Metals Exploration (LSE:MTL) - Philippines Producer Doubles Down with Nicaragua Gold Project

Jan 20, 2025

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Interview with Darren Bowden, CEO, Metals Exploration PLC

Our previous interview: https://www.cruxinvestor.com/posts/metals-exploration-aimmtl-acquisitive-cash-generative-gold-junior-4935

Recording date: 15th of January, 2025

Metals Exploration, an LSE-listed gold producer, is executing a multi-jurisdictional growth strategy anchored by strong operational performance and strategic acquisitions. The company's Runruno mine in the Philippines achieved stellar results in 2024, with over 90% recovery rates and 83,500 ounces of gold production, generating $96 million in free cash flow.

In a significant move to expand its portfolio, the company acquired the Condor gold assets in Nicaragua in 2024. The construction-ready Condor project is expected to produce 130,000-150,000 ounces annually, marking a 50% increase over Runruno's current output. To accelerate development, Metals Exploration purchased a secondhand processing plant, targeting production within 18-24 months. With estimated all-in sustaining costs of $900-1,000 per ounce, the project promises robust margins at current gold prices.

The company's growth strategy is backed by a strong financial position, with zero debt and consistent quarterly free cash flow of $20-25 million. Projected cash generation of $170-180 million over the next two years will fully fund Condor's $110-120 million capital requirements without shareholder dilution.

At Runruno, a recently identified near-mine target could extend operations by 3-10 years beyond the current 2027 mine life. Initial assessments show promising grades of over 15 g/t gold and 7% copper across the strike length, with drilling set to commence soon.

CEO Darren Bowden's team brings extensive Latin American experience to navigate the Nicaraguan operation. The Condor acquisition included a seasoned management team with established local relationships, helping mitigate operational risks in the new jurisdiction.
Further growth potential lies in the Philippines through the Abra project, acquired in August 2024, which hosts two significant targets including one of the largest copper footprints in the region. This forms part of the company's "pillar four" strategy for longer-term growth once multiple operating mines are established.

Metals Exploration aims to achieve a FTSE listing by 2028, driving its ambitious expansion plans. The company's measured approach to growth, combining operational excellence with strategic acquisitions, positions it to evaluate additional opportunities once Condor's development advances, creating a sustainable pathway to mid-tier producer status without overextending resources.

Learn more: https://www.cruxinvestor.com/companies/metals-exploration-plc