SAS Reports 2011 Second Quarter Results
TORONTO, Aug. 9, 2011 /CNW/ --
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
IN THE UNITED STATES
All dollar amounts are stated in Canadian dollars, unless otherwise
indicated
TORONTO, Aug. 9, 2011 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ('SAS' or the 'Company') announces a net loss for the second quarter
2011 of $1.2 million or nil on a per share basis as compared to a loss
of $7.1 million, or $0.02 per share for the same period last year.
Adjusted net earnings for the quarter were $1.4 million, or nil on a
per share basis.
QUARTER HIGHLIGHTS
-- Net loss for the quarter was $1.2 million attributable to
shareholders or nil, on a per share basis. Adjusted net
earnings ((1)) were $1.4 million or nil, on a per share basis.
-- Incurred exploration expenditures of $3.9 million at the Deep
Thunder, Taylor and Garrison Creek projects, of which $2.6
million were expensed.
-- Incurred total capital expenditures of $12.7 million for the
quarter which included $5.2 million in stripping costs at the
Hislop Mine (see 'Operational Review - Hislop Mine')
-- Produced 15,197 ounces of gold ((1)) and sold 15,160 ounces of
gold at an average realized price ((1)) of US$1,507 per ounce
for revenue of $22.1 million.
-- Total cash cost per ounce of gold sold( (1)) of US$1,277,
included production costs of US$1,178 per ounce and royalty
costs of US$99 per ounce; earned cash margin from mine
operations ((1)) of $3.4 million.
-- Generated $0.5 million in Operating cash flow before the
repayment of Gold Notes ((1) )and after total exploration
expenses of $2.6 million.
-- Received favourable decision from the Ontario Court of Appeal
concerning the Holt Royalty; the matter is now concluded in the
Company's favour.
-- SAS employees celebrated 1 Million hours worked without a Lost
Time Accident.
Notes:
(1) See pages 6-9 for non-GAAP measures.
* Effective January 1, 2011, the Company changed over its accounting
policies from Canadian GAAP to IFRS. Financial statements for prior
periods since January 1, 2010, previously reported have been restated
to conform to the accounting principles used in the preparation of the
interim financial statements for the three months and six months period
ended June 30, 2011 (see the Company's Unaudited Condensed Interim
Financial Report for the three months ended June 30, 2011 and the
Second Quarter 2011 Management Discussion and Analysis at the Company's
website www.sasgoldmines.com or under the Company's profile at www.sedar.com).
'Our revenue increased over the previous quarter, however, we had a
significant capital requirement at Hislop due to the increased
overburden and waste mining, and experienced a challenging quarter at
our operations', said Jacques Perron, President and CEO of SAS. 'The
development of the Holt Mine progressed slower than initially
anticipated which was coupled with lower than expected ore grades from
the C-103 Zone. We encountered difficult overburden conditions at the
Hislop Mine, and continued pressures at the Holloway Mine due to the
transition in mining. In spite of these issues, we are encouraged that
the mined ore grade at Zone 4 thus far is in line with our
expectations; that the development at Smoke Deep is progressing well;
and we are confident we will be able to bring these zones into
production in the second half of this year. The exploration programs at
the Deep Thunder Zone, Garrison Creek Project and in particular, at the
Taylor Project, have all returned positive results. We remain confident
that our third and fourth quarters will deliver better results'.
Holloway Mine, Operational Review (see Operating and Financial Statistics on page 10)
Gold production at the Holloway Mine continued to be negatively impacted
by the shift of mining from the Blacktop Zone to the Lightning Zone in
the first two quarters of 2011 while the Smoke Deep Zone is being
explored and developed. The ramp development towards the Smoke Deep
Zone is expected to be completed in the third quarter of 2011.
Exploration and definition drilling began in the second quarter and
will continue as ramp development progresses. Gold sales for the
quarter decreased by 61% when compared to the same quarter for 2010,
but were within the Company's estimates. The production target for the
Holloway Mine has been revised with a new estimate of between 23,000 -
26,000 ounces of gold in 2011, with approximately 13,000 - 16,000
expected during the second half of the year.
