Gryphon Gold Announces Financial Results for 2012 Fiscal Year
28.06.2012 | Marketwire
- Cash balance at June 22 was approximately $4.5 million- Sales in 2012 fourth quarter and fiscal year were $1.8 million and $2.7 million, respectively
CARSON CITY, NEVADA -- (Marketwire) -- 06/28/12 -- Gryphon Gold Corporation (the "Company" or "Gryphon Gold") (TSX: GGN) (OTCBB: GYPH), a gold exploration, development and production company focused on its Borealis Oxide Heap Leach Project in Nevada (the "Borealis Property"), announced financial results for its 2012 fourth quarter and fiscal year. The Company had product sales of $1.8 million and $2.7 million in the fourth quarter and fiscal year ended March 31, 2012 ("fiscal 2012"), respectively. During the year, the Company sold 32 tons of loaded carbon containing approximately 1,580 gold ounces.
James T. O'Neil Jr., CEO of Gryphon Gold, commented, "Fiscal 2012 was a year of great progress, yet not without challenges. Importantly, we initiated construction of our heap leach operation in June of last year and poured our first gold dore bar just as the fiscal year ended. Despite not meeting our expectations of earlier production, we were able to achieve several goals during the year. Having only joined the company in January and assuming the role of CEO in February, I can attest that we have a team dedicated to continuing the advancement of this project and achieving a production rate of 25,000 ounces to 30,000 ounces of gold equivalent by the end of calendar year 2012. We are in the process of developing a detailed two-year mining plan based on our recently completed drilling activities. We also are developing a more extensive, systematic drilling program to validate previously identified resources."
Fiscal Year 2012 Financial Results
For the 2012 fiscal year, the Company had a loss from continuing operations of $5.1 million, or $0.03 per diluted share, equivalent to its net loss for the period. For the 2011 fiscal year, the Company had a loss from continuing operations of $3.4 million, or $0.04 per diluted share, and net income of $0.6 million, or $0.01 per diluted share, from discontinued operations.
Exploration expenses during fiscal 2012 were $113,483 compared with $949,022 in the prior year. During fiscal 2012, resources were focused on production operations and a majority of those costs were capitalized as construction in progress.
Salaries and consulting fees for fiscal 2012 were $1.4 million up from $1.2 million in fiscal 2011 reflecting the additions to the Company's geological and engineering staff. Total non-cash compensation expense recognized in the year was $277,283 compared with $184,410 in fiscal 2011.
Interest expense, net of capitalized interest, was $979,510 for the year compared with $1,040 in the prior year. The increase was the result of interest incurred on promissory and convertible notes issued to reduce potential future obligations under the royalty and debt offering completed in July and November of 2011.
Liquidity and Outlook
At March 31, 2012, the Company had cash on hand of $0.6 million. At June 22, 2012, the Company had $4.5 million (unaudited) in cash reflecting cash generated from gold sales and borrowings on its senior credit. On April 18, 2012, the Company secured a $15 million senior secured non-revolving gold stream credit agreement for debt repayment and working capital requirements. The Company drew the full $15 million facility and used approximately $9.0 million for debt repayment.
Mr. O'Neil noted, "Our operating costs are expected to be in the range of $1.0 million to $2.0 million per month depending upon a number of production variables and at current production rates we are expected to have positive cash flow from operations. We continue to look for ways to increase cost efficiencies while we expand our operations to reach our production targets. We'll also continue to invest in our drilling program and mine plan as we evaluate the potential for future production expansion."
Required investments for increasing production capacity and future production potential includes a new leach pad, additional reclamation bonding, mining equipment, a larger crusher and a drilling program. The Company estimates it will invest approximately $9.0 million to $12.0 million in capital investments during fiscal 2013 for these purposes.
2012 FISCAL YEAR END CONFERENCE CALL AND WEBCAST
The Company will host a conference call and webcast to discuss its results and progress in advancing the Borealis project on Friday, June 29, 2012 at 11:30 a.m. ET.
The teleconference call can be accessed by dialling (201) 689-8560. The webcast can be found on the Company's website at www.gryphongold.com.
A telephonic replay will be available from 2:30 p.m. Eastern Time the day of the teleconference until Friday, July 6, 2012. To listen to a replay of the call, dial (858) 384-5517 and enter replay pin number 396253. An archive of the call can be found on the website and a transcript of the call will be posted once available.
