SAS reports positive 2012 third quarter results with another record quarter of production and increase in operating cash flow

All dollar amounts are stated in Canadian dollars, unless otherwise indicated

TORONTO, Nov. 12, 2012 /CNW/ - St Andrew Goldfields Ltd. (T-SAS) (OTCQX-STADF), ("SAS" or the "Company") earned net income attributable to shareholders for the third quarter 2012 ("Q3 2012") of $6.3 million or $0.02 per share compared to net income of $8.2 million, or $0.02 per share for the third quarter 2011 ("Q3 2011"). For Q3 2011, the Company recorded a reversal of an income and mining tax asset valuation allowance of $13.7 million, which positively impacted net earnings by $0.04 per share. Adjusted net earnings⁽¹⁾ for the quarter were $5.0 million, or $0.01 per share compared to adjusted net earnings of $2.6 million, or $0.01 per share, for Q3 2011.

Q3 2012 Highlights

• Generated operating cash flow of $14.7 million.
• Achieved record production of 25,742 ounces of gold from three operations (Holt, Holloway and Hislop) reaching a steady state run rate that will sustain annual gold production of approximately 100,000 ounces.
• Sold 25,197 ounces of gold at an average realized price per ounce of gold sold⁽¹⁾ of US$1,640 per ounce for record revenues of $40.7 million.
• Mine cash costs of US$768 per ounce and a royalty cost of US$127 per ounce, for a total cash cost per ounce of gold sold⁽¹⁾ of US$895 per ounce.
• Earned cash margin from mine operations⁽¹⁾ of $18.3 million.
• Invested $9.7 million in mine capital expenditures and exploration and evaluation assets.
• Continued to advance the Taylor Project with stope access and development completed to the area of the first bulk sample program, which commenced at the end of October.

(1) See pages below for an explanation of non-GAAP measures

"With a second consecutive quarter of free cash flow, we are very happy to show solid improvement quarter over quarter, which will allow us to meet our 2012 objectives", said Jacques Perron, President and CEO of SAS. "Again, we achieved a record quarter of production and a further reduction in mine cash costs. We look forward to additional improvements at the operations in the last quarter of 2012; the completion of the bulk sampling program at Taylor; and additional drill results from the Ghost, Zone 4 and Hislop North targets."

OPERATING AND FINANCIAL SUMMARY

Amounts in thousands of Canadian dollars, except per unit amounts	Q3 2012	Q3 2011		2012 YTD	2011 YTD
SAS Operating Results
Gold production (ounces)^(3)	25,742	20,018		69,775	51,672
Commercial gold production sold(ounces)	25,197	19,260		68,017	46,160
Per ounce data (US$)
Average realized price per ounce of gold sold ^(1)	$ 1,640	$ 1,715		$ 1,650	$ 1,547
Mine cash costs	$ 768	$ 990		$ 799	$ 1,056
Royalty costs	127	142		134	109
Total cash cost per ounce of gold sold ^(1)	$ 895	$ 1,132		$ 933	$ 1,165
SAS Finanical Results
Total revenue (Gold sales)	$ 40,690	$ 33,345		$ 112,059	$ 71,423
Cash margin from mine operations ^(1)	$ 18,250	$ 11,987		$ 48,369	$ 18,840
Net income for the period	$ 6,269	$ 8,238		$ 13,360	$ 4,252
Adjusted net earnings (loss) ^(1)	$ 4,954	$ 2,580		$ 12,539	$ (4,025)
Cash from operations	$ 14,682	$ 7,647		$ 32,348	$ 9,465
Net cash flow ^(1)	$ 6,231	$ (3,036)		$ 7,031	$ (15,827)
SAS Finanical Position	September 30, 2012			December 31, 2011
Cash and cash equivalents	$ 20,718			$ 17,617
Working capital ^(2)	$ 14,394			$ 7,897
Total assets	$  202,884			$  190,167
Long-term debt	$  19,123			$ 19,769
Notes:

(2)	The current portion of the Gold Notes as at December 31, 2011, is removed from the calculation of working capital as the Company retired the balance of the outstanding Gold Notes on May 8, 2012. Management believes this adjustment gives rise to more meaningful information for the Company and certain investors to evaluate the Company's performance and ability to generate cash flow.
(3)	Gold production for 2011 YTD included 5,435 ounces of gold produced at the Holt Mine while the mine was under pre-production and development. The Holt Mine commenced commercial production on April 1, 2011.

