Mandalay Resources Corporation (MND), a mid-tier gold producer, has announced its financial results for the fourth quarter and the full year of 2023. The company reported a total production of approximately 90,000 gold equivalent ounces for the year, aligning with its revised production guidance. Despite facing production challenges in the early half of the year, Mandalay ended 2023 on a strong note with a consolidated net income of $8 million and a year-end cash position of $27 million. Looking ahead, the company is focused on expanding its operations and has set a production target of 90,000 to 100,000 gold equivalent ounces for 2024.
Key Takeaways
- Mandalay Resources met its revised 2023 production guidance with approximately 90,000 gold equivalent ounces.
- The company overcame early-year challenges and reported a net income of $8 million for 2023.
- Mandalay's year-end cash position was $27 million, rising to $37 million by the end of January 2024.
- Production targets for 2024 are set at 90,000 to 100,000 gold equivalent ounces.
- The company plans to enhance operational success and extend mine life at its gold mines.
- $14 million will be invested in exploration activities in 2024.
- The new CFO, Hashim Ahmed, was welcomed during the earnings call.
Company Outlook
- Mandalay is committed to operational discipline and cost-effective production in 2024.
- The focus is on growing the company's value, market capitalization, and trading liquidity.
- Strategic options to increase market cap size and share registry spread are being pursued.
- FX hedging strategies are in place to minimize financial risks.
Bearish Highlights
- The company faced significant production challenges in the first half of 2023.
- Closure of the Lupin Mine has been delayed, with fulfillment of obligations expected by 2025.
- Mandalay was removed from a silver ETF index, contributing to a decline in share price.
Bullish Highlights
- Mandalay demonstrated a stronger performance in the second half of 2023.
- The company is optimistic about a turnaround in the current year.
- There is potential for deals and combinations with other producers to improve liquidity and recognition.
Misses
- The company acknowledged the underperformance of senior gold miners due to poor capital allocation.
- A lack of detail in financial reporting was noted, with promises to address this issue offline.
Q&A Highlights
- The CEO addressed questions on production guidance, grade profiles, and reserve replacement.
- Possibility of dividends was discussed, emphasizing the need for a healthy cash profile.
- Details on product types at the Björkdal Mine and process improvements at the Costerfield Mine were provided.
- The company repurchased 167,000 shares at around $2 each and may buy more this year.
- Exploration plans for Costerfield and Björkdal mines are focused on True Blue and the Eastern extension.
Throughout the earnings call, Mandalay Resources Corporation showed resilience in the face of early-year adversities and outlined a clear strategy for growth and operational efficiency in 2024. With a strong cash position and a focus on disciplined investments, Mandalay is poised to continue its journey as a significant player in the gold sector.
InvestingPro Insights
As Mandalay Resources Corporation (MND) looks forward to a year of growth and operational efficiency, data from InvestingPro provides additional context for investors considering the company's stock. With a market capitalization of $98.37 million, Mandalay operates with a moderate level of debt and has a P/E ratio of 12.9, which adjusts to 21.81 when looking at the last twelve months as of Q4 2023. This indicates that while the stock is currently valued above its earnings, analysts predict that the company will be profitable this year, which is reflected in the company's net income growth expectations.
InvestingPro Tips suggest that Mandalay's high shareholder yield and the fact that liquid assets exceed short-term obligations could be reassuring for investors. However, it's worth noting that the stock has fared poorly over the last month, with a one-month price total return of -17.91%. This could signal a potential buying opportunity for long-term investors, especially considering the company's solid gross profit margin of 38.89% and its revenue growth of 22.25% in Q4 2023.
For those interested in deeper analysis, there are additional InvestingPro Tips available on their platform, which can be accessed at https://www.investing.com/pro/MNDJF. These tips could provide further guidance on the company's financial health and future prospects. Additionally, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a more comprehensive investment tool to navigate the complexities of the market.
Full transcript - Mandalay Res Corp (MNDJF) Q4 2023:
Operator: Good morning ladies and gentlemen and welcome to the Mandalay Resources Corporation Q4 and Year End 2023 Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Friday, February 23rd, 2024. [Operator Instructions] This call contains forward-looking statements, which reflect the current expectations or beliefs of the company based on information currently available to the company. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results of the company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from the current expectations are disclosed under the heading Risk Factors and Elsewhere in the company's annual information form dated March 31st, 2023 available on SEDAR and the company's website. I would now like to turn the conference over to Mr. Frazer Bourchier President and CEO. Please go ahead sir.
