REG - Metals Exploration - Quarterly Update to 30 September 2024

Metals ExplorationAnnouncement

16/10/2024 07:00

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RNS Number : 3122I  Metals Exploration PLC  16 October 2024

METALS EXPLORATION PLC

QUARTERLY UPDATE TO 30 September 2024

 

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or the
"Group"), a gold producer in the Philippines, is pleased to announce its
quarterly results for Q3 2024, reporting record quarterly positive free cash
flow and record quarterly gold revenue.

 

Corporate

Ø Completion of an off-market buy back of Runruno Holdings Limited's ("RHL")
18.6% shareholding.

Ø Introduction of a new strategic long-term shareholder - Drachs Investments.

Ø Completion of the acquisition of the Yamang Mineral Corporation  Group
("YMC").

 

Finance

Ø Record quarterly positive free cash flow of US$27.9 million (Q2 2024:
US$24.8 million).

Ø Record quarterly gold revenue of US$52.6 million (Q2 2024: US$46.7
million).

Ø Q3 2024 gold sales of 21,943oz sold at an average realised gold price of
US$2,396 per oz (Q2 2024: 20,124 oz at an average US$2,320 per oz).

Ø YTD 2024 AISC of US$1,088 per oz (YTD 2023: US$1,092 per oz) - below the
lower 2024 full year production guidance estimate of US$1,175 per oz.

 

Mining Operations

Ø No lost time injuries occurred during the period - over 24 million hours
worked without a reportable injury.

Ø Q3 2024 mining production of ore and waste was 2.63Mt (Q2 2024: 2.71Mt),
with a total of 599Kt of ore mined in Q3 2024 (Q2 2024: 516Kt).

 

Processing Operations

Ø Q3 2024 gold production of 22,533 oz (Q2 2024: 19,529 oz) recovered from
521Kt at a head grade of 1.51g/t (Q2 2024: 518Kt at a head grade of 1.34g/t).

Ø Q3 2024 gold recovery of 89.0% (Q2 2024: 89.1%).

 

Exploration - Abra Project

Ø Pre-exploration soil geochemistry and airborne geophysics data highlights
several drill targets.

Ø Government approval to commence drilling imminent, such that drilling of
initial targets are expected to commence in Q4 2024

Ø Social licence activities ongoing, with widespread community support being
encountered.

 

Darren Bowden, CEO of Metals Exploration, commented:

"This has been another excellent quarter for the Company with record
quarterly gold revenue and free cash flow. Our disciplined approach to
improving efficiencies at every echelon of the Company continues to yield
demonstrable results, enabling us to benefit from the sustained robust gold
price. In addition, we are delighted with the continued operational strength
at Runruno, giving a quarter on quarter increase in ore mined whilst
maintaining our exceptional safety credentials with over 24 million hours
worked without a reportable injury.

 

"As we look beyond Runruno, our corporate activity in completing the RHL
shareholding buy-back will allow the Board the freedom to act on its vision
for the Company's future, which is now aligned to the wishes of our major
shareholders. We have successfully completed the acquisition of the YMC Group
and have already identified several drill targets from pre-exploration
surveys. We look forward to commencing drilling in Q4 2024 once we gain
governmental approval. Our objective is to replicate our success at our
flagship asset.

 

"This is a highly exciting time for the Company. We have a producing asset
performing well, some highly prospective exploration acreage where we believe
we can mirror the success that we have delivered at Runruno, and are debt free
with a strong balance sheet; whilst now being unrestricted to deliver our
strategy of building a cash generative portfolio of projects through
appropriate acquisition opportunities.

 

"We look forward to providing further updates in due course."

Production and Finance Summary

 

