TIDMMTL
RNS Number : 2684V
Metals Exploration PLC
13 April 2021
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 31 MARCH 2021
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 Q1 2021.
Finance and corporate
-- Gold sold during Q1 2021 of 18,316 ounces, at an average
realised gold price of US$1,788 per ounce (Q4 2020: 20,295 ounces
at an average gold price of US$1,869 per ounce).
-- Gold sales of US$32.8 million in Q1 2021 (Q4 2020: US$37.9 million).
-- Positive free cash flow of US$11.5 million in Q1 2021 (Q4 2020: US$13.6 million).
-- Senior debt repaid during Q1 2021 was US$12.3 million (Q4
2020: US$8.0 million). Since the end of the quarter, a further
senior debt repayment of US$3.0 million has been made.
-- Cash available for use as at 31 March 2021 was US$7.8 million.
-- Total interest-bearing liabilities as at 31 March 2021 were,
in aggregate, US$120.5 million.
Mining Operations
-- No lost time injuries during the period.
-- Ore and waste mined for the quarter was slightly above
forecast, at 2.43Mt (Q4 2020: 2.49Mt) of which total ore mined was
423kt (Q4 2020: 661kt).
-- Access development to mine plan Stages 3 & 4, and
resettlement of the remaining illegal miners away from these areas
continues. Access to Stages 3 & 4 continues to be impacted.
Further actions in relation to access development and resettlement
activities will be made in the forthcoming quarters.
Processing Operations
-- Gold poured during Q1 2021 of 18,725 ounces (Q4 2020: 19,907 ounces).
-- Gold recovery for Q1 2021 improved to 81.9% (Q4 2020: 79.8%).
-- Further BIOX testing and design updates are targeted for
incremental production improvements.
FY 2021 Production Guidance
-- The Company expects its FY 2021 gold production to be between 64,000 and 69,000 ounces.
-- FY 2021 AISC is projected to be approximately US$1,275 per ounce.
COVID-19 Impacts
-- Post the quarter end, the Philippines is suffering from a
surge in COVID-19 cases, including the Municipality of Quezon and
neighbouring cities/towns near the Runruno mine site.
-- Numerous COVID-19 cases have been recorded amongst personnel at the project site.
-- All infected personnel and their traced close contacts have been isolated.
-- More stringent COVID-19 testing protocols have been introduced and access to mine site for non-operational personnel has been restricted.
-- Normal mining and processing operations continue notwithstanding COVID-19 pandemic impacts.
-- Ongoing and changing travel restrictions continue to impact
the ability of key senior personnel to freely travel to and from
the mine site.
Darren Bowden, CEO of Metals Exploration, commented :
"Following on from our record quarter in Q4 2020 we are very
pleased to report further excellent progress during Q1 2021 with
gold sales continuing to be strong with 18,316 ounces sold during
the quarter. It is also very pleasing to have achieved these
results despite the ongoing challenges and impact of COVID-19.
" The safety of our staff remains our focus. We have an
exceptional safety record with over 13 million man hours without a
reportable injury as at the quarter end and we will continue to be
stringent, taking the appropriate actions given the increased level
of COVID-19 infections seen recently in the region, to ensure the
safety and wellbeing of all our staff and local community.
"We are also delighted to also be able to offer shareholders
forecast production guidance following the production stability
that we are delivering and the completion of our restructuring last
year. For the full year ending 2021, we are forecasting gold
production of between 64,000 and 69,000 ounces with an AISC of
approximately US$1,275 per ounce.
