Aura Minerals Inc. ("Aura Minerals" or the "Company") (TSX:ORA)
announces financial and operating results for the first quarter of
2013.
This release does not constitute management's discussion and
analysis ("MD&A") as contemplated by applicable securities laws
and should be read in conjunction with the MD&A and the
Company's condensed interim consolidated financial statements for
the three months ended March 31, 2013, which are available on SEDAR
at www.sedar.com and on the Company's website.
Highlights:
-- Highest gold ounce ("oz") production in Aura's history achieved in the
first quarter of 2013, which was 34% higher as compared to the first
quarter of 2012;
-- Net sales revenues in the first quarter of 2013 increased 17% over the
first quarter of 2012;
-- Copper concentrate sales are from the shipment of 5,370 dry metric
tonnes ("DMT") and 5,396 DMT of copper concentrate for the quarters
ended March 31, 2013 and 2012, respectively;
-- Copper production at Aranzazu for the first quarter of 2013 was in line
with management's expectations at 3,005,000 pounds. On-site average cash
cost(1) per pound of payable copper produced, net of gold and silver
credits was $3.69 for the first quarter of 2013, including $0.57 in
respect of Arsenic related charges and penalties;
-- Gross margin of $(7.2) million and $(10.5) for the three months ended
March 31, 2013 and 2012, respectively;
-- Loss of $10.9 million or $0.05 per share for the first quarter of 2013
compared to a loss of $18.7 million or $0.08 per share for the first
quarter of 2012;
-- Cash flows from operating activities of $16.1 million for the first
quarter of 2013 compared to $20.6 million for the first quarter of 2012;
-- The Company was not in compliance with its revolving credit facility's
financial covenant at March 31, 2013 and is in negotiations with its
Lenders to obtain a waiver or a forbearance; and
-- Subsequent to quarter end, received R$20.6 million (approximately $10.3
million) in additional preliminary bridge financing for Serrote
development.
Jim Bannantine, the Company's President and Chief Executive
Officer stated, "Over the past year and a half, we have focused on
achieving cost-efficient improvements to our existing operations
while continuing to focus on our expansion plans at Aranzazu and
the development of the Serrote Project. As a result of this effort,
this quarter shows an overall improvement in throughput and
production at our operations and the highest quarterly gold
production in the Company's history. Aranzazu is producing to
expectations with a substantially reduced Arsenic content, and the
Company has generated a strong cash flow from operations.
As we move into Aranzazu's expansion phase including the
installation of the partial roasting facility, it is currently
anticipated that major equipment purchases for this phase will
commence in the middle of this year. The Serrote Project continues
to be under budget and negotiations for long-term financing are
progressing. We are exploring our value maximization options with
respect to all the Brazilian Projects in addition to a number of
corporate financing alternatives.
I'd also like to announce that Ian Stalker decided not to stand
for re-election to the Board of Directors at the Company's annual
general meeting on May 10th to focus on his other endeavours.
Management and the Board wish to thank Ian for his valuable
contributions and dedication to the development of the Company
during his tenure as a director."
Production and Cash Costs
The Company's production and cash costs for the three months
ended March 31, 2013 and 2012 are summarized in the table
below:
For the three months ended For the three months ended
March 31, 2013 March 31, 2012
Oz Produced Cash Costs(1) Oz Produced Cash Costs(1)
----------------------------------------------------------------------------
San Andres 15,714 $ 1,116 13,386 $ 1,130
Sao Francisco 25,652 1,332 15,349 2,424
Sao Vicente 9,048 1,410 8,852 1,553
----------------------------------------------------------------------------
Total / Average 50,414 $ 1,279 37,587 $ 1,758
----------------------------------------------------------------------------
Gold production at San Andres in the first quarter 2013
increased 17% over the comparable period due to higher plant feed.
Average cash cost per oz of gold produced(1) in the first quarter
of 2013 decreased 1% over the first quarter of 2012.
