Mandalay Resources Corporation (TSE:MND) (OTCQB:MNDJF) posted a strong operating and financial performance in its first quarter, largely thanks to its Costerfield mine in Australia, where the firm saw improved grades and realized gold prices, leading to record revenue.
Revenue from the Costerfield mine for the three months to March 31 came in at C$ $20.4 million, which was 96% up on the fourth quarter to end December.
READ: Mackie upgrades Mandalay Resources to a Buy on upbeat production figures from its Australian and Swedish gold operations
The production and grades increase was propelled by the high-grade Youle vein at the mine, which is expected to serve as a catalyst for substantial further improvement at Costerfield, Mandalay noted.
Mandalay operates producing assets in Australia (Costerfield ) and Sweden (Björkdal).
Across the group as a whole, revenue for the quarter came in at C$41.5 million versus C$29.9 million in the same quarter of 2019. Adjusted net income per share was C$0.06, up from a net loss per share of $0.01 in the first quarter of 2019.
"Mandalay generated excellent financial results, with an all-time record in quarterly adjusted EBITDA at Costerfield of $13.9 million, despite the unprecedented global impacts from (coronavirus) COVID-19. Our excellent consolidated financial performance was the result of strong production at both of our mines coupled with higher realized gold prices and a 25% decline in cash cost per gold equivalent ounce produced to $846 as compared to the previous quarter result of $1,128," Dominic Duffy, Mandalay's chief executive said in the results statement.
He added that Björkdal continued to deliver steady production and sales, leading to C$21.2 million in revenue and C$8.8 million in adjusted EBITDA for the first quarter.
"The increase in revenue was aided by the higher realized gold prices. We expect production improvements in the coming months as underground tonnages lift in the higher-grade Aurora zone. Considerable strides have been made at site in reducing overall costs as reflected by an increase in adjusted EBITDA margin of 45% for the quarter as compared to 22% in the fourth quarter of 2019," he added.
Mandalay also noted that it had successfully restructured its corporate debt by entering into a new syndicated credit facility with HSBC and Macquarie and retiring its remaining Gold Bonds, the last of which have now been exchanged.
"This quarter was defined by strong operating and financial performance as the company ended the quarter with a cash balance of $21.5 million. We are excited to return to operating profitability after a period of transition and are eager to demonstrate continued success in growing organically and operating efficiently," concluded Duffy.
Shares in Toronto added 7.9% to C$1.64 each.
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