Mine-site cost per tonne milled((1)) in the second quarter of 2011 improved by 19% when compared to the
previous quarter and has increased by 5% from the 2010 average as a
result of decreased throughput. The lower gold sales and higher royalty
costs in the quarter led to an $8.0 million decrease in cash margin
from mine operations((1)) when compared to the quarterly average of $10.0 million achieved since
the mine recommenced production in the fourth quarter of 2009.
The Company expects the cost for operating the Holloway Mine will remain
high until the Smoke Deep Zone is brought into production, and the
mined ore grade improves. The anticipated ore grades are based on the
current inferred mineral resources of the Smoke Deep Zone. As the
definition drilling program continues, and mineral resources are
converted into the measured and indicated categories over time, a
better understanding of the ore grades will be developed.
Hislop Mine, Operational Review (see Operating and Financial Statistics on page 11)
The head grade for the Hislop Mine achieved during the quarter was 8%
lower than that achieved in the previous quarter but is consistent with
the grade as seen during 2010. The head grade of ore processed since
the commencement of mining remained below the average reserve grade due
to distribution within the ore body as well as continuity issues.
During the second quarter, the operations at the Hislop Mine were
negatively impacted by the additional overburden removal and waste rock
mining activities. It is anticipated that the overburden removal will
be completed for the entire pit in September. Waste rock mining is also
above any previous quarter due to the change in the mining sequence
required to accommodate the overburden stripping activities. The strip
ratio is expected to decrease in the second half of the year, and
continue to reduce going forward.
The Company has engaged a consultant to assist with a review of the
geological model and mine plan. This work is expected to be completed
in the third quarter. The gold production target has been revised with
a new estimate of between 18,000 - 21,000 ounces for 2011, with 8,000 -
11,000 expected during the second half of the year.
Mine-site cost per tonne milled((1) )decreased by $6 per tonne to $55 per tonne from the cost incurred in the
previous quarter, but remains $4 per tonne higher than the average cost
experienced in 2010, due to: (i) the increase in ore crushing
requirements as a result of the hardness of rock; (ii) the incurrence
of additional drilling costs due to the complexity of the ore body:
and, (iii) increased fuel costs. Cash margin from mine operations((1)) improved by $0.7 million from the previous quarter as a result of the
reduced mine-site operating costs, coupled with a higher realized gold
price ((1)).
Holt Mine, Operational Review (see Operating and Financial Statistics on page 12)
Gold production in the first quarter was substantially derived from the
C-103 Zone, which had a lower head grade than the ore reserve grade of
4.50 g/t Au as outlined in the Company's reserves and resources
estimate as at December 31, 2010. The mining sequence has predicated
that the lower grade fringe areas located at the higher elevations of
the C-103 Zone be mined first. Furthermore the grade anticipated for
the mined stopes reconcile at approximately 0.50 g/t Au less than
expected due to complexities in ore geometry and dilution.
Production from Zone 4 has commenced on the 925m Level and concurrent
development is currently progressing on the 925m Level and up to the
900m sublevel. For the remainder of 2011, ramp, footwall access, stope
development and long-hole mining will be the primary focus in this
area. Definition diamond drilling was completed on the 1075m Level in
the second quarter with two underground rigs, and development will
commence in this area in August. The gold production target has been
revised with a new estimate of between 24,000 - 28,000 ounces for 2011,
with 13,000 - 17,000 expected during the second half of the year.
Mine-site cost per tonne milled for the second quarter of 2011 was $121
per tonne, which is significantly higher than expected due to lower
throughput. The Company anticipates that the mine-site cost per tonne
at the Holt Mine will reduce significantly to the expected level, of
approximately $100 per tonne milled, in the second half of 2011 when
Zone 4 commences production in August. The mining rate for the second
quarter was 604 tpd and is expected to increase to an average of
approximately 850 tpd by December, which will positively impact unit
costs.