 

Holt Mine, Operations and Financial Review (see Operating and Financial Statistics on page 10)
For the third quarter of 2012, the Holt Mine ("Holt") produced 13,145 ounces of gold, an increase of 17% over the previous quarter as a result of the higher head grade. The head grade of 5.40 g/t Au mined during the quarter was above the reserve grade for Zone 4 of 5.18 g/t Au. Recoveries were at their expected levels of approximately 94%.

When compared to the previous quarter, gold sales increased by 10% mainly due to a 17% increase in production and a 1% increase in the average realized price per ounce of gold sold⁽¹⁾.

Total cash cost per ounce of gold sold⁽¹⁾ increased by US$36 per ounce or 4% over the previous quarter mainly due to a 17% increase in mine-site cost per tonne milled⁽¹⁾, which is attributable to accelerated operating development during the quarter. Total operating development metres increased by 46% over the previous quarter. SAS is also currently developing Zone 6 in order to bring it into production in 2013.

Cash margin from mine operations⁽¹⁾ increased slightly from the previous quarter as a result of the increase in gold sales, partially offset by the increase in mine-site unit operating costs. Holt contributed 51% of the total cash margin from mine operations⁽¹⁾ earned during the quarter.

Holt is on track to contribute approximately 50% of the Company's total gold production for 2012.

Holloway Mine, Operations and Financial Review (see Operating and Financial Statistics on page 11)
The Holloway Mine ("Holloway") produced 5,408 ounces of gold from the Smoke Deep Zone with a head grade of 4.15 g/t Au and a mill recovery rate of approximately 91%. Gold sales for the quarter were in line with the previous quarter, reflecting a stronger average realized price per ounce of gold sold⁽¹⁾, offset by the weakness in the US dollar to the Canadian dollar exchange rate for the quarter.

Total cash cost per ounce of gold sold⁽¹⁾ during the quarter decreased by US$26 per ounce when compared to the previous quarter, mainly due to a 9% increase in head grade offset by a 12% or $10 dollar per tonne increase in mine-site cost per tonne milled⁽¹⁾ due to the reduction in the mining rate.

Cash margin from mine operations for Q3 2012 was in line with the previous quarter, despite an increase in mine-site unit operating costs of 12%.

Holloway is on track to contribute approximately 25% of the Company's total gold production for 2012.

Hislop Mine, Operations and Financial Review (see Operating and Financial Statistics on page 12)
The Hislop Mine ("Hislop") produced 7,189 ounces of gold during Q3 2012. The head grade averaged 2.53 g/t Au, which was substantially higher than the reserve grade of 1.88 g/t Au. Mill recovery during the quarter was approximately 86%, in line with expectations.

Gold sales during the quarter increased by 22% over the previous quarter due to a 14% improvement in head grade and a 5% increase in throughput.

Total cash cost per ounce of gold sold⁽¹⁾ was 13% lower than the previous quarter as a result of the continued improvement in head grade and increased throughput, partially offset by the weakness in the US dollar to Canadian dollar exchange rate. Mine‐site cost per tonne milled⁽¹⁾ for Q3 2012 was in line with expectations.

Hislop is on track to contribute approximately 25% of the Company's total gold production for 2012.

Holt Mill Performance
The Holt Mill processed 226,956 tonnes of ore from Holt, Holloway and Hislop in Q3 2012 as compared to 228,781 tonnes of ore from the three mining operations in the previous quarter. This represents an average milling rate of 2,467 tonnes per day. Availability was 89.1%, lower than anticipated due to increased SAG Mill maintenance requirements during the quarter.

Taylor Project Update
A stepped approach is being taken in order to improve the quality of information prior to allocating total capital expenditures for the development activities at the West Porphyry Zone ("WPZ"). Dewatering activities at the WPZ were completed in August and underground access has been re-established. Stope access and development activities commenced during the quarter. SAS expects to conduct a 15,000 tonne bulk sampling program WPZ (which commenced at the end of October), on the upper lens of the WPZ which will be used to validate the geological model, mining method and mill recovery rate and is expected to be completed towards the end of the year. The Company expects to incur approximately $6.0 million in capital expenditures at Taylor during 2012 of which $2.9 million has been spent.

Exploration Projects
Exploration activities during Q3 2012 were focused on surface drilling at the Ghost Zone ("Ghost") and Zone 4 targets near Holt and the Hislop North Project ("Hislop North") located northwest of the Hislop pit. During the quarter, SAS conducted approximately 13,000 metres of surface drilling, consisting of 18 drill holes, on these targets. On a year-to-date basis, approximately 40,000 metres of diamond core drilling has been completed on the Company's exploration targets.

