SAS reports 2011 fourth quarter and year end results with a record fourth quarter and year of, production, income and cash flow
All dollar amounts are stated in Canadian dollars, unless otherwise indicated
TORONTO, Feb. 16, 2012 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ('SAS' or the 'Company') earned net income attributable to shareholders for the fourth quarter of 2011 of $12.9 million or $0.04 per share as compared to a loss of $0.2 million, or nil on a per share basis, for the same period last year. Operating cash flow before repayment of the Gold Notes((1) )in the quarter was $17.1 million or $0.05 per share, compared to $9.3 million, or $0.03 per share for the same period last year. For the full year in 2011, SAS earned net income attributable to shareholders of $17.2 million or $0.05 per share as compared to a net income of $2.1 million, or $0.01 per share for the same period in 2010.
'We had a great fourth quarter achieving record production, record earnings and record cash flow,' said Jacques Perron, President and CEO of SAS. 'We saw a steady increase in production and as expected, our mine cash costs in the fourth quarter reduced to under US$800 per ounce. Holt continues to perform well, and we are on track to reach 1,000 tpd by the end of the first quarter. We are committed to continue to improve at each operation. We will grow our production on a quarterly basis to achieve our 2012 objective of 90,000 to 100,000 ounces of gold production while reducing our cash cost per ounce. I want to thank our dedicated employees for their commitment to achieving success, and look forward to a promising 2012.'
Q4 and ANNUAL 2011 HIGHLIGHTS
_____________________________________________________________________
|ACHIEVEMENTS | |
|__________________________________|__________________________________|
|Net income attributable to |Record year of earnings with net |
|shareholders for the fourth |income increasing by 56% over the |
|quarter and 2011, of $12.9 |previous quarter. |
|million, or $0.04 per share, and | |
|$17.2 million, or $0.05 per share,| |
|respectively. Adjusted net | |
|earnings(1)for the fourth quarter | |
|and 2011 of $6.6 million or, $0.02| |
|per share and $6.2 million, or | |
|$0.02 per share, respectively. | |
|__________________________________|__________________________________|
|Produced 22,350 ounces of gold in |A record year of production |
|the fourth quarter and 74,022 |representing a 12% increase in |
|ounces during 2011, from three |gold production over the previous |
|operations (Holt, Holloway and |quarter, and a 5% increase over |
|Hislop). |2010. |
|__________________________________|__________________________________|
|Sold 23,368 ounces of gold during |An increase in gold sales revenues|
|the quarter, at an average |by 21% over the previous quarter, |
|realized price(1)of US$1,690, and |and 25% over the previous year. |
|a total of 69,528 ounces of gold | |
|during 2011, at an average | |
|realized price(1)of US$1,592. | |
|Earned revenues in the fourth | |
|quarter and 2011 of $40.4 million | |
|and $111.9 million, respectively. | |
|__________________________________|__________________________________|
|Mine cash costs of US$772 per |Mine cash costs increased in 2011 |
|ounce and a royalty cost of US$137|due to the delay in start up at |
|per ounce, for a total cash cost |the Holt Mine and the transition |
|per ounce of gold sold(3)of US$909|in mining areas at the Holloway |
|per ounce in the fourth quarter. |Mine, compounded by a high royalty|
|Mine cash costs for 2011 were |cost due to the increase in the |
|US$960 per ounce with a royalty |price of gold. However, cash costs|
|cost of US$120 per ounce, for a |improved by 20% over the previous |
|total cash cost per ounce of gold |quarter in 2011, and are expected |
|sold(3)of US$1,080. |to reduce further throughout 2012.|
|__________________________________|__________________________________|
|Earned cash margin from mine |An increase of $6.7 million or 56%|
|operations(1)of $18.7 million in |in cash margin from mine |
|the fourth quarter, and $37.5 |operations(1) when compared to |
|million for 2011. |previous quarter in 2011, as a |
| |result of the increase in |
| |throughput and an increase in ore |
| |grade. |
|__________________________________|__________________________________|
|Operating cash flow before |A record year of operating cash |
|repayment of the Gold Notes(1)of |flow since the restart of mine |
|$17.1 million, or $0.05 on a per |operations in 2009, an increase of|
|share basis,for the fourth |58% over the previous quarter, and|
|quarter, and $35.0 million, or |an increase by $9.1 million over |
|$0.10 on a per share basis, for |the previous year. |
|annual 2011. | |
|__________________________________|__________________________________|
|Holt achieved commercial |Commenced commercial production at|
|production at the beginning of the|our flag ship mine, which saw |
|second quarter of 2011. |progressive ramp up throughout |
| |2011, from the initial 500 tonnes |
| |per day ('tpd'). |
|__________________________________|__________________________________|
|Smoke Deep Zone at the Holloway |Production commenced in the |
|Mine commenced production in |western portion of the zone and |
