Elgin Mining Reports First Quarter 2014 Results
Date : 05/13/2014 @ 5:30PM
Source : Marketwired Canada
Stock : Elgin Mining (ELG)
Quote : 0.24 0.02 (9.09%) @ 3:59PM
Elgin Mining Reports First Quarter 2014 Results
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Elgin Mining Inc. ("Elgin Mining" or the "Company") (TSX:ELG) reports its
financial and operational results for the three months ended March 31, 2014.
Elgin Mining owns and operates the Bjorkdal gold mine ("Bjorkdal Mine") in
Sweden, and holds the past-producing Lupin gold mine ("Lupin") and the Ulu gold
property in Nunavut, Canada. All figures are in United States dollars(1) ($ or
USD) unless otherwise indicated.
A copy of the Company's financial statements and Management's Discussion and
Analysis can be viewed on the Company's website at www.elginmining.com or on
SEDAR at www.sedar.com.
First Quarter 2014 Financial Highlights
-- Gold production of 10,812 ounces which was ahead of plan for the
quarter;
-- Cash cost of $932 and all-in sustaining cost ("AISC") of $1,161 per gold
ounce sold;
-- Cash cost of $1,049 and AISC of $1,284 per gold ounce produced;
-- Cash flow from operating activities was $2.0 million, and increased to
$4.2 million when non-cash working capital movements are excluded; and
-- Cash improved by $0.1 million during the quarter after debt repayments
of $0.3 million.
First Quarter 2014 Operational Highlights
-- Underground ("UG") mine productivity continued to exceed early
expectations with the UG unit mining rate reaching close to 2,000 ore
tonnes per day. Lower UG head grades in the quarter were due to a three
week delay in mine sequencing to finalize a ventilation raise, with
higher planned grades expected for the remainder of the year;
-- Open Pit ("OP") head grades were above plan reflecting the benefits of
the mine's on-going grade control efforts;
-- Unit mining costs in both the UG and OP have trended significantly
downwards from elevated levels in 2013 due to the Company's continued
focus to reduce costs and optimize operational efficiencies. In the OP,
the mine has reverted to the previous lower-cost drill and blast
patterns for the full quarter, and in the UG, the transition from
contractor to owner-operated mining that commenced in Q4-2013 continues
to deliver a high-level of productivity, helping to drive down unit
costs;
-- Plant reached record daily throughput towards the end of the quarter
without any loss in the plant's metallurgical recovery rate, mainly due
to improvements in the flotation circuit;
-- Permit application to expand the plant's annual throughput limit from
1.3 million tonnes to 1.5 million tonnes remains on track with receipt
of the temporary expansion permit anticipated by the end of 2014; and
-- Completed a detailed structural and geological review of the deposit
which has led to the identification of several potential high-grade UG
targets at the Bjorkdal Mine which the Company will drill test in the
coming quarters.
(1) Effective January 1, 2014, the Company changed its presentation currency
from the Canadian dollar to the United States dollar to improve comparability of
its financial results with those of its gold mining peers and to allow easier
comparison of the Company's financial numbers to other measures that are quoted
in USD, including the price of gold and key performance indicators used within
the gold mining industry.
Re-affirmation of Bjorkdal Mine 2014 Guidance
The Bjorkdal Mine's first quarter gold production is traditionally the weakest
quarter of the year due to the cold weather impact on the plant's crushing and
milling circuits, and on labour and equipment productivity within the mines, in
addition to being the shortest quarter in the year. Despite these factors,
production is still ahead of target and was in fact the best Q1 since the
restart of mining operations in 2006.
The ongoing improvements have definitely taken hold and now that the UG mine
sequencing is back on track, second quarter gold production to May 12, 2014 (42
days out of the 91 days in the quarter) currently stands at 6,242 gold ounces
from the processing of an approximate equal mix of UG and OP ore feed. The
strong start to this quarter is attributable to higher UG grades as planned and
continued higher OP head grades which have put the Company on track year-to-date
to meet or exceed the higher end of production guidance for 2014.
The Company's full year 2014 guidance for gold production and unit cash cost is
as follows:
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2014 Gold Production Guidance Production Low-end Production High-end
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Gold production (ounces) 44,000 49,000
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Cash cost per gold ounce produced
(USD/ounce) $982 $886
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AISC per gold ounce produced
(USD/ounce) $1,227 $1,106
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AISC per gold ounce produced
excluding non-cash accretion and
share-based payment expense
(USD/ounce) $1,207 $1,088
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Sustaining capital (USD) $7.9 million $7.9 million
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SEK per USD FX rate assumption 6.50 6.50
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CAD per USD FX rate assumption 1.10 1.10
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The above AISC guidance includes all capital expenditures (including capitalized
exploration) expected to be incurred at the Bjorkdal Mine for 2014, and all
general and administration costs incurred at the Company's corporate office in
Canada.
Management forecasts that full year gold production will be at the high end of
the range while AISC per gold ounce produced will be at the low-end of the range
provided.
Patrick Downey, President and CEO, commented, "We have had a good start to 2014
as our operational improvements have continued to provide increased productivity
and improved unit costs. The OP and UG operations are performing extremely well,
and we can expect to see greater UG productivity and lower unit costs as final
ramp-up is achieved later in 2014. These improvements have continued well into
Q2 where our grades to the mill have continued to ramp up and we expect to have
a very solid Q2 in terms of gold ounces produced, cash cost per ounce, and AISC
per ounce. There are now three expected quarters in a row where the mine and
overall operation have performed at or above plan. We are also now proceeding
with our 15% mill expansion to increase processing capacity from 1.3 million
tonnes to 1.5 million tonnes annually. This additional capacity should increase
overall gold production to 55,000 to 60,000 ounces per year with expected low
capital expenditures, mainly related to mill upgrades.
