TORONTO, Aug. 16 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, MND.WT) announced today its financial results for the six months ended June 30, 2010. The Company's consolidated financial statements for the six months ended June 30, 2010, together with its Management's Discussion and Analysis of these results, are available for review on the Company's website and at www.sedar.com.
Brad Mills, Chief Executive Officer of Mandalay, commented "During the second quarter, our Costerfield, Australia mine achieved design mine production and delivered an operational profit of $1.06 million. We expect further significant improvements in the third and fourth quarter as the concentrator throughput catches up with the mine and dilution is reduced as we implement our fleet of new narrow width mining equipment. Exploration drilling targeting the Augusta deeps commenced at the end of the quarter. Just after the end of the quarter we completed our planned acquisition of the Cerro Bayo mine in Chile and its associated equity financing. These are important milestones on the way to achieving our strategy of developing a portfolio of low cost, self funding, precious metal operations with significant exploration potential."
The Company posted a net loss for the three months ended June 30, 2010 of $2.3 million ($0.02 per share) on revenues of $5.2 million derived from the sale of 2,001 ounces of gold and 278 tonnes of antimony. Consolidated net loss for the six months ended June 30, 2010 was $4.4 million ($0.05 per share) on revenues of $8.3 million derived from the sale of 3,412 ounces of gold and 473 tonnes of antimony. These losses were primarily due to costs associated with the ramp-up of the Costerfield mine, which the Company purchased in December 2009, business development expenses associated with the Company's acquisition of Cerro Bayo, which closed on August 10, 2010 (please refer to Mandalay's news releases of August 6th and August 10th for further details) and the write-off of $0.72 million of previously capitalized Chilean exploration expenses.
Costerfield Mine, Australia
During the second quarter the Costerfield mine and concentrating operations met management's expectations for mine ramp-up, delivering an operating profit of $1.06 million (versus a loss in the first quarter of $0.3 million).
- In the second quarter, the Costerfield mine produced 15,003 tonnes of
ore (compared to 10,220 tonnes in the first quarter of 2010). In the
mine, the Company is focused on improving ore grade by reducing
dilution. To achieve this, the Company has ordered new narrow width
mining equipment which will become operational in the third quarter.
- The concentrator produced 2,001 ounces of saleable gold (compared to
1,483 ounces in the first quarter of 2010), and 282 tonnes of
saleable antimony (compared to 201 tonnes in the first quarter of
2010) from 13,672 tonnes of ore (compared to 8,744 tonnes in the
first quarter). Gold and antimony production are expected to reach
design in the third quarter as mill debottlenecking issues are
overcome, grades improves with the reduction in development ore and
the Company implements stoping with its new width narrow mining
At the La Quebrada copper-silver manto project near La Serena, Chile, Mandalay outlined two significant drill targets and accelerated completion of its option to purchase 100% interest, subject to 2% Net Smelter Royalty, by issuing 400,000 shares to Inversiones y Mineria Andale Ltda. Mandalay anticipates receiving the environmental permit for its anticipated drilling program in late third quarter or early fourth quarter, 2010.
Mandalay terminated its purchase option with Inversiones y Mineria Andale Ltda on the Santos Ladrones properties north of La Serena, Chile in exchange for a US$200,000 cash payment. Compilation of historical data, mapping, and sampling failed to develop gold, copper or iron ore targets that fit Mandalay's criteria. Abandonment of this property led to the write-off of $0.72 million in previously capitalized exploration costs.
Melanie McCarthy, Manager at Costerfield and a member of AusIMM is a Qualified Person as defined by NI 43-101, and has reviewed and approved the technical and scientific information pertaining to the Costerfield mine contained in this release.
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.
This news release contains "forward-looking statements" within the meaning of applicable securities laws. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, Mandalay's ability to complete the proposed financing, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE Mandalay Resources Corporation
For further information: For further information: Bradford Mills, Chief Executive Officer, Greg DiTomaso, Investor Relations, Contact: 647.260.1566, Email: firstname.lastname@example.org, Company website: www.mandalayresources.com