SAS reports 2014 fourth quarter and year end results, increases reserves and resources, and announces a positive production decision for the Taylor Project

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

TORONTO, Feb. 12, 2015 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") incurred a net loss attributable to shareholders for Q4 2014 of $0.07 million or nil, on a per share basis, compared to net loss of $4.4 million, or $0.01 per share, in Q4 2013. Adjusted net earnings (1) for Q4 2014 was $0.1 million, or nil, on a per share basis as compared to an adjusted net loss (1) of $4.7 million or $0.01 share for Q4 2013.

For FY 2014, net loss attributable to shareholders was $8.8 million or $0.02 per share as compared to net loss of $5.0 million or $0.01 per share for FY 2013. The FY 2014 result includes a one-time non-cash impairment loss on the Aquarius Project of $13.1 million.

Adjusted net loss (1) for FY 2014 was $0.3 million, or nil, on a per share basis as compared to an adjusted net loss (1) of $5.4 million, or $0.01 per share, for FY 2013.

Q4 2014 and FY 2014 HIGHLIGHTS

Gold production - Production from the Holt and Holloway Mines in Q4 2014 was 22,643 ounces of gold, a decline of 7% from Q4 2013, as mining operations at the Hislop Mine ceased since mid-2014. FY 2014 production of 90,676 ounces of gold achieved the mid-range of the Company's 2014 production guidance.

Gold sold - Sold 20,744 ounces of gold in Q4 2014 at an average realized price (1) of US$1,202 per ounce for revenues of $28.4 million. Gold sales revenue of $124.0 million for FY 2014 decreased by $19.0 million or 13% from FY 2013 due to a 10% decline in gold price and the decrease in production.

Total cash cost per ounce of gold sold (1) - Mine cash costs decreased by 16% to US$706 per ounce for Q4 2013. In conjunction with a royalty cost of US$110 per ounce, total cash cost (1) for Q4 2014 was US$816 per ounce. For FY 2014 mine cash cost of US$738 per ounce of gold sold was below the Company's guidance.

All-in sustaining cost (AISC) (1) - Decreased by 11% or US$123 from Q4 2013 to US$1,042 per ounce of gold sold in Q4 2014. FY 2014, AISC of US$1,072 per ounce of gold sold, down by US$101 per ounce, when compared to FY 2013.

Cash margin from operations (1) - Increased by 18% from Q4 2013 to $9.2 million earned in Q4 2014. For FY 2014 SAS earned cash margin of $40.5 million, a decrease of $10.8 million as compared to $51.3 million for FY 2013, substantially due to a 10% decline in gold price.

Operating cash flow - SAS generated $7.6 million in operating cash flow for Q4 2014 as compared to $6.9 million in Q4 2013. Cash flow from operations for FY 2014 was $30.9 million, or $0.08 on a per share basis, as compared to $36.5 million or $0.10 per share in FY 2013. The Company was successful in controlling operational spending to adapt to the low gold price environment.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

OUTLOOK FOR 2015

SAS is forecasting 2015 annual production of between 85,000 – 95,000 ounces of gold from Holt and Holloway with similar mine cash cost estimates as in 2014 of between US$750 and US$800 per ounce of gold sold.

The Company is also focused on bringing its wholly-owned Taylor Project towards commercial production by the end of 2015.

Capital budgets for 2015 of $26.0 million consist of the following:






Expressed in millions of Canadian dollars





Holt




$16.0

Holloway




0.9

Holt Mill




2.0





18.9

Taylor (net of gold sales during pre-production of $10.0)




7.0

Corporate and Other




0.1





$26.0

Exploration programs in 2015 will continue to focus on key targets at Holt Deep (Zone 4 Extension), Taylor, Holloway East Complex, the Hislop property, and several near mine targets at Holt and Holloway. 

"2014 was a transitional year for SAS, where we saw a 30% increase in throughput at Holt, the extension of mine life at Holloway, and the depletion of open pit reserves at Hislop. Overall, we are proud of our production achievement this year and wish to thank our employees for their contribution throughout the year," said Duncan Middlemiss, President and CEO of SAS. "We are also pleased with the results of the Taylor second bulk sample and have made the decision to advance the project towards production. This represents a new mining front for the Company and we look forward to maximizing the potential at Taylor. Our exploration programs have delivered excellent results in 2014, and are the main contributor in the 25% increase in the year end Mineral Reserves and the 24% increase in the Inferred Mineral Resource category. We look forward to reporting on our progress in developing Taylor as our next mine and in other areas as 2015 advances."

Conference Call Information
A conference call will be held Friday, February 13, 2015 at 10:00 a.m. (EST) to discuss the fourth quarter and annual 2014 results. Participants may join the call via webcast at www.sasgoldmines.com or call in toll free at 1-866-212-4491.  A playback of the conference call will be available via the website and will be posted within 24 hours of the call.

