TORONTO, March 1, 2018 /CNW/ - Anaconda Mining Inc.
("Anaconda" or the "Company") – (TSX:ANX) is pleased to report its
financial and operating results for the seven month period ended
December 31, 2017. The Company has
changed its fiscal year end to December
31, from its previous fiscal year end of May 31. Consequently, Anaconda is reporting
audited financial results for the seven month fiscal year from
June 1, 2017 to December 31, 2017.
All dollar amounts are in Canadian Dollars. The Company's
audited consolidated financial statements, management discussion
and analysis, and annual information form will be available today
at www.sedar.com and the Company's website
www.anacondamining.com.
Highlights for the Seven Month Period Ended December 31, 2017
- Anaconda produced 10,002 ounces of gold and sold 9,509 ounces
during the seven months ended December 31,
2017, on track to exceed original guidance of 15,500 ounces
for the twelve-month period ending May 31,
2018, and exceeding pro-rated guidance of 9,042 ounces for
the seven month period;
- The Company generated $15.4
million in revenue at an average sale price of $1,615 per ounce, and earned a further
$0.8 million from the sale of waste
rock as aggregate from its Point Rousse Project;
- The Pine Cove Mill achieved a throughput rate of 1,316 tonnes
per day during the seven month period, an 8% improvement over the
previous fiscal year;
- Anaconda mined 382,111 tonnes of ore during the seven-month
period at a strip ratio of 1.8 waste tonnes to ore tonnes, a 65%
reduction from the previous fiscal year strip ratio of 5.1;
- As at December 31, 2017, the
Company had cash of $4.0 million, net
working capital of $6.5 million and
additional available liquidity of $1,000,000 from an undrawn upon revolving line of
credit facility;
- Operating cash costs per ounce sold* for the seven-month period
ended December 31, 2017, was
$1,001 (US$787), in line with guidance of $1,000 - $1,050,
and an 11% improvement over the prior fiscal year;
- All-in sustaining cash costs per ounce sold ("AISC")*,
including corporate administration and sustaining capital
expenditures, was $1,384 (US$1,088) for the seven month period ended
December 31, 2017, a 20% improvement
over the prior fiscal year;
- At the Point Rousse Project, EBITDA* for the seven months ended
December 31, 2017 was $5.6 million, while consolidated EBITDA was
$3.7 million;
- Net income for the period ended December
31, 2017 was $904,635, or
$0.01 per share, compared to a net
loss of $3,602,188, or $0.07 per share, for the full year ended
May 31, 2017;
- With the completion of a $3.0
million non-brokered private placement in October 2017, the Company is undertaking
extension and infill drill programs at the Goldboro and Point Rousse Projects (see press
releases dated November 1 and 29,
2017).
*Refer to Non-IFRS Measures section below.
"The Company has again achieved strong financial results and
maintained a robust financial position, generating EBITDA of
$5.6 million from the Point Rousse
Project over the seven-month fiscal period, and ending the year
with $4.0 million of cash and an
undrawn $1 million line of credit. We
produced just over 10,000 ounces of gold, on track to exceed our
original guidance for the full year ended May 31, 2018, and came in at the lower end of our
operating cash cost per ounce guidance with $1,001 per ounce, or US$787. Anaconda is well positioned for success
in 2018, as it transitions to the higher-grade Stog'er Tight Mine,
progresses the high-grade Goldboro Project, and continues to expand
and develop the Argyle Deposit at Point Rousse."
