LSG Lake Shore Gold Reports Record Operating Results in Second Quarter 2014
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Lake Shore Gold Reports Record Operating Results in Second Quarter 2014
TORONTO, ONTARIO--(Marketwired - Jul 31, 2014) - Lake Shore Gold Corp. (TSX:LSG)(NYSE MKT:LSG) ("Lake Shore Gold" or the "Company") today announced financial and operating results for the second quarter and first six months of 2014. Full details of the results are provided in the Company's Management's Discussion & Analysis, which is available on the Company's website at www.lsgold.com and on SEDAR at www.sedar.com. Key highlights of the results include:
Second Quarter 2014 ("Q2/14")
-- Record production of 52,300 ounces, 70% increase from second quarter 2013
("Q2/13")
-- Record gold sales of 53,500 ounces, close to double the 27,600 ounces
sold in Q2/13
-- Cash operating cost(1) per ounce sold of US$556, 39% better than US$908
in Q2/13
-- All-in sustaining cost(2) per ounce sold of US$784, 38% improvement from
Q2/13
-- Total production costs(3) of $32.5 million compared to $26.0 million in
Q2/13, reflecting significantly higher volumes
-- Cash and bullion increased $14.3 million in Q2/14 to $53.4 million at
June 30, 2014
Six Months 2014 ("6M/14")
-- Record production of 96,900 ounces, 79% increase from first six months of
2013 ("6M/13")
-- Record gold sales of 96,500 ounces, 80% increase from 53,700 ounces sold
in 6M/13
-- Cash operating cost per ounce sold of US$585, 38% better than US$944 in
6M/13
-- All-in sustaining cost per ounce sold of US$862, 38% improvement from
6M/13
-- Total production costs of $62.1 million versus $52.1 million in 6M/13,
reflecting higher production volumes
-- Cash and bullion increased $19.4 million in 6M/14 to $53.4 million at
June 30, 2014
Revenues in Q2/14 totaled $75.1 million based on an average selling price of US$1,289 ($1,404) per ounce, which compared to revenues of $39.7 million and an average selling price of US$1,409 ($1,441) per ounce in Q2/13. Strong growth in sales volumes, reflecting higher production levels, accounted for the significant increase in revenues year over year. Net earnings in Q2/14 were $13.1 million, or $0.03 per common share, versus a net loss of $5.4 million, or $0.01 per common share, in Q2/13. Total capital expenditures during Q2/14 were $11.8 million, a reduction of 57% from $27.8 million in Q2/13. The $14.3 million increase in cash and bullion during Q2/14 was after debt repayments of $13.7 million during the quarter, including a $10.0 million prepayment made on the Company's standby line of credit on June 4, 2014.
For 6M/14, higher gold sales resulted in a 66% increase in revenues to $136.6 million from $82.5 million in 6M/13. The average selling price of gold in 6M/14 was US$1,291 ($1,416) per ounce versus an average price of US$1,516 ($1,539) per ounce in 6M/13. Net earnings in 6M/14 totaled $17.8 million, or $0.04 per common share, which compared to a net loss of $6.1 million, or $0.01 per common share, in 6M/13. Total capital expenditures during 6M/14 were $24.5 million, 63% lower than the $66 million invested in 6M/13. A total of $17.4 million of debt repayments were made in the first six months of the year.
Tony Makuch, President and CEO of Lake Shore Gold, commented: "Our company has performed very well so far in 2014 as demonstrated by our record results in both the second quarter and first six months of the year. Driven by our strong first-half results, we are well positioned to meet or exceed our 2014 performance targets. Performing well against our targets is a top priority for our company as it is the key to generating free cash flow and building our financial strength. In the first six months of 2014, we increased our cash and bullion by $19.4 million, to $53.4 million, while at the same time repaying $17.4 million of debt.
"Another key priority is extending mine life with drilling continuing at both our Timmins West and Bell Creek mines focused on upgrading resources and identifying extensions of mineralization. In addition to our existing drill programs, we are about to commence a new $1.8 million, 18,000 metre, program at Bell Creek to further test the extension of mineralization below the current reserve in support of continuing development below the 775 Level into the Labine Deep Zone. We will also invest $1.6 million on a new surface exploration program focused on high-potential targets near our current mining operations and will continue to advance drilling, engineering and metallurgical work at a number of our attractive projects."
Outlook
The Company's key performance targets for the full-year 2014 include:
-- Gold production of 160,000 - 180,000 ounces;
-- Cash operating cost per ounce sold of US$675 to US$775;
-- All-in sustaining cost per ounce sold between US$950 and US$1,050;
-- Total production costs of $128.0 million; and,
-- Total principal debt repayments of $25 million.
The Company is well positioned to achieve the top end of its full-year 2014 target range for production and to meet, and possibly beat, its targets for cash operating costs and all-in sustaining costs. In addition, after repaying $17.4 million of debt in 6M/14, the Company is on track for total debt repayments of $25 million for the full year, with repayments in the second half of 2014 to come from monthly payments on the Company's gold loan.
The Company's Outlook section contains forward-looking information within the meaning of certain securities laws. The Outlook section, also included in the Company's MD&A, represents the Company's guidance and forms the basis for most of the forward-looking information disclosed elsewhere in these documents and in other areas such as other press releases, newsletters, fact sheets and the Company's website. Readers are directed to the Forward-Looking Statements advisory at the end of this press release for cautionary language relating to forward-looking information.
Conference Call & Webcast
Lake Shore Gold will also host a conference call and webcast on Thursday, July 31, 2014 at 3 pm EST to discuss the Company's second quarter and six-month 2014 financial and operating results (see call-in numbers that follow). The call will also be webcast and available on the Company's website.
Conference ID: 75046433
Participant call-in: 647-788-4922 or 877-223-4471
(North American toll free number)
Replay number: 416-621-4642 or 800-585-8367 (North
American toll free number)
Re-dial ID: 75046433
Available until: 11:59 pm (August 7, 2014)
Qualified Person
Scientific and technical information contained in this press release related to mine engineering and production has been reviewed and approved by Natasha Vaz, P.Eng., Vice-President, Technical Services, who is an employee of Lake Shore Gold Corp., and a "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").
Scientific and technical information related to resources, exploration drilling and all matters involving mine production geology contained in this press release, or source material for this press release, was reviewed and approved by Eric Kallio, P.Geo., Vice-President, Exploration. Mr. Kallio is an employee of Lake Shore Gold Corp., and is a "qualified person" as defined by NI 43-101.
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