TIDMMTL
RNS Number : 7837L
Metals Exploration PLC
15 January 2021
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 31 DECEMBER 2020
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the
"Company" or the "Group"), the natural resources exploration and
development company with assets in the Pacific Rim region, is
pleased to announce its quarterly results for Q4 2020, which has
seen new records achieved across gold sales, production and certain
key operational parameters.
Finance and corporate
-- The Company saw a record level of gold sold during Q4 2020 of
20,295 ounces, an increase of 26% on Q3 2020, at an average
realised gold price of US$1,869 per ounce (Q3 2020: 16,094 ounces
at an average gold price of US$1,943 per ounce).
-- Record gold sales of US$37.9 million in Q4 2020 (Q3 2020: US$31.3 million).
-- Positive free cash flow of US$13.6 million in Q4 2020 (Q3 2020: US$8.6 million).
-- Total sales for FY2020 were US$122 million, a 30% increase
over FY2019, despite the impacts of the COVID-19 pandemic.
-- In October 2020, the Company completed a restructuring of the Group's debt position.
-- A US$8 million repayment of senior debt was made during the
quarter (Q3 2020: US$4 million). Since the end of the quarter a
further senior debt repayment of US$7.3 million has been made.
-- Cash available for use as at 31 December 2020 was US$15.6
million, being prior to the US$7.3 million debt payment referred to
above.
-- Total interest-bearing liabilities as at 31 December 2020
were, in aggregate, approximately US$129.3 million.
Mining Operations
-- No lost time injuries during the period.
-- Record results for the quarter were achieved despite greater
than normal rainfall impacting on mining activities (attributed to
Typhoon Vamco in November)
-- Ore and waste mined for the quarter was slightly below
budget, due to above average rainfall and four typhoons during the
quarter, at 2.5Mt (Q3 2020: 3.1Mt) of which total ore mined was
661kt (Q3 2020: 687kt).
-- Access development to mine plan Stages 3 & 4, and
resettlement of illegal miners away from these areas continues.
Mine plan scheduling and access road development have been adjusted
due to delays to access Stages 3 & 4. Further actions in
relation to access development and resettlement activities will be
made in the forthcoming quarters.
Processing Operations
-- Record gold poured during Q4 2020 of 19,907 ounces, an
increase of 26% (Q3 2020: 15,705 ounces).
-- Record gold recovery for Q4 2020 improved to 79.8% (Q3 2020: 71.3%).
-- Improved power supply during the quarter allowed the BIOX
process to be stabilised and to operate at an improved level.
-- BIOX testing and design updates targeted to increase overall oxidation levels and recovery.
COVID-19 Impact
-- Normal operations maintained in Q4 2020 notwithstanding COVID-19 pandemic impacts.
-- Only one COVID-19 case reported at the mine site to date.
-- Preventative quarantine and medical steps in place to best
protect mine site employees and contractors.
-- Ongoing and changing travel restrictions continue to impact
key senior personnel's ability to feely travel to and from the mine
site.
-- Supply chain logistics stabilised with improved power supply during the quarter.
Darren Bowden, CEO of Metals Exploration commented :
"I am pleased to report our operational update for Q4 2020. This
has been a record quarter for the Company having achieved a 26%
increase in gold ounces sold and US$37.9 million of sales revenue.
We are particularly pleased to have achieved this given the ongoing
challenges of COVID-19 that all companies are dealing with at this
time as well as the impact of the four Typhoons during the quarter
which resulted in heavier than anticipated rainfall which impacted
mining operations.
"Our focus remains on maintaining our exceptional safety record
and COVID testing and management protocols, whilst also looking to
continue to build on this operational performance at Runruno for
2021 and beyond.
