Crocodile Gold Reports Revenue of $70 Million and Operating Cash
Flow of $12.5 Million from Production of 53,583 oz in Q1 2014
TORONTO, ONTARIO--(Marketwired - May 12, 2014) - Crocodile Gold
Corp. (TSX:CRK)(TSX:CRK.DB)(TSX:CRK.WT)(OTCQX:CROCF)(FRANKFURT:XGC)
("Crocodile Gold" or the "Company") today announces its financial
and operating results for the three months ended March 31, 2014.
All figures are in U.S. dollars, unless stated otherwise.
Q1 2014 Financial Highlights
- Crocodile Gold generated over $70 Million in revenue from
production of 53,583 ounces of gold from its three operating mines,
a 9.5% increase in production over Q1 2013.
- Gold production is on track to meet guidance of 200,000 -
210,000 ounces for 2014.
- Operating cash costs per ounce* have decreased over 15% from Q1
2013. Average operating cash costs per ounce* are on target to meet
the $900 - $950/oz guidance for 2014.
- The all-in sustaining cash costs per ounce* have decreased over
12% compared to Q1 2013; the Company continues to focus on cost
reduction initiatives.
- Crocodile Gold generated cash flow from its operations of $12.5
Million.
- Crocodile Gold ended the quarter with a cash balance of $38.0
Million and working capital of $26.0 Million.
- The Company made payments of $4.96 Million to fully settle the
outstanding credit facility with Credit Suisse.
2014 Q1 Financial Results
|
Q1 2014 |
|
Q1 2013 |
|
| Revenue ($) |
70,387,636 |
|
83,780,492 |
|
| Cost of operations, including depletion and
depreciation |
(63,089,969 |
) |
(83,988,182 |
) |
| Mine operating income (loss)($) |
7,297,667 |
|
(207,690 |
) |
| Net income (loss)($) |
(3,325,737 |
) |
17,621,570 |
|
| Net income (loss) per share ($/share) |
(0.01 |
) |
0.04 |
|
| Cash from operating activities ($) |
12,459,464 |
|
17,559,642 |
|
| Investment in mine development, property, plant and
equipment: |
|
|
|
|
|
|
|
|
|
|
|
Cosmo Gold Mine |
5,312,713 |
|
9,600,650 |
|
|
Fosterville Gold Mine |
10,459,332 |
|
8,683,613 |
|
|
Stawell Gold Mine / Big
Hill Project |
1,060,643 |
|
900,290 |
|
|
|
Total Investment (CAPEX) |
16,832,688 |
|
19,184,553 |
|
|
|
|
|
|
| Gold ounces produced |
53,583 |
|
48,953 |
|
| Gold ounces sold |
54,735 |
|
49,720 |
|
| Average realized gold price ($) |
1,280 |
|
1,664 |
|
| Operating cash cost per ounce sold ($)* |
971 |
|
1,151 |
|
| All In sustaining Cash Costs per ounce sold ($)* |
1,307 |
|
1,490 |
|
* Refer to non-IFRS measures below
Commenting on the financial results, Rod Lamond, President and
CEO, said: "I am very pleased with the strong results in the first
quarter of 2014 and particularly happy with the successful
transition of the mining contractor at Cosmo and the updated
drilling results from Fosterville. The Company is continuing on the
positive path that was established in 2013. From a consolidated
view, our consistent production base and decreasing cash costs have
allowed Crocodile Gold to maintain a strong cash position of over
$38 million. During the quarter, we have repaid $4.9 million of
debt and kicked off new exploration programs at all three of our
operating mines. The Crocodile Gold Management Committee has
developed process and controls for value-driven capital investments
like the ventilation and tailing facility upgrades at Fosterville
and the continuation of our commitment to the Big Hill project at
Stawell. These investments, plus the commitment of our team, are
what will drive the future success of the Company."
Financial Discussion
Total revenues in Q1 2014 were $70,387,636, down from Q1 2013
despite higher ounce production as the average realized gold price
sold was $1,280/oz compared to $1,664/oz in the prior year. Despite
the drop in the realized gold price, Crocodile Gold was still able
to generate $12,459,464 of cash from operations as a result of
strong gold production and reduced operating cash costs. Operating
cash costs per ounce have decreased as a result of productivity
gains at Fosterville and sustainable production at Cosmo compared
to Q1 2013.
