San Gold reports fourth quarter and year-end 2009 financial results
BISSETT, MB, March 26 /CNW/ - (SGR: TSX-V) San Gold has released its financial results for the fourth quarter of 2010, which have been prepared on the basis of available information up to March 26th, 2010. To review the complete interim unaudited financial statements and associated management discussion and analysis, which should be read in conjunction with the most recent audited annual financial statements, please visit the company's website or SEDAR.
Mr. Dale Ginn, Chief Executive Officer reports improved results and several significant milestones. - Record Revenue of $27,808,071 for 2009 fiscal year - All convertible debt was retired during 2009 - The completion of a 43-101 compliant resource calculation, released in Q1 2010, bringing property wide Measured and Indicated Mineral resources to 835,755 oz. and property wide Inferred Mineral resources to 2,259,227 ounces - 2nd consecutive quarter of record gold production - 11,984 ounces produced with 97% recoveries achieved in the Rice Lake mill - Completion of new Hinge Mine bulk test on June 30th, 2009 and the commencement of commercial gold production at the Hinge - Discovery of the new Cohiba and L13 zones near surface - Discovery and initiation of development for the new 007 high grade zone near surface - Continued development and application of a predictive geological model that has resulted in multiple gold discoveries over the past two years - Expansion into Timmins via SGX spinoff and acquisition of 31.5% of Davidson-Tisdale advanced project
Results of Operations
By the last month of the year San Gold's two mines produced 17,474 tons of ore for an average of 564 tons per day. A new single day production record of 1,069 tons of ore moved was established and the operation did achieve 8 days with production levels in excess of 700 tons per day. The Company has 5,096 ounces of salable gold in inventory that was shipped in the period immediately subsequent so will be recorded as part of Q1 2010 revenue. The overall plant recovery for December was 95.3% including 93.9% recovery on Rice Lake ore and 97.2% recovery on higher grade Hinge material. Management expects this is indicative of the types of recoveries going forward.
On a year to date basis San Gold employees have worked 576,776 hours and incurred four (4) lost time accidents resulting in a LTA frequency rate of 1.39. Comparatively during the same period in 2008 San Gold employees had incurred 14 lost time accidents and had a LTA frequency rate of 6.28. This represents an order of magnitude improvement year over year and is demonstrative of the operational focus on a safe and productive work environment.
Exploration
At the Hinge mine the Company drilled 234,241 feet (71,400 meters) from surface and 85,002 feet (25,900 meters) from underground. Hinge drilling was focused on expanding knowledge of No.1, No.2, No.3 and No.6 veins as well as exploring for additional footwall lenses.
This significant surface and underground drilling continues to confirm the geologic model of the Hinge in what is proving to be a predictive model in identifying mineralization in the surrounding area; most notably at the Cohiba, L-13 and 007 areas - with activity at 007 well underway.
The Company drilled 105,197 feet (32,064 meters) from underground at Rice Lake - for a total of 424,440 feet (129,400 meters) drilled. Rice Lake drilling has been focused on the 26 level, 28 level and the Deep West areas where large, new zones continue to be encountered. These new zones include high grade gold-bearing veins and broad breccia vein systems that are not yet fully defined by drilling.
Financial
The Company continued its transition to commercial production with its operations at the new Hinge Mine. The Company recognized revenue of $11.7 MM for the quarter and $27.8 MM for the year to date. The result was a loss from operations of $1.1 MM for the quarter and $11.8 MM for the year. If non-cash items are added back to this amount, the quarter produced positive contribution of $2.2 MM whereas the year generated a cash loss of $4.4 MM (calculated before exploration, general and administrative and other revenue and expenses). This final quarter therefore continues the Company's improving performance trend started in the previous quarter. The increased level of Gold in process inventory of $8.6 MM compared to $4.7 MM at December 31, 2008 is a result of the increasing level of production activity through the period. The primary driver of the improved performance is the higher level of gold production as the Company continues to increase activity levels.
SAN GOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE YEARS ENDED DECEMBER 31 ------------------------------------------------------------------------- 2009 2008 -------------- -------------- REVENUE $ 27,808,071 $ 8,700,375 OPERATIONS Operations 32,193,830 29,391,331 Asset retirement accretion 151,637 137,584 Amortization of property, plant, & equipment 1,908,244 2,194,744 Depletion of mineral properties 5,394,763 1,397,875 -------------- -------------- LOSS FROM OPERATIONS (11,840,403) (2 4,421,159) Exploration 6,534,754 6,197,117 General and administrative 6,844,830 5,447,894 Accretion of convertible debentures 134,157 237,947 Amortization of financing fees 152,423 249,222 Royalty expense 7,870,839 7,870,798 Interest expense 966,389 892,422 Share based compensation 3,952,219 3,538,004 -------------- -------------- LOSS BEFORE OTHER REVENUE (38,296,014) (48,854,563) OTHER REVENUE AND EXPENSES Indemnification fee 255,153 255,153 Interest income 8,582,135 8,633,251 Equity loss of SGX Resources Inc. (18,033) - -------------- -------------- LOSS BEFORE INCOME TAX (29,476,759) (39,966,159) Future income tax recovery - 6,608,250 -------------- -------------- LOSS AND COMPREHENSIVE LOSS FOR THE YEAR (29,476,759) (33,357,909) DEFICIT, BEGINNING OF THE YEAR (121,011,395) (80,309,943) Share issue costs (1,696,224) (1,247,769) Debentures redeemed - 509,367 Options expired 71,734 3,109 Warrants expired 75,210 - Share issue costs of SGX Resources Inc. (217,442) - Future income tax on flow-through shares - (6,608,250) -------------- -------------- DEFICIT, END OF THE YEAR $(152,254,876) $(121,011,395) -------------- -------------- -------------- -------------- LOSS PER COMMON SHARE: Basic & diluted (Note 17) $ (0.12) $ (0.15) ------------------------------------------------------------------------- Summary of Published Mineral Resources Information Rice Lake Mine Tons Oz./ton Ounces Measured Mineral Resources 320,100 0.28 88,530 Indicated Mineral Resources 644,000 0.29 186,770 Total Measured and Indicated Resources 964,100 0.29 275,300 Inferred Mineral Resources 1,879,500 0.29 551,620 San Gold No. 1 Mine Measured Mineral Resources 69,000 0.15 10,280 Indicated Mineral Resources 214,200 0.24 52,150 Total Measured and Indicated Resources 283,200 0.22 62,430 Inferred Mineral Resources 936,500 0.22 206,900 Cartwright Zone Indicated Mineral Resources 136,200 0.22 29,830 Inferred Mineral Resources 1,761,200 0.22 388,940 San Gold No. 2-3 Zones Indicated Mineral Resources 173,100 0.2 35,320 Inferred Mineral Resources 195,600 0.26 50,210 Hinge Mine Measured Mineral Resources 116,300 0.53 61,980 Indicated Mineral Resources 496,300 0.36 177,200 Total Measured and Indicated Resources 612,600 0.39 239,180 Total Inferred Resources 1,375,200 0.39 538,700 007 Zone Indicated Mineral Resources 74,960 2.58 193,695 Inferred Mineral Resources 293,740 1.78 522,857 ------------------------------------------------------------------------- San Gold Global Total Mineral Resources Tons Oz./ton Ounces Total Measured plus Indicated Resources 2,244,160 0.37 835,755 Total Inferred Resources 6,441,740 0.35 2,259,227 Documents are available for review at www.sedar.com. www.sangoldcorp.com The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. We seek safe harbour.
For further information: Gestur Kristjansson, Chief Financial Officer of San Gold Corporation at 1-800-321-8564
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