SAS reports 2014 first quarter results, with an eighth consecutive quarter of positive cash flow from operations

PR Newswire

All dollar amounts are stated in Canadian dollars, unless otherwise indicated

(1) See non-GAAP section for an explanation of these non-GAAP measures

TORONTO, May 13, 2014 /CNW/ - St Andrew Goldfields Ltd. (T-SAS) (OTCQX-STADF), ("SAS" or the "Company") reports a net loss attributable to shareholders for Q1 2014 of $1.8 million, or nil on a per share basis, compared to net income of $1.0 million, or nil per share, for Q1 2013. For Q1 2014, adjusted net loss (1) was $1.9 million, or $0.01 on a per share basis, compared to adjusted net earnings of $1.1 million, or nil per share, for Q1 2013.

Q1 2014 production of 24,361 ounces of gold was in line with the Company's expectation. All-in sustaining cost per ounce of gold sold (1) was US$1,089 per ounce during the quarter. Operations continued to perform well with a total cash cost per ounce of gold sold (1) in the quarter of US$856 per ounce (including royalty costs of US$116 per ounce). Mine cash costs of US$740 per ounce improved by 7%, or US$54 per ounce over Q1 2013, and was below guidance of US$800 - US$850 per ounce.

SAS generated operating cash flow of $9.5 million, or $0.03 per share, and net cash flow (1) of $1.5 million for Q1 2014, as compared to operating cash flow of $13.8 million or $0.04 per share and net cash flow (1) of $3.8 million, in Q1 2013. Both operating cash flow and net cash flow for the quarter continued to be negatively impacted by lower average realized price per ounce of gold sold (1) when compared to the same period last year.

"We are very pleased with our achievements in the first quarter", said Duncan Middlemiss, President & CEO of SAS. "Holt has continued its strong performance, and is now at an increased steady state throughput level for 2014. We remain on track with the development program at Taylor, and the underground exploration program has yielded positive results, which we plan to verify in the fourth quarter with our bulk sampling program."

Q1 2014 Highlights

Produced 24,361 ounces of gold from three operations (Holt, Holloway and Hislop). Gold production remains on track to meet the 2014 guidance of between 75,000 to 85,000 ounces.
Sold 23,500 ounces of gold at an average realized price per ounce of gold sold (1) of US$1,294 for revenues of $33.5 million. Gold sales revenue decreased by $4.7 million when compared to Q1 2013 due to the lower gold price. When compared to Q4 2013, revenues improved by $1.8 million as a result of the higher gold price and strengthening of the US dollar relative to the Canadian dollar.
Mine cash costs of US$740 per ounce and a royalty cost of US$116 per ounce, for a total cash cost per ounce of gold sold (1) of US$856 per ounce. A decrease in total cash cost per ounce of gold sold (1) of US$83 per ounce over Q1 2013 and US$95 per ounce when compared to Q4 2013.  Mine cash costs beat the Company's guidance of US$800-US$850 per ounce.
All-in sustaining costs (1) of US$1,089 per ounce of gold sold. All-in sustaining costs decreased by US$191 per ounce when compared to Q1 2013; and US$76 per ounce compared to Q4 2013. The decrease resulted from the lower total cash cost per ounce of gold sold (1) and a disciplined capital expenditure program.
Earned cash margin from mine operations (1) of $11.3 million and operating cash flow of $9.5 million or $0.03 per share (1). Generated net cash flow (1) of $1.5 million during the quarter.
Spent $4.5 million at Taylor as part of the Advanced Exploration Program. Advanced approximately 600 metres of ramp development during the quarter and remain on schedule to reach the area of the second bulk sample towards the end of Q3 2014. Underground diamond drilling continued to return positive results.
Extended US$10.0 million revolving credit facility. Subsequent to the quarter, SAS retired the outstanding US$7.0 million term credit facility; and extended the US$10.0 million revolving credit facility with Scotiabank, for an additional two years.


Q1 2014 Conference Call Information
The Company invites you to participate in the upcoming conference call to discuss its first quarter financial and operating results for 2014. The conference call will take place on Wednesday May 14, 2014 at 10:00am EST.

Participants may join the call via webcast at www.sasgoldmines.com. A playback of the conference call will be available via the website and will be posted within 24 hours of the call. For more information regarding the annual meeting and the conference call please visit the SAS website.

