SAS Reports Positive 2012 Second Quarter Results with Record Production and Strong Operating Cash Flow
All dollar amounts are stated in Canadian dollars, unless otherwise indicated
TORONTO, Aug. 10, 2012 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") earned net income attributable to shareholders for the second quarter 2012 of $4.4 million or $0.01 per share as compared to a net loss of $1.2 million, or nil on a per share for the same period last year. Adjusted net earnings(1) for the quarter were $5.9 million, or $0.02 per share compared to an adjusted net loss of $3.0 million, or $0.01 per share, for the same period in 2011.
SECOND QUARTER HIGHLIGHTS
- Generated operating cash flow of $9.4 million.
- Achieved record production of 23,016 ounces of gold from three operations (Holt, Holloway and Hislop).
- Sold 22,495 ounces of gold at an average realized price (1) of US$1,620 per ounce for revenues of $37.1 million.
- Mine cash costs of US$785 per ounce and a royalty cost of US$134 per ounce, for a total cash cost per ounce of gold sold (1) of US$919 per ounce.
- Earned cash margin from mine operations (1) of $16.2 million.
- Invested $9.6 million in mine capital expenditures and exploration and evaluation assets.
- Commenced dewatering activities at the Taylor Project to advance the underground ramp rehabilitation and development.
- Completed a US$25.0 million secured bank facility and retired all of the outstanding Gold Notes.
(1) See pages below for an explanation of non-GAAP measures
"We have achieved another record quarter of production, coupled with another consecutive quarter of positive cash flow from operations meeting our objectives, and improving on our first quarter results", said Jacques Perron, President and CEO of SAS. "Production is expected to increase at Holt in the second half of 2012, and grades at Hislop have been at or better than reserve grade for the mine. We are confident we will meet our 2012 production target of 90,000 - 100,000 ounces of gold, and unit cost objectives. We have an improved balance sheet with sufficient cash resources to complete our currently planned capital programs, and advance our exploration efforts."
Holt Mine, Operations and Financial Review (see Operating and Financial Statistics on page 10)
For the second quarter of 2012, the Holt Mine ("Holt") produced 11,193 ounces of gold, a slight increase over the previous quarter due to a 15% increase in throughput. The head grade mined during the quarter was slightly above the Company's expectation and recovery was at the planned level.
When compared to the previous quarter, gold sales were impacted by a 4% decrease in the average realized price per ounce of gold sold (1); partially offset by a 1% increase in the CAD:USD exchange rate. This resulted in a 2% decrease in cash margin from mine operations(1) compared to the previous quarter.
Mine‐site cost per tonne milled(1) for the second quarter decreased by 16% when compared to the previous quarter mainly due to increased throughput, combined with lower heating costs. The Company expects the mine-site cost per tonne milled(1) will continue to improve as the mining rate at Holt increases.
Total cash cost per ounce of gold sold(1) was consistent with the previous quarter.
Holloway Mine, Operations and Financial Review (see Operating and Financial Statistics on page 11)
Production at the Holloway Mine ("Holloway") of 5,923 ounces of gold from the Smoke Deep Zone ("Smoke Deep") improved by 17% over the previous quarter due to increased throughput and a marginally better head grade. The increase in gold production during the quarter led to a 14% increase in gold sales over the previous quarter.
Mine-site cost per tonne milled(1) in the quarter decreased by 22% or $23 per tonne when compared to the previous quarter due to increased throughput, lower heating costs, and redeployment of manpower to Holt.
Total cash cost per ounce of gold sold(1) decreased by US$181 per ounce over the previous quarter mainly due to the decrease in mine-site costs associated with higher throughput and resulted in an increase in cash margin from mine operations(1) of $1.3 million.
The Company expects the operating costs at Holloway will remain at around the same level as achieved during the second quarter.
Hislop Mine, Operations and Financial Review (see Operating and Financial Statistics on page 12)
The Hislop Mine ("Hislop") produced 5,899 ounces of gold during the second quarter of 2012. The head grade averaged 2.21 g/t Au, which was substantially higher than the reserve grade of 1.88 g/t Au. Mining is progressing as planned and surface excavation is completed to the final pit perimeter in all areas. Recovery for Hislop during the second quarter averaged 85.6%, slightly below expectations. The ore grade is expected to range from 1.88 g/t Au to 2.00 g/t Au for 2012, depending on the mining area in the pit.
Gold sales in the quarter increased by 17% over the previous quarter due to an 18% increase in head grade, partially offset by a 4% decrease in the average realized price per ounce of gold sold(1).
Mine‐site cost per tonne milled(1) for the second quarter of 2012 was $61 per tonne, which was in line with expectations. Total cash cost per ounce of gold sold(1) decreased by US$165 per ounce over the previous period mainly due to the increase in ore grade, which also resulted in an increase in cash margin from mine operations of $1.1 million.