~ Dustin Angelo, President and
CEO
Consolidated Results Summary
Financial
Results
|
Four
months
ended
December
31,
2017
|
Three months
ended
May 31, 2017
|
Seven months
ended December
31, 2017
|
Year ended May
31,
2017
|
Revenue
($)
|
7,747,414
|
7,722,202
|
15,360,584
|
25,696,629
|
Cost of operations,
including depletion and depreciation ($)
|
6,455,603
|
6,182,586
|
13,765,473
|
24,790,421
|
Mine operating income
($)
|
1,291,812
|
1,539,616
|
1,595,111
|
906,208
|
Net income (loss)
($)
|
1,228,668
|
(1,890,260)
|
904,635
|
(3,602,188)
|
Net income (loss) per
share ($/share)
– basic and
diluted
|
0.01
|
(0.03)
|
0.01
|
(0.07)
|
Cash generated from
operating activities ($)
|
1,495,034
|
3,172,938
|
2,035,506
|
4,782,426
|
Capital investment in
property, mill and equipment ($)
|
(347,647)
|
(225,612)
|
(527,118)
|
(3,414,163)
|
Capital investment in
exploration and evaluation assets ($)
|
(1,260,414)
|
(323,954)
|
(1,942,146)
|
(2,868,112)
|
Average realized gold
price per ounce ($)
|
1,619
|
1,658
|
1,615
|
1,651
|
Operating cash costs
per ounce sold ($)*
|
936
|
699
|
1,001
|
1,126
|
All-in sustaining
cash costs per ounce sold ($)*
|
1,349
|
1,066
|
1,384
|
1,735
|
Total
assets
|
|
|
49,927,877
|
46,074,065
|
Non-current
liabilities
|
|
|
5,511,935
|
5,801,863
|
*Refer to Non-IFRS
Measures section below.
|
|
|
|
|
|
Operational
Results
|
Four months
ended
December 31, 2017
|
Three
months
ended May
31,
2017
|
Seven months
ended December
31, 2017
|
Year ended May
31,
2017
|
Ore mined
(t)
|
223,254
|
92,167
|
382,111
|
432,081
|
Waste mined
(t)
|
328,434
|
386,387
|
692,814
|
2,197,251
|
Strip
ratio
|
1.5
|
4.2
|
1.8
|
5.1
|
|
|
|
|
|
Ore milled
(t)
|
156,239
|
107,956
|
275,640
|
423,204
|
Grade (g/t
Au)
|
1.29
|
1.49
|
1.32
|
1.33
|
Recovery
(%)
|
85.0
|
85.8
|
85.8
|
85.0
|
Gold Oz
Produced
|
5,421
|
4,442
|
10,002
|
15,566
|
Gold Oz
Sold
|
4,786
|
4,658
|
9,509
|
15,562
|
Review of the Seven Month Period Ended December 31, 2017
Operational Performance - Anaconda sold 9,509
ounces of gold during the seven months ended December 31, 2017, and had 600 ounces of gold
doré in finished goods at year-end. Production of 10,002 ounces for
the seven month period was on track to exceed the Company's
guidance of 15,500 ounces for the twelve month period ending
May 31, 2018, the result of higher
throughput and recovery rates.
The mill processed 275,640 tonnes of ore during the period,
representing a throughput rate of 1,316 tonnes per day, an 8%
increase over the prior year throughput rate. Mill recovery was
85.8% over the seven month period, up slightly from the previous
year, at an average grade of 1.32 g/t, which is consistent with the
prior year. Preventative maintenance continues to be a focus to
maintain consistent levels of production, with a liner change in
ball mill and related maintenance activities taking place in early
Q1 2018.
Mine operations at Point Rousse ran for 135 days during the
seven months ended December 31, 2017,
with activity in the later part of December focused on development
activity at Stog'er Tight, as mining areas became constrained in
the bottom of the Pine Cove Pit. Ore produced from the Pine Cove
Pit during the period was 382,111 tonnes, which compares favourably
to the 432,081 tonnes of production for the full year ended
May 31, 2017. Total material moved
during the period of 1,074,926 tonnes is significantly lower than
the prior year, notwithstanding the shorter comparative period,
which is reflective of reduced mining rates as the operation
approaches the planned base of the Pine Cove Pit.
The decrease in material moved wholly relates to lower waste
material mined, due to the sequencing of the mine plan which
resulted in less waste mined in the most recent period. As a
result, the strip ratio for the period of 1.8 waste tonnes to ore
tonnes is significantly improved from 5.1 strip ration in the
previous fiscal year.
