SAS Reports 2011 First Quarter Results
06.05.2011 | CNW
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES ORDISSEMINATION IN THE UNITED STATES
All dollar amounts are stated in Canadian dollars, unless otherwise indicated
TORONTO, May 6 /CNW/ - St Andrew Goldfields Ltd. (TSX: SAS), ("SAS" or the "Company") announces a net loss for the first quarter 2011 of $2.8 million, or $0.01 per share. Adjusted net loss for the quarter was $2.9 million, or $0.01 per share.
FIRST QUARTER 2011 HIGHLIGHTS
- Production of 16,457 ounces of gold from the Holloway and Hislop mines, and pre-production ore from the Holt Mine.
- The current production level reflects the transition to the Smoke Deep Zone at the Holloway Mine and the production ramp up at the Holt Mine from the initial 500 tpd to 1,000 tpd throughout the year.
- The Holt Mine completed pre-production at the end of the quarter and entered commercial production at the beginning of the second quarter of 2011.
- Revenues of $15.9 million from the sale of 11,740 ounces of gold (3) at an average realized price (1) of US$1,391 per ounce and at a production cost per ounce of $1,007 and production royalty cost per ounce of $72, for total a cash cost (1) of US$1,079 per ounce of gold sold.
- Operating cash flow of $6.6 million before the repayment of Gold Notes (1).
- Incurred $3.0 million in exploration expenditures at the Deep Thunder, Taylor and Garrison Creek projects delivered encouraging results.
- Successful conversion of the Company's previous accounting policies under Canadian GAAP to International Financial Reporting Standards ("IFRS") (2).
- SAS had the honour of receiving the Angus Campbell Award for "No Lost Time Accidents" for 2010 from the Porcupine and Northern Ontario Mines Safety Group. This is the third consecutive year receiving this prestigious award.
Note:
(1) See pages 6 - 9 for non-GAAP measures.
(2) Effective January 1, 2011, the Company changed over its accounting policies from Canadian GAAP to IFRS. Financial reports for periods since January 1, 2010, previously reported have been restated to conform to the accounting principles used in the preparation of the condensed interim financial report for the three months period ended March 31, 2011 (see the Company's Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011 ("Financial Report") and the First Quarter 2011 Interim Management Discussion and Analysis at the Company's website www.sasgoldmines.com or under the Company's profile at www.sedar.com).
(3) Gold sales exclude the sale of 5,044 ounces of gold poured from the Holt Mine while the operation was in pre-production.
"We are pleased to have brought the Holt Mine into commercial production at the beginning of the second quarter", said Jacques Perron, President and CEO of SAS. "We achieved one of our main objectives; to put three mines into production within eighteen months, and after only one year of significant exploration activities, we are pleased with our exploration efforts which have identified a number of prospective targets and returned encouraging results. This year is a pivotal year for the Company as we transition the main production zone at the Holloway Mine from Blacktop to Smoke Deep, and ramp up operations at the Holt Mine from 500 tpd to 1,000 tpd. We are confident that we will be able to improve on the grade and throughput abilities of the Hislop Mine, and continue to expand our activities in this area with the recent option of the Stroud property. At the end of 2011, we will have been able to achieve a number of milestones that will advance us towards becoming a 100,000 ounce gold producer in the Timmins mining district, and poise us for future growth possibilities."
Holloway Mine, Operational Review (see Operating and Financial Statistics on page 10)
The Holloway Mine gold production was negatively impacted by the increased importance of mining at the Lightning Zone, which is lower in grade than that of the Blacktop Zone. The ramp development to access the Smoke Deep Zone ("Smoke Deep") is expected to be completed in the third quarter of 2011, which will then allow for development of the zone for production. Exploration drilling began in the second quarter, and definition drilling is expected to begin soon after the completion of the ramp development further to the east, where the zone remains open. Gold sales in the first quarter decreased by 42% when compared to the previous quarter, but were within the Company's estimate for the quarter. The Holloway Mine is expected to produce between 20,000 - 23,000 ounces of gold in 2011.
Mine-site cost per tonne milled (1) in the first quarter of 2011 was negatively impacted as a result of a 39% decrease in throughput (operating costs at the mine are primarily fixed costs). The lower gold sales and a higher royalty cost in the quarter led to a $7.0 million decrease in cash margin from mine operations (1) achieved in the first quarter of 2011 when compared to the $10.0 million quarterly average since the mine recommenced gold production in the fourth quarter of 2009.
