Metals Exploration exceeds mining and processing budgets in third quarter

Natural resources exploration and development company Metals Exploration updated the market on operations at the Runruno gold project in the Philippines for the latest quarter on Friday.

The AIM-traded firm said total ore mined was 464 kilotonnes, with total ore and waste mined of 2.77 megatonnes, slightly exceeding its budget for ore mined.

It said key mobile fleet equipment rebuilds began in the third quarter, and would continue into the first quarter of 2020.

Average mined gold grade was 1.39 grams per tonne, which was consistent with the historical dilution rate.

Metals Exploration said on-ground activities in relation to access development to mine plan stages three and four, and the resettlement of illegal miners away from mine plan those mine plan stages, began in the third quarter as well.

Looking at its processing operations, a total of 18,848 ounces of gold was poured during the quarter, with throughput exceeding budget by 74 kilotonnes.

Gold recovery was 77.6% in the period, with gravity circuit gold recovery achieving 30.8%.

The company said ‘BIOX’ oxidation rates were still below design, however feed rates had improved to average 57.5 tonnes per day of sulphur average for the quarter and an average oxidation rate of 61%.

Metals Exploration said CIL recovery was maintained at 85%.

On the financial front, 18,239 ounces of gold were sold during the third quarter, at an average realised gold price of $1,479 per ounce.

Discussions with the group's lenders to restructure its overall debt position were ongoing, and a standstill from making principal and interest payments remained in place until further notice.

Cash at bank at 30 September totalled $5.2m.

“A standstill agreement, first put in place in March, remains in place with both the group's lenders, HSBC and BNP Paribas, and its major shareholders, MTL Luxembourg and Runruno Holdings, as holders of its mezzanine debt,” Metals Exploration’s board said in its statement.

“Under this standstill agreement, the group is not required to make interest or principal payments to either the senior lenders or the mezzanine lenders until further notice.

“The aim of this standstill has been to provide time for all parties to consider debt restructuring options.”

Extensive discussions and negotiations had been held with all lenders during the standstill period, the board confirmed.

“Although this process has taken longer to conclude than expected, discussions are continuing, and a final outcome is expected during the fourth quarter.

“Until a re-structure of the group's debt is achieved all relevant interest and fees continue to be accrued.

“On this basis, the total interest-bearing liabilities as at 30 September were $121.9m.”

At 1126 GMT, shares in Metals Exploration were down 14.2% at 1.05p.