Holt Mill Performance
The Holt Mill processed 228,781 tonnes of ore from the Holt, Holloway and Hislop mines in the second quarter of 2012 as compared to 209,748 tonnes of ore from the three mining operations in the previous period. This represents an average milling rate of 2,500 tonnes per day or 96% of the mill capacity. Availability was 89.9%, lower than anticipated due to power outages and regular mill maintenance.
Taylor Project Update
A stepped approach is being taken in order to improve the quality of information prior to allocating total capital expenditures for the development activities at the West Porphyry Zone ("WPZ"). Once underground access is re-established, SAS will validate its geological model, mining method and mill recovery rate by initiating a bulk sampling program. Dewatering activities commenced in late April and partial underground access has now been established. Development of the underground ramp is forecast to commence in August in preparation for an initial bulk sampling program on the first lens of the WPZ. The Company expects to process the first bulk sample towards the end of the year. See press release dated August 8, 2012, available under the Company's profile on SEDAR at www.sedar.com, and on the Company's website at www.sasgoldmines.com.
Exploration Projects
Exploration activities during the second quarter of 2012 were focused on surface drilling at the Ghost Zone ("Ghost") near Holt and the Hislop North Project ("Hislop North") located northwest of the Hislop pit. Recent results from the Ghost and Hislop North projects were encouraging (see press release dated July 31, 2012, available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.sasgoldmines.com). A small infill drilling program was also conducted at Taylor. On a year-to-date basis, more than 28,000 metres of core drilling has been completed on the Company's exploration targets. In the second half of this year, drilling will continue at the Ghost and Hislop North targets, and surface drilling has commenced on the westerly extension of Zone 4 at the Holt Mine.
Financial Performance
Commercial gold production sold in the second quarter of 2012 increased by 48% from the same period in 2011 due to the commencement of mining operations at Holt in the second quarter of 2011, and increased by 11% when compared to the previous quarter.
For the second quarter of 2012, mine cash cost per ounce of gold sold decreased by US$393 per ounce from the second quarter of 2011 as a result of the addition of Holt, and decreased by US$73 per ounce when compared to the previous quarter due to increased production and lower operating unit costs. The increase in revenue in the second quarter resulted in an increase in cash margin from mine operations(1) of $2.3 million when compared to the previous quarter.
Mark-to-market loss on the gold-linked derivatives in the current quarter was $0.8 million which resulted from the retirement of the Gold Notes. The Company also incurred a foreign currency transaction and translation loss of $0.6 million as a result of the fluctuation of the US dollar to the Canadian dollar exchange rate. Similarly, the Company also incurred a mark-to-market loss of $0.8 million on foreign currency derivatives during the quarter.
Capital Resources
At the end of the quarter, the Company had cash and cash equivalents of $16.9 million. After completion of the bank financing on May 8, 2012, the Company has access to additional cash resources by way of a US$10.0 million revolving credit facility. In conjunction with the expected cash flows from operations, the Company believes it has sufficient capital resources to finance its ongoing capital programs at the mines and to finance the further advancement of Taylor and other advanced stage exploration projects.
(1) See pages below for an explanation of non-GAAP measures
Q2 2012 Conference Call Information
SAS is scheduled to release its 2012 second quarter results on Friday, August 10, 2012. A conference call and webcast is scheduled for 10:00am EST, Monday, August 13, 2012. Participants may join the call by dialling 1-866-212-4491 (toll free within North America) or 1-416-800-1066 (outside North America) with the password "St Andrew Goldfields". The Company will post accompanying power point slides for the call on the website the morning of August 13, 2012. For further information, please see the Company's website at www.sasgoldmines.com.
A recorded playback of the call will also be available via the website and will be posted within 24 hours of the call.
Qualified Person
Production and ongoing development programs at the Holt, Holloway and Hislop mines, and processing at the Holt Mill, as well as rehabilitation and development activities at the Taylor Project are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's COO and VP of Operations. The exploration programs on the Company's various mineral properties are under the supervision of Craig Todd, P.Geo, the Company's Exploration Manager. Messrs. Middlemiss and Todd are qualified persons as defined by National Instrument43-101, and have reviewed and approved this news release.
Non-GAAP Measures
The Company has included the non-GAAP performance measures, adjusted net earnings (loss), average realized price per ounce of gold sold, total cash costs per ounce of gold sold, cash margin from mine operations and mine-site cost per tonne milled, throughout this news release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to pages 6-9 of this news release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Condensed Interim Financial Report for the three and six months ended June 30, 2012.
The Unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and six months ended June 30, 2012, can be found on pages 13-15.
To review the complete Unaudited Condensed Financial Report for the three and six months ended June 30, 2012, and the Interim Management's Discussion and Analysis for the second quarter 2012, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.
About SAS
SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.
