Mandalay Resources Corporation Announces Exercise of Warrants by West Face Capital
![Mandalay Resources Corporation Announces Exercise of Warrants by West Face Capital](https://www.minenportal.de/media/goldseiten-news.jpg)
Brad Mills, Mandalay's CEO commented, "Current metal prices offer the opportunity to purchase downside price protection for our silver sales while still allowing the Company to keep all of the upside of a record high silver commodity price cycle. We expect to produce between 3.2 and 3.7 million ounces of silver and 35,000 - 40,000 ounces of gold in 2012 and current metal prices offer the Company an opportunity to secure short-term cash flows to an unprecedented degree. The Company currently owns 900,000 silver puts at $25/ounce evenly spaced at 50,000 ounces/month from July 2011 through December 2012. The cost of these puts was $2,000,000 or about $2.22/ounce. The new hedging program will be executed to cover up to an additional 2 million ounces of silver and 28,000 ounces of gold sales during 2012. We will announce the specifics of these additional puts once they are in place."
The warrants were acquired by West Face in August 2010. With this transaction, West Face has increased its ownership in Mandalay to approximately 49.3% of current outstanding shares. After this exercise West Face continues to hold 25,973,955 warrants to purchase Mandalay shares at C$0.33 with an expiry date of August 6, 2012.
About Mandalay Resources Corporation:
Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and producing and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.
Forward-Looking Statements:
This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's expected gold and silver production in 2012 and its plan to implement a new hedging program covering this production. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
For further information:
Bradford Mills
Chief Executive Officer
Greg DiTomaso
Investor Relations
Contact:
647.260.1566
www.mandalayresources.com