All dollar amounts are stated in Canadian dollars, unless otherwise indicated
(1) See "non-GAAP Measures" for an explanation of non-GAAP
TORONTO, Nov.
6, 2013 /CNW/ - St Andrew Goldfields Ltd.
(T-SAS) (OTCQX-STADF), ("SAS" or the "Company") reports a net loss attributable to shareholders for Q3 2013 of $0.6
million, or nil on a per share basis, compared to net income of $6.3
million, or $0.02 per share, for Q3 2012.
For Q3 2013, adjusted net
loss (1) was $0.9 million, or nil on a per share basis, compared to adjusted net
earnings of $5.0 million, or $0.01 per share, for Q3 2012.
Earnings continued to be impacted by the significant decrease in the gold price since the beginning of Q2 2013 and the increase in non-cash depreciation and depletion charges due to the depletion of the mineral reserves at the Holloway and Hislop mines.
Q3 2013 production of 25,434 ounces of gold was in line with the
Companys expectation.
With the cost reduction program implemented in
Q2 2013 and a stronger US dollar, all-in sustaining cost per ounce of
gold sold (1) was US$1,086 per ounce during the quarter.
Operations continued to
perform well with a total cash cost per ounce of gold sold (1) in the quarter of US$832 per ounce (including royalty costs of US$112
per ounce).
Mine cash costs of US$720 per ounce were below guidance and
improved by 8% or US$60 per ounce over Q2 2013.
SAS reiterates its 2013
production guidance of between 95,000 to 105,000 ounces of gold with
mine cash costs between US$800 to US$850 per ounce.
SAS generated operating cash flow of $8.9 million, or $0.02 per share,
and net cash flow (1) of $3.0 million for Q3 2013 as compared to operating cash flow of $15.2
million or $0.04 per share and net cash flow (1) of $6.8 million, in Q3 2012.
Both operating cash flow and net cash flow
for the quarter were negatively impacted by a 19% decrease in the
average realized price per ounce of gold sold (1) when compared to the same period last year.
"We had another strong quarter with year-to-date production of 75,248
ounces of gold, and a significant improvement in mine cash costs," said
Duncan Middlemiss, President & CEO of SAS.
"We are pleased to see that
we were able to reduce cash costs and return to a positive net cash
flow state despite the current gold price.
Holt continued to perform
well, with a 13% increase in throughput in the quarter.
Our team has
worked hard to meet our stated objectives of generating net cash flow
from our operations, and maintaining a strong financial position during
these volatile markets.
We have a relatively strong balance sheet, we
will continue to operate well in the current gold price environment,
and thrive in better ones."
Q3 2013 Highlights
Produced 25,434 ounces of gold from three operations (Holt, Holloway and Hislop). |
Gold production remains on track to meet the 2013 guidance of between 95,000 to 105,000 ounces. |
Sold 26,600 ounces of gold at an average realized price per ounce of gold sold (1) of US$1,329 per ounce for revenues of $36.4 million. |
When compared to Q3 2012, gold sales revenue decreased by $4.3 million due to a US$311 per ounce decrease in the average realized price per ounce of gold sold (1). |
Mine cash costs of US$720 per ounce and a royalty cost of US$112 per ounce, for a total cash cost per ounce of gold sold (1) of US$832 per ounce. |
Achieved a US$63 per ounce reduction in total cash cost per ounce of gold sold (1) over Q3 2012. Mine cash cost per ounce of gold sold was better than the Companys guidance of US$800-US$850 per ounce. |
For Q3 2013, the Company began to report all-in sustaining cost per ounce of gold sold (1) adopting the reporting guidelines as released by the World Gold Council. All-in sustaining costs (1) for the quarter was US$1,086 per ounce. |
All-in sustaining cost per ounce of gold sold (1) for the quarter decreased by US$181 per ounce when compared to Q3 2012. The reduction was a result of a disciplined capital expenditure program implemented at the beginning of Q2 2013. In addition, the US dollar strengthened relative to the Canadian dollar during the quarter. |
Earned cash margin from mine operations (1) of $13.4 million and operating cash flow of $8.9 million or $0.02 per share. |
Despite a 19% decrease in the average realized price per ounce of gold sold (1) when compared to Q3 2012, both cash margin from mine operations (1) and operating cash flow remained strong. SAS generated positive net cash flow of $3.0 million during the quarter. |
On September 16, 2013, SAS announced the appointment of Duncan Middlemiss (the former Chief Operating Officer and Vice-President of Operations) as the new President, and Chief Executive Officer, and Director of SAS effective October 1, 2013.
