TORONTO, Nov. 14, 2018 /CNW/ - RNC Minerals (TSX: RNX)
("RNC") announces that its Management Discussion and Analysis
(MD&A) for the three and nine months ended September 30, 2018, and related news release,
each filed on SEDAR on November 13,
2018, is being refiled to correct a clerical error.
The Adjusted EBITDA and Adjusted EBITDA per share table
on page 23 of the MD&A contained a clerical error, which
affected each of the reported time periods by overstating each
figure by $2 million. Adjusted EBITDA
and Adjusted EBITDA per share for the three and nine months ended
September 30, 2018 have been
corrected in the below table (with corresponding corrections made
to the 2017 comparative figures).
(in thousands of
dollars except per share amounts)
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Three month
ended,
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Nine months
ended,
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For the periods ended
September 30,
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2018
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2017
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2018
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2017
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Adjusted
EBITDA
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$
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8,751
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$
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(665)
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$
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11,382
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$
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1,173
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Adjusted EBITDA per
share
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$
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0.02
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$
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(0.00)
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$
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0.03
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$
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0.00
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Corresponding references to Adjusted EBITDA and Adjusted EBITDA
per share were corrected on the following pages of the
MD&A:
- Page 5 in the Executive Summary table;
- Page 5 in the paragraph Solid EBITDA performance
improvement: Adjusted earnings before interest, tax,
depreciation and amortization (EBITDA) has been amended to
$8.8 million; and
- Page 10 in the Financial Results of Operations
table.
There are no other amendments to the MD&A that was
previously filed on SEDAR on November 13,
2018. There are no changes required to RNC's condensed
interim consolidated financial statements for the three and nine
months ended September 30, 2018
(filed on November 13, 2018).
The RNC news release issued on November
13, 2018 ("RNC Announces Strong Third Quarter 2018 Results")
with references to these figures has also been corrected as
follows:
- Page 1 in Mr. Selby's quote, the reference to third quarter
EBITDA has been amended to $8.8
million;
- Page 1 in the paragraph Solid EBITDA performance
improvement: Adjusted EBITDA has been amended to $8.8 million, or $0.02 per share; and
- Page 2 the last two lines of Table 2 has been amended as in the
table set out above.
[Corrected version of November 13, 2018 news release follows]
RNC Announces Strong Third Quarter 2018
Results
RNC will host a call/webcast on November 13 at 10:00 a.m.
(Eastern Time) to discuss Q3 2018 results. North American
callers please dial: 1-888-231-8191, international callers
please dial: (+1) 647-427-7450. For the webcast of
this event click [here] (replay access information
below).
Toronto, Ontario,
November 13, 2018 – RNC Minerals
(TSX: RNX) ("RNC") announces its financial results and review of
activities for the quarter ended September
30, 2018. All amounts are expressed in Canadian dollars,
unless otherwise noted, and are based on the unaudited interim
consolidated financial statements of RNC for the three and nine
months ended September 30, 2018.
Mark Selby, President and CEO,
commented, "The third quarter was transformative for both RNC and
the Beta Hunt Mine. The major high-grade gold Father's Day Vein
discovery generated sufficient cash to eliminate over $30 million in long-term and convertible debt and
significantly improve the balance sheet. With cash and cash
equivalents of $18.8 million as of
November 12, 2018, RNC has sufficient
funds for near term operational and exploration initiatives. The
discovery, and a greater understanding of the pyritic sediment
structures associated with the discovery, has resulted in extensive
new insights into the significant high-grade gold potential of the
mine. RNC generated $8.8 million
EBITDA in the third quarter, and with less than half of the
low-cost, high-grade gold production sold in the third quarter, we
expect to realize significant additional EBITDA in the fourth
quarter."
Consolidated Third Quarter of 2018 and Recent
Highlights
Record Quarterly Gold Production: Third quarter 2018 gold
production of 31,360 mined gold ounces set a new quarterly
production record, representing a 199% increase versus third
quarter of 2017. Gold production for the first nine months of 2018
totaled 58,460 ounces compared to 24,305 for the comparable prior
year period. The large increase in high-grade specimen and coarse
gold production led to a 198% improvement in the mined grade for
the quarter to 6.67 g/t, as compared to 2.24 g/t in third quarter
of 2017.
