TIDMMTL
RNS Number : 1575Z
Metals Exploration PLC
21 January 2022
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 31 DECEMBER 2021
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 2021, which saw
the Company achieve record annual gold sales, sales proceeds and
gold poured in FY2021.
Finance and corporate
-- Record gold sales in FY2021 of 72,447 ounces (FY2020: 68,510 ounces).
-- Record gold sale proceeds in FY2021 of US$129.8 million (FY2020: US$122.1 million).
-- Gold sold during Q4 2021 of 18,505 ounces at an average
realised gold price of US$1,794 per ounce (Q3 2021: 19,197 ounces
at an average gold price of US$1,782 per ounce).
-- Gold sales of US$33.2 million in Q4 2021 (Q3 2021: US$34.2 million).
-- Positive free cash flow of US$10.1 million in Q4 2021 (Q3 2021: US$11.2 million).
-- Senior debt repaid during FY2021 was US$39.7 million, with Q4
2021 payments of US$11.8 million (Q3 2021: US$7.3 million).
-- Net debt as at 31 December 2021 was US$98.9 million (30 June
2021: US$106.2 million, 31 December 2020 US$120.4 million). Strong
cashflow generated from operations has enabled accelerated debt
repayments, putting the Company on a stronger future footing.
Mining Operations
-- No lost time injuries occurred during the period, with over
15 million hours worked without a reportable injury .
-- Ore mined increased for the quarter to 637kt (Q3 2021: 546kt)
with waste mined at 2.24Mt (Q3 2021: 2.09Mt).
-- During the quarter, the resettlement of illegal miners and
their infrastructure away from Stages 3 & 4 was further
advanced.
-- In-pit dumping of waste material commenced in early Q1 2022.
Processing Operations
-- Record gold poured in FY2021 of 73,206 ounces (FY2020: 67,552 ounces).
-- Gold recovery for FY2021 was 83.7% (FY2020: 72.2%) - up 16.2% on FY2020.
-- Gold poured during Q4 2021 of 18,435 ounces (Q3 2021: 19,456 ounces).
-- Gold recovery for Q4 2021 was 89.0% (Q3 2021: 84.4%).
COVID-19 Impacts
-- Although the number of COVID-19 cases recorded amongst
personnel at the project site increased during the quarter,
operations were largely unaffected.
-- All infected personnel and their traced close contacts have been/were isolated.
-- Typical mining and processing operations continue
notwithstanding COVID-19 pandemic impacts.
-- COVID-19 vaccine programme of all staff well advanced, with
over 95% of all employees having had at least one vaccination
dose.
FY2022 Production Guidance
-- Gold production: 67,000 - 71,000 ounces.
-- AISC: US$1,275 - US$ 1,325 per ounce.
Darren Bowden, CEO of Metals Exploration, commented :
"Q4 was another solid quarter, leading to the Company achieving
record FY2021 numbers in terms of annual gold sales, sale proceeds,
and gold poured; excellent results given the ongoing COVID-19
situation and restrictions. On that note, the safety of all our
employees and their families remains a priority, and we are proud
that our vaccination programme is well advanced. We will continue
to drive this forward in the coming months. We are also delighted
to be proceeding and advancing with the Stage 3 mine
development.
"Given the team we have in place and these results, we believe
that we are well placed for the year ahead to successfully deliver
our development plans and production guidance at Runruno; whilst
continuing to reduce our debt burden. In addition, during the year
ahead the executive team will focus on both internal and external
growth opportunities, building on the solid foundation that has
been established.
"I would like to thank all our employees for their continued
efforts, and I look forward to providing further updates during the
year."
Production and Finance Summary
Runruno Project
Report Quarter Quarter FY 2021 FY 2020
------------------- -------------------- ------------------- --------------------
FY 2021 Actual Actual Actual Actual
------------------- -------------------- ------------------- --------------------
PHYSICALS Units Q4 2021 Q4 2020 12 Months 12 Months
------------- -------------------- --------------------
Mining
------------- -------------------- --------------------
Ore Mined Tonnes 636,916 661,256 1,896,808 2,473,400
-------------- -------------------- --------------------
Waste Mined Tonnes 2,243,456 1,828,605 8,806,216 8,922,496
-------------- -------------------- --------------------
Total Mined Tonnes 2,880,372 2,489,861 10,771,074 11,395,896
-------------- -------------------- --------------------
Au Grade Mined g/tonne 1.19 1.30 1.21 1.40
-------------- -------------------- --------------------
Strip Ratio 3.42 2.36 4.43 3.32
-------------------- --------------------
Processing
------------- -------------------- --------------------
Ore Milled Tonnes 537,208 526,547 2,136,875 2,057,274
-------------- -------------------- --------------------
Au Grade g/tonne 1.15 1.47 1.26 1.41
-------------- -------------------- --------------------
S(2) Grade % 0.91 1.14 0.97 1.22
-------------- -------------------- --------------------
Au Milled
(contained) Ounces 19,923 24,946 86,611 93,568
-------------- -------------------- --------------------
Recovery % 89.0 79.8 83.7 72.2
-------------- -------------------- --------------------
Au
Recovered/Poured Ounces 18,435 19,907 73,206 67,552
-------------- -------------------- --------------------
Sales
------------- -------------------- --------------------
Au Sold Ounces 18,505 20,295 72,447 68,510
-------------- -------------------- --------------------
Au Price US$/oz 1,794 1,869 1,792 1,782
-------------- -------------------- --------------------
FINANCIALS
(Unaudited)
-------------------- ------------- -------------------- --------------------
Revenue
------------- -------------------- --------------------
Gold Sales (US$000's) 33,202 37,936 129,849 122,099
-------------- -------------------- --------------------
Operating Costs
- Summary
------------- -------------------- --------------------
