SAS REPORTS 2011 FIRST QUARTER RESULTS

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/

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

TORONTO, May 6 /CNW/ - St Andrew Goldfields Ltd. (TSX: SAS), ("SAS" or the "Company") announces a net loss for the first quarter 2011 of $2.8 million, or $0.01 per share. Adjusted net loss for the quarter was $2.9 million, or $0.01 per share.

FIRST QUARTER 2011 HIGHLIGHTS

  • Production of 16,457 ounces of gold from the Holloway and Hislop mines, and pre-production ore from the Holt Mine.

  • The current production level reflects the transition to the Smoke Deep Zone at the Holloway Mine and the production ramp up at the Holt Mine from the initial 500 tpd to 1,000 tpd throughout the year.

  • The Holt Mine completed pre-production at the end of the quarter and entered commercial production at the beginning of the second quarter of 2011.

  • Revenues of $15.9 million from the sale of 11,740 ounces of gold (3) at an average realized price (1) of US$1,391 per ounce and at a production cost per ounce of $1,007 and production royalty cost per ounce of $72, for total a cash cost (1) of US$1,079 per ounce of gold sold.

  • Operating cash flow of $6.6 million before the repayment of Gold Notes (1).

  • Incurred $3.0 million in exploration expenditures at the Deep Thunder, Taylor and Garrison Creek projects delivered encouraging results.

  • Successful conversion of the Company's previous accounting policies under Canadian GAAP to International Financial Reporting Standards ("IFRS") (2).

  • SAS had the honour of receiving the Angus Campbell Award for "No Lost Time Accidents" for 2010 from the Porcupine and Northern Ontario Mines Safety Group. This is the third consecutive year receiving this prestigious award.

Note:

(1) See pages 6 - 9 for non-GAAP measures.
(2) Effective January 1, 2011, the Company changed over its accounting policies from Canadian GAAP to IFRS. Financial reports for periods since January 1, 2010, previously reported have been restated to conform to the accounting principles used in the preparation of the condensed interim financial report for the three months period ended March 31, 2011 (see the Company's Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011 ("Financial Report") and the First Quarter 2011 Interim Management Discussion and Analysis at the Company's website www.sasgoldmines.com or under the Company's profile at www.sedar.com).
(3) Gold sales exclude the sale of 5,044 ounces of gold poured from the Holt Mine while the operation was in pre-production.

"We are pleased to have brought the Holt Mine into commercial production at the beginning of the second quarter", said Jacques Perron, President and CEO of SAS. "We achieved one of our main objectives; to put three mines into production within eighteen months, and after only one year of significant exploration activities, we are pleased with our exploration efforts which have identified a number of prospective targets and returned encouraging results. This year is a pivotal year for the Company as we transition the main production zone at the Holloway Mine from Blacktop to Smoke Deep, and ramp up operations at the Holt Mine from 500 tpd to 1,000 tpd. We are confident that we will be able to improve on the grade and throughput abilities of the Hislop Mine, and continue to expand our activities in this area with the recent option of the Stroud property. At the end of 2011, we will have been able to achieve a number of milestones that will advance us towards becoming a 100,000 ounce gold producer in the Timmins mining district, and poise us for future growth possibilities."

Holloway Mine, Operational Review (see Operating and Financial Statistics on page 10)

The Holloway Mine gold production was negatively impacted by the increased importance of mining at the Lightning Zone, which is lower in grade than that of the Blacktop Zone. The ramp development to access the Smoke Deep Zone ("Smoke Deep") is expected to be completed in the third quarter of 2011, which will then allow for development of the zone for production. Exploration drilling began in the second quarter, and definition drilling is expected to begin soon after the completion of the ramp development further to the east, where the zone remains open. Gold sales in the first quarter decreased by 42% when compared to the previous quarter, but were within the Company's estimate for the quarter. The Holloway Mine is expected to produce between 20,000 - 23,000 ounces of gold in 2011.

Mine-site cost per tonne milled (1) in the first quarter of 2011 was negatively impacted as a result of a 39% decrease in throughput (operating costs at the mine are primarily fixed costs). The lower gold sales and a higher royalty cost in the quarter led to a $7.0 million decrease in cash margin from mine operations (1) achieved in the first quarter of 2011 when compared to the $10.0 million quarterly average since the mine recommenced gold production in the fourth quarter of 2009.

