TORONTO,
April 24, 2014 /CNW/ - Roxgold Inc.
("Roxgold" or "the Company") (TSX.V: ROG) today reported
its financial results for the twelve
months ended December 31, 2013, including development
highlights from its Yaramoko Gold Project in Burkina Faso, West Africa.
Over the year Roxgold made significant progress
in advancing the 55 Zone deposit at the Yaramoko property,
including delivering a Preliminary Economic Assessment and
commencing work on its Feasibility Study, which has since been
completed (for more details please refer to the Company's
April 22, 2014 news
release).
The Company also delivered two resource updates
for the 55 Zone. Resources in the indicated category have
increased by 141% since the maiden resource in 2012 and a
comprehensive regional exploration program, which has so far
yielded promising targets such as Bagassi South, is currently
underway. Over 2013, the Company also raised $28.5 million towards further project
advancement, in line with its development timelines.
For complete details of the audited Consolidated
Financial Statements and associated Management's Discussion and
Analysis please refer to the Company's filings on SEDAR
(www.sedar.com) or the Company's website (www.roxgold.com).
FISCAL 2013 FINANCIAL HIGHLIGHTS
- On February 11, 2013, pursuant to
a bought deal private placement financing, Roxgold issued
14,973,214 common shares and received gross proceeds of
$10,481,000.
- On August 1, 2013, pursuant to a
bought deal private placement financing, The Company issued
25,625,000 common shares and received gross proceeds totalling
$10,250,000.
- On December 31, 2013, Roxgold
announced the completion of the acquisition of XDM Royalty Corp.
("XDM") and issued 15,153,752 common shares for net assets
totalling $7,954,000 including cash
and cash equivalents amounting to $8,367,000.
- At December 31, 2013, The Company
had $17,720,000 in cash and cash
equivalents.
- Expenditures on the Yaramoko exploration property totalled
$19,475,000 for year ended
December 31, 2013 compared to
$31,570,000 during the fourteen-month
period ended December 31, 2012.
- Net loss for the year ended December 31,
2013 amounted to $5,321,000
compared to $30,570,000 for the
fourteen-month period ended December 31,
2012.
FISCAL 2013 CORPORATE AND OPERATING HIGHLIGHTS
- On March 4, 2013, Roxgold
announced a first updated resource estimate on the 55 Zone of its
Yaramoko permit. The estimate was undertaken by AGP Mining
Consultants Inc. and prepared in accordance with National
Instrument 43-101 Standards for Disclosure of Mineral Properties.
The estimate was based on 81,105 metres of drilling in 213 diamond
drill holes. The updated resource estimate on the 55 Zone returned
an indicated resource estimate of 1,343,000 tonnes at 15.7 gpt for
679,000 contained ounces of gold and an inferred resource estimate
of 751,000 tonnes at 8.9 gpt for 216,000 contained ounces of gold,
reported at a 3 grams per tonne ("g/t") gold cut-off. The full
report was filed on SEDAR on April 18,
2013.
- On May 22, 2013, Roxgold received
a three-year extension to the 100% owned Yaramoko exploration
permit. The Yaramoko permit is now valid until September 8, 2016.
- On August 27, 2013, Roxgold
announced a second updated resource estimate of 1,904,000 tonnes at
13.88 gpt totalling 850,000 gold ("Au") ounces in the indicated
category at a 3.0 gram per tonne ("gpt") cut-off grade representing
a 143% increase in indicated ounces compared to the maiden resource
estimate dated August 7, 2012, while
the inferred category included an estimated 860,000 tonnes at 9.88
gpt totalling 273,000 inferred ounces. A total of 243 drill holes
were used for this resource update, with an aggregate length of
99,077 metres. The full Preliminary Economic Assessment report,
which contained the resource update data, was filed on SEDAR on
October 29, 2013.
