CASH COSTS CAD $569/OZ (USD $432/OZ @0.76 USD/CAD)
AISC CAD $743/OZ (USD $565/OZ @0.76 USD/CAD)
MINE OPERATING EARNINGS CAD $15.5 MILLION
OPERATING CASH FLOW CAD $19.4 MILLION ($0.10 PER SHARE)
REMAINS ON TRACK TO MEET ANNUAL
PRODUCTION AND COST GUIDANCE
Canadian dollars unless otherwise
noted
VANCOUVER,
Aug. 15, 2018
/CNW/ - Atlantic Gold Corporation (TSX-V: AGB)
("Atlantic" or the "Company") is pleased to
announce its operational and financial results for the second
quarter of 2018 at its Moose River Consolidated Gold Mine
("MRC") in Nova Scotia,
Canada.
Description
|
Q1 2018
|
Q2 2018
|
YTD 2018
|
Gold Produced (oz.)
|
18,183
|
22,269
|
40,452
|
Gold Sold (oz.)
|
17,187
|
22,728
|
39,915
|
Cash Cost/oz. ($CAD)
|
549
|
569
|
560
|
AISC/oz. ($CAD)
|
751
|
743
|
746
|
Mine Operating Earnings ($CAD)
|
5,889,743
|
15,483,426
|
21,373,169
|
Operating Cash Flow ($CAD)
|
4,214,432
|
19,393,031
|
23,607,463
|
The Company remains on track to deliver on its annual
guidance of producing 82,000 - 90,000 ounces at a cash
cost (see "Non-IFRS Performance Measures")
of CAD $500 - CAD $560 per ounce and an AISC between CAD
$675 - CAD $735 per ounce. The Company
previously released its gold production and revenue for the second
quarter of 2018 (see news release dated July 09, 2018).
Additionally, in July 2018,
the Company announced the execution of a credit approved commitment
letter for a fully underwritten CAD $150,000,000 senior secured revolving credit
facility with National Bank of Canada. This facility will be used to repay
the Company's project financing loan and for general working
capital purposes.
The Company has a total cash balance at June 30, 2018 of CAD $33
million, which includes $17
million of restricted cash that will be released upon
execution of the credit facility with National Bank of Canada.
Throughout the second half of 2018, the Company will
continue to focus on the following:
- Producing 82,000 - 90,000 ounces from Touquoy in 2018 at
a cash cost of $500 - $560 per ounce (US$400 – US$448 per
ounce @ an exchange rate of CAD$0.80), and an AISC between $675 and $735 per
ounce (US$540 – US$588 per ounce, @ an exchange rate of
CAD$0.80).
- Progressing the Company's Phase 4 Corridor Regional
diamond drilling program which commenced in April 2018, with the objective to systematically
explore the regional prospective host structure targeting the
Company's disseminated style gold deposit model amenable to open
pit mining.
- Completing formal documentation in respect of the senior
secured revolving credit facility with National Bank of
Canada.
- Progressing and seeking approval of the Environmental
Impact Statement for Beaver Dam
which was submitted in June
2017.
- Preparation of the Fifteen Mile Stream and Cochrane Hill
Projects Environmental Impact Statements, with submissions expected
in Q1 2019.
Q2 and YTD 2018 Operating Results**:
|
|
Three months
ended
June 30, 2018
|
Six months ended
June 30, 2018
|
Operating data
|
|
|
|
Ore mined
|
Tonnes
|
757,865
|
1,852,353
|
Waste to ore
ratio
|
(waste to
ore)
|
1.39
|
0.85
|
Mining rate (waste +
ore)
|
Tonnes per
day
|
19,921
|
18,903
|
Ore milled
|
Tonnes
|
567,238
|
986,388
|
Head grade
|
g/t Au
|
1.28
|
1.35
|
Recovery
|
%
|
95.2
|
94.7
|
Mill
throughput
|
Tonnes per
day
|
6,233
|
5,450
|
Gold ounces
produced
|
ozs.
|
22,269
|
40,452
|
Gold ounces
sold
|
ozs.
|
22,728
|
39,915
|
|
**Disclosure of operating results and supporting
discussion in this news release does not present comparative
statistics for the prior year as MRC began producing gold in Q4
2017 and commenced commercial production
effective March 1, 2018.
|
Gold production and sales
During
the three months ended June 30, 2018,
MRC produced 22,269 ounces of gold (which was above Q2 2018
production guidance of 21,000 to 22,000 ounces of gold) and sold
22,728 ounces of gold.
