Greetings, and welcome to the Mandalay First Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Mr. Dominic Duffy, CEO. Please go ahead sir.

Thank you everybody for joining us today for our first quarter 2020 financial results call. I am joined today by Nick Dwyer, Mandalay's CFO to help out with any financial questions you may have at the end of this session. The first quarter has been an excellent start to the year for Mandalay. While we have been facing the challenges, all other companies have been battling in relation to COVID-19. The company was very proactive in putting in social distancing measures and other controls early at the sites to ensure the health and safety of all employees while continuing the operations. As a result, the company has limited impacted by the virus. However, we have done all we can to minimize the impact and we are very happy with the resulting quarter. In relation to the operations, this quarter we had extremely positive results at Costerfield as the ramp-up of the Youle vein proceeded according to plan, resulting in record quarterly antimony production of 1,108 tonnes of saleable antimony. And we also reported the highest quarterly gold production since the first quarter of 2016 of 10,620 ounces of saleable gold. The grades from Youle vein have been performing better than modeled in the upper sections of the vein, which is most likely related to the upper limit of the deposit not being drilled as densely as the main portion. We expect the vein to fall more in line with the moderate grades as we proceed deeper into the vein. Processed grades for the quarter ended up being 12.6 grams per tonne gold and 5.5 grams per tonne antimony. That's the highest antimony grades we have had over the quarter. Almost all the mine from the Youle vein was developed all and made up slightly less than half of the overall production with over 50% of the ore feed continuing to come from the Brunswick vein. We expect the Brunswick vein to be exhausted in the third quarter as the Youle vein will be getting close to full production ramp-up. The Youle has been giving very good results in the processing plant as well. And the operation is now averaging in the high 80s for gold recovery, whereas, in 2019 it only averaged 79% for the whole year. Capital development was also proceeding per budget and we will continue to see more development drives opening in the coming quarters and our stopping will begin to ramp up over the quarter as well. Exploration at Costerfield proceeded throughout the year-to-date with the drilling of multiple targets. We have been able to continue our exploration through this whole COVID pandemic. We have been drilling for extensions into Youle vein and new high priority targets including MacDonald's, Damper Gully, True Blue, Brown’s and Robinson’s. We also kicked off the second deep hole, which is targeting at depth under the Cuffley and Augusta veins. However, due to the length of this hole, we expect it to take around three months for completion. We will be updating the market on the exploration results in June 2020. So unfortunately, I won't be able to discuss so much in this call. Financially Costerfield performed exceptionally well, producing at cash cost of $577 per ounce and all-in sustaining costs of $854 per ounce. At Björkdal the start of the year production was slightly lower than expected, as we changed out our underground haulage contractor at the end of January. With the slow ramp-up in production, impacting the amount of high grade ore we could move from the underground. The material being moved from the underground has continued to lift and we expect to see gradual increases for the remainder of the year. The operation produced 10,750 ounces of sale of the gold at average processed grade of 1.2 grams per tonne. The good news is that we begun our first starting block of the Aurora vein. We expect more material to continue to be produced from the Aurora for the remainder of the year with grades performing well as we expected them to. We have put a priority on the capital development to reach lower levels – lower high-grade levels of the Aurora load, which we are currently focusing on. We have also been actively exploring in Björkdal, two main focuses with drilling, one being on extending the Aurora zone and the other being drilling significantly to the north of the Aurora zone approximately 500 meters past the Aurora zone. We will also be updating the market on the exploration results of Björkdal concurrently with Costerfield during the month of June. The production of Björkdal was produced at cash costs of $1052 per ounce and all-in sustaining costs of $1,479 million making the operation profitable even with the slow start to the year. During the first quarter, we were also very pleased to close out the refinancing of the company with Macquarie and HSBC syndicated facility of US$65 million, which allowed the company to convert the remaining gold bonds and put the company in a much more stable financial position going forward. The new facility required that the company enter into a gold hedge position for three years – three-year period starting in July 2020 at a rate of 50,000 ounces of gold per annum. Half of the hedge was taken in Aussie dollars and the other half was taken in U.S. dollars. This was done to lower the risk of exchange rate fluctuations over the course of the three years. I'll now move on to our earnings. For the first quarter, we were helped out by higher-than-expected gold prices and better exchange rates, which was slightly counted by the lower antimony prices. But as a result, the company as a whole produced 25,700 ounces of equivalent gold production. The financial results were positive step change with revenues of US$41 million. And when you compare that to the $23 million of revenue in the fourth quarter of 2019 the step change can really be – is really evident. Our cost of sales were $19 million and adjusted EBITDA of $21 million. This included an all-time record in quarterly adjusted EBITDA at Costerfield of $14 million showing that the direction of the company is going is becoming more evident. Adjusted net income for the quarter was $5 million, which excludes a $9 million fair value related to the gold hedge. We expect to see fluctuations in fair value gains and losses going forward as valuation is directly linked to gold price at the close of each quarter. Taking this into account, the company had a consolidated net loss of $4 million. Our capital spend for the quarter was $10 million with the majority of it being on capital development and exploration. So, Mandalay finished quarter with $21 million in cash and cash equivalents. And finally, our consolidated cash costs were $846 per ounce and an all-in sustaining cost of $1,191 per ounce. In summary, even with the negative impacts of COVID-19 the company put together a very strong first quarter, mainly due to the ramp-up of the Youle vein. We expect similar results to continue for the remainder of the year and are not adjusting our guidance. However, the COVID-19 situation creates potentially significant uncertainties and difficulties for everyone. So, we will continue to monitor the situation closely and make adjustments if we deemed necessary. That is all I have for today and I will now turn it back to the moderator for any questions.

