Mangazeya Mining Ltd WHTGF

Mangazeya Mining Year-end Financial Statements

[relic]

NEWS RELEASE
Mangazeya Mining announces the filing of its 2021 Year-end Financial Statements and
MD&A, and financial results
TORONTO, ONTARIO, April 29, 2022 – Mangazeya Mining Ltd. (“Mangazeya” or the
“Company”) (NEX: MGZ.H) announced the filing of its audited consolidated financial statements
(“Financial Statements”) and management’s discussion and analysis (“MD&A”) for the financial
year ended December 31, 2021 as required by the National Instrument 51-102							Continuous
Disclosure Obligations.
All figures are quoted in thousands of Canadian dollars unless otherwise indicated
Fourth quarter and 2021 highlights:
4Q 2021	4Q 2020	Change		%	2021	2020	Change	%
Gold production, ounces	37,048	17,328	19,720	113.8%	87,866	51,562	36,304	70.4%
Refining gold, ounces	37,732	21,067	16,665	79.1%	86,433	50,729	35,704	70.4%
Gold sales, ounces	36,818	20,991	15,827	75.4%	85,915	51,995	33,920	65.2%
Ore mined, tones	498,174	302,599	195,575	64.6%	1,894,875	1,343,775	551,100	41.0%
Stripping ratio, m3/t	2.75	2.23	0.52	23.3%	2.45	2.00	0.45	22.5%
Ore processed, tones	387,526	326,450	61,076	18.7%	1,353,025	1,340,975	12,050	0.9%
Ore grade in ore processed, g/t	3.10	1.99	1.11	55.8%	2.37	1.60	0.77	48.1%
Revenue	83,897	53,087	30,810	58.0%	193,319	128,361	64,958	50.6%
Adjusted EBITDA 1	57,905	25,452	32,453	27.5%	118,122	58,731	59,391	101.1%
Total cash cost per ounce
Savkino (TCC), CAD 1	-	1,843	(1,843)	(100.0%)	-	1,533	(1,533)	(100.0%)
Total cash cost per ounce
Kochkovskoye (TCC), CAD	1,812	1,294	518	40.0%	1,799	1,200	599	49.9%
Total cash cost per ounce
Nasedkino (TCC), CAD	457	923	(466)	(50.0%)	614	1,001	(387)	(38.7%)
Average gold price, CAD 1	2,233	2,529	(296)	(11.7%)	2,223	2,465	(242)	(9.8%)
Cash balance	37,799	45,734	(7,935)	(17.4%)	37,799	45,734	(7,935)	(17.4%)
Cash flow from operating
activities before changes in
working capital	56,227	20,575	35,652	73.3%	115,917	51,478	64,439	125.2%
Cash flow used in investing
activities	(12,897)	(19,004)	(6,107)	(32.1%)	(37,987)	(58,292)	20,305	(34.8%)
Cash flow (used in) / provided
by financing activities	(5,173)	11,511	(16,684)	(144.9%)	(47,473)	63,201	(110,674)	(175.1%)
•	In 2021 the total revenue of the Group increased by 51% compared to the previous year in line
	with the increase in sales volumes by 65%.
•	The total gold production in 2021 amounted to 87.9k ounces, which represents a 70% increase
	in comparison with the previous year, mostly because of the higher volumes of production and
	processing of ore with higher concentration of gold at Nasedkino deposit.
•	The Group had a total net negative cash flow of $7.3 million in 2021, that also excludes a
	payment under the bank loan agreement in the amount of $9.4 million (7.5 million USD) that
	was technically rescheduled from December 2021 to January 2022.
•	The decrease of the total cash cost per ounce at Nasedkino deposit among other factors is
	attributed to processing of ore with a high concentration of gold (2.9 g/t) in 2021, it is expected
	that in 2022 and onwards this parameter would be of a lower level.
•	The recent developments in relation to the geopolitical environment since the end of February
	2022 and the corresponding serious sanction measures imposed on Russia represent significant
1The adjusted EBITDA, total cash cost and average gold price are non-IFRS performance measures explained on page 3 of this News Release. Non-IFRS
performance measures provide additional information and should not be considered in isolation or a substitute for measure of performance prepared in
accordance with IFRS.
								1