|October. |contributed approximately 18% of |
| |the Holloway mine's throughput for|
| |the year. Development continues |
| |towards the eastern portion of the|
| |zone and production rates and ore |
| |grade are anticipated to increase |
| |in 2012. |
|__________________________________|__________________________________|
|Incurred total capital |At Hislop, the Company spent |
|expenditures at the three |capital expenditures of $10.7 |
|operations of $8.6 million in the |million in 2011 and $0.7 million |
|quarter, and $33.8 million for |during the fourth quarter as the |
|2011. |overburden stripping was |
| |substantially complete. Ongoing |
| |mine capital is expected to be |
| |minimal. |
| | |
| |Mine development and capital |
| |expenditures for the Holt Mine and|
| |Mill, and the Holloway Mine during|
| |the fourth quarter and 2011 were |
| |$7.9 million and $23.1 million, |
| |respectively. |
|__________________________________|__________________________________|
|Finalized an updated resource |Incurred $2.7 million in 2011 to |
|estimate for the Taylor Project |advance the Taylor Project towards|
|which was utilized as part of a |the pre-feasibility stage. The |
|pre-feasibility study outlining |Taylor pre-feasibility study |
|173,000 ounces of probable |outlines 985,000 tonnes at an |
|reserves at the West Porphyry Zone|average grade of 5.01 g/t Au for |
| |173,000 ounces of contained gold |
| |in the West Porphyry Zone. The |
| |results of the pre-feasibility |
| |study are being released |
| |concurrently with this press |
| |release. |
|__________________________________|__________________________________|
|In May 2011, the Company received |Receiving this final judgement |
|a favourable ruling from the |successfully removes the |
|Ontario Court of Appeal concerning|contingent liability which |
|the Holt Royalty. |significantly improves the |
| |economics of the Holt Mine and the|
| |Company's value. |
|__________________________________|__________________________________|
|In May 2011, SAS employees |The Company achieved a mine safety|
|celebrated 1 million hours worked |record, and continues to operate |
|without a lost time accident. |without a Lost Time Accident. |
|__________________________________|__________________________________|
A summary of the 2011 Mineral Resources and Mineral Reserves estimate as at December 31, 2011, are included as part of the Company's Management Discussion and Analysis for 2011, which is being filed today, February 16, 2012, and is available under the Company's profile on SEDAR at www.sedar.com, and on the Company's website at www.sasgoldmines.com.
Holt Mine, Operations and Financial Review (see Operating and Financial Statistics on page 12)
In the fourth quarter, the Holt Mine ('Holt') produced 11,421 ounces of gold from processing 67,778 tonnes of ore at a head grade of 5.57 g/t Au, which was substantially derived from Zone 4. Since the commencement of commercial production at the beginning of the second quarter in 2011, Holt produced 26,941 ounces of gold from a throughput of 188,872 tonnes at a grade of 4.74 g/t Au. Mill recoveries in the fourth quarter and in 2011 of 94.1% and 93.5%, respectively, were at the expected level.
Mine development in the first half of 2011 was negatively impacted by a four month delay in ramp up of operations due to the limited availability of skilled manpower and equipment issues. The implementation of an underground employee training program in the second quarter of 2011, coupled with improved equipment availability, resulted in a 36% increase in development productivity over the first half of 2011, and the mine currently has its full complement of skilled workers. The mining rate during 2011 ramped up from the initial 500 tonnes per day ('tpd') in the second quarter, and continued to progress towards the anticipated steady state rate of production of 1,000 tpd expected by the end of the first quarter of 2012, which will positively impact unit costs.
During the second and third quarter of 2011, most of the production ore was derived from the C-103 Zone, which achieved lower than expected grade. The head grade saw a steady increase during the last few months of 2011, as the C-103 Zone was depleted at the end of the third quarter, and the mine saw better development grade ore from Zone 4 coupled with production ore which was in line or better than the reserve grade of 4.34 g/t Au (as of December 31, 2010).
Holt achieved a cash margin from mine operations((1)) of $12.1 million during the fourth quarter. The mine saw a steady increase in throughput quarter over quarter; which led to consecutive decreases in mine-site cost per tonne milled((1)) of $15 per tonne from the second quarter of 2011 to the third quarter, and another $11 per tonne in the fourth quarter. In conjunction with the improvement in ore grade in the third and fourth quarters, total cash cost per ounce of gold sold((1)) decreased by US$377 per ounce and US$292 per ounce, respectively. The Company expects operating costs at Holt will continue to decrease as the mining rate increases towards its steady state levels.
Holt is expected to contribute approximately 50% of the annual gold production for 2012.
