September 2021 mnd gf
- 1. CONTINUED PRODUCTION GROWTH AND EXPLORATION SUCCESS SEPTEMBER 2021 TSX | MND OTCQB | MNDJF
- 2. Forward-looking Statements This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life of mine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things: exploration results or production results not meeting management’s expectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward looking statements in this presentation can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 31, 2021, a copy of which is available under Mandalay’s profile at www.sedar.com. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward- looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Quality Control and Assurance Quality control and assurance programs are implemented in line with the standards of National Instrument 43-101. The exploration programs at Mandalay’s properties are supervised by Chris Davis, Vice President of Operational Geology and Exploration at Mandalay Resources, is a Chartered Professional of the Australasian Institute of Mining and Metallurgy (MAusIMM CP(Geo)), and a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information provided in this presentation. Mr. Davis regularly visits Mandalay’s properties and supervises the collection and interpretation of scientific and technical information contained in this presentation. Mr. Davis has visited Costerfield and Björkdal and has supervised the preparation of this presentation. All currency references in US$ unless otherwise indicated. 2
- 3. A Profitable Gold Producer Delivering Value and Exploration Upside 3 Costerfield Mine Australia Björkdal Mine Sweden 105,000 – 117,000 AuEq oz 2021 PRODUCTION GUIDANCE Two producing gold mines in Australia and Sweden – both mining-friendly, tier-one jurisdictions • Successful turnaround with both operations continuing to be significant cash generators in 2021 • At Costerfield, significant Shepherd discovery during 2021, currently performing extension drilling • Björkdal beginning to reap the benefits of higher grade, wider Aurora zone • Exploration success at Björkdal, finding higher grades at depth to north-east
- 4. Strategy 4 Maximize cash flow from operations Unlock further value and mine life through exploration Continue to significantly improve balance sheet Re-invest cash in growth opportunities 1. 2. 3. 4.
- 5. Demonstrated Operational Turnaround 5 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 0 5,000 10,000 15,000 20,000 25,000 30,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 USD$/oz Production AuEq oz Production and Cash Cost Performance Costerfield Production Björkdal Production Cerro Bayo Production Costerfield Cash Cost Björkdal Cash Cost SIX CONSECUTIVE QUARTERS of excellent operational results • Consolidated 57,519 ounces of saleable gold equivalent production in H1 2021 • Significant decrease in Costerfield cash costs in 2020, with stable costs at Björkdal • Sustainable cash cost reductions as a result of higher-grade material and improved underground operations 2020 CONSOLIDATED COSTS & CAPEX Cash cost (1) $843 per oz AuEq All-in-sustaining cost (1,2) $1,254 per oz AuEq Capital expenditures (3) $46.9M 1. Cash cost and all-in sustaining cost are non-IFRS measures. 2. Consolidated costs per Au Eq. oz includes corporate overhead spending and costs associated Cerro Bayo care and maintenance costs 3. CAPEX breakdown: $23.6M capital development, $17.0M PPE & $6.3M exploration
- 6. 6 A Compelling Growth Trajectory 2019 76,659 AuEq oz 2020 (1) 103,444 AuEq oz 2021E (2) 105,000 – 117,000 AuEq oz 2021 CONSOLIDATED COSTS GUIDANCE Cash cost (3) $800 – $1,000 per oz AuEq All-in-sustaining cost (3,4) $1,100 – $1,350 per oz AuEq Capital expenditures $48M – $56M Exceeded original 2020 consolidated production guidance Demonstrated Organic Growth • Costerfield: Slight production increase in 2021 • Björkdal: Steady ramp-up expected from Björkdal in 2021 as production increases from the Aurora zone • On track to attain 2021 production and cost guidance 1. 2020 realized prices: $1,804/oz Au and $5,659/t Sb 2. 2021E gold equivalent production assumes average metal prices of: Au $1,860/oz, Sb $6,600/t 3. Cash cost and all-in sustaining cost are non-IFRS measures. 4. Consolidated costs per Au Eq. oz includes corporate overhead spending, costs associated with the trial processing of waste dumps at Cerro Bayo and total care and maintenance costs
