TORONTO, Nov. 8, 2012 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND) announced today revenues of $48.8 million and EBITDA of $23.4 million for the third quarter of 2012. These record quarterly results were achieved as both of the Company's mines, Cerro Bayo and Costerfield, reached design production and reduced costs.
Given the excellent third quarter 2012 financial results, Mandalay's Board of Directors has declared the Company's first dividend - an initial quarterly dividend of CDN$0.01 per share, payable on December 5, 2012 to shareholders of record as of November 20, 2012.
Brad Mills, Chief Executive Officer of Mandalay, commented: "From a financial perspective, Mandalay performed extremely well in the third quarter, repaying substantially all of our debt and achieving record revenue and EBITDA. We are now generating significant amounts of cash flow after all capital and exploration requirements. Looking forward to 2013, we currently expect the Company's gold equivalent production to increase by between 12%-23%."
The Company's unaudited consolidated financial results for the three and nine months ended September 30, 2012, together with its Management's Discussion and Analysis ("MD&A") for the corresponding periods can be accessed under the Company's profile on www.sedar.com and on the Company's website at www.mandalayresources.com. All currency references in this press release are in U.S. dollars except as otherwise indicated.
Third Quarter 2012 Financial Highlights
The following table summarizes the Company's financial results for the three and nine months ended September 30, 2012, and September 30, 2011.
| |
Three months ended Sept 30,
2012 |
Three months ended Sept 30,
2011 |
Nine months ended Sept 30,
2012 |
Nine months ended Sept 30,
2011 |
| |
$ |
$ |
$ |
$ |
| Revenue |
48,847,630 |
26,960,784 |
116,105,859 |
67,930,832 |
| EBITDA |
23,399,401 |
10,968,335 |
51,091,422 |
28,637,354 |
Income from Mine
Operations |
24,094,727 |
10,260,134 |
50,078,292 |
26,182,769 |
| Net Income / (loss) |
9,011,008 |
13,177,845 |
19,337,192 |
17,521,563 |
| Total Assets |
163,483,354 |
135,162,587 |
163,483,354 |
135,162,587 |
| Total Liabilities |
41,266,533 |
38,683,332 |
41,266,533 |
38,683,332 |
| Earnings / (loss) per share |
0.03 |
0.05 |
0.07 |
0.07 |
| Underlying Earnings / (loss)* |
16,090,881 |
5,712,154 |
32,203,462 |
15,721,547 |
| Underlying Earnings / (loss) per share** |
0.05 |
0.02 |
0.11 |
0.06 |
*Underlying Earnings is Net Income before fair value and deferred tax adjustments
** Underlying Earnings per share is Net Income before fair value and deferred tax adjustments per share
In the third quarter of 2012 the Company achieved revenue, EBITDA, and net income of $48.8 million, $23.4 million and $9.0 million ($0.03 per share) respectively.
Net income is inclusive of non-cash, non-operating expense of $4,713,133 related to mark-to-market adjustments of silver and gold put options1 ("puts"), a silver note payable to Coeur d'Alene Mine Corporation (the "Silver Note"), fair value expense related to financing warrants of $1,657,000 and deferred tax expense of $709,740. Excluding these items, profit after tax from underlying operations for the third quarter was $16,090,881 ($0.05 per share). By comparison, in the third quarter of 2011 the Company's net income of $13,177,845 ($0.05 per share) was inclusive of a $7,465,691 positive mark to market adjustment for puts. Excluding that adjustment, profit from underlying operations in Q3 of 2011 was $5,712,154 ($0.02 per share).
During the quarter, the Company used $9 million of internally generated cash to repay all of the amounts outstanding under its revolving corporate loan facility with Bank of Montreal and equipment loan facilities in Australia and to make the penultimate payment of the Silver Note. In addition, the Company repurchased and cancelled 1,312,000 shares at a cost of $1,062,904 in the third quarter of 2012. At the end of the third quarter of 2012, the Company had just $945,949 in total outstanding debt and $6.4 million in cash. All remaining debt will be repaid before year end.
Dividend Policy
Mandalay's Board of Directors has adopted a dividend policy that provides for a quarterly discretionary cash dividend based on financial results and the future cash requirements of the Company.
Given the excellent third quarter 2012 financial results, the Board of Directors has declared an initial quarterly dividend of CDN$0.01 per share, payable on December 5, 2012 to shareholders of record as of November 20, 2012.
This is designated as an eligible dividend for the purposes of the Income Tax Act (Canada) and any similar provincial legislation.
Production, Cost and Capital Expenditure Guidance for 2013
| |
Total |
Cerro Bayo |
Costerfield |
| Saleable silver production |
2.8 - 3.1 million oz |
2.8 - 3.1 million oz |
|
| Saleable gold production |
36,000 - 42,000 oz |
18,000 - 21,000 oz |
18,000 - 21,000 oz |
| Saleable antimony production |
2,800 - 3,000 t |
|
2,800 - 3,000 t |
| Gold equivalent production |
112,000 - 123,000 oz |
|
|
| Cost/oz silver net by-product |
|
$4.00 - $6.00 |
|
| Cost/oz gold equivalent |
|
|
$950 - $1,000 |
| Capital expenditure |
$37 million |
$21 million |
$16 million |
| Exploration expenditure |
$11 million |
$7 million |
$4 million |
_________________________
1 These put options gives the Company the right, but not the obligation, to sell a specified amount of gold or silver at a specified price within a specified time.
About Mandalay Resources Corporation
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and producing and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's anticipated production of gold, silver and antimony for the 2012 fiscal year and production, cost and capital expenditure guidance for 2013. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 30, 2012, a copy of which is available under Mandalay's profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Non-IFRS Measures
This news release contains references to EBITDA and Underlying Earnings both of which are non-IFRS measures and do not have standardized meanings under IFRS. Therefore, these measures may not be comparable to similar measures presented by other issuers.
The Company defines EBITDA as earnings before interest, taxes and non cash charges. EBITDA is presented as the Company believes it is a useful indicator of relative operating performance. EBITDA should not be considered by an investor as an alternative to net income or cash flows as determined in accordance with IFRS. For a detailed reconciliation of net income to EBITDA, please refer to page 9 of Management's Discussion and Analysis of the Company's financial statements for the third quarter of 2012.
SOURCE: Mandalay Resources Corporation