Stronger balance sheet: All long-term debt and
convertible debt with Auramet International LLC ("Auramet"), Pala
Investments Limited ("Pala") and YA II PN, Ltd. ("YA II PN") of
$11.4 million was eliminated during
the third quarter of 2018. During the nine months ended
September 30, 2018, long-term debt
and convertible debt totalling $33.5
million was eliminated. The cash and cash equivalents
balance, including value of gold specimens held for sale (at gold
content only with no premium), as of November 12, 2018 was $18.8 million.
Solid EBITDA performance improvement: Adjusted earnings
before interest, tax, depreciation and amortization (EBITDA)
improved to $8.8 million, or
$0.02 per share, in the third quarter
of 2018, a $9.4 million increase from
the comparable quarter of 2017, reflecting the impact of higher
sales and revenue and lower production costs. These earnings also
reflect less than half of the low-cost, high-grade coarse gold
production which was sold in the quarter. The balance of this
production is expected to be realized in the coming quarter.
Improved production unit costs: All-in sustaining costs
(AISC) were US$1,013 per ounce sold
for the third quarter of 2018, a 37% improvement compared to
US$1,609 in the prior year
comparative period. Year-to-date 2018 AISC was US$1,207, a 28% improvement over the same period
in 2017. The mining cash cost was reduced to US$325 per ounce mined, 66% lower than the third
quarter of 2017.
Table 1: Summary of Third Quarter 2018 Financial
Results
(in thousands of
dollars except per share amounts)
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Three months
ended,
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Nine months
ended,
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For the periods ended
September 30,
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2018
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2017
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2018
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2017
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Revenue
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$
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43,397
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$
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24,952
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$
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96,694
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$
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43,565
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Production and
toll-processing costs
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29,060
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20,775
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73,305
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34,195
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Loss before income
taxes
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(7,364)
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(12,018)
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(20,673)
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(17,790)
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Net loss
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(7,510)
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(12,347)
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(21,190)
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(11,855)
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Basic and diluted
loss per share
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(0.02)
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(0.04)
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(0.06)
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(0.04)
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Cash flow provided by
(used in) operating activities
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3,368
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(3,624)
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(9,592)
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(2,134)
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Cash investment in
property, plant and equipment
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(291)
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(6,720)
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(605)
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(27,862)
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Operations / Projects
Table 2: Summary of Third Quarter 2018 Operating
Results
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Three months
ended,
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Nine months
ended,
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For the periods ended
September 30,
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2018
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2017
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2018
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2017
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Gold (Beta Hunt
Mine)
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Tonnes mined
(000s)
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146
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146
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447
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371
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Gold mined, grade (g/t
gold)
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6.67
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2.24
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4.07
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2.04
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Gold mined
(ounces)
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31,360
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10,489
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58,460
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24,305
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Recovery
(%)
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95
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90
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94
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91
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Gold sold
(oz)
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23,805
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8,659
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43,291
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20,682
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Average realized price
(US$/oz sold) 1
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1,205
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1,286
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1,252
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1,257
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Mining cash cost
(US$/oz mined)
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325
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963
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526
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1,074
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Cash operating costs
(US$/oz sold)1
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962
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1,480
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1,155
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1,602
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All-in sustaining cost
(AISC) (US$/oz sold) 1
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1,013
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1,609
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1,207
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1,681
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Nickel2
(Beta Hunt Mine)
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Tonnes mined
(000s)
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N/A
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8.3
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16.1
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25.2
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Nickel mined, grade
(%)
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N/A
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2.84
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2.31
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2.75
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Nickel in concentrate
(000s of tonnes)
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N/A
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0.25
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0.32
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0.64
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Average realized price
(US$ per pound)
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N/A
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4.48
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7.13
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3.95
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Cash operating cost
(US$ per pound sold)
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N/A
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3.40
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4.32
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3.26
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All-in sustaining cost
(AISC) (US$ per pound sold) 1
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N/A
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3.45
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4.34
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3.61
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Copper3
(Reed Mine)
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Copper in concentrate
(kilo tonnes)
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0.78
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1.21
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3.1
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3.47
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Cash operating cost
(US$ per pound sold)
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0.56
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1.55
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0.48
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1.68
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All-in sustaining cost
(AISC) (US$ per pound sold) 1
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0.58
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1.57
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0.50
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1.73
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Adjusted
EBITDA1
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$8,751
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$(665)
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$11,382
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$1,173
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Adjusted EBITDA per
share1
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$0.02
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$(0.00)
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$0.03
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$0.00
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1.
