Mandalay Resources TSX:MND Stock Report

Investor sentiment deteriorated over the past week

After last week's 17% share price decline to CA$2.88, the stock trades at a trailing P/E ratio of 5.2x. Average forward P/E is 10x in the Metals and Mining industry in Canada. Total returns to shareholders of 122% over the past three years.

Mandalay Resources Corporation Confirms Excellent Results from Its Björkdal Eastward Mine Extension Drilling and Reports Encouraging Results from the North Zone Drilling Program

Mandalay Resources Corporation provided an update on the eastern extension drilling and significant intercepts from the North Zone drilling program at its Björkdal operation in Sweden. Late in 2021, it became apparent that a gap of highly prospective ground was underexplored between Lake and Central Zones at depth. A testing program was designed to explore the gap and yielded initial success. A follow-up drilling campaign was designed to define the extended and newly discovered veining. The 2022 program included seven holes and intercepted 17 now modelled veins with encouraging grades amongst them including 14.7 g/t gold over 4.10 m (3.48 m ETW) and 27.3 g/t gold over 2.20 m (1.61 m ETW). Assays are pending for the last half of MU22-006 however veining was identified within this drillhole along trend. This drilling program has now identified veining of mineable grades up to 400 m down plunge from the current underground infrastructure. Like previous drilling of the eastern continuation, visible gold is common within the quartz veining and is generally accompanied by significant gold grades when assayed. Below is an image of the aforementioned MU022-010 intercept. In January 2022, Mandalay recommenced the North Zone drilling program with an intention to further define mineralization intercepted in 2020 and test for lateral and vertical extents. The drilling program is ongoing with 11 drill holes completed to-date. Excitingly, the drilling has highlighted an area of increased veining density at approximately 450 m north of Aurora. This increased density is also accompanied by increased grades with two of the best results in the prospect coming from MU22-002. These are: 155.0 g/t gold over 0.80 m (0.61 m ETW) in MU22-002 and 183.0 g/t gold over 0.45 m (0.34 m ETW). Apart from the exceptional grade, these intercepts are important due to their location above the marble unit and what that could mean for vertical and lateral grade continuity. Veining below the marble horizon general persists for 80 m in vertical extent. The Aurora orebody like the North Zone exists above the marble and has a mineable vertical extent of approximately 350 m and lateral extent of 400 m. The 2022 North Zone drilling campaign has intersected mineralization across a 750 m trend and 200 m vertical extent although the bounds of the zone have not yet been found. Plan section of the North Zone drilling area showing the 2022 drilling complete to date. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2.0 g/t Au when diluted to 1 m.

Mandalay Resources Corporation Intersects 1,780 g/t Gold Over 0.17 m in Its Costerfield Regional Drilling Program at the Robinson Prospect

First quarter 2022 earnings released: EPS: US$0.11 (vs US$0.28 in 1Q 2021)

First quarter 2022 results: EPS: US$0.11 (down from US$0.28 in 1Q 2021). Revenue: US$54.2m (up 3.0% from 1Q 2021). Net income: US$10.5m (down 59% from 1Q 2021). Profit margin: 19% (down from 49% in 1Q 2021). Over the next year, revenue is forecast to grow 2.0%, compared to a 16% growth forecast for the industry in Canada. Over the last 3 years on average, earnings per share has increased by 123% per year but the company’s share price has only increased by 44% per year, which means it is significantly lagging earnings growth.