White Tiger Announces an Updated 2012 Production Forecast and the Commencement of Discussions with VTB Capital plc
TORONTO, Dec. 28, 2012 /CNW/ - White Tiger Gold Ltd. ("White Tiger" or the "Company") (TSX: WTG) today provided an update of its 2012 production forecast, outlined related actions being taken by the Company and announced that it is in discussions with VTB Capital plc ("VTB Capital") regarding its US$80.0 million loan facility (the "VTB Facility").
2012 Production Forecast
The Company currently expects 2012 gold production at its Savkino Mine of approximately 18,000 ounces instead of the original production target of 20,000 ounces. The production shortfall can be attributed primarily to longer leach times than planned (based on the metallurgical characteristics of ore stacked in the third and fourth quarters of 2012), under-utilization of crushers (due to significant rainfall over the summer) and faulty pit/crusher scales, resulting in less ore being stacked than anticipated. Nevertheless, the average grades from current Savkino operations are currently well in excess of 1.5g/t and we expect our cash costs for 2012 to be approximately $750/ounce. The Company currently has in excess of 29,000 ounces of gold on pad and with the longer leach times the Company expects an increase in gold production in the first and second quarters of 2013. We are maintaining our 2013 gold production guidance of approximately 48,000 ounces.
Commenting, Jim McBurney, CEO of White Tiger, said "While the Company is disappointed with the 2012 production shortfall we believe the appropriate actions are being taken to ensure that we will develop successfully our Russian assets. The next milestone will be to more than double our production in 2013. However, as the Company now expects not to meet its December 31, 2012 gold sales covenant under the VTB Facility, we have initiated discussions with VTB to ensure that we will continue to have access to the US$21.0 million remaining under the VTB Facility."
"In the mean time, we will complete the construction, installation and commissioning of the second crushing and screening unit in January, and install pump stations, complete the expansion of heap leaching pads and finish the construction of new accommodation facilities for the Phase 2 Expansion of the Savkino Mine. As we refocus on our Russian assets we will continue to review operations to ensure that the Company maintains the right capability and structure to deliver value to our shareholders."
Actions Being Taken by the Company
The Company has initiated a comprehensive review of operations at the Savkino Mine, which will be conducted during the first quarter of 2013 and led by Geoff Cowley, the Company's Chief Operating Officer. White Tiger will implement recommendations from the review as appropriate and as soon as practicable. The Company is also undertaking a series of metallurgical tests and is updating its life of mine model for the Savkino Mine.
In line with the Company's ongoing review of its organizational structure, Rinat Ismagilov, the General Director of White Tiger Gold Management LLC (the Company's Russian management company) has assumed direct responsibility for the operations at the Savkino Mine.
VTB Capital plc
As the Company now expects that it will not meet the December 31, 2012 gold sales covenant under the VTB Facility, VTB Capital has been notified to ensure that any potential concerns of VTB Capital are addressed and so that the Company will continue to have access to the remaining $21.0 million under the VTB Facility.
Pursuant to the VTB Facility, VTB Capital has been granted security by the Company in the form of guarantees of the companies that collectively hold White Tiger's interests in all of its Russian Federation projects and license areas (other than Olondo). The participatory interests in the Company's Russian subsidiaries (the "OpCos") and its shareholding in Diascia Investments Limited (the Company's Cyprus holding company) ("Diascia") are also pledged as security under the VTB Facility. The failure by the Company to meet the December 31, 2012 gold sales covenant constitutes an event of default under the VTB Facility and should a waiver by or an agreement with VTB Capital not be granted or reached, VTB Capital could attempt to realize its security under the VTB Facility and White Tiger could lose its interest in Diascia or one or more of the OpCos, and any mine, project or license area held by such entities.
About White Tiger
White Tiger Gold Ltd. is a TSX-listed mining and exploration company, focused on the development of mineral resources in the Russian Federation.
Caution Concerning Forward-Looking Information
This news release contains forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements") relating, but not limited to, the Company's expectations, intentions and beliefs (including, without limitation, statements regarding, the Company's mines, projects and licence areas, exploration and development plans (including the timing thereof) and potential, anticipated gold production and future plans and objectives of the Company. Words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology are used to identify forward-looking statements. Such statements are based on assumptions, estimates, opinions and analysis made by the management of the Company in light of their experience, current conditions and their expectations of future developments as well as other factors which they believe to be reasonable and relevant. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties that may cause actual results to vary include but are not limited to: changes in equity and debt markets; inflation; uncertainties relating to the availability and costs of financing needed to complete exploration, development and production activities; failure to establish estimated mineral resources or mineral reserves (the Company's mineral resource and mineral reserve figures are estimates and no assurances can be given that the indicated levels of gold will be produced); exploration costs varying significantly from estimates; delays in the exploration and development of, and/or commercial production from, the properties in which the Company has an interest; unexpected geological or hydrological conditions; the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties, including the failure of major mining and/or milling equipment; the availability to the Company of suitable financing alternatives; the ability of the Company to service its existing debt facilities; fluctuations in gold and other commodity prices; the existence of undetected or unregistered interests or claims, whether in contract or in tort, over the property of the Company; success of future exploration and development initiatives; competition; operating performance of facilities; environmental and safety risks, including increased regulatory burdens, seismic activity, weather and other natural phenomena; inability to, or delays in, obtaining necessary permits and approvals from government authorities; risks relating to labour; and other exploration, development and operating risks; changes to and compliance with applicable laws and regulations, including environmental laws; political, economic and other risks arising from the Company's activities in Russia; fluctuations in foreign exchange rates; and those risks set out in the Company's public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all.
Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE: White Tiger Gold Ltd.For further information:
White Tiger Gold Ltd. Jim McBurney, Chief Executive Officer firstname.lastname@example.org