NEWS RELEASE
MANGAZEYA MINING LTD ANNOUNCES ITS PRODUCTION RESULTS
TORONTO, ONTARIO, August 31, 2020 – Mangazeya Mining Ltd. (“Mangazeya” or the “Company”) (NEX: MGZ.H) is pleased to announce its production results for the second quarter and the six months ended June 30, 2020.
| Operating results | Q2 2020 | Q2 2019 | Y-o-Y change | H1 2020 | H1 2019 | Y-o-Y change |
| | | | | | |
| Total rock moved, '000 m3 | 974 | 611 | 59.4% | 1,510 | 1,232 | 22.6% |
| Savkinskoye | - | - | 0.0% | - | 297 | -100.0% |
| Kochkovskoye | 552 | 611 | -9.7% | 1,087 | 934 | 16.4% |
| Nasedkino | 423 | - | 100.0% | 423 | - | 100.0% |
| Stripping, '000 m3 | 818 | 467 | 75.2% | 1,238 | 1,001 | 23.6% |
| Savkinskoye | - | - | 0.0% | - | 266 | -100.0% |
| Kochkovskoye | 440 | 467 | -5.8% | 860 | 735 | 17.0% |
| Nasedkino | 378 | - | 100.0% | 378 | - | 100.0% |
| Ore mined, kt | 383 | 348 | 9.9% | 662 | 538 | 23.0% |
| Savkinskoye | - | - | 0.0% | - | 65 | -100.0% |
| Kochkovskoye | 260 | 348 | -25.4% | 539 | 473 | 13.9% |
| Nasedkino | 123 | - | 100.0% | 123 | - | 100.0% |
| Stripping ratio, m3/t | 2.14 | 1.34 | 59.4% | 1.87 | 1.86 | 0.5% |
| Savkinskoye | - | - | 0.0% | - | 4.10 | -100.0% |
| Kochkovskoye | 1.69 | 1.34 | 26.3% | 1.60 | 1.55 | 2.7% |
| Nasedkino | 3.08 | - | 100.0% | 3.08 | - | 100.0% |
| Average grade in ore mined, g/t | 1.36 | 2.19 | -37.9% | 1.46 | 2.11 | -31.0% |
| Savkinskoye | - | - | 0.0% | - | 1.23 | -100.0% |
| Kochkovskoye | 1.40 | 2.19 | -36.3% | 1.50 | 2.24 | -33.0% |
| Nasedkino | 1.29 | - | 100.0% | 1.29 | - | 100.0% |
| Gold in ore mined, kg | 520 | 763 | -31.8% | 965 | 1,138 | -15.2% |
| Savkinskoye | - | - | 0.0% | - | 80 | -100.0% |
| Kochkovskoye | 362 | 763 | -52.5% | 807 | 1,058 | -23.7% |
| Nasedkino | 158 | - | 100.0% | 158 | - | 100.0% |
| Ore stacked, kt | 426 | 412 | 100.0% | 453 | 412 | 10.0% |
| Savkinskoye | 49 | 251 | -80.5% | 49 | 251 | -80.5% |
| Kochkovskoye | 377 | 161 | 134.3% | 404 | 161 | 150.9% |
| Average grade in ore stacked, g/t | 1.48 | 1.62 | 100.0% | 1.50 | 1.62 | -7.6% |
| Savkinskoye | 1.13 | 1.09 | 3.7% | 1.13 | 1.09 | 3.7% |
| Kochkovskoye | 1.53 | 2.45 | -37.6% | 1.54 | 2.45 | -37.1% |
| Gold in ore stacked, kg | 632 | 667 | 100.0% | 677 | 667 | 1.6% |
| Savkinskoye | 56 | 273 | -79.6% | 55.59 | 273 | -79.6% |
| Kochkovskoye | 576 | 394 | 100.0% | 621.89 | 394 | 57.9% |
| Gold production, ounces | 9.13 | 6.83 | 33.7% | 12.51 | 9.09 | 37.7% |
| Savkinskoye | 1.86 | 3.56 | -47.7% | 3.05 | 4.29 | -29.0% |
| Kochkovskoye | 7.26 | 3.26 | 122.6% | 9.47 | 4.80 | 97.4% |
| including | | | | | | |
| Gold from hard-rock deposit | 7.14 | 2.25 | 218.1% | 9.35 | 3.78 | 147.3% |
| Gold from placers | 0.12 | 1.02 | -88.1% | 0.12 | 1.02 | -88.1% |
| Refining gold, ounces | 9.38 | 5.08 | 84.7% | 11.97 | 6.79 | 76.2% |
| Savkinskoye | 2.18 | 2.80 | -21.9% | 3.14 | 3.43 | -8.4% |
| Kochkovskoye | 7.20 | 2.28 | 215.3% | 8.83 | 3.36 | 162.5% |
| including | | | | | | |
