|
TORONTO , Jan. 9, 2015 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (ANX.TO) is pleased to report its financial and operating results for the three months ended November 30 , 2014. The Company generated Pine Cove Project EBITDA (see Reconciliation of Non-GAAP Financial Measures) for the three months ended November 30, 2014 of $613,468 . The Company sold 3,431 ounces of gold resulting in $4,798,179 in revenue at an average sales price of $1,398 per ounce. Cash cost per ounce sold at the Pine Cove Project was $1,220 and all-in sustaining cash cost was $1,792 . Adjusted net loss for the three months ended November 30, 2014 was $828,120 , which excluded the write down of the Chilean assets. As at November 30, 2014 , the Company had cash and cash equivalents of $1,368,936 and net working capital of $1,195,115 .
The Company generated Pine Cove Project EBITDA (see Reconciliation of Non-GAAP Financial Measures) for the six months ended November 30, 2014 of $1,677,684 . The Company sold 7,364 ounces of gold resulting in $10,309,791 in revenue at an average sales price of $1,400 per ounce. Cash cost per ounce sold at the Pine Cove Project was $1,172 and all-in sustaining cash cost was $1,613 . Adjusted net loss for the three months ended November 30, 2014 was $1,014,678 , which excluded the write down of the Chilean assets.
President and CEO, Dustin Angelo , stated, "The second quarter was a time for laying a much larger foundation for our future beyond the Pine Cove deposit. We spent significant resources on drilling at Stog'er Tight to develop the next deposit for our project and trenching at the Argyle zone, a new discovery in our pipeline of targets. While long term investment was the focus in the quarter, we still made some remarkable, sustainable improvements at the Pine Cove mill, which will drive more ounces of production and help fund our long term plans. During October and November, the mill operated at 96% availability and an average throughput of 1,101 tonnes per operating day which was 18% more than the run rate for the previous 12 months. Pine Cove continues to be the cash flow engine that supports all of our exploration and capital programs.
As at November 30, 2014 , an impairment charge of $2,260,158 was recorded against the carrying value of the Chilean assets mainly a result of Tal Tal's inability to make future royalty, sales price and milestone payments. Despite this, Anaconda continues to maintain a strong balance sheet and made a final government loan payment on December 1st, 2014 , retiring the initial $500,000 loan. We expect positive cash flow from operations to continue to fund operations and exploration growth initiatives during the second half of fiscal 2015."
Highlights for the three and six months ended November 30 , 2014
OPERATING PERFORMANCE
- As at November 30, 2014 , the Company had cash and cash equivalents of $1,368,936 and net working capital of $1,195,115 .
- For the three months ended November 30, 2014 , the Company sold 3,431 ounces of gold and generated $4,798,179 in revenue at an average sales price of $1,398 per ounce.
- For the six months ended November 30, 2014 , the Company sold 7,364 ounces of gold and generated $10,309,791 in revenue at an average sales price of $1,400 per ounce.
- The mill processed 1,056 tonnes of ore per operating day for the three months ended November 30, 2014 .
- The overall recovery in the mill for the three and six months ended November 30, 2014 was 85%.
- Mill availability was 88% for the three months ended November 30, 2014 and was as high as 98% for the month of October.
- Cash flow from operations was $1,282,338 for the six months ended November 30, 2014 .
- Cash cost per ounce sold at the Pine Cove Project for the three and six months ended November 30, 2014 was $1,220 and $1,172 per ounce respectively.
- All-in sustaining cash cost per ounce sold ("AISC"), including corporate administration, capital expenditures and exploration costs for the three and six months ended November 30, 2014 was $1,792 and $1,613 per ounce respectively.
- A write down of Chilean assets was recognized during the three months ended November 30, 2014 of $2,260,158 .
- At the Pine Cove Project, EBITDA (see Reconciliation of Non-GAAP Financial Measures) for the three and six months ended November 30, 2014 was $613,468 and $1,677,684 respectively.
- On a consolidated basis, EBITDA for the three and six months ended November 30, 2014 was $115,658 and $980,830 , respectively, excluding the write down of Chilean assets.
- Net loss for the three and six months ended November 30, 2014 was $3,170,174 and $3,345,984 respectively. Adjusted net loss for the three and six months ended November 30, 2014 was $828,120 and $1,014,678 , which excluded the write down of the Chilean assets.
- Purchase of property, mill and equipment for the six months ended November 30, 2014 was $1,168,931 . Key items included tailing expansion costs of $676,000 , dry stacking of $138,000 , a compressor of $88,000 , waste dump development of $60,000 , blast monitoring of $58,000 , men's dry upgrades of $50,000 and survey equipment of $38,000 .
- Additions to production stripping assets for the six months ended November 30, 2014 were $353,988 .