The Company expects the cost for operating the Holloway Mine will remain high until the development of Smoke Deep is completed in the first quarter of 2012, and the mined ore grade and throughput improve. These forecasts are subject to change as the Smoke Deep definition diamond drilling program will commence in the second quarter of 2011 and further information will be generated in order to upgrade the current level of inferred resources to measured and indicated resource categories.
Hislop Mine, Operational Review (see Operating and Financial Statistics on page 11)
The grade at the Hislop Mine gradually improved in the first quarter of 2011 but remained below the average reserve grade due to ore body continuity issues, which are anticipated to lessen as the pit is mined deeper and to the southeast. Throughput from the Hislop Mine increased in the first quarter of 2011 as a result of the excess capacity at the Holt Mill created by the reduction in ore processed from the Holloway Mine. Gold production improved by 24% when compared to the previous quarter and the Mine is on target to produce between 20,000 - 22,000 ounces for 2011.
Mine-site cost per tonne milled (1) increased by $8 per tonne to $61 per tonne from the cost incurred in the previous quarter as a result of the increased fuel costs during the first quarter as the market price of diesel fuel increased by $0.27 per tonne of rock mined or approximately $0.3 million when compared to the previous quarter. This resulted in decreased cash margin from mine operations by $0.3 million when compared to the previous quarter.
Holt Mine
The Holt Mine completed pre-production operations at the end of the first quarter and commenced commercial production at the beginning of the second quarter of 2011. During the quarter, 44,769 tonnes of low grade ore were mined from the Holt Mine at a rate of approximately 500 tonnes-per-day ("tpd").
In the first quarter of 2011, the Holt Mill processed 43,458 tonnes of ore from the Holt Mine at a head grade of 4.15 g/t Au, with a recovery rate of 93.6%. The Mine produced 5,435 ounces of gold, of which 5,044 ounces of gold were sold during the quarter and realized $6.8 million in revenue. Pre-production operating costs incurred in the first quarter of 2011 were $6.4 million which was within the Company's expectation.
The mined grade achieved in the first quarter of 2011 was lower than the overall grade for the Holt Mine reserves as ore was substantially derived from the C-103 Zone, which outlined an estimated reserve grade of 4.5 g/t Au as of December 31, 2010. Production was sourced from lower grade stopes within the C-103 Zone due to stope sequencing. Head grades from this location are expected to achieve the reserve grade of 4.5 g/t Au for the entire zone until completion of mining in the third quarter of 2011.
The litigation in respect of the Holt Royalty was heard by the Ontario Court of Appeal on March 28, 2011. The decision of the Court of Appeal is pending. While the Company believes that its position, that the Company's sole obligation under a royalty agreement previously entered into by Newmont Canada Limited and Barrick Gold Corporation was limited to a flat rate 0.013% NSR royalty on production from the Holt property will be upheld by the Court of Appeal, there can be no assurance that such outcome will occur. A decision of the Court of Appeal adverse to the Company's position will result in a material adverse impact on the Company's anticipated cash flow and earnings and a significant decline in the value of the Holt property.
Exploration Projects
The Company's planned $10.0 million exploration program for 2011, consisting of 66,000 metres of drilling at various targets is focused on targets that lie near its existing operations, and/or where previous exploration has identified anomalous zones of gold mineralization. Exploration programs for the upcoming months include:
- Surface drilling east of the Blacktop Zone to follow up on significant results (hole 410‐058 which intersected 11.62 g/t Au over 14.4 metres and hole 410‐061 which intersected 6.55 g/t Au over 19.7 metres) returned from limited underground exploration;
- Surface drilling at the Deep Thunder Zone near the Holloway Mine to systematically step‐out further to the east while expanding the current zone of gold mineralization;
- Surface drilling as part of a second phase of drilling on the Taylor Project to better define the gold distribution, as well as to explore the new footwall zone identified below the previously defined West Porphyry Zone;
- Continued surface drilling at Garrison Creek in order to better define and delineate the potential for gold mineralization along the Garrison Fault that hosts the syenite, and into the host volcanic and sedimentary rocks; and
- Commence surface drilling on the newly optioned Plato property in Holloway Township (which lies in close proximity to the Deep Thunder Zone) and the Hislop property recently optioned from Stroud Resources Ltd.
