SASKATOON, Nov. 28, 2011 /CNW/ - Golden Band Resources Inc. (TSXV: GBN) (the Company) released its interim financial and operating results for
the quarter ended October 31, 2011 (Q2 2012). All figures are reported
in Canadian dollars, unless otherwise noted:
For the first time in its history, the Company reported income from
operations - $4.5 million for Q2 2012.
Cash flow from operations for Q2 2012 was $8.9 million.
Revenue for Q2 2012 was $20.7 million on sales of 11,950 gold ounces, an
average selling price of $1,731/ounce.
The Company produced 11,870 gold ounces in Q2 2012.
Cash cost of sales per ounce of gold sold was $900 for Q2 2012.
Production from Roy Lloyd mine in Q2 2012 was 28,656 tonnes ore at an
average grade of 11.95 grams/tonne (g/t) gold, an increase of 30% over
The Jolu mill processed 33,822 tonnes of ore in Q2 2012, which graded
10.91 g/t gold, producing 11,870 gold ounces, an increase of 22% over
Review of Financial Results
Income from operations for the quarter ended October 31, 2011 was
$4,505,485 compared with a loss of $1,285,607 for same quarter in the
previous year. Income from operations for the six months ended October
31, 2011 was $6.0 million compared to a loss of $2.1 million for the
same period in the previous year as the Company continued its
successful start up of the Roy Lloyd mine and Jolu mill.
Gross profit for Q2 2012, the second full quarter of operations, was
$6,240,414 million or 30%, up from $3,003,133 and 20% for Q1 2012, the
first full quarter of operations as process improvements resulted in
higher levels of mine and mill production.
General and administrative expenses were $453,572 for Q2 2012, down from
$596,667 in the same quarter of the previous year due to a reduction in
consulting fees related to start up. Wages and benefits and share-based
compensation were $320,397 and $395,162, respectively, for Q2 2012, up
from $139,795 and $172,600, respectively, for the same period in the
previous year, a reflection of the increased level of staffing
associated with ongoing operations. Exploration costs were $414,501 for
Q2 2012 as the Company continued its program in the Waddy Lake area.
Other expenses were $463,244 in Q2 2012 due to a foreign exchange loss
on the notes payable. The increase in fair value of notes, tied to the
price of gold, for Q2 2012 was $241,194, down from $1,106,249 for the
same period in 2011. Future income tax expense for Q2 2012 was
$1,483,035 compared to a recovery of $501,676 for the same period in
the previous year as positive earnings resulted in the reversal of
deferred income tax timing differences.
Net and comprehensive income was $2,318,012 for Q2 2012 compared to a
loss of $1,889,824 for the same period in the previous year due to the
continued production and sale of gold bullion in second quarter of the
2012 fiscal year.
There was $8,923,823 cash generated by operations for the quarter ended
October 31, 2011 versus a deficiency of $1,083,048 for the quarter
ended October 31, 2010. There was $4,782,403 of this cash used in the
repayment of the notes payable a month ahead of the last scheduled
payment date along with capital and development costs of $5,760,847.
Review of Operational Results
For the quarter ended October 31, 2011, the Roy Lloyd mine produced
28,656 tonnes of ore with an average grade of 11.95 g/t gold. This
represents an increase of 30% over mine production in Q1 2012 as a
result of improvements in long-hole drilling and blasting.
Production at the Jolu mill was 11,870 gold ounces with 33,822 tonnes of
ore processed with an average grade of 10.91 g/t gold. This represents
a 22% improvement over mill production in Q1 2012 due to continued
efficiencies gained in plant maintenance and critical supply levels as
well as operational improvements in density slurry control and
Total cash costs were $900/ounce in Q2 2012 compared to $901/ounce in Q1
2012 as improvements in production levels were partially offset by
increases in the cost of blasting supplies, higher than expected costs
in the Alimak Zone bulk sample and changes in mine design implemented
at Roy Lloyd that will benefit future operations.
The Company completed its summer exploration program in the Komis and EP
mine (Round Lake) areas and an initial phase of follow-up diamond
drilling was conducted in September to test the newly discovered
Fireweed gold prospect and targets in the Round Lake area.
In Q2 2012, the Company agreed to purchase Cameco Corporation's 66.66%
interest in the Preview Lake project within the southern La Ronge Gold
Belt. Closing is expected by the end of December 2011. The property is
40 km south of Roy Lloyd mine and 85 km south of the Jolu mill.
The Company has optioned the North Lake gold deposit from 1542651
Alberta Ltd. Notice has been provided to the vendor of its intention to
proceed with the exercise of the option. The option agreement gives the
Company the right to evaluate the property and, subject to certain
terms and conditions, exercise the option to acquire the claim.
The North Lake gold deposit is 24 kilometres south of the Company's Roy
Lloyd mine and 9 km north of the former Contact Lake gold mine. It is
located 62 km north of the Town of La Ronge, immediately adjacent to
Highway 102. Work completed during the 2011 exploration program was
designed to provide an evaluation of the North Lake gold deposit and
environment of the rocks hosting the mineralization. This included
geological reconnaissance, prospecting, collection of 57 grab and 81
channel rock samples, and 328 soil samples. A total of 101 man-days
were spent on this program.
Mine development at the Roy Lloyd mine will continue to focus on
establishing access below existing production areas. In Q3 2012, the
decline ramp is to be extended down to the 1175 level. Also, the first
phase of a surface diamond drill program to provide additional data on
the Inferred Mineral Resource below existing mineral reserves will
commence. This is to be followed up with an underground diamond drill
program with the objective of providing detailed information for
production planning purposes.