Financial Performance - Anaconda generated total
revenue of $15,360,584 during the
seven months ended December 31, 2017,
based on gold sales of 9,509 ounces of gold and an average realized
gold price of $1,615 per ounce. For
the year ended May 31, 2017, the
Company achieved total revenue of $25,696,629, based on gold sales for the period
of 15,562 ounces.
The Company also generated other income of $809,192 from the sale of waste rock to be used
in aggregates, compared to $938,089
in the prior year when it delivered more waste rock tonnes. The
aggregates contract was completed in October
2017, and the Company is evaluating opportunities for
further waste rock sale agreements.
Operating expenses for the seven months ended December 31, 2017, which include mining,
processing and mine support costs, were $9,519,731, compared to $17,525,386 for the year ended May 31, 2017. On a per ounce sold basis,
operating cash costs were $1,001 per
ounce for the period, which is at the lower end of the Company's
guidance range for its old fiscal year. This represented an 11%
improvement over operating cash costs per ounce of $1,126 during the previous year ended
May 31, 2017. The improvement was the
result of stronger mine production volumes, with ore mined for the
period only 12% lower than the previous full year, at a
significantly lower strip ratio of 1.8 waste tonnes to ore tonnes.
In addition, mill throughput had increased 8% compared to the prior
fiscal year. There was no royalty expense during the period,
however the Stog'er Tight deposit will be subject to a 3% net
smelter royalty on currently planned production.
Depletion and depreciation was $4,248,742 for the seven months ended
December 31, 2017, compared to
$7,262,083 for the year ended
May 31, 2017. On an annualized basis,
the depletion and depreciation was comparatively consistent, with
generally higher depletion and depreciation over the past two
fiscal periods as a result of the higher gold ounces sold, which
drove higher units-of-production depreciation, and higher depletion
of stripping costs for the Pine Cove Pit, which is approaching its
end of life.
Mine operating income for the seven months ended December 31, 2017 was $1,595,111, compared to $906,208 for the full year ended May 31, 2017. The higher mine operating income,
despite only over a seven month period, was predominantly
attributable to higher productivity in both the mine and mill
operations, which drove down operating cash costs on a per ounce
sold basis.
Corporate administration costs were $2,747,770 for the period, compared to
$2,637,276 for the year ended
May 31, 2017. Corporate
administration includes senior management and corporate
compensation, regulatory costs including audit, tax, and listing
costs, marketing and investor relations, and general office
expenses. The higher comparative expenditures reflect the expanded
senior management team after the acquisition of Goldboro, and increased marketing and
communication costs.
Share-based compensation was $131,676 during the period, compared to
$181,225 in the twelve months ended
May 31, 2017, reflecting the lower
days vesting of stock options in the most recent period ended
December 31, 2017.
The deferred premium on flow-through shares was a recovery of
$96,584, reflecting a proportion of
the total deferred premium based on qualifying exploration
expenditures spent up to December 31,
2017, as a percentage of the total exploration expenditures
to be made under the flow-through financing. The remaining deferred
flow-through premium liability of $253,535 is expected to be amortized into
comprehensive income over the first two quarters of 2018 as the
remaining qualifying exploration expenditures are incurred.
During the period ended December 31,
2017, the Company recognized a write-down of exploration and
evaluation costs of $65,939 relating
to the removal of tenements from an option agreement, to enable the
Company to focus on more prospective targets within that
agreement.
Finance expenses of $46,883 for
the period are significantly lower than the year ended May 31, 2017, which had included finance costs
related to gold prepayment arrangements. Current finance expenses
relate to interest on government loans, capital leases and other
loans.
The Company recognized a current income tax expense of
$118,000 during the period ended
December 31, 2017, reflecting the
Company's estimate of Newfoundland
and Labrador mining taxes payable
based on results for the period. A deferred income tax recovery of
$1,569,000 was also recognized during
the seven month period, mainly the result of the impact of the
expected development of the Argyle Mineral Resource on management's
estimates with respect to the expected use of tax loss pools. A
deferred tax expense of $2,475,000
was recognized for the year ended May 31,
2017, due to a $2,520,000
increase in unrecognized portion of the deferred tax asset.