During the first half of 2018, the Company produced 40,452
ounces of gold, which included 9,373 ounces of gold produced during
operation ramp up in January and February
2018, prior to commencement of commercial production. Gold
sales during the first half of 2018 was 39,915 ounces, which
includes 9,432 ounces of gold sold during operation ramp up in
January and February 2018, prior to
commencement of commercial production.
Mining
During the three months
ended June 30, 2018, a total of
757,865 tonnes of ore were mined at a waste to ore ratio of 1.39:1
with a total of 1,812,803 tonnes of material moved.
During the first half of 2018, a total of 1,852,353 tonnes
of ore were mined, at a waste to ore ratio of 0.85:1 with a total
of 3,421,473 tonnes of material moved. Approximately 49% of
the ore mined in the first half of 2018 was stockpiled as low and
medium-grade material which will be readily available for
processing later in the mine life. This material was assumed to be
waste in the 2015 Feasibility Study. Waste material was used
to build the Tailings Management Facility ("TMF") and the waste
dump with its ditches and water collection area.
Processing
During the three months
ended June 30, 2018, a total of
567,238 tonnes of ore was processed at an average grade of 1.28 g/t
Au and average process recovery of 95.2% which exceeded the design
recovery of 94%. The decrease in grade for Q2 2018 is
attributed to physical constraints in accessing the ore due to the
removal of historical tailings that required permitting plus
supervision by independent consultants and prevented access to
higher grade ore for more than 8 weeks. Access to the
higher-grade mining blocks was achieved by the end of
June.
A total of 986,388 tonnes of ore was processed during the
first half of 2018, at an average grade of 1.35 g/t Au with a
recovery of 95%.
As with Q1, during the second quarter, the Company
continued its efforts to optimize certain areas of the plant
including the crushing circuit, reagents consumption and overall
energy management. Operations statistics since the commencement of
commercial production on March 1,
2018 supports the Company's full year production guidance
for 2018.
Sustaining capital
The Company
incurred a total of $2,400,054 and
$4,428,850 in sustaining capital
expenditures during the three and six months ended June 30, 2018, respectively. The vast
majority of the expenditures relate to the scheduled TMF raise
which commenced ahead of schedule due to favorable
weather conditions at the end of the first quarter of
2018.
Growth capital
The Company incurred
a total of $2,126,754 and
$4,889,196 in growth capital
expenditures during the three and six months ended June 30, 2018, respectively. A large proportion
of the expenditures in the first half of 2018 relate to development
of the waste dump area, removal of historic tailings, and costs
associated with initial fit-out of site infrastructure, as well as
costs incurred due to design and commissioning issues identified as
part of the ramp-up process.
Q2 2018 Financial Results
|
|
For the three
months
ended June 30, 2018
|
For the six
months
ended June 30, 2018
|
IFRS Measures(1)
|
|
|
Revenue
|
CAD
$35,888,640
|
CAD
$48,770,102
|
Mine operating
earnings
|
15,483,426
|
21,373,169
|
Cash generated from
operating activities
|
19,393,031
|
23,607,463
|
Net income and
comprehensive income
|
8,342,731
|
11,653,286
|
Earnings per share -
basic
|
0.04
|
0.06
|
Earnings per share –
diluted
|
0.04
|
0.05
|
Operating cash flow
per share – basic
|
0.10
|
0.12
|
Operating cash flow
per share – diluted
|
0.09
|
0.11
|
Non IFRS Performance Measures(2)
|
|
|
Total cash cost per
ounce
|
CAD $569
|
CAD $560
|
AISC per
ounce
|
743
|
746
|
Average realized
price per ounce
|
1,583
|
1,598
|
Average realized cash
margin per ounce
|
1,014
|
1,038
|
Average realized AISC
margin per ounce
|
840
|
852
|
|
|
|
|
As at June 30,
2018
|
As at December 31,
2017
|
Key Balance Sheet Items
|
|
|
Total
cash(3)
|
CAD
$33,116,412
|
CAD
$32,687,346
|
Total
assets
|
264,828,828
|
258,565,362
|
Current portion of
long-term debt
|
47,278,643
|
32,210,417
|
Long-term
debt
|
71,150,511
|
105,617,533
|
|
|
(1)
|
MRC commenced
commercial production effective March 1, 2018. As such, only
financial operating results from this date
are recognized in the Company's Statement of Income (Loss) and
Other Comprehensive Income (Loss) for the three and six
months ended June 30, 2018. Financial operating results prior to
that were capitalized to mine development within property,
plant and equipment.