As announced in May 2011, the Ontario Court of Appeal upheld the
decision made by the Superior Court of Justice (Ontario) on July 23,
2009, that the Company's position that its sole obligation under a
royalty agreement previously entered into by Newmont Canada Limited ('Newmont') and Barrick Gold Corporation was limited to a flat rate 0.013% NSR
royalty on production from the Holt property, rather than a variable
rate royalty tied to the price of gold. There is no further appeal that may be taken by Newmont from the
decision of the Ontario Court of Appeal and the Company is pleased that
this matter has been concluded in its favour.
Exploration Projects
The Company's planned $10.9 million exploration program for 2011,
focused on targets that lie near its existing operations, and/or where
previous exploration has identified anomalous zones of gold
mineralization, particularly east of the Holloway Mine at the Deep
Thunder Zone, and the eastern extent of the Blacktop East Zone, the
Garrison Creek Project and the Taylor Project.
Exploration for the upcoming months will include continued exploration
on these projects as well as at two new areas; the recently acquired
Stroud Project (located immediately southwest of the Hsilop Mine) and
the northwestern portion of the Hislop Property due south of Brigus
Gold's recent exploration activities. Advancements at the Taylor
Project will also include updating the mineral resources estimate for
the West Porphyry Zone and a prefeasibility study which is expected
before the end of the year.
SAS currently has 9 drills turning and will be providing drilling
results from these projects throughout the year. The Company will also
continue to assess other opportunities in the district that fit with
the current portfolio of properties.
Conference Call Information
A conference call will be held this morning, August 9, 2011 at 10:00
a.m. (EDT) to discuss the second quarter results. Participants may join
the call by dialling toll free 1-866-212-4491 or 1-416-800-1066 for calls from outside Canada and the US. The Company will post
accompanying power point slides for the call, please visit the website
for more detailed information and any webcast links (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.
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. Messer's Middlemiss and
Michaud are qualified persons as defined by NI 43-101, and have
reviewed and approved this news release.
Non-GAAP Measures
The Company has included the 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 and six months ended June 30, 2011.
The Balance Sheets, Statements of Operations and Statements of Cash
Flows for the Company for the three and six months ended June 30, 2011,
can be found on pages 13-16.
To review the complete Unaudited Condensed Financial Report for the
three and six months ended June 30, 2011, and the accompanying Interim
Management's Discussion and Analysis, please see SAS's SEDAR filings
under the Company's profile at www.sedar.com or 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
focussed 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 the planned gold production levels at the
Holloway, Hislop and Holt mines; the time required to develop the Smoke
Deep Zone at the Holloway Mine and the development of Zone 4 at the
Holt Mine; improvement in the ore grade and reduction in costs at the
three operations; the revised targeted production levels for 2011; and
the continuance of the exploration programs at the Deep Thunder Zone,
the Garrison Creek Project, the recently acquired Stroud Property, and
the Taylor Project, including the completion of an updated mineral
resources estimate and prefeasibility study, and the timing thereof.
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 the availability of
personnel, changes in laws or regulations, the risks of obtaining
necessary licenses and permits, changes in general economic conditions,
and changes in conditions in the financial markets. 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 reserves and resources
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 statements, to assist in the
understanding of the Company's operating results and financial
position.