- 7. Capital Structure and Key Shareholders 7 CAPITAL STRUCTURE Share price (CAD$) (1) $2.72 per share Shares Outstanding 91.5M Fully Diluted Shares Outstanding (2) 94.5M Market Capitalization (CAD$) $248.9M Cash and Cash Equivalents (USD$) (4) $39.1M Total Interest-Bearing Debt (USD$) (4) $56.5M Enterprise Value (USD$) (3,4) $216.5M ANALYST COVERAGE BMO Capital Markets Brian Quast Mackie Research Capital Stuart McDougall Share price performance Mandalay Share Price Performance 26% 20% 19% 17% 13% 5% 1. As at September 3, 2021 | 2. Includes: 0.5M RSU, 0.3 PSU, 0.1 DSU and 2M employee stock options with exercise prices of: CAD$0.61 – CAD$6 and expiry dates from Jun 30, 2024 – Jun 30, 2028. 3. Using exchange rate of CAD$1 = USD$0.80 | 4. From Mandalay’s Financial Statements as of June 30, 2021 | 5. Ownership positions are estimates - as at Sept 2021 Note: numbers may be rounded 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 0 0.5 1 1.5 2 2.5 3 3.5 4 8-Sep 8-Oct 8-Nov 8-Dec 8-Jan 8-Feb 8-Mar 8-Apr 8-May 8-Jun 8-Jul 8-Aug Volume Share Price CAD$ Volume Close KEY SHAREHOLDERS CE Mining 26% GMT Capital 20% Ruffer LLP 19% Others 17% AzValor 13% West Face 5%
- 8. Significantly Undervalued Relative to Peers 8 Source: Company filings. 1. Enterprise value reflects share prices as at September 3, 2021 for Peer group and of $2.72 for Mandalay. Mandalay’s 2021E gold equivalent production midpoint graphed. Note Peer group: Wesdome Gold Mines, Superior Gold, Harte Gold Group, Fosterville South Exploration, Fiore Gold, Robex Resources, Great Panther Mining, Gran Colombia Gold, McEwen Mining, Jaguar Mining, Calibre Mining, Roxgold, and Golden Star Resources $229 $588 Mandalay Resources Peers (Average) EV/Proven & Probable Au oz $217 $412 Mandalay Resources Peers (Average) Enterprise Value (USD$M) 111 120 Mandalay Resources (Average) Peers (Average) 2021E Production AuEq. ('000) Despite operational and financial turnaround, MND trading at lower value relative to peers 25 13 Mandalay Resources Peers (Average) YE2020A Free Cashflow (USD$M) $1,225 $1,246 Mandalay Resources (Average) Peers (Average) 2021E AISC (USD$/oz) ~2x more than Peers ~0.5x that of Peers ~0.9x that of Peers ~0.9x that of Peers ~0.4x that of Peers -4% -12% 39% Gold Spot Peers (Average) Mandalay Resources YTD Price Performance
- 10. Costerfield Gold-Antimony Mine Production profile reinvigorated by high-grade Youle vein • Constant ramp-up of Youle production since Q4 2019 • Processed grades of 11.6 g/t Au and 4.3% Sb YE2020 • Stable production scheduled over the next 4 years • Highly-prospective land package with massive exploration upside • Recent exploration success, growing mine life 10 OVERVIEW Location Victoria, Australia Land package 1,293 hectares Life of Mine 4 – 5 years 2021E Production 53,000 – 60,000 Au Eq oz 2021E Cash costs (1) $675 – $825 per oz AuEq 2021E AISC (1) $950 – $1,100 per oz AuEq 2021E CAPEX $16M – $20M P&P Reserves (2) Youle: 396,000 t @ 15.3 g/t Au & 3.3% Sb for 195,000 Au oz & 13,100 Sb t Total: 616,000 t @ 12.8 g/t Au & 3.5% Sb for 255,000 Au oz & 21,700 Sb t 1. Cash and all-in sustaining costs are non-IFRS measures. Please refer to the Company's management's discussion and analysis for further information. 2. Mining Plus Pty Ltd. Effective December 31, 2020, documented in an independent NI 43-101 Technical Report filed March 31, 2021 One of the HIGHEST-GRADE underground gold mine in the world 12.6 11.2 11.5 11.2 11.0 9.9 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 Mill head grade Au g/t
