Metals Exploration : Interim Results for Six Months Ended 30 June 2022

Metals Exploration plc

Condensed Consolidated Interim Financial statements for the six-month period ended 30 June 2022

METALS EXPLORATION PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022

Metals Exploration plc (AIM: MTL) ("Metals Exploration" or the "Company"), the Philippine gold producer, announces its interim results for the six months ended 30 June 2022, and will be made available on the Company's website at www.metalsexploration.com.

Highlights

• Gold production of 31,348 ounces (H1 2021: 35,316 ounces);
• Gold recoveries of 87.7% (H1 2021: 81.0%);
• Operating profit of US$9.4 million achieved (H1 2021: US$14.2 million);
• Positive cashflow from operations of US$17.0 million (H1 2021: US$21.3 million);
• The Group's senior debt was US$8.1 million (H1 2021: US$42.4 million) - it is expected that the senior loan will be fully repaid during Q4 2022.
• Net Debt as at 30 June 2022 US$92.9 million (H1 2021: US$111.0 million);
• Over 17 million man-hours since the last reported lost-time injury.

Production Summary

Runruno Project

Production Summary

	Units
Mining
Ore Mined	Tonnes
Waste Mined	Tonnes
Total Mined	Tonnes
Au Grade Mined	g/tonne
Strip Ratio
Processing
Ore Milled	Tonnes
Gold (Au) Grade	g/tonne
Sulphur Grade	%
Au Milled (contained)	ounces
Recovery	%
Au Poured	ounces
Sales
Au Sold	ounces
Au Price	US$/oz

Actual	Actual		Actual
6 Months to	6 Months to		12 Months to
30 June 2022	30 June 2021		31 December 2021
1,289,123	713,742		1,896,808
5,676,856	4,537,749		8,874,266
6,965,979	5,251,491		10,771,074
1.10	1.27		1.21
4.28	5.92		4.43
1,017,258	1,048,290		2,136,875
1.09	1.29		1.26
0.98	1.11		0.97
35,742	43,620		86,611
87.7	81.0		83.7
31,348	35,316		73,206
30,676	34,745		72,447
1,878	1,797		1,792

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Metals Exploration plc

Condensed Consolidated Interim Financial statements for the six-month period ended 30 June 2022

Review of Operations

Safety and health

The outstanding safety record of the operation continues with in excess of 17 million man-hours with no lost time incidents occurring since the last lost time incident in December 2016. All employees and contractors are to be congratulated on this ongoing achievement.

The COVID-19 vaccination programme has been successful in that in excess of 95% of all staff and on-site contractors have received at least two vaccine doses. This has contributed to the mine-site operations being unaffected as a result of COVID-19.

Finance

A lower head grade of 1.10g/t for H1 2022 (H1 2021: 1.27g/t) contributed to lower gold production and sales revenue. Gold sales were US$57.6 million (H1 2021 US$62.4 million). Operations resulted in positive free cash flow of US$17.0 million (H1 2021: US$21.3 million).

As at H1 2022 end, the Group's senior debt was US$8.1 million (H1 2021: US$42.4 million) with net debt of

US$92.9 million (H1 2021: US$109.6 million). Total debt repayments made during H1 2022 were US$17.0 million

(H1 2021: US$20.6 million). It is expected that the senior loan will be fully repaid during Q4 2022. Details of these debt facilities can be found in Note 5.

Mining

Mining production of ore and waste was 7.0Mt for H1 2022 (H1 2021: 5.3Mt) and the total ore mined was 1.3Mt

(H1 2021: 0.7Mt).

Mining of Stage 1 of the mine plan was completed during H1 2022, while mining of Stage 2 was completed in early Q3 2022. In-pitback-filling of waste is well underway.

Full access to Stage 3 of the mine plan, which is critical to the mining operation schedule, was not achieved during H1 2022. Notwithstanding several court orders in the Company's favour, access to a key area of Stage 3 was not achieved. This resulted in changes to the Company mine plan delaying access to higher grade material in Stage 3. Mining of this material is now scheduled to commence in Q3 2022. These access issues have also temporarily halted both the resource definition and exploration drill programmes planned for Stages 4 and 5. Access to the final Stage 3 areas was secured during Q3 2022.

During H1 2022, due to macro-economic conditions, there was a noticeable increase in the cost of essential consumables including fuel, explosives etc, resulting in mining unit costs exceeding budget. The Company's mining equipment fleet performed adequately during H1 2022.

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Metals Exploration plc

Condensed Consolidated Interim Financial statements for the six-month period ended 30 June 2022

Process plant

Throughput for H1 2022 of 1.02Mt (H1 2021: 1.05Mt) was on budget, however, operations were managed to a lower feed grade. Delays in accessing mine plan Stage 3 and 4 affected the head grade during H1 2022, with higher grade material from Stage 3 now scheduled to be accessed during H2 2022.

Gold production for H1 2022 was 31,348 ounces (H1 2021: 35,316 ounces). Notwithstanding the below noted

BIOX performance issues, a higher gold recovery rate of 87.7% was achieved (H1 2021: 81.0%).