"We look forward to continuing to build on this quarter's
performance during the year ahead, further paying down our debt
liabilities and delivering the forecasts that we are
outlining."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2021 FY 2020
---------- ---------- ---------- ----------
FY 2021 Actual Actual Actual Actual
---------- ---------- ---------- ----------
PHYSICALS Units Q1 2021 Q1 2020 3 Months 3 Months
------------- ---------- ----------
Mining
------------- ---------- ----------
Ore Mined Tonnes 422,895 557,165 422,895 557,165
-------------- ---------- ----------
Waste Mined Tonnes 2,013,001 2,557,703 2,013,001 2,557,703
-------------- ---------- ----------
Total Mined Tonnes 2,435,896 3,114,868 2,435,896 3,114,868
-------------- ---------- ----------
Au Grade Mined g/tonne 1.39 1.41 1.39 1.41
-------------- ---------- ----------
Strip Ratio 4.53 4.59 4.53 4.59
---------- ----------
Processing
------------- ---------- ----------
Ore Milled Tonnes 536,754 494,826 536,754 494,826
-------------- ---------- ----------
Au Grade g/tonne 1.33 1.54 1.33 1.54
-------------- ---------- ----------
S(2) Grade % 1.06 1.38 1.06 1.38
-------------- ---------- ----------
Au Milled (contained) ounces 22,875 24,575 22,875 24,575
-------------- ---------- ----------
Recovery % 81.9 68.3 81.9 68.3
-------------- ---------- ----------
Au Recovered/Poured ounces 18,725 16,794 18,725 16,794
-------------- ---------- ----------
Sales
------------- ---------- ----------
Au Sold ounces 18,316 17,213 18,316 17,213
-------------- ---------- ----------
Au Price US$/oz 1,788 1,581 1,788 1,581
-------------- ---------- ----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- ----------
Revenue
------------- ---------- ----------
Gold Sales (US$000's) 32,757 27,222 32,757 27,222
-------------- ---------- ----------
Operating Costs
- Summary
------------- ---------- ----------
Mining (US$000's) 5,535 5,263 5,535 5,263
-------------- ---------- ----------
Processing (US$000's) 7,486 7.,732 7,486 7.,732
-------------- ---------- ----------
G&A (US$000's) 2,911 2,824 2,911 2,824
-------------- ----------
Total Operating
Costs (US$000's) 15,932 15,819 15,932 15,819
-------------- ----------
Excise Duty (US$000's) 1,350 1,096 1,350 1,096
-------------- ---------- ----------
UK/Philippine G&A (US$000's) 1,599 1,367 1,599 1,367
-------------- ---------- ----------
Total Direct Production
Costs (US$000's) 18,881 18,282 18,881 18,282
-------------- ---------- ----------
Net Cash Income (US$000's) 13,877 8,940 13,877 8,940
-------------- ---------- ----------
Total Capital Costs (US$000's) 2,345 3,777 2,345 3,777
-------------- ---------- ----------
Total non-cash costs (US$000's) 4,324 4,163 4,324 4,163
-------------- ---------- ----------
Free Cashflow ( US$000's) 11,532 5,163 11,532 5,163
-------------- ---------- ----------
Cash Cost / oz Sold
- C1 US$/oz 886 961 886 961
-------------- ---------- ----------
Cash Cost / oz Sold
- AISC US$/oz 1,175 1,323 1,175 1,323
-------------- ---------- ----------
Note: AISC includes all UK Corporate costs.
Review of Operations
Operations during Q1 2021 were largely unaffected by disruptions
resulting from the COVID-19 pandemic.
However, since late March 2021 the number of COVID-19 cases
detected in the Philippines has soared as a new wave of infection
spreads across the country.
This increase in COVID-19 cases has been particularly evident in
the Province of Vizcaya, especially in the Municipality of Quezon
and neighbouring cities/towns near the Runruno mine site.
Unfortunately, and notwithstanding the various on-site procedures
to test for and quarantine for potential COVID-19 cases, numerous
on-site cases of COVID-19 have been detected. Initially these cases
have been concentrated within the administrative and other
supporting non-operational departments, and to date there has been
no interruption to mining/processing operations.
As a result of the increased level of infection across the
Philippines the Company has introduced enhanced on-site testing
procedures. Effective quarantine arrangements are in place for
those personnel who test positive as well as their traced close
contacts. The COVID-19 cases detected and the Company's responses
have been reported to the appropriate government agencies and the
Company continues to be compliant with all relevant government
directives with regards COVID-19.
