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Mandalay Resources sales and production hit high in 2015

Dividend maintained as margins hold up despite lower gold and silver prices
Mandalay Resources sales and production hit high in 2015
Gold sales were at record levels

Gold and silver miner Mandalay Resources (TSE:MND) posted record sales in 2015 despite lower metal prices hitting revenues in the final quarter.

For the full year, Mandalay generated income of US$195mln (US$185mln) as sales rose to a record 167,808 gold ounces equivalent.

The weakness in gold, silver and also antimony prices meant fourth quarter revenues fell 35% to US$43.6mln.

Underlying profits [EBITDA] were US$68mln, while net income in 2015 was US$14.7mln (US$17.6mln) but there was a loss of US$3.1mln in the fourth quarter as Mandalay booked impairments for La Quebrada and Bjorkdal.

Mandalay has three operating mines at Costerfield, Cerro Bayo and Bjorkdal.

Brad Mills, chief executive, said the Costerfield mine in Australia maintained a strong volume performance and excellent cost performance for all quarters in 2015.

The mine sold record quantities, 40,686 oz gold and 3,563 tonnes antimony or 62,895 oz gold equivalent, at record low cash production costs of $559/oz Au Eq and all-in operating costs of $773/oz Au Eq.

Cerro Bayo, in Chile, saw grades improve in the fourth quarter and for the full year sold 2.78mln oz of silver and 24,489 oz Au.

All-in costs in the fourth quarter fell to $11.75/oz compared to $14.69/oz over the full year.

Bjorkdal’s cost rose in the final three months due to lower volumes, but grade control has been introduced underground at the mine and this will gradually lift grades over the coming four quarters, said Mills.

The quarterly dividend was held at 6% of trailing revenue or US$0.0064.

Mills added: “The company produced and sold a record amount of gold equivalent ounces in 2015.

It maintained strong operating margins despite lower metal prices, with EBITDA margins for the three months and year ended December 31, 2015, of 32% and 35% respectively.

“As a result, we are pleased to be able to continue our usual dividend this quarter despite the current depressed price environment for our products."

Cash was $49.2mln at the year end.  

Shares in Toronto eased 3.53% to C$0.82.

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