Mineral Reserves and Mineral Resources Update
Compared to the December 31, 2013 Mineral Reserves Estimates, the December 31, 2014 Mineral Reserves Estimates increased from approximately 668,000 ounces of gold to approximately 833,000 ounces of gold. The net increase in Mineral Reserves, taking into account FY 2014 production of 90,676 ounces (97,725 ounces in-situ) depleted from 2013 Mineral Reserve Estimates, was approximately 263,000 ounces.

Compared to the December 31, 2013 Mineral Resources Estimates, the December 31, 2014 Mineral Resources Estimates have decreased by approximately 135,000 ounces of gold or 5% in the measured and indicated categories and increased by 1,065,000 ounces of gold or 98% in the inferred category. Most notably, the gain of just over 1 million of inferred ounces is due to the addition of new zones such as McKenna West, DL Zone, Zone 4 West, NBS, and Zone 4 Vertical at the Holt Mine.

SAS – Mineral Reserves Estimates (December 31, 2014)


Property


Proven


Probable


Proven + Probable


Tonnes('000)


Grade
(g/t Au)


Ounces Au
('000 oz)


Tonnes
('000)


Grade
(g/t Au)


Ounces Au
('000 oz)


Tonnes
('000)


Grade
(g/t Au)


Ounces Au
('000 oz)

Holt


1,452


4.26


199


2,414


5.05


392


3,866


4.75


591

Holloway


-


-


-


233


5.35


40


233


5.35


40

Taylor


-


-


-


774


6.27


156


774


6.27


156

Hislop


-


-


-


280


5.16


46


280


5.16


46

TOTAL


1,452


4.26


199


3,701


5.33


634


5,153


5.03


833

Notes: 

a)         

Mineral Reserves were estimated by Management according to CIM Definition Standards – November 2010;

b)        

Mineral Reserves were estimated using a gold price of US$1,250 per ounce and an exchange rate of C$1.08 = US$1.00;

c)         

Mineral Reserves for  Holt were estimated using a "stope by stope" method at an averaged cut-off grade of 3.02 g/t Au;

d)         

Mineral Reserves for Holloway were estimated using a "stope by stope" method at an average cut-off grade of 4.11 g/t Au;

e)         

Mineral Reserves for Hislop were estimated using a "stope by stope" method at an average cut-off grade of 3.00 g/t Au for Thor;

f)          

Mineral Reserves for Taylor were estimated using a "stope-by-stope" method with average cut-off grade of 3.48 g/t;

g)         

Tonnes and gold ounce information is rounded to the nearest thousands. As a result, rows and columns may not add up exactly due to rounding.

h)         

Work was done under the supervision of Keyvan Salehi, P.Eng., MBA, (SAS Sr. Director of Corp Dev & Tech Services).

 

SAS – Mineral Resources Estimates (December 31, 2014)







Project


Measured

Indicated

Measured + Indicated

Inferred


Tonnes
('000)

Grade
(g/t Au)

Ounces
Au
('000 oz)

Tonnes
('000)

Grade
(g/t Au)

Ounces
Au
('000 oz)

Tonnes
('000)

Grade
(g/t Au)

Ounces
Au
('000 oz)

Tonnes
('000)

Grade
(g/t Au)

Ounces
Au
('000 oz)

Holt


3,702

3.97

473

3,861

3.90

485

7,563

3.94

957

7,866

4.67

1,181

Holloway


310

4.71

47

482

4.54

70

792

4.61

117

2,479

4.88

389

Hislop


-

-

-

983

4.01

127

983

4.01

127

690

4.16

92

Taylor


-

-

-

2,323

4.76

356

2,323

4.76

356

1,951

4.10

257

Aquarius


-

-

-

22,300

1.29

926

22,300

1.29

926

9

0.79

0

Clavos


-

-

-

503

4.81

78

503

4.81

78

318

4.73

48

Ludgate


-

-

-

522

4.06

68

522

4.06

68

1,396

3.60

162

Canamax


-

-

-

240

5.09

39

240

5.09

39

170

4.26

23

TOTAL


4,012

4.03

520

31,214

2.14

2,149

35,227

2.36

2,668

14,879

4.50

2,154

Notes:

a)       

Mineral Resources were estimated by Management according to CIM Definition Standards – November 2010;

b)      

Mineral Resources for Holt, Holloway and Hislop used a US$1,250 per ounce gold price and an exchange rate of C$1.08 = US$1.00;

c)       

Mineral Resources were estimated at a cut-off grade of 2.50 g/t Au with the exception of:


i)

Mineral Resources for Taylor Shoot zone estimated using a 3.00 g/t Au Cut-off grade;


ii)

Mineral Resources for Aquarius are as of the 2012-2013 John Reddick Report & SRK Mining Study;


iii)

Mineral Resources for Clavos Project JV represent 40%, as per the option agreement with Sage Gold;


iv)

Clavos Resources were calculated by RPA as per the October 23, 2012 RPA Technical report;

d)      

Tonnes and gold ounce information is rounded to the nearest thousands. As a result, rows and columns may not add up exactly due to rounding.

