New Dawn Mining Corp. Reports Financial Results for the Quarter Ended December 31, 2010

Quarterly Sales and Gold Production Levels Reach Record Highs

Q1 Fiscal 2011 - Quarter Ended December 31, 2010 Highlights
(All amounts are in US dollars)

  • Record Quarterly Consolidated Gold Sales of US$6.46 Million for the Quarter Ended December 31, 2010, as compared to gold sales of US$3.97 Million for the Quarter Ended December 31, 2009
  • 62.7% Increase in Quarterly Consolidated Gold Sales for the Quarter Ended December 31, 2010, as compared to the Quarter Ended December 31, 2009
  • 48.4% Increase in Quarterly Consolidated Gold Production for the Quarter Ended December 31, 2010, as compared to the Quarter Ended December 31, 2009

TORONTO, Feb. 14 /CNW/ - New Dawn Mining Corp. (TSX: ND) ("New Dawn" or the "Company") announced that its financial results and corresponding Management's Discussion and Analysis for the quarter ended December 31, 2010 have now been filed on SEDAR and are also available to view on the Company's website at www.newdawnmining.com.

The Company prepares its consolidated financial statements in U.S. Dollars and in accordance with Canadian Generally Accepted Accounting Principles. 

As a result of New Dawn having made an investment in Central African Gold Plc ("CAG") in June 2010, in which it acquired an 88.7% controlling interest, New Dawn has consolidated the operations of CAG for accounting purposes from June 16, 2010.  New Dawn increased its interest in CAG to approximately 89.9% during December 2010, and subsequently thereafter to approximately 95.2% as at February 10, 2011. 

Q1 FISCAL 2011 - QUARTER ENDED DECEMBER 31, 2010 HIGHLIGHTS

Selected unaudited quarterly financial information is presented below.

Quarters Ended
  Fiscal 2011 Fiscal 2010
  December 31,
2010
September 30,
2010
 June 30,
2010
 March 31,
2010
December 31,
2009
Operations          
Revenue $6,458,735 $5,059,903    $3,549,786   $3,801,780 $3,969,038
Net income (loss) for the period 96,598 (1,101,276) (150,969) (461,372) 927,494
Basic and diluted earnings (loss) per share 0.00 (0.03) (0.00) (0.02) 0.03
           
Balance sheet          
Total assets 50,437,852 44,820,031 43,493,749 19,620,871 18,628,285
Total liabilities 17,337,028 19,245,119 16,813,687 5,302,744 3,971,871
           
Other measures          
Quantity of gold produced (oz) 4,808  4,141 3,243 3,395 3,239
Quantity of gold sold (oz) 4,715 4,084 2,974 3,427 3,604
Intercompany loan repayments paid from Zimbabwe $- $- $- $436,455 $2,500,000
Revenue per oz (2) $1,370 $1,239 $1,194 $1,109 $1,101
Cash costs per oz (1) $874 $683 $756 $653 $580
Adjusted EBITDA (1) $1,286,691 $1,119,751 $380,702 $1,063,935 $1,439,065
           
Attributable (1)          
Revenue $6,184,661 $4,949,676 $3,549,786 $3,801,780 $3,969,038
Quantity of gold produced (oz) 4,577 4,023 3,243 3,395 3,239
Quantity of gold sold (oz) 4,515 3,999 2,974 3,427 3,604

(1)     Cash costs per oz, Adjusted EBITDA and Attributable are non-GAAP measures and are more fully described in the discussion at the end of the MD&A entitled "Non-GAAP Measures".

(2)     Revenue per ounce is calculated by dividing the revenue by the ounces of gold sold

Ian R. Saunders, President and CEO of New Dawn, commented, "I am very pleased to report record gold production and sales for the quarter ended December 31, 2010, which is a clear indication of the growth that our expanded portfolio of gold mining operations in Zimbabwe is capable of supporting. Our primary goal is to steadily increase monthly production to reach annualized run rates of 38,000 to 40,000 ounces of gold by the end of calendar 2011, and then to 50,000 to 60,000 ounces of gold by the end of calendar 2012. As well as looking to achieve these growth targets, we are also targeting a reduction in cash costs per ounce of gold produced as we realize improved economies of scale through increased gold production at our mines as part of our three gold camp operating strategy focused in Zimbabwe".