The Company expects the cost for operating the Holloway Mine will remain high until the development of Smoke Deep is completed in the first quarter of 2012, and the mined ore grade and throughput improve. These forecasts are subject to change as the Smoke Deep definition diamond drilling program will commence in the second quarter of 2011 and further information will be generated in order to upgrade the current level of inferred resources to measured and indicated resource categories.

Hislop Mine, Operational Review (see Operating and Financial Statistics on page 11)

The grade at the Hislop Mine gradually improved in the first quarter of 2011 but remained below the average reserve grade due to ore body continuity issues, which are anticipated to lessen as the pit is mined deeper and to the southeast. Throughput from the Hislop Mine increased in the first quarter of 2011 as a result of the excess capacity at the Holt Mill created by the reduction in ore processed from the Holloway Mine. Gold production improved by 24% when compared to the previous quarter and the Mine is on target to produce between 20,000 - 22,000 ounces for 2011.

Mine-site cost per tonne milled (1) increased by $8 per tonne to $61 per tonne from the cost incurred in the previous quarter as a result of the increased fuel costs during the first quarter as the market price of diesel fuel increased by $0.27 per tonne of rock mined or approximately $0.3 million when compared to the previous quarter. This resulted in decreased cash margin from mine operations by $0.3 million when compared to the previous quarter.

Holt Mine

The Holt Mine completed pre-production operations at the end of the first quarter and commenced commercial production at the beginning of the second quarter of 2011. During the quarter, 44,769 tonnes of low grade ore were mined from the Holt Mine at a rate of approximately 500 tonnes-per-day ("tpd").

In the first quarter of 2011, the Holt Mill processed 43,458 tonnes of ore from the Holt Mine at a head grade of 4.15 g/t Au, with a recovery rate of 93.6%. The Mine produced 5,435 ounces of gold, of which 5,044 ounces of gold were sold during the quarter and realized $6.8 million in revenue. Pre-production operating costs incurred in the first quarter of 2011 were $6.4 million which was within the Company's expectation.

The mined grade achieved in the first quarter of 2011 was lower than the overall grade for the Holt Mine reserves as ore was substantially derived from the C-103 Zone, which outlined an estimated reserve grade of 4.5 g/t Au as of December 31, 2010. Production was sourced from lower grade stopes within the C-103 Zone due to stope sequencing. Head grades from this location are expected to achieve the reserve grade of 4.5 g/t Au for the entire zone until completion of mining in the third quarter of 2011.

The litigation in respect of the Holt Royalty was heard by the Ontario Court of Appeal on March 28, 2011. The decision of the Court of Appeal is pending. While the Company believes that its position, that the Company's sole obligation under a royalty agreement previously entered into by Newmont Canada Limited and Barrick Gold Corporation was limited to a flat rate 0.013% NSR royalty on production from the Holt property will be upheld by the Court of Appeal, there can be no assurance that such outcome will occur. A decision of the Court of Appeal adverse to the Company's position will result in a material adverse impact on the Company's anticipated cash flow and earnings and a significant decline in the value of the Holt property.

Exploration Projects

The Company's planned $10.0 million exploration program for 2011, consisting of 66,000 metres of drilling at various targets is focused on targets that lie near its existing operations, and/or where previous exploration has identified anomalous zones of gold mineralization. Exploration programs for the upcoming months include:

  • Surface drilling east of the Blacktop Zone to follow up on significant results (hole 410‐058 which intersected 11.62 g/t Au over 14.4 metres and hole 410‐061 which intersected 6.55 g/t Au over 19.7 metres) returned from limited underground exploration;

  • Surface drilling at the Deep Thunder Zone near the Holloway Mine to systematically step‐out further to the east while expanding the current zone of gold mineralization;

  • Surface drilling as part of a second phase of drilling on the Taylor Project to better define the gold distribution, as well as to explore the new footwall zone identified below the previously defined West Porphyry Zone;

  • Continued surface drilling at Garrison Creek in order to better define and delineate the potential for gold mineralization along the Garrison Fault that hosts the syenite, and into the host volcanic and sedimentary rocks; and

  • Commence surface drilling on the newly optioned Plato property in Holloway Township (which lies in close proximity to the Deep Thunder Zone) and the Hislop property recently optioned from Stroud Resources Ltd.

