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TMAC Announces Q3-2019 Financial Results

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


Jason Neal, President and Chief Executive Officer of TMAC, stated, "TMAC reported a third quarter net profit of $0.07 per share on revenue of $72.8 million with an average realized gold price of US$1,469 per ounce. EBITDA improved to $35.1 million from $26.2 million in the previous quarter and cash flow from operations before working capital changes improved to $30.1 million from $19.9 million. Quarter-end cash balance was $76.8 million, including $47.4 million unrestricted.a??


Jason Neal continued, "Although plant recoveries in the third quarter increased from 80% to 82%, quarterly production did not improve as plant feed grade was lower. Quarter over quarter, Cash Costs(1) were unchanged at US$729 per ounce, and AISC(1) increased to US$1,155 per ounce from US$1,081 per ounce in the second quarter and is attributed to an increase in sustaining capital per ounce from US$254 to US$343 related largely to annual sealift capital items.a??


Jason Neal continued, "While the Doris Mine is characterized almost uniformly by outstanding ground conditions, the Doris BTD East Limb is unique as it is in contact with the underside of the diabase dyke zone and we have had to undertake significant rehabilitation work after initial development to re-establish a safe working environment. The highest-grade portions of the BTD East Limb are at the end of the sequence and are now scheduled to be processed in the first quarter of 2020. In the release of our operating results on October 15, 2019, we spoke to the need to produce 45,000 ounces in the fourth quarter to meet full year guidance, and we outlined the key areas where we needed to deliver to meet our target. At the time of that release we believed this was within our capability. We are now however forecasting 25,000 to 35,000 ounces, significantly as a result of recent rescheduling of BTD East Limb production. We have evaluated resequencing the mining plan to access this material sooner, but it may result in losing ounces from the overall plan. As with the last stopes of the Doris Hinge zone, which was mined and processed earlier this year, the highest-grade areas at BTD East Limb also need to be blended for processing over a reasonable period and cannot be rushed through the Plant. I am very disappointed to not be able to meet initial annual production guidance, but not so much so that we are going to deviate from the prominence of safety in the mine or risk sterilizing any of the best ore in the Doris mine.a??


Jason Neal concluded, "We are now scheduling release of our Preliminary Feasibility Study ("PFSa??) concurrently with our updated year end Mineral Resource and Mineral Reserve statement. The PFS assumptions are an important input to the Mineral Resource and Mineral Reserve statement, and vice versa, so concurrent release is required. Therefore, please expect both disclosures in the first quarter of 2020. The purpose of the PFS is to define the potential for improved shareholder value through future expansion at Hope Bay. We have been evaluating two cases internally for increased processing rates in parallel to compare against the approach of our 2015 PFS plan: one focused on integrating an open pit with the underground plan; and the second seeking to maximize underground mine production through greater concurrent rather than sequential mine development. Our 2020 PFS will be based on the preferred scenario. Our main objective is to generate free cash flow and shareholder value through disciplined investment, risk assessment and operating flexibility, and does not displace our primary focus of continuing to improve current operating performance. We are creating options not commitments and look forward to presenting the results of our work.a??
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