TIDMMTL
RNS Number : 5117G
Metals Exploration PLC
27 July 2021
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 JUNE 2021
Metals Exploration plc (AIM: MTL) ("Metals Exploration", the
"Company" or the "Group"), a Philippine gold producer, is pleased
to announce its quarterly results for Q2 2021.
Finance and corporate
-- Gold sold during Q2 2021 of 16,429 ounces at an average
realised gold price of US$1,807 per ounce (Q1 2021: 18,316 ounces
at an average gold price of US$1,788 per ounce).
-- Gold sales of US$29.7 million in Q2 2021 (Q1 2021: US$32.8 million).
-- Positive free cash flow of US$5.5 million in Q2 2021 (Q1 2021: US$11.5 million).
-- Senior debt repaid during Q2 2021 was US$8.3 million (Q1 2021: US$12.3 million).
-- Net debt as at 30 June 2021 was US$111.0 million (31 March 2021: US$112.7 million).
-- Appointment of new independent Non-executive Chairman and two
additional non-executive directors.
Mining Operations
-- No lost time injuries during the period.
-- Ore and waste mined for the quarter was below forecast, at
2.66Mt (Q1 2021: 2.43Mt) of which total ore mined was 288kt (Q1
2021: 423kt).
-- Access development to mine plan Stages 3 & 4, and
resettlement of the remaining illegal miners away from these areas
continues. Access to Stages 3 & 4 continues to be impacted.
Further actions in relation to access development and resettlement
activities will be made in the forthcoming quarters.
Processing Operations
-- Gold poured during Q2 2021 of 16,591 ounces (Q1 2021: 18,725 ounces).
-- Gold recovery for Q2 2021 was 80% (Q1 2021: 81.9%).
COVID-19 Impacts
-- The Philippines suffered from a surge in COVID-19 cases
during Q2 2021, including the Municipality of Quezon and
neighbouring cities/towns near the Runruno mine site.
-- The number of COVID-19 cases recorded amongst personnel at
the project site has reduced since quarter end.
-- All infected personnel and their traced close contacts have been/were isolated.
-- General access to mine site for non-operational personnel continues to be restricted.
-- Normal mining and processing operations continue notwithstanding COVID-19 pandemic impacts.
-- Despite ongoing and changing travel restrictions key senior
personnel were able to return to the mine site from 1 May 2021.
-- COVID-19 vaccinations for all Company employees have been
ordered and are due to be received during Q3 2021.
Darren Bowden, CEO of Metals Exploration, commented :
" The second quarter of the year, whilst having been a
challenging one, has seen the Company continue to produce strong
results from Runruno.
The safety of our staff remains a key priority, and we continue
to have an exceptional safety record with over 14 million hours
worked without a reportable injury as at the quarter-end. We also
continue to be stringent regarding COVID-19, especially in light of
the recent surge that beset the Philippines. We continue to take
appropriate actions to safeguard and help our staff and their
communities. It is also extremely satisfying that we will shortly
be able to offer all our staff COVID-19 vaccinations.
We believe we are well placed for the second half of 2021 to
continue delivering good operational progress at Runruno. We look
forward to providing further updates during the course of the
year."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2021 FY 2020
---------- ---------- ---------- ----------
FY 2021 Actual Actual Actual Actual
---------- ---------- ---------- ----------
PHYSICALS Units Q2 2021 Q2 2020 6 Months 6 Months
------------- ---------- ----------
Mining
------------- ---------- ----------
Ore Mined Tonnes 287,866 567,973 713,742 1,125,138
-------------- ---------- ----------
Waste Mined Tonnes 2,371,708 1,856,423 4,537,749 4,414,126
-------------- ---------- ----------
Total Mined Tonnes 2,659,574 2,424,396 5,251,491 5,539,264
-------------- ---------- ----------
Au Grade Mined g/tonne 1.10 1.46 1.27 1.44
-------------- ---------- ----------
Strip Ratio 7.42 3.27 5.92 3.92
---------- ----------
Processing
------------- ---------- ----------
Ore Milled Tonnes 511,536 544,980 1,048,290 1,039,806
-------------- ---------- ----------
Au Grade g/tonne 1.26 1.26 1.29 1.39
-------------- ---------- ----------
S(2) Grade % 1.17 1.20 1.11 1.28
-------------- ---------- ----------
Au Milled (contained) ounces 20,745 22,034 43,620 46,609
-------------- ---------- ----------
Recovery % 80.0 68.7 81.0 68.5
-------------- ---------- ----------
Au Recovered/Poured ounces 16,591 15,146 35,316 31,940
-------------- ---------- ----------
Sales
------------- ---------- ----------
Au Sold ounces 16,429 14,908 34,745 32,121
-------------- ---------- ----------
Au Price US$/oz 1,807 1,722 1,797 1,647
-------------- ---------- ----------
FINANCIALS (Unaudited)
------------------------- ------------- ---------- ----------
Revenue
------------- ---------- ----------
Gold Sales (US$000's) 29,682 25,669 62,439 52,891
-------------- ---------- ----------
Operating Costs
- Summary
------------- ---------- ----------
Mining (US$000's) 6,415 4,485 11,950 9,748
-------------- ---------- ----------
Processing (US$000's) 7,876 7,027 15,363 14,760
-------------- ---------- ----------
G&A (US$000's) 2,638 2,741 5,548 5,564
-------------- ----------
Total Operating
Costs (US$000's) 16,929 14,253 32,860 30,072
-------------- ----------
Excise Duty (US$000's) 1,190 1,031 2,541 2,127
-------------- ---------- ----------
UK/Philippine G&A (US$000's) 1,897 1,698 3,496 3,065
-------------- ---------- ----------
Total Direct Production
Costs (US$000's) 20,016 16,983 38,897 35,264
-------------- ---------- ----------
Net Cash Income (US$000's) 9,666 8,686 23,543 17,817
-------------- ---------- ----------
Total Capital Costs (US$000's) 4,209 2,640 6,553 6,416
-------------- ---------- ----------
Total non-cash costs (US$000's) 3,583 4,240 7,907 8,402
-------------- ---------- ----------
Free Cashflow ( US$000's) 5,457 6,046 16,989 11,210
-------------- ---------- ----------
Cash Cost / oz Sold
- C1 US$/oz 1,014 895 946 930
-------------- ---------- ----------
Cash Cost / oz Sold
- AISC US$/oz 1,458 1,229 1,309 1,279
-------------- ---------- ----------
Note: AISC includes all UK Corporate costs.