Amounts in thousands Six months
of Canadian dollars, Three months ended ended
except per share
amounts June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
Net income (loss) per $ $ $
Financial Reports $(1,233) (2,753) (7,141) $(3,986) (2,335)
Change in fair value
of gold delivery
commitment and
embedded derivative
instruments
associated with the
Gold Notes 782 (202) 4,769 580 3,892
Change in fair value
of gold delivery
commitment associated
with the advance
royalty payment
obligation 155 191 757 346 570
Change in fair value
of derivative foreign
exchange contracts 635 (93) 1,707 542 827
Proceeds from
insurance claim, net
of tax of $122 (338) - - (338) -
Loss on the
divestiture of the
non-core asset 1,353 - - 1,353 -
Write down of mining
assets - - - - 263
Secured debenture
participation fee - - 756 - 756
Total adjusted net
earnings (loss) $1,354 $(2,857) $848 $(1,503) $3,973
Weighted
average
number of
shares
outstanding
(000s)
Basic 367,858 367,716 330,420 367,787 328,792
Diluted 370,257 371,318 337,267 370,463 335,561
Adjusted net earnings
(loss) per share
Basic and diluted $0.00 $(0.01) $0.00 $(0.00) $0.01
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
Statements. 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 Three months ended Six months ended
thousands
of Canadian
dollars,
June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
Operating $ $4,027 $3,119 $1,818 $6,382
cash flow (2,209)
per
Financial
Reports
Repayments 2,718 2,573 3,230 5,291 5,982
of Gold
Notes
Operating $509 $6,600 $6,349 $7,109 $12,364
cash flow
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 Statements for the three months
and six months ended June 30, 2011:
Amounts in thousands of Three months ended Six months ended
Canadian dollars, except
where indicated June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
Mine-site costs per $15,785
Financial Reports $17,282 $11,665 $7,116 $28,947
Production royalties per 2,501
Financial Reports ((1)) 1,449 829 1,480 2,278
Other adjustments - - (207) - (95)
Total cash costs $18,731 $12,494 $8,389 $31,225 $18,191
Divided by gold ounces 32,749
sold 15,160 11,740 14,819 26,900
Total cash cost per ounce $555
of gold sold (Canadian
dollars) $1,236 $1,064 $566 $1,161
Average CAD:USD exchange 1.04
rate 0.97 0.99 1.03 0.98
Total cash cost per gold $537
ounce sold (US$) $1,277 $1,079 $551 $1,188
Amounts in thousands of Three months ended Six months ended
Canadian dollars, except
where indicated June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
Breakdown of total cash
cost per ounce of gold
sold (US$)((2))
Holloway Mine $1,128 $948 $551 $1,021 $537
Holt Mine 1,391 - - 1,391 -
Hislop Mine 1,311 1,301 - 1,306 -
$1,277 $1,079 $551 $1,188 $537
Breakdown of mine-site
costs by producing mines
((2))
Holloway Mine $4,658 $6,052 $7,116 $10,710 $15,785
Holt Mine 6,045 - - 6,045 -
Hislop Mine 6,579 5,613 - 12,192 -
$17,282 $11,665 $7,116 $28,947 $15,785
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) The Hislop Mine commenced commercial operations on July 1,
2010 and the Holt Mine commenced commercial operations on
April 1, 2011.
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 Three months ended Six months ended
Canadian dollars, except
per tonne amounts June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
Holloway Mine
Mine-site costs $4,658 $6,052 $7,116 $10,710 $15,785
Inventory adjustments (
(1)) (334) (439) 991 (773) 683
Mine-site operating costs $4,324 $5,613 $8,107 $9,937 $16,468
Divided by tonnes of ore
milled 47,971 50,625 84,930 98,596 170,772
Mine-site cost per tonne
milled $90 $111 $95 $101 $96
Holt Mine ((2))
Mine-site costs $6,045 N/A N/A $6,045 N/A
Inventory adjustments (
(1)) 528 528
Mine-site operating costs $6,573 N/A N/A $6,573 N/A
Divided by tonnes of ore
milled 54,538 N/A N/A 54,538 N/A
Mine-site cost per tonne
milled $121 N/A N/A $121 N/A
Hislop Mine ((2))
Mine-site costs $6,579 $5,613 N/A $12,192 N/A
Inventory adjustments (
(1)) 14 1,144 1,158
Mine-site operating costs $6,593 $6,757 N/A $13,350 N/A
Divided by tonnes of ore
milled 120,677 110,875 N/A 231,552 N/A
Mine-site cost per tonne
milled $55 $61 N/A $58 N/A
Note:
(1) This inventory adjustment reflects production costs associated
with unsold bullion and in-circuit inventory.
(2) The Hislop Mine commenced commercial operations on July 1,
2010 and the Holt Mine commenced commercial operations on
April 1, 2011.