|
(2)
|
The Non-IFRS
performance measures for the six months ended June 30, 2018 include
pre-commercial production operating
results from January 2018 and February 2018. For accounting
purposes, pre-commercial production financial operating
results have been capitalized to property, plant and equipment
(refer to note 9 of the interim financial statements for the
three and six months ended June 30, 2018). Refer to the "Non IFRS
Performance Measures" section in this news release and in the
Company's Management and Discussion Analysis for the six months
ended June 30, 2018.
|
(3)
|
As at June 30, 2018
total cash as presented above represents the cash and cash
equivalents balance on the Company's
Condensed Consolidated Interim Balance Sheet of $16,075,980 plus
the restricted cash balance of $17,040,432. As at
December 31, 2017 total cash as presented above represents the cash
and cash equivalents balance on the Company's
Condensed Consolidated Interim Balance Sheet of $22,093,914 plus
the restricted cash balance of $10,593,432.
|
In the three months ended June 30,
2018 the Company had earnings of $8,342,731, an increase of $9,335,357, when compared to the 2017 comparative
period as the Company commenced commercial production in 2018,
recognizing mine operating earnings of $15,483,426 for the three months ended
June 30, 2018. The mine operating
earnings were before general and administration expenses of
$2,407,082 and $2,953,404 in finance costs.
The income (loss) for the three months ended June 30, 2018 and 2017 is comprised of the
following items:
|
|
Three months ended
|
Three months ended
|
|
June 30, 2018
|
June 30, 2017
|
|
|
|
Mine operating
earnings
|
15,483,426
|
-
|
General &
Administration
|
(2,407,082)
|
(1,531,862)
|
Financing
costs
|
(2,953,404)
|
(253,874)
|
Interest and other
income
|
99,180
|
73,256
|
|
|
|
Net earnings (loss) before income
taxes
|
10,222,120
|
(1,712,480)
|
|
Deferred income tax
(loss) recovery
|
(1,879,389)
|
719,854
|
|
|
|
Net earnings (loss) and comprehensive earnings
(loss)
|
$
|
8,342,731
|
$
|
(992,626)
|
Mine operating earnings
The mine operating earnings for the three months ended
June 30, 2018 and 2017 is comprised
of the following.
|
|
2018
|
2017
|
|
Revenue
|
$
|
35,888,640
|
$
|
-
|
|
Costs of
sales
|
(13,196,922)
|
-
|
|
Depreciation and
depletion
|
(7,208,292)
|
-
|
|
|
|
Mine operating earnings
|
$
|
15,483,426
|
$
|
-
|
During the three months ended June
30, 2018, the Company sold 22,728 ounces of gold at an
average price of $1,583 resulting in
net revenue of $35,888,640. The
Company delivered 16,983 ounces into fixed price contracts and the
remaining 5,745 ounces were sold at spot price. Revenue is net of
treatment and refining costs which were $78,985 for the three months ended June 30, 2018.
The costs of sales are comprised of production costs,
including mining, processing, maintenance, site administration and
site share-based payments. Cash costs per ounce sold for the three
months ended June 30, 2018 were
$569 (see Non-IFRS Performance
Measures section).
Depreciation and depletion was $7,208,292. Most assets are depreciated or
depleted on a units-of-production basis over the reserves to which
they relate.
AISC per ounce sold for the three months ended
June 30, 2018 was $743 (see Non-IFRS Performance Measures
section). This is slightly higher than average guidance as
the MRC process facility was still being optimized during Q2 2018,
but generally consistent with guidance for the full year of
2018.
