– US$3.5 M Cash Flow from Operations Fiscal Q1 2015 Results

Transcription

– US$3.5 M Cash Flow from Operations Fiscal Q1 2015 Results
Fiscal Q1 2015 Results – US$3.5 M Cash Flow from Operations
SANTIAGO, Chile, October 15, 2014. Orosur Mining Inc. (“Orosur” or the “Company”) (TSX: OMI) (AIM:
OMI), a South American-focused gold producer, developer and explorer is pleased to announce the results
for the fiscal 2015’s first quarter ended August 31, 2014.
Highlights
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Q1 gold production of 13,684 oz, in line with the top end of annual guidance (50,000–55,000 oz for the
year)
Cash operating costs of US$945/oz (Q1 13/14: US$754/oz) in line with guidance
All-In-Sustaining costs of US$1,182/oz (Q1 13/14: US$916/oz).
Average gold price received of US$1,302/oz (Q1 13/14: US$1,321/oz)
Cash flow from operations of US$3.5M (Q1 13/14: US$6.8M )
Net loss after tax of US$1.3M (Q1 13/14: Net loss after tax US$1.0M)
Net cash of US$6.0M at August 31, 2014 (net negative cash of US$2.0M at August 31, 2013)
Successful completion of plan of arrangement with Waymar on July 10, 2014
Continued funding of exploration programs in the San Gregorio district of Uruguay, including 6,018
metres of exploration drilling and 539 metres of trenching. Pre-development work focused on the main
known extension of the San Gregorio deposit continued.
Ignacio Salazar, CEO of Orosur, said:
“Orosur is pleased to have once again delivered quarterly results in line with its guidance. The current gold
price environment is not strong; however, the operational improvements implemented over the past 18
months have positioned the Company to continue to generate positive cash flow whilst also advancing
exploration and development efforts. After funding approximately US$3.6 million in capex and exploration
during the quarter in and around San Gregorio, the Company’s net cash position continues to grow.
In July 2014, we completed the transaction with Waymar and welcomed Pablo Marcet and H.D. Lee to the
Board. Their contributions to the Company commenced immediately and have brought further depth and
expertise to our team.”
Results Conference Call
Orosur will be hosting a conference call for analysts to discuss the results, details for the call are below:
Time & Date:
15 October 2014
2.00pm British Summer Time, 9:00am Eastern Standard Time.
Dial-In Details:
London
+44 (0) 20 3139 4830
Canada
+1 (514) 841 2196
United States +1 (718) 873 9077
Passcode:
22277727#
Operational & Financial Summary1
Q1 ended August 31
Q1 14/15
Operating Results
Gold produced
Operating cash cost3
Average price received
Financial Results
Revenue
Net loss after tax
Cash flow from operations2
Cash & Debt at the end of the
period – Summary
Cash balance
Total debt
Cash net of debt
Q1 13/14
Diff
Ounces
US$/oz
US$/oz
13,684
945
1,302
16,851
754
1,321
(3,167)
(191)
(19)
US$ ‘000
US$ ‘000
US$ ‘000
16,526
(1,280)
3,543
22,945
(1,036)
6,810
(6,419)
244
US$ ‘000
US$ ‘000
US$ ´000
August 31,
2014
11,425
5,401
6,024
May 31,
2014
10,818
4,939
5,879
August
31, 2013
6,463
8,487
(2,024)
(3,267)
1
Results are based on IFRS and expressed in US dollars
Before non-cash working capital movements
3
Operating cash cost is total cost discounting royalties and capital tax on production assets.
2
Q1 Production and Cash Costs
First quarter ended August 31,
Gold Produced
Cash Operating Costs
Ounces
US$/oz
2014 (Actual)
2014 (Guidance)
2013 (Actual)
13,684
$945
12,500–13,750
$850–$950
16,851
$755
Production and cash operating costs for the quarter ended August 31, 2014 (“Q1 2015”) are in line with the
Company’s mine plan and previously stated guidance.
As stated in its fiscal 2014 year-end results announced on August 18, 2014, Orosur expects higher unit costs
in the first half of fiscal 2015, as observed in Q1 2015 and as anticipated in the second quarter. During Q1
2015, in accordance with the mine plan, work at Arenal Deeps focused on room and pillar mining (instead of
transverse stoping) which entails operating at smaller, lower grade stopes, grading on average
approximately 1.68 g/t. The Company expects a similar pattern in the second quarter, after which a return to
higher grade, larger transverse stopes in the second half of fiscal 2015 is expected to reduce cash operating
costs.
Orosur continues to focus on cost reduction initiatives, including optimizing corporate and operational teams,
geological modelling, mine planning, and fleet use.
FY 2015 Outlook & Guidance
The Company maintains its forecast production guidance for FY 2015 between 50,000 to 55,000 ounces of
gold at operating cash costs of between US$850 to US$950 per ounce. FY 2015 Production from Arenal
Deeps is expected to contribute approximately 70-75% of total gold production, with open pit mining
contributing the balance of the production profile.
