SAS reports 2015 second quarter results - strong operating cash flow and operational performance at Holloway
TORONTO, Aug. 12, 2015 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") reports $9.2 million or $0.03 per share, in operating cash flow for Q2 2015. Net income attributable to shareholders for Q2 2015 was $3.5 million or $0.01 per share, as compared to net income of $0.6 million, or nil, on a per share basis, in Q2 2014. Excluding marked-to-market adjustments on derivative financial instruments, adjusted net earnings (1) for Q2 2015 was $3.3 million or $0.01 per share as compared to an adjusted net loss (1) of $0.2 million or nil, on a per share basis for Q2 2014.Q2 2015 HIGHLIGHTS
Gold production – Produced 23,533 ounces of gold from Holt and Holloway (17% increase from Q2 2014 for the two mines); and on track to meet the top end of the Company's 2015 production guidance.
Gold sold - Sold 23,319 ounces of gold at an average realized price (1) of US$1,201 per ounce for revenues of $34.4 million (9% increase from Q2 2014).
Total cash cost per ounce of gold sold (1) – US$739 per ounce (15% decrease from Q2 2014). Mine site cash cost of US$641 (1) for Q2 2015 is 14% below the Company's mine cash cost guidance of between US$750 and US$800 per ounce.
All-in sustaining cost (AISC) (1) – US$966 per ounce of gold sold (12% or US$132 per ounce decrease from Q2 2014).
Cash margin from operations (1) - $13.2 million ($3.3 million or 33% increase from Q2 2014).
Operating cash flow - $9.2 million or $0.03 per share. For Q2 2015, SAS generated $1.8 million in net cash flow (1) as compared to a $2.6 million cash outflow in Q2 2014.
OUTLOOK FOR 2015
The Company's 2015 production guidance for Holt and Holloway remains between 85,000 – 95,000 ounces of gold at a mine cash costs target of between US$750-US$800 per ounce of gold sold (1). The Taylor production will be included in the Company's production guidance once the timing of the commencement of commercial production is more certain. It is anticipated that commercial production could commence in Q4 2015 and if that occurs, it is anticipated that Taylor would contribute between 10,000 and 12,000 ounces of commercial production in 2015.
SAS is focused on bringing Taylor into commercial production in 2015 and is continuing its cost containment initiative at all of its operations, with the objective of maximizing cash margin from mine operations while exploration programs remain focused on the near-mine targets. SAS is sufficiently funded to achieve its near-term objectives.
Conference Call Information
A conference call will be held Thursday, August 13, 2015 at 10:00 a.m. (EST) to discuss the second quarter 2015 results. Participants may join the call via webcast at www.sasgoldmines.com or call in toll free at 1-866-212-4491. A playback of the conference call will be available via the website and will be posted within 24 hours of the call.
Mine Operations Review
Holt (see Operating and Financial Statistics – Holt Mine on page 12)
Production increased by 5% from Q2 2014 as a result of an increase in ore grade due to mining sequence. For Q2 2015, mine cash cost improved by US$52 per ounce of gold sold from Q2 2014, due to the increased strength of the US dollar relative to the Canadian dollar.
Cash margin from mine operations in Q2 2015 improved by $1.6 million or 19% when compared to Q2 2014 due to an 11% increase in revenue, in conjunction with a 4% reduction in royalty costs.
Holloway (see Operating and Financial Statistics – Holloway Mine on page 13)
Both throughput and ore grade increased by 22% and 26%, respectively, from Q2 2014, resulting in a 55% increase in production from 4,893 ounces of gold in Q2 2014 to 7,582 ounces in Q2 2015.
In Q2 2015, cash margin from mine operations increased 3 times or by $2.1 million over Q2 2014 as a result of the increased throughput and ore grade.
Taylor Project
Underground development activities started at Taylor during Q1 2015 after the decision was made to advance the project into commercial production by the end of 2015. During Q2 2015, the Company commenced with the procurement of $7.2 million of mining equipment and initiated a recruitment campaign for miners to replace the current mine contractors for the project late this quarter. It is anticipated that ore mined during the pre-production period will be stockpiled and processed upon the receipt of the production closure plan. Applications for all permitting requirements, including the mine production closure plan, are currently underway.
