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Good morning. My name is Dina, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Mandalay Resources Corporation's Q1 2019 Financial Results Conference Call.Joining us on the call is Dominic Duffy, President, Chief Executive Officer and Director of Mandalay Resources.[Operator Instructions]This call contains forward-looking statements, which reflect 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 28, 2019, available on SEDAR and the company's website.Thank you. Mr. Duffy, you may begin your conference.
Thank you, Dina.To start with, the first quarter for Mandalay has been very a exciting one for us. There have been a lot of changes within the company and the most significant thing being the significant equity raise that was carried out by the company. That financing closed out with us obtaining $39 million net proceeds to put the company on a very good financial footing for going into the rest of this year to make sure that we can carry out the plans we have in place to continue to grow this company.The Q1 results showed that we did have significant improvements in the company as a whole. We generated $29.9 million of revenue, had adjusted EBITDA of $5.2 million and a net loss of $1.3 million.The major improvements we saw within Mandalay were from our Björkdal operation. At that mine, we mined 14,400 ounces of gold -- salable gold, sorry. And so that is the best production results we've had since Q4 2017. And it has definitely shown that since we have obtained the new haulage fleet underground, Björkdal has got back to similar levels to what it was producing in 2017. We do expect to see good production results for the remainder of the year and thus putting the company in a very good position slightly better than we were expecting to be able to carry out all of our plans.Costerfield, on the other hand, had a steady quarter. We had 7,555 salable equivalent gold ounces produced from that asset. It's not a significant amount, although we are not expecting significant production from our Costerfield operation until we are in the Youle lode towards end of 2019. And there we do see -- expect to see a sharp increase in our grades as we start producing from there and eventually mining over double the grades that we are currently producing. So it's put the company in a very good position going for this first quarter. We do expect to see the results staying pretty stable for the next few quarters and then, in the last quarter of the year, significant uplift as we begin producing from the Youle lode.We also have just kicked off our exploration program at our 2 sites. So in the exploration program at Costerfield, we are looking to extend the Youle lode that has significant upside potential to it. It is opened at depth and to the north. So we will be drilling those areas. We will also begin our deep hole program. That, of course, is looking -- following on from success of our neighboring mine going deep. We will be -- we have targeted several areas that we do feel that there is potential to have significant high-grade discoveries. So that program has been kicked off, and we will be releasing results on that drilling later into the year.We have also initiated, just started our exploration program for 2019 in Björkdal as well. So that is aiming to increase the size of Aurora lode as we draw up dip on that. And we also will be focusing some of our drilling on high-grade skarn materials. So we do find several small, high-grade skarn pockets within our operation and within the deposit, and we do expect that we will be able find some more of those and to add a bit of a kicker to our production throughout the year.That is pretty much it for a summary of Mandalay, where we sit at the moment. I would open it up to any questions if anybody has any.
[Operator Instructions] And our first question comes from the line of [ Ernie Molles ], a private investor.
Yes. Congratulations on a great quarter. I have a question concerning Björkdal. Is there any impediment permitting-wise to expanding the operation from 1.3 million to 1.7 million tonnes a year?
Yes, thanks, [ Ernie ]. There's no impediment from the permitting side of things. We -- and so the permit we obtained in November 2018 does allow for increasing the tailings depositation from 1.3 million to 1.7 million tonnes per annum. At the current time, we are not putting into -- putting in any plans or we don't have any intentions of upgrading our processing facility to be able to handle more tonnes. It's pretty much limited at 1.3 million tonnes per annum. The capital investment required for lifting that would be significant. And our focus is more on underground, looking for high-grade mineral to -- so that we can lower the amount of the -- or process in the processing plant and lifting the grade in the plant more than lifting the throughput. The capital project that we would implement before a upgrade to the throughput would be optical ore sorting, which we have investigated in the past. In 2017, we did have a trial run of optical ore sorting, and the results were very positive. We have found that we were able to lift the 0.6-gram material to 1 gram per tonne. So if any capital projects are budgeted in the coming years for processing at Björkdal, it would be more focused on optical ore sorting to lift the grade, more so than the upgrading throughput.
Okay. On Björkdal, you mentioned high-grade skarn. What kind of skarn is that? Is that a copper skarn with gold? Or is it a different type of skarn?
I couldn't answer that exactly, [ Ernie ]. I'm not a geologist. It is a limestone that does have high gold content. We have had it up -- they're very small pockets, but you can get then plus 10 grams per tonne. And we're still spending a lot of time understanding exactly what the skarn is. In the past, it was not a focus of the operation because the focus was always on the white quartz veins. And quite often, the skarn was not even assayed. It has only come to light in the last few years, that this material can be profitable, so it's quite a new project really looking at the skarn materials.
Okay. And the other question I have is what's the planned breakdown for underground ore versus open-pit ore for the remainder of the years? Is it going to be increasing underground? Or...
Yes. So we do. We are increasing the underground throughput. So we do -- we would hope to be getting up towards 1 million tonnes of underground ore processed for the processing plan, which does lessen to the -- significantly the impact of the open-pit mining. So we do find that virtually all of our higher-grade material does from -- come from underground. So that's why we will be pushing it over the coming years to get it up to 1 million tonnes per annum.
That's great. Sounds like things are going along very well at Björkdal. The other question I have is on Costerfield. How many meters do you have to go until you hit the Youle lode?
300 -- it's 300 meters until we hit vent raise. And so that -- once we hit the vent raise area, development does slow significantly because we are moving a lot of material. [ There's a raise always ] put up. There's a lot of dirt to move, but we -- so we do -- we'll be across here in a few months but really not into the vein until the Q4 of this year, as we -- there's quite a bit of infrastructure that's set up in the Youle lode before we start producing. So by Q4, we'll be mining that long vein.
[Operator Instructions] Ladies and gentlemen, we have no more questions. I would like to turn the call back over to Mr. Duffy for closing statements.
Thanks, Dina.So in summary, I feel the in Mandalay we're in a much better position at the current time. Financially, we're sitting on $37 million of cash. The Björkdal operation has shown -- since we've obtained our new fleet, we are seeing good production back to our 2017 rates, which makes it a profitable mine. We still have changes to do going forward. Costerfield, we are now producing from out Brunswick lode, and we do expect to see significant uptick on our production once we are in the Youle lode year-end. And the most significant thing, I think, is our exploration, what is emerging at our Björkdal operation with the Aurora find; and finding that the veins above the marble contact do appear to be unconstrained, adding significant potential ounces to the operation. And also the big drilling and at Costerfield, the significant potential [ if we had to find there ]; and adding to Youle lode, for the remainder of this year, some reserves.It's an exciting time, and we're looking forward to reporting on our progress through the remainder of the year.Thank you, Dina.
Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.