Mandalay Resources: Navigating Production Declines at Costerfield Mine

Mandalay Resources Corporation (TSX: MND), a leading gold and antimony producer, has recently announced that production at its Costerfield mine in Australia is expected to decline in 2025. This news has raised concerns among investors, as the mine has been a significant contributor to the company's revenue and cash flow. However, Mandalay Resources is taking proactive steps to mitigate the impact of this production decline and ensure the long-term success of the company.

The expected decrease in production at Costerfield this year can be attributed to several factors. First, the mine plan for 2025 involves mining lower-grade areas, which will result in lower production compared to previous years. This is evident in the guidance provided for 2025, which expects production to range between 43,000 – 48,000 gold equivalent ounces, compared to the 54,805 ounces produced in 2024. Second, the Company plans to invest $18 – $20 million in sustaining capital at Costerfield in 2025. This investment is focused on enabling mining flexibility, long-term growth, and sustained profitability. However, this investment may temporarily impact production as resources are allocated to development rather than immediate mining activities. Lastly, the mine plan for 2025 prioritizes mining lower-grade areas, which will result in lower production compared to previous years when higher-grade areas were mined. This is reflected in the expected production guidance for 2025, which is lower than the production achieved in 2024.

Despite the expected production decline at Costerfield, Mandalay Resources is implementing several strategies to mitigate the impact on the company's overall financial performance. The company plans to schedule higher production for 2026 to compensate for the lower production expected in 2025. This approach allows Mandalay to maintain a consistent production level over time. Additionally, Mandalay is investing in sustaining capital expenditures at Costerfield, totaling $18 - $20 million in 2025. This investment aims to enhance mining flexibility, long-term growth, and sustained profitability. The focus is on enabling mining flexibility, which will help optimize production in the long run. Furthermore, the company continues to invest in exploration at both Costerfield and Björkdal. This commitment to exploration helps replace mine depletion, extend mine life, and pursue near-mine discovery opportunities. By investing in exploration, Mandalay can potentially increase production and reduce the impact of lower production at Costerfield in the short term.



In conclusion, Mandalay Resources is taking proactive steps to navigate the expected production decline at the Costerfield mine in 2025. By implementing strategies such as mine sequencing, capital development, and exploration investment, the company aims to maintain operational excellence, sustainable growth, and deliver value to shareholders. While the production decline may impact the company's short-term financial performance, Mandalay Resources' commitment to long-term growth and profitability ensures that the company remains well-positioned to capitalize on opportunities and maximize shareholder value.