Quarterly Update to 30 June 2022

RNS Number : 0115T

Metals Exploration PLC

20 July 2022

 

METALS EXPLORATION PLC

QUARTERLY UPDATE TO 30 JUNE 2022

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 Q2 2022.

Finance and corporate

· Gold sold during Q2 2022 of 14,992 ounces at an average realised gold price of US$1,858 per ounce (Q1 2022: 15,685 ounces at an average realised gold price of US$1,898 per ounce).

· Gold sales of US$27.8 million in Q2 2022 (Q1 2022: US$29.8 million).

· Positive free cash flow of US$5.4 million in Q2 2022 (Q1 2022: US$8.2 million).

· Senior debt repaid during Q2 2022 of US$5.0 million (Q1 2022: US$12.0 million).

· Senior debt outstanding as at 30 June 2022 was US$8.1 million (31 March 2022: US$12.9 million).

· Net debt as at 30 June 2022 was US$92.9 million (31 March 2022: US$94.2 million).

Mining Operations

· No lost time injuries occurred during the period, with over 17 million hours worked without a reportable injury .

· Ore mined decreased for the quarter to 510kt (Q1 2022: 779kt) with waste mined at 2.47Mt (Q1 2022: 3.15Mt).

Processing Operations

· Gold recovered during Q2 2022 of 16,529 ounces (Q1 2022: 14,819 ounces) from a higher head grade of 1.18g/t (Q1 2022: 1.02g/t).

· Gold recovery for Q2 2022 was 86.6% (Q1 2022: 89.0%).

COVID-19 Impacts

· Operations continuing to be largely unaffected by COVID-19 impacts.

· COVID-19 vaccine programme well advanced, with over 95% of all employees having had at least two vaccination doses.

Darren Bowden, CEO of Metals Exploration, commented :

"Runruno has maintained a positive trend in recovery and we are delighted that the operation is now able to sustain an >85% average recovery.  The project is well positioned for a strong second half of 2022 as the grade in the mine improves once the higher grade ore in Stage 3 is accessed.  The Company remains on track to meet our 2022 production guidance and to repay the senior debt during Q4 2022 as forecast, which will further strengthen our balance sheet.

"I would also like to take this opportunity to thank the operations team for an outstanding safety performance as the Company passes 17 Million man-hours without a lost time injury." 

Production and Finance Summary

Runruno Project Report			Quarter	Quarter		FY 2022	FY 2021
FY 2022			Actual	Actual		Actual	Actual
PHYSICALS	Units		Q2 2022	Q2 2021		6 Months	6 Months
Mining
Ore Mined	Tonnes		509,825	287,866		1,289,123	713,742
Waste Mined	Tonnes		2,467,685	2,371,708		5,619,472	4,537,749
Total Mined	Tonnes		3,002,244	2,659,574		6,965,979	5,251,491
Au Grade Mined	g/tonne		1.18	1.10		1.10	1.27
Strip Ratio			4.77	7.42		4.28	5.92
Processing
Ore Milled	Tonnes		510,214	511,536		1,017,258	1,048,290
Au Grade	g/tonne		1.16	1.26		1.09	1.29
S2 Grade	%		1.10	1.17		0.98	1.11
Au Milled (contained)	Ounces		19,087	20,745		35,742	43,620
Recovery	%		86.6	80.0		87.7	81.0
Au Recovered/Poured	Ounces		16,529	16,591		31,348	35,316
Sales
Au Sold	Ounces		14,992	16,429		30,676	34,745
Au Price	US$/oz		1,858	1,807		1,878	1,797
FINANCIALS (Unaudited)
Revenue
Gold Sales	(US$000's)		27,849	29,682		57,622	62,439
Operating Costs - Summary
Mining	(US$000's)		6,972	6,415		13,307	11,950
Processing	(US$000's)		6,926	7,876		14,296	15,363
G&A	(US$000's)		2,616	2,638		5,316	5,548
Total Operating Costs	(US$000's)		16,515	16,929		32,919	32,860
Excise Duty	(US$000's)		1,099	1,190		2,317	2,541
UK/Philippine G&A	(US$000's)		3,102	1,897		4,783	3,496
Total Direct Production Costs	(US$000's)		20,716	20,016		40,019	38,897
Net Cash Income	(US$000's)		7,133	9,666		17,603	23,543
Total Capital Costs	(US$000's)		1,775	4,209		4,039	6,553
Total non-cash costs	(US$000's)		3,009	3,583		7,682	7,907
Free Cashflow	( US$000's)		5,358	5,457		13,564	16,989
Cash Cost / oz Sold - C1	US$/oz		938	1,014		960	946
Cash Cost / oz Sold - AISC	US$/oz		1,336	1,458		1,323	1,309