Exploration Programs
Exploration activities during Q2 2015 continued to focus on the near mine targets, specifically exploring for strike and depth extensions of the known mineralized zones and also exploring for potential repetitions and satellite zones situated near the operations. In Q2 2015, SAS drilled a total of 11,400 metres of surface core and an additional 10,000 metres of underground drilling. The majority of surface drilling activities were focused on Phase 2 evaluation of Zone 4 West Extension, on the Tousignant West and Mattawasaga west pit extensions on the Holt property. At Holloway surface drilling targeted the down-dip extension of Blacktop mineralization and at Hislop North drilling continued to target the southerly strike extension of the "147 Zone style" mineralization. The majority of the underground drilling took place on the 710m and 925m Sub-levels at Holt targeting the Zone 6 extension, and on the 945m Sub-level at Holloway to evaluate the easterly strike potential of Smoke Deep (See press release dated August 5, 2015 available under the Company's profile on www.sedar.com or on the Company's website at www.sasgoldmines.com.).
Capital Resources
SAS generated $1.8 million in net cash flow in Q2 2015 as compared to a cash outflow of $2.6 million in Q2 2014, despite a 7% decline in gold price. Working capital at the end of quarter was $17.2 million, an increase of $7.5 million from working capital of $9.6 million at the end of 2014. The Company maintained a cash position of $26.8 million at the end of the quarter and also has a US$10.0 million revolving credit facility available and a $7.0 million capital lease facility to be used for the procurement of mining equipment for use at Taylor. In conjunction with the expected cash flows from operations, the Company is well positioned to finance its planned sustaining capital programs, the growth capital required for Taylor and to conduct its planned exploration programs for 2015.
Qualified Person
Production at Holt and Holloway, processing at the Holt Mill, and mine development at Taylor are conducted under the supervision of Marc-Andre Pelletier, P.Eng., the Company's Vice-President and General Manager of Operations.
Exploration activities on the Company's various mineral properties, including the drilling program at Taylor are 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 news release.
The following abbreviations are used to describe the periods under review throughout this release.
| Abbreviation | Period | Abbreviation | Period |
| Q1 2015 | January 1, 2015 – March 31, 2015 | Q1 2014 | January 1, 2014 – March 31, 2014 |
| Q2 2015 | April 1, 2015 – June 30, 2015 | Q2 2014 | April 1, 2014 – June 30, 2014 |
| Q3 2014 | July 1, 2014 – September 30, 2014 | Q3 2013 | July 1, 2013 – September 30, 2013 |
| Q4 2014 | October 1, 2014 - December 31, 2014 | Q4 2013 | October 1, 2013 - December 31, 2013 |
| YTD 2015 | January 1, 2015 – June 30, 2015 | YTD 2014 | January 1, 2014 – June 30, 2014 |
| FY 2015 | January 1, 2015 – December 31, 2015 | FY 2014 | January 1, 2014 – December 31, 2014 |
Non-GAAP Measures
The Company has included the following non-GAAP performance measures: adjusted net earnings; operating cash flow per share; net cash flow; average realized price per ounce of gold sold; total cash cost and all-in sustaining cash costs per ounce of gold sold; cash margin from mine operations; cash margin per ounce of gold sold; 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 6 –11 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Q2 2015 Condensed Interim Financial Statements ("Financial Statements").
The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three months and six months ended June 30, 2015, can be found on pages 14 – 16 of this press release.
To review the complete unaudited Condensed Interim Financial Statements and the Q2 2015 Management's Discussion and Analysis, please see the Company'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, 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 and Holloway mines and is also advancing its Taylor Project into commercial production. The Company is conducting various exploration programs 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 and cash cost guidance for 2015; the advancement of Taylor towards production, the timing thereof, and Taylor's potential 2015 production level; the Company's exploration programs in 2015; and the sufficiency of the Company's capital resources to carry out its planned objectives. Also, Mineral Reserves and Mineral Resources are considered to be forward-looking information as they involve the assessment, based on certain estimates and assumptions, that such Mineral Reserves and Resources can be economically 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 are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.