Operating and Financial Summary

         
Amounts in thousands of Canadian dollars, except per share and per unit amounts   Q1 2014   Q1 2013
         
SAS Operating Results        
Gold production (ounces)        
   Holt Mine   17,497   14,806
   Holloway Mine   5,154   5,140
   Hislop Mine   1,710   4,515
    24,361   24,461
         
Commercial gold production sold (ounces)        
   Holt Mine   16,516   13,715
   Holloway Mine   5,175   5,126
   Hislop Mine   1,809   4,168
    23,500   23,009
         
Per ounce data (US$)        
   Average realized price (1) $   1,294 $   1,632
         
   Mine cash costs $ 740 $ 794
   Royalty costs   116   145
   Total cash cost (1) $ 856 $ 939
         
   Cash margin (1) $ 438 $ 693
         
   All-in sustaining cost (1) $ 1,089 $ 1,280
         
SAS Financial Results        
Gold sales and total revenue $ 33,481 $ 38,190
Cash margin from mine operations (1) $ 11,275 $ 16,409
Net income (loss) $ (1,806) $ 1,039
Adjusted net earnings (loss) (1) $ (1,863) $ 1,070
Operating cash flow $ 9,468 $ 13,780
Net cash flow (1) $ 1,481 $ 3,791
         
Per share information:        
   Basic and diluted income (loss) $ 0.00   0.00
   Adjusted net earnings (loss) (1) $ (0.01)   0.00
   Operating cash flow (1) $ 0.03   0.04
         
SAS Financial Position    March 31,
2014
   December 31,
2013
Cash and cash equivalents $ 31,615 $ 33,690
Working capital $ 12,431 $ 13,846
Total assets $ 210,655 $ 211,070
Total non-current financial liabilities $ 3,070 $ 3,295
         

 

Financial Performance

Revenues and net earnings in Q1 2014, declined when compared to Q1 2013, as a result of a US$338 per ounce or 21% decrease in the average realized price per ounce of gold sold (1) , and led to a $5.1 million decrease in cash margin from mine operations (1).  Total cash cost per ounce of gold sold (1) declined by US$83 per ounce due to a reduced royalty cost and the strengthening of the US dollar relative to the Canadian dollar.

Net earnings in the quarter were also negatively impacted by a $2.1 million increase in non-cash depreciation and depletion charge due to the depletion of the mineral reserves at the Holloway Mine.

Holt Mine, Operations and Financial Review (see "Operating and Financial Statistics")

During Q1 2014, the Holt Mine ("Holt") produced 17,497 ounces of gold, an increase of 18% over Q1 2013, attributable to a 26% increase in throughput, offset by a 6% decline in ore grade. When compared to Q1 2013, revenue saw a slight increase of 3%, despite a 21% decline in the average realized price per ounce of gold sold (1) as a result of the increase in throughput.

The increase in throughput also contributed to a US$87 per ounce or 11% reduction in total cash cost per ounce of gold sold (1) compared to Q1 2013, in conjunction with a lower royalty cost and a stronger US dollar relative to the Canadian dollar.

In Q1 2014, Holt contributed 96% of the total cash margin from mine operations (1).

Holt is expected to contribute approximately 85% of the Company's total gold production for 2014.

Holloway Mine, Operations and Financial Review (see "Operating and Financial Statistics")

The Holloway Mine ("Holloway") produced 5,154 ounces of gold for Q1 2014, in line with production in Q1 2013. Head grades averaged during the quarter of 4.14 g/t Au, were similar to that achieved in Q1 2013. Mill recoveries during the quarter were in line with expectations at approximately 90%.

Gold sales revenue for the quarter decreased by 14% when compared with Q1 2013, mainly due to the decrease in the average realized price per ounce of gold sold (1).

Total cash cost per ounce of gold sold (1) during the quarter increased marginally when compared to Q1 2013, which was due to increasing unit costs offset by the strengthening of the US dollar relative to the Canadian dollar. Cash margin from mine operations (1) decreased by $1.8 million over Q1 2013 as a result of the decrease in the gold price.

Holloway is expected to contribute approximately 9% of the Company's total gold production for 2014.

Hislop Mine, Operations and Financial Review (see "Operating and Financial Statistics")

The Hislop Mine ("Hislop") produced 1,710 ounces of gold during Q1 2014, with an average head grade of 2.09 g/t Au and mill recoveries of approximately 80%, lower than expected due to the processing of a significant amount of ore containing a fine gold size fraction. The reserves in the West Pit are now depleted; however, the Company will continue to process the ore stockpiles during Q2 2014.

Commercial gold production sold during the quarter decreased by 57% when compared to Q1 2013 as a result of the reduced production. Total cash cost per ounce of gold sold (1) increased by US$215 per ounce over Q1 2013 as mining at the open pit was substantially completed during the quarter.

Hislop is expected to contribute approximately 6% of the Company's total gold production for 2014.

