VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 1, 2015) - True Gold Mining Inc. (News - Market indicators) ("True Gold" or the "Company") reported the financial results and business highlights for the three months ended March 31, 2015.
FIRST QUARTER HIGHLIGHTS AND SUBSEQUENT EVENTS
Strengthened Leadership Team
- Appointed Christian Milau as Chief Executive Officer, effective April 27, 2015. Mr. Milau joined True Gold from Endeavour Mining Corporation, where he served as Executive Vice President and Chief Financial Officer and played a leading role in Endeavour's acquisition, financing, development, and operation of four gold mines in West Africa.
- Hired a new Chief Operating Officer ("COO") to lead the strengthened team. The new COO, who will join the company and be formally announced by the end of June, is a mining professional with extensive experience in mine operations and project development with recent and relevant West African experience. Peter Carter has resigned as COO to pursue other interests.
- Announced a strengthened development and operations team with extensive mine building, operational and West African stakeholder relations expertise. The team, composed of both existing and new senior personnel, will be responsible for completing construction of the Karma gold mine ("Karma Project"), as well as subsequent operations and ongoing community and government relations in Burkina Faso.
Karma Project
- Project Construction Resumed:
- Beginning with a site clean-up and repair program the Karma Project has begun to ramp-up to full construction. Specific activities planned in the coming weeks include the remobilizing and commissioning of the mine fleet, ordering of liners and piping (completed), and excavation of ponds and surveying (commenced). The local workforce will be re-engaged as construction accelerates.
- True Gold and the Government of Burkina Faso will continue extensive communication and discussion with community leaders through a reconstituted Community Liaison Committee.
- Project construction is well advanced, with approximately US$61.7 million (~47%) spent and committed as at March 31, 2015.
- With the resumption of construction at Karma Project, the Company expects it will be in a position for first gold pour by the end of first quarter 2016.
- Project Finance - Karma Project Remains Fully Funded:
- Karma remains fully funded through construction to first gold pour. True Gold has $29 million in cash, and up to $62 million under our finance facility with approximately $70 million of project cost remaining. The Company continues to have full support from its partners, Franco-Nevada and Sandstorm Gold.
- The Company is implementing a plan to enable a measured ramp-up of operations at the mine and, as a result of realized cost savings, remains fully funded to complete construction.
Financial Results
The following selected financial data is derived from the unaudited condensed interim consolidated financial statements and related notes thereto for the three months ended March 31, 2015 (the "Interim Financial Statements"), as prepared in accordance with International Financial Reporting Standards. Details of these results are described in the Interim Financial Statements and related Management's Discussion and Analysis ("MD&A"). These documents can be found on the Company's website (www.truegold.com) or on SEDAR at www.sedar.com. All amounts are presented in United States dollars unless otherwise stated.
For the three months ended March 31, 2015, the Company reported a net loss of $6.9 million compared to a net loss of $3.9 million for the three months ended March 31, 2014. The most significant contributor to the loss for the three months ended March 31, 2015 was the impairment recognized on assets damaged during the demonstration at the Karma Project. The most significant contributor to the comparative period loss was exploration and evaluation expenditures predominately related to the Karma Project.
Total assets as at March 31, 2015 have decreased since December 31, 2014 by $11.9 million to $98.1 million, mainly due to a decrease in total cash and short term investments reflecting cash outflows from operations through the three month period ended March 31, 2015. This was offset by the capitalization of development costs related to the Karma Project net of the impairment charge related to assets damaged during the demonstration at the Karma Project.
In the year ending December 31, 2014 the Company entered into a $100-million definitive Agreement with Franco-Nevada and Sandstorm to complete funding for the construction of the Karma Project. In exchange for $100-million in funding, True Gold is obligated to deliver 100,000 ounces of gold over five years, and thereafter 6.5% of equivalent production at the Karma Project. In addition, True Gold holds sole option to increase funding by up to $20-million during the first 18 months following the date of the execution of the Agreement. As at March 31, 2015, the Company has drawn down $57.7M under the Agreement. During the period ended March 31, 2015 the Company recorded a loss on the change in fair value of the liability of $0.8 million.
About True Gold
True Gold Mining Inc. is where gold comes to life. We are committed to growing a successful gold exploration, development and production company, by focusing on projects with low costs, low technical risks and solid economics. The Company's board, management and technical teams have proven track records in gold exploration, development, operations and production worldwide.
Additional information about the Company and its activities may be found on the Company's website at www.truegoldmining.com and under the Company's profile at www.sedar.com.
ON BEHALF OF THE BOARD
Christian Milau, President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, copper, silver and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes, the Company's ability to efficiently recommence operations at the Karma Project, that the Company will receive additional drawdowns under the financing agreement with Franco-Nevada and Sandstorm and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of Pilot Gold and there is no assurance they will prove to be correct.
Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Karma Project, reliance on technical information provided by third parties as related to the Karma Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; satisfaction of Burkina Faso requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company or its joint venture partners; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, the potential for delays in exploration and permitting activities, uncertainties related to the Company's relationship with communities that surround its properties in Burkina Faso, risks related to the financing agreement with Franco-Nevada and Sandstorm, including the Company's ability to meet its scheduled delivery obligations, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk as well as those factors discussed in the Annual Information Form of the Company dated April 27, 2015 in the section entitled "Risk Factors", under True Gold's SEDAR profile at www.sedar.com.
Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.