| Gold from hard-rock deposit | 7.10 | 1.97 | 260.7% | 8.73 | 3.05 | 186.3% |
| Gold from placers | 0.10 | 0.31 | -68.5% | 0.10 | 0.31 | -68.5% |
| Gold sold, ounces | 10.28 | 4.21 | 144.1% | 13.52 | 6.03 | 124.4% |
| Savkinskoye | 3.21 | 1.93 | 66.1% | 4.71 | 2.66 | 76.8% |
| Kochkovskoye | 7.07 | 2.28 | 210.0% | 8.82 | 3.36 | 162.1% |
| including | | | | | | |
| Gold from hard-rock deposit | 6.97 | 1.97 | 254.5% | 8.72 | 3.05 | 185.9% |
| Gold from placers | 0.10 | 0.31 | -68.5% | 0.10 | 0.31 | -68.5% |
General analysis
•In Q2 2020, mining works started at Nasedkino deposit.
•In H1 2020, the total stripping ratio for all deposits (1.87 m3/t) remained nearly unchanged YoY (1.86 m3/t). The lack of change in 2020 was caused by the final development of Khlebny pit, Savkinskoye deposit, and start of mining works at Nasedkino deposit. In Q2 2020, the stripping ratio was 2.14 m3/t compared to 1.34 m3/t in Q2 2019.
•In H1 2020, the gold in ore mined reduced by 15.2% YoY, or from 1.138 kg to 965 kg due to the reduced gold grade in ore mined (1.46 g/t and 2.11 g/t in 2020 and 2019, respectively) mainly at Kochkovskoye deposit. The gold in ore mined was 520 kg in Q2 2020 and 763 kg in Q2 2019.
•Gold production increased from 9.09k ounces in H1 2019 to 12.51k ounces in H1 2020, as in H1 2019 161k tons of ore with average gold grade of 2.45 g/t and 393.9 kg of gold in ore were stacked, and in H1 2020, 404k tons of ore with average gold grade of 1.54 g/t and 621.9 kg of gold in ore were stacked. In Q2 2020, 9.13k ounces of gold were produced, in Q2 2019 – 6.83k ounces (9.38k and 5.08k ounces of gold were refined, respectively).
•Gold sales increased consequently by 124.4%, or from 6.03k ounces in H1 2019 to 13.52k ounces in H1 2020. In Q2 2020, 10.28k ounces of gold were sold as compared to 4.21k ounces in Q2 2019.
Kochkovskoye deposit
•The volume of mining in H1 2020 was as follows: total ore mined was 539k tons, gold in ore mined was 807 kg, average grade in ore mined was 1.50 g/t, as compared to 473k tons, 1.058 kg and 2.24 g/t, respectively, in H1 2019. The volume of mining increased as in Q1 2019 mining was performed from February to March, and in Q1 2020 – from January to March nonstop. In Q2 2020, total ore mined was 260k tons, gold in ore mined was 362 kg, average grade in ore mined was 1.4 g/t, as compared to 348k tons, 763 kg of gold and average grade of 2.19 g/t in Q2 2019. The volume of mining reduced in Q2 2020 as compared to Q2 2019 as the volume of oxide ore available at ore storage facilities was sufficient to ensure work of ore beneficiation facilities at full capacity.
•In H1 2020, ore stacked was 404k tons, or by 150.9% more YoY (161k tons in H1 2019). The volume of ore stacked increased due to the improved processing flow and the start of ore stacking in March 2020, while in 2019, ore stacking started in May, after completion of construction of crushing-and-screening unit. In Q2 2020, 377k tons of ore were stacked, and in Q2 2019 – 161k tons.
