New Dawn Mining Corp. Reports Financial Results for the Quarter Ended December 31, 2010
TORONTO, Feb. 14 /CNW/ --
Quarterly Sales and Gold Production Levels Reach Record Highs
Q1 Fiscal 2011 - Quarter Ended December 31, 2010 Highlights
(All amounts are in US dollars)
-- Record Quarterly Consolidated Gold Sales of US$6.46 Million for
the Quarter Ended December 31, 2010, as compared to gold sales
of US$3.97 Million for the Quarter Ended December 31, 2009
-- 62.7% Increase in Quarterly Consolidated Gold Sales for the
Quarter Ended December 31, 2010, as compared to the Quarter
Ended December 31, 2009
-- 48.4% Increase in Quarterly Consolidated Gold Production for
the Quarter Ended December 31, 2010, as compared to the Quarter
Ended December 31, 2009
TORONTO, Feb. 14 /CNW/ - New Dawn Mining Corp. (TSX: ND) ('New Dawn' or the 'Company') announced that its financial results and
corresponding Management's Discussion and Analysis for the quarter
ended December 31, 2010 have now been filed on SEDAR and are also
available to view on the Company's website at www.newdawnmining.com.
The Company prepares its consolidated financial statements in U.S.
Dollars and in accordance with Canadian Generally Accepted Accounting
Principles.
As a result of New Dawn having made an investment in Central African
Gold Plc ('CAG') in June 2010, in which it acquired an 88.7%
controlling interest, New Dawn has consolidated the operations of CAG
for accounting purposes from June 16, 2010. New Dawn increased its
interest in CAG to approximately 89.9% during December 2010, and
subsequently thereafter to approximately 95.2% as at February 10,
2011.
Q1 FISCAL 2011 - QUARTER ENDED DECEMBER 31, 2010 HIGHLIGHTS
Selected unaudited quarterly financial information is presented below.
_________________________________________________________________________
|Quarters Ended |
|_________________________________________________________________________|
| | Fiscal | Fiscal 2010 |
| | 2011 | |
|____________|__________|_________________________________________________|
| | December | September | June 30, | March 31, | December |
| | 31, | 30, | 2010 | 2010 | 31, |
| | 2010 | 2010 | | | 2009 |
|____________|__________|___________|_____________|____________|__________|
|Operations | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Revenue |$6,458,735| $5,059,903| $3,549,786| $3,801,780|$3,969,038|
|____________|__________|___________|_____________|____________|__________|
|Net income | 96,598|(1,101,276)| (150,969)| (461,372)| 927,494|
|(loss) for | | | | | |
|the period | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Basic and | 0.00| (0.03)| (0.00)| (0.02)| 0.03|
|diluted | | | | | |
|earnings | | | | | |
|(loss) per | | | | | |
|share | | | | | |
|____________|__________|___________|_____________|____________|__________|
| | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Balance | | | | | |
|sheet | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Total assets|50,437,852| 44,820,031| 43,493,749| 19,620,871|18,628,285|
|____________|__________|___________|_____________|____________|__________|
|Total |17,337,028| 19,245,119| 16,813,687| 5,302,744| 3,971,871|
|liabilities | | | | | |
|____________|__________|___________|_____________|____________|__________|
| | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Other | | | | | |
|measures | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Quantity of | 4,808 | 4,141| 3,243| 3,395| 3,239|
|gold | | | | | |
|produced | | | | | |
|(oz) | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Quantity of | 4,715| 4,084| 2,974| 3,427| 3,604|
|gold sold | | | | | |
|(oz) | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Intercompany| | | | | |
|loan | | | | | |
|repayments | | | | | |
|paid from | | | | | |
|Zimbabwe | $-| $-| $-| $436,455|$2,500,000|
|____________|__________|___________|_____________|____________|__________|
|Revenue per | | | | | |
|oz ((2)) | $1,370| $1,239| $1,194| $1,109| $1,101|
|____________|__________|___________|_____________|____________|__________|
|Cash costs | | | | | |
|per oz ((1))| $874| $683| $756| $653| $580|
|____________|__________|___________|_____________|____________|__________|
|Adjusted | | | | | |
|EBITDA ((1))|$1,286,691| $1,119,751| $380,702| $1,063,935|$1,439,065|
|____________|__________|___________|_____________|____________|__________|
| | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Attributable| | | | | |
|((1)) | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Revenue |$6,184,661| $4,949,676| $3,549,786| $3,801,780|$3,969,038|
|____________|__________|___________|_____________|____________|__________|
|Quantity of | 4,577| 4,023| 3,243| 3,395| 3,239|
|gold | | | | | |
|produced | | | | | |
|(oz) | | | | | |
|____________|__________|___________|_____________|____________|__________|
|Quantity of | 4,515| 3,999| 2,974| 3,427| 3,604|
|gold sold | | | | | |
|(oz) | | | | | |
|____________|__________|___________|_____________|____________|__________|
(1) Cash costs per oz, Adjusted EBITDA and Attributable are non-GAAP
measures and are more fully described in the discussion at the end of
the MD&A entitled 'Non-GAAP Measures'.
