SAS reports positive 2013 first quarter results, beating cash cost guidance and generating net cash flow
All dollar amounts are stated in Canadian dollars, unless otherwise
(1) See “non-GAAP measures” for an explanation of non-GAAP
TORONTO, May 9, 2013 /CNW/ – St Andrew Goldfields Ltd. (T-SAS) (OTCQX-STADF), (“SAS” or the “Company“) earned net income attributable to shareholders for Q1 2013 of $1.0
million, or nil on a per share basis, compared to net income of $2.7
million, or $0.01 per share, for Q1 2012. For the Q1 of 2013, adjusted
net earnings ((1)) were $1.1 million, or nil on a per share basis, compared to adjusted
net earnings of $2.0 million, or $0.01 per share, for Q1 2012.
Net income for the quarter was negatively impacted by an increase in
non-cash depreciation and depletion expense of $3.9 million over Q1
2012, and $1.2 million mark-to-market loss in foreign currency
derivatives. Compared to Q1 2012, adjusted net earnings ((1) )for the quarter were also negatively impacted by the increase in
depreciation and depletion expenses.
Cash provided by operating activities for Q1 2013 was $14.1 million,
compared to $8.3 million in Q1 2012. Net cash flow ((1)) for the quarter was $4.1 million as compared to net cash out flows of
$1.0 million in Q1 2012.
“We are happy to report strong first quarter results and another
consecutive quarter of net cash flow generation,” said Jacques Perron,
President & CEO of SAS. “Our operating mines are performing well and
our production guidance for 2013 remains unchanged. The Company expects
to produce between 95,000 and 105,000 ounces from the three operations
with mine cash costs of between US$800-US$850 per ounce, before
royalties. In recent weeks, we have witnessed a significant decline in
the gold price to as low as US$1,378 per ounce. In light of the recent
gold price volatility, we have reviewed our capital expenditure
programs and deferred some expenditures in order to ensure we can meet
our near-term objectives while maintaining a strong financial
Q1 2013 Conference Call Information
A conference call and webcast is scheduled for 10:00am EDT, Friday, May
10, 2013 to discuss the Q1 2013 results. Participants are invited to
join via webcast from the Company’s 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.
Q1 2013 Highlights
_____________________________________________________________________ |Produced 24,461 ounces of gold |An increase of 16% when compared | |from three operations (Holt, |to Q1 2012 as a result of the | |Holloway and Hislop). |increased production at Holt. | |__________________________________|__________________________________| |Sold 23,009 ounces of gold at an |Gold sales revenue increased by | |average realized price per ounce |11% from Q1 2012 despite a US$63 | |of gold sold (1) of US$1,632 per |per ounce decrease in the average | |ounce for revenues of $38.2 |realized price per ounce of gold | |million. |sold(1). | |__________________________________|__________________________________| |Mine cash costs of US$794 per |Achieved an overall unit cost | |ounce and a royalty cost of US$145|reduction of US$57 per ounce of | |per ounce, for a total cash cost |gold sold when compared to Q1 | |per ounce of gold sold (1) of |2012. Mine cash cost per ounce of | |US$939 per ounce. |gold sold for Q1 2013 of US$794 | | |per ounce is lower than the | | |Company's base 2013 cost guidance.| |__________________________________|__________________________________| |Earned cash margin from mine |An 18% increase in cash margin | |operations (1) of $16.4 million |from mine operations (1) and an | |and operating cash flow of $14.1 |improvement of 70% on operating | |million or $0.04 per share. |cash flowover Q1 2012. | |__________________________________|__________________________________| |Invested $4.7 million in mine |Mine capital expenditures reduced | |capital expenditures. |by $3.3 million or 42% when | | |compared to Q1 2012. | |__________________________________|__________________________________| |Incurred $4.0 million in |During Q1 2013, SAS generated | |exploration and project |representative samples from the | |development expenditures at the |material that was extracted in | |Taylor Project. |December, through a sampling | | |tower. These samples were assayed | | |and further geological assessment | | |and drilling was conducted in the | | |bulk sample area to enhance | | |knowledge of the upper lens of the| | |West Porphyry Zone. (see "Taylor | | |Project Update") | |__________________________________|__________________________________|
Summarized Operating and Financial Data