Gold production at Sao Francisco in the first quarter of 2013
was 67% higher than the first quarter of 2012 due to both the
higher plant throughput and recovery of additional gold from the
staged leach on the heap quarter on quarter, as well as the first
quarter of 2012's production being impacted by a structural failure
of the primary crusher feed bin in February 2012, which resulted in
Sao Francisco not having use of the primary crusher for 47 days.
The crushing system at Sao Francisco has performed well since it
was repaired and stockpile management policies have resulted in
sufficient ore feed being fed to the plant during the rainy season
which is now over. Average cash cost per oz of gold produced(2) in
the first quarter of 2013 was 45% lower than the first quarter of
2012. The higher average cash cost per oz of gold produced in the
first quarter of 2012 was primarily due to lower volumes caused by
the structural failure of the primary crusher during that
period.
During the first quarter of 2013 at Sao Vicente, 2% more gold oz
was produced compared to the first quarter of 2012. The average
cash cost per oz of gold produced(1) in the first quarter of 2013
was 9% lower than the average cash cost(1) in the first quarter of
2012. Sao Vicente implemented revised stockpile management plans
which have mitigated the effect of the heavy rainy season.
At Aranzazu, the 4% decrease in copper grades for the three
months ended March 31, 2013 compared to the three months ended
March 31, 2012 was primarily due to the blending of ore from four
distinct zones to reduce the arsenic feed grades. Copper
concentrate production decreased by 10% in the first quarter of
2013 as compared to the first quarter of 2012 and the copper
recovery increased by 5%.
Average cash cost per payable pound of copper produced(1) for
the three months ended March 31, 2013 increased by 50% as compared
to the three months ended March 31, 2012. Average cash cost per
payable pound of copper produced(1) decreased to $3.69 from the
fourth quarter of 2012 of $5.42 due to higher production volumes
and lower penalties and charges related to the improvement in the
concentrate quality. The impact on the first quarter of 2013's
average cash cost(1) as a result of arsenic related charges and
penalties is estimated to be $0.57 per payable pound of copper as
compared to the fourth quarter of 2012's $1.21 per payable pound of
copper.
Brazilian Assets - Value Maximization
The Company has been investigating multiple options to maximize
the disposal and closure value of the assets of the Sao Francisco
and Sao Vicente mines, including selling the plant and equipment
and utilizing key members of their operating teams in other group
locations. The Company is also considering multiple options to
maximize the value of Serrote including, but not limited to, a
disposal of either a majority holding or the entire project.
Revenues and Cost of Goods Sold
Revenue for the three months ended March 31, 2013 and 2012 was
$88,585,000 and $75,596,000, respectively. The Company's revenue
for the first quarter 2013 is comprised of sales of gold from the
Company's gold mines of $78,541,000 and copper concentrate sales
from Aranzazu of $10,044,000 compared to $61,618,000 from the gold
mines and $13,978,000 from Aranzazu for the first quarter of
2012.
Revenues for the three months ended March 31, 2013 increased 17%
compared to the three months ended March 31, 2012. The increase in
revenues resulted from a 27% increase in gold sales partially
offset by a 28% decrease in copper concentrate sales.
The increase in gold sales is mainly attributable to a 31%
increase oz sold partially offset by a 3% decrease in the realized
average gold price per oz.
The decrease in copper concentrate sales is fully attributable
to the decrease in realized revenue per DMT of copper concentrate
as the DMT sold were consistent quarter over quarter. Total
revenues for the three months ended March 31, 2013 at Aranzazu
related to the shipment of 5,370 DMT of copper concentrate compared
to 5,396 DMT of copper concentrate for the prior comparable period.
Total concentrate shipment revenues for the three months ended
March 31, 2013 and 2012 were $1,870 per DMT and $2,590 per DMT,
respectively. The lower concentrate shipment revenue per DMT is due
to lower copper prices and the arsenic penalties incurred starting
in the second quarter of 2012.
