Rusoro Mining Reports Q1 2011 Financial Results
30 Junio 2011 - 7:30AM
Marketwired Canada
Rusoro Mining Ltd. (TSX VENTURE:RML) ("Rusoro" or the "Company") reports its
financial results for the three months ended March 31, 2011 ("Q1 2011"). The
Company's consolidated financial statements and management's discussion and
analysis ("MD&A") for Q1 2011 have been filed on SEDAR (www.sedar.com).
All amounts set out in this news release and the Company's unaudited
consolidated financial statements and MD&A are expressed in United States
dollars, unless otherwise stated.
The following is a synopsis of the Q1 2011 financial results. For detailed
information regarding Rusoro's Q1 2011 results, please refer to the unaudited
consolidated financial statements and related MD&A for Q1 2011, which can also
be found on the Company's website at www.rusoro.com.
The Company's highlights for Q1 2011 were:
-- Average realized gold price per ounce sold of $1,292 (three months ended
March 31, 2010 ("Q1 2010"): $718) and cash cost per ounce sold of $1,294
(Q1 2010: $587). The higher average realized gold price is a result of a
higher international spot price per ounce of gold in Q1 2011 and due to
the change in Venezuelan laws during May, 2010, which effectively
changed, going forward, the rate at which the translations of
transactions and balances from Venezuelan Bolivars Fuertes ("BsF") to US
dollars were performed ("the Change in Translation Rate") (see
"Venezuela Currency Exchange and Gold Sales" section of the MD&A). The
higher cash cost per ounce sold is mainly due to the lower production
ore grade, the Change in Translation Rate and an increase in labour
costs resulting from the Venezuelan inflation rate.
-- Gold production of 17,742 ounces of finished gold (dore form) (Q1 2010:
27,986 ounces) (2011 revised guidance: 98,000 ounces) and gold sold of
22,052 ounces (Q1 2010: 22,760 ounces).
-- During Q1 2011, the Company exported 11,817 ounces of finished gold at
the international spot price per ounce, less associated costs and
commissions.
The Company's highlights subsequent to Q1 2011 were:
-- During the period subsequent to Q1 2011 and up to the date of this news
release, the Company exported 7,824 ounces of finished gold at the
international spot price per ounce, less associated costs and
commissions.
-- On June 10, 2011, the Company did not perform the repayment of the
convertible loan for $30 million (see news release "Rusoro Mining
Reports on its Loan Repayment Status", dated June 14, 2011, as filed on
SEDAR). The Company is currently holding discussions with the lenders
for the granting of an extension to the loan repayment period for a
sufficient amount of time to allow the Company to complete financing
options that it is currently evaluating to fund the retirement of the
loan and general corporate purposes.
Results for Q1 2011
-- Revenue increased to $28.5 million (22,052 ounces sold) in Q1 2011 from
$16.3 million (22,760 ounces sold) in Q1 2010 due to the increase in the
average international spot price of gold to $1,384 in Q1 2011 from
$1,109 in Q1 2010, and due to the Change in Translation Rate.
-- Mining operating expenses and depreciation and depletion increased to
$30.1 million and $3.2 million, respectively, in Q1 2011 from $13.5
million and $2.9 million in Q1 2010. This cost increase is primarily due
to the Change in Translation Rate. Operational factors impacting the
amount of tonnes mined, tonnes milled and average ore grade realized
also negatively impacted production costs in Q1 2011 at the Choco Mine
and Isidora Mine.
-- General and administrative expenses decreased to $1.8 million in Q1 2011
from $2.8 million in Q1 2010 significantly due to increased efficiencies
and the non-renewal of consulting agreements with two senior officers of
the Company.
-- Interest on the Company's convertible loan decreased to $1.5 million in
Q1 2011 from $2.6 million in Q1 2010 due to the partial retirement of
the convertible loan during 2010.
-- Gain on revaluation of derivative financial liabilities increased to
$2.2 million in Q1 2011 from $0.2 million in Q1 2010 due to the issuance
and subsequent revaluation of Canadian dollar warrants, which were
issued in June 2010 as part of the convertible loan refinancing
transaction.