ABOUT GRYPHON GOLD:
Gryphon Gold is in the business of acquiring, exploring, and developing gold properties in the United States, emphasizing the State of Nevada. The Company's primary focus is on the advancement of its Borealis property, located in Nevada's Walker Lane Gold Belt (the "Borealis Property"). The plan for the Borealis Property is to advance the development of the oxide heap leachable gold and silver to the production stage and to further expand and develop the significant sulphide resource through exploration, metallurgical design and sulphide project permitting and development. The Borealis Property is unpatented mining claims (including claims leased to the Company's wholly owned subsidiary) of approximately 20 acres each, totaling about 15,020 acres, which has successful past production.
Gryphon Gold routinely posts news and other important information on its website. www.gryphongold.com.
Safe Harbor Statement
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of United States and Canadian securities laws, which may include, but are not limited to, statements relating to composition of the shipped dore; estimates related to cash flow, fixed costs revenue from dore shipments; plans and timing of the drill program and expected results; estimates related to the production rate for 2012; expected investments to increase production capacity and for capital investments in 2013; ability to increase cost efficiencies and achieve positive cash flow from operations; investment in increasing production capacity and future production potential and the plans to advance the development of the Borealis Property. Such forward-looking statements and forward-looking information reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risk that additional financing may be required and, if so, may not be available on terms satisfactory to the Company if at all, risks associated with mining operations, risks associated with the oxide heap, risks associated with exploration, metallurgical design and project permitting and development and the risks and uncertainties outlined under the section headings "Forward-Looking Statements" and "Risks Factors and Uncertainties" in the Company's annual report on Form 10-K for the year ended March 31, 2011, and interim report on Form 10Q for the period ended December 31, 2011, as filed with the SEC and Canadian securities administrators and in the Company's other reports, documents, and registration statements filed with the SEC (available at www.sec.gov) and with Canadian securities administrators (available at www.sedar.com ). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company does not undertake to update forward-looking statements or forward-looking information, except as may be required by law. Full financial statements and securities filings are available on the Company's website: www.gryphongold.com and www.sec.gov or www.sedar.com. Financial data included in the financial tables should be read in conjunction with the Company's audited financial statements and the notes attached thereto.
FINANCIAL TABLES FOLLOW.
Gryphon Gold Corporation
Consolidated Balance Sheets
(Stated in U.S. dollars)
As at As at
March 31, March 31,
2012 2011
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ASSETS
Current Assets
Cash $ 602,343 $ 837,457
Accounts receivable 358,005 29,892
Note receivable - 2,975
Prepaid expenses 171,515 122,716
Inventories 6,363,016 -
Deferred share issue costs - 281,278
Deferred debt issue costs 312,549 -
--------------------------
Total Current Assets 7,807,428 1,274,318
Property, plant & equipment, net 19,565,395 2,760,330
Reclamation bonds 2,839,559 225,893
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Total Assets $ 30,212,382 $ 4,260,541
--------------------------
--------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 5,004,298 $ 397,106
Current portion of the long term debt 583,458 -
Note payable 1,376,479 -
--------------------------
Total Current Liabilities 6,964,235 397,106
Asset retirement obligation 1,675,877 51,300
Warrant derivative liability 137,291 -
Long-term debt 10,198,611 -
--------------------------
Total liabilities 18,976,014 448,406
--------------------------
Commitments & contingencies (Note 10 and 13)
Stockholders' Equity
Common stock 194,103 96,984
Additional paid-in capital 54,114,438 41,665,952
Accumulated deficit (43,072,173) (37,950,801)
--------------------------
Total Stockholders' Equity 11,236,368 3,812,135
--------------------------
Total Liabilities and Stockholders' Equity $ 30,212,382 $ 4,260,541
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Gryphon Gold Corporation
Consolidated Statement of Operations
(Stated in U.S. dollars)
Three Months Ended Twelve Months Ended
March 31, March 31, March 31, March 31,
2012 2011 2012 2011
-----------------------------------------------------
Sales of product 1,806,048 - 2,737,842 -
Cost of sales and other
direct production
costs (3,063,099) - 2,132,880 -
-----------------------------------------------------