SAS owns and operate the Holt, Holloway and Hislop mines and is forecasting 2012 production of between 90,000 - 100,000 ounces of gold. The Company is also advancing the Taylor Project and is conducting an aggressive exploration program across 120km of land straddling the Porcupine-Destor Fault Zone.
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including in respect of the targeted gold production levels at the Company's three operating mines for 2012; the improvement in throughput and the impact on operating costs at Holt; the reduction in operating costs at Holt; the maintenance of ore grades at Hislop; the rehabilitation of the underground mine workings at Taylor and the completion of an initial bulk sample, and the timing thereof; the continuance of the exploration programs at the Ghost Zone, Hislop North, and Zone 4 targets; and the sufficiency of the Company's cash flow and cash resources to finance its capital programs and the advancement of Taylor and other advance stage exploration projects.
This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; fluctuations in gold prices and exchange rates; operational hazards and risks; compliance with applicable government regulations, including the ability to obtain requisite permits and licenses; dependence on key employees and changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the ability to achieve capital and operating cost estimates, the accuracy or reserve and resource estimates and the assumptions upon which such estimates are based, the continued availability of qualified personnel, and the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward‐looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.
NON-GAAP MEASURES
Adjusted net earnings (loss)
Adjusted net earnings (loss) are calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivative contracts, one-time gains or losses on the disposition of non-core assets and expenses and significant tax adjustment not related to current period's earnings, as detailed in the table below. Adjusted net earnings (loss) does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. The Company discloses this measure, which is based on its Financial Report, to assist in the understanding of the Company's operating results and financial position.
| Three months ended | Six months ended June 30, | ||||||||||
| June 30, | March 31, | June 30, | |||||||||
| Amounts in thousands of Canadian dollars, except per share amounts | 2012 | 2012 | 2011 | 2012 | 2011 | ||||||
| Net income (loss) per Financial Reports | $ | 4,357 | $ | 2,734 | $ | (1,233) | $ | 7,091 | $ | (3,986) | |
| Reversal of income and mining tax asset valuation allowance | - | - | (4,354) | - | (4,354) | ||||||
| Mark-to-market loss on gold-linked liabilities | 815 | 822 | 937 | 1,637 | 926 | ||||||
| Mark-to-market loss (gain) on foreign currency derivatives | 777 | (1,755) | 635 | (978) | 542 | ||||||
| Proceeds from insurance claim | - | (338) | - | (338) | |||||||
| Loss on the divestiture of non-core assets | - | - | 1,353 | - | 1,353 | ||||||
| Adjusted net earnings (loss) | $ | 5,949 | $ | 1,801 | $ | (3,000) | $ | 7,750 | $ | (5,857) | |
| Weighted average number of shares outstanding (000s) | |||||||||||
| Basic | 368,245 | 368,245 | 367,858 | 368,245 | 367,787 | ||||||
| Diluted | 368,359 | 368,782 | 370,257 | 368,592 | 370,463 | ||||||
| Adjusted net earnings (loss) per share - basic and diluted | $ | 0.02 | Nil | $ | (0.01) | $ | 0.02 | $ | (0.02) | ||
Total cash cost per ounce of gold sold
Total cash cost per ounce of gold sold is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following table provides a reconciliation of total cash costs per ounce of gold sold to production expenses per the Financial Report for the three and six months ended June 30, 2012:
| Three months ended | Six months ended June 30, | ||||||||||
| Amounts in thousands of Canadian dollars, except where indicated | June 30, 2012 |
March 31, 2012 |
June 30, 2011 |
2012 | 2011 | ||||||
| Mine-site costs per Financial Reports | $ | 17,831 | $ | 17,451 | $ | 17,282 | $ | 35,282 | $ | 28,947 | |
| Production royalties per Financial Reports | 3,046 | 2,922 | 1,449 | 5,968 | 2,278 | ||||||
| Adjustments (1) | - | (99) | - | (99) | - | ||||||
| Total cash costs | $ | 20,877 | $ | 20,274 | $ | 18,731 | $ | 41,151 | $ | 31,225 | |
| Divided by gold ounces sold (2) | 22,495 | 20,325 | 15,160 | 42,820 | 26,900 | ||||||
| Total cash cost per ounce of gold sold (Canadian dollars) | $ | 928 | $ | 996 | $ | 1,236 | $ | 961 | $ | 1,161 | |