Frazer Bourchier: Thank you operator and welcome everyone. Joining me on this fourth quarter and year end 2023 financial results conference call today is Ryan Austerberry, our Chief Operating Officer; Nick Dwyer, our transitioning Chief Financial Officer; and Chris Davis, our Vice President of Operational, Geology, and Exploration. Mandalay Resources released its financial results at market close yesterday. You can find our consolidated financial statements and MD&A on the Mandalay Resources' website or under our profile on SEDAR. Mandalay showcased resilience and the effectiveness of various strategic initiatives by mostly overcoming numerous and various production challenges we encountered, predominantly in the first half of 2023 including production interruptions from weather events, loss of some mobile equipment, labor shortfalls, and mill throughput reductions. However, both sites demonstrated stronger second half year performance and on a consolidated basis, we finished with a much better fourth quarter, concluding the year on a positive note and enabling the company to meet its revised 2023 production guidance, yielding a total of just about 90,000 gold equivalent ounces. The continual operational improvements throughout the year to get back on track were complemented with an impressive safety record, maintaining loss-time and medical incident rates below industry averages. In 2024, we are anticipating a steady operational tonnes and announced production profile within an annual production of between 90,000 to 100,000 gold equivalent ounces. And 2024 will be a critically important year for the company as we build upon the stable operating platform of our company's two underground mine gold producing assets in Tier 1 geographies. A primary focus remains on tracking key lead operational metrics who effectively preempt potential risks to the 2024 plan. The goal for the year is to enhance our operational success and cash flow generation. And another key objective in 2024 is to replace mine depletion at both mines and extend the mine life again across the field. Opportunities remain for expansion in existing mineralized areas and the discovery of new near mine deposits exist at both sites. The strategic emphasis remaining on organic growth, coupled with promising external opportunities, position 2024 is an exciting year for Mandalay. Now reverting back to and reflecting upon Q4 2023, I would like to hand the call over to different members of my team to recap this past quarter for Mandalay, starting first with Ryan, our Chief Operating Officer. Ryan?
Ryan Austerberry: Thanks, Frazer. So reflecting on our key achievements and results in the last quarter, we achieved a consolidated production of 26,941 salable gold equivalent ounces, marking our highest quarterly production for 2023. In comparison to the preceding quarter, there was a significant 42% increase in Costerfield's gold equivalent production, reaching 15,383 ounces. This contributed to Costerfield concluding the year with a total of 47,661 gold equivalent ounces produced. The substantial growth in quarter four can be mainly attributed to elevated gold grades, as well as increased mine tonnes in our underground mining operation. This mine grade increase was due to overcoming previous delays to mining higher grade stoves in central Youle, rather than the periphery of the ore body. Additionally, challenges that led to a reduction in mill tonnes due to processing transitional ore from Youle to Shepherd have been largely addressed with ongoing planned improvements to enhance the plant's consistent throughput. We also showcased sustained improvements for the third consecutive quarter, achieving a production of 11,558 gold ounces. This represents its highest quarterly output since Q1 of 2022. Over the year, Björkdal yielded 42,148 ounces of gold, reflecting a modest improvement over the full year results from 2022. This advancement is mainly credited to improved grades from the eastern extension zone in the second half of the year, and the steady production from the mine after the first quarter, reaching our target annualized rate of processing of 1.45 million tonnes through our mill conversion project by Q2 of this year. I'd like to pass the call to Nick, our Chief Financial Officer to highlight Mandalay's financials.
Nick Dwyer: Thanks, Ryan. So again, as a reminder, the numbers mentioned are in USD, and following were the Q4 highlights. So consolidated revenue was up 22% as compared to the same period last year, reaching $51 million. And it's worth noting that Björkdal had its strongest quarter for revenue since Q1 2022, generating just over $22 million. Mandalay generated a consolidated adjusted EBITDA of $23 million, reflecting a 15% increase as compared to Q4 2022. This translated to $15 million and $6 million in cash flow from operating activities and free cash flow, respectively. Regarding our Q4 unit costs per gold equivalent ounce production, consolidated cash cost was $979 and all-in sustaining cost was $1,296. This was an increase of 8% and 3%, respectively as compared to the same period last year. For full year 2023, Mandalay generated a consolidated net income of $8 million, which translates to US$0.08 per share or CAD0.11 per share. Over the year, our realized gold price was $1,963 per ounce, which was an 8% increase compared to 2022 while the antimony price decreased by 7% to $12,120 per tonne. Mandalay's year-end cash position stood at $27 million with a net cash position of $3.3 million. It is important to highlight though that the year-end cash and net cash positions were adversely affected by delayed cash receipts from shipments, which we received early in the new year. It's also worth noting that our January, 2024 ending cash position had risen by $10 million to approximately $37 million. I'd now like to turn the call over to Chris, our VP of Operational Geology and Exploration. Thanks. Chris?
