TIDMMTL
RNS Number : 2982P
Metals Exploration PLC
18 October 2021
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 SEPTEMBER 2021
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the
"Company" or the "Group"), a Philippine gold producer, is pleased
to announce its quarterly results for Q3 2021.
Finance and corporate
-- Gold sold during Q3 2021 of 19,197 ounces at an average
realised gold price of US$1,782 per ounce (Q2 2021: 16,429 ounces
at an average gold price of US$1,807 per ounce).
-- Gold sales of US$34.2 million in Q3 2021 (Q2 2021: US$29.7 million).
-- Positive free cash flow of US$11.2 million in Q3 2021 (Q2 2021: US$5.5 million).
-- Senior debt repaid during Q3 2021 was US$7.3 million (Q2 2021: US$8.3 million).
-- Net debt as at 30 September 2021 was US$106.2 million (30 June 2021: US$111.0 million).
Mining Operations
-- No lost time injuries occurred during the period.
-- Ore and waste mined for the quarter were below forecast, at
2.64Mt (Q2 2021: 2.66Mt) of which total ore mined was 546kt (Q2
2021: 288kt).
-- During the quarter, the resettlement of illegal miners and
their infrastructure away from Stages 3 & 4 was significantly
advanced. Access development to mine plan Stages 3 & 4
continues to be restricted in some important areas; however, Stage
3 development is proceeding.
Processing Operations
-- Gold poured during Q3 2021 of 19,456 ounces (Q2 2021: 16,591 ounces).
-- Gold recovery for Q3 2021 was 84.4% (Q2 2021: 80%).
COVID-19 Impacts
-- Although the number of COVID-19 cases recorded amongst
personnel at the project site increased during the quarter,
operations were largely unaffected.
-- All infected personnel and their traced close contacts have been/were isolated.
-- Typical mining and processing operations continue
notwithstanding COVID-19 pandemic impacts.
-- COVID-19 vaccine programme of all staff commenced.
Darren Bowden, CEO of Metals Exploration, commented :
"This quarter has continued to produce strong results despite
some challenges. We are delighted to have completed mining in Stage
1 and to finally have meaningful access to Stages 3 and 4 with
preliminary development work in Stages 3 and 4 advancing
satisfactorily. We are also delighted that the design modifications
implemented to the flotation circuit are positively impacting with
an increase in the consistency of higher gold recovery in this
circuit now evident.
"We look forward to continuing to build on this quarter's
performance for the remainder of this year and into 2022."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2021 FY 2020
------------------- -------------------- ------------------- --------------------
FY 2021 Actual Actual Actual Actual
------------------- -------------------- ------------------- --------------------
PHYSICALS Units Q3 2021 Q3 2020 9 Months 9 Months
------------- -------------------- --------------------
Mining
------------- -------------------- --------------------
Ore Mined Tonnes 546,149 687,172 1,259,892 1,812,311
-------------- -------------------- --------------------
Waste Mined Tonnes 2,093,062 2,453,508 6,630,810 6,867,634
-------------- -------------------- --------------------
Total Mined Tonnes 2,639,211 3,140,680 7,890,702 8,679,945
-------------- -------------------- --------------------
Au Grade Mined g/tonne 1.15 1.30 1.22 1.40
-------------- -------------------- --------------------
Strip Ratio 3.60 3.57 4.92 3.79
-------------------- --------------------
Processing
------------- -------------------- --------------------
Ore Milled Tonnes 551,377 490,921 1,599,667 1,530,727
-------------- -------------------- --------------------
Au Grade g/tonne 1.30 1.39 1.30 1.39
-------------- -------------------- --------------------
S(2) Grade % 0.75 1.16 0.99 1.24
-------------- -------------------- --------------------
Au Milled
(contained) Ounces 23,060 22,013 66,688 68,622
-------------- -------------------- --------------------
Recovery % 84.4 71.3 82.1 69.4
-------------- -------------------- --------------------
Au
Recovered/Poured Ounces 19,456 15,705 54,771 47,645
-------------- -------------------- --------------------
Sales
------------- -------------------- --------------------
Au Sold Ounces 19,197 16,094 53,942 48,215
-------------- -------------------- --------------------
Au Price US$/oz 1,782 1,943 1,792 1,746
-------------- -------------------- --------------------
FINANCIALS
(Unaudited)
-------------------- ------------- -------------------- --------------------
Revenue
------------- -------------------- --------------------
Gold Sales (US$000's) 34,208 31,271 96,648 84,162
-------------- -------------------- --------------------
Operating Costs
- Summary
------------- -------------------- --------------------
Mining (US$000's) 6,230 5,466 18,180 15,214
-------------- -------------------- --------------------
Processing (US$000's) 7,539 7,763 22,902 22,523
-------------- -------------------- --------------------
G&A (US$000's) 2,619 2,733 8,167 8,297
-------------- --------------------
Total Operating
Costs (US$000's) 16,388 15,962 49,248 46,034
-------------- --------------------
Excise Duty (US$000's) 1,364 1,265 3,905 3,392
-------------- -------------------- --------------------
UK/Philippine G&A (US$000's) 1,129 2,156 4,625 5,221
-------------- -------------------- --------------------
Total Direct
Production
Costs (US$000's) 18,881 19,383 57,778 54,647
-------------- -------------------- --------------------
Net Cash Income (US$000's) 15,328 11,888 38,870 29,516
-------------- -------------------- --------------------
Total Capital Costs (US$000's) 4,161 3,226 10,714 9,643
-------------- -------------------- --------------------
Total non-cash
costs (US$000's) 6,557 4,317 14,464 12,719
-------------- -------------------- --------------------
Free Cashflow ( US$000's) 11,167 8,663 28,156 19,873
-------------- -------------------- --------------------
Cash Cost / oz Sold
- C1 US$/oz 967 979 954 947
-------------- -------------------- --------------------
Cash Cost / oz Sold
- AISC US$/oz 1,314 1,383 1,311 1,314
-------------- -------------------- --------------------
Note: AISC includes all UK Corporate costs.
