Industria
Mandalay Resources Announces Production and Sales Results for the Second Quarter of 2023 and Revised Full-Year 2023 Guidance
Frazer Bourchier, President and CEO of Mandalay, commented:
"The Company experienced a challenging first half of 2023 at both its operations which will impact our ability to meet the previously stated annual production and cost guidance for 2023. Despite our original expectation that production will be higher in the second half of this year than it was over the first six months, we no longer anticipate that this will compensate for the shortfall experienced year-to-date and are therefore revising production guidance downward by just over 15%.
"While the revision in our annual guidance is unfortunate, we now have a better understanding of the factors that led to the recent production shortfalls. We are taking steps to implement mitigating solutions, which I am confident will be effective. In addition, the recently expanded exploration budget at both operations not only remains unchanged but will become a key focus area going forward as self-funded organic exploration success is envisioned to underpin the growth of the assets. Lastly, I am pleased that all of our previous gold hedges have now expired and that we anticipate the continued generation of positive cashflow."
Ryan Austerberry , COO of Mandalay, commented:
"Several temporary, yet significant factors influenced our production performance during this quarter which unfortunately caused production to fall below our initial expectations at both operations. On a consolidated basis, the Company produced 20,850 and 40,836 saleable gold equivalent ounces during Q2 2023 and the first six months of this year, respectively.
"Björkdal produced 10,397 saleable gold ounces in Q2 2023, while facing continued challenges related to personnel vacancies, mined tonne volumes and stope dilution. However, we are seeing encouraging signs of improvement resulting from the initiatives implemented during the first half of the year with a steady increase in ore volumes delivered from the mine. We expect further productivity enhancements from our trucking contractors in the second half of this year.
"Looking ahead, we are optimistic that we will receive the mining concession required to allow us to begin production from the eastern extension of the Björkdal veining that was discovered and defined over the past two years. This development would initially shift our focus to the Eastern extension of Main Zone, where we are anticipating higher gold grades and less dilution due to the vertical orientation of the mineralization. Regarding personnel, we are committed to ongoing investment and training, but have needed to leverage the expertise of experienced contractors to supplement staffing shortfalls particularly over the summer vacation period in Sweden .
"Costerfield produced 10,453 saleable gold equivalent ounces in Q2 2023, as it encountered challenges leading to deficits in the annual budget for both gold grades and mined tonnes. The drop in grades can be attributed primarily to a delay in stope progression into the higher-grade core of the Youle orebody. We have investigated root causes of the grade discrepancies and have recalibrated our geological modeling and scheduling, adding confidence to the revised guidance. For the latter half of this year, we will be retreating production fronts into the higher-grade core of Youle while continuing to develop along the multiple veins of the Shepherd orebody.
"The shortfall in mined tonnes was further exacerbated by supply chain issues that resulted in a delay in receiving a remote underground loader. Although we initially anticipated its arrival during Q2, we now expect it to be delivered and fully functional in Q3."
Mr. Bourchier concluded, "We are making concerted efforts towards mitigating the factors leading to this productivity shortfall. In parallel, we are actively working towards optimizing our mining processes, increasing mining flexibility, and streamlining our operations. These measures are aimed at mitigating most of the identified operational risks to better position our operations on a path towards building a stronger and sustainable track record of operational excellence."
Mandalay's updated guidance for 2023 production and capital expenditures are set out below together with the original guidance amounts.
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Björkdal gold mine). The Company is focused on growing its production and reducing costs to generate significant positive cashflow. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement.
Mandalay's mission is to create shareholder value through the profitable operation and continuing the regional exploration program, at both its Costerfield and Björkdal mines. Currently, the Company's main objectives are to continue mining the high-grade Youle vein at Costerfield, bring online the deeper Shepherd veins, both of which will continue to supply high-grade ore to the processing plant, and to extend Youle Mineral Reserves. At Björkdal, the Company will aim to increase production from the Aurora zone and other higher-grade areas in the coming years, in order to maximize profit margins from the mine.
Frazer Bourchier, President and Chief Executive Officer; Edison Nguyen , Director, Business Valuations and IR, Contact: 647.258.9722
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