Brigus Gold Reports Q2 Financial Results (bwire)
HALIFAX, Nova Scotia (Business Wire) --
Brigus Gold Corp. (
NYSE -BRD ) (
TSX:
BRD) (“Brigus” or the “Company”) announces results for the second quarter
(“Q2-12”) of 2012.
This press release should be read in conjunction with the Company's June 30,
2012 consolidated 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
(“IFRS”).
Key accomplishments for the quarter include achieving gold production of
18,254 ounces, meeting the Company's Q2 production target, and averaging grades
of 6.31 grams per tonne (gpt) from the underground mine.
“We are pleased with our results for the first half of the year,” said Wade
Dawe, President and CEO of Brigus. “We met our second consecutive production
target, underground grades are meeting expectations and cash costs are lower
than projected. We are focused on completing development of the underground mine
and optimizing production at Black Fox. I am confident that we will continue on
this path as operations at Black Fox strengthen through the year.”
Second Quarter 2012 Financial Highlights
- Gold sales improved by 21% to 18,419 ounces of gold,
compared to 15,178 ounces sold in Q2-11.
- Average realized gold price increased by 5% to $1,543
per ounce compared to $1,463 in Q2-11.
- Reduced cash costs to $799 per ounce, an 8% reduction
in cash costs from Q2-11 which were $865 per ounce and a 7% reduction from cash
costs in Q1-12 which were $858 per ounce.
- Generated cash flow from operations, before working
capital adjustments, of $12.6 million, compared to $3.6 million in the same
period in 2011.
- Increased operating margin by 24% to $744 per ounce,
compared to $598 per ounce in Q2-11.
- Generated positive income from operations of $4.7 M,
compared to a net operating loss of $2.9 M in Q2-11.
- Capital additions totalled $16.0 million, consisting
of $13.4 million in capital expenditures at Black Fox related to property, plant
and equipment and $2.6 million related to exploration and development
expenditures.
Consolidated Financial Results
| ($
thousands, except per share and ounces) |
|
For the three
months ended |
|
For the six
month ended |
|
| |
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2011
|
|
| Revenue from the sale
of gold |
|
$
|
|
28,422
|
|
$
|
|
17,863
|
|
$
|
|
54,245
|
|
$
|
|
31,433
|
|
| Operating costs |
|
$
|
|
23,736
|
|
$
|
|
20,754
|
|
$
|
|
46,079
|
|
$
|
|
37,700
|
|
| Income (loss) from
operations |
|
$
|
|
4,686
|
|
$
|
|
(2,891)
|
|
$
|
|
8,166
|
|
$
|
|
(6,267)
|
|
| Net income (loss) and
comprehensive income (loss) |
|
$
|
|
416
|
|
$
|
|
(3,972)
|
|
$
|
|
5,936
|
|
$
|
|
289
|
|
| Basic earnings (loss)
per share |
|
$
|
|
0.00
|
|
$
|
|
(0.02)
|
|
$
|
|
0.03
|
|
$
|
|
0.00
|
|
| Cash flows from
operations |
|
$
|
|
10,407
|
|
$
|
|
4,055
|
|
$
|
|
17,328
|
|
$
|
|
7,470
|
|
| Gold sales in ounces
|
|
|
|
18,419
|
|
|
|
15,178
|
|
|
|
34,452
|
|
|
|
25,181
|
|
| Total cash cost per
ounce of gold sold |
|
$
|
|
799
|
|
$
|
|
865
|
|
$
|
|
826
|
|
$
|
|
969
|
|
Second Quarter 2012 Operational Highlights
- Produced 18,254 ounces of gold, consistent with
quarterly production guidance, a 16% increase over Q2-11.
- The underground mined 36,604 ore tonnes and achieved
an average grade of 6.31 gpt, an increase of 19.5% over Q1-12.
- The open pit mined 192,041 ore tonnes at an average
grade of 2.16 gpt, a 119% increase over the ore tonnes mined in Q2-11.
- The Black Fox Mill processed 178,002 tonnes of ore at
an average grade of 3.31 gpt and an average recovery of 96.5%.
- Continued positive drilling results on the Grey Fox
property, including 11.68 gpt gold over 26.0 m from the 147 Zone.