- On September 16, 2013, The
Company released the results of its Preliminary Economic Assessment
("PEA"). For more details on the PEA see the technical report
entitled "NI 43-101 Preliminary Economic Assessment for the
Yaramoko Project, Burkina Faso"
(the "Technical Report") dated October 29,
2013 and available on SEDAR at www.sedar.com and on the
Company's website at www.roxgold.com.
SIGNIFICANT EVENTS SUBSEQUENT TO DECEMBER 31, 2013
A. Bought deal offering
On
March 25, 2014, Roxgold completed a
public offering ("Offering") of 49,680,000 common shares pursuant
to its short form prospectus dated March 17,
2014 and raised gross proceeds of $28,814,000. The Company intends to use the
net proceeds of the Offering to advance the Yaramoko gold project
and complete further exploration at the property, as well as for
general working capital purposes.
B. Feasibility study
On April 22, 2014, The Company announced the results
of its feasibility study for the Yaramoko Gold Project (the
"Feasibility Study"). The study envisions an underground mining
scenario with an initial mine life of over seven years. The Study
also outlined:
IRR
|
- Pre-tax IRR of 53.7% with a 1.5
year payback on initial capital
- After-tax IRR of 48.4% with a 1.6
year payback on initial capital
|
NPV
|
- Pre-tax NPV5% of $300
million
- After-tax NPV5% of $250
million
|
Production
Costs1
|
- Average Total Cash Costs of $467/oz
(including royalties)
- Average All-in Sustaining Costs of
$590/oz
|
Capex
|
- Pre-Production capital of $106.5
million
|
Production
|
- Estimated average annual gold
production of 99,500 ounces
|
Mine
Life
|
- Current study mine life of 7.4
years
|
Probable Mineral
Reserves
|
- 1.996Mt @ 11.8 g/t Au containing
759,000 ounces Au
|
Recoveries
|
- Average metallurgical recoveries of
96.9% gold
|
1
Production costs are presented in accordance with World Gold
Council standards and are non-IFRS financial performance measure
with no standard definition under IFRS.
|
|
The economic parameters presented above are based
upon 100% ownership of the Yaramoko gold project. Under the Mining
Code of Burkina Faso, the
Government of Burkina Faso is
entitled to a 10% interest in the project upon formal award of an
exploitation permit. On a 90% basis, the After-tax NPV5%
of the Company's interest in the project is $232 million under the base case scenario. The
Government of Burkina Faso is
estimated to receive an undiscounted $143
million from Yaramoko in the form of dividends, taxes, VAT,
duties and levies.
Several key assumptions utilized in the
Feasibility Study were a gold price of $1,300 per ounce sold, a diesel price of
$1.58 per litre delivered to site as
well as an electricity tarrif of $0.171 per kWhr and a royalty rate of 5%.
More information on the Feasibility Study can be
found in the April 22, 2014 press
release available on SEDAR at www.sedar.com and on our website at
www.roxgold.com.
C. Environmental and Social Impact
Assessment ("ESIA")
In March
2014, Roxgold made a provisional submission of its ESIA to
the environmental regulator (BUNEE) in Burkina Faso. The Company expects to finalize
this submission shortly while advancing other aspects of in-country
permitting. Discussions with community members regarding income
restoration and compensation for land disturbed by the planned
mining activities are well advanced. No relocations are required as
part of the proposed development.
NEAR TERM CORPORATE OBJECTIVES
The Company will continue to advance its Yaramoko
gold project throughout 2014 in line with several development goals
for this year. These include:
- Completing detailed engineering in the second quarter
- Finalizing project financing, which is expected by the second
or third quarter.
- Finalizing permitting, which is expected in the third
quarter.
In addition, Roxgold continues to explore on its
167 km2 permit where it has identified eight priority
drill targets that will be tested within Q2 2014. Most notably
these targets include the QV1 target at Bagassi South where recent
drilling has returned high grade results including 19.94 gpt over
3.7 metres (See the Company's press release dated Feb 20, 2014) and 41.7 gpt over 4.4 metres (see
the Company's press release dated Jul 09,
2013).
