Brigus Gold Reports Q2 Financial Results
Brigus Gold Corp. (NYSE MKT: BRD; TSX: BRD) ('Brigus? or the 'Company?)
announces results for the second quarter ('Q2-12?) of 2012.
This press release should be read in conjunction with the Company′s June
30, 2012 consolidated financial statements and associated Management′s
Discussion and Analysis ('MD&A?), which are available from the Company's
website (www.brigusgold.com)
and on SEDAR (www.sedar.com).
All dollar amounts are expressed in US dollars unless otherwise
specified. All financial results are presented in accordance with
International Financial Reporting Standards ('IFRS?).
Key accomplishments for the quarter include achieving gold production of
18,254 ounces, meeting the Company′s Q2 production target, and averaging
grades of 6.31 grams per tonne (gpt) from the underground mine.
'We are pleased with our results for the first half of the year,? said
Wade Dawe, President and CEO of Brigus. 'We met our second consecutive
production target, underground grades are meeting expectations and cash
costs are lower than projected. We are focused on completing development
of the underground mine and optimizing production at Black Fox. I am
confident that we will continue on this path as operations at Black Fox
strengthen through the year.?
Second Quarter 2012 Financial Highlights
Gold sales improved by 21% to 18,419 ounces of gold, compared to
15,178 ounces sold in Q2-11.
Average realized gold price increased by 5% to $1,543 per ounce
compared to $1,463 in Q2-11.
Reduced cash costs to $799 per ounce, an 8% reduction in cash costs
from Q2-11 which were $865 per ounce and a 7% reduction from cash
costs in Q1-12 which were $858 per ounce.
Generated cash flow from operations, before working capital
adjustments, of $12.6 million, compared to $3.6 million in the same
period in 2011.
Increased operating margin by 24% to $744 per ounce, compared to $598
per ounce in Q2-11.
Generated positive income from operations of $4.7 M, compared to a net
operating loss of $2.9 M in Q2-11.
Capital additions totalled $16.0 million, consisting of $13.4 million
in capital expenditures at Black Fox related to property, plant and
equipment and $2.6 million related to exploration and development
expenditures.
Consolidated Financial Results
| ($ thousands, except per share and ounces) | ? | For the three months ended | ? | For the six month ended | |||||||||||||
? | June 30, 2012 | ? | June 30, 2011 | June 30, 2012 | ? | June 30, 2011 | |||||||||||
Revenue from the sale of gold | $ | ? | 28,422 | $ | ? | 17,863 | $ | ? | 54,245 | $ | ? | 31,433 | |||||
Operating costs | $ | 23,736 | $ | 20,754 | $ | 46,079 | $ | 37,700 | |||||||||
Income (loss) from operations | $ | 4,686 | $ | (2,891) | $ | 8,166 | $ | (6,267) | |||||||||
Net income (loss) and comprehensive income (loss) | $ | 416 | $ | (3,972) | $ | 5,936 | $ | 289 | |||||||||
Basic earnings (loss) per share | $ | 0.00 | $ | (0.02) | $ | 0.03 | $ | 0.00 | |||||||||
Cash flows from operations | $ | 10,407 | $ | 4,055 | $ | 17,328 | $ | 7,470 | |||||||||
Gold sales in ounces | ? | 18,419 | ? | 15,178 | ? | 34,452 | ? | 25,181 | |||||||||
Total cash cost per ounce of gold sold | $ | 799 | $ | 865 | $ | 826 | $ | 969 | |||||||||
Second Quarter 2012 Operational Highlights
Produced 18,254 ounces of gold, consistent with quarterly production
guidance, a 16% increase over Q2-11.
The underground mined 36,604 ore tonnes and achieved an average grade
of 6.31 gpt, an increase of 19.5% over Q1-12.
The open pit mined 192,041 ore tonnes at an average grade of 2.16 gpt,
a 119% increase over the ore tonnes mined in Q2-11.
The Black Fox Mill processed 178,002 tonnes of ore at an average grade
of 3.31 gpt and an average recovery of 96.5%.
Continued positive drilling results on the Grey Fox property,
including 11.68 gpt gold over 26.0 m from the 147 Zone.