Chris Davis: Thanks, Nick. Earlier this week we provided updates on the mineral resource reserve for the Costerfield mine in Australia, along with an interim mineral reserve update for the Björkdal mine. At Costerfield, we saw a drop in mineral reserves roughly in line with depletion. Drilling on the in 2023 confirmed high gold grades in a network of seasoned with complex interactions, and although defining Shepherd has bolstered mining confidence, extending the mineral resource has proven somewhat challenging. The current mine life at Costerfield is now 3.5 years, which is a return to historic norms for Costerfield. The main focus of exploration during 2023 was on near mine and regional testing where we have been successful in reporting our first mineral resource on a satellite deposit. The True Blue deposit lies approximately two kilometers to the west of Youle, and although small so far, we have strong hopes that this will turn into another extensive corridor refining. Regarding Björkdal, an interim update was conducted considering the depletion of mineral reserves for 2023. We have also implemented an updated scheduling methodology to better represent the optimal mining practices needed to extract the complex fanning at Björkdal. A comprehensive mineral resource and reserve update for Björkdal as at December 31, 2024 is scheduled for release in Q1, 2025. As for exploration activities in the quarter at Costerfield the drilling focus shifted from Shepherd and Youle to the south of the field, where drilling commenced on several Costerfield extension targets, as well as testing the potential Westwood extension of Shepherd. Drilling of the Brunswick (NYSE:BC) deeps program was temporarily halted, whilst the focus shifted to the prospective panel located to the east of the Brunswick deposit. In early 2024, new mine exploration will continue to focus on external -- sorry extensional drilling testing at Cuffley and Brunswick. Drilling also commenced on the Westwood progression of the Shepherd veining system. The regional folks remained on True Blue, where resource extension was conducted, as well as step-out drill testing on one kilometer striving to the south. Drilling here continued into 2024 and we'll be our main focus in Q1. At Björkdal, new mine drilling concluded on infill programs, drilling to the east of the central zone and to the north of the Boreal zone, while continuing on the Eastern and depth extension of Aurora, a new program focusing on the depth and Northern plant extension of Björkdal mineralization. These programs have continued into 2024 with a new [indiscernible] and extension program set to begin in Q1. There was no regional drilling at Björkdal during Q4 2023. However, assaying and analysis were ongoing from the Q3 -- from drilling in Q3 and the extension of Norrberget mineral resource and the Storheden mineralization. Regional drilling is set to recommence in May 2023 -- sorry May 2024. I would now like to return the call back to our President and CEO, Frazer Bourchier.
Frazer Bourchier: Thanks a lot. Yes, thanks very much for that. Look, well Q4 was our best quarter of the year. We know the full year did not meet our full potential and we intend to rectify that in 2024. So that being said, in 2023, we generated about $43 million cash flow from our operations, $67 million in gross profit, $60 million in EBITDA and we sit now at the end of January of this year with $37 million in cash, underpinned by a proven track record of 10 years operating experience plus. Since joining the company 10 months ago as the President and CEO, I have a much better understanding now of our assets, their potential respective organic development profiles and I have generated and aligned with our Board of Directors on a very important growth strategy in generating much-needed returns for our shareholders. With respect to our executive team, I've added additional bench strength. On March 1, we have a new Executive Vice President, Chief Financial Officer starting Hashim Ahmed. And I'd like to welcome Hashim, who has a proven history of success with over 20 years' experience in our industry and his knowledge, which is extensive and focused on capital discipline and strategic financial acumen, I believe make him an ideal fit for the leadership team. But I'd also like to thank Nick Dwyer for his invaluable contribution, that were long before I joined the company over nine years with Mandalay and I do wish him both success with his future endeavors. And I want to thank him for allowing such a smooth transition and duties to our new CFO. In 2024, the focus remains on operational discipline by achieving consistent, reliable production at budgeted costs while efficiently and prudently deploying all self-funded $14 million in various exploration activities, uncovering what we believe will be near mine and regional exploration opportunities, to grow and extend reserves at both of our assets. In paired with the steady production, Mandalay is poised to enter a new phase, exploring currently numerous strategic initiatives, and I anticipate the company evolving into a significant player is a mid-tier producer in the gold sector as well as improving our trading liquidity, market capitalization and strengthening our balance sheet. On behalf of management or Mandalay's Board and management, I'd like to express my appreciation for both the mine sites hard work, their loyalty and aligning along our core values and their commitment to operational excellence. It's through the collective efforts of these talented individuals and our team that we believe will continue to strive and reach new heights in 2024. So with that, I thank everyone. I conclude this portion of the call. And I would like to open the lines for questions and hand the call back to our operator. Thank you.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Kevin Tracey from Oberon Asset Management. Please go ahead.
Kevin Tracey: Thanks. Hi, Frazer, I got disconnected a bit through, so forgive me, if I ask anything repetitive. My first question, well, first, it was good to see the improvement in the results in the fourth quarter. I have a question on the guidance, given what we saw in the fourth quarter. In the fourth quarter, if I just kind of take the run rate production was 108,000 equivalent ounces. So that's well above the high end of the guidance you gave for 2024. And then all-in-sustaining cost in Q4 was $1,300 an ounce, which is well below the range of the guidance you gave. So, can you talk about what you expect to -- I guess get worse in 2024 versus what you saw in Q4?