Amounts in thousands of Canadian dollars, except per unit amounts Q1 2013 Q1 2012 SAS Operating Results Gold production (ounces) 24,461 21,018 Commercial gold production sold (ounces) 23,009 20,325 Per ounce data (US$) Average realized price per ounce of gold sold (1) $ 1,632 $ 1,695 Mine cash costs $ 794 $ 858 Royalty costs 145 138 Total cash cost per ounce of gold sold (1) $ 939 $ 996 SAS Financial Results Gold sales and total revenue $ 38,190 $ 34,296 Cash margin from mine operations (1) $ 16,409 $ 13,923 Net income for the period $ 1,039 $ 2,734 Adjusted net earnings (1) $ 1,070 $ 2,034 Cash from operations $ 14,053 $ 8,256 Net cash flow (1) $ 4,064 $ (511) Per share information: Net income $ 0.00 $ 0.01 Adjusted net earnings (1) $ 0.00 $ 0.01 Operating cash flow (1) $ 0.04 $ 0.02 March 31, December 31, SAS Financial Position 2013 2012 Cash and cash equivalents $ 32,103 $ 30,656 Working capital $ 15,226 $ 18,210 Total assets $ 223,807 $ 219,748 Long-term debt $ 16,338 $ 18,581
Gold sales revenues for Q1 2013 increased by $3.9 million over Q1 2012
as a result of increased production from the Holt Mine, despite a US$63
per ounce decrease in the average realized price per ounce of gold sold
((1)). The increase in production for Q1 2013 resulted in a decrease in total
cash cost per ounce of gold sold ((1)) of US$57 per ounce when compared to Q1 2012. The increase in gold sales
during the quarter coupled with the decrease in unit cost has led to an
18% increase in cash margin from mine operations ((1)).
When compared to the previous quarter, commercial gold production sold
decreased by 12% or approximately 3,000 ounces which together with a
US$78 per ounce decrease in the average realized price per ounce of
gold sold ((1)), which led to a decrease in gold sales revenue of $6.1 million. The
decline in revenue together with a US$49 per ounce increase in mine
cash cost over the previous quarter, (as a result of the additional
heating requirements during the winter season), led to a decrease in
cash margin from mine operations ((1) )of $5.1 million.
Depreciation and depletion expenses for the quarter increased by $3.9
million and $1.2 million when compared to Q1 2012, and Q4 2012,
respectively. The increase resulted from the depletion of mineral
reserves and resources at the operations, and the loss of approximately
26,000 contained ounces in mineral reserves at Hislop as a result of
the updated mineral reserves and resource model and pit optimization
completed at year end 2012.
For Q1 2013, the Company incurred $1.2 million in mark-to-market loss on
foreign currency derivatives for the quarter due to the strengthening
of the US dollar relative to Canadian dollar, which negatively impacted
Holt Mine, Operations and Financial Review (see “Operating and Financial Statistics Holt”)
During Q1 2013, the Holt Mine (“Holt”) produced 14,806 ounces of gold, a decrease of 2% over Q4 2012. As a
result of the slight decrease in production, gold sales also decreased
slightly over Q4 2012.
Total cash cost per ounce of gold sold ((1)) increased by US$44 per ounce or 6% over the previous quarter mainly due
to an 8% increase in mine cash costs, which is attributable to the
increase in heating costs for the mine due to the winter season.
The decrease in gold sales and a slight increase in operating costs lead
to a $2.7 million decrease in cash margin from mine operations ((1)) over Q4 2012. Holt contributed 72% of the total cash margin from mine
operations ((1)) earned during the quarter.
Holt is expected to contribute approximately 55% of the Company’s total
gold production for 2013.
Holloway Mine, Operations and Financial Review (see “Operating and Financial Statistics Holloway”)
The Holloway Mine (“Holloway”) produced 5,140 ounces of gold for Q1 2013, which is consistent with
the production level achieved in Q4 2012. For the quarter, ore grade
improved slightly while the mill recovery rate of approximately 92%
exceeded the Company’s forecast recovery due to improved mineralogical
conditions in the areas mined during the quarter. Development crews
continue to provide access for additional areas within the Smoke Deep
Zone (“Smoke Deep”) in order to sustain the production profile for the mine.
Gold sales revenues for the quarter were in line with the previous
quarter, despite a decrease in the average realized price per ounce of
gold sold ((1)).
Total cash cost per ounce of gold sold ((1) )during the quarter increased by US$131 per ounce when compared to the
previous quarter, mainly due to a 7% decrease in throughput and the
additional heating costs in the winter season. These factors, in
conjunction with a lower average realized price per ounce of gold sold ((1)), led to a $0.9 million decrease in cash margin from mine operations ((1)) over the previous quarter.
Holloway is expected to contribute approximately 25% of the Company’s
total gold production for 2013.