General and administration
General and administration for the three
months ended June 30, 2018 and 2017
is comprised of:
|
|
|
2018
|
2017
|
Amortization
|
|
$
|
27,816
|
$
|
24,372
|
Corporate development
and investor relations
|
|
45,517
|
151,389
|
Director
fees
|
|
71,875
|
58,125
|
Management fees,
salaries and benefits
|
|
757,208
|
390,828
|
Office and
general
|
|
57,828
|
73,075
|
Professional
fees
|
|
254,351
|
239,652
|
Rent
|
|
50,547
|
49,610
|
Share-based
payments
|
|
1,049,743
|
505,498
|
Travel, meals and
entertainment
|
|
16,011
|
27,502
|
Transfer agent and
filing fees
|
|
76,187
|
11,811
|
|
|
$
|
2,407,083
|
$
|
1,531,862
|
In the three months ended June 30,
2018, the Company experienced an increase in general and
administration costs over the three months ended June 30, 2017 due to increased activity and
aligning staffing to an appropriate level for that of an operating
entity.
Management fees, salaries and benefits were $757,208 in the three months ended June 30, 2018, an increase of $366,380 over the three months ended June 30, 2017. The increase is a result of the
growth of the Company largely stemming from increased
activity, specifically, the commencement of operations at MRC and
the further development of the Company's other Nova Scotia deposits.
Share-based payments, increased by $544,245 to $1,049,743 and represents the Black-Scholes
calculated value of stock options issued to directors, officers,
consultants and employees which vested during the period. The
increase in share-based payments is due primarily to the increase
in the number of options granted and vesting and to the increased
share price, which, with all other variables being equal increases
the value assigned to each option. The average exercise price of
options granted was $1.85 per share
in the three months ended June 30,
2018 compared to $1.01 per
share in the 2017 year.
Financing Costs
Financing costs are comprised of interest incurred on the
Company's long-term debt facilities, and amortization of deferred
transaction costs. Prior to the start of commercial production on
March 1, 2018, the interest,
accretion and amortization of the transaction costs related to the
long-term debt facilities were capitalized to mineral properties
and expensed thereafter.
Financing costs for the three months ended June 30, 2018 were comprised
of:
|
Total
financing
costs -
2018
|
Financing
costs
–
expensed
2017
|
Financing
costs
–
capitalized
2017
|
Total
financing
costs -
2017
|
|
|
|
|
|
Interest on the
PLF
|
$
|
1,871,013
|
$
|
-
|
$
|
1,222,723
|
$
|
1,222,723
|
Amortization of
transaction costs on the PLF
|
484,191
|
-
|
383,062
|
383,062
|
Interest and
accretion of convertible debt
|
311,339
|
-
|
290,966
|
290,966
|
Financing fees on
capital leases
|
168,840
|
-
|
159,439
|
159,439
|
Accretion on
reclamation provision
|
18,021
|
13,506
|
-
|
13,506
|
Other financing
charges
|
100,000
|
240,368
|
-
|
240,368
|
|
$
|
2,953,404
|
$
|
253,874
|
$
|
2,056,190
|
$
|
2,310,064
|
In the three months ended June 30,
2017 there was $2,056,190
finance costs which were all capitalized to mineral properties and
development costs, compared to a total of $2,835,383 finance costs in the current period,
which all were expensed to the statement of income (loss), as a
result of the Company commencing commercial production on
March 1, 2018. The costs in the three
months ended June 30, 2017 were lower
as the loan balances were lower on the Company's long-term debt
facilities during the same period in the prior year, resulting in
lower interest charges. The Company's Project Loan Facility
("PLF") was not fully drawn until Q3 2017. In May,
2018 the convertible debentures and the all unpaid interest owing
was converted into 21,927,360 common shares of the
Company.
In the three months ended June 30,
2017, the Company incurred $240,368 of standby fees related to the PLF and
Equipment Facility. There were no standby fees incurred in the
three months ended June 30, 2018 as
the PLF was fully drawn at the end of Q3 2017. Accretion
expense on the reclamation obligation was $18,021 in the three months ended June 30, 2018 compared to $13,506 in the three months ended June 30, 2018.
