TIDMMTL
RNS Number : 2781Q
Metals Exploration PLC
17 October 2023
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 September 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 Q3 2023.
Finance and corporate
Ø Gold revenue of US$42.4 million (Q2 2023: US$49.1
million).
Ø Gold sales of 22,043 ounces sold at an average realised gold
price of US$1,926 per ounce (Q2 2023: 24,744 ounces at an average
US$1,984 per ounce).
Ø Positive free cash flow of US$19.0 million (Q2 2023: US$24.1
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$18.5 million (Q2 2023: US$20.7
million).
Ø Net debt as at 30 September 2023 was US$30.6 million (30 June
2023: US$48.3 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
3.30Mt (Q2 2023: 3.49Mt), with a total of 568Kt of ore mined in Q3
2023 (Q2 2023: 566Kt).
Processing Operations
Ø Gold production of 22,034 ounces (Q2 2023: 24,235 ounces)
recovered from 483Kt at a head grade of 1.60g/t (Q2 2023: 522Kt at
a head grade of 1.66g/t).
Ø Gold recovery of 88.7% (Q2 2023: 86.9%).
Darren Bowden, CEO of Metals Exploration, commented :
"This has been another very strong operational quarter at
Runruno with mining production above forecast with excellent gold
recovery in our processing operations. Although a lower head grade
is expected in the remaining quarter of the year we look forward to
a strong finish to the year; whilst maintaining focus on our
exceptional health and safety standards. I would also like to
congratulate the team for being nominated as the Philippines
national representative in the Association of Southeast Asian
Nations ("ASEAN") mining industry awards in both the mining and
processing categories; and further being shortlisted in the final
three candidates in both categories."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2023 FY 2022
---------- ------------------- ------------------ -------------------
FY 2023 Actual Actual Actual Actual
---------- ------------------- ------------------ -------------------
PHYSICALS Units Q3 2023 Q3 2022 9 Months 9 Months
------------- ------------------- -------------------
Mining
------------- ------------------- -------------------
Ore Mined Tonnes 567,816 380,071 1,415,839 1,669,194
-------------- ------------------- -------------------
Waste Mined Tonnes 2,731,344 3,264,442 8,117,273 7,212,607
-------------- ------------------- -------------------
Total Mined Tonnes 3,299,160 3,644,513 9,533,112 8,881,802
-------------- ------------------- -------------------
Au Grade Mined g/tonne 1.49 1.49 1.55 1.19
-------------- ------------------- -------------------
Strip Ratio 4.48 8.57 5.43 45.24
------------------- -------------------
Processing
------------- ------------------- -------------------
Ore Milled Tonnes 482,743 455,907 1,551,133 1,473,165
-------------- ------------------- -------------------
Au Grade g/tonne 1.60 1.26 1.51 1.15
-------------- ------------------- -------------------
S(2) Grade % 1.46 1.80 1.43 1.23
-------------- ------------------- -------------------
Au Milled (contained) Ounces 24,850 18,541 75,551 54,283
-------------- ------------------- -------------------
Recovery % 88.7 84.8 89.4 86.7
-------------- ------------------- -------------------
Au Recovered/Poured Ounces 22,034 15,715 67,568 47,063
-------------- ------------------- -------------------
Sales
------------- ------------------- -------------------
Au Sold Ounces 22,043 14,980 68,230 45,641
-------------- ------------------- -------------------
Au Price US$/oz 1,926 1,714 1,935 1,825
-------------- ------------------- -------------------
FINANCIALS (Unaudited)
------------------------ ------------- ------------------- -------------------
Revenue
------------- ------------------- -------------------
Gold Sales (US$000's) 42,448 25,676 131,999 83,298
-------------- ------------------- -------------------
Operating Costs
- Summary
------------- ------------------- -------------------
Mining (US$000's) 5,280 5,907 15,747 19,214
-------------- ------------------- -------------------
Processing (US$000's) 8,322 7,675 26,135 21,971