For the remainder of 2012, the exploration program will continue to concentrate on targets situated near the existing mining operations with a goal of increasing mine life. The priorities will include both the Ghost and Zone 4 targets near Holt and the Hislop North target located near the Hislop pit. There are currently four surface drills active with two drills focused on the Hislop North target. Data compilations are on-going which will examine generative "discovery level" targets for potential future testing.

Financial Performance
Commercial gold production sold in Q3 2012 increased by 31% from the same period in 2011 due to the commencement of mining operations at Holt in the second quarter of 2011, and increased by 12% when compared to the previous quarter.

For Q3 2012, mine cash cost per ounce of gold sold decreased by US$222 per ounce from the third quarter of 2011 as a result of the addition of Holt, and decreased by US$17 per ounce when compared to the previous quarter due to the increase in production from Holt and Hilsop. The increase in gold sales in the quarter resulted in an increase in cash margin from mine operations⁽¹⁾ of $2.1 million when compared to the previous quarter.

Mark-to-market gain on the Company's foreign currency derivatives for the quarter was $1.4 million as compared to a loss of $6.8 million for the same period in 2011 as a result of a  decrease in the US dollar to Canadian dollar exchange rate.

Capital Resources
Working capital at the end of the quarter of $14.4 million improved by 76% when compared to the previous quarter, which primarily resulted from the change in working capital management which led to an increase in operating cash flow by $2.9 million, and the increase in cash margin generated from mine operations of $2.1 million. At the end of the quarter, the Company had cash and cash equivalents of $20.7 million; and in conjunction with the expected cash flows from operations and an undrawn US$10 million revolving credit facility, the Company believes it has sufficient capital resources to finance its ongoing capital programs at the mines and to finance the further advancement of Taylor and other advanced stage exploration projects.

Q3 2012 Conference Call Information
A conference call and webcast is scheduled for 10:00am EDT, Tuesday, November 13, 2012 to discuss the 2012 third quarter results. Participants are invited to join the call by dialling 1-866-212-4491 (toll free within North America) or 1-416-800-1066 (outside North America) with the password "SAS". The Company will post accompanying power point slides for the call on the website the morning of November 13, 2012. For further information, please see the Company's website at www.sasgoldmines.com.

A recorded playback of the call will also be available via the website and will be posted within 24 hours of the call.

Qualified Person
Production and ongoing development programs at the Holt, Holloway and Hislop mines, and processing at the Holt Mill, as well as rehabilitation and development activities at the Taylor Project are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's COO and VP of Operations. The exploration programs on the Company's various mineral properties are under the supervision of Doug Cater, P.Geo, the Company's VP, Exploration. Messrs. Middlemiss and Cater are qualified persons as defined by National Instrument 43-101, and have reviewed and approved this news release.

Non-GAAP Measures
The Company has included the non-GAAP performance measures, adjusted net earnings (loss), average realized price per ounce of gold sold, total cash costs per ounce of gold sold, cash margin from mine operations and mine-site cost per tonne milled, throughout this news release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to pages 6-9 of this news release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Condensed Interim Financial Report for the three and nine months ended September 30, 2012.

The Unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and nine months ended September 30, 2012, can be found on pages 13-15.

To review the complete Unaudited Condensed Financial Report for the three and nine months ended September 30, 2012, and the Interim Management's Discussion and Analysis for the third quarter 2012, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

About SAS
SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.

SAS owns and operates the Holt, Holloway and Hislop mines and is forecasting 2012 production of between 90,000 - 100,000 ounces of gold. The Company is also advancing the Taylor Project and is conducting an aggressive exploration program across 120km of land straddling the Porcupine-Destor Fault Zone.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including in respect of the targeted gold production levels at the Company's three operating mines for 2012; the achievement of further operational improvements during the fourth quarter; the completion of a bulk sampling program at Taylor, the level of capital expenditures required at Taylor; the commencement of production from Zone 6 at Holt, and the timing thereof; the extent and objectives of the Company's exploration programs for the balance of 2012; and the sufficiency of the Company's cash flow and existing cash resources to finance its capital programs and the further development of its advanced stage exploration projects.

This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; fluctuations in gold prices and exchange rates; operational hazards and risks; compliance with applicable government regulations, including the ability to obtain requisite permits and licenses; dependence on key employees and changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the ability to achieve capital and operating cost estimates, the accuracy or reserve and resource estimates and the assumptions upon which such estimates are based, the continued availability of qualified personnel, and the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward‐looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.