Frazer Bourchier: Sure. Yes. Thanks for that Kevin. Look, at the end of the day, it's about Costerfield and the grade profile at that operation. So, because so many of our costs or the 65% of our costs are fixed, if we have lower production and as a result both cash costs and as costs go up. So the great profile at our Costerfield operation fluctuates over the years. It starts out high for the first six months similar to what you would have seen in Q4. And then it peels off as we get a bit deeper and the grades get lower in both antimony as well as within the mine for that particular section. So it's very location dependent, timing dependent. And for a change instead of having a hockey stick profile we have an inverted one with a stronger first half than second half.
Kevin Tracey: Okay. And is that explained by moving to Shepherd? Or I guess are you for the fourth quarter and in the first half of this year were you mining mostly Youle when you're moving to Shepherd in the second half and just Shepherd isn't coming on at the same grades. What explains that?
Frazer Bourchier: It is that in part but I'm actually going to hand over to our Chief Operating Officer who at a high level can sort of just give a bit more color to that.
Ryan Austerberry: Yes. Thanks, Kevin. The -- it comes to antimony the central quarterly ore body at Youle so the first half of that year we're back into the central area. And then after the -- after that we back out to the periphery side, so we move on from the peripheries and we do a retreat to a central core -- central pillar. And yes, so we'll be going step and back out and then recruiting back into sort of the some – the grade profile is a bit up and down because of that if that makes sense.
Kevin Tracey: Okay. And specifically at Björkdal, can you talk about the ramp-up in production from the eastern extension area? Or can you give some sense of what the proportion of ounces produced in the fourth quarter from that higher grade area was and how you expect that proportion to evolve as we go through 2024?
Frazer Bourchier: Yes. Sure. I'll make a couple of comments and then Ryan can add a bit more detail. Look the good news is when we guide into the Eastern extension once the permit was approved mid last year, we don't -- we do know there's higher grade sections in there. We were able to hit that that helped us certainly in Q3, but because we didn't have the permit for a while we're still catching up on some development. So we weren't able to get as much feed through there as we had hoped. But as for next year Ryan I'll let you give a sense roughly at a high level sort of what percentage we think comes from Eastern versus rest of the ore body and why it's reflected in our guidance at Björkdal that we gave in terms of the 43,000 to 47,000 ounces for this year.
Ryan Austerberry: Yes to summarize the start of 2023 when we didn't have the mining concession affected us a little bit in the second quarter and delayed that higher grade area. So we sort of when we got that concession -- mining concession in the second half of the year you've seen the grades pick up. And I guess that we focused on mining that area from that point. For this year it's around 25% to 30% of our tonnes of the operation is from that area. It's still like -- it's still limited area and there's only so much equipment you can run in there at a time. But we are looking at ways in the future to increase the productivity from these better grade zones.
Kevin Tracey: All right. And on the recent reserve report that you released yesterday at Costerfield, so in a very little reserve replacement over the last two years. And that's despite a pretty meaningful step-up in the exploration budget versus where the company had operated historically. And seemingly there were kind of lots of releases over the past two years announcing drilling results and extensions of Youle and Shepherd. So how are we supposed to reconcile all that? And then given what seems like pretty poor returns on exploration spending at Costerfield over the past couple of years, why are you increasing the budget even further there this year?
Frazer Bourchier: Yes, Kevin, I'll take that first. It's an excellent question. And I guess I want to share a couple of things. The short answer is, you're right, for the last two years, although, sure there were good drill results in different places. Once you pull it all together, ultimately, it comes down to the reserve that we have and we mine, and it was not what we were hoping. But in the last 15 years under Mandalay's ownership. We have had this fluctuation that kind of varies between two to five years for the last 15 years. So we were disappointed. It dropped down 3.5 years. We were believing it could stay five. But to your second question in terms of why spend? Look that's an excellent question. We are very focused in terms of how we spend stage gating it, making sure we're not just going to be spending less right in center if we don't get success. So a lot of the spend will be in target testing. It's not infill drilling. So, both what's happened in the past, et cetera, and going forward. And we have to make sure that we think we're going to get test there. And then if not we'll make a decision accordingly. We do believe there's as good a chance in the regional, but the regional unfortunately as optimistic as we are about that that is usually a three to five year -- three to four-year lead time before that comes into reserve. So we will be balanced on that. We will stage-gate it and we're not going to keep going if we don't think we'll get something. But based on the past 15 years we seem to be able to cycle through this two to five-year history of reserves at Costerfield.
Kevin Tracey: Okay. Now a bigger picture question here for you Frazer. Just given you've been in the industry for a while I'm curious on your perspective. Now if I just pull up a chart here of the gold price and the gold mining ETF going back 2007, the gold price has nearly tripled, and the gold mining ETF is down 33%. And then the junior mining ETF, it's only been around since 2009, but over that time frame the gold price has roughly doubled, and the junior mining ETF is down 66%. So what do you think explains this huge underperformance of the industry over such a long period? And what are you doing different at Mandalay, so shareholders have a better experience?