Hislop Mine, Operations and Financial Review (see “Operating and Financial Statistics Hislop”)
The Hislop Mine (“Hislop”) produced 4,515 ounces of gold during Q1 2013. The head grade averaged
2.14 g/t Au, with lower than expected mill recoveries of 82%, which was
affected by the challenging winter conditions.
Commercial gold production sold decreased by 31% or approximately 2,000
ounces for Q1 2013 compared to Q4 2012, due to the decrease in
Total cash cost per ounce of gold sold ((1) )was 4% higher than the previous quarter as a result of the decrease in
throughput, and lower head grade and mill recoveries.
Hislop is expected to contribute approximately 20% of the Company’s
total gold production for 2012.
Taylor Project Update (“Taylor”)
A stepped approach was implemented in order to improve the quality of
information prior to allocating total capital expenditures for the
development activities at the West Porphyry Zone (“WPZ“). During 2012, SAS conducted ramp dewatering and rehabilitation, and
accessed the area at the top of the WPZ, near surface, in order to,
extract a 15,000 tonne bulk sample, test the proposed mining method,
and gather more information from an area that had limited information.
During Q1 2013, activities at Taylor included: the completion of the
tower sampling program and subsequent assaying of the generated
representative samples; a campaign of diamond drilling in the bulk
sample area (approximately 700 metres of drilling); an extensive
geological structural analysis by a leading expert in the field; a
comprehensive geochemical analysis performed by a reputable outside
third party; as well as the continuation of lateral development within
the ramp system.
Based on the results of the sampling program and the additional
structural and geochemical analysis, the Company has concluded that it
needs additional geological information to further improve the accuracy
of the geological model. In addition, in light of the revised capital
expenditure program for 2013, SAS has revised the program at Taylor to
include additional diamond drilling on the area identified for the
second bulk sample, to confirm its knowledge of the ore grade
distribution within the main lens of the WPZ. SAS has advanced ramp
development and commenced underground diamond drilling on this part of
the WPZ and will utilize this additional information in order to
optimize the future development and mining plan for Taylor. The
rescheduling of the main ramp infrastructure does not have a material
impact on net cash flow for 2014 and 2015.
Exploration activities during Q1 2013 remained focused on drilling at
Holloway and Hislop. Drilling to test the easterly strike and up-dip
and down-dip component at Smoke Deep returned encouraging results, and
identified a new zone, the Sediment Zone. Additional drilling on these
two zones is planned for Q2 2013 with one surface drill, and one
underground drill set up on the 550m Level drift, to follow up on
results released on March 4, 2013 (see press release available under
the Company’s profile on www.sedar.com or on the Company website at www.sasgoldmines.com).
Drilling on the Hislop Property, namely the Hislop North Project, also
returned encouraging results and is situated directly along strike from
the 147 and Grey Fox South mineralized trends. As well, drilling
beneath the West Pit at Hislop, returned significant grades and width,
with hole HP12-002 returning 94.56 g/t Au over 9.6 metres (uncut),
including 120.60 g/t Au over 7.5 metres (uncut) (see press release
dated March 4, 2013, available under the Company’s profile on www.sedar.com or on the Company website at www.sasgoldmines.com).
For the remainder of 2013, the exploration programs will continue to
concentrate on targets situated near the existing mining operations.
The priorities will include the Hislop North and Hislop Pit targets
located near Hislop, as well as the Smoke Deep and Sediment targets at
Holloway. There are currently three surface drills active with two
drills focused on the Hislop Property and one drill at Holloway.
Working capital at the end of the quarter was $15.2 million compared to
working capital of $18.2 million in the previous quarter. SAS generated
cash flow from operations in Q1 2013 of $14.1 million, a decrease of
$7.7 million over Q4 2012, primarily as a result of the reduction in
gold sold for the quarter. This resulted in a decrease in cash margin
from mine operations((1)) of $5.1 million, coupled with a decrease in net change in working
capital of $2.5 million. At the end of Q1 2013, the Company had cash
and cash equivalents of $32.1 million. The Company also has access to
additional cash resources by way of an undrawn US$10.0 million
revolving credit facility.
The price of gold has declined significantly to a level that will impact
the Company’s cash flow and operating results. There is no certainty
that the price of gold will increase in the near term or return to
levels attained in FY 2012 and in Q1 2013. With this in mind, the
Company has revised its capital expenditure programs as well as
exploration and evaluation assets with the objective to maintain a
strong financial position.