Note: AISC includes all UK Corporate costs.

Review of Operations

Gold sales for Q2 2022 were US$27.8 million (Q1 2022: US$29.8 million), at an average realised gold price of US$1,858 per ounce (Q1 2022: average gold price of US$1,898 per ounce); producing a positive free cash flow of US$5.4 million (Q1 2022: US$8.2 million).

During Q2 2022, debt repayments of US$5.0 million (Q1 2022: US$12.0 million) were made. The net Group debt position as at 30 June 2022 was US$92.9 million (Q1 2022: US$94.2 million). Cash holdings at 30 June 2022 were $0.3million (31 March 2022: $0.7 million).

Mining Operations

Mining production of ore and waste for Q2 2022 was above forecast at 3.00Mt (Q1 2022: 3.96Mt), with a total of 510Kt of ore mined in Q2 2022 (Q1 2022: 779kt).

Back-fill of waste into Stage 1 has continued with mining in Stage 2 expected to be completed during Q3 2022.

Although the removal and resettlement of illegal miners from Stages 3 and 4 of the Project site is largely complete, full access to Stage 3 has not yet been achieved. Despite several court orders in the Company's favour, access to a key area of Stage 3 has not yet been achieved. This delay has resulted in changes to the Company mine plan such that higher grade material in Stage 3 is now scheduled for mining during H2 2022. These access issues have also temporarily halted the exploration drill programme planned for Stages 4 and 5.

Process Plant

Throughput for Q2 2022 was 510kt (Q1 2022: 507kt). Gold production for Q2 2022 was 16,529 ounces at a recovery rate of 86.6% (Q1 2022: 14,819 ounces at a recovery rate of 89.0%). The higher quarter production was achieved notwithstanding continuing issues with the BIOX bacteria culture reflecting a higher head grade of 1.18g/t (Q1 2022: 1.02g/t).

Further power failures were experienced during Q2 2022 that contributed to a lack of stability of the BIOX bacteria culture; giving rise to resultant recovery losses. In addition, studies continue in an effort to identify an as yet unknown contaminant that developed in the return water sources that were being used to feed the BIOX circuit. The combined impact of these issues resulted in the BIOX circuit performance to under-perform during the quarter.

A major upgrade to the process plant return water and cooling systems is continuing.

Residual Storage Impoundment ("RSI")

Work continued on the final RSI dam-wall raise. D am water freeboard remains well above design minimum levels. Detailed planning of the RSI final in-rock spillway is advancing.

Occupational Health & Safety

Runruno continues to record an exceptional safety record with over 17 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 few remaining illegal miners, including their infrastructure and dwellings, from those areas scheduled to be mined as part of mine plan Stages 3 and 4, and those areas the Company wishes to conduct exploration drilling in Stages 4 and 5.

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.

-  END  -

For further information please visit or contact:

Metals Exploration PLC
Via Tavistock Communications Limited	[phone]
Nominated & Financial Adviser:	STRAND HANSON LIMITED
James Spinney, James Dance, Rob Patrick	[phone]
Financial Adviser & Broker:	HANNAM & PARTNERS
Matt Hasson, Franck Nganou	[phone]
Public Relations:	TAVISTOCK COMMUNICATIONS LIMITED
Jos Simson, Nick Elwes	[phone]

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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