Brigus Gold Reports Q3 Financial Results
Brigus Gold Reports Q3 Financial Results
HALIFAX, Nova Scotia--(BUSINESS WIRE)-- Brigus Gold Corp. ("Brigus" or the "Company")(NYSE MKT: BRD) (TSX: BRD) announces results for the third quarter ("Q3-12") of 2012.
This press release should be read in conjunction with the Company's September 30, 2012 condensed consolidated interim financial statements and associated Management's Discussion and Analysis ("MD&A"), which are available from the Company's website (www.brigusgold.com) and on SEDAR (www.sedar.com). All dollar amounts are expressed in US dollars unless otherwise specified. All financial results are presented in accordance with International Financial Reporting Standards.
Third Quarter 2012 Financial Highlights
Sold 19,064 ounces of gold, a 4% increase over the 18,419 ounces sold in Q2-12 and an 11% increase over the 17,119 ounces sold in Q3-11.
Reduced cash costs to $728 per ounce, a 10% decrease in cash costs from Q3-11, which totalled $807 per ounce and a 9% decrease in cash costs in Q2-12, which were $799 per ounce.
Generated cash flow from operations, before working capital adjustments, of $12.5M, compared to $10.5M in the same period in 2011.
Increased operating margin by 2% to $855 per ounce, compared to $836 per ounce in Q3-11.
Generated positive income from operations of $5.9M, compared to $2.6M in Q3-11.
Brigus completed the sale of the Calais Notes to New West Capital for total proceeds of $6M.
Gold ounces | Cash costs per ounce | ||||
Q1-12 | 16,922 | $858 | |||
Q2-12 | 18,254 | $799 | |||
Q3-12 | 19,526 | $728 |
Consolidated Financial Results
($ thousands, except per share and ounces) | For the three months ended | For the nine months ended | |||||||||||||||
September 30, 2012 | September | September | September 30, 2011 | ||||||||||||||
Revenue from the sale of gold | $ | 30,170 | $ | 19,243 | $ | 84,415 | $ | 50,676 | |||||||||
Operating costs | $ | 24,266 | $ | 16,617 | $ | 70,345 | $ | 54,317 | |||||||||
Income (loss) from operations | $ | 5,904 | $ | 2,626 | $ | 14,070 | $ | (3,641) | |||||||||
Net income | $ | 8,724 | $ | 13,073 | $ | 14,660 | $ | 13,362 | |||||||||
Basic and diluted earnings per share | $ | 0.04 | $ | 0.07 | $ | 0.07 | $ | 0.07 | |||||||||
Cash flows from operations | $ | 4,144 | $ | 6,281 | $ | 21,471 | $ | 13,752 | |||||||||
Gold sales in ounces | 19,064 | 17,119 | 53,516 | 42,299 | |||||||||||||
Total cash cost per ounce of gold sold | $ | 728 | $ | 807 | $ | 791 | $ | 913 | |||||||||
Third Quarter 2012 Operational Highlights
Produced 19,526 ounces of gold, a 7% increase over Q2-12 production of 18,254 ounces and a 16% increase over Q3-11 production of 16,838 ounces.
The underground average gold grade in the third quarter was 6.00 grams per tonne (gpt).
The open pit mined 217,118 ore tonnes at an average grade of 2.13 gpt, a 22% increase over the ore tonnes mined in Q3-11.
The Black Fox Mill processed 190,879 tonnes of ore at an average grade of 3.34 gpt and an average recovery of 95%, compared to 189,674 tonnes at an average grade of 2.93 gpt and an average recovery of 94% in Q3-11.
Brigus released a National Instrument 43-101 report which increased the Indicated gold resource at the Company's Grey Fox property from 116,710 to 480,850 ounces. This resource offers a near term production opportunity for Brigus and remains open for expansion.
Late in the quarter, the Company began mining a large long-hole stope in the West zone of the underground mine. This stope will provide 400 to 500 tonnes of ore per day once fully operational in Q1-13.
The Company continued to report excellent exploration results from the 147 and Contact zones and reported the discovery of a new zone named the Grey Fox South Zone.
Subsequent to the quarter, the mill optimization program was completed and resulted in increased mill processing capacity of approximately 10% to 2,200 tpd.
Subsequent to the quarter, the Company completed a $10M Flow Through financing to fund Brigus' 2013 exploration program.
Subsequent to the quarter, the Company completed a bought deal debt financing for $30M in senior secured notes, the proceeds of which were used to repurchase 4% of a goldstream with Sandstorm Gold Ltd.
Early in the quarter, Daniel Racine, a well-respected mining engineer with over 25 years of experience, joined the Brigus team as Chief Operating Officer.
Marc Bilodeau was promoted from General Mine Manager to Vice President Operations. Marc's hard work and leadership have resulted in significant operational improvements at the Black Fox Mine over the past year.