Under SAS’ revised expenditure program, exploration programs for FY 2013
have been prioritized and expenditures were reduced by $1.5 million, a
reduction of 19% from the amount initially forecasted. The core
programs are to focus on near mine exploration with the objectives to
increase the mineral resource base at Holloway and Hislop. Mine
sustaining and development capital, in conjunction with the Taylor
advanced stage exploration program, have also been revised to
reschedule mid and long-term development programs and/or curtail
non-essential equipment procurement and infrastructure upgrades. As a
result, the Company’s forecast for the remainder of 2013 has been
reduced by $20.8 million, a reduction of 40% from the initial amount
Amounts in Revised thousands Incurred Deferred 2013 of Canadian 2013 in Capital Forecast dollars Forecast Q1 2013 Expenditures Q2 2013 - Q4 2013 Mine capital and Exploration and evaluation asset additions in Q1 2013 Holt $ 22.0 $ 3.4 $ 5.8 12.8 Holloway 7.0 0.9 2.0 4.1 Holt Mill 1.4 0.4 - 1.0 $ 30.4 $ 4.7 $ 7.8 $ 17.9 Taylor $ 21.0 $ 4.3 $ 13.0 $ 3.7 51.4 9.0 20.8 21.6
The Company believes that it is able to sustain operations at an average
gold price of US$1,300 per ounce without any significant reduction or
curtailment of its current operating plans. The Company continues to
monitor this risk and will revise its operating plans accordingly in
order to ensure its near-term and long-term cash flow objectives are
Production and ongoing development programs at the Holt, Holloway and
Hislop mines, and processing at the Holt Mill, as well as activities at
the Taylor Project are being conducted under the supervision of Duncan
Middlemiss, P.Eng, the Company’s COO and Vice-President of Operations.
The exploration programs on the Company’s various mineral properties
are under the supervision of Doug Cater, P.Geo, the Company’s
Vice-President, Exploration. Both Messrs. Middlemiss and Cater are
qualified persons as defined by National Instrument 43-101, and have
reviewed and approved this news release.
The Company has included the following non GAAP performance measures:
adjusted net earnings; operating cash flow per share; net cash flow;
average realized price per ounce of gold sold; total cash cost per
ounce of gold sold; cash margin from mine operations; cash margin per
ounce of gold sold; and mine site cost per tonne milled throughout this
press 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.
Refer to pages the non-GAAP section 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 Q1 2013.
The Unaudited Balance Sheets, Statements of Operations and Statements of
Cash Flows for the Company for the three months ended March 31, 2013,
can be found at the end of this release.
To review the complete Unaudited Condensed Financial Report for Q1 2013,
and the Interim Management’s Discussion and Analysis for Q1 2013,
please see SAS’s SEDAR filings under the Company’s profile at www.sedar.com or the Company’s website at www.sasgoldmines.com.
The following abbreviations are used to describe the periods under
review throughout this release
Abbreviation Period Abbreviation Period January 1, July 1, 2012 FY 2013 2013 - Q3 2012 - September December 31, 30, 2012 2013 October 1, April 1, 2012 Q4 2013 2013 - Q2 2012 - June 30, December 31, 2012 2013 July 1, 2013 January 1, Q3 2013 - September Q1 2012 2012 - March 30, 2013 31, 2012 April 1, 2013 October 1, Q2 2013 - June 30, Q4 2011 2011 - 2013 December 31, 2011 January 1, July 1, 2011 Q1 2013 2013 - March Q3 2011 - September 31, 2013 30, 2011 January 1, April 1, 2011 FY 2012 2012 - Q2 2011 - June 30, December 31, 2011 2012 October 1, Q4 2012 2012 - December 31, 2012
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 operates the Holt, Holloway and Hislop mines, which
contribute approximately 100,000 ounces of annual gold production. The
Company is also advancing the Taylor Project and is conducting
exploration across 120km of land straddling the Porcupine-Destor Fault
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 2013; the
revised advanced exploration program at Taylor, and the timing thereof;
and the level of capital expenditures required at the three operations,
development and exploration projects; the extent and objectives of the
Company’s exploration programs for the balance of 2013; the impact of
significant declines in the gold price; and the sufficiency of the
Company’s cash flow and existing cash resources to finance its capital
programs and the further development of its advanced stage exploration
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 increase the time necessary to complete the
development initiatives, 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; the Company’s dependence on key
employees and changes in the availability of qualified personnel;
fluctuations in gold prices and exchange rates; operational hazards and
risks, including the inability to insure against all risks; changes in
laws and regulations; and changes in general economic conditions. Such
forward looking information is based on a number of assumptions,
including in respect of the ability to achieve operating cost
estimates, the level and volatility of the price of gold, the accuracy
of reserve and resource estimates and the assumptions on which such
estimates are based 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.
