Metals Exploration

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Primary ticker: AIM:MTL
Stage of development: Exploration, Development, Production
Primary minerals: Gold and Copper/Gold
Project to promote: Runruno gold mine and Abra gold and copper/gold exploration project in the Philippines. La India, Estrella and La Luna projects in Nicaragua
Project location: Philippines and Nicaragua
Website: www.metalsexploration.com

MTL is the 100% owner of the Runruno gold mine, the Philippines’ second-largest gold mine. Runruno has a track record of producing strong profits and free cash flows. The company is currently debt-free. MTL recently acquired Condor Gold, with the La India Project offering a clear development path to production. In addition, an extensive Philippine exploration and development project opportunity, the Abra tenement, has also been acquired, with several drill ready targets defined. Runruno’s free cash flow is being reinvested to fund new project development and exploration efforts to provide post-Runruno cashflow as it approaches the end of its mine life.

Cash: GBP 10.9M
Debt: NIL

Major shareholders:
MTL (Luxemburg) Sarl – 37.67%
Drachs Investments No3 Limited – 18.37%
Baker Steel Capital Managers LLP – 3.75%
Management Ownership – <2%

Financials

Management Profile

Darren Bowden – CEO; Tim Livesey – NED; David Cather – NED; Mike Langoulant – CFO.
Darren Bowden – Engineer, ex-Glencore, has led the corporate turnaround at Metals Exploration transforming Runruno into a highly profitable operation and achieving debt-free status.
Tim Livesey – Geologist, ex-Barrick Group director.
David Cather – Mining engineer, ex-Anglo American, current Chairman of Tungsten West.
Mike Langoulant – CA with extensive financial expertise, ensuring robust fiscal management and supporting strategic growth initiatives.

What is your rationale for taking part in 121 Mining Investment?

Metals Exploration aims to elevate its profile among institutional and retail investors as it focuses on delivering long-term growth. The company is 100% owner of the Runruno gold mine, the Philippines’ second-largest gold mine, which is now at a mature stage and has a limited remaining life-of-mine. The company has no debt, a strong balance sheet, and is implementing a growth strategy of building a diversified, cash-generative portfolio of projects through appropriate acquisitions.
Now debt-free, the company is concentrating on strategic acquisitions and development of high-potential exploration projects. The strong free cash delivered by the Runruno mine is being utilised to fund the development of the company’s next producing operation without the need for future equity issues. Metals Exploration has recently announced the acquisition of Condor Gold, the owner of substantial gold development projects in Nicaragua with a clear development path to production.

What recent news would you like to highlight to investors attending?

• 28 August 2024 – Completion of YMC Acquisition
• 16 October 2024 – Quarterly Update to 30 September 2024
• 25 November 2024 – Operational Update
• 4 December 2024 – Recommended Offer for Condor Gold plc by Metals Exploration plc to be implemented by means of a scheme of arrangement under Part 26 of the Companies Act 2006

What are your key goals for the next 3, 6 and 12 months?

3 Months:
• Maintain strong cash flow from the Runruno mine
• Sustain an impeccable safety record with zero lost-time incidents
• Commence and continue exploration activities at the Abra tenement
• Complete takeover of Condor Gold
• Advance early construction planning for the La India project

6 Months:
• Maintain strong cash flow from the Runruno mine
• Sustain an impeccable safety record with zero lost-time incidents
• Expand exploration activities at Abra
• Begin initial construction activities for the La India project

12 Months:
• Maintain strong cash flow from the Runruno mine
• Sustain an impeccable safety record with zero lost-time incidents
• Compiling of an initial resource estimate for the Abra tenement
• Commenced further resource drilling of Condor Nicaraguan projects
• Achieve significant progress on the construction of the La India project with the goal of fast-tracking production

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

With Runruno’s remaining life-of-mine extending to 2027, the company’s key challenge is to develop a new production project before this time to sustain its operational and financial momentum. The acquisition of Condor Gold’s La India project directly addresses this challenge, providing a development-ready project to replace cash flows from Runruno. Our Philippine exploration project, Abra, offers multiple drill-ready targets, and exploration is set to commence. Metals Exploration intends to leverage its operational expertise and substantial cash reserves to mitigate the risks associated with developing new projects.

What do you think makes your company such a compelling investment?

Metals Exploration is a proven operator with a strong track record at the Runruno gold mine, the Philippines’ second-largest gold mine. The company is debt-free, generates robust free cash flows, and has received multiple government awards for safety, environmental stewardship, and community engagement. With the acquisition of the La India project, Metals Exploration is poised to become a geographically diversified gold producer with significant exploration and development upside. Future growth is well-funded through Runruno’s cash flow, ensuring minimal reliance on equity financing.

What are the top 3 key investor takeaways?

1. Proven leadership with a track record of corporate turnarounds and operational excellence
2. Robust cash flow from Runruno, with the company now debt free. This is coupled with a stellar safety record of 24+ million man-hours without incidents
3. Clear growth strategy with acquisition of Condor Gold and YMC Group, and further acquisitions in the pipeline