SAS currently has 8 surface drills turning and will be providing drilling results from these exciting projects throughout the year. The Company will also continue to assess other opportunities in the district that fit with the current mix of properties.
Qualified Person
Production at the Holloway, Hislop and Holt mines, and processing at the Holt Mill are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's Vice President & General Manager, East Timmins Operations. The exploration programs on the Company's various mineral properties are under the supervision of Michael Michaud, P.Geo., the Company's Vice President of Exploration. Mr. Middlemiss and Mr. Michaud are SAS' qualified persons as defined by NI 43‐101, and both have reviewed and approved this news release.
Non-GAAP Measures
The Company has included non-GAAP performance measures, adjusted net earnings (loss), cash flow from operations before repayments of Gold Notes, average realized price per ounce of gold sold and total cash costs per ounce of gold sold, cash margin from mine operations and mine-site cost per tonne milled throughout this press release which do not have standardized meanings prescribed by 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. 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. Refer to pages 6-9 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011.
The Balance Sheets, Statements of Operations and Statements of Cash Flows of the Company for the three months ended March 31, 2011 can be found on pages 12 - 14.
To review the complete Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011, and First Quarter 2011 Interim Management's Discussion and Analysis, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or on the Company's website at www.sasgoldmines.com.
About SAS
SAS (operating as "SAS Goldmines") is a gold mining and exploration company with an extensive land package in the Timmins mining district, northeastern Ontario which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada. SAS is focused on developing its assets in the Timmins Camp with three producing mines and aggressive exploration activities across 120km of land straddling the Porcupine-Destor Fault Zone.
FORWARD-LOOKING INFORMATION
This news release contains forward‐looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the 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 regarding the planned 2011 gold production levels at the Holloway, Hislop and Holt mines; the capital expenditures required to develop the Smoke Deep Zone at the Holloway Mine and the development of Zone 4 at the Holt Mine, and the timing thereof; the improvement in ore grade and reduction in costs at the Hislop Mine and the Holt Mine; the anticipated manpower levels at the Holt Mine (and the ability to achieve same); the Company' ability to attract and maintain adequate, skilled manpower to operate the Holloway, Holt and Hislop mines; and the completion of the exploration program at the Deep Thunder Zone, the Taylor Project, the Garrison Creek projects and the recently acquired Plato and Hislop properties. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward‐looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources, unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels, the Company's expectations with respect to gold prices during the tenure of the Company's Gold Notes; fluctuations in gold prices and exchange rates, insufficient funding or delays or inability to raise additional financing on satisfactory terms, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions, changes in conditions in the financial markets and an adverse Appeal Court decision on the Holt Royalty. Such forward looking information is based on a number of assumptions, including but not limited to the expected timeline to complete pre-production activities, the availability of adequate financing, the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates and general business and economic conditions. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward‐looking information. SAS does not assume the obligation to revise or update this forward‐looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.
NON-GAAP MEASURES
Adjusted net earnings (loss)
Adjusted net earnings (loss) are calculated by removing the gains and losses, net of income tax, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivative contracts, and one-time gains or losses on the disposition of non-core assets and expenses, as detailed in the table below. Adjusted net earnings (loss) 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 financial position.
Amounts in thousands Three months ended
of Canadian dollars,
except per share
amounts
March 31, 2011 March 31, 2010 December 31, 2010
Net income (loss) per $(2,753) $4,806 $(235)
Financial Reports
Change in fair value of (202) (877) 1,346
gold delivery
commitment and embedded
derivative instruments
associated with the
Gold Notes
Change in fair value 191 (187) 665
of gold delivery
commitment associated
with the advance
royalty payment
obligation
Change in fair value of (93) (880) (796)
derivative foreign
exchange contracts
Write down of mining - 263 -
assets
Total adjusted net $(2,857) $3,125 $980
earnings (loss)
Weighted average number
of shares outstanding
Basic 367,716,286 327,426,358 362,311,097
Diluted 371,318,380 334,711,035 366,645,371
Adjusted net earnings
(loss) per share
Basic and diluted $(0.01) $0.01 $0.00
Operating cash flow before repayment of Gold Notes
SAS uses the financial measure operating cash flow before repayment of
Gold Notes to supplement the information included in its Financial
Reports. The presentation of operating cash flow before repayment of
Gold Notes does not constitute a measure recognized by IFRS and is not
meant to be a substitute for cash flow from operations or cash flow
from operating activities presented in accordance with IFRS, but rather
should be evaluated in conjunction with such IFRS measures. Operating
cash flow before repayment of Gold Notes excludes the non-cash value of
gold delivered to the Company's Gold Note holders.