The Company invested $14,005,838 into mine development and
resource definition at Fosterville and Cosmo, and $975,788 to
progress the permitting of the Big Hill Project. A further
$1,851,062 was also spent on property, plant and equipment.
As at December 31, 2013, the Company began publishing all-in
sustaining cash costs per ounce to provide transparency to the
operating and capital expenditures to support the Company's current
and future production profile. All-in sustaining cash costs were
$1,307/oz in Q1 2014, down significantly from $1,490/oz in Q1 2013.
Current all-in sustaining costs include significant investments for
ventilation and tailings facility upgrades at Fosterville, which
will sustain the operation into future years. The Company continues
to review costs across all its operations and departments, and
expects to see savings at Cosmo from the mining contractor change
over in late March.
The Company reported a net loss for Q1 2014 of $3,325,737 or
$0.01 per share, compared to net income of $17,621,570 or $0.04 a
share in Q1 2013. Net income for Q1 2013 included a non-cash gain
on the revaluation of derivative liabilities of $21,500,928 and a
gain from the change in fair value of the contingent payments
liability of $5,763,994. The net loss in the current quarter was
impacted by the lower gold price and the loss on the revaluation of
the contingent payments liability. It also included higher care and
maintenance costs associated with the environmental reclamation of
a low-grade stockpile in the Northern Territory.
Financial Position
Crocodile Gold ended the period with a cash balance of
$38,013,759 and working capital of $25,941,392. In addition, the
Company made $4,962,285 in payments to Credit Suisse during Q1 2014
to fully settle the outstanding credit facility. The Company's
working capital was strengthened during the quarter with the
closing of a private placement in February for net proceeds of
$15,494,409.
The working capital for the quarter ended March 31, 2014 has
changed from the amount provisionally disclosed by the Company in
its Q1 2014 Production press release (see release dated April 23,
2014). As disclosed in the December 31, 2013 audited annual
financial statements, the Company and AuRico Gold Inc. engaged an
independent expert to determine the treatment of certain financial
transactions in the net free cash flow sharing arrangement that
exists between the two parties. On April 14th, the independent
expert concluded that such items were to be included in the
calculation of contingent payments. After reviewing the independent
expert's report, the Company initially determined that no
contingent payments were currently payable, however, after further
analysis as part of the finalization of the Q1 2014 financial
statements it was determined that C$2,693,000 was currently due and
payable. Other than the aforementioned payable amount, based on
current mine plans and gold prices, no further portion of the
contingent consideration has been classified as current.
Operational Discussion
|
|
Q1 2014 |
Q1 2013 |
|
Northern Territory |
|
|
|
Ore Milled (Tonnes) |
230,815 |
152,128 |
|
Average Grade (g/t Au) |
2.79 |
3.12 |
|
Recovery (%) |
85.9 |
86.4 |
|
Gold Produced (Ounces) |
17,841 |
13,169 |
|
Gold Sold (Ounces) |
19,416 |
12,309 |
|
Fosterville |
|
|
|
Ore Milled (Tonnes) |
220,379 |
190,026 |
|
Average Grade (g/t Au) |
4.32 |
4.74 |
|
Recovery (%) |
84.3 |
81.4 |
|
Gold Produced (Ounces) |
25,786 |
23,556 |
|
Gold Sold (Ounces) |
25,809 |
24,270 |
|
Stawell |
|
|
|
Ore Milled (Tonnes) |
227,627 |
213,132 |
|
Average Grade (g/t Au) |
1.71 |
2.06 |
|
Recovery (%) |
79.4 |
86.5 |
|
Gold Produced (Oz) |
9,956 |
12,228 |
|
Gold Sold (Oz) |
9,510 |
13,141 |
|
|
|
|
|
Consolidated Gold Produced (Oz) |
53,583 |
48,953 |
|
Consolidated Gold Sold (Oz) |
54,735 |
49,720 |
Crocodile Gold produced 53,583 ounces of gold in Q1 2014, a 9.5%
increase over Q1 2013. The increase year over year reflects
consistent production from the Fosterville Gold Mine and
sustainable production from the Cosmo Gold Mine which has
contributed more ounces and ore tonnes milled compared to the
previous year, when commercial production had only been declared on
March 1, 2013. Production from Cosmo has more than offset reduced
ounces from the Stawell Gold Mine which had begun to wind down its
underground operations in the first quarter of 2013. At that time,
Stawell was projected to close its underground operations by the
third quarter of 2013. However Stawell continues to produce ore
from the underground resource in the upper levels of the mine,
contributing 9,956 ounces of gold in the first quarter, and is
expected to do so until late 2014.