 Runruno Project Report                       Quarter                              Quarter      FY 2024                            FY 2023
 FY 2024                                      Actual                               Actual       Actual                             Actual
 PHYSICALS                      Units         Q3 2024                              Q3 2023      9 Months                           9 Months
 Mining
 Ore Mined                      Tonnes        599,078                              567,816      1,772,008                          1,415,839
 Waste Mined                    Tonnes        2,026,150                            2,731,344    6,875,186                          8,117,273
 Total Mined                    Tonnes        2,625,228                            3,299,160    8,647,194                          9,533,112
 Au Grade Mined                 g/tonne       1.62                                 1.49         1.46                               1.55
 Strip Ratio                                  3.18                                 4.48         3.76                               5.43
 Processing
 Ore Milled                     Tonnes        521,479                              482,743      1,620,638                          1,551,133
 Au Grade                       g/tonne       1.51                                 1.60         1.40                               1.51
 S(2) Grade                     %             1.39                                 1.46         1.36                               1.43
 Au Milled (contained)          Ounces        25,329                               24,850       72,818                             75,551
 Recovery                       %                             89.0                 88.7                        89.4                              89.4
 Au Recovered/Poured            Ounces        22,533                               22,034       65,068                             67,568
 Sales
 Au Sold                        Ounces        21,943                               22,043       63,532                             68,230
 Au Price                       US$/oz        2,396                                1,926        2,261                              1,935
 FINANCIALS (Unaudited)
 Revenue
 Gold Sales                     (US$000's)    52,574                               42,448       143,660                            131,999
 Operating Costs - Summary
 Mining                         (US$000's)    4,402                                5,280        14,010                             15,747
 Processing                     (US$000's)    9,231                                8,322        26,780                             26,135
 G&A                            (US$000's)    3,430                                2,816        9,079                              8,718
 Total Operating Costs          (US$000's)    17,063                               16,419       49,870                             50,599
 Excise Duty                    (US$000's)    2,109                                1,708        5,755                              5,318
 UK/Philippine G&A              (US$000's)    3,753                                2,180        8,524                              6,841
 Total Direct Production Costs  (US$000's)    22,925                               20,307       64,149                             62,658
 Net Cash Income                (US$000's)    29,649                               22,141       79,510                             69,241
 Total Capital Costs            (US$000's)    1,749                                3,150        5,255                              8,357
 Total non-cash costs           (US$000's)    29,267                               6,340        56,684                             21,704
 Free Cashflow                  (US$000's)    27,900                               18,991       74,255                             60,885
 Cash Cost / oz Sold - C1       US$/oz        782                                  736          781                                792
 Cash Cost / oz Sold - AISC     US$/oz        1,129                                1,055        1,088                              1,092

Note: AISC includes all UK Corporate costs.

 

 

 

 

CORPORATE

RHL's 18.6% shareholding buy-back

During the quarter, the Company completed the acquisition of 100% of RHL's
18.6% shareholding in the Company at 5p per share, being 393,513,302 Ordinary
Shares for a total outlay of £19,675,665, as part of a wider full and final
settlement with RHL in relation to various finance agreements and other
matters. In the short-term these shares will be held in treasury.

 

YMC Acquisition

As announced on 28 August 2024, the Company completed the acquisition of the
majority and controlling interest in the YMC Group for US$1.6 million cash
consideration, plus the issue of options to subscribe for up to 41 million new
Metals Exploration Ordinary Shares at an exercise price equal to nominal
value. On the date of the acquisition YMC held US$1.1 million in cash and
owned a purpose built man portable drill rig and associated drill consumables
to the value of approximately US$122,000.

 

The Company acquired 72.5% of Yamang Mineral Corporation, a Philippines
incorporated company ("YMCP"), the owner of an extensive exploration tenement
in the prospective Abra area of the Philippines; and 100% of Yamang Mineral
Corp Pte Ltd, a Singaporean incorporated company ("YMCS"), which holds the
right to process any minerals from mining tenements owned by YMCP. This is a
common Philippine mining industry corporate structure resulting in Metals
Exploration effectively being entitled to approximately 97% of the economic
benefit of any commercial mining operation upon a YMCP tenement.

 

RUNRUNO OPERATIONS

Finance

Q3 2024 operations produced another excellent quarter result for the Company,
setting records for both gold revenue and free cash flow.

 

Gold sales amounted to US$52.6 million (Q2 2024: US$46.7 million), at an
average realised gold price of US$2,396 per oz (Q2 2024: average gold price of
US$2,320 per oz), and positive free cash flow totalled US$27.9 million (Q2
2024: US$24.8 million).

 

Notwithstanding the RHL share buy-back cash outlay of US$25.4 million during
Q3 2024, the Company's cash holdings at 30 September 2024 were US$10.9 million
(30 June 2024: US$6.6 million). The Company has no debt.

 

Mining Operations

Mining production of ore and waste for Q3 2024 was 2.63Mt (Q2 2024: 2.71Mt),
with a total of 599Kt of ore mined in Q3 2024 (Q2 2024: 516kt).

 

Process Plant

During Q3 2024 most aspects of the process plant performed adequately
maintaining a high average recovery rate of 89.0% (Q2 2024: 89.1%).  Whilst
overall recoveries were excellent at 89.0%, the Company continues to carefully
manage temperature and calcification issues in the BIOX plant with an on-going
maintenance programme as well as through blending of ore to manage sulphur
levels.

 

Gold produced during Q3 2024 was 22,533 ounces (Q2 2024: 19,529 ounces) from
ore milled in Q3 2024 of 521Kt (Q2 2024: 518Kt).

 

Planned downtime included scheduled maintenance to the semi-autogenous
grinding ("SAG") mill shell relining and SAG mill girth gear phase array.
Unplanned downtime was not material, consisting mainly of power interruptions
and repairs to the return discharge line.