Taylor Project Update ("Taylor")

During Q1 2014, ramp development remained on schedule. Underground drilling targeted the easterly strike extension of the 1004 lens, within the area of the second bulk sample. SAS reported significant grade and widths from hole T220-022, which returned 18.13 g/t Au over 12.4 metres (22.57 g/t Au uncut), including 22.37 g/t Au over 9.9 metres (27.94 g/t Au uncut) and from hole T220-023, which returned 11.50 g/t Au over 4.8 metres (12.49 g/t Au uncut). These results extended 1004 lens mineralization an additional 25 metres to the east.

Subsequent to Q1 2014, additional results continued to intersect good grade and widths as in hole T220-034 which intercepted 8.88 g/t Au over 29.2 metres (6.11 g/t Au cut), hole T220-046 which intercepted 16.62 g/t Au over 19.4 metres (11.95 g/t Au cut), including 24.93 g/t Au over 12.6 metres (17.73 g/t Au cut), and hole T220-049 which intercepted 26.21 g/t Au over 10.3 metres (9.63 g/t Au cut) (see press releases dated March 3 and May 6, 2014, available under the Company's profile on www.sedar.com or on the Company's website at www.sasgoldmines.com).

Drilling continues to demonstrate the potential to expand mineralization on the 1004 resource block at depth, and additional drilling will follow-up on these results. Ramp development and access will continue throughout the second and third quarter of 2014.

Exploration Projects

Exploration activities during Q1 2014 were focused on following up on targets identified during the 2013 exploration program. At Hislop North, surface drilling attempted to identify extensions of the Alphabet Veins from the Romios Property to the west and also to test the southerly strike extension of the 147 and Grey Fox zones from the Primero (formerly Brigus Gold) property onto SAS ground. At the Holt-Holloway Properties, drilling concentrated on the Howey-Cochenour area, situated 3 kilometres south of the Holt shaft.

During Q1 2014, a total of 5,018 metres of surface core drilling were completed. The 2014 field season will concentrate on 2013 generated targets resulting from geochemical sampling, trenching and mapping exercises and were initiated in Q2 2014.

Capital Resources

SAS generated cash flow from operations of $9.5 million in Q1 2014, a decrease of $4.3 million over Q1 2013, mainly due to the decline in gold price.

Working capital as at March 31, 2014, was $12.4 million compared to a working capital of $13.8 million as at December 31, 2013. The slight decrease was primarily due to increased mine site accounts payable requirements. At the end of Q1 2014, the Company had cash and cash equivalents of $31.6 million. The Company's financial position remains strong at the end of the quarter.

For FY 2014, SAS expects to incur a total of $32.0 million in capital expenditures at the two underground mines, the Holt Mill, Taylor and at the Aquarius Project during 2014, of which $8.0 million was spent in Q1 2014.

Credit Facilities

During Q1 2014, the Company repaid US$2.0 million on the term credit facility, reducing the principal owing to US$7.0 million as at March 31, 2014, and retired the term credit facility on May 8, 2014, when it matured.

The Company extended the US$10.0 million Revolving Credit Facility ("Facility"), which remains undrawn, for an additional two years. Interest rates on the Facility range from 2.50% to 3.25% on prime rate based advances and from 3.50% to 4.25% on LIBOR based advances. Depending on the level of the Company's financial strength, standby charges on the facility range from 0.875% to 1.0625% per annum.

Qualified Person

Mine development and production at the Holt, Holloway and Hislop mines, processing at the Holt Mill, and mine development activities at Taylor are being conducted under the supervision of Marc-Andre Pelletier, P.Eng, the Company's General Manager of Mine Operations.

Exploration activities on the Company's various mineral properties, including the drilling program at Taylor is under the supervision of Mr. Doug Cater P. Geo, the Company's Vice-President of Exploration.

Messrs. Pelletier and Cater are qualified persons as defined by NI 43-101, and have reviewed and approved this MD&A.

About SAS
SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.

SAS owns and operates the Holt, Holloway and Hislop mines and produced approximately 100,000 ounces of gold in 2013. The Company is also advancing the Taylor Project and is conducting aggressive exploration across 120km of land straddling the Porcupine-Destor Fault Zone.

Non-GAAP Measures

The Company has included the following non‐GAAP performance measures: adjusted net earnings (loss); total cash cost per ounce of gold sold; all-in sustaining cost per ounce of gold sold; mine‐site cost per tonne milled; cash margin from mine operations; average realized price per ounce of gold sold; cash margin per ounce of gold sold; net cash flow; and operating cash flow per share; throughout this news release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance. Refer to the non-GAAP section of this news release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Condensed Interim Financial Statements for Q1 2014.

The Unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three months ended March 31, 2014, can be found at the end of this release.

To review the complete Unaudited Condensed Financial Statements for Q1 2014, and the Interim Management's Discussion and Analysis for Q1 2014, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

The following abbreviations are used to describe the periods under review throughout this release.