As in the past, variations in production and unit costs will occur quarter on quarter as the mine plan draws
ore from several Arenal stopes with different grades, positions and sizes, changing the level of access
required as well as the addition of ore from several open pits at varying grades and stages of stripping.
2
Q1 2015 Financial Summary
Cash flow from operations before working capital was US$3.5 million for the quarter compared to US$6.8
million for Q1 13/14, mainly due to a lower gold price and production rates. Net loss after tax for the quarter
was US$1.3 million compared to US$1 million in Q1 13/14.
The Company invested US$2.6 million in capital expenditures and US$1 million in exploration expenditures
in the quarter compared to US$2.5 million and US$1.5 million respectively in Q1 13/14.
The cash balance at August 31, 2014 was US$11.4 million compared to US$10.8 million at May 31, 2014.
The Company’s debt balance at August 31, 2014 was US$5.4 million compared to US$4.9 million at May 31,
2014, as a result of the addition of the US$0.5 loan agreement between Waymar and Continental Gold
Limited consolidated in Orosur as part of the closing of the transaction during Q1 2015.
The Company expects to continue following the contracted schedule of lease repayments with HSBC and
Banco Santander and anticipates being close to debt free by the end of FY 2015. The Company has
US$3.0M of committed but undrawn lines of credit available at August 31, 2014 and at present is not
planning to utilize them within the current development plans and gold price environment.
Q1 Development and Exploration
During Q1, the Company continued its exploration programs in the San Gregorio district of Uruguay,
including 6,018 metres of exploration drilling and 539 metres of trenching while continued pre-development
work focused on the main known extension of the San Gregorio deposit.
Uruguay Development Projects
In Q1, a program of >3,000 metres of drilling was designed to further evaluate a significant geological
resource adjacent to the San Gregorio open pit that is the subject of prefeasibility level engineering work.
The additional work program, scheduled to commence in Q2, is aimed at validating and improving the
current geological model and at gathering precise geotechnical data with the goal of reaching a development
decision in the current fiscal year.
Uruguay Brownfields Exploration
The brownfields exploration program continued to focus on two areas. The first, Arenal Deeps, with 1,076
metres of drilling, identifying, delineating and infilling extensions of the known ore deposit. Secondly, 3,556
metres of shallow drilling (to 15 m depths) was completed to add ounces at the edges of the existing open
pits, especially at Vaca Muerta.
Uruguay Greenfields Exploration
The Company’s greenfields exploration efforts continued on the corridor of the Santa Teresa, San Gregorio
and Arenal Shear Zone (“SGSZ”), a zone that was delineated in FY2014 within an approximate 200m wide
corridor and along an extension of approximately 10 km, and on several targets in the Sobresaliente district.
During Q1, in addition to the ongoing geological, geochemical and geophysical surveys, 1,386 metres of
drilling and 539 metres of trenching were completed on three high priority targets.
With total historic and current exploration drilling in the wider San Gregorio district amounting to
approximately 100,000 metres and production of over 1M ounces of gold, the Company believes that the
area remains significantly underexplored, highly prospective and a prime target for organic growth given the
proximity of the existing infrastructure at the San Gregorio operation.
Chile
No significant field activities were conducted in Chile during Q1. Altovalsol, the company that bought Talca in
December 2013, communicated their decision to discontinue the exploration program due to insufficient
results. The Company is currently in discussions with Altovalsol who must return the asset and following
this, may seek alternative strategic options and/or partners for Talca.
3
Colombia
The Waymar transaction was finalized in July 2014. Routine environmental monitoring, community relations
engagement and inspections by the local authorities were conducted in Q1 at the Anzá project as the
Company prepares to advance its exploration programme.
END
Qualified Person's Statement
The information presented in this press release has been reviewed by Walter Muehlebach, GM Exploration
of OMI, considered to be in compliance with N.I. 43-101 reporting guidelines. Mr. Muehlebach is a graduate
in Geology of the Universidad Católica del Norte (Chile) and a member of the Chilean Comisión Calificadora
de Competencias en Recursos y Reservas Mineras, and has 23 years of experience in the field of mineral
exploration.
Forward Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news
release, including any information as to the future financial or operating performance of the Company,
constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe
harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform
Act of 1995 and are based on expectations estimates and projections as of the date of this news release.
There can be no assurance that such statements will prove to be accurate, such statements are subject to
significant risks and uncertainties, and actual results and future events could differ materially from those
anticipated in such statements. Forward-looking statements include, without limitation success of exploration
activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated;
accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on
insurance coverage. The Company disclaims any intention or obligation to update or revise any forward
looking statements whether as a result of new information, future events and such forward-looking
statements, except to the extent required by applicable law.
Neither TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Orosur Mining Inc.
Orosur Mining Inc. is a fully integrated gold producer, developer and exploration company focused on
identifying and advancing gold projects in South America. The Company operates the only producing gold
mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in
Uruguay, Chile and Colombia. The Company is quoted in Canada (TSX: OMI) and London (AIM: OMI).
