Mandalay Resources Corporation Announces Production and Sales Results for the Third Quarter, 2014

TORONTO, October 14, 2014 /PRNewswire/ --

Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND) announced today its production and sales results for the third quarter, 2014.

Brad Mills, Chief Executive Officer of Mandalay, commented:  "Mandalay's production in the third quarter of 2014 reached new all-time quarterly records with respect to total gold (18,990 ounces), antimony (1,000 tonnes), and total gold equivalent (39,021 ounces).  This excellent performance was due to a record production quarter at Costerfield with the successful transition to stoping from the new Cuffley lode; a strong quarter at Cerro Bayo due to increased throughput and high ore grades; and initial production from the Björkdal mine post-closing of the Elgin Mining acquisition on September 10, 2014."

Mr. Mills continued, "Mandalay sales in the third quarter did not keep pace with the record production as a result of delayed loading of concentrates on ships from Cerro Bayo due to inclement weather at the port.  Otherwise, we realized record gold sales and strong antimony sales from Costerfield and our first gold sales from Björkdal.  We expect the delayed shipments from Cerro Bayo to be caught up by the end of the year."

Mr. Mills concluded with remarks on revised Mandalay guidance: "Total guidance for full-year 2014 has risen slightly to 141,000-156,000 ounces gold equivalent. Within this revision, the guidance for gold and silver production from Cerro Bayo is unchanged.  From Costerfield, the guidance for antimony has been revised upward from the previous 3,000-3,300 tonnes to 3,500-3,800 tonnes, whereas the guidance for gold has been revised downward from the previous 37,000-43,000 ounces to 32,000-37,000.  These changes are due to differences between the ore grades estimated and actually encountered in early Cuffley lode mining; their impacts on total gold equivalent production from Costerfield largely offset each other.  Finally, from Björkdal, while the fourth quarter guidance of 8,000-10,000 ounces is unchanged from the guidance issued upon the close of the Elgin transaction, Björkdal produced 3,091 ounces in the third quarter post-close, which has been added to the full-year guidance."

Saleable production for the three months ended September 30, 2014: 

• The Company produced a record total of 18,990 ounces ("oz") gold ("Au"), a record 1,000 tonnes ("t") antimony ("Sb"), and 823,379 oz silver ("Ag"), representing a record total of 39,021 oz of gold equivalent ("Au Eq.") production. 
• Production at Costerfield (Australia) was a record 9,454 oz Au and a record 1,000 t Sb representing a record total of 16,792 oz Au Eq. The production increase was due mainly to higher tonnage mined and processed as transition to mining in the newly developed Cuffley lode occurred. 
• Production at Cerro Bayo (Chile) was 6,445 oz Au and 823,379 oz Ag, higher than the year-ago-quarter, due to favourable grades and higher throughput. 
• Production at Björkdal (Sweden) was 3,091 oz Au. Björkdal was acquired on September 10, 2014; accordingly, this production relates only to the 20-day period from September 10 to 30, 2014.

Saleable production for the nine months ended September 30, 2014: 

• The Company's production totaled 46,264 oz Au, 2,713 t Sb, and 2,308,330 oz Ag, representing a total of 102,209 oz of Au Eq. 
• Production at Costerfield was 24,625 oz Au and 2,713 t Sb. 
• Production at Cerro Bayo was 18,548 oz Au and 2,308,330 oz Ag.

Table 1 - Third Quarter and Nine Month Saleable Production for 2014 and 2013 

                                         Three months Three months  Nine months  Nine months
              Metal            Source              to           to        ended        ended
                                         30 September 30 September 30 September 30 September
                                                 2014         2013         2014         2013

    Gold (oz)                 Costerfield       9,454        8,831       24,625       21,913
                              Cerro Bayo        6,445        5,611       18,548       16,210
                              Björkdal          3,091            -        3,091            -
                              Total            18,990       14,442       46,264       38,123
    Antimony (t)              Costerfield       1,000          966        2,713        2,470
    Silver (oz)               Cerro Bayo      823,379      733,659    2,308,330    2,266,995
    Average quarterly prices:
    Gold US$/oz                                 1,281        1,328
    Antimony US$/tonne                          9,405        9,928
    Silver US$/oz                               19.76        21.33
    Au Eq. (oz)[1]            Costerfield      16,792       16,053       44,811       39,768
                              Cerro Bayo       19,138       17,399       54,307       54,370
                              Björkdal          3,091            -        3,091            -
                              Total            39,021       33,452      102,209       94,138