Frazer Bourchier: Yes. So I suppose when I'll answer that question. I think what we have suffered from is partly related to that, but partly separate from what I think the general junior gold space is suffering from. So I want to make sure we separate those two. To give a more general high-level answer on the Junior Gold space relative to the price, I think, there's been a history of underperformance capital blowout. I would say, over -promising under-delivering, that's affected the whole sector. It probably permeates down to the Juniors where that might share a lot of drill results and nothing maybe comes down of it, whether they presented projects that are not that economic or they go to build them and they blow the capital out. So that is maybe in the Junior space part of it. I'm sure that's a much longer answer required. For us I would say, there's somewhat of a different situation going on. As I've shared before, for all intents and purposes we're a semi-private company, not by desire but we have four major shareholders that hold 80% of the stock, they're very supportive, but it's so thinly traded and volatile. There's no real trading liquidity. And that's what takes us down both the path of continuing to focus on our operations. And in terms of what we can do, but also pursuing other strategic options for us to increase both market cap size, spread out the share registry and increased trading liquidity. So that's really part of the -- that's really part of the approach, I've talked about in terms of operations exploration, but also looking at combinations where other producers like us might be suffering from the same fate of being fairly small not enough liquidity and just no recognition in these markets. So as a side note, we do FX hedge to derisk. We've done that this year, for our currency to help us out. And we believe that there will be a turnaround this year.
Kevin Tracey: Okay. Well just so the Senior Gold Miners have hugely underperformed too, right? And they have plenty of liquidity and significant market cap. So I'll just share helping in my perspective, it seems to me the only reasonable explanation for such a big underperformance is poor capital allocation by the industry as a whole and really bad -- well what, bad results from business development. So I hope, just given the really poor experience, industry seems to have had historically the bar for Mandalay in doing deals is pretty high. Because I suppose, you've kind of talked about hoping to increase the liquidity and increase the market cap and so on. And I'm sure you could do that, but what I imagine most shareholders are interested is in increasing the per share value. So with that I'll pass it on to the next caller.
Frazer Bourchier: Yeah. 100%. I hear you, Kevin. And maybe we can take this offline afterwards and have a more detailed discussion about that. And we'll let a few other people ask some questions. But I appreciate your comments, I've heard you.
Kevin Tracey: Thanks pleasure.
Operator: Thank you. Our next question comes from the line of Daniel Baldini. Please go ahead.
Unidentified Analyst: Hi. Good morning. I have two questions. First off, could you explain what in the world is going on at this Lupin Mine, where the closure costs just go up and up and up? Now it's almost $20 million to close the thing now. What in the world is going on there? Thanks.
Frazer Bourchier: Okay. Thanks, Daniel. I'll give you some – a few comments and I'll hand over to my Chief Financial Officer, to add some additional color. Look, the Lupin Mine, I know that came in part of the Elgin deal back in 2014. The plan had been to close that mine really just before COVID came in and there were a number of interruptions that delayed that for two or three years. There are – we're fully bonded on that. We feel fairly comfortable about that in terms of getting that security back. But we have some remaining obligations there that still have to be fulfilled that we plan to do in the final field season of 2025. That's when the majority will be complete. And then after that we believe that most of the work is finally done. So closing mines is never exciting and it's not great but it's as important as opening them and operating them from both an ethical point of view and for the industry. That's a commitment we've taken on and we believe it's manageable and doesn't impact our overall forward profile in terms of ultimate cash generation. Nick, you can add some more color to that if Daniel has a follow-up on that.
Q – Unidentified Analyst: No. That's it. So my second question is sort of related to the previous caller's question. Could you point to deal if you or maybe this development person you've hired have done in your previous capacities that has – that have been sort of big winners for shareholders?
Frazer Bourchier: Sure. I'll go back to the one that I'll group on where both of us together were involved. I mean I've got separate ones myself as does Scott. But probably the big one would have been Nevsun Resources, where eventually that led to a transaction that's different than what we're looking at in terms of combination. But that led to a transaction where [indiscernible] initially came in and then Singen [ph] mining came and bought that operation. And that was after we built the asset operated and then did another acquisition of an asset in Serbia. And then once the company got to a larger size it attracted a fair bit more interest. And that transaction happened. I think it was in 2018 where Singen came and bought that out.
Q – Unidentified Analyst: Okay. All right. So presumably selling Mandalay would be one of the alternatives in your strategy?
Frazer Bourchier: This is what my strategy is to improve the share price, if by growing the company and we become entering up for someone and it makes sense for the shareholders, I would certainly be open to that. I'm not a believer in leading with your foot to try and sell a company. You've got no leverage that makes no sense. I mean the growing value for the shareholders and the company. And if along that journey some were to come in and that's certainly an option. And if it made sense for the shareholders I would totally be open to that. But it's not something I would lead with in terms of a standalone with no other story. So hopefully that makes sense to you Dan.
