TIDMMTL
RNS Number : 5642G
Metals Exploration PLC
20 July 2023
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 JUNE 2023
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the
"Company" or the "Group"), a gold producer in the Philippines, is
pleased to announce its quarterly results for Q2 2023.
Finance and corporate
Ø Record half-year and quarterly gold sales:
-- H1 2023 - 46,186 ounces sold at an average realised gold
price of US$1,939 per ounce (H1 2022: 30,676 ounces at an average
US$1,878 per ounce)
-- Q2 2023 - 24,744 ounces sold at an average realised gold
price of US$1,984 per ounce (Q1 2023: 21,442 ounces at an average
US$1,887 per ounce).
Ø Record half-year and quarterly gold revenue:
-- H1 2023 - US$89.6 million (H1 2022: US$57.6 million).
-- Q2 2023 - US$49.1 million (Q1 2023: US$40.5 million).
Ø Record half-year and quarterly positive free cash flow:
-- H1 2023 - US$41.9 million (H1 2022: US$13.6 million).
-- Q2 2023 - US$24.1 million (Q1 2023: US$17.8 million).
Ø Elevation of mezzanine debt to secured status is progressing
to execution stage, however uncertainty remains over the interest
rate, as well as the date of its application, which will be applied
to the outstanding loan in the period prior to completion of the
elevation.
Ø Mezzanine debt repayments of US$20.7 million in Q2 2023 (Q1
2023 - US$14.3 million).
Ø Net debt as at 30 June 2023 was US$48.3 million (31 March
2023: US$69.0 million).
Mining Operations
Ø No lost time injuries occurred during the period - over 20
million hours worked without a reportable injury .
Ø Mining production of ore and waste was above forecast at
3.49Mt (Q1 2023: 2.74Mt), with a total of 566Kt of ore mined in Q2
2023 (Q1 2023: 282Kt).
Processing Operations
Ø Record half-year gold production of 45,533 ounces (H1 2022:
31,348 ounces) recovered from 1.07Mt at a head grade of 1.48g/t (H1
2022: 1.02Mt at a head grade of 1.09g/t).
Ø Q2 2023 gold production of 24,235 ounces (Q1 2023: 21,299
ounces) recovered from 522Kt at a head grade of 1.66g/t (Q1 2023:
546Kt at a head grade of 1.30g/t).
Ø Record half-year gold recovery of 89.8% (H1 2022: 87.7%)
Ø Q2 2023 gold recovery of 86.9% (Q1 2023: 93.4%).
FY2023 Production Guidance Update
Ø Operations in H1 2023 have exceeded expectations with head
grade, tonnes milled and recovery rates all above forecast.
Although the head grade for H2 2023 is forecast to drop, the
Company has updated its FY2023 production guidance as follows:
-- FY2023 updated gold production forecast: 78,000 - 81,000
ounces (previous guidance: 68,000 - 72,000 ounces).
-- FY 2023 updated AISC forecast: US$1,120 - US$1,200 per ounce
(previous guidance: US$1,250 - US$1,300 per ounce).
Darren Bowden, CEO of Metals Exploration, commented :
"This was an excellent quarter at Runruno with record
performances in a number of key metrics, leading to a first half
that has exceeded our expectations operationally. The Company's
cash flows remain strong, and we continue to make substantial debt
repayments, whilst also looking to finalise the mezzanine debt
position as soon as is practicable.
"Given Runruno's strong performance in the first half of the
year, we are delighted to announce that we have updated our
production guidance, as well as our forecast all-in sustaining
costs - increasing our production range and further reducing our
costs.
"This has been an excellent first half of 2023 for the Company
and we expect the second half of this year to continue to deliver
our strategy both from an operational and a corporate
perspective."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2023 FY 2022
---------- ---------- ---------- ----------
FY 2023 Actual Actual Actual Actual
---------- ---------- ---------- ----------
PHYSICALS Units Q2 2023 Q2 2022 6 Months 6 Months
------------- ---------- ----------
Mining
------------- ---------- ----------
Ore Mined Tonnes 565,767 509,825 848,023 1,289,123
-------------- ---------- ----------
Waste Mined Tonnes 2,928,776 2,467,685 5,385,929 5,619,472
-------------- ---------- ----------
Total Mined Tonnes 3,494,543 3,002,244 6,233,952 6,965,979
-------------- ---------- ----------
Au Grade Mined g/tonne 1.62 1.18 1.59 1.10
-------------- ---------- ----------
Strip Ratio 5.01 4.77 6.08 4.28
---------- ----------
Processing
------------- ---------- ----------
Ore Milled Tonnes 522,307 510,214 1,068,391 1,017,258
-------------- ---------- ----------
Au Grade g/tonne 1.66 1.16 1.48 1.09
-------------- ---------- ----------
S(2) Grade % 1.55 1.10 1.41 0.98
-------------- ---------- ----------
Au Milled (contained) Ounces 27,894 19,087 50,701 35,742
-------------- ---------- ----------
Recovery % 86.9 86.6 89.8 87.7
-------------- ---------- ----------
Au Recovered/Poured Ounces 24,235 16,529 45,533 31,348
-------------- ---------- ----------
Sales
------------- ---------- ----------
Au Sold Ounces 24,744 14,992 46,186 30,676
-------------- ---------- ----------
Au Price US$/oz 1,984 1,858 1,939 1,878
-------------- ---------- ----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- ----------
Revenue
------------- ---------- ----------
Gold Sales (US$000's) 49,093 27,849 89,552 57,622
-------------- ---------- ----------
Operating Costs
- Summary
------------- ---------- ----------
Mining (US$000's) 5,223 6,972 10,466 13,307
-------------- ---------- ----------
Processing (US$000's) 8,580 6,926 17,813 14,296
-------------- ---------- ----------
G&A (US$000's) 2,950 2,616 5,901 5,316
-------------- ----------
Total Operating
Costs (US$000's) 16,753 16,515 34,181 32,919
-------------- ----------
Excise Duty (US$000's) 1,975 1,099 3,610 2,317
-------------- ---------- ----------
UK/Philippine G&A (US$000's) 2,980 3,102 4,661 4,783
-------------- ---------- ----------
Total Direct Production
Costs (US$000's) 21,708 20,716 42,452 40,019
-------------- ---------- ----------
Net Cash Income (US$000's) 27,385 7,133 47,100 17,603
-------------- ---------- ----------
Total Capital Costs (US$000's) 3,334 1,775 5,206 4,039
-------------- ---------- ----------
Total non-cash
costs (US$000's) 7,512 3,009 15,364 7,682
-------------- ---------- ----------
Free Cashflow ( US$000's) 24,051 5,358 41,894 13,564
-------------- ---------- ----------
Cash Cost / oz
Sold - C1 US$/oz 723 938 818 960
-------------- ---------- ----------
Cash Cost / oz
Sold - AISC US$/oz 1,058 1,336 1,110 1,323
-------------- ---------- ----------
Note: AISC includes all UK Corporate costs.