^[1] Quarterly Au Eq. oz produced is calculated by multiplying the saleable quantities of Au, Ag, and Sb in the period by the respective average market prices of the commodities in the period, adding the three amounts to get a "total contained value based on market price", and then dividing that total contained value by the average market price of Au in the period.  Average Au price in the period is calculated as the average of the daily LME PM fixes in the period, with price on weekend days and holidays taken of the last business day; average Sb price in the period is calculated as the average of the daily average of the high and low Rotterdam warehouse prices for all days in the period, with price on weekend days and holidays taken from the last business day; average Ag price in the period is calculated as the average of the daily London Broker's silver spot price for all days in the period, with price on weekend days and holidays taken from the last business day. The source for all prices is http://www.metalbulletin.com.

Sales for the three months ended September 30, 2014: 

• The Company sold 16,106 oz Au (a record), 852 t Sb, and 467,606 oz Ag, representing a total of 29,572 oz Au Eq. 
• Costerfield sold 8,891 oz Au (a record) and 852 t Sb.   
• Cerro Bayo sold 3,921 oz Au and 467,606 oz Ag. 
• Björkdal sold 3,294 oz Au in the period from September 10 through the end of the quarter.

Sales for the nine month ended September 30, 2014: 

• The Company sold 42,913 oz Au, 2,355 t Sb, and 2,080,435 oz Ag, representing a total of 92,669 oz Au Eq. 
• Costerfield sold 23,235 oz Au and 2,355 t Sb. 
• Cerro Bayo sold 16,384 oz Au and 2,080,435 oz Ag. 
• Björkdal sold 3,294 oz Au.

Table 2 - Third Quarter and Nine Month Sales for 2014 and 2013 

   

                                         Three months Three months  Nine months  Nine months
              Metal            Source              to           to        ended        ended
                                         30 September 30 September 30 September 30 September
                                                 2014         2013         2014         2013

    Gold (oz)                 Costerfield       8,891        7,532       23,235       20,263
                              Cerro Bayo        3,921        7,090       16,384       16,654
                              Björkdal          3,294            -        3,294            -
                              Total            16,106       14,622       42,913       36,917
    Antimony (t)              Costerfield         852          777        2,355        2,295
    Silver (oz)               Cerro Bayo      467,606      973,107    2,080,435    2,379,766
    Average quarterly prices:
    Gold US$/oz                                 1,281        1,328
    Antimony US$/tonne                          9,405        9,928
    Silver US$/oz                               19.76        21.33
    Au Eq. (oz)[2]            Costerfield      15,148       13,344       40,752       36,818
                              Cerro Bayo       11,130       22,727       48,623       56,629
                              Björkdal          3,294            -        3,294            -
                              Total            29,572       36,071       92,669       93,447

^[2]Quarterly Au Eq. oz sold is calculated by multiplying the saleable quantities of Au, Ag, and Sb in the period by the respective average market prices of the commodities in the period, adding the three amounts to get a "total contained value based on market price", and then dividing that total contained value by the average market price of Au for the period. The source for all prices is http://www.metalbulletin.com with price on weekend days and holidays taken of the last business day.

Revision of 2014 production guidance 

Mandalay is revising its 2014 full-year production guidance upward from the previous 138,000-148,000 saleable oz Au Eq. guidance issued with completion of the Elgin transaction on September 10.  This includes offsetting revisions upward and downward, respectively, of Sb and Au production from Costerfield, and an additional three thousand ounces from Björkdal that was produced post-closing of the Elgin transaction on September 10, 2014.

Table 3 - Revised full-year 2014 production guidance 

                                        Total       Cerro Bayo    Costerfield    Björkdal
    Saleable
    silver production    Moz          3.0-3.2        3.0-3.2
    Saleable
    gold production      oz         66,000-77,000 23,000-27,000 32,000-37,000 11,000-13,000
    Saleable
    antimony production  t           3,500-3,800                 3,500-3,800
    Saleable
    oz Au Eq. production oz Au Eq. 141,000-156,000

About Mandalay Resources Corporation: 

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia, Sweden and producing and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia, the Americas and Europe to generate near-term cash flow and shareholder value.

Forward-Looking Statements: 

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's production of gold, silver and antimony for the 2014 fiscal year. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 28, 2014, a copy of which is available under Mandalay's profile at http://www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. 

Bradford Mills, Chief Executive Officer; Greg DiTomaso, Investor Relations, Contact: +1-647-260-1566