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Mandalay's Björkdal mine boosts first quarter output and sales

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The addition of the Björkdal gold mine in Sweden helped miner Mandalay Resources (TSE:MND) post stronger first quarter production and sales compared to a year ago, though metal prices were lower.

The firm's three operating mines - at Costerfield, Cerro Bayo and Björkdal - are on track to achieve the group's 2015 production and sales guidance, it revealed.

At Cerro Bayo in Chile, production was lower than in same period in 2014 mainly due to lower grades as the firm nears the end of mining in the Fabiola vein and moves to the Delia SE mine around mid-year, while the Costerfield mine in Australia continues to "perform admirably", the firm said.

Brad Mills, chief executive, told investors: "Björkdal production was slightly greater than in the previous quarter as the operation continues to lay the groundwork for improvements that are at the core of our value-add plan."

The firm is building a new lab near the mine to process high quality gold assays rapidly, and when commissioned early in the third quarter, is expected to improve grade consistency from the underground and open pit mines.

Mandalay aims to develop a detailed production plan incorporating the new reserve estimate for Björkdal and expects, when this is implemented, to see progressive improvements in quarterly gold production.

For the three months to end March, the firm produced a total of 42,277 gold equivalent ounces compared to 31,449 such ounces in 2014.

In terms of sales in the first quarter, Costerfield sold 9,823 ounces of gold (2014: 7,046), Cerro Bayo sold 7,084 ounces (2014: 4,804) and Björkdal, 111,750 ounces (zero).

Average quarterly prices for the latest quarter were gold US$1,218 per ounce (2014: US$1,292), Antimony US$8,109  per tonne (US$9,758), silver - US$16.67 per ounce (US$20.47).

Quick facts: Mandalay Resources Corp.

Price: 1.32 CAD

TSX:MND
Market: TSX
Market Cap: $120.42 m
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