| Average CAD:USD exchange rate | $ | 1.01 | $ | 1.00 | $ | 0.97 | $ | 1.01 | $ | 0.98 | |
| Total cash cost per ounce of gold sold (US$) | $ | 919 | $ | 996 | $ | 1,277 | $ | 956 | $ | 1,188 | |
| Breakdown of total cash cost per ounce of gold sold (US$) | |||||||||||
| Holt Mine (2) | |||||||||||
| Mine cash costs | $ | 671 | $ | 670 | $ | 1,255 | $ | 671 | $ | 1,255 | |
| Royalty costs | 166 | 168 | 136 | 167 | 136 | ||||||
| $ | 837 | $ | 838 | $ | 1,391 | $ | 838 | $ | 1,391 | ||
| Holloway Mine | |||||||||||
| Mine cash costs | $ | 771 | $ | 948 | $ | 964 | $ | 852 | $ | 887 | |
| Royalty costs | 205 | 209 | 164 | 207 | 134 | ||||||
| $ | 976 | $ | 1,157 | $ | 1,128 | $ | 1,059 | $ | 1,021 | ||
| Hislop Mine (2) | |||||||||||
| Mine cash costs | $ | 1,020 | $ | 1,185 | $ | 1,311 | $ | 1,095 | $ | 1,306 | |
| Royalty costs | - | - | - | - | - | ||||||
| $ | 1,020 | $ | 1,185 | $ | 1,311 | $ | 1,095 | $ | 1,306 | ||
| Total | |||||||||||
| Mine cash costs | $ | 785 | $ | 858 | $ | 1,178 | $ | 819 | $ | 1,101 | |
| Royalty costs | 134 | 138 | 99 | 137 | 87 | ||||||
| $ | 919 | $ | 996 | $ | 1,277 | $ | 956 | $ | 1,188 | ||
| Notes: | |
| (1) | In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011. This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively. |
| (2) | Commercial operations at Holt and Hislop commenced on April 1, 2011, and July 1, 2010, respectively. |
Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. As illustrated in the table below, this measure is calculated by adjusting Production Costs, as shown in the statements of operations for inventory level changes and then dividing by tonnes processed through the mill. Since total cash cost per ounce of gold sold data can be affected by fluctuations in foreign currency exchange rates, Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure eliminates the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, in order to be economically viable, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled. Management is aware that this per tonne milled measure is impacted by fluctuations in production levels and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.
| Three months ended | Six months ended June 30, | |||||||||
| Amounts in thousands of Canadian dollars, except per tonne amounts | June 30, 2012 |
March 31, 2012 |
June 30, 2011 |
2012 | 2011 | |||||
| Holt Mine (2)(3) | ||||||||||
| Mine-site costs | $ | 7,508 | $ | 7,163 | $ | 6,045 | $ | 14,671 | $ | 6,045 |
| Inventory adjustments (1) | (6) | 611 | 528 | 605 | 528 | |||||
| Mine-site operating costs | $ | 7,502 | $ | 7,774 | $ | 6,573 | $ | 15,276 | $ | 6,573 |
| Divided by tonnes of ore milled | 78,429 | 67,937 | $ | 54,538 | 146,366 | 54,538 | ||||
| Mine-site cost per tonne milled | $ | 96 | $ | 114 | $ | 121 | $ | 104 | $ | 121 |
| Holloway Mine | ||||||||||
| Mine-site costs | $ | 4,472 | $ | 4,659 | $ | 4,658 | $ | 9,131 | $ | 10,710 |
| Inventory adjustments (1) | (92) | 281 | (334) | 189 | (773) | |||||
| Mine-site operating costs | $ | 4,380 | $ | 4,940 | $ | 4,324 | $ | 9,320 | $ | 9,937 |
| Divided by tonnes of ore milled | 53,169 | 47,151 | 47,971 | 100,320 | 98,596 | |||||
| Mine-site cost per tonne milled | $ | 82 | $ | 105 | $ | 90 | $ | 93 | $ | 101 |
| Hislop Mine (2) | ||||||||||
| Mine-site costs | $ | 5,851 | $ | 5,629 | $ | 6,579 | $ | 11,480 | $ | 12,192 |
| Inventory adjustments (1) | 62 | 167 | 14 | 229 | 1,158 | |||||
| Mine-site operating costs | $ | 5,913 | $ | 5,796 | $ | 6,593 | $ | 11,709 | $ | 13,350 |
| Divided by tonnes of ore milled | 97,183 | 94,660 | 120,677 | 191,843 | 231,552 | |||||
| Mine-site cost per tonne milled | $ | 61 | $ | 61 | $ | 55 | $ | 61 | $ | 58 |
| Notes: | |
| (1) | This inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory. |
| (2) | Commercial operations at Holt and Hislop commenced on April 1, 2011, and July 1, 2010, respectively. |
| (3) | Excludes 43,458 tonnes of development ore processed while Holt was in pre-production producing 5,435 ounces of gold in 2011. |
Cash margin from mine operations
Cash margin from mine operations is a non-GAAP measure which may not be comparable to information in other gold producers' reports and filings. It is calculated as the difference between gold sales and production costs (comprised of mine-site operating costs and production royalties) per the Company's Financial Report. The Company believes it illustrates the performance of the Company's operating mines and enables investors to better understand the Company's performance in comparison to other gold producers who present results on a similar basis.
