Mako Mining Provides Q2 2023 Financial Results
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595 Burrard Street, Suite 2833
Vancouver, BC V7X 1K8
Tel: (604) 646-1580
www.makominingcorp.com
TSX-V: MKO | OTCQX: MAKOF
Suite 700 - 838 West Hastings St.
Vancouver, BC - V6C 0A6
IR: (647) 203-8793
www.makominingcorp.com
TSX-V: MKO | OTCQX: MAKOF
August 23rd, 2023
TSX-V: MKO; OTCQX: MAKOF
Mako Mining Provides Q2 2023 Financial Results
Mako Mining Corp. (TSX-V: MKO; OTCQX: MAKOF) (“Mako” or the “ Company”) is pleased to provide
financial results for the three months ended June 30th, 2023 (“Q2 2023”), which is the eighth full quarter of
financial results since declaring commercial production on July 1st, 2021 at its San Albino gold mine (“San
Albino”) in northern Nicaragua. All dollar amounts referred to herein are expressed in United States dollars
unless otherwise stated.
Q2 2023 Highlights
Financial
• $12.9 million in Revenue
• $4.0 million in Adjusted EBITDA (1)
• $4.9 million in Mine Operating Cash Flow (“Mine OCF”) (1) (3)
• $2.6 million Net Loss after $3.9 million of depreciation, depletion (4) and amortization and $ 1.5
million in exploration expenses
• $995 Cash Costs ($/oz sold) (1) (2)
• $1,090 Total Cash Costs ($/oz sold) (1) (2)
• $1,322 All-In Sustaining Costs (“AISC”) ($/oz sold) (1) (2)
• Three monthly repayment installments totaling $ 1.1million were made on the Sailfish Loan during
Q2 2023 and $4 million of the Wexford Loan principal was repaid as a result of the $6 million Silver
Loan
(1) Refers to a Non-GAAP financial measure within the meaning of National Instrument 52 -112 – Non-GAAP and Other Financial Measures Disclosure (“ NI
52-112”). Refer to information under the heading “Non-GAAP Measures” as well as the reconciliations later in this press release.
(2) Refers to a Non-GAAP ratio within the meaning of NI-52-112. Refer to information under the heading “Non-GAAP Measures” later in this press release.
(3) Refer to “Chart 1 – Q2 2023 - Mine OCF Calculation and Cash Reconciliation (in $ millions)” for a reconciliation of the beginning and ending cash position
of the Company, including OCF.
(4) The depletion for the quarter was calculated on the basis of the San Albino mine plan only; going forward, depletion will incorporate Las Conchitas material
as well, substantially decreasing this expense.
Growth
• $1.4 million in exploration and evaluation expenses ($0.5 million in areas surrounding San Albino
and approx. $1.0 million at Las Conchitas).
• Permits to begin extracting a nd processing material from Las Conchitas were received in June ,
with processing beginning in late July.
Subsequent to June 30th, 2023
● On July 7, 2023, and on August 3, 2023, the Company delivered 17,190 and 16,367 oz of silver to
Sailfish in lieu of $0.4 million and $0.4 million cash, respectively.
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● On August 23rd, 2023, the Wexford Loan was expanded by an additional $2 million to ensure the
Company has a sufficient amount of working capital during the ramp up of Las Conchitas (see full
details below under Loan Agreement)
Akiba Leisman, Chief Executive Officer, states that “Q2 2023 was the eighth full quarter of financial results
since declaring commercial production at San Albino. Mine Operating Cash Flow and Adjusted EBITDA of
$4.9 and $4.0 million, respectively, reflect that the Company was processing approximately 35% run of
mine material (with the rest coming from lower grade stockpiles), instead of the normal 50% run of mine
material prior to permits being received at Las Conchitas . Permits at Las Conchitas were subsequently
received in June, with material from La s Conchitas beginning to be processed at the end of July . In this
context, the Company reported Cash Costs of 995 $/Oz sold, Total Cash Costs of 1,090 $/Oz sold, and
AISC at 1,322 $/Oz during the quarter. Q2 2023 is the last quarter the Company will be rep orting a
depletion and depreciation expense ($3.9 million) solely on the basis of the San Albino mine plan. The net
book value of our Mineral Property and Plant are now just $3.2 million and $14.1 million respectively,
compared to a cost of $14.8 million and $38.7 million as of year-end 2022. The remaining net book value
is a tiny fraction of its net realizable value including the Las Conchitas resource, which will lead to materially
lower depletion and depreciation expenses going forward. The maiden resource estimate at Las Conchitas
will be released shortly.”