SUMMARIZED OPERATING AND FINAL INFORMATION
| Amounts in thousands of Canadian dollars, except per share and per unit amounts | Q2 2015 | Q2 2014 | YTD 2015 | YTD 2014 | |||||
| SAS Operating Results | |||||||||
| Gold production (ounces)2 | 23,533 | 22,505 | 47,260 | 46,866 | |||||
| Commercial gold production sold (ounces)2 | 23,319 | 22,850 | 48,270 | 46,350 | |||||
| Per ounce data (US$) | |||||||||
| Average realized price(1) | $ | 1,201 | $ | 1,285 | $ | 1,209 | $ | 1,289 | |
| Mine cash costs | $ | 641 | $ | 761 | $ | 624 | $ | 750 | |
| Royalty costs | $ | 98 | $ | 111 | $ | 104 | 114 | ||
| Total cash cost (1) | $ | 739 | $ | 872 | $ | 728 | $ | 864 | |
| Cash margin(1) | $ | 462 | $ | 413 | $ | 481 | $ | 425 | |
| All-in sustaining costs (1) | $ | 966 | $ | 1,098 | $ | 951 | $ | 1,094 | |
| SAS Financial Results | |||||||||
| Gold sales and total revenue (3) | $ | 35,388 | $ | 31,934 | $ | 73,226 | $ | 65,415 | |
| Cash margin from mine operations (1) | $ | 13,207 | $ | 9,948 | $ | 27,750 | $ | 21,223 | |
| Net income (loss) | $ | 3,503 | $ | 553 | $ | 6,546 | $ | (1,253) | |
| Adjusted net earnings (loss) (1) | $ | 3,255 | $ | (186) | $ | 6,915 | $ | (2,049) | |
| Operating cash flow | $ | 9,238 | $ | 5,461 | $ | 18,724 | $ | 14,929 | |
| Net cash flow (1) | $ | 1,759 | $ | (2,647) | $ | 6,611 | $ | (1,166) | |
| Per share information: | |||||||||
| Basic and diluted income (loss) | $ | 0.01 | $ | 0.00 | $ | 0.02 | $ | 0.00 | |
| Adjusted net earnings (loss) (1) | $ | 0.01 | $ | 0.00 | $ | 0.02 | $ | 0.00 | |
| Operating cash flow (1) | $ | 0.03 | $ | 0.01 | $ | 0.05 | $ | 0.04 | |
| June 30, | December 31, | ||||||||
| SAS Financial Position | 2015 | 2014 | |||||||
| Cash and cash equivalents | $ | 26,805 | $ | 21,485 | |||||
| Working capital | $ | 17,161 | $ | 9,634 | |||||
| Total assets | $ | 198,406 | $ | 191,553 | |||||
| Total non-current financial liabilities | $ | 344 | $ | 1,284 | |||||
| Notes: | |
| (1) | Average realized price per ounce of gold sold, Total cash costs and All-in sustaining cash cost per ounce of gold sold, adjusted net earnings (loss), Net cash flow and Operating cash flow per share are non-GAAP measures. Refer to pages 6–11 hereof for a discussion and the reconciliation of these non-GAAP measurements to reported gold sales and production costs per the Financial Statements. |
| (2) | Gold production and commercial production sold in YTD 2015 excludes 2,427 ounces (none in YTD 2014) of gold poured from processing 7,756 tonnes of material extracted from the Taylor bulk sample program; and 628 ounces of gold recovered from processing 3,800 tonnes of material from Taylor in Q2 2015. |
| (3) | Gold sales and total revenue includes $1.1 million of toll milling revenue earned in Q1 2015 and $1.0 million in Q2 2015 (none in Q1 2014 and $0.3 million in Q2 2014). |
NON-GAAP MEASURES
Adjusted net earnings (loss)
Adjusted net earnings (loss) 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, and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Net income (loss) per Financial Statements | $ | 3,504 | $ | 553 | $ | 3,043 | $ | 6,546 | $ | (1,253) | |
| Mark-to-market loss (gain) on gold-linked liabilities | (62) | (56) | 177 | 115 | 400 | ||||||
| Mark-to-market loss (gain) on foreign currency derivatives | (269) | (1,128) | 646 | 377 | (883) | ||||||
| Loss on disposal of fixed assets | - | 149 | - | - | 149 | ||||||
| Net change in provision | - | - | - | - | (777) | ||||||
| Tax effect of above items | 83 | 296 | (206) | (123) | 315 | ||||||
| Adjusted net earnings (loss) | $ | 3,256 | $ | (186) | $ | 3,660 | $ | 6,915 | $ | (2,049) | |
| Weighted average number of shares outstanding (000s) | |||||||||||
| Basic | 368,274 | 368,296 | 368,274 | 368,274 | 368,296 | ||||||
| Diluted | 368,314 | 368,237 | 368,296 | 368,306 | 368,296 | ||||||
| Adjusted net earnings (loss) per share - basic and diluted | $ | 0.01 | $ | 0.00 | $ | 0.01 | $ | 0.02 | $ | (0.01) | |
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 have a standardized meaning defined by IFRS 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 Q2 2015, Q2 2014 and Q1 2015; and YTD 2015 and 2014:
| Amounts in thousands of Canadian dollars, except where indicated | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | |||||
| Mine site operating costs per Financial Statements | $ | 19,367 | $ | 19,228 | $ | 19,888 | $ | 39,255 | $ | 38,417 |
| Less: Toll milling revenue | (987) | (269) | (1,083) | (2,070) | (269) | |||||
| Production royalties per Financial Statements | 2,814 | 2,758 | 3,407 | 6,221 | 5,775 | |||||
| Total cash costs | $ | 21,194 | $ | 21,717 | $ | 22,212 | $ | 43,406 | $ | 43,923 |
| Divided by gold ounces sold | 23,319 | 22,850 | 24,951 | 48,270 | 46,350 | |||||
| Total cash cost per ounce of gold sold (Canadian dollars) | $ | 909 | $ | 950 | $ | 890 | $ | 899 | $ | 948 |
| Average 1 USD ?CAD exchange rate | $ | 1.23 | $ | 1.09 | $ | 1.24 | $ | 1.24 | $ | 1.10 |
| Total cash cost per ounce of gold sold (US$) | $ | 739 | $ | 872 | $ | 717 | $ | 728 | $ | 864 |
All-in sustaining cost per ounce of gold sold
All-in sustaining cost per ounce of gold sold is a non-GAAP performance measure, which 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 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. To report on this performance metrics, the Company uses the all-in sustaining definition as set out in the guidance note released by the World Gold Council on June 27, 2013. All-in sustaining costs include mine-site operating costs and production royalties incurred at the Company's mining operations (net of toll milling revenue), sustaining capital expenditures, 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. 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.