- 11. Youle Vein: High-Quality, Low-Cost Production and Organic Growth Youle providing Costerfield with sustainable organic growth year-over-year 11 0 20 40 60 80 100 0 2 4 6 8 10 12 14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 Recovery % Grade (g/t or %) Grade and Recovery Mill head grade Au g/t Mill head grade Sb % Au Recovery Sb Recovery - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 $USD per AuEq oz AuEq oz Production Production and Cash Costs AuEq produced Cash cost per oz AuEq Produced 14,818 AuEq oz PRODUCTION Q2 2021 30,276 AuEq oz Production H1 2021 – 6% increase vs. H1 2020 10.4 g/t Au & 3.8% Sb GRADES IN H1 2021 11.9 Au g/t & 4.8% Sb H1 2020
- 12. Three Keys to Value Creation at Costerfield 12 Continued Sustainable High- grade Production Deep Hole Drilling Exploring High-Potential Targets • Costerfield is the second highest grade gold mine in Australia after neighboring Fosterville mine. Shepherd discovery continues high grade results • Increasing gold recoveries at plant (CavTube flotation commissioning in Q2 2021) Targeting high-grade mineralization at depth • Regional success has shown potential for super grade deposits within the region • Deep hole program to be recommenced under Shepherd discovery in 2nd half of 2021 Surface drilling on highly-prospective targets • Targets include Youle Extension, Damper Gully, True Blue, and Brown’s & Robinson’s • Exploration update videos available here
- 14. 1. Extensional Drilling at Youle: Continuity of High-Grade • Continuous core defined by multiple intercepts of +50 g/t AuEq over 1.8 m minimum mining width • 2021 extensional drilling intercepted high-grade veining to the North of the current mine design JAN 2021 HIGHLIGHTS: NEW HIGH-GRADE RESULTS NORTH OF YOULE EXTENDING AT DEPTH 345.1 g/t gold and 19.7% antimony over a true width of 0.11 m in BC166W1 316.1 g/t gold and 0.1% antimony over a true width of 0.22 m in BC167 142.0 g/t gold and 0.0% antimony over a true width of 0.07 m in BC157 14 Minerva Intercept BC142 - 0.24m @ 12.6g/t Au & 3.1% Sb New High Grade Gold Domain Open Plunge Minerva Target shape East of Historic workings
- 15. Shepherd Zone: Extension 15 JUN 2021 HIGHLIGHTS: Eastern Veining • 172.3 g/t gold over true width of 0.27 m in BC213; and • 69.5 g/t gold over true width of 1.11 m in BC210 including: • 406.0 g/t gold over true width of 0.14 m Western Veining • 33.7 g/t gold over true width of 3.22 m in BC201 including: • 127.0 g/t gold over true width of 0.69 m; • 712.8 g/t gold over true width of 0.10 m in BC205; and • 19.4 g/t gold over true width of 4.84 m in BC210 including: • 657.3 g/t gold over true width of 0.13 m Eastern and Western veining horizons are extended in the Shepherd Zone, with numerous high-grade gold intercepts along a 400 m strike extent Eastern Veining Western Veining
- 16. 2. Deep Drilling Program: Timeline Mandalay intercepted high-grade gold mineralization in deep drilling in 2014, with 2 of 4 intercepts returning grades that support the Costerfield-Fosterville analogy 16 CSK007: 0.08 m @ 1,361 g/t Au and CSK012: 0.19m @ 345 g/t Au 2014: Intersected high-grade mineralization with two deep holes drilled under Cuffley 2019: Began deep hole program with first deep hole under Youle (completed) 2020: Second deep hole under Cuffley/ Augusta 2021: Continuing drilling under Cuffley/ Augusta/ Brunswick
- 18. Björkdal Gold Mine LONG LIFE ASSET WITH SIGNIFICANT HIGHER GOLD GRADE OPPORTUNITIES AND MINING OPTIONALITY • Currently ramping-up production of higher-grade, more profitable underground ore • Exploration success and development ramp-up at higher-grade, wider Aurora zone continues 18 OVERVIEW Location Skellefteå, Sweden Land package 12,949 hectares Life of Mine 9 years 2021E Production 52,000 – 57,000 Au oz 2021E Cash costs (1) $900 – $1,050 per Au oz 2021E AISC (1) $1,200 – $1,350 per Au oz 2021E CAPEX $32M – $36M P&P Reserves (2) 11.5 mt @ 1.47 g/t Au for 544,000 Au oz 1. Cash and all-in sustaining costs are non-IFRS measures. Please refer to the Company's management's discussion and analysis for further information 2. SLR Consulting Ltd. Effective December 31, 2020, documented in an independent NI 43-101 Technical Report filed Mar 31, 2021