| Three months ended | Six months ended June 30, | |||||||||
| Amounts in thousands of Canadian dollars | June 30, 2012 |
March 31, 2012 |
June 30, 2011 |
2012 | 2011 | |||||
| Gold sales per Financial Reports | $ | 37,073 | $ | 34,296 | $ | 22,135 | $ | 71,369 | $ | 38,078 |
| Mine site operating costs per Financial Reports | 17,831 | 17,451 | 17,282 | 35,282 | 28,947 | |||||
| Production royalties per Financial Reports | 3,046 | 2,922 | 1,449 | 5,968 | 2,278 | |||||
| 20,877 | 20,373 | 18,731 | 41,250 | 31,225 | ||||||
| Cash margin from mine operations | $ | 16,196 | $ | 13,923 | $ | 3,404 | $ | 30,119 | $ | 6,853 |
| Breakdown of cash margin from mine operations by mines: | ||||||||||
| Holt Mine | $ | 8,886 | $ | 9,054 | $ | 582 | $ | 17,940 | $ | 582 |
| Holloway Mine | 3,805 | 2,492 | 1,822 | 6,297 | 4,937 | |||||
| Hislop Mine | 3,505 | 2,377 | 1,000 | 5,882 | 1,334 | |||||
| $ | 16,196 | $ | 13,923 | $ | 3,404 | $ | 30,119 | $ | 6,853 | |
Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure and is calculated by dividing gold sales as reported in the Company's Financial Report by the gold ounces sold. It may not be comparable to information in other gold producers' reports and filings.
Operating and Financial Statistics - Holt Mine
| Amounts in thousands of Canadian dollars, except where indicated | Three months ended | Six months ended June 30, | |||||||||||||
| June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
September 30, 2011 |
June 30, 2011 |
2012 | 2011 | |||||||||
| Tonnes milled | 78,429 | 67,937 | 67,778 | 66,556 | 54,538 | 146,366 | 97,996 | ||||||||
| Head grade (g/t Au) | 4.71 | 5.36 | 5.57 | 5.01 | 3.39 | 5.01 | 3.73 | ||||||||
| Average mill recovery | 94.2% | 94.1% | 94.1% | 93.4% | 92.5% | 94.2% | 93.1% | ||||||||
| Gold produced (ounces) | 11,193 | 11,025 | 11,421 | 10,012 | 5,508 | 22,218 | 10,943 | ||||||||
| Commercial gold production sold (ounces) (1) | 11,073 | 10,674 | 12,175 | 8,870 | 4,979 | 21,747 | 4,979 | ||||||||
| Gold sales (1) | $ | 18,250 | $ | 18,015 | $ | 21,060 | $ | 15,449 | $ | 7,284 | $ | 36,265 | $ | 7,284 | |
| Cash margin from mine operations (2) | $ | 8,886 | $ | 9,054 | $ | 12,054 | $ | 6,625 | $ | 582 | $ | 17,940 | $ | 582 | |
| Mine-site cost per tonne milled (2) | $ | 96 | $ | 114 | $ | 95 | $ | 106 | $ | 121 | $ | 104 | $ | 121 | |
| Total cash cost per ounce of gold sold (US dollars)(2): | |||||||||||||||
| Mine cash costs | $ | 671 | $ | 670 | $ | 556 | $ | 833 | $ | 1,255 | $ | 671 | $ | 1,255 | |
| Royalty costs | 166 | 168 | 166 | 181 | 136 | 167 | $ | 136 | |||||||
| Total cash cost per ounce of gold sold (2) | 837 | 838 | 722 | 1,014 | 1,391 | 838 | 1,391 | ||||||||
| Depreciation and depletion | 161 | 145 | 129 | 134 | 130 | 153 | 130 | ||||||||
| Total production cost per ounce of gold sold (US dollars) | $ | 998 | $ | 983 | $ | 851 | $ | 1,148 | $ | 1,521 | $ | 991 | $ | 1,521 | |
| Average CAD:USD exchange rate | 1.01 | 1.00 | 1.02 | 0.98 | 0.97 | 1.01 | 0.97 | ||||||||
| Capital expenditures | $ | 5,036 | $ | 3,177 | $ | 4,250 | $ | 1,841 | $ | 1,963 | $ | 8,213 | $ | 3,703 | |
| Notes: | |
| (1) | Holt commenced commercial production on April 1, 2011. The operating results for the mine prior to April 1, 2011, were classified as site maintenance and pre-production expenditures. |
| (2) | Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages above for non-GAAP measurements). |
Operating and Financial Statistics - Holloway Mine
| Amounts in thousands of Canadian dollars, except where indicated | Three months ended | Six months ended June 30, | |||||||||||||
| June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
September 30, 2011 |
June 30, 2011 |
2012 | 2011 | |||||||||
| Tonnes milled | 53,169 | 47,151 | 56,225 | 49,437 | 47,971 | 100,320 | 98,596 | ||||||||