SAS currently has 8 surface drills turning and will be providing drilling results from these exciting projects throughout the year. The Company will also continue to assess other opportunities in the district that fit with the current mix of properties.

Qualified Person
Production at the Holloway, Hislop and Holt mines, and processing at the Holt Mill are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's Vice President & General Manager, East Timmins Operations. The exploration programs on the Company's various mineral properties are under the supervision of Michael Michaud, P.Geo., the Company's Vice President of Exploration. Mr. Middlemiss and Mr. Michaud are SAS' qualified persons as defined by NI 43‐101, and both have reviewed and approved this news release.

Non-GAAP Measures
The Company has included non-GAAP performance measures, adjusted net earnings (loss), cash flow from operations before repayments of Gold Notes, average realized price per ounce of gold sold and total cash costs per ounce of gold sold, cash margin from mine operations and mine-site cost per tonne milled throughout this press release which do not have standardized meanings prescribed by 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 press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011.

The Balance Sheets, Statements of Operations and Statements of Cash Flows of the Company for the three months ended March 31, 2011 can be found on pages 12 - 14.

To review the complete Unaudited Condensed Interim Financial Report for the three months ended March 31, 2011, and First Quarter 2011 Interim Management's Discussion and Analysis, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or on 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, northeastern Ontario which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada. SAS is focused on developing its assets in the Timmins Camp with three producing mines and aggressive exploration activities 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 regarding the planned 2011 gold production levels at the Holloway, Hislop and Holt mines; the capital expenditures required to develop the Smoke Deep Zone at the Holloway Mine and the development of Zone 4 at the Holt Mine, and the timing thereof; the improvement in ore grade and reduction in costs at the Hislop Mine and the Holt Mine; the anticipated manpower levels at the Holt Mine (and the ability to achieve same); the Company' ability to attract and maintain adequate, skilled manpower to operate the Holloway, Holt and Hislop mines; and the completion of the exploration program at the Deep Thunder Zone, the Taylor Project, the Garrison Creek projects and the recently acquired Plato and Hislop properties. 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, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources, unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels, the Company's expectations with respect to gold prices during the tenure of the Company's Gold Notes; fluctuations in gold prices and exchange rates, insufficient funding or delays or inability to raise additional financing on satisfactory terms, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions, changes in conditions in the financial markets and an adverse Appeal Court decision on the Holt Royalty. Such forward looking information is based on a number of assumptions, including but not limited to the expected timeline to complete pre-production activities, the availability of adequate financing, the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates and general business and economic conditions. 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.

NON-GAAP MEASURES

Adjusted net earnings (loss)
Adjusted net earnings (loss) are calculated by removing the gains and losses, net of income tax, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivative contracts, and one-time gains or losses on the disposition of non-core assets and expenses, 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 reports, to assist in the understanding of the Company's operating results and financial position.

   
Amounts in thousands of  Canadian dollars, except per share amounts Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
       
Net income (loss) per Financial Reports       $(2,753)       $4,806       $(235)
Change in fair value of gold delivery commitment and embedded derivative instruments associated  with the  Gold Notes (202) (877) 1,346
Change in fair value of  gold delivery commitment associated with the advance royalty payment obligation 191 (187) 665
Change in fair value of derivative foreign exchange contracts (93) (880) (796)
Write down of mining assets - 263 -
Total adjusted net earnings (loss) $(2,857) $3,125 $980
       
Weighted average number of shares outstanding      
Basic 367,716,286 327,426,358 362,311,097
Diluted 371,318,380 334,711,035 366,645,371
       
Adjusted net earnings (loss) per share      
Basic and diluted $(0.01) $0.01       $0.00
       

Operating cash flow before repayment of Gold Notes
SAS uses the financial measure operating cash flow before repayment of Gold Notes to supplement the information included in its Financial Reports. The presentation of operating cash flow before repayment of Gold Notes does not constitute a measure recognized by IFRS and is not meant to be a substitute for cash flow from operations or cash flow from operating activities presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Operating cash flow before repayment of Gold Notes excludes the non-cash value of gold delivered to the Company's Gold Note holders.

The term operating cash flow before repayment of Gold Notes does not have a standardized meaning prescribed by IFRS, and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies. The Company's Management believes that the presentation of operating cash flow before repayment of Gold Notes provides useful information to investors because it excludes the repayment of Gold Notes in working capital items, and is a better indication of the Company's cash flow from operations and is considered by Management to be meaningful in evaluating the Company's past financial performance and its future prospects. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of the Company's operating mines to generate cash flow.