Review of Operations
During Q2 2021 the Philippines suffered from a new wave of
COVID-19 infection that spread across the country. This increase in
COVID-19 cases was particularly evident in the neighbouring
cities/towns near the Runruno mine site. Despite enhanced on-site
testing and strict site access protocols approximately 35 on-site
cases of COVID-19 were detected. These cases were concentrated
within the administrative and other supporting non-operational
departments, and to date there has been no interruption to
mining/processing operations. Importantly, at quarter end the
frequency in identified COVID-19 infections both within Company
employees/contractors and the general local population has reduced
substantially, with this trend continuing post-quarter end.
The COVID-19 cases detected and the Company's responses have
been reported to the appropriate government agencies and the
Company continues to be compliant with all relevant government
directives with regards COVID-19.
Other than the recent on-site outbreak of COVID-19, the main
operational disruption from the pandemic has been the ongoing and
regularly changing restrictions on the movement of people in and
out of the country.
In mid-March, the Philippine government implemented a ban on
international personnel returning to the country. This travel ban
was lifted on 1 May 2021 and key senior personnel have managed to
travel back to the project site. The unpredictability of
international travel brought about by the changing nature of the
COVID-19 pandemic, will continue to challenge the Company's ability
to maintain its senior expat management on-site roster.
Notwithstanding the above issues, Q2 2021 resulted in gold sales
of US$29.7 million (Q1 2021: US$32.8 million), at an average
realised gold price of US$1,807 per ounce (Q1 2021: average gold
price of US$1,788 per ounce); producing a positive free cash flow
of US$5.5 million (Q1 2021: US$11.5 million).
During Q2 2021 a total of US$8.3 million (Q1 2021: US$12.3
million) in debt repayments were made, bringing the net Group debt
position as at 30 June 2021 to US$111.0 million (Q1 2021: US$112.7
million).
Mining Operations
Mining production of ore and waste for Q2 2021 was below
forecast at 2.66Mt (Q1 2021: 2.43Mt), and the total ore mined for
Q2 2021 of 288Kt (Q1 2021: 423kt). Total material movement has been
negatively impacted by reliability issues with the Company's
equipment fleet. Longer than normal delays in sourcing certain
essential replacement parts continue to impact in this area.
Mining in Stage 1 is well advanced with backfill operations into
this area on track to commence in Q4 2021.
Notwithstanding continued delays in completing the resettlement
of the illegal miners from Stages 3 and 4 of the Project site, the
new access road to mine plan Stages 3 and 4 has been completed and
preliminary development work in Stage 3 and 4 has commenced.
Although the Company does not have full access to these areas,
negatively impacting the Company's mining schedule, the programme
of infill resource and mine plan drilling is underway in mine plan
Stages 3 and 4. The Company continues to work diligently with the
local authorities to complete the process of removal and
resettlement.
Process Plant
Throughput for Q2 2021 was 512kt (Q1 2021: 537kt). Gold
production for Q2 2021 was 16,591 ounces at a recovery rate of
80.0% (Q1 2021: 18,725 ounces at a recovery rate of 81.9%). Ongoing
delays in accessing mine plan Stages 3 and 4 continues to affect
the head grade with higher grade material from Stage 3 now not
scheduled to be accessed until Q1 2022.
During the quarter, major shutdowns were undertaken to install
the SAG mill variable speed drive and to replace the SAG mill
liners. Unplanned downtime consisted in the main of tails line
failures and conveyor belt repairs.
The 4(th) blower to BIOX will be installed during Q3 2021, with
the aim to increase the available air for, and hence the efficiency
of, the BIOX circuit.
Implementation of minor design modifications to the flotation
circuit continue; with the aim to increase the consistency of gold
recovery of this circuit.
Residual Storage Impoundment ("RSI")
RSI construction continues with the d am water freeboard level
well above design levels. Studies into designing the RSI final
in-rock spillway have determined the optimal design and detailed
planning is underway. The Stage 6 lift to the dam was completed
during the quarter under the supervision of international
engineering consultants, GHD.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 14 million man hours without a reportable injury as at the
quarter end.
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, in conjunction with relevant government agencies,
continues in its efforts to complete the removal of the remaining
illegal miners, including their infrastructure and dwellings, from
those areas scheduled to be mined as part of mine plan Stages 3 and
4. Further actions in relation to access development and the
resettlement activities will be made in the forthcoming
quarters.
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 (Withdrawal) Act
2018. 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
www.metalsexploration.com
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 & Broker: HANNAM & PARTNERS
-------------------------
Nilesh Patel +44 (0) 207 907 8500
-------------------------
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
-------------------------
Jos Simson, Nick Elwes +44 (0) 207 920 3150
-------------------------
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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END
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