Good morning. My name is Rob and I'll be your conference facilitator today. At this time, I'd like to welcome everyone to Mandalay Resources Corporation Fourth Quarter and Year End 2020 Financial Results Call. Joining us on the call is Dominic Duffy, President, Chief Executive Officer and Director of Mandalay Resources. [Operator instructions] Please note, this conference is being recorded. This call contains forward-looking statements, which reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from the current expectations are disclosed under the heading risk factors and elsewhere in the Company's annual information form dated March 30, 2020, available on the SEDAR and the Company's website. I'd now turn the call over to Mr. Dominic Duffy. Please go ahead.

Thank you, Rob. Thank everyone and thank you for joining us today. Today, we have on the call is Nick Dwyer, Mandalay's Chief Financial Officer, and he will walk through the financials. We also have Chris Davis, Mandalay's Vice President Exploration and Operational Geology to give you a quick update on where we stand on our current exploration program and the plan we have going growth. Mandalay released its fourth quarter and full year 2020 financial results at market close yesterday. You can find our consolidated financial statement and MD&A on the Mandalay Resources website and also under our profile at sadar.com. Mandalay Resources delivered another excellent quarter in Q4 2020. We leveraged our strong operational performance with 32% increase in realized gold prices, a good cost control to achieve one of our best quarters on record. Before I get into our operations, though, I wanted to take a moment to have Nick Dwyer, speak on our financial performance and just how significant this quarter and 2020 as a whole was for the Company. Are you on the line, Nick?

Yes. Thanks, Dom. Mandalay had outstanding in Q4 2020. Q4 2020 compared to Q4 2019, we doubled our quarterly consolidated revenues to $45.3 million. We grew our quarterly adjusted EBITDA by over 400% to $25.3 million, which was the third highest result in company history. Our also grew our consolidated production by was 47%. We lowered our all-in sustaining cost by 14% and we delivered an adjusted net income 12.1 million. And the Company closed the 2020 year with $34.2 million in cash. This cash balance was similar to the amount at the end of Q3. However, it's important to note that deliverance amount does not include an additional $5 million payment relating to a delayed shipment from Costerfield, and this would normally have saved by the year-end, but it was received on January. The fourth quarter was capped off by a tremendous full year, in which the Company demonstrated dramatically improved financial results. In the full year 2020, we generated $179 million in revenue, that's the highest annual revenue since 2016, and that was when we had three operating mines rather than the two that we have today. We generated a record adjusted EBITDA with 94.2 million and a record EBITDA margin of 53%. We generated 70 million in net cash flows from operating activities, generated 25 million in free cash flow, which again exclude the previously mentioned like $5 million shipment from Costerfield and produced an adjusted -- record adjusted net income of $43.7 million or Canadian CAD0.51 income per share, which is the equivalent to 25% of market cap of company at the quarter 2020. Thanks, I'd like to turn the call back to you Nick.

