Mangazeya Mining Announces Filing of Q1 2019 Financial Statements, MD&A Quarterly Highlights
TORONTO, ONTARIO, May 30, 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 first quarter ended March 31, 2019. All figures are quoted in Canadian dollars unless otherwise indicated.
Highlights for Q12019 include:
|1Q 2019||1Q 2018||Change||%|
|Gold production, ounces||2,259||1,191||1,068||90%|
|including Refining gold, ounces||1,717||1,191||526||44%|
|Gold sales, ounces||1,814||952||862||91%|
|Total cash cost per ounce Savkino (TCC),CAD||987||1,507||(520)||(35%)|
|Total cash cost per ounce Kochkovskoye (TCC), CAD||1,406||–||1,406||100%|
|Average gold price, CAD||1,716||1,676||40||2%|
|Cash flow from operating activities before changes in working capital||(4,619)||(5,699)||1,080||(19%)|
|Cash flow from financing activities||25,683||13,014||12,669||97%|
|Cash flow from investing activities||(13,618)||(4,340)||(9,278)||214%|
Gold production was 2.3 koz in 1Q2019, a 90% YoY change, gold production of refining gold increases was 1.7 koz and increased by 44%.
Gold production was 0.73 koz in 1Q 2019, a decrease of 39% compared to 1Q2018. The difference has been caused by the decrease in the amount of gold in ore stacked in Q4 2018 YoY – the amount of gold in ore stacked reduced by 39.1%.
From April 2018, mining operations started at Kochkovskoye deposit. Gold from hard-rock deposit production was 1.53 koz.
- Revenue was $3.1 million in Q1 2019, 81% YoY change. Mangazeya Mining sold 1.81 koz of gold (Q1 2018: 0.95 koz of gold and 5.8 koz of silver). The average gold price increased from $1,676 per ounce in 1Q2018 to $1,716 in Q1 2019 or by 2% (US$1,325 per ounce in 1Q2018 and US$1,291 per ounce in Q12019);
TCC for 1Q 2019 ($987 per ounce) decreased by 35% as compared to TCC for Q1 2018 ($1,507 per ounce) as a result of a decrease in basic and auxiliary materials, fuels and lubricants, electricity, other production materials due to cost per unit regulation adoption, stronger budget control procedures and write-off norms revision.
TCC for 3m 2019 was $1,406 per ounce of gold sold due to seasonal fluctuation in COS (gold production and sales in 1Q are lower comparing to the remaining quarters) and high proportion of permanent production costs in COS. The proportion of permanent production costs will decrease as gold production and sales increase till the end of 2019.
- Gross profit increased from negative $ 0.13 million in 1Q2018 to positive $2.0 million in 1Q 2019 due to increase of revenue and decrease in TCC. The gross profit margin increased from (1%) in 1Q 2018 to 65% in Q1 2019.
- Administrative expenses during 1Q2019 decreased by 7% compared to 1Q2018. High administrative expenses explained by the active construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas.
- Other operating expenses increased by 122% in Q1 2019 compared to Q12018. Mangazeya Mining LLC production team participates in the trial development of the Koryakmimg LLC and provides the mining operational services. Operational service expenses is the direct expenses Mangazeya Mining LLC in accordance with the Operational agreement between Mangazeya Mining LLC and Koryakmining LLC.
- As a result the Company decreased the negative adjusted EBITDA in Q1 2019 ($4.6 million) comparing with the negative adjusted EBITDA in Q1 2018 ($4.9 million).
- The finance expenses for Q1 2019 increased by 73% ($1.5 million in Q 1 2019 and $0.88 million in Q1 2018) mainly because of the financial obligations under the loan agreement with VTB Bank (PJSC);
The net loss for Q1 2019 was $2.4 million comparing with the net loss of $5.3 million in Q1 2018;
Cash flow and capital resources:
- For Q1 2019, cash used in operating activity before changes in working capital was $4.6 million in comparison with cash used in Q1 2018 of $5.7 million. Cash used in investing activities in Q1 2019 was $13.6 million as compared to $4.3 million in Q 1 2018. Cash provided by financing activities in Q1 2019 was $25,6 million compared to cash provided by financing activities of $13 million in Q1 2018;
- The Company invested $13.6 million in Q1 2019 compared to $5.8 million in Q1 2018. In PPE – $13.59 million ($2.1 million for 1Q 2018); in Mine properties – None ($1.8 million for 1Q 2018); in Exploration and evaluation assets – $0.01 million ($1.9 million for 1Q 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.