Numbers are out! Love that balance sheet, reinvesting
FIORE GOLD ANNOUNCES FISCAL Q1 2021 RESULTS
February 23, 2021
TSXV–F
OTCQB–FIOGF
FSE–2FO
Vancouver, British Columbia – FIORE GOLD LTD. (TSXV: F) (OTCQB: FIOGF) (FSE-2FO) (“Fiore” or the “Company”) is pleased to announce that its financial statements and management’s discussion and analysis for the first fiscal quarter (“Q1 2021”) ended December 31, 2020, have been filed with the securities regulatory authorities and are available at www.sedar.com and on the Company’s website at www.fioregold.com.
Fiscal Q1 2021 Highlights
(all figures in U.S. dollars unless otherwise indicated)
Operating & Financial
Q1 gold production of 9,204 ounces, reflecting guided lower production in first half of fiscal 2021
Gold sales of 9,210 ounces at an average realized price of $1,868 per ounce
Mined ore production in Q1 of 14,586 tons per day with a stripping ratio of 1.0:1.0 and grade of 0.49 grams/tonne
Q1 cash costs per ounce sold1 of $923, a $102 per ounce decrease relative to Q1 2020 reflecting the expected benefit of a decreasing stripping ratio and consistent crusher operations
Q1 Pan Mine AISC1 per ounce sold of $1,019 and Q1 2021 Fiore consolidated AISC1 of $1,219
Recorded quarterly revenues of $17.2 million with mine operating income of $7.3 million
Generated Pan operating cash flow1 of $5.7 million and consolidated operating cash flow of $3.0 million
Net income of $4.5 million and net earnings per share of $0.05 per share
Closing cash balance of $19.2 million at December 31, 2020, a reduction in cash from September 30, 2020 as we invest in the expansion of the Pan heap leach pad to accommodate added mine life, and on-going drilling and Feasibility Study activities to advance Gold Rock
One-million hours worked at the Pan Mine without a lost time injury achieved subsequent to quarter- end
69,940 total site hours worked in Q1 with no reportable incidents and zero lost-time injuries
Organic Growth
Following the completion of the Gold Rock Preliminary Economic Assessment, we are conducting a program of resource expansion, metallurgical, geotechnical and condemnation drilling in support of a Gold Rock Feasibility Study. First drill results were announced in November 2020, headlined by 48.8 metres of 2.17 g/t gold and 32.0 metres of 1.41 g/t gold.
Subsequent to quarter-end, a second set of Gold Rock drill results were issued in January 2021 headlined by 19.8 metres of 1.33 g/t gold and 12.2 metres of 1.75 g/t gold. These drill results continue to demonstrate strong intervals of oxide gold mineralization both within and outside of the current resource pit shells.
1 This is a non-IFRS financial measure. Please refer to “Non-IFRS Financial Measures” at the end of this news release for a description of these non-IFRS financial measures and to the Non-IFRS Financial measures in the December 31, 2021 Management’s Discussion and Analysis for a reconciliation to operating costs from the Company’s interim financial statements.
Tim Warman, Fiore’s CEO commented, “The first fiscal quarter of 2021 was another strong one with earnings of $0.05 per share and solid operating cash flow. We maintained a healthy cash balance of $19.2 million while continuing to invest in the growth of our Nevada assets. With drilling at Gold Rock underway to progress the project to feasibility and the construction of the third leach pad expansion at Pan, following an expansion of resources and reserves, we expect these capital investments to deliver continued growth to our shareholders while positively impacting the local communities where we operate.”
Gold production of 9,204 ounces was a 5% increase over fiscal Q1 2020, although lower than fiscal Q4 2020. The decrease in production compared to fiscal Q4 2020 was due to fewer ore tons placed, lower ore grade and timing of gold recovery. Gold extraction on the leach pad was also temporarily impacted by a drop in the pH and alkalinity of the leach solution. With the start-up of the crushing circuit in fiscal 2020, we changed our operating practices to switch from lime to cement addition for pH control, as cement brings the added benefit of reducing the migration of fines within the leach pad. However, after having time to sufficiently observe leaching under this practice, we determined that cement addition alone appears insufficient to maintain the proper pH for optimal gold leaching. Lime addition has been reinstated as a standard operating practice and this has begun to bring the leach solution pH back towards optimal ranges for effective gold leaching.
As guided, 2021 will be a year of significant reinvestment to support the longevity of the Pan Mine and to continue advancing Gold Rock. We recently announced a two-year mine life extension at Pan, and we are immediately investing in expanding the heap leach capacity to support this extension. We spent $3.8 million on capital additions in the quarter, primarily the Pan Mine heap leach pad expansion, which is expected to be ready for ore stacking in fiscal Q3. At Gold Rock, we continued with our resource expansion drilling and related Feasibility Study work spending $3.0 million in the quarter. We are pleased with initial drill results as they continue to expand the oxide mineralization at Gold Rock.
