SEMAFO Reports Record Cash Flow from Operations of $92.1 Million for 2009
SEMAFO TSX-SMF
MONTREAL, March 17 /CNW Telbec/ - SEMAFO (TSX: SMF) today announced its financial and operational results for the year ended December 31, 2009. All amounts are in US dollars unless otherwise stated.
2009 Highlights
In 2009 SEMAFO produced a record 242,400 ounces of gold and achieved record gold sales of $240,788,000, compared to gold production of 195,400 ounces and sales of $169,911,000 in 2008. Cash flow from operating activities increased to a record $92,147,000, compared to $56,339,000 in 2008. Highlights for the year ended December 31, 2009 include:
- Record gold production of 242,400 ounces, a 24% increase over 2008
- Record gold sales of $240,788,000, an increase of 42% year over year
- Cash operating cost of $463 per ounce compared to $461 in 2008
- Record operating income of $60,905,000 compared to $33,108,000 in 2008
- Record net income of $43,505,000 compared to $39,529,000 in 2008
- Record cash flow from operating activities of $92,147,000 compared
to $56,339,000 in 2008
- Debt reduction of $27,000,000, including prepayment of $3,750,000
- Positive at-depth and on-surface exploration results confirming the
economic potential of the Wona deposit and resulting in a 55% increase
in mineral resources at Mana
- Identification of new prospective regional targets at Mana
- Increased ownership in the Samira Hill Mine
- SEMAFO added to S&P/TSX Composite Index
- Entered into a partnership with the government of Burkina Faso to
develop a solar power station
Fourth Quarter Highlights
- Gold production of 57,900 ounces
- Record gold sales of $73,286,000
- Record operating income of $17,494,000
- Cash flow from operating activities of $23,902,000
- Net income of $10,483,000
Outlook
In January and February 2010, SEMAFO's strong momentum continued, with a two-month gold production of 41,000 ounces. Accordingly, management remains confident that the Company will attain its 2010 production guidance of between 235,000 and 260,000 ounces of gold.
A Word from the CEO
SEMAFO's operations and management teams continued to excel in 2009, delivering another strong performance during the fourth quarter and culminating in the best year in our Company's history.
In 2009, we established new records. Our gold production totaled a record 242,400 ounces, surpassing the upper end of our annual guidance. Our revenues increased by 42%. Our operating income rose by 84% over 2008 and cash flow from operating activities reached $92,147,000, a 64% increase year over year.
Our ongoing exploration program at the Mana Mine continued to accentuate the robust potential of the Wona Deep Zone. In October 2009, we announced that a preliminary economic assessment confirmed the viability of an underground mining operation. We have since initiated pre-feasibility and feasibility studies with results expected in Q2 and Q3 2010 respectively. A recent airborne geophysical survey clearly identified the Wona structural corridor and suggested that it may extend to the south over more than 30 kilometers. Drill results in early 2010 confirmed both new gold zones and new surface targets at Mana.
Our balance sheet is stronger than ever as our debt to equity ratio decreased to 13% at year-end 2009, compared to 38% as at December 31, 2008.
In June, we successfully closed out the remaining gold ounces of our hedging program. As a result, we have been in a position to fully benefit from the market price of gold, which rose by 25% in 2009.
In 2009, SEMAFO's share price rose by 269% and the Company's market capitalization surpassed $1.2 billion. Our growth and value creation initiatives were significant all year long bringing the Company to be included in the S&P/TSX Composite Index.
We are proud of our accomplishments in 2009 and look forward to continued growth and value generation for our shareholders in the years to come.
SEMAFO's Consolidated Financial Statements and Management's Discussion and Analysis and other relevant financial materials are available in the Investor Relations section of the Company's website at www.semafo.com. These and other Company reports are also available on the website maintained by the Canadian Securities regulators at www.sedar.com.
SEMAFO will host a conference call to discuss the results, as well as to provide an update on operations.