             
Abbreviation   Period   Abbreviation   Period
FY 2014    January 1, 2014 - December 31, 2014   Q3 2013   July 1, 2013 - September 30, 2013
Q4 2014   October 1, 2014 - December 31, 2014   Q2 2013   April 1, 2013 - June 30, 2013
Q3 2014   July 1, 2014 - September 30, 2014   Q1 2013   January 1, 2013 - March 31, 2013
Q2 2014   April 1, 2014 - June 30, 2014   Q4 2012   October 1, 2012 - December 31, 2012
Q1 2014   January 1, 2014 - March 31, 2014   Q3 2012   July 1, 2012 - September 30, 2012
FY 2013   January 1, 2013 - December 31, 2013   Q2 2012   April 1, 2012 - June 30, 2012
Q4 2013   October 1, 2013 - December 31, 2013        

 

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 Company's production and cash cost guidance for 2014; the relative production contributions from each of the operations; the level of capital expenditures at Holt, the Holt Mill, Taylor and the Aquarius Project; the continuation of advanced exploration at Taylor including the planned second bulk sample and the timing thereof; and the extent of the exploration programs in 2014. In addition, mineral resources and mineral reserves constitute forward-looking information as they involve the assessment, based on certain estimates and assumptions, that such mineral resources and mineral reserves can be profitably produced in the future.

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 Company's dependence on key employees and changes in the availability of qualified personnel; fluctuations in gold prices and exchange rates; insufficient funding or delays or inability to raise additional financing on satisfactory terms if required; operational hazards and risks, including the inability to insure against all risks; changes in laws, regulations and 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 level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates, the ability of the Company to retain and attract qualified personnel, the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities, the availability of additional financing on acceptable terms if and as required and the level of stability of 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. A description of these risks and uncertainties can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.

NON-GAAP MEASURES

Adjusted net earnings (loss)

Adjusted net earnings (loss) is a non-GAAP performance measure which does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. As well, it may not be comparable to information in other gold producers' reports and filings. Adjusted net earnings (loss) is calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency derivative contracts, one-time gains or losses on the disposition of non-core assets, periodic adjustments to the Company's asset retirement obligations, and expenses, asset impairment gains or losses and significant tax adjustments not related to current period's earnings, as detailed in the table below.  The Company discloses this measure, which is based on its Financial Statements, to assist in the understanding of the Company's operating results and financial position.

             
Amounts in thousands of Canadian dollars, except per share amounts   Q1 2014   Q4 2013   Q1 2013
             
Net income (loss) per Financial Statements $   (1,806) $ (4,365) $ 1,039
Reversal of unrecognized deferred income tax assets   -   -   (1,256)
Mark-to-market loss (gain) on gold-linked liabilities   456   (594)   (191)
Mark-to-market loss on foreign currency derivatives   245   91   1,240
Impairment loss on available-for-sale investments   -   67   500
Reversal of provision   (777)   -   -
Tax effect of above items   19   126   (262)
Adjusted net earnings (loss) $ (1,863) $ (4,675) $ 1,070
             
Weighted average number of shares outstanding (000s)            
   Basic   368,296   368,296   368,246
   Diluted   368,296   368,296   368,801
             
Adjusted net earnings (loss) per share - basic and diluted $ (0.01) $   (0.01) $ 0.00
             
             
             

 

Total cash cost per ounce of gold sold

Total cash cost per ounce of gold sold is a non-GAAP performance measure which does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. As well, it may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document 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. The following table provides a reconciliation of total cash costs per ounce of gold sold to production expenses per the Financial Statements:

             
Amounts in thousands of Canadian dollars, except where indicated   Q1 2014   Q4 2013   Q1 2013
             
Mine site operating costs per Financial Statements $   19,189 $   21,216 $ 18,411
Production royalties per Financial Statements   3,017   2,720   3,370
Total cash costs $   22,206 $ 23,936 $  21,781
             
Divided by gold ounces sold   23,500   23,985   23,009
             
Total cash cost per ounce of gold sold (Canadian dollars) $ 945 $ 998 $ 947
             
Average USD:CAD exchange rate $ 1.10 $ 1.05 $ 1.01
             
Total cash cost per ounce of gold sold (US$) $ 856 $ 951 $ 939
             

 

All-in sustaining cost per ounce of gold sold

All-in sustaining cost per ounce of gold sold is a non-GAAP performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. As well, it may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. All-in sustaining costs include mine-site operating costs and production royalties incurred at the Company's mining operations, sustaining capital expenditures (which the Company defines as any capital expenditures that are reinvested into the business to maintain the current level of operations), corporate administration expense, mine-site exploration costs, and reclamation cost accretion. The Company believes that this measure represents the total costs of producing gold from current operations, and provides the Company and other stakeholders with additional information that illustrates the Company's operational performance and ability to generate cash flow. This cost measure is reported on a consolidated level and on a per-ounce of gold sold basis in accordance with the guidelines published by the World Gold Council. As the measure seeks to reflect the full cost of gold production from current operations, new project capital is not included. Certain other cash expenditures, including tax payments and financing costs are also not included.

