Trading Symbol: TSX: GGD
Shares Outstanding: 171,376,481
HALIFAX, Dec. 22, 2017 /CNW/ - GoGold Resources Inc.
(TSX: GGD) ("GoGold", "the Company") is pleased to announce the
release of financial results for the quarter and year ending
September 30, 2017 with revenue of
$17.0 million (All amounts are in
U.S. dollars) from the sale of 502,804 silver ounces and 7,313 gold
ounces during the year.
Financial Highlights for the year ending September 30, 2017:
- Executed agreement for sale of Santa
Gertrudis for gross proceeds of $80
million (less working capital adjustment of $380,000) plus a 2% net smelter royalty resulting
in a gain of $53.9 million which
closed subsequent to year end.
- Revenue of $17.0 million from the
sale of 502,804 silver ounces and 7,313 gold ounces, a realized
price of $16.40 per silver equivalent
ounce and a net loss of $584,000
- Cash flow from operations before changes in non-cash working
capital of $3.6 million, or
2 cents per basic share
- Adjusted cash cost per ounce of silver, net of gold by-product
credits was $1.80
- Adjusted cash cost per silver equivalent ounce was $9.39
- Adjusted all in sustaining cost per silver equivalent ounce was
$16.10
- Produced 545,465 silver and 7,961 gold ounces, providing
1,146,573 silver equivalent ounces at Parral
GoGold generated record revenue for the year end September 30, 2017, with low adjusted cash costs
per silver equivalent ounce. The sale of Santa Gertrudis was entered into on September 5, 2017 and closed on November 2, 2017. Net proceeds on the sale
were cash of $77,190,000 and a 2% net
smelter royalty on the project. The sale resulted in a pre-tax
gain in the quarter ending December 31,
2017 of $53,920,000 on the
project which was initially acquired in 2014.
The net loss for the year includes an unusual net realizable
value adjustment related to inventory of $9,420,000. In August
2017, management determined that it was economical to
reprocess tailings which had been originally stacked on the leach
pad in the summer of 2016. The quality of the agglomerate was poor
during this period, and as a result, the material has not been able
to leach solution at the proper flow rates. To decrease the
recovery time for this material, the Corporation will reagglomerate
and restack the material on the leach pad using the same
methodology that has been used to stack material over the past
year. There have been no adjustments to the expected
recoverable ounces on the rehandled material as a result of the
reprocessing. As the Corporation carries the heap leach inventory
at the lower of cost or net realizable value, an assessment of net
realizable value was completed in Q4 2017 considering the impact of
reprocessing and related costs which resulted in a charge to cash
costs of $7,652,000 and amortization
and depletion of $1,768,000. The
increased costs of reagglomerating the material had a significant
impact on the net realizable value adjustment. The adjusted
cash and all in sustaining costs per ounce set out above and in the
table below exclude the effect of the net realizable value
adjustment.
Production for the quarter ending September 30, 2017 was 353,370 silver equivalent
ounces which was the fourth consecutive quarter of production
growth. The quarter ended September
30th is traditionally the rainy season in
Mexico which can negatively impact
production. With improvements that have been made to the operating
procedures related to managing the impact of rain, production
increased 125% over the previous year rainy season quarter.
Financial Highlights for the quarter ending September 30, 2017:
- Revenue of $4.44 million from
262,095 silver equivalent ounces, a realized price of $16.96 per silver equivalent ounce
- Adjusted cash cost per ounce of silver, net of gold credits was
$4.03
- Adjusted cash cost per silver equivalent ounce was $10.18
- Adjusted all in sustaining cost per silver equivalent ounce was
$22.42
- Produced 165,415 silver and 2,177 gold ounces, providing
353,370 silver equivalent ounces
Summarized
Consolidated Financial Information
|
Three months
ended
September 30
|
|
Year ended
September 30
|
(in thousands USD,
except per share amounts)
|
|
2017
|
|
20161
|
|
|
2017
|
|
2016
|
Revenue
|
$
|
4,444
|
$
|
2,220
|
|
$
|
17,045
|
$
|
16,267
|
Cost of
sales2
|
$
|
13,183
|
$
|
1,346
|
|
$
|
23,179
|
$
|
10,582
|
Operating income
(loss)
|
$
|
(10,227)
|
$
|
(715)
|
|
$
|
(9,743)
|
$
|
943
|
Net
loss3
|
$
|
(1,501)
|
$
|
(1,291)
|
|
$
|
(584)
|
$
|
(20,537)
|
Basic net loss per
share
|
$
|
(0.009)
|
$
|
(0.008)
|
|
$
|
(0.003)
|
$
|
(0.124)
|
Cash flow from
operations, before changes in non-cash working capital
|
$
|
2,091
|
$
|
(448)
|
|
$
|
3,551
|
$
|
3,422
|
|
|
1
|
Adjusted for
discontinued operations associated with the sale of Santa
Gertrudis.
|
2
|
Cost of sales in the
quarter ended September 30, 2017 includes a negative net realizable
value adjustment of $9,420.
|
3
|
Net loss in the year
ended 2016 includes an impairment charge of $20,030 recorded on the
San Diego property.