Review of Operations
Stable operations were maintained during H1 2023, which in
combination with a sustained period of higher grade material, and
higher gold prices, has produced a record H1 revenue of US$89.6
million (H1 2022: US$57.6 million). Gold sales for Q2 2023 were
US$49.1 million (Q1 2023: US$40.5 million), at an average realised
gold price of US$1,984 per ounce (Q1 2023: average gold price of
US$1,887 per ounce); producing a positive free cash flow of US$24.1
million (Q1 2023: US$17.8 million).
Finance
The process of elevating the status of the mezzanine loans to
that of secured debt is continuing. The mechanics to achieve this
requires new securities to be created across several jurisdictions.
The due diligence work sought by the RHL Group as part of the
elevation has been completed and the documentation to achieve all
aspects of the elevation is largely agreed. The process of
executing these documents is expected to begin shortly, but is
likely to take several weeks to complete, as the process involves
the notarisation and legalisation of multiple documents.
As previously advised, the October 2020 debt restructuring
agreements envisage the interest rate applicable to the mezzanine
debt being reduced from 15% to 7% once the senior debt is repaid
and the elevation of the mezzanine debt to "new" senior debt is
complete.
The majority mezzanine lender, MTL Luxemburg, Nick Candy's
investment vehicle (holding 70.7% of the mezzanine debt), has
confirmed in writing that, subject to completion of the elevation
documents within a reasonable period, the interest rate on its
portion of the mezzanine debt will reduce to 7% per annum from 15%
per annum as from 3 November 2022 (being the date that the Company
could have fully repaid the Senior Facility, but for the
requirements of the elevation).
The minority 29.3% mezzanine lender, the RHL Group, has not
confirmed the same in writing; however, the Company is hopeful the
RHL Group will apply the 7% interest rate from 3 November 2022 and
that this will be formalised once the elevation documents are
completed within a reasonable period.
Total mezzanine debt payments of US$20.75 million were made
during Q2 2023 (Q1 2023: US$14.30 million).
The net debt position of the Group as at 30 June 2023 was
US$48.3 million (Q1 2023: US$64.4 million). Cash holdings at 30
June 2023 were US$1.0 million (31 March 2023: US$4.6 million).
Mining Operations
Mining production of ore and waste for Q2 2023 was above
forecast at 3.49Mt (Q1 2023: 2.74Mt), with a total of 566Kt of ore
mined in Q2 2023 (Q1 2023: 282kt).
An exploration programme in Stages 4 and 5 commenced in Q1 2023,
with the objective of identifying new gold resources both in and
near-to the current pit-shell design. To date, this drilling has
not produced any material gold discoveries.
Process Plant
Record gold production in H1 2023 of 45,533 ounces (H1 2022:
30,676) was achieved from a half-year record recovery rate of 89.8%
(H1 2022: 87.7%), with all aspects of the process plant performing
adequately.
Gold produced during Q2 2023 was 24,235 ounces for the quarter
(Q1 2023: 21.299 ounces). Throughput for Q2 2023 was 522Kt (Q1
2023: 546Kt) at a recovery rate of 86.9% (Q1 2023: 93.4%).
Residual Storage Impoundment ("RSI")
Work on the final RSI dam-wall raise is expected to be completed
in Q3 2023. Notwithstanding this, the d am water freeboard remained
well above design minimum levels. Earthworks for the construction
of the RSI final in-rock spillway are well advanced.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 20 million hours worked without a lost-time reportable injury
as at the date of this announcement.
Environment and Compliance
Compliance matters continue to be successfully monitored, and
the mine remains compliant, with no outstanding material
issues.
Community & Government Relations
In conjunction with relevant government agencies, the Company
has largely completed the removal of illegal miners, including
their infrastructure and dwellings, from mine plan Stages 4 and
5.
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 Union (Withdrawal)
Act 2018 (as amended). Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
- END -
For further information please visit or contact:
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 & HANNAM & PARTNERS
Broker:
-------------------------
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes +44 (0) 207 920 3150
-------------------------
Web: www.metalsexploration.com
Twitter: @MTLexploration
LinkedIn: Metals Exploration
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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