(In US Dollars unless otherwise
stated)
TORONTO, Jan. 17, 2022 /CNW/ - Superior Gold
Inc. ("Superior Gold" or the "Company") (TSXV: SGI) (OTCQX:
SUPGF) announces detailed production results for the fourth quarter
and full year 2021 and provides full year 2022 guidance for the
Company's 100%-owned Plutonic Gold operations, located in
Western Australia.
Fourth Quarter Highlights
- Stope grade of 3.14 g/t gold in the fourth quarter and 3.20 g/t
gold for the full year, achieving the Company's target of an
average stope grade of more than 3.0 g/t gold
- Production of 20,983 ounces, an 8% increase over the prior
quarter and a 32% increase over the prior year period
- Continued exploration success along the Western Mining
Front1 and the Indian Access Mining Front2,
with the latter including intersections of 20.4 g/t over 3.5 metres
and 11.9 g/t over 4.3 metres
- Improved financial position with cash and cash equivalents
increasing by $3.3 million to
$23.8 million at the end of the
fourth quarter
- The Company is now an unhedged producer following the delivery
of the remaining ounces under call options related to the repaid
Auramet gold loan
Full Year Highlights
- Safely operated through the global pandemic with zero
incidences of COVID
- Exceeded full year upper end of guidance range of 65,000-75,000
ounces with production of 77,321 ounces (a 23% increase over the
63,065 ounces produced in 2020) and sales of 77,061 ounces
- Positive exploration results in 2021 support the Company's
strategy of opening new mining fronts at the Western Mining Front,
the Baltic Gap and at Indian Access within the Plutonic
underground
- Exited the year with a strong financial position of
$23.8 million in cash and cash
equivalents (a 38% increase from $17.3
million on December 31, 2020)
after the full repayment of the Auramet gold loan, capital
expenditures necessary to improve performance and strategic
commitments on an expanded underground exploration program to open
new mining fronts
________________________________
|
1 Refer to the News Release dated
November 29, 2021, for additional information.
|
2 Refer to
the News Release dated December 13, 2021, for additional
information.
|
Chris Jordaan, President and CEO
of Superior Gold stated: "We are very pleased to have exceeded our
2021 production guidance which is attributable to the actions taken
on the operational front and which has led to a sixth consecutive
quarter of improving gold production and cash position at our
Plutonic Gold Operations. Our fourth quarter production of 20,983
ounces represents an 8% increase over the prior quarter and a 32%
increase over the prior year period (Figure 1). Full year
production was 77,321 ounces, a 23% improvement year over year. The
strategic projects and operational initiatives that we put in place
last year have resulted in a steady improvement in our performance
as we delivered an average underground stope grade of above 3.0 g/t
gold as well as increased our surface grades by optimizing and
mining our open pits. The Company also continues to reap the
benefits of block model improvements designed to better predict the
spatial positioning of the ore at Plutonic. As a result, larger
more productive stopes are now being identified, developed and
mined. This is evidenced by the continued increase in tonnage mined
from underground stopes in each quarter of 2021 with the full year
stope tonnage production up 8% over 2020. Feed to the mill was
augmented from additional open pit tonnage being available, which
was up 6% year over year.
An operational review of several growth projects continues with
an aim of enhancing Plutonic's sustainable, long-term success.
These projects include, in part, a continued focus on our open pit
operations with the completion of mining at Plutonic East, the
commencement of mining at Perch during 2021 and the planned early
entry into the main pit during 2022 (Main Pit Deeps), a product of
the opportunity review conducted in Q3 and Q4 of 2021. The
higher-grade open pit feed replacing low grade legacy stockpiles in
conjunction with opening new high-grade and more productive
underground mining fronts are expected to result in a continued
improvement in our ounce profile moving forward.
Over the course of 2021, the Company provided a number of
important exploration updates that continue to point towards the
identification of more productive mining fronts in the near future.
Ongoing geological initiatives have improved our understanding of
the mineralization at Plutonic and specifically the northwest
trending faults that control the concentration of higher-grade gold
mineralization.
