Golden Band Resources reports results for the quarter ended July 31, 2012
GBN: TSX Venture Exchange | OTCQX: GBRIF
SASKATOON, Oct. 1, 2012 /CNW/ - Golden Band Resources Inc. (Golden Band or the Company) (TSXV: GBN) (OTCQX: GBRIF) today reported results from first quarter of the 2013 fiscal year, a net loss of $3.6 million on gold sales revenue of $12.7 million compared to a net loss of $1.3 million on gold sales revenue of $15.0 million for the same quarter of the previous year. All dollar amounts presented are Canadian dollars, unless otherwise specified.
2013 First Quarter Highlights
- Processed 38,585 tonnes ore at the Jolu mill with a recovery rate of 94.6% and 8,395 poured ounces
- Commenced shrink stoping mining at Roy Lloyd mine to improve future profitability.
- Excellent safety performance with no lost-time accidents
- No reportable environmental incidents in the quarter.
For the quarter ended July 31, 2012, the Company had a net loss of $3.6 million, on revenue of $12.7 million from sales of 7,929 gold ounces and an average realized price of $1,599 per ounce. For the quarter ended July 31, 2011, the Company had a net loss of $1.3 million, on revenue of $15.0 million from sales of 10,031 gold ounces and an average realized gold price of $1,491 per ounce. Production expenses were $1,391 per ounce gold sold in Q1 2013, up from $901 for Q1 2012 largely as a result of the lower tonnage from Roy Lloyd mine and related processing of lower grade stockpiled ore from EP. The average mill head grade for Q1 2013 was 7.95 grams/tonne (g/t) compared to 11.25 g/t for the same period in the previous year. Non-cash costs of sales (depletion and depreciation) of $538 per ounce is higher for the quarter as the capitalized costs of the Roy Lloyd mine are being depreciated over the measured and indicated resources as currently delineated.
Gold production for the quarter ended July 31, 2012 was 8,395 gold ounces at total cash cost per ounce produced of $1,377 per ounce. Grade and tonnage continued to be a challenge at the Roy Lloyd underground mine as the nature of the ore zone is changing at depth with pinching and swelling. To address these challenges, the Company commenced the shrink stoping method of mining. While shrink stoping is typically more efficient with less dilution, the benefits will not be realized until after the first quarter of the 2013 fiscal year. As well, contractor performance continued to be a challenge that negatively impacted the total cash cost per ounce. (Total cash cost per ounce produced is a non-IFRS measure and is discussed under 'Non-IFRS Measures" in this news release).
Robson Garden, President and Chief Executive Officer of Golden Band Resources commented, "Our first quarter results reflect the operational challenges identified in our year-end report. Our new Vice-President, Operations, Matthew Conklin, has worked diligently throughout the quarter to improve productivity and reduce costs. The adoption of shrink stoping mining at the Roy Lloyd mine is an example of the changes being made to increase future profitability. We will continue to look for opportunities to increase production and reduce costs.
Having completed the first production blast on September 29, 2012 and looking to the future, the Komis mine will provide a secure supply of ore into 2014, when the Golden Heart mine is scheduled to come into production. As well, the positive drill results from the surface and underground drill programs at Roy Lloyd mine reinforce our confidence in the potential for our deposits (see news releases dated September 5, 2012 and September 12, 2012)."
|Financial and Operating Summary|
Ended July 31
|Revenue - CDN $ 000's||12,681||14,956||-15%|
|Cost of sales - CDN $ 000's||15,290||13,730||11%|
|Gross margin - CDN $ 000's||-2,609||1,226||-313%|
|Loss from operations - CDN $ 000's||-5,196||-337||1,442%|
|Net loss - CDN $ 000's||-3,580||-1,305||-174%|
|Cash from operations - CDN $ 000's||165||11,905||99%|
|Capital expenditures - CDN $ 000's||4,524||4,113||10%|
|Average gold spot price - CDN $/oz||1,619||1,487||9%|
|Average realized gold price - CDN $/oz||1,599||1,491||7%|
|Gold sold - ounces||7,929||10,031||-21%|
|Cost of sales - CDN $/oz sold||1,928||1,369||41%|
|Gold produced - ounces||8,395||10,933||-23%|
|Total cash cost - CDN $||11,564||8,876||30%|
|Total cash cost - CDN $/oz produced||1,377||812||70%|
|Total production cost - CDN $/oz produced||1,910||1,290||48%|
|Roy Lloyd - underground||26,175||24,650||6%|
|Roy Lloyd North- open pit||64,336||0||64,336%|
|Komis - open pit||0||0||0%|
|Roy Lloyd - underground - CDN $ 000's||1,391||1,955||-29%|
|Komis - open pit - CDN $ 000's||2,468||1,545||60%|
|Other - CDN $ 000's||665||613||8%|
|Average mill head grade - g/t||7.95||11.25||-29%|
|Recovery - %||94.63%||94.73%||0%|
|Gold produced - ounces||8,395||10,933||-23%|
Revenue in the first quarter of 2013 was $12.7 million on sales of 7,929 gold ounces, an average realized price of $1,599 per ounce compared to $1,491 per ounce for sales in July 31, 2011.
