AltynGold : Results for the year ended 31 December 2021

AltynGold plc

("Altyn" or the "Company")

Results for the year ended 31 December 2021

AltynGold Plc (LSE:ALTN) an exploration and development company, is pleased to announce its results for the year ended 31 December 2021.

Highlights

Financial highlights

• Turnover increased in the year to US$50m (2020: US$30m) an increase of 67%.
• 27,747oz of gold sold (2020: 16,535oz), an increase of 68%.
• Average gold price achieved (including silver), US$1,803oz, (2020: US$1,816oz).
• The Company made a profit before tax of US$18.3m (2020: US$3.3m).
• Adjusted EBITDA (Earnings before interest, tax, depreciation and amortisation) of US$26.4m (2020: US$13.5m).
• The Group repaid borrowings of US$7.9m (2020: US$3.4m).
• Capital expenditure in the year amounted to US$8.1m (2020: US$8.6m).

Operational highlights

• Ore processed 571,000t (2020 506,000t).
• Gold poured 28,450oz, (2020: 17,028oz) a 67% increase year-on-year.
• Mined gold grade 1.97g/t, (2020: 1.57g/t).
• Operating cash cost US$649/oz, (2020: US$800/oz).
• Gold recovery rate 83.05% (2020: 80.44%).

Underground development & exploration

• Transport decline No.1 was developed and is now at 117masl on ore bodies 3-8, transport decline 2 is now at 134masl, opening up significant reserves at ore body 11.
• Development of the shaft and tunnelling amounted to 6,209 linear metres.
• Blast hole drilling at Sekisovskoye amounted to 119,340 linear metres.
• Extensive maintenance and improvement works were carried out to maintain production safely and efficiently.
• Exploration work at Teren-Sai continued with the drilling of 22,580m linear metres of exploratory drilling.

Further Information:

For further information please contact:

AltynGold Plc

Rajinder Basra

[phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

Information on the Company

AltynGold Plc (LSE:ALTN) is an exploration and development company, which is listed on the main market segment of the London Stock Exchange.

To read more about AltynGold Plc please visit our website www.altyngold.uk

CHAIRMAN'S STATEMENT

Given the backdrop of the COVID-19 pandemic, 2021 was pencilled in by many Companies to potentially be a difficult trading year. Indeed for some sectors this has been the case, in relation to AltynGold, due to the careful management of its resources and deployment of its fundraising into new equipment and infrastructure improvements, the Company has been able to generate a significant uplift in its revenue and profits. The primary driver to the increase in revenues in the current year has been the increase in production and grades achieved.

The Company is particularly pleased with the principal key performance indicators in the majority of cases exceeding the budgets that were set for the year. The Company generated an EBITDA in excess of US$26m (2020: US$13.5m) on a turnover of US$50m (2020: US$30m).

During the year the Company reviewed the staffing structure which led to a number of changes at head office in terms of grade and departmental structures. At Board level, after a review, two new Non-Executive directors were appointed to complement the skills and expertise of the existing Board. This resulted in the employment of the Company's first female Director Maryam Buribayeva who, together with Vladimir Shkolnik, will monitor and assess the Company's environmental obligations. The Board sees its climate change and environmental obligations has increasing importance in the future and will monitor this closely, especially in light of the new environmental laws introduced by the Kazakhstan government in July 2021.

The Company is changing and evolving and moving towards its medium term plan for the extraction of 850ktpa. The budget for 2023 is set at 650ktpa, with the move to 850ktpa being planned thereafter. With a stable cost base and a gold price consensus of US$1,700 in the medium term the business model is evolving. Further plant upgrades are scheduled for 2023 that will move the capacity up to 1mtpa for Sekisovskoye in the longer term.

In terms of funding, there is sufficient cash generation to fund the expanded operations at Sekisovskoye and service the debt for existing operations.

In relation to Teren-Sai, from the exploration work and test production results, we believe the asset will add significantly to the profitability of the Company. The development of Teren-Sai will require additional funding initially. This can be met by the Company's own resources, however it will require further external funding to bring it fully on stream. With the Company gearing set to go down with the repayment of the bond listed on AIX and the scheduled repayment of the bank borrowings, the Company are looking at a number of possibilities to raise further funds.

The Company is set to move forward having established a strong platform for growth, from a review and strengthening of its management and human resources, keeping tight controls over its operational structure and ensuring that the right level of financing is in place. The growth and prosperity of the Company are always balanced by the Company's obligations to all stakeholders and wider environmental issues which are growing in importance.

Kanat Assaubayev

Chairman

CHIEF EXECUTIVE OFFICER'S REVIEW

Overview

The Company achieved its principal goals in relation to its current operations at Sekisovskoye being that of processing ore of 571ktpa (budget 570kpta), and producing gold of 34,258oz (target 33,634oz). The step up in ore extraction and the subsequent processing of the ore has led to a marked change in the profitability of the Company. The Company profits have climbed to US$18.3m (2020: US$3.3m) and EBITDA has moved to US$26.4m from last year's level of US$13.5m.