The operational improvements implemented along with our improved
understanding of the mineralization at Plutonic, combined with the
full repayment of our gold loan in the second quarter, has resulted
in a significant improvement in our ability to generate free cash
flow. It is our view that increased production from more
non-remnant underground mining areas, continued feed from the Perch
open pit, early entry into the main pit as well as increased
milling rates may translate to increases in cash flow in 2022 and
beyond.
In 2021, the Company delivered on the first goal of its growth
strategy, namely a sustainable operation between 70,000-85,000
ounces per annum. In 2022 the Company will progress towards
delivering the second goal of its growth strategy to deliver an
operation of scale. The first phase of this goal is to increase
production sustainably to approximately 100,000 ounces/annum by
increasing production from the underground mine and mining higher
grade open pit targets in Perch and Main Pit Deeps. Our 2022
guidance reflects additional investment to open new underground
mining fronts identified from our successful 2021 exploration
program, plus the continued development and mining of open pit
targets, which is expected to result in an improvement in our grade
profile. Importantly the Plutonic underground mine is expected to
mine up to 30% of the ore from new areas, compared to 100% remnant
mining in 2021. These investments are designed to improve on the
Company's strategy to fully optimize the underground operation and
when combined with the addition of new sources of open pit feed,
are expected to positively contribute to the Company's overall
profitability."
The Company will be releasing its complete financial and
operating results for the fourth quarter and full year 2021 in
March 2022.
Fourth Quarter and Full Year 2021 Production Details
Preliminary production details are summarized in the table
below.
Operating
Parameters1
|
Three Months
Ended December 31,
2021
|
Twelve Months
Ended December 31,
2021
|
Stope material mined
(Tonnes)
|
180,375
|
648,714
|
Stope grade mined
(g/t Au)
|
3.14
|
3.20
|
Development material
mined (Tonnes)
|
44,975
|
186,576
|
Development grade
mined (g/t Au)
|
1.39
|
1.39
|
Surface material
milled (Tonnes)2
|
167,337
|
677,215
|
Surface material
grade (g/t Au)2
|
0.61
|
0.60
|
Total material milled
(Tonnes)
|
388,920
|
1,509,316
|
Grade milled (g/t
Au)
|
1.93
|
1.83
|
Gold recovery
(%)
|
87
|
87
|
Gold Produced
(ounces)
|
20,983
|
77,321
|
Gold Sold
(ounces)
|
21,143
|
77,061
|
Cash and Cash
Equivalents ($ million)
|
23.8
|
23.8
|
1 Numbers
may not add due to rounding.
|
2 Surface
material milled in Q4 and full year 2020 is primarily the
processing of open pit material from Plutonic East and
Perch.
|
2022 Guidance
Details of production, cost and capital expenditure guidance for
2022 are summarized in the table below. It is anticipated that the
first quarter will be the weakest due to a planned 14-day
maintenance shutdown on the SAG mill foundation. It is however
expected that production will progressively improve as the Company
increases production tonnages from the underground and accesses
higher grade open pit material from Main Pit Deeps. Main Pit Deeps
will bring forward ounces from the Preliminary Economic Assessment
(completed in December 2020) without
jeopardizing the full Main Pit Pushback project. As a result, the
Company aims to increase the annualised production rate to 100,000
ounces/annum in the second half of 2022.
With improved production, costs are expected to reduce further.
In addition, exploration investment is expected to increase as the
Company accelerates its exploration in new mining fronts as well as
surface targets. Capital spend is set to increase relative to 2021
as the Company proceeds with investments in operations to unlock
additional value.
2022 Operating
Parameters
|
Low
|
High
|
Production (oz of
Gold)
|
80,000
|
90,000
|
Cash Costs
($/oz)1
|
$1,300
|
$1,450
|
All In Sustaining
Costs ($/oz)1
|
$1,450
|
$1,600
|
Exploration
Expenditure ($ million)2
|
$7.0-10.0M
|
Sustaining Capital