•In H1 2020, average gold grade in ore stacked reduced by 37.1% YoY (from 2.45 g/t to 1.54 g/t) due to the mining of lower-grade ore.
•Gold produced increased from 4.80k ounces in H1 2019 to 9.47k ounces in H1 2020 due to increased volume of ore stacked.
In Q2 2020, 7.26k ounces of gold were produced, in Q2 2019 - 3.26k ounces.
•Gold sales were 8.82k ounces in H1 2020, and 3.36k ounces in H1 2019. In Q2 2020, gold sales were 7.07k ounces, in Q2 2019 - 2.28k ounces.
•Most of gold produced and sold is hard-rock gold. In H1 2020, 8.73k ounces of gold were produced, and 8.72k ounces of hard-rock gold and 0.1k ounces of placer gold were sold. In H1 2019, 3.05k ounces of hard-rock gold and 0.31k ounces of placer gold were produced and sold.
Savkinskoye deposit
•In H1 2020, the volume of production reduced by 29.0% YoY. The change was caused by the completion of deposit development. In Q2 2020, the reduction was by 47.7% YoY.
•The gold sold in H1 2020 increased by 76.8% YoY due to the sales of earlier produced metal. In Q2, the gold sold increased by 66.1% YoY.
•In H1 2020, no mining or stripping works were performed due to deposit development and production of gold from earlier mined ore.
•The volume of ore stacked in H1 2020 reduced by 80.5% YoY due to lack of mining in H1 2020.
Nasedkino deposit
•The volume of mining in Q2 and H1 2020 was as follows: total rock moved was 423k tons, total ore mined – 123k tons, stripping ratio – 3.08 m3/t, gold in ore mined – 158kg, average gold grade in ore mined – 1.29 g/t.
In Q2 2020, neither refining nor production of gold mined at the deposit was performed. The gold production technology used at Nasedkino deposit is different from that one used at Savkinskoye and Kochkovskoye deposits. At Savkinskoye and Kochkovskoye deposits, heap leaching method is used, and at Nasedkino deposit, gravity concentration and direct cyanidation methods will be used at gold recovery factory.
About Mangazeya Mining Ltd.
Mangazeya Mining Ltd. is a NEX-listed mining and exploration company, focused on the development of mineral resources in the Russian Federation.
Contact:
Anton Grigoryev
Corporate Secretary
Mangazeya Mining Ltd.
a.grigoryev@mangazeya.ru
Caution Concerning Forward-Looking Information
This news release contains forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements") relating, but not limited to, the Company's expectations, intentions and beliefs, the Company's financial position, financial alternatives and the Company's ability to continue operations (including any possible defaults and consequences thereof for the Company). Words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology are used to identify forward-looking statements. Such statements are based on assumptions, estimates, opinions and analysis made by the management of the Company in light of their experience, current conditions and their expectations of future developments as well as other factors which they believe to be reasonable and relevant. Forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties that may cause actual results to vary include but are not limited to: the Company's ability to obtain additional financing on acceptable terms or at all; the Company's ability to demonstrate compliance with NEX listing requirements; changes in equity and debt markets; inflation; uncertainties relating to the availability and costs of financing needed to complete exploration, development and production activities; failure to establish estimated mineral resources or mineral reserves (the Company's mineral resource and mineral reserve figures are estimates and no assurances can be given that the indicated levels of gold will be produced); exploration costs varying significantly from estimates; delays in the exploration and development of, and/or commercial production from, the properties in which the Company has an interest; unexpected geological or hydrological conditions; the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties, including the failure of major mining and/or milling equipment; the ability of the Company to service its existing debt facilities; fluctuations in gold and other commodity prices; the existence of undetected or unregistered interests or claims, whether in contract or in tort, over the property of the Company; success of future exploration and development initiatives; competition; operating performance of facilities; environmental and safety risks, including increased regulatory burdens, seismic activity, weather and other natural phenomena; inability to, or delays in, obtaining necessary permits and approvals from government authorities; risks relating to labour; and other exploration, development and operating risks; changes to and compliance with applicable laws and regulations, including environmental laws; political, economic and other risks arising from the Company's activities in Russia; fluctuations in foreign exchange rates; and those risks set out in the Company's public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.