High River Financial Results for the First Quarter Ended March 31, 2012
16.05.2012 | Marketwire
(All currency figures are in Canadian Dollars unless otherwise noted)TORONTO, ONTARIO -- (Marketwire) -- 05/15/12 -- High River Gold Mines Ltd. (TSX: HRG) ("High River" or the "Company") announces its financial results for the quarter ending March 31, 2012.
First Quarter Financial Highlights
-- Average realized gold price of US$1,663 per ounce, up 20% (Q1 2011:
US$1,385)
-- Revenue of $138.9 million, up 13% (Q1 2011: $122.4 million)
-- Net income up 54% to $57.6 million (Q1 2011: $37.3 million)
-- Cash flow from operating activity of $71.5 million (Q1 2011: $53.5
million)
-- Cash and cash equivalents of $95.6 million (Q1 2011: $204.1 million)
Corporate Developments
-- Bissa project construction in Burkina Faso progressing rapidly with
engineering work mostly complete; on track to deliver first gold in H1
2013.
Financial summary
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In thousands of Canadian Dollars 2012 2011 2010
(except per share amounts)
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Gold revenue $ 138,897 $ 122,363 $ 97,656
Net income (loss) 57,636 37,299 30,421
Net income (loss) per share
(basic) 0.07 0.04 0.03
Cash provided by (used in)
operating activities 71,472 53,519 31,499
Weighted average number of shares
outstanding (basic) 840,218,962 840,218,962 799,327,755
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Materials
The Company's financial results for Q1 2012 are available under the Company's SEDAR profile.
For further information on High River please visit the company's website - www.hrg.ca.
Notes to Editors
About High River
High River is an unhedged gold company with interests in producing mines, development and advanced exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has a 90% interest in a development project, the Bissa gold project in Burkina Faso, and a 50% interest in an advanced exploration project with resource estimates compliant with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (" NI 43-101"), the Prognoz silver project in Russia.
Capital Expenditure Programme
We forecast 2012 capex to be in the region of US$230 million. Exploration will continue to remain a significant part of High River's capex programme going forward. The Company's existing operations will require mainly maintenance capex going forward.
Reserves & Resources
On April 16 and April 24, 2012, High River announced the results of its resource and reserve upgrade using all available data for the Company's mineral projects as reported by Wardell Armstrong International and Valls Geoconsultant (NI 43-101 compliant updates). These estimates supersede all previously announced estimates.
Highlights as of January 1, 2012:
-- Combined JORC Code and NI 43-101 compliant proven and probable reserves
of 3.6 mOz of gold (56,736 kilotonnes of ore, at an average grade of
1.96 g/t).
-- Combined JORC Code and NI 43-101 compliant measured and indicated
resources of 5.0 mOz of gold (106,862 kilotonnes of ore, at an average
grade of 1.46 g/t) and inferred resources of 3.1 mOz of gold (80,297
kilotonnes of ore, at an average grade of 1.20 g/t).
For details on the specific reserve and resource category, grade and total tonnage for each mineral project, and for information on key assumptions, parameters, methods and procedures used to estimate the mineral reserves and resources and the data verification methods employed, see the press release issued by the Company on April 16, 2012, titled "High River Announces Updated Reserve and Resource Estimate and Current Technical Reports for Irokinda and Zun-Holba" and the press release issued by the Company on April 24, 2012, titled "High River Announces Updated Reserve and Resource Estimates for Berezitovy and Burkina Faso Properties".
Exploration and Production
The 2011 exploration programme of US$39 million showed encouraging results across all regions and mines, including:
-- Bissa: Mineral resources up 10%. New resources estimated near the Bissa
mine combining five different satellites with total mineral resources of
approximately 4.9 mOz, including 1.0 mOz of resources at a grade of 0.77
g/t at Bouly.
Key exploration priorities in 2012 - 2013 will include:
-- Continued life of mine extension at Buryatzoloto and Taparko;
-- Initiation of drilling programme at Berezitovy;
-- Further resource definition at Bouly;
-- Bissa satellite drilling; and
-- Regional exploration in Russia and Burkina Faso.
Review of Operations
-- Total gold production decreased 8% to 84,457 (Q1 2011 - 91,756 ounces).
Total cash cost per ounce increased 40% to US$786 (Q1 2011 - US$560 per
ounce);
-- The Zun-Holba and Irokinda Gold Mines produced 30,426 ounces (Q1 2011 -
31,855) at a total cash cost of US$805 per ounce;
-- The Taparko-Bouroum Gold Mine produced 33,747 ounces (Q1 2011 - 36,456)
at a total cash cost of US$602 per ounce;
-- Gold production at Berezitovy was 20,284 ounces (Q1 2011 - 23,445
ounces) at a total cash cost of US$ 1,065 per ounce; and
-- In 2011, High River's subsidiary in Burkina Faso, Bissa Gold S.A.
("Bissa Gold") was granted the mining license for the Bissa Gold Project
by the governmental authorities of Burkina Faso for a term of 20 years
with a possibility of renewal. In Q1 2012, Bissa Gold continued
procurement of mining and processing equipment and construction of the
new mine's production facilities and infrastructure.
Qualified Person
Dr. Phil Newall, BSc (ARSM), PhD (ACSM), CEng, FIMMM, Director with Wardell Armstrong International is a "qualified person" as such term is defined in NI 43-101 and has reviewed and approved the technical information and data, other than for Zun-Holba and Irokinda, included in this press release. Dr. Newall is independent of High River.
Ricardo Valls, M. Sc, P. Geo., is a "qualified person" as such term is defined in NI 43-101 and has reviewed and approved the technical information and data related to Zun-Holba and Irokinda included in this press release. Mr. Valls is independent of High River.