             
Amounts in thousands of Canadian dollars, except where indicated   Q1 2014   Q4 2013   Q1 2013
             
Mine site operating costs per Financial Statements $   19,189 $  21,216 $  18,411
Production royalties per Financial Statements   3,017   2,720   3,370
             
Add (less):            
   Sustaining mine capital   4,349   3,255   4,210
   Mine site exploration   227   335   1,362
   Mine reclamation obligation    104   98   99
   Corporate administration    1,362   1,703   2,265
All-in sustaining costs $ 28,248 $ 29,327 $ 29,717
             
Divided by gold ounces sold   23,500   23,985   23,009
             
All-in sustaining cost per ounce of gold sold (Canadian dollars) $ 1,202 $  1,223 $ 1,292
             
Average USD:CAD exchange rate $  1.10 $  1.05 $ 1.01
             
All-in sustaining cost per ounce of gold sold (US$) $ 1,089 $   1,165 $ 1,280
             

 

Mine-site cost per tonne milled

Mine-site cost per tonne milled is a non-GAAP performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. As well, it may not be comparable to information in other gold producers' reports and filings. As illustrated in the table below, this measure is calculated by adjusting Production Costs, as shown in the statements of operations for inventory level changes and then dividing by tonnes processed through the mill. Since total cash cost per ounce of gold sold data can be affected by fluctuations in foreign currency exchange rates, Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure reduces the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled in order to be economically viable. Management is aware that this per tonne milled measure is impacted by fluctuations in throughput and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.

             
Amounts in thousands of Canadian dollars, except per tonne amounts   Q1 2014   Q4 2013   Q1 2013
             
Holt Mine             
Mine-site costs $   10,304 $ 9,196 $ 8,563
Inventory adjustments (1)   600   85   1,017
Mine site operating costs $ 10,904 $ 9,281 $ 9,580
             
Divided by tonnes of ore milled   113,279   81,791   89,985
             
Mine-site cost per tonne milled $ 96 $ 114 $ 106
             
Holloway Mine             
Mine-site costs $ 6,181 $ 5,580 $ 5,059
Inventory adjustments (1)   374   254   320
Mine site operating costs $ 6,555 $   5,834 $ 5,379
             
Divided by tonnes of ore milled   42,981   47,960   43,252
             
Mine-site cost per tonne milled  $ 153 $ 122 $ 124
             
Hislop Mine            
Mine-site costs $ 2,704 $ 6,440 $ 4,788
Inventory adjustments (1)   56   391   537
Mine site operating costs $ 2,760 $ 6,831 $ 5,325
             
Divided by tonnes of ore milled   31,999   98,293   79,771
             
Mine-site cost per tonne milled $ 86  $ 69 $ 67
             

Notes:

(1) Inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory.


Cash margin from mine operations

Cash margin from mine operations is a non-GAAP measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. As well, it may not be comparable to information in other gold producers' reports and filings. It is calculated as the difference between gold sales and production costs (comprised of mine-site operating costs and production royalties) per the Company's Financial Statements. The Company believes it illustrates the performance of the Company's operating mines and enables investors to better understand the Company's performance in comparison to other gold producers who present results on a similar basis.

               
Amounts in thousands of Canadian dollars     Q1 2014   Q4 2013   Q1 2013
               
Gold sales per Financial Statements [A] $   33,481 $ 31,707 $ 38,190
               
Mine site operating costs per Financial Statements     19,189   21,216   18,411
Production royalties per Financial Statements     3,017   2,720   3,370
  [B]   22,206   23,936   21,781
Cash margin from mine operations [A] - [B] $ 11,275 $ 7,771 $ 16,409
               
Breakdown of cash margin from mine operations by mines:              
   Holt Mine   $  10,819 $ 6,915 $ 11,887
   Holloway Mine     589   562   2,391
   Hislop Mine     (133)   294   2,131
    $ 11,275 $   7,771 $ 16,409
               

 

Average realized price per ounce of gold sold

Average realized price per ounce of gold sold is a non-GAAP measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Average realized price per ounce of gold sold is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. It may not be comparable to information in other gold producers' reports and filings.