The Company determines sustaining capital as those capital expenditures that are necessary to maintain current gold production and execute the current mine plan. Capital expenditures to develop new operations, or related to projects at existing operations where these projects will enhance gold production or Mineral Reserves, are considered development capital. For Q2 2015, all capital expenditures at Holt and Holloway are classified as sustaining; and the capital expenditures incurred to bring Taylor, net of bulk sample gold sales, are classified as development capital.
| Amounts in thousands of Canadian dollars, except where indicated | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Mine site operating costs per Financial Statements | $ | 19,367 | $ | 19,228 | $ | 19,888 | $ | 39,255 | $ | 38,417 | |
| Less: Toll milling revenue | (987) | (269) | (1,083) | (2,070) | (269) | ||||||
| Production royalties per Financial Statements | 2,814 | 2,758 | 3,407 | 6,221 | 5,775 | ||||||
| Add (less): | |||||||||||
| Sustaining mine capital | 4,021 | 3,921 | 4,460 | 8,481 | 8,270 | ||||||
| Mine site exploration | 343 | 207 | 605 | 948 | 434 | ||||||
| Mine reclamation obligation | 49 | 104 | 102 | 151 | 208 | ||||||
| Corporate administration | 2,083 | 1,402 | 1,634 | 3,717 | 2,764 | ||||||
| All-in sustaining costs | $ | 27,690 | $ | 27,351 | $ | 29,013 | $ | 56,703 | $ | 55,599 | |
| Divided by gold ounces sold | 23,319 | 22,850 | 24,951 | 48,270 | 46,350 | ||||||
| All-in sustaining cost per ounce of gold sold (Canadian dollars) | $ | 1,187 | $ | 1,197 | $ | 1,163 | $ | 1,175 | $ | 1,200 | |
| Average 1 USD ?CAD exchange rate | $ | 1.23 | $ | 1.09 | $ | 1.24 | $ | 1.24 | $ | 1.10 | |
| All-in sustaining cost per ounce of gold sold (US$) | $ | 966 | $ | 1,098 | $ | 937 | $ | 951 | $ | 1,094 | |
Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure, which does not have a standardized meaning defined by IFRS 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 toll milling revenue and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Holt Mine | |||||||||||
| Mine site costs per Financial Statements | $ | 12,479 | $ | 11,051 | $ | 12,579 | $ | 25,058 | $ | 21,355 | |
| Less: toll milling revenue allocation | (700) | (137) | (769) | (1,469) | (137) | ||||||
| Inventory adjustments (1) | (341) | 354 | (157) | (498) | 954 | ||||||
| Mine site operating costs | $ | 11,438 | $ | 11,268 | $ | 11,653 | $ | 23,091 | $ | 22,172 | |
| Divided by tonnes of ore milled | 106,026 | 106,282 | 108,766 | 214,792 | 219,561 | ||||||
| Mine site cost per tonne milled | $ | 108 | $ | 106 | $ | 107 | $ | 108 | $ | 101 | |
| Holloway Mine | |||||||||||
| Mine site costs per Financial Statements | $ | 6,888 | $ | 5,597 | $ | 7,309 | $ | 14,197 | $ | 11,778 | |
| Less: toll milling revenue allocation | (287) | (92) | (314) | (601) | (92) | ||||||
| Inventory adjustments (1) | 1 | (441) | (87) | (86) | (67) | ||||||
| Mine site operating costs | $ | 6,602 | $ | 5,064 | $ | 6,908 | $ | 13,510 | $ | 11,619 | |
| Divided by tonnes of ore milled | 49,856 | 40,932 | 45,617 | 95,473 | 83,913 | ||||||
| Mine site cost per tonne milled | $ | 132 | $ | 124 | $ | 151 | $ | 142 | $ | 138 | |
| Hislop Mine | |||||||||||
| Mine site costs per Financial Statements | $ | - | $ | 2,580 | - | - | $ | 5,284 | |||
| Less: toll milling revenue allocation | - | (41) | - | - | (41) | ||||||
| Inventory adjustments (1) | - | (49) | - | - | 7 | ||||||
| Mine site operating costs | $ | - | $ | 2,490 | $ | - | $ | - | $ | 5,250 | |
