MONTREAL, QUEBEC--(Marketwired - May 13, 2013) - SEMAFO (SMF.TO)(SMF.ST) today reported its financial and operating results for the three-month period ended March 31, 2013. All amounts are in US dollars unless otherwise stated.
First Quarter 2013 in Review
- Gold production of 59,700 ounces, a decrease of 2% compared to the same period in 2012
- Gold sales of $106.1 million, a 6% increase compared to the same period in 2012
- Non-cash impairment charge of $35.1 million at the Samira Hill Mine
- Operating loss of $1.7 million compared to an operating income of $38.0 million in the same period in 2012
- Net loss attributable to equity shareholders of $7.3 million or a loss of $0.03 per share compared to net income attributable to equity shareholders of $28.1 million or $0.10 per share in the same period in 2012
- Adjusted operating income1 of $33.4 million compared to $38.0 million in the same period in 2012
- Adjusted net income1 attributable to equity shareholders of $19.7 million or $0.07 per share1 compared to $28.1 million or $0.10 per share in the same period in 2012
- Cash flow from operating activities2 of $38.8 million or $0.14 per share compared to $40.2 million or $0.15 per share in the same period in 2012
- Delineation drilling at Mana's Siou sector confirms mineralization and extension
- On track to issue mineral reserve estimate for the Siou Sector in Q3 2013
- Declaration of a dividend of C$0.02 per share as of May 13
1 Adjusted operating income, adjusted net income attributable to equity shareholders and adjusted basic earnings per share are non-IFRS financial performance measures with no standard definition under IFRS. In the three-month period ended March 31, 2013, the adjusted operating income excludes the charge of $35,100,000 related to the impairment of non-financial assets of the Samira Hill Mine, while the adjusted net income attributable to equity shareholders and the adjusted basic earnings per share also exclude the non-controlling interest impact totalling $8,148,000 related to these transactions.
2 Cash flow from operating activities excludes changes in non-cash working capital items.
A Word from the CEO
2012 was a year of transition for our Corporation, and it was in a tumultuous gold market and a difficult mining industry in general that we began 2013. Gold plummeted to a 2-year low and our stock price suffered the consequences.
Operationally, SEMAFO had a good start to the year. In the first quarter, we generated cash flow from operating activities of $38.8 million ($0.14 per share) compared to $40.2 million ($0.15 per share) in the first quarter of 2012. We produced almost 60,000 ounces of gold during the first three months of this year, while maintaining the total cash cost per ounce below our 2013 guidance.
Our flagship Mana property produced 42,700 ounces of gold, representing over 70% of our total production. Mana's total cash cost was $709 per ounce, a six percent decrease compared to $746 in the fourth quarter of 2012.
It is important to reiterate that we are focusing on quality ounces. In this regard, our top priority is to fast-track the Siou Sector in order to commence stripping during the fourth quarter of 2014 at the latest. The recent volatility in the price of gold reinforces our decision to accelerate the development of the high-grade Siou Sector, which has low sensitivity to gold price fluctuations.
We believe that bringing Siou to reserves in the third quarter of this year will provide more clarity to the market. It will also serve to highlight the role that Siou will play in our short-term value creation strategy.
As part of our disciplined capital allocation strategy and resolution to maintain our exploration program, SEMAFO's entire 2013 exploration budget of $22 million will be invested at Mana, within the 20-kilometer radius of the processing plant. The main focus is on delineation drilling at Siou and step-out drilling on the Kokoi Trend, which offers the best potential for quality ounces and rapid cash flow generation.
To date, results from the 2013 ongoing infill drilling program confirmed good continuity and predictability as well as the extended mineralization when compared to the 2012 year-end results. We are on track to bring Siou to reserves in the third quarter of 2013. We are currently completing the delineation drilling and have commenced the environmental impact assessment in order to accelerate the permitting process. Our Mana property is very promising in terms of its exploration potential, which will enable us to continue to build on our already solid foundation in the years to come.
As communicated in our 2012 annual report, we are determined to optimize our operations at all levels and to reduce costs in order to maximize cash flow. This is even more important in today's extremely volatile economic environment. We will be disciplined and prudent in our capital allocation and cash flow management in order to effectively cope with any realistic gold price scenario.
In March 2013, we announced a review of the strategic alternatives for the Kiniero and Samira Hill mines, two non-core assets. In light of the recent drop in the price of gold, these two projects became even more sensitive to further downturns in the gold price or in any technical parameters. Accordingly, investments are hereafter limited to those having a short-term payback period. A decision has been made to wind down operations to an eventual care and maintenance status at Samira Hill in 2013.This resulted in an additional $6 million decrease in capital expenditures at Samira Hill, following the initial $10 million reduction announced earlier in the year. Samira Hill's capital expenditures are now forecasted at $11 million, down from the original 2013 budget of $27 million. This led to a $35.1 million impairment charge in the first quarter of 2013.
SEMAFO's Board of Directors approved a cash dividend of C$0.02 per common share, payable on July 15, 2013 to shareholders of record at the close of business on June 30, 2013.
In this period of economic turbulence, with a volatile gold price, and lacking full clarity about the timing and the potential of Siou's cash flow, we wish to reassure shareholders that we will be disciplined and prudent while continuing to build for the future.
