Alacer Gold files third quarter financial results and related management’s discussion and analysis
TORONTO, Nov. 14, 2012 /CNW/ – Alacer Gold Corp. (“Alacer Gold” or the “Corporation”) [TSX: ASR and ASX: AQG] today announced that it has filed its third quarter 2012 financial
results and related management’s discussion and analysis (“MD&A”). This
news release should be read in conjunction with the Corporation’s
complete unaudited interim consolidated financial statements for the
period ended September 30, 2012 and the related MD&A which are
available on www.AlacerGold.com and on www.SEDAR.com.
Alacer Gold will host a conference call on Wednesday, November 14 at 5:00 pm (North America Eastern Standard Time) and Thursday, November 15 at 9:00
am (Australian Eastern Daylight Time). Conference call details are
provided below.
Mr. David Quinlivan, President and CEO of Alacer Gold stated, “The Corporation maintained its strong balance sheet and saw improved
production out of its South Kalgoorlie Operations in Western
Australia. Higher grade ore production is expected at both
Higginsville and Çöpler in the fourth quarter of 2012 and we remain on
track to meet our previously released full-year 2012 production and
cost guidance on an aggregate basis.
Our focus is to produce the highest margin ounces available in order to
improve total shareholder returns. I am confident the measures we are
putting in place to cut costs and improve grades across all of our
operations should improve the Corporation’s operating and financial
performance.
Further to the above measures, I have realigned the Corporation’s
operational executive management structure on geographical lines to
provide greater role clarity and accountability. The newly-created
positions are President – Turkish Operations, President – Australian
Operations and a global role of Chief Technical Services Officer.”
Third Quarter 2012 Performance Summary
Financial Performance
-- Sold 99,355 attributable1 ounces of gold, (108,310 on 100%
basis)
-- Gold sales revenue of $179.5 million
-- Realized attributable net profit of $23.4 million ($0.08 per
share)
-- Generated mining gross profit of $50.9 million
-- Cash of $280.0 million at September 30, 2012
Operational Performance
-- Produced 90,951 attributable1 gold ounces, (99,120 on 100%
basis)
-- Attributable Cash Operating Costs2 of $747 per ounce and
attributable Total Cash Costs2 of $841 per ounce
-- Çöpler Total Cash Costs2of $416 per ounce
-- Australian mines Total Cash Costs2 of $1,080 per ounce
Business Update
-- Increased Çöpler Measured and Indicated Resource estimate of
8.0 million ounces as at June 30, 2012
-- Çöpler Sulfide Feasibility Study on track for completion in
late 2012
-- On an aggregate basis, the Corporation remains on track to meet
guidance
-- 2013 production and cost guidance and will be released to the
market in Q1 2013
Operations Management Realignment
The Corporation’s executive management positions of Chief Operating
Officer, Chief Development Officer and Executive Vice President – Mine
Performance have been eliminated and, effective November 1, 2012,
replaced on geographical lines with the positions of President -
Turkish Operations and President – Australian Operations. Howard
Stevenson is serving as President – Turkish Operations and Tony James
is serving as President – Australian Operations. Messrs. James and
Stevenson will be responsible, respectively, for all capital works and
ongoing operations at our existing mine sites in Australia and Turkey.
In addition, Louw Smith has been named Chief Technical Services Officer
with responsibility to ensure consistency of processes and standards
across the Turkish and Australian Business Units. These three positions
will report directly to the President and Chief Executive Officer.
Australian Business Unit (“ABU”) Review
As previously disclosed, a strategic and operational review is currently
in progress to identify opportunities to improve the cash generation
and profit contribution from the Corporation’s ABU. This review is
being conducted in conjunction with the Corporation’s 2013 budgeting
process. The results of the review will be incorporated into the ABU’s
budget for 2013 and will be released to the market during Q1 2013.
This review encompasses a full range of strategic and operational
options in order to maximize value and shareholder return from these
assets.
To date, the Corporation has implemented a number of cost-saving
initiatives in Australia, including demobilizing two open-pit mining
fleets at South Kalgoorlie Operations (“SKO”) and reducing the
workforce at both SKO and Higginsville by a total of 108 persons. Costs
saving initiatives are currently focused on evaluating and optimizing
underground mine development layouts at Higginsville and maximizing
open-pit mining grade at SKO.
Çöpler Update and New Developments
An updated Çöpler resource estimate was released during the quarter. The
Measured and Indicated Resources increased to 182.6 million tonnes at
a grade of 1.4g/t gold, containing a total of 8.0 million ounces
(inclusive of reserves) as at June 30, 2012. This resource will form
the basis of the mine plan in the Çöpler Sulfide Feasibility Study.