	challenges for the Company’s operations and its financial position (see below ‘subsequent
	events’).
	Savkinskoye deposit
	In 2021 no gold has been produced or sold, the Company resumed stripping activities at the
	end of 2021 and plans to resume production in 2022.
	Kochkovskoye deposit
	The gold produced in 4Q and in the year 2021 amounted to 3.5 and 13.6k ounces respectively,
	which is lower than in the same periods of the previous year due to reduction of mining and
	processing activities in part of oxidized ore.
	The sales of gold were 4.1k and 13.5k ounces in 4Q 2021 and 2021 respectively.
	The average TCC for gold mined at Kochkovskoye for 2021 was $1,799 per ounce, which
	represents a 50% increase in comparison with 2020 ($1,200) due to the decrease of production
	and sales volumes, while the fixed cost share in the cost of sales structure remained stable.
	Nasedkino deposit
	In 4Q and in the year 2021 respectively 33.6k and 74.3k ounces of gold were produced
	representing a significant increase in comparison with the previous year due	to	higher
	volumes of gold mined and processed.
	In 4Q and in the year 2021 respectively 32.7k and 72.1k ounces of gold were sold.
	The TCC for gold sold amounted to $614 per ounce that is by 39% lower than in		the
	comparative period due to the effect of decrease of the fixed cost component in the cost of
	sales structure per one unit sold because of the increased volumes of production and sales.
	The decrease is also related to processing of the ore of a higher gold grade that is a temporary
	factor applicable for the reporting period (2021), the Company expects this parameter to be
	of a lower level since 2022 and onwards.
•	The gross consolidated profit of Mangazeya Mining Ltd for the 2021 amounted to $103.4 mln,
	and the gross profit margin was 53%. The increase of gross profit against the comparative
	period by 70% due to higher revenue as well as the reduction of the fixed costs share in the
	cost of sales structure of Nasedkino due to higher amount of production and sales volumes.
•	The general and administrative expenses for 2021 were $9.9 mln, representing a decrease of
	15% compared to the same period of the previous year.
•	In the 2021 the Company had a positive adjusted EBITDA of $118.1 million and an adjusted
	EBITDA margin of 61%.
•	The finance expenses of the Company in 2021 totaled $56.0 million, including the expenses on
	derivative financial instruments of $39.8 mln as well as interest expenses on bank loans in the
	amount of $11.3 mln.
•	The Company’s net income for the year 2021 was $51.8 million.
Cash flow and capital resources
•	In 2021 the Company had a positive cash flow of $115.9 million from operating activities
	before changes in working capital, being a result of increased volumes of sales and stable
	market prices.
•	During 2021 the Company invested $38.0 million in technical enhancement of the
	production facilities, exploration and evaluation activities and upgrade of IT infrastructure.
•	In 2021 the Company’s cash outflow on financing activity was $47.5 million, representing
	settlements under bank loan agreements, payments in regard to finance lease obligations and

financial instruments. This excludes the payment under the bank loan agreement in the
amount of $9.4 million (7.5 million USD) that was technically rescheduled from December
2021 to January 2022.
Subsequent events
The deterioration of the geopolitical situation resulting from the conflict in Ukraine rapidly developing
since the end of February 2022 has led to severe economic sanctions adopted by the United States, the
European Union, the United Kingdom, Canada and other countries against Russian Federation. The
already adopted measures and announced future restrictions represent significant challenges and an
increased level of uncertainty for the Russian economy in general and specific industries in particular,
including the metals and mining sector. The management of the Company considers the main factors
of risk:
-	the global disruptions in the supply chains, leading to higher operational and capital costs for
	the Company.
-	the sanctions imposed on the banking system imply difficulties of access to capital markets,
	resulting in increased borrowing rates
-	the general macroeconomic environment may affect the gold sales by the increased discounts
	to the gold price.
While the management assumes that the Company will be able to continue its current operational
activities and work on the achievement of its business goals, the unprecedented sanctions already
adopted and possible in the future, and further unpredictable developments of economic and political
situation are expected to have an impact on the financial results of 2022.
Non-IFRS measures
	•	The adjusted EBITDA is a non-IFRS measure used by the Company to analyze its performance in regard to its
		ordinary operational activity and also for comparison purposes with the other companies in the industry
		excluding non-recurring and irregular items.
	•	The Total Cash Cost (TCC) is a non-IFRS measure that is used by the Company to evaluate and analyze its
		performance and for comparison purposes between own assets as well as with other companies in the industry.
	•	The average price of gold sales is a non-IFRS measure that is used for analytical purposes and represents the
		total revenue from the sales of gold divided by the total amount of units sold.
The	Financial Statements and MD&A are available on Mangazeya Mining’s			website		at
https://mangazeyamining.ru/ and have been filed on SEDAR at www.sedar.com.
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.