REG - Metals Exploration - QUARTERLY UPDATE TO 31 December 2024

Metals ExplorationAnnouncement

16/01/2025 07:00

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RNS Number : 4903T  Metals Exploration PLC  16 January 2025

METALS EXPLORATION PLC

 

QUARTERLY UPDATE TO 31 December 2024

 

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or the
"Group"), a gold production, exploration, and development company with assets
in the Philippines and Nicaragua, is pleased to announce its unaudited
quarterly results for Q4 2024 (the "Quarter").

 

Corporate

·      Announcement of recommended offer to acquire 100% of Condor Gold
plc ("Condor Gold") which was completed post period end on 15 January 2025.

·      Appointments of David Cather and Rob Marshall as Non-Executive
Directors in November 2024.

Finance

·      Record FY2024 positive free cash flow of US$96.7 million (FY2023:
US$72.3 million).

·      Record FY2024 gold revenue of US$191.1 million (FY2023: US$145.8
million).

·      Q4 2024 positive free cash flow of US$22.5 million (Q3 2024:
US$27.9 million).

·      Q4 2024 gold revenue of US$47.5 million (Q3 2024: US$52.6
million).

·      Q4 2024 gold sales of 19,144 ounces sold at an average realised
gold price of US$2,481 per ounce (Q3 2024: 21,943 ounces at an average
US$2,396 per ounce).

 

Mining Operations

·      No lost time injuries occurred during the period - over 25
million hours worked without a  lost time injury.

·      Q4 2024 mining production of ore and waste was 2.70 million
tonnes ("Mt") (Q3 2024: 2.63Mt), with a total of 284 thousand tonnes ("Kt") of
ore mined in Q4 2024 (Q3 2024: 599Kt).

 

Processing Operations

·      Q4 2024 gold production of 18,829 ounces (Q3 2024: 22,533 ounces)
recovered from 530Kt at a head grade of 1.17 grammes per tonne ("g/t") (Q3
2024: 521Kt at a head grade of 1.51 g/t).

·      Q4 2024 gold recovery of 94.5% (Q3 2024: 89.0%).

FY2024/FY2025 Production Guidance

·      FY2024 gold production of 83,897 ounces exceeded the FY2024 upper
guidance forecast of 82,500 ounces at an AISC of US$1,135 per ounce which was
slightly above the improved FY2024 lower guidance forecast of US$1,125 per
ounce and significantly below the upper guidance forecast of US$1,275.

·      FY2025 gold production forecast: 70,000 - 75,000 ounces.

·      FY2025 AISC forecast: US$1,225 - US$1,325 per ounce.

Exploration

·      Interpretation of geophysics at the Abra project completed.

·      Government approval to commence exploration drilling approval
received.

Darren Bowden, CEO of Metals Exploration, commented:

 

"This has been another strong quarter and a transformative period for the
Company. We are delighted to have delivered record FY2024 free cash flow of
US$96.7 million alongside record gold revenue of US$191.1 million, both of
which were underpinned by robust operational performance at Runruno and
sustained high gold prices. The Quarter also marked a significant strategic
milestone - the announcement of our recommended offer to acquire Condor Gold -
which brings a highly prospective asset portfolio in Nicaragua into our fold.

 

"At Runruno, our focus on operational efficiency continues to deliver results,
with gold recovery rates reaching 94.5% for the Quarter, alongside maintaining
our exceptional safety record of over 25 million hours worked without a
reportable injury.

 

"This Quarter has also seen further progress being made on the initial
geophysics and geochemical work at our Abra Project, ahead of an initial
drilling programme, which is expected to begin during Q1 of this year.

 

"Looking ahead, the acquisition of Condor Gold opens exciting new growth
opportunities, starting with the La India gold project in Nicaragua. We are
rapidly advancing plans to build an experienced in-country team, re-estimate
the current resource base, and commence the design of a gold resource
extension and verification drill programme. This positions us to unlock
significant value from these assets whilst aiming to replicate the operational
success we have demonstrated at Runruno.

 

"The Company enters 2025 with a strong balance sheet, record free cash flow,
and exciting exploration prospects, which gives us confidence in our ability
to deliver sustainable value to all our stakeholders. We look forward to
providing further updates as we progress through this transformational year."

 

 

 

 

Production and Finance Summary

 

 Runruno Project Report                       Quarter    Quarter      FY 2024     FY 2023
 FY 2024                                      Actual     Actual       Actual      Actual
 PHYSICALS                      Units         Q4 2024    Q4 2023      12 Months   12 Months
 Mining
 Ore Mined                      Tonnes        283,862    533,815      2,055,871   1,949,654
 Waste Mined                    Tonnes        2,418,510  2,295,472    9,293,694   10,412,735
 Total Mined                    Tonnes        2,702,372  2,829,287    11,349,565  12,362,398
 Au Grade Mined                 g/tonne       1.50       1.27         1.46        1.47
 Strip Ratio                                  8.50       3.99         4.40        5.03
 Processing
 Ore Milled                     Tonnes        529,791    533,074      2,150,429   2,104,207
 Au Grade                       g/tonne       1.17       1.15         1.34        1.42
 S(2) Grade                     %             1.30       1.18         1.35        1.36
 Au Milled (contained)          Ounces        19,934     20,517       92,752      96,068
 Recovery                       %             94.5       85.9         90.5         88.7
 Au Recovered/Poured            Ounces        18,829     17,626       83,897      85,194
 Sales
 Au Sold                        Ounces        19,144     17,514       82,676      85,744
 Au Price                       US$/oz        2,481      1,980        2,312       1,944
 FINANCIALS (Unaudited)
 Revenue
 Gold Sales                     (US$000's)    47,490     34,684       191,150     166,683
 Operating Costs - Summary
 Mining                         (US$000's)    4,868      5,172        18,879      20,919
 Processing                     (US$000's)    8,139      8,591        34,919      34,725
 G&A                            (US$000's)    2,569      2,992        11,649      11,709
 Total Operating Costs          (US$000's)    15,576     16,755       65,447      67,354
 Excise Duty                    (US$000's)    1,913      1,392        7,668       6,710
 UK/Philippine G&A              (US$000's)    5,244      2,384        13,768      9,225
 Total Direct Production Costs  (US$000's)    22,733     20,531       86,882      83,289
 Net Cash Income                (US$000's)    24,757     14,153       104,267     83,394
 Total Capital Costs            (US$000's)    2,263      2,695        7,518       11,051
 Total non-cash costs           (US$000's)    13,110     5,468        69,794      27,172
 Free Cashflow                  (US$000's)    22,494     11,457       96,749      72,343
 Cash Cost / oz Sold - C1       US$/oz        797        890          785         812
 Cash Cost / oz Sold - AISC     US$/oz        1,289      1,260        1,135       1,126