Our focus is creating value through the generation of future cash flow. We have identified how to best move forward and are determined to avoid distractions while concentrating on our priorities.
SEMAFO is maintaining its annual production and total cash cost guidance of between 153,000 -168,000 ounces at $805 - $855 per ounce at Mana and between 16,000 - 20,000 at $975 - $1,055 per ounce at Kiniero. For Samira Hill, given the mine's sensitive state, the Corporation has decided to maintain guidance for the first six months of 2013, with production forecasted at between 23,000 - 26,000 ounces at a total cash cost of $985 - $1,035 per ounce.
SEMAFO's Consolidated Financial Statements and Management's Discussion and Analysis and other relevant financial materials are available in the Investor Relations section of the Corporation's website at www.semafo.com. These and other corporate reports are also available on the website maintained by the Canadian Securities regulators at www.sedar.com.
|Consolidated Results and Mining Operations|
|ended March 31,|
|Gold ounces produced||59,700||60,900||(2||%)|
|Gold ounces sold||65,400||58,700||11||%|
|(in thousands of dollars, except amounts per ounce, per tonne and per share)|
|Revenues - Gold sales||106,055||100,401||6||%|
|Mining operating expenses (excluding government royalties)||46,124||37,242||24||%|
|Operating income (loss)||(1,675||)||38,044||-|
|Income tax expense||10,285||6,189||66||%|
|Net income (loss) attributable to equity shareholders||(7,290||)||28,106||-|
|Cash flow from operating activities1||38,798||40,196||(3||%)|
|Basic earnings (loss) per share||(0.03||)||0.10||-|
|Diluted earnings (loss) per share||(0.03||)||0.10||-|
|Operating cash flow per share2||0.14||0.15||(7||%)|
|Adjusted operating income3||33,425||38,044||(12||%)|
|Adjusted net income attributable to equity shareholders3||19,662||28,106||(30||%)|
|Adjusted basic earnings per share3||0.07||0.10||(30||%)|
|Average realized selling price (per ounce)||1,622||1,710||(5||%)|
|Cash operating cost (per ounce produced)4||694||619||12||%|
|Cash operating cost (per tonne processed)4||33||35||(6||%)|
|Total cash cost (per ounce sold)5||790||708||12||%|
|1||Cash flow from operating activities excludes changes in non-cash working capital items.|
|2||Operating cash flow per share is a non-IFRS financial performance measure with no standard definition under IFRS. See the "Non-IFRS financial performance measures" section of the Corporation's MD&A.|
|3||Adjusted operating income, adjusted net income attributable to equity shareholders and adjusted basic earnings per share are non-IFRS financial performance measures with no standard definition under IFRS. In the three-month period ended March 31, 2013, the adjusted operating income excludes the charge of $35,100,000 related to the impairment of non-financial assets of the Samira Hill Mine, while the adjusted net income attributable to equity shareholders and the adjusted basic earnings per share also exclude the non-controlling interest impact totalling $8,148,000 related to these transactions.|
|4||Cash operating cost is a non-IFRS financial performance measure with no standard definition under IFRS and is calculated using ounces produced and tonnes processed. See the "Non-IFRS financial performance measures" section of the Corporation's MD&A.|
|5||Total cash cost is a non-IFRS financial performance measure with no standard definition under IFRS and represents the mining operation expenses and government royalties per ounce sold.|
|6||Amounts have been restated for the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine. Please refer to note 4 of the condensed interim consolidated financial statements.|
SEMAFO's senior management will host a conference call to discuss the first quarter financial and operational results, as well as to provide an update on the Corporation's activities.
|Conference Call:||Date:||Tuesday, May 14, 2013|
|Time:||10:00 AM (EDT)|
|Tel. local & overseas:||+1 (416) 981-9000|
|Tel. North America:||1 (800) 785-8944|
The conference call will be archived for replay until June 3, 2013. To access the archived conference call, please dial 1 (800) 558-5253 and enter pass code 21654601 followed by the number sign (#).
A live audio webcast of the conference will be accessible through SEMAFO's website at www.semafo.com. The webcast will be available for replay for a period of 90 days.
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Corporation currently operates three gold mines: the Mana Mine in Burkina Faso, the Samira Hill Mine in Niger and the Kiniero Mine in Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "on track", "priority", "fast-track", "accelerate", "believe", "will", "creation", "strategy", "guidance", "committed", "evolve", "become", "pursuing", "growth", "opportunities" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to issue a mineral reserve estimate in Q3 2013, the ability to fast-track the Siou Sector in order to commence stripping in the fourth quarter 2014 at the latest, the ability to reduce costs in order to maximize cash flow, the ability to meet our annual production and total cash cost guidance of between 153,000 -168,000 ounces at $805 - $855 per ounce at Mana and between 16,000 - 20,000 at $975 - $1,055 per ounce at Kiniero and to meet guidance at Samira Hill for the first six months of 2013 of between 23,000 - 26,000 ounces at a total cash cost of $985 - $1,035 per ounce, the ability to execute on our strategic focus, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2012 Annual MD&A, as updated in SEMAFO's 2013 First Quarter MD&A, and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
The above information has been made public in accordance with the Swedish Securities Market Act and/or the Financial Instruments Trading Act.
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