New Dawn Reports Net Income of $2.3 Million and Earnings Per Share of $0.05 for the Quarter Ended December 31, 2011
Highlights - Fiscal 1st Quarter Ended December 31, 2011
- $15.4 million in revenues from gold sales ($14.2 million attributable)
- $2.3 million of net income
- $0.05 earnings per share (basic and diluted)
- $3.6 million of EBITDA
- 9,095 ounces of gold produced (8,399 ounces attributable)
- 2,000 tonnes per day current milling capacity
- Operating cash flows being re-invested in Zimbabwe to fund 2012 expansion and development plans
TORONTO, March 13, 2012 /CNW/ - New Dawn Mining Corp. (TSX: ND) ("New Dawn" or the "Company"), a junior gold company with an expanding base of assets and operations in Zimbabwe, announced that its financial results and corresponding Management's Discussion and Analysis for the quarter ended December 31, 2011 have now been filed on SEDAR (www.sedar.com) and are also available to view on the Company's web-site at www.newdawnmining.com.
Effective October 1, 2011, the beginning of the Company's 2012 fiscal year, the Company, as required, is presenting its financial statements based on International Financial Reporting Standards ("IFRS"), instead of Canadian Generally Accepted Accounting Principles ("Canadian GAAP") applied in previous reporting periods. Comparative figures for the fiscal year ended September 30, 2011 and its component fiscal quarters, originally prepared and reported under Canadian GAAP, have been restated to conform to IFRS. Information for earlier fiscal periods has not been restated and continues to be presented in and conform to Canadian GAAP.
All amounts presented herein are in United States dollars.
NEW DAWN'S OPERATIONS AND FOCUS
New Dawn is a Zimbabwe-focused junior gold company that is currently expanding gold production, with a targeted run-rate of approximately 5,000 ounces of gold per month, equivalent to approximately 60,000 ounces of annualized gold production, by December 2012. New Dawn plans to further increase production at its existing properties to reach a targeted run-rate of approximately 100,000 ounces of annualized gold production by December 2014. These production targets are premised, in part, on access to adequate financing, which, in turn, requires approval and implementation of the Company's proposed Plan of Indigenisation. These production targets could also be impacted by more restrictive and potentially new, more expensive environmental regulations in Zimbabwe, which could require revisions to the Company's capital allocation budget and current operating and expansion plans.
Selected unaudited quarterly information is presented below.
| Fiscal 2012 and 2011, By Quarter - Presented Under IFRS | |||||||||
| --Fiscal 2012-- | ------------------------Fiscal 2011------------------------------------- | ||||||||
| December 31, 2011 |
September 30, 2011 |
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
|||||
| Operations | |||||||||
| Revenue | $15,440,766 | $14,059,739 | $9,791,973 | $7,983,223 | $6,458,735 | ||||
| Net income for the period | $2,298,880 | $2,450,305 | $430,729 | $1,214,352 | $212,661 | ||||
| Net income per common share - basic and diluted | $0.05 | $0.06 | $0.01 | $0.03 | $0.01 | ||||
| Weighted average common shares outstanding: | |||||||||
| Basic | 42,949,736 | 42,949,736 | 42,204,843 | 42,204,843 | 40,706,123 | ||||
| Diluted | 43,841,661 | 43,740,595 | 43,315,087 | 43,471,432 | 41,512,819 | ||||
| Common shares outstanding - quarter end | 42,949,736 | 42,949,736 | 42,204,843 | 42,204,843 | 42,204,843 | ||||
| EBITDA (1) | $3,583,788 | $2,702,477 | $1,412,643 | $1,875,553 | $1,010,375 | ||||
| Balance sheet | |||||||||
| Total assets | $62,935,726 | $57,606,554 | $53,510,642 | $50,064,249 | $50,310,262 | ||||
| Total liabilities | $22,697,021 | $19,756,788 | $19,127,662 | $17,290,900 | $18,226,327 | ||||
| Other measures | |||||||||
| Gold produced (ounces) | 9,095 | 8,814 | 6,841 | 6,226 | 4,808 | ||||
| Gold sold (ounces) | 9,171 | 8,246 | 6,458 | 5,747 | 4,715 | ||||
| Revenue per ounce (3) | $1,684 | $1,705 | $1,516 | $1,389 | $1,370 | ||||
| Cash costs per ounce (1) | $1,029 | $1,038 | $1,024 | $799 | $821 | ||||
| Attributable (2) | |||||||||
| Revenue | $14,238,642 | $13,145,209 | $9,197,031 | $7,510,160 | $6,184,661 | ||||
| Gold produced | 8,399 | 8,212 | 6,355 | 5,854 | 4,577 | ||||
