Magna Gold Corp V.MGR.H

RE:1st quarter earning report.

[MacRellen]

Seems we were both too optimistic, at least as far as q1 is concerned. The recent drop in price suggests that someone smarter than us anticipated this, and sold in advance of the results, so hopefully share price won't fall much further, but we shall see. There's no denying that this quarter looks really bad though, with cash costs of $1675 and site AISC of $2467, and less than 12koz produced.

It's not all bad though. The guidance for the rest of the year is still good (2022 production of 65-75koz @ cash cost of $1250-1350). Seems the main reason for the high costs were stripping activities "required in order to gain access to new ore zones. These activities will continue during Q2 2022 and should result in increased production of gold during the second half of fiscal 2022" (from the MDA). So q3 and q4 should look a lot better. It was similar in 2021, q1 was a lot worse than the rest of the year, even worse than q1 this year, also due to very high strip ratio (though they weren't in commercial production then). They still managed EPS of 6 cents for the whole year.

So I hope (and think) we'll see the same pattern this year, with strip ratio much lower for the remaining quarters than for q1. And hopefully they won't need financing that dilutes shareholders at current prices. (In the MDA they state "The working capital deficiency is expected to be remedied by the generation of cash flows from operations and, if not sufficient, by raising additional capital.")