Metals Exploration (LSE:MTL) - Gold Producer Targets $500M Annual Cash Flow by 2028

Interview with Darren Bowden, CEO of Metals Exploration PLC

Our previous interview: https://www.cruxinvestor.com/posts/metals-exploration-lsemtl-philippines-producer-doubles-down-with-nicaragua-gold-project-6571

Recording date: 11th March 2025

Metals Exploration (LSE:MTL), a gold producer with operations in the Philippines, is leveraging its strong financial position to fund ambitious growth plans. The company is currently debt-free and generating approximately $10 million in monthly free cash flow from its Runruno operation, with all-in sustaining costs of around $1,000 per ounce.

CEO Darren Bowden has outlined a clear growth strategy centered on using existing cash flow rather than taking on new debt. The company reported $96 million in free cash flow last year, providing a solid foundation for its expansion plans.

A key focus is the development of the recently acquired Condor Gold project in Nicaragua. The company has purchased a second-hand processing plant for $10 million, representing significant savings compared to new construction. Metals Exploration is targeting a processing capacity of 1.4 million tonnes annually, substantially higher than the 850,000 tonnes envisioned in the original feasibility study.

Groundbreaking for the Nicaragua project is scheduled for May, with concrete contractors arriving in June and plant equipment expected in August. Management anticipates the project will be 50-60% complete by year-end, with full commercial production targeted for Q4 2026. When operational, the Nicaragua project is expected to produce approximately 145,000 gold ounces annually.

Meanwhile, the company is actively exploring the Dupax deposit, a VMS (volcanogenic massive sulfide) deposit near its existing Runruno operation in the Philippines. Initial ground mapping has been completed, with geophysics and drilling scheduled to begin soon. The company aims to establish a maiden resource of 8-10 million tonnes by year-end.

Metals Exploration has articulated a clear timeline for growth, with Nicaragua as its two-year plan, Dupax as its 3-5 year plan, and additional opportunities in the Philippines as its 5-10 year plan. By 2028, the goal is to have two producing mines that together could generate between $400-500 million in annual free cash flow.

The company also indicated that by 2028, once both operations are cash flowing, it will likely be in a position to start paying dividends. Management believes Metals Exploration has the potential to become a billion-dollar business based solely on the successful development of Nicaragua and Dupax, with additional upside from other opportunities within their existing tenements.

View Metals Exploration's company profile: https://www.cruxinvestor.com/companies/metals-exploration-plc

Sign up for Crux Investor: https://cruxinvestor.com