Q3 2013 Conference Call Information
A conference call and webcast is scheduled for 10:00am EST, Thursday
November 7, 2013 to discuss the Q3 2013 results.
Participants are
invited to join via webcast from the Companys website under the
section titled "Events", at www.sasgoldmines.com.
A recorded playback of the call will also be available via the website
and will be posted within 24 hours of the call.
Operating and Financial Summary | |||||||||||
Amounts in thousands of Canadian dollars, except per unit and per share amounts | Q3 2013 | Q3 2012 | YTD 2013 | YTD 2012 | |||||||
SAS Operating Results | |||||||||||
Gold production (ounces) | 25,434 | 25,742 | 75,248 | 69,775 | |||||||
Commercial gold production sold (ounces) | 26,600 | 25,197 | 74,669 | 68,017 | |||||||
Per ounce data (US$) | |||||||||||
Average realized price (1) | $ | 1,329 | $ | 1,640 | $ | 1,455 | $ | 1,650 | |||
Mine cash costs | $ | 720 | $ | 768 | $ | 763 | $ | 799 | |||
Royalty costs | 112 | 127 | 124 | $ | 134 | ||||||
Total cash cost (1) | $ | 832 | $ | 895 | $ | 887 | $ | 933 | |||
All-in sustaining cost (1) | $ | 1,086 | $ | 1,267 | $ | 1,194 | $ | 1,377 | |||
SAS Financial Results | |||||||||||
Gold sales and total revenue | $ | 36,363 | $ | 40,690 | $ | 111,276 | $ | 112,059 | |||
Cash margin from mine operations (1) | $ | 13,381 | $ | 18,250 | $ | 43,505 | $ | 48,369 | |||
Net income (loss) for the period | $ | (599) | $ | 6,269 | $ | (653) | $ | 13,360 | |||
Adjusted net earnings (loss) (1) | $ | (880) | $ | 4,954 | $ | (685) | $ | 12,539 | |||
Operating cash flow | $ | 8,880 | $ | 15,205 | $ | 29,628 | $ | 32,575 | |||
Net cash flow (1) | $ | 2,953 | $ | 6,754 | $ | 6,397 | $ | 7,258 | |||
Per share information: | |||||||||||
Net income (loss) | $ | 0.00 | $ | 0.02 | $ | 0.00 | $ | 0.04 | |||
Adjusted net earnings (loss) (1) | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.03 | |||
Operating cash flow (1) | $ | 0.02 | $ | 0.04 | $ | 0.08 | $ | 0.09 | |||
SAS Financial Position | September 30, 2013 | December 31, 2012 | |||||||||
Cash and cash equivalents | $ | 31,559 | $ | 30,656 | |||||||
Working capital | $ | 19,586 | $ | 18,210 | |||||||
Total assets | $ | 216,860 | $ | 219,748 | |||||||
Long-term debt | $ | 12,906 | $ | 18,581 | |||||||
Financial Performance
Despite a US$311 per ounce or 19% decrease in the average realized price
per ounce of gold sold (1), gold sales revenue saw a slight decrease over Q3 2012.
Total cash cost
per ounce of gold sold (1) decreased by US$63 per ounce when compared to Q3 2012 mainly due to an
increase in commercial gold production sold and a reduction in royalty
costs due to the decline in the gold price.
The decrease in the average
realized price per ounce of gold sold (1), partially offset by the increase in commercial gold production sold
and lower royalty costs, resulted in a $4.9 million decrease in cash
margin from mine operations (1).
When compared to Q3 2012, depreciation and depletion expense increased
by $3.3 million.
The increase resulted from the depletion of mineral
reserves at Holloway and Hislop.
Mark-to-market on derivative instruments in Q3 2013 resulted in a net gain of $0.4 million compared to a net gain of $1.2 million in Q3 2012, due to the significant decline in the gold price and the strengthening of the US dollar relative to the Canadian dollar.
Holt Mine, Operations and Financial Review (see "Operating and Financial Statistics")
During Q3 2013, the Holt Mine ("Holt") produced 16,807 ounces of gold, an increase of 28% over Q3 2012.
When
compared to Q3 2012, despite a 19% decline in the the average realized
price per ounce of gold sold (1), gold sales revenue increased by 12% as a result of the increase in
production.