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 Statements. 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 Statements 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 where Six months
indicated Three months ended ended
June March December September June June
30, 31, 31, 30, June 30, 30, 30,
Holloway
Mine( (1)) 2011 2011 2010 2010 2010 2011 2010
Tonnes mined 47,972 49,666 84,987 88,369 85,673 97,638 170,497
Tonnes
milled 47,971 50,625 82,659 87,162 84,930 98,596 170,772
Head grade
(g/t Au) 3.43 4.13 4.85 5.99 6.78 3.79 6.64
Average mill
recovery 85.0% 86.4% 85.9% 84.7% 87.7% 85.8% 88.3%
Gold
produced
(ounces) 4,497 5,813 11,069 14,230 16,231 10,310 32,160
Gold sold (
(2) )
(ounces) 4,996 7,364 12,694 16,004 14,819 12,360 32,749
Gold sales $7,272 $9,996 $17,508 $20,385 $18,484 $17,268 $39,240
Cash margin
from mine
operations(
(3)) $1,822 $3,115 $8,450 $11,420 $9,888 $4,937 $20,954
Mine-site
cost per
tonne milled
(C$) ((3)) $90 $111 $80 $73 $95 $101 $96
Total cash
cost per
ounce of
gold sold (
(4)) (US
dollars):
Production
costs $964 $834 $596 $442 $467 $887 $466
Production
royalties 164 114 108 97 84 134 71
Total cash
cost per
ounce of
gold sold (
(3)) 1,128 948 704 539 551 1,021 537
Depreciation
and
depletion 462 345 263 189 168 392 144
Total
production
cost per
ounce of
gold sold (
(4)) (US
dollars) $1,590 $1,293 $967 $728 $719 $1,413 $681
Average
CAD:USD
exchange
rate 0.97 0.99 1.01 1.04 1.03 0.98 1.03
Capital
expenditures $2,986 $2,779 $2,333 $1,794 $628 $5,765 $943
Notes:
(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 June 30, 2011, March 31,
2011, December 31, 2010, and September 30, 2010; and 2,430
ounces of gold delivered for the quarter ended June 30, 2010.
(3) During the quarter ended June 30, 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
cash cost per ounce of gold sold.
Operating and Financial Statistics - Hislop Mine
Amounts in thousands of Canadian
dollars, except where indicated Three months ended Six months ended
September
June 30, March 31, December 31, 30, June 30, June 30, June 30,
Hislop Mine( (1)) 2011 2011 2010 2010 2010 2011 2010
Over burden stripped (m(3)) 472,214 291,307 66,477 222,883 147,182 763,521 291,927
Tonnes mined (ore)
( ) 114,849 117,138 101,425 107,461 82,827 231,987 84,738
(waste) 1,303,072 927,216 1,013,011 599,790 358,661 2,230,288 401,740
1,417,921 1,044,354 1,114,436 707,251 441,488 2,462,275 486,478
Waste-to-Ore Ratio 11.3 7.9 10.0 5.6 4.3 9.6 4.7
Tonnes milled 120,677 110,875 98,333 110,587 54,051 231,552 55,930
Head grade (g/t Au) 1.53 1.66 1.54 1.51 1.35 1.59 1.38
Average mill recovery 87.2% 88.0% 86.3% 87.5% 84.0% 87.6% 84.0%
Gold produced (ounces) 5,192 5,209 4,195 4,682 1,962 10,401 2,075
Gold sold ((2)) (ounces) 5,185 4,376 5,258 3,756 1,578 9,561 1,578
Gold sales ((2)) $7,579 $5,947 $7,253 $4,799 N/A $13,526 N/A
Cash margin from mine operations(
(4)) $1,000 $334 $609 $176 N/A $1,334 N/A
Mine-site cost per tonne milled (C$)
((4)) $55 $61 $53 $49 N/A $58 N/A
Total cash cost per ounce of gold
sold (US dollars)( (3)) $1,311 $1,301 $1,192 $1,114 N/A $1,306 N/A
Depreciation and depletion 104 95 46 29 N/A 100
Total production cost per ounce of
gold sold (US dollars) ((4)) $1,415 $1,396 $1,238 $1,143 N/A $1,406 N/A
Average CAD:USD exchange rate 0.97 0.99 1.01 1.04 1.03 0.98 1.03
Capital expenditures $5,244 $1,885 $1,944 $900 $2,155 $7,129 $3,290
Notes:
(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 on July 1, 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 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
to the presentation adopted for the current period
(4) See pages 6-9 for non-GAAP measures.
