Metals miner Mandalay Resources Corp (TSE:MND) has confirmed that it expects to return to cash flow positive in 2018, as it posted first quarter financials, which showed its loss had narrowed.
In the three months, Mandalay generated C$12.1mln in adjusted EBITDA (underlying earnings) in the current quarter, which was C$2.3mln lower than in the previous quarter, which meant a net loss of C$1.2mln for the three months versus a loss of C$2.3mln in the same period of 2017. Revenue was down to C$39.7mln versus C$45.3mln in 2017.
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Mandalay generated a net cash inflow of C$6.5mln compared to a net cash outflow of C$8.1mln in the first quarter of last year, largely due to the sales from the record fourth quarter 2017 production at its Swedish mine - Bjorkdal.
Significantly, Mandalay grew its cash balance by 38% quarter-over-quarter, increasing it to $23.4mln on March 31 this year, from C$16.9mln as at year end 2017.
The miner has producing mines in Australia and Sweden, and care and maintenance and development projects in Chile.
"The first quarter of 2018 was distinguished by record quarterly revenue at Bjorkdal under Mandalay ownership, resulting from sales of the record fourth quarter 2017 production," said Dr Mark Sander, the president and chief executive.
"We are pleased that the grade control program continues to function well, that the sustained metallurgical performance of the plant continues, and that the debottlenecking carried out during 2017 in the open pit and underground mines keeps performing as planned.
"As all of these operational improvements have taken hold, we expect continued strong performance from Bjorkdal into the remainder of 2018.
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"In the coming months, we plan to introduce new loading and haulage contractors to the open pit and underground mine in a campaign to improve safety, control costs, and bring new capacity to bear on our goal of increasing the mining rate of highest-grade A-quality ore."
Sander went on to say that in Australia, at Costerfield, the mine continued to deliver "dependable" performance in the first quarter, producing 10,456 gold equivalent ounces at a cash cost of $869 per ounce.
"We expect continued performance at these levels for the upcoming year as development of the new Brunswick lode is completed and production transitions from Cuffley to Brunswick.
"We believe the emerging, high-grade Youle vein discovery close to Brunswick holds the potential for adding significant Mineral Reserves by year-end 2018, which could support a low-cost mine life extension. We continue drilling with three rigs on Youle."