Results from Operations
| |
|
For the
three months |
|
For the
six months ended |
|
|
June 30, 2012
|
|
June 30, 2011
|
|
June 30, 2012
|
|
June 30, 2011
|
|
| Metal Sales
|
|
| Gold (ounces) |
|
|
|
18,419
|
|
|
|
15,178
|
|
|
|
34,452
|
|
|
|
25,181
|
|
| Silver (ounces) |
|
|
|
1,191
|
|
|
|
469
|
|
|
|
2,049
|
|
|
|
905
|
|
| Average realized gold
price |
|
$
|
|
1,543
|
|
$
|
|
1,463
|
|
$
|
|
1,575
|
|
$
|
|
1,421
|
|
| Production |
|
| Open pit ore tonnes
mined |
|
|
|
192,041
|
|
|
|
87,760
|
|
|
|
412,621
|
|
|
|
117,569
|
|
| Open pit operating
waste tonnes mined |
|
|
|
1,332,625
|
|
|
|
1,553,069
|
|
|
|
2,659,987
|
|
|
|
1,624,136
|
|
| Open
pit capital stripping tonnes mined |
|
|
|
691,635
|
|
|
|
712,273
|
|
|
|
1,444,995
|
|
|
|
2,602,724
|
|
| Open pit overburden
tonnes mined |
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
293,680
|
|
| Total open pit
tonnes mined |
|
|
|
2,216,301
|
|
|
|
2,333,102
|
|
|
|
4,517,603
|
|
|
|
4,638,109
|
|
| Total underground ore
tonnes mined |
|
|
|
36,604
|
|
|
|
30,316
|
|
|
|
71,751
|
|
|
|
39,132
|
|
|
Total tonnes mined
|
|
|
|
2,252,905
|
|
|
|
2,363,418
|
|
|
|
4,589,354
|
|
|
|
4,677,241
|
|
| Milling |
|
| Tonnes milled |
|
|
|
178,002
|
|
|
|
181,488
|
|
|
|
358,967
|
|
|
|
360,717
|
|
| Tonnes milled per day
|
|
|
|
1,956
|
|
|
|
1,994
|
|
|
|
1,972
|
|
|
|
1,993
|
|
| Head grade of ore (gpt)
|
|
|
|
3.31
|
|
|
|
2.86
|
|
|
|
3.17
|
|
|
|
2.26
|
|
| Recovery (%) |
|
|
|
96%
|
|
|
|
94%
|
|
|
|
96%
|
|
|
|
93%
|
|
| Gold ounces produced
|
|
|
|
18,254
|
|
|
|
15,688
|
|
|
|
35,176
|
|
|
|
24,460
|
|
| |
|
| Total cash costs
($/ounce): |
|
$
|
|
799
|
|
$
|
|
865
|
|
$
|
|
826
|
|
$
|
|
969
|
|
| Operating Margin
($/ounce): |
|
$
|
|
744
|
|
$
|
|
598
|
|
$
|
|
749
|
|
$
|
|
452
|
|
Outlook
Operations at the Black Fox Mine continue to ramp up and will deliver
increased gold production quarter over quarter in 2012. Brigus is forecasting
2012 gold production of 77,000 to 85,000 ounces, at a cash cost per ounce of
$775 - $825 as follows:
| 2012
|
|
Low |
|
High |
|
Actual |
|
Cash Costs / ounce
|
|
| Q1 |
|
15,500
|
|
17,000
|
|
16,922
|
|
$858
|
|
| Q2 |
|
18,000
|
|
21,000
|
|
18,254
|
|
$799
|
|
| Q3 |
|
21,500
|
|
23,000
|
|
|
|
|
|
| Q4 |
|
22,000
|
|
24,000
|
|
|
|
|
|
| Total |
|
77,000
|
|
85,000
|
|
|
|
|
|
During the second quarter the Company reviewed its 2012 capital budget. As a
result of this review, the Company expects capital development costs in the
underground to be $29 million and spending on plant, property and equipment to
be $13 million. Capital development in the underground has increased as a result
of changes to mining techniques and additional development activity. The
original budget for the underground mine called for the use of mechanized cut
and fill techniques throughout the mine. In Q1 2012, the Company identified that
it would be more appropriate to mine the west side of the mine using long-hole
techniques, which require more up-front development, but provide a lower overall
mining cost and higher ore recovery rates. Development of the long-hole stope on
the west side of the mine is on-going and production from the west side
long-hole will commence in Q4 2012. Additionally, an exploration drift was added
to the east ramp to facilitate an underground exploration program while enabling
definition drilling on existing reserves. Finally, the original mine plan did
not include development within the upper workings of the mine which were
initially mined from 1997-2001. The Company has recently revisited this area and
identified potential new mining zones. In order to mine these zones the Company
will require additional up-front capital investment. Increases in the budget for
plant, property and equipment also include an upgrade to the electrical system
at the mine and improvements to the tailing facilities.
The revised capital budget for 2012 is $60 million, consisting of $29 million
related to underground development, $12 million related to open pit capital
stripping, $3 million related to Phase 3 overburden removal, $8 million related
to mining equipment purchases and overhauls, $3 million for electrical upgrades,
$2 million for Grey Fox development, and $3 million relating to the completion
of the mill expansion.
The mill optimization program is progressing according to plan and is
expected to be completed and in service during the second half of 2012.
Processing capacity and recovery will increase through optimization of existing
equipment, equipment additions and reduction of production losses. The
optimization is expected to increase mill processing capacity by 5-10%, up to
2,200 tpd.
Planning is underway to develop the Grey Fox Mine located on the southeast
portion of the Black Fox Complex. The initial resource estimate from this area,
announced in December 2011, added more than 50 percent to the gold resource at
the Black Fox Complex. Brigus is in the process of expanding the resource and
converting Inferred ounces to Indicated ounces through systematic in‐fill
drilling. An updated resource estimate will be released in September. Initial
engineering studies have also been initiated and will continue through 2012 to
determine project economics as well as development and production timelines. A
preliminary economic assessment (“PEA”) for Grey Fox will be released in Q4, and
will incorporate the new resource.
The Black Fox underground ore body is open for expansion with grades that
trend higher at depth. The Company began underground exploration drilling from
the east ramp in June with the objective of increasing the reserves and
extending the mine life. Exploration drilling with a second underground drill
will commence from the west ramp in September.
Second Quarter Webcast and Conference Call
A webcast and conference call will be held Monday, August 13, 2012 at 12 noon
Atlantic time (11:00 a.m. Eastern time).
To attend by webcast please visit
http://www.investorcalendar.com/IC/CEPage.asp?ID=169112
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 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 and adjoining properties in the Township of Black
River-Matheson, Ontario, Canada. Brigus is also advancing the Goldfields Project
located near Uranium City, Saskatchewan, Canada, which hosts the Box and Athona
gold deposits. In Mexico, Brigus has granted Cangold Limited the option to
acquire a 75% interest in the Company's 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; increase in profitability; 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
Email:
jnicholson@brigusgold.com
or
Katherine Burgess
Manager, Stakeholder
Relations
Phone: (902) 442-7184
Email: kburgess@brigusgold.com