Thanks, Dominic. With four consecutive quarters of remarkable operational and financial improvement, Mandalay has not demonstrated that is turn the corner with no shine that this is this turnaround is sustainable. This continued performance highlights not only the successful execution of the operational strategy at Costerfield, which was to reach develop and ramp up the high grade production and yield, but it also demonstrates our positive growth trajectory and underlying long-term value and cash generating potential both sides. Turning to operations, on a consolidated basis, Mandalay produced 27,350 ounces of gold equivalent in the fourth quarter of 2020 at a cash and all-in sustaining cost of 930 and $1,350 per ounce, respectively. Mandalay's consolidated production rose by 47% compared to Q4 2019. This production lift was driven in large part by high quality and low cost production from Costerfield, most notably from Youle vein. For the full year 2020, Mandalay met its upwardly revised production guidance of that was upgraded to 100 from 100,000 to 109,000 ounces of equivalent gold producing. We ended-up producing 103 and 440 ounces. This was a 35% year-over-year increase, significantly improved cash and all-in sustaining costs of $843 and $1,254 per ounce respectively. At Costerfield in Q4 2020, Costerfield produced 12,230 ounces of gold and 860 ounces of antimony for 15,100 ounces of gold equivalent produce. This is nearly double the production over the same period in 2019 where Costerfuel produced 4,750 ounces of gold and 694 tons of antimony for 7,600 ounces of gold equivalent. Costerfield, cash cost per ounce of gold equivalent produce $668 down 38% from the year ago quarter and the all-in sustaining costs were $1,077, that's 34% lower in Q4 2019. This resulted in Costerfield posting yet again a record quarter, quarterly adjusted EBITDA of $20 million, which surpassed the previous record of a 19.8 million set in Q3 2020 for the full year 2020. Full year 2020, Costerfield generated 68 million of adjusted EBITDA. The uplift in production and reduce costs in Q4 2020 were largely dry driven, as our process grades average 11.2 grams per ton gold and 3.5% antimony. For the full year 2020, Costerfield produced 44,960 ounces of gold and 3,900 tons of antimony for 58,150 ounces of equivalent gold, that's 131% production increase year-over-year. Costerfield's cash and all-in sustaining cost for 2020 was $634 and $1,010, respectively. Looking ahead, we expect to see a similar production profile and continued high grades at Costerfield over the course of 2021, and we are guiding annual production equivalent -- we are guiding annual gold equivalent production of between 53,000 and 60,000 ounces. At Bjorkdal, we continue to deliver stable, profitable performance. The mine produced 12,250 ounces in Q4 2020, which was a slightly higher than the 10,990 in the fourth quarter of 2019. Cash enrolling sustaining cost was slightly higher at $1,251 and $1,116 per ounce respectively, versus $1,071 and $1,460 per ounce a year ago. This resulted in quarterly revenue of in Q4 2020 of 19 million 6.4 million in adjusted EBITDA. For the full year 2020, Bjorkdal generated 81.5 million in revenue and 32 million in EBITDA, both improvements of 2019. For the full year 2020, Bjorkdal produce 45,296 ounces of gold, down 12% year-over-year. Bjorkdal's cash costs and all-in sustaining costs for 2020 were $1,112 and $1,435, respectively. We continue to execute our new operating strategy of Bjorkdal to focus on maximizing the delivery of a higher margin or feed to the mill for greater profitability. This means it boosting the overall mix of high grade underground ore and supplementing the milk capacity with low cost low grade stock power. While this transition is still underway, we have seen four consecutive quarters of steadily increasing underground tonnage delivered to the mill. We're working to ramp up our production and wholly of underground ore, with the goal of delivering 1.1 million tons of high grade underground ore to develop per annum. Haulage numbers definitely trending positively in the last three quarters, we have seen positive lift in the underground tonnage. We are also developing further into the higher grade lower levels of the Aurora zone. However, we are seeing some delays in stopping and in Aurora as the majority of the auto is extending further than originally expected, as further mineralization is found that the extent of the deposits. We expect Bjorkdal's performance both operationally and financially to improve significantly as we execute this strategy and have guided annual gold production of 2021 or 52,000 to 57,000 ounces. Overall, I'm pleased with the current state of operations heading into 2021. Both are in strong positions, stable grind and generating significant cash flow. As we mentioned in our production and cash guidance released in January, we expect to take our annual consolidated production from 103,000 ounces in 2020 to between 105,000 to 117,000 ounces in 2021. We're also guiding improved cash and all-in sustaining costs of $800 to $1000 per ounce and $1100 to $1300 per ounce respectively. On other points of operation, one other points -- sorry is that on the first quarter of 2021, we will be restating our process -- restarting our processing plant at Cerro Bayo to process mineralized waste dumps that can have value in the current metal price environment. It is a three month scheduled trial that could be continued further in the event of the economics of the program proving feasible. Now, I'd like to move on to the exploration front. Subsequent quarter to end, we reported some exciting exploration success, and I'd like to turn the call over to Chris Davis to talk about these highlights. Chris.

