SAS Reports Record Gold Production in the Third Quarter
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/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
TORONTO, Oct. 17, 2011 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ('SAS' or the 'Company') announces third quarter production results for the Holt, Holloway and Hislop mines. SAS achieved a record quarter for production and is on track to meet its 2011 gold production target of between 65,000 - 75,000 ounces of gold. Cash cost per ounce of gold sold ((1)) for the third quarter is expected to fall between US$970 and US$1,000 before royalties of approximately US$140 per ounce for a total cash cost of US$1,100 to US$1,140, which is an improvement over the previous quarter ((2)). The expected 16% reduction in cash cost over the previous quarter is attributable to higher gold production; while offset by a US$40 per ounce increase in royalty cost due to a higher gold price in the quarter. SAS anticipates cash costs to continue to reduce quarter over quarter as production at the Holt Mine progresses, and the transition at the Smoke Deep Zone is completed.
The Holt, Holloway and Hislop mines are located on the eastern end of the Company's 120km land package in the Timmins Mining District. The Company is currently ramping up production activities in order to achieve annualized gold production of approximately 100,000 ounces starting in 2012.
PRODUCTION HIGHLIGHTS
-- Record gold production of 20,018ounces of gold from three
operations (Holt, Holloway and Hislop) with an increase in gold
production of 32% over the previous quarter.
-- Continued development at the Smoke Deep Zone at the Holloway
Mine on track for production to commence in the fourth quarter
of this year.
-- Mill throughput improvement of approximately 6%, with the Holt
Mill averaging 2,829tpd ('tonnes per day') after mill
availability during the quarter.
'We certainly have seen an improvement at our operations from the last quarter', said Jacques Perron, President and CEO of SAS. 'The development activities at the Holt Mine have improved considerably since the beginning of the third quarter. The Holloway Mine is performing as expected and development at the Smoke Deep Zone is continuing as planned. Production at Hislop during the quarter was as expected. We are very pleased with the progress at our operations and the anticipated decrease in costs, and will continue to forge ahead to make the fourth quarter even better.'
Note:
(1) 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 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.
(2) Final unit costs will be provided upon filing the Q3 2011
unaudited interim financial report on November 11, 2011.
Q3 2011 Production Results
_________________________________________________________________
| |Tonnes |Head Grade|Average Mill |Gold Produced|
| |Milled | (g/t Au) |Recovery Rate| (ounces) |
|__________________|_______|__________|_____________|_____________|
| Holt|66,556 | 5.01 | 93.4% | 10,012 |
|__________________|_______|__________|_____________|_____________|
| Holloway|49,437 | 3.71 | 85.2% | 5,026 |
|__________________|_______|__________|_____________|_____________|
| Hislop|107,741| 1.68 | 85.4% | 4,980 |
|__________________|_______|__________|_____________|_____________|
|Q3 2011 production|223,734| 3.12 | 89.2% | 20,018 |
|__________________|_______|__________|_____________|_____________|
| Year-to-date|651,878| 2.77 | 89.0% | 51,672 |
| production(1)| | | | |
|__________________|_______|__________|_____________|_____________|
((1)) Includes 43,458 tonnes of development ore from the Holt Mine at a head grade of 4.15 g/t Au processed while the mine was in pre-production producing 5,435 ounces of gold.
SAS is scheduled to release its third quarter 2011 earnings results on November 11, 2011, after market close. A conference call and webcast is scheduled for the morning of Monday November 14, 2011. For further information, please see the Company's website at www.sasgoldmines.com.
Holt Mine, Operational Review
Gold production in the first half of the year was substantially derived from the C-103 Zone while Zone 4 was being prepared for development. Production from Zone 4 commenced on the 925m Level at the beginning of the third quarter with concurrent development on the 925m Level 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. Development has also commenced on the 1075m Level with production anticipated to commence in November. The head grade at the Holt Mine saw a steady increase over the past few months mainly attributable to higher grade reserves in the remaining portion of the C-103 Zone and better development grade ore from Zone 4 coupled with production ore which was in line with reserve grade.
The mining rate during the third quarter continued to progress towards the anticipated steady state rate of production of 1,000tpd expected by the end of the first quarter of 2012, which will positively impact unit costs.
Holloway Mine, Operational Review
The Holloway Mine is still in transition as the Smoke Deep Zone is being prepared for production. Ramp development was completed during the third quarter of 2011. Results from the definition drilling program conducted on the western portion of the zone were recently released with additional drilling being conducted further to the east. Development is on track and production from the Smoke Deep Zone is expected to commence during October as production drilling has already started.
The Company expects the operating cost at the Holloway Mine will remain high until the Smoke Deep Zone is brought into production and the mined ore grade improves. The Company intends to update the mineral resources and reserves estimates for the Smoke Deep Zone at year end.
Hislop Mine, Operational Review
The head grade for the Hislop Mine achieved during the quarter averaged 1.68 g/t Au and is approximately 10% higher than that achieved in the previous quarter. The operations at the Hislop Mine continued to be impacted by the additional overburden removal and waste rock mining activities. Additional overburden slope failures during the third quarter have further delayed stripping of the eastern portion of the pit and it is now anticipated that the overburden removal will be completed for the entire pit before the end of November. Waste rock mining was below the previous quarter, however the fourth quarter may see a slight increase due to the change in the mining sequence required to accommodate the overburden stripping activities.
Holt Mill Performance
Towards the end of July the Company installed a new SAG mill motor which coupled with some operational improvements resulted in an increase in mill throughput of approximately 6% over the previous quarter. The Holt Mill has a rated capacity of 3,000tpd and averaged 2,829tpd during the quarter, after mill availability (the milling operations were shut down for approximately 6 days in order to complete the installation of the new motor, other down time is attributable to SAG Mill liner change-outs and power interruptions).
Qualified Person
Production at the Holt, Holloway and Hislop mines, processing at the Holt Mill, and mine development and production activities at the operations are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's Vice President & General Manager, East Timmins Operations. Mr. Middlemiss is a qualified person as defined by NI 43-101, and has reviewed and approved this news release.
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 the planned gold production levels at the Holt, Holloway and Hislop mines; the time required to develop and commence production at the Smoke Deep Zone at the Holloway Mine and the continued development of Zone 4 at the Holt Mine; the time required to complete the overburden removal at the Hislop Mine; improvement in the ore grade and reduction in costs at the three operations; and achieving the targeted production levels for 2011 and 2012. 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 ability of the Company to continue to attract and retain a skilled labour force; 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.
St Andrew Goldfields Ltd.
CONTACT: 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 Ben Au
President & CEO CFO, VP
Finance &
Email:jperron@sasgoldmines.com
Administration
Email:bau@sasgoldmines.com