Unless otherwise stated, all amounts discussed herein are
denominated in Canadian dollars.
THUNDER BAY, ON, Aug. 8, 2017 /CNW/ - PREMIER GOLD MINES
LIMITED (TSX:PG) ("Premier", "the Company") is pleased to
announce its operational and financial results for the second
quarter ended June 30, 2017. The
Company previously released on July
18, 2017 its gold production results of 37,617 ounces
for the second quarter. Operating results for the second
quarter contributed to an EBITDA of $31.4
million (US$23.5 million) and
net income of $14.6 million
(US$10.9 million) or $0.07/share (US$0.05/share).
2017 Second Quarter Consolidated Highlights
- Production of 37,617 ounces of gold and 89,474 ounces of
silver
- Gold sales of 43,212 ounces at an average realized
price(i) of $1,677
(US$1,256) per ounce
- Co-product cash costs(i) of US$481 per ounce of gold
- Co-product all-in sustaining costs ("AISC")(i) of
US$607 per ounce of gold
- Revenue of $74.6 million
(US$55.9 million)
- Operating income of $28.7 million
(US$21.5 million)
- Net income of $14.6 million
(US$10.9 million)
- Quarter end cash balance of $156.8
million (US$120.9
million)
- Cash flow from operating activities of $17.8 million (US$13.4
million) or $0.09/share
(US$0.07/share)
- Free cash flow of $10.1 million
(US$7.5million) or $0.05/share (US$0.04/share), after investing $10.7 million (US$ 8.0
million) in exploration and pre-development programs and
$7.1 million (US$5.5 million) in capital expenditures.
(i)
|
See "Non-IFRS
Measures" section. A cautionary note and further information
regarding Non-IFRS financial metrics is included in the "Non-IFRS
Measures" section of the Q2-2017 Management's Discussion and
Analysis
|
Consolidated Financial Highlights – For the three months
ended June 30, 2017
The continued strong performance at both operations contributed
to record quarterly earnings. Gold production at South Arturo
during the quarter has resulted in an increase in full year
production guidance, while cost reduction initiatives and an
increased mining rate at the Mercedes Mine continued to strengthen
operations quarter on quarter. The Company remains on track to meet
its 2017 full-year gold production guidance of 130,000-140,000
ounces.
Capital expenditures during the second quarter were $7.1 million (US$5.5
million). Exploration, evaluation and pre-development costs
were $10.7 million (US$8.0 million). Positive operating results
continue to contribute to the Company's strong financial position
with a $9.5 million (US$7.4 million) increase in cash and equivalents
to $156.8 million (US$120.9 million) and precious metals inventories
of 17,176 ounces of gold and 47,348 ounces of silver as at
June 30, 2017.
Millions CA$,
except
for earnings/(loss) per
share
|
Three months
ended June
30, 2017
|
Six months
ended June
30, 2017
|
|
Millions US$,
except
for earnings/(loss) per
share
|
Three months
ended June
30, 2017
|
Six months
ended June
30, 2017
|
|
|
|
|
|
|
|
Revenue
|
74.6
|
159.9
|
|
Revenue
|
55.9
|
119.9
|
Mine Operating
Income
|
28.7
|
57.2
|
|
Mine Operating
Income
|
21.5
|
42.8
|
EBITDA (i)
|
31.4
|
76.0
|
|
EBITDA (i)
|
23.5
|
56.9
|
Net income
(loss)
|
14.6
|
21.3
|
|
Net income
(loss)
|
10.9
|
16.0
|
Earnings (loss) per
share
|
0.07
|
0.10
|
|
Earnings (loss) per
share
|
0.05
|
0.08
|
Change in
cash
|
9.5
|
37.1
|
|
Change in
cash
|
7.4
|
28.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions
CA$
|
Six months
ended June
30, 2017
|
Six months
ended June
30, 2016
|
|
Millions
US$
|
Six months
ended June
30, 2017
|
Six months
ended June
30, 2016
|
EBITDA (i)
|
76.0
|
(19.7)
|
|
EBITDA (i)
|
56.9
|
(14.8)
|
Cash flow from
operating activities
|
55.7
|
(14.6)
|
|
Cash flow from
operating activities
|
41.7
|
(11.0)
|
Cash and cash
equivalents
|
156.8
|
46.9
|
|
Cash and cash
equivalents
|
120.9
|
36.3
|
|
|
|
|
|
|
|
(i) Earnings before
interest, tax, depreciation and amortization
|
Operational Highlights – For the three months ended
June 30, 2017
Mercedes Mine - Sonora State, Mexico
Second quarter co-product cash costs were US$577 per ounce of gold sold and AISC were
US$707 per ounce of gold (2017
guidance is US$680-$710 and
US$810-$840 per ounce respectively).