Thanks, Dominic. Last month, we announced encouraging results from our extensive drilling at the high grade your deposit at Costerfield. The drilling which was intended to further delineate the recently discovered high grade Southern gold domain, returned results that convey a link between the current mine development and the end provided us the strong indications that the high grades continue through this site. Some of the drilling highlights include 264 grams per ton gold and 19.7% antimony over a true width of 0.23 of a meter, and 94.7 grams per ton and 16.4% antimony over a true width of 0.05 meter. We also encountered new high grades to the north of Youle at depth, grading it 345 grams per ton gold over 19.7 -- sorry, and 19.7% antimony over a true width of 0.11 meter, and 316 grams per ton gold over a true width of 0.22 meter. That's I guess most excitingly, step out drilling down plunge on new returned grades of 460 grams per ton gold over a partially recovered vein which was outside 0.11 meter. This intercept is 130 meters down plunge of the previous high grade intercepts and could represent the anticipated beginning of a new structural domain at Youle. As we walked out, drilling over the last few months has been focused on the eastern end depth extension of Aurora as well as the eastern extension of Lake Zone. Significant and exciting results have been received in both programs with highlights of 4.8 grams per ton gold over a true width of 2.5 meters at Aurora and 119 grams per ton gold over a true width of 1.44 meter at Lake Zone. Also earlier this week, we announced our resource and reserves updates for both of our operations, with positive results at each. We extended our mien life at Costerfield to 4.5 years, increasing our mineral reserves for gold and antimony by 25% and 22% respectively, net of depletion. Most significant is that, we nearly doubled our proven reserves at the high grade Youle vein, which was the driving force behind the Company's turnaround in 2020. We also maintained a long mine life until 2029, I feel an increase that underground mineral reserves, which is slated to be the primary source of mill feed going forward. Looking to 2021, we have budgeted the largest combined exploration expenditure in the company's history of USD 9 million. At Costerfield, our focus is threefold

the growth of high-grade resources at depth on Youle Deposit, drill testing of the exciting Youle analog environment at depth under Cuffle, Augusta and Brunswick deposits, including the deeper Fosterville sale environment. And advancement of the promising browns and Western corridor projects. At Björkdal, we will be focusing on delivering higher grade resources and extending the Aurora system as well as building on Lake Zone and Main Zone resources. We have also identified a number of surface targets which we'll be undertaking petrotechnical analysis and diamond drill testing. Thank you. I'd like to hand back to Dominic.

Thanks, Chris. Before I take any questions, I'd like to take a moment just to revisit our main corporate priorities in our prior M&A. On our last earnings call, I laid out four core areas of focus for Mandalay. First, we want to maximize our cash flow from operations. We want to continue to take advantage of the record high gold price environment. This means continuing to grow production at Costerfield and ramping up high margin ounces on Björkdal underground. As Nick mentioned, we generated 72 million in net cash flows for our operating activities this year, delivering -- driving record adjusted net income of $34.7 million and $25 million in pre-cash flow. Next, we want to unlock further value and extend mine life through expiration. At Costerfield, this is extending the mine life at a high grade yield deposit and unlocking further value through new discoveries. At Björkdal, our objective is to continue to delineate and grow Aurora and other high grade ore sources. We are pleased to have grinded our mine life at Costerfiled and maintain the nine plus year life at Björkdal while growing underground mineral reserves. Our third priority is derisking our balance sheet. We plan to significantly strengthen our balance sheet in the coming quarters. As of quarter end, our deposition was $59 million. It's worth noting that the spot is paying 4.5 million towards our hedging program in 2020, mainly driven by the race and strengthening what is, mainly driven by the rates and strengthening of the Australian dollar relative to the U.S. dollar when anticipate receiving proceeds from the Australian dollar, going forward contracts in the near-term. Our improved operations and cost generation allowed us to grow our cash position to $34.2 million at year 2020, not including the $5 million shipment receivable that was recovered in early January 2021. We've expect this trend to continue and we're on track to not only have zero net debt that by 2021, but to have cash exceeding out debt. Lastly with our balance sheet, we're currently beginning to beat the risk. We will turn our attention to investment and cash growth opportunities that will continue to strengthen the business and surface value for our shareholders. Thank you everybody for joining us today. This concludes a part of our presentation. I would now like to open the lines up for questions.

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from the line of Robert [indiscernible] with Mandalay. Please proceed with your question.

Hey guys, congratulations on the great quarter and great, quite an accomplishment that you've turned the Company around and made such tremendous progress. The first question I have is kind of a housekeeping question. Are you aware that you guys have a spam sync for email inquiries to Investor Relations?

No. I did not realize that. We would appreciate if you could reach out to Edison with our Investor Relations.

Yes, I have and he's been quite, quite helpful, but a half hour ago or so just before the conference calls started, I checked the website and that's still info at mandalayresources.com. So, yes, I've alerted, Edison to this problem, but I was wondering if you guys were wondering why you never got any questions from Investors through the email. So.

Okay. No, thank you very much for highlighting that again and we'll follow up and ensure that the situation is remedied.

Excellent. Excellent. Okay. Onto more important questions, can you kind of give a little bit more color about elevated all-in sustaining costs over at Björkdal?