Adverse weather events resulted in numerous power failures during Q2 2022. These power outages contributed to a lack of stability of the BIOX bacteria culture; giving rise to resultant production losses over several weeks. Difficulties were experienced in re-establishing a stable bacteria culture in the BIOX circuit due to an unknown contaminant that developed in the return water sources that were being used to feed the BIOX circuit. As a result of these issues BIOX has under-performed in H1 2022, impacting overall gold produced during the period. Since period end, there have been no further water contaminant issues, which are expected to have a similar effect on the BIOX circuit's performance.

A major upgrade to the process plant return water and cooling systems is underway. Once completed, the Company will have an increased ability to control BIOX temperature and to reduce the risk of contaminated return water feed.

Further unplanned process plant downtime during H1 2022 was caused in the main by tails line failures and conveyor belt and return water line repairs.

Residual Storage Impoundment ("RSI")

The RSI is operating to design with an excellent environmental performance record. Construction of the final Stage 6 RSI lift has commenced with completion expected by year end.

The performance of the RSI is continuously monitored by an independent international consulting group. Engineering and final detailed designs for the final in-rock spillway are well advanced with the commencement of construction expected in H1 2023.

Community & Government Relations

Productive relations with both the community and the Philippine government continue. The Company, with the assistance of various government agencies, finally secured full access to Stage 3 mine areas in Q3 2022. Further removal of illegal miners, their infrastructure and dwellings from mine plan Stages 4 and 5 is required to allow exploration drilling to be undertaken in these areas.

Corporate

In June 2022 Tim Livesey replaced Jeremy Wrathall as an Independent Non-Executive Director of the Company. Mr Livesey has been appointed Chairman of the Remuneration Committee and a member of the Audit Committee.

The 2022 AGM held in June 2022 approved acapital sub-division and capital reduction. The capital sub-division corporate event changed the nominal value of ordinary shares to £0.0001 while creating a new class of Deferred Shares effective from the date of the AGM.

Since period end, the Company completed the capital reduction corporate event, eliminating both the Deferred Share capital account and the Share Premium account, resulting in a capital reduction of approximately US$224 million, with an offsetting US$224 million credit applied against the accumulated profit and loss account. This has simplified the Company's equity structure whilst adding greater flexibility for both future equity raises and shareholder distributions.

In addition, in June 2022, the Company issued 17,462,835 ordinary shares at an issue price of £0.01245 to certain members of senior management in lieu of a £217,400 cash bonus.

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Metals Exploration plc

Condensed Consolidated Interim Financial statements for the six-month period ended 30 June 2022

For further information please visit or contact www.metalsexploration.com

Metals Exploration PLC
Via Tavistock Communications Limited	[phone]
Nominated & Financial Adviser:	STRAND HANSON LIMITED
James Spinney, James Dance, Rob Patrick	[phone]
Financial Adviser & Broker:	HANNAM & PARTNERS
Matt Hasson, Franck Nganou	[phone]
Public Relations:	TAVISTOCK COMMUNICATIONS
	LIMITED
Jos Simson, Nick Elwes	[phone]

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Metals Exploration plc

Condensed Consolidated Interim Financial statements for the six-month period ended 30 June 2022

CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the six months ended 30 June 2022

Notes

Continuing Operations

Revenue

Cost of sales

Gross profit

Administrative expenses

Operating profit

Impairment loss

Loss on sale of assets

Net finance and other costs

Loss on fair value changes to derivatives

Share based payment expense

Share of (loss)/ profit of associates

Profit before tax

Tax expense

Profit for the period attributable to equity holders of the parent

Other comprehensive income:

Items that may be re-classified subsequently to profit or loss:

Exchange differences on translating foreign operations

Items that will not be re-classified subsequently to profit or loss:

Re-measurement of pension liabilities

Total comprehensive profit for the period attributable to equity holders of the parent

Earnings per share:

Basic cents per share

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Diluted cents per share

6 month		6 month period
period ended		ended		Year ended
30 June 2022		30 June 2021		31 December 2021
(unaudited)		(unaudited)		(audited)
US$		US$		US$
57,621,936	62,439,246	129,843,489
(42,493,529)	(44,363,193)	(91,977,555)
15,128,407	18,076,053	37,865,934
(5,724,198)	(3,897,168)	(8,475,303)
9,404,209	14,178,885	29,390,631
(670,677)	(798,275)	(1,450,078)
-	(78,206)	(78,206)
(7,271,289)	(7,324,104)	(16,232,196)
(526,495)	-	(332,996)
(75,698)	-	(10,982)
(2,729)	(6,642)	18,232
857,321	5,971,658	11,304,405
(75,255)	(29,910)	(11,769)
782,066	5,941,748	11,292,636

40,020	(1,428,287)	(791,929)
-	-	123,855
822,086	4,513,461	10,624,562
0.04	0.29	0.55
0.04	0.28	0.52

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