Semafo Reports Net Earnings of $12.5 Million for the First Quarter 2008
Montreal, Quebec, May 14, 2008 - SEMAFO (TSX: SMF) today reported its financial and operational results for the three-month period ended March 31, 2008. All amounts are in US dollars unless otherwise stated.
Highlights:
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Gold production of 28,700 ounces at a cash operating cost of $528 per ounce for the first quarter of 2008, an 8% increase over the fourth quarter of 2007.
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Record gold sales of $25,540,000 at an average selling price of $906 per ounce for the first quarter of 2008, representing a 37% increase over the same period last year. Previous quarter gold sales totalled $21,044,000 at an average price of $819 per ounce.
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Operating income of $2,801,000 compared to $70,000 for the corresponding period in 2007.
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Disposal of a subsidiary, resulting in a non-cash gain of $17,849,000.
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Net earnings of $12,502,000, or $0.06 per share, for the first quarter of this year, including an unrealized loss of $7,807,000 resulting from the change in fair value of derivative financial instruments.
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Operating cash flows of $6,143,000 for the first quarter of 2008, representing a 60% increase over the same period last year.
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Start-up of the Mana mine in Burkina Faso and first gold pour.
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Kiniero is back to profitability in the first quarter of 2008, with production of 12,400 ounces at a cash operating cost of $451 per ounce, compared with an average cash operating cost of $707 per ounce in 2007. The average cash operating cost for the fourth quarter of 2007 was $882 per ounce.
A Word from the CEO
We are pleased with the organization's performance during this first quarter of 2008 and proud of the work and individual contributions of the entire Semafo team. The continuous improvement of our overall performance is part of our ongoing commitment.
The first gold pour at our Mana mine in Burkina Faso took place on March 31, 2008. This gold pour marks the third time the Company has successfully brought a West African gold project into production.
Our objective for the first quarter of 2008 was to produce 24,500 ounces of gold from the Kiniero and Samira Hill mines. We exceeded this target with a total production of 28,700 ounces.
We are committed to the continuous improvement of our overall performance and have taken measures to streamline all areas of operations in order to maximize opportunities. This diligent approach resulted in an operating income of $2,801,000 for the first quarter of 2008, compared to $70,000 for the corresponding period in 2007, reflecting an increase in the average realized selling price, which was higher than the increase in operating costs. In the current strong-growth market, controlling costs, increasing production and minimizing the negative effects of our hedging contracts are all part of our commitment to continuous improvement.
We appreciate that the Company's performance is a direct result of the ongoing dedicated efforts of our employees and remain committed to being a best practice company and an employer of choice. Leveraging skills, respect, integrity, the search for excellence, competence and teamwork motivate us all to excel. Semafo is a mining company committed to sustainable development in the communities in which we operate, while increasing shareholder value.
Highlights of operations and consolidated financial results
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|
|
|
|
Three-month periods ending March 31 |
|
2008 |
|
2007 |
Gold ounces produced................................................................... |
28,700 |
|
29,000 |
Gold ounces sold.......................................................................... |
28,200 |
|
28,100 |
(In thousands of dollars, except amounts per ounce, per tonne and per share) |
|
|
|
Revenues - Gold sales ................................................................. |
25,540 |
|
18,576 |
Operating costs ........................................................................... |
17,129 |
|
13,479 |
Operating income ......................................................................... |
2,801 |
|
70 |
Net income (loss) ......................................................................... |
12,502 |
|
(3,233) |
Basic and diluted net income (loss) per share.................................. |
0.06 |
|
(0.02) |
Cash flows from operating activities 1............................................... |
6,143 |
|
3,871 |
|
|
|
|
|
|
|
|
Average selling price (per ounce).................................................... |
906 |
|
661 |
Cash operating cost (per tonne processed) ..................................... |
27 |
|
23 |
Cash operating cost (per ounce produced) ...................................... |
528 |
|
450 |
Total cash cost (per ounce sold)..................................................... |
607 |
|
480 |
1 Cash flow from operating activities excludes changes in non-cash working capital items and settlement of liabilities related to asset retirement obligations for property, plant and equipment.
Outlook
During the month of April, we produced 4,300 ounces at Mana, 7,000 ounces at Samira Hill and 6,300 ounces at Kiniero, for a total production of 17,600 ounces of gold.
We are pleased with production to date and are confident that we will reach our targets, despite the fast-approaching rainy season. We are also satisfied with the diligent management of our operating costs per tonne, which remain below budget.
The 4,000 tonne-per-day ball mill has arrived at the Mana site, with commissioning scheduled for the third quarter. We therefore maintain our previously announced production target of between 165,000 and 185,000 ounces for 2008.
A conference call will be held at 10:00 a.m. on May 15, 2008 to discuss the quarterly results. Details to access the call can be found on the home page of the Company's website at www.semafo.com. Semafo's consolidated financial statements together with Management's Discussion and Analysis are available on its website or at www.sedar.com.
About SEMAFO
Semafo is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines in Burkina Faso, Niger and Guinea. Semafo is committed to evolve in a conscientious manner to become a m
ajor player in its geographical area of interest, while maintaining principles and strengthening relationships to increase shareholder value.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding expectations of the Company as to the market price of gold, strategic plans, future commercial production, production targets, timetables, mining operating expenses, capital expenditures, and mineral reserve and resource estimates. Forward-looking statements involve known and unknown risks and uncertainties and accordingly, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, fluctuations in the market price of precious metals, mining industry risks, uncertainty as to calculation of mineral reserves and resources, risks related t
o hedging strategies, risks of delays in construction, requirements of additional financing and other risks described in the Company's documents filed from time to time with Canadian securities regulatory authorities. Although the Company is of the opinion that these forward-looking statements are based on reasonable assumptions, those assumptions may prove to be incorrect. Accordingly, readers should not place undue reliance on forward-looking statements. Readers can find further information with respect to risks in the Annual Information Form of the Company and other filings of the Company with Canadian securities regulatory authorities available at www.sedar.com. The Company disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
For more information contact :
SEMAFO:
BENOIT LA SALLE,
PRESIDENT & CEO
TEL :  (514) 744-4408
E-MAIL :  BLASALLE@SEMAFO.COM 
RENMARK FINANCIAL COMMUNICATIONS INC. :
MAURICE DAGENAIS : MDAGENAIS@RENMARKFINANCIAL.COM
JASON ROY : JROY@RENMARKFINANCIAL.COM
TEL :  (514) 939-3989
FAX : (514) 939-3717
WWW.RENMARKFINANCIAL.COM