Yes. So, the mining attributed to the increased costs in the fourth quarter where we did have quite a bit for the development, operational development in the first quarter, as we were developing quite a bit of you in those very little -- capital during up periods -- capital development. So, that pushed operating cost subsequently and the all-in sustaining costs. We also were winterizing, so preparing for the winter and had some tailings work to do. So, it was anomalous in the fourth quarter, and we were anticipating higher cash spend during that quarter. But I think you're saying the first quarter of this year, you will say that total costs are back online to what we're obtaining in the first three quarters total overall operating costs.

Excellent. My next question regards Cerro Bayo and Chile. Do you know the approximate tonnage to be gone through of the tailings? And how long that might last, I mean, might it last six months, a year, year and a half?

At the current time frame, it's only at all processing. So, we've scheduled in three months, tailings to see what the actual results are. These actual waste dumps were mined from the old title pit and several others in the 90s. Quite a few years ago, a study was done to see if these waste dumps are relatable, and the results came back negative. It more than anything, it is taking advantage of these current high silver prices, and to see if these dumps can be profitable processing to our plant. So, we anticipate will be passing through 1,400 to 1,500 tons per day. And the program, if it is profitable, could be extended by quiet period because our several million tons of these waste dumps still at Cerro bio. The margins will not be extremely significant, but then we do anticipate that they will definitely hold, covered the holding costs at Cerro Bayo as well as giving some profit on top.

Well, if that could be accomplished, every little bit helps and that would be excellent. Could that also perhaps serve as a catalyst to Equus to exercise their option contract on the property?

Yes, I can't speak 100% for what John and Equus’ plans are -- but I do speak to them regularly and I am quite certain their business model is factored pretty much solidly around Cerro Bayo. And that option expires at the end of this year. So, I would be surprised if their course does not realize on that option and purchase Cerro Bayo. And we, if they do, Mandalay becomes a substantial, the largest shareholder of Equus. So for us, it is important to show you that these waste dumps can be profitable and it might be a big catalyst for people beginning to say that value in aqueous while which is a benefit to us.

Okay, excellent. You're getting close to the end of my questions here. On the balance sheet going forward, do you anticipate holding higher levels of cash in 2021, 2022 versus the past to prevent the financial problems that hit the Company here in 2019 an d early 2020?

We definitely do intend to buy cash balance. However, I do anticipate that that will continue to grow substantially over the next 4.5 years. We have demonstrated how much cash we can generate while we are producing from the your load Costerfield, and we have 4.5 years at least of that production and with the bracer results with saying Chris getting down deep, I would anticipate that will continue to grow further. So I don't anticipate that we'll have any financial concerns going forward. I am anticipate that we will be going our cash position. We do have still a significant debt of 59 million that we are paying down 3.8 million a quarter going forward. So, we'll be looking at what we do with that going forward as we become net debt free and have a lot more cash to play with. But our focus predominantly with the cash is maintaining large cash balance and reinvesting in expiration. So, we're starting to see the benefits of what to do for the Company with the smaller uplifting, capital expression and Costerfield s last year. We not only replaced depletion, but added another year and a bit on top. And the results were starting to say a Bjorkdal join into this lifetime and mind depot starting to get some phenomenal growth reporting back from that drilling. So, we are seeing big successful putting money back into the ground and that will be the priority with the amount of cash we are generating and growing your cash balance. But we definitely will get comfortable buffer.

And then my last question is, you guys have done such a tremendous job of turning the Company around and currently are my single largest position. Do you have any plans to expand your promotion efforts going forward? Getting the word out to the investor community just seems? Just seems nobody knows about the Company unfortunately.

Yes. So, it has flown under the radar for many investors. And we do, I think that is reflected in our current market capitalization. We will be attending a lot more conferences this year. We are definitely speaking to a lot of banks to try and get a lot more following. We do only have two analysts still there has been a lot of hesitancy for banks picking up on our story and to the large part that we haven't proven that this turnaround is permanent. I think we have shown that it is here for the long-term now with we're continuing to add reserves, especially at Costerfield. So, we will be doing quite a bit to try and get the word out about Mandalay and how successful the Company currently is and how much growth there still using the Company going forward.

Our next question is coming from the line of Kevin Tracey with Oberon Asset Management. Please proceed with your question.

I have a couple about the guidance at Costerfield. So, the guidance of 53,000 to 60,000 gold equivalent ounces of production this year and that compares to close to say 75 to 90 that you originally gave as part of your three year guidance in a couple years ago. So I'm wondering if that kind of higher level of production? Is that just then delayed into 2022? Or is there something that's going to change about your mind that means that production won't get to those levels?