Following up on our successful exploration program during 2013, we have recently
completed a detailed structural and geological study of the ore body and have
now identified some very exciting targets which will be drilled tested in 2014
as part of our exploration budget."
First Quarter 2014 Financial and Operational Summaries
For the three For the three
months ended months ended
March 31, 2014 March 31, 2013
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FINANCIAL DATA
Revenue $ 14,884,095 $ 16,601,659
Production costs, excluding depreciation and
depletion $ 10,535,150 $ 13,195,614
Income from mining operations $ 1,056,709 $ 951,485
Exploration expense $ 2,939 $ 122,882
Corporate administration $ 703,179 $ 1,293,904
Lupin care and maintenance $ 390,718 $ 2,485,195
Net loss $ (613,961) $ (3,569,845)
Net loss per share
- Basic $ (0.00) $ (0.02)
- Diluted $ (0.00) $ (0.02)
Cash flow provided by operating activities $ 2,006,167 $ (2,772,394)
Cash and cash equivalents $ 12,501,725 $ 10,861,475
Working capital $ 9,975,100 $ 16,212,713
Long-term debt, non-current $ 3,048,271 $ 612,470
Capital expenditures $ 1,808,910 $ 2,779,943
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OPERATING DATA
Gold ounces produced 10,812 10,034
Gold ounces sold 11,136 10,644
Average realized gold price (USD per ounce) $ 1,384 $ 1,618
Cash cost per gold ounce sold (USD per
ounce) $ 932 $ 1,246
All-in sustaining cost per gold ounce sold
(USD per ounce) $ 1,161 $ 1,606
Cash cost per gold ounce produced (USD per
ounce) $ 1,049 $ 1,347
All-in sustaining cost per gold ounce
produced (USD per ounce) $ 1,284 $ 1,729
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Conference Call Details
Elgin Mining will host a conference call on Wednesday, May 14th, 2014 at 2:00 pm
(Eastern Time).
Live Dial-In Information
Toronto and International: 416-695-7806 passcode: 7551641
North America (Toll Free): 866-696-5910 passcode: 7551641
Replay Call Information
Toronto and International: 905-694-9451 passcode: 9378295
North America (Toll Free): 800-408-3053 passcode: 9378295
The conference call replay will be available from 7 pm (Eastern Time) on May
14th, 2014, until 11:59 pm (Eastern Time) on May 28th, 2014.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on production at the Bjorkdal
gold mine in Sweden. In addition, Elgin Mining's portfolio includes the Lupin
and Ulu gold projects located in Nunavut, Canada.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of
Canadian securities legislation and "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995.
Except for statements of historical fact relating to the Company, information
contained herein constitutes forward-looking statements, including any
information as to the Company's strategy, plans or future financial or operating
performance. Forward-looking statements are characterized by words such as
"plan," "expect", "budget", "target", "project", "intend," "believe",
"anticipate", "estimate" and other similar words, or statements that certain
events or conditions "may" or "will" occur. Forward-looking statements are based
on the opinions, assumptions and estimates of management considered reasonable
at the date the statements are made, and are inherently subject to a variety of
risks and uncertainties and other known and unknown factors that could cause
actual events or results to differ materially from those projected in the
forward-looking statements.
These factors include risks relating to variations in the mineral content within
the material identified as mineral reserves and mineral resources from that
predicted, changes in development or mining plans due to changes in logistical,
technical or other factors, the impact of general business and economic
conditions, global liquidity and credit availability on the timing of cash flows
and the values of assets and liabilities based on projected future conditions,
fluctuating metal prices and currency exchange rates, possible variations in ore
grade or recovery rates, changes in accounting policies, changes in the
Company's corporate resources, changes in project parameters as plans continue
to be refined, changes in project development and production time frames, the
possibility of project cost overruns or unanticipated costs and expenses, higher
prices for fuel, steel, power, labour and other consumables contributing to
higher costs and general risks of the mining industry, failure of plant,
equipment or processes to operate as anticipated, unexpected changes in mine
life, unanticipated results of future studies, seasonality and unanticipated
weather changes, costs and timing of the development of new deposits, success of
exploration activities, successful completion of proposed acquisitions,
permitting time lines, government regulation of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or claims, limitations
on insurance coverage and timing and possible outcome of pending litigation and
labour disputes as well as those risk factors discussed or referred to in the
Company's Annual Information Form dated March 21, 2014, a copy of which is filed
on SEDAR at www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be anticipated,
estimated or intended.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. The Company undertakes no obligation to update
forward-looking statements if circumstances or management's estimates,
assumptions or opinions should change, except as required by applicable law. The
reader is cautioned not to place undue reliance on forward-looking statements.
The forward-looking information contained herein is presented for the purpose of
assisting investors in understanding the exploration and development plans and
objectives and may not be appropriate for other purposes.
FOR FURTHER INFORMATION PLEASE CONTACT:
Elgin Mining Inc.
Patrick Downey
President and Chief Executive Officer
(604) 682-3366
(604) 682-3363 (FAX)
info@elginmining.com
www.elginmining.com
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