Mining LLC. In Q3 2019 the Company recognized loss due to difference in gold price on loan in gold payment equal to $12.5 million. The finance expenses for Q3 2019 are 2,462% higher than Q3 2018 ($13.1 million in Q3 2019 and $0.5 million in Q3 2018).
- The net loss for 9m 2019 was $7.2 million comparing with the net loss of $6.6 million in 9m 2018. The net loss for Q3 2019 was $3.8 million comparing with the net income of $2.9 million in Q3 2018.
- For 9m 2019 cash used in operating activity before changes in working capital was $66.2 million in comparison with cash used in operating activities 9m 2018 of $6 million. Cash used in investing activities in 9m 2019 was $40.8 million as compared to $13.9 million in 9m 2018. Cash received from financing activities in 9m 2019 was $132.2 million compared to cash received from financing activities of $37.5 million in 9m 2018;
- For 9m 2019 the Company invested $40.8 million ($18 million in 9m 2018). Out of them in property, plant and equipment – $39.8 million ($14.5 million in 9m 2018); in Mine properties – $0 million ($2 million in 9m 2018); in Exploration and evaluation assets – $1.0 million ($1.6 million in 9m 2018).
- For 9m 2019 the Company invested $40.8 million ($18 million in 9m 2018). Out of them in property, plant and equipment – $39.8 million ($14.5 million in 9m 2018); in Mine properties – $0 million ($2 million in 9m 2018); in Exploration and evaluation assets – $1.0 million ($1.6 million in 9m 2018).
Cash flow and capital resources:
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