Yes, so that's easily explained, back two years ago when we were planning for Youle, all that we had drilled out. We found Youle deposit and had to throw it out the main through a high grade core of Youle, that's where the focus was. And as we drill out further, we really had little information on that you back from what the size of our reserves in your two years ago to what they are now, it's growing significantly, because we have continued to drill out further into Youle and it has gone laterally significantly. And as you go out further from the high grade core, the great you are getting low grades, as deposits slowly drops down, but they're still very profitable. So as a whole, it did drop the overall grades of Youle, drilling out to the extent, but it did increase our reserves significantly. So that all it really was a timing issue with drilling to actually understand how much bigger the deposit was and what we what we had originally draw it out. In hindsight, we probably should have continued to drill out the whole deposit before reporting so many years ahead. The net result is positive for us. We asked the grade of that highest grade coal of Youle has not dropped, but we have just added the extremities of Youle load as well, which drops in grade over the period, but that's quite a few ounces.

Got it. Okay. And more specifically on the exploration results and your plans for this year, do you expect to, again replace more than 100% of production this year at Costerfield? And, as far as yield goes what's your best guess at this point in time of what that mine life will ultimately be?

It's extremely hard to say, suffice to say that our lowest currently, our deepest hole was grinding over 400 grams per ton, it was 11 centimeters narrow, but that's Youle. So, we know that to open in depth, it does appear to be moving into a different structure, but that's quite common in Youle within Youle and all the deposits with minor Costerfield. So, it's open at that I do not know to what depth that will go down and we know that Costerfield is mining over a kilometer deep now, how deep is always around about 600 meters down into Youle. I would anticipate that we will replace depletion, but it's very early on in the year to understand how much more we can add. We are continuing to draw ground as well. So the hope is that will emerge into something that we can move into resource this year and we subsequently are reserved. We are attacking the actual Cuffley load again once again because of information that was gathered from Youle and how it be highs at depth you have, Chris and his team have come up with a hypothesis or that the Youle the load has moved into a different structure, which we haven't we didn't actually intercept several years ago grading quite a wide intercept over meter. I think it was 11 grams, so that we're actually just started going now and should be accepting of the coming weeks. So there's a lot of money being put into expiration this year, so 6.8 million more than we ever had have previously in Costerfield. So, I do anticipate we will be able to replace our reserves, but all that being said a lot of our focus this year is not specifically aimed at reserve replacement. It's more aimed at target testing and actually pure exploration. Because I point back to the prior 10 years of Mandalay, almost a bulk of our drilling has been focused solely at infield drilling with very little target testing, regenerative drilling, I think over 10 years we've struggled to draw even 10 million of that type of drilling. So this year, we're drilling $6.9 million worth of drilling and the bulk of it is trying to find significant extensions to older deposits or final brand new deposits such as brands. Hopefully that answers it.

Yes, no, thank you. And then lastly, on the cost guidance for cost repealed, at the midpoint, it implies roughly $115 per ounce of higher costs relative to 2020. Now, by my math, the strengthening Australian dollar might account for half of that. And I'm wondering if you could talk a little bit more about what the other, where the other increase is coming from? And if this cash cost guidance for 2021 is not a reasonable kind of expectation for 2022. And the years on as you continue to develop yield?

Yes, so it is reasonable, I think. Costerfield is a little different, virtually every other mining operation in the world in that. Our stoping production is actually more expensive than development because of we have plant restrictions. So we mined the stope as narrow as possible and to decrease dilution and because of the relatively poor ground conditions in Costerfiled. We have to backfill stope after every blast, using cemented rockfill and then reopen the stope. So development is quite simple for us just advancing actual stoping is does result in a high operational cost when we are mining. And that's Youle always transitioning more from becoming in development operation to over 50% of our production, over the course of 2021 will be stoping, that's where the bulk of our actual operating costs live come comes from. So, if we do continue to grow the deposit depth and have more operation of development or high ratio development than stopping then we may see a slight decrease in costs over the course of the year.

Thank you. The next question is coming from the line of Lawrence Cooney [ph] a Private Investor. Please proceed with your question.

Hey, Dominic, I just want to congratulate the team on the turnaround. I've been investing in Mandalay since three years ago. So I've ridden out the storm. So I have a series of questions, but I do have one comment about the Investor Relations point of contact someone if get verify the phone number as well, because I haven't been getting any call back.

