Brigus Gold Reports Strong First Quarter 2013 Financial Results
Business WirePress Release: Brigus Gold Corp. – 1 hour 6 minutes ago...
HALIFAX, Nova Scotia--(BUSINESS WIRE)--
Brigus Gold Corp. (“Brigus” or the “Company”) (NYSE MKT: BRD; TSX: BRD) today reported strong financial results for the quarter ended March 31, 2013.
First quarter 2013 production of 26,316 ounces of gold was the highest ever achieved by the Company. Cash operating costs of $630 per ounce were 27% lower than in the first quarter 2012 and contributed to a material increase in cash flow from operations.
Wade Dawe, Chairman and CEO of Brigus Gold, commented: “We are pleased with the financial results for the quarter. Our strong cash flow generation is a result of record gold production combined with effective cost management throughout the organization. We are confident that the Black Fox mine will continue to perform well throughout the year and the company is well positioned for success in this gold price environment. I would also like to acknowledge and thank our operations and mining team for their excellent work.”
First Quarter 2013 Financial Highlights
• Sold 27,818 ounces of gold, a 38% increase over Q4 2012 and a 74% increase over Q1 2012
• Cash costs of $630 per ounce decreased 27% versus Q1 2012
• Cash position of $31.3 million as of March 31, 2013 increased by $1.5 million
• Adjusted cash flow from operations increased by 174% from $8.9 million in the year ago quarter to $24.4 million
• Operating margin increased by 26% from $753 per ounce in the year ago quarter to $946 per ounce
• Income from operations increased by 334% from $3.5 million in the year ago quarter to $15.2 million
First Quarter 2013 Operational Highlights
• Produced 26,316 ounces of gold, a 16% increase over Q4 2012 and a record for quarterly production
• Processed 183,819 tonnes of ore at 4.74 grams per tonne (“gpt”) and a 94% recovery, compared to 180,965 tonnes of ore at 3.04 gpt and a 96% recovery in Q1 2012
Consolidated Financial Results
(in thousands, except per share amounts and ounces)
For the three months ended
March 31 2013 March 31 2012
Revenue from the sale of gold $43,828 $25,823
Direct operating costs $17,525 $13,758
Income from operations $15,189 $3,480
Total comprehensive income $13,682 $5,520
Basic and diluted earnings per share $0.06 $0.03
Adjusted cash flow from operations(1) $24,362 $8,866
Gold sales in ounces 27,818 16,033
Cash cost per ounce gold sold(1) $630 $858
(1)Adjusted cash flow from operations and cash cost per ounce gold sold are non-GAAP measures and are not necessarily comparable to similar titled measures of other companies due to potential inconsistencies in the method of calculation. Please see the Company’s Q1 2013 Management Discussion and Analysis for a reconciliation of these non-GAAP measures.
Results from Operations
(in thousands, except per share amounts and ounces)
For the three months ended
March 31, 2013 March 31, 2012
Metal Sales
Gold (ounces) 27,818 16,033
Silver (ounces) 1,383 858
Average realized gold price ($/ounce) $1,576 $1,611
Production
Open Pit Mine
Ore tonnes mined 198,999 220,580
Operating waste tonnes mined 626,868 1,327,362
Capital stripping tonnes mined 103,446 753,360
Overburden tonnes mined 1,876,339 –
Total tonnes mined – Open Pit Mine 2,805,652 2,301,302
Underground Mine
Ore tonnes mined 71,417 35,147
Total Tonnes Mined 2,877,069 2,336,449
Tonnes milled 183,819 180,965
Tonnes milled per day 2,042 1,989
Head grade of ore (gpt) 4.74 3.04
Recovery (%) 94% 96%
Gold ounces produced 26,316 16,922
Cash costs ($/ounce) $630 $858
Operating margin ($/ounce) $946 $753
Outlook
Brigus is forecasting production of 90,000 to 100,000 ounces of gold in 2013, at a per ounce cash cost between $650 - $700. This cash cost is lower than our previously forecasted guidance of $700 - $750 per ounce.
Production from the underground mine continues to be strong. The underground mine averaged 794 tpd during the quarter and achieved grades above the reserve model. Production from phase three of the open pit is set to commence in Q2 2013, as the overburden removal was completed in April.
The Black Fox property continues to be a proven source for new gold discoveries. Successful drilling results outside of current reserves during the first quarter are highly encouraging and reinforce our view that the Black Fox mine has significant potential for increased gold reserves and a long mine life.
The Company continued to drill the 147, Contact and Grey Fox South zones since the September NI 43-101 compliant resource estimate which expanded the Indicated Resource at Grey Fox to 480,850 ounces. An updated resource report for the Grey Fox property will be released in June, however further work on the feasibility study will be deferred until 2014.
Cost Management
Cost management has been a focus for the Company, which is reflected in the Company’s cash costs. In response to reduced gold price expectations for the year, Brigus conducted a company-wide review of operating and capital costs and has identified additional cost management opportunities. As a result of this review, a total of $4 million in forecasted capital spending has been eliminated or deferred, as follows: $2 million relating to the completion of the Grey Fox Feasibility study; $1 million in relation to the underground drilling program at the Black Fox mine and $1 million from other capital projects. The revised capital forecast calls for total spending in 2013 of $41.5 million on open pit and underground sustaining capital and other capital projects, and $10 million on exploration and mine development activities. As of March 31, 2013 $9.8 million has been spent on the underground, open pit and sustaining capital, and $3.8 million has been spent on exploration and mine development activities. This leaves a balance of $37.9 million for the remainder of the year. These capital reductions will not impact the Company’s mine plan or forecasted gold production in 2013.
First Quarter Webcast and Conference Call
A webcast and conference call will be held, Tuesday, May 14 at 12 noon Atlantic time (11:00 a.m. EST). Analysts and other interested parties wanting to participate in the call should dial 1-877-407-8133 (international 201-689-8040) at least 10 minutes prior to the start of the call. No pass code is required. The teleconference will be recorded. If you are unable to join the teleconference live, you can dial for playback, toll-free at 1-877-660-6853 (international 201-612-7415), please use conference ID 412216. The event will be archived and available for replay until midnight on May 28, 2013. The teleconference will also be accompanied by a presentation made available on the Company’s website at www.brigusgold.com.