(2) Revenue per ounce is calculated by dividing the revenue by the
ounces of gold sold
Ian R. Saunders, President and CEO of New Dawn, commented, 'I am very
pleased to report record gold production and sales for the quarter
ended December 31, 2010, which is a clear indication of the growth that
our expanded portfolio of gold mining operations in Zimbabwe is capable
of supporting. Our primary goal is to steadily increase monthly
production to reach annualized run rates of 38,000 to 40,000 ounces of
gold by the end of calendar 2011, and then to 50,000 to 60,000 ounces
of gold by the end of calendar 2012. As well as looking to achieve
these growth targets, we are also targeting a reduction in cash costs
per ounce of gold produced as we realize improved economies of scale
through increased gold production at our mines as part of our three
gold camp operating strategy focused in Zimbabwe'.
GOLD SALES
Consolidated gold sales for the quarter ended December 31, 2010 totalled
US$6,458,735 (US$6,184,661 after adjusting for the minority interests'
share of gold sales from the Central African Gold properties) at an
average sales price per ounce of gold of US$1,370, as compared to
US$3,969,038 (US$3,969,038 attributable) for the quarter ended December
31, 2009 at an average sales price per ounce of gold of US$1,101, an
increase of 62.7% (55.8% increase on an attributable basis).
Consolidated gold sales for the quarter ended December 31, 2010
increased by 27.6% (25.0% increase on an attributable basis), as
compared to gold sales for the previous quarter ended September 30,
2010 of US$5,059,903 (US$4,949,676 attributable) at an average sales
price per ounce of gold of US$1,370.
100% of sale proceeds were received in US dollars.
GOLD PRODUCTION
Gold sales reached record levels as New Dawn reported increased
consolidated gold production of 4,808 ounces of gold produced (4,577
ounces attributable to New Dawn, after adjusting for the minority
interests' share of gold production from the Central African Gold
properties) for the quarter ended December 31, 2010, as compared to
3,239 ounces of gold produced (3,239 ounces attributable) for the
quarter ended December 31, 2009, an increase of 48.4% (41.3% increase
on an attributable basis).
As compared to the production output of 4,141 ounces of gold produced
(4,024 ounces attributable) for the previous quarter ended September
30, 2010, consolidated gold production for the quarter ended December
31, 2010 increased by 16.1% (13.8% increase on an attributable basis,
after adjusting for the minority interests' share of gold production
from the Central African Gold properties).
The increase in gold production was a result of greater tonnage mined
and processed at the Turk Mine, as well as an increase in production
output from the Central African Gold properties. This increase occurred
despite a temporary shaft breakdown at Turk Mine, as well as additional
downtime during the quarter for holidays. The Dalny and Old Nic Mines
resumed operation in early August 2010 on a limited basis. During the
quarter ended December 31, 2010, production output increased at both
the Dalny and Old Nic Mines and, collectively, these mines contributed
1,154 ounces (923 ounces attributable) to New Dawn's total production
output for the quarter ended December 31, 2010. The Dalny and Old Nic
Mines are expected to contribute an increasing proportion of New Dawn's
consolidated gold production in future periods.