Q – Unidentified Analyst: Yes, all right. Thanks very much.
Frazer Bourchier: Thank you.
Operator: We have our next question coming from the line of [indiscernible] from PMG. Please go ahead.
Q – Unidentified Analyst: Hi, congratulations on a great quarter. The solution is simple, go back to your 6% dividend. I believe that's what I used to do is 6% of the previous quarter's revenue went to dividends and that would help the share price. No doubt
Frazer Bourchier: Thanks, Ernie. Certainly, an option in terms of, how we get back to our shareholders whether it's the NCIB, which does provide that flexibility to repurchase shares that we think are undervalued and give that back to shareholders. I'm not anti dividend, but I'll just give two colors on dividend while it certainly guarantees, a return for our shareholders. It's a balance with the available cash we have that we think we're going to need to both continue to grow the company be it through exploration and/or M&A. And I also have been involved with companies in the past. When you start a dividend, I believe you really need to maintain that and not stop and start it. So, I'd want to have confidence in our cash profile going forward that was so healthy, that we can continue that at infinite so to speak. I'm just not in that position yet, as I still believe we have a few more pieces to work in terms of how we grow the company overall.
Q – Unidentified Analyst: Okay. That's a good, fair answer. I'd like to ask a couple of questions regarding the process at Björkdal. Could you break down the product type that you got this quarter, flotation concentrate, gravity concentrate middling and Nelson?
Frazer Bourchier: Okay. I'm laughing, not because it's a bad question, but just a bit more detail for me. So I'm going to hand over to our Chief Operating Officer to share the different concentrates roughly we have there that gold and rubies that we sell. And you are right, I mean not only at Costerfield all we produce in our company right now is concentrates. We don't do Björkdal [ph]. So Ryan would you be able to answer this question in terms of that rough set between the different cons in Björkdal?
Ryan Austerberry: Yes. No worries. The very portion of about 50% just under 50% midline is around 25% rotations around just above 20% and then Nelson is very under 4%. They're the rough sort of breakdown of the portions.
Q – Unidentified Analyst: Yes. I mean in the old days you used to provide that detail on the quarterly reports and now, it's basically not there. Also I noticed that you had some open pit, mined ore and that wasn't broken out in the financial statement either. So, part of the problem is Björkdal is basically everything is back calculated from the end. So, it's very difficult to track, how well the mine is doing that way without the detail in the financial reporting.
Frazer Bourchier: Yes. Just to be clear, we do report salable gold, which means gold that we get paid for by the various smelters within our concentrate. That open pit, I mean, fair point but I feel like there was a bit of open pit but it represented like 1%. It was really a small section of the open pit mine. It was pretty minor in the bigger picture. Most of our feed is about 70% 75% from underground and 20% 25% from the surface stockpiles from the open pit nine years ago that run about 0.6 grams a tonne.
Q – Unidentified Analyst: Okay. That's good. And I noticed that at Costerfield that you had a nice improvement in the process there. You went from 4.84 ounces per tonne of antimony concentrate to 10.71. What kind of changes you make to the process there?
Frazer Bourchier: I might again ask our Chief Operating Officer -- Chief Financial Officer to respond to those grades you're talking about in the concentrate Costerfield.
Ryan Austerberry: Are you able to repeat that question please Ernie sorry?
Q – Unidentified Analyst: Yes. The -- I track the ounces of gold per tonne of antimony concentrate. It went from 4.8 ounces last quarter to 10.71 ounces this quarter. So obviously there must have been some kind of process improvement to make that change. Or is it just higher grade?
Ryan Austerberry: It is generally grade related. Sorry go Nick.
Nick Dwyer: Oka, good. It is grade related. And just to confirm part of that ratio is due to the drop of the antimony percentage as an overall percentage of the production. So, it's partly just due to the mining more of Shepherd. More of the Shepherd zone where the antimony -- would be which has got an impact on that. But also process improvements as well.
Q – Unidentified Analyst: And then the other question related to that is if you're mining 11 grams per tonne, how do you come up with 13 grams per tonne head grade on node [ph]? Is there a concentrator effect in the process?
Chris Davis: No. I'll let Frazer answer that. There's always a bit of a lead lag depending on the small stockpile that we run when it's mined and when it goes through. So, there's a little bit of a fluctuation in timing there. But net-net with over six months, everything tends to reconcile pretty closely to what we have underground. Ryan I don't know if you wanted to add a little bit more on that.
Ryan Austerberry: Just to make sure you look at the -- there's a salable AUHU [ph] which is antimony converted to a gold equivalent versus maybe a gold only, but as Frazer said the other reason could be the visible lag of a couple of weeks at least it flows over from the quarter to the next quarter.
