Quarterly Update to 30 September 2024
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
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 Q3 2024, reporting record quarterly positive free cash flow and record quarterly gold revenue.
Corporate
Ø Completion of an off-market buy back of Runruno Holdings Limited's ("RHL") 18.6% shareholding.
Ø Introduction of a new strategic long-term shareholder - Drachs Investments.
Ø Completion of the acquisition of the Yamang Mineral Corporation Group ("YMC").
Finance
Ø Record quarterly positive free cash flow of US$27.9 million (Q2 2024: US$24.8 million).
Ø Record quarterly gold revenue of US$52.6 million (Q2 2024: US$46.7 million).
Ø Q3 2024 gold sales of 21,943oz sold at an average realised gold price of US$2,396 per oz (Q2 2024: 20,124 oz at an average US$2,320 per oz).
Ø YTD 2024 AISC of US$1,088 per oz (YTD 2023: US$1,092 per oz) - below the lower 2024 full year production guidance estimate of US$1,175 per oz.
Mining Operations
Ø Q3 2024 mining production of ore and waste was 2.63Mt (Q2 2024: 2.71Mt), with a total of 599Kt of ore mined in Q3 2024 (Q2 2024: 516Kt).
Processing Operations
Ø Q3 2024 gold production of 22,533 oz (Q2 2024: 19,529 oz) recovered from 521Kt at a head grade of 1.51g/t (Q2 2024: 518Kt at a head grade of 1.34g/t).
Ø Q3 2024 gold recovery of 89.0% (Q2 2024: 89.1%).
Exploration - Abra Project
Ø Pre-exploration soil geochemistry and airborne geophysics data highlights several drill targets.
Ø Government approval to commence drilling imminent, such that drilling of initial targets are expected to commence in Q4 2024
Ø Social licence activities ongoing, with widespread community support being encountered.
Darren Bowden, CEO of Metals Exploration, commented:
"This has been another excellent quarter for the Company with record quarterly gold revenue and free cash flow. Our disciplined approach to improving efficiencies at every echelon of the Company continues to yield demonstrable results, enabling us to benefit from the sustained robust gold price. In addition, we are delighted with the continued operational strength at Runruno, giving a quarter on quarter increase in ore mined whilst maintaining our exceptional safety credentials with over 24 million hours worked without a reportable injury.
"As we look beyond Runruno, our corporate activity in completing the RHL shareholding buy-back will allow the Board the freedom to act on its vision for the Company's future, which is now aligned to the wishes of our major shareholders. We have successfully completed the acquisition of the YMC Group and have already identified several drill targets from pre-exploration surveys. We look forward to commencing drilling in Q4 2024 once we gain governmental approval. Our objective is to replicate our success at our flagship asset.
"This is a highly exciting time for the Company. We have a producing asset performing well, some highly prospective exploration acreage where we believe we can mirror the success that we have delivered at Runruno, and are debt free with a strong balance sheet; whilst now being unrestricted to deliver our strategy of building a cash generative portfolio of projects through appropriate acquisition opportunities.
"We look forward to providing further updates in due course."
Production and Finance Summary
| Runruno Project Report | Quarter | Quarter | FY 2024 | FY 2023 | |
|---|---|---|---|---|---|
| FY 2024 | Actual | Actual | Actual | Actual | |
| PHYSICALS | Units | Q3 2024 | Q3 2023 | 9 Months | 9 Months |
| Mining | |||||
| Ore Mined | Tonnes | 599,078 | 567,816 | 1,772,008 | 1,415,839 |
| Waste Mined | Tonnes | 2,026,150 | 2,731,344 | 6,875,186 | 8,117,273 |
| Total Mined | Tonnes | 2,625,228 | 3,299,160 | 8,647,194 | 9,533,112 |
| Au Grade Mined | g/tonne | 1.62 | 1.49 | 1.46 | 1.55 |
| Strip Ratio | 3.18 | 4.48 | 3.76 | 5.43 | |
| Processing | |||||
| Ore Milled | Tonnes | 521,479 | 482,743 | 1,620,638 | 1,551,133 |
| Au Grade | g/tonne | 1.51 | 1.60 | 1.40 | 1.51 |
| S 2 Grade | % | 1.39 | 1.46 | 1.36 | 1.43 |
| Au Milled (contained) | Ounces | 25,329 | 24,850 | 72,818 | 75,551 |
| Recovery | % | 89.0 | 88.7 | 89.4 | 89.4 |
| Au Recovered/Poured | Ounces | 22,533 | 22,034 | 65,068 | 67,568 |
| Sales | |||||
| Au Sold | Ounces | 21,943 | 22,043 | 63,532 | 68,230 |
| Au Price | US$/oz | 2,396 | 1,926 | 2,261 | 1,935 |
| FINANCIALS (Unaudited) | |||||
| Revenue | |||||
| Gold Sales | (US$000's) | 52,574 | 42,448 | 143,660 | 131,999 |
| Operating Costs - Summary | |||||
| Mining | (US$000's) | 4,402 | 5,280 | 14,010 | 15,747 |
| Processing | (US$000's) | 9,231 | 8,322 | 26,780 | 26,135 |
| G&A | (US$000's) | 3,430 | 2,816 | 9,079 | 8,718 |
| Total Operating Costs | (US$000's) | 17,063 | 16,419 | 49,870 | 50,599 |
| Excise Duty | (US$000's) | 2,109 | 1,708 | 5,755 | 5,318 |
| UK/Philippine G&A | (US$000's) | 3,753 | 2,180 | 8,524 | 6,841 |
| Total Direct Production Costs | (US$000's) | 22,925 | 20,307 | 64,149 | 62,658 |
| Net Cash Income | (US$000's) | 29,649 | 22,141 | 79,510 | 69,241 |
| Total Capital Costs | (US$000's) | 1,749 | 3,150 | 5,255 | 8,357 |
| Total non-cash costs | (US$000's) | 29,267 | 6,340 | 56,684 | 21,704 |
| Free Cashflow | ( US$000's) | 27,900 | 18,991 | 74,255 | 60,885 |
| Cash Cost / oz Sold - C1 | US$/oz | 782 | 736 | 781 | 792 |
| Cash Cost / oz Sold - AISC | US$/oz | 1,129 | 1,055 | 1,088 | 1,092 |
Note: AISC includes all UK Corporate costs.
