SAS Reports Record Gold Production in the Third Quarter
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
IN THE UNITED STATES/
TORONTO, Oct.
17, 2011 /CNW/ - St Andrew Goldfields Ltd.
(T-SAS), ("SAS" or the "Company") announces third quarter production results for
the Holt, Holloway and Hislop mines.
SAS achieved a record quarter for
production and is on track to meet its 2011 gold production target of
between 65,000 - 75,000 ounces of gold.
Cash cost per ounce of gold
sold (1) for the third quarter is expected to fall between US$970 and US$1,000
before royalties of approximately US$140 per ounce for a total cash
cost of US$1,100 to US$1,140, which is an improvement over the previous
quarter (2).
The expected 16% reduction in cash cost over the previous quarter is
attributable to higher gold production; while offset by a US$40 per
ounce increase in royalty cost due to a higher gold price in the
quarter.
SAS anticipates cash costs to continue to reduce quarter over
quarter as production at the Holt Mine progresses, and the transition
at the Smoke Deep Zone is completed.
The Holt, Holloway and Hislop mines are located on the eastern end of
the Companys 120km land package in the Timmins Mining District.
The
Company is currently ramping up production activities in order to
achieve annualized gold production of approximately 100,000 ounces
starting in 2012.
PRODUCTION HIGHLIGHTS
-
Record gold production of 20,018 ounces of gold from three operations (Holt, Holloway and Hislop) with an
increase in gold production of 32% over the previous quarter.
-
Continued development at the Smoke Deep Zone at the Holloway Mine on
track for production to commence in the fourth quarter of this year.
-
Mill throughput improvement of approximately 6%, with the Holt Mill
averaging 2,829tpd ("tonnes per day") after mill availability during
the quarter.
"We certainly have seen an improvement at our operations from the last
quarter", said Jacques Perron, President and CEO of SAS.
"The
development activities at the Holt Mine have improved considerably
since the beginning of the third quarter.
The Holloway Mine is
performing as expected and development at the Smoke Deep Zone is
continuing as planned.
Production at Hislop during the quarter was as
expected.
We are very pleased with the progress at our operations and
the anticipated decrease in costs, and will continue to forge ahead to
make the fourth quarter even better."
Note:
(1)
|
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 as the Company believes that this generally accepted industry
performance measure provides a useful indication of the Companys
operational performance.
The Company believes that, in addition to
conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate the Companys 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.
|
(2)
|
Final unit costs will be provided upon filing the Q3 2011 unaudited
interim financial report on November 11, 2011.
|
Q3 2011 Production Results
|
Tonnes
Milled
|
Head Grade
(g/t Au)
|
Average Mill
Recovery Rate
|
Gold Produced
(ounces)
|
Holt
|
66,556
|
5.01
|
93.4%
|
10,012
|
Holloway
|
49,437
|
3.71
|
85.2%
|
5,026
|
Hislop
|
107,741
|
1.68
|
85.4%
|
4,980
|
Q3 2011 production
|
223,734
|
3.12
|
89.2%
|
20,018
|
Year-to-date production(1)
|
651,878
|
2.77
|
89.0%
|
51,672
|
(1) Includes 43,458 tonnes of development ore from the Holt Mine at a head
grade of 4.15 g/t Au processed while the mine was in pre-production
producing 5,435 ounces of gold.
SAS is scheduled to release its third quarter 2011 earnings results on
November 11, 2011, after market close.
A conference call and webcast is
scheduled for the morning of Monday November 14, 2011.
For further
information, please see the Companys website at www.sasgoldmines.com.
Holt Mine, Operational Review
Gold production in the first half of the year was substantially derived
from the C-103 Zone while Zone 4 was being prepared for development.
Production from Zone 4 commenced on the 925m Level at the beginning of
the third quarter with concurrent development on the 925m Level up to
the 900m sublevel.
For the remainder of 2011, ramp, footwall access,
stope development and long-hole mining will be the primary focus in
this area.
Development has also commenced on the 1075m Level with
production anticipated to commence in November.
