Cash flow from operating activities up by 21% to $24,301,000
MONTREAL, Nov. 9 /CNW Telbec/ - SEMAFO (TSX: SMF) today reported its third quarter financial and operational results for the three-month period ended September 30, 2009. All amounts are in US dollars unless otherwise stated.
Highlights for the three- and nine-month periods ended September 30, 2009
- Gold production for the three-month period ended September 30, 2009
totalled 62,300 ounces, a 13% increase over Q3 2008. For the first nine
months of 2009, overall production totalled 184,500 ounces, an increase
of 33% over the corresponding period in 2008.
- Record gold production at Mana for the quarter of 41,600 ounces.
- Gold sales amounted to $59,361,000 in the third quarter, a 16% increase
over Q3 2008. Gold sales rose to $167,502,000 for the first nine months
of this year, representing a 38% increase over the corresponding period
- Operating income increased by 27% year-over-year to $15,195,000 for the
three-month period, and by 52%, to $43,411,000 for the nine-month
- Net income for the third quarter was $13,399,000, an increase of 25%
over the previous quarter and an increase of 18% over the same period
last year. Net income for the first nine months of 2009 totalled
- Cash flow from operating activities for the quarter totalled
$24,301,000 and $68,245,000 for the nine-month period, representing a
21% increase over Q3 2008 and a 50% increase for the nine-month period
over the corresponding period in 2008.
- Cash operating costs were $472 per ounce for the quarter and $450 per
ounce for the nine-month period.
- Average selling price per ounce was $969 for the quarter and $942 for
the nine-months ended September 30, 2009, compared to the average
London PM Gold Fix price of $960 and $931 per ounce, respectively.
- Drilling results at Mana validated the presence of significant
mineralized zones at-depth and laterally.
- An airborne geophysical survey identified the Wona structural corridor
indicating that it may extend over a distance of more than
30 kilometers. Other similar signatures were also observed over the
1,695 km2 of permitted properties.
- A preliminary economic assessment ("PEA") confirmed the economic
potential of the Wona underground deposit. The Company has decided to
proceed with a pre-feasibility study.
- Increased balance sheet strength with a debt-equity ratio of 17%,
compared to 38% as at December 31, 2008.
A Word from the CEO
SEMAFO maintained the positive momentum established in 2008. Our disciplined growth strategy resulted in a 13% increase in gold production compared to Q3 2008, and a 33% increase year-over-year for the nine months ended September 30, 2009.
SEMAFO's flagship Mana mine in Burkina Faso increased production to 41,600 ounces of gold, representing 67% of the Company's total production of 62,300 ounces for the third quarter. On this property, which encompasses 1,695 km2, we increased and accelerated exploration activities with the intention to validate the presence of significant mineralized zones at-depth and identify new targets on-surface to ultimately increase reserves and resources. The preliminary results reported not only some of the highest-grade intercepts recorded to date (WDC133 5.24 g/t over 57.8 m), but most importantly underscored the robust nature of a significant high-grade lode just below the bottom of the Wona North pit. The preliminary economic assessment to evaluate the potential to develop an economically viable underground mining operation at Mana was very positive and accordingly, SEMAFO has decided to proceed with a pre-feasibility study. Additionally, an airborne geophysical survey identified the Wona structural corridor and results suggest that the Wona corridor may extend over a distance of more than 30 kilometers. The results also revealed other similar signatures elsewhere over the property.
At the Kiniero mine in Guinea, third quarter performance waned as we faced a significant decrease in head grade. This can be rectified by additional investments. Given the current situation in the country, the Company has decided at this time to suspend any additional cash investment in this property.
Management remains confident that the Company will attain the upper bracket of its 2009 production guidance of between 220,000 and 240,000 ounces of gold.
Consolidated Results and Mining Operations
Three-month period Nine-month period
ended September 30 ended September 30
2009 2008 tion 2009 2008 tion
produced 62,300 55,300 13% 184,500 138,600 33%
Gold ounces sold 61,200 59,200 3% 177,800 137,000 30%
Revenues - Gold
sales 59,361 51,147 16% 167,502 121,513 38%
Operating costs 31,009 28,119 10% 87,844 67,830 30%
Operating income 15,195 11,959 27% 43,411 28,582 52%
Net income 13,399 11,366 18% 33,022 35,549 (7%)
price (per ounce) 969 864 12% 942 887 6%
cost (per ounce
produced)(1) 472 456 4% 450 447 1%
cost (per tonne
processed)(1) 34 35 (3%) 32 33 (3%)
Total cash cost
(per ounce sold)(2) 507 475 7% 494 495 -
(1) Cash operating cost is calculated using ounces produced and tonnes
processed. See the section ''Non-GAAP measures'' of the Company's
(2) Total cash cost represents the cash operating cost plus royalties and
selling expenses as well as the effects of inventory adjustments.
In October 2009, SEMAFO recorded its second highest monthly production result ever, having produced 22,600 ounces of gold. The Company looks forward to continuing this positive trend.
A conference call will be held at 10:00 a.m. on Tuesday, November 10, 2009 to discuss the Company's quarterly results. Details to access the call can be found on the home page of the Company's website at www.semafo.com. SEMAFO'S consolidated financial statements, together with Management's Discussion and Analysis, are available on its website or at www.sedar.com.
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines in Burkina Faso, Niger and Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest, while maintaining principles and strengthening relationships to increase shareholder value.
This press release may contain 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. Forward-looking statements include words or expressions such as "suggests", "proceed with", "growth", "increase", "extend", "remains", "guidance, "committed", "evolve", "become", "maintaining", "strengthening" and other similar words or expressions as well as statements regarding the Company's expectations as to future commercial production and grade estimates. 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 of the exploration programs at Mana to accurately validate the presence of significant mineralized zones, the ability of the helicopter borne geophysical survey to clearly identify the Wona structural corridor and accurately suggest that the Wona corridor may extend over a given distance, the possibility that the pre-feasibility study does not demonstrate the potential to develop an economically viable underground mining operation at Mana fluctuations in the market price of precious metals, mining industry risks, uncertainty as to calculation of mineral reserves and resources and other risks described in the Company's documents filed from time to time with Canadian securities regulatory authorities. Although the Company is of the opinion that these forward-looking statements are based on reasonable assumptions, those assumptions may prove to be incorrect. Accordingly, readers should not place undue reliance on forward-looking statements. Readers can find further information with respect to risks in the Company's 2008 Annual MD&A as updated in the First Quarter 2009 MD&A, Second Quarter 2009 MD&A and Third Quarter 2009 MD&A, and other filings with Canadian securities regulatory authorities available at www.sedar.com. The Company disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
SOURCE SEMAFO INC.
For further information: For further information: SEMAFO: Benoit La Salle, President & CEO, (514) 744-4408, Toll-Free: 1-888-744-4408, email@example.com; Sofia St Laurent, Communications, (514) 744-4408, Toll-Free: 1-888-744-4408, firstname.lastname@example.org