New Dawn's 100%-owned Turk Mine produced 3,654 ounces of gold during the
quarter ended December 31, 2010, as compared to 3,239 ounces of gold
during the quarter ended December 31, 2009, an increase of 12.8%. Gold
production at the Turk Mine for the quarter ended December 31, 2010
increased by 2.4%, to 3,654 ounces of gold, as compared to gold
production for the previous quarter ended September 30, 2010 of 3,570
ounces of gold.
The Turk, Old Nic and the Dalny Mine all experienced an increase in gold
production in line with management's operating plan to reach a
consolidated production run rate of 38,000 to 40,000 ounces of
annualized gold production by December 2011.
CASH COSTS
Average cash costs per ounce of gold produced for all mines was US$874
for the quarter ended December 31, 2010, as compared to US$580 for the
quarter ended December 31, 2009, and as compared to US$691 for the
quarter ended Sepember 30, 2010.
Average cash costs per ounce of gold produced at the Turk Mine increased
as a result of a high level of power outages in October 2010, a
temporary shaft breakdown at the Turk Mine in November 2010, increased
power costs from the continuous power supply contract in force from
November 2010, increased labor rates, and the annual holiday shut-down
in December 2010. Although these factors limited the benefit that was
realized from the continuous power supply contract during the quarter
ended December 31, 2010, the Company expects its average cash costs per
ounce of gold produced to improve subsequent to December 31, 2010 as a
result of the increasing positive impact from the continuous power
supply contract. After taking into account all of these negative
factors, the Turk Mine achieved cash costs per ounce of gold produced
during the quarter ended December 31, 2010 of US$703.
As limited production has recently resumed at both the Old Nic and Dalny
Mines, these mines are operating at reduced levels, and therefore the
fixed cost component of their mining costs is being allocated over a
sub-optimal number of ounces produced, thus increasing the cash costs
per ounce of gold produced. This factor, combined with power outages,
wage rates and the annual holiday shut-down, resulted in substantially
higher cash costs per ounce of gold produced during the quarter ended
December 31, 2010 than what was experienced at Turk Mine. As a result,
the average cash costs per ounce for all gold produced was US$874,
which the Company believes will begin to trend downward as production
levels increase and the factors impacting the quarter ended December
31, 2010 are either mitigated or eliminated.
NET INCOME and ADJUSTED EBITDA
For the quarter ended December 31, 2010, New Dawn reported quarterly
consolidated net income of US$96,598, as compared to the quarter ended
December 31, 2009 of US$927,494.
For the quarter ended December 31, 2010, New Dawn reported adjusted
EBITDA of US$1,286,691, as compared adjusted EBITDA for the quarter
ended December 31, 2009 of US$1,439,065.
Despite record gold sales and production levels, both net income and
adjusted EBITDA were lower on a period to period comparison as a result
of increased costs directly attributable to increased power and labor
costs, CAG restructuring costs, and higher mining and processing costs
attributable to the resumption of mining operations at the Old Nic and
Dalny Mines.
Management anticipates a reduction in corporate overhead costs in future
periods to more normalized levels, and expects that mining and
processing operations should reflect increasing efficiencies from
economies of scale as production levels increase.
About New Dawn …
New Dawn is a Zimbabwe-focused junior gold company currently expanding
gold production at its wholly-owned Turk Mine and, with its June 2010
investment in which it acquired an 88.7% controlling interest in
Central African Gold, New Dawn is targeting consolidated annualized
gold production of 50,000 to 60,000 ounces within the next 18 to 24
months, increasing to 100,000 ounces of annualized gold production
within the next 4 to 5 years. New Dawn increased its interest in
Central African Gold to approximately 89.9% during December 2010, and
subsequently thereafter to approximately 95.2%.