   
Amounts in thousands of  Canadian dollars Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
Operating cash flow per Financial Reports       $4,027       $3,263 $6,697
Repayments of Gold Notes 2,573 2,752 2,585
Operating cash flow before repayments of Gold Notes $6,600 $6,015 $9,282
       

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 months ended March 31, 2011:

   
Amounts in thousands of Canadian dollars, except per ounce amounts or otherwise indicated Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
Mine-site costs per Financial Reports $11,665 $8,669 $14,018
Production royalties per Financial Reports (1) 829 1,133 1,684
Production royalties related to the Hislop Mine operations (2) - - (293)
Total cash costs $12,494 $9,802 $15,409
       
Divided by gold ounces sold 11,740 17,930 17,952
       
Total cash cost per ounce of gold sold
(Canadian dollars)
$1,064 $540 $858
       
Average CAD:USD exchange rate 0.99 1.04 1.01
       
Total cash cost per gold ounce sold (US$) $1,079 $525 $850
       
Breakdown of total cash cost per ounce of gold sold (US$)      
      Holloway Mine $948 $525 $704
      Hislop Mine 1,301 - 1,192
  $1,079 $525 $850

   
Amounts in thousands of Canadian dollars, except per ounce amounts or otherwise indicated Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
Breakdown of mine-site costs by producing mines      
      Holloway Mine $6,052 $8,669 $7,667
      Hislop Mine 5,613 - 6,351
  $11,665 $8,669 $14,018
       

Note:

(1) During 2010, the Company recorded royalty expenses in the amount of $95 relating to gold production from the Holloway Mine for the period from October 1, 2009, to December 31, 2009. This amount is allocated to the relevant periods for the calculation of total cash cost per ounce of gold sold. An adjustment of the royalty expense in the amount of $112 for the three months ended March 31, 2010, has been added as a component of the Holloway Mine production royalty costs.
(2)  Commencing the first quarter of 2011, the Company reports the implicit interest on the Hislop advanced minimum royalty obligation as a financing cost. For periods since January 1, 2010, the production royalty recorded for the Hislop Mine when gold is produced have been reclassified as a financing cost accordingly.

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, in order to be economically viable, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled. Management is aware that this per tonne milled measure is impacted by fluctuations in production levels 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 Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
Holloway Mine      
Mine-site costs $6,052 $8,669 $7,667
Inventory adjustments (1) (439) (308) (1,048)
Mine-site operating costs $5,613 $8,361 $6,619
       
Divided by tonnes of ore milled 50,625 85,842 82,659
       
Mine-site cost per tonne milled $111 $97 $80
       

   
Amounts in thousands of Canadian dollars, except per tonne amounts Three months ended
  March 31, 2011 March 31, 2010 December 31, 2010
       
Hislop Mine      
Mine-site costs $5,613 $- $6,351
Inventory adjustments (1) 1,144 - (1,117)
Mine-site operating costs $6,757 $- $5,234
       
Divided by tonnes of ore milled 110,875 - 98,333
       
Mine-site cost per tonne milled $61 $- $53
       

Note:

(1)  This inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory.

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.

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.

Operating and Financial Statistics - Holloway Mine

           
Amounts in thousands of Canadian dollars, except per ounce and per tonne amounts          
  Three months ended
  March 31, December 31, September  30, June 30, March 31,
Holloway Mine (1) 2011 2010 2010 2010 2010
           
Tonnes mined 51,820 84,987 88,369 85,673 84,824
           
Tonnes milled 50,625 82,659 87,162 84,930 85,842
Head grade (g/t Au) 4.13 4.85 5.99 6.78 6.50
Average mill recovery 86.4% 85.9% 84.7% 87.7% 88.8%
           
Gold produced (ounces) 5,813 11,069 14,230 16,231 15,929
Gold sold (2) (ounces) 7,364 12,694 16,004 14,819 17,930
           
Gold sales (2) $9,996 $17,508 $20,385 $18,484 $20,756
           
Cash margin from mine operations (2)(4) $3,115 $8,450 $11,420 $9,888 $11,066
           
Mine-site cost per tonne milled (C$) (4) $111 $80 $73 $95 $97
           
Total cash cost per ounce of gold sold (3)(4) (US dollars):          
Production costs $834 $596 $442 $467 $464
Production royalties 114 108 97 84 61
Total cash cost per ounce of gold sold (1) 948 704 539       551       525
Non-cash costs:          
    Depreciation and depletion 345 263 189 168 122
Total production cost per ounce of gold sold (3)(4) (US dollars) $1,293 $967       $728       $719       $647
           