| Head grade (g/t Au) | 3.80 | 3.77 | 4.03 | 3.71 | 3.43 | 3.78 | 3.79 | ||||||||
| Average mill recovery | 91.2% | 88.6% | 84.1% | 85.2% | 85.0% | 90.0% | 85.8% | ||||||||
| Gold produced (ounces) | 5,923 | 5,058 | 6,126 | 5,026 | 4,497 | 10,981 | 10,310 | ||||||||
| Commercial gold production sold (ounces) (1) | 5,744 | 4,907 | 6,208 | 5,130 | 4,996 | 10,651 | 12,360 | ||||||||
| Gold sales (2) | $ | 9,467 | $ | 8,275 | $ | 10,750 | $ | 8,828 | $ | 7,272 | $ | 17,742 | $ | 17,268 | |
| Cash margin from mine operations (3) | $ | 3,805 | $ | 2,492 | $ | 4,116 | $ | 2,931 | $ | 1,822 | $ | 6,297 | $ | 4,937 | |
| Mine-site cost per tonne milled (3) | $ | 82 | $ | 105 | $ | 93 | $ | 98 | $ | 90 | $ | 93 | $ | 101 | |
| Total cash cost per ounce of gold sold (US dollars) (3): | |||||||||||||||
| Mine cash costs | $ | 771 | $ | 948 | $ | 853 | $ | 960 | $ | 964 | $ | 852 | $ | 887 | |
| Royalty costs (4) | 205 | 209 | 203 | 218 | 164 | 207 | 134 | ||||||||
| Total cash cost per ounce of gold sold (3) | 976 | 1,157 | 1,056 | 1,178 | 1,128 | 1,059 | 1,021 | ||||||||
| Depreciation and depletion | 376 | 368 | 368 | 540 | 462 | 372 | 392 | ||||||||
| Total production cost per ounce of gold sold (US dollars) | $ | 1,352 | $ | 1,525 | $ | 1,424 | $ | 1,718 | $ | 1,590 | $ | 1,431 | $ | 1,413 | |
| Average CAD:USD exchange rate | 1.01 | 1.00 | 1.02 | 0.98 | 0.97 | 1.01 | 0.98 | ||||||||
| Capital expenditures | $ | 2,539 | $ | 4,342 | $ | 3,666 | $ | 2,938 | $ | 2,986 | $ | 6,881 | $ | 5,765 | |
| Notes: | |
| (1) | Holloway commenced production in October 2009. |
| (2) | Excluding the three months ended March 31, 2012 and June 30, 2012, gold sales include 1,860 ounces of gold delivered to the Gold Note holders in each of the quarters during 2011. |
| (3) | Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations, are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages above for non-GAAP measurements). |
| (4) | In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011. This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively. |
Operating and Financial Statistics - Hislop Mine
| Amounts in thousands of Canadian dollars, except where indicated | Three months ended | Six months ended June 30, | ||||||||||||||
| June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
September 30, 2011 |
June 30, 2011 |
2012 | 2011 | ||||||||||
| Overburden stripped (m3) | 29,236 | 4,212 | 103,346 | 300,249 | 472,214 | 33,448 | 763,521 | |||||||||
| Tonnes mined (ore) | 76,764 | 118,918 | 107,827 | 109,457 | 114,849 | 195,682 | 231,987 | |||||||||
| (waste) | 536,015 | 680,221 | 599,330 | 738,054 | 1,303,072 | 1,216,236 | 2,230,288 | |||||||||
| 612,779 | 799,139 | 707,157 | 847,511 | 1,417,921 | 1,411,918 | 2,462,275 | ||||||||||
| Waste-to-Ore Ratio | 7.0 | 5.7 | 5.6 | 6.7 | 11.3 | 6.2 | 9.6 | |||||||||
| Tonnes milled | 97,183 | 94,660 | 92,794 | 107,741 | 120,677 | 191,843 | 231,552 | |||||||||
| Head grade (g/t Au) | 2.21 | 1.88 | 1.94 | 1.68 | 1.53 | 2.04 | 1.59 | |||||||||
| Average mill recovery | 85.6% | 86.4% | 83.0% | 85.4% | 87.2% | 85.9% | 87.6% | |||||||||
| Gold produced (ounces) | 5,899 | 4,935 | 4,803 | 4,980 | 5,192 | 10,834 | 10,401 | |||||||||
| Commercial gold production sold (ounces) (1) | 5,678 | 4,744 | 4,985 | 5,260 | 5,185 | 10,422 | 9,561 | |||||||||
| Gold sales | $ | 9,356 | $ | 8,006 | $ | 8,625 | $ | 9,068 | $ | 7,579 | $ | 17,362 | $ | 13,526 | ||
| Cash margin from mine operations (2) | $ | 3,505 | $ | 2,377 | $ | 2,528 | $ | 2,432 | $ | 1,000 | $ | 5,882 | $ | 1,334 | ||
| Mine-site cost per tonne milled (2) | $ | 61 | $ | 61 | $ | 60 | $ | 59 | $ | 55 | $ | 61 | $ | 58 | ||
| Total cash cost per ounce of gold sold (2) | $ | 1,020 | $ | 1,185 | $ | 1,196 | $ | 1,286 | $ | 1,311 | $ | 1,095 | $ | 1,306 | ||
| Depreciation and depletion | 238 | 186 | 177 | 150 | 104 | 215 | 100 | |||||||||