GOLD SALES

Consolidated gold sales for the quarter ended December 31, 2010 totalled US$6,458,735 (US$6,184,661 after adjusting for the minority interests' share of gold sales from the Central African Gold properties) at an average sales price per ounce of gold of US$1,370, as compared to US$3,969,038 (US$3,969,038 attributable) for the quarter ended December 31, 2009 at an average sales price per ounce of gold of US$1,101, an increase of 62.7% (55.8% increase on an attributable basis).

Consolidated gold sales for the quarter ended December 31, 2010 increased by 27.6% (25.0% increase on an attributable basis), as compared to gold sales for the previous quarter ended September 30, 2010 of US$5,059,903 (US$4,949,676 attributable) at an average sales price per ounce of gold of US$1,370.

100% of sale proceeds were received in US dollars.

GOLD PRODUCTION

Gold sales reached record levels as New Dawn reported increased consolidated gold production of 4,808 ounces of gold produced (4,577 ounces attributable to New Dawn, after adjusting for the minority interests' share of gold production from the Central African Gold properties) for the quarter ended December 31, 2010, as compared to 3,239 ounces of gold produced (3,239 ounces attributable) for the quarter ended December 31, 2009, an increase of 48.4% (41.3% increase on an attributable basis).

As compared to the production output of 4,141 ounces of gold produced (4,024 ounces attributable) for the previous quarter ended September 30, 2010, consolidated gold production for the quarter ended December 31, 2010 increased by 16.1% (13.8% increase on an attributable basis, after adjusting for the minority interests' share of gold production from the Central African Gold properties).

The increase in gold production was a result of greater tonnage mined and processed at the Turk Mine, as well as an increase in production output from the Central African Gold properties. This increase occurred despite a temporary shaft breakdown at Turk Mine, as well as additional downtime during the quarter for holidays. The Dalny and Old Nic Mines resumed operation in early August 2010 on a limited basis. During the quarter ended December 31, 2010, production output increased at both the Dalny and Old Nic Mines and, collectively, these mines contributed 1,154 ounces (923 ounces attributable) to New Dawn's total production output for the quarter ended December 31, 2010.  The Dalny and Old Nic Mines are expected to contribute an increasing proportion of New Dawn's consolidated gold production in future periods. 

New Dawn's 100%-owned Turk Mine produced 3,654 ounces of gold during the quarter ended December 31, 2010, as compared to 3,239 ounces of gold during the quarter ended December 31, 2009, an increase of 12.8%. Gold production at the Turk Mine for the quarter ended December 31, 2010 increased by 2.4%, to 3,654 ounces of gold, as compared to gold production for the previous quarter ended September 30, 2010 of 3,570 ounces of gold.

The Turk, Old Nic and the Dalny Mine all experienced an increase in gold production in line with management's operating plan to reach a consolidated production run rate of 38,000 to 40,000 ounces of annualized gold production by December 2011.

CASH COSTS

Average cash costs per ounce of gold produced for all mines was US$874 for the quarter ended December 31, 2010, as compared to US$580 for the quarter ended December 31, 2009, and as compared to US$691 for the quarter ended Sepember 30, 2010. 

Average cash costs per ounce of gold produced at the Turk Mine increased as a result of a high level of power outages in October 2010, a temporary shaft breakdown at the Turk Mine in November 2010, increased power costs from the continuous power supply contract in force from November 2010, increased labor rates, and the annual holiday shut-down in December 2010.  Although these factors limited the benefit that was realized from the continuous power supply contract during the quarter ended December 31, 2010, the Company expects its average cash costs per ounce of gold produced to improve subsequent to December 31, 2010 as a result of the increasing positive impact from the continuous power supply contract.  After taking into account all of these negative factors, the Turk Mine achieved cash costs per ounce of gold produced during the quarter ended December 31, 2010 of US$703.

As limited production has recently resumed at both the Old Nic and Dalny Mines, these mines are operating at reduced levels, and therefore the fixed cost component of their mining costs is being allocated over a sub-optimal number of ounces produced, thus increasing the cash costs per ounce of gold produced. This factor, combined with power outages, wage rates and the annual holiday shut-down, resulted in substantially higher cash costs per ounce of gold produced during the quarter ended December 31, 2010 than what was experienced at Turk Mine.  As a result, the average cash costs per ounce for all gold produced was US$874, which the Company believes will begin to trend downward as production levels increase and the factors impacting the quarter ended December 31, 2010 are either mitigated or eliminated. 

