Magna Gold Corp. – Q2 2022 Operating and Financial Results
Magna Gold Corp. (TSXV: MGR) (OTCQB: MGLQF) (“Magna” or the “Company”), announced operating and financial results for the three and six months ended June 30, 2022 and 2021 (“Q2 2022” and “Q2 2021”, respectively). All figures are in US Dollars, unless otherwise expressed.
Q2 2022 Operating and Financial Highlights
- Total tonnes mined during Q2 2022 were 5.9 million compared to 6.1 million during Q2 2021.
- Q2 2022 strip-ratio was 3.5:1 compared to 4.0:1 during Q2 2021.
- Tonnes of ore processed during Q2 2022 were 1.4 million compared to 1.3 million during Q2 2021.
- Ore mined grade from June 2020 to date averages 0.39 g/t Au, which is within 5-10% of the grades set forth in the technical report dated August 8, 2020.
- Gold production of 10,795 ounces during Q2 2022 compared to 11,713 ounces during Q2 2021.
- Revenues for Q2 2022 were $21.0 million compared to $21.2 million during Q2 2021.
- Production costs of $24.7 million during Q2 2022 compared to $17.7 million during Q2 2021. The increase is mostly due to inventory drawdown during Q2 2022.
Cash Position and Working Capital
- Cash at June 30, 2022, was $1.4 million compared to $0.3 million at March 31, 2022.
- As of June 30, 2022, working capital was negative $35.4 million compared to negative $22.7 million at March 31, 2022.
The Company has experienced some difficulties with operations at the mine relating to ore sourcing from certain areas of the block model. To mitigate the long-term effects of this, the team has undertaken several initiatives, both internal and external, to maximize the value of the San Francisco Mine. These initiatives include, but are not limited to, financing discussions with various counterparties to accelerate stripping and development activities, mine plan optimization, block model audits and improvements, and exploiting efficiencies in alternative mine sequencing. Management is also open to strategic alternatives and transactions in an ongoing effort to create value for shareholders. Based on prevailing market conditions, management believes it is prudent to preserve capital by reducing mining rates and secondary activities across the Company’s portfolio of assets. As a result of these initiatives, the Company’s board and management determined that previously stated guidance for FY 2022 will be retracted and revised at a later date when a more accurate estimate of production impacts is known.
Arturo Bonillas, President and CEO of Magna Gold, stated: “It has been both a rewarding and difficult journey bringing the San Francisco Mine back into production. Given the market conditions and limited resources, the team has managed to accomplish much and through our cost conservative and alternative strategies, we look to build increased value for all our stakeholders moving forward.”