Deferred Income Tax
Recovery/(Loss)
During the three months ended
June 30, 2018, the Company recognized
a deferred income tax loss of $1,879,389, a non-cash accounting loss, versus a
deferred income tax recovery of $719,854 for the three months ended June 30, 2017. This does not represent cash
taxes payable at the end of the current period. The expense
recognized in the current period is largely a result of taxable
temporary differences resulting from the income generated at MRC
consuming formerly recognized loss tax pools which are categorized
as deductible temporary differences. A deferred income tax
asset was not recorded in prior periods as up until 2018, there was
no reasonable expectation of realizing such assets through a
history of income. Furthermore, taxable temporary differences
exist as a result of the Company incurring flow through related
expenditures which are capitalized on the Company's balance sheet
but have no tax basis as the expenditures are renounced to the
related flow through investor.
Working Capital and Liquidity
The
Company has a working capital deficit position as at June 30, 2018 of CAD $32,913,256. Included in this deficit position is
CAD $47,278,643 related to principal
payments under the Company's senior project loan facility
("PLF"). These amounts are intended to be refinanced from
the new $150,000,000 revolving credit
facility (discussed above).
The Company believes that it has sufficient funding to
meet its obligations and to maintain administrative and operational
expenditures for the next 12 months from existing treasury,
estimated future operating cash flows, as well as the new revolving
credit facility. MRC is expected to produce 82,000 to 90,000 ounces
of gold in 2018 at a cash costs of between CAD $500 to CAD $560
per ounce. In order to mitigate gold price risk, the Company
entered into margin free gold forward sales contracts for 215,000
ounces which is at a flat forward price of CAD $1,550 per ounce and scheduled out its hedged
contracts over the life of the PLF (the "Hedge Facility") to
be delivered during production in 2018 and beyond. As of
June 30, 2018, there were 189,473
ounces committed to the gold forward contracts for delivery between
July 2018 and February 2021.
Exploration Update
The Company completed its Phase 3 Expansion drilling
program at Fifteen Mile Stream and Cochrane Hill in the first
quarter of 2018. The objectives of the Phase 3 Expansion drilling
program were to:
- identify additional gold resources immediately peripheral
to those resources previously defined at Fifteen Mile Stream and
Cochrane Hill;
- at Cochrane Hill and at Fifteen Mile Stream –
particularly at the Hudson and Plenty zones, to upgrade previously
defined Inferred Mineral Resources to Measured and Indicated
categories; and
- seek additional new Mineral Resources within the
350-metre gap between the Plenty and Egerton MacLean zones at Fifteen Mile
Stream.
The Phase 3 Resource Expansion diamond drilling program at
Fifteen Mile Stream comprised 185 holes to December 31, 2017 and was completed at the end of
January with a total of 24,325m
drilled in 221 holes. Holes were generally drilled on 25m x 20m centres,
except for the first-pass drilling along the 350m gap between Plenty and Egerton MacLean where holes were drilled on
50m-spaced sections. The Phase 3
Resource Expansion diamond drilling program at Cochrane Hill was
completed at the end of December, 2017 with a total of 44 holes for
6,900 metres having been drilled.
Further drilling is planned for Q3, 2018 to further define
the additional mineralization identified, particularly in the
Egerton-MacLean and Plenty Zones at Fifteen Mile Stream and at
Cochrane Hill. The Company currently plans to have the
updated resource estimates completed in Q4, 2018 when the results
of planned drilling have been received and analysed. Results
from the Phase 3 Resource Expansion diamond drilling program were
announced in news releases dated December
20, 2017, January 17, 2018,
January 24, 2018, February 22, 2018, March
15, 2018 and April 4,
2018.
In respect of Beaver Dam,
the Company incurred $592,984 on
Beaver Dam during the six months
ended June 30, 2018. The focus
of expenditures at Beaver Dam were
to secure the environmental approval expected in early
2019.
Phase 4 Program
The Phase 4 Corridor Regional Program is designed to
systematically explore along the + 45km un-tested structure hosting
all existing deposits. This under-explored and geologically
prospective 45km trend extends northeast from the central
processing facility at Touquoy to the Beaver Dam gold deposit and through to the
Fifteen Mile Stream gold deposit in the east.
