VANCOUVER, May 12, 2014 /CNW/ - Golden Queen Mining Co. Ltd. (TSX:GQM; OTCQX:GQMNF) (the "Company") is pleased to announce its financial results for the three months ended March 31, 2014. Management's discussion and analysis of financial condition and results of operation are described in the Form 10-Q, which is available on the Company's website at www.goldenqueen.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Amounts shown in U.S. dollars.
1st Quarter Construction Highlights
- Initial site grading was completed in January 2014 and included an employee parking lot, sediment pond and drainage channel and a pad where the sub-station will be constructed. Work was also completed on the north-south access road and the overland conveyor route.
- Construction of the workshop-warehouse footings has been completed and the erection of steelwork is well underway with completion of the cladding expected at the end of May.
- The Company's general contractor is doing site preparation of the area where the crushing-screening plant will be constructed. The lower portion of the area was mostly completed in March 2014 and the upper portion of the area will be completed in early May. The fill material required for this project is being taken from the overflow pond, which is part of the heap leach facilities.
- The Company completed detailed engineering for construction and updated its cost estimates for the major turn-key projects. Please refer to the Company's press release dated March 27, 2014 for further details on the Company's revised capital expenditures cost estimates.
1st Quarter Financial Highlights
For the three months ended March 31, 2014, the Company reported a net loss of $7.5 million (or $0.08 basic and $0.01 diluted loss per share), compared to net income of $0.2 million (or $0.00 basic income per share and $0.00 diluted loss per share) for the corresponding period in 2013. The variance in the first quarter is mostly due to a significant increase in the derivative liability, including foreign exchange, resulting in a non-cash expense of $5.7 million (compared to a recovery of $0.6 million for the same quarter in 2013) on fair value measurement of the derivative liability.
The Company had $25.2 million in assets, including $10.9 million in cash, and a working capital deficit of $1.1 million as at March 31, 2014 compared with $15.8 million in assets, including $5.0 million in cash, and a working capital balance of $3.6 million as at December 31, 2013.
The Company incurred general and administrative expenses of $1.1 million during the three months ended March 31, 2014 as compared to $0.4 million for the same period in 2013. This increase is due to an increase in corporate activities both at the Company's head office and on site as the Company continues to prepare the site for production.
The Company capitalized development costs of $3.5 million in the first quarter of 2014 as compared to development costs of $0.8 million for the corresponding period in 2013. Construction costs included $1.1 million in site development, $0.9 million for the crushing-screening plant site preparation and $0.6 million towards the workshop-warehouse. The Company also spent $0.4 million to acquire mineral property interests.
The results for the first quarter of 2014 are summarized in the table below:
| Results for the quarter ended on:
| Mar. 31, 2014
| Dec. 31, 2013
|Mineral property interests||13,383,969||9,919,486|
|Working capital (deficit)||(1,139,779)||3,585,305|
|Stockholders' equity (deficiency)||(1,120,431)||6,240,932|
| Results for the quarter ended on:
| Mar. 31, 2014
| Mar. 31, 2013
|Net income (loss) and comprehensive income (loss)||(7,494,638)||167,304|
|Basic income (loss) per share||(0.08)||0.00|
|Diluted income (loss) per share||(0.01)||(0.00)|
Shareholders are reminded that the Company has no revenues as its gold and silver Soledad Mountain Project is not yet in production.
The Company is evaluating various financing options for the Soledad Mountain Project, including equity, debt, and other alternatives. It is estimated that construction can be completed in approximately 15 to 18 months once project financing has been secured.
The Company is currently conserving cash and is not making additional commitments for construction-related projects on site until project financing is finalized.
The Company has recently engaged a Manager - Services, Manager - Plant Operations, Manager - Accounting and a Chief Geologist to strengthen its management team in Mojave in preparation for the start of full construction.
Major updates for the first quarter of 2014 and plans for the second quarter of 2014 include the following:
Pictures 1 & 2 - Construction of the concrete footings for the workshop-warehouse under way in early April. Erection of the steel work for the workshop-warehouse is well-advanced in late April
Picture 3 - Excavation of the overflow pond, which is part of the heap leach facility, is under way and completion is expected in May
Picture 4 - Site grading of the area where the crushing-screening plant will be constructed is proceeding and is expected to be completed in May
Annual General Meeting
The Annual General Meeting of shareholders (the "Meeting") will be held on Tuesday, June 10, 2014 at 10:00 am, Pacific Daylight time, in the Coal Harbour Room at the Pan Pacific Hotel, 999 Canada Place, Vancouver, British Columbia, V6C 3B5. The record date for the Meeting was set as April 17, 2014.
The Company's 2013 audited financial statements and accompanying management's discussion and analysis and the Information Circular are available on the Company's website at www.goldenqueen.com and under the Company's profile on SEDAR at www.sedar.com.
About Golden Queen Mining Co. Ltd:
The Company is developing a gold-silver, open pit, heap leach operation on its fully-permitted Soledad Mountain property, located just outside the town of Mojave in Kern County in southern California. The Project will use conventional open pit mining methods and the cyanide heap leach and Merrill-Crowe processes to recover gold and silver from crushed, agglomerated ore.
Technical information in this news release was approved by H. Lutz Klingmann, President, and a Qualified Person as defined under NI 43-101.
Caution With Respect To Forward-looking Statements: The information in this news release includes certain "forward-looking statements". All statements in this news release, other than statements of historical fact, including, without limitation, plans for and intentions with respect to construction and other development activities on the Soledad Mountain Project, and future mining operations on the Project, are forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from statements in this news release regarding our intentions include the uncertainties involving the availability of project financing in the debt and capital markets; risks of construction and mining such as accidents, equipment breakdowns, non-compliance with environmental and permit requirements, and other risks and uncertainties disclosed in the section entitled "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2013. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, should not to put undue reliance on forward-looking statements. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made.
Image with caption: "Construction of the concrete footings for the workshop-warehouse under way in early April. Erection of the steel work for the workshop-warehouse is well-advanced in late April. (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140512_C7907_PHOTO_EN_40209.jpg
Image with caption: "Construction of the concrete footings for the workshop-warehouse under way in early April. Erection of the steel work for the workshop-warehouse is well-advanced in late April. (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140512_C7907_PHOTO_EN_40210.jpg
Image with caption: "Excavation of the overflow pond, which is part of the heap leach facility, is under way and completion is expected in May. (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140512_C7907_PHOTO_EN_40211.jpg
Image with caption: "Site grading of the area where the crushing-screening plant will be constructed is proceeding and is expected to be completed in May. (CNW Group/Golden Queen Mining Co. Ltd.)". Image available at: http://photos.newswire.ca/images/download/20140512_C7907_PHOTO_EN_40212.jpg
SOURCE: Golden Queen Mining Co. Ltd.
For further information:
H. Lutz Klingmann, President
Telephone: (604) 921-7570