At San Andres, for the three months ended March 31, 2013 and
2012, total cost of goods sold was $20,721,000 or $1,456 per oz
compared to $17,160,000 or $1,354 per oz, respectively. For the
three months ended March 31, 2013 and 2012, cash operating costs
were $1,189 per oz and $1,116 per oz, respectively, while non-cash
depletion and amortization charges were $266 per oz and $237 per
oz, respectively.
At the Brazilian Mines, total cost of goods sold for the three
months ended March 31, 2013 and 2012 were $62,028,000 or $1,794 per
oz and $56,878,000 or $2,317 per oz, respectively. Cash operating
costs for the three months ended March 31, 2013 and 2012 were
$1,404 per oz and $2,017 per oz, respectively, while non- cash
depletion and amortization charges were $390 per oz and $300 per
oz, respectively. The three months ended March 31, 2013 included a
write-down of $3,194,000 or $92 per oz to bring production
inventory to its net realizable value (2012: $13,422,000 or $547
per ounce).
At Aranzazu, total cost of goods sold for the three months ended
March 31, 2013 and 2012 were $13,031,000 or $2,427 per DMT and
$12,090,000 or $2,241 per DMT, respectively. Cash operating costs
for the three months ended March 31, 2013 and 2012 were $2,034 per
DMT and $1,797 per DMT, respectively, while non- cash depletion and
amortization charges were $393 per DMT and $444 per DMT,
respectively. The three months ended March 31, 2013 included a
write-down of $1,024,000 or $191 per DMT to bring production
inventory to its net realizable value (2012: $918,000 or $170 per
DMT of concentrate).
Additional Highlights
Other expense items for the first quarter of 2013 include
general and administrative expenses of $3,466,000 (2012:
$6,268,000) and exploration expenses of $676,000 (2012:
$3,865,000). The first quarter 2012 exploration primarily consisted
of expenditures at the Serrote Project and the Aranzazu PEA.
Additionally, for the first quarter of 2013, the Company
recorded finance costs of $1,664,000 (2012: $872,000), interest and
other income of $120,000 (2012: expense of $19,000), and other
gains of $1,817,000 (2012: $4,913,000). Loss before income taxes
for the first quarter of 2013 was $11,164,000 (2012:
$16,643,000).
For the quarter ended March 31, 2013, the Company recorded
income tax recovery of $226,000 (2012: expense of $2,040,000)
comprising a current income tax expense of $1,034,000 (2012:
$1,353,000) relating to the San Andres Mine, offset by a future
income tax recovery of $1,260,000 (2012: $687,000).
For the first quarter of 2013, the Company recorded a loss of
$10,938,000 or $0.05 per share. This compares to a loss of
$18,683,000 or $0.08 per share for the first quarter 2012.
Outlook and Strategy
Aura Minerals' future profitability, operating cash flows and
financial position will be closely related to the prevailing prices
of gold and copper. Key factors influencing the price of gold and
copper include the supply of and demand for these commodities, the
relative strength of currencies (particularly the U.S. dollar) and
macroeconomic factors such as current and future expectations for
inflation and interest rates. Management believes that the
short-to-medium term economic environment is likely to remain
relatively supportive for both gold and copper prices but with
continued volatility for both commodities. In order to decrease
risks associated with gold price volatility the Company will
evaluate entering into additional hedging programs.
Other key factors influencing profitability and operating cash
flows are production levels (impacted by grades, ore quantities,
labour, plant and equipment availabilities, and process recoveries)
and production and processing costs (impacted by production levels,
prices and usage of key consumables, labour, inflation, and
exchange rates).