e)       

Work was done under the supervision of D. Cater, P. Geo. (SAS VP-Exploration)

Mine Operations Review

Holt (see Operating and Financial Statistics – Holt Mine on page 15)
Throughput at Holt increased by 48% in Q4 2014 when compared to Q4 2013 due to the increased mining rate. Throughout the year, total tonnes mined increased by 20% over the 2013 period from 1,000 tonnes per day in 2013 ("tpd") to 1,200 tpd. The increase in the mining rate throughout 2014, offset somewhat by the lower head grade, gave rise to a 6% increase in gold production in FY 2014, from 58,898 ounces to 62,633 ounces. Holt contributed 83% of the total cash margin from mine operations (1) earned during FY 2014 as compared to 76% for FY 2013.

Holloway (see Operating and Financial Statistics – Holloway Mine on page 16)
Throughput at Holloway in Q4 2014 increased by 14% when compared to Q4 2013, and in conjunction with a 16% higher head grade, resulted in a 37% increase in gold production for Q4 2014. For FY 2014, production increased by 11% from FY 2013 reflecting in a 5% improvement in productivity, and a 6% higher head grade achieved in FY 2014 than FY 2013. Holloway contributed 15% of the total cash margin from mine operations earned during FY 2014 as compared to 12% for FY 2013.

Hislop (see Operating and Financial Statistics – Hislop Mine on page 17)
The open pit mining operations at Hislop have ceased since Q2 2014 due to open pit reserves depletion. For FY 2014, 81,530 tonnes of remaining open pit ore (including low grade ore stock pile) were processed through the Holt Mill as compared to 333,097 tonnes of ore in FY 2013, which resulted in a 78% decline in production. For FY 2014, Hislop contributed 2% of the total cash margin from mine operations (1) earned as compared to 12% for FY 2013.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

Advanced Exploration Program - Taylor

The FY 2014 program consisted of approximately 2,000 m of ramp development and access towards the 1004 lens at the West Porphyry Zone ("WPZ"), underground diamond drilling and the extraction and processing of a 17,540-tonne bulk sample.

In addition, the Company completed the in-fill drill program of the 1004 lens which totaled (102) drill holes collared from drill bays located off the main ramp development on the 220m, 250m and 305m Sub level elevations, totaling 17,500 m. Additionally, 3,000 m of surface drilling was conducted. The assay results from the underground program have been consistent, illustrating better grade continuity and mineral widths than previously realized from surface drilling. Mineral resource expansion drilling demonstrates the potential to expand mineralization beyond the 1004 lens, both at depth and along the strike to the west.

In Q4 2014 and in January 2015, the Company processed a 17,540 tonne bulk sample at Taylor.  The bulk sample achieved an average head grade of 9.01 g/t Au and a mill recovery of 97.4%. As a confirmatory measure and in support of generating more bulk sample data, 106 representative samples were collected from the bulk sample using a sample tower, prior to processing.  The assay results of these samples returned an average head grade of 8.74 g/t Au, which correlated very well to the mill head grade of 9.01 g/t Au, a 3% variance.

The 2014 updated Mineral Reserves and Resource Estimates incorporate infill drill results completed at year end. In Q4 2014, the Company conducted geological modeling and technical work to update the resource model, as well as maintaining surface and ramp infrastructure. On February 12, 2015, a decision was made to advance the project into commercial production.

Exploration Programs

Exploration activities in FY 2014 were focussed on the near mine targets, specifically exploring for strike and depth extensions of the known mineralized zones and also exploring for potential repetitions and satellite zones situated near the operations. In particular, the key projects were the Holt Deep Zone 4 Extension which commenced in mid-2014, the continuation of drilling at the Holloway and Hislop properties. A total of 40,300 m of surface core and an additional 33,200 m of underground drilling were conducted in FY 2014.

Capital Resources

SAS generated $1.9 million in net cash flow (1) in FY 2014 as compared to $9.2 million in the prior year. The gold price in 2014 continued to negatively impact earnings and cash flow. As a consequence, working capital decreased by $4.2 million at the end of 2014 from a working capital of $13.8 million as at December 31, 2013. Despite this decline, the Company maintained a cash position of $21.5 million at the end of the year. The Company has access to additional cash resources by way of a US$10.0 million revolving credit facility. In conjunction with the expected cash flows from operations, the Company is well positioned to finance its planned sustaining capital programs, the growth capital required for Taylor and to conduct its planned exploration programs for 2015.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

Qualified Person

Production at the Holt, Holloway and Hislop mines, processing at the Holt Mill, and mine development and production activities at the operations and evaluation activities at Taylor are conducted under the supervision of Marc-Andre Pelletier, P.Eng., the Company's General Manager of Operations.

Exploration activities on the Company's various mineral properties, including the drilling program at Taylor and the update of Mineral Resources is under the supervision of Mr. Doug Cater, P. Geo., the Company's Vice-President of Exploration.