The Çöpler Sulfide Feasibility Study was initiated in January 2012 and
is on track for completion in December 2012. The Corporation expects
to disclose the results and next steps of the Feasibility Study during
Q1 2013. Pilot plant pressure oxidation tests were completed in Q2
2012. Based on the results of the pilot plant and ongoing process test
work, the Corporation expects that the twin horizontal autoclaves
envisaged in the Çöpler Sulfide Pre-Feasibility Study (“PFS”) will be
replaced with two lines of vertical autoclaves. This will facilitate
transportation to site and reduce risks associated with on-site
fabrication. In addition, the throughput of the pressure oxidation
plant was envisaged to be 8,000 tonnes per day in the PFS. Detailed
costing is now progressing on a throughput scenario of 10,000 tonnes
per day. Facility layouts and equipment selection are underway in
preparation for developing cost estimates consistent with feasibility
study standards. Initial indications are that capital estimates for
construction of the sulfide treatment plant will be higher than those
estimated in the PFS as a result of the proposed increase in
throughput, the revised plant arrangements and general cost escalation
since the PFS costs were estimated in Q3 2010. A scoping study is in
progress to evaluate the construction of a separate mill to treat the
higher grade oxide material which is expected to be completed in
conjunction with the Sulfide Feasibility Study. The Corporation has
expended $12.0 million on the feasibility study and expects the final
feasibility study cost to be $18.0 million, which is less than the
budgeted $25.5 million.
The Sulfidization, Acidification, Recirculation and Thickening (“SART”)
plant is currently scheduled to be commissioned in Q3 2013. Detailed
design engineering has advanced to 95% completion. All required
permitting and regulatory approvals have now been received for this
plant. The SART plant baseline estimated cost is $32.2 million and
construction has been approved by the Corporation’s Board of
Directors. To date, the Corporation has committed $5.8 million for
time sensitive equipment and engineering, of which $2.4 million has
been spent.
Engineering design work for a stand-alone clay sizer/crushing and
materials handling circuit continued during the quarter. The circuit
will supplement the existing crushing and materials handling facilities
to offer increased options for handling the various ore types
encountered at the Çöpler mine. The capital cost associated with this
project is estimated to be $13 million and the work is expected to be
complete in Q2 2013.
Preliminary evaluation on how to optimize the throughput capacity of the
carbon-in-column circuit commenced in the quarter.
Outlook
Higher grades are expected at Higginsville and Çöpler in Q4 2012. On an
aggregate basis, the Corporation remains on track to meet the
previously released full-year 2012 production and cost guidance. The
Corporation’s previously announced guidance on an aggregate basis for
2012 is set forth immediately below.
Category 2012 Guidance
Attributable3
Production Ounces 385,000 - 403,000
Cash Operating Costs4/ounce $649 - $675
Total Cash Costs4/ounce $755 - $781
Total (100% basis)
Production Ounces 423,000 - 443,000
Cash Operating Costs4/ounce $619 - 644
Total Cash Costs4/ounce $719 - 744
Conference Call Details
Alacer Gold will host a conference call on Wednesday, November 14 at
5:00 pm (North America Eastern Standard Time) and Thursday, November 15
at 9:00 am (Australian Eastern Daylight Time).
You may participate in the conference call by dialing:
1-800-895-0198 for U.S. and Canada
1-800-144-837 for Australia
800-901-494 for Hong Kong
800-101-2018 for Singapore
0-808-101-1183 for United Kingdom
1-785-424-1053 for International
5434417 Conference ID
If you are unable to participate in the call, a recording of the call
will be available on Alacer’s website at www.AlacerGold.com or through replay until November 28, 2012 by using passcode 5434417 and calling:
1-888-203-1112 for U.S. and Canada
1-800-154-669 for Australia
800-901-108 for Hong Kong
800-101-2009 for Singapore
0-808-101-1153 for United Kingdom
1-719-457-0820 for International
About Alacer Gold
Alacer Gold Corp. is a leading intermediate gold mining company with
interests in multiple mines which provide ore to three processing
facilities in Australia and Turkey:
-- 80% interest in the Çöpler Gold Mine;
-- 100% interest in the Higginsville Gold Operations;
-- 100% interest in the South Kalgoorlie Gold Operations; and
-- 49% interest in the Frog's Leg Gold Mine.
Alacer Gold’s operations produced a total of 411,193 ounces of gold
during 2011.
Alacer Gold is executing a growth strategy through the use of cash flows
to grow production and cash margins to generate strong capital returns.
While the primary objective is organic growth, the Corporation also
identifies and evaluates strategic transactions that will add
shareholder value.
Qualified Person
The information in this report which relates to Mineral Resources has
been compiled and approved by Chris Newman, a full-time employee of
Alacer, who is a Member of the Australasian Institute of Mining and
Metallurgy and a Member of the Australian Institute of Geoscientists.
Mr. Newman has sufficient experience which is relevant to the style of
mineralization and type of deposit under consideration and to the
activity which is being undertaken to qualify as a Competent Person as
defined in the 2004 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves” and a
qualified person pursuant to National Instrument 43-101 of the Canadian
Securities Administrators. Mr. Newman consents to the inclusion in
this release of the matters based on this information in the form and
context in which it appears.
Çöpler Mineral Resource
The following Çöpler Mineral Resource was released during Q3 2012.