NON-GAAP MEASURES

Adjusted net earnings (loss)
Adjusted net earnings (loss) are calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivative contracts, one-time gains or losses on the disposition of non-core assets and expenses and significant tax adjustment not related to current period's earnings, as detailed in the table below.  Adjusted net earnings (loss) does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. The Company discloses this measure, which is based on its Financial Report, to assist in the understanding of the Company's operating results and financial position.

Amounts in thousands of Canadian dollars, except per share amounts		Q3 2012	Q2 2012	Q3 2011	Nine Months 2012	Nine Months 2011
Net income per Financial Reports		$ 6,269	$ 4,357	$ 8,238	$ 13,360	$ 4,252
Reversal of income and mining tax asset valuation allowance		-	-	(13,668)	-	(18,022)
Mark-to-market loss on gold-linked liabilities		181	815	3,835	1,818	4,761
Mark-to-market loss (gain) on foreign currency derivatives		(1,416)	777	6,763	(2,394)	7,305
Proceeds from insurance claim		-	-	-	-	(460)
Loss (gain) on the divestiture of non-core assets		(519)	-	-	(519)	1,353
Write-down of mining assets		-	-	300	-	300
Tax effect of above items		439	(398)	(2,888)	274	(3,514)
Adjusted net earnings (loss)		$ 4,954	$ 5,551	$ 2,580	$ 12,539	$ (4,025)
Weighted average number of shares outstanding (000s)
	Basic	368,245	368,245	368,004	368,245	367,798
	Diluted	368,508	368,359	369,777	368,572	370,280
Adjusted net earnings (loss) per share - basic and diluted		$ 0.01	$ 0.02	$ 0.01	$ 0.03	$ (0.01)

 

Total cash cost per ounce of gold sold
Total cash cost per ounce of gold sold is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following table provides a reconciliation of total cash costs per ounce of gold sold to production expenses per the Financial Report for the three and nine months ended September 30, 2012:

Amounts in thousands of Canadian dollars, except where indicated		Q3 2012	Q2 2012	Q3 2011	Nine Months 2012	Nine Months 2011
Mine-site costs per Financial Reports		$ 19,245	$ 17,831	$ 18,699	$ 54,527	$ 47,646
Production royalties per Financial Reports		3,195	3,046	2,659	9,163	4,937
Adjustments ^(1)		-	-	29	(99)	29
Total cash costs		$ 22,440	$ 20,877	$ 21,387	$ 63,591	$ 52,612
Divided by gold ounces sold ^(2)		25,197	22,495	19,260	68,017	46,160
Total cash cost per ounce of gold sold (Canadian dollars)		$ 891	$ 928	$ 1,110	$ 935	$ 1,140
Average CAD:USD exchange rate		$ 0.99	$ 1.01	$ 0.98	$ 1.00	$ 0.98
Total cash cost per ounce of gold sold (US$)		$ 895	$ 919	$ 1,132	$ 933	$ 1,165
Breakdown of total cash cost per ounce of gold sold (US$)
Holt Mine ^(2)
	Mine cash costs	$ 708	$ 671	$ 833	$ 684	$ 985
	Royalty costs	165	166	181	166	165
		$ 873	$ 837	$ 1,014	$ 850	$ 1,150
Holloway Mine
	Mine cash costs	$ 746	$ 771	$ 960	$ 815	$ 908
	Royalty costs	204	205	218	206	158
		$ 950	$ 976	$ 1,178	$ 1,021	$ 1,066
Hislop Mine ^(2)
	Mine cash costs	$ 889	$ 1,020	$ 1,286	$ 1,012	$ 1,299
	Royalty costs	-	-	-	-	-
		$ 889	$ 1,020	$ 1,286	$ 1,012	$ 1,299
Total
	Mine cash costs	$ 768	$ 785	$ 990	$ 799	$ 1,056
	Royalty costs	127	134	142	134	109
		$ 895	$ 919	$ 1,132	$ 933	$ 1,165

 

Notes:
(1)	In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011. This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively.
(2)	Commercial operations at Holt and Hislop commenced on April 1, 2011, and July 1, 2010, respectively.

Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. As illustrated in the table below, this measure is calculated by adjusting Production Costs, as shown in the statements of operations for inventory level changes and then dividing by tonnes processed through the mill. Since total cash cost per ounce of gold sold data can be affected by fluctuations in foreign currency exchange rates, Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure eliminates the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled in order to be economically viable. Management is aware that this per tonne milled measure is impacted by fluctuations in throughput and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.