| Divided by tonnes of ore milled | - | 47,785 | - | - | 79,784 | ||||||
| Mine site cost per tonne milled | $ | - | $ | 52 | $ | - | $ | - | $ | 66 | |
| Mine site costs per Financial Statements | |||||||||||
| Holt | $ | 12,479 | $ | 11,051 | $ | 12,579 | $ | 25,058 | $ | 21,355 | |
| Holloway | 6,888 | 5,597 | 7,309 | 14,197 | 11,778 | ||||||
| Hislop | - | 2,580 | - | - | 5,284 | ||||||
| $ | 19,367 | $ | 19,228 | $ | 19,888 | $ | 39,255 | $ | 38,417 | ||
| Note: | |
| (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, which does not have a standardized meaning defined by IFRS and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | |||||||
| Gold sales per Financial Statements | [A] | $ | 34,401 | $ | 31,665 | $ | 36,755 | $ | 71,156 | $ | 65,146 | |
| Mine site operating costs per Financial Statements | 19,367 | 19,228 | 19,888 | 39,255 | 38,417 | |||||||
| Less: Toll milling revenue | (987) | (269) | (1,083) | (2,070) | (269) | |||||||
| Production royalties per Financial Statements | 2,814 | 2,758 | 3,407 | 6,221 | 5,775 | |||||||
| [B] | 21,194 | 21,717 | 22,212 | 43,406 | 43,923 | |||||||
| Cash margin from mine operations | [A] - [B] | $ | 13,207 | $ | 9,948 | $ | 14,543 | $ | 27,750 | $ | 21,223 | |
| Breakdown of cash margin from mine operations by mines: | ||||||||||||
| Holt Mine | $ | 10,010 | $ | 8,407 | $ | 10,209 | $ | 20,219 | $ | 19,226 | ||
| Holloway Mine | 3,197 | 1,083 | 4,334 | 7,531 | 1,672 | |||||||
| Hislop Mine | - | 458 | - | - | 325 | |||||||
| $ | 13,207 | $ | 9,948 | $ | 14,543 | $ | 27,750 | $ | 21,223 | |||
Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Gold sales per Financial Statements | $ | 34,401 | $ | 31,665 | $ | 36,755 | $ | 71,156 | $ | 65,146 | |
| Foreign exchange loss (gain) realized on the settlement of gold sales | 33 | 192 | (637) | (614) | 98 | ||||||
| Loss on foreign currency derivative cash flow hedges realized | 15 | 158 | 1,437 | 1,452 | 387 | ||||||
| $ | 34,449 | $ | 32,015 | $ | 37,555 | $ | 71,994 | $ | 65,631 | ||
| Average 1 USD ?CAD exchange rate | 1.23 | 1.09 | 1.24 | 1.24 | 1.10 | ||||||
| Gold sales recorded in US$ | $ | 28,028 | $ | 29,353 | $ | 30,262 | $ | 58,290 | $ | 59,759 | |
| Divided by gold ounces sold | 23,319 | 22,850 | 24,751 | 48,270 | 46,350 | ||||||
| Average realized price per ounce of gold sold (US$) | $ | 1,201 | $ | 1,285 | $ | 1,213 | $ | 1,209 | $ | 1,289 | |
Cash margin per ounce of gold sold
Cash margin per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | |||||||
| Per ounce of gold sold: | ||||||||||||
| Average realized price per ounce of gold sold | [A] | $ | 1,201 | $ | 1,285 | $ | 1,213 | $ | 1,209 | $ | 1,289 | |
| Total cash cost per ounce of gold sold | [B] | 739 | 872 | 717 | 728 | 864 | ||||||
| Cash margin per ounce of gold sold | [A] - [B] | $ | 462 | $ | 413 | $ | 496 | $ | 481 | $ | 425 | |
Net cash flow
Net cash flow is a non-GAAP measure which does not have a standardized meaning defined by IFRS and 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Cash flow from operating activities per Financial Statements | $ | 9,238 | $ | 5,461 | $ | 9,486 | $ | 18,724 | $ | 14,929 | |
| Less: | |||||||||||
| Cash used in investing activities per Financial Statements | 7,479 | 8,108 | 4,634 | 12,113 | 16,095 | ||||||
| $ | 1,759 | $ | (2,647) | $ | 4,852 | $ | 6,611 | $ | (1,166) | ||
Operating cash flow per share
Operating cash flow per share is a non-GAAP measure and 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 year. It may not be comparable to information in other gold producers' reports and filings.