Cosmo Gold
Mine
Cosmo continued to operate at a consistent level, posting
underground ore production of 180,047 tonnes of ore at an average
grade of 3.36 g/t Au during Q1 2014, despite a mining contractor
changeover in March. While there were some operational challenges
in the early part of the transition which impacted mine
productivity, all critical gear and staffing are now in place and
operating at targeted levels. The new contractor has quickly met or
exceeded performance indicators with target run rates achieved by
the third day after changeover.
Tonnes milled in the first quarter were 230,815 tonnes of ore at
an average grade of 2.79 g/t Au and recovery rate of 85.9%, for
total gold production of 17,841 ounces of gold. Underground ore was
supplemented with approximately 56,000 tonnes of lower-grade oxide
material from an exploration property for environmental reclamation
purposes. The stockpile had a lower than estimated grade, which
also impacted the recovery rate. The material was fully processed
in Q1.
Fosterville Gold
Mine
Fosterville started the year strong with underground production
of 206,540 tonnes at an average grade of 3.76 g/t Au, as higher
tonnes offset lower grades. Mine grade is expected to improve in
coming quarters as mining fronts progress into higher grade zones
of the ore body and design changes to reduce dilution take effect.
Fosterville drew on higher grade stockpiles to process 220,379
tonnes of ore at a grade of 4.32 g/t Au with a recovery rate of
84.3%, resulting in gold production of 25,786 ounces in the first
quarter. Mine development continued at an average advance rate of
618 metres per month with a strong advance of 662 metres in March
as the site pushes to open up more mining fronts. Exploration on
the Phoenix and Central ore bodies had encouraging results (see
news release of March 12, 2014) and the Company is preparing an
updated Mineral Resource and Reserve Estimate in Q2 2014 with the
anticipation that additional mineral resources identified will
continue to extend the mine life of Fosterville.
Stawell Gold
Mine
Stawell continues to focus on the upper levels of the mine,
producing from remnant underground mining zones and defining other
areas of opportunity. During the quarter Stawell mined 141,126
tonnes of underground ore at an average grade of 2.49 g/t Au.
Stawell processed a total of 227,627 tonnes at an average grade of
1.71 g/t Au, as underground ore was supplemented by lower grade
surface oxide stockpiles. An average recovery rate of 79.4%
resulted in gold production of 9,956 ounces for the quarter. The
recovery rate is consistent with the underground ore source and is
being managed through more selective mining methods which limit the
mining of preg-robbing material, allowing the mill to maintain
recoveries closer to 80% levels.
About Crocodile Gold
Crocodile Gold is a Canadian gold mining and exploration company
with three operating mines in Australia, in the State of Victoria
and the Northern Territory. The Company has a combined land package
in excess of 4,000 sq. km. The objective of Crocodile Gold is to
continue production from its three operating mines, Cosmo,
Fosterville, and Stawell, while also exploring and developing the
Company's resources to ensure sustainable production in the
future.
For additional information, please visit our website
www.crocgold.com or follow us on Twitter @crocgold_crk or on
Facebook at CrocodileGoldCorp.
Qualified Person
F. W. Nielsen P.Geo, Technical Consultant to Crocodile Gold is a
"qualified person" as such term is defined in National Instrument
43-101 and has reviewed and approved the technical information and
data included in this press release.
Cautionary
Notes
Non-IFRS Measures
The Company believes that, in addition to conventional measures
prepared in accordance with International Financial Reporting
Standards ("IFRS"), certain investors use non-IFRS information to
evaluate the Company's performance and ability to generate cash
flow. Accordingly, the following measurements are intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
Operating Cash Costs per ounce of Gold - The Company
calculates operating cash costs per ounce by deducting silver sales
revenue as a by-product from operating expenses per the
consolidated statement of operations, then dividing by the gold
ounces sold during the applicable period. Operating expenses
include mine site operating costs such as mining, processing and
administration as well as royalties, however excludes depletion and
depreciation, share-based payments and rehabilitation costs.