SELECTED FINANCIAL DATA
The following table and contained data is derived
from the Company's financials for the years ended December 31, 2013, 2012 and 2011, prepared in
accordance with IFRS reporting standards. All amounts are
expressed in US dollars unless otherwise stated.
|
For
the
year
ended
December
31
2013
$
|
For
the
fourteen-month
period
ended
December
31,
2012
$
|
Cost of
operations
|
|
|
General and
administrative expenses
|
3,312,000
|
3,739,000
|
Contested annual
general meeting related costs
|
-
|
1,876,000
|
Severance
pay
|
68,000
|
1,888,000
|
Depreciation
|
90,000
|
38,000
|
Share-based
payments
|
1,664,000
|
8,685,000
|
Impairment (recovery)
of exploration & evaluation assets
|
-
|
14,850,000
|
Operating loss for
the period
|
5,134,000
|
31,076,000
|
Other expenses
(income)
|
65,000
|
(506,000)
|
Loss before income
taxes
|
5,199,000
|
30,570,000
|
Income tax
expense
|
122,000
|
-
|
Net loss for the
period
|
5,321,000
|
30,570,000
|
|
|
|
Loss per share (basic
and diluted)
|
0.03
|
0.26
|
|
|
|
|
December
31,
2013
$
|
December
31,
2012
$
|
|
|
|
Cash and cash
equivalents
|
17,720,000
|
8,565,000
|
Other current
assets
|
489,000
|
1,890,000
|
Total current
assets
|
18,209,000
|
10,455,000
|
Property and
equipment
|
1,252,000
|
697,000
|
Exploration and
evaluation assets ("E&E")
|
84,197,000
|
60,071,000
|
Total
assets
|
103,658,000
|
71,223,000
|
Total
liabilities
|
4,410,000
|
2,510,000
|
Total shareholders'
equity
|
99,248,000
|
68,713,000
|
|
|
|
General and administrative expenses decreased
slightly, compared to the same period in 2012, mainly owing to the
fact that some administrative expenses are now directly performed
in Burkina Faso and accordingly
are being capitalized in owners' costs as part of exploration and
evaluation assets.
The decrease in severance pay and share-based
payment expenses results from change of control provisions being
triggered in employment agreements following the change in the
Company's Board of Directors at the 2012 Annual General Meeting
("AGM"). The remaining variation relates to one-time costs incurred
in 2012. These costs were associated with the contested AGM
and the fact that at December 31,
2012 the Company determined that the Solna and Bissa West
properties were impaired. The Company considered that
substantive exploration and evaluation expenditures were neither
budgeted nor planned for the next 18 months, and that minimal
expenditures were incurred in 2012 compared to its Yaramoko project
on which currently all efforts are deployed. Accordingly, at
December 31, 2012, Roxgold recorded
$14,850,000 in impairment for the
Solna and Bissa West properties.
The other expenses incurred during the year
reflect lower interest income compensated by transaction costs
incurred for the acquisition of XDM when compared to the
comparative period. Current income tax relates to withholding
taxes on management fee recharges to the subsidiary in Burkina Faso.
As a result, the Company's net loss for the year
ended December 31, 2013 totalled
$5,321,000 or a loss of $0.03 per share compared to $30,570,000 for the fourteen-month period ended
December 31, 2012 or a loss of
$0.26 per share.
Total current assets have increased between
December 31, 2012 and December 31, 2013 mainly owing to XDM acquisition
made as of December 31, 2013. Total
assets increased during the current year ended December 31, 2013 when compared to the previous
period due to on-going investments in Yaramoko's exploration and
evaluation assets. This reflect the focus Roxgold puts on this
property which was the subject of a positive PEA and recent
positive feasibility study as per the press releases dated
September 16, 2013 and April 22, 2014, respectively.