FORWARD LOOKING INFORMATION
This release contains forward-looking statements. Wherever possible, words such as "intends", "expects ", "scheduled", "estimates", "anticipates", "believes", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, High River cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause High River's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although High River has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended, including those risk factors discussed in the Company's 2011 Annual Information Form. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and High River assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.
High River Gold Mines Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
For the three months ended 31 March
(In thousands of Canadian Dollars)
Notes 2012 2011
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Revenue
Gold 138,897 122,363
Silver 1,786 2,000
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140,683 124,363
Cost of sales (76,565) (56,824)
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Gross Profit 64,118 67,538
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Exploration expenses - (4,036)
General and administrative expenses (605) (993)
Other expenses, gains and losses 10,919 (5,051)
Interest income 3,777 1,771
Finance costs (314) (1,906)
Change in fair value of derivative - -
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Profit before income taxes 77,895 57,324
Income tax expense (15,263) (12,423)
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Profit for the year 62,632 44,901
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Attributable to:
Non-controlling interest 4,996 7,602
Equity holders of the Company 57,636 37,299
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Profit for the year 62,632 44,901
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Other Comprehensive (loss) Income
Net (loss) gains on available for sale
financial assets (1,070) 7,923
Exchange differences on translation of
foreign operations 19,139 17,202
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Other comprehensive (loss) income, net of
tax 18,070 25,125
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Attributable to:
Non-controlling interest 16 4,996 7,602
Equity shareholders of the Company 75,706 62,425
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Comprehensive Income, net of tax 80,702 70,026
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Profit attributable to equity holders of the
Company 57,636 37,299
Weighted average number of ordinary shares
outstanding 840,218,962 840,218,962
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Basic and diluted earnings per share 0.07 0.04
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High River Gold Mines Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of Canadian Dollars)
As at As at
Notes March 31 2012 December 31 2011
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ASSETS
Current Assets
Cash & cash equivalents 3 95,563 162,310
Inventories 4 139,315 121,690
Loans to related parties 5 110,415 24,360
Other assets 6 53,952 37,690
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399,244 346,050
Non-Current Assets
Exploration and evaluation
assets 7 85,936 80,035
Mine properties 8 113,276 107,105
Property, plant & equipment 9 306,865 244,131
Available for sale financial
assets 84,778 86,023
Loans to related parties 5 37,955 57,219
Other assets 6 3,173 9,654
Deferred tax assets 77,620 77,610
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709,603 661,777
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TOTAL ASSETS 1,108,847 1,007,826
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LIABILITIES
Current Liabilities
Accounts payable and accrued
liabilities 11 80,516 51,566
Loans and other borrowings 12 11,153 20,531
Derivative Financial Liabilities - -
Income tax payable 12,673 16,705
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104,342 88,802
Non-Current Liabilities
Provisions 13 20,616 19,147
Deferred tax liabilities 97,266 93,957
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117,883 113,104
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TOTAL LIABILITIES 222,225 201,906
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EQUITY
Share Capital 641,298 641,298
Contributed surplus 25,079 25,079
Available for sale reserve 69,861 70,930
Foreign currency translation
reserve (25,933) (45,071)
Retained Earnings/(Deficit) 116,152 58,515
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Equity attributable to equity
holders of the Company 826,457 750,751
Non-controlling interest 16 60,165 55,169
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TOTAL EQUITY 886,621 805,920
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TOTAL LIABILITIES AND EQUITY 1,108,847 1,007,826
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High River Gold Mines Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in thousands of Canadian Dollars)
Three months ended
OPERATING ACTIVITIES March 31, 2012 March 31, 2011
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Profit after income taxes 62,632 57,324
Adjustments to profit for non-cash items
Depreciation of property, plant and
equipment 15,365 6,750
Accretion expense 314 534
Write-down of exploration - 18,551
Loss/(gain) on disposal of investments (10) (16,614)
Non-cash mining costs (499) (1,676)
Equity loss from associated company (247) -
Fair value adjustment to financial
instruments - -
Share based payment expense - -
Interest on capital lease - -
Gain/(loss) on disposal of property,
plant and equipment 1,926 (404)
Deferred tax expense 19,088 4,694
Other non-cash items (7,228) (1,599)
Working Capital Adjustments
Change in trade receivable and other
assets (8,321) (5,483)
Change in inventories (17,625) (26,825)
Change in other assets (7,924) 622
Change in accounts payable and accrued
liabilities 29,135 20,546
Income tax paid (15,173) (2,900)
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NET OPERATING CASH FLOWS 71,432 53,520
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INVESTING ACTIVITIES
Investment in exploration and evaluation
assets (6,609) (5,577)
Expenditure on property, plant and
equipment (73,872) (9,845)
Allocation of restricted cash
Proceeds on sale of property, plant and
equipment - 583
Other investing activities (751) (1,539)
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NET INVESTING CASH FLOWS (81,231) (16,378)
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FINANCING ACIVITIES
Proceeds from debt issuance - -
Payments of loans and borrowings (27,211) (10,283)
Joint venture repayment of Prognoz
contribution 16,609
Other Financing activities (34,421) 209
Proceeds from exercise of share options - -
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NET FINANCING CASH FLOWS (61,632) 6,535
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Increase (decrease) in cash and cash
equivalents (71,431) 43,677
Net foreign exchange difference 4,684 6,444
Cash and cash equivalents, beginning of
the period 162,310 153,964
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Cash and cash equivalents, end of the
period 95,563 204,085
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Contacts:
High River Gold Mines Ltd.
Yury Lopukhin, Chief Executive Officer
011 7 495 981 0910 ext. 6821
info@hrg.ca
www.hrg.ca