As the Turk Mine and the adjacent Angelus Mine are now interlinked on
several levels underground, management no longer considers it feasible
to separate the two mining projects. Accordingly, they are now being
treated for both operational and management purposes as one contiguous
mining property, referred to as the Turk/Angelus Complex. The Turk
Mine is in production, and exploration work is continuing on the
Angelus Mine.
Having recently filed a NI 43-101-compliant mineral reserve and resource
estimate for the Central African Gold properties acquired, New Dawn's
total attributable mineral reserves, including its Turk Mine, increased
32% to 220,000 ounces of gold grading 3.81 g/t from 1,785,000 tons of
mineralized material. The attributable mineral reserves are comprised
of attributable proven mineral reserves of 109,400 ounces of gold
grading 3.69 g/t from 874,700 tons of mineralized material and
attributable probable mineral reserves of 110,600 ounces of gold
grading 3.78 g/t from 910,300 tons of mineralized material.
Additionally, New Dawn's total attributable measured and indicated
mineral resources (inclusive of attributable mineral reserves)
increased by 92% to 1,558,400 ounces of gold grading 2.37 g/t from
20,436,000 tons of mineralized material and New Dawn's total
attributable inferred mineral resources increased by 54% to 552,600
ounces of gold grading 4.95 g/t from 3,477,000 tons of mineralized
material. (Reference: New Dawn press release dated October 19, 2010)
Currently, New Dawn operates 3 significant gold camps in Zimbabwe, where
it owns 6 mines, 3 of which are currently producing gold and expanding
production. New Dawn is on the path to becoming a leading gold mining
company in Zimbabwe, active in both gold production and gold
exploration, by employing modern mining techniques and deploying
capital in a country that is geologically rich, highly prospective, and
significantly under explored.
Additional information on New Dawn's gold reserve and resource estimates
is included at the Company's website at www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.
The TSX has not reviewed and does not accept responsibility for the
adequacy or the accuracy of this release.
The contents of this news release were supervised and reviewed by Ian R.
Saunders, B.Sc., who is President, Chief Executive Officer, and a
Director of New Dawn Mining Corp., and who is a Qualified Person within
the meaning of NI 43-101.
Special Note Regarding Forward-Looking Statements: Certain statements included or incorporated by reference in this news
release, including information as to the future financial or operating
performance of the Company, its subsidiaries and its projects,
constitute forward-looking statements. The words 'believe,' 'expect,'
'anticipate,' 'contemplate,' 'target,' 'plan,' 'intends,' 'continue,'
'budget,' 'estimate,' 'may,' 'schedule' and similar expressions
identify forward-looking statements. Forward-looking statements
include, among other things, statements regarding targets, estimates
and assumptions in respect of gold production and prices, operating
costs, results and capital expenditures, mineral reserves and mineral
resources and anticipated grades and recovery rates. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. Many factors
could cause the Company's actual results to differ materially from
those expressed or implied in any forward-looking statements made by,
or on behalf of, the Company. Such factors include, among others,
risks relating to reserve and resource estimates, gold prices,
exploration, development and operating risks, political and foreign
risk, uninsurable risks, competition, limited mining operations,
production risks, environmental regulation and liability, government
regulation, currency fluctuations, recent losses and write-downs and
dependence on key employees. See 'Risk Factors' in the Company's
Annual Information Form - 2010. Due to risks and uncertainties,
including the risks and uncertainties identified above, actual events
may differ materially from current expectations. Investors are
cautioned that forward-looking statements are not guarantees of future
performance and, accordingly, investors are cautioned not to put undue
reliance on forward-looking statements due to the inherent uncertainty
therein. Forward-looking statements are made as of the date of this
press release and the Company disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or results or otherwise.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/February2011/14/c2609.html
Investor Relations Contact: Richard Buzbuzian 1 416.585.7890
President and Chief Executive Officer: Ian R. Saunders 1 416.585.7890
Visit us on the internet: http://www.newdawnmining.com or
Email us at: info@newdawnmining.com