Average CAD:USD exchange rate 0.99 1.01 1.04 1.03 1.04
           
Capital expenditures $2,779 $2,333       $1,794       $628       $315
           

Note:

(1)  The Holloway Mine commenced production in October 2009.
(2)  Includes 1,860 ounces of gold delivered to the Gold Note holders in each of the quarters ended March 31, 2011, December 31, 2010, and September 30, 2010; and 2,430 ounces of gold delivered in the first and second quarters of 2010.
(3)  During the second quarter of 2010, the Company recorded an accrual of royalty expenses in the amount of $207 relating to gold production from the Holloway Mine for the period from October 1, 2009, to March 31, 2010. This amount has been allocated to the relevant periods for the calculation of total production cost per ounce of gold sold.
(4) See pages 6-9 of this press release for non-GAAP Measures

Operating and Financial Statistics - Hislop Mine

           
Amounts in thousands of Canadian dollars, except per ounce and per tonne amounts          
  Three months ended
  March 31, December 31, September 30, June 30, March 31,
Hislop Mine (1) 2011 2010 2010 2010 2010
           
Over burden stripped (m3) 291,307 66,477 222,883 147,182 144,745
           
Tonnes mined (ore) 117,138 101,425 107,461 82,827 1,911
                          (waste) 927,216 1,013,011 599,790 358,661 43,079
  1,044,354 1,114,436 707,251 441,488 44,990
           
Waste-to-Ore Ratio 7.9 10.0 5.6 4.3 22.5
           
Tonnes milled 110,875 98,333 110,587 54,051 1,879
Head grade (g/t Au) 1.66 1.54 1.51 1.35 2.25
Average mill recovery 88.0% 86.3% 87.5% 84.0% 83.4%
           
Gold produced (ounces) 5,209 4,195 4,682 1,962 113
Gold sold (2) (ounces) 4,376 5,258 3,756 1,578 -
           
Gold sales (2) $5,947 $7,253 $4,799 $- $-
           
Cash margin from mine operations (3)(4) $334 $609 $176 $- $-
           
Mine-site cost per tonne milled (C$) (4) $61 $53 $49 N/A N/A
           
Total cash cost per ounce of gold sold (US dollars) (3)  $1,301       $1,192       $1,114       N/A       N/A
Non-cash costs:          
      Depreciation and depletion 95 46 29 N/A N/A
Total production cost per ounce of gold sold (3)(4) (US dollars)  $1,396       $1,238       $1,143       N/A       N/A
           
Average CAD:USD exchange rate 0.99 1.01 1.04 1.03 1.04
           
Capital expenditures       $1,885       $1,944       $900       $2,155       $1,135
           

Note:

(1) Pre-production activities to prepare the Hislop Mine commenced in early 2010 and were completed at the end of the second quarter. The Hislop Mine began production in the third quarter of 2010. The operating results for the Hislop Mine prior to June 30, 2010, were classified as exploration or site maintenance and pre-production expenditures where appropriate.
(2) During pre-production, the Hislop Mine sold 1,578 ounces of gold for revenue of $2,033. These incidental gold sales were recorded as a component of pre-production and mine development expenditures.
(3) Commencing the first quarter of 2011, the Company reports the implicit interest on the Hislop advanced minimum royalty obligation as a financing cost. For periods since January 1, 2010, a production royalty cost was recorded for the Hislop Mine when gold is produced with a corresponding decrease in interest expense. These amounts have been reclassified as a financing cost to conform with the presentation adopted for the current period.
(4) See pages 6-9 of this press release for non-GAAP Measures

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

         
      Three months ended March 31, 
      2011 2010
         
         
Gold sales    $                  15,943  $                    20,756
         
Operating costs and expenses:      
  Mine site operating                         11,665                           8,669
  Production royalty                               829                           1,021
  Site maintenance and pre-production                             (315)                              801
  Exploration                           2,284                           1,047
  Corporate administration                           2,261                           1,764
  Depreciation and depletion                           3,308                           2,437
  Write-down of mining assets                                    -                                263
                            20,032                        16,002
Operating income (loss)                         (4,089)                           4,754
         
