Magna Gold Reports Solid Quarter Despite DifficultiesBy Paloma Duran | Wed, 08/31/2022 - 10:28
Magna Gold reported the 2Q22 operating and financial results from its San Francisco mine in Sonora, Mexico. The company highlighted that despite having ore sourcing problems, it closed a solid quarter with results close to those of 1Q22. The company also announced new initiatives it will implement to prevent such issues in the future and to maximize its operations.
Magna reported that during 2Q22, it encountered ore sourcing difficulties in some key mining areas. Consequently, the company has decided to implement several initiatives that will maximize the value of its San Francisco mine operations. By funding discussions to accelerate stripping and development activities, optimization plans, block model audits and upgrades, as well as finding alternatives in mining sequencing, Magna aims to get the best out of its asset.
In addition, the company explained that given the situation of its operations and the market conditions, the best option is to preserve capital by reducing mining rates and secondary activities al all its assets. As a result, the company announced that once it knows more about the impact these initiatives will have on its operations, it will revise its 2022 guidance to provide more accurate information.
“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,” said Arturo Bonillas, President and CEO, Magna Gold.
Among the company's key results in 2Q22 are that it mined 5.9 million tons compared with the 6.1 million in 2Q21. In addition, 1.4 million tons of ore were processed in comparison to 1.3 million in 1Q21. The company's gold production was 10,795oz, less than the 11,713oz produced in 2Q21.
Meanwhile, 2Q22 financing highlights included US$21 million in revenue compared to the US$21.2 million in 2Q21. In addition, production costs were US$24.7 million compared with the 17.7 million in 2Q21. This increase was mainly due to the reduction of inventories in 2022. As of June 2022, Magna had a negative working capital of US$35.4 million, more than the negative US$22.7 million of March 2022.
Magna Gold Corp is a mineral exploration company focused on acquiring, exploring and developing quality precious metals properties in Mexico. It operates with highly experienced mining professionals with a proven track record of developing properties in the country, from discovery to production. In 2021, Magna achieved full scale commercial production at its San Francisco Mine, placing the company on track to achieve its 2021 guidance of from 55,000 to 65,000oz of gold production.