| Gold sold | 8,459 | 7,712 | 6,067 | 5,406 | 4,515 | ||||
| (1) | EBITDA and Cash Costs per Ounce measures are not recognized accounting measures under IFRS (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months ended December 31, 2011 and 2010). See also "Cash Costs Per Ounce" below. |
| (2) | Attributable ounces of gold are calculated on the basis of the Company's proportionate ownership of total ounces, after adjusting for the non-controlling interests' share of gold production and sales (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months ended December 31, 2011 and 2010). |
| (3) | Revenue per ounce is calculated by dividing revenue by the ounces of gold sold. |
GOLD PRODUCTION
Consolidated gold production reached a record of 9,095 ounces of gold (8,399 ounces attributable) for the quarter ended December 31, 2011, as compared to 4,808 ounces of gold (4,577 ounces attributable) for the quarter ended December 31, 2010, an increase of 89.2% (83.5% increase on an attributable basis).
Consolidated gold production for the current quarter ended December 31, 2011 increased by 3.2% (2.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of 8,814 ounces (8,212 ounces attributable).
The production increase during the three months ended December 31, 2011 was achieved through a continued focus on the mines acquired in the June 2010 Central African Gold transaction. Since October 1, 2010, the Company has invested a total of approximately $12,200,000 in property, plant and equipment at its Zimbabwe operations, of which approximately $3,500,000 was invested during the quarter ended December 31, 2011.
GOLD SALES
Consolidated gold sales reached a record of $15,440,766 ($14,238,642 attributable) for the quarter ended December 31, 2011, as compared to $6,458,735 ($6,184,661 attributable) for the quarter ended December 31, 2010, an increase of 139.1% (130.2% increase on an attributable basis). The average sales price per ounce of gold sold was $1,684 for the quarter ended December 31, 2011, as compared to $1,370 for the quarter ended December 31, 2010.
Consolidated gold sales for the current quarter ended December 31, 2011 increased by 9.8% (8.3% increase on an attributable basis), as compared to the previous quarter ended September 30, 2011 of $14,059,739 ($13,145,209 attributable).
100% of sale proceeds were received in US dollars.
NET INCOME AND EBITDA
For the quarter ended December 31, 2011, consolidated net income was $2,298,880, as compared to $2,450,305 for the previous quarter ended September 30, 2011, a decrease of $151,425 or 6.2%. Comparative net income on a quarter-to-quarter basis was impacted by a fiscal 2011 year-end adjustment to the estimated deferred tax liability at September 30, 2011, which was recorded as part of the normal accounting process and caused a commensurate reduction to the total provision for income taxes in the statement of comprehensive income for the quarter ended September 30, 2011. No similar adjustment was recorded in the quarter ended December 31, 2011. Consolidated net income was $212,661 for the quarter ended December 31, 2010.
The Company also provides a non-IFRS financial metric, EBITDA, to assist investors in assessing the Company's operating performance. EBITDA eliminates the impact of income taxes, as well as certain other defined operating and financing costs. Reflecting the Company's improving operating efficiencies and steadily increasing revenues and operating cash flows, quarterly EBITDA has been trending upward. EBITDA was $3,583,788 for the current quarter ended December 31, 2011, as compared to $2,702,477 for the previous quarter ended September 30, 2011, an increase of $881,311 or 32.6%. EBITDA was $1,010,375 for the quarter ended December 31, 2010.
CASH COSTS PER OUNCE
The cash costs per ounce of gold produced for all of the Company's mines were $1,029 for the quarter ended December 31, 2011, as compared to $821 for the quarter ended December 31, 2010, and as compared to $1,038 for the quarter ended September 30, 2011. Cash costs per ounce increased during the quarter ended December 31, 2011, as compared to the quarter ended December 31, 2010, primarily as a result of significant increases during 2011 in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these costs in 2012, as well as a potential increase in environmental costs.