Mining (US$000's) 6,254 6,348 24,434 21,563
-------------- -------------------- --------------------
Processing (US$000's) 8,295 7,234 31,197 29,757
-------------- -------------------- --------------------
G&A (US$000's) 2,861 2,894 11,027 11,191
-------------- --------------------
Total Operating
Costs (US$000's) 17,409 16,476 66,658 62,510
-------------- --------------------
Excise Duty (US$000's) 1,350 1,504 5,255 4,895
-------------- -------------------- --------------------
UK/Philippine G&A (US$000's) 2,913 2,902 7,537 8,123
-------------- -------------------- --------------------
Total Direct
Production
Costs (US$000's) 21,672 20,882 79,450 75,529
-------------- -------------------- --------------------
Net Cash Income (US$000's) 11,529 17,054 50,400 46,570
-------------- -------------------- --------------------
Total Capital Costs (US$000's) 1,466 3,437 12,180 13,080
-------------- -------------------- --------------------
Total non-cash
costs (US$000's) 4,166 3,573 18,629 16,293
-------------- -------------------- --------------------
Free Cashflow ( US$000's) 10,063 13,617 38,219 33,490
-------------- -------------------- --------------------
Cash Cost / oz Sold
- C1 US$/oz 887 743 937 886
-------------- -------------------- --------------------
Cash Cost / oz Sold
- AISC US$/oz 1,197 1,129 1,281 1,259
-------------- -------------------- --------------------
Note: AISC includes all UK Corporate costs.
Review of Operations
The Philippines continues to suffer from a relatively high
number of positive COVID-19 cases. Importantly, however, the
Company is well advanced with its vaccination programme, with over
95% of all employees having had at least one vaccination dose.
Approximately 50 positive COVID-19 cases were detected on the
Project site during Q4 2021. The Company's responses have been
reported to the appropriate government agencies, and the Company
continues to be compliant with all relevant government directives
regarding COVID-19.
Since the period ended, however, the more contagious Omicron
COVID-19 variant has reached the mine site with numerous positive
cases recorded. Consistent with worldwide conclusions, there has
been no serious illness impact on employees but submissions have
been lodged with local government agencies to adapt isolation
protocols, similar to those being adopted by many countries to deal
with the rapid spread of the Omicron variant.
The on-site COVID-19 positive cases have not impacted operations
significantly. The main operational disruption from the COVID-19
pandemic continues to be the ongoing and regularly changing
restrictions on the movement of people in and out of the country,
increases in the cost of production inputs and supply delays. The
unpredictability of international travel remains but appears to
becoming easier to navigate, however, the cost of reagents and fuel
are negatively impacting the operating surplus.
Notwithstanding the above issues, Q4 2021 resulted in gold sales
of US$33.2 million (Q3 2021: US$34.2 million), at an average
realised gold price of US$1,794 per ounce (Q3 2021: average gold
price of US$1,782 per ounce); producing a positive free cash flow
of US$10.1 million (Q3 2021: US$11.2 million).
During FY2021 a total of US$39.7 million in debt repayments were
made, including Q4 2021 payments of US$11.8 million (Q3 2021:
US$7.3 million). The net Group debt position as at 31 December 2021
was US$98.9 million (Q3 2021: US$106.2 million).
Mining Operations
Mining production of ore and waste for Q4 2021 was below
forecast at 2.88Mt (Q3 2021: 2.64Mt), and the total ore mined for
Q4 2021 of 637Kt (Q3 2021: 546kt). The total material movement was
negatively impacted by reliability issues with the Company's
equipment fleet. Longer than normal delays in sourcing certain
essential replacement parts continue to impact this area.
Mining in Stage 1 was completed during Q4 2021, and waste
backfill into this area has commenced in early 2022.
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 Stages 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 removal and resettlement of all
illegal miners in these areas.
Process Plant
Throughput for Q4 2021 was 537kt (Q3 2021: 551kt). Gold
production for Q4 2021 was 18,435 ounces at a recovery rate of
89.0% (Q3 2021: 19,456 ounces at a recovery rate of 84.4%).
During the quarter, the fourth blower to the BIOX circuit became
fully operational, improving the supply of air to (and hence
overall performance of) the BIOX system. Tails line failures and
conveyor belt, crusher, return water lines and pump repairs were
responsible for most of the unplanned downtime. In addition, the
SAG mill variable speed drive (installed in Q3 2021) suffered a
major failure rendering it inoperable. It is unlikely that this
piece of equipment will be replaced due to the excessive cost of
re-installing a new variable speed drive compared to the potential
marginal production benefits it may produce, and given the ongoing
doubt that a new system will be successfully commissioned.
Residual Storage Impoundment ("RSI")
RSI construction continued 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.
Occupational Health & Safety
Runruno continues to record an exceptional safety record with
over 15 million hours worked without a 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
In conjunction with relevant government agencies, the Company
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. As of this report, over 700 occupants have been safely relocated
without incident. 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:
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
Matt Hasson, Franck Nganou +44 (0) 207 907 8500
Public Relations: TAVISTOCK COMMUNICATIONS
LIMITED
Jos Simson, Nick Elwes,
Oliver Lamb +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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