             
Amounts in thousands of Canadian dollars, except where indicated   Q1 2014   Q4 2013   Q1 2013
             
Gold sales per Financial Statements $   33,481 $  31,707 $ 38,190
Foreign exchange gain realized on the settlement of gold sales   (94)   (186)   (9)
Loss on foreign currency derivative cash flow hedges realized   229   244   (253)
   $ 33,616 $ 31,765 $ 37,928
             
Average USD:CAD exchange rate   1.10   1.05   1.01
             
Gold sales recorded in US$ $ 30,406 $ 30,193 $ 37,546
             
Divided by gold ounces sold   23,500   23,985   23,009
             
Average realized price per ounce of gold sold (US$) $ 1,294 $   1,259 $ 1,632
             

 

Cash margin per ounce of gold sold

Cash margin per ounce of gold sold is a non-GAAP measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Cash margin per ounce of gold sold is calculated by subtracting the total cash cost per ounce of gold sold from the average realized price per ounce of gold sold. It may not be comparable to information in other gold producers' reports and filings.

                 
Amounts in United States dollars       Q1 2014   Q4 2013   Q1 2013
                 
Per ounce of gold sold:                
   Average realized price per ounce of gold sold   [A] $   1,294   1,259  $ 1,632
   Total cash cost per ounce of gold sold   [B]   856   951   939
Cash margin per ounce of gold sold   [A] - [B]  $   438   308 $ 693
                 

 

Net cash flow

Net cash flow is a non-GAAP measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Net cash flow is calculated by taking cash flow from operating activities less cash used in investing activities as reported in the Company's Financial Statements. It may not be comparable to information in other gold producers' reports and filings.

             
Amounts in thousands of Canadian dollars   Q1 2014   Q4 2013   Q1 2013
             
Cash flow from operating activities per Financial Statements $   9,468 $   6,903 $ 13,780
Less:            
   Cash used in investing activities per Financial Statements   7,987   4,128   9,989
  $   1,481 $ 2,775 $ 3,791
             

 

Operating cash flow per share

Operating cash flow per share is a non-GAAP measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Operating cash flow per share is calculated by dividing cash flow from operating activities in the Company's Financial Statements by the weighted average number of shares outstanding for each period.  It may not be comparable to information in other gold producers' reports and filings.

             
Amounts in thousands of Canadian dollars, except per share amounts   Q1 2014   Q4 2013   Q1 2013
             
Cash flow from operating activities per Financial Statements $   9,468 $   6,903 $ 13,780
             
Weighted average number of shares outstanding (000s)   368,296   368,296   368,246
             
Operating cash flow per share $ 0.03 $   0.02 $ 0.04
             

 

Operating and Financial Statistics - Holt Mine

                                 
Amounts in thousands of Canadian dollars, except per unit amounts   Q1 2014   Q4 2013   Q3 2013   Q2 2013   Q1 2013   Q4 2012   Q3 2012   Q2 2012
                                 
Tonnes milled   113,279   81,791   104,800   93,081   89,985   89,901   80,219   78,429
Head grade (g/t Au)   5.08   5.42   5.25   4.83   5.40   5.51   5.40   4.71
Average mill recovery   94.6%   95.2%   95.0%   94.9%   94.8%   94.7%   94.4%   94.2%
                                 
Gold produced (ounces)   17,497   13,579   16,807   13,706   14,806   15,082   13,145   11,193
Commercial gold production sold (ounces)   16,516   13,775   16,381   14,230   13,715   15,043   12,373   11,073
                                 
Gold sales revenue $   23,541  $ 18,239 $ 22,417 $   20,865 $  22,750 $ 25,584 $ 20,000 $ 18,250
                                 
Cash margin from mine operations (1) $ 10,819  $ 6,915 $ 10,677 $  9,341 $   11,887 $ 14,538 $ 9,250 $ 8,886
                                 
Mine-site cost per tonne milled (1) $  96  $ 114  $ 90 $   95 $ 106 $ 93 $ 112 $ 96
                                 
Total cash cost per ounce of gold sold (US dollars) (1)                                
   Mine cash costs $ 565  $ 636 $ 548 $ 636 $ 619 $ 573 $ 708 $ 671
   Royalty costs   133   147   143   155   166   168   165   166
Total cash cost per ounce of gold sold  $ 698  $ 783  $ 691 $ 791 $ 785 $ 741 $ 873 $ 837
                                 
Capital expenditures $ 4,072  $ 2,991 $ 3,104 $ 3,487 $ 3,383 $ 4,536 $  4,990 $ 5,036
                                 
Depreciation and depletion expense $ 2,793 $   2,602 $ 2,338 $ 2,667 $ 2,709 $ 2,979 $ 2,293 $ 1,804
                                 

 

Notes:  
(1)      Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures which do not have standardized meanings as prescribed by IFRS and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see non-GAAP section for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics - Holloway Mine