Cost reduction initiatives continued to be a focus during the
quarter and a plan has been put in place to reach and maintain a
mill throughput of 2,000 tonnes per day. Throughput at
the mill was steady with daily processing averaging 1,954 tonnes
per day with production during the second quarter of 21,893 ounces
of gold and 89,474 ounces of silver.
To achieve future throughput and stockpile targets, the Mercedes
mine team continues to develop additional mine workings including
the Diluvio deposit, where ore has now been accessed at Level 1,
and the Rey De Oro deposit where access is expected during the
third quarter.
Capital expenditures during the quarter totaled $6.8 million (US$5.2
million), including $1.3
million (US$1.0 million) in
underground sustaining development, $1.7
million (US$1.3 million) in
equipment and building infrastructure, $1.9
million (US$1.5 million) in
expansion development and $1.3
million (US$1.0 million) in
exploration.
Exploration and development drilling steadily ramped up during
the quarter with nine drill rigs now active on the site.
Mercedes
Operational Results
|
|
|
Three months
ended June
30, 2017
|
|
Six months
ended June
30, 2017
|
in CA$, unless
otherwise stated
|
|
|
|
|
|
|
|
|
|
Ore milled
|
|
tonnes
|
177,883
|
|
344,673
|
|
|
|
|
|
|
Gold
produced
|
|
ounces
|
21,893
|
|
44,057
|
Silver
produced
|
|
ounces
|
89,474
|
|
178,046
|
Gold
sold
|
|
ounces
|
26,379
|
|
43,273
|
Silver
sold
|
|
ounces
|
97,356
|
|
171,190
|
|
|
|
|
|
|
Average gold
grade
|
|
grams/tonne
|
4.03
|
|
4.18
|
Average silver
grade
|
|
grams/tonne
|
36.47
|
|
40.07
|
|
|
|
|
|
|
Average gold recovery
rate
|
|
%
|
94.9
|
|
95.2
|
Average silver
recovery rate
|
|
%
|
43.0
|
|
40.2
|
|
|
|
|
|
|
Revenues and
Realized Prices
|
|
|
|
|
Gold
revenue
|
|
000s
|
44,176
|
|
71,066
|
Silver
revenue
|
|
000s
|
2,199
|
|
3,882
|
|
Total
revenues
|
|
000s
|
46,375
|
|
74,948
|
|
|
|
|
|
|
Average realized gold
price (i,ii)
|
|
$/oz
|
1,675
|
|
1,642
|
Average realized
silver price (i,ii)
|
|
$/oz
|
23
|
|
23
|
|
|
|
|
|
|
Non-IFRS
Performance Measures
|
|
|
|
|
|
Co-product cash costs
per ounce of gold sold (i,ii)
|
|
US$/oz
|
577
|
|
613
|
Co-product all in
sustaining costs per ounce of gold sold
(i,ii)
|
|
US$/oz
|
707
|
|
735
|
|
|
|
|
|
|
Co-product cash costs
per ounce of silver sold
(i,ii)
|
|
US$/oz
|
10
|
|
9
|
Co-product all in
sustaining costs per ounce of silver sold
(i,ii)
|
|
US$/oz
|
12
|
|
10
|
|
|
|
|
|
|
By-product cash costs
per ounce of gold sold
(i,ii)
|
|
US$/oz
|
550
|
|
580
|
By-product all in
sustaining costs per ounce of gold sold
(i,ii)
|
|
US$/oz
|
688
|
|
709
|
|
|
(i)
|
See "Non-IFRS
Measures" section. A cautionary note regarding Non-IFRS metrics is
included in the "Non-IFRS Measures" section of the Q2-2017
Management's Discussion and Analysis
|
(ii)
|
Cash costs, all-in
sustaining costs as well as average realized gold price per ounce
are Non-IFRS metrics and discussed in the "Non-IFRS Measures"
section of the Q2-2017 Management's Discussion and
Analysis
|
South Arturo Mine – Carlin
Trend, Nevada
Owned 40% by Premier and operated by joint venture partner
Barrick Gold, the mine was brought
into production in Q3-2016 and continues to operate at industry-low
production costs.