Amounts in thousands of Canadian dollars, except per tonne amounts	Q3 2012	Q2 2012	Q3 2011	Nine Months 2012	Nine Months 2011
Holt Mine ^(2)(3)
Mine-site costs	$ 8,724	$ 7,508	$ 7,242	$ 23,395	$ 13,287
Inventory adjustments ^(1)	241	(6)	(168)	847	359
Mine-site operating costs	$ 8,965	$ 7,502	$ 7,074	$ 24,242	$ 13,646
Divided by tonnes of ore milled	80,219	78,429	$ 66,556	226,585	121,094
Mine-site cost per tonne milled	$ 112	$ 96	$ 106	$ 107	$ 113
Holloway Mine
Mine-site costs	$ 4,263	$ 4,472	$ 4,821	$ 13,394	$ 15,531
Inventory adjustments ^(1)	(157)	(92)	10	32	(763)
Mine-site operating costs	$ 4,106	$ 4,380	$ 4,831	$ 13,426	$ 14,768
Divided by tonnes of ore milled	44,546	53,169	49,437	144,866	148,033
Mine-site cost per tonne milled	$ 92	$ 82	$ 98	$ 93	$ 100
Hislop Mine ^(2)
Mine-site costs	$ 6,258	$ 5,851	$ 6,636	$ 17,738	$ 18,828
Inventory adjustments ^(1)	82	62	(326)	311	832
Mine-site operating costs	$ 6,340	$ 5,913	$ 6,310	$ 18,049	$ 19,660
Divided by tonnes of ore milled	102,191	97,183	107,741	294,035	339,293
Mine-site cost per tonne milled	$ 62	$ 61	$ 59	$ 61	$ 58

Notes:
(1)	This inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory.
(2)	Commercial operations at Holt commenced on April 1, 2011.
(3)	Excludes 43,458 tonnes of development ore processed while Holt was in pre-production producing 5,435 ounces of gold in 2011.

Cash margin from mine operations
Cash margin from mine operations is a non-GAAP measure which may not be comparable to information in other gold producers' reports and filings. It is calculated as the difference between gold sales and production costs (comprised of mine-site operating costs and production royalties) per the Company's Financial Report. The Company believes it illustrates the performance of the Company's operating mines and enables investors to better understand the Company's performance in comparison to other gold producers who present results on a similar basis.

Amounts in thousands of Canadian dollars	Q3 2012	Q2 2012	Q3 2011	Nine Months 2012	Nine Months 2011
Gold sales per Financial Reports	$ 40,690	$ 37,073	$ 33,345	$ 112,059	$ 71,423
Mine site operating costs per Financial Reports	19,245	17,831	18,699	54,527	47,646
Production royalties per Financial Reports	3,195	3,046	2,659	9,163	4,937
	22,440	20,877	21,358	63,690	52,583
Cash margin from mine operations	$ 18,250	$ 16,196	$ 11,987	$ 48,369	$ 18,840
Breakdown of cash margin from mine operations by mines:
Holt Mine	$ 9,250	$ 8,886	$ 6,625	$ 27,190	$ 7,206
Holloway Mine	3,835	3,805	2,930	10,132	7,868
Hislop Mine	5,165	3,505	2,432	11,047	3,766
	$ 18,250	$ 16,196	$ 11,987	$ 48,369	$ 18,840

 

Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure and is calculated by dividing gold sales as reported in the Company's Financial Report by the gold ounces sold.  It may not be comparable to information in other gold producers' reports and filings.

Net cash flow
Net cash flow is a non-GAAP measure and is calculated by taking cash flow from operating activities less cash used in investing activities as reported in the Company's Financial Report. It may not be comparable to information in other gold producers' reports and filings.

Operating and Financial Statistics - Holt Mine

First Quarter 2012 ("Q1 2012"); Fourth Quarter 2011 ("Q4 2011")

