Commodities

Metals Exploration Pretax Profit Rose in 2021 — Commodity Comment

By Jaime Llinares Taboada

Metals Exploration PLC on Monday reported an improved pretax profit for 2021, although its operating profit fell 3.6%. Here’s what the owner of the Runruno gold mine in the Philippines had to say:

On 2021 performance:

“Operational profit was US$29.4 million (2020: US$30.5 million) as the Runruno mine’s operational performance in FY2021 consolidated upon positive improvements that first emerged during FY2019.”

“Gold production for FY2021 was 73,206 ounces (2020: 67,552 ounces) which exceeded the Group’s FY2021 production guidance of between 64,000 to 67,000 ounces. The increased gold production was achieved with average gold recovery improving by 17% from 72.2% in FY2020 to 84.5% in FY2021. The All-In-Sustaining-Cost (AISC) for FY2021 was US$1,281 per ounce (2020: US$1,259 per ounce), which was in line with the FY2021 AISC guidance of approximately US1,275 per ounce.”

“During FY2021 the gold price remained strong resulting in an average sales price of US$1,792 per ounce (2020: US$1,782 per ounce). Total sales for FY2021 were US$129.8 million, a 6.3% increase over the FY2020 sales proceeds.”

“During FY2021 the cash generated from operations was US46.5 million (FY2020: US$28.8 million). This enabled the Group to accelerate its senior loan repayments in accordance with the October 2020 restructured debt repayment arrangements. The restructured debt provides the Group with significant flexibility in repaying its borrowings while providing certainty of its ongoing financial stability.”

On 2022 outlook:

“Notwithstanding potential impacts from the continuing COVID-19 pandemic, FY2022 operations should maintain the efficiencies that have been developed over the past three years such that free cash flow is maintained from a stable consistent level of mining and gold production. However, gold production may be impacted in the short term due to changes in the mine plan to cater for the land access issues detailed above.”

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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