Jim's Mining Letter - May 10, 2024

Mandalay Resources (MND.TO MNDJF) announced financial results for the first quarter ended March 31, 2024, supported by by what the company described as solid production results, disciplined capital allocation, and favorable metal prices. Significant strengthening of balance sheet was reported with a cash balance of $47.1 million. The company generated $29.5 million and $16.1 million in cash flow from operating activities and free cash flow, respectively. Consolidated revenue was up 32% and 10% as compared to Q1 2023 and Q4 2023 respectively, reaching $55.5 million. Björkdal recorded its highest ever quarterly revenue of $24.9 million and Costerfield generated $30.6 million in quarterly revenue, its highest since Q2 2022. Consolidated quarterly adjusted EBITDA was $26.7 million, a two-fold increase as compared to corresponding quarter last year. Consolidated cash operating cost per gold equivalent ounce produced decreased 15% to $1,039 per ounce in Q1 2024 compared to $1,222 in Q1 2023. All-in sustaining cost decreased to $1,430 per gold equivalent ounce produced in Q1 2024, compared to $1,612 in Q1 2023. Consolidated net income was $5.9 million ($0.06 or C$0.09 per share). Exploration expenditure is anticipated to remain on course, with an expected full-year spending of $12 to $15 million across both operational sites. Additionally, the company continues to look for M&A opportunities in the sector.

Ivanhoe Electric (IE IE.TO) announced the signing of a definitive exploration alliance agreement with a subsidiary of BHP (BHP.AX BHP BHP.L). The alliance aims to explore mutually agreed areas of interest in the United States to identify projects within those areas of interest that may become 50/50 owned joint ventures. The initial areas of interest are in Arizona, New Mexico, and Utah. The alliance is for a term of three years, which may be extended. BHP (through a wholly owned subsidiary) will provide the initial funding of $15 million and any subsequent funding will be on a 50/50 basis. Ivanhoe Electric will provide the Alliance with access to one of its new generation Typhoon geophysical survey systems as well as the machine learning algorithmic software and data inversion services of its subsidiary, Computational Geosciences. The alliance aims to explore the untapped mineral wealth of the United States using IE’s Typhoon and CGI technologies; the companies say they have a common goal to find new sources of the critical minerals necessary to meet growing demand associated with the energy transition and the electrification revolution.

Hecla Mining (HL) announced first quarter 2024 financial and operating results. The company produced 4.2 million silver ounces, an increase of 43% over the fourth quarter of 2023. Lucky Friday completed the ramp-up to full production with 1.1 million silver ounces produced and improved safety at Keno Hill increased throughput 29% over the prior quarter, producing 0.6 million ounces of silver. 2024 production and cost guidance is reiterated. Sales were $189.5 million, 44% from silver and 34% from gold. Net loss applicable to common stockholders was $5.9 million or ($0.01) per share and adjusted net income applicable to common stockholders was $6.5 million or $0.01 per share. Consolidated silver total cost of sales was $108.2 million and cash cost and all-in sustaining cost per silver ounce (after by-product credits) was $4.78 and $13.10, respectively. The company received $17.4 million in Lucky Friday fire related insurance proceeds. The first quarter is said to reflect an inflection point with the strong performance from Greens Creek, achieving full production at the Lucky Friday, and significant improvements in safety, environment, and production from Keno Hill. Per Phillips S. Baker Jr., President and CEO, with this strong start to the year, the company is well-positioned to achieve production and cost guidance for 2024. Hecla is the largest U.S. silver producer and is on track to be Canada's largest this year. With silver production growth expected up to 20 million silver ounces by 2026, Hecla is said to be the fastest growing established silver producer.

Tudor Gold (TUD.V TDRRF) announced that crews are on site preparing camp and drill locations for the company’s upcoming 2024 exploration program at the Treaty Creek Project, located in the Golden Triangle of Northwest British Columbia. Phase 1 of the 2024 exploration program is expected to consist of approximately 10,000 meters of diamond drilling at the Goldstorm Deposit. The primary objective of the Phase 1 drill program is to expand and upgrade the recently released mineral resource estimate. Several drill holes have been designed as step-out drilling to the high-grade Supercell One system identified in 2023. Supercell One is a gold dominant, quartz-sulphide, breccia-hosted structural corridor open to the northwest, north and east. Drilling will take place from two drill pads that were built last fall in preparation for this program. One drill rig is positioned just beyond the northern limit of known mineralization and the second rig is located at the northeastern boundaries of the Goldstorm Deposit. Drilling will focus on an area located between 200-250 m northeast of the current mineral resource limit. In addition to testing the SC-1 high-grade breccia, the proposed Phase 1 drill holes are designed to expand and convert much of the inferred mineralization within the CS-600 and DS5 domains that is estimated to contain approximately six million ounces of gold-equivalent resource grading 1.25 g/t AuEq. The concept is to add as much high-grade ounces as possible to the current estimated mineral resource of 26.9 million ounces of 1.19 g/t AuEq. A preliminary economic assessment of the Goldstorm Deposit is planned for release in late Q1 or early Q2 2025.

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