Q – Unidentified Analyst: Okay, that's fine. And it would be nice if you could break out in your inventory report on the financials what the inventory is by each mine.
Frazer Bourchier: Okay. I appreciate that Ernie. And again if it's something we can always take it offline and address their issues. So, thanks again.
Q – Unidentified Analyst: Okay, that’s all I ask. Thank you. bye.
Operator: Thank you. Our next question comes from the line of Lauren [indiscernible]. Please go ahead.
Unidentified Analyst: Yes. Good morning. I have a few questions to ask. And it's nice to hear that we're at $37 million at the end of January. So, that's a nice substantial amount of money. My first question is regarding the share buyback that was announced last year. Was any shares bought back last year and terminated or--?
Frazer Bourchier: Yes, it's -- sorry can you hear me Lauren?
Unidentified Analyst: Yes.
Frazer Bourchier: Yes, Frazer here. There were shares bought back. In fact, we'll -- I believe we have a press release. If it didn't go out, it should go out today to show the annual renewal or reapplication of which we approved on that. And within that, we actually state how many shares. It wasn't very many. I believe it was about 300,000 or so. That's a pretty small percentage when we have the ability to go up to 4 million. But the reason we didn't buy a lot of shares back, although we always have the option to, is I really wanted to be careful how we managed cash until I got a better understanding of our future cash needs, capital needs going forward. So after we repurchased -- or sorry, I think it was 167,000, not 300,000 shares at about $2, just over $2.
Unidentified Analyst: Okay. Okay.
Frazer Bourchier: We have renewed that and it gives us the option this year for the same or even more, if it makes sense.
Unidentified Analyst: Okay. Because I didn't see any insider filing for those buybacks last year. So if you're buying shares out of the market, aren't you supposed to file an insider trading report?
Frazer Bourchier: Actually, for buying shares back, that's not necessary. We don't need to do that. But we do summarize and you'll see it if the press release hasn't gone out, the 167,000 shares that I think it was Canadian 237, but we do reference it in the quarterlies as well. So again, I can take that offline if there's something else missing, but I'm pretty sure we're on sides from a governance perspective and it will be shared in the press release that went out today.
Unidentified Analyst: Okay. I thought that all insider transactions had to be reported within a certain period of time, but it could be my mistake, so I apologize.
Frazer Bourchier: Insider do, but I don't believe share buyback is considered part of that when the company's repurchased.
Unidentified Analyst: From the company. Yeah. Okay. I do have a couple of questions on Costerfield. Is there going to be any exploration -- continued exploration done on the Robinson Brown Corridor or has that kind of worked its course and you're moving over to True Blue?
Frazer Bourchier: I'm going to hand over to our VP of Exploration. The short answer is while we haven't given up on that, we just think with managing our exploration dollars, there's a better chance of success of something larger at True Blue, even though we had had some initial success at Robinson. But Chris, do you want to answer Lauren's question on that?
Chris Davis: Yeah, sure. So I guess in short, we do have a small program at depth in the Robinson line due for this year, but I guess the sort of mineral horizon that we're looking for is closer to the surface of True Blue and so that's sort of the main focus of what we're doing this year. We're trying to sort of build on the resource that we've put out and also have this step out testing to test the full length of the corridor. But yeah, we had some extremely high grade results at Robinson last year or the year before and these were in veins that were not as cohesive and we think that they will come together at depth, but that is a little bit further down than what we're dealing with at True Blue. But it's still on the cards for us.
Unidentified Analyst: Okay. That's good. With regards to -- are you still doing any deep hole drilling underneath Cuffley?
Chris Davis: Yeah. Do you want me to jump in, Frazer?
Frazer Bourchier: We'll continue with this one. Yeah. Yeah, absolutely. So Cuffley is becoming again a focus for us, and we are actually doing some deep drilling below Cuffley into the south Cuffley at the moment. But, yeah, that's an evolving story and we're using our learnings from the Shepherd ore body to bring down to the south there, sort of, similar style of mineralization.
Unidentified Analyst: Okay. I'm looking at the geological structure on slide 10. Is some of that kind of a projection on your part as to the fractures and layering in there? Is there any -- like the different color band in that? Is that based on some seismic readings and stuff that you did? Or is it just more knowledge of geology of the area and how you think the layers are represented under the three different mines?
Chris Davis: Yeah. The geological interpretation there is of the geology that we've built on site from seismic and from our drilling obviously, and it does have a relationship for us to mineralization and the mineral horizons. So it's probably a little bit too much to go into it all right now, but yes those are the different geological units or sedimentary units.
Unidentified Analyst: So do you think it's looking more and more like Costerfield with the nuggety gold at the lower layers?
Chris Davis: So lower funds at depth is we're moving more into a turbidite sequence that Costerfield is within over to about 30,000 west of us. So that's something that we're still looking at and some of our deeper Cuffley drilling is heading into that area at the moment. So, yeah, I guess, in a nutshell we're looking at a similar trap environment to Costerfield.