Maintaining a motivated and engaged management team during this
time has been a key priority and challenge for the Company and I
would like to thank all our employees for their efforts in
achieving this record quarter of production and sales."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2020 FY 2019
-------------------- -------------------- -------------------- --------------------
FY 2020 Actual Actual Actual Actual
-------------------- -------------------- -------------------- --------------------
PHYSICALS Units Q4 2020 Q4 2019 12 Months 12 Months
------------- -------------------- --------------------
Mining
------------- -------------------- --------------------
Ore Mined Tonnes 661,256 572,361 2,473,400 2,058,395
-------------- -------------------- --------------------
Waste Mined Tonnes 1,828,605 2,749,298 8,922,496 9,720,994
-------------- -------------------- --------------------
Total Mined Tonnes 2,489,861 3,321,659 11,395,896 11,779,389
-------------- -------------------- --------------------
Au Grade Mined g/tonne 1.30 1.52 1.40 1.48
-------------- -------------------- --------------------
Strip Ratio 2.36 4.80 3.32 4.72
-------------------- --------------------
Processing
------------- -------------------- --------------------
Ore Milled Tonnes 526,547 501,388 2,057,274 1,948,025
-------------- -------------------- --------------------
Au Grade g/tonne 1.47 1.65 1.41 1.55
-------------- -------------------- --------------------
S(2) Grade % 1.14 0.97 1.22 0.94
-------------- -------------------- --------------------
Au Milled
(contained) ounces 24,946 26,529 93,568 97,386
-------------- -------------------- --------------------
Recovery % 79.8 71.4 72.2 70.8
-------------- -------------------- --------------------
Au
Recovered/Poured ounces 19,907 18,941 67,552 68,983
-------------- -------------------- --------------------
Sales
------------- -------------------- --------------------
Au Sold ounces 20,295 18,247 68,510 67,356
-------------- -------------------- --------------------
Au Price US$/oz 1,869 1,481 1,782 1,400
-------------- -------------------- --------------------
FINANCIALS
(Unaudited)
-------------------- ------------- -------------------- --------------------
Revenue
------------- -------------------- --------------------
Gold Sales (US$000's) 37,936 27,021 122,099 94,280
-------------- -------------------- --------------------
Operating Costs
- Summary
------------- -------------------- --------------------
Mining (US$000's) 6,348 7,465 21,563 25,619
-------------- -------------------- --------------------
Processing (US$000's) 7,234 8,130 29,757 29,110
-------------- -------------------- --------------------
G&A (US$000's) 2,894 2,861 11,191 9,318
-------------- --------------------
Total Operating
Costs (US$000's) 16,476 18,456 62,510 64,047
-------------- --------------------
Excise Duty (US$000's) 1,504 1,086 4,895 3,789
-------------- -------------------- --------------------
UK/Philippine G&A (US$000's) 2,902 1,913 8,123 8,057
-------------- -------------------- --------------------
Total Direct
Production
Costs (US$000's) 20,882 21,455 75,529 75,894
-------------- -------------------- --------------------
Net Cash Income (US$000's) 17,054 5,566 46,570 18,387
-------------- -------------------- --------------------
Total Capital Costs (US$000's) 3,437 5,142 13,080 11,038
-------------- -------------------- --------------------
Total non-cash
costs (US$000's) 3,573 808 16,293 7,749
-------------- -------------------- --------------------
Free Cashflow ( US$000's) 13,617 424 33,490 7,349
-------------- -------------------- --------------------
Cash Cost / oz Sold
- C1 US$/oz 743 917 886 941
-------------- -------------------- --------------------
Cash Cost / oz Sold
- AISC US$/oz 1,129 1,363 1,259 1,281
-------------- -------------------- --------------------
Note: AISC includes all UK Corporate costs.
Review of Operations
Operations during Q4 2020 were largely unaffected by disruptions
resulting from the COVID-19 pandemic. The main operational
disruption is the ongoing and changing restrictions on the movement
of people in and out of the country. International and domestic
travel restrictions continue to impact on the senior personnel's
ability to travel to and from mine site and maintain an appropriate
on-site roster.
Interruptions to the Company's supply chain of operational
consumables and spare parts are being well managed. During the
quarter there was a significant improvement in the consistency in
the supply of power to the operation.
Notwithstanding the above issues, Q4 2020 resulted in a record
level of gold sales of US$37.9 million (Q3 2020: US$31.1 million),
producing a positive free cash flow of US$13.6 million (Q3 2020:
US$8.6 million).
The various on-site procedures to test for and quarantine for
potential COVID-19 cases continues to operate efficiently, with
only one employee who has tested COVID-19 positive having been at
the mine site. The Company continues to be compliant with all
relevant government directives with regards COVID-19.
Finance (Unaudited)
As announced on 23 October 2020, the Company concluded a debt
restructuring with its lenders. As a result, trading of the
Company's shares on AIM re-commenced on 26 October 2020.
Total interest-bearing liabilities as at 31 December 2020 were,
in aggregate, approximately US$129.3 million. An early US$8 million
senior debt repayment was made during the quarter. Since quarter
end, a further US$7.3 million loan repayment has been made in
accordance with the terms of the new debt facilities. Should the
Company generate sufficient cash resources, the Board may decide to
make additional early repayments to minimise interest payments, in
line with the terms of the restructured debt facilities.
Notwithstanding ongoing impacts of the COVID-19 pandemic, total
sales for FY2020 were US$122 million, a 30% increase over the
FY2019 sales proceeds.
Gold sold during Q4 2020 was 20,295 ounces, at an average
realised gold price of US$1,869 per ounce (Q2 2020: 16,094 ounces,
at an average gold price of US$1,943 per ounce).
Cash at bank and available for use as at 31 December 2020 was
US$15.6 million.
Mining Operations
Mining was negatively impacted by the excessive rainfall
experienced in the quarter, largely a result of four Typhoons
during the quarter. The wetter than normal wet season resulted in
some wall slippages in the Stage 2 and Stage 3 mining areas which
required clean-up and re-buttressing. In addition, studies have
determined that a further cut-back to the upper levels of the east
wall are required for future stability. A 60 metre wall step-out
has been designed and is being developed.
Delays in the resettlement of the illegal miners allowing access
to Stages 3 and 4 of the Project site has required in changes to
the Company's mining schedule. These delays have affected the 2021
head grade with high grade material from Stage 3 being pushed to
the 2022 mining schedule. The incremental cutback has resulted in
the need to create a new access road to Stages 3 and 4 from the
Company's Tuds waste area and behind the east wall. The Company
expects to have this access road completed during Q1 2021 and
access to the higher grade ore by end Q4 2021.
