Mandalay Resources Corp has reported its seventh consecutive three months of profitability in the third quarter, as the metals miner saw revenue grow and costs go down.
The firm, which has operating assets in Sweden and Australia, added that the momentum seen in the first half had continued and that it was on pace to reach the upper limit of its production guidance and achieve cost guidance for full-year 2021.
Adjusted net income for the three months to September 30 this year was around US$10 million, up from US$9.8 million in the year-ago period, on revenue of US$52.5 million (3Q, 2020: US$49.7 million).
Mandalay Resources CEO Dominic Duffy also noted that Mandalay had generated US$25.1 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA), resulting in an EBITDA margin of 48% and year-to-date adjusted EBITDA of US$74.3 million.
"Our operational efficiency was further reflected by the declining consolidated cash and all-in sustaining costs per saleable gold equivalent ounce during this quarter to $825 and $1,135, respectively, from $826 and $1,262 during the same period last year," Duffy said in a statement.
READ: Mandalay Resources intersects high-grade gold at its Costerfield operation in Australia
At the Costerfield mine in Australia, there was about 30% increase in gold equivalent produced during the quarter compared to the same period last year, and the mine's per gold equivalent ounce metrics improved significantly to a cash and all-in sustaining costs of US$546 and US$837 respectively, from US$657 and US$1,088, noted Duffy.
The improved production also resulted in Costerfield generating US$27 million in revenue and US$18.5 million in adjusted EBITDA.
However, due to coronavirus (COVID-19) shipping delays, around US$5.5 million in revenue was delayed from the third quarter and will be accounted for during the fourth, said the company boss.
Meanwhile, Mandalay's Björkdal mine in Sweden generated stable production and sales resulting in US$20.5 million in revenue and US$6.8 million in adjusted EBITDA in the third quarter.
"We anticipate further grade improvements for the rest of 2021 and beyond as dilution control measures continue to be implemented," added Duffy.
"For the remainder of 2021, we are expecting to see our cash position grow significantly with the normalization in our payment obligations. We are pleased with the steps taken to strengthen our balance sheet, which will further improve with the upcoming sale of Cerro Bayo in the fourth quarter, and adding financial flexibility and look to continue with the company’s growth through the final quarter of 2021 and into 2022," he concluded.
Canada-headquartered Mandalay Resources has projects in Australia (Costerfield gold-antimony mine), Sweden (Björkdal gold mine) and Chile (Cerro Bayo gold-silver mine). It is focused on growing production and reducing costs to generate significant positive cashflow.
Contact the author at giles@proactiveinvestors.com