Amounts in thousands of Canadian dollars, except where indicated		Q3 2012	Q2 2012	Q1 2012	Q4 2011	Q3 2011	Nine Months 2012	Nine Months 2011
Tonnes milled		80,219	78,429	67,937	67,778	66,556	226,585	121,094
Head grade (g/t Au)		5.40	4.71	5.36	5.57	5.01	5.15	4.27
Average mill recovery		94.4%	94.2%	94.1%	94.1%	93.4%	94.3%	93.0%
Gold produced (ounces)		13,145	11,193	11,025	11,421	10,012	35,363	15,520
Commercial gold production sold (ounces) ^(1)		12,373	11,073	10,674	12,175	8,870	34,120	13,849
Gold sales  ^(1)		$ 20,000	$ 18,250	$ 18,015	$ 21,060	$ 15,449	$ 56,265	$ 22,733
Cash margin from mine operations ^(2)		$ 9,250	$ 8,886	$ 9,054	$ 12,054	$ 6,625	$ 27,190	$ 7,206
Mine-site cost per tonne milled ^(2)		$ 112	$ 96	$ 114	$ 95	$ 106	$ 107	$ 113
Total cash cost per ounce of gold sold (US dollars)^(2):
	Mine cash costs	$ 708	$ 671	$ 670	$ 556	$ 833	$ 684	$ 985
	Royalty costs	165	166	168	166	181	166	$ 165
Total cash cost per ounce of gold sold ^(2)		873	837	838	722	1,014	850	1,150
	Depreciation and depletion	186	161	145	129	134	165	133
Total production cost per ounce of gold sold (US dollars)		$ 1,059	$ 998	$ 983	$ 851	$ 1,148	$ 1,015	$ 1,283
Average CAD:USD exchange rate		0.99	1.01	1.00	1.02	0.98	1.00	0.98
Capital expenditures		$ 4,990	$ 5,036	$ 3,177	$ 4,250	$ 1,841	$ 13,203	$ 5,544

 

Notes:
(1)	Holt commenced commercial production on April 1, 2011. The operating results for the mine prior to April 1, 2011, were classified as site maintenance and pre-production expenditures.
(2)	Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 6-9 for non-GAAP measurements).

Operating and Financial Statistics - Holloway Mine

First Quarter 2012 ("Q1 2012"); Fourth Quarter 2011 ("Q4 2011")

Amounts in thousands of Canadian dollars, except where indicated		Q3 2012	Q2 2012	Q1 2012	Q4 2011	Q3 2011	Nine Months 2012	Nine Months 2011
Tonnes milled		44,546	53,169	47,151	56,225	49,437	144,866	148,033
Head grade (g/t Au)		4.15	3.80	3.77	4.03	3.71	3.90	3.76
Average mill recovery		91.0%	91.2%	88.6%	84.1%	85.2%	90.3%	85.6%
Gold produced (ounces)		5,408	5,923	5,058	6,126	5,026	16,389	15,336
Commercial gold production sold (ounces) ^(1)		5,749	5,744	4,907	6,208	5,130	16,400	17,490
Gold sales ^(2)		$ 9,267	$ 9,467	$ 8,275	$ 10,750	$ 8,828	$ 27,009	$ 26,096
Cash margin from mine operations ^(3)		$ 3,835	$ 3,805	$ 2,492	$ 4,116	$ 2,930	$ 10,132	$ 7,868
Mine-site cost per tonne milled ^(3)		$ 92	$ 82	$ 105	$ 93	$ 98	$ 93	$ 100
Total cash cost per ounce of gold sold (US dollars) ^(3):
	Mine cash costs	$ 746	$ 771	$ 948	$ 853	$ 960	$ 815	$ 908
	Royalty costs ^(4)	204	205	209	203	218	206	158
Total cash cost per ounce of gold sold ^(3)		950	976	1,157	1,056	1,178	1,021	1,066
	Depreciation and depletion	410	376	368	368	540	386	436
Total production cost per ounce of gold sold (US dollars)		$ 1,360	$ 1,352	$ 1,525	$ 1,424	$ 1,718	$ 1,407	$ 1,502
Average CAD:USD exchange rate		0.99	1.01	1.00	1.02	0.98	1.00	0.98
Capital expenditures		$ 1,794	$ 2,539	$ 4,342	$ 3,666	$ 2,938	$ 8,675	$ 8,703

 

Notes:
(1)	Holloway commenced production in October 2009.
(2)	Excluding the three months ended March 31, 2012 and June 30, 2012, gold sales include 1,860 ounces of gold delivered to the Gold Note holders in each of the quarters during 2011.
(3)	Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations, are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 6-9 for non-GAAP measurements).
(4)	In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011.  This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively.