Two diamond drill rigs commenced drilling in early April
and a total of 7,037 metres in 53 holes have been completed to
June 30, 2018. The objective of the
program is to explore the gaps between the three known deposits
along this trend. The program will comprise up to a total of
100,000 metres of diamond drilling distributed throughout the
Touquoy-Beaver Dam-Fifteen Mile Stream Corridor.
The first results of the Phase 4 Corridor Regional
Program, announced in a news release on June
28, 2018, reported the discovery of a new zone of
significant mineralization at the 149 Prospect, approximately 1km
east from the Fifteen Mile Stream project.
Targeted as part of the Corridor Regional Program on the
basis of favourable geological position and historical anomalous
mineralization, initial widely spaced drilling produced encouraging
results which, when followed up, resulted in the discovery of
shallow, near surface gold mineralization over a strike length of
250m.
Early stage interpretation suggests that mineralization is
of a style similar to that located in the Egerton-MacLean zone of
the Fifteen Mile Stream deposits. The gold mineralization is
associated with disseminated arsenopyrite and banded pyrrhotite in
argillite units on the northern flank of an east-west trending
anticlinal structure. Based on limited drilling to date, the
mineralization appears to dip approximately 60-75° north, may be up
to 25m in true thickness and is
covered by a modest 5m glacial till
cover.
The latest results of the drill program can be found in
the Company's news release on the Company's website. Drilling
continues to infill and expand the zone of mineralization which is
open at depth and along strike to the east. Drilling also continues
to complete additional regional traverses within the Corridor
Regional program.
Qualified Persons
Kodjo Afewu, PhD, SME (CP), Plant Manager for the Company
and a Qualified Person as defined by NI 43-101, has approved the
scientific and technical information related to operations matters
contained in this news release.
Doug Currie, P. Geo.,
MAusIMM (CP), General Manager of Exploration for the Company and a
Qualified Person as defined by NI 43-101, has approved the
scientific and technical information related to exploration matters
contained in this news release.
Conference Call Details
Atlantic Gold Corporation is hosting a live Q&A
conference call to discuss the results on August 15, 2018 at 2:00 pm
Eastern time (11:00 am Pacific
time) with the Atlantic executive team. Participants
may join the call by dialing:
Participant Dial-in Numbers:
Local -
Toronto
|
(+1) 416 764
8688
|
Local -
Vancouver
|
(+1) 778 383
7413
|
Toll Free - North
America
|
(+1) 888 390
0546
|
Additional International Dial-in Numbers: UK: 08006522435,
Switzerland: 0800312635,
Germany: 08007240293, Hong Kong: 800962712
Please provide the company name (Atlantic Gold
Corporation) to the operator. A recorded playback of the call
will be available one hour after the call's completion
until September 15th, 2018 by dialing:
Toll Free - North
America
|
(+1) 888 390
0541
|
Enter the playback passcode: 191950#, an MP3 recording
will also be available on the Atlantic website.
Further updates will be provided in due course.
On behalf of the Board of Directors,
Steven
Dean
Chairman and Chief Executive
Officer
Neither the 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.
About Atlantic:
Atlantic is a well-financed, growth-oriented gold
development group with a long term strategy to build a mid-tier
gold production company focused on manageable, executable projects
in mining-friendly jurisdictions.
Atlantic is focused on growing gold production in
Nova Scotia beginning with its MRC
phase one open pit gold mine which declared commercial production
in March 2018, and its phase two Life
of Mine Expansion which will ramp up gold production to + 200,000
ounces per year at industry lowest quartile cash and
all-in-sustaining-costs (as stated in the Company's news releases
dated January 19, 2018 and
January 29, 2018).
Atlantic is committed to the highest standards of
environmental and social responsibility and continually invests in
people and technology to manage risks, maximize outcomes and
returns to all stakeholders.
Forward-Looking Statements:
This release contains certain "forward looking
statements" and certain "forward-looking information" as defined
under applicable Canadian and U.S. securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans"
or similar terminology. Forward-looking statements and information
are not historical facts, are made as of the date of this press
release, and include, but are not limited to, statements regarding
discussions of future plans, guidance, projections, objectives,
estimates and forecasts and statements as to management's
expectations with respect to, among other things, the activities
contemplated in this news release and the timing and receipt of
requisite regulatory, and shareholder approvals in respect thereof.
