TIDMMTL
RNS Number : 6731A
Metals Exploration PLC
24 January 2024
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 31 DECEMBER 2023
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 Q4 2023.
Finance and corporate
Ø Record annual gold revenue of US$166.7 million (FY2022:
US$124.4 million).
Ø Record annual gold sales of 85,744 ounces sold at an average
realised gold price of US$1,944 per ounce (FY2022: 69,249 ounces at
an average US$1,797 per ounce).
Ø Record annual positive free cash flow of US$72.3 million
(FY2022: US$35.7 million).
Ø Q4 2023 gold revenue of US$34.7 million (Q3 2023: US$42.4
million).
Ø Q4 2023 gold sales of 17,514 ounces sold at an average
realised gold price of US$1,980 per ounce (Q3 2023: 22,034 ounces
at an average US$1,926 per ounce).
Ø Q4 2023 positive free cash flow of US$11.5 million (Q3 2023:
US$19.0 million).
Ø Elevation of mezzanine debt to secured status remains
outstanding for the determination of the interest rate which will
be applied to the outstanding loan in the period prior to
completion of the elevation, as well as the date of its
application.
Ø Mezzanine debt repayments of US$11.5 million (Q3 2023: US$18.5
million).
Ø Net debt as at 31 December 2023 was US$19.9 million (30
September 2023: US$30.6 million).
Ø Post period end the Company announced the acquisition (subject
to shareholder and lender approval) of an extensive exploration
tenement in the prospective Abra area of the Philippines.
Mining Operations
Ø No lost time injuries occurred during the period - over 21
million hours worked without a reportable injury .
Ø Annual mining production of ore and waste was above forecast
at 12.36Mt (FY2022: 13.72Mt), with a total of 1.95Mt of ore mined
in FY2023 (FY2022: 2.29Mt).
Ø Q4 2023 mining production of ore and waste was slightly below
forecast at 2.83Mt (Q3 2023: 3.30Mt), with a total of 534Kt of ore
mined in Q4 2023 (Q3 2023: 568Kt).
Ø Received several government and industry awards in recognition
of outstanding levels of dedication, initiatives and innovations in
the pursuit of excellence in environmental protection, safety and
health, management and social/community development.
Processing Operations
Ø Record annual gold production of 85,194 ounces (FY2022: 72,537
ounces) recovered from 2.10Mt at a head grade of 1.42g/t (FY2022:
2.07Mt at a head grade of 1.27g/t).
Ø Q4 2023 gold production of 17,626 ounces (Q3 2023: 22,034
ounces) recovered from 553Kt at a head grade of 1.15g/t (Q3 2023:
483Kt at a head grade of 1.60g/t).
Ø FY2023 gold recovery of 88.7% (FY2022: 85.7%); Q4 2023 gold
recovery of 85.9% (Q3 2023: 88.7%).
FY2023/FY2024 Production Guidance
Ø FY2023 gold production of 85,194 ounces exceeded the revised
FY2023 upper guidance forecast of 81,000 ounces at an AISC of
US$1,126 per ounce which was slightly above the FY2023 lower
guidance forecast of US$1,120 per ounce.
Ø FY2024 gold production forecast: 74,000 - 80,000 ounces.
Ø FY2024 AISC forecast: US$1,175 - US$1,275 per ounce.
Darren Bowden, CEO of Metals Exploration, commented :
"This was another very strong quarter for MTL, leading us to
achieve record annual gold revenues and production, exceeding the
upper production guidance of our revised 2023 forecasts. Throughout
the year, we also maintained our excellent safety record while
delivering higher gold recovery levels and strong cash flows, which
have enabled us to continue to further deleverage the Company.
"We were also delighted to announce, post the year end, the
first steps of delivering our strategy to grow MTL within the
Philippines, and ultimately the broader region, through the
conditional acquisition of the Abra Tenement. The Abra tenement is
an extensive exploration tenement covering some 16,200 hectares
with multiple prospective targets in both gold and copper. We
believe this project has the potential to provide us with an
extensive future project growth pipeline.
