ANNOUNCES MANAGEMENT CHANGE, SECOND QUARTER
2020 PRODUCTION RESULTS AND REVISED 2020 GUIDANCE
(In US Dollars unless otherwise
stated)
TORONTO, July 30, 2020 /CNW/ - Superior Gold
Inc. ("Superior Gold" or the "Company") (TSXV: SGI) announces
that effective at the close of business on July 31, 2020, Christopher Bradbrook will step down as the
Company's President and Chief Executive Officer. Mr. Bradbrook was
the founder of the Company and has been President and CEO since its
formation in 2017. Mr. Bradbrook will also tender his resignation
as a Director of the Company.
Tamara Brown, an Independent
Director of the Company since 2017, will assume the role of Interim
Chief Executive Officer, effective at the close of business on
July 31, 2020. Ms. Brown brings over
25 years of mining industry and capital markets experience
including in senior leadership roles. Of particular importance is
Ms. Brown's experience with leading corporate development
activities and participating in strategic review processes.
Following recent discussions, the Company's Board of Directors
has established a Special Committee and formally initiated a
strategic review process to explore and evaluate a broad range of
potential alternatives focused on maximizing shareholder value. The
alternatives could include, but are not limited to, a potential
sale or merger of the Company, a joint venture, the addition of a
new strategic shareholder or other various financing alternatives.
The Special Committee will also initiate a search to find a
permanent CEO; and the Compensation and Nominating Committee will
undergo a search for a new independent director to fill the vacancy
from Mr. Bradbrook's departure. The Special Committee will be
comprised of Independent Directors Mark
Wellings, Chairman and Rene
Marion, Audit Committee Chair. In connection with Ms.
Brown's appointment as Interim CEO, the Company will grant an
aggregate of 1,000,000 stock options to Ms. Brown at an exercise
price to be determined in accordance with the policies of the TSX
Venture Exchange and consistent with the Company's Omnibus Equity
Incentive Plan.
Mark Wellings, Chairman of
Superior Gold, stated, "The Board is committed to driving value for
shareholders and we have implemented the necessary changes in order
to conduct a robust and thorough strategic review process. The
ultimate value of the Plutonic Gold mine may be achieved by being
part of a larger portfolio with a stronger balance sheet to better
capitalize the current operations and fully explore its prospective
land package. Tamara is well experienced to assist us through this
process and in addition, as an Australian citizen, can more easily
travel to site during the current COVID-19 ("COVID") travel
restrictions. I would like to thank Chris
Bradbrook for all his efforts in founding Superior Gold and
building it to this point. We would not have had this valuable gold
mining asset if it wasn't for Chris' perseverance several years ago
when gold assets weren't fashionable. We wish him well in his
future endeavours."
"I am pleased to step in and assist Superior Gold as we explore
all alternatives to maximize value for our shareholders. I believe
the Plutonic Gold mine's existing mineral reserves and resources,
established infrastructure and surrounding land package in a world
class mining jurisdiction have inherent value well beyond what is
currently reflected in our share price. I am committed to leading
Superior Gold until we have a clear path towards unlocking that
value or appoint a permanent CEO capable of delivering on our
vision," said Tamara Brown,
Independent Director and incoming Interim CEO.
There can be no assurance that the strategic review process will
result in any transaction. The Company does not intend to comment
further unless the Board of Directors of the Company has approved a
specific course of action or the Company has determined further
disclosure is appropriate.
SECOND QUARTER PRODUCTION DETAILS
Production details are summarized in the table below.
Operating
Parameters1
|
Three month
period
ended June 30,
2020
|
Six month
period
ended June 30,
2020
|
Stope material mined
(Tonnes)
|
182,895
|
304,036
|
Stope grade mined (g
Au/t)
|
2.41
|
2.78
|
Development material
mined (Tonnes)
|
66,779
|
128,027
|
Development grade
mined (g Au/t)
|
1.54
|
1.93
|
Surface material
milled (Tonnes)2
|
159,167
|
335,098
|
Surface material
grade (g Au/t)2
|
0.28
|
0.35
|
Total material milled
(Tonnes)
|
394,012
|
795,861
|
Grade milled (g
Au/t)
|
1.42
|
1.56
|
Gold recovery
(%)
|
84%
|
83%
|
Gold Produced
(ounces)
|
15,177
|
31,528
|
Gold Sold
(ounces)
|
15,536
|
32,386
|
Preliminary Total
Cash Cost ($/oz)3
|
1,426
|
1,356
|
Preliminary All-In
Sustaining Cash Cost ($/oz)3
|
1,547
|
1,479
|
Cash Balance ($
Million)
|
15.6
|
15.6
|
|
1 Numbers may not add due
to rounding.
|
2
Surface material milled in Q220 and H220 are primarily the
processing of low-grade stockpile.
|
3
This is a Non-IFRS measure. Refer to Non-IFRS measures section
of the Company's prior MD&A's for a description of these
measures.
|
Production in the second quarter of 2020 came in below internal
budgets. Although the stope grade remained below the reserve grade,
we believe the underground physicals of the operations are
performing at the highest level since the Company acquired the
asset, where the stope tonnage mined increased by 51% relative to
the first quarter of 2020.
