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May 14, 2008
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Central Sun Reports First Quarter 2008 Financial Results
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TORONTO, ONTARIO--(Marketwire - May 14, 2008) - Central Sun Mining Inc. (TSX:CSM)(TSX:CSM.WT)(AMEX:SMC) reports its financial results for the three months ended March 31, 2008 (currency figures in U.S. dollars). The consolidated financial statements along with management's discussion and analysis are available for viewing on the Central Sun website at www.centralsun.ca. The documents have been filed with SEDAR (www.sedar.com) and should be available on SEDAR no later than 24 hours from dissemination of this release.
The following are highlights of financial results for the first quarter 2008 (Q1 2008) compared to results for the first quarter 2007 (Q1 2007). The operating results for Q1 2008 reflect only the Limon Mine compared to three mines in Q1 of 2007. The Orosi Mill Project development costs have been charged to income as these are prior to the receipt of a positive feasibility study.
- The Q1 2008 results reflect operations from only the Limon Mine whereas in Q1 2007 results of operations included the Company's Bellavista, Orosi and Limon mines. This had the following impact:
-- Revenue decreased 39% to $12.3 million in Q1 2008 compared to revenue of $20.3 million in Q1 2007,
-- Gold sales decreased 57% to 13,524 ounces in Q1 2008 compared to 31,134 ounces in Q1 2007
-- Gold production decreased 69% to 9,844 ounces in Q1 2008 compared to 31,801 ounces in Q1 2007
-- Income from mining operations increased 439% to $4,075,000 in Q1 2008 compared to $756,000 in Q1 2007
-- Cash operating costs per ounce of gold sold increased to $502 per ounce in Q1 2008 compared to $470 per ounce in Q1 2007
- Orosi Mill Project is on target for Q1 2009 completion with $4,423,000 spent in Q1 2008 ($4,216,000 expensed and $207,000 capitalized)
- Loss in Q1 2008 was $5.0 million, or $0.08 per share compared to a $1.2 million, or $0.03 per share
- Cash used in operations totalled $3.3 million in Q1 2008 compared to $5.4 million generated in Q1 2007
- Cash on hand totalled $12.2 million as at March 31, 2008 compared to $16.8 million as at December 31, 2007
Consolidated Statements of Operations (Unaudited)
(US Dollars and shares in thousands, except per share amounts)
Three months ended March 31
2008 2007
Sales $ 12,310 $ 20,297
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Cost of sales 6,786 14,639
Royalties and production taxes 702 856
Depreciation and depletion 597 3,980
Accretion expense 150 66
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8,235 19,541
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Income from mining operations before the
undernoted items 4,075 756
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Expenses and other income
General and administrative 1,296 1,371
Orosi Mine - Mill Project 4,216 -
Care and maintenance 1,214 -
Stock based compensation 1,132 366
Exploration 1,061 417
Other (income) expense 178 (253)
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9,097 1,901
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Loss from continuing operations (5,022) (1,145)
Loss from discontinued operations, net of tax - (28)
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Net loss for the period $ (5,022) $ (1,173)
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Loss per share from continuing operations
- basic and diluted $ (0.08) $ (0.03)
Income per share from discontinued operations,
net of tax - basic and diluted - -
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Loss per share - basic and diluted $ (0.08) $ (0.03)
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Weighted average number of shares issued
and outstanding 59,337 34,396
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----------- -----------Limon Mine
The first quarter gold sales established a good start to the year and puts the Company on track to reach its 2008 sales and production targets of 45,000 ounces from the Limon Mine.
- Income from mining operations at Limon totalled $4.2 million in Q1 2008 compared to $1.0 million in Q1 2007
- Gold sold during Q1 2008 totalled 13,524 ounces (Q1/07: 8,513 ounces) at a cash operating cost per ounce sold of $502 (Q1/07: $453)
- The mine generated total revenue of $12.3 million (Q1/07: $5.6 million) on an average realized gold price of $910 per ounce (Q1/07: $654).
"When you compare the Limon Mine's performance in Q1 2008 compared to Q1 2007, we see improvements in almost every aspect. Our gold sales have increased significantly to 13,524 ounces in Q1 2008 as compared to 8,513 in Q1 2007, with actual sales numbers reaching $12.3 million in Q1 2008 compared to $5.6 million in Q1 2007," said Peter Tagliamonte, President and CEO. "The Orosi Mill project is progressing well. With a positive feasibility study on this project now completed, we are in a position to keep the project on a "fast track" for completion in Q1 of 2009."
About Central Sun Mining Inc.
The Company is a growing gold producer with mining and exploration activities focused in Nicaragua. The Company operates the Limon Mine in Nicaragua and is converting the Orosi Mine in Nicaragua to conventional milling to increase the annual gold output. It also holds an option to acquire a 100% interest in the Mestiza gold property which is located 70 kilometres east of the Limon Mine. The Company is focused on efficient and productive mining practices to establish high quality and cost effective operations. Central Sun Mining is committed to growth by optimizing current operations, expanding mineral reserves and resources at existing mines, exploring its extensive land holdings and seeking strategic mergers or acquisitions in the Americas.
Cautionary Note Regarding Forward-Looking Statements: This press release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the completion of the Company's new strategic plan, the future financial or operating performance of the Company, its subsidiaries and its projects, the future price of gold, estimated recoveries under the milling plan, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital for the mill project, operating and exploration expenditures, costs and timing of the development of new deposits, outcome, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, insurrection or war; delays in obtaining governmental approvals or required financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "General Development of the Business - Risks of the Business" in the Company's annual information form for the year ended December 31, 2007 on file with the securities regulatory authorities in Canada and the Company's Form 40-F on file with the Securities and Exchange Commission in Washington, D.C. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities law.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources
The information presented uses the terms "measured", "indicated" and "inferred" mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
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