________________________________________________________________________________
| Mineral Resource for the Çöpler Deposit (100%) as at June 30, 2012 |
|________________________________________________________________________________|
| Gold |Mineralization|Resource | Tonnes |Gold |Contained|Silver|Copper|Sulfur|
|Cut-off | Type |Category |(million)|Grade| Gold |Grade |Grade |Grade |
| Grade | | | |(g/t)|(million |(g/t) | (%) | (%) |
| (g/t) | | | | | ounces) | | | |
|________|______________|_________|_________|_____|_________|______|______|______|
| | |Measured | 94.0 | 1.6 | 4.8 | 5.1 | 0.1 | 3.3 |
| | |_________|_________|_____|_________|______|______|______|
| | |Indicated| 88.7 | 1.1 | 3.2 | 2.8 | 0.1 | 2.5 |
| | |_________|_________|_____|_________|______|______|______|
|Variable| Total |Measured | 182.6 | 1.4 | 8.0 | 3.9 | 0.1 | 2.9 |
| | |+ | | | | | | |
| | |Indicated| | | | | | |
| | |_________|_________|_____|_________|______|______|______|
| | |Inferred | 51.5 | 0.9 | 1.6 | 1.9 | 0.1 | 1.7 |
|________|______________|_________|_________|_____|_________|______|______|______|
Note: Resources are quoted after mining depletion and are inclusive of
reserves. Resources are shown on a 100% basis, of which Alacer Gold
owns 80%. Resource methodology is summarised in the Technical
Procedural Section of this announcement. Stockpiles consist of a ROM
stockpile of 38kt at 3.6g/t and a leach pad stockpile estimated at
12.4Mt at 0.18g/t of recoverable gold as of 30 June, 2012. Silver,
copper and sulfur grades are not included for stockpiles. Rounding
errors will occur.
Further information on this Mineral Resource estimate is available in an
announcement dated September 10, 2012.
Cautionary Statements
Except for statements of historical fact relating to Alacer Gold,
certain statements contained in this press release constitute
forward-looking information, future oriented financial information, or
financial outlooks (collectively “forward-looking information”) within
the meaning of Canadian securities laws. Forward-looking information
may be contained in this document and other public filings of Alacer.
Forward-looking information often relates to statements concerning
Alacer Gold’s future outlook and anticipated events or results and, in
some cases, can be identified by terminology such as “may”, “will”,
“could”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”,
“estimate”, “projects”, “predict”, “potential”, “continue” or other
similar expressions concerning matters that are not historical facts.
Forward-looking information includes statements concerning, among other
things, matters relating to proposed exploration, communications with
local stakeholders and community relations, status of negotiations of
joint ventures, weather conditions at our operations, commodity prices,
mineral resources, mineral reserves, realization of mineral reserves,
existence or realization of mineral resource estimates, the development
approach, the timing and amount of future production, timing of studies
and analyses, the timing of construction of proposed mines and process
facilities, capital and operating expenditures, economic conditions,
availability of sufficient financing, exploration plans and any and all
other timing, exploration, development, operational, financial,
budgetary, economic, legal, social, regulatory and political factors
that may influence future events or conditions. Such forward-looking
information and statements are based on a number of material factors
and assumptions, including, but not limited in any manner to, those
disclosed in any other of Alacer Gold’s filings, and include
exploration results and the ability to explore, the ultimate
determination of mineral reserves, availability and final receipt of
required approvals, titles, licenses and permits, sufficient working
capital to develop and operate the mines, access to adequate services
and supplies, commodity prices, ability to meet production targets,
foreign currency exchange rates, interest rates, access to capital
markets and associated cost of funds, availability of a qualified work
force, ability to negotiate, finalize and execute relevant agreements,
lack of social opposition to the mines, lack of legal challenges with
respect to the property of Alacer Gold and the ultimate ability to
mine, process and sell mineral products on economically favorable
terms. While we consider these factors and assumptions to be reasonable
based on information currently available to us, they may prove to be
incorrect.
You should not place undue reliance on forward-looking information and
statements. Forward-looking information and statements are only
predictions based on our current expectations and our projections about
future events. Actual results may vary from such forward-looking
information for a variety of reasons, including but not limited to
risks and uncertainties disclosed in Alacer Gold’s filings at www.sedar.com and other unforeseen events or circumstances. Other than as required
by law, Alacer does not intend, and undertakes no obligation to update
any forward-looking information to reflect, among other things, new
information or future events.
——————————
(1) Attributable production and sales includes the Corporation’s 80%
controlling interest at Çöpler.
(2) Cash Operating Costs and Total Cash Costs are non-IFRS financial
performance measures with no standardized definitions under IFRS. For
further information and detailed reconciliations, see the “Non-IFRS
Measures” section of the Corporation’s Q3 2012 MD&A.
(3) Attributable production includes the Corporation’s 80% controlling
interest at Çöpler.
(4) Cash Operating Costs and Total Cash Costs are non-IFRS financial
performance measures with no standardized definitions under IFRS. For
further information and detailed reconciliations, see the “Non-IFRS
Measures” section of the Corporation’s Q3 2012 MD&A.
SOURCE ALACER GOLD CORP.
