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Press release from CNW Group

Mandalay Resources Corporation reports record production and sales for the second quarter, 2012

Monday, July 09, 2012

Mandalay Resources Corporation reports record production and sales for the second quarter, 201203:30 EDT Monday, July 09, 2012TORONTO, July 9, 2012 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, MND.WT) announced today its production and sales results for the second quarter of 2012.Production for the three months ended June 30, 2012:The Company produced a total of 9,215 ounces ("oz") gold ("Au"), 612 tonnes ("t") antimony ("Sb"), and 814,970 oz silver ("Ag"), representing a total of 29,210 oz of gold equivalent ("Au Eq.") production.Production at Costerfield (Australia) was 4,122 oz Au and 612 t Sb. These represent the highest production volumes since Mandalay assumed management of the mine in the fourth quarter of 2009.Production at Cerro Bayo (Chile) reached record volumes of 5,093 oz Au and 814,970 oz Ag as the planned production ramp-up continued approximately on schedule, augmented by processing of ore stockpiled during the first quarter.Brad Mills, Chief Executive Officer of Mandalay, commented: "The record second quarter represents our best production and sales quarter ever with both mines producing well. We expect to be able to maintain this level of performance going forward with some growth still to come from Cerro Bayo as the mine remains on track to reach design tonnage of 1,200 tpd in the fourth quarter of 2012."Table 1. Quarterly Saleable Mine Production for 2011 and 2012                 Metal  Source Q1, 2011  Q2, 2011 Q3, 2011 Q4, 2011 2011 Total Q1 2012 Q2 2012Gold (oz) Costerfield 4,528 2,856 2,057 2,803 12,244  3,690 4,122  Cerro Bayo 1,450 1,552 1,567 2,109 6,678  2,190 5,093  Total 5,978 4,408 3,624 4,912 18,922 5,880 9,215Antimony (t) Costerfield 512 413 305 346 1,576 489 612Silver (oz) Cerro Bayo 339,366   284,324   299,679   395,296 1,318,665   396,624   814,970Average quarterly prices:                Gold US$/oz    1,386 1,506 1,703 1,685   1,694 1,614Antimony US$/tonne   14,128 15,898 14,899 13,890   12,692 13,574Silver US$/oz   31.67 38.56 38.83 31.81   31.78 29.39Au Eq. (oz)1 Costerfield 9,747 7,216 4,725 5,655 27,343 7,356 9,273  Cerro Bayo 9,204 8,832 8,400 9,572 36,008 9,631 19,936  Total 18,951 16,048 13,125 15,227 63,351 16,988 29,2101 Au Eq. oz produced is calculated by multiplying the saleable quantities of Au, Ag, and Sb in the quarter by the respective average market prices of the commodities in the quarter, adding the three amounts to get a "total contained value based on market price", and then dividing that total contained value by the average market price of Au in the quarter.  Average Au price in the quarter is calculated as the average of the daily LME PM fixes in the quarter, with price on weekend days and holidays taken from the last business day; average Sb price in the quarter is calculated as the average of the daily average of the high and low Rotterdam warehouse prices for all days in the quarter, with price on weekend days and holidays taken from the last business day; average Ag price in the quarter is calculated as the average of the dailyLondon Broker's silver spot price for all days in the quarter, with price on weekend days and holidays taken from the last business day.  The source for all prices is www.metalbulletin.com.Table 2. Quarterly Quantity Sold for 2011 and 2012                 Metal  Source Q1 2011  Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012Gold (oz) Costerfield 4,741 3,229 2,108 2,837 12,915 3,384 4,063  Cerro Bayo 204 1,297 1,690 2,347 5,538 1,284 4,960  Total 4,945 4,526 3,798 5,184 18,453 4,668 9,023Antimony (t) Costerfield 476 433 279 352 1,540 450 608Silver (oz) Cerro Bayo 69,037   270,404   376,409   396,150 1,112,000   218,060   853,364Average quarterly prices:                Gold US$/oz   1,499 1,469 1,814 1,734   1,715 1,570Antimony US$/tonne   15,050 16,036 17,326 12,921   12,282 13,123Silver US$/oz   29.41 39.85 40.50 27.00   32.97 28.68Au Eq. (oz)2 Costerfield 9,521 7,955 4,773 5,460 27,709 6,604 9,140  Cerro Bayo 1,559 8,632 10,093 8,516 28,801 5,475 20,546  Total 11,080 16,587 14,866 13,977 56,510 12,080 29,687Sales quantities of all three metals closely matched production quantities in the second quarter, as the Company's shipping schedule at Cerro Bayo returned to normal, recovering from the delays experienced in the first quarter.About Mandalay Resources Corporation:Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and producing 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.Forward-Looking Statements:This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's anticipated gold, silver and antimony production and sales in 2012. 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, 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. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 31, 2011, a copy of which is available under Mandalay's profile at www.sedar.com. 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.  For further information: Bradford Mills Chief Executive Officer Greg DiTomaso Investor Relations Contact: 647.260.1566