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TMAC Announces Q2-2019 Financial Results

TMAC Resources Inc. (TSX: TMR) ("TMACa?? or the "Companya??) reports its second quarter 2019 financial results. All amounts are in Canadian dollars unless otherwise indicated.


Jason Neal, President and Chief Executive Officer of TMAC, stated, "The royalty transaction announced this morning strengthens the balance sheet with gross proceeds of $57 million to enable ongoing investment in growth at Hope Bay while providing a buffer against operational volatility as well as the funding support for our seasonal sealift. This transaction was determined to be the most attractive cost of capital, preserve the best participation in strengthening gold prices for our shareholders and has the benefit of maintaining both financial and strategic flexibility. TMAC reported consecutive quarters of earnings with a second quarter net profit of $0.01 per share on revenue of $66.1 million with an average realized gold price of US$1,310 per ounce. As previously reported, quarterly production has modestly declined as a result of reduced plant recovery from 84% to 80%, which in turn has contributed to an increase in AISC(1) and Cash Costs(1) to US$1,081 per ounce and US$729 per ounce, and US$1,036 per ounce and US$693 per ounce for the quarter and year to date, respectively.a??


Jason Neal continued, "We continue to have strong drilling results in the growing Doris BTD Extension zone, including in one hole 110.8 grams per tonne of gold over 10.8 metres. Additionally, initial drill results in a new zone we are calling Doris Valley, as part of our Doris regional program, are intriguing and we are evaluating our follow up strategy. At Doris Valley, assays from two holes in the vicinity of good surface grab samples included promising intercepts within the first 15 metres from surface. The first encountered 9.0 grams per tonne of gold over 8.5 metres including 15.4 grams per tonne of gold over 2.3 metres and a second had 5.3 grams per tonne of gold over 4.8 metres including 12.5 grams per tonne of gold over 1.6 metres. There is obviously more work required to follow up on this initial success, but this highlights the potential to grow our mineral inventory through even modest exploration investment.a??


Jason Neal concluded, "In the second quarter the Board of Directors approved the addition of two key capital investments, including additional mining equipment to begin the portal and decline at Madrid North for advanced exploration, as it is important to advance the second potential mine at Hope Bay. Our capital project to improve gravity recovery is complete but highlighted the capacity constraint of the concentrate treatment plant, and the purchase and installation of the scavenger circuit was approved to address gold in solution losses. These items together with an increase in capital for the ocean discharge project, including a scope change to add water treatment, from approximately 90% of the increase in our expansion capital guidance from $20 million to $36 million. We are also narrowing our initial production guidance from 160,000 to 180,000 ounces to now be 170,000 ounces at the top end. Cash costs and AISC guidance has been updated to reflect the change in production guidance as well as a modestly strengthening Canadian dollar and additional royalties for the second half of the year. Cash cost guidance has been narrowed within the existing range, with the low end increasing from US$625 per ounce to US$650 per ounce. AISC guidance has increased by about 5% to now be US$950 per ounce to US$1,050 per ounce.a??
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