Mineral Reserves were updated under the supervision of Mr. Keyvan Salehi, P. Eng., MBA, the Company's Senior Director, Corporate Development and Technical Services.

Messrs. Pelletier, Cater and Salehi are qualified persons as defined by NI 43-101, and have reviewed and approved this news release.

The following abbreviations are used to describe the periods under review throughout this release.











Abbreviation



Period



Abbreviation



Period

Q1 2014



January 1, 2014 – March 31, 2014



Q1 2013



January 1, 2013 – March 31, 2013

Q2 2014



April 1, 2014 – June 30, 2014



Q2 2013



April 1, 2013 – June 30, 2013

Q3 2014



July 1, 2014 – September 30, 2014



Q3 2013



July 1, 2013 – September 30, 2013

Q4 2014



October 1, 2014 - December 31, 2014



Q4 2013



October 1, 2013 - December 31, 2013

FY 2014 



January 1, 2014 – December 31, 2014



FY 2013



January 1, 2013 – December 31, 2013

Non-GAAP Measures

The Company has included the following non-GAAP performance measures: adjusted net earnings; operating cash flow per share; net cash flow; average realized price per ounce of gold sold; total cash cost per ounce of gold sold; cash margin from mine operations; cash margin per ounce of gold sold; and mine-site cost per tonne milled throughout this press 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 9-14 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.          

The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and twelve months ended December 31, 2014, can be found on pages 18-20.

To review the complete 2014 Annual Financial Statements and the Annual Management's Discussion and Analysis for 2014, please see the Company's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

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 and Holloway mines and is also advancing its Taylor Project into commercial production. The Company is conducting various exploration programs 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 the Company's production and cash cost guidance for 2015; the advancement of Taylor towards production and the time and the timing thereof; the Company's capital budgets and its exploration programs in 2015; and the sufficiency of the Company's capital resources to carry out its planned objectives.  Also, Mineral Reserves and Mineral Resources are considered to be forward-looking information as they involve the assessment, based on certain estimates and assumptions, that such Mineral Reserves and Resources can be economically produced in the future.

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 dependence on key employees and changes in the availability of qualified personnel; fluctuations in gold prices and exchange rates; insufficient funding or delays or inability to raise additional financing on satisfactory terms if required; operational hazards and risks, including the inability to insure against all risks; changes in laws, regulations and the risks of obtaining necessary licenses and permits; 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 accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates, the ability of the Company to retain and attract qualified personnel, the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities, the availability of additional financing on acceptable terms if and as required and the level of stability of 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 forwardlooking 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) is a non-GAAP performance measure and 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. Adjusted net earnings (loss) is calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency derivative contracts, one-time gains or losses on the disposition of non-core assets, periodic adjustments to the Company's asset retirement obligations, and expenses, asset impairment gains or losses and significant tax adjustments not related to current period's earnings, as detailed in the table below.  The Company discloses this measure, which is based on its Financial Statements, to assist in the understanding of the Company's operating results and financial position.

















Amounts in thousands of Canadian dollars, except per share
amounts



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Net income (loss) per Financial Statements


$

(67)


$

(4,365)


$

(7,499)


$

(8,816)


$

(5,018)

Reversal of unrecognized deferred income tax assets



-



-



-



-



(1,256)

Mark-to-market loss (gain) on gold-linked liabilities



55



(594)



(116)



340



(1,596)

Mark-to-market loss (gain) on foreign currency derivatives



(60)



91



280



(663)



1,065

Impairment loss on available-for-sale investments



-



67



-



-



567

Loss (gain) on disposal of fixed assets



-



-



(4)



145



-

Impairment loss 



-



-



13,110



13,110



-

Write-down of mining equipment and investment



-



-



-



-



994

One-time accrual adjustment



-



-



(1,095)



(1,094)



-

Net change in provision



250



-



-



(527)



-

Tax effect of above items



(61)



126



(3,045)



(2,792)



(116)

Adjusted net earnings (loss)


$

116


$

(4,675)


$

1,631


$

(297)


$

(5,360)

















Weighted average number of shares outstanding (000s)

















Basic



368,296



368,295



368,296



368,296



368,270


Diluted



368,296



368,295



368,296



368,296



368,270

















Adjusted net earnings (loss) per share - basic and diluted


$

(0.00)


$

(0.01)


$

0.00


$

0.00


$

(0.01)

















Total cash cost per ounce of gold sold
Total cash cost per ounce of gold sold is a non-GAAP performance measure, which 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 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 Statements for Q4 2014, Q4 2013, Q3 2014, FY 2014 and FY 2013:

















Amounts in thousands of Canadian dollars, except where
indicated



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Mine site operating costs per Financial Statements


$

17,633


$

21,216


$

18,800


$

74,851


$

79,499

Less: Toll milling revenue



(992)



-



(1,230)



(2,491)