Mining production of ore and waste was 2.5Mt for Q4 2020 and the
total ore mined for Q4 2020, of 661kt. The heavy rain resulted in
the flooding of Stage 1 and no mining in this area was possible
during the quarter. Priority during 2021 will be placed on mining
this stage so that planned backfill can commence in 2022 increasing
mining efficiency and managing the long term cost structure of
mining operations.
The programme of infill resource and mine plan drilling is
ongoing and has commenced in mine plan Stages 3 and 4.
Process Plant
Throughput for Q4 2020 was 526kt a new record for the plant.
Gold production for Q4 2020 was 19,907 ounces at a recovery rate of
79.8% (Q3 2020: 15,705 ounces at a recovery rate of 71.3%).
During Q4 2020, the Company was able to move some senior expat
management personnel back into the country and the project site,
however, the ongoing and changing travel restrictions brought about
by the changing nature of the COVID-19 pandemic will continue to
challenge the Company's ability to maintain its senior management
on-site roster.
Residual Storage Impoundment ("RSI")
During Q4 2020, the project site was impacted by extreme
rainfall from numerous typhoons and low-pressure rain-bearing
systems that passed through the region. The RSI slipway operated as
per design in safely releasing water overflow from the RSI during
one such event. Additional pumping capacity has been installed to
improve the Company's ability to control rain-water runoff and to
return the d am water freeboard level to design levels. Although
the RSI construction has continued at a rate slower than budgeted,
the RSI remains in compliance with local guidelines and the
development requirements.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 12 million man hours without a reportable injury as at the
quarter end.
Environment and Compliance
Compliance matters continue to be successfully monitored and the
mine remains compliant, with no outstanding material issues.
Community & Government Relations
The Company, in conjunction with relevant government agencies,
has been able to remove the majority of illegal miners, including
their infrastructure and dwellings, from those areas scheduled to
be mined as part of mine plan Stages 3 and 4, with a target to
finalise the outstanding groups by the end of Q1 2021. Access
development to mine plan stages 3 & 4 continued during Q4 2020.
Further actions in relation to access development and the
resettlement activities will be made in the forthcoming
quarters.
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
- -
-
For further information please visit or contact
www.metalsexploration.com
Metals Exploration PLC
Via Tavistock Communications
Limited +44 (0) 207 920 3150
-------------------------
Nominated & Financial STRAND HANSON LIMITED
Adviser:
-------------------------
James Spinney, James
Dance, Robert Patrick +44 (0) 207 409 3494
-------------------------
Financial Adviser & Broker: HANNAM & PARTNERS
-------------------------
Andrew Chubb, Nilesh
Patel +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes +44 (0) 207 920 3150
-------------------------
Competent Person's Statement
Mr Darren Bowden, a director of the Company, a Member of the
Australasian Institute of Mining and Metallurgy and who has been
involved in the mining industry for more than 25 years, has
compiled, read and approved the technical disclosure in this
regulatory announcement in accordance with the AIM Rules - Note for
Mining and Oil & Gas Companies.
Forward Looking Statements
Certain statements relating to the estimated or expected future
production, operating results, cash flows and costs and financial
condition of Metals Explorations, planned work at the Company's
projects and the expected results of such work contained herein are
forward-looking statements which are based on current expectations,
estimates and projections about the potential returns of the Group,
industry and markets in which the Group operates in, the Directors'
beliefs and assumptions made by the Directors . Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by words such as the
following: "expects", "plans", "anticipates", "forecasts",
"believes", "intends", "estimates", "projects", "assumes",
"potential" or variations of such words and similar expressions.
Forward-looking statements also include reference to events or
conditions that will, would, may, could or should occur.
Information concerning exploration results and mineral reserve and
resource estimates may also be deemed to be forward-looking
statements, as it constitutes a prediction of what might be found
to be present when and if a project is actually developed.
These statements are not guarantees of future performance or the
ability to identify and consummate investments and involve certain
risks, uncertainties and assumptions that are difficult to predict,
qualify or quantify. Among the factors that could cause actual
results or projections to differ materially include, without
limitation: uncertainties related to raising sufficient financing
to fund the planned work in a timely manner and on acceptable
terms; changes in planned work resulting from logistical, technical
or other factors; the possibility that results of work will not
fulfil projections/expectations and realize the perceived potential
of the Company's projects; uncertainties involved in the
interpretation of drilling results and other tests and the
estimation of gold reserves and resources; risk of accidents,
equipment breakdowns and labour disputes or other unanticipated
difficulties or interruptions; the possibility of environmental
issues at the Company's projects; the possibility of cost overruns
or unanticipated expenses in work programs; the need to obtain
permits and comply with environmental laws and regulations and
other government requirements; fluctuations in the price of gold
and other risks and uncertainties.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward looking
statements contained herein to reflect any change in the Group's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based
unless required to do so by applicable law or the AIM Rules.
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