Net income for the period ended December
31, 2017 was $904,635, or
$0.01 per share, compared to a net
loss for the year ended May 31, 2017
of $3,602,188, or $0.07 per share (per share amounts reflect the
impact of the Share Consolidation). The increase in net income is
the result of higher mine operating income, and the deferred tax
recovery.
Review of the Four Months Ended December 31, 2017
Operational Performance - Anaconda sold 4,789
ounces of gold during the four months ended December 31, 2017, and had 600 ounces of gold
doré in finished goods at year-end. The Pine Cove Mill processed
156,239 tonnes of ore during this period, representing a throughput
rate of 1,299 per operating day, an 8% improvement on throughput
compared to the three-month period ended May
31, 2017. Mill recovery of 85.0% was in line with the
comparative period, while average grade of 1.29 g/t for the four
months ended December 31, 2017 was
13% lower than the three months ended May
31, 2017.
The mining operations at Point Rousse ran for 69 days over the
four month period, with activity in the later part of December 2017 focused on development activity at
Stog'er Tight. Mine production of 223,254 tonnes of ore was
significantly higher than the 92,167 tonnes of ore mined during the
three months ended May 31, 2017,
notwithstanding the shorter comparative period, as operations were
challenged in the spring of 2017 due to snowfall and related
weather conditions. The strip ratio for the four months ending
December 31, 2017 was 1.5 waste
tonnes to ore tonnes, significantly improved from 4.2 in the
comparative period ending May 31,
2017, driven by the sequence of the mine plan as the
operation moved to the lower levels of the Pine Cove Pit.
The completion of mining in the Pine Cove Pit is expected in the
later part of Q1 2018, with Pine Cove ore stockpiles being
processed over the first two quarters of 2018 as the mining
operation transitions to Stog'er Tight. Initial mining from the
Stog'er Tight West Pit is expected to start in the first quarter of
2018.
Financial Performance - For the four months ended
December 31, 2017, the Company
generated $7,747,414 in revenue at an
average gold sales price of approximately $1,619 per ounce. Despite a 3% increase in gold
ounces sold compared to the three months ended May 31, 2017, total revenue was comparatively
flat due to the decrease in the average gold price.
Operating expenses were $4,479,599
for the four months ended December 31,
2017, equivalent to $936 per
ounce sold (US$743), which compares
favourably to the Company's guidance of $1,000 to $1,050
per ounce for the old fiscal year ended May
31, 2018. Operating cash costs were $699 per ounce sold for the three months ended
May 31, 2017, when the Company
achieved record quarterly gold sales of 4,658 ounces. The higher
operating cash costs in the most recent period are reflective of a
13% lower mill grade compared to the quarter ended May 31, 2017, which resulted in higher gold ounce
production despite comparably lower mill throughput.
Mine operating income for the four months ended December 31, 2017 was $1,291,812, compared to $1,539,616 for the three months ended
May 31, 2017. The comparatively lower
mine operating income in the most recent period, despite being a
four-month period, reflects higher operating expenses in absolute
terms due to significantly higher mining rates and higher mill
throughput rates during the four months ended December 31, 2017. The increased operating
expense were partially offset by depletion and depreciation.
Net income for the four months ended December 31, 2017 was $1,228,668, or $0.01 per share, compared to a net loss of
$1,890,260, or $0.03 per share, for the three months ended
May 31, 2017. The change in net
income is due to strong mine operating income in the recent period,
higher income from the sale of waste rock, and a deferred tax
recovery of $1,243,000, which were
partially offset by higher comparative corporate administration
costs, which reflect the Company's expanded corporate presence
after the acquisition of the Goldboro Project. The net loss for the
three months ended May 31, 2017 was
also impacted be a deferred tax expense of $2,785,000.