-

Production royalties per Financial Statements



2,599



2,720



2,735



11,109



12,208

Total cash costs


$

19,240


$

23,936


$

20,305


$

83,469


$

91,707

















Divided by gold ounces sold



20,744



23,985



21,728



88,822



98,654

















Total cash cost per ounce of gold sold (Canadian dollars)


$

928


$

998


$

935


$

940


$

930

















Average 1 USD - CAD exchange rate


$

1.14


$

1.05


$

1.09


$

1.10


$

1.03

















Total cash cost per ounce of gold sold (US$)


$

816


$

951


$

858


$

851


$

902

















All-in sustaining cost per ounce of gold sold
All-in sustaining cost per ounce of gold sold is a non-GAAP performance measure, which 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 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. Effective Q3 2013, the Company has adopted the all-in sustaining definition as set out in the guidance note released by the World Gold Council on June 27, 2013. All-in sustaining costs include mine-site operating costs and production royalties incurred at the Company's mining operations (net of toll milling revenue), sustaining capital expenditures, corporate administration expense, mine-site exploration costs, and reclamation cost accretion. The Company believes that this measure represents the total costs of producing gold from current operations, and provides the Company and other stakeholders with additional information that illustrates the Company's operational performance and ability to generate cash flow. This cost measure is reported on a consolidated level and on a per-ounce of gold sold basis. As the measure seeks to reflect the full cost of gold production from current operations, new project capital is not included. Certain other cash expenditures, including tax payments and financing costs are also not included.

















Amounts in thousands of Canadian dollars, except where
indicated



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Mine site operating costs per Financial Statements


$

17,633


$

21,216


$

18,800


$

74,851


$

79,499

Less:  Toll milling revenue



(992)



-



(1,230)



(2,491)



-

Production royalties per Financial Statements



2,599



2,720



2,735



11,109



12,208

















Add (less):

















Sustaining mine capital



3,790



3,255



3,243



15,304



14,416


Mine site exploration



388



335



289



1,110



5,501


Mine reclamation obligation



15



98



28



251



396


Corporate administration



1,135



1,703



1,210



5,109



7,148

All-in sustaining costs


$

24,569


$

29,327


$

25,075


$

105,244


$

119,168

















Divided by gold ounces sold



20,744



23,985



21,728



88,822



98,654

















All-in sustaining cost per ounce of gold sold (Canadian dollars)


$

1,184


$

1,223


$

1,154


$

1,185


$

1,208

















Average 1 USD - CAD exchange rate


$

1.14


$

1.05


$

1.09


$

1.10


$

1.03

















All-in sustaining cost per ounce of gold sold (US$)


$

1,042


$

1,165


$

1,060


$

1,072


$

1,173

















Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure, which does not have a standardized meaning defined by IFRS 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 toll milling revenue and 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 reduces 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



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Holt Mine 
















Mine site costs per Financial Statements


$

11,703


$

9,196


$

12,033


$

45,069


$

36,340

Less: toll milling revenue allocation



(702)



-



(810)



(1,626)



-

Inventory adjustments (1)



601



85



(265)



1,290



770

Mine site operating costs


$

11,603


$

9,281


$

10,958


$

44,733


$

37,110

















Divided by tonnes of ore milled



120,721



81,791



101,826



442,108



369,657

















Mine site cost per tonne milled


$

96


$

113


$

108


$

101


$

100

















Holloway Mine 
















Mine site costs per Financial Statements


$

5,927


$

5,580


$

5,745


$

23,399


$

21,247

Less: toll milling revenue allocation



(291)



-



(410)



(742)



-

Inventory adjustments (1)



420



254



340



693



401

Mine site operating costs


$

6,056


$

5,834


$

5,675


$

23,349


$

21,648

















Divided by tonnes of ore milled



54,674



47,960



47,651



186,239



177,006

















Mine site cost per tonne milled


$

111


$

122


$

119


$

125


$

122

















Hislop Mine
















Mine site costs per Financial Statements


$

4


$

6,440


$

1,022


$

6,384


$

21,912

Less: toll milling revenue allocation



-



-



(10)



(124)



-

Inventory adjustments (1)



(4)



391



(837)



(834)



341

Mine site operating costs


$

-


$

6,831


$

175


$

5,426


$

22,253

















Divided by tonnes of ore milled



-



98,293



1,747



81,530



333,097

















Mine site cost per tonne milled


$

-


$

69


$

100


$

67


$

67

















Mine site costs per Financial Statements

















Holt


$

11,703


$

9,196


$

12,033


$

45,069


$

36,340


Holloway



5,927



5,580



5,745



23,399



21,247


Hislop



4



6,440



1,022



6,384



21,912



$

17,634


$

21,216


$

18,800


$

74,851


$

79,499

















Note:

(1)

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 does not have a standardized meaning defined by IFRS and 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 Statements. 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





Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013



















Gold sales per Financial Statements


[A]


$

28,391


$

31,707


$

30,430


$

123,967


$

142,983



















Mine site operating costs per Financial Statements





17,633



21,216



18,800



74,851



79,499

Less: Toll milling revenue





(992)



