Mako Mining Provides Q3 2022 Financial Results and Corporate Update
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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
November 30th, 2022
TSX-V: MKO; OTCQX: MAKOF
Mako Mining Provides Q3 2022 Financial Results and Corporate Update
Mako Mining Corp. (TSX-V: MKO; OTCQX: MAKOF) (“Mako” or the “ Company”) is pleased to provide
financial results for the three months ended September 30, 2022 (“Q3 2022”), which is the fifth full quarter
of financial results since declaring commercial production on July 1, 2021 at its San Albino gold mine (“San
Albino”) in northern Nicaragua. For detailed Q3 2022 operating results, please see the press release dated
October 21st, 2022 (“Operating Update”). All dollar amounts referred to herein are expressed in United
States dollars unless otherwise stated.
Q3 2022 Highlights
Financial
• $13.6 million in Revenue
• $4.0 million in Adjusted EBITDA(1)
• $3.8 million in Mine Operating Cash Flow (“Mine OCF”) (1) (3)
• $7.0 million in Net Loss after $5.4 million of depreciation, depletion (4) and amortization and $3.9
million in exploration expenses
• $1,018 Cash Costs ($/oz sold) (1) (2)
• $1,102 Total Cash Costs ($/oz sold) (1) (2)
• $1,367 All-In Sustaining Costs (“AISC”) ($/oz sold) (1) (2)
• Three monthly repayment installments totaling $1.1 million were made on the Sailfish Loan during
Q3 2022
(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 – Q3 2022 - Mine OCF Calculation and Cash Reconciliation (in $ millions)” for a reconciliation of the beginning and ending cash position
of the Company, including OCF.
(4) Refer to Corporate Update: Depreciation and Depletion (Page 4) for more detailed information
Growth
• $3.9 million in exploration and evaluation expenses ($1.6 million surrounding San Albino and $2.3
million at Las Conchitas)
Subsequent to September 30, 2022
● Two monthly repayment installments totaling $0.7 million were made on the Sailfish Loan
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Akiba Leisman, Chief Executive Officer , states that “Q3 2022 was the fifth full quarter of financial results
since declaring commercial production at San Albino. The decline in recoveries from March through August
of 2022 (77.0% vs. 86% expected in Q3) and lower throughput (as we optimized recoveries for plant
residence time) negatively affected the Company, driving Mine OCF and Adjusted EBITDA to
approximately $4 million and AISC to $1,367 during Q3 2022, but still allowing the Company to invest
nearly $4 million in growth exploration. Year to date, Mako has generated $20 million in Mine OCF, which
allowed the Company to invest $8.5 million in growth exploration and repay $7.4 million of debt without the
need for external financing. Now that the metallurgical issues have been resolved, we expect a very strong
Q4, with an increase in throughput to 600tpd by the end of the quarter with no additional capex and minimal
recovery losses. Additionally, the Company expects a significant reduction in AISC, higher net income and
record gold sales in Q4 2022.”
Table 1 – Revenue
(1) Realized price before deductions from Sailfish 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 streaming agreement
(in $000s) 3 months ended 9 months ended
Sep 30, 2022 Sep 30, 2021 Change Sep 30, 2022 Sep 30, 2021 Change
Revenue 13,637 14,287 -650 47,288 18,850 28,438
Gold sold (oz) 8,327 8,280 47 26,934 10,867 16,067
Average realized gold price ($/oz) (1) 1,724 1,726 -2 1,824 1,735 89
Tonnes mined 1,566,290 1,297,146 1,242,326
Tonnes milled 46,869 49,332 44,452
Availability 87% 93% 94%
Avg. tonnes per day 596 586 512
Gold sold (oz) 9,580 9,027 8,327
Avg. realized gold price ($/oz sold)(3) $1,870 $1,866 $1,724
Cash Costs ($/oz sold) (1)(2) $797 $860 $1,018
Total Cash Costs ($/oz sold) (1)(2) $862 $903 $1,102
AISC ($/oz sold) (1)(2) $1,104 $1,121 $1,367
Revenues (in $000's) $17,279 $16,222 $13,637
EBITDA (in $000's) (1) $6,307 $4,521 -$819
Adjusted EBITDA (in $000's) (1) $8,330 $7,353 $3,962
Q1 2022 Q2 2022 Q3 2022
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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. Please refer to the MD&A for detailed calculations.