Table 1 – Revenue
(1) Realized price before deductions from Sailfish gold streaming agreement.
Table 2 – Operating and Financial Data
(1) Refers to a Non -GAAP financial measure within the meaning of NI 52 -112). Refer to information under the heading “Non -GAAP Measures” as well as the
reconciliations later in this press release.
(2) Refers to a Non-GAAP ratio within the meaning of NI-52-112. Refer to information under the heading “Non-GAAP Measures” later in this press release.
(3) Realized price before deductions from Sailfish gold streaming agreement.
(in $000s) 3 months ended
June 30, 2023 June 30, 2022 Change
Revenue 12,853 16,373 (3,520)
Gold sold (oz) 6,727 9,027 (2,300)
Average realized gold price ($/oz) (1) 1,911 1,814 97
Tonnes mined 1,573,432
Tonnes milled 54,284
Availability 95%
Avg. tonnes per day 627
Gold sold (oz) 6,727
Avg. realized gold price ($/oz sold)(3) $1,911
Cash Costs ($/oz sold) (1)(2) $995
Total Cash Costs ($/oz sold) (1)(2) $1,090
AISC ($/oz sold) (1)(2) $1,322
Revenues (in $000's) $12,853
EBITDA (in $000's) (1) $1,989
Adjusted EBITDA (in $000's) (1) $4,029
Q2 2023
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Table 3 – EBITDA Reconciliation
(1) Refers to a Non -GAAP financial measure within the meaning of NI 52-112. Refer to information under the heading “Non -GAAP Measures” later in this press
release.
Chart 1
Q2 2023 - Mine OCF Calculation and Cash Reconciliation (in $ millions)
(1) Refers to Non-GAAP financial measure within the meaning of NI 52-112. Refer to information under the heading “Non-GAAP Measures” later in this press release.
(2) Includes all expenses incurred to sustain operations. Excludes Nicaraguan Taxes and Royalties, changes in Non -cash Working Capital, and Exploration
expenses.
(in $000's) 3 months ended 3 months ended
June 30, 2023 June 30, 2022
EBITDA (1) $1,989 $3,749
Gain on disposal of subsidiaries - -
Share-based compensation (recovery) expense 204 144
Exploration activities 1,498 2,718
Write-down of Inventories 353 769
Change in provision for reclamation and rehabilitation (15) (30)
Adjusted EBITDA (1) $4,029 $7,348
Mine OCF Calculation
Net cash from Operating Activities 3.1
Substract
Change in Non-cash WC 0.8
Cash from Operating Activities 2.3
Add back
Exploration Expense -1.5
Nicaraguan Taxes & Royalties -1.1
Mine Operating Cash Flow (Mine OCF) 4.9
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Loan Agreement
The Company also announces that it has entered into a further amendment to the loan agreement dated
February 20, 2020 (as amended, the “Existing Loan Agreement”) between the Company, Wexford Capital
LP (“Wexford”) and the Lenders (as hereinafter defined) pursuant to which, among other things, W exford
Catalyst Trading Limited, Wexford Spectrum Trading Limited and Wexford Focused Trading Limited
(together with Debello Trading Limited, collectively, the “Lenders”) have agreed to make an additional loan
to the Company in the principal amount of US$2,000,000 (the “Incremental Loan”) subject to the terms of
the Existing Loan Agreement.
The Company proposes to use the proceeds from the Incremental Loan for, among other things, its
ongoing activities in Nicaragua and for general corporate purposes.
Funds managed by Wexford beneficially own an aggregate of 36,462,623 common shares of the
Company, representing approximately 55.4% of the Company’s issued and outstanding common shares.
Accordingly, the Incremental Loan constitutes a “related party transact ion” under Multilateral Instrument
61-101 (“MI 61 -101”) as a result of the Company entering into the Loan Amending Agreement with the
Lenders and Wexford Capital LP, who are related parties of the Company. Pursuant to Section 5.5(b) and
5.7(1)(f) of MI 61-101, the Company is exempt from obtaining a formal valuation and minority approval of
the Company’s shareholders for the Incremental Loan on the basis that the Company’s common shares
trade on the TSXV and the Incremental Loan is a loan transaction with a related party that meets the
criteria as set out in MI 61-101.