-------------- ------------------- -------------------
G&A (US$000's) 2,816 2,557 8,718 7,873
-------------- -------------------
Total Operating
Costs (US$000's) 16,419 16,139 50,599 49,059
-------------- -------------------
Excise Duty (US$000's) 1,708 1,045 5,318 3,362
-------------- ------------------- -------------------
UK/Philippine G&A (US$000's) 2,180 1,684 6,841 6,467
-------------- ------------------- -------------------
Total Direct Production
Costs (US$000's) 20,307 18,869 62,658 58,888
-------------- ------------------- -------------------
Net Cash Income (US$000's) 22,141 6,807 69,241 24,410
-------------- ------------------- -------------------
Total Capital Costs (US$000's) 3,150 2,634 8,357 6,672
-------------- ------------------- -------------------
Total non-cash
costs (US$000's) 6,340 4,030 21,704 11,712
-------------- ------------------- -------------------
Free Cashflow ( US$000's) 18,991 4,173 60,885 17,737
-------------- ------------------- -------------------
Cash Cost / oz
Sold - C1 US$/oz 736 989 792 970
-------------- ------------------- -------------------
Cash Cost / oz
Sold - AISC US$/oz 1,055 1,347 1,092 1,332
-------------- ------------------- -------------------
Note: AISC includes all UK Corporate costs.
Review of Operations
Q3 2023 operations produced another strong quarter result for
the Company. Gold sales for Q3 2023 were US$42.4 million (Q2 2023:
US$49.1 million), at an average realised gold price of US$1,926 per
ounce (Q2 2023: average realised gold price of US$1,984 per ounce);
producing a positive free cash flow of US$19.0 million (Q2 2023:
US$24.1 million).
Finance
The process of elevating the status of the mezzanine loans to
that of secured debt continues and the process of executing the
relevant documents is expected to be completed during Q4 2023.
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.
Total mezzanine debt payments of US$18.5 million were made
during Q3 2023 (Q2 2023: US$20.7 million).
The net debt position of the Group as at 30 September 2023 was
US$30.6 million (30 June 2023: US$48.3 million). Cash holdings as
at 30 September 2023 were US$0.9 million (30 June 2023: US$1.0
million).
Mining Operations
Mining production of ore and waste for Q3 2023 was above
forecast at 3.30Mt (Q2 2023: 3.49Mt), with a total of 568Kt of ore
mined in Q3 2023 (Q2 2023: 566kt).
An additional six drill holes are planned to complete the
exploration programme in Stages 4 and 5, undertaken 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 significantly reducing the potential
for life of mine extensions.
Process Plant
During Q3 2023, most aspects of the process plant performed
adequately, although BIOX continues to under-perform, however
ongoing engineering improvements to the cooling circuits within the
BIOX process are expected to deliver a sustained increase in
performance.
Gold produced during Q3 2023 was 22,034 ounces for the quarter
(Q2 2023: 24,235 ounces). Throughput for Q3 2023 was 483Kt at a
head grade of 1.60g/t (Q2 2023: 522Kt at a head grade of 1.66g/t)
and had a recovery rate of 88.7% (Q2 2023: 86.9%). The expectation
is that, in Q4 2023, the trend of decreasing head grade is set to
continue.
Planned downtime included scheduled maintenance on the SAG mill,
while unplanned downtime consisted mainly of repairs to tails
lines, tails line pump change overs and temporary BIOX failure due
to power outages.
Residual Storage Impoundment ("RSI")
The RSI dam-wall is at its final height and the d am water
freeboard remains well above design minimum levels. Earthworks for
the construction of the RSI final in-rock spillway are well
advanced and continuing.
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
The Company continues to receive strong support from local
communities and government agencies. The operations have been
nominated for several government industry awards which will be
awarded before the end of the year.
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
QRTEQLFFXBLBFBK
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