Non-IFRS Measures
Anaconda has included in this press release certain non-IFRS
performance measures as detailed below. In the gold mining
industry, these are common performance measures but may not be
comparable to similar measures presented by other issuers. 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.
Operating Cash Costs per Ounce of Gold – Anaconda
calculates operating cash costs per ounce by dividing operating
expenses per the consolidated statement of operations, net of
silver sales by-product revenue, by the gold ounces sold during the
applicable period. Operating expenses include mine site operating
costs such as mining, processing and administration as well as
royalties, however excludes depletion and depreciation and
rehabilitation costs.
All-In Sustaining Costs per Ounce of Gold – Anaconda has
adopted an all-in sustaining cost performance measure that reflects
all of the expenditures that are required to produce an ounce of
gold from current operations. While there is no standardized
meaning of the measure across the industry, the Company's
definition conforms to the all-in sustaining cost definition as set
out by the World Gold Council in its guidance dated June 27, 2013. The World Gold Council is a
non-regulatory, non-profit organization established in 1987 whose
members include global senior mining companies. The Company
believes that this measure will be useful to external users in
assessing operating performance and the ability to generate free
cash flow from current operations.
The Company defines all-in sustaining costs as the sum of
operating cash costs (per above), sustaining capital (capital
required to maintain current operations at existing levels),
corporate administration costs, sustaining exploration, and
rehabilitation accretion and amortization related to current
operations. All-in sustaining costs excludes capital expenditures
for significant improvements at existing operations deemed to be
expansionary in nature, exploration and evaluation related to
growth projects, financing costs, debt repayments, and taxes.
Canadian and US dollars are noted for realized gold price,
operating cash costs per ounce of gold and all-in sustaining costs
per ounce of gold. Both currencies are considered relevant and the
Company uses the average foreign exchange rate for the period.
Earnings before Interest, Taxes, Depreciation and
Amortization ("EBITDA") - EBITDA is earnings before finance
expense, deferred income tax expense and depletion and
depreciation.
Point Rousse Project EBITDA is EBITDA before corporate
administration and other expenses (income).
ABOUT ANACONDA
Anaconda Mining is a TSX-listed gold mining, development, and
exploration company, focused in the prospective Atlantic Canadian
jurisdictions of Newfoundland and
Nova Scotia. The Company operates
the Point Rousse Project located in the Baie Verte Mining District
in Newfoundland, comprised of the
Pine Cove open pit mine, the Stog'er Tight and Argyle Mineral
Resource, the fully-permitted Pine Cove Mill and tailings facility,
and approximately 5,800 hectares of prospective gold-bearing
property. Anaconda is also developing the Goldboro Gold Project in
Nova Scotia, a high-grade Mineral
Resource, with the potential to leverage existing infrastructure at
the Company's Point Rousse Project.
The Company also has a pipeline of organic growth opportunities,
including the Great Northern Project on the Northern Peninsula of
Newfoundland and the Tilt Cove
Property on the Baie Verte
Peninsula, also in Newfoundland.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking information"
within the meaning of applicable Canadian and United States securities legislation.
Generally, forward-looking information 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 information is based on the opinions and estimates
of management at the date the information is made, and is based on
a number of assumptions and is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Anaconda to be
materially different from those expressed or implied by such
forward-looking information, including risks associated with the
exploration, development and mining such as economic factors as
they effect exploration, future commodity prices, changes in
foreign exchange and interest rates, actual results of current
production, development and exploration activities, government
regulation, political or economic developments, environmental
risks, permitting timelines, capital expenditures, operating or
technical difficulties in connection with development activities,
employee relations, the speculative nature of gold exploration and
development, including the risks of diminishing quantities of
grades of resources, contests over title to properties, and changes
in project parameters as plans continue to be refined as well as
those risk factors discussed in Anaconda's annual information form
for the year ended December 31, 2017,
available on www.sedar.com. Although Anaconda
has attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
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 information. Accordingly, readers should not
place undue reliance on forward-looking information. Anaconda does
not undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE Anaconda Mining Inc.