-



(1,230)



(2,491)



-

Production royalties per Financial Statements





2,599



2,720



2,735



11,109



12,208



[B]



19,240



23,936



20,305



83,469



91,707

Cash margin from mine operations


[A] - [B]


$

9,151


$

7,771


$

10,125


$

40,498


$

51,276



















Breakdown of cash margin from mine operations by mines:



















Holt Mine




$

6,241


$

6,915


$

8,191


$

33,659


$

38,820


Holloway Mine





2,911



562



1,606



6,189



6,309


Hislop Mine





(1)



294



328



650



6,147





$

9,151


$

7,771


$

10,125


$

40,498


$

51,276



















Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. It may not be comparable to information in other gold producers' reports and filings.

















Amounts in thousands of Canadian dollars, except where indicated



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Gold sales per Financial Statements


$

28,391


$

31,707


$

30,430


$

123,967


$

142,983

Foreign exchange gain realized on the settlement of gold sales



(247)



(186)



(250)



(359)



(683)

Gain (loss) on foreign currency derivative cash flow hedges realized



183



244



13



582



650



$

28,327


$

31,765


$

30,193


$

124,190


$

142,950

















Average 1 USD - CAD exchange rate



1.14



1.05



1.09



1.10



1.03

















Gold sales recorded in US$


$

24,932


$

30,193


$

27,714


$

112,405


$

138,869

















Divided by gold ounces sold



20,744



23,985



21,728



88,822



98,654

















Average realized price per ounce of gold sold (US$)


$

1,202


$

1,259


$

1,275


$

1,266


$

1,408

















Cash margin per ounce of gold sold
Cash margin per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and is calculated by subtracting the total cash cost per ounce of gold sold from the average realized price per ounce of gold sold. It may not be comparable to information in other gold producers' reports and filings.



















Amounts in United States dollars





Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013



















Per ounce of gold sold:



















Average realized price per ounce of gold sold


[A]


$

1,202


$

1,259


$

1,275


$

1,266


$

1,408


Total cash cost per ounce of gold sold


[B]



816



951



858



851



902

Cash margin per ounce of gold sold


[A] - [B]


$

386


$

308


$

417


$

415


$

505



















Net cash flow

Net cash flow is a non-GAAP measure which does not have a standardized meaning defined by IFRS and is calculated by taking cash flow from operating activities less cash used in investing activities as reported in the Company's Financial Statements. It may not be comparable to information in other gold producers' reports and filings.

















Amounts in thousands of Canadian dollars



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Cash flow from operating activities per Financial Statements


$

7,586


$

6,903


$

8,355


$

30,871


$

36,531

Less:

















Cash used in investing activities per Financial Statements



5,888



4,128



6,943



28,926



27,359



$

1,698


$

2,775


$

1,412


$

1,945


$

9,172

















Operating cash flow per share
Operating cash flow per share is a non-GAAP measure and is calculated by dividing cash flow from operating activities in the Company's Financial Statements by the weighted average number of shares outstanding for each year.  It may not be comparable to information in other gold producers' reports and filings.

















Amounts in thousands of Canadian dollars, except per share
amounts



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Cash flow from operating activities per Financial Statements


$

7,586


$

6,903


$

8,355


$

30,871


$

36,531

















Weighted average number of shares outstanding (000s)



368,296



368,295



368,296



368,296



368,270

















Operating cash flow per share


$

0.02


$

0.02


$

0.02


$

0.08


$

0.10

















Operating and Financial Statistics – Holt Mine

















Amounts in thousands of Canadian dollars, except per unit
amounts



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Tonnes milled



120,721



81,791



101,826



442,108



369,657

Head grade (g/t Au)



4.05



5.42



4.82



4.65



5.22

Average mill recovery



94.8%



95.2%



95.5%



94.8%



95.0%

















Gold produced (ounces)



14,908



13,579



15,087



62,633



58,898

Commercial gold production sold (ounces)



13,996



13,775



15,400



61,447



58,101

















Gold sales revenue


$

19,153


$

18,239


$

21,572


$

85,787


$

84,271

















Cash margin from mine operations (1)


$

6,241


$

6,915


$

8,191


$

33,659


$

38,820

















Mine site cost per tonne milled (1)


$

96


$

114


$

108


$

101


$

100

















Total cash cost per ounce of gold sold (US dollars) (1)

















Mine cash costs *


$

692


$

636


$

669


$

640


$

607


Royalty costs



120



147



129



128



152

Total cash cost per ounce of gold sold (US dollars) (1)


$

812


$

783


$

798


$

768


$

759

















Capital expenditures


$

3,274


$

2,991


$

2,699


$

13,654


$

12,965

















Depreciation and depletion expense


$

3,531


$

2,602


$

3,299


$

12,373


$

10,316

















* Toll milling revenue is allocated to each of SAS's mine operations






























Note:

(1)