In relation to Teren-Sai the exploration program has proved fruitful, and the extension of the licence and move to a commercial discovery in Area no2 is being processed. Initially the areas will be stripped, as the initial step to make it ready for ore extraction. Further plans will be put in place once the licence is acquired for Area No. 2. In relation to the other areas of interest, further exploration drilling is to be continued.

During the year a comprehensive review was undertaken to assess the human resources requirements of the Company. The review ranged from the assessment of the Board, head office function and the production workforce. This resulted in changes to the Board, with the employment of the Company's first female Director. In relation to head office, staff were employed to deal with the financial and regulatory requirements of the Company. Fewer staff were required, but the pay grades did increase to attract the calibre of staff required. The increase at the production site was a result of the greater volume of processing.

The Company drew down the balance of its facilities with Bank Center Credit at the start of the year, and took on a short term working capital loan at the start of the year repayable in September 2022. The EBITDA is generating funds to repay the loans during the year, finance its capital commitments and repay the AIX bond in December 2022. In the current period factors that will have a positive effect on the Company's profitability in the forthcoming year are the devaluation of the Kazakh Tenge against the US Dollar and the increase in the gold price, currently trading at a higher rate than the average achieved in 2021 of US$1,803oz.

Economic outlook

In relation to COVID-19 the restrictions have largely eased and there was little impact on the productivity of the Company. A mention should also be made of the unrest which occurred at the start of 2022 in Kazakhstan, which was largely contained to Almaty. The Company was largely insulated from the effects of any lockdowns and restrictions imposed. The Company is aware of its wider social duties and obligations and is a responsible employer in this regard, maintaining good relationships with its workforce.

With regard to the possible impact on the Company's operations that may arise out of the conflict that has arisen in Ukraine and sanctions imposed in Russia. On a macro scale Kazakhstan as a country has close ties with Russia, and thus the devaluation of the Russian Rouble has had an effect on devaluing the Kazakh Tenge against the US Dollar, and there has been an upward push on the price of an ounce of gold, which is currently trading in the range of US$1,950oz. At a Company level, the trading with Russia has been reviewed and alternative sources put in place for the small value of consumables purchased from Russia. There is no reliance on Russian companies in terms of the supply of capital equipment, parts or financing. All sales will continue under the current off take agreement with all sales made in Kazakhstan in US Dollars.

Mine development

The input of significant capital equipment additions in 2020 and H1 2021 has enabled the Company to progress mining operations in all areas of mining operations. A significant acquisition in this regard was the purchase of the self- propelled tunnelling equipment.

The principal development milestones achieved in the period were:

• Tunnelling and shaft sinking of 6,209 linear metres.
• Blast hole drilling of 119,340 linear metres.
• Exploration drilling was carried out and amounted to 18,943 linear metres.

• Backfilling of voids was carried out in the period amounting to a volume of 64,404m.

During this period the Company has been concentrating on developing ore bodies 3-8 at horizons 117masl-178masl and ore body 11 at horizons 134masl-174masl.

The transport decline No.2 was extended by 343 linear metres allowing the access of 640,000 tons of ore. Similarly transport decline No. 1 was extended by 391 linear metres opening up accessible reserves of 163,000 tons.

In order to continue to mine efficiently and safely the following capital/maintenance was carried out:

• A forced air facility was commissioned and built at elevation 355masl, this necessitated the installation of 17km of overhead 6Kv lines. The Korfmann ventilation equipment will allow safe and stable operations for a period up to 2029 in accordance with the mine operational plans.
• Various works were carried out to enable the efficient and safe working of the stoping, this included introducing a new system of stoping and obtaining an Ulba-150 charging unit to improve the quality of ore crushing.
• The mine operational procedures are constantly being updated to conform to current safe working practices, during the period an electronic accounting and explosive digitised log was introduced.

The key production figures are shown below:

Mining results ore extraction

		2021	2020
Ore mined	T	571,035	506,050
Gold grade	g/t	1.94	1.57
Silver grade	g/t	1.81	1.08
Contained gold	oz	35,580	25,555
Contained silver	oz	33,296	17,525
Mining results processing
		2021	2020
Crushing	T	534,426	421,040
Milling	T	541,576	420,256
Gold grade	g/t	1.97	1.58
Silver grade	g/t	1.63	1.13
Gold recovery	%	83.05	80.44
Silver recovery	%	73.54	72.81
Contained gold	oz	34,258	21,355
Contained silver	oz	28,408	15,253
Gold Poured	oz	28,450	17,028
Silver poured	oz	20,891	11,180
Projected capital expenditure
	Total	2022	2023
	US$m	US$m	US$m
Prospect drilling	2.3	1.4	0.9
Underground development	7.2	5.3	1.9
Infrastructure	5.2	0.4	4.8
Ore handling facilities	14.0	-	14.0
Process plant incremental expansion	9.0	2.4	6.6
Teren-Sai exploration program	0.4	0.4	-
Total	38.1	9.9	28.2