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 (m3) (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: 1-800-463-5139 or (416) 815-9855; Fax: (416) 815-9437; Website: www.sasgoldmines.com

Suzette N Ramcharan
Manager, Investor Relations
Email: sramcharan@sasgoldmines.com

Jacques Perron
President & CEO
Email: jperron@sasgoldmines.com

Ben Au
CFO, VP Finance & Administration
Email: bau@sasgoldmines.com