Yes. Sorry. I don't have the actual number on hand. I would have to get back to you or have Edison reach out to you, Lawrence.

Okay. Thank you. I do have a series of small questions here. So, I'll start off with the Bjorkdal mining operation. Last time, we chatted on the quarterly call, I inquired about the ore sorter. Is there any consideration being put forth on that?

Yes. So, there is consideration and that's going to be investigated over the course of 2021. So, we do anticipate that we will be able to continue to live the underground production from Björkdal, and there is true directions in which we can go at Björkdal, actually lifting overall throughput through the processing plant. So, we can't really process in dispose 1.3 million tons per annum. We are permitted to process 1.7 million tons per annum. So over the course of 2021, we'll be looking at and doing a study, looking at what is the best and most optimal method to upgrade Björkdal in the longer-term, because this is where you have the tenure is in front of us, but this is an operation that's been quite easy to continue to add additional reserves to this operation. So, it will be operating much longer. So, we do have a lot of broom to upgrade the facility for larger ounce production on an annual basis, and to have it long-term. So, there's two main routes that we'll be looking at that is upgrading the whole processing capacity or implementing the optical assorting. So, we did do the feasibility study for the optical sorting two to three years ago. So, we understand very well total capital costs associated with that. We don't yet understand the total cost to upgrading the processing facility and that all that's involved mining wise to bet upgrades total processing tonnage and underground feed significantly to understand the financial results of, if we did that. So, we do want to do try it off study between two projects and look at a how feasible they are before actually selecting in which direction Björkdal is going to go. And that's going to be my focus of one of the studies of Björkdal this year. So there won't be a capital investment. We will be carrying out this year, mining focused exploration, capital discipline on will remain on exploration.

Okay. Another question for the Björkdal mining operation. On the presentation, you mentioned the drilling. Is that going to be similar to the deep drilling that occurred at Cuffley and Youle?

Sorry, Bjorkdal, no, not that date and definitely not tell you, it's an extension of mine design and life science. So where are we did the deep drilling into Aurora out to the Northeast, we did start to say some pretty significant grade intercepts and Chris and his Björkdal team have done a lot of extrapolation in investigating this and have found identified areas within the mine and life science where we could see a similar occurrence of block we saying around this Aurora zone back within those two areas, that's our primary focus at the moment, those two areas down deeper. And so they're not stepping down, like 500 meters down below, that is following these fine structures, maybe 100 meters plus, down, they belong. Chris, did release on that a few weeks ago, our first results coming back from that, and that was mainly around the light side, we will be updating further with more information on the mine zone over the coming months as well, where we're hoping to see repetitions of intercepting on average high grades deep enough.

Okay, so it's not going to be like a deep hole drilling like?

No, no definitely.

Okay.

Yes, as we are drilling did this was also drilling deeper, but because of the whole depth of the deposit is going further to the northeast. And it is getting closer to actually another mining confession that we hold, which is store hidden. So, when we're getting closer to time, there's two mining concessions together where we're permitted to mine and it is highlighting the interest and possibly following up on what was called the store head in deposit, which, if you'd like more information on that we can discuss it another time.

That's interesting because that was kind of my next question. So, I can understand your need to reassess the mill and determine how to increase its gold recovery and throughput. I'm going to sort of tack here towards more the M&A scene. I found an article, actually a press release from Mandalay Resources back in 2013, when Brian was the CEO, and he was talking about divesting into copper mining with the La Quebrada of permits in Chile. So, I was wondering, with all this new cash coming in, where does Mandalay sees ourselves going with M&A? And is there a possibility of getting into some more base metals to basically protect us against the interesting fluctuations in gold these days?

Yes. So, I'll start with La Quebrada it's a very interesting one, because it's copper silver, which is where the trend of copper and silver with where it's going at the current time is that deposit is of more interest to us. And actually, Chris has recently just started reviewing the information at La Quebrada. Obviously, it has not been a high priority for us over the course of the last two years. My focus has been on how to operation assets to turn them around and become a successful company again. But now they have in pretty stable position, we are going to be in looking at La Quebrada and what is the best way for, for that property. It is neighboring and operating open pit mine with deposit continuing in open [San Jaron] mine into the open pit. So, that area has been successful with the [Cote] deposit. So, we do want to understand that deposit is a little better. And we do have the time now to begin investigating that to understand exactly what we're going to do with La Quebrada going forward because there's value there we see in relation to M&A and getting into base metals. Still the priority of Mandalay is we are a precious metals producer but we are not adverse to base metals as well especially if they have a precious metals tinge to them. Our priority during the course of 2021 is not on acquisitions and trying to find something to purchase, because we do think there's a lot more shareholder value to be realized, with our current production results and current and drilling into our own properties both built on Costerfield to get some more value into Mandalay before actually moving into that transition of trying to grow externally. So unlikely our 2021, we do want to understand a little better what we have in Costerfield, which is why we're drawing so much more. Before we actually make any decisions and look at growing externally.

