Orosur Mining Inc. - Q1 2017 Results: Net Profit US$2.8M & Cash Operating Costs US$693/oz
Orosur Mining Inc. (“Orosur” or the “Company”) (TSX/AIM: OMI), a South American-focused gold producer, developer and explorer is pleased to announce the results for its 2017 first quarter ended August 31, 2016 (“Q1 17” or the “Quarter”).
Highlights of Q1 FY17
- Gold production of 9,950 oz, on the higher end of the Company’s 35,000 – 40,000 oz guidance for the full year (Q1 16: 12,471 oz).
- Cash operating costs of US$693/oz, significantly beating guidance of between US$800 to US$900/oz (Q1 16: US$954/oz).
- All-In-Sustaining costs (“AISC”) of US$989/oz (Q1 16: US$1,166/oz). The Company has maintained AISC below US$1,000/oz for the last three consecutive quarters now.
- Net profit after tax of US$2.8M (Q1 16: loss of US$1.7M).
- Cash generated from operations of US$4.8M (Q1 16: US$0.2M).
- Total cash balance of US$5.0M (Q1 16: US$4.3M).
| Operational & Financial Summary1 Operating Results | Quarter ended August 31 | |||||||||
| 2017 | 2016 | Diff | ||||||||
| Gold produced | Ounces | 9,950 | 12,471 | (2,521) | ||||||
| Operating cash cost3 | US$/oz | 693 | 954 | (261) | ||||||
| AISC | US$/oz | 989 | 1,166 | (177) | ||||||
| Average price received | US$/oz | 1,324 | 1,147 | 177 | ||||||
| Financial Results | ||||||||||
| Revenue | US$ ‘000 | 12,658 | 14,465 | (1,807) | ||||||
| Net profit/(loss) after tax | US$ ‘000 | 2,759 | (1,726) | 4,485 | ||||||
| Cash flow from operations2 | US$ ‘000 | 4,795 | 173 | 4,622 | ||||||
| Cash & Debt Summary | August 31, 2016 | May 31, 2016 | Diff | |||||||
| Cash balance | US$ ‘000 | 4,982 | 4,320 | 662 | ||||||
| Total debt | US$ ‘000 | 289 | 352 | (63) | ||||||
| Cash net of debt | US$ ‘000 | 4,693 | 3,968 | 725 | ||||||
| 1 | Results are based on IFRS and expressed in US dollars | |
| 2 | Before non-cash working capital movements | |
| 3 | Operating cash cost is total cost discounting royalties and capital tax on production assets. | |
Ignacio Salazar, CEO of Orosur, said:
“We are very pleased to announce a strong quarter with cash operating costs below US$700/oz, AISC below US$1,000/oz, net profit US$2.8M and cash from operations of US$4.8M. The commitment, additional work load and the tough decisions the team has had to assume during the past year has positioned the Company well to take advantage of gold price improvements this year and we are delighted to be seeing the benefits.
I believe the financial results speak for themselves, and taken together with the exploration and development progress we reported last week, show this is an exciting time for the Company. That said, we remain as pro-active as ever and are committed to making the most of the current position of the Company for the benefit of our shareholders and team. I very much look forward to the work and results ahead.”
FY17 Outlook & Guidance
The Company's forecast production guidance for FY17 remains between 35,000 to 40,000 oz of gold at operating cash costs of between US$800 - US$900/oz.
As in the past, variations in production and unit costs are expected to occur, quarter on quarter, as the mine plan draws ore from multiple sources at varying grades, stages of development and stripping factors. The Company expects to have higher unit costs in Q2 as underground staff and equipment are transferred from the Arenal UG operation in its final months of production to the SGW UG development which is expected to commence production by the end of November 2016.
Q1 17 Financial Summary
Cash flow from operations before working capital was US$4.8 million compared to US$0.2 million for Q1 16, mainly as a result of the higher gold prices received in Q1 17 and lower production rates year over year. Net profit after tax was US$2.8 million compared with a loss of US$1.7 million in Q1 16.