                                 
Amounts in thousands of Canadian dollars, except per unit amounts   Q1 2014   Q4 2013   Q3 2013   Q2 2013   Q1 2013   Q4 2012   Q3 2012   Q2 2012
                                 
Tonnes milled   42,981   47,960   40,152   45,642   43,252   46,606   44,546   53,169
Head grade (g/t Au)   4.14   4.13   4.02   4.32   4.04   3.90   4.15   3.80
Average mill recovery   90.1%   88.9%   89.7%   92.6%   91.5%   89.7%   91.0%   91.2%
                                 
Gold produced (ounces)   5,154   5,654   4,662   5,874   5,140   5,240   5,408   5,923
Commercial gold production sold (ounces)   5,175   5,105   5,741   5,175   5,126   4,981   5,749   5,744
                                 
Gold sales revenue  $ 7,369 $   6,734 $   7,831 $ 7,568 $   8,521 $  8,473   9,267 $ 9,467
                                 
Cash margin from mine operations (1) $ 589 $ 562 $   1,561 $ 1,795 $ 2,391 $ 3,262 $ 3,835 $ 3,805
                                 
Mine-site cost per tonne milled (1) $ 153 $ 122 $   131 $ 113 $ 124 $ 94 $ 92 $ 82
                                 
Total cash cost per ounce of gold sold (US dollars)(1)                                
   Mine cash costs $ 1,082 $ 1,041   938 $ 947 $ 977 $ 834 $ 746 $ 771
   Royalty costs   105   111   114   143   209   221   204   205
Total cash cost per ounce of gold sold $ 1,187 $ 1,152 $ 1,052 $ 1,090 $ 1,186 $ 1,055 $ 950 $ 976
                                 
Capital expenditures $ 250 $ 130 $ 816 $ 1,189 $ 912 $ 1,443 $ 1,794 $ 2,539
                                 
Depreciation and depletion expense $   7,325 $ 4,848 $ 4,843 $ 2,149 $ 2,144 $ 1,970 $ 2,346 $ 2,181
                                 
Notes:  
(1)      Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations, are non-GAAP measures which do not have standardized meanings as prescribed by IFRS and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see non-GAAP section hereof for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics - Hislop Mine

                                 
Amounts in thousands of Canadian dollars, except per unit amounts   Q1 2014   Q4 2013   Q3 2013   Q2 2013   Q1 2013   Q4 2012   Q3 2012   Q2 2012
                                 
Overburden stripped (m3)   -   19,646   43,094   64,807   -   -   (32,205)   29,236
                                 
Tonnes mined (ore)   51,120   35,540   92,378   105,900   82,361   101,617   99,287   76,764
  (waste)   218,712   377,627   389,978   312,705   267,906   453,629   513,988   536,015
    269,832   413,167   482,356   418,605   350,267   555,246   613,275   612,779
                                 
Waste-to-Ore Ratio   4.3   10.6   4.2   3.0   3.3   4.5   5.2   7.0
                                 
Tonnes milled   31,999   98,293   66,940   88,093   79,771   95,516   102,191   97,183
Head grade (g/t Au)   2.09   1.96   2.27   2.43   2.14   2.22   2.53   2.21
Average mill recovery   79.4%   81.6%   81.0%   84.0%   82.1%   80.8%   86.5%   85.6%
                                 
Gold produced (ounces)   1,710   5,068   3,965   5,773   4,515   5,507   7,189   5,899
Commercial gold production sold (ounces)   1,809   5,105   4,478   5,655   4,168   6,026   7,075   5,678
                                 
Gold sales revenue $ 2,571 $   6,734 $ 6,115 $ 8,290 $ 6,919 $ 10,275 $ 11,423 $ 9,356
                                 
Cash margin from mine operations (1) $ (133) $ 294 $  1,143 $ 2,579 $ 2,131 $ 3,700 $ 5,165 $   3,505
                                 
Mine-site cost per tonne milled (1) $ 86 $ 69 $ 67 $ 64 $ 67 $ 65 $ 62 $ 61
                                 
Total cash cost per ounce of gold sold (1)(2) $ 1,354 $ 1,202 $ 1,070 $ 987 $  1,139 $   1,100 $ 889 $   1,020
                                 
Capital expenditures $ - $ - $ 20 $ - $ - $ (39) $ 390 $ 970
                                 
Depreciation and depletion expense $   75 $   2,186 $ 2,364 $ 4,252 $   3,224 $   1,981 $ 1,644 $   1,363
                                 

 

Notes:  
(1)      Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures which do not have standardized meanings as prescribed by IFRS and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see non-GAAP section hereof for an explanation and reconciliation of non-GAAP measurements).
(2)      Hislop is subject to a 4% net smelter return royalty, which includes a minimum Advance royalty payment obligation (see "Gold-linked Liabilities" in the Company's Q1 2014 MD&A).
   