GROWTH INITIATIVES
- Approximately $1,100,000 was spent at the Pine Cove Project on exploration for the six months ended November 30, 2014 . The Company's exploration initiatives included a Diamond drill program at the Stog'er Tight deposit, the commencement of a drill program at the Pine Cove deposit and trenching and soil sampling.
Operations overview
During the three months ended November 30, 2014 , the gold sales volume of 3,431 ounces represented a 11% decrease over the same period in fiscal 2014 largely due to a change in ore grade from 1.80 grams per tonne ("gpt") for the three months ended November 30, 2013 to 1.60 gpt for the three months ended November 30, 2014 . Average sales price for the three months ended November 30, 2014 was $1,398 per ounce versus $1,376 per ounce for the same period in fiscal 2014. As a result of the lower sales volume, gross revenue for the three months ended November 30, 2014 of $4,798,179 was lower than the same period of fiscal 2014 by $501,267 or 9%.
The following table summarizes the key operating metrics for the three and six months ended November 30, 2014 and 2013:
|
OPERATING STATISTICS:
|
For the three months ended
|
For the six months ended
| |
November 30
2014
|
November 30
2013
|
November 30
2014
|
November 30
2013
| |
Mill
|
|
|
|
| |
Operating days
|
81
|
79
|
168
|
164
| |
Availability
|
88%
|
87%
|
92%
|
90%
| |
Dry tonnes processed
|
85,515
|
76,114
|
169,297
|
160,004
| |
Tonnes per 24-hour period
|
1,056
|
963
|
1,008
|
976
| |
Grade (grams per tonne)
|
1.60
|
1.80
|
1.70
|
1.86
| |
Overall mill recovery
|
85%
|
83%
|
85%
|
83%
| |
Gold sales volume (troy oz.)
|
3,431
|
3,852
|
7,364
|
7,948
| |
Mine
|
|
|
|
| |
Operating days
|
63
|
62
|
127
|
126
| |
Ore production (tonnes)
|
77,489
|
84,533
|
166,728
|
158,722
| |
Waste production (tonnes)
|
457,387
|
427,845
|
949,427
|
912,359
| |
Total production (tonnes)
|
534,876
|
512,378
|
1,116,155
|
1,071,081
| |
Waste: Ore ratio
|
5.9
|
5.1
|
5.7
|
5.7
|
MILLING OPERATIONSThe mill operated for 81 days during the second quarter of fiscal 2015 and processed 85,515 dry tonnes of ore resulting in a record average run rate of 1,056 tonnes per operating day. Tonnes processed in the second quarter of fiscal 2015 were 12% higher than the similar period in fiscal 2014. Mill availability was 88% and recovery was 85%, both improvements in comparison to 87% and 83%, respectively, in the second quarter of fiscal 2014. During the month of September, a preventative mill maintenance program was performed which included a liner and lifter change and repairs on the thickener tank, cyclone feed pump and floatation air compressor. On the crushing plant, the crusher enclosure was completed to mitigate previous winter weather effects and conveyor belts were vulcanized. As a result of these repairs and management's focus on certain operating procedures, the mill achieved new levels of production with October and November achieving 98% and 95% availability respectively, resulting in both months having throughput levels in excess of 32,000 tonnes per month compared to the second quarter of fiscal 2014 average of 25,371 tonnes per month. Recovery for the two months was 86% and 87% respectively.
MINING OPERATIONSThe pit operated for 63 days in the second quarter of fiscal 2015 and produced 77,489 tonnes of ore and 457,387 tonnes of waste. Mining production remained at elevated levels in the second quarter of fiscal 2015, as planned, to complete stacking of waste material for the tailings dam expansion project, which is near completion. Management continues to focus on improving grade by updating ore solids and the block model for the Pine Cove deposit and using pit mapping tools to provide more accurate mine planning and ore identification. In addition, the Company has finished a series of blast movement monitoring tests and is currently evaluating the efficacy of incorporating this tool into its operating plans. Lastly, Anaconda has just begun a research project in partnership with the Industrial Research Assistance Program to install GPS on its primary excavator to improve accuracy of digging within ore limits and decreasing dilution.
EXPLORATIONThe Company developed a strategy to leverage the existing infrastructure at Pine Cove by exploring and developing its mineral and mining leases in search of two general mineralization styles: Pine Cove like, quartz-carbonate-pyrite hosted (2+ gpt) mineralization and higher grade (5+ gpt) quartz vein ± carbonate ± pyrite mineralization. The strategy involves delineating more Pine Cove like ore through the expansion of the current Pine Cove resource, delineation and expansion of the Stog'er Tight deposit and the discovery of similar deposits, while also delineating higher-grade deposits such as Deer Cove and Romeo and Juliet and discovery of similar style deposits to incrementally increase the feed grade for the mill.