The Company invested US$1.9 million in capital expenditures and US$0.6 million in exploration expenditures compared with US$1.0 million and US$1.0 million respectively in Q1 16. During the Quarter, the Company advanced the development of the ramp and access in the San Gregorio underground mine as planned and on budget and commenced the construction of the phase 4A of the tailings dam.
The cash balance at the end of the Quarter was US$5.0 million compared with US$4.3 million at May 31, 2016. The Company’s debt balance was US$0.3 million compared to US$0.4 million at May 31, 2016.
Forward Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. There can be no assurance that such statements will prove to be accurate. Such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements include, without limitation success of exploration activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on insurance coverage. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.
About Orosur Mining Inc.
Orosur Mining Inc. is a fully integrated gold producer, developer and explorer focused on identifying and advancing gold projects in South America. The Company operates the only producing gold mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in Uruguay, Chile and Colombia. The Company is listed in Canada (TSX: OMI) and London (AIM: OMI).
For more information please visit www.orosur.ca
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.
| Orosur Mining Inc. | ||||||
| Condensed Interim Consolidated Unaudited Statements of Financial Position | ||||||
| Thousands of United States Dollars, except where indicated | ||||||
| As at August 31, 2016 ($) | As at May 31, 2016 ($) | |||||
| Assets | ||||||
| Cash | 4,982 | 4,320 | ||||
| Accounts receivable and other assets | 1,983 | 1,770 | ||||
| Inventories | 12,794 | 12,069 | ||||
| Total current assets | 19,759 | 18,159 | ||||
| Accounts receivable and other assets | 550 | 550 | ||||
| Property plant and equipment and development costs | 10,209 | 10,106 | ||||
| Exploration and evaluation costs | 17,729 | 17,250 | ||||
| Deferred income tax assets | 2,534 | 2,534 | ||||
| Restricted cash | 229 | 221 | ||||
| Total non-current assets | 31,251 | 30,661 | ||||
| Total assets | 51,010 | 48,820 | ||||
| Liabilities and Shareholders’ Equity | ||||||
| Trade payables and other accrued liabilities | 10,112 | 10,586 | ||||
| Current portion of long-term debt | 237 | 253 | ||||
| Environmental rehabilitation provisions | 360 | 360 | ||||
| Total current liabilities | 10,709 | 11,199 | ||||
| Long-term debt | 52 | 99 | ||||
| Environmental rehabilitation provisions | 5,281 | 5,327 | ||||
| Total non-current liabilities | 5,333 | 5,426 | ||||
| Total liabilities | 16,042 | 16,625 | ||||
| Capital stock | 60,849 | 60,751 | ||||
| Contributed surplus | 5,878 | 5,925 | ||||
| Deficit | (30,738) | (33,497) | ||||
| Currency translation reserve | (1,021) | (984) | ||||
| Total shareholders’ equity | 34,968 | 32,195 | ||||
| Total liabilities and shareholders’ equity | 51,010 | 48,820 | ||||
| Orosur Mining Inc. | ||||||
| Condensed Interim Consolidated Unaudited Statements of profit/ (loss) and Comprehensive profit/(loss) | ||||||
| Thousands of United States Dollars, except for per share amounts | ||||||
| Three months ended August 31, | ||||||
| 2016 ($) | 2015 ($) | |||||
| Sales | 12,658 | 14,465 | ||||
| Cost of sales | (9,243) | (15,015) | ||||
| Gross profit/(loss) | 3,415 | (550) | ||||
| Corporate and administrative expenses | (467) | (631) | ||||
| 124 | (1,114) | |||||
| (9) | (18) | |||||
| (88) | - | |||||
| 350 | 554 | |||||
| Net finance cost | (45) | (61) | ||||
| Derivative loss | (420) | - | ||||
| Net foreign exchange (loss)/gain | (101) | 78 | ||||
| (656) | (1,192) | |||||
| Profit/(loss) before income tax | 2,759 | (1,742) | ||||
