Mandalay Resources Corp (TSE:MND) revealed year-on-year revenue growth and better earnings in the second quarter of 2016.
The group generated US$54.2mln of revenue in the three months to June 30, up from US$50.8mln in the same period of 2015.
Earnings (adjusted EBITDA) meanwhile amounted to US£22.1mln, from US$13.5mln in the second quarter last year, and consolidated net income totalled US$3.4mln compared to US$4.4mln in 2015 with the company pointing to higher taxes and special items for the reduction.
Chief executive Mark Sander said: “Mandalay generated strong revenue and adjusted EBITDA in the second quarter of 2016.”
He highlighted that total production for the current quarter was 39,653 ounces of gold equivalent, slightly less than the year-ago, and at US$811 per ounce the cash cost of production was only slightly higher than last year.
“The stronger financial results are due mostly to higher metal prices than in the second quarter of 2015,” Sander added.
Mandalay now expects group gold production at the upper end of guidance of 105,000 - 110,000 ounces for the full year.
The company ended the quarter with US$45.7mln of cash and equivalents. The quarterly dividend was confirmed as 0.72 cents per share, which amounts to US$3.25mln.
Mandalay noted that current taxes rose to US$1.8mln during the current quarter, versus US$0.4mln a year ago, as the Costerfield operation has exhausted tax losses that had been carried forward. That asset is now fully taxable, the company added.
In the current quarter it also recognises US$1.5mln of deferred tax expenses relating to the acquisition of the Cerro Bayo royalty, purchased in the first quarter of this year.
Sander added: “Having completed the major capital items in the current life of mine plan at Costerfield, the operation now generates substantial free cash flow for the Company each quarter.
“We are working to extend the mine life through drilling lodes below the King Cobra fault, approximately 100 metres deeper than the current Cuffley workings, and by applying recent, sustainably lower operating costs to evaluation of resources already drilled in the Brunswick lode adjacent to the plant.”
"Our grade control program at Bjorkdal continued to demonstrate success in the second quarter, during which we processed an average mill-reconciled grade of 1.43 grams per tonne gold, a record under Mandalay ownership.”