Forward looking information, including future oriented financial
information (such as guidance) provide investors an improved
ability to evaluate the underlying performance of the
Company. Forward-looking statements in this news release
include, without limitation, statements related to proposed
exploration and development programs, grade and tonnage of material
and resource estimates. These forward looking statements involve
numerous risks and uncertainties and actual results may vary.
Important factors that may cause actual results to vary include
without limitation, the timing and receipt of certain approvals,
changes in commodity and power prices, changes in interest and
currency exchange rates, risks inherent in exploration estimates
and results, timing and success, inaccurate geological and
metallurgical assumptions (including with respect to the size,
grade and recoverability of mineral reserves and resources),
changes in development or mining plans due to changes in
logistical, technical or other factors, unanticipated operational
difficulties (including failure of plant, equipment or processes to
operate in accordance with specifications, cost escalation,
unavailability of materials, equipment and third party contractors,
delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related
to health, safety and environmental matters), political risk,
social unrest, and changes in general economic conditions or
conditions in the financial markets. In making the forward-looking
statements in this press release, the Company has applied several
material assumptions, including without limitation, the assumptions
that: (1) market fundamentals will result in sustained gold demand
and prices; (2) the receipt of any necessary approvals and consents
in connection with the development of any properties; (3) the
availability of financing on suitable terms for the development,
construction and continued operation of any mineral properties; and
(4) sustained commodity prices such that any properties put into
operation remain economically viable. Information concerning
mineral reserve and mineral resource estimates also may be
considered forward-looking statements, as such information
constitutes a prediction of what mineralization might be found to
be present if and when a project is actually developed. Certain of
the risks and assumptions are described in more detail in the
Company's audited financial statements and MD&A for the year
ended December 31, 2017 and for the
quarter ended June 30, 2018 on the
Company's SEDAR profile at www.sedar.com. The actual results or
performance by the Company could differ materially from those
expressed in, or implied by, any forward-looking statements
relating to those matters. Accordingly, no assurances can be given
that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
impact they will have on the results of operations or financial
condition of the Company. Except as required by law, the Company is
under no obligation, and expressly disclaim any obligation, to
update, alter or otherwise revise any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities
laws.
Non-IFRS Performance Measures
The Company has included certain non-IFRS measures in
this news release. The company believes that these measures,
in addition to conventional measures prepared in accordance with
IFRS, provide investors an improved ability to evaluate the
underlying performance of the company. The non-IFRS measures are
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. These measures do not
have any standardized meaning prescribed under IFRS and therefore
may not be comparable with other issuers. Readers should
refer to the Company's management discussion and analysis,
available on the Company's profile on SEDAR and on the Company's
website, under the heading "Non-IFRS Performance Measures" for a
more detailed discussion of how the Company calculates certain such
measures and reconciliation of certain measures to IFRS
terms.
Cash costs
Cash costs are a common financial performance measure
in the gold mining industry but with no standard meaning under
IFRS. Atlantic reports total cash costs on a sales basis. The
Company believes that, in addition to conventional measures
prepared in accordance with IFRS, such as sales, certain investors
use this information to evaluate the Company's performance and
ability to generate operating earnings and cash flow from its
mining operations. Management uses this metric as an important tool
to monitor operating cost performance.
Cash costs include production costs such as mining,
processing, refining and site administration, less non-cash
share-based compensation divided by gold ounces sold to arrive at
total cash costs per gold ounce sold. Costs include royalty
payments and permitting costs Production costs are exclusive of
depreciation. Other companies may calculate this measure
differently.
All-in sustaining costs
The Company believes that AISC more fully defines the
total costs associated with producing gold. The company calculates
all-in sustaining costs as the sum of total cash costs (as
described above), corporate general and administrative expense (net
of stock-based compensation), reclamation cost accretion and
amortization and sustaining capital, all divided by the gold ounces
sold to arrive at a per ounce figure.
Other companies may calculate this measure differently
as a result of differences in underlying principles and policies
applied. Differences may also arise due to a different definition
of sustaining versus growth capital.
SOURCE Atlantic Gold Corporation