Conference Call: Date: Thursday, March 18, 2010
Time: 10:00 AM (ET)
Tel. local & overseas: 647 427-7450
Tel. North America: 1 888 231-8191
The conference call will feature Benoit La Salle, President and Chief Executive Officer, Benoit Desormeaux, Executive Vice-President and Chief Operating Officer, Martin Milette, Chief Financial Officer, Michel Crevier, SEMAFO's Geology Manager and Qualified Person, and Patrick Moryoussef, Mining Operations Manager.
The conference call will be archived for replay until April 2, 2010. To access the archived conference call, please dial 1 800 642-1687 and enter pass code 62468767.
A live audio webcast of the conference can be accessed through SEMAFO's website at www.semafo.com. The webcast will be available for replay for a period of 90 days.
SEMAFO's Annual Meeting of Shareholders will be held on Tuesday, June 16, 2010 at 4:00 p.m. at the Centre Sheraton Hotel Montréal, Salon 4-5, 1201 René-Lévesque Boulevard West, in Montreal. Attendees will have the opportunity to ask questions and meet the management team and Board of Directors.
Consolidated Results and Mining Operations
--------------------------------------
2009 2008 Variation
--------------------------------------
Operating Highlights
Gold ounces produced 242,400 195,400 24%
Gold ounces sold 243,800 198,000 23%
(In thousands of dollars, except
amounts per ounce and per tonne)
Revenues - Gold sales 240,788 169,911 42%
Mining operating costs 124,265 100,676 24%
Operating income 60,905 33,108 84%
Net income 43,505 39,529 12%
Adjusted net income(1) 39,968 21,680 84%
Cash flow from operating
activities(2) 92,147 56,339 64%
Average selling price (per ounce) 988 858 15%
Cash operating cost (per ounce
produced)(3) 463 461 -
Cash operating cost (per tonne
processed)(3) 33 33 -
Total cash cost (per ounce sold)(4) 510 508 -
Cash and cash equivalents - as at
December 31 62,481 23,442 166%
(1) Adjusted net income is a non-GAAP measure. For 2009, the net adjusted
net income represents the net income excluding a gain on settlement
of advances payable totaling $3,537,000 while the adjusted net income
for 2008 excluded a gain on disposal of investment in subsidiaries in
the amount of $17,849,000.
(2) Cash flow from operating activities excludes changes in non-cash
working capital items and settlement of liabilities related to asset
retirement obligations.
(3) Cash operating cost is calculated using ounces produced and tonnes
processed. See the section "Non-GAAP measures" section of SEMAFO's
MD&A.
(4) Total cash cost is a non-GAAP measure and it represents the mining
operating costs per ounce sold.
Consolidated Balance Sheets
As at December 31, 2009 and 2008
-------------------------------------------------------------------------
(Expressed in thousands of US dollars)
2009 2008
$ $
Assets
Current assets
Cash and cash equivalents 62,481 23,442
Restricted cash - 1,250
Accounts receivable 9,894 5,067
Inventories 60,300 49,152
Other short-term assets 4,556 3,546
---------- -----------
137,231 82,457
Restricted cash 4,407 4,050
Property, plant and equipment 200,375 202,980
Investment and other assets 19,743 25,186
---------- -----------
361,756 314,673
---------- -----------
---------- -----------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 33,658 28,843
Income tax payable 5,019 -
Current portion of long-term debt 18,808 22,390
Fair value of derivative financial instruments - 15,020
---------- -----------
57,485 66,253
Long-term debt 15,612 38,076
Advances payable 3,007 8,890
Asset retirement obligations 5,879 4,846
Future income taxes 7,110 2,288
---------- -----------
89,093 120,353
---------- -----------
Shareholders' Equity
Share capital 329,759 293,910
Contributed surplus 5,998 4,797
Deficit (63,094) (104,387)
---------- -----------
272,663 194,320
---------- -----------
361,756 314,673
---------- -----------
---------- -----------
Consolidated Statement of Operations
For the Years Ended December 31, 2009 and 2008
-------------------------------------------------------------------------
(Expressed in thousands of US dollars)
2009 2008
$ $
Revenue - Gold sales 240,788 169,911
--------------------------
Expenses