Interest expense                              (773)                        (2,082)
Other income (expense)                               997                           2,134
Income (loss) from before income taxes                         (3,865)                           4,806
Deferred taxes                         (1,112)                                  -  
Net income (loss) for the period    $                   (2,753)  $                      4,806
         
Other comprehensive income (loss)      
Unrealized gain (loss) on available for sale investments, net of tax (nil for both periods)                             (73)                                65
Comprehensive income (loss) for the period    $                   (2,826)  $                      4,871
         
Basic and diluted income (loss) per share     $                     (0.01)  $                         0.01
         
Weighted average number of shares outstanding      
Basic             367,716,286              327,426,358
Diluted               371,318,380              334,711,035
         

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

     
      Three Months Ended March 31,
      2011 2010
Cash provided by (used in):    
         
Operating activities:    
  Net Income (loss) for the period  $                   (2,753)  $                      4,806
  Items not affecting cash:    
    Deferred taxes                           (700)                                  -  
    Net change in fair value of secured gold notes and advance minimum royalty payment obligation                             (11)                        (1,064)
    Implicit interest on secured gold notes and advance minimum royalty payment obligation                             623                           1,725
    Repayment of Gold Notes                       (2,573)                        (2,752)
    Depreciation and depletion                         3,308                           2,437
    Write-down of mining assets                                  -                                263
    Share-based payments                             432                              239
    Change in fair value of derivative foreign exchange contracts                             (93)                            (880)
    Accretion of reclamation liability                              132                              125
  Change in non-cash operating working capital and other                         5,662                        (1,636)
                              4,027                           3,263
Investing activities:    
    Additions to exploration and evaluation assets                           (545)                              (58)
    Additions to producing properties and mine development                       (4,624)                        (1,569)
    Additions to plant and equipment                       (1,419)                            (443)
    Proceeds from sale of non-core assets                                  -                                  25
                            (6,588)                        (2,045)
Financing activities:    
    Share purchase warrants and stock options exercised                                  6                              488
    Share purchase plan contributions                                  -                                106
    Advance minimum royalty payments                           (406)                            (225)
    Capital lease obligations                              (10)                              (27)
                                (410)                              342
         
Increase (decrease) in cash and cash equivalents for the period                       (2,971)                           1,560
Cash and cash equivalents, beginning of period                       32,412                        15,644
Cash and cash equivalents, end of period  $                  29,441  $                    17,204

 

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

    March 31, 2011 December 31, 2010
       
Assets    
Current assets:    
  Cash and cash equivalents  $                  29,441  $                    32,412
  Accounts and settlements receivable                         4,521                        10,694
  Inventories                         7,091                           5,081
  Fair value of derivative contracts                         2,048                           1,955
  Prepayments and other assets                             988                           1,694
                          44,089                        51,836
       
Exploration and evaluation assets                       23,854                        23,309
Producing properties and mine development                       48,624                        46,357
Plant and equipment                       42,860                        42,401
Reclamation deposits                         8,471                           8,471
Restricted cash                         2,734                           2,734
Deferred tax assets                             575                                  -  
Other assets                             955                              996
     $                172,162  $                  176,104
       
Liabilities and Shareholders' Equity    
Current liabilities:    
  Accounts payable and accrued liabilities  $                  15,071  $                    15,885
  Employee-related liabilities                         3,657                           2,535
  Current portion of long-term debt                       10,865                        10,623
  Current portion of capital lease obligations                                 12                                18
                          29,605                        29,061
       
Long-term debt                       12,737                        14,838
Capital lease obligations                                  1                                   5
Asset retirement obligations                        10,288                        10,156
Deferred taxes                                  -                                125
                          52,631                        54,185
       
Shareholders' equity:    
  Share capital                     219,320                      218,482
  Share capital to be issued                                  -                                832
  Contributed surplus                       42,972                        42,972
  Warrants                             878                              878
  Stock options                          4,156                           3,724
  Deficit                  (147,428)                    (144,675)
  Accumulated other comprehensive loss                           (367)                            (294)
                       119,531                      121,919
     $                172,162  $                  176,104

 

  

 

SOURCE St Andrew Goldfields Ltd.

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

 

Profil de l'entreprise

St Andrew Goldfields Ltd.

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