Results from Operations
? | ? | For the three months | ? | For the six months ended | |||||||||||||
| June 30, 2012 | ? | June 30, 2011 | June 30, 2012 | ? | June 30, 2011 | ||||||||||||
| Metal Sales | |||||||||||||||||
Gold (ounces) | ? | ? | 18,419 | ? | ? | 15,178 | ? | ? | 34,452 | ? | ? | 25,181 | |||||
Silver (ounces) | ? | 1,191 | ? | 469 | ? | 2,049 | ? | 905 | |||||||||
Average realized gold price | $ | 1,543 | $ | 1,463 | $ | 1,575 | $ | 1,421 | |||||||||
| Production | |||||||||||||||||
Open pit ore tonnes mined | ? | 192,041 | ? | 87,760 | ? | 412,621 | ? | 117,569 | |||||||||
Open pit operating waste tonnes mined | ? | 1,332,625 | ? | 1,553,069 | ? | 2,659,987 | ? | 1,624,136 | |||||||||
Open pit capital stripping tonnes mined | ? | 691,635 | ? | 712,273 | ? | 1,444,995 | ? | 2,602,724 | |||||||||
Open pit overburden tonnes mined | ? | - | ? | - | ? | - | ? | 293,680 | |||||||||
| Total open pit tonnes mined | ? | 2,216,301 | ? | 2,333,102 | ? | 4,517,603 | ? | 4,638,109 | |||||||||
Total underground ore tonnes mined | ? | 36,604 | ? | 30,316 | ? | 71,751 | ? | 39,132 | |||||||||
Total tonnes mined | ? | 2,252,905 | ? | 2,363,418 | ? | 4,589,354 | ? | 4,677,241 | |||||||||
| Milling | |||||||||||||||||
Tonnes milled | ? | 178,002 | ? | 181,488 | ? | 358,967 | ? | 360,717 | |||||||||
Tonnes milled per day | ? | 1,956 | ? | 1,994 | ? | 1,972 | ? | 1,993 | |||||||||
Head grade of ore (gpt) | ? | 3.31 | ? | 2.86 | ? | 3.17 | ? | 2.26 | |||||||||
Recovery (%) | ? | 96% | ? | 94% | ? | 96% | ? | 93% | |||||||||
Gold ounces produced | ? | 18,254 | ? | 15,688 | ? | 35,176 | ? | 24,460 | |||||||||
? | |||||||||||||||||
| Total cash costs ($/ounce): | $ | 799 | $ | 865 | $ | 826 | $ | 969 | |||||||||
| Operating Margin ($/ounce): | $ | 744 | $ | 598 | $ | 749 | $ | 452 | |||||||||
Outlook
Operations at the Black Fox Mine continue to ramp up and will deliver
increased gold production quarter over quarter in 2012. Brigus is
forecasting 2012 gold production of 77,000 to 85,000 ounces, at a cash
cost per ounce of $775 - $825 as follows:
2012 | ? | Low | ? | High | ? | Actual | ? | Cash Costs / ounce | |
Q1 | 15,500 | 17,000 | 16,922 | $858 | |||||
Q2 | 18,000 | 21,000 | 18,254 | $799 | |||||
Q3 | 21,500 | 23,000 | ? | ? | |||||
Q4 | 22,000 | 24,000 | ? | ? | |||||
Total | 77,000 | 85,000 | ? | ? |
During the second quarter the Company reviewed its 2012 capital budget.
As a result of this review, the Company expects capital development
costs in the underground to be $29 million and spending on plant,
property and equipment to be $13 million. Capital development in the
underground has increased as a result of changes to mining techniques
and additional development activity. The original budget for the
underground mine called for the use of mechanized cut and fill
techniques throughout the mine. In Q1 2012, the Company identified that
it would be more appropriate to mine the west side of the mine using
long-hole techniques, which require more up-front development, but
provide a lower overall mining cost and higher ore recovery rates.
Development of the long-hole stope on the west side of the mine is
on-going and production from the west side long-hole will commence in Q4
2012. Additionally, an exploration drift was added to the east ramp to
facilitate an underground exploration program while enabling definition
drilling on existing reserves. Finally, the original mine plan did not
include development within the upper workings of the mine which were
initially mined from 1997-2001. The Company has recently revisited this
area and identified potential new mining zones. In order to mine these
zones the Company will require additional up-front capital investment.
Increases in the budget for plant, property and equipment also include
an upgrade to the electrical system at the mine and improvements to the
tailing facilities.
The revised capital budget for 2012 is $60 million, consisting of $29
million related to underground development, $12 million related to open
pit capital stripping, $3 million related to Phase 3 overburden removal,
$8 million related to mining equipment purchases and overhauls, $3
million for electrical upgrades, $2 million for Grey Fox development,
and $3 million relating to the completion of the mill expansion.
The mill optimization program is progressing according to plan and is
expected to be completed and in service during the second half of 2012.
Processing capacity and recovery will increase through optimization of
existing equipment, equipment additions and reduction of production
losses. The optimization is expected to increase mill processing
capacity by 5-10%, up to 2,200 tpd.