NET INCOME and ADJUSTED EBITDA

For the quarter ended December 31, 2010, New Dawn reported quarterly consolidated net income of US$96,598, as compared to the quarter ended December 31, 2009 of US$927,494.

For the quarter ended December 31, 2010, New Dawn reported adjusted EBITDA of US$1,286,691, as compared adjusted EBITDA for the quarter ended December 31, 2009 of US$1,439,065.

Despite record gold sales and production levels, both net income and adjusted EBITDA were lower on a period to period comparison as a result of increased costs directly attributable to increased power and labor costs, CAG restructuring costs, and higher mining and processing costs attributable to the resumption of mining operations at the Old Nic and Dalny Mines.

Management anticipates a reduction in corporate overhead costs in future periods to more normalized levels, and expects that mining and processing operations should reflect increasing efficiencies from economies of scale as production levels increase.

About New Dawn …

New Dawn is a Zimbabwe-focused junior gold company currently expanding gold production at its wholly-owned Turk Mine and, with its June 2010 investment in which it acquired an 88.7% controlling interest in Central African Gold, New Dawn is targeting consolidated annualized gold production of 50,000 to 60,000 ounces within the next 18 to 24 months, increasing to 100,000 ounces of annualized gold production within the next 4 to 5 years.  New Dawn increased its interest in Central African Gold to approximately 89.9% during December 2010, and subsequently thereafter to approximately 95.2%.

As the Turk Mine and the adjacent Angelus Mine are now interlinked on several levels underground, management no longer considers it feasible to separate the two mining projects.  Accordingly, they are now being treated for both operational and management purposes as one contiguous mining property, referred to as the Turk/Angelus Complex.  The Turk Mine is in production, and exploration work is continuing on the Angelus Mine. 

Having recently filed a NI 43-101-compliant mineral reserve and resource estimate for the Central African Gold properties acquired, New Dawn's total attributable mineral reserves, including its Turk Mine, increased 32% to 220,000 ounces of gold grading 3.81 g/t from 1,785,000 tons of mineralized material.  The attributable mineral reserves are comprised of attributable proven mineral reserves of 109,400 ounces of gold grading 3.69 g/t from 874,700 tons of mineralized material and attributable probable mineral reserves of 110,600 ounces of gold grading 3.78 g/t from 910,300 tons of mineralized material.

Additionally, New Dawn's total attributable measured and indicated mineral resources (inclusive of attributable mineral reserves) increased by 92% to 1,558,400 ounces of gold grading 2.37 g/t from 20,436,000 tons of mineralized material and New Dawn's total attributable inferred mineral resources increased by 54% to 552,600 ounces of gold grading 4.95 g/t from 3,477,000 tons of mineralized material. (Reference: New Dawn press release dated October 19, 2010)

Currently, New Dawn operates 3 significant gold camps in Zimbabwe, where it owns 6 mines, 3 of which are currently producing gold and expanding production.  New Dawn is on the path to becoming a leading gold mining company in Zimbabwe, active in both gold production and gold exploration, by employing modern mining techniques and deploying capital in a country that is geologically rich, highly prospective, and significantly under explored.

Additional information on New Dawn's gold reserve and resource estimates is included at the Company's website at www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.

The TSX has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

The contents of this news release were supervised and reviewed by Ian R. Saunders, B.Sc., who is President, Chief Executive Officer, and a Director of New Dawn Mining Corp., and who is a Qualified Person within the meaning of NI 43-101.

Special Note Regarding Forward-Looking Statements:  Certain statements included or incorporated by reference in this news release, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements.  The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements.  Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.  Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company.  Such factors include, among others, risks relating to reserve and resource estimates, gold prices, exploration, development and operating risks, political and foreign risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs and dependence on key employees.  See "Risk Factors" in the Company's Annual Information Form - 2010.  Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations.  Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.  Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise.

SOURCE New Dawn Mining Corp.

For further information:

Investor Relations Contact:  Richard Buzbuzian +1 416.585.7890

President and Chief Executive Officer:  Ian R. Saunders +1 416.585.7890

Visit us on the internet:  http://www.newdawnmining.com or

Email us at:  info@newdawnmining.com

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New Dawn Mining Corp.

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