Consistent with this strategy, in the six months ended November 30, 2014 , the Company has made the following advances in exploration:
- Conducted a Diamond drill program at the Deer Cove and Stog'er Tight deposits.
- Initiated a drill program at the Pine Cove deposit.
- Trenching and soil sampling at various locations around the Ming's Bight Peninsula including the Goldenville trend and the Ming's West area.
Deer CoveExploration activities for the six months ended November 30, 2014 included the continuation of a Diamond drill program on the Deer Cove deposit, assemblage of historical data, geological mapping, core cutting and analysis, and initial work on the resource model. These activities were coordinated to achieve the goal of preparing an internal resource estimate to be used in assessing the next stage of exploration and/or development.
Stog'er TightExploration activities for the six months ended November 30, 2014 included the completion of a Diamond drill program on the Stog'er Tight deposit. The Stog'er Tight drill program consisted of 2,265 metres of Diamond drilling in 31 holes, designed to infill known shallow mineralization, intersect down dip mineralization in areas where gold is anticipated, but not previously intersected (holes BN14-198, 200 to 203, and 205) and to verify historical drilling programs by twinning existing drill holes in anticipation of publishing an NI 43-101 compliant resource (holes BN14-208 to 216). As part of this design, holes were distributed over approximately 500 metres of strike length. All drill holes tested mineralization at depths less than 125 metres. In addition, the program built on historic data and led to a better understanding of the geological setting and distribution of gold within the deposit.
Consistent with the Company's goals the drill program began the process of outlining a deposit that has at least a five-year mine life at the current Pine Cove mill throughput rate of approximately 1,000 tonnes per day. If Stog'er Tight has a five-year mine life, then the Company would nearly double the life of the Pine Cove Project to almost 10 years. Drilling was supplemented by detailed geochemical analysis and structural mapping of the deposit to determine geological controls on mineralization and to develop grade-control techniques for use in mining.
Pine CoveExploration activities for the six months ended November 30, 2014 included the initiation of a Diamond drill program on the Pine Cove deposit. The program consists of approximately 2,000 metres of Diamond drilling in 10 holes. The fiscal 2015 program has two primary goals. The first goal is to increase near surface mineral resources at the Pine Cove mine proximal to the current ultimate pit design. The focus will be on the Western Extension area discovered in 2013 (See press release dated February 28, 2013 ) and the Pine Cove Pond area on the southern side of the pit (where mining initiated in 2007), which hosts known mineralization not included in the initial mineral reserves. Secondly, the Company is looking to identify the limits of the northern and down dip extension of the deposit. In the down dip area, Anaconda would like to determine if there is the potential for future expansion of the mine and if the surface ground immediately north of the Pine Cove pit can be utilized as waste rock storage, providing a shorter haul and lower mining costs than the present waste rock storage location.
This drilling program is consistent with the Company's strategy to grow the Pine Cove Project by developing resources to extend the project and continue feeding the base-load production of the mill.
Trenching and soil samplingExploration activities for the six months ended November 30, 2014 included trenching of soil anomalies in an area immediately north of the Stog'er Tight deposit and an area west of the community of Ming's Bight as well as a soil sampling program along the Goldenville trend was conducted to identify exploration targets. The results of this program were reported in a press release dated January 8, 2015 .
Reconciliation of Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures in this document. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.
Adjusted net earnings measures the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company's underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, impairment charges, and non--hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results.
The following table provides a reconciliation of adjusted net earnings for the three and six months ended November 30, 2014 and 2013:
|
For the three months ended
|
For the six months ended
|
|
November 30
|
November 30
|
November 30
|
November 30
|
|
2014
|
2013
|
2014
|
2013
|
|
$
|
$
|
$
|
$
| |
Net income (loss)
|
(3,170,174)
|
2,646,938
|
(3,345,984)
|
3,243,234
|
|
|
|
|
| |
Adjusting items:
|
|
|
|
|
|
Foreign exchange loss (gain)
|
(281)
|
3,182
|
(10,165)
|
3,552
|
|
Unrealized loss (gain) on forward sales contract derivative
|
67,819
|
(25,714)
|
52,597
|
36,525
|
|
Write down of Chilean assets
|
2,260,158
|
-
|
2,260,158
|
-
|
|
Reclamation expense
|
14,358
|
13,729
|
28,716
|
27,458
| |
Total adjustments
|
2,342,054
|
(8,803)
|
2,331,306
|
67,535
| |
Adjusted net earnings (loss)
|
(828,120)
|
2,638,135
|
(1,014,678)
|
3,310,769
|
Cash cost per ounce sold is cost of sales before depreciation divided by gold ounces sold. All-in sustaining cash cost per ounce sold is cash cost, corporate administration, purchase of property, mill and equipment and purchase of exploration and evaluation assets divided by gold ounces sold.