Operating and Financial Statistics - Hislop Mine

First Quarter 2012 ("Q1 2012"); Fourth Quarter 2011 ("Q4 2011")

Amounts in thousands of Canadian dollars, except where indicated		Q3 2012	Q2 2012	Q1 2012	Q4 2011	Q3 2011	Nine Months 2012	Nine Months 2011
Overburden stripped (m^3)		(32,205)	29,236	4,212	103,346	300,249	1,243	1,063,770
Tonnes mined (ore)		99,287	76,764	118,918	107,827	109,457	294,969	341,444
	(waste)	513,988	536,015	680,221	599,330	738,054	1,730,224	2,968,342
		613,275	612,779	799,139	707,157	847,511	2,025,193	3,309,786
Waste-to-Ore Ratio		5.2	7.0	5.7	5.6	6.7	5.9	8.7
Tonnes milled		102,191	97,183	94,660	92,794	107,741	294,035	339,293
Head grade (g/t Au)		2.53	2.21	1.88	1.94	1.68	2.21	1.62
Average mill recovery		86.5%	85.6%	86.4%	83.0%	85.4%	86.1%	86.9%
Gold produced (ounces)		7,189	5,899	4,935	4,803	4,980	18,023	15,381
Commercial gold production sold (ounces) ^(1)		7,075	5,678	4,744	4,985	5,260	17,497	14,821
Gold sales		$ 11,423	$ 9,356	$ 8,006	$ 8,625	$ 9,068	$ 28,785	$ 22,594
Cash margin from mine operations ^(2)		$ 5,165	$ 3,505	$ 2,377	$ 2,528	$ 2,432	$ 11,047	$ 3,766
Mine-site cost per tonne milled ^(2)		$ 62	$ 61	$ 61	$ 60	$ 59	$ 61	$ 58
Total cash cost per ounce of gold sold ^(2)(3)		$ 889	$ 1,020	$ 1,185	$ 1,196	$ 1,286	$ 1,012	$ 1,299
	Depreciation and depletion	234	238	186	177	150	222	118
Total production cost per ounce of gold sold (US dollars)		$ 1,123	$ 1,258	$ 1,371	$ 1,373	$ 1,436	$ 1,234	$ 1,417
Average CAD:USD exchange rate		0.99	1.01	1.00	1.02	0.98	1.00	0.98
Capital expenditures		$ 390	$ 970	$ 463	$ 701	$ 2,822	$ 1,823	$ 9,951

 

Notes:
(1)	Hislop commenced commercial production on July 1, 2010.
(2)	Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 6-9 for non-GAAP measurements).

Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information

			Three months ended September 30,			Nine months ended September 30,
			2012	2011		2012	2011
Gold sales			$ 40,690	$ 33,345		$ 112,059	$ 71,423
Operating costs and expenses:
	Mine site operating		19,245	18,699		54,527	47,646
	Production royalty		3,195	2,659		9,163	4,937
	Site maintenance and pre-production		175	220		452	84
	Exploration		1,713	1,992		4,891	6,924
	Corporate administration		1,740	1,461		5,151	4,926
	Depreciation and depletion		6,433	4,807		16,354	11,651
	Write-down of mining assets		-	300		-	300
			32,501	30,138		90,538	76,468
Operating income (loss)			8,189	3,207		21,521	(5,045)
Finance costs			(557)	(1,220)		(2,180)	(3,192)
Mark-to-market loss on gold-linked liabilities			(181)	(3,835)		(1,818)	(4,761)
Mark-to-market gain (loss) on foreign currency derivatives			1,416	(6,763)		2,394	(7,305)
Foreign exchange gain (loss)			549	392		(327)	2,254
Gain (loss) on divestiture of non-core assets			519	-		519	(1,353)
Finance income and other			97	60		183	645
Income (loss) before taxes			10,032	(8,159)		20,292	(18,757)
Deferred taxes			(3,763)	16,397		(6,932)	23,009
Net income for the period			$ 6,269	$ 8,238		$ 13,360	$ 4,252
Other comprehensive income (loss)
Unrealized gain (loss) on available for sale investments, net of tax of nil for all periods			129	(78)		(403)	(301)
Unrealized mark-to-market gain on foreign currency derivatives			905	-		691	-
			1,034	(78)		288	(301)
Comprehensive income for the period			$ 7,303	$ 8,160		$ 13,648	$ 3,951
Basic and diluted income per share attributable to shareholders			$ 0.02	$ 0.02		$ 0.04	$ 0.01
Weighted average number of shares outstanding (000's)
Basic			368,245	368,004		368,245	367,798
Diluted			368,508	369,777		368,572	370,280

 

Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

				Three months ended September 30,			Nine months ended September 30,
				2012	2011		2012	2011
Cash provided by (used in):
Operating activities:
	Net Income (loss) for the period			$ 6,269	$ 8,238		$ 13,360	$ 4,252
	Items not affecting cash:
		Deferred taxes		3,763	(16,397)		6,932	(23,009)
		Mark-to-market loss on gold-linked liabilities		181	3,835		1,818	4,761
		Implicit interest on gold-linked liabilities		160	1,077		1,355	2,764
		Mark-to-market loss (gain) on foreign currency derivatives		(1,416)	6,763		(2,394)	7,305
		Repayment of Gold Notes		-	(3,148)		-	(8,439)
		Depreciation and depletion		6,433	4,807		16,354	11,651
		Gain on disposal of equipment		(47)	-		(47)	-
		Write-down of mining assets		-	300		-	300
		Loss (gain) on divestiture of non-core assets		(519)	-		(519)	1,353
		Share-based payments		270	349		746	1,203
		Amortization of bank facility transaction costs		102	-		133	-
		Accretion of asset retirement obligation		137	131		412	391
		Change in non-cash operating working capital and other		(502)	1,692		(5,560)	6,933
		Interest paid		(149)	-		(242)	-
				14,682	7,647		32,348	9,465
Investing activities:
		Additions to exploration and evaluation assets		(2,163)	(748)		(2,821)	(2,821)
		Mine development expenditures		(4,768)	(6,152)		(17,054)	(19,127)
		Additions to plant and equipment		(2,723)	(1,745)		(7,518)	(5,951)
		Amounts payable on capital additions		1,071	(1,756)		299	2,872
		Cash collateralized for banking facilities		-	(265)		1,685	(265)
		Change in reclamation deposits		288	(17)		248	(50)
		Cash advance to joint venture		(156)	-		(156)	-
		Proceeds from sale of non-core assets		-	-		-	50
				(8,451)	(10,683)		(25,317)	(25,292)
Financing activities:
		Repayment of Gold Notes		-	-		(14,775)	-
		Advance royalty payments		(476)	(479)		(1,487)	(1,314)
		Proceeds from term credit facility		-	-		14,975	-
		Bank facility transaction costs		-	-		(644)	-
		Repayment of term credit facility		(1,966)	-		(1,966)	-
		Capital lease payments		(11)	(7)		(33)	(24)
		Share purchase warrants and stock options exercised		-	-		-	102
				(2,453)	(486)		(3,930)	(1,236)
Increase (decrease) in cash and cash equivalents for the period				3,778	(3,522)		3,101	(17,063)
Cash and cash equivalents, beginning of period				16,940	18,871		17,617	32,412
Cash and cash equivalents, end of period				$ 20,718	$ 15,349		$ 20,718	$ 15,349

 

Balance Sheets (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

			September 30, 2012	December 31, 2011
Assets
Current assets:
	Cash and cash equivalents		$ 20,718	$ 17,617
	Restricted cash		-	1,739
	Accounts receivable		6,891	1,717
	Inventories		8,111	6,369
	Derivative assets		1,676	103
	Prepayments and other assets		590	900
			37,986	28,445
Exploration and evaluation assets			27,479	24,658
Producing properties			65,078	60,067
Plant and equipment			48,551	45,737
Reclamation deposits			8,290	8,538
Restricted cash			1,695	1,641
Deferred tax assets			13,093	20,365
Other assets			712	716
			$ 202,884	$ 190,167
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and other liabilities		$ 13,086	$ 12,754
	Employee-related liabilities		3,924	4,057
	Provisions		541	-
	Derivative liabilities		-	1,914
	Current portion of long-term debt		5,992	14,413
	Current portion of capital lease obligations		49	32
			23,592	33,170
Long-term debt			13,131	5,356
Capital lease obligations			150	67
Asset retirement obligations			10,831	10,678
			47,704	49,271
Shareholders' equity:
	Share capital		98,556	98,556
	Contributed surplus		20,316	18,968
	Warrants		-	878
	Stock options		3,404	3,128
	Retained earnings		33,261	20,011
	Accumulated other comprehensive loss		(357)	(645)
			155,180	140,896
			$ 202,884	$ 190,167

 

 

 

 

 

SOURCE: St Andrew Goldfields Ltd.

For further information:

For further information about St Andrew Goldfields Ltd., please contact:
Tel: [phone] or [phone]; Fax: [phone]; Website: www.sasgoldmines.com

Suzette N Ramcharan
Manager, Investor Relations
Email: [e-mail]

Jacques Perron
President & CEO
Email: [e-mail]

Ben Au
CFO, VP Finance & Administration
Email: [e-mail]