| Total production cost per ounce of gold sold (US dollars) | $ | 1,258 | $ | 1,371 | $ | 1,373 | $ | 1,436 | $ | 1,415 | $ | 1,310 | $ | 1,406 | ||
| Average CAD:USD exchange rate | 1.01 | 1.00 | 1.02 | 0.98 | 0.97 | 1.01 | 0.98 | |||||||||
| Capital expenditures | $ | 970 | $ | 463 | $ | 701 | $ | 2,822 | $ | 5,244 | $ | 1,433 | $ | 7,129 | ||
| Notes: | |
| (1) | Hislop commenced commercial production on July 1, 2010. |
| (2) | Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages above for non-GAAP measurements). |
Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information
| Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||
| Gold sales | $ | 37,073 | $ | 22,135 | $ | 71,369 | $ | 38,078 | |||
| Operating costs and expenses: | |||||||||||
| Mine site operating | 17,831 | 17,282 | 35,282 | 28,947 | |||||||
| Production royalty | 3,046 | 1,449 | 5,968 | 2,278 | |||||||
| Site maintenance and pre-production | 129 | 179 | 277 | (136) | |||||||
| Exploration | 1,362 | 2,648 | 3,178 | 4,932 | |||||||
| Corporate administration | 1,321 | 1,204 | 3,411 | 3,465 | |||||||
| Depreciation and depletion | 5,515 | 3,536 | 9,921 | 6,844 | |||||||
| 29,204 | 26,298 | 58,037 | 46,330 | ||||||||
| Operating income (loss) | 7,869 | (4,163) | 13,332 | (8,252) | |||||||
| Finance costs | (654) | (1,199) | (1,623) | (1,972) | |||||||
| Mark-to-market loss on gold-linked liabilities | (815) | (937) | (1,637) | (926) | |||||||
| Mark-to-market gain (loss) on foreign currency derivatives | (777) | (635) | 978 | (542) | |||||||
| Foreign exchange gain (loss) | (618) | 1,018 | (876) | 1,862 | |||||||
| Loss on divestiture of non-core assets | - | (1,353) | - | (1,353) | |||||||
| Finance income and other | 48 | 536 | 86 | 585 | |||||||
| Income (loss) before taxes | 5,053 | (6,733) | 10,260 | (10,598) | |||||||
| Deferred taxes | (696) | 5,500 | (3,169) | 6,612 | |||||||
| Net income (loss) for the period | $ | 4,357 | $ | (1,233) | $ | 7,091 | $ | (3,986) | |||
| Other comprehensive income (loss) | |||||||||||
| Unrealized loss on available for sale investments, net of tax of nil for all periods |
(266) | (150) | (532) | (223) | |||||||
| Unrealized mark-to-market loss on foreign currency derivatives, net of tax of $71 (2011, nil) |
(214) | - | (214) | - | |||||||
| (480) | (150) | (746) | (223) | ||||||||
| Comprehensive income (loss) for the period | $ | 3,877 | $ | (1,383) | $ | 6,345 | $ | (4,209) | |||
| Basic and diluted income (loss) per share attributable to shareholders |
$ | 0.01 | $ | (0.00) | $ | 0.02 | $ | (0.01) | |||
| Weighted average number of shares outstanding (000's) | |||||||||||
| Basic | 368,245 | 367,858 | 368,245 | 367,787 | |||||||
| Diluted | 368,359 | 370,257 | 368,592 | 370,463 | |||||||
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| Cash provided by (used in): | ||||||||||||
| Operating activities: | ||||||||||||
| Net Income (loss) for the period | $ | 4,357 | $ | (1,233) | $ | 7,091 | $ | (3,986) | ||||
| Items not affecting cash: | ||||||||||||
| Deferred taxes | 696 | (5,500) | 3,169 | (6,612) | ||||||||
| Mark-to-market loss on gold-linked liabilities | 815 | 937 | 1,637 | 926 | ||||||||
| Implicit interest on gold-linked liabilities | 380 | 1,064 | 1,195 | 1,687 | ||||||||
| Mark-to-market loss (gain) on foreign currency derivatives | 777 | 635 | (978) | 542 | ||||||||
| Repayment of Gold Notes | - | (2,718) | - | (5,291) | ||||||||
| Depreciation and depletion | 5,515 | 3,536 | 9,921 | 6,844 | ||||||||
| Loss on divestiture of non-core assets | - | 1,353 | - | 1,353 | ||||||||
| Share-based payments | 287 | 422 | 476 | 854 | ||||||||
| Amortization of bank facility transaction costs | 31 | - | 31 | - | ||||||||
| Accretion of asset retirement obligation | 137 | 128 | 275 | 260 | ||||||||