At the Komis project, development is expected to commence in Q3 2012
from the lowest level of the mine workings with the objective of
providing further geological information. The Company will also update
its mineral resource estimate based on the latest engineering and
geological information gathered, and the results of the second phase of
the drilling program scheduled to be completed early in the Q3 2012.
Assay results are pending for the drilling program.
It is expected that ore production from the EP open pit will commence
early in Q3 2012, initially targeting the supergene ore zone. The
mineral reserve of 51,000 tonnes grading 5.51 g/t gold is scheduled to
be mined over the remainder of the fiscal year.
Ore from EP will be blended with that from Roy Lloyd and gold production
from the Jolu mill is expected to be 45,000 gold ounces for the fiscal
year ended April 30, 2012.
About Golden Band
Golden Band Resources, already Saskatchewan's leading gold explorer, is
now also its newest gold producer. Golden Band is a Saskatchewan-based,
publicly listed company (GBN: TSXV) whose focus is the long-term,
systematic exploration and development of its 100%-owned La Ronge Gold
Belt properties. Since 1994, Golden Band has assembled through staking
and strategic acquisition a land package of more than 875 km2, including 12 known gold deposits, four former producing mines, and a
licensed gold mill. Golden Band's key value drivers are the methodical
and systematic targeting of primary to advanced-stage exploration while
progressing along a parallel path of being a sustainable gold producer.
The Company is aggressively pursuing its near-term goal of commercial
production of its Bingo, Komis, and EP deposits with processing at the
100%-owned Jolu mill. The Company's objective is the annual production
of at least 75,000 ounces of gold over a ten-year project life. Other
longer-term objectives include the continuation of its highly
successful exploration and acquisition strategies.
On behalf of the Board of Directors of Golden Band Resources Inc.,
"Ronald K. Netolitzky"
Ronald K. Netolitzky, Chairman
All of Golden Band's exploration programs and pertinent disclosure of a
scientific nature are prepared and/or designed and carried out under
the supervision of Charlie Harper, P.Geo., who serves as the qualified
person (QP) under the definitions of National Instrument 43-101. All of
Golden Band's development-related programs and pertinent disclosure of
a development nature are prepared and/or designed and carried out under
the supervision of Gary Haywood, P.Eng., Golden Band's VP of Operations
and COO, who serves as the qualified person (QP) under the definitions
of National Instrument 43-101.
Caution Regarding Forward-Looking Information and Statements
This document includes statements and information about the Company's
expectations for the future. When Golden Band's strategy, plans, and
future financial and operating performance, or other things that have
not yet taken place, are discussed, the Company is making statements
considered to be forward-looking information or forward-looking
statements under Canadian and United States securities laws. Such
forward-looking information and statements in this document are
referred to as "forward-looking information".
Generally, forward-looking information can be identified by the use of
forward-looking terminology such as, for example, "plans", "expects" or
"does not expect", "is expected", "budget", "goal", "target",
"project", "potential", "strategy", "outlook", "scheduled", "predicts",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate" or "believes", and similar expressions, or the negative
connotation thereof or variations of such words and phrases or
statements that certain actions, events or results, "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved" or the
negative connotation thereof.
Readers are cautioned that the forward-looking information in this
document represents Golden Band's current views and can change
significantly. Forward-looking information contained in this document
is based on certain material assumptions, including, but not limited
geological and other conditions that may affect exploration,
development, and the amenability for mining;
the Company's ability to comply with current and future environmental,
safety and other regulatory requirements, and to obtain and maintain
required regulatory approvals; and,
the Company's operations not being significantly disrupted as a result
of political instability, nationalization, terrorism, sabotage,
blockades, breakdown, natural disasters, governmental or political
actions, litigation or arbitration proceedings, or other development or
Readers are cautioned that such assumptions are not exhaustive and may
prove to be incorrect. Although the Company believes that the
assumptions on which the forward-looking information is based are
reasonable, undue reliance should not be placed on the forward-looking
statements because Golden Band can give no assurance that they will
prove to be correct.
Actual results and events may be significantly different from those
currently expected due to a number of material risks. These include,
but are not limited to:
the Company's inability to enforce its legal rights, or its being
subject to litigation or arbitration that has an adverse effect on the
defects in title to the Company's properties;
unexpected or challenging geological, hydrological, or mining
environmental, safety and regulatory risks, including increased
regulatory burdens or delays;
the Company's inability to obtain or maintain necessary permits or
approvals from government authorities or other third parties;
changes to government regulations or policies, including, but not
limited to, tax and trade laws and policies;
natural phenomena, including, but not limited to, inclement weather,
fire, and flooding; and,
operational disruption of the Company due to problems and other
developments and operating risks.
In addition, Golden Band's annual and interim MD&A, which are available on SEDAR at www.sedar.com, include a discussion of other material risks that could cause actual
results to differ significantly from the Company's current
Forward-looking information is designed to help the reader understand
management's current views of the Company's near and longer-term
prospects, and it may not be appropriate for other purposes. The
forward-looking information contained in this document is made as of
the date hereof and the Company undertakes no obligation to update
publicly or revise any forward-looking information, whether as a result
of new information, future events or otherwise, unless so required by
applicable securities laws.
The forward-looking information is expressly qualified by these
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Golden Band Resources Inc.
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