Mandalay Resources Corp. (TSX:MND, OTCQB:MNDJF) has reported financial results for the fourth quarter and year ended December 31, 2022, which highlighted the company's improved net cash position and a 10th consecutive quarter of profitability.
At the year-end, Mandalay had $38.4 million of cash on hand and $24.0 million in total interest-bearing debt outstanding, a $33.5 million improvement over a net debt position of $19.1 million at the end of 2021.
In the results statement, Dominic Duffy, president and chief executive officer of Mandalay, commented: "Mandalay finished the year strongly and continued tracking towards our long-term growth and value creation objectives. We are pleased to have strengthened our balance sheet while improving our net cash position over the year."
READ: Mandalay Resources reveals reserve and resource increase, grade improvement for Björkdal gold mine in Sweden
He added: "Mandalay's healthy results this quarter and for the full year 2022 is a reflection of the team's hard work on controlling our costs in this tough economic environment. From a cash and all-in sustaining cost perspective, both per-ounce cost metrics remained relatively in line during 2022 as compared to 2021. For the year 2022, on a consolidated basis our cash cost per ounce of saleable gold equivalent produced was $896, while our all-in sustaining cost was $1,207."
Looking at the company's individual operations, Duffy noted: "Costerfield continued its strong financial performance in the fourth quarter of 2022, with $25.8 million in revenue and $18.1 million in adjusted EBITDA. Our high-grade deposits are providing consistently strong margins with processed grades of 12.7 g/t (grams per ton) gold and 2.6% antimony. Gold and antimony recovery rates also improved as compared to the previous quarter to 94.2% and 93.8%, respectively.
"Bjorkdal generated stable sales of $15.6 million and $3.3 million in revenue and adjusted EBITDA, respectively, during the fourth quarter."
He concluded: "During 2022, we also maintained our focus on strategically investing in our exploration programs at both sites with more than $10.0 million spent. With the company's strengthening balance sheet year over year and the commitment towards exploration, we are anticipating an even stronger 2023. We look forward to building upon operational and financial success and improving returns to our shareholders as we look towards generating stronger cash flow."
Results detail
In the fourth quarter of 2022, Mandalay reported consolidated quarterly revenue of $41.4 million, 43% lower than the $72.9 million in the fourth quarter of 2021, and posted consolidated quarterly adjusted EBITDA of $20.1 million, 50% lower than adjusted EBITDA of $40.6 million in the fourth quarter of 2021, with the decrease due to the lower revenue in the quarter.
Adjusted net income was $5.2 million in the fourth quarter of 2022, or 6 US cents/8 Canadian cents per share, marking the company's 10th consecutive quarter of profitability, compared with an adjusted net income of $22.0 million in the fourth quarter of 2021.
The company saw $20.9 million in net cash flow from operating activities in the quarter and $10.4 million in free cash flow and it refinanced its existing debt facility and $15.0 million debt repayment of new revolving credit facility, with $20.0 million currently drawn down on this facility.
For full-year 2022, Mandalay posted revenue of $191.7 million and consolidated adjusted EBITDA of $91.2 million, a margin of 48%, with $80.0 million in net cash flow from operating activities and $45.0 million in free cash flow. That compared to 2021 annual results of adjusted EBITDA of $115.0 million, a margin of 50%, and $18.2 million in free cash flow.
Results conference call
Mandalay said its management will be hosting a conference call for investors and analysts on Friday, February 24, 2023, at 8.00am Toronto time.
The dial-in numbers are: Participant number (toll-free) 888-664-6383; Participant number (local) 416-764-8650; Conference ID 92453217
A replay of the conference call will be available until 11.59pm Toronto time on March 3, 2023, and can be accessed using the following dial-in numbers: Encore number (toll-free) 888-390-054; Encore number (local) 416-764-8677; Encore replay code 453217
Mandalay is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Bjorkdal gold mine).
The company is focused on increasing its production and reducing costs to generate significant positive cash flow. Mandalay is committed to operating safely and in an environmentally responsible manner while developing a high level of community and employee engagement.
Contact the author at jon.hopkins@proactiveinvestors.com