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 9-14 for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics – Holloway Mine

















Amounts in thousands of Canadian dollars, except per unit
amounts



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Tonnes milled



54,674



47,960



47,651



186,239



177,006

Head grade (g/t Au)



4.80



4.13



4.27



4.36



4.13

Average mill recovery



91.6%



88.9%



91.8%



91.2%



90.7%

















Gold produced (ounces)



7,734



5,654



5,999



23,780



21,330

Commercial gold production sold (ounces)



6,745



5,105



5,356



22,433



21,147

















Gold sales revenue 


$

9,235


$

6,734


$

7,518


$

31,270


$

30,654

















Cash margin from mine operations (1)


$

2,911


$

562


$

1,606


$

6,189


$

6,309

















Mine site cost per tonne milled (1)


$

111


$

122


$

119


$

125


$

122

















Total cash cost per ounce of gold sold (US dollars) (1)

















Mine cash costs *


$

735


$

1,041


$

915


$

1,010


$

975


Royalty costs



90



111



99



108



143

Total cash cost per ounce of gold sold (US dollars)(1)


$

825


$

1,152


$

1,014


$

1,118


$

1,118

















Capital expenditures


$

405


$

130


$

290


$

1,215


$

3,047

















Depreciation and depletion expense


$

738


$

4,848


$

625


$

11,954


$

13,984

















* Toll milling revenue is allocated to each of SAS's mine operations





























Note:

(1)

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 9-14 hereof for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics – Hislop Mine

















Amounts in thousands of Canadian dollars, except per unit
amounts



Q4 2014



Q4 2013



Q3 2014



FY 2014



FY 2013

















Overburden stripped (m3)



-



19,646



-



-



127,547

















Tonnes mined

(ore)



-



35,540



-



79,971



316,179


(waste)



-



377,627



-



223,712



1,348,216




-



413,167



-



303,683



1,664,395

















Waste-to-Ore Ratio



-



10.6



-



2.8



4.3

















Tonnes milled



-



98,293



1,747



81,530



333,097

Head grade (g/t Au)



-



1.96



1.76



2.12



2.19

Average mill recovery



-



81.6%



81.2%



76.8%



82.3%

















Gold produced (ounces)



-



5,067



80



4,263



19,320

Commercial gold production sold (ounces)



2



5,105



972



4,942



19,406

















Gold sales revenue


$

3


$

6,734


$

1,340


$

6,911


$

28,058

















Cash margin from mine operations (1)


$

(1)


$

294


$

328


$

650


$

6,147

















Mine site cost per tonne milled (1) (3)


$

-


$

69


$

100


$

67


$

67

















Total cash cost per ounce of gold sold (US Dollars)(1)(2)(3)


$

1,708


$

1,202


$

957


$

1,147


$

1,096

















Capital expenditures


$

-


$

-


$

-


$

-


$

20

















Depreciation and depletion expense


$

-


$

2,186


$

88


$

289


$

12,026

















Notes:

(1)

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 9-14 hereof for an explanation and reconciliation of non-GAAP measurements).

(2)

Hislop is subject to a 4% net smelter return royalty, which includes a minimum advance royalty payment obligation (see "Gold-linked Liabilities" in the Company's Annual MD&A for 2014).

(3)

Net of toll milling revenue allocated to each of SAS's mine operations.

 

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


























Three months ended December 31,



Year ended December 31,




2014


2013



2014


2013












Revenue











Gold sales

$

28,391

$

31,707


$

123,967

$

142,983


Toll milling


992


-



2,491


-




29,383


31,707



126,458


142,983












Operating costs and expenses:











Mine site operating


17,633


21,216



74,851


79,499


Production royalty


2,599


2,720



11,109


12,208


Site maintenance


32


9



62


182


Exploration


2,588


929



6,396


7,971


Corporate administration


1,135


1,703



5,109


7,148


Depreciation and depletion


4,516


9,862



25,548


37,220


Impairment loss


-


-



13,110


-


Write-down of mining equipment  and investment


-


-



-


994




28,503


36,439



136,185


145,222

Operating income (loss)


880


(4,732)



(9,727)


(2,239)












Finance costs


227


461



1,450


1,960

Mark-to-market loss (gain) on gold-linked liabilities


55


(594)



340


(1,596)

Mark-to-market (gain) loss on foreign currency derivatives


(60)


91



(663)


1,065

Foreign exchange loss


335


864



1,621


1,455

Impairment loss on available-for-sale investments


-


67



-


567

Finance income and other


(44)


(79)



(1,989)


(308)




513


810



759


3,143

Income (loss) before taxes


367


(5,542)



(10,486)


(5,382)

Net deferred tax expense (recovery)


434


(1,177)



(1,670)


(364)

Net income (loss) attributable to shareholders

$

(67)

$

(4,365)


$

(8,816)

$

(5,018)












Other comprehensive income (loss)




















Unrealized gain (loss) on available-for-sale investments (nil tax effect)