As the health and safety of our employees and contractors is of
paramount importance, the Company continues to adhere to the
measures that have been put in place to mitigate the threat of
COVID as described in the press release dated March 19, 2020. To date, there have been no
incidences of infection from COVID at either the operations or
corporate offices. However, the restrictions of the COVID protocols
impacted the Company advancing its open pit plan, which will be
deferred pending COVID restrictions easing.
Revised 2020 Guidance
The Company now anticipates production of between 60,000 and
70,000 ounces of gold in 2020. As part of a review of the
underground operations, the Company has refocused its efforts on a
cost reduction program that targets higher grade stopes while
improving productivity. The Company is pleased to report that the
initiatives underway are starting to achieve positive results as
subsequent to the end of the quarter, the stope grade has
increased, averaging over 3 g Au/t to date for the third quarter.
Looking beyond 2020, the Company remains committed to executing on
its five-year Life of Mine plan and remains encouraged about the
longer-term potential of the Plutonic Gold operations where the
Company's most recent Mineral Reserve and Resource estimate (refer
to the press release dated July 21,
2020) continues to illustrate a large mineralized system
that represents significant future opportunities.
2020
Guidance
|
Original
|
Revised
|
Production (oz of
Gold)
|
80,000 -
90,000
|
60,000 -
70,000
|
Cash Costs
($/oz)1
|
$975 -
$1,075
|
$1,250 -
$1,350
|
All In Sustaining
Costs ($/oz)1
|
$1,075 -
$1,175
|
$1,350 -
$1,450
|
|
Notes:
|
1 This is
a Non-IFRS measure. Refer to Non-IFRS measures section of the
Company's prior MD&A's for a description of these
measures.
|
Qualified Person
Scientific and technical information in this news release has
been reviewed and approved by Keith
Boyle, P.Eng., Chief Operating Officer of the Company, who
is a "qualified person" as defined by National Instrument 43-101
(NI 43-101). Mr. Boyle is not independent of the Company within the
meaning of NI 43-101.
About Superior Gold
Superior Gold is a Canadian based gold producer that owns 100%
of the Plutonic Gold operations located in Western Australia. The Plutonic Gold
operations include the Plutonic underground gold mine and central
mill, the Hermes open pit projects and an interest in the Bryah
Basin joint venture. Superior Gold is focused on expanding
production at the Plutonic Gold operations and building an
intermediate gold producer with superior returns for
shareholders.
Forward Looking Information
This news release contains "forward-looking information" within
the meaning of applicable securities laws that is intended to be
covered by the safe harbours created by those laws.
"Forward-looking information" includes statements that use
forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential" or the negative
thereof or other variations thereof or comparable terminology. The
forward-looking information contained herein includes, without
limitation, information related to: (i) the Company's plans to
carry out a strategic review process, the potential outcome of such
process and the intended maximization of shareholder value that the
Company believes may result from such process; and (ii) Ms. Brown's
appointment as Interim Chief Executive Officer and the Company's
ability to take advantage of her experience in corporate
development activities and strategic review processes. By
identifying such information in this manner, the Company is
alerting the reader that such information is subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking information.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made. Furthermore,
such forward-looking information involves a variety of known and
unknown risks, uncertainties and other factors which may cause the
actual plans, intentions, activities, results, performance or
achievements of the Company to be materially different from any
future plans, intentions, activities, results, performance or
achievements expressed or implied by such forward-looking
information. See "Risk Factors" in the Company's prospectus dated
February 15, 2017 filed on SEDAR at
www.sedar.com for a discussion of these risks. In addition, The
Company is exposed to outbreaks or threats of outbreaks of viruses,
other infectious diseases or other similar health threats,
including the novel coronavirus ("COVID-19") outbreak, which could
have a material adverse effect on the Company by causing
operational and supply chain delays and disruptions, labour
shortages, shutdowns, the inability to sell gold, capital markets
volatility or other unknown but potentially significant impacts.
The Company cannot accurately predict what effects these conditions
will have on the Plutonic Gold Operations or the financial results
of the Company, including uncertainties relating to travel
restrictions to the Plutonic Gold Operations or otherwise and
business closures that have been or may be imposed by governments.
If an outbreak or threat of an outbreak of a virus or other
infectious disease or other public health emergency occurs, it
could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company cautions that there can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. Accordingly, investors should not
place undue reliance on forward-looking information as no assurance
can be given that any of the events anticipated by the
forward-looking information will transpire or occur, and if any of
them do so, what benefits the Company will derive therefrom. Except
as required by law, the Company does not assume any obligation to
release publicly any revisions to forward-looking information
contained in this news release to reflect events or circumstances
after the date hereof.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Superior Gold