   
   

Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information

       
    Three months ended March 31, 
    2014 2013
       
       
Gold sales  $ 33,481  $ 38,190
       
Operating costs and expenses:    
  Mine site operating 19,189 18,411
  Production royalty 3,017 3,370
  Site maintenance 42 121
  Exploration 1,165 2,511
  Corporate administration 1,362 2,265
  Depreciation and depletion 10,420 8,284
    35,195 34,962
Operating income (loss) (1,714) 3,228
       
Finance costs 548 504
Mark-to-market (gain) loss on gold-linked liabilities 456 (191)
Mark-to-market loss on foreign currency derivatives 245 1,240
Foreign exchange loss 783 4
Impairment loss on available-for-sale investments - 500
Finance income and other (870) (77)
    1,162 1,980
Income (loss) before taxes (2,876) 1,248
Net deferred tax expense (recovery) (1,070) 209
Net income (loss) attributable to shareholders  $ (1,806)  $ 1,039
       
Other comprehensive income (loss)    
Unrealized gain (loss) on available-for-sale investments (nil tax effect) 138 (95)
Reclassification adjustment for impairment loss on available-for-sale investments (nil tax effect) - 500
Unrealized loss on derivatives designated as cash flow hedges, net of tax $8 (2013 - $154) (22) (463)
    116 (58)
Comprehensive income (loss) for the period  $ (1,690)  $ 981
       
Basic and diluted income (loss) per share   $ 0.00  $ 0.00
       
Weighted average number of shares outstanding (000's)    
Basic   368,296 368,246
Diluted   368,296 368,801
       

 


Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

         
      Three months ended March 31, 
      2014 2013
         
Operating activities:    
  Net Income (loss) for the period  $ (1,806)  $ 1,039
  Items not affecting cash:    
    Net deferred tax expense (recovery) (1,070) 209
    Mark-to-market loss (gain) on gold-linked liabilities 456 (191)
    Non-cash interest 419 366
    Mark-to-market loss on foreign currency derivatives 245 1,240
    Depreciation and depletion 10,420 8,284
    Reversal of provision (777) -
    Impairment loss on available-for-sale investments - 500
    Share-based payments 44 323
  Net change in non-cash operating working capital and other 1,640 2,136
  Interest paid (103) (126)
    Cash provided by operating activities 9,468 13,780
Investing activities:    
    Additions to exploration and evaluation assets (4,364) (4,010)
    Mine development expenditures (2,610) (2,987)
    Additions to plant and equipment (1,892) (2,233)
    Amounts payable on capital additions 895 (416)
    Reclamation costs and other (16) (343)
    Cash used in investing activities (7,987) (9,989)
Financing activities:    
    Advance royalty payments (419) (508)
    Capital lease payments (260) (77)
    Repayment of term credit facility (2,239) (2,032)
    Cash used in financing activities (2,918) (2,617)
         
Effects of exchange rate changes on cash and cash equivalents (638) 273
Increase (decrease) in cash and cash equivalents (2,075) 1,447
Cash and cash equivalents, beginning of period 33,690 30,656
Cash and cash equivalents, end of period  $ 31,615  $ 32,103

 


Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

       
    March 31, 2014 December 31, 2013
       
Assets    
Current assets:    
  Cash and cash equivalents  $ 31,615  $ 33,690
  Accounts receivable 993 951
  Inventories 10,477 8,638
  Prepayments and other assets 266 193
    43,351 43,472
       
Exploration and evaluation assets 42,755 38,390
Producing properties 44,646 49,751
Plant and equipment 48,425 49,025
Reclamation deposits 8,389 8,373
Restricted cash 1,695 1,695
Deferred tax assets 21,117 20,228
Other assets 277 136
     $ 210,655  $ 211,070
       
Liabilities and Shareholders' Equity    
Current liabilities:    
  Accounts payable and other liabilities  $ 12,788  $ 9,793
  Employee-related liabilities 5,268 5,241
  Royalties payable 1,202 956
  Provisions - 777
  Derivative liabilities 1,381 1,105
  Current portion of long-term debt 10,281 11,754
    30,920 29,626
       
Long-term debt 3,070 3,295
Asset retirement obligations 12,182 12,023
Deferred tax liabilities 2,141 2,330
    48,313 47,274
       
Shareholders' equity:    
  Share capital  98,575 98,575
  Contributed surplus 20,413 20,317
  Stock options  4,407 4,267
  Retained earnings  38,972 40,778
  Accumulated other comprehensive loss (25) (141)
    162,342 163,796
     $ 210,655  $ 211,070

  

 

 

Rates

View Comments (0)