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Reference is made to
the Non-IFRS Measures section in RNC's MD&A for the period
ended September 30, 2018.
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2.
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Nickel was not mined
during the third quarter of 2018.
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3.
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RNC's share of
production from the Reed Mine was 27% in the third quarter of 2018,
28% for the nine months ended 2018, and 30% for 2017
periods.
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Highlights of RNC's financial position are as follows (in
millions of dollars):
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As at
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September 30,
2018
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December 31,
2017
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Cash and cash
equivalents1
Long-term
debt
Convertible
debentures
Working capital
deficit1
Property, plant and
equipment
Mineral property
interests
Total
assets
Shareholder's
equity
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0.7
0.5
-
(27.4)
15.5
-
49.9
12.6
|
24.4
12.9
21.1
(29.0)
23.5
49.0
109.0
10.9
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1
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Working capital
deficit is a measure of current assets (including cash and cash
equivalents) less current liabilities. At quarter end, 11.4
thousand ounces of specimen and coarse gold valued at $17.5 million
(at US$1,187.25/oz gold) were in inventory valued at a cost
of $3.0 million which, when sold, would reduce the working capital
deficit by $14.5 million.
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Operations / Projects
Beta Hunt Mine
On September 9, 2018, RNC
announced a significant new high-grade gold discovery (Father's Day
Vein) at the Beta Hunt Mine. RNC expects a minimum 27-30,000 ounces
of gold will be recovered from the discovery area.
Highlights of quarterly results:
- Mined gold production at the Beta Hunt Mine during the third
quarter of 2018 was 31,360 mined gold ounces, representing a 199%
increase compared to 10,489 ounces in the third quarter of 2017.
Gold tonnes mined was 146 kt in the third quarter, flat compared to
the third quarter of 2017 as operations concentrated on mining high
grade coarse gold and specimen stone discovered in September. Gold
sales were 23,805 ounces in the third quarter, an increase of 175%
compared to 8,659 ounces in the third quarter of 2017.
- For the third quarter of 2018, gold mining cash cost per ounce
decreased by 66% to US$325 per ounce
mined from US$963 per ounce in the
third quarter of 2017. On a cost per ounce sold basis, gold cash
operating costs decreased by 37% to US$954 per ounce sold, and all-in sustaining
costs decreased by 36% to US$1,006
per ounce sold, compared to US$1,609
in the third quarter of 2017 due to a significant increase in gold
grades (in both mined and milled tonnes). Reference is made to the
non-IFRS Measures section of RNC's MD&A for the period ended
September 30, 2018.
Dumont Nickel-Cobalt Project
Dumont remains one of the world's premier battery metals
projects containing the world's largest undeveloped reserves of
nickel and second largest undeveloped reserves of cobalt. As one of
the only large-scale fully permitted, shovel-ready nickel-cobalt
projects globally, Dumont is ideally positioned to deliver the
nickel and cobalt required to meet the massive demand growth
expected from the electric vehicle ("EV") market in the coming
decade.
RNC remains focused on completing an updated feasibility study.
RNC announced in September 2018 that
Ausenco Engineering Canada Inc. ("Ausenco") was awarded the
contract for a feasibility study update for Dumont. The results of
the updated feasibility study are expected to be announced in the
first half of 2019.
Reed Mine Production
For the three months ended September 30,
2018, RNC's 27% share of metal contained in concentrate
production from the Reed Mine was 0.78 kt of copper. The all-in
sustaining cost improved to US$0.58
per pound of copper sold, compared to US$1.57 in the prior year period. Costs improved
in the quarter compared to the prior year primarily due to the
effect of RNC electing not to fund its share of mining and general
and administration costs.
The Reed Mine ceased mining operations and completed processing
of stockpiled material in the third quarter of 2018.
Orford Mining Corporation
The Corporation also has a 35% equity interest in Orford Mining
Corporation ("Orford") which holds the Qiqavik and West Raglan
exploration projects (gold, nickel) in northern Quebec and gold exploration properties in the
U.S. Carolina Gold Belt. The Qiqavik
Project hosts several new high-grade gold discoveries along a
mineralized trend in excess of 40 km. In October, Orford announced completion the 2018 summer
exploration program on the Qiqavik property. The Qiqavik program
included 8 drill holes totaling 1,211m. The highlight of the 2018 drilling
program results was the discovery at the Interlake Area of a thick
sequence of gold mineralized quartz-carbonate veining associated
with sulphidic metasediments which was intersected in three diamond
drill holes. This is the first time that thicknesses of up to
24.6m of gold-bearing mineralization
within a structural complex zone has been intersected on the
property. The Interlake area has generated additional potential
high-grade gold targets for 2019.