Aura Minerals' production and cash cost per oz guidance for the
2013 year has not changed from previous guidance and is as
follows:
Gold Mines Cash Cost per oz 2013 Production
----------------------------------------------------------------------------
San Andres $1,000 - $1,150 60,000 - 65,000 oz
Sao Francisco $1,100 - $1,250 78,000 - 88,000 oz
Sao Vicente $950 - $1,100 28,000 - 32,000 oz
----------------------------------------------------------------------------
Total $1,050 - $1,200 166,000 - 185,000 oz
----------------------------------------------------------------------------
Aranzazu's production for 2013 is expected to be between
13,000,000 and 15,000,000 pounds of copper at a revised range of
$2.90 to $3.40 average cash cost per payable pound of copper.
With respect to the Company's gold operations, the first quarter
2013 results were in line with the Company's expectation that the
first two quarters of 2013 would have higher cash costs. The
Company expects to meet the previously reported annual guidance and
it is anticipated that the cash costs per ounce over the remainder
of the 2013 year will be at the lower end of the guidance range
provided above.
For the remainder of 2013, total capital spending is expected to
be $43 million. This amount relates to growth and sustaining
capital for existing mines - including $36 million on the Aranzazu
expansion and roaster installation and $5 million on completing
Phase V of the heap leach expansion and community expenditures at
San Andres. These capital expenditures are expected to be funded by
a combination of internal cash flows and external financing and may
be delayed if financing is not obtained; The Company has also
delayed previously planned development expenditures at Serrote
until the bridge loan financing is completed.
Conference Call
Aura Minerals' management will host a conference call and audio
webcast for analysts and investors on Tuesday, May 14, 2013 at 9:00
a.m. (Eastern Time) to review the first quarter 2013 results.
Participants may access the call by dialing 416-340-8530 or the
toll-free access at 1-888-340-9642. Participants are encouraged to
call in 10 minutes prior to the scheduled start time to avoid
delays.
The call is being webcast and can be accessed at Aura Minerals'
website at www.auraminerals.com. Those who wish to listen to a
recording of the conference call at a later time may do so by
dialing 905-694-9451 or 1- 800-408-3053 (Passcode 6892960#). The
conference call replay will be available from 2:00 p.m. on May 14,
2013, until 11:59 p.m. (EST) on May 28, 2013.
Non-GAAP Measures
This news release includes certain non-GAAP performance
measures, in particular, the average cash cost of gold per oz,
average cash cost per payable pound of copper and operating cash
flow which are non-GAAP performance measures. These non-GAAP
measures do not have any standardized meaning within IFRS and
therefore may not be comparable to similar measures presented by
other companies. The Company believes that these measures provide
investors with additional information which is useful in evaluating
the Company's performance and should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS.
Average cash costs per oz of gold or per payable pound of copper
are presented as they represent an industry standard method of
comparing certain costs on a per unit basis. Total cash costs of
gold produced include on- site mining, processing and
administration costs, off-site refining and royalty charges,
reduced by silver by- product credits, but exclude amortization,
reclamation, and exploration costs, as well as capital
expenditures.
Total cash costs of gold produced are divided by oz produced to
arrive at per oz cash costs. Similarly, total cash costs of copper
produced include the above costs, and are net of gold and silver
by-products, but include offsite treatment and refining charges.
Total cash costs of copper produced are divided by payable pounds
of copper produced to arrive at per payable pound cash costs.
Operating cash flow is the term the Company uses to describe the
cash that is generated from operations excluding depletion and
amortization, stock based compensation, impairment charges and the
effect of changes in working capital.
About Aura Minerals Inc.
Aura Minerals is a Canadian mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. The Company's producing assets
include the San Andres gold mine in Honduras, the Sao Francisco and
Sao Vicente gold mines in Brazil and the copper-gold- silver
Aranzazu mine in Mexico. The Company's core development asset is
the copper-gold-iron Serrote project in Brazil. Activities to date
on the Serrote project include detailed negotiations for debt and
equity financing, a geotechnical drill program, the engineering has
been awarded and the Company has commenced advancing with early
procurement.