|
Key Performance
Indicators1
|
Three months
ended
September 30
|
|
Year ended
September 30
|
(in thousands USD,
except per ounce amounts)
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Total tonnes
stacked
|
|
279,717
|
|
332,628
|
|
|
1,166,789
|
|
1,834,888
|
Adjusted AISC per
silver equivalent ounce2,4
|
$
|
22.42
|
$
|
21.04
|
|
$
|
16.10
|
$
|
11.36
|
Adjusted cash cost
per silver ounce3,4
|
$
|
4.03
|
$
|
(5.20)
|
|
$
|
1.80
|
$
|
0.76
|
Adjusted cash cost
per silver equivalent ounce2,4
|
$
|
10.18
|
$
|
7.50
|
|
$
|
9.39
|
$
|
6.49
|
Realized silver
price
|
$
|
16.96
|
$
|
18.96
|
|
$
|
16.40
|
$
|
15.50
|
|
|
1
|
Key performance
indicators are unaudited non-GAAP
|
2
|
Gold is converted
using actual realized prices
|
3
|
Using Gold as a
by-product credit
|
4
|
Adjusted for net
realizable value adjustment, see reconciliation in
MD&A
|
This news release should be read in conjunction with the
consolidated financial statements for the year ended September 30, 2017, notes to the financial
statements, and management's discussion and analysis for the year
ended September 30, 2017, which have
been filed on SEDAR and are available on the Company's website.
Technical information contained in this news release with
respect to GoGold has been reviewed and approved by Mr.
Bob Harris, P.Eng., who is a
qualified person for the purposes of NI 43-101.
CAUTIONARY STATEMENT:
The securities described herein
have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or
any state securities laws, and may not be offered or sold within
the United States or to, or for
the benefit of, U.S. persons (as defined in Regulation S under the
U.S. Securities Act) except in compliance with the registration
requirements of the U.S. Securities Act and applicable state
securities laws or pursuant to exemptions therefrom. This release
does not constitute an offer to sell or a solicitation of an offer
to buy of any of GoGold's securities in the United States.
This news release may contain "forward-looking information" as
defined in applicable Canadian securities legislation. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
the future plans and objectives of GoGold, constitute
forward-looking information that involve various risks and
uncertainties. Forward-looking information is based on a
number of factors and assumptions which have been used to develop
such information but which may prove to be incorrect, including,
but not limited to, assumptions in connection with the continuance
of GoGold and its subsidiaries as a going concern, general economic
and market conditions, mineral prices, the accuracy of mineral
resource estimates, and the ability to satisfy all conditions to
funding of the second tranche under the credit
agreement. There can be no assurance that such information
will prove to be accurate and actual results and future events
could differ materially from those anticipated in such
forward-looking information.
Important factors that could cause actual results to differ
materially from GoGold's expectations include exploration and
development risks associated with the GoGold's projects, the
failure to establish estimated mineral resources or mineral
reserves, volatility of commodity prices, variations of recovery
rates and global economic conditions. For additional information
with respect to risk factors applicable to GoGold, reference should
be made to GoGold's continuous disclosure materials filed from time
to time with securities regulators, including, but not limited to,
GoGold's Annual Information Form. The forward-looking information
contained in this release is made as of the date of this
release.
Cautionary non-GAAP Measures and Additional GAAP
Measures
Note that for purposes of this section, GAAP
refers to IFRS. The Company believes that investors use certain
non-GAAP and additional GAAP measures as indicators to assess
mining companies. They are intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared with GAAP. Non-GAAP
and additional GAAP measures do not have a standardized meaning
prescribed under IFRS and therefore may not be comparable to
similar measures presented by other companies.
Additional GAAP measures that are presented on the face of the
Company's consolidated statements of comprehensive income include
"Operating income (loss)". These measures are intended to provide
an indication of the Company's mine and operating performance.
"Cash flow from operating activities before changes in non-cash
working capital" is a non-GAAP performance measure that could
provide an indication of the Company's ability to generate cash
flows from operations, and is calculated by adding back the change
in non-cash working capital to "Net cash used in operating
activities" as presented on the Company's consolidated statements
of cash flows. Per ounce measures are calculated by dividing the
relevant mining and processing costs and total costs by the tonnes
of ore processed in the period. "Cash costs per ounce" and "all-in
sustaining costs per ounce" as used in this analysis are non-GAAP
terms typically used by mining companies to assess the level of
gross margin available to the Company by subtracting these costs
from the unit price realized during the period. These non-GAAP
terms are also used to assess the ability of a mining company to
generate cash flow from operations. There may be some variation in
the method of computation of these metrics as determined by the
Company compared with other mining companies. In this context,
"cash costs per ounce" reflects the cash operating costs allocated
from in-process and dore inventory associated with ounces of silver
and gold sold in the period. "Cash costs per ounce" may vary from
one period to another due to operating efficiencies, grade of
material processed and silver/gold recovery rates in the period.
"All-in sustaining costs per ounce" include total cash costs,
exploration, corporate and administrative, share based compensation
and sustaining capital costs. For a reconciliation of non-GAAP and
GAAP measures, please refer to the Management Discussion and
Analysis dated December 22, 2017, for
the year ended September 30, 2017, as
presented on SEDAR.
SOURCE GoGold Resources Inc.