TIDMMTL
RNS Number : 8642C
Metals Exploration PLC
14 October 2022
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 SEPTEMBER 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 Q3 2022.
Finance and corporate
-- Gold sold during Q3 2022 of 14,980 ounces at an average
realised gold price of US$1,714 per ounce (Q2 2022: 14,992 ounces
at an average realised gold price of US$1,858 per ounce).
-- Gold sales of US$25.7 million in Q3 2022 (Q2 2022: US$27.8 million).
-- Positive free cash flow of US$4.2 million in Q3 2022 (Q2 2022: US$5.4 million).
-- Senior debt repaid during Q3 2022 of US$3.5 million (Q2 2022: US$5.0 million).
-- Senior debt outstanding as at 30 September 2022 was US$4.7
million (30 June 2022: US$8.1 million), which is expected to be
fully repaid in Q4 2022.
-- Net debt as at 30 September 2022 was US$92.4 million (30 June 2022: US$92.9 million).
Mining Operations
-- No lost time injuries occurred during the period, with over
17.6 million hours worked without a reportable injury .
-- Mining production of ore and waste for Q3 2022 was above
forecast at 3.64Mt (Q2 2022: 3.00Mt), with a total of 380Kt of ore
mined in Q3 2022 (Q2 2022: 510kt).
Processing Operations
-- Gold recovered during Q3 2022 of 15,715 ounces (Q2 2022:
16,529 ounces) from a head grade of 1.26g/t (Q2 2022: 1.18g/t). The
head grade for Q4 2022 is expected to average 1.44g/t.
-- Gold recovery for Q3 2022 was 84.8% (Q2 2022: 86.6%).
FY2022 Production Guidance
-- FY2022 is currently expected to be at or slightly below the
lower range of the FY2022 guidance, which was 67,000 - 71,000
ounces.
-- Production has been negatively impacted by delayed access to
higher grade material in Stage 3, BIOX instability due to numerous
transmission line power outages, and a higher sulphur content than
forecast in the processed ore.
Darren Bowden, CEO of Metals Exploration, commented :
"Runruno has continued to perform well during the quarter from
an operational and safety point of view, despite transmission line
power outages which have impacted the stability of the BIOX. These
power outages combined with the delayed access to higher grade
material in Stage 3 and a higher sulphur content than forecast have
all impacted our FY2022 guidance. Notwithstanding the above, the
plant is operating well and gold production in Q4 2022 is expected
to be the best quarter result for this year.
"There is a major upgrade continuing to the process plant return
water, cooling systems and tailings line pumps which we believe
will benefit the future performance of the plant. In addition to
this, we are on track to repay our senior debt in this coming
quarter which will considerably strengthen our financial position,
not least through a significant reduction in the interest rate on
the remaining debt
"I would also like to take this opportunity to thank the
operations team for their continuing outstanding safety performance
of over 17.6 million man-hours without a lost time injury,
something that as a company we are very proud of indeed."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2022 FY 2021
---------- ---------- ---------- ----------
FY 2022 Actual Actual Actual Actual
---------- ---------- ---------- ----------
PHYSICALS Units Q3 2022 Q3 2021 9 Months 9 Months
------------- ---------- ----------
Mining
------------- ---------- ----------
Ore Mined Tonnes 380,071 546,149 1,669,194 1,259,892
-------------- ---------- ----------
Waste Mined Tonnes 3,264,442 2,093,062 7,212,607 6,630,810
-------------- ---------- ----------
Total Mined Tonnes 3,644,513 2,639,211 8,881,802 7,890,702
-------------- ---------- ----------
Au Grade Mined g/tonne 1.49 1.15 1.19 1.22
-------------- ---------- ----------
Strip Ratio 8.57 3.60 45.24 4.92
---------- ----------
Processing
------------- ---------- ----------
Ore Milled Tonnes 455,907 551,377 1,473,165 1,599,667
-------------- ---------- ----------
Au Grade g/tonne 1.26 1.30 1.15 1.30
-------------- ---------- ----------
S(2) Grade % 1.80 0.75 1.23 0.99
-------------- ---------- ----------
Au Milled (contained) Ounces 18,541 23,060 54,283 66,688
-------------- ---------- ----------
Recovery % 84.8 84.4 86.7 82.1
-------------- ---------- ----------
Au Recovered/Poured Ounces 15,715 19,456 47,063 54,771
-------------- ---------- ----------
Sales
------------- ---------- ----------
Au Sold Ounces 14,980 19,197 45,641 53,942
-------------- ---------- ----------
Au Price US$/oz 1,714 1,782 1,825 1,792
-------------- ---------- ----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- ----------
Revenue
------------- ---------- ----------
Gold Sales (US$000's) 25,676 34,208 83,298 96,648
-------------- ---------- ----------
Operating Costs
- Summary
------------- ---------- ----------
Mining (US$000's) 5,907 6,230 19,214 18,180
-------------- ---------- ----------
Processing (US$000's) 7,675 7,539 21,971 22,902
-------------- ---------- ----------
G&A (US$000's) 2,557 2,619 7,873 8,167
-------------- ----------
Total Operating
Costs (US$000's) 16,139 16,388 49,059 49,248
-------------- ----------
Excise Duty (US$000's) 1,045 1,364 3,362 3,905
-------------- ---------- ----------
UK/Philippine G&A (US$000's) 1,684 1,129 6,467 4,625
-------------- ---------- ----------
Total Direct Production
Costs (US$000's) 18,869 18,881 58,888 57,778
-------------- ---------- ----------
Net Cash Income (US$000's) 6,807 15,328 24,410 38,870
-------------- ---------- ----------
Total Capital Costs (US$000's) 2,634 4,161 6,672 10,714
-------------- ---------- ----------
Total non-cash
costs (US$000's) 4,030 6,557 11,712 14,464
-------------- ---------- ----------
Free Cashflow ( US$000's) 4,173 11,167 17,737 28,156
-------------- ---------- ----------
Cash Cost / oz
Sold - C1 US$/oz 989 967 970 954
-------------- ---------- ----------
Cash Cost / oz
Sold - AISC US$/oz 1,347 1,314 1,332 1,311
-------------- ---------- ----------
Note: AISC includes all UK Corporate costs.