| Recovery/(Provision) for income taxes | - | 16 | ||||
| Total profit/(loss) for the period | 2,759 | (1,726) | ||||
| Other comprehensive loss | ||||||
| Cumulative translation adjustment | (37) | (713) | ||||
| Total comprehensive profit/(loss) for the period | 2,722 | (2,439) | ||||
| Profit/(loss) per common share | ||||||
| Basic and fully diluted | 0.03 | (0.02) | ||||
| Orosur Mining Inc. | ||||||
| Condensed Interim Consolidated Unaudited Statements of Cash Flows | ||||||
| Thousands of United States Dollars, except where indicated | ||||||
|
| Three months ended August 31, | |||||
| 2016 ($) | 2015 ($) | |||||
| Net inflow/(outflow) of cash related to the following activities
Cash flow from operating activities | ||||||
| Net profit/(loss) for the period | 2,759 | (1,726) | ||||
| Adjustments to reconcile net income to net cash provided from operating activities: | ||||||
| Depreciation | 1,766 | 1,814 | ||||
| Exploration and evaluation expenses written off | 9 | 18 | ||||
| Obsolescence provision | 88 | - | ||||
| Fair value of derivatives | 94 | - | ||||
| Accretion of asset retirement obligation | 19 | 6 | ||||
| Stock based compensation | 28 | 7 | ||||
| Gain on sale of property, plant and equipment | - | (20) | ||||
| Other | 32 | 74 | ||||
| Subtotal | 4,795 | 173 | ||||
| Changes in working capital: | ||||||
| Accounts receivable and other assets | (308) | (175) | ||||
| Inventories | (812) | 1,349 | ||||
| Trade payables and other accrued liabilities | (474) | 56 | ||||
| Net cash generated from operating activities | 3,201 | 1,403 | ||||
| Cash flow from financing activities | ||||||
| Loan payments | (63) | (355) | ||||
| Proceeds on sale of common shares of Anillo SPA | - | 714 | ||||
| Net cash used in financing activities | (63) | 359 | ||||
| Cash flow from investing activities | ||||||
| Purchase of property, plant and equipment and development costs | (1,862) | (913) | ||||
| Environmental tasks | (65) | (81) | ||||
| Proceeds from the sale of fixed assets | - | 33 | ||||
| Exploration and evaluation expenditure assets | (549) | (966) | ||||
| Net cash used in investing activities | (2,476) | (1,927) | ||||
| Increase/ (decrease) in cash | 662 | (165) | ||||
| Cash at the beginning of period | 4,320 | 4,787 | ||||
| Cash at the end of period | 4,982 | 4,622 | ||||
| Orosur Mining Inc. | ||||||
| Condensed Interim Consolidated Unaudited Statements of Changes in Shareholders’ Equity | ||||||
| Thousands of United States Dollars, except where indicated | ||||||
| Three months ended August 31, | ||||||
| 2016 ($) | 2015 ($) | |||||
|
Capital stock | ||||||
| Balance at beginning of period | 60,751 | 60,544 | ||||
| Exercise of stock options | 75 | - | ||||
| Grant of shares | 23 | - | ||||
| Balance at end of period | 60,849 | 60,544 | ||||
| Broker warrants | ||||||
| Balance at beginning of period | - | 62 | ||||
| Balance at end of period | - | 62 | ||||
| Contributed surplus | ||||||
| Balance at beginning of period | 5,925 | 5,824 | ||||
| Stock based compensation recognized | 28 | 7 | ||||
| Exercise of stock options | (75) | - | ||||
| Balance at end of period | 5,878 | 5,831 | ||||
| (Deficit) Retained earnings | ||||||
| Balance at beginning of period | (33,497) | (32,287) | ||||
| Net profit/(loss) for the period | 2,759 | (1,726) | ||||
| Balance at end of period | (30,738) | (34,013) | ||||
| Currency translation reserve | (1,021) | (970) | ||||
| Shareholders’ equity at end of period | 34,968 | 31,454 | ||||
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Contact
Orosur Mining Inc
Ignacio Salazar, +1 (778) 373-0100
Chief Executive Officer
info@orosur.ca
or
Cantor Fitzgerald Europe
David Porter / Craig Francis / Philip Davies
Tel: +44 (0) 20 7894 7000
or
FTI Consulting
Ben Brewerton / Oliver Winters / Sara Powell / Emerson Clarke
Tel: +44 (0) 20 3727 1000