| Change in non-cash operating working capital and other | (3,585) | (833) | (5,151) | 5,241 | ||||||||
| 9,410 | (2,209) | 17,666 | 1,818 | |||||||||
| Investing activities: | ||||||||||||
| Additions to exploration and evaluation assets | (614) | (1,528) | (658) | (2,073) | ||||||||
| Mine development expenditures | (5,794) | (8,351) | (12,286) | (12,975) | ||||||||
| Additions to plant and equipment | (3,161) | (2,787) | (4,795) | (4,206) | ||||||||
| Amounts payable on capital additions | (134) | 4,628 | (772) | 4,628 | ||||||||
| Cash collateralized for banking facilities | 1,627 | - | 1,685 | - | ||||||||
| Interest earned on reclamation deposits | (23) | (33) | (40) | (33) | ||||||||
| Proceeds from sale of non-core assets | - | 50 | - | 50 | ||||||||
| (8,099) | (8,021) | (16,866) | (14,609) | |||||||||
| Financing activities: | ||||||||||||
| Repayment of Gold Notes | (11,102) | - | (14,775) | - | ||||||||
| Advance royalty payments | (507) | (429) | (1,011) | (835) | ||||||||
| Proceeds from term credit facility | 14,975 | - | 14,975 | - | ||||||||
| Bank facility transaction costs | (644) | - | (644) | - | ||||||||
| Capital lease payments | (11) | (7) | (22) | (17) | ||||||||
| Share purchase warrants and stock options exercised | - | 96 | - | 102 | ||||||||
| 2,711 | (340) | (1,477) | (750) | |||||||||
| Increase (decrease) in cash and cash equivalents for the period | 4,022 | (10,570) | (677) | (13,541) | ||||||||
| Cash and cash equivalents, beginning of period | 12,918 | 29,441 | 17,617 | 32,412 | ||||||||
| Cash and cash equivalents, end of period | $ | 16,940 | $ | 18,871 | $ | 16,940 | $ | 18,871 | ||||
Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
| June 30, 2012 |
December 31, 2011 |
||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 16,940 | $ | 17,617 | |||
| Restricted cash | - | 1,739 | |||||
| Accounts receivable | 6,428 | 1,717 | |||||
| Inventories | 8,027 | 6,369 | |||||
| Derivative assets | - | 103 | |||||
| Prepayments and other assets | 277 | 900 | |||||
| 31,672 | 28,445 | ||||||
| Exploration and evaluation assets | 25,317 | 24,658 | |||||
| Producing properties | 65,014 | 60,067 | |||||
| Plant and equipment | 47,646 | 45,737 | |||||
| Reclamation deposits | 8,578 | 8,538 | |||||
| Restricted cash | 1,695 | 1,641 | |||||
| Deferred tax assets | 17,157 | 20,365 | |||||
| Other assets | 389 | 716 | |||||
| $ | 197,468 | $ | 190,167 | ||||
| Liabilities and Shareholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable and other liabilities | $ | 11,275 | $ | 12,754 | |||
| Employee-related liabilities | 4,490 | 4,057 | |||||
| Provisions | 376 | - | |||||
| Derivative liabilities | 1,344 | 1,914 | |||||
| Current portion of long-term debt | 5,951 | 14,413 | |||||
| Current portion of capital lease obligations | 42 | 32 | |||||
| 23,478 | 33,170 | ||||||
| Long-term debt | 15,297 | 5,356 | |||||
| Capital lease obligations | 133 | 67 | |||||
| Asset retirement obligations | 10,953 | 10,678 | |||||
| 49,861 | 49,271 | ||||||
| Shareholders' equity: | |||||||
| Share capital | 98,556 | 98,556 | |||||
| Contributed surplus | 20,316 | 18,968 | |||||
| Warrants | - | 878 | |||||
| Stock options | 3,134 | 3,128 | |||||
| Retained earnings | 26,992 | 20,011 | |||||
| Accumulated other comprehensive loss | (1,391) | (645) | |||||
| 147,607 | 140,896 | ||||||
| $ | 197,468 | $ | 190,167 | ||||
SOURCE: St Andrew Goldfields Ltd.
For further information about St Andrew Goldfields Ltd., please contact:
Tel: 1-800-463-5139 or (416) 815-9855; Fax: (416) 815-9437; Website: www.sasgoldmines.com
Suzette N Ramcharan
Manager, Investor Relations
Email: [email protected]
Jacques Perron
President & CEO
Email: [email protected]
Ben Au
CFO, VP Finance & Administration
Email: [email protected]
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