"The Company is in an excellent position as it enters the new
year. Runruno continues to deliver safe, strong performances and
provide a solid platform from which to grow as we look to add
further assets to our portfolio to deliver our strategy and value
to shareholders.
"We look forward to providing further updates on our progress in
the coming months."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2023 FY 2022
---------- ---------- ----------- -----------
FY 2023 Actual Actual Actual Actual
---------- ---------- ----------- -----------
PHYSICALS Units Q4 2023 Q4 2022 12 Months 12 Months
------------- ---------- -----------
Mining
------------- ---------- -----------
Ore Mined Tonnes 533,815 623,245 1,949,654 2,292,439
-------------- ---------- -----------
Waste Mined Tonnes 2,295,472 2,484,760 10,412,735 11,422,847
-------------- ---------- -----------
Total Mined Tonnes 2,829,287 3,108,004 12,362,398 13,715,286
-------------- ---------- -----------
Au Grade Mined g/tonne 1.27 1.65 1.47 1.31
-------------- ---------- -----------
Strip Ratio 3.99 3.95 5.03 4.89
---------- -----------
Processing
------------- ---------- -----------
Ore Milled Tonnes 533,074 594,866 2,104,207 2,068,031
-------------- ---------- -----------
Au Grade g/tonne 1.15 1.59 1.42 1.27
-------------- ---------- -----------
S(2) Grade % 1.18 1.68 1.36 1.36
-------------- ---------- -----------
Au Milled (contained) Ounces 20,517 30,394 96,068 84,677
-------------- ---------- -----------
Recovery % 85.9 83.8 88.7 85.7
-------------- ---------- -----------
Au Recovered/Poured Ounces 17,626 25,474 85,194 72,537
-------------- ---------- -----------
Sales
------------- ---------- -----------
Au Sold Ounces 17,514 23,608 85,744 69,249
-------------- ---------- -----------
Au Price US$/oz 1,980 1,742 1,944 1,797
-------------- ---------- -----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- -----------
Revenue
------------- ---------- -----------
Gold Sales (US$000's) 34,684 41,113 166,683 124,411
-------------- ---------- -----------
Operating Costs
- Summary
------------- ---------- -----------
Mining (US$000's) 5,172 5,972 20,919 25,186
-------------- ---------- -----------
Processing (US$000's) 8,591 9,491 34,725 31,462
-------------- ---------- -----------
G&A (US$000's) 2,992 2,486 11,709 10,359
-------------- ----------
Total Operating
Costs (US$000's) 16,755 17,948 67,354 67,007
-------------- ----------
Excise Duty (US$000's) 1,392 1,661 6,710 5,023
-------------- ---------- -----------
UK/Philippine G&A (US$000's) 2,384 1,824 9,225 8,291
-------------- ---------- -----------
Total Direct Production
Costs (US$000's) 20,531 21,433 83,289 80,321
-------------- ---------- -----------
Net Cash Income (US$000's) 14,153 19,680 83,394 44,090
-------------- ---------- -----------
Total Capital Costs (US$000's) 2,695 1,669 11,051 8,341
-------------- ---------- -----------
Total non-cash
costs (US$000's) 5,468 7,620 27,172 19,332
-------------- ---------- -----------
Free Cashflow ( US$000's) 11,457 18,011 72,343 35,748
-------------- ---------- -----------
Cash Cost / oz
Sold - C1 US$/oz 890 829 812 922
-------------- ---------- -----------
Cash Cost / oz
Sold - AISC US$/oz 1,260 1,047 1,126 1,235
-------------- ---------- -----------
Note: AISC includes all UK Corporate costs.
Review of Operations
Project Acquisition
Since the period end, the Company announced the acquisition
(subject to shareholder and lender approval) of an extensive
exploration tenement in the prospective Abra area of the
Philippines, covering 16,200 hectares, which is approximately 200km
north of the Company's Runruno mine. For further details on the
proposed acquisition, please refer to the 12 January 2024
announcement.