Note: AISC includes all UK Corporate costs.

 

 

 

 

 

Corporate

 

Condor Gold plc Acquisition

 

On 15 January 2025, the Company completed the acquisition of 100% of Condor
Gold which is the 100% owner of an extensive highly prospective tenement
package in Nicaragua, including the La India gold resource. Refer to previous
announcements in relation to the Condor Gold takeover, which can be found on
the Company's website.

 

Planned activities in Q1 2025 in relation to the Nicaraguan assets are to:

·      Complete the recruitment of key Spanish speaking executives to
join the Nicaraguan in-country management team;

·      Review, and re-estimate, the current gold reserve and resource
statements;

·      Design a gold resource extension and verification drill
programme; and

·      Commence the detailed design and construction phase for the La
India project.

 

Non-Executive Director Appointments

 

On 1 November 2024, Rob Marshall was appointed to the Board as a Non-Executive
Director as the representative of the Company's second largest shareholder,
Drachs Investments No3 Limited. Also, on 1 November 2024, David Cather
rejoined the parent company board as a Non-Executive Director. Mr Cather
remains Chairman of the Group's Singaporean holding company.

 

Runruno Operations

 

During Q4 2024, operations at Runruno produced another set of strong results
for the Company with gold sales of US$47.5 million (Q3 2024: US$46.7 million),
at an average realised gold price of US$2,481 per ounce (Q3 2024: average gold
price of US$2,320 per ounce); producing a positive free cash flow of US$22.5
million (Q3 2024: US$24.8 million).

 

Finance

 

The Company's cash holdings at 31 December 2024 were US$32.0 million (30
September 2024: US$10.9 million). This cash position included US$27.8 million
reserved to be applied to satisfy the maximum cash component portion of the
Condor Gold takeover. The cash consideration will be paid to Condor Gold
shareholders during January 2025.

 

As at 31 December 2024, the Company had a short-term bridging loan of US$6.9
million. This loan is due to repaid on or before 31 January 2025.

 

Mining Operations

 

Mining production of ore and waste for Q4 2024 was slightly below management's
forecast at 2.70Mt (Q3 2024: 2.71Mt), mainly due to persistent heavy rain in
the latter half of the quarter which lead to poor road conditions. Also,
equipment was diverted to clean-up activities in and around the mine site to
repair company and community infrastructure following typhoon Pepito, which
passed directly over the mine site as a category 5 typhoon. During Q4 2024,
only a total of 284Kt of ore was mined (Q3 2024: 516kt) as substantial waste
was removed during Stage 5 development operations.

 

Process Plant

 

During Q4 2024 most aspects of the process plant performed adequately
producing a quarter record average recovery rate of 94.5% (Q3 2024: 89.1%).

 

Gold produced during Q4 2024 was 18,829 ounces (Q3 2024: 19,529 ounces) from
ore milled in Q4 2024 of 530Kt (Q3 2024: 518Kt).

 

Planned downtime included scheduled maintenance to the semi-autogenous
grinding ("SAG") mill girth gear. The main source of unplanned downtime
resulted from power interruptions due to typhoons and inclement weather
events. Other unplanned downtime included installation of new flotation stator
blades, and repairs to the return discharge line ("RDL"), conveyor belts,
rollers and trommel panel screens.

 

Residual Storage Impoundment ("RSI")

 

The RSI dam-wall is at its final height and the dam water freeboard remains
well above design minimum levels, notwithstanding the numerous wet weather
events during the Quarter. Construction of the RSI final in-rock spillway
continues.

 

Occupational Health & Safety

 

Runruno continues to record an exceptional safety record with over 25 million
hours worked without a  lost time 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

 

During the Quarter, the Company completed the review of the initial geophysics
and geochemistry activities over the key target areas of the Abra project area
as a prelude to designing an exploration drill programme. Final government
approval to undertake drilling operations was also received during the
Quarter, and it is expected that drilling of initial targets will commence
during Q1 2025.

 

 

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.

 

-       END    -

 

 

 

For further information, please contact or visit:

 

 Metals Exploration PLC
 Via BlytheRay                            +44 (0) 207 138 3204

 Nominated & Financial Adviser:           STRAND HANSON LIMITED
 James Spinney, James Dance, Rob Patrick  +44 (0) 207 409 3494
 Broker:                                  HANNAM & PARTNERS
 Matt Hasson, Franck Nganou               +44 (0) 207 907 8500

 Public Relations:                        BLYTHERAY
 Megan Ray, Said Izagaren                 +44 (0) 207 138 3204

 

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 relation to the Group's Philippine projects 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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