| Amounts in thousands of Canadian dollars, except per share amounts | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | |||||
| Cash flow from operating activities per Financial Statements | $ | 9,238 | $ | 5,461 | $ | 9,486 | $ | 18,724 | $ | 14,929 |
| Weighted average number of shares outstanding (000s) | 368,274 | 368,296 | 368,274 | 368,274 | 368,296 | |||||
| Operating cash flow per share | $ | 0.03 | $ | 0.01 | $ | 0.03 | $ | 0.05 | $ | 0.04 |
Operating and Financial Statistics – Holt Mine
| Amounts in thousands of Canadian dollars, except per unit amounts | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Tonnes milled | 106,026 | 106,282 | 108,766 | 214,792 | 219,561 | ||||||
| Head grade (g/t Au) | 4.91 | 4.70 | 4.86 | 4.88 | 4.90 | ||||||
| Average mill recovery | 95.4% | 94.2% | 95.0% | 95.2% | 94.4% | ||||||
| Gold produced (ounces) | 15,951 | 15,140 | 16,152 | 32,103 | 32,637 | ||||||
| Commercial gold production sold (ounces) | 16,201 | 15,534 | 16,646 | 32,847 | 32,050 | ||||||
| Gold sales revenue | $ | 23,909 | $ | 21,521 | $ | 24,499 | $ | 48,408 | $ | 45,062 | |
| Cash margin from mine operations (1) | $ | 10,010 | $ | 8,407 | $ | 10,209 | $ | 20,219 | $ | 19,226 | |
| Mine site cost per tonne milled (1) | $ | 108 | $ | 106 | $ | 107 | $ | 108 | $ | 101 | |
| Total cash cost per ounce of gold sold (US dollars) (1) | |||||||||||
| Mine cash costs * | $ | 592 | $ | 644 | $ | 572 | $ | 581 | $ | 604 | |
| Royalty costs | 106 | 130 | 120 | 113 | 131 | ||||||
| Total cash cost per ounce of gold sold (US dollars) (1) | $ | 698 | $ | 774 | $ | 692 | $ | 694 | $ | 735 | |
| Capital expenditures | $ | 3,710 | $ | 3,608 | $ | 4,217 | $ | 7,927 | $ | 7,680 | |
| Depreciation and depletion expense | $ | 2,884 | $ | 2,749 | $ | 3,107 | $ | 5,991 | $ | 5,542 | |
| * Toll milling revenue is allocated to each of SAS's mine operations | |||||||||||
| Note: | |
| (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 and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 6 – 11 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 | Q2 2015 | Q2 2014 | Q1 2015 | YTD 2015 | YTD 2014 | ||||||
| Tonnes milled | 49,856 | 40,932 | 45,617 | 95,473 | 83,913 | ||||||
| Head grade (g/t Au) | 5.15 | 4.09 | 5.58 | 5.35 | 4.12 | ||||||
| Average mill recovery | 91.9% | 90.9% | 92.6% | 92.2% | 90.5% | ||||||
| Gold produced (ounces) | 7,582 | 4,893 | 7,575 | 15,157 | 10,047 | ||||||
| Commercial gold production sold (ounces) | 7,118 | 5,157 | 8,305 | 15,423 | 10,332 | ||||||
| Gold sales revenue | $ | 10,492 | $ | 7,149 | $ | 12,256 | $ | 22,748 | $ | 14,518 | |
| Cash margin from mine operations (1) | $ | 3,197 | $ 1,083 | $ | 4,334 | $ | 7,531 | $ | 1,672 | ||
| Mine site cost per tonne milled (1) | $ | 132 | $ | 124 | $ | 151 | $ | 142 | $ | 138 | |
| Total cash cost per ounce of gold sold (US dollars) (1) | |||||||||||
| Mine cash costs * | $ | 755 | $ | 979 | $ | 679 | $ | 714 | $ | 1,031 | |
| Royalty costs | 79 | 100 | 90 | 85 | 102 | ||||||
| Total cash cost per ounce of gold sold (US dollars) (1) | $ | 834 | $ | 1,079 | $ | 769 | $ | 799 | $ | 1,133 | |
| Capital expenditures | $ | 231 | $ | 270 | $ | 231 | $ | 462 | $ | 520 | |
| Depreciation and depletion expense | $ | 266 | $ | 3,266 | $ | 574 | $ | 839 | $ | 10,591 | |
| * Toll milling revenue is allocated to each of SAS's mine operations | |||||||||||
| Note: | |
| (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 and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 6-11 hereof for an explanation and reconciliation of non-GAAP measurements). |
Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Revenue | ||||||||||||
| Gold sales | $ | 34,401 | $ | 31,665 | $ | 71,156 | $ | 65,146 | ||||
| Toll milling | 987 | 269 | 2,070 | 269 | ||||||||
| 35,388 | 31,934 | 73,226 | 65,415 | |||||||||
| Operating costs and expenses: | ||||||||||||
| Mine site operating | 19,367 | 19,228 | 39,255 | 38,417 | ||||||||
| Production royalty | 2,814 | 2,758 | 6,221 | 5,775 | ||||||||
| Site maintenance | 51 | (34) | 102 | 8 | ||||||||
| Exploration | 2,004 | 1,263 | 3,814 | 2,428 | ||||||||
| Corporate administration | 2,083 | 1,402 | 3,717 | 2,764 | ||||||||
| Depreciation and depletion | 3,269 | 6,370 | 7,084 | 16,790 | ||||||||
| Loss on disposal of fixed assets | - | 149 | - | 149 | ||||||||
| 29,588 | 31,136 | 60,193 | 66,331 | |||||||||
| Operating income (loss) | 5,800 | 798 | 13,033 | (916) | ||||||||
| Finance costs | 237 | 421 | 526 | 969 | ||||||||
| Mark-to-market (gain) loss on gold-linked liabilities | (62) | (56) | 115 | 400 | ||||||||
| Mark-to-market (gain) loss on foreign currency derivatives | (269) | (1,128) | 377 | (883) | ||||||||
| Foreign exchange (gain) loss | (150) | 458 | 201 | 1,241 | ||||||||
| Finance income and other | (81) | (70) | (132) | (940) | ||||||||
| (325) | (375) | 1,087 | 787 | |||||||||
| Income (loss) before taxes | 6,125 | 1,173 | 11,946 | (1,703) | ||||||||
| Net deferred tax expense (recovery) | 2,622 | 620 | 5,400 | (450) | ||||||||
| Net income (loss) attributable to shareholders | $ | 3,503 | $ | 553 | $ | 6,546 | $ | (1,253) | ||||
| Other comprehensive income (loss) | ||||||||||||
| Unrealized gain (loss) on available-for-sale investments (nil tax effect) | (64) | (23) | 62 | 115 | ||||||||
| Unrealized loss on derivatives designated as cash flow hedges, net of tax of $32, $42, $56 and $34 | 97 | 126 | 168 | 104 | ||||||||
| 33 | 103 | 230 | 219 | |||||||||
| Comprehensive income (loss) for the period | $ | 3,536 | $ | 656 | $ | 6,776 | $ | (1,034) | ||||
| Basic and diluted income (loss) per share | $0.01 | $0.00 | $0.02 | $0.00 | ||||||||
| Weighted average number of shares outstanding (000's) | ||||||||||||
| Basic | 368,274 | 368,296 | 368,274 | 368,296 | ||||||||
| Diluted | 368,314 | 368,337 | 368,306 | 368,296 | ||||||||
Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Operating activities: | |||||||||||||
| Net income (loss) for the period | $ | 3,503 | $ | 553 | $ | 6,546 | $ | (1,253) | |||||
| Items not affecting cash: | |||||||||||||
| Net deferred tax expense (recovery) | 2,622 | 620 | 5,400 | (450) | |||||||||
| Mark-to-market loss on gold-linked liabilities | (62) | (56) | 115 | 400 | |||||||||
| Non-cash interest | 193 | 348 | 436 | 767 | |||||||||
| Mark-to-market loss on foreign currency derivatives | (269) | (1,128) | 377 | (883) | |||||||||
| Depreciation and depletion | 3,269 | 6,370 | 7,084 | 16,790 | |||||||||
| Loss on disposal of fixed assets | - | 149 | - | 149 | |||||||||
| Net change in provision | - | - | - | (777) | |||||||||
| Share-based payments | 127 | 146 | 184 | 190 | |||||||||
| Net change in non-cash operating working capital and other | (118) | (1,496) | (1,364) | 144 | |||||||||
| Interest paid | (27) | (45) | (54) | (148) | |||||||||
| Cash provided by operating activities | 9,238 | 5,461 | 18,724 | 14,929 | |||||||||
| Investing activities: | |||||||||||||
| Additions to exploration and evaluation assets | (12) | (3,746) | (14) | (8,110) | |||||||||
| Mine development expenditures | (6,510) | (2,000) | (8,947) | (4,610) | |||||||||