The term operating cash flow before repayment of Gold Notes does not
have a standardized meaning prescribed by IFRS, and therefore the
Company's definitions are unlikely to be comparable to similar measures
presented by other companies. The Company's Management believes that
the presentation of operating cash flow before repayment of Gold Notes
provides useful information to investors because it excludes the
repayment of Gold Notes in working capital items, and is a better
indication of the Company's cash flow from operations and is considered
by Management to be meaningful in evaluating the Company's past
financial performance and its future prospects. The Company believes
that conventional measures of performance prepared in accordance with
IFRS do not fully illustrate the ability of the Company's operating
mines to generate cash flow.
Amounts in thousands Three months ended
of Canadian dollars
March 31, 2011 March 31, 2010 December 31, 2010
Operating cash flow per $4,027 $3,263 $6,697
Financial Reports
Repayments of Gold 2,573 2,752 2,585
Notes
Operating cash flow $6,600 $6,015 $9,282
before repayments of
Gold Notes
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 the three months ended
March 31, 2011:
Amounts in thousands of
Canadian dollars,
except per ounce
amounts or otherwise
indicated Three months ended
March 31, 2011 March 31, 2010 December 31, 2010
Mine-site costs per
Financial Reports $11,665 $8,669 $14,018
Production royalties
per Financial Reports (
(1)) 829 1,133 1,684
Production royalties
related to the Hislop
Mine operations ((2)) - - (293)
Total cash costs $12,494 $9,802 $15,409
Divided by gold ounces
sold 11,740 17,930 17,952
Total cash cost per
ounce of gold sold
(Canadian dollars) $1,064 $540 $858
Average CAD:USD
exchange rate 0.99 1.04 1.01
Total cash cost per
gold ounce sold (US$) $1,079 $525 $850
Breakdown of total cash
cost per ounce of gold
sold (US$)
Holloway Mine $948 $525 $704
Hislop Mine 1,301 - 1,192
$1,079 $525 $850
Amounts in thousands of
Canadian dollars,
except per ounce
amounts or otherwise
indicated Three months ended
March 31, 2011 March 31, 2010 December 31, 2010
Breakdown of mine-site
costs by producing
mines
Holloway Mine $6,052 $8,669 $7,667
Hislop Mine 5,613 - 6,351
$11,665 $8,669 $14,018
Note:
(1) During 2010, the Company recorded royalty expenses in the amount
of $95 relating to gold production from the Holloway Mine for the
period from October 1, 2009, to December 31, 2009. This amount is
allocated to the relevant periods for the calculation of total
cash cost per ounce of gold sold. An adjustment of the royalty
expense in the amount of $112 for the three months ended March 31,
2010, has been added as a component of the Holloway Mine
production royalty costs.
(2) Commencing the first quarter of 2011, the Company reports the
implicit interest on the Hislop advanced minimum royalty
obligation as a financing cost. For periods since January 1, 2010,
the production royalty recorded for the Hislop Mine when gold is
produced have been reclassified as a financing cost accordingly.
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, in order to be economically viable, the estimated
revenue on a per tonne basis must be in excess of the mine-site cost
per tonne milled. Management is aware that this per tonne milled
measure is impacted by fluctuations in production levels 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 Three months ended
March 31, 2011 March 31, 2010 December 31, 2010
Holloway Mine
Mine-site costs $6,052 $8,669 $7,667
Inventory adjustments ( (439)
(1)) (308) (1,048)
Mine-site operating $5,613
costs $8,361 $6,619
Divided by tonnes of 50,625
ore milled 85,842 82,659
Mine-site cost per $111
tonne milled $97 $80
Amounts in thousands of
Canadian dollars,
except per tonne
amounts Three months ended
March 31, 2011 March 31, 2010 December 31, 2010
Hislop Mine
Mine-site costs $5,613 $- $6,351
Inventory adjustments (
(1)) 1,144 - (1,117)
Mine-site operating
costs $6,757 $- $5,234
Divided by tonnes of
ore milled 110,875 - 98,333
Mine-site cost per
tonne milled $61 $- $53
Note:
(1) This 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 Report. 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 basis.