-- Foreign exchange loss was $3.7 million in Q1 2011 compared to a foreign
exchange gain of $3.6 million in Q1 2010. The foreign exchange gain
experienced in Q1 2010 was due to the Company having a negative net
monetary position (assets less liabilities) and the change in
translation rate from BsF 5.97/$1.00 (December 31, 2009) to BsF
7.00/$1.00 (March 31, 2010), which created gains on the translation of
the net monetary position as the Company's liabilities denominated in
BsF became less costly to settle.
-- Deferred tax recovery increased to $7.9 million in Q1 2011 from $3.1
million in Q1 2010 due to declining results at the Choco Mine and the
Isidora Mine.
-- Net loss amounted to $1.4 million during Q1 2011 compared to net profit
of $1.2 million during Q1 2010.
Operating Performance
The following table summarizes key operating statistics for 100% of the Choco
Mine and 50% of the Isidora Mine:
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3 Months Ended March 3 Months Ended March
31, 2011 31, 2010
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Choco Isidora Total Choco Isidora Total
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Ore tonnes mined ('000 t) 83 9 92 396 6 402
Ore tonnes milled ('000 t) 363 6 369 371 4 375
Average grade (g/t) 1.28 16.40 1.53 2.18 23.51 2.41
Average recovery rate (%) 93 90 93 93 90 93
Gold produced (ounces) 13,956 3,786 17,742 25,142 2,844 27,986
Gold sold (ounces) 17,410 4,642 22,052 20,821 1,939 22,760
Total mining operating
expenses $(000) 24,612 5,531 30,143 12,171 1,352 13,523
- decommissioning and
restoration provision
accretion $(000) (227) (176) (403) (92) (80) (172)
- impairment of
inventories $(000) (1,201) - (1,201) - - -
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Total cash costs $(000)(1) 23,184 5,355 28,539 12,079 1,272 13,351
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Total cash costs per ounce
sold $(2) 1,332 1,154 1,294 580 656 587
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Average spot gold price per
ounce $ n/a n/a 1,384 n/a n/a 1,109
Average realized gold price
per ounce sold $ 1,285 1,319 1,292 716 735 718
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The following notes are applicable to the above tables:
1. Total cash costs used in the calculation of cash costs per ounce is
calculated as mining operating expenses from the consolidated statement
of comprehensive income (loss) excluding accretion expense related to
the decommissioning and restoration provision and expense for impairment
of inventories.
2. Cash costs per ounce sold is a non-IFRS measure. Total cash costs per
ounce sold is calculated by dividing the total cash costs by the gold
ounces sold during the period. Cash costs per ounce sold includes all
expenditures related to the mine such as mining, processing,
administration, royalties and production taxes but excludes reclamation,
capital and exploration expenditures, and impairments of inventories.
Outlook
During 2011, the Company expects to produce 98,000 ounces of finished gold from
the Choco Mine and its 50% interest in the Isidora Mine. Total cash costs per
ounce sold for 2011 are expected to be $1,050 per ounce. For the cost per ounce
estimate, the Company assumes that the Venezuelan government will not devalue
the currency in reaction to the highly inflationary economy. As a result, a
BsF/US dollar average exchange rate during the year for translation of BsF
4.30/$1.00 is forecasted. Any increase in the rate will likely generate a
reduction in the Company's expected costs and capital expenditures.
Cautionary non-IFRS measures
Total cash costs per ounce sold is a non-IFRS measure. The Company believes
that, in addition to conventional measures, prepared in accordance with IFRS,
certain investors use the cash costs per ounce data 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 as it
does not have any standardized meaning prescribed by IFRS. Data used in the
calculation of total cash costs per ounce may not conform to other similarly
titled measures provided by other precious metals companies.
ON BEHALF OF THE BOARD
Andre Agapov, President & CEO
Forward-looking statements: This document contains statements about expected or
anticipated future events and financial results that are forward-looking in
nature and as a result, are subject to certain risks and uncertainties, such as
general economic, market and business conditions, the regulatory process and
actions, technical issues, new legislation, competitive and general economic
factors and conditions, the uncertainties resulting from potential delays or
changes in plans, the occurrence of unexpected events, and the Company's
capability to execute and implement its future plans. Actual results may differ
materially from those projected by management. For such statements, we claim the
safe harbour for forward-looking statements within the meaning of the Private
Securities Legislation Reform Act of 1995.
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