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St Andrew Goldfields Ltd

SAS Reports 2015 Second Quarter Results - Strong Operating Cash Flow and Operational Performance at Holloway

Oct 6, 2015
TORONTO, Aug. 12, 2015 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") reports $9.2 million or $0.03 per share, in operating cash flow for Q2 2015. Net income attributable to shareholders for Q2 2015 was $3.5 million or $0.01 per share, as compared to net income of $0.6 million, or nil, on a per share basis, in Q2 2014. Excluding marked-to-market adjustments on derivative financial instruments, adjusted net earnings (1) for Q2 2015 was $3.3 million or $0.01 per share as compared to an adjusted net loss (1) of $0.2 million or nil, on a per share basis for Q2 2014.

 
Q2 2015 HIGHLIGHTS
 
Gold production – Produced 23,533 ounces of gold from Holt and Holloway (17% increase from Q2 2014 for the two mines); and on track to meet the top end of the Company's 2015 production guidance.
 
Gold sold - Sold 23,319 ounces of gold at an average realized price (1) of US$1,201 per ounce for revenues of $34.4 million (9% increase from Q2 2014).
 
Total cash cost per ounce of gold sold (1) – US$739 per ounce (15% decrease from Q2 2014). Mine site cash cost of US$641 (1) for Q2 2015 is 14% below the Company's mine cash cost guidance of between US$750 and US$800 per ounce.
 
All-in sustaining cost (AISC) (1) – US$966 per ounce of gold sold (12% or US$132 per ounce decrease from Q2 2014).
 
Cash margin from operations (1) - $13.2 million ($3.3 million or 33% increase from Q2 2014).
 
Operating cash flow - $9.2 million or $0.03 per share. For Q2 2015, SAS generated $1.8 million in net cash flow (1) as compared to a $2.6 million cash outflow in Q2 2014.

 
OUTLOOK FOR 2015
 
The Company's 2015 production guidance for Holt and Holloway remains between 85,000 – 95,000 ounces of gold at a mine cash costs target of between US$750-US$800 per ounce of gold sold (1). The Taylor production will be included in the Company's production guidance once the timing of the commencement of commercial production is more certain. It is anticipated that commercial production could commence in Q4 2015 and if that occurs, it is anticipated that Taylor would contribute between 10,000 and 12,000 ounces of commercial production in 2015.
 
SAS is focused on bringing Taylor into commercial production in 2015 and is continuing its cost containment initiative at all of its operations, with the objective of maximizing cash margin from mine operations while exploration programs remain focused on the near-mine targets. SAS is sufficiently funded to achieve its near-term objectives.

 
Conference Call Information
 
A conference call will be held Thursday, August 13, 2015 at 10:00 a.m. (EST) to discuss the second quarter 2015 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.

 
Mine Operations Review
 
Holt (see Operating and Financial Statistics – Holt Mine on page 12)
Production increased by 5% from Q2 2014 as a result of an increase in ore grade due to mining sequence.  For Q2 2015, mine cash cost improved by US$52 per ounce of gold sold from Q2 2014, due to the increased strength of the US dollar relative to the Canadian dollar. 
 
Cash margin from mine operations in Q2 2015 improved by $1.6 million or 19% when compared to Q2 2014 due to an 11% increase in revenue, in conjunction with a 4% reduction in royalty costs.
 
Holloway (see Operating and Financial Statistics – Holloway Mine on page 13)
Both throughput and ore grade increased by 22% and 26%, respectively, from Q2 2014, resulting in a 55% increase in production from 4,893 ounces of gold in Q2 2014 to 7,582 ounces in Q2 2015.
 
In Q2 2015, cash margin from mine operations increased 3 times or by $2.1 million over Q2 2014 as a result of the increased throughput and ore grade.

 
Taylor Project

Underground development activities started at Taylor during Q1 2015 after the decision was made to advance the project into commercial production by the end of 2015. During Q2 2015, the Company commenced with the procurement of $7.2 million of mining equipment and initiated a recruitment campaign for miners to replace the current mine contractors for the project late this quarter. It is anticipated that ore mined during the pre-production period will be stockpiled and processed upon the receipt of the production closure plan. Applications for all permitting requirements, including the mine production closure plan, are currently underway.

 
Exploration Programs
 
Exploration activities during Q2 2015 continued to focus 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 Q2 2015, SAS drilled a total of 11,400 metres of surface core and an additional 10,000 metres of underground drilling. The majority of surface drilling activities were focused on Phase 2 evaluation of Zone 4 West Extension, on the Tousignant West and Mattawasaga west pit extensions on the Holt property. At Holloway surface drilling targeted the down-dip extension of Blacktop mineralization and at Hislop North drilling continued to target the southerly strike extension of the "147 Zone style" mineralization. The majority of the underground drilling took place on the 710m and 925m Sub-levels at Holt targeting the Zone 6 extension, and on the 945m Sub-level at Holloway to evaluate the easterly strike potential of Smoke Deep (See press release dated August 5, 2015 available under the Company's profile on www.sedar.com or on the Company's website at www.sasgoldmines.com.).


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Source: http://www.sasgoldmines.com/s/NewsDetails.asp?id=122597