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 Report by the gold ounces sold. It may not be comparable to
information in other gold producers' reports and filings.
Operating and Financial Statistics - Holloway Mine
Amounts in
thousands of
Canadian
dollars, except
per ounce and
per tonne
amounts
Three months ended
December September
March 31, 31, 30, June 30, March 31,
Holloway Mine (
(1)) 2011 2010 2010 2010 2010
Tonnes mined 51,820 84,987 88,369 85,673 84,824
Tonnes milled 50,625 82,659 87,162 84,930 85,842
Head grade (g/t
Au) 4.13 4.85 5.99 6.78 6.50
Average mill
recovery 86.4% 85.9% 84.7% 87.7% 88.8%
Gold produced
(ounces) 5,813 11,069 14,230 16,231 15,929
Gold sold ((2) )
(ounces) 7,364 12,694 16,004 14,819 17,930
Gold sales ((2)) $9,996 $17,508 $20,385 $18,484 $20,756
Cash margin from
mine operations
( (2)(4)) $3,115 $8,450 $11,420 $9,888 $11,066
Mine-site cost
per tonne milled
(C$) ((4)) $111 $80 $73 $95 $97
Total cash cost
per ounce of
gold sold ((3)
(4)) (US
dollars):
Production costs $834 $596 $442 $467 $464
Production
royalties 114 108 97 84 61
Total cash cost
per ounce of
gold sold ((1)) 948 704 539 551 525
Non-cash costs:
Depreciation
and depletion 345 263 189 168 122
Total production
cost per ounce
of gold sold (
(3)(4)) (US
dollars) $1,293 $967 $728 $719 $647
Average CAD:USD
exchange rate 0.99 1.01 1.04 1.03 1.04
Capital
expenditures $2,779 $2,333 $1,794 $628 $315
Note:
(1) The Holloway Mine commenced production in October 2009.
(2) Includes 1,860 ounces of gold delivered to the Gold Note holders in each of the quarters ended March 31, 2011, December 31, 2010, and September 30, 2010; and 2,430 ounces of gold delivered in the first and second quarters of 2010.
(3) During the second quarter of 2010, the Company recorded an accrual of royalty expenses in the amount of $207 relating to gold production from the Holloway Mine for the period from October 1, 2009, to March 31, 2010. This amount has been allocated to the relevant periods for the calculation of total production cost per ounce of gold sold.
(4) See pages 6-9 of this press release for non-GAAP Measures
Amounts in thousands of
Canadian dollars, except
per ounce and per tonne
amounts
Three months ended
December 31, September June 30, March 31,
March 31, 30,
Hislop Mine ((1)) 2011 2010 2010 2010 2010
Over burden stripped (m 66,477 222,883 147,182 144,745
(3)) 291,307
Tonnes mined (ore)( ) 117,138 101,425 107,461 82,827 1,911
1,013,011 599,790 358,661 43,079
(waste) 927,216
1,044,354 1,114,436 707,251 441,488 44,990
Waste-to-Ore Ratio 7.9 10.0 5.6 4.3 22.5
Tonnes milled 110,875 98,333 110,587 54,051 1,879
Head grade (g/t Au) 1.66 1.54 1.51 1.35 2.25
Average mill recovery 88.0% 86.3% 87.5% 84.0% 83.4%
Gold produced (ounces) 5,209 4,195 4,682 1,962 113
Gold sold ((2)) (ounces) 4,376 5,258 3,756 1,578 -
Gold sales ((2)) $5,947 $7,253 $4,799 $- $-
Cash margin from mine $609 $176 $- $-
operations( (3)(4)) $334
Mine-site cost per tonne $53 $49 N/A N/A
milled (C$) ((4)) $61
Total cash cost per ounce
of gold sold (US dollars)
((3)) $1,301 $1,192 $1,114 N/A N/A
Non-cash costs:
Depreciation and 46 29 N/A N/A
depletion 95
Total production cost per
ounce of gold sold ((3)
(4)) (US dollars) $1,396 $1,238 $1,143 N/A N/A
Average CAD:USD exchange 1.01 1.04 1.03 1.04
rate 0.99
Capital expenditures $1,885 $1,944 $900 $2,155 $1,135
Note:
(1) Pre-production activities to prepare the Hislop Mine commenced in early 2010 and were completed at the end of the second quarter. The Hislop Mine began production in the third quarter of 2010. The operating results for the Hislop Mine prior to June 30, 2010, were classified as exploration or site maintenance and pre-production expenditures where appropriate.