The Company produced 8,395 gold ounces in the first quarter of 2013. Production was impacted by lower tonnage at Roy Lloyd underground mine resulting in the processing of more stockpiled ore from the EP mine, which was at a lower grade. The commencement of mining using shrink stoping also impacted production in Q1 2013. Mining of the stope commenced in June 2012 and continued throughout the quarter; however, shrink stoping requires that broken ore remain in the stope until it has been mined out. This ore was being hauled to the Jolu mill and processed in Q2 2013.
There were 38,585 tonnes processed at the Jolu mill in the first quarter of 2013 with a mill head grade of 7.95 g/t gold, compared to an average head grade for Q1 2012 of 11.25 g/t gold.
For the first quarter of 2013, total cash cost per ounce produced was $1,377, with total cash costs of $11.6 million and production of 8,395 ounces. Total cash costs per ounce were impacted by the processing of lower tonnage of ore from Roy Lloyd, lower grade of ore from EP, as well as the commencement of shrink stoping mining method, with costs incurred in Q1 2013.
Cash from operations was $164,872 for the first quarter of 2013 reflecting an average gold spot price of $1,619 per ounce partially offset by a lower sales volume of 7,929 gold ounces.
Capital expenditures for the first quarter of 2013 were $4.5 million with $758,000 spent on mine development and $632,000 on resource delineation drilling below the 1175 level at the Roy Lloyd mine. There was approximately $2.5 million spent on waste development and pre-stripping in the first quarter of 2013 at Komis in preparation for mining of the deposit. In addition, approximately $460,000 was spent on upgrading of the tailings management facilities at the Jolu mill.
2013 Fiscal Year Outlook
Golden Band's gold production is forecasted to be between 40,000 and 45,000 ounces for the 2013 fiscal year with total cash costs in the range of $1,000 per ounce to $1,150 per ounce.
The Komis mine, which commenced production on October 1, 2012, will provide most of the feed to the Jolu mill, which is planned for 650 tonnes per day, supplemented by higher-grade ore from the Roy Lloyd underground mine. With the partial change to the shrinkage stoping mining method at Roy Lloyd mine, the daily production target will be at 100-150 tonnes per day at a grade averaging just under 10.0 g/t gold.
Milling at Jolu is expected to be in the range of 190,000 to 200,000 tonnes a year with a recovery of approximately 95%.
The level of capital expenditure for the 2013 fiscal year is being reassessed, pending the outcome of the mineral resources updates at the Roy Lloyd mine and revisions to the plans for the permanent tailings management facility at Jolu.
For exploration for the 2013 fiscal year, the Company has entered into an expanded joint venture with Masuparia Gold Corporation to carry out exploration on the Preview Lake, North Lake and Greywacke properties (see previous news release of April 2, 2012). The Company is also developing a winter drill program on several of its own properties with plans to be finalized in October, 2012.
Total cash cost per ounce produced is a non-IFRS performance measure used to better assess the Company's performance for the current period and its expected performance in the future. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this measure to evaluate the Company's performance and cash generating capabilities.
Total cash cost per ounce produced is calculated by dividing total cash costs by gold ounces produced for the relevant period. Total production cost per ounce produced includes total cash cost plus depreciation, depletion and amortization divided by gold ounces produced for the relevant period.
About Golden Band
Golden Band Resources is a gold producer operating in the La Ronge gold belt in northern Saskatchewan and publicly listed on the TSX Venture exchange in Canada under the symbol GBN and is traded in the United States on the OTCQX under the symbol GBRIF. Commercial production was declared on April 1, 2011 and the Company has production from two mines, the Roy Lloyd and EP gold mines. A third mine, Komis, is to be brought into production later in the summer of 2012. Processing is at the centrally located Jolu mill, with a nominal capacity of 650 tonnes per day. The Company has been actively exploring for gold since 1994 and has assembled a land package of 870 km2, including 13 known gold deposits and four former producing mines, being Jolu, Decade, Star Lake and Komis. The Company plans to undertake aggressive drill programs throughout the La Ronge Gold projects with the goal of significantly expanding the existing NI 43-101 gold resources that have been identified to date.
On behalf of the Board of Directors of Golden Band Resources Inc.,
A. Robson Garden, President and CEO
Caution Regarding Forward-Looking Information and Statements
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the mine properties, estimates of production, costs of production, the sufficiency and availability of capital and financing and other future plans, objectives or expectations of Golden Band Resources Inc. (Company) are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators available on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Accordingly, readers should not place undue reliance on forward-looking information. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Golden Band Resources Inc.For further information:
Mark J. Thiel, CA VP, Finance and CFO
Golden Band Resources Inc.
Phone: 306 385 7128
Fax: 306 955 0788