TIDMMTL
RNS Number : 0115T
Metals Exploration PLC
20 July 2022
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 JUNE 2022
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 2022.
Finance and corporate
-- Gold sold during Q2 2022 of 14,992 ounces at an average
realised gold price of US$1,858 per ounce (Q1 2022: 15,685 ounces
at an average realised gold price of US$1,898 per ounce).
-- Gold sales of US$27.8 million in Q2 2022 (Q1 2022: US$29.8 million).
-- Positive free cash flow of US$5.4 million in Q2 2022 (Q1 2022: US$8.2 million).
-- Senior debt repaid during Q2 2022 of US$5.0 million (Q1 2022: US$12.0 million).
-- Senior debt outstanding as at 30 June 2022 was US$8.1 million
(31 March 2022: US$12.9 million).
-- Net debt as at 30 June 2022 was US$92.9 million (31 March 2022: US$94.2 million).
Mining Operations
-- No lost time injuries occurred during the period, with over
17 million hours worked without a reportable injury .
-- Ore mined decreased for the quarter to 510kt (Q1 2022: 779kt)
with waste mined at 2.47Mt (Q1 2022: 3.15Mt).
Processing Operations
-- Gold recovered during Q2 2022 of 16,529 ounces (Q1 2022:
14,819 ounces) from a higher head grade of 1.18g/t (Q1 2022:
1.02g/t).
-- Gold recovery for Q2 2022 was 86.6% (Q1 2022: 89.0%).
COVID-19 Impacts
-- Operations continuing to be largely unaffected by COVID-19 impacts.
-- COVID-19 vaccine programme well advanced, with over 95% of
all employees having had at least two vaccination doses.
Darren Bowden, CEO of Metals Exploration, commented :
"Runruno has maintained a positive trend in recovery and we are
delighted that the operation is now able to sustain an >85%
average recovery. The project is well positioned for a strong
second half of 2022 as the grade in the mine improves once the
higher grade ore in Stage 3 is accessed. The Company remains on
track to meet our 2022 production guidance and to repay the senior
debt during Q4 2022 as forecast, which will further strengthen our
balance sheet.
"I would also like to take this opportunity to thank the
operations team for an outstanding safety performance as the
Company passes 17 Million man-hours without a lost time
injury."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2022 FY 2021
FY 2022 Actual Actual Actual Actual
------------------------- ------------- ------------------- -------------------
PHYSICALS Units Q2 2022 Q2 2021 6 Months 6 Months
------------- ---------- ----------
Mining
------------- ---------- ----------
Ore Mined Tonnes 509,825 287,866 1,289,123 713,742
-------------- ---------- ----------
Waste Mined Tonnes 2,467,685 2,371,708 5,619,472 4,537,749
-------------- ---------- ----------
Total Mined Tonnes 3,002,244 2,659,574 6,965,979 5,251,491
-------------- ---------- ----------
Au Grade Mined g/tonne 1.18 1.10 1.10 1.27
-------------- ---------- ----------
Strip Ratio 4.77 7.42 4.28 5.92
---------- ----------
Processing
------------- ---------- ----------
Ore Milled Tonnes 510,214 511,536 1,017,258 1,048,290
-------------- ---------- ----------
Au Grade g/tonne 1.16 1.26 1.09 1.29
-------------- ---------- ----------
S(2) Grade % 1.10 1.17 0.98 1.11
-------------- ---------- ----------
Au Milled (contained) Ounces 19,087 20,745 35,742 43,620
-------------- ---------- ----------
Recovery % 86.6 80.0 87.7 81.0
-------------- ---------- ----------
Au Recovered/Poured Ounces 16,529 16,591 31,348 35,316
-------------- ---------- ----------
Sales
------------- ---------- ----------
Au Sold Ounces 14,992 16,429 30,676 34,745
-------------- ---------- ----------
Au Price US$/oz 1,858 1,807 1,878 1,797
-------------- ---------- ----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- ----------
Revenue
------------- ---------- ----------
Gold Sales (US$000's) 27,849 29,682 57,622 62,439
-------------- ---------- ----------
Operating Costs
- Summary
------------- ---------- ----------
Mining (US$000's) 6,972 6,415 13,307 11,950
-------------- ---------- ----------
Processing (US$000's) 6,926 7,876 14,296 15,363
-------------- ---------- ----------
G&A (US$000's) 2,616 2,638 5,316 5,548
-------------- ----------
Total Operating
Costs (US$000's) 16,515 16,929 32,919 32,860
-------------- ----------
Excise Duty (US$000's) 1,099 1,190 2,317 2,541
-------------- ---------- ----------
UK/Philippine G&A (US$000's) 3,102 1,897 4,783 3,496
-------------- ---------- ----------
Total Direct Production
Costs (US$000's) 20,716 20,016 40,019 38,897
-------------- ---------- ----------
Net Cash Income (US$000's) 7,133 9,666 17,603 23,543
-------------- ---------- ----------
Total Capital Costs (US$000's) 1,775 4,209 4,039 6,553
-------------- ---------- ----------
Total non-cash
costs (US$000's) 3,009 3,583 7,682 7,907
-------------- ---------- ----------
Free Cashflow ( US$000's) 5,358 5,457 13,564 16,989
-------------- ---------- ----------
Cash Cost / oz
Sold - C1 US$/oz 938 1,014 960 946
-------------- ---------- ----------
Cash Cost / oz
Sold - AISC US$/oz 1,336 1,458 1,323 1,309
-------------- ---------- ----------
Note: AISC includes all UK Corporate costs.