(2) During pre-production, the Hislop Mine sold 1,578 ounces of gold for revenue of $2,033. These incidental gold sales were recorded as a component of pre-production and mine development expenditures.
(3) Commencing the first quarter of 2011, the Company reports the implicit interest on the Hislop advanced minimum royalty obligation as a financing cost. For periods since January 1, 2010, a production royalty cost was recorded for the Hislop Mine when gold is produced with a corresponding decrease in interest expense. These amounts have been reclassified as a financing cost to conform with the presentation adopted for the current period.
(4) See pages 6-9 of this press release for non-GAAP Measures
Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information or otherwise indicated
Three months ended March 31,
2011 2010
Gold sales $ 15,943 $ 20,756
Operating costs and
expenses:
Mine site
operating 11,665 8,669
Production
royalty 829 1,021
Site
maintenance
and
pre-production (315) 801
Exploration 2,284 1,047
Corporate
administration 2,261 1,764
Depreciation
and depletion 3,308 2,437
Write-down of
mining assets - 263
20,032 16,002
Operating income
(loss) (4,089) 4,754
Interest expense (773) (2,082)
Other income (expense) 997 2,134
Income (loss) from
before income taxes (3,865) 4,806
Deferred taxes
(1,112) -
Net income (loss) for
the period $ (2,753) $ 4,806
Other comprehensive
income (loss)
Unrealized gain (loss)
on available for sale
investments, net of tax
(nil for both periods) (73) 65
Comprehensive income
(loss) for the period $ (2,826) $ 4,871
Basic and diluted
income (loss) per
share $ (0.01) $ 0.01
Weighted average
number of shares
outstanding
Basic 367,716,286 327,426,358
Diluted 371,318,380 334,711,035
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
Three Months Ended March 31,
2011 2010
Cash provided by
(used in):
Operating
activities:
Net Income
(loss) for the $ (2,753)
period $ 4,806
Items not
affecting cash:
Deferred
taxes (700) -
Net change in
fair value of
secured gold
notes and
advance
minimum
royalty
payment
obligation (11) (1,064)
Implicit
interest on
secured gold
notes and
advance
minimum
royalty
payment
obligation 623 1,725
Repayment of
Gold Notes (2,573) (2,752)
Depreciation
and depletion 3,308 2,437
Write-down of
mining assets - 263
Share-based
payments 432 239
Change in
fair value of
derivative
foreign
exchange
contracts (93) (880)
Accretion of
reclamation
liability 132 125
Change in
non-cash
operating 5,662
working capital
and other (1,636)
4,027 3,263
Investing
activities:
Additions to
exploration
and
evaluation
assets (545) (58)
Additions to
producing
properties
and mine
development (4,624) (1,569)
Additions to
plant and
equipment (1,419) (443)
Proceeds from
sale of
non-core
assets - 25
(6,588) (2,045)
Financing
activities:
Share
purchase
warrants and
stock options
exercised 6 488
Share
purchase plan
contributions - 106
Advance
minimum
royalty
payments (406) (225)
Capital lease
obligations (10) (27)
(410) 342
Increase
(decrease) in
cash and cash (2,971)
equivalents for
the period 1,560
Cash and cash
equivalents, 32,412
beginning of
period 15,644
Cash and cash
equivalents, end $ 29,441
of period $ 17,204
Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
_____________________________________________________________________________________
| | | March 31, 2011| December 31, 2010|
|_|________________|________________________________|_________________________________|
| | | | |
|_|________________|________________________________|_________________________________|
|Assets | | |
|__________________|________________________________|_________________________________|
|Current assets: | | |
|__________________|________________________________|_________________________________|
| |Cash and cash | | |
| |equivalents | $ 29,441| $ 32,412|
|_|________________|________________________________|_________________________________|
| |Accounts and | | |
| |settlements | | |
| |receivable | 4,521| 10,694|
|_|________________|________________________________|_________________________________|
| |Inventories | 7,091| 5,081|
|_|________________|________________________________|_________________________________|
| |Fair value of | | |
| |derivative | | |
| |contracts | 2,048| 1,955|
|_|________________|________________________________|_________________________________|
| |Prepayments and | | |
| |other assets | 988| 1,694|
|_|________________|________________________________|_________________________________|
| | | 44,089| 51,836|
|_|________________|________________________________|_________________________________|
| | | | |
|_|________________|________________________________|_________________________________|
