Quarterly Update To 30 September 2023
No summary for this filing – the full text is below.
Select text to share a quote on X · sign in to keep highlights & notes in your MTL notes
Ø Gold revenue of US$42.4 million (Q2 2023: US$49.1 million).
Ø Gold sales of 22,043 ounces sold at an average realised gold price of US$1,926 per ounce (Q2 2023: 24,744 ounces at an average US$1,984 per ounce).
Ø Positive free cash flow of US$19.0 million (Q2 2023: US$24.1 million).
Ø Elevation of mezzanine debt to secured status is progressing to execution stage, however uncertainty remains over the interest rate, as well as the date of its application, which will be applied to the outstanding loan in the period prior to completion of the elevation.
Ø Mezzanine debt repayments of US$18.5 million (Q2 2023: US$20.7 million).
Ø Net debt as at 30 September 2023 was US$30.6 million (30 June 2023: US$48.3 million).
Mining Operations
Ø Mining production of ore and waste was above forecast at 3.30Mt (Q2 2023: 3.49Mt), with a total of 568Kt of ore mined in Q3 2023 (Q2 2023: 566Kt).
Processing Operations
Ø Gold production of 22,034 ounces (Q2 2023: 24,235 ounces) recovered from 483Kt at a head grade of 1.60g/t (Q2 2023: 522Kt at a head grade of 1.66g/t).
Ø Gold recovery of 88.7% (Q2 2023: 86.9%).
Darren Bowden, CEO of Metals Exploration, commented:
"This has been another very strong operational quarter at Runruno with mining production above forecast with excellent gold recovery in our processing operations. Although a lower head grade is expected in the remaining quarter of the year we look forward to a strong finish to the year; whilst maintaining focus on our exceptional health and safety standards. I would also like to congratulate the team for being nominated as the Philippines national representative in the Association of Southeast Asian Nations ("ASEAN") mining industry awards in both the mining and processing categories; and further being shortlisted in the final three candidates in both categories."
Production and Finance Summary
| Runruno Project Report | Quarter | Quarter | FY 2023 | FY 2022 | |
|---|---|---|---|---|---|
| FY 2023 | Actual | Actual | Actual | Actual | |
| PHYSICALS | Units | Q3 2023 | Q3 2022 | 9 Months | 9 Months |
| Mining | |||||
| Ore Mined | Tonnes | 567,816 | 380,071 | 1,415,839 | 1,669,194 |
| Waste Mined | Tonnes | 2,731,344 | 3,264,442 | 8,117,273 | 7,212,607 |
| Total Mined | Tonnes | 3,299,160 | 3,644,513 | 9,533,112 | 8,881,802 |
| Au Grade Mined | g/tonne | 1.49 | 1.49 | 1.55 | 1.19 |
| Strip Ratio | 4.48 | 8.57 | 5.43 | 45.24 | |
| Processing | |||||
| Ore Milled | Tonnes | 482,743 | 455,907 | 1,551,133 | 1,473,165 |
| Au Grade | g/tonne | 1.60 | 1.26 | 1.51 | 1.15 |
| S 2 Grade | % | 1.46 | 1.80 | 1.43 | 1.23 |
| Au Milled (contained) | Ounces | 24,850 | 18,541 | 75,551 | 54,283 |
| Recovery | % | 88.7 | 84.8 | 89.4 | 86.7 |
| Au Recovered/Poured | Ounces | 22,034 | 15,715 | 67,568 | 47,063 |
| Sales | |||||
| Au Sold | Ounces | 22,043 | 14,980 | 68,230 | 45,641 |
| Au Price | US$/oz | 1,926 | 1,714 | 1,935 | 1,825 |
| FINANCIALS (Unaudited) | |||||
| Revenue | |||||
| Gold Sales | (US$000's) | 42,448 | 25,676 | 131,999 | 83,298 |
| Operating Costs - Summary | |||||
| Mining | (US$000's) | 5,280 | 5,907 | 15,747 | 19,214 |
| Processing | (US$000's) | 8,322 | 7,675 | 26,135 | 21,971 |
| G&A | (US$000's) | 2,816 | 2,557 | 8,718 | 7,873 |
| Total Operating Costs | (US$000's) | 16,419 | 16,139 | 50,599 | 49,059 |
| Excise Duty | (US$000's) | 1,708 | 1,045 | 5,318 | 3,362 |
| UK/Philippine G&A | (US$000's) | 2,180 | 1,684 | 6,841 | 6,467 |
| Total Direct Production Costs | (US$000's) | 20,307 | 18,869 | 62,658 | 58,888 |
| Net Cash Income | (US$000's) | 22,141 | 6,807 | 69,241 | 24,410 |
| Total Capital Costs | (US$000's) | 3,150 | 2,634 | 8,357 | 6,672 |
| Total non-cash costs | (US$000's) | 6,340 | 4,030 | 21,704 | 11,712 |
| Free Cashflow | ( US$000's) | 18,991 | 4,173 | 60,885 | 17,737 |
| Cash Cost / oz Sold - C1 | US$/oz | 736 | 989 | 792 | 970 |
| Cash Cost / oz Sold - AISC | US$/oz | 1,055 | 1,347 | 1,092 | 1,332 |
Note: AISC includes all UK Corporate costs.
Review of Operations
Q3 2023 operations produced another strong quarter result for the Company. Gold sales for Q3 2023 were US$42.4 million (Q2 2023: US$49.1 million), at an average realised gold price of US$1,926 per ounce (Q2 2023: average realised gold price of US$1,984 per ounce); producing a positive free cash flow of US$19.0 million (Q2 2023: US$24.1 million).
Finance
The process of elevating the status of the mezzanine loans to that of secured debt continues and the process of executing the relevant documents is expected to be completed during Q4 2023.
As previously advised, 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 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$18.5 million were made during Q3 2023 (Q2 2023: US$20.7 million).
The net debt position of the Group as at 30 September 2023 was US$30.6 million (30 June 2023: US$48.3 million). Cash holdings as at 30 September 2023 were US$0.9 million (30 June 2023: US$1.0 million).
Mining Operations
Mining production of ore and waste for Q3 2023 was above forecast at 3.30Mt (Q2 2023: 3.49Mt), with a total of 568Kt of ore mined in Q3 2023 (Q2 2023: 566kt).
An additional six drill holes are planned to complete the exploration 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. To date, this drilling has not produced any material gold discoveries significantly reducing the potential for life of mine extensions.
Process Plant
During Q3 2023, most aspects of the process plant performed adequately, although BIOX continues to under-perform, however ongoing engineering improvements to the cooling circuits within the BIOX process are expected to deliver a sustained increase in performance.
Gold produced during Q3 2023 was 22,034 ounces for the quarter (Q2 2023: 24,235 ounces). Throughput for Q3 2023 was 483Kt at a head grade of 1.60g/t (Q2 2023: 522Kt at a head grade of 1.66g/t) and had a recovery rate of 88.7% (Q2 2023: 86.9%). The expectation is that, in Q4 2023, the trend of decreasing head grade is set to continue.
Planned downtime included scheduled maintenance on the SAG mill, while unplanned downtime consisted mainly of repairs to tails lines, tails line pump change overs and temporary BIOX failure due to power outages.
Residual Storage Impoundment ("RSI")
The RSI dam-wall is at its final height and the dam 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
Environment and Compliance
Community & Government Relations
The Company continues to receive strong support from local communities and government agencies. The operations have been nominated for several government industry awards which will be awarded before the end of the year.
-
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.