All-In Sustaining Costs per Ounce of Gold - Effective
December 31, 2013, the Company has adopted an all-in sustaining
cost ("AISC") performance measure that reflects all of the
expenditures that are required to produce an ounce of gold from
current operations. While there is no standardized meaning of the
measure across the industry, the Company's definition confirms to
the AISC definition as set out by the World Gold Council in its
guidance dated June 27, 2013. The World Gold Council is a
non-regulatory, non-profit organization established in 1987 whose
members include global senior mining companies. The Company
believes that this measure will be useful to external users in
assessing operating performance and the ability to generate free
cash flow from current operations.
The Company defines AISC as the sum of operating cash costs (per
above), sustaining capital (capital required to maintain current
operations at existing levels), capital lease repayments, corporate
general and administrative expenses, in-mine exploration expenses
and rehabilitation accretion and amortization related to current
operations. AISC excludes capital expenditure related to projects
to mine expansion, exploration and evaluation related to growth
projects, rehabilitation accretion and amortization not related to
current operations, financing costs, debt repayments, share-based
compensation not related to operations, and taxes.
The operating cash costs per ounce and all-in sustaining cost
per ounce are reconciled to the consolidated statement of
operations as follows:
|
|
Q1 2014 |
|
Q1 2013 |
|
|
Operating expense per the consolidated statement of operations,
including royalties |
53,224,374 |
|
57,367,448 |
|
|
By-product silver sales credit |
(79,360 |
) |
(126,435 |
) |
|
Operating Cash Costs |
53,145,014 |
|
57,241,013 |
|
|
Sustaining mine development (1) |
14,005,838 |
|
10,616,262 |
|
|
Sustaining capital expenditures, including capital lease
payments |
2,957,570 |
|
3,059,260 |
|
|
General and administration costs |
974,675 |
|
1,926,708 |
|
|
Rehabilitation - accretion and amortization (operating sites) |
266,993 |
|
547,975 |
|
|
In-mine exploration expense |
196,264 |
|
713,857 |
|
|
All-in Sustaining Cash Costs |
71,546,354 |
|
74,105,075 |
|
|
Gold ounces sold |
54,735 |
|
49,720 |
|
|
Operating Cash cost per ounce |
971 |
|
1,151 |
|
|
All-in sustaining cash cost per ounce |
1,307 |
|
1,490 |
|
(1) Sustaining mine development are defined as those
expenditures which do not increase annual gold production at a mine
operation and exclude expenditures for growth projects and mine
development to commercial production. Total sustaining capital for
the quarters ending March 31, 2014 and 2013 is calculated as
follows:
|
Expenditure on mine development per the statement of cash
flows |
14,981,626 |
|
17,857,245 |
|
|
Less: Cosmo development before commercial production |
- |
|
(6,353,689 |
) |
|
Less: Big Hill Project Development costs |
(975,788 |
) |
(887,294 |
) |
|
|
14,005,838 |
|
10,616,262 |
|
Forward-Looking Information
Certain information set forth in this press release contains
"forward-looking statements", and "forward-looking information
under applicable securities laws. Except for statements of
historical fact, certain information contained herein constitutes
forward-looking statements, which include the Company's
expectations for future performance based on current drill results
and past production, expected gold prices, and mineral resource
estimates, and are based on Crocodile Gold's current internal
expectations, estimates, projections, assumptions and beliefs,
which may prove to be incorrect. Some of the forward-looking
statements may be identified by words such as "expects"
"anticipates", "believes", "projects", "plans", and similar
expressions. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Crocodile Gold's actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to:
liabilities inherent in mine development and production;
geological, mining and processing technical problems; Crocodile
Gold's inability to obtain required mine licences, mine permits and
regulatory approvals required in connection with mining and mineral
processing operations; competition for, among other things,
capital, acquisitions of reserves, undeveloped lands and skilled
personnel; incorrect assessments of the value of acquisitions;
changes in commodity prices and exchange rates; currency and
interest rate fluctuations; various events that could disrupt
operations and/or the transportation of mineral products, including
labour stoppages and severe weather conditions; the demand for and
availability of rail, port and other transportation services; the
ability to secure adequate financing and management's ability to
anticipate and manage the foregoing factors and risks. There can be
no assurance that forward-looking statements will prove to be
accurate, and actual results and future events could differ
materially from those anticipated in such statements. Crocodile
Gold undertakes no obligation to update forward-looking statements
if circumstances or management's estimates or opinions should
change except as required by applicable securities laws. The reader
is cautioned not to place undue reliance on forward-looking
statements.
Crocodile Gold Corp.Rob HopkinsManager, Investor
Relations416-861-5899info@crocgold.comwww.crocgold.com