Okay, I just have two closing comments. I guess my recommendation to Chris is to contact to Brad Mills and find out and get as much as he can with regard to his notes based on this comment from the '23 press release. And just to close off, and thank you very much for the turnaround and look forward to speaking to you again on the next quarter.

[Operator Instructions] Our next question comes from the [Bernie with EMG]. Please proceed with your question.

Congratulations on the excellent quarter. I guess most of my questions have already been asked by other callers, But I do have a couple of questions on Costerfield. The recovery went up to 93.53%. Is that the result of the process improvements that you've implemented there?

There's been some improvements definitely, but the bulk of the improvement has been the type of mineralization that we have in your load. So it's very, a lot of free gold. So we are recovering a lot more gold in our gravity circuit, up to 50% of our gold comes out in gravity now. Previously, for example, Brunswick was 25% to 30%, so that getting so much more than our gravity is lifting our recovery overall from the whole site. We are also -- hopefully in March, we now have it on site. So hopefully, we'll be commissioning in March then you come to flotation. So that we were anticipating a 2% lift in recoveries with that. Obviously, the recoveries have already improved so much. Since we started this capturing project, we might not get up to 2% further improvement from the captured but we do anticipate that definitely getting over 1.5% improvement further with this capture we should be commissioned in March. So because it's focusing on the very fine gold within our flotation token, almost all of our gold that goes to the tailings is my microscopic very fine gold and the captured system that focuses on recovery of very fine gold. So that's where we expect to see our improvement, further improvements this year with or already improved recoveries at Costerfield.

I see and on your hedges, are your hedges really making your money now? I mean, the perception on the part of most investors is that, Mandalay Resources isn't a void because of the hedges. So could you provide some cover on the hedges?

So when we took out the hedges to try and de risk it, and we didn't want to, we have to take these hedges out with the refinancing of the credit facility, but to try and de risk and decided to take it out in two currencies. So half of it was taken out in U.S. dollars, so 25,000 ounces per annum with a ceiling of I think its 16 and 20 services in 30 gold price, but that other 25,000 ounces was taken out in Aussie gold price at the time, because of the low exchange rate, devalued Aussie dollar. We got that at $23.90 per ounce that was locked in. And if you look at current Australian gold price is around about 20 to 70. So I will be making around about $120 per ounce on that, at the current time losing possibly slightly more on the U.S. So it's close to breakeven, but with the Aussie exchange rate lifting, strengthening that's becoming the margin with the Aussie hedge is becoming larger for us. So I think derisking at both split into currencies was a good decision.

Now is the gold that's hedge coming from Costerfield exclusively? Or is it Yorktown and Costerfield?

Yes. So, the cost of the Aussie gold hedge is linked to Costerfield and the U.S. dollar hedge is linked to Björkdal.

I see. Okay, that that explains that. Thank you very much and congratulations on excellent performance.

Excellent. Thank you.

Thank you. We have a follow-up from the line of [Rob] with Mandalay. Please proceed with your question.

Hey, guys, quick question. How close is Costerfield to Kirkland Lake's production areas?

It's approximately 30 kilometers away. So, you have got Bendigo then you go further to the east Fosterville and then through continue long enough 30 kilometers to the east and that's where we are.

Okay, very good, thank you.

Thank you. At this time, we've reached the end of our question and answer session, I'll hand the call back to Dominic Duffy for closing remarks.

Excellent. Thank you, everybody, for joining us today. Before we disconnect, I'd just like to give a special thank you to all the Mandalay team for their excellent hard work and contributions at to delivering these fantastic results in Q4 and 2020 as a whole. And I really look forward to updating the market on our progress as we go forward. So have a good day everybody and thank you.

Thank you. This will conclude today's conference. You may disconnect your lines this time. Thank you for your participation.