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 further description of the risks and uncertainties
facing the Company may also be found in the Company’s Annual
Information Form available on SEDAR at www.sedar.com.
Adjusted net earnings
Adjusted net earnings 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, periodic adjustments to the Company’s asset retirement
obligations, and expenses, asset impairment gains or losses and
significant tax adjustments not related to current period’s earnings,
as detailed in the table below. Adjusted net earnings 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 Reports, to
assist in the understanding of the Company’s operating results and
Amounts in thousands of Canadian dollars, except Q1 2013 Q4 2012 Q1 2012 per share amounts Net income per Financial $ 1,039 $ 12,632 $ 2,734 Reports Reversal of unrecognized (1,256) (8,312) - deferred income tax assets Mark-to-market loss (gain) (191) (151) 822 on gold-linked liabilities Mark-to-market loss (gain) on foreign currency 1,240 333 (1,755) derivatives Loss on the divestiture of - 272 - non-core assets Impairment loss on available-for-sale 500 825 - investment Tax effect of above items (262) (114) 233 Adjusted net earnings $ 1,070 $ 5,485 $ 2,034 Weighted average number of shares outstanding (000s) Basic 368,246 368,246 368,246 Diluted 368,801 368,691 368,782 Adjusted net earnings per $ 0.00 $ 0.01 $ 0.01 share - basic and diluted
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 Q1 2013:
Amounts in thousands of Canadian dollars, except Q1 2013 Q4 2012 Q1 2012 where indicated Mine site operating costs $ 18,411 $ 19,242 $ 17,451 per Financial Reports Production royalties per 3,370 3,590 2,922 Financial Reports Adjustments (1) - - (99) Total cash costs $ 21,781 $ 22,832 $ 20,274 Divided by gold ounces sold 23,009 26,050 20,325 Total cash cost per ounce of gold sold (Canadian $ 947 $ 876 $ 996 dollars) Average USD:CAD exchange $ 1.01 $ 0.99 $ 1.00 rate Total cash cost per ounce $ 939 $ 884 $ 996 of gold sold (US$) Breakdown of total cash cost per ounce of gold sold (US$) Holt Mine Mine cash costs $ 619 $ 573 $ 670 Royalty costs 166 168 168 $ 785 $ 741 $ 838 Holloway Mine Mine cash costs $ 977 $ 834 $ 948 Royalty costs 209 221 209 $ 1,186 $ 1,055 $ 1,157 Hislop Mine Mine cash costs $ 1,139 $ 1,100 $ 1,185 Royalty costs - - - $ 1,139 $ 1,100 $ 1,185 Total Mine cash costs $ 794 $ 745 $ 858 Royalty costs 145 139 138 $ 939 $ 884 $ 996
Notes: (1) In Q1 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.
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, the estimated revenue on a per tonne basis must be in
excess of the mine-site cost per tonne milled in order to be
economically viable. Management is aware that this per tonne milled
measure is impacted by fluctuations in throughput 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.
Amounts in thousands of Canadian dollars, except per tonne amounts Q1 2013 Q4 2012 Q1 2012 Holt Mine Mine-site costs $ 8,563 $ 8,546 $ 7,163 Inventory adjustments (1) 1,017 (230) 611 Mine site operating costs $ 9,580 $ 8,316 $ 7,774 Divided by tonnes of ore milled 89,985 89,901 67,937 Mine-site cost per tonne milled $ 106 $ 93 $ 114 Holloway Mine Mine-site costs $ 5,059 $ 4,119 $ 4,659 Inventory adjustments (1) 320 277 281 Mine site operating costs $ 5,379 $ 4,396 $ 4,940 Divided by tonnes of ore milled 43,252 46,606 47,151 Mine-site cost per tonne milled $ 124 $ 94 $ 105 Hislop Mine Mine-site costs $ 4,788 $ 6,577 $ 5,629 Inventory adjustments (1) 537 (391) 167 Mine site operating costs $ 5,325 $ 6,186 $ 5,796 Divided by tonnes of ore milled 79,771 95,516 94,660 Mine-site cost per tonne milled $ 67 $ 65 $ 61
Notes: (1) Inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory.