The following table provides a reconciliation of cash cost per ounce sold and all-in sustaining cash cost per ounce sold for the three and six months ended November 30, 2014 and 2013:
|
For the three months ended
|
For the six months ended
|
|
November 30
|
November 30
|
November 30
|
November 30
|
|
2014
|
2013
|
2014
|
2013
| |
Cost of sales
|
5,137,634
|
4,714,294
|
10,665,663
|
8,983,561
| |
Less: Depletion and depreciation
|
(952,923)
|
(780,570)
|
(2,033,556)
|
(1,595,755)
| |
Cash operating cost
|
4,184,711
|
3,933,724
|
8,632,107
|
7,387,806
| |
Corporate administration
|
472,330
|
515,599
|
976,826
|
1,006,948
| |
Purchase of property, mill and equipment
|
813,512
|
345,409
|
1,168,931
|
748,469
| |
Purchase of exploration and evaluation assets
|
679,017
|
120,968
|
1,101,048
|
599,611
| |
All-in cash cost
|
6,149,570
|
4,915,700
|
11,878,912
|
9,742,834
|
|
|
|
|
| |
Gold ounces sold
|
3,431
|
3,852
|
7,364
|
7,948
| |
Cash cost per ounce sold
|
1,220
|
1,021
|
1,172
|
930
| |
All-in sustaining cash cost per ounce sold
|
1,792
|
1,276
|
1,613
|
1,226
|
EBITDA is earnings before finance expense, foreign exchange loss (gain), unrealized gain on forward sales contract derivative, share based payments, income tax recovery and depreciation and depletion.
Pine Cove Project EBITDA is EBITDA before corporate administration, other revenues and expenses and write down of Chilean assets.
The following table provides a reconciliation of EBITDA for the three and six months ended November 30, 2014 and 2013:
|
For the three months ended
|
For the six months ended
|
|
November 30
|
November 30
|
November 30
|
November 30
|
|
2014
|
2013
|
2014
|
2013
|
|
$
|
$
|
$
|
$
| |
Net income (loss)
|
(3,170,174)
|
2,646,938
|
(3,345,984)
|
3,243,234
|
|
|
|
|
| |
Add back:
|
|
|
|
| |
Finance expense
|
-
|
287,691
|
336
|
287,883
| |
Foreign exchange loss (gain)
|
(281)
|
3,182
|
(10,165)
|
3,552
| |
Unrealized loss (gain) on forward sales contract derivative
|
67,819
|
(25,714)
|
52,597
|
36,525
| |
Share-based payments
|
51,078
|
71,821
|
99,197
|
139,891
| |
Income tax expense (recovery)
|
(45,865)
|
374,675
|
(108,865)
|
618,675
| |
Depletion and depreciation
|
952,923
|
780,570
|
2,033,556
|
1,595,755
| |
EBITDA
|
(2,144,500)
|
4,139,163
|
(1,279,328)
|
5,925,515
| |
Corporate administration
|
472,330
|
515,599
|
976,826
|
1,006,948
| |
Other revenues and expenses
|
25,480
|
(3,289,040)
|
(279,972)
|
(3,289,040)
| |
Write down of Chilean assets
|
2,260,158
|
-
|
2,260,158
|
-
| |
Pine Cove Project EBITDA
|
613,468
|
1,365,722
|
1,677,684
|
3,643,423
|
ABOUT ANACONDA
Headquartered in Toronto, Canada , Anaconda is a growth oriented, gold mining and exploration company with a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called the Pine Cove mine.
FORWARD LOOKING STATEMENTS
This document contains or refers to forward-looking information. Such forward-looking information includes, among other things, statements regarding targets, estimates and/or assumptions in respect of future production, mine development costs, unit costs, capital costs, timing of commencement of operations and future economic, market and other conditions, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to: the final approval of the private placement by the Toronto Stock Exchange; the grade and recovery of ore which is mined varying from estimates; capital and operating costs varying significantly from estimates; inflation; changes in exchange rates; fluctuations in commodity prices; delays in the development of the any project caused by unavailability of equipment, labour or supplies, climatic conditions or otherwise; termination or revision of any debt financing; failure to raise additional funds required to finance the completion of a project; and other factors. Additionally, forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans," "may," "estimates," "expects," "indicates," "targeting," "potential" and similar expressions. These forward-looking statements, including statements regarding Anaconda's beliefs in the potential mineralization, are based on current expectations and entail various risks and uncertainties. Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no responsibility to update them or revise them to reflect new events or circumstances, except as required by law.
SOURCE Anaconda Mining Inc.
|
|