Mangazeya Mining : Announces Filing of 2019 Year-End Financial Statements, MD&A and Financial Results for 2019

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TORONTO, ONTARIO, May 12, 2020 - Mangazeya Mining Ltd. ('Mangazeya' or the 'Company') (NEX: MGZ.H) announced the filing of its annual audited financial statements ('Financial Statements'), management's discussion and analysis ('MD&A') for the Company's financial year ended December 31, 2019 as required by National Instrument 51-102 Continuous Disclosure Obligations.
All figures are quoted in Canadian dollars unless otherwise indicated.

FOURTH QUARTER AND TWELVE MONTHS 2019 HIGHLIGHTS

4Q 2019	4Q 2018	Change	%	12m2019	12m2018	Change	%
Operational highlights
Gold production, ounces	17,635	8,523	9,112	107%	44,363	27,672	16,691	60%
Refining gold, ounces	18,048	8,523	9,525	112%	44,363	27,672	16,691	60%
Gold sales, ounces	19,126	10,233	8,893	87%	41,513	22,245	19,268	87%
Ore mined, tones	460,606	171,863	288,743	168%	1,492,421	1,172,458	319,963	27%
Stripping ratio, m3/t	1.21	7.20	(5.99)	(83%)	1.51	4.81	(3.30)	(69%)
Ore stacked, tones	220,842	57,743	163,099	282%	1,025,605	869,582	156,023	18%
Ore grade in ore stacked, g/t	2.21	1.36	0.85	63%	1.87	1.37	0.50	36%
Financial highlights
Revenue	37,143	16,996	20,147	119%	79,925	37,211	42,714	115%
Adjusted EBITDA	14,654	(5,645)	20,299	(360%)	26,424	(9,045)	35,469	(392%)
Total cash cost per ounce Savkino (TCC), CAD	$1,382	$1,119	$263	24%	$1,453	1,314	139	11%
Total cash cost per ounce Kochkovskoye (TCC), CAD	$1,010	$1,749	($739)	(42%)	$924	1,570	(645)	(41%)
Average gold price, CAD	1,942	1,609	333	21%	1,925	1,528	397	26%
Cash balance	23,108	2,291	20,817	909%	23,108	2,291	20,817	909%
Cash flow (used in)/ received from operating activities before changes in working capital	88,792	(6,754)	95,546	(1,415%)	22,606	(12,459)	35,065	(281%)
Cash flow (used in)/ provided by financing activities	(40,777)	20,187	(60,964)	(302%)	91,379	60,410	30,969	51%
Cash flow (used in)/ provided by investing activities	(42,246)	(18,425)	(23,821)	129%	(83,069)	(32,372)	(50,697)	157%

Highlights for 2019 include:

• Gold production increased from 27.67k ounces in 12m 2018 to 44.36k ounces in 12m 2019 due to the start of active mining works at Kochkovskoye deposit. In
  Q4 2019, 17.64k ounces were produced, in Q4 2018 - 8.52k ounces.
  Savkinskoe deposit
  In 12m 2019, total ore mined and gold produced reduced by 72.3% and 24% YoY, respectively, due to the scheduled suspension of mining at Khlebny pit in Q2 2019, and completion of deposit final development.
  In Q4 2019, the volume of ore mined decreased by 59.2%, and gold production volume increased by 18.5% YoY.
  Kochkovskoe deposit
  The Company managed to increase gold produced from 8k ounces in 12m 2018 to 29.41k ounces in 12m 2019 as, in 2019, the volume of ore mined was higher and the gold grade in ore stacked was by 8.2% higher YoY (2.12 g/t in 2019 and 1.96 g/t in 2018). Low performance in 2018 was caused by the startup and commissioning works, and heavy precipitation in summer. In 2019, processing flow improvement was performed.
  In Q4 2019, 11.35k ounces of gold were produced, in Q4 2018 - 3.21k ounces.
• For 12m 2019, revenue increased by 115% compared to 12m 2018, the company sold 41,513 ounces of gold and 10,649 ounces of silver (2018: 22,245 ounces of gold and 18,204 ounces of silver). In the Q4 of 2019 revenue was 119% higher than in the comparative quarter of 2018, the Company sold 19,126 ounces of gold (Q4 of 2018: 10,233 ounces of gold).
• Savkinskoe deposit
  TCC increased by 11% to $1,453 per ounce for 12m 2019 compared to TCC for 12m 2018 ($1,314 per ounce) as a result of a decrease in gold production and in gold sales. TCC increased by 24% in the Q4 of 2019 compared to the Q4 of 2018.
  Kochkovskoe deposit
  TCC decreased by 41% to $924 per ounce for 12m 2019 compared to TCC for 12m 2018 ($1,570 per ounce) as a result of increased volumes of gold production and gold sales at Kochkovskoye deposit. TCC decreased by 42% in the Q4 of 2019 compared to the Q4 of 2018 year.
• The gross profit margin increased from 21% for 12m 2018 to 45% for 12m 2019.
• Administrative expenses during 12m 2019 increased by 15% in comparison with 12m 2018. The Group continues active construction and exploration works in Nasedkino and Zolinsko-Arkiinskaya areas. Administrative expenses are connected to the Management Services Agreement with Mangazeya Zoloto LLC.
• Other operating expenses in 2018 year of $4,598k have changed to other operating income of $3,345k in 2019 year. Other operating expenses do not include any production related items. The increase is mostly due to provision of Century Mining write off (please refer to Note 14 in Financial statements).
• As a result the Company has positive adjusted EBITDA for 12m 2019 of $26,424k comparing to negative adjusted EBITDA for 12m 2018 ($9,045k).
• The finance expenses for 12m 2019 increased by 767% ($19.1 million in 2019 and $2.2 million in 2018) as result of growth in the debt load and expenses on financial instruments.
• The Company has net income for 2019 year of $7.4 million against net loss of $18.5 million in 2018 year.

Cash flow and capital resources:

• For 2019, cash provided in operating activity before changes in working capital was $22.6 million in comparison with $12.5 million cash used in 2018. Cash used in investing activities in 2019 was $83.1 million as compared to $32.4 million in 2018. Cash provided by financing activities in 2019 was $91.4 million compared to cash provided by financing activities of $60.4 million in 2018;
• For Q4 2019, cash provided in operating activity before changes in working capital was $88.8 million in comparison with cash used in Q4 2018 of $6.4 million. Cash used in investing activities in Q4 2019 was $42.2 million as compared with $18.4 million in Q4 2018. Cash used in financing activities in Q4 2019 was $40.8 million as compared to $20.2 million of cash provided by financing activities in Q4 2018;
• The Company invested in PPE $84,366k in 2019 compared to $36,391k in 2018. For 12m 2019 year the Company invested $71,440k to CIP on Nasedkino site and $1,675 to equipment for Nasedkino site and Zolinsko-Arkiinskaya area. For 12m 2018 year the Company invested $36,391k: PPE - $29,804k (Savkinskoye - $1,207 k mainly to equipment; Nasedkino: mainly to CIP- $22,716k; Zolinsko-Arkiinskaya area - $4,970k mainly to CIP); In Mine properties - $5,546k on Savkinskoye and Zolinsko-Arkiinskaya area; In Exploration and evaluation assets - $1,041k (Zolinsko-Arkiinskaya area).

The Financial Statement and MD&A are available on Mangazeya's website at http://mangazeyamining.ru/ and have been filed on SEDAR at www.sedar.com.

About Mangazeya Mining Ltd.
Mangazeya Mining Ltd. is a NEX-listed mining and exploration company, focused on the development of mineral resources in the Russian Federation.

Contact:
Anton Grigoryev
Corporate Secretary
Mangazeya Mining Ltd.
[e-mail]