Gross profit (1,257,051) - 604,962 -
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Other operating
expenses:
Exploration 44,623 254,664 113,483 949,022
Salaries & consulting
fees 574,914 350,416 1,411,379 1,195,968
General and
administrative 254,035 216,346 781,199 699,613
Legal and audit 78,952 27,784 282,154 260,470
Travel and
accommodation 71,966 36,856 231,555 142,515
Depreciation (18,467) 11,152 16,709 51,919
Asset retirement
obligation accretion 112,393 3,046 139,673 3,046
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Total other operating
expenses 1,119,375 3,302,441 2,977,111 3,302,441
-----------------------------------------------------
(Loss) from operations (474,310) (900,152) (2,372,149) (3,302,441)
-----------------------------------------------------
Other income (expense): - -
Loss on modification
of debt 1,590,321 - 1,590,321 -
Loss (gain) on
disposal of
equipment 959 (13) 959 (112)
Foreign exchange loss 1,102 (12,185) 190,551 6,447
Realized loss on
securities - - - 75,772
Interest income (6) (127) (11,159) (2,101)
Interest expense, net
of
capitalized
interest 512,696 43 979,510 1,040
-----------------------------------------------------
Total other (income)
expense 2,105,072 (12,282) 2,749,223 81,158
-----------------------------------------------------
Loss for the period
from continuing
operations (2,578,423) (806,824) (5,121,372) (3,383,599)
Discontinued
operations:
Loss from discontinued
operations - (11,003) - (29,244)
Gain on sale of
discontinued
operations - 11,003 - 664,952
-----------------------------------------------------
Income from
discontinued
operations - (635,708) - 635,708
-----------------------------------------------------
Net loss for the period (2,578,423) (887,982) (5,121,372) (2,747,891)
-----------------------------------------------------
-----------------------------------------------------
Basic and diluted
income (loss) per
share:
Loss from continuing
operations $ (0.016)$ (0.012)$ (0.030)$ (0.040)
-----------------------------------------------------
Income from
discontinued
operations - $ 0.003 - $ 0.010
-----------------------------------------------------
-----------------------------------------------------
Total loss per share $ (0.016)$ (0.009)$ (0.030)$ (0.030)
Basic and diluted
weighted average
number of common shares
outstanding 181,395,836 90,075,261 181,395,836 90,075,261
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Gryphon Gold Corporation
Consolidated Statements of Cash Flows
(Stated in U.S. dollars)
Year ended Year ended
March 31, March 31,
2012 2011
----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period $ (5,121,372)$ (2,747,891)
Items not involving cash:
Depreciation 178,405 51,919
Asset retirement obligation
accretion 139,673 3,046
Loss on disposal of equipment: (959) 112
Write down of accrued liability: - (124,008)
Share based compensation 277,283 184,410
Amortization of debt offering costs 385,389 -
Amortization of notes payable discount 372,415 -
Unrealized gain on foreign exchange 9,861 -
Non-cash interest expense - 10,364
Realized loss on securities - 75,771
Loss on modification of debt 1,590,321
Gain on sale of discontinued
operations - (664,952)
Changes in non-cash working
Capital items:Accounts receivable (328,113) 6,521
Accounts payable and accrued liabilities 2,991,584 (251,863)
Inventories (5,886,776) -
Prepaid expenses (48,799) 34,765
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Cash used in operating activities (5,441,086) (3,421,806)
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INVESTING ACTIVITIES
Reclamation bonds purchased (2,613,666) (65,116)
Option payment received - 100,000
Purchase of property, plant & equipment (9,618,934) (59,007)
Cash received from sale of discontinued
operations - 2,250,000
Option payment to amend and reduce royalty (150,000) (200,000)
Proceeds from sales of held for trading
securities - 116,195
Proceeds from note receivable 2,975 10,597
Proceeds from insurance claim on equipment 31,050 52
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Cash used in investing activities (12,348,575) 2,152,721
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FINANCING ACTIVITIES
Payments on notes payable (223,521) -
Proceeds from notes payable 8,533,743 -
Shares and warrants issued for cash 11,134,317 1,555,493
Debt and share issue costs (1,880,131) (385,557)
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Cash provided by financing activities 17,564,408 1,169,486
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Effect of foreign exchange on cash (9,861) -
Increase (decrease) in cash during the
year (235,114) (99,599)
Cash, beginning of year $ 837,457 937,056
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Cash, end of year $ 602,343 $ 837,457
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Contacts:
Gryphon Gold Corporation
James T. O'Neil Jr.
CEO
775.883.1456
joneil@gryphongold.com
www.gryphongold.com
Kei Advisors LLC
Deborah K. Pawlowski
716.843.3908
Dpawlowski@keiadvisors.com