- 19. Björkdal Gold Mine: Operations 19 Operational focus is on ramping-up supply of higher-margin underground ore feed to the mill - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 Tonnage Processing Underground Open Pit Stockpile 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 Au grade g/t Au Production oz Production & Grade Au Production Au grade 22,796 Au oz H1 2021 PRODUCTION 22,000 IN H1 2020
- 20. Aurora Zone: Key to Lifting Underground Production • Mineralization found to extend hundreds of metres; previously was constrained by a marble contact • Significantly wider and consistently higher-grade than current ore – open at depth • Current known mineralization over 500 m horizontally and 400 m vertically • Readily accessible; 10 levels currently being developed • Stoping has been initiated on first levels • Large step-out drilling occurring below and East and West of currently known mineralization 20 Emerging growth catalyst in development Perspective view of the Björkdal Mine looking towards the SSW highlighting the interaction of the veining (Red) marble (Blue) and Björkdal shear (Yellow). Drilling of the 2021 Main Zone extension and Lake Zone infill drilling is also shown
- 21. Aurora Zone Exploration Success Mineralization open in all directions • Underground drilling campaign focused on extending Aurora zone • Drill results demonstrate potential to extend Aurora in all laterally and down dip • High-grade mineralization continuity has been confirmed at depth and to the east in early 2021 21 NOV 2020 HIGHLIGHTS: HIGH-GRADE EXTENSIONS TO BOTH THE EAST AND AT DEPTH • 4.8 g/t gold over a true width of 2.47 m in MU20-007; • 2.7 g/t gold over a true width of 2.82 m in MU20-016; • 8.1 g/t gold over a true width of 2.99 m in DOD2020-063; and • 3.0 g/t gold over a true width of 3.45 m in DOD2020-073
- 22. Depth Extension to the Lake Zone 22 JUN 2021 HIGHLIGHTS: • 226.0 g/t gold over true width of 0.21 m in MU21-003; • 25.3 g/t gold over true width of 1.03 m in MU21-007; and • 4.2 g/t gold over true width of 4.11 m in MU21-004 FEB 2021 HIGHLIGHTS: • 92.2 g/t gold over a true width of 0.40 m in MU20-021; • 32.5 g/t gold over a true width of 1.1 m in MU20-021; • 16.4 g/t gold over a true width of 1.11 m in MU20-022; • 119.2 g/t gold over a true width of 0.44 m in MU20-023; and • 58.5 g/t gold over a true width of 0.32 m in MU20-025 Initial high-grade intercepts demonstrating significant continuation within the Lake Zone at depth and at higher grades
- 23. Main Zone Extension 23 JUN 2021 HIGHLIGHTS: • 174.0 g/t gold over true width of 0.49 m in MU21-010; • 6.1 g/t gold over true width of 8.85 m in MU21-010; and • 105.0 g/t gold over true width of 0.21 m in MU21-015 Direct extensions to 10 veins have been interpreted from the program with 63 significant intercepts within the drilling
- 24. The Path Forward 24 Ramp-up Underground Production Focus on More Profitable Ore Exploring High-Potential Targets • Underground ore is higher-grade and most profitable mill feed • Plan to ramp-up underground tonnage to +1.1Mtpa in 2021 • Increase Aurora zone’s contribution to overall mill feed • Focus on other high-grade vein systems • Extend the mineralization of Aurora zone • Test potential high-grade skarn deposits Underground production ramp-up, delineation and development of the Aurora zone currently underway • Deep drilling under Main and Lake zones • Exploration update videos available here
- 26. Investment Summary 26 Strengthened Operations Strengthened Financial Performance and Return to Profitability High-Potential Exploration Upside High-Potential and Fully-funded for Future Growth • Costerfield: High-grade Youle vein major growth catalyst • Björkdal: Ramping-up underground production, focused on higher-margin ore • Strong growth in revenue, adjusted EBITDA and adjusted net income • Generated $10.9M and $25.3M of free cash in H1 2021 and YE 2020, respectively • Continuing regional exploration highly-prospective targets at both assets • Defined pipeline for long-term value creation • Cash position of $39.1M as at Q2 2021 • Opportunity for net debt free in 2021 • Fully-funded exploration programs • High potential for future profitability and growth