TORONTO, Aug. 29,
2022 /CNW/ - Magna Gold Corp. (TSXV: MGR)
(OTCQB: MGLQF) ("Magna" or the "Company"), today announced
operating and financial results for the three and six months ended
June 30, 2022 and 2021 ("Q2 2022" and
"Q2 2021", respectively). All figures are in US Dollars, unless
otherwise expressed.
Q2 2022 Operating and Financial Highlights
- Total tonnes mined during Q2 2022 were 5.9 million compared to
6.1 million during Q2 2021.
- Q2 2022 strip-ratio was 3.5:1 compared to 4.0:1 during Q2
2021.
- Tonnes of ore processed during Q2 2022 were 1.4 million
compared to 1.3 million during Q2 2021.
- Ore mined grade from June 2020 to
date averages 0.39 g/t Au, which is within 5-10% of the grades set
forth in the technical report dated August
8, 2020.
- Gold production of 10,795 ounces during Q2 2022 compared to
11,713 ounces during Q2 2021.
- Revenues for Q2 2022 were $21.0
million compared to $21.2
million during Q2 2021.
- Production costs of $24.7 million
during Q2 2022 compared to $17.7
million during Q2 2021. The increase is mostly due to
inventory drawdown during Q2 2022.
Cash Position and Working Capital
- Cash at June 30, 2022, was
$1.4 million compared to $0.3 million at March 31,
2022.
- As of June 30, 2022, working
capital was negative $35.4 million
compared to negative $22.7 million at
March 31, 2022.
Corporate Update
The Company has experienced some difficulties with operations at
the mine relating to ore sourcing from certain areas of the block
model. To mitigate the long-term effects of this, the team has
undertaken several initiatives, both internal and external, to
maximize the value of the San Francisco Mine. These initiatives
include, but are not limited to, financing discussions with various
counterparties to accelerate stripping and development activities,
mine plan optimization, block model audits and improvements, and
exploiting efficiencies in alternative mine sequencing. Management
is also open to strategic alternatives and transactions in an
ongoing effort to create value for shareholders. Based on
prevailing market conditions, management believes it is prudent to
preserve capital by reducing mining rates and secondary activities
across the Company's portfolio of assets. As a result of these
initiatives, the Company's board and management determined that
previously stated guidance for FY 2022 will be retracted and
revised at a later date when a more accurate estimate of production
impacts is known.
Arturo Bonillas, President and
CEO of Magna Gold, stated: "It
has been both a rewarding and difficult journey bringing the San
Francisco Mine back into production. Given the market conditions
and limited resources, the team has managed to accomplish much and
through our cost conservative and alternative strategies, we look
to build increased value for all our stakeholders moving
forward."
The financial statements and MD&A for the three and six
months ended June 30, 2022 and 2021,
are available on SEDAR (www.sedar.com) and on the Company's website
(www.magnagoldcorp.com).
About Magna Gold Corp.
Magna is a Mexico focused gold
and silver production company engaged in acquiring, exploring,
developing and operating quality precious metals properties in
Mexico. It is committed to
advancing its 100% owned flagship San Francisco Mine, its Margarita
Silver Project and other highly prospective mineral properties
located in Sonora and in
Chihuahua. The primary strength of the Company is the team of
highly experienced mining professionals with a proven track record
of developing properties in Mexico
from discovery to production. Magna employs community members and
services in its operations.
ON BEHALF OF THE BOARD OF DIRECTORS
Arturo Bonillas
President and CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Statements
This News Release includes certain "forward-looking
statements" which are not comprised of historical facts.
Forward-looking statements include estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "expects",
"estimates", "may", "could", "would", "will", or "plans". Since
forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Although these statements are
based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management's expectations. Risks, uncertainties and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward-looking information in this news release
includes, but is not limited to, the Company's objectives, goals or
future plans, exploration results exploration and mine development
plans, production (including gold production expectations and
guidance), processing and mining expectations (including statements
regarding expansion and advancement of assets) and strip ratio
trends and expectations. Factors that could cause actual results to
differ materially from such forward-looking information include,
but are not limited to failure to identify mineral resources,
failure to convert estimated mineral resources to reserves, the
inability to complete a feasibility study which recommends a
production decision, the preliminary nature of metallurgical test
results, delays in obtaining or failures to obtain required
governmental, environmental or other project approvals, political
risks, uncertainties relating to the availability and costs of
financing needed in the future, changes in equity markets,
inflation, changes in exchange rates, fluctuations in commodity
prices, delays in the development of projects, capital, operating
and reclamation costs varying significantly from estimates and the
other risks involved in the mineral exploration and development
industry, risks related to the effects of COVID-19 on
the Company; 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 in this news release 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. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
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SOURCE Magna Gold Corp.