Mining operations 124,265 100,676
Amortization of property, plant and equipment 40,863 25,445
Administration 14,367 10,250
Accretion expense of asset retirement
obligations 388 432
--------------------------
179,883 136,803
--------------------------
Operating income 60,905 33,108
Charitable donations - Fondation SEMAFO 722 -
Interest, banking fees and other income 355 (638)
Interest on long-term debt 4,947 4,621
Stock-based compensation 1,337 1,186
Change to the fair value of derivative
financial instruments 2,383 5,077
Gain on disposal of investment in subsidiaries - (17,849)
Loss on disposal of portfolio investments - 317
Write-down of exploration property 827 -
Gain on settlement of advances payable (3,537) -
Foreign exchange loss (gain) 525 (1,423)
--------------------------
Net income before taxes 53,346 41,817
Income tax expense
Current 5,019 -
Future 4,822 2,288
--------------------------
9,841 2,288
Net income for the year 43,505 39,529
--------------------------
Basic net income per share 0.18 0.19
Diluted net income per share 0.18 0.19
--------------------------
--------------------------
Consolidated Statement of Cash Flows
For the Years Ended December 31, 2009 and 2008
-------------------------------------------------------------------------
(Expressed in thousands of US dollars)
2009 2008
$ $
Cash flows from
Operating activities
Net income for the year 43,505 39,529
Adjustment for :
Change to fair value of derivative
financial instruments 2,383 5,077
Loss on disposal of investment in
portfolio investments - 317
Amortization of property, plant
and equipment 39,673 25,445
Amortization of stripping costs 1,190 452
Stock-based compensation 1,337 1,186
Accretion expense of asset retirement
obligations 388 432
Amortization of deferred transaction costs 871 767
Gain on disposal of investment in
subsidiaries - (17,849)
Gain on settlement of advances payable (3,537) -
Write-down of exploration property 827 -
Unrealized foreign exchange loss (gain) 688 (1,305)
Future income taxes 4,822 2,288
--------------------------
92,147 56,339
--------------------------
Changes in non-cash working capital items
and settlement of liabilities related to
asset retirement obligations (6,984) (9,939)
--------------------------
85,163 46,400
--------------------------
Financing activities
Reimbursement of long-term debt (26,951) (7,768)
Term facility, net of transaction costs - 4,250
Settlement of advances payable (3,000) -
Issuance of share capital 35,713 18,817
Share issue expenses (2,212) (1,316)
--------------------------
3,550 13,983
--------------------------
Investing activities
Additions to property, plant and equipment (35,084) (41,093)
Disposal of portfolio investments - 702
Financial instruments settled (15,483) (29,844)
Decrease in restricted cash 893 3,250
-------------------------
(49,674) (66,985)
--------------------------
Change in cash and cash equivalents
during the year 39,039 (6,602)
Cash and cash equivalents - beginning of year 23,442 30,044
--------------------------
Cash and cash equivalents - end of year 62,481 23,442
--------------------------
--------------------------
About SEMAFO
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines: the Mana Mine in Burkina Faso, the Samira Hill Mine in Niger and the Kiniero Mine in Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities in West Africa.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "potential", "prospective", "targets", "continued", "ongoing", "accentuate", "expected", "suggested", "may" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to complete the pre-feasibility and feasibility studies of the Mana underground, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2009 Annual MD&A and 2009 Annual Information Form and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
SEMAFO Inc.'s Board of Directors has approved this press release.
For further information: Benoit La Salle, President & CEO, SEMAFO, (514) 744-4408, Toll-Free: 1-888-744-4408, [email protected]; Sofia St Laurent, Communications, SEMAFO, (514) 744-4408, Toll-Free: 1-888-744-4408, [email protected]
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