Unidentified Analyst: Okay. Is it looking closer and closer to being a Costerfield style deposit at depth?
Chris Davis: Well, yes, these are deep holes that we have been doing over the last few years to understand the area. And so I can't say that we're getting close to a Costerfield under there at the moment, but we are hitting bits of gold that we've reported on previously and we're still analyzing the area for the right trap environment that we'll be targeting.
Unidentified Analyst: Okay. Well I'll send you a four-leaf clover and maybe we'll get lucky there. How is that?
Chris Davis: Excellent. We'll take it.
Unidentified Analyst: Yeah exactly. Totally right at being shareholder.
Chris Davis: It's still a very tantalizing prospect there.
Unidentified Analyst: Well, the great -- in the antimony helps out the -- I guess my only comment on that is I kind of missed the -- in the last news releases the AU equivalent for Costerfield -- sorry for Costerfield. I like that in the report to see how the antimony adds to the grade. I think it's about a 50% increase, but usually you're reporting 18 grams per tonne equivalent, which is always nice when you're looking at the numbers quickly. Got a couple of questions on Björkdal. Looking at slide 15, just for my own orientation here, the Eastern extension is that the Aurora zone and the newly discovered Boreal zone? Is that what you're calling the Eastern extension?
Chris Davis: No, sorry. The Eastern extension that we referred to as the extension of the Main and Central Zone, which is further back up the mine. And those plunge off to the east.
Unidentified Analyst: Okay. So the drilling through the Aurora zone was done from surface or from underground?
Chris Davis: Predominantly from underground and that's -- yes. So we are drilling ahead of ourselves as we head down, and we're not seeing a limit to this deposit at the moment. And I guess that's what's limiting us.
Unidentified Analyst: Well, that sounds horrible, if you can't see the limits of the deposit. So I was being facetious, of course. So the Aurora zone, will that be pitable or is the grades too far or to below depth there to make it economical?
Chris Davis: Sorry, the Aurora zone, we don't have any plans to put an open pit over Aurora at the moment. We are still planning to mine that from underground. And there is a -- I guess, a significant portion from what we believe is the top of Aurora to the surface.
Unidentified Analyst: I see. Okay. So it's the great -- obviously, the grades are most likely higher underground as close to the surface. I'm going to go back in history I've asked this question again. Is there any plan's to put an ore sorter into Yorkdale operation?
Frazer Bourchier: Yeah, I might -- yeah, thanks for that. We have looked at options for ore sorting, probably the -- if it does make sense, it's going to be more on the beneficiation side not on the optical or sorting for the stockpile. But we have done one study. We're thinking and maybe re-looking at that at the initial study did not prove that at the time to be beneficial to go over sorting. But it's not something we've completely discarded.
Unidentified Analyst: Okay. Yeah, just one more question here. Is there plans to do any drilling on the Southwest corner of the permitted area for Yorkdale? I'm thinking more long Granholm, if I pronounced it correctly, and [indiscernible] in those areas where it's more a BMS copper gold deposits.
Frazer Bourchier: Yeah. Again, I'm going to hand that over just for time, I'll ask Chris to speak high level. But the short answer is the $3 million to $4 million we set aside this year. There is some regional. We're probably the most excited about store heating. That looks like another significant system here that, we're focusing on. But we are going to that area that you speak to, which is right adjacent to where believe is doing some drilling as well, we are going to be doing some targeting there, both field work. Do you want to speak to any drilling there, Chris, in that Southwest section?
Chris Davis: Not just yet. We have been active there over the last couple of years, and we're going to be putting out a release soon on that zone.
Unidentified Analyst: Okay. Well, thank you very much for your time, gentlemen and answering my question.
Chris Davis: Thank you.
Operator: There are no further questions at this time. I'd now like to turn the call back over to Mr. Bourchier for final closing comments.
Frazer Bourchier: Thank you very much for that operator. It's been a long, but informative -- hopefully everyone found that informative healthy call. I do want to share one last thing that happened during the quarter that may explain some of the issue we had with respect to Mandalay had been part of a silver ETF, particularly as the ETF managers group probably close to 1 million shares. And as most of you may have been aware, Amplify ETF, which is another big company took that out. And as a result of that that new ETF went through some rebalancing and reworking in a number of companies, including Mandalay, were deleted from that index. So that did have -- you would have seen the drop in our share price, because we're still thinly traded that got bled out and has put a bit of downward pressure on. Based on where we're going for this year, we're optimistic that now that that is no longer involved in our register, as well as everything else, we've spoken about that we'll be able to recover from that. So I just wanted to add that as one last minute context to wrap it up as a full hour call. So, thank you very much everyone for their time, and both dialing in and webcast, and I hope you have a good rest of the day and weekend. Thank you.
Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
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