Review of Operations
The Philippines continues to suffer from a relatively high
number of positive COVID-19 cases. Importantly, however, the
Company has been able to commence the Company funded vaccination
programme with the aims to have all employees and contractors
double vaccinated as soon as possible.
Although the Company-funded vaccination programme commenced
during Q3 2021, in excess of 50 positive COVID-19 cases were
detected on the Project site during Q3 2021. The Company's
responses have been reported to the appropriate government
agencies, and the Company continues to be compliant with all
relevant government directives regarding COVID-19.
The recent increase in on-site COVID-19 positive cases does not
appear to have impacted operations significantly. The main
operational disruption from the COVID-19 pandemic continues to be
the ongoing and regularly changing restrictions on the movement of
people in and out of the country, increases in the cost of
production inputs and supply delays. The unpredictability of
international travel brought about by the changing nature of the
COVID-19 pandemic continues to challenge the Company's ability to
maintain its senior ex-pat management on-site roster, while the
cost of reagents and fuel are negatively impacting the operating
surplus.
Notwithstanding the above issues, Q3 2021 resulted in gold sales
of US$34.2 million (Q2 2021: US$29.7 million), at an average
realised gold price of US$1,792 per ounce (Q2 2021: average gold
price of US$1,807 per ounce); producing a positive free cash flow
of US$11.2 million (Q2 2021: US$5.5 million).
During Q3 2021 a total of US$7.3 million (Q2 2021: US$8.3
million) in debt repayments were made, bringing the net Group debt
position as at 30 September 2021 to US$106.2 million (Q2 2021:
US$111.0 million).
Mining Operations
Mining production of ore and waste for Q3 2021 was below
forecast at 2.64Mt (Q2 2021: 2.66Mt), and the total ore mined for
Q3 2021 of 546Kt (Q2 2021: 288kt). Total material movement has been
negatively impacted by reliability issues with the Company's
equipment fleet. Longer than normal delays in sourcing certain
essential replacement parts continue to impact this area.
Mining in Stage 1 was completed during Q3 2021, and waste
backfill into this area has commenced.
Notwithstanding continued delays in completing the resettlement
of the illegal miners from Stages 3 and 4 of the Project site, the
new access road to mine plan Stages 3 and 4 has been completed, and
preliminary development work in Stages 3 and 4 has commenced.
Although the Company does not have full access to these areas,
negatively impacting the Company's mining schedule, the programme
of infill resource and mine plan drilling is underway in mine plan
Stages 3 and 4. The Company continues to work diligently with the
local authorities to complete the removal and resettlement of all
illegal miners in these areas.
Process Plant
Throughput for Q3 2021 was 551kt (Q2 2021: 512kt). Gold
production for Q3 2021 was 19,456 ounces at a recovery rate of
84.4% (Q2 2021: 16,591 ounces at a recovery rate of 80.0%). Ongoing
delays in accessing mine plan Stages 3 and 4 continue to affect the
head grade with higher grade material from Stage 3 now not
scheduled to be accessed until Q1 2022.
During the quarter, a major shutdown was undertaken to install
the 4(th) blower to the BIOX circuit. Unplanned downtime consisted
mainly of tails line failures and conveyor belt, crusher and pump
repairs.
Implementation of minor design modifications to the flotation
circuit continues; and an increase in the consistency of higher
gold recovery in this circuit is now evident.
Residual Storage Impoundment ("RSI")
RSI construction continues with the d am water freeboard level
well above design levels. Studies into designing the RSI final
in-rock spillway have determined the optimal design and detailed
planning is underway.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 15 million man hours without a reportable injury as at the
date of this report.
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,
continues in its efforts to complete the removal of the remaining
illegal miners, including their infrastructure and dwellings, from
those areas scheduled to be mined as part of mine plan Stages 3 and
4. As at the date of this report over 700 occupants have been
safely relocated without incident. Further actions in relation to
access development and the resettlement activities will be made in
the forthcoming quarters.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, which forms part of United
Kingdom domestic law by virtue of the European (Withdrawal) Act
2018. 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, Rob Patrick +44 (0) 207 409 3494
-------------------------
Financial Adviser & Broker: HANNAM & PARTNERS
-------------------------
Nilesh Patel +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes,
Oliver Lamb +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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END
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