For further information, please visit Aura Minerals' web site at
www.auraminerals.com.
National Instrument 43-101 Compliance
Unless otherwise indicated, Aura Minerals has prepared the
technical information in this press release ("Technical
Information") based on information contained in the technical
reports and news releases (collectively the "Disclosure Documents")
available under the Company's profile on SEDAR at www.sedar.com.
Each Disclosure Document was prepared by or under the supervision
of a qualified person (a "Qualified Person") as defined in National
Instrument 43-101 - Standards of Disclosure for Mineral Projects
("NI 43-101"). Readers are encouraged to review the full text of
the Disclosure Documents which qualifies the Technical Information.
Readers are advised that mineral resources that are not mineral
reserves do not have demonstrated economic viability. The
Disclosure Documents are each intended to be read as a whole, and
sections should not be read or relied upon out of context. The
Technical Information is subject to the assumptions and
qualifications contained in the Disclosure Documents. The
disclosure of Technical Information in this MD&A has been
reviewed and approved by Bruce Butcher, P. Eng., Vice President,
Technical Services.
Cautionary Note
This news release contains certain "forward-looking information"
and "forward-looking statements", as defined in applicable
securities laws (collectively, "forward-looking statements"). All
statements other than statements of historical fact are
forward-looking statements. Forward-looking statements relate to
future events or future performance and reflect the Company's
current estimates, predictions, expectations or beliefs regarding
future events and include, without limitation, statements with
respect to: the amount of mineral reserves and mineral resources;
the amount of future production over any period; the amount of
waste tonnes mined; the amount of mining and haulage costs; cash
costs; operating costs; strip ratios and mining rates; expected
grades and ounces of metals and minerals; expected processing
recoveries; expected time frames; prices of metals and minerals;
mine life; and gold hedge programs. Often, but not always,
forward-looking statements may be identified by the use of words
such as "expects", "anticipates", "plans", "projects", "estimates",
"assumes", "intends", "strategy", "goals", "objectives" or
variations thereof or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved, or the negative of any of these terms and similar
expressions.
Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable by
the Company, are inherently subject to significant business,
economic and competitive uncertainties and contingencies.
Forward-looking statements in this news release and related
MD&A are based upon, without limitation, the following
estimates and assumptions: the presence of and continuity of metals
at the Company's Mines at modeled grades; the capacities of various
machinery and equipment; the availability of personnel, machinery
and equipment at estimated prices; exchange rates; metals and
minerals sales prices; appropriate discount rates; tax rates and
royalty rates applicable to the mining operations; cash costs;
anticipated mining losses and dilution; metals recovery rates,
reasonable contingency requirements; and receipt of regulatory
approvals on acceptable terms.
Known and unknown risks, uncertainties and other factors, many
of which are beyond the Company's ability to predict or control
could cause actual results to differ materially from those
contained in the forward-looking statements. Specific reference is
made to the most recent Annual Information Form on file with
certain Canadian provincial securities regulatory authorities for a
discussion of some of the factors underlying forward- looking
statements, which include, without limitation, gold and copper or
certain other commodity price volatility, changes in debt and
equity markets, the uncertainties involved in interpreting
geological data, increases in costs, environmental compliance and
changes in environmental legislation and regulation, interest rate
and exchange rate fluctuations, general economic conditions and
other risks involved in the mineral exploration and development
industry. Readers are cautioned that the foregoing list of factors
is not exhaustive of the factors that may affect the
forward-looking statements.
All forward-looking statements herein are qualified by this
cautionary statement. Accordingly, readers should not place undue
reliance on forward-looking statements. The Company undertakes no
obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information
or future events or otherwise, except as may be required by law. If
the Company does update one or more forward- looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements.
Contacts: Aura Minerals Inc. Alex Penha Vice President,
Corporate Development (416) 509-0583 or (416) 649-1033 (416)
649-1044 (FAX)info@auraminerals.com www.auraminerals.com
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