Results from Operations
For the three months ended | For the nine months ended | ||||||||||||||||
September 30, 2012 | September 30, 2011 | September 30, 2012 | September 30, 2011 | ||||||||||||||
Metal Sales | |||||||||||||||||
Gold (ounces) | 19,064 | 17,119 | 53,516 | 42,299 | |||||||||||||
Silver (ounces) | 1,033 | 997 | 3,082 | 1,855 | |||||||||||||
Average realized gold price | $ | 1,583 | $ | 1,643 | $ | 1,577 | $ | 1,511 | |||||||||
Production | |||||||||||||||||
Open pit ore tonnes mined | 217,118 | 178,427 | 629,739 | 295,996 | |||||||||||||
Open pit operating waste tonnes mined | 1,293,515 | 1,798,717 | 3,953,502 | 3,422,853 | |||||||||||||
Open pit capital stripping tonnes mined | 632,650 | 968,431 | 2,077,645 | 3,571,155 | |||||||||||||
Open pit overburden tonnes mined | 38,632 | - | 38,632 | 293,680 | |||||||||||||
Total open pit tonnes mined | 2,181,915 | 2,945,575 | 6,699,518 | 7,583,684 | |||||||||||||
Total underground ore tonnes mined | 43,504 | 67,551 | 115,255 | 104,319 | |||||||||||||
Total tonnes mined | 2,225,419 | 3,013,126 | 6,814,773 | 7,688,003 | |||||||||||||
Milling | |||||||||||||||||
Tonnes milled | 190,879 | 189,674 | 549,846 | 550,391 | |||||||||||||
Tonnes milled per day | 2,075 | 2,062 | 2,007 | 2,016 | |||||||||||||
Head grade of ore (gpt) | 3.34 | 2.93 | 3.23 | 2.50 | |||||||||||||
Recovery (%) | 95% | 94% | 96% | 94% | |||||||||||||
Gold ounces produced | 19,526 | 16,838 | 54,702 | 41,299 | |||||||||||||
Total cash costs ($/ounce) | $ | 728 | $ | 807 | $ | 791 | $ | 913 | |||||||||
Operating margin ($/ounce) | $ | 855 | $ | 836 | $ | 786 | $ | 598 | |||||||||
"We are pleased with continued financial and operational improvements at the Black Fox Mine during quarter three," said Wade Dawe, Brigus' President and Chief Executive Officer. "Gold production from the underground mine continues to ramp up and per ounce production costs are trending lower. We have a strong operational team in place to build on our successes at the Black Fox Mine, while implementing a plan to develop the Grey Fox Mine. We are confident that quarter four will be our best quarter to date and we look forward to the future with optimism."
Outlook
Operations at the Black Fox Mine continue to ramp up and the Company is on track to meet its forecasted 2012 gold production of 77,000 to 85,000 ounces, at a per ounce cash cost of $775 - $825.
An underground exploration program at the Black Fox Mine commenced in June of this year. Drilling is being performed with two drill rigs from a new exploration drift at the 9670 metre level on the East side of the mine, and has returned excellent gold grades over significant widths. The objective of the drilling program is to extend the Black Fox orebody and increase the current gold resource at the mine.
Planning is underway to develop the Grey Fox Mine located on the southeast portion of the Black Fox Complex. The Company currently has four drills working at the Grey Fox property. Over the past two years exploration at Grey Fox has been very successful with the definition of a new 571,000 ounce resource including 480,850 ounces in the Indicated category from the Contact and 147 zones, and the recent announcement of a new discovery named the Grey Fox South Zone. All three zones remain open for expansion.
Initial engineering studies on the Grey Fox Mine have been initiated and will continue through 2012 to determine project economics as well as development and production timelines. The Company had initially planned to release a Preliminary Economic Assessment for Grey Fox in the fourth quarter of this year. Due to positive results from the on-going drill program, the Company has decided that a full feasibility on a larger gold resource is appropriate and will be beneficial. This study will incorporate the current resource as well as results from deeper in-fill drilling which will define a resource suitable for underground mining. The feasibility study for Grey Fox will be released in 2013.
Third Quarter Webcast and Conference Call
A webcast and conference call will be held Tuesday, November 13, 2012 at 12 noon Atlantic time (11:00 a.m. Eastern time).
To attend by webcast please visit the Company website, www.brigusgold.com.
To attend by phone, dial toll free 1-877-407-8133 (international 201-689-8040) at least 10 minutes prior to the start of the call. No pass code is required.
About Brigus Gold
Brigus is a growing Canadian gold producer committed to maximizing shareholder value through a strategy of efficient production, targeted exploration and select acquisitions. The Company operates the wholly owned Black Fox Mine and Mill in the Timmins Gold District of Ontario, Canada. The Black Fox Complex encompasses the Black Fox Mine, the new Grey Fox property and adjoining properties in the Township of Black River-Matheson, Ontario, Canada. The Black Fox Mine is in production and the Grey Fox Mine, located four kilometres from Black Fox is in development. Brigus is also advancing the Goldfields Project located near Uranium City, Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In Mexico, Brigus owns the Ixhuatan Project located in the state of Chiapas. In the Dominican Republic, Brigus has signed an agreement to sell its remaining interests in three mineral exploration projects.
Cautionary Note to U.S. Investors Concerning Estimates of Mineral Resources
This news release uses the term mineral "resources". The Company advises U.S. investors that while these terms are defined in and required by Canadian regulations, these terms are not defined terms under the U.S. Securities and Exchange Commission ("SEC") Industry Guide 7 and are generally not permitted to be used in reports and registration statements filed with the SEC. The SEC generally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves" as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
Cautionary and Forward-Looking Statements
Statements contained in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the ability of the Company to achieve its production, total cash costs, steady state annual production and mining rate estimates; estimated average gold grades for the open pit and underground operations; increase in gold production; exploration drill results and resource additions, are forward-looking statements and estimates that involve various risks and uncertainties. This forward-looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the Company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the Company.
Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading "Risk Factors" in Brigus' most recent Annual Information Form and Management Discussion and Analysis filed under the Company's name at www.sedar.com and annual report on Form 40-F filed with the United States Securities and Exchange Commission at www.sec.gov as well as elsewhere in Brigus' documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex Equities, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.
Brigus Gold Corp.
Jennifer Nicholson, CA
Executive Vice President
Phone: (902) 442-7186
jnicholson@brigusgold.com
or
Kate Wood
Manager, Investor Relations
Phone: (902) 442-7184
kwood@brigusgold.com
KEYWORDS: North America Canada
INDUSTRY KEYWORDS:
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