Second quarter production, attributable to Premier, was 15,724
ounces of gold. Mining of the Phase 2 pit is now complete, and
stockpiled ore will continue to be processed at the Goldstrike
facility throughout the remainder of 2017 and into 2018. Production
guidance for South Arturo has been increased to 45,000-50,000
ounces for 2017 to account for the higher than expected grades and
revised pit slope designs that led to the extension of mining
operations and resultant increase in ore extracted from the Phase 2
pit.
South Arturo
Operating Results
|
|
|
Three months
ended June
30, 2017
|
Six months
ended June
30, 2017
|
in CAD $, unless
otherwise stated
|
|
|
|
|
|
|
Ore
milled
|
|
tonnes
|
112,466
|
266,519
|
|
|
|
|
|
Gold
produced
|
|
ounces
|
15,724
|
44,539
|
Gold sold
|
|
ounces
|
16,833
|
51,533
|
|
|
|
|
|
Average gold
grade
|
|
grams/tonne
|
5.01
|
5.90
|
Average gold recovery
rate
|
|
%
|
86.7
|
88.1
|
|
|
|
|
|
Revenues and
Realized Prices
|
|
Gold
revenue
|
|
000s
|
28,271
|
84,989
|
Average realized gold
price (i,ii)
|
|
$/oz
|
1,679
|
1,649
|
|
|
|
|
|
Non-IFRS
Performance Measures
|
|
Co-product cash costs
per ounce of gold sold
(i,ii)
|
|
US$/oz
|
332
|
272
|
Co-product all in
sustaining costs per ounce of gold
sold (i,ii)
|
|
US$/oz
|
451
|
322
|
|
|
|
|
|
By-product cash costs
per ounce of gold sold
(i,ii,iii)
|
|
US$/oz
|
332
|
272
|
By-product all in
sustaining costs per ounce of gold sold
(i,ii,iii)
|
|
US$/oz
|
451
|
322
|
|
|
(i)
|
See "Non-IFRS
Measures" section. A cautionary note regarding Non-IFRS metrics is
included in the "Non-IFRS Measures" section of the Q2-2017
Management's Discussion and Analysis
|
(ii)
|
Cash costs, all-in
sustaining costs as well as average realized gold price per ounce
are Non-IFRS metrics and discussed in the "Non-IFRS Measures"
section of the Q2-2017 Management's Discussion and
Analysis
|
(iii)
|
South Arturo had no
silver related by-product credits
|
There were no material capital expenditures at South Arturo
during the second quarter.
The joint venture continues to assess additional open pit and
underground mining opportunities on the project for future
development. Phase 1 open pit development has been moved into
Barrick's draft plan for detailed review and, if approved,
development could begin in early 2019. Drilling to complete
additional metallurgical and geotechnical characterization is
underway at both the Phase 1 pit and the potential future Phase 3
pit. Drilling of the El Nino deposit from within the Phase 2
pit is expected to begin in Q3-2017.
McCoy-Cove – Battle Mountain Trend, Nevada
Drilling during the second quarter was comprised primarily of
infill core holes in advance of underground development.
Development activities on the property included finalizing the
construction of a 2400-metre pipeline and a 16-acre rapid
infiltration basin (RIB) prior to a hydrologic flow test expected
during the third quarter. Results from the flow test, updated
mineral resource estimate, metallurgical test work, and engineering
data will be included in a Preliminary Economic Assessment (PEA)
that is expected to be completed by year end. As part of the
underground permitting process, Premier is working closely with
community stakeholders as well as State and Federal agencies. A
total of $5.3 million (US$4.0 million) was spent on exploration and
development on the project during the quarter.
Greenstone Gold Mines ("GGM") – Ontario, Canada
Environmental and community and aboriginal engagement activities
were the primary focus during the quarter as the GGM team prepared
to submit the Hardrock Project Environmental Impact Statement /
Environmental Assessment (EIS/EA) to the Canadian Environmental
Assessment Agency (CEAA) and the Ministry of the Environment and
Climate Change (MOECC) to initiate the formal environmental review
part of the permitting process. The final EIS/EA was
submitted in July. Progress also continues with feasibility
study optimization initiatives as part of a project de-risking
mandate. A total of $3.8
million (US$2.9 million) was
spent by Greenstone Gold during the quarter, and all project
expenditures will continue to be funded 100% by our joint venture
partner Centerra Gold Inc. until the remaining development
commitment of $123.4 million
(US$92.5 million) has been
spent.
CEO Commentary
Ewan Downie, President and CEO
stated, "We continue to realize strong production performance and
record earnings since the beginning of our mining operations.
The resulting cash flow allows us to aggressively pursue multiple
development opportunities within the Company's portfolio of
advanced projects without additional financing".