We continue to recognize the inherent risk posed by COVID-19. The health and safety of our employees comes first, and we have put a range of operating protocols in place to reduce the risk to them. While there have been a few positive cases of COVID-19 at the Pan Mine, effects of this have not had a meaningful impact on production. Through enhanced safety measures, we believe we have minimized cases and impacts of COVID-19.
Review of Operating Results
Three Months Ended
December 31,
Operating Results 2020 2019
Ore Mined (t) 1,341,945 1,406,656
Waste Mined (t) 1,310,581 2,490,412
Total Mined (t) 2,652,526 3,897,068
Gold Ounces Mined (oz) 19,317 20,649
Ore Grade Mined (oz/t) 0.014 0.015
Ore Grade Mined (g/t) 0.408 0.416
Strip Ratio waste/ore 1.0 1.8
Gold Ounces Produced (oz) 9,204 8,750
Gold Ounces Sold (Payable) (oz) 9,210 9,093
Average Realized Price1 $/oz 1,868 1,437
Total Cash Costs per Ounce1 $/oz 923 1,025
Cost of Sales per Ounce1 $/oz 1,080 1,178
Pan Mine AISC per Ounce1 $/oz 1,019 1,115
Fiore Consolidated AISC per Ounce1 $/oz 1,219 1,248
Ore tons mined was slightly lower than prior year quarter but remains above target at 14,586 tons per day. At a gold grade of 0.408 g/t, we mined 19,371 ounces in the quarter. Gold production at 9,204 ounces is higher than the prior year quarter but lower than fiscal Q4 2020 for the reasons noted above.
Cash cost per ounce sold1 for Q1 2021 was $923 per ounce, a $102 per ounce decrease relative to the prior year quarter due particularly to a lower stripping ratio. Stripping for the full year fiscal 2021 is guided at approximately 1.6:1.0. Q1 2021 Pan Mine AISC1 per ounce sold was $1,019 and Fiore Consolidated AISC1 per ounce sold was $1,219. The Fiore Consolidated AISC1 includes an increase in corporate general and administrative expense driven by an increase in insurance costs, salary and benefit expenses and higher stock-based compensation expense tied to the recent grant of restricted stock units. This is in part impacted by additional corporate costs to support the Gold Rock project.
1 This is a non-IFRS financial measure. Please refer to “Non-IFRS Financial Measures” at the end of this news release for a description of these non-IFRS financial measures and to the Non-IFRS Financial measures in the December 31, 2021 Management’s Discussion and Analysis for a reconciliation to operating costs from the Company’s interim financial statements.
Q1 2021 Financial Results
Three Months Ended December 31,
Financial Results of Operations 2020 2019
Select Items - On a Consolidated Basis $000's $000's
Revenue 17,209 13,074
Mine Operating Income 7,263 2,365
Income from Operations 5,315 449
Operating Cash Flow 3,026 88
Unrealized Gain on Derivatives, net - 399
Net Income 4,496 588
Adjusted Net Earnings1 4,492 189
Financial Position as of: December 31,
2021 September 30,
2020
Select Items - On a Consolidated Basis $000's $000's
Cash 19,224 23,207
Inventories 29,493 26,256
Total Current Assets 49,978 50,786
Mineral Property, Plant and Equipment, net 14,900 11,412
Total Assets 80,070 75,770
Total Current Liabilities (10,478) (10,793)
Long-Term Liabilities (6,950) (7,231)
Working Capital Surplus 39,500 40,043
Relative to the prior year quarter, Fiore demonstrated improvements on all profitability and cash flow measures noted above. This was primarily due to higher realized gold prices and lower operating costs as the stripping ratio decreased.
Our liquidity and financial position remain strong with a cash balance of $19.2 million and working capital of $39.5 million. Refer to the Company’s MD&A and Financial Statements for additional information. Our financial strength puts Fiore in a good position to continue to progress our growth assets.
Corporate Strategy
Our corporate strategy is to grow Fiore Gold into a 150,000 ounce per year gold producer. To achieve this, we intend to:
grow gold production at the Pan Mine while also growing the reserve and resource base;
advance exploration and development of the nearby Gold Rock project; and
acquire additional production or near-production assets to complement our existing operations.
Qualified Person
The scientific and technical information contained in this news release relating to Fiore Gold’s Pan Mine was approved by J. Ross MacLean (MMSA), Fiore Gold’s Chief Operating Officer and a "Qualified Person" under National Instrument 43-101.
On behalf of FIORE GOLD LTD.
"Tim Warman"
Chief Executive Officer
Contact Us:
info@fioregold.com
1 (416) 639-1426 Ext. 1
www.fioregold.com