Total cash cost per ounce of gold sold (1) decreased by US$183 per ounce or 21% from Q3 2012, mainly as a result of the increase in commercial gold production sold and the reduction in royalty costs due to the decline in the gold price.
Cash margin from mine operations (1) increased by $1.4 million over Q3 2012 due to the increase in
commercial gold production sold, offset partially by the decrease in
the gold price during the quarter.
Holt contributed 80% of the total
cash margin from mine operations (1) earned during the quarter.
Holt is expected to contribute approximately 59% of the Companys total gold production for 2013.
Holloway Mine, Operations and Financial Review (see "Operating and Financial Statistics")
The Holloway Mine ("Holloway") produced 4,662 ounces of gold for Q3 2013, a decrease over Q3 2012.
For Q3 2013, head grades averaged 4.02 g/t Au, a decrease of 3% when
compared to Q3 2012.
Mill recoveries during the quarter were in line
with expectations at approximately 90%.
Gold sales revenue for the quarter decreased by 15% when compared with Q3 2012, mainly due to the decrease in production and the decrease in the average realized price per ounce of gold sold(1) during the quarter.
Total cash cost per ounce of gold sold (1) during the quarter increased by US$102 per ounce when compared to Q3
2012, mainly due to the decrease in throughput.
Cash margin from mine
operations (1) decreased by $2.3 million over Q3 2012 as a result of the decrease in
the gold price and higher unit operating costs due to the reduction in
throughput and increased ore development.
Holloway is expected to contribute approximately 22% of the Companys total gold production for 2013.
Hislop Mine, Operations and Financial Review (see "Operating and Financial Statistics")
The Hislop Mine ("Hislop") produced 3,965 ounces of gold during Q3 2013.
The head grade averaged
2.27 g/t Au, with mill recoveries of 81%.
Commercial gold production sold during the quarter decreased by 37% when compared to Q3 2012 as a result of the reduced production.
Total cash cost per ounce of gold sold (1) increased by US$181 per ounce over Q3 2012 mainly as a result of the reduction in throughput and slightly lower head grade.
Hislop is expected to contribute approximately 19% of the Companys total gold production for 2012.
Taylor Project Update ("Taylor")
During Q3 2013, the Company released results from 22 drill holes
totalling 4,032 metres, collared from the ramp development on the 220m
elevation, targeting the easterly strike extension of the 1004 lens (in
the vicinity of the second proposed bulk sample) of the West Porphry
Zone.
SAS reported near surface intersections over significant widths
in hole T220-020, which returned 14.12 g/t Au over 18.6 metres (21.67
g/t Au uncut), including 26.92 g/t Au over 4.6 metres (47.66 g/t Au
uncut), and hole T220-003, which returned 11.56 g/t Au over 16.2 metres
(13.14 g/t Au uncut), including 12.48 g/t Au over 14.7 metres (14.22
g/t Au uncut) (see press release dated August 27, 2013, available under
the Companys profile on www.sedar.com or on the Companys website at www.sasgoldmines.com).
This phase of drilling confirmed that: (i) wider, more continuous and
higher grade mineralized zones are present along the eastern edge of
the 1004 lens than were previously defined; and (ii) potential exists
to expand mineralization on the 1004 lens both to the east and to
depth.
These findings support advancing the underground exploration
program.
Exploration Projects
Exploration activities during Q3 2013 mainly focussed on the targets at
Holloway and Hislop.
Drilling during the quarter totalled approximately
12,900 metres with all programs now substantially complete.
Holloway Mine - Smoke Deep and Sediment Zones
A total of 15 holes and 4,300 metres were drilled from surface and from
underground focussing on the down dip and down plunge extension of
Smoke Deep to the east and up-dip, and also targeted the Sediment Zone.
Underground drilling on the Smoke Deep target will continue into Q4
2013, with program results currently being assessed.
Hislop Mine - Hislop North Project ("Hislop North") and Hislop Pit
Complex
As reported on October 31, 2013, drilling at Hislop North focussed on
tightening the drill spacing on the 147 and Grey Fox zone extensions,
from the claim boundary towards the West Pit.
A total of 18 holes and
8,700 metres were drilled, using one drill from surface with Phase I of
this drilling program now complete.
SAS reported near surface
intersections over significant widths intercepted in hole H13-014 which
returned 8.08 g/t Au over 5.4 metres and H13-016 which returned 5.50
g/t Au over 2.7 metres and 8.43 g/t Au over 1.2 metres (see press
release dated October 31, 2013, available under the Companys profile
on www.sedar.com or on the Companys website at www.sasgoldmines.com).
