Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mandalay Resources Corp (MNDJF, Financial) achieved a record free cash flow of $69 million in 2024, a significant increase from $300,000 in 2023.
- The company eliminated all debt and now has a fully undrawn $35 million revolver facility, providing available liquidity of over $100 million.
- Production increased by 8% year-on-year, reaching 97,000 gold equivalent ounces, which was at the upper end of their guidance.
- The share price more than doubled in 2024, increasing by 114%, and is up over 150% at the time of the call.
- Mandalay Resources Corp (MNDJF) reported its highest annual revenue to date at $241 million, with adjusted EBITDA doubling to $122 million from $60 million.
Negative Points
- Operating costs increased by 4% to $110 million, primarily due to processing costs at Costerfield and increased throughput tonnage at Bjorkdal.
- All-in sustaining costs per ounce of gold equivalent produced increased by 3% to $1,548 per ounce in 2024.
- The mine life at Costerfield remains at four years, which is considered normal but may not meet expectations for growth despite increased exploration spending.
- The antimony market is volatile, with prices increasing significantly but also facing global import-export restrictions that pressure refiner margins.
- Despite exciting drilling results at Bjorkdal, production has remained steady at 40,000 to 45,000 ounces per year, with no significant increase in output.
Q & A Highlights
Q: Can you discuss the current mine life at Costerfield and potential areas for growth?
A: Frazer Bourchier, President and CEO, explained that while the current mine life at Costerfield is considered normal, the focus has been on resource growth, particularly at True Blue and Cuffley Deeps. These areas are expected to contribute to reserve growth in the coming years, with True Blue potentially becoming a significant contributor in three years.
Q: What is the expected production outlook for Costerfield in the coming years?
A: Frazer Bourchier noted that high-grade production is expected to continue from Youle and Shepherd for the next two years. Beyond that, production will likely come from areas like Augusta and Cuffley, where grades are expected to improve as development progresses.
Q: Can you provide an update on the timeline and capital requirements for bringing True Blue into production?
A: Frazer Bourchier stated that True Blue is about 2 kilometers from current workings, and significant capital is not expected to be required. The aim is to bring True Blue into production within three to four years, with extensive drilling and permitting processes already underway.
Q: What are the plans for Bjorkdal's production and potential improvements?
A: Frazer Bourchier highlighted that Bjorkdal's production is expected to remain between 40,000 to 45,000 ounces annually. However, there is potential for increased production from higher-grade areas like the North Zone Below Marble and Eastern extension, as well as potential open-pit opportunities.
Q: How does Mandalay plan to manage its robust cash balance and potential strategic opportunities?
A: Frazer Bourchier mentioned that with a strong cash position, Mandalay is exploring strategic growth opportunities, including potential acquisitions or combinations with other producers. If no suitable opportunities arise, options like share buybacks or dividends may be considered to return value to shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