Chart 1
Q3 2022 - Mine OCF Calculation and Cash Reconciliation (in $ millions)
(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.
(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 9 months ended
Sep 30, 2022 Sep 30, 2022
EBITDA (1) ($819) $9,466
Gain on disposal of subsidiaries - -
Share-based compensation (recovery) expense 111 390
Exploration activities 3,878 8,463
Write-down Inventories 769 769
Change in provision for reclamation and rehabilitation 23 19
Adjusted EBITDA (1) $3,962 $19,107
Mine OCF Calculation
Cash from Operating Activities 1.2
Substract
Change in Non-cash WC 2.2
Net cash from Operating Activities -1.0
Add back
Exploration Expense 3.9
Nicaraguan Taxes & Royalties 1.0
Mine Operating Cash Flow (Mine OCF) 3.8
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Chart 2
Accumulated 9 months ending Sep 3 0 - Mine OCF Calculation and Cash Reconciliation (in $
millions)
(3) 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.
(4) Includes all expenses incurred to sustain operations. Excludes Nicaraguan Taxes and Royalties, changes in Non-cash Working Capital, and Exploration expenses
Corporate Update
Depreciation and Depletion
In October 2020, Mako published its National Instrument 43-101 Technical Report and Estimate of Mineral
Resources for the San Albino Project. A portion of that published mineral resource formed the basis of our
non-cash depletion and depreciation calculation through Q3 2022.
Subsequently, the Company has added certain previously delineated mineral resources into a mine plan
and identified additional mineral resources within the San Albino mine area, which are expected to increase
the base of the estimated tonnes to be depleted going forward. In addition, we expect that a maiden mineral
resource at Las Conchitas (which currently has no carrying value) will be incorporated into a separate mine
Mine OCF Calculation
Cash from Operating Activities 13.4
Substract
Change in Non-cash WC 4.9
Net cash from Operating Activities 8.5
Add back
Exploration Expense 8.5
Nicaraguan Taxes & Royalties 3.1
Mine Operating Cash Flow (Mine OCF) 20.0
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plan beginning early next year . In this context, we expect to see a materially lower depletion and
depreciation expense, and a significant increase in net income starting in Q4 2022.
US Sanctions in Nicaragua
Further to the Company’s press release of October 31, 2022 addressing the October 24, 2022
announcement by the United States Department of the Treasury’s Office of Foreign Assets Controls
(OFAC) relating to new U.S. sanctions imposed on the General Directorate of Mi nes (DGM) pursuant to
Executive Order (“EO”) 13851, as well as the issuance of EO 14088 (the “October 24 measures”), following
consultations with its US legal advisors, we are taking additional internal measures aimed at ensuring that
we are in compliance with the October 24 measures, and although we do not currently expect there to be
any material changes to our mining and exploration operations in Nicaragua as a result of the October 24
measures, we are continuing to monitor the situation.
Board of Directors update
The Company also announces that Mr. John Stevens has stepped down as a director of the Company.
Mr. Stevens has served as a member of the Mako board for three years, and his contributions have been
significant. His previous experience with Latin America, as a senior credit officer for a large financial
institution as well as various board assignments, brought a valued perspective to the Company. On behalf
of the board of directors, the management team and our shareholders, the Company thanks John for his
service and wish him all the best in his future endeavors.
For complete details, please refer to the unaudited interim consolidated financial statements and the
associated management discussion and analysis for the nine months ended September 30, 2022,
available on SEDAR (www.sedar.com) or on the Company’s website (www.makominingcorp.com).
Non-GAAP Measures
The Company has included 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 consider ed 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 evaluate 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.
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“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.
“Total cash costs per ounce sold” is calculated by deducting revenues from silver sales from production
cash costs and production taxes and royalties and dividing 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, su staining 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 payments, 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 pr imary 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 reaso nable assumptions, and includes,
without limitation, that we expect a very strong Q4 with an increase in throughput to 600 tpd with no additional Capex
and minimal recovery loses; that we expect a significant reduction in cash cost (in line with the higher ounces
produced), a higher net income and record gold sales for the Q4 2022; that we do not currently expect there to be
any material changes to our mining and exploration operations in Nicaragua as a result of the October 24 measures;;
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 stated target capacity; unanticipated costs; the October 24 measures
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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 Q3 2022 financial results and may not be
appropriate for other p urposes. 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.