The head grade at the
Holt Mine saw a steady increase over the past few months mainly
attributable to higher grade reserves in the remaining portion of the
C-103 Zone and better development grade ore from Zone 4 coupled with
production ore which was in line with reserve grade.
The mining rate during the third quarter continued to progress towards
the anticipated steady state rate of production of 1,000tpd expected by
the end of the first quarter of 2012, which will positively impact unit
costs.
Holloway Mine, Operational Review
The Holloway Mine is still in transition as the Smoke Deep Zone is being
prepared for production.
Ramp development was completed during the
third quarter of 2011.
Results from the definition drilling program
conducted on the western portion of the zone were recently released
with additional drilling being conducted further to the east.
Development is on track and production from the Smoke Deep Zone is
expected to commence during October as production drilling has already
started.
The Company expects the operating cost at the Holloway Mine will remain
high until the Smoke Deep Zone is brought into production and the mined
ore grade improves.
The Company intends to update the mineral resources
and reserves estimates for the Smoke Deep Zone at year end.
Hislop Mine, Operational Review
The head grade for the Hislop Mine achieved during the quarter averaged
1.68 g/t Au and is approximately 10% higher than that achieved in the
previous quarter.
The operations at the Hislop Mine continued to be
impacted by the additional overburden removal and waste rock mining
activities.
Additional overburden slope failures during the third
quarter have further delayed stripping of the eastern portion of the
pit and it is now anticipated that the overburden removal will be
completed for the entire pit before the end of November.
Waste rock
mining was below the previous quarter, however the fourth quarter may
see a slight increase due to the change in the mining sequence required
to accommodate the overburden stripping activities.
Holt Mill Performance
Towards the end of July the Company installed a new SAG mill motor which
coupled with some operational improvements resulted in an increase in
mill throughput of approximately 6% over the previous quarter.
The Holt
Mill has a rated capacity of 3,000tpd and averaged 2,829tpd during the
quarter, after mill availability (the milling operations were shut down
for approximately 6 days in order to complete the installation of the
new motor, other down time is attributable to SAG Mill liner
change-outs and power interruptions).
Qualified Person
Production at the Holt, Holloway and Hislop mines, processing at the
Holt Mill, and mine development and production activities at the
operations are being conducted under the supervision of Duncan
Middlemiss, P.Eng, the Companys Vice President & General Manager, East
Timmins Operations.
Mr.
Middlemiss is a qualified person as defined by
NI 43-101, and has reviewed and approved this news release.
About SAS
SAS (operating as "SAS Goldmines") is a gold mining and exploration
company with an extensive land package in the Timmins mining district,
northeastern Ontario which lies within the Abitibi greenstone belt, the
most important host of historical gold production in Canada.
SAS is
focused on developing its assets in the Timmins Camp with three
producing mines and aggressive exploration activities 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
Companys business, operations, financial performance, condition and
prospects, as well as managements 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 the planned gold production levels at the
Holt, Holloway and Hislop mines; the time required to develop and
commence production at the Smoke Deep Zone at the Holloway Mine and the
continued development of Zone 4 at the Holt Mine; the time required to
complete the overburden removal at the Hislop Mine; improvement in the
ore grade and reduction in costs at the three operations; and achieving
the targeted production levels for 2011 and 2012.
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, uncertainties relating to the interpretation of the
geology, continuity, grade and size estimates of the mineral reserves
and resources, unanticipated operational or technical difficulties
which could escalate operating and/or capital costs and reduce
anticipated production levels, the ability of the Company to continue
to attract and retain a skilled labour force; fluctuations in gold
prices and exchange rates, insufficient funding or delays or inability
to raise additional financing on satisfactory terms, changes in the
availability of personnel, changes in laws or regulations, the risks of
obtaining necessary licenses and permits, 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 expected timeline to complete
pre-production activities, the availability of adequate financing, the
level and volatility of the price of gold, the accuracy of reserves and
resources estimates and the assumptions on which such estimates are
based, the ability to achieve capital and operating cost estimates and
general business and economic conditions.
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.