Expansion of the mineralization remains open at depth and the Company
expects to commence with a second phase of drilling on both target
areas at Hislop North in early 2014.
During the quarter, one surface drill continued to test for the depth
extension beneath the East and West pits with 11 holes and
approximately 3,600 metres completed at the end of the quarter.
Recently released drill results highlighted well mineralized intercepts
being reported below both pits.
Hole HP13-014 returned 3.40 g/t Au over
28.2 metres including 12.27 g/t Au over 2.5 metres which is situated
approximately 350 metres below the bottom of the current West Pit.
Drilling below the East Pit returned strong mineralization in Hole
HP13-045 which assayed 6.34 g/t Au over 11.0 metres (8.62 g/t Au
uncut), including a higher grade intercept of 16.55 g/t Au over 3.2
metres (24.38 g/t Au uncut), situated approximately 100 metres below
the bottom of the current East Pit.
The mineralized zones remain open
at depth below both pits (see press release dated October 31, 2013,
available under the Companys profile on www.sedar.com or on the Companys website at www.sasgoldmines.com).
Capital Resources
SAS generated cash flow from operations of $8.9 million in Q3 2013, a
decrease of $6.3 million over Q3 2012.
The decrease in cash flow from
operations over Q3 2012, was mainly due to the decline in gold price
during the quarter.
Working capital as at September 30, 2013, was $19.6 million compared to
a working capital of $18.2 million as at December 31, 2012.
The slight
increase was primarily due to the change in mark-to-market positions of
derivative instruments.
At the end of Q3 2013, the Company had cash and
cash equivalents of $31.6 million, in conjunction with an additional
cash resource of US$10.0 million in an undrawn revolving credit
facility.
The Companys financial position remains strong at the end of
the quarter despite the significant decline in the gold price since Q2
2013.
SAS expects to incur a total of $3.8 million in capital expenditures at the two underground mines, the Holt Mill, and at Taylor during Q4 2013.
Qualified Person
Production at the Holt, Holloway and Hislop mines, processing at the
Holt Mill, and mine development and production activities at the
operations were being conducted under the supervision of Duncan
Middlemiss, P.Eng.
Mr.
Middlemiss was the Companys Chief Operating
Officer and Vice-President of Operations during the third quarter, and
was appointed as SAS President & CEO on October 1, 2013.
Exploration
activities on the Companys various properties, including the drilling
program at the Taylor Project is under the supervision of Mr.
Doug
Cater P.
Geo, the Companys Vice-President of Exploration.
Messrs.
Middlemiss and Cater are qualified persons as defined by NI
43-101, and have reviewed and approved this news release.
Non-GAAP Measures
The Company has included the following non‐GAAP performance measures:
adjusted net earnings (loss); total cash cost per ounce of gold sold;
all-in sustaining cost per ounce of gold sold; mine‐site cost per tonne
milled; cash margin from mine operations; average realized price per
ounce of gold sold; cash margin per ounce of gold sold; net cash flow;
and operating cash flow per share; 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 Companys performance.
Refer to the "non-GAAP measures", section of this news release for a
discussion and the reconciliation of these non-GAAP measurements to the
Companys Unaudited Condensed Interim Financial Report for Q3 2013.
The Unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and nine months ended September 30, 2013, can be found at the end of this news release.
To review the complete Unaudited Condensed Financial Report for Q3 2013, and the Interim Managements Discussion and Analysis for Q3 2013, please see SASs SEDAR filings under the Companys profile at www.sedar.com or the Companys website at www.sasgoldmines.com.
The following abbreviations are used to describe the periods under review throughout this release. | ||||||||||||
Abbreviation | Period | Abbreviation | Period | |||||||||
FY 2013 | January 1, 2013 - December 31, 2013 | YTD 2012 | January 1, 2012 - September 30, 2012 | |||||||||
YTD 2013 | January 1, 2013 - September 30, 2013 | Q4 2012 | October 1, 2012 - December 31, 2012 | |||||||||
Q4 2013 | October 1, 2013 - December 31, 2013 | Q3 2012 | July 1, 2012 - September 30, 2012 | |||||||||
Q3 2013 | July 1, 2013 - September 30, 2013 | Q2 2012 | April 1, 2012 - June 30, 2012 | |||||||||
Q2 2013&l
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