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 Reports. 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
Amounts in thousands Q1 2013 Q4 2012 Q1 2012 of Canadian dollars Gold sales [A] per $ 38,190 $ 44,332 $ 34,296 Financial Reports Mine site operating costs per 18,411 19,242 17,451 Financial Reports Production royalties per 3,370 3,590 2,922 Financial Reports [B] 21,781 22,832 20,373 Cash margin [A] - [B] from mine $ 16,409 $ 21,500 $ 13,923 operations Breakdown of cash margin from mine operations by mines: Holt Mine $ 11,887 $ 14,538 $ 9,054 Holloway 2,391 3,262 2,492 Mine Hislop 2,131 3,700 2,377 Mine $ 16,409 $ 21,500 $ 13,923
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 Reports by the gold ounces sold. It may not be comparable to
information in other gold producers’ reports and filings.
Cash margin per ounce of gold sold
Cash margin per ounce of gold sold is a non-GAAP measure, and is
calculated by subtracting the total cash cost per ounce of gold sold
from the average realized price per ounce of gold sold.
Amounts in United Sates dollars Q1 2013 Q4 2012 Q1 2012 Per ounce of gold sold: Average realized price per [A] $ 1,632 $ 1,710 $ 1,695 ounce of gold sold Total cash cost per ounce [B] $ 939 $ 884 $ 996 of gold sold Cash margin per ounce [A] - [B] $ 693 $ 826 $ 699 of gold sold
Net cash flow
Net cash flow is a non-GAAP measure and is calculated by taking cash
flow from operating activities less cash used in investing activities
as reported in the Company’s Financial Reports. It may not be
comparable to information in other gold producers’ reports and filings.
Amounts in thousands of Q1 2013 Q4 2012 Q1 2012 Canadian dollars Cash flow from operating activities per Financial $ 14,053 $ 21,737 $ 8,256 Reports Less: Cash used in investing activities per Financial 9,989 11,282 8,767 Reports $ 4,064 $ 10,455 $ (511)
Operating cash flow per share
Operating cash flow per share is a non-GAAP measure and is calculated by
dividing cash flow from operating activities in the Company’s Financial
Reports by the weighted average number of shares outstanding for each
period. It may not be comparable to information in other gold
producers’ reports and filings.
Amounts in thousands of Canadian dollars, except Q1 2013 Q4 2012 Q1 2012 per share amounts Cash flow from operating activities per Financial $ 14,053 $ 21,737 $ 8,256 Reports Weighted average number of 368,246 368,246 368,246 shares outstanding (000s) Operating cash flow per $ 0.04 $ 0.06 $ 0.02 share
Operating and Financial Statistics – Holt Mine
Amounts in thousands of Canadian dollars, except where Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 indicated 2013 2012 2012 2012 2012 2011 2011 2011 Tonnes milled 89,985 89,901 80,219 78,429 67,937 67,778 66,556 54,538 Head grade (g/t Au) 5.40 5.51 5.40 4.71 5.36 5.57 5.01 3.39 Average mill recovery 94.8% 94.7% 94.4% 94.2% 94.1% 94.1% 93.4% 92.5% Gold produced (ounces) 14,806 15,082 13,145 11,193 11,025 11,421 10,012 5,508 Commercial gold production sold (ounces) (1) 13,715 15,043 12,373 11,073 10,674 12,175 8,870 4,979 Gold sales revenue (1) $ 22,750 $ 25,584 $ 20,000 $ 18,250 $ 18,015 $ 21,060 $ 15,449 $ 7,284 Cash margin from mine operations (2) $ 11,887 $ 14,538 $ 9,250 $ 8,886 $ 9,054 $ 12,054 $ 6,625 $ 582 Mine-site cost per tonne milled (2) $ 106 $ 93 $ 112 $ 96 $ 114 $ 95 $ 106 $ 121 Total cash cost per ounce of gold sold (US dollars) (2): Mine cash costs $ 619 $ 573 $ 708 $ 671 $ 670 $ 556 $ 833 $ 1,255 Royalty costs 166 168 165 166 168 166 181 136 Total cash cost per ounce of gold sold (2) 785 741 873 837 838 722 1,014 1,391 Depreciation and depletion 196 200 186 161 145 129 134 130 Total production cost per ounce of gold sold (US dollars) $ 981 $ 941 $ 1,059 $ 998 $ 983 $ 851 $ 1,148 $ 1,521 Average USD:CAD exchange rate 1.01 0.99 0.99 1.01 1.00 1.02 0.98 0.97 Capital expenditures $ 3,383 $ 4,536 $ 4,990 $ 5,036 $ 3,177 $ 4,250 $ 1,841 $ 1,963
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 9-12 for an explanation of non-GAAP measurements).