Operating and Financial Statistics - Holt Mine
Amounts in
thousands of
Canadian
dollars,
except where
indicated Three months ended Six months ended
June March December September June
30, 31, 31, 30, 30, June 30, June 30,
Holt Mine(
(1)) 2011 2011 2010 2010 2010 2011 2010
Tonnes mined 55,004 43,804 23,406 N/A N/A 98,808 N/A
Tonnes
milled 54,538 43,458 23,257 N/A N/A 97,996 N/A
Head grade
(g/t Au) 3.39 4.15 2.92 N/A N/A 3.73 N/A
Average mill
recovery 92.5% 93.6% 92.5% N/A N/A 93.1% N/A
Gold
produced
(ounces) 5,508 5,435 2,022 N/A N/A 10,943 N/A
Gold sold (
(2) )
(ounces) 4,979 5,044 1,408 N/A N/A 10,023 N/A
Gold sales
(from
production) $7,284 N/A N/A N/A N/A $7,284 N/A
Cash margin
from mine
operations(
(3)) $581 N/A N/A N/A N/A $581 N/A
Mine-site
cost per
tonne milled
(C$) ((3)) $121 N/A N/A N/A N/A $121 N/A
Total cash
cost per
ounce of
gold sold
(US
dollars):
Production
costs $1,255 N/A N/A N/A N/A $1,255 N/A
Production
royalties 136 N/A N/A N/A N/A 136 N/A
Total cash
cost per
ounce of
gold sold 1,391 N/A N/A N/A N/A 1,391 N/A
Depreciation
and
depletion 130 N/A N/A N/A N/A 130 N/A
Total
production
cost per
ounce of
gold sold(
(3)) (US
dollars) $1,521 N/A N/A N/A N/A $1,521 N/A
Average
CAD:USD
exchange
rate 0.97 0.99 1.01 1.04 1.03 0.97 1.03
Capital
expenditures $1,963 $1,740 $6,519 $2,027 Nil $3,703 Nil
Notes:
(1) The Holt Mine commenced pre-production activities since the
second half of 2010 and was put into commercial production on
April 1, 2011. The operating results for the Holt Mine prior
to April 1, 2011, were classified as exploration or site
maintenance and pre-production expenditures where
appropriate.
(2) During mine pre-production, the Company sold 5,044 ounces of
gold for revenue of $6,844. These incidental gold sales were
recorded as a component of pre-production and mine development
expenditures.
(3) See pages 6-9 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 Six months ended June
June 30, 30,
2011 2010 2011 2010
Gold sales $ 22,135 $ 18,484 $ 38,078 $ 39,240
Operating costs and expenses:
Mine site
operating 17,282 7,116 28,947 15,785
Production
royalty 1,449 1,480 2,278 2,501
Site
maintenance
and
pre-production 179 967 (136) 1,768
Exploration 2,648 1,923 4,932 2,970
Corporate
administration 1,204 1,961 3,465 3,725
Depreciation
and depletion 3,536 2,727 6,844 5,164
Write-down of
mining assets - - - 263
26,298 16,174 46,330 32,176
Operating income (4,163) (8,252)
(loss) 2,310 7,064
Interest expense (1,199) (2,764) (1,972) (4,846)
Other income (expense) (1,371) (6,687) (374) (4,553)
Loss before taxes (6,733) (7,141) (10,598) (2,335)
Deferred taxes 5,500 - 6,612 -
Net loss for the $ (1,233) $ (3,986)
period $ (7,141) $ (2,335)
Other comprehensive
loss
Unrealized loss on
available for sale
investments, net of
tax (nil for all
periods) (150) (80) (223) (15)
Comprehensive loss for $ (1,383) $ (4,209)
the period $ (7,221) $ (2,350)
Basic and diluted loss $ (0.00) $ (0.01)
per share $ (0.02) $ (0.01)
Weighted average number
of shares outstanding
(000's)
Basic 367,858 330,420 367,787 328,792
Diluted 370,257 337,267 370,463 335,561
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
Three Months Ended June
30, Six Months Ended June 30,
2011 2010 2011 2010