Holloway Mine, Operations and Financial Review (see Operating and Financial Statistics on page 13)
The Holloway Mine ('Holloway') produced 6,126 ounces of gold in the fourth quarter from three areas, the Lightning Zone ('Lightning Zone'), Blacktop Footwall Lower Zone ('BFWL'), and the Smoke Deep Zone ('Smoke Deep'). During 2011, approximately 45% of production was derived from Lightning, 37% from the BFWL, and in the fourth quarter, 18% from Smoke Deep. Production was negatively impacted throughout 2011 due to the shift in mining from the BFWL and Lightning zones, while preparing Smoke Deep for production. Ramp development at Smoke Deep was completed during the third quarter of 2011, and production commenced at the end of October 2011. Mill recovery of 84.1% in the fourth quarter was slightly lower than anticipated due to the processing of graphitic ore from the BFWL and the slower leach kinetics associated with ore from the western portion of Smoke Deep, where initial production was derived from.
Gold sales for 2011 were 23,698 ounces or 61% lower than the 61,447 ounces of gold sold in 2010 due to the reasons mentioned above. Cash margin from mine operations((1)) for the fourth quarter and for 2011 were $4.1 million and $12.0 million, respectively. Mine site cost per tonne milled increased by 14% from $86 per tonne in 2010 to $98 per tonne in 2011, which was attributable to a 40% decrease in throughput when compared to 2010, partially offset by the improved efficiencies in operating activities at the mine. The Company expects mine site cost per tonne in 2012 will reduce as production rates at Smoke Deep continue to increase, and the mined ore grade improves.
Holloway is expected to contribute approximately 30% of the annual gold production for 2012.
Hislop Mine, Operations and Financial Review (see Operating and Financial Statistics on page 14)
The Hislop Mine ('Hislop') produced 4,803 ounces of gold in the fourth quarter of 2011. The head grade for the Hislop Mine in the fourth quarter increased by approximately 15% from the previous quarter and 13% over 2010. The ore grade mined continued to improve in the fourth quarter as mining progressed deeper and into the eastern portion of the pit. Mill recovery in the fourth quarter of 83.0% was negatively impacted by processing a higher portion of ore that requires a finer grind.
Operations at Hislop were impacted since the second quarter of 2011, by the additional overburden removal and waste rock mining activities as a result of overburden slope failures during the year, and delayed stripping of the eastern portion of the pit. Rehabilitation activities commenced in the third quarter and are now complete, and all overburden has been stripped. Waste rock mining was reduced in the second half of 2011 but remained higher than expected due to the change in mining sequence required to accommodate overburden stripping activities. The strip ratio for 2012 is expected to decrease to 3.8, which is lower than the life-of-mine strip ratio of 4.8.
Gold sales in the fourth quarter were 4,985 ounces, and 19,806 ounces for 2011, 87% higher than the 10,592 ounces of gold sold in 2010 (as the mine only commenced commercial mining operations in the second half of 2010). Hislop contributed gold sales revenue of $31.2 million in 2011 as compared to $12.1 million in 2010, a 150% increase due to the increase in throughput and the improvement in ore grade as mentioned above, as well as a 39% increase in the average realized price per ounce of gold sold((1)). Mine site costs per tonne milled increased by 14% from $51 per tonne in 2010 to $58 per tonne in 2011, which was attributable to the additional waste rock mining activities mentioned above. The Company expects the remaining life‐of‐mine mine site cost per tonne milled to remain closer to $59 per tonne. The higher cost is primarily due to the complexity of the ore body, the rock hardness and the increased fuel costs.
Production cash cost per ounce of gold sold in the fourth quarter and 2011 was US$1,196 per ounce and US$1,272 per ounce, respectively. The Company anticipates the cash cost per ounce of gold sold for the Hislop Mine during 2012, will remain at the level experienced in the fourth quarter of 2011, despite a lower strip ratio, as a consequence of the increase in mine operating costs mentioned above.
Hislop is expected to contribute approximately 20% of the annual gold production for 2012.
Taylor Project
As of December 31, 2011, the Company completed an updated resource estimate and calculation of mineral reserves for the Taylor Project ('Taylor'), as part of preparation for a Pre-feasibility study. The study outlined mineral reserves for the West Porphyry Zone ('WPZ') of approximately 1.0 million tonnes at a grade of 5.45 g/t Au containing approximately 173,000 ounces of gold, included within measured and indicated mineral resources (which include the West Porphyry and Shoot Zone) totalling 2.6 million tonnes grading 5.42 g/t Au for 457,000 ounces of contained gold in the indicated category, and 1.9 million tonnes grading 3.96 g/t Au for 246,000 million ounces of contained gold in the inferred category.
Results of the Pre-feasibility study are being released concurrently with the financial information on February 16, 2012. A National Instrument 43-101 compliant technical report will be available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.sasgoldmines.com on or before March 30, 2012.
