Shares List Toronto Stock Exchange: Symbol - ND
TORONTO, Aug. 12 /CNW/ - New Dawn Mining Corp. (the "Company") is pleased
to announce its financial results for the period ended June 30, 2008. The
Company prepares its consolidated financial statements in U.S. Dollars and in
accordance with Canadian Generally Accepted Accounting Principles. To review
the complete interim unaudited financial statements or Management's Discussion
and Analysis, please see the Company's SEDAR filings at www.sedar.com or on
the Company's website at www.newdawnmining.com.
The third quarter was highlighted by the following activities:
- Revenue from continuing operations of $1.96 million
- Gold production of 2,194 ounces.
- Initial Public Offering/TSX listing generated gross proceeds of
$6.0 million Canadian Dollars.
- Net loss of $0.07 million, or $(0.003) per share, basic and diluted.
- Cash and cash equivalents of $6.20 million
The Company is engaged in the production of gold and related activities
including exploration, development, mining and processing in the Southern
African Development Community (SADC). The Company's principal assets are; the
producing Turk Mine in Zimbabwe, the advanced exploration project Angelus Mine
in Zimbabwe, and the advanced exploration project Blue Dot Property mine in
South Africa. The Turk Mine and the Angelus Mine are contained within a large
contiguous block of claims, with a total area of 2,171 hectares. In addition,
the Company holds an additional 357 hectares of other claims within 10
kilometers of the Turk Mine. The Blue Dot Property has two mineral packages of
1,145 hectares and 2,746 hectares The Company has significant additional
prospective assets that form a portfolio of exploration properties and include
the Consolidated Bubi Gold Fields, Consolidated Midlands Gold Fields and
Consolidated Shurugwi Gold Fields properties, all of which are located in
Third Fiscal Quarter 2008 (Three Months Ended June 30, 2008)
Revenue for the third quarter of 2008 was $1.96 million, compared with
$2.1 million for the second quarter of 2008. In the 2008 quarter, 2,194 ounces
of gold were sold at an average price of $898.80 per ounce. Total sales of
gold were $1.96 million in the third quarter of 2008, compared with
$2.47 million in the third quarter of 2007. Gold production is lower then the
same period last year due to reduced labour availability, power shortages, and
disruption of consumables delivery due to the delayed payment of US$ gold
proceeds by the Reserve Bank of Zimbabwe.
Total operating costs for the third quarter of 2008 were $1.89 million.
The at mine cash cost per ounce of gold sold was US$559.70 in the third
quarter. The high cash costs incurred at the Turk Mine are directly related to
lower production, the artificially low rate of exchange in April 2008, and the
fact that, due to the delayed payment in US$ gold proceeds by the Reserve Bank
of Zimbabwe, the Company had to purchase key consumables in the local Zimbabwe
market at inflated values that resulted in high translated US$ costs.
SOURCES and LIQUIDITY
At June 30, 2008, cash and cash equivalents were $6.20 million, a
$4.75 million increase from $1.45 million at March 31, 2008. During the
quarter ended June 30, 2008, $5.04 million was received from the net proceeds
of the Initial Public Offering/TSX listing completed on June 13, 2008. Also
during the quarter, $0.48 million was invested in deferred exploration costs
in the Blue Dot Property in South Africa. The Company has no long-term debt
obligations and has working capital of $9.81 million at June 30, 2008.
During the third quarter of 2008, 23,236 tonnes of ore from the Turk Mine
were processed at an average grade recovered grade of 2.93 g/t, and
2,194 ounces of gold were sold. Tonnage processed was 22% lower then the
same period in 2007. This is attributable to the constrained labour
availability that has resulted in a reduced stoping and development
program, as well as periodic load shedding by the local power utility
company. Staff recruitment and retention is a high priority at the mine
site, and a number of programs have been initiated to that end.
Adjustments to work programs have been optimized for the available labour
force. The average recovered grade is lower then the same period in 2007,
attributable to a reduced development/stope tonnage ratio as development
grade is typically of higher grade than the stoping grade, reduced
internal control cut off grade from 3.0 g/t to 2.0 g/t in May 2008 and
changes to development cut off at 2.25 g/t and stoping at 2.75 g/t in
June 2008, and the stoping grade being marginally below call in April and
May 2008. The reduced cut off grade was a result of higher gold prices
and thus more efficient use of resources. An improvement in the economic
environment in Zimbabwe would be expected to result in a significant
improvement in operating results at the Turk Mine.
Both a surface and underground exploration program that is being funded
from internally generated cash flows is ongoing. The underground program
involves the assessment of mineral reserves and resources through a
detailed and systematic drilling program. The first phase of the program
is complete and the resultant Reserves and Resources are expected to be
published in the Annual Independent Reserve and Resource Report, expected
to be available in October 2008.
Blue Dot Mine(1)
The underground infrastructure is effectively ready for production and
the drilling and development program is currently outlining ore grade
material for stoping. The processing plant is currently being refurbished
and upgraded and the commissioning of the mill is expected in the quarter
ending September 30, 2008. It is expected that the first full fiscal
quarter of operations ending December 31, 2008 will see a blend of early
development ore and current mined material. It is anticipated that the
mine should be fully functional in the second fiscal quarter ending
March 31, 2009.
(1) New Dawn Mining Corp. owns a 74% interest in Blue Dot Properties 40
(Pty) Limited, a South African company with two exploration properties.
South African legislation requires that indigenous people hold an
interest in such projects under the Black Economic Empowerment (B.E.E.)
rules. The minority interest in Blue Dot is owned by a company that
qualifies as a B.E.E. participant with the result that this investment
meets the requisite legislation.
The focus of the Company, in the next quarter and beyond, will be the
continued exploration and development of the Angelus Mine, the development and
start-up production of the Blue Dot Mine, and the continued production and
development at the Turk Mine. The Company has initiated work on its other
prospects and continues to look for and assess new projects on an ongoing
basis. The Company expects to fund these efforts from the net proceeds from
the Initial Public Offering, as well as from the cash on hand and cash flow
The Company's working capital at June 30, 2008 is $9.81 million.
Management believes the current working capital is sufficient to fund the
Company's planned exploration and development activities and overheads through
the remainder of fiscal 2008 and beyond, including all currently planned
Due to the continued delay in payment of US$ gold proceeds and current
economic turmoil in Zimbabwe, the Company has been forced to alter its current
operating program, which was designed to maximize output, subject to certain
operational constraints, to one which reverts to an exploration drilling and
mine development (i.e., no stope depletion) program. This new operating
program has been designed to ensure continuity of operations, for as long a
period as possible, utilizing current inventory levels and onshore cash
resources. Should the Company start to receive payment of US$ gold proceeds
within the stipulated time frames, the previous operating mode can be
reinstated relatively quickly. However it is likely that, if the continued
delays in US$ payments continue and the Company does not begin to receive
substantial and sustained payment for gold produced, the Company will be
forced, in the coming quarter, to further revise, and potentially curtail, its
operating programs in Zimbabwe.
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 May 29, 2008 Prospectus. 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 Management
Discussion and Analysis 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.
For further information:
For further information: Investor Relations Contact: Darryl J. Harding,
(416) 585-7890; President and Chief Executive Officer: Ian R. Saunders, (416)
585-7890; Visit us on the internet: http://www.newdawnmining.com or Email us