CORPORATE
RHL's 18.6% shareholding buy-back
During the quarter, the Company completed the acquisition of 100% of RHL's 18.6% shareholding in the Company at 5p per share, being 393,513,302 Ordinary Shares for a total outlay of £19,675,665, as part of a wider full and final settlement with RHL in relation to various finance agreements and other matters. In the short-term these shares will be held in treasury.
YMC Acquisition
As announced on 28 August 2024, the Company completed the acquisition of the majority and controlling interest in the YMC Group for US$1.6 million cash consideration, plus the issue of options to subscribe for up to 41 million new Metals Exploration Ordinary Shares at an exercise price equal to nominal value. On the date of the acquisition YMC held US$1.1 million in cash and owned a purpose built man portable drill rig and associated drill consumables to the value of approximately US$122,000.
The Company acquired 72.5% of Yamang Mineral Corporation, a Philippines incorporated company ("YMCP"), the owner of an extensive exploration tenement in the prospective Abra area of the Philippines; and 100% of Yamang Mineral Corp Pte Ltd, a Singaporean incorporated company ("YMCS"), which holds the right to process any minerals from mining tenements owned by YMCP. This is a common Philippine mining industry corporate structure resulting in Metals Exploration effectively being entitled to approximately 97% of the economic benefit of any commercial mining operation upon a YMCP tenement.
RUNRUNO OPERATIONS
Finance
Q3 2024 operations produced another excellent quarter result for the Company, setting records for both gold revenue and free cash flow.
Gold sales amounted to US$52.6 million (Q2 2024: US$46.7 million), at an average realised gold price of US$2,396 per oz (Q2 2024: average gold price of US$2,320 per oz), and positive free cash flow totalled US$27.9 million (Q2 2024: US$24.8 million).
Notwithstanding the RHL share buy-back cash outlay of US$25.4 million during Q3 2024, the Company's cash holdings at 30 September 2024 were US$10.9 million (30 June 2024: US$6.6 million). The Company has no debt.
Mining Operations
Mining production of ore and waste for Q3 2024 was 2.63Mt (Q2 2024: 2.71Mt), with a total of 599Kt of ore mined in Q3 2024 (Q2 2024: 516kt).
Process Plant
During Q3 2024 most aspects of the process plant performed adequately maintaining a high average recovery rate of 89.0% (Q2 2024: 89.1%). Whilst overall recoveries were excellent at 89.0%, the Company continues to carefully manage temperature and calcification issues in the BIOX plant with an on-going maintenance programme as well as through blending of ore to manage sulphur levels.
Gold produced during Q3 2024 was 22,533 ounces (Q2 2024: 19,529 ounces) from ore milled in Q3 2024 of 521Kt (Q2 2024: 518Kt).
Planned downtime included scheduled maintenance to the semi-autogenous grinding ("SAG") mill shell relining and SAG mill girth gear phase array. Unplanned downtime was not material, consisting mainly of power interruptions and repairs to the return discharge line.
Residual Storage Impoundment ("RSI")
The RSI dam-wall is at its final height and the dam water freeboard remains well above design minimum levels. Construction of the RSI final in-rock spillway is progressing as planned.
Occupational Health & Safety
Environment & Compliance
Community & Government Relations
The Company continues to receive strong support from local communities and government agencies.
EXPLORATION
Abra project - Approx 97% economic interest
The Abra Project covers 16,200 hectares approximately 200km north of the Company's Runruno mine. The Company believes the project area has interesting copper and gold prospectivity, some of which have benefitted from historical drilling. Through its pre-exploration surveys undertaken since taking ownership, the Company has already identified several additional drill targets from soil geochemistry and airborne geophysical data. The initial drilling programme will begin with targeting an area prospective for copper, close to an historical drill hole. Once we have increased our geological understanding of the prospectivity in this area, we will be able to plan a more extensive drilling programme.
Our objective is to replicate our success at our Runruno flagship asset, As with Runruno, it is essential to work closely with the national and regional government and, crucially, the local community. The Company has initiated a social license programme which is on-going, and the Company has been encouraged by the widespread community support for our efforts.
Government approval to commence drilling activities is expected forthwith, such that that drilling of initial targets are expected to commence early in Q4 2024.
A detailed RNS will be released soon updating shareholders on the technical status and analysis of the current pre-drilling exploration surveys undertaken.
-
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.