Financial Results
For the third quarter of 2018, revenue increased by $18.4 million, or 74%, which was primarily due to
increased gold deliveries from the Beta Hunt Gold mine of
$23.6 million. Partially
offsetting higher gold revenue was a $3.4
million decrease of copper revenue from the Reed Mine which
ceased operations during the third quarter of 2018. Total operating
loss for the period improved by $5.6
million which was also primarily due to the Beta Hunt mine
which had operating earnings of $5.0
million during the period compared with a loss of
$4.7 million for the prior year, a
$9.7 million improvement.
Furthermore, the Reed Mine had higher operating earnings of
$4.8 million which was partially due
to a $1.9 million impairment recorded
in 2017. The combined increase in operating earnings from Beta Hunt
and Reed Mine of $14.6 million was
partially offset by a higher accrual for share-based
payments. The share-based payments expense of $8.9 million in the period was higher than the
same period of 2017 by an $8.6
million increase in as a result of the mark-to-market
adjustments relating to a higher market price for the Corporation's
common shares on September 30, 2018
relative to the beginning of the period.
RNC's ability to operate as a going concern is dependent on its
ability to raise financing. While management has been successful in
securing financing in the past, there can be no assurance that
adequate or sufficient funding will be available in the future, or
available under terms acceptable to RNC.
Conference Call / Webcast
RNC will be hosting a conference call and webcast today
beginning at 10:00 a.m. (Eastern
time).
Live Conference Call and Webcast Access
Information:
North American callers please dial: 1-888-231-8191
Local and international callers please dial: 647-427-7450
A live webcast of the call will be available through Cision's
website at: www.newswire.ca/en/webcast/index.cgi
A recording of the conference call will be available for replay
for a one week period beginning at approximately 1:00 p.m. (Eastern Time) on November 13, 2018, and can be accessed as
follows:
North American callers please dial: 1-855-859-2056; Pass Code:
7283426
Local and international callers please dial: 416-849-0833; Pass
Code: 7283426
About RNC Minerals
RNC has a 100% interest in the producing Beta Hunt gold mine
located in Western Australia where
a significant high grade gold discovery - "Father's Day Vein" - was
recently made. Beta Hunt gold resource potential is underpinned by
multiple gold shears with gold intersections across a 4km strike
length which remain open in multiple directions adjacent to an
existing 5km ramp network. RNC also has a 28% interest in a nickel
joint venture that owns the Dumont Nickel-Cobalt Project located in
the Abitibi region of Quebec which
contains the second largest nickel reserve and eighth largest
cobalt reserve in the world. RNC owns a 35% interest in Orford
Mining Corporation, a mineral explorer focused on highly
prospective and underexplored areas of Northern Quebec and the U.S. Carolina Gold Belt. RNC has a strong management
team and Board with over 100 years of mining experience. RNC's
common shares trade on the TSX under the symbol RNX. RNC shares
also trade on the OTCQX market under the symbol RNKLF.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information"
including without limitation statements relating to the liquidity
and capital resources of RNC, production guidance and the potential
of the Beta Hunt and Reed mines as well as the and the potential of
the Dumont development project and Orford Mining's Qiqavik, West
Raglan, Jones-Keystone Loflin and Landrum-Faulkner exploration
properties.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of RNC to be materially different from
any future results, performance or achievements expressed or
implied by the forward-looking statements. Factors that could
affect the outcome include, among others: future prices and the
supply of metals; the results of drilling; inability to raise the
money necessary to incur the expenditures required to retain and
advance the properties; environmental liabilities (known and
unknown); general business, economic, competitive, political and
social uncertainties; results of exploration programs; accidents,
labour disputes and other risks of the mining industry; political
instability, terrorism, insurrection or war; or delays in obtaining
governmental approvals, projected cash operating costs, failure to
obtain regulatory or shareholder approvals. For a more detailed
discussion of such risks and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements, refer to RNC's filings with
Canadian securities regulators, including the most recent Annual
Information Form, available on SEDAR at www.sedar.com.
Although RNC has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. Forward-looking
statements contained herein are made as of the date of this news
release and RNC disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
SOURCE RNC Minerals