For complete details, please refer to the financial statements and the associated management discussion
and analysis for the twelve months ended June 30th, 2023, available on SEDAR ( www.sedar.com) or on
the Company’s website (www.makominingcorp.com).
Non-GAAP Measures
The Company has incl uded certain non-GAAP financial measures and non -GAAP ratios in this press
release such as EBITDA, Adjusted EBITDA, Mine Operating Cash Flow cash cost per ounce sold, total
cash cost per ounce sold, AISC per ounce sold. These non -GAAP measures are intended to provide
additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. In the gold mining industry, th ese are commonly used
performance measures and ratios, but do not have any standardized meaning prescribed under IFRS and
therefore may not be comparable to other issuers. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use this information to evalu ate the
Company’s underlying performance of its core operations and its ability to generate cash flow.
"EBITDA” represents earnings before interest (including non -cash accretion of financial obligation and
lease obligations), income taxes and depreciation, depletion and amortization.
“Adjusted EBITDA ” represents EBITDA, adjusted to exclude exploration activities, share -based
compensation and change in provision for reclamation and rehabilitation.
“Cash costs per ounce sold” is calculated by deducting revenues from silver sales and dividing the sum
of mining, milling and mine site administration cost.
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“Total cash costs per ounce sold” is calculated by deducting revenues from silver sales from production
cash costs and production taxes and royalties and d ividing the sum by the number of gold ounces sold .
Production cash costs include mining, milling, mine site security and mine site administration costs.
“AISC per ounce sold” includes total cash costs (as defined above) and adds the sum of G&A, sustaining
capital and certain exploration and evaluation (“ E&E”) costs, sustaining lease payments, provision for
environmental fees, if applicable, and rehabilitation costs paid, all divided by the number of ounces sold.
As this measure seeks to reflect the full cost of gold production from current operations, capital and E&E
costs related to expansion or growth projects are not included in the calculation of AISC per ounce .
Additionally, certain other cash expenditures, including income and other tax pay ments, financing costs
and debt repayments, are not included in AISC per ounce.
“Mine OCF” represents operating cash flow, excluding Nicaraguan taxes and royalties, changes in non -
cash working capital and exploration expenses.
On behalf of the Board,
Akiba Leisman
Chief Executive Officer
About Mako
Mako Mining Corp. is a publicly listed gold mining, development and exploration company. The Company
operates the high -grade San Albino gold mine in Nueva Segovia, Nicaragua, which ranks as one of the
highest-grade open pit gold mines globally . Mako’s primary objective is to operate San Albino profitably
and fund exploration of prospective targets on its district-scale land package.
For further information: Mako Mining Corp., Akiba Leisman, Chief Executive Officer, Telephone: 203-862-
7059, E -mail: [email protected] or visit our website at www.makominingcorp.com and
SEDAR www.sedar.com.
Forward-Looking Information: Some of the statements contained herein may be considered “forward -looking
information” within the meaning of applicable securities laws. Forward-looking information can be identified by words
such as, without limitation, “estimate", "project", "believe", "anticipate", "intend", "expect", "plan", "predict", "may" or
"should" or variations thereon or comparable terminology. The forward-looking information contained herein reflects
the Company’s current beliefs and expectations, based on management’s reasonable assumptions, and includes,
without limitation, that mining of high -grade material from the Phase 3 West Pit, and permits to begin mining Las
Conchitas are expected later this month, at which point the Company expects that new record production numbers
should be achieved; and Mako’s primary objective to operate San Albino profitably and fund exploration of prospective
targets on its district -scale land package. Such forward -looking information is subject to a variety of risks and
uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking
information, including, without limitation, changes in the Company’s exploration and development plans and growth
parameters and its ability to fund its growth to reach its expected new record production numbers ; unanticipated
costs; the October 24 measures having impacts on business operations not current expected, or new sanctions being
imposed by the U.S. Treasury Department or other government entity in Nicaragua in the future; and other risks and
uncertainties as disclosed in the Company’s public disclosure filings on SEDAR at www.sedar.com. Such information
contained herein represents management’s best judgment as of the date hereof, based on information currently
available and is included for the purposes of providing investors with information regarding the Company’s Q2 2023
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financial results and may not be appropriate for other purposes. Mako does not undertake to update any forward -
looking information, except in accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.