|Exploration and | | |
|evaluation assets | 23,854| 23,309|
|__________________|________________________________|_________________________________|
|Producing | | |
|properties and | | |
|mine development | 48,624| 46,357|
|__________________|________________________________|_________________________________|
|Plant and | | |
|equipment | 42,860| 42,401|
|__________________|________________________________|_________________________________|
|Reclamation | | |
|deposits | 8,471| 8,471|
|__________________|________________________________|_________________________________|
|Restricted cash | 2,734| 2,734|
|__________________|________________________________|_________________________________|
|Deferred tax | | |
|assets | 575| - |
|__________________|________________________________|_________________________________|
|Other assets | 955| 996|
|__________________|________________________________|_________________________________|
| | | $ 172,162| $ 176,104|
|_|________________|________________________________|_________________________________|
| | | | |
|_|________________|________________________________|_________________________________|
|Liabilities and | | |
|Shareholders' | | |
|Equity | | |
|__________________|________________________________|_________________________________|
|Current | | |
|liabilities: | | |
|__________________|________________________________|_________________________________|
| |Accounts payable| | |
| |and accrued | | |
| |liabilities | $ 15,071| $ 15,885|
|_|________________|________________________________|_________________________________|
| |Employee-related| | |
| |liabilities | 3,657| 2,535|
|_|________________|________________________________|_________________________________|
| |Current portion | | |
| |of long-term | | |
| |debt | 10,865| 10,623|
|_|________________|________________________________|_________________________________|
| |Current portion | | |
| |of capital lease| | |
| |obligations | 12| 18|
|_|________________|________________________________|_________________________________|
| | | 29,605| 29,061|
|_|________________|________________________________|_________________________________|
| | | | |
|_|________________|________________________________|_________________________________|
|Long-term debt | 12,737| 14,838|
|__________________|________________________________|_________________________________|
|Capital lease | | |
|obligations | 1| 5|
|__________________|________________________________|_________________________________|
|Asset retirement | | |
|obligations | 10,288| 10,156|
|__________________|________________________________|_________________________________|
|Deferred taxes | | |
| | - | 125|
|__________________|________________________________|_________________________________|
| | | 52,631| 54,185|
|_|________________|________________________________|_________________________________|
| | | | |
|_|________________|________________________________|_________________________________|
|Shareholders' | | |
|equity: | | |
|__________________|________________________________|_________________________________|
| |Share capital | 219,320| 218,482|
|_|________________|________________________________|_________________________________|
| |Share capital to| | |
| |be issued | - | 832|
|_|________________|________________________________|_________________________________|
| |Contributed | | |
| |surplus | 42,972| 42,972|
|_|________________|________________________________|_________________________________|
| |Warrants | 878| 878|
|_|________________|________________________________|_________________________________|
| |Stock options | 4,156| 3,724|
|_|________________|________________________________|_________________________________|
| |Deficit | (147,428)| (144,675)|
|_|________________|________________________________|_________________________________|
| |Accumulated | | |
| |other | | |
| |comprehensive | | |
| |loss | (367)| (294)|
|_|________________|________________________________|_________________________________|
| | | 119,531| 121,919|
|_|________________|________________________________|_________________________________|
| | | $ 172,162| $ 176,104|
|_|________________|________________________________|_________________________________|
For further information:
about St Andrew Goldfields Ltd., please contact:
Tel: 1-800-463-5139 or (416) 815-9855; Fax: (416) 815-9437; Website: www.sasgoldmines.com
Suzette N Ramcharan
Manager, Investor Relations
Email: sramcharan@sasgoldmines.com
Jacques Perron
President & CEO
Email: jperron@sasgoldmines.com
Ben Au
CFO, VP Finance & Administration
Email: bau@sasgoldmines.com