Hello Dominic?

Hi Mark.

It's actually Lawrence. I guess the operator has difficulty spelling my first name. Anyways, I just had a couple of questions more to do with the operations at both -- it's a question that actually applies to both mining sites, is there any plans to put an ore sorter into the mill?

I assume you're talking Bjorkdal. Yes. Back I think it was in 2016, we did a several month trial of the optical sorting and we had very positive results with the low-grade stockpile, which was around about 0.6 grams per ton material. We were able to lift the grade of that to approximately one gram per tonne. So the results were very positive. As you know we have been cash constrained for the last several years. Now it's the first quarter where we are beginning to see significant gains in generation of cash from our sites. So at the current plan, we don't have that budgeted for 2020, but we will be very actively looking at that to see if we do possibly install that in 2021. The trade-off is as to where we do deploy our capital whether it be in exploration or in capital projects such as the ore sorting. That is our number one priority for major capital investments once we do start investing heavily in those type of capital projects, however, so not over the course of this year but possibly in 2021.

Yes. I can see that for Björkdal because of the -- well like you said the cash constraints, but you probably have a fairly vast area in that pit to store the low-grade ore at this point in time right?

Yes and we also have a lot of area on the surface. We have approximately 3 million tonnes of that low-grade material. So it could be very profitable for us in the long-term.

Can you do sorting of the ore at Costerfield?

No we don't but a pure flotation plan with a small Knelson gravity.

Okay. What about the 20% recovery of the tailings?

No we are looking at alternatives at Costerfield for possibly expanding our flotation circuit to get better recoveries from [indiscernible] mine, but no we don't reprocess [indiscernible] at the current time.

Okay. Can you just give a little bit more information on the Brown Diggings in the Robinson Reef like the history behind it? Is there -- was it mostly artisan type mining? And what do you expect to see as you drill deeper down there? And do you expect to hit the antimony again or you're looking more base metals like copper?

No it's also a gold antimony deposit. They were more than artisanal. They were operating mines in the 1800s and into the early 1900s. We do have some very old historical information and newspaper clippings. That's how we did a lot of our research. We have done surface assigned that does indicate that there could be high-grade gold antimony and all the information we have does indicate high -- potentially for some very high-grade deposits down there. It's the first time, we've been drilling out there and it's a completely separate corridor to what we've been mining and exploring on in the past. So it's further to the east and then the current -- sorry to the west -- sorry no east of the current corridor which has August/Cuffley, Brunswick, Youle. So it's a completely new area for us with historical workings. And we have been successful drilling on the historical workings in the past which is evident in the Youle and Cuffley mines. So in summary it is gold antimony as well that we are looking for.

Yes my last question still regarding that area because I know from -- I believe that's a mining permit as opposed to an exploration permit. Do you have to still do a lot of due diligence drilling on a mining permit as opposed to exploration permit?

No it's -- because the original mining permit is in like a U-shape where we're -- that we're currently using. So it goes across and then up and covers a whole Browns, Robinsons area as well. So we would not need further mining permit for that. And we would be accessing it from the existing underground workings. It's -- I think it's within the 600 meter radius of the current working.

Do you still have to drill it to the same extent as if it was an exploration permit?

We would for operational purposes. So we would be looking to drill it to an indicated reserve -- resource.

Thank you very much for answering my questions.

No problem. Thank you.

[Operator Instructions] Your next question comes from the line of Arnie Melissa with PMG [ph]. Please proceed with your question.

Good morning, Dominic. Congratulations on the great quarter. Would have been greater if you weren't forward selling some of your gold, is there any chance that that hedge is going to come up as gold price continues to go up?

No, not at the current time. It was a requirement of the banks at the time to be -- take out syndicated facility. So as long as we do have the debt in place that hedge facility will be remaining. So we took it out when gold was around about US$1,600 per ounce. So it's not an unreasonable price and it does give us some stability over the next three years at least with gold pricing. It equates to full 2020 approximately 50% of our equivalent gold production. We expect it to become smaller proportion of our gold production in 2021. As Youle vein continues to ramp up we do expect more higher production from Costerfield next year as well as Björkdal as Aurora zone starts to give us more.

And related question when do you figure that your debt is going to be paid off and is the dividend ever coming back?

As long as we have the dividend -- I'm sorry the debt, we won't be issuing dividend. That as a result of one of the clauses within the facility, I can't tell on this forum as to whether or not we would be down paying the debt 100% sooner but that is definitely a possibility for the company. If we were to pay off the debt then we would be looking at the possibility of dividends going forward but undecided. It's, obviously, ongoing discussion as two operations progress.

Okay. And at Björkdal, what percentage of the throughput is going to be coming from Aurora do you think?

We currently process about 1.3 million tonnes per annum. 1 million of those is directly from underground. I'd like to have around about 40% plus of that coming from the Aurora zone in 2021 but still it's a gradual ramp-up of that zone. One of the complications that we have found and boy, we haven't start expecting very much is that the ore dries have pushed out much further than we originally expected because we started mining this deposit as we found it. We still had not and still have not found the lateral limits of this deposit. So that’s why the ramp up has been as quick because the level is just going lot longer than we originally anticipated but on the long term that’s a very good. That’s very positive for us is making deposit larger.

Yes. So that’s a great deposit. Yes and good luck to you on the next quarter.

Excellent. Thanks, Ernie.

Thanks.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And this does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.