TORONTO, ONTARIO--(Marketwire - Nov. 15, 2012) - QMX GOLD CORPORATION (QMX.TO)(QMXGF) ("QMX Gold" or the "Company") is announcing its third quarter financial and operational results for the period ending September 30, 2012. All figures are reported in Canadian dollars, unless noted otherwise.
Third Quarter Financial Summary:
- The Aurbel Gold Mill produced 5,235 ounces and realized an average recovery rate of 93.5%.
- Revenue on mining operations was $8.30 million for the quarter on the sale of 5,287 ounces of gold at an average realized price of $1,651 per ounce.
- Cash cost of sales per ounce of gold production from Lac Herbin was $1,366 per ounce (see non-GAAP measures).
- The Company reported net income of $4.5 million which includes $277,000 from mine operations and a $4.6 million reversal of impairment charges on mineral properties.
- QMX Gold sold to Falco Pacific Resources Group Ltd. (formerly Druk Capital Partners) interest in the Rouyn-Noranda Base Metal and Gold Camp. QMX Gold received $5,000,000 in gross proceeds and 7,000,000 shares of Falco Pacific Resources at a deemed price of $0.25 in consideration of this property.
- The company also implemented a 20:1 share consolidation.
Third Quarter Financial Results
QMX Gold sold 5,287 ounces of gold to generate $8.30 million in revenue from mining operations during the third quarter of 2012 with an average gold sale price of $1,651 (USD $1,644) per ounce. Mine operating expenses were $7.2 million and depreciation and depletion amounted to approximately $800,000 generating a gross profit of $277,000. The cost of sales per ounce sold during the current quarter, excluding depreciation and depletion, was $1,366 per ounce (see non-GAAP Measures). Cash costs continue to decrease with improved efficiencies at the Lac Herbin Mine and the Aurbel Mill.
QMX Gold recorded a net profit for the quarter of $4.47 million or $0.15 per share. This includes a reversal to an impairment charge of $4.6 million on the properties at Lac Herbin, Quebec and gains on investments of $1.75 million, which includes the recently acquired Falco Pacific shares (see press release of September 24, 2012). General and administrative expenses were $0.6 million.
Commenting on the results, Francois Perron, President and CEO commented: "I am very pleased to see operational profitability at the Lac Herbin Mine. These results are directly attributable to the commitment of the team in Val d'Or. Our third quarter production is in line with current forecasts and the Company is on track to achieving its 2012 operational targets. For the Snow Lake project, the Company continues to focus on securing additional project financing by evaluating a number of opportunities that will fit with the Credit Suisse financing agreement."
Financial Results for Nine Months Ending September 30, 2012
In the nine months ending September 30, 2012, QMX Gold sold a total of 15,528 ounces of gold generating $24.55 million in revenue for the company. The average sale price was $1,655 per ounce. In this same period, mine operating expenses totaled $22.44 million and depreciation amounted to $4.34 million for a gross loss of $2.23 million. The net loss for the nine months ending September 30, 2012 was $16.63 million including an impairment charge of $10.26 million on the Rouyn-Noranda properties and a $4.6 million reversal of impairment charges to the Lac Herbin Properties. The average cost of sales per ounce is $1,440 compared to $2,278 in the same period in 2011.
Exploration at Lac Herbin has been focused on infill drilling at the FL, Apex and Bonanza Zones with the goal of increasing the mine life. In July, the Company reported on the Bonanza Zone, where recent drilling suggests that the zone is larger than initially believed. Highlights from this drill program included:
- 7.63 g/t Au over 10.50 metres (true width) from Hole LH03-316
- 19.24 g/t Au over 2.80 meters (true width) from Hole LH03-390
Drilling was also completed at the FL Zone where mineralization was confirmed within the inferred resource envelope. Results were reported in September and contained the following highlights:
- 25.9 g/t Au over 1.5 metres from hole AMAR-226
- 22.2 g/t Au over 1.6 metres from hole AMAR-220
- 21.5 g/t Au over 1.5 metres from hole AMAR-176
The S1 Zone will be the next zone to be reported and the Company is aiming to have a mineral resource estimate prepared as part of the year end activities to be released in the first quarter of 2013.
Complete interim financial statements and related Management's Discussion and Analysis documents will be available under the Company's profile on www.sedar.com and at the Company's website www.qmxgold.ca
The Company has included certain non-GAAP performance measures, namely, cash costs per gold ounce sold throughout this document. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are non-GAAP measures. In addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company's performance and ability to generate cash, profits and meet financial commitments. These non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following tables provide a reconciliation of cash costs per gold ounce sold for the nine months ended September 30, 2011 and 2010.
|Cash cost per ounces sold:|
|Period ending||Three |
months ending September 30, 2012
months ending September 30, 2011
|Nine months ending June 30, 2012||Nine months ending June 30, 2011|
|From commercial production ounces (CAD 000's)||$||8,297||$||2,221||$||24,549||$||7,907|
|Mine operating expenses (CAD 000's)||$||7,221||$||4,151||$||22,440||$||13,038|
|Cash cost per ounce sold (CAD)||$||1,366||$||2,810||$||1,440||$||2,278|
|(mining operating expenses divided by ounces sold)|
Technical programs and information included in this release have been supervised, compiled, reviewed and approved by David Rigg, P.Geo., the Chairman of the Company and a Qualified Person as defined under NI 43-101.
About QMX Gold
QMX Gold Corporation is a Canadian publicly traded mining company focusing on mine development and exploration in Quebec and Manitoba. The Company is listed on the Toronto Stock Exchange and effective July 5, 2012, began trading under the symbol "QMX", and trades in the United States on the Over the Counter QX International platform under the symbol "QMXGF". QMX Gold operates in: Val-d'Or, Quebec and Snow Lake, Manitoba. QMX Gold continues to operate in the Val-d'Or area with production estimated at 18,000-20,000 ounces of gold per year. The Company has also begun to ramp-up pre-production activities at its property at the Snow Lake Mining Camp which has a Measured and Indicated Mineral Resources of over 720,000 oz gold and is expected to produce 80,000 ounces of gold per year as identified in the Technical Report of the Company dated of December 10, 2010 titled "Snow Lake Mine Re-activation Project" prepared by: Andre Roy (Eng.) Jamie Lavigne (P.Geo), David West (P.Eng), Ian Ward (P.Eng), Matthew Parfitt (P.Eng), Mark Bednarz (P.Geo) and available on the SEDAR profile of the Company at www.sedar.com.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the impact of these financial results and operational developments on the timing and amount of future exploration and development of the property, the timing and amount of future production, and the future financial or operating performance of Alexis and its projects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company, which is available under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.