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NR - Q2
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terrancekeenan
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September 5, 2016 - 2:29 pm
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NR - Q2, Revenue $8.8M, Gr Profit $4.4M, Net Income $2.0M

MANGAZEYA MINING ANNOUNCES FILING OF ITS Q2 AND 6 MONTHS 2016 FINANCIAL STATEMENTS AND MD&A QUARTERLY HIGHLIGHTS

TORONTO, ONTARIO, August 26, 2016 – Mangazeya Mining Ltd. (“Mangazeya” or the “Company”) (NEX: MGZ.H) announced the filing of its unaudited interim condensed financial statements (“Financial Statements”), management’s discussion and analysis – quarterly highlights (“QH”) for the second quarter and six months ended June 30, 2016. All figures are quoted in Canadian dollars unless otherwise indicated.

HIGHLIGHTS FOR 6 MONTHS AND Q2 2016 INCLUDE:

 

  • During H1 2016 Mangazeya increased production of gold from 5,065oz to 8,110oz comparing to H1 2015; sale of gold from 3,302oz to 6,602oz (all production came from Savkinskoye mine). In Q2 2016 the production of gold was 6,260oz comparing to 5,065oz in the corresponding period of 2015, the sale of gold was 5,475oz comparing to 3,302oz in Q2 2015.
  • Revenues for the period made up $8,773k for Q2 2016 and $10,799k for H1 2016. The average gold price in Q2 2016 increased comparing with the average gold price for Q2 2015 from $1,375 to $1,602 per ounce or by 17%; from $1,375 in H1 2015 to $1,607 in H1 2016 (from US$1,113 to US$1,209 per ounce).
  • Due to production and sales growth the gross profit margin increased from 41% in H1 2015 to 49% in H1 2016.
  • For H1 2016 total cash cost (TCC1) per ounce of gold sales made up $781 (US$588) comparing to $759 (US$614), a 3% increase YoY due to increase of stripping ratio (4.58m3/t compared to 3.71m3/t YoY).
  • The reported net income for Q2 2016 was $1,938k or $0.0015 per share, for Q2 2015 the net loss from continuing operations was $3,074k or $0.01 per share.
  • The accumulated net income for H1 2016 was $1,036k comparing to net loss from continuing operations for H1 2015 of $12,596k.
  • Adjusted EBITDA for H1 2016 was $3,680k compared to negative EBITDA of $519k in H1 2015, for Q2 2016 was $3,199k compared to $680k in Q2 2015. Adjusted EBITDA margin was 34% for H1 2016 and 36% for Q2 2016.
  • Cash inflow from operating activities before changes in working capital amounted to $4,483k for H1 2016 compared to cash outflow used in operating activities of $2,841k in H1 2015.
  • Capital expenditures for H1 2016 amounted to $9,649k compared with $2,645k in H1 2015. The Company invested mainly on machinery and equipment for Savkinskoe ($4,692k), on mine properties in Zolinsko-Arkiinskaya ($971k), on new licenses in Nasedkino ($1,685) and other.

Roman Kashuba, CEO commented, “We are pleased to report our 1H 2016 results. Mangazeya delivered strong production period and the Company turns to profit. We expect and focus on keeping the achieved results and finishing the current financial year within the annual guidance.”

FINANCIAL RESULTS FOR Q2 AND H1 2016

The Company reported operating income of $2,856k in Q2 2016 compared to income of $502k in Q2 2015. The increase was mainly the result of increased sales volume by 66% and increase of gold price by 17%. For 6m 2016, the operating income amounted to $3,257k compared to operating loss of $708k in H1 2015. The change was mainly the result of the beginning of production and sale in Q1 2016 whereas in Q1 2015 the Company suspended production.

Administrative expenses in H1 2016 decreased by 18% due to changes in service agreement on third party services as a result of cost reduction in Q1 2016. In Q2 2016 administrative expenses was mainly on the same level as in Q2 2015.

During Q2 2016, the Company incurred finance expenses of $553k compared to $7,735k in Q2 2015. For 6m 2016 finance expenses was $1,813k compared to $12,201k in the corresponding period of 2015. Finance expenses in 2016 were accrued on new loan agreement with Sberbank PLC and partly on the related party’s loan agreements, whereas in 2015 all finance expenses were accrued on the related party’s loan agreements converted to shares in the early of 2016.

Cash received from operating activity (before changes in working capital) in Q2 2016 was $3,739k as compared to outflow of $1,515k in Q2 2015. The increase was due to increase in the sale of gold. Cash outflow from investing activities in Q2 2016 was $9,914k as compared to inflow of $8,779k in Q2 2015. The outflow was due to significant capital expenditure in Q2 2016, the inflow in Q2 2015 was resulted from the sale of Geozvetmet. Cash received from financing activities in Q2 2016 was $11,694k compared to cash used in financing activities of $1,590k in Q2 2015. In Q2 2016 the Company received the loan under the agreements with Sberbank PLC.

For 6m 2016 cash received from operating activity (before changes in working capital) was $4,483k as compared to outflow of $2,841k in 6m 2015. Cash outflow from investing activities in 6m 2016 was $4,707k as compared to inflow of $7,831k in H1 2015. The inflow in 6m 2015 was resulted from the sale of Geozvetmet. Cash received from financing activities in 6m 2016 was $11,664k compared to cash received in financing activities of $3,498k in 6m 2015.

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