Runruno operations
FY2023 operations achieved record gold production of 85,194
ounces, which exceeded the revised FY2023 upper guidance forecast
of 81,000 ounces at an AISC of US$1,126 per ounce, which was just
above the FY2023 lower guidance forecast of US$1,120 per ounce.
This led to record annual gold revenue of US$166.7 million, record
annual gold sales of 85,744 ounces, at an average realised gold
price of US$1,944 per ounce, and record annual positive free cash
flow of US$72.3 million.
Q4 2023 operations produced another strong quarter result for
the Company, notwithstanding lower head grades. Gold sales for Q4
2023 were US$34.7 million (Q3 2023: US$42.4 million), at an average
realised gold price of US$1,980 per ounce (Q3 2023: average gold
price of US$1,926 per ounce); producing a positive free cash flow
of US$11.5 million (Q3 2023: US$19.0 million).
Finance
The process of elevating the status of the mezzanine loans to
that of secured debt continues.
As previously announced, the October 2020 debt restructuring
agreements envisage the interest rate applicable to the mezzanine
debt being reduced from 15% to 7% once the senior debt is repaid
and the elevation of the mezzanine debt to "new" senior debt is
complete.
The majority mezzanine lender, MTL Luxemburg, Nick Candy's
investment vehicle (holding 70.7% of the mezzanine debt), has
confirmed in writing that, subject to completion of the elevation
documents within a reasonable period, the interest rate on its
portion of the mezzanine debt will reduce to 7% per annum from 15%
per annum as from 3 November 2022 (being the date that the Company
could have fully repaid the Senior Facility, but for the
requirements of the elevation).
The minority 29.3% mezzanine debt lender, the RHL Group, has not
confirmed the same in writing; however, the Company is hopeful the
RHL Group will apply the 7% interest rate from 3 November 2022 and
that this will be formalised once the elevation documents are
completed.
Total mezzanine debt payments of US$11.5 million were made
during Q4 2023 (Q3 2023: US$18.5 million).
The net debt position of the Group as at 31 December 2023 was
US$19.9 million (Q3 2023: US$30.6 million). Cash holdings at 31
December 2023 were US$0.9 million (30 September 2023: US$0.9
million).
Mining Operations
Extended wet weather periods resulted in mining production of
ore and waste for Q4 2023 being slightly below forecast at 2.83Mt
(Q3 2023: 3.49Mt), with a total of 534Kt of ore mined in Q4 2023
(Q3 2023: 566kt). Mining activities were also impacted from
encountering illegal miners unmapped old underground workings.
The exploration drill programme in Stages 4 and 5, undertaken
with the objective of identifying new gold resources both in and
near-to the current pit-shell design, was completed with no
material gold discoveries that have the potential for a significant
increase in the projected life of mine.
Process Plant
During Q4 2023 most aspects of the process plant performed
adequately, although a combination of low head grade and high
sulphur resulted in lower recoveries.
Gold produced during Q4 2023 was 17,626 ounces (Q3 2023: 22,034
ounces). Throughput for Q4 2023 was 533Kt (Q3 2023: 483Kt) at a
recovery rate of 85.9% (Q3 2023: 88.7%).
Planned downtime included scheduled maintenance to replace the
SAG mill liners. Unplanned downtime consisted mainly of repairs to
the SAG mill girth gear and pinion and to tails lines.
Residual Storage Impoundment ("RSI")
The RSI dam-wall is at its final height and the d am water
freeboard remains well above design minimum levels. Earthworks for
the construction of the RSI final in-rock spillway are well
advanced and continuing.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 21 million hours worked without a lost-time reportable injury
as at the date of this announcement.
Environment and Compliance
Compliance matters continue to be successfully monitored, and
the mine remains compliant, with no outstanding material
issues.
Community & Government Relations
The Company continues to receive strong support from local
communities and government agencies, receiving several government
and industry awards. Please refer to the 11 December 2023
announcement.
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.
- -
-
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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