Cash provided by
(used in):
Operating
activities:
Net loss for the $ (7,141) (3,986)
period (1,233) $ $ $ (2,335)
Items not
affecting cash:
Deferred taxes (4,804) - (5,504) -
Net change in
fair value of
secured gold
notes and
advance
minimum
royalty
payment
obligation 937 5,526 926 4,462
Implicit
interest on
secured gold
notes and
advance
minimum
royalty
payment
obligation 1,064 1,628 1,687 3,353
Repayment of
gold notes (2,718) (3,230) (5,291) (5,982)
Depreciation
and depletion 3,536 2,727 6,844 5,164
Write-down of
mining assets - - - 263
Loss on the
divestiture of
non-core
assets 1,353 - 1,353 -
Share-based
payments 422 376 854 615
Change in fair
value of
derivative
foreign
exchange
contracts 635 1,707 542 827
Accretion of
reclamation
liability 128 125 260 250
Change in
non-cash
operating 1,401 4,133
working capital
and other (1,529) (235)
(2,209) 3,119 1,818 6,382
Investing
activities:
Additions to
exploration
and evaluation
assets (1,528) (386) (2,073) (444)
Additions to
producing
properties and
mine
development (8,351) (2,436) (12,975) (4,005)
Additions to
plant and
equipment (2,787) (752) (4,206) (1,195)
Amounts
payable on
capital
additions 4,628 - 4,628 -
Proceeds from
sale of
non-core
assets 50 50 50 75
Interest
earned on
reclamation
deposits (33) - (33) -
Cash
collateralized
for banking
facilities - (1,322) - (1,322)
(8,021) (4,846) (14,609) (6,891)
Financing
activities:
Share purchase
warrants and
stock options
exercised 96 2,442 102 2,930
Share purchase
plan
contributions - 97 - 203
Advance
minimum
royalty
payments (429) (359) (835) (584)
Capital lease
obligations (7) (23) (17) (50)
(340) 2,157 (750) 2,499
Increase
(decrease) in cash
and cash (10,570)
equivalents for
the period 430 (13,541) 1,990
Cash and cash
equivalents, 29,441
beginning of
period 17,204 32,412 15,644
Cash and cash
equivalents, end $ 18,871 $
of period $ 17,634 $ 18,871 17,634
Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
June 30, 2011 December 31, 2010
Assets
Current assets:
Cash and cash equivalents $ 18,871 $ 32,412
Accounts and settlements receivable 3,591 10,694
Inventories 7,341 5,081
Fair value of derivative contracts 1,413 1,955
Prepayments and other assets 983 1,694
32,199 51,836
Exploration and evaluation assets 24,029 23,309
Producing properties and mine
development 54,501 46,357
Plant and equipment 44,441 42,401
Reclamation deposits 8,504 8,471
Restricted cash 2,734 2,734
Deferred tax assets 5,379 -
Other assets 844 996
$ 172,631 $ 176,104
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 17,753 $ 15,885
Employee-related liabilities 3,258 2,535
Current portion of long-term debt 11,859 10,623
Current portion of capital lease
obligations 31 18
32,901 29,061
Long-term debt 10,597 14,838
Capital lease obligations 51 5
Asset retirement obligations 10,416 10,156
Deferred taxes - 125
53,965 54,185
Shareholders' equity:
Share capital 98,417 218,482
Share capital to be issued - 832
Contributed surplus 17,112 42,972
Warrants 878 878
Stock options 4,359 3,724
Deficit (1,583) (144,675)
Accumulated other comprehensive
loss (517) (294)
118,666 121,919
$ 172,631 $ 176,104
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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 |