Review of Operations
Gold sales for Q2 2022 were US$27.8 million (Q1 2022: US$29.8
million), at an average realised gold price of US$1,858 per ounce
(Q1 2022: average gold price of US$1,898 per ounce); producing a
positive free cash flow of US$5.4 million (Q1 2022: US$8.2
million).
During Q2 2022, debt repayments of US$5.0 million (Q1 2022:
US$12.0 million) were made. The net Group debt position as at 30
June 2022 was US$92.9 million (Q1 2022: US$94.2 million). Cash
holdings at 30 June 2022 were $0.3million (31 March 2022: $0.7
million).
Mining Operations
Mining production of ore and waste for Q2 2022 was above
forecast at 3.00Mt (Q1 2022: 3.96Mt), with a total of 510Kt of ore
mined in Q2 2022 (Q1 2022: 779kt).
Back-fill of waste into Stage 1 has continued with mining in
Stage 2 expected to be completed during Q3 2022.
Although the removal and resettlement of illegal miners from
Stages 3 and 4 of the Project site is largely complete, full access
to Stage 3 has not yet been achieved. Despite several court orders
in the Company's favour, access to a key area of Stage 3 has not
yet been achieved. This delay has resulted in changes to the
Company mine plan such that higher grade material in Stage 3 is now
scheduled for mining during H2 2022. These access issues have also
temporarily halted the exploration drill programme planned for
Stages 4 and 5.
Process Plant
Throughput for Q2 2022 was 510kt (Q1 2022: 507kt). Gold
production for Q2 2022 was 16,529 ounces at a recovery rate of
86.6% (Q1 2022: 14,819 ounces at a recovery rate of 89.0%). The
higher quarter production was achieved notwithstanding continuing
issues with the BIOX bacteria culture reflecting a higher head
grade of 1.18g/t (Q1 2022: 1.02g/t).
Further power failures were experienced during Q2 2022 that
contributed to a lack of stability of the BIOX bacteria culture;
giving rise to resultant recovery losses. In addition, studies
continue in an effort to identify an as yet unknown contaminant
that developed in the return water sources that were being used to
feed the BIOX circuit. The combined impact of these issues resulted
in the BIOX circuit performance to under-perform during the
quarter.
A major upgrade to the process plant return water and cooling
systems is continuing.
Residual Storage Impoundment ("RSI")
Work continued on the final RSI dam-wall raise. D am water
freeboard remains well above design minimum levels. Detailed
planning of the RSI final in-rock spillway is advancing.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 17 million hours worked without a 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
continues in its efforts to complete the removal of the few
remaining illegal miners, including their infrastructure and
dwellings, from those areas scheduled to be mined as part of mine
plan Stages 3 and 4, and those areas the Company wishes to conduct
exploration drilling in 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 Adviser: STRAND HANSON LIMITED
-------------------------
James Spinney, James Dance,
Rob Patrick +44 (0) 207 409 3494
-------------------------
Financial Adviser & Broker: HANNAM & PARTNERS
-------------------------
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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