Mandalay Resources is a Toronto-based natural resource company with an international focus. The precious metals explorer already has producing assets in Australia and Sweden. Its focus remains on furthering growth at both operations, reducing associated costs where it can, and continuing to generate significant positive cash flow.

Part of the company’s philosophy is choosing to operate in areas with low political risk and clear legal frameworks for tenure and taxation.

Joining us today to discuss a little more about the company’s projects and the world of precious metals is Mandalay Resources CEO, Dominic Duffy. 

TMH: So first off, give us some background and tell us a little bit about the company and where your focus lies?

DD: Yeah, so Simon, our main focus, we are a gold-producing company with also a byproduct of antimony in Australia. So we’ve got our two assets, as you mentioned, the pure gold mine in Northern Sweden. That’s a bulk tonnage low-grade mine, but then we have our extremely high-grade narrow-vein underground operation in Victoria, Australia, and that’s producing both gold and antimony. Our main focus over the last several years has really been cash generation for the company. So two years ago, the Company was $60 million in net debt, and the board wanted the focus to be on bringing the Company out of debt and generating maximum cash flow from our two assets and really turning the Company around, and we have done that. We are now net debt free. We’ve been averaging approximately $35 million in free cash flow over the last two years. That’s the US also, and when you consider we’re only a $160 to $170 million Canadian market cap company, you could really consider that we are relatively undervalued for the cash generation where we are currently earning. Our other main focus is on exploration, in Björkdal, it is to lift the grade so that we can have high production tonnage coming from their mine and in Costerfield, Victoria, it is to extend the mine life. It’s already a very profitable operation, and we just want to prolong that.

TMH: You had some promising exploration results last month at your Costerfield operation in Australia. What’s the latest there, and what do you expect going into 2023, not just there but across the company as a whole?

DD: Yeah, so that release was focused mainly on the Youle area, and that’s where all the production currently is coming from in Costerfield. As I mentioned earlier, it’s an extremely high-grade mine, but it’s a single vein, the Youle deposit what we have found underneath it is a series of parallel sub-vertical veining called the Shepherd Zone, and that release was just highlighting some of the extremely high grades that we are finding there. What you do see in Shepherd, because it is multiple veins, does have the potential to add extensive mine life to this asset. I did mention that we are trying to grow the mine life here. It’s currently approximately five years of life we have in front of us. If we can grow the Shepherd Zone significantly, then we could be adding a lot more years to the Costerfield mine and asking about exploration as a whole with the company.

We also do have a focus on Björkdal. There it is trying to increase the grade of this asset, and we have also had some very good results there as well working towards those aims. We began drilling down to the eastern deeps last year. So this is a very long deposit with many veins, and the geological team came up with the theory that we should start focusing on the eastern extents of the mine, and we have been seeing high-grade results from there. That area of the mine is not currently permitted, but we are in the process of getting it permitted, and the application was submitted in January then we hope to have it near year and this year. If we can start exploring those high grades in the eastern deeps of Björkdal, then we should be growing our production in the mine over the coming years.

TMH: You have just released third-quarter production results, take us through those and your reaction to them.

DD: Yeah. Third quarter results were we produced 27,000 equivalent gold ounces. That was up on the Q2 results, although it was below our expectations for the guidance this year. We have had issues over the course of this year with sick leave. So that’s related to COVID, and so I think we’ve increased at least over 30% in both of our assets and the amount of sick leave that people are taking for any cold or flu, and that’s been a pretty big impact in our Australian operations. So we did underproduce for what we are expecting, but the good thing is it’s still profitable, that the company’s very profitable at those production rates, and we do see Australia coming out of the flu season. So we do expect probably some big lifts coming out of our Costerfield mine in Q4 and the Björkdal mine also continuing to lift. We did update our guidance with the production release, and in line with the production dropping slightly, we did in reinforce that our cost guidance will be remaining constant for this quarter for this year. So we did make a lot of adjustments and some cost-cutting to ensure that the company would still be spending within our unit cost guidance, and we also will be dropping slightly our capital costs this year as well.

TMH: You’ve had a busy few months. You sold a project in August, you’re gearing up for drilling right now in Australia (as we mentioned), take us through the biggest highlights for your shareholders

DD: Yeah, we sold the Challacollo deposit, so that was part of the key focus that we’ve had over the last two years disposing of non-core assets, Challacollo, Cerro Bayo, re-rehabilitating the Lupin mine in Northern Canada so that we can focus on our two primary assets and the key highlights, it’s reiterating again where our focus is on exploration at Costerfield. We’re seeing some very good results coming out of that. We are growing the mine life there. We do anticipate that the production profile from that asset will remain constant with our current reserves over the next five years, and we do anticipate it will be growing. So the company will continue to be significantly cash flow generative, and we are a very small market cap company. We do also anticipate that our production will be lifting in Björkdal as we start exploiting the lower levels to the east of that or the eastern side of this mine.

So I think it’s only upside for the company going forward, and I haven’t touched on business development. So when I became CEO, the guidance from the board was to focus on our two operating assets, make the company cash flow positive and ensure that we are a very stable company with continual growth from those two mines. Now that we’re in that position and the company is very stable, we are also searching around to see if there are other assets out there that would work for Mandalay and increase the shareholder value within this company. So it’s not just organic growth that we’re focusing on at the moment. There is potential that we could have some inorganic growth in the coming future.

TMH: Is there anything else we haven’t touched on today that’s important to mention for our viewers or your investors?

DD: No, I think it’s just reiterating that the company is a very stable company at the current time we will possibly be looking at ways for the shareholders to gain some value from this company through share buybacks or dividends. We’ll be looking at that over the course of the next year. We currently do have debt on the books. We will be looking to eliminate that debt over the coming years. At the moment, it’s currently just a safety blanket because we are net debt free, but I do anticipate probably the main takeaway is that next year the company will increase its cash holding significantly, and we will increase our production profile.

Thanks again for joining us at The Market Herald today, Dominic, we look forward to keeping an eye on things and chatting with you again soon.

We’ve been speaking with Dominic Duffy, the CEO of Mandalay Resources. The company trades on the TSX under the ticker symbol MND. You can also visit for more information.

Once again, I’d like to thank Dominic for joining us today to learn more about his company’s latest developments and sharing his insights with our Top Line audience and his investors.

I’m Simon Druker for The Market Herald. Thanks for watching Top Line, and we’ll see you next time.

FULL DISCLOSURE: This is a paid article produced by The Market Herald.

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