For more information please visit www.orosur.ca or contact:
Orosur Mining Inc
Ignacio Salazar, Chief Executive Officer
[email protected]
Tel: + 562 2924 6800
Cantor Fitzgerald Europe
Stewart Dickson / Jeremy Stephenson
Tel: +44 (0) 20 7894 7000
FTI Consulting
Ben Brewerton / Oliver Winters / Sara Powell
Tel: +44 (0) 20 3727 1000
4
Financial Statements Follow –
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Financial Position
Thousands of United States Dollars, except where indicated
Note Ref. As at August 31,
2014 ($)
As at May 31,
2014 ($)
Assets
Cash and cash equivalents
Accounts receivables and other assets
Inventories
Total current assets
Accounts receivables and other assets
Property plant and equipment and development costs
Exploration and evaluation costs
Deferred income tax assets
Restricted cash
Total non-current assets
4
5
4
6
7
13
Total assets
11,425
2,961
16,107
30,493
10,818
3,338
14,254
28,410
414
34,664
43,773
4,900
289
84,040
414
37,323
35,813
5,470
258
79,278
114,533
107,688
Liabilities and Shareholders’ Equity
Trade payables and other accrued liabilities
Current portion of long-term debt
Environmental rehabilitation provisions
Total current liabilities
4
18
8
15,726
4,571
598
20,895
13,343
3,978
598
17,919
Long-term debt
Environmental rehabilitation provisions
Total non-current liabilities
18
8
830
5,599
6,429
961
5,828
6,789
27,324
24,708
60,544
62
5,849
20,754
87,209
55,184
5,708
22,088
82,980
114,533
107,688
Total liabilities
Capital stock
Warrants
Contributed surplus
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity
5
9
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
Thousands of United States Dollars, except for earnings per share amounts
Note Ref.
Sales
Cost of sales
Gross profit
Corporate and administrative expense
Exploration and evaluation expenses written off
Other income
Finance cost
Finance income
Net foreign exchange gain
20
19
19
(Loss) Profit before income tax
Provision for income taxes
Total loss for the period
13
Other comprehensive loss
Foreign exchange differences on translating foreign
operations
Total loss and comprehensive loss for the
period
Three months ended
August 31,
2014 ($)
2013 ($)
16,526
(16,474)
52
22,945
(19,899)
3,046
(882)
(29)
188
(95)
2
54
(762)
(831)
(516)
40
(120)
1
298
(1,128)
(710)
1,918
(570)
(1,280)
(2,954)
(1,036)
(54)
-
(1,334)
(1,036)
(0.02)
(0.01)
Loss per common share
17
Basic and fully diluted
6
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Cash Flows
Thousands of United States Dollars, except where indicated
Note Ref.
Three months ended
August 31,
2014 ($)
2013 ($)
(1,280)
(1,036)
4,472
29
19
570
47
(179)
(135)
3,543
4,295
516
19
2,954
48
11
3
6,810
396
(1,855)
1,775
3,859
274
522
(2,004)
5,602
18
(298)
(298)
(305)
(305)
6
8
(2,374)
(249)
767
(1,098)
(2,954)
(1,238)
(1,220)
(2,009)
(4,467)
607
830
Cash and cash equivalents at the beginning of period
10,818
5,633
Cash and cash equivalents at the end of period
11,425
6,463
Net inflow (outflow) of cash related to the following activities
Cash flow from operating activities
Net loss for the period
Adjustments to reconcile net income to net cash provided from
operating activities:
Depreciation
Exploration and evaluation expenses
Accretion of asset retirement obligation
Deferred income tax assets
Stock based compensation
Gain on sale of property, plant and equipment
Others
Subtotal
Changes in operating assets and liabilities
Accounts receivables and other assets
Inventories
Trade payables and other accrued liabilities
Net cash generated from operating activities
Cash flow from financing activities
Repayment of long-term debt
Net cash from financing activities
Cash flow from investing activities
Purchase of property, plant and equipment and development costs
Environmental tasks
Proceeds from the sale of fixed assets
Exploration and evaluation expenditure assets
Net cash used in investing activities
Increase in cash and cash equivalents
7
7
8
13
10
7
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
Thousands of United States Dollars, except where indicated
Three months ended
August 31,
2014 ($)
2013 ($)
Balance at beginning of period
Issued for Waymar acquisition
55,184
5,360
55,184
-
Balance at end of period
60,544
55,184
62
62
276
(276)
-
5,708
47
94
5,849
5,534
48
5,582
Balance at beginning of period
Warrant expiration
Net loss for the period
Currency translation reserve
Balance at end of period
22,088
(1,280)
(54)
20,754
16,965
276
(1,036)
16,205
Shareholders’ equity at end of period
87,209
76,971
Capital stock
Broker Warrants
Balance at beginning of period
Issued for Waymar acquisition
Expiration
Balance at end of period
Contributed surplus
Balance at beginning of period
Employee stock based compensation recognized
Issued for Waymar acquisition
Balance at end of period
Retained earnings
8

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