At December 31,
2013, Roxgold had $17,720,000
in cash and cash equivalents with no long-term debt. As an
exploration and evaluation stage Company equity financings have
been its sole source of funds.
QUALIFIED PERSONS
Pierre Desautels, P.Geo, of AGP Mining
Consultants Inc., and Jean François Couture, P.Geo of SRK
Consulting Canada, Qualified Persons within the meaning of National
Instrument 43-101 and independent consultants to the company, have
verified and approved the technical data disclosed in the press
releases included herein by reference. This includes the sampling,
analytical and test data underlying the information.
About Roxgold
Roxgold is a gold
exploration and development company with its key asset, the high
grade, 100% owned Yaramoko Gold Project located in the Houndé
greenstone region of Burkina Faso,
West Africa. The Company is currently advancing Yaramoko's 55
Zone through permitting and expects to commence development in Q4
2014. Roxgold trades on the TSX Venture Exchange under the
symbol ROG.
"Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release."
This news release contains forward-looking
information. Forward looking information contained in this new
release includes, but is not limited to, statements with respect
to: (i) the estimation of inferred and indicated mineral resources
and probable mineral reserves; (ii) the success of exploration
activities; (iii) the completion and timing of the environmental
assessment process (iv) the results of the Feasibility Study
including statements about future production, future operating and
capital costs, the projected IRR, NPV, payback period, and
production timelines for the 55 Zone on the Yaramoko
permit.
These statements are based on information
currently available to the Company and the Company provides no
assurance that actual results will meet management's expectations.
In certain cases, forward-looking information may be identified by
such terms as "anticipates", "believes", "could", "estimates",
"expects", "may", "shall", "will", or "would". Forward-looking
information contained in this news release is based on certain
factors and assumptions regarding, among other things, the
estimation of mineral resources and mineral reserves, the
realization of resource estimates and reserve estimates, gold metal
prices, the timing and amount of future exploration and development
expenditures, the estimation of initial and sustaining capital
requirements, the estimation of labour and operating costs, the
availability of necessary financing and materials to continue to
explore and develop the Yaramoko project in the short and
long-term, the progress of exploration and development activities,
the receipt of necessary regulatory approvals, the completion of
the environmental assessment process, and assumptions with respect
to currency fluctuations, environmental risks, title disputes or
claims, and other similar matters. While the Company considers
these assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect.
Forward looking information involves known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
information. Such factors include risks inherent in the exploration
and development of mineral deposits, including risks relating to
changes in project parameters as plans continue to be redefined
including the possibility that mining operations may not commence
at the Yaramoko project, risks relating to variations in mineral
resources and mineral reserves, grade or recovery rates resulting
from current exploration and development activities, risks relating
to changes in gold prices and the worldwide demand for and supply
of gold, risks related to increased competition in the mining
industry generally, risks related to current global financial
conditions, uncertainties inherent in the estimation of mineral
resources and mineral reserves, access and supply risks, reliance
on key personnel, operational risks inherent in the conduct of
mining activities, including the risk of accidents, labour
disputes, increases in capital and operating costs and the risk of
delays or increased costs that might be encountered during the
development process, regulatory risks, including risks relating to
the acquisition of the necessary licenses and permits, financing,
capitalization and liquidity risks, including the risk that the
financing necessary to fund the exploration and development
activities at the Yaramoko project may not be available on
satisfactory terms, or at all, risks related to disputes concerning
property titles and interest, and environmental risks. Please refer
to the Company's Short Form Prospectus dated March 17, 2014 filed on SEDAR at
www.sedar.com for political, environmental or other risks
that could materially affect the development of mineral resources
and mineral reserves. This list is not exhaustive of the
factors that may affect any of the Company's forward-looking
information. These and other factors should be considered carefully
and readers should not place undue reliance on the Company's
forward-looking information. The Company does not undertake to
update any forward-looking information that may be made from time
to time by the Company or on its behalf, except in accordance with
applicable securities laws.
SOURCE Roxgold Inc.