Operating and Financial Statistics – Holloway Mine
Amounts in thousands of Canadian dollars, except where Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 indicated 2013 2012 2012 2012 2012 2011 2011 2011 Tonnes milled 43,252 46,606 44,546 53,169 47,151 56,225 49,437 47,971 Head grade (g/t Au) 4.04 3.90 4.15 3.80 3.77 4.03 3.71 3.43 Average mill recovery 91.5% 89.7% 91.0% 91.2% 88.6% 84.1% 85.2% 85.0% Gold produced (ounces) 5,140 5,240 5,408 5,923 5,058 6,126 5,026 4,497 Commercial gold production sold (ounces) (1) 5,126 4,981 5,749 5,744 4,907 6,208 5,130 4,996 Gold sales $ revenue $ 8,521 $ 8,473 $ 9,267 9,467 $ 8,275 $ 10,750 $ 8,828 $ 7,272 Cash margin from mine $ operations (2) $ 2,391 $ 3,262 $ 3,835 3,805 $ 2,492 $ 4,116 $ 2,931 $ 1,822 Mine-site cost per tonne $ milled (2) $ 124 $ 94 $ 92 82 $ 105 $ 93 $ 98 $ 90 Total cash cost per ounce of gold sold (US dollars) (2): Mine cash $ costs $ 977 $ 834 $ 746 771 $ 948 $ 853 $ 960 $ 964 Royalty costs (3) 209 221 204 205 209 203 218 164 Total cash cost per ounce of gold sold (2) 1,186 1,055 950 976 1,157 1,056 1,178 1,128 Depreciation and depletion 415 399 410 376 368 368 540 462 Total production cost per ounce $ of gold sold (US dollars) $ 1,601 $ 1,454 $ 1,360 1,352 $ 1,525 $ 1,424 $ 1,718 $ 1,590 Average USD:CAD exchange rate 1.01 0.99 0.99 1.01 1.00 1.02 0.98 0.97 Capital $ expenditures $ 912 $ 1,443 $ 1,794 2,539 $ 4,342 $ 3,666 $ 2,938 $ 2,986
Notes: (1) Holloway commenced production in October 2009. (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 9-12 hereof for a reconciliation of non-GAAP measurements). (3) In Q1 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 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Overburden stripped (m3) - - (32,205) 29,236 4,212 103,346 300,249 472,214 Tonnes (ore) mined 82,361 101,617 99,287 76,764 118,918 107,827 109,457 114,849 (waste) 267,906 453,629 513,988 536,015 680,221 599,330 738,054 1,303,072 350,267 555,246 613,275 612,779 799,139 707,157 847,511 1,417,921 Waste-to-Ore Ratio 3.3 4.5 5.2 7.0 5.7 5.6 6.7 11.3 Tonnes milled 79,771 95,516 102,191 97,183 94,660 92,794 107,741 120,677 Head grade (g/t Au) 2.14 2.22 2.53 2.21 1.88 1.94 1.68 1.53 Average mill recovery 82.1% 80.8% 86.5% 85.6% 86.4% 83.0% 85.4% 87.2% Gold produced (ounces) 4,515 5,507 7,189 5,899 4,935 4,803 4,980 5,192 Commercial gold production sold (ounces) (1) 4,168 6,026 7,075 5,678 4,744 4,985 5,260 5,185 Gold sales revenue $ 6,919 $ 10,275 $ 11,423 $ 9,356 $ 8,006 $ 8,625 $ 9,068 $ 7,579 Cash margin from mine operations (2) $ 2,131 $ 3,700 $ 5,165 $ 3,505 $ 2,377 $ 2,528 $ 2,432 $ 1,000 Mine-site cost per tonne milled (2) $ 67 $ 65 $ 62 $ 61 $ 61 $ 60 $ 59 $ 55 Total cash cost per ounce of gold sold (2)(3) $ 1,139 $ 1,100 $ 889 $ 1,020 $ 1,185 $ 1,196 $ 1,286 $ 1,311 Depreciation and depletion 767 332 234 238 186 177 150 104 Total production cost per ounce of gold sold (US dollars) $ 1,906 $ 1,432 $ 1,123 $ 1,258 $ 1,371 $ 1,373 $ 1,436 $ 1,415 Average USD:CAD exchange rate 1.01 0.99 0.99 1.01 1.00 1.02 0.98 0.97 Capital expenditures $ - $ (39) $ 390 $ 970 $ 463 $ 701 $ 2,822 $ 5,244
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 9-12 hereof for reconciliation of non-GAAP measurements). (3) Hislop is subject to a 4% net smelter return royalty ("NSR") which includes a minimum Advance royalty payment obligation (see "Gold-linked Liabilities").
Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information
Three months ended March 31, 2013 2012 Gold sales $ 38,190 $ 34,296 Operating costs and expenses: Mine site operating 18,411 17,451 Production royalty 3,370 2,922 Site maintenance and 121 148 pre-production Exploration 2,511 1,816 Corporate administration 2,265 2,090 Depreciation and depletion 8,284 4,406 34,962 28,833 Operating income 3,228 5,463 Finance costs (504) (969) Mark-to-market gain (loss) on 191 (822) gold-linked liabilities Mark-to-market gain (loss) on (1,240) 1,755 foreign currency derivatives Foreign exchange loss (4) (258) Impairment loss on (500) - available-for-sale investments Finance income and other 77 38 Income before taxes 1,248 5,207 Deferred taxes (209) (2,473) Net income for the period $ 1,039 $ 2,734 Other comprehensive income Unrealized loss on available-for-sale investments, net (95) (266) of tax of nil for all periods Impairment loss on 500 - available-for-sale investments Mark-to-market loss on foreign currency and gold derivatives (net of tax of $154 in 2013, 2012, nil) (463) - (58) (266) Comprehensive income for the period $ 981 $ 2,468 Basic and diluted income per share $ 0.00 $ 0.01 attributable to shareholders Weighted average number of shares outstanding (000's) Basic 368,246 368,246 Diluted 368,801 368,782
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
Three months ended March 31, 2013 2012 Cash provided by (used in): Operating activities: Net Income for the period $ 1,039 $ 2,734 Items not affecting cash: Deferred taxes 209 2,473 Mark-to-market loss (gain) on (191) 822 gold-linked liabilities Implicit interest and amortization of transaction 215 815 costs Mark-to-market loss (gain) on 1,240 (1,755) foreign currency derivatives Depreciation and depletion 8,284 4,406 Impairment loss on 500 - available-for-sale investments Share-based payments 323 189 Accretion of asset retirement 151 138 obligation Change in non-cash operating 2,409 (1,566) working capital and other Interest paid (126) - 14,053 8,256 Investing activities: Additions to exploration and (4,010) (44) evaluation assets Mine development expenditures (2,987) (6,492) Additions to plant and equipment (2,233) (1,634) Amounts payable on capital (416) (638) additions Net change in cash collateralized for banking - 58 facilities Reclamation costs and other (343) (17) (9,989) (8,767) Financing activities: Repayment of term credit (2,032) - facility Advance royalty payments (508) (504) Capital lease payments (77) (11) Repayment of Gold Notes - (3,673) (2,617) (4,188) Increase (decrease) in cash and cash 1,447 (4,699) equivalents for the period Cash and cash equivalents, beginning 30,656 17,617 of period Cash and cash equivalents, end of $ 32,103 $ 12,918 period
Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
March 31, 2013 December 31, 2012 Assets Current assets: Cash and cash $ 32,103 $ 30,656 equivalents Accounts receivable 1,652 4,475 Inventories 10,406 8,568 Derivative assets 62 725 Prepayments and other 424 237 assets 44,647 44,661 Exploration and 35,369 31,382 evaluation assets Producing properties 61,355 64,363 Plant and equipment 52,917 50,537 Reclamation deposits 8,323 8,307 Restricted cash 1,695 1,695 Deferred tax assets 18,832 18,064 Investment in joint 374 374 venture Other assets 295 365 $ 223,807 $ 219,748 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and $ 15,468 $ 15,296 other liabilities Employee-related 5,334 4,613 liabilities Provisions 777 669 Derivative liabilities 1,194 - Current portion of 5,894 5,822 long-term debt Current portion of capital lease 754 51 obligations 29,421 26,451 Long-term debt 10,444 12,759 Capital lease 1,589 137 obligations Asset retirement 11,568 11,743 obligations Deferred tax liabilities 1,578 721 54,600 51,811 Shareholders' equity: Share capital 98,556 98,556 Contributed surplus 20,138 19,892 Stock options 3,753 3,676 Retained earnings 46,801 45,796 Accumulated other comprehensive income (41) 17 (loss) 169,207 167,937 $ 223,807 $ 219,748
SOURCE St Andrew Goldfields Ltd.