Planning is underway to develop the Grey Fox Mine located on the
southeast portion of the Black Fox Complex. The initial resource
estimate from this area, announced in December 2011, added more than 50
percent to the gold resource at the Black Fox Complex. Brigus is in the
process of expanding the resource and converting Inferred ounces to
Indicated ounces through systematic in?fill drilling. An updated
resource estimate will be released in September. Initial engineering
studies have also been initiated and will continue through 2012 to
determine project economics as well as development and production
timelines. A preliminary economic assessment ('PEA?) for Grey Fox will
be released in Q4, and will incorporate the new resource.
The Black Fox underground ore body is open for expansion with grades
that trend higher at depth. The Company began underground exploration
drilling from the east ramp in June with the objective of increasing the
reserves and extending the mine life. Exploration drilling with a second
underground drill will commence from the west ramp in September.
Second Quarter Webcast and Conference Call
A webcast and conference call will be held Monday, August 13, 2012 at 12
noon Atlantic time (11:00 a.m. Eastern time).
To attend by webcast please visit http://www.investorcalendar.com/IC/CEPage.asp?ID=169112
To attend by phone, dial toll free 1-877-407-8133 (international
201-689-8040) at least 10 minutes prior to the start of the call. No
pass code is required.
About Brigus Gold
Brigus is a growing gold producer committed to maximizing shareholder
value through a strategy of efficient production, targeted exploration
and select acquisitions. The Company operates the wholly owned Black Fox
Mine and Mill in the Timmins Gold District of Ontario, Canada. The Black
Fox Complex encompasses the Black Fox Mine and adjoining properties in
the Township of Black River-Matheson, Ontario, Canada. Brigus is also
advancing the Goldfields Project located near Uranium City,
Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In
Mexico, Brigus has granted Cangold Limited the option to acquire a 75%
interest in the Company′s Ixhuatan Project located in the state of
Chiapas. In the Dominican Republic, Brigus has signed an agreement to
sell its remaining interests in three mineral exploration projects.
Cautionary Note to U.S. Investors Concerning Estimates of Mineral
Resources
This news release uses the term mineral 'resources?. The Company advises
U.S. investors that while these terms are defined in and required by
Canadian regulations, these terms are not defined terms under the U.S.
Securities and Exchange Commission ('SEC?) Industry Guide 7 and are
generally not permitted to be used in reports and registration
statements filed with the SEC. The SEC generally only permits issuers to
report mineralization that does not constitute SEC Industry Guide 7
compliant 'reserves? as in-place tonnage and grade without reference to
unit measures. U.S. investors are cautioned not to assume that any
part or all of mineral deposits in these categories will ever be
converted into reserves.
Cautionary and Forward-Looking Statements
Statements contained in this news release, which are not historical
facts, are forward-looking statements that involve risk, uncertainties
and other factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. All
statements regarding the ability of the Company to achieve its
production, total cash costs, steady state annual production and mining
rate estimates; estimated average gold grades for the open pit and
underground operations; increase in gold production; increase in
profitability; exploration drill results and resource additions, are
forward-looking statements and estimates that involve various risks and
uncertainties. This forward-looking statements include, or may be based
upon, estimates, forecasts, and statements as to management's
expectations with respect to, among other things, the outcome of legal
proceedings, the issue of permits, the size and quality of the Company's
mineral resources, progress in development of mineral properties, future
production and sales volumes, capital and mine production costs, demand
and market outlook for metals, future metal prices and treatment and
refining charges, and the financial results of the Company.
Important factors that could cause actual results to differ materially
from these forward-looking statements include environmental risks and
other factors disclosed under the heading 'Risk Factors? in Brigus′ most
recent Annual Information Form and Management Discussion and Analysis
filed under the Company′s name at www.sedar.com
and annual report on Form 40-F filed with the United States Securities
and Exchange Commission at www.sec.gov
as well as elsewhere in Brigus′ documents filed from time to time with
the Toronto Stock Exchange, the NYSE Amex Equities, the United States
Securities and Exchange Commission and other regulatory authorities. All
forward-looking statements included in this news release are based on
information available to the Company on the date hereof. The Company
assumes no obligation to update any forward-looking statements, except
as required by applicable securities laws.
Brigus Gold Corp.
Jennifer Nicholson, CA
Executive Vice
President
Phone: (902) 442-7186
Email: jnicholson@brigusgold.com
or
Katherine
Burgess
Manager, Stakeholder Relations
Phone: (902) 442-7184
Email:
kburgess@brigusgold.com