Review of Operations
Gold sales for Q3 2022 were US$25.7 million (Q2 2022: US$27.8
million), at an average realised gold price of US$1,714 per ounce
(Q2 2022: average gold price of US$1,858 per ounce); producing a
positive free cash flow of US$4.2 million (Q2 2022: US$5.4
million).
During Q3 2022, debt repayments of US$3.5 million (Q2 2022:
US$5.0 million) were made. The net Group debt position as at 30
September 2022 was US$92.4 million (Q2 2022: US$92.9 million). Cash
holdings at 30 September 2022 were US$0.6million (30 June 2022:
US$0.3 million).
The Group continues to expect the senior debt to be fully repaid
during Q4 2022, significantly strengthening the Company's financial
position. Upon this event, the interest rate on the Group mezzanine
debt will drop from 15% to 7% per annum.
Mining Operations
Mining production of ore and waste for Q3 2022 was above
forecast at 3.64Mt (Q2 2022: 3.00Mt), with a total of 380Kt of ore
mined in Q3 2022 (Q2 2022: 510kt). A greater ratio of waste
material was moved during the quarter as development activities in
Stage 3 progressed to enable access to higher grade material.
Mining in Stage 2 was completed during Q3 2022 and mining
operations are underway in Stages 3 and 4.
Final full access to mine plan Stage 3 was achieved during Q3
2022 and higher grade Stage 3 ore will be accessed during Q4 2022.
Additional access issues have continued to temporarily halt the
exploration drill programme planned for Stages 4 and 5. These
access issues are expected to be substantially resolved during Q4
2022 which will enable the exploration programme to commence in Q1
2023 after the end of the wet season.
Process Plant
Throughput for Q3 2022 was 456kt (Q2 2022: 510kt). Gold
production for Q3 2022 was 15,715 ounces at a recovery rate of
84.8% (Q2 2022: 16,529 ounces at a recovery rate of 86.6%).
Gold recovery for Q3 2022 was impacted by higher sulphide
material with the total sulphur grade averaging 1.80% against a
budget 1.38%.
Numerous mains power failures were experienced during Q3 2022.
These power failures caused ongoing difficulties in maintaining
stability of the BIOX bacteria culture. However, during Q3 2022
there were no further issues with contaminants in the return water
sources feeding the BIOX circuit.
A major upgrade to the process plant return water and cooling
systems and tailings line pumps is continuing. These projects will
be completed in Q4 2022 and should result in improved plant
availability and throughput rates.
FY2022 Production Guidance
During the FY2022 period to date, gold production has been
negatively impacted by a combination of:
-- delayed access to higher grade Stage 3 material resulting in
greater processing of lower grade material than forecast;
-- BIOX instability due to numerous transmission line power outages; and
-- a higher sulphur content than forecast in the processed ore.
Accordingly, the Company advises that that gold production for
FY2022 is currently expected to be at or slightly below the lower
range of the FY2022 guidance, which was 67,000 - 71,000 ounces.
Residual Storage Impoundment ("RSI")
Work continued on the final RSI dam-wall raise. Notwithstanding
the onset of the wet season with a number of severe rain events,
the d am water freeboard remains well above design minimum levels.
Detailed planning of the RSI final in-rock spillway continues.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 17.6 million hours worked without a lost-time reportable
injury as at the date of this announcement. Runruno's operations
also continue to be largely unaffected by COVID-19 and the Company
are delighted that the COVID-19 vaccine programme is well advanced
with over 97% of all employees having had at least two vaccination
doses.
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 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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