Mako Mining Corp. (TSX-V: MKO; OTCQX: MAKOF) (“Mako” or the “Company”) is pleased to provide an operating update from its San Albino gold mine (“San Albino”) in northern Nicaragua.
All components of the 500 tonnes per day (“tpd”) gravity and carbon-in-leach processing plant have been fully operational since the beginning of May 2021. Since May 12th, when the processing of high-grade mineralization began, the plant has been averaging 432 tpd at 80% availability (see Table 2). Since this time, the plant has been processing 71% high-grade diluted vein material and 29% historical dump and other mineralized material with a blended average grade of 9.81 grams per tonne (“g/t”) gold and recovering an average of 94.9% (see Table 2).
Since May 12th, an average of 578 tpd of diluted vein, historical dump material and other mineralized material above cutoff grade have been mined, with a strip ratio of 15.4 (see Table 2). The stockpile is now approximately 123,000 tonnes and is comprised of 3,522 tonnes of diluted vein material at 5.88 g/t gold and 119,478 tonnes of historical dump and other mineralized material at 2.45 g/t gold for a total of 10,087 ounces of gold (see Table 3).
Since May 12th, 11,577 ounces of gold have been recovered and 8,603 ounces of gold have been shipped (see Table 2). The variance of approximately 3,000 ounces of gold is a combination of unprocessed gravity concentrates, gold in process throughout the plant, and timing of gold pours. The buildup of inventory is typical during startup and inventory levels have started stabilizing since July.
For accounting purposes, Mako declared commercial production effective July 1, 2021.
The Company’s cash balance materially improved since the start of May and commencement of debt repayment has begun, including the refinancing of US$8 million (see press release dated August 30, 2021). The Company has also begun to increase its exploration expenditures with the addition of three rigs, bringing the total to five rigs for a 60,000-meter drilling program over the next twelve months. Importantly, all of Mako’s exploration activities are being funded through operating cash flow (see Table 1).
Towards the end of August, more than 50% of the diluted vein material has been coming from the Porcelana Zone and the Company has continued to blend diluted vein material with historical dump material and other mineralized material above cutoff grade. Looking forward, the Porcelana Zone, which has the highest grade-thickness profile encountered at San Albino, is expected to make up the majority of the diluted vein tonnes for the foreseeable future.
August plant throughput of 426 tpd (see Table 2) continues to be impacted by labor availability issues that have persisted over the past three months. The Company has implemented an aggressive recruitment campaign and adjusted salaries where appropriate to mitigate these issues and expects to reach nameplate capacity of 500 tpd as newly hired employees gain additional training and experience.
Plant adjustments to mitigate timber from historical underground workings making its way into the plant appear to be working and recoveries do not appear to have been affected.
Up until now, the gravity circuit was only operational for short periods of time to reduce the need for additional fresh water coming into the plant. The Knelson concentrator requires a significant amount of clean water to run properly, and the Company wanted to maintain a neutral water balance during the current rainy season, which ends in October. Adjustments were made to the filter press and various pumps throughout the plant such that reliably clean process water is now available from the tailings filter press. The gravity circuit can now be operated continuously and is expected to improve recoveries and reduce processing costs of the high-grade mineralization coming from the Porcelana Zone.
Akiba Leisman, Chief Executive Officer of Mako states that, “this operating update continues to highlight the high grades being mined and processed at San Albino, especially the increase in both tonnes and grade of diluted vein material mined in August as the Porcelana Zone is opened up. Furthermore, the consistent cash flow being generated at San Albino is allowing the Company to continue repaying debt, fund an aggressive exploration program and accelerate plans for the return of capital to shareholders.”
Table 1 – Monthly Financial Snapshot of Operations
The table below is being furnished by management to provide investors with a useful snapshot of the revenue and Adjusted Operating Expenses at San Albino. Adjusted Operating Expenses is a non-IFRS financial measure that excludes depletion and depreciation that will be included in the next comparable financial measure disclosed in the Company’s financial statements. Revenue also represents pre-production revenue in the months of May and June of 2021 that were capitalized as mineral property, plant and equipment in the most comparable set of financial statements. The non-IFRS financial measures are not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers.
Table 2 – Monthly Operating Statistics
Table 3 – Month End Stockpile Statistics
John Rust, a metallurgical engineer and qualified person (as defined under NI 43-101) has read and approved the technical information contained in this press release. Mr. Rust is a senior metallurgist and a consultant to the Company.
On behalf of the Board,
Chief Executive Officer