San Gold Corporation (SGRCF)

[goldenpolarbear]

San Gold Corporation (TSX: SGR; OTCQX: SGRCF) is an operating gold company with two producing gold mines and an extensive gold exploration program in the Rice Lake Greenstone Belt.

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Income Statement Analysis & Financial Review
For the first quarter ended March 31, 2014, revenues were C$14.9 million vs. C$24.3 million in the prior year. Loss from operations was C$2.8 million vs. loss from operations of C$39,046 in the prior year. The net loss was C$7.7million (C$0.02 per share), vs. a net loss of C$9.7 million (C$0.03 per share) in 2013.

Key Operating Information
Gold production of 12,083 ounces in the first quarter of 2014 was 30% lower than gold production of 17,354 ounces in the same period of 2013. Lower gold production in the first quarter of 2014 relative to the same period of 2013 was primarily a result of a 12% decrease in milled head grade and a 23% decrease in tons of material processed by the mill. The decrease in mill head grade in the first quarter of 2014 relative to the comparative period of 2013 is primarily a result of lower than planned grade from the Hinge and 007 mines due to mining of lower grade material and the sequencing of stoping activities. The company expects that grade will improve significantly as the year progresses.

Gold sales revenue in the first quarter of 2014 of C$14.9 million was 39% lower than revenues of C$24.3 million recognized in the first quarter of 2013. The decrease in gold sales revenue in the first quarter of 2014 is a result of a 32% decrease in the number of ounces sold and a 9% decrease in the average realized gold price compared to the first quarter of 2013.

Total cash operating costs of C$1,226 per ounce of gold sold in the first quarter of 2014 was 10% higher than the C$1,113 per ounce of gold sold reported for the first quarter of 2013. The increase in cash cost per ounce of gold sold was the result of lower gold production in the first quarter of 2014 due to processing of lower grade ore as well as a delay in extracting ore from the company's higher grade Rice Lake and 007 stoping blocks. T

Recent Developments
Development activities continue to focus on developing access to new areas for ore production and exploration purposes. In the first quarter of 2014, the company invested C$11.3 million in mine development activities and recognized related depletion of C$3.0 million, compared to an investment of C$15.6 million and depletion of C$5.5 million in the same period of the prior year.