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Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
Mandalay Resources (TSX: MND) announced this week that despite all the challenges that came with 2020, it was able to meet its full-year production guidance with a consolidated 103,444 ounces of gold equivalent produced and it also achieved 35% year-over-year production growth.
In a press release, Mandalay said that last year was so positive for the company that it even registered the highest quarterly saleable gold production since Q4-2017, with 24,488 saleable gold ounces produced in the last quarter of 2020.
“Costerfield was a high performing anchor asset that drove the company’s operational and financial turnaround, producing and selling record amounts of both gold and antimony for the year,” Dominic Duffy, Mandalay Resources president and CEO, said in the media brief.
“The high-grade Youle vein continued to deliver excellent results in the fourth quarter of 2020, as head grades averaged 11.22 g/t gold and 3.5% antimony processed. Overall, Costerfield produced 15,099 saleable gold equivalent ounces during the fourth quarter of 2020 and 58,148 ounces of gold equivalent for full-year 2020.”
In 2020, Mandalay registered the highest quarterly saleable gold production since Q4-2017
The gold-antimony Costerfield operation is located in the state of Victoria, in southeastern Australia. According to Duffy, compared on an annual basis, the mine’s 2020 production rate increased by over 2 times thanks to the high-grade ore of the Youle vein. Thus, for 2021, production is expected to be between 53,000 and 60,000 ounces of saleable gold equivalent.
Duffy also praised the performance of Mandalay’s Björkdal operation in Skellefteå, northern Sweden, whose output for the full-year 2020 was 45,296 ounces of saleable gold.
“[The year] 2020 was a transitional year for Björkdal operationally, one in which is setting the foundation for an expected improved production profile in 2021 as we continue to institute the steady ramp-up in supplying the mill with higher-margin underground ore, more scheduled stoping and advancing development into Aurora’s higher-grade lower levels,” Duffy said.
“For 2021, we are forecasting a significant production increase at Björkdal, with expected production of 52,000 – 57,000 gold ounces.”
Based on these results, Mandalay predicts that its two core assets will produce between 105,000 and 117,000 ounces of gold equivalent in 2021 at $800 – $1,000 and $1,100 – $1,350 per ounce cash costs and all-in sustaining cost, respectively.
Besides ramping up production, the Canadian miner also wants to focus on exploration in the year ahead, with increased spending and drilled meters at both sites over the course of 2021.
“We expect this to unlock further value and extend the mine life of our assets,” Duffy said.
3 Comments
Nathan
I have never really looked at them before. How do they have a market cap below 200 million with these results? Can anybody let me know if I’m missing something
Albert
Cerro Bayo…
https://www.mining.com/mandalay-resources-declares-force-majeure-flooded-chilean-mine/
https://www.mining.com/mandalay-resources-mothballs-cerro-bayo-mine-chile/
And although the current numbers are pleasing, they have not been there for long… and resources at e.g. Fosterville are rather limited. And ore grades turned out to be rather variable with lower recovery rates in the past.
And I am pretty sure quite a number of shareholders and interested people remember times when the company paid dividends and had to stop due to financial issues (accompanied by a subsequent and significant debt financing)
Nick
Mandalay has been through the wringer in the past few years. In 2017, they had an accident at their 3rd mine in Chile in which 2 miners were killed; they suspended production there, and their share price was cut from .60 to .30 or so. The next year, their contractor at Bjorkdal pulled out, and they experienced a haulage crunch that cut their revenue right at a time when debt was coming due. In 2019, they did a major financing that doubled their share count, then did a 10/1 rollback, to get rid of their pressing debt. It was right at this time, when they were on the verge of going bankrupt, that they had some real success drilling at Costerfield, and found a higher-grade lode than any previously know. Without this, the company probably would have been finished. They developed this lode and their 2020 production is a testament to how successful it has been. They had to take on more debt in March of 2020 to retire some long-term debt, and have a hedging agreement for about 1/3 of their production that will expire in 2.5 years.
They’ve had Costerfield for 12 years, and it has always had a 3-4 year mine life. Right now they have an aggressive drilling program going to stretch this further, which includes a deep zone similar to what was discovered at Fosterville. Their Swedish mine is going excellently, they’re cleaning up the balance sheet, and the stock has broken out past its recent high of 2.12. They should benefit a lot, with higher gold prices, increasing production, and some real hope for improved reserves (in Sweden too). Check out their presentation for more details.