2017 Guidance
On July 18, 2017 the Company
increased its full-year production guidance to 130,000 to 140,000
ounces of gold and 340,000 to 365,000 ounces of silver.
Production estimates for 2017 are derived from life of mine
operating plans prepared on the basis of mineral reserves
associated with each property. The underlying assumptions for the
estimates are presented in the table below.
Gold
|
Guidance
2017
|
USD, unless
otherwise noted Mine
|
Production
ounces
|
Realized Gold
Price per ounce (i)
|
Cash Cost per ounce
(i)
|
AISC per ounce
(i)
|
South
Arturo
|
45,000 -
50,000
|
$1,250
|
$440 -
$470
|
$450 -
$480
|
Mercedes
|
85,000 -
90,000
|
$1,250
|
$680 -
$710
|
$810 -
$840
|
Consolidated
|
130,000 -
140,000
|
$1,250
|
$580 -
$610
|
$660 -
$690
|
|
|
(i)
|
See "Non-IFRS
Measures" section. A cautionary note regarding Non-IFRS metrics is
included in the "Non-IFRS Measures" section of the Q2-2017
Management's Discussion and Analysis
|
Premier Gold Mines Second Quarter 2017 Results - Conference
Call
Premier executives will host a conference call and webcast to
discuss the results on Wednesday, August 9,
2017 at 10:00 am EDT. To
access the call please follow the instructions below or visit the
Company's website at www.premiergoldmines.com.
Second Quarter 2017 Results Conference Call
Information
Toll Free (North
America): 1-888-231-8191
International: 1-647-427-7450
Conference ID: 51433191
Webcast Link
https://event.on24.com/wcc/r/1462788/43C04AF1A6ADB2FC1838FA89106895A2
Conference Call Replay
Toll Free Replay Call
(North America):
1-855-859-2056
International Replay Call: 1-416-849-0833
Passcode: 51433191
A recording of the conference call and webcast replay will be
available 1:00pm EDT on August 9, 2017 until 11:59
pm EST on August 16, 2017.
Stephen McGibbon, P. Geo., is the
Qualified Person for the information contained in this press
release and is a Qualified Person within the meaning of National
Instrument 43-101.
Premier Gold Mines Limitedis a gold producer and
respected exploration and development company with a high-quality
pipeline of precious metal projects in proven, accessible and safe
mining jurisdictions in Canada,
the United States, and
Mexico. Premier remains focused on creating a low-cost,
mid-tier gold producer through its two producing gold mines; South
Arturo and Mercedes, and through future mine development
opportunities at McCoy-Cove in Nevada and Hardrock in Ontario (Greenstone Gold JV) where permitting
and development initiatives are ongoing.
Exchange Rates
Exchange rates used are sourced from The Bank of Canada,
http://www.bankofcanada.ca/rates/exchange/. The balance sheet
closing rate at June 30, 2017 was
$1.2977 and the income statement year
to date weighted average closing rate used at June 30, 2017 was $1.3343.
Non-IFRS Measures
The Company has included certain terms or performance measures
commonly used in the mining industry that are not defined under
International Financial Reporting Standards ("IFRS") in this
document. These include: cash cost per ounce sold, all in
sustaining cost ("AISC") per ounce sold and average realized price
per ounce. Non-IFRS measures do not have any standardized meaning
prescribed under IFRS, and therefore, they may not be comparable to
similar measures employed by other companies. The data presented is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures prepared in
accordance with IFRS and should be read in conjunction with the
Company's consolidated financial statements. Readers should refer
to the Company's Management Discussion and Analysis under the
heading "Non-IFRS Measures" for a more detailed discussion of how
such measures and are calculated.
Forward Looking Statement
This Press Release contains certain information that may
constitute "forward-looking information" under applicable Canadian
securities legislation. Forward-looking information includes, but
is not limited to, statements about strategic plans, including
future operations, future work programs, capital expenditures,
earnings estimates, discovery and production of minerals, price of
gold and currency exchange rates, timing of geological reports,
economic studies (including timing of the McCoy-Cove PEA) and
corporate and technical objectives. Forward-looking information is
necessarily based upon a number of assumptions that, while
considered reasonable, are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results
and future events to differ materially from those expressed or
implied by such forward-looking information, including the risks
inherent to the mining industry, adverse economic and market
developments and the risks identified in Premier's annual
information form under the heading "Risk Factors". There can be no
assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. All
forward-looking information contained in this press release is
given as of the date hereof and is based upon the opinions and
estimates of management and information available to management as
at the date hereof. Premier disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by law.
SOURCE Premier Gold Mines Limited