42


(75)



74


(151)

Reclassification adjustment for impairment loss on available-for-sale

investments (nil tax effect)


-


67



-


567

Unrealized loss on derivatives designated as cash flow hedges, net of tax

of $191 (2013 - $144)


(14)


142



(43)


(574)

Reclassification adjustment for unrealized loss on the ineffective portion of

cash flow hedges, net of tax of nil (2013 - $64)


-


(192)



-


-




28


(58)



31


(158)

Comprehensive income (loss) for the period

$

(39)

$

(4,423)


$

(8,785)

$

(5,176)












Basic and diluted income (loss) per share 

$

0.00

$

(0.01)


$

(0.02)

$

(0.01)












Weighted average number of shares outstanding (000's)










Basic


368,296


368,295



368,296


368,270

Diluted


368,296


368,295



368,296


368,270












 

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





























Three months ended December 31,



Year ended December 31,





2014


2013



2014


2013













Operating activities:











Net loss for the period

$

(67)

$

(4,365)


$

(8,816)

$

(5,018)


Items not affecting cash:












Net deferred tax expense (recovery)


434


(1,177)



(1,670)


(364)



Mark-to-market loss (gain) on gold-linked liabilities


56


(594)



340


(1,596)



Non-cash interest


(473)


351



500


1,434



Mark-to-market loss (gain) on foreign currency derivatives


(60)


91



(663)


1,065



Depreciation and depletion


4,515


9,862



25,548


37,220



Net change in provision


250


-



(527)


-



Impairment loss


-





13,110


-



Write-down of mining equipment and investment


-


-



-


994



Impairment loss on available-for-sale investments


-


67



-


567



Loss (gain) on disposal of fixed assets


(1)


-



144


-



Share-based payments


95


386



367


1,209


Net change in non-cash operating working capital and other


2,863


2,382



2,736


1,474


Interest paid


(26)


(100)



(198)


(454)



Cash provided by operating activities


7,586


6,903



30,871


36,531

Investing activities:












Additions to exploration and evaluation assets


(2,096)


(783)



(14,782)


(7,014)



Mine development expenditures


(2,166)


(2,056)



(8,558)


(12,013)



Additions to plant and equipment


(1,801)


(1,295)



(7,538)


(6,014)



Amounts payable on capital additions


142


-



1,879


(1,925)



Reclamation costs and other


33


(17)



(17)


(393)



Proceeds on disposal of fixed assets


-


-



90


-



Cash collateralized for banking facilities


-


23



-


-



Cash used in investing activities


(5,888)


(4,128)



(28,926)


(27,359)

Financing activities:












Advance royalty payments


(996)


(416)



(1,704)


(1,799)



Capital lease payments


(269)


(261)



(1,074)


(710)



Repayment of term credit facility


-





(9,815)


(4,092)



Cash used in financing activities


(1,265)


(677)



(12,593)


(6,601)













Effects of exchange rate changes on cash and cash equivalents


(125)


33



(1,557)


463

Increase (decrease) in cash and cash equivalents


308


2,131



(12,205)


3,034

Cash and cash equivalents, beginning of period


21,176


31,559



33,690


30,656

Cash and cash equivalents, end of period

$

21,485

$

33,690


$

21,485

$

33,690













 

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


















December 31, 2014



December 31, 2013








Assets






Current assets:







Cash and cash equivalents

$

21,485


$

33,690


Accounts receivable


1,220



951


Inventories


10,128



8,638


Prepayments and other assets


324



193




33,157



43,472








Exploration and evaluation assets


47,193



38,390

Producing properties


41,907



49,751

Plant and equipment


36,144



49,025

Reclamation deposits


7,736



8,373

Restricted cash


2,397



1,695

Deferred tax assets


22,809



20,228

Other assets


210



136



$

191,553


$

211,070








Liabilities and Shareholders' Equity






Current liabilities:







Accounts payable and other liabilities

$

13,094


$

9,793


Employee-related liabilities


4,954



5,241


Royalties payable


1,220



956


Provisions


250



777


Derivative liabilities


501



1,105


Current portion of long-term debt


2,579



11,754


Current portion of asset retirement obligations


925



-




23,523



29,626








Long-term debt


1,284



3,295

Asset retirement obligations


7,950



12,023

Deferred tax liabilities


3,226



2,330




35,983



47,274








Shareholders' equity:







Share capital 


98,575



98,575


Contributed surplus


21,157



20,317


Stock options 


3,986



4,267


Retained earnings 


31,962



40,778


Accumulated other comprehensive loss


(110)



(141)




155,570



163,796



$

191,553


$

211,070








 

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; Keyvan Salehi, P. Eng., MBA, Senior Director, Corporate Development and Technical Services, ksalehi@sasgoldmines.com; Duncan Middlemiss, P. Eng., President & CEO, dmiddlemiss@sasgoldmines.com; Ben Au, CFO, VP Finance & Administration, bau@sasgoldmines.com

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