Other than the recent on-site outbreak of COVID-19, the main
operational disruption from the pandemic has been the ongoing and
regularly changing restrictions on the movement of people in and
out of the country. International and domestic travel restrictions
continue to impact on the ability of senior personnel to travel to
and from the mine site and maintain an appropriate on-site
roster.
Notwithstanding the above issues, Q1 2021 resulted in gold sales
of US$32.8 million (Q4 2020: US$37.9 million), at an average
realised gold price of US$1,788 per ounce (Q4 2020: 20,295 ounces,
at an average gold price of US$1,869 per ounce); producing a
positive free cash flow of US$11.5 million (Q4 2020: US$13.6
million).
During Q1 2021 a total of US$12.3 million (Q4 2020: US$8.0
million) in debt repayments were made, bringing the Group debt at
31 March 2021 to US$120.5 million (Q4 2020: US$129.3 million). Debt
repayments since September 2020 to the date of this report total
US$27.3 million.
Cash at bank and available for use as at 31 March 2021 was
US$7.8 million (Q4 2020: US$15.6 million).
FY2021 Production Guidance
With the Company's debt restructure concluded in Q4 2020,
together with a degree of production stability having been
achieved, the Company is now positioned to provide shareholders
with some forecast production guidance.
The Company provides the following forecast key production
metrics for the full 2021 financial year:
-- Gold production of between 64,000 - 69,000 ounces
-- AISC (including UK head office costs) of approximately US$1,275 per ounce
Mining Operations
A government ban of the usage and movement of explosives for
several weeks in early Q1 2021 impacted upon total material moved
during the quarter. Mining production of ore and waste for Q1 2021
was below forecast at 2.43Mt (Q4 2020: 2.49Mt), and the total ore
mined for Q1 2021 of 423Kt (Q4 2020: 661kt). Mining in Stage 1
re-commenced and backfill operations are on track to commence in Q4
2021.
Continued delays in completing the resettlement of the illegal
miners from Stages 3 and 4 of the Project site is impeding full
access to these areas such that the Company's mining schedule
continues to be negatively impacted. The Company continues to work
diligently with the local authorities to expedite the process of
resettlement.
These delays have affected the 2021 head grade with high grade
material from Stage 3 being pushed to the 2022 mining schedule. The
new access road to Stages 3 and 4 was not completed due to
in-climate weather, but is expected to be completed in Q2 2021.
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 Q1 2021 was 537kt (Q4 2020: 526kt). Gold
production for Q1 2021 was 18,725 ounces at a recovery rate of
81.9% (Q4 2020: 19,907 ounces at a recovery rate of 79.8%).
During the quarter, a major shutdown was undertaken to upgrade
electrical cables to BIOX and Milling. The shutdown resulted in
BIOX being offline for 6 hours, followed by a one week recovery
period for the BIOX circuit. Despite this downtime, overall gold
recoveries in Q1 2021 exceeded the previous best quarter
result.
The 4(th) blower to BIOX has arrived on-site and will be
installed in Q2 2021, leading to an overall increase in available
air and redundancy for the BIOX circuit.
While flotation performed very well during the quarter, some
minor design modifications are currently underway to increase the
consistent high gold recovery of this circuit.
In mid-March, the Philippine government implemented a five week
ban on international personnel returning to the country. This
travel ban remains in place as at the date of this report. The
ongoing, changing and unpredictable travel restrictions brought
about by the changing nature of the COVID-19 pandemic, continues to
challenge the Company's ability to maintain its senior expat
management on-site roster.
Residual Storage Impoundment ("RSI")
RSI construction continues with the d am water freeboard level
at design levels. Studies into designing the RSI final in-rock
spillway have commenced and geotechnical drilling for these studies
has commenced. The Stage 6 lift to the dam was commenced and is
being supervised by international engineering consultants GHD.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 13 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,
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. 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
-------------------------
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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END
MSCUOANRAOUSARR
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April 13, 2021 02:15 ET (06:15 GMT)
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