| Additions to plant and equipment | (1,375) | (2,030) | (2,176) | (3,922) | |||||||||
| Amounts payable on capital additions | 429 | (400) | (854) | 495 | |||||||||
| Reclamation costs and other | (11) | (17) | (23) | (33) | |||||||||
| Cash collateralized for banking facilities | - | 85 | (99) | 85 | |||||||||
| Cash used in investing activities | (7,479) | (8,108) | (12,113) | (16,095) | |||||||||
| Financing activities: | |||||||||||||
| Advance royalty payments | (441) | (289) | (899) | (708) | |||||||||
| Capital lease payments | (274) | (280) | (545) | (540) | |||||||||
| Repayment of term credit facility | - | (7,576) | - | (9,815) | |||||||||
| Cash used in financing activities | (715) | (8,145) | (1,444) | (11,063) | |||||||||
| Effects of exchange rate changes on cash and cash equivalents | 4 | (760) | 153 | (1,398) | |||||||||
| Increase (decrease) in cash and cash equivalents | 1,048 | (11,552) | 5,320 | (13,627) | |||||||||
| Cash and cash equivalents, beginning of period | 25,757 | 31,615 | 21,485 | 33,690 | |||||||||
| Cash and cash equivalents, end of period | $ | 26,805 | $ | 20,063 | $ | 26,805 | $ | 20,063 | |||||
Balance Sheets
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars
| June 30, 2015 | December 31, 2014 | |||||||||
| Unaudited | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 26,805 | $ | 21,485 | ||||||
| Accounts receivable | 1,285 | 1,220 | ||||||||
| Inventories | 9,523 | 10,128 | ||||||||
| Prepayments and other assets | 1,333 | 324 | ||||||||
| 38,946 | 33,157 | |||||||||
| Exploration and evaluation assets | 9,949 | 47,193 | ||||||||
| Mines under development | 39,835 | - | ||||||||
| Producing properties and mines under development | 45,273 | 41,907 | ||||||||
| Plant and equipment | 34,317 | 36,144 | ||||||||
| Reclamation deposits | 7,759 | 7,736 | ||||||||
| Restricted cash | 2,496 | 2,397 | ||||||||
| Deferred tax assets | 19,559 | 22,809 | ||||||||
| Other assets | 272 | 210 | ||||||||
| $ | 198,406 | $ | 191,553 | |||||||
| Liabilities and Shareholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and other liabilities | $ | 11,996 | $ | 13,094 | ||||||
| Employee-related liabilities | 5,106 | 4,954 | ||||||||
| Royalties payable | 1,138 | 1,220 | ||||||||
| Provisions | 250 | 250 | ||||||||
| Derivative liabilities | 654 | 501 | ||||||||
| Current portion of long-term debt | 2,385 | 2,579 | ||||||||
| Current portion of asset retirement obligations | 256 | 925 | ||||||||
| 21,785 | 23,523 | |||||||||
| Long-term debt | 344 | 1,284 | ||||||||
| Asset retirement obligations | 8,315 | 7,950 | ||||||||
| Deferred tax liabilities | 5,432 | 3,226 | ||||||||
| 35,876 | 35,983 | |||||||||
| Shareholders' equity: | ||||||||||
| Share capital | 98,569 | 98,575 | ||||||||
| Contributed surplus | 21,358 | 21,157 | ||||||||
| Stock options | 3,975 | 3,986 | ||||||||
| Retained earnings | 38,508 | 31,962 | ||||||||
| Accumulated other comprehensive income (loss) | 120 | (110) | ||||||||
| 162,530 | 155,570 | |||||||||
| $ | 198,406 | $ | 191,553 | |||||||
All dollar amounts are stated in Canadian dollars, unless otherwise indicated
SOURCE St Andrew Goldfields Ltd.
Contact
For further information about St Andrew Goldfields Ltd., please contact:
Tel: 1-800-463-5139 or (416) 815-9855
Fax: (416) 815-9437
Website: www.sasgoldmines.com
Keyvan Salehi, P. Eng., MBA, VP, Corporate Development and Technical Services
ksalehi@sasgoldmines.com
Duncan Middlemiss, P. Eng., President & CEO
dmiddlemiss@sasgoldmines.com
Ben Au, CFO, VP Finance & Administration
bau@sasgoldmines.com