 

Residual Storage Impoundment ("RSI")

The RSI dam-wall is at its final height and the dam water freeboard remains
well above design minimum levels. Construction of the RSI final in-rock
spillway is progressing as planned.

 

Occupational Health & Safety

Runruno continues to record an exceptional safety record with over 24 million
hours worked without a lost-time reportable injury as at the date of this
announcement.

 

Environment & Compliance

Compliance matters continue to be successfully monitored, and the mine remains
compliant, with no outstanding material issues.

 

Community & Government Relations

The Company continues to receive strong support from local communities and
government agencies.

 

EXPLORATION

Abra project - Approx 97% economic interest

The Abra Project covers 16,200 hectares approximately 200km north of the
Company's Runruno mine. The Company believes the project area has interesting
copper and gold prospectivity, some of which have benefitted from historical
drilling. Through its pre-exploration surveys undertaken since taking
ownership, the Company has already identified several additional drill targets
from soil geochemistry and airborne geophysical data. The initial drilling
programme will begin with targeting an area prospective for copper, close to
an historical drill hole. Once we have increased our geological understanding
of the prospectivity in this area, we will be able to plan a more extensive
drilling programme.

 

Our objective is to replicate our success at our Runruno flagship asset, As
with Runruno, it is essential to work closely with the national and regional
government and, crucially, the local community. The Company has initiated a
social license programme which is on-going, and the Company has been
encouraged by the widespread community support for our efforts.

 

Government approval to commence drilling activities is expected forthwith,
such that that drilling of initial targets are expected to commence early in
Q4 2024.

 

A detailed RNS will be released soon updating shareholders on the technical
status and analysis of the current pre-drilling exploration surveys
undertaken.

 

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

 

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For further information please visit or contact:

 

 Metals Exploration PLC
 Via Tavistock Communications Limited     +44 (0) 207 920 3150
 Nominated & Financial Adviser:           STRAND HANSON LIMITED
 James Spinney, James Dance, Rob Patrick  +44 (0) 207 409 3494
 Financial Adviser & Broker:              HANNAM & PARTNERS
 Matt Hasson, Franck Nganou               +44 (0) 207 907 8500
 Public Relations:                        TAVISTOCK COMMUNICATIONS LIMITED
 Jos Simson, Nick Elwes                   +44 (0) 207 920 3150

 

Web:                      www.metalsexploration.com
(http://www.metalsexploration.com)

Twitter:                  @MTLexploration
(https://twitter.com/MTLexploration)

LinkedIn:               Metals Exploration
(https://www.linkedin.com/company/metals-exploration-plc)

 

 

 

Competent Person's Statement

Mr Darren Bowden, a director of the Company, a Member of the Australasian
Institute of Mining and Metallurgy and who has been involved in the mining
industry for more than 25 years, has compiled, read and approved the technical
disclosure in this regulatory announcement in accordance with the AIM Rules -
Note for Mining and Oil & Gas Companies.

 

Forward Looking Statements

Certain statements relating to the estimated or expected future production,
operating results, cash flows and costs and financial condition of Metals
Explorations, planned work at the Company's projects and the expected results
of such work contained herein are forward-looking statementswhich are based on
current expectations, estimates and projections about the potential returns of
the Group, industry and markets in which the Group operates in, the Directors'
beliefs and assumptions made by the Directors. Forward-looking statements are
statements that are not historical facts and are generally, but not always,
identified by words such as the following: "expects", "plans", "anticipates",
"forecasts", "believes", "intends", "estimates", "projects", "assumes",
"potential" or variations of such words and similar expressions.
Forward-looking statements also include reference to events or conditions that
will, would, may, could or should occur. Information concerning exploration
results and mineral reserve and resource estimates may also be deemed to be
forward-looking statements, as it constitutes a prediction of what might be
found to be present when and if a project is actually developed.

 

These statements are not guarantees of future performance or the ability to
identify and consummate investments and involve certain risks, uncertainties
and assumptions that are difficult to predict, qualify or quantify. Among the
factors that could cause actual results or projections to differ materially
include, without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner and on acceptable terms;
changes in planned work resulting from logistical, technical or other factors;
the possibility that results of work will not fulfil projections/expectations
and realize the perceived potential of the Company's projects; uncertainties
involved in the interpretation of drilling results and other tests and the
estimation of gold reserves and resources; risk of accidents, equipment
breakdowns and labour disputes or other unanticipated difficulties or
interruptions; the possibility of environmental issues at the Company's
projects; the possibility of cost overruns or unanticipated expenses in work
programs; the need to obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations in the price of
gold and other risks and uncertainties.

 

The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules.

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