However, as gold production moves toward higher normalized levels and refurbishment programs are completed, the Company expects to realize increased operating efficiencies, with a corresponding expected downward trend in cash costs per ounce.
Royalty rates on gold sales, which are an operating cost, but are not included in the calculation of cash costs of production, increased effective January 1, 2012 to 7.0% from 4.5%.
SUPPORT OF ZIMBABWE ECONOMY
During the quarter ended December 31, 2011, the Company's Zimbabwe operations paid approximately $2,200,000 in respect of royalties, taxes, licence fees, levies and other amounts to the Government of Zimbabwe and to various local authorities. In addition, the Company sources a majority of its operational supplies and services from local Zimbabwean businesses and employs a total of 2,480 workers at its various operations in Zimbabwe.
INDIGENISATION
The Government of Zimbabwe is in the process of implementing an indigenisation policy wherein all domestic businesses are required to be 51% owned by indigenous Zimbabweans. As discussed in the Company's press release dated February 24, 2012, New Dawn is continuing to engage in confidential discussions with the Government of Zimbabwe regarding its proposed Plan of Indigenisation. The Company is also engaging with various indigenous investor groups and possible financing sources with respect to an investment in the Company as part of the implementation of the Company's proposed Plan of Indigenisation. One of these groups was recently advised by the National Indigenisation and Economic Empowerment Board that it has been confirmed as an indigenous company and approved to invest as an indigenous investor in New Dawn.
As there continues to be substantial uncertainty surrounding the implementation of the Indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the Indigenisation laws and regulations under commercially viable terms and conditions, or at all. The Company is currently unable to predict the effect of an inability to arrive at or implement an Indigenisation Plan that is acceptable to all parties involved in the process. Further information will be provided to shareholders as and when such discussions have been concluded, or when developments otherwise warrant.
A comprehensive and up-to-date summary of Indigenisation matters, as of the date of this press release, is contained in the Company's Management's Discussion and Analysis for the three months ended December 31, 2011 and 2010, as filed on SEDAR and posted on the Company's web-site at www.newdawnmining.com.
ABOUT NEW DAWN
New Dawn is a junior gold company currently focused on expanding its gold mining operations in Zimbabwe. New Dawn owns 100% of the Turk and Angelus Mine, the Old Nic Mine and the Camperdown Mine. In addition, New Dawn owns approximately 85% of the Dalny Mine, the Golden Quarry Mine, and the Venice Mine (currently not in operation), and a portfolio of prospective exploration acreage in Zimbabwe. These six mines, five of which are currently operational, are divided into three significant gold camps, and have a combined milling capacity of 2,000 tonnes per day.
In addition to gold production, New Dawn is also actively exploring on highly prospective ground employing modern exploration techniques and deploying capital in Zimbabwe, a country that is proven to be geologically rich, highly prospective, and is significantly under explored.
New Dawn, with its large gold resource, existing mine sites and production facilities, and current exploration programs, is a growing gold mining company in Zimbabwe, active in both gold production and gold exploration.
Additional information on New Dawn's gold reserve and resource estimates is included at the Company's web-site at www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.
The contents of this news release were supervised and reviewed by Ian R. Saunders, B.Sc., who is President, Chief Executive Officer, and a Director of New Dawn Mining Corp., and who is a Qualified Person within the meaning of NI 43-101.
Special Note Regarding Forward-Looking Statements: Certain statements included or incorporated by reference in this news release, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements. The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among others, risks relating to reserve and resource estimates, gold prices, exploration, development and operating risks, political and foreign risk, indigenisation risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs and dependence on key employees. See "Risk Factors" in the Company's Annual Information Form - 2011. Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise.
Investor Relations Contact: Richard Buzbuzian +1 416.585.7890
President and Chief Executive Officer: Ian R. Saunders +1 416.585.7890
Visit New Dawn on the internet at: www.newdawnmining.com
E-mail New Dawn at: [email protected]
Share this article