Exploration Programs
The Company recently released its plans for its 2012 exploration program which will focus on targets that lie near the Holloway-Holt and Hislop Mines and which has an initial budget of $7.0 million. Drilling has resumed on two targets, the Ghost Zone near Holt, and the Hislop North Project, and results will be released as they become available.
Capital Resources
SAS achieved a record year for cash flow from operations of $23.4 million since the restart of mining operations in the fourth quarter of 2009. The Company ended the year with cash of $17.6 million, however, working capital decreased during the third quarter, and in the first nine months of the year, as a result of a four-month delay in the development of Holt, and the additional overburden and waste rock removal activities at Hislop. These operational issues are now resolved, and cash flow from operations in the future periods is expected to improve. The Company generated $37.5 million in cash margin from mine operations((1)) and $35.0 million in operating cash flow before repayment of Gold Notes((1)).
Conference Call Information
A conference call will be held on Friday morning, February 17, 2011 at 10:00 a.m. (EST) to discuss the fourth quarter and annual 2011 results. Participants may join the call by dialling toll free 1-866-212-4491 or 1-416-800-1066 for calls from outside Canada and the US. The Company will post accompanying power point slides for the call, please visit the website for more detailed information and any webcast links (www.sasgoldmines.com).
A recorded playback of the call will also be available via the website and will be posted within 24 hours of the call.
Qualified Person
Production at the Holt, Holloway and Hislop mines, and processing at the Holt Mill are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's Vice President & General Manager, East Timmins Operations. The calculation of Mineral Reserves and the Taylor pre-feasibility study was completed by the Company under the supervision of Pierre Rocque, P.Eng, the Company's Director of Engineering. The exploration programs on the Company's various mineral properties are under the supervision of Craig Todd, P.Geo, the Company's Exploration Manager. Messrs. Middlemiss, Rocque and Todd are qualified persons as defined by National Instrument 43-101, and have reviewed and approved this news release.
Non-GAAP Measures
The Company has included the non-GAAP performance measures: adjusted net earnings (loss); operating cash flow before repayments of Gold Notes; average realized price per ounce of gold sold; total cash cost per ounce of gold sold; cash margin from mine operations; and mine-site cost per tonne milled throughout this press 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. 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. Refer to pages 8-11 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2011 Annual Financial Statements.
((1)) See pages 8-11 for non-GAAP Measures
The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and twelve months ended December 31, 2011, can be found on pages 15-17.
To review the complete 2011 Annual Financial Statements and the Annual Management's Discussion and Analysis for 2011, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.
About SAS
SAS (operating as 'SAS Goldmines') is a gold mining and exploration company with an extensive land package in the Timmins mining district, northeastern Ontario which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada. SAS is focussed on developing its assets in the Timmins Camp with three producing mines and aggressive exploration activities across 120km of land straddling the Porcupine-Destor Fault Zone.
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 budgets, and planned gold production levels at the Holt, Holloway and the Hislop mines in 2012; the improvement in throughput and reduction in unit costs at the Holt Mine; the improvement in the ore grade and production rates, and reduction in costs at the Holloway Mine; the improvement in the ore grade and the stabilization in costs at the Hislop Mine; the anticipated manpower levels at the Company's mining operations (and the ability to achieve same); the extent of exploration programs in 2012; the improvement in the Company's cash flow from operations; and the availability of a NI 43-101 technical report on the Taylor Project, and the timing thereof.
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 are 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 are calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivatives, one-time gains or losses on the disposition of non-core assets and expenses and significant tax adjustments not related to current period's earnings, as detailed in the table below. Adjusted net earnings does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. 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 Three monthsendedDecember31, Year endedDecember 31,
dollars,
except
pershare
amounts 2011 2010 2011 2010
Net income
(loss) per $
Financial
Statements 12,921 $ (235) $ 17,173 $ 2,090
Reversal of
income and
mining tax
asset
valuation
allowance (433) - (18,455) -
Mark-to-market
loss (gain) on
gold-linked
liabilities (1,414) 2,010 3,347 6,630
Mark-to-market
loss (gain) on
foreign
currency
derivatives (3,436) (796) 3,869 (1,327)
Proceeds from
insurance
claim - - (338) -
Loss (gain) on
the
divestiture of
non-core
assets (1,049) - 304 -
Write-down of
mining assets - - 300 263
Secured
debenture
participation
fee - - - 756
Adjusted net $
earnings 6,589 $ 979 $ 6,200 $ 8,412
Weighted
average number
of shares
outstanding
(000s)
Basic 368,067 362,311 367,912 343,082
Diluted 368,739 366,645 369,945 345,854
Adjusted net
earnings per $
share - basic
and diluted 0.02 $ 0.00 $ 0.02 $ 0.02
Operating cash flow before repayment of Gold Notes
SAS uses the financial measure operating cash flow before repayment of Gold Notes to supplement the information included in its Financial Statements. The presentation of operating cash flow before repayment of Gold Notes does not constitute a measure recognized by IFRS and is not meant to be a substitute for cash flow from operations or cash flow from operating activities presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Operating cash flow before repayment of Gold Notes excludes the non-cash value of gold delivered to the Company's Gold Note holders.
The term operating cash flow before repayment of Gold Notes does not have a standardized meaning prescribed by IFRS, and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies. Management believes that the presentation of operating cash flow before repayment of Gold Notes provides useful information to investors because it excludes the repayment of Gold Notes (which will be retired at the end of 2012) in working capital items, and is a better indication of the Company's cash flow from operations and is considered by Management to be meaningful in evaluating the Company's past financial performance and its future prospects. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of the Company's operating mines to generate cash flow.
Amounts in
thousands Three monthsendedDecember
of Canadian 31, Year endedDecember31,
dollars,
except
per share
amounts 2011 2010 2011 2010
Operating
cash flow
per $ 13,981
Financial
Statements $ 6,697 $ 23,446 $ 14,853
Repayment
of Gold
Notes 3,083 2,585 11,522 11,035
Operating
cash flow
before
repayment
of
Gold Notes $ 17,064 $ 9,282 $ 34,968 $ 25,888
Weighted
average
number of
shares
outstanding
(000s) 368,067 362,311 367,912 343,082
Per share $ 0.05
amounts $ 0.03 $ 0.10 $ 0.08
Notes:
(1) Per share amounts are calculated by dividing the operating
cash flow before repayments of Gold Notes by the weighted
average number of shares outstanding for each period
Total cash cost per ounce of gold sold
Total cash cost per ounce of gold sold is a non-GAAP performance measure and 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 for the three months and year ended 2011:
Amounts in
thousands
of Three months ended Yearended December31,
Canadian December 31,
dollars,
except
where
indicated 2011 2010 2011 2010
Mine-site
costs per
Financial
Statements $ 18,452 $ 14,017 $ 66,098 $ 41,497
Production
royalties
per
Financial
Statements
(2) 3,285 1,392 8,222 5,418
Total cash
costs $ 21,737 $ 15,409 $ 74,320 $ 46,915
Divided by
gold
ounces
sold (1) 23,368 17,952 69,528 70,461
Total cash
cost per
ounce of
gold sold
(Canadian
dollars) $ 930 $ 858 $ 1,069 $ 666
Average
CAD:USD
exchange
rate $ 1.02 $ 1.01 $ 0.99 $ 1.03
Total cash
cost per
ounce of
gold sold
(US$) $ 909 $ 850 $ 1,080 $ 646
Breakdown
of total
cash cost
per ounce
of
gold sold
(US$)
Holt Mine
(2)
Mine
cash
costs $ 556 N/A $ 785 N/A
Royalty
costs 166 N/A 167 N/A
$ 722 N/A $ 952 N/A
Holloway
Mine
Mine
cash
costs $ 853 $ 596 $ 894 $ 485
Royalty
costs 192 108 167 87
$ 1,045 $ 704 $ 1,061 $ 572
Hislop
Mine(2)
Mine
cash
costs $ 1,196 $ 1,192 $ 1,272 $ 1,152
Royalty
costs - - - -
$ 1,196 $ 1,192 $ 1,272 $ 1,152
Total
Mine
cash
costs $ 772 $ 772 $ 960 $ 570
Royalty
costs 137 78 120 76
$ 909 $ 850 $ 1,080 $ 646
Notes:
(1) Includes gold ounces delivered to Gold Note holders; and after
deducting 1,578 ounces of gold from the Hislop Mine and
1,408 ounces from the Holt Mine while the operations were in
pre-production.
(2) The Hislop Mine commenced commercial operations on July 1,
2010, and the Holt Mine commenced commercial operations
on April 1, 2011.
Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure and 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 eliminates 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, in order to be economically viable, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled. Management is aware that this per tonne milled measure is impacted by fluctuations in production levels 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 Three Year endedDecember31,
Canadian monthsendedDecember31,
dollars,except
per tonne
amounts 2011 2010 2011 2010
Holt Mine(2)
(3)
Mine-site $ 6,936
costs N/A $ 20,223 N/A
Inventory
adjustments(1) (483) N/A (124) N/A
Mine-site
operating $ 6,453
costs N/A $ 20,099 N/A
Divided by
tonnes of ore
milled 67,778 N/A 188,872 N/A
Mine-site cost
per tonne $ 95
milled N/A $ 106 N/A
Holloway Mine
Mine-site $ 5,418
costs $ 7,667 $ 20,949 $ 30,797
Inventory
adjustments
(1) (181) (1,048) (944) (1,351)
Mine-site
operating $ 5,237
costs $ 6,619 $ 20,005 $ 29,446
Divided by
tonnes of ore
milled 56,225 82,659 204,258 340,593
Mine-site cost
per tonne $ 93
milled $ 80 $ 98 $ 86
Hislop Mine(2)
(3)
Mine-site $ 6,098
costs $ 6,351 $ 24,926 $ 10,700
Inventory
adjustments
(1) (563) (1,117) 269 (95)
Mine-site
operating $ 5,535
costs $ 5,234 $ 25,195 $ 10,605
Divided by
tonnes of ore
milled 92,794 98,333 432,087 208,920
Mine-site cost
per tonne $ 60
milled $ 53 $ 58 $ 51
Note:
(1) This inventory adjustment reflects production costs associated
with unsold bullion and in-circuit inventory.
(2) The Hislop Mine commenced commercial operations on July 1, 2010
and the Holt Mine commenced commercial operations on
April 1, 2011.
(3) Excludes 43,458 tonnes of development ore processed while the
Holt Mine was in pre-production producing 5,435 ounces of
gold in 2011; and 55,930 tonnes of development ore processed
while the Hislop Mine was in pre-production producing
2,075 ounces of gold in 2010.
Cash margin from mine operations
Cash margin from mine operations is a non-GAAP measure which 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.
Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure and is calculated by dividing gold sales as reported in the Company's Financial Statements by the gold ounces sold. It may not be comparable to information in other gold producers' reports and filings.
Operating and Financial Statistics - Holt Mine
Amounts in
thousands of
Canadian
dollars,
except
where Q4 Q3
indicated 2011 2011 Q22011 Q12011 Annual2011 Annual2010
Tonnes milled 67,778 66,556 54,538 43,458 232,330 23,257
Head grade
(g/t Au) 5.57 5.01 3.39 4.15 4.63 2.92
Average mill
recovery 94.1% 93.4% 92.5% 93.6% 93.5% 92.5%
Gold produced
(ounces) 11,421 10,012 5,508 5,435 32,376 2,022
Commercial
gold
production
sold (ounces)
(1) 12,175 8,870 4,979 - 26,024 1,408
Gold sales $ 21,060 $ 15,449 $ 7,284 N/A $ 43,793 N/A
Cash margin
from mine
operations (2) $ 12,054 $ 6,625 $ 581 N/A $ 19,260 N/A
Mine-site cost
per tonne
milled (2) $ 95 $ 106 $ 121 N/A $ 106 N/A
Total cash
cost per ounce
of gold sold
(US dollars)
(2):
Mine cash
costs $ 556 $ 833 $ 1,255 N/A $ 785 N/A
Royalty
costs 166 181 136 N/A 167 N/A
Total cash
cost per ounce
of gold sold
(2) 722 1,014 1,391 N/A 952 N/A
Depreciation
and
depletion 129 134 130 N/A 132 N/A
Total
production
cost per ounce
of gold sold
(US dollars) $ 851 $ 1,148 $ 1,521 N/A $ 1,084 N/A
Average
CAD:USD
exchange rate 1.02 0.98 0.97 0.99 0.99 1.03
Capital
expenditures $ 4,250 $ 1,841 $ 1,963 $ 1,740 $ 9,794 $ 8,546
Notes:
(1) The Holt Mine commenced pre-production activities in the second
half of 2010 and was put into commercial production on April 1,
2011. The operating
results for the Holt Mine prior to April 1, 2011, were
classified as site maintenance and pre-production expenditures.
(2) See pages 8-11 for non-GAAP measurements.
Operating and Financial Statistics - Holloway Mine
Amounts in
thousands of
Canadian
dollars,
except
where Q1
indicated Q42011 Q32011 Q22011 2011 Annual2011 Annual2010
Tonnes milled 56,225 49,437 47,971 50,625 204,258 340,593
Head grade
(g/t Au) 4.03 3.71 3.43 4.13 3.84 6.04
Average mill
recovery 84.1% 85.2% 85.0% 86.4% 85.2% 86.9%
Gold produced
(ounces) 6,126 5,026 4,497 5,813 21,462 57,459
Commercial
gold
production
sold (ounces)
(1) 6,208 5,130 4,996 7,364 23,698 61,447
Gold sales $ 10,750 $ 8,828 $ 7,272 $ 9,996 $ 36,846 $ 77,133
Cash margin
from mine
operations (2) $ 4,116 $ 2,931 $ 1,822 $ 3,115 $ 11,984 $ 40,824
Mine-site cost
per tonne
milled (2) $ 93 $ 98 $ 90 $ 111 $ 98 $ 86
Total cash
cost per ounce
of gold sold
(US dollars)
(2):
Mine cash
costs $ 853 $ 960 $ 964 $ 834 $ 894 $ 485
Royalty
costs 192 212 164 114 167 87
Total cash
cost per ounce
of gold sold
(2) 1,045 1,172 1,128 948 1,061 572
Depreciation
and
depletion 368 540 462 345 418 180
Total
production
cost per ounce
of gold sold
(US dollars) $ 1,413 $ 1,712 $ 1,590 $ 1,293 $ 1,479 $ 752
Average
CAD:USD
exchange rate 1.02 0.98 0.97 0.99 0.99 1.03
Capital
expenditures $ 3,666 $ 2,938 $ 2,986 $ 2,779 $ 12,369 $ 5,070
Notes:
(1) The Holloway Mine commenced production in October 2009.
(2) See pages 8-11 for non-GAAP measurements.
Operating and Financial Statistics - Hislop Mine
Amounts in
thousands of
Canadian dollars,
except
where indicated Q42011 Q32011 Q2 2011 Q12011 Annual2011 Annual2010
Overburden
stripped (m3) 103,346 300,249 472,214 291,307 1,167,116 581,287
Tonnes mined (ore) 107,827 109,457 114,849 117,138 449,271 293,624
(waste) 599,330 738,054 1,303,072 927,216 3,567,672 2,014,541
707,157 847,511 1,417,921 1,044,354 4,016,943 2,308,165
Waste-to-Ore Ratio 5.6 6.7 11.3 7.9 7.9 6.9
Tonnes milled 92,794 107,741 120,677 110,875 432,087 264,850
Head grade (g/t
Au) 1.94 1.68 1.53 1.66 1.69 1.49
Average mill
recovery 83.0% 85.4% 87.2% 88.0% 86.0% 86.4%
Gold produced
(ounces) 4,803 4,980 5,192 5,209 20,184 10,952
Commercial gold
production sold
(ounces) (1) 4,985 5,260 5,185 4,376 19,806 10,592
Gold sales $ 8,625 $ 9,068 $ 7,579 $ 5,947 $ 31,219 $ 12,052
Cash margin from
mine operations
(2) $ 2,527 $ 2,432 $ 1,000 $ 334 $ 6,293 $ 1,351
Mine-site cost per
tonne milled (2) $ 60 $ 59 $ 55 $ 61 $ 58 $ 51
Mine cash cost per
ounce of gold sold
(2) $ 1,196 $ 1,286 $ 1,311 $ 1,301 $ 1,272 $ 1,152
Depreciation and
depletion 177 150 104 95 134 39
Total production
cost per ounce of
gold sold (US
dollars) $ 1,373 $ 1,436 $ 1,415 $ 1,396 $ 1,406 $ 1,191
Average CAD:USD
exchange rate 1.02 0.98 0.97 0.99 0.99 1.03
Capital
expenditures $ 701 $ 2,822 $ 5,244 $ 1,885 $ 10,652 $ 6,134
Notes:
Pre-production activities to prepare the Hislop Mine commenced in
early 2010 and were completed at the end of the second quarter.
The Hislop Mine
(1) began production on July 1, 2010. The operating results for the
Hislop Mine prior to June 30, 2010, were classified as
exploration or site maintenance
and pre-production expenditures where appropriate.
(2) See pages 8-11 for non-GAAP measurements.
Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
December 31, 2011 December 31, 2010
Assets
Current assets:
Cash and cash $ 17,617 $ 32,412
equivalents
Restricted cash 1,739 1,093
Accounts 1,717 10,694
receivable
Inventories 6,369 5,081
Derivative assets 103 1,955
Prepayments and 900 1,694
other assets
28,445 52,929
Exploration and 24,658 23,309
evaluation assets
Producing properties 60,067 46,357
Plant and equipment 45,737 42,401
Reclamation deposits 8,538 8,471
Restricted cash 1,641 1,641
Deferred tax assets 20,365 -
Other assets 716 996
$ 190,167 $ 176,104
Liabilities and
Shareholders' Equity
Current liabilities:
Accounts payable
and other $ 12,754 $ 15,885
liabilities
Employee-related 4,057 2,535
liabilities
Derivative 1,914 -
liabilities
Current portion of 14,413 10,623
long-term debt
Current portion of
capital lease 32 18
obligations
33,170 29,061
Long-term debt 5,356 14,838
Capital lease 67 5
obligations
Asset retirement 10,678 10,156
obligations
Deferred tax - 125
liabilities
49,271 54,185
Shareholders'
equity:
Share capital 98,556 218,482
Share capital to - 832
be issued
Contributed 18,968 42,972
surplus
Warrants 878 878
Stock options 3,128 3,724
Retained earnings 20,011 (144,675)
(deficit)
Accumulated other (645) (294)
comprehensive loss
140,896 121,919
$ 190,167 $ 176,104
Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information or otherwise indicated
Threemonths ended YearendedDecember 31,
December31,
2011 2010 2011 2010
Gold sales $ 40,435 $ 24,761 $ 111,858 $ 89,185
Operating costs
and expenses:
Mine site 18,452 14,017 66,098 41,497
operating
Production 3,285 1,392 8,222 5,513
royalty
Site
maintenance 180 315 264 2,229
and
pre-production
Exploration 1,443 2,419 8,367 7,154
Corporate 1,277 1,362 6,203 6,612
administration
Depreciation 5,014 4,142 16,665 12,991
and depletion
Write-down of - - 300 263
mining assets
29,651 23,647 106,119 76,259
Operating 10,784 1,114 5,739 12,926
income
Finance costs (1,112) (892) (4,304) (7,377)
Mark-to-market
gain (loss) on 1,414 (2,010) (3,347) (6,630)
gold-linked
liabilities
Mark-to-market
gain (loss) on 3,436 796 (3,869) 1,327
foreign currency
derivatives
Foreign exchange (1,120) 311 1,134 1,179
gain (loss)
Gain (loss) on
divestiture of 1,049 - (304) -
non-core assets
Finance income 42 107 687 172
and other
Income (loss) 14,493 (574) (4,264) 1,597
before taxes
Deferred taxes (1,572) 339 21,437 493
Net income
(loss) for the $ 12,921 $ (235) $ 17,173 $ 2,090
period
Other
comprehensive
income (loss)
Unrealized loss
on available for
sale
investments, net
of tax of nil
for
all periods (50) (209) (351) (174)
Comprehensive
income (loss) $ 12,871 $ (444) $ 16,822 $ 1,916
for the period
Basic and
diluted earnings
per share $ 0.04 $ (0.00) $ 0.05 $ 0.01
attributable to
shareholders
Weighted average
number of shares
outstanding
(000's)
Basic 368,067 362,311 367,912 343,082
Diluted 368,739 366,645 369,945 345,854
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
Threemonths ended Year ended December
December 31, 31,
2011 2010 2011 2010
Cash provided by
(used in):
Operating
activities:
Net income
(loss) for the $ 12,921 $ (235) $ 17,173 $ 2,090
period
Items not
affecting cash:
Deferred taxes 1,572 (339) (21,437) (493)
Mark-to-market
(gain) loss on (1,414) 2,010 3,347 6,630
gold-linked
liabilities
Implicit
interest on 956 762 3,720 5,505
gold-linked
liabilities
Mark-to-market
(gain) loss on
foreign (3,436) (796) 3,869 (1,327)
currency
derivatives
Repayment of (3,083) (2,585) (11,522) (11,035)
Gold Notes
Depreciation 5,014 4,142 16,665 12,991
and depletion
Write-down of - - 300 263
mining assets
Loss (gain) on
the
divestiture of (1,049) - 304 -
non-core
assets
Share-based 327 337 1,530 1,295
payments
Finance costs 131 125 522 500
Change in
non-cash
operating 2,042 3,276 8,975 (1,566)
working capital
and other
13,981 6,697 23,446 14,853
Investing
activities:
Additions to
exploration (184) (542) (3,005) (993)
and evaluation
assets
Mine
development (8,544) (6,911) (24,799) (14,905)
expenditures
Additions to
plant and (2,134) (4,001) (8,085) (6,241)
equipment
Proceeds from
the
divestiture of - - 50 75
non-core
assets
Interest
earned on (17) (32) (67) (32)
reclamation
deposits
Cash
collateralized (381) (153) (646) (1,475)
for banking
facilities
(11,639) (36,552) (23,571)
(11,260)
Financing
activities:
Share purchase
warrants and 88 3,820 190 7,055
stock options
exercised
Private
placements of - - - 28,938
common share
units
Share issue - - - (1,704)
expense
Share purchase
plan - - - 203
contributions
Repayment of
secured - - - (7,555)
debentures
Advance
royalty (534) (403) (1,848) (1,363)
payments
Capital lease (7) (17) (31) (88)
payments
(453) 3,400 (1,689) 25,486
Increase
(decrease) in cash
and cash 2,268 (1,542) (14,795) 16,768
equivalents for
the period
Cash and cash
equivalents, 15,349 33,954 32,412 15,644
beginning of
period
Cash and cash
equivalents, end $ 17,617 $ 32,412 $ 17,617 $ 32,412
of period
St Andrew Goldfields Ltd.
CONTACT: about St Andrew Goldfields Ltd., please contact:
Tel: 1-800-463-5139 or (416) 815-9855; Fax: (416) 815-9437;
Website: www.sasgoldmines.com
Suzette N Ramcharan
Manager, Investor Relations
Email: sramcharan@sasgoldmines.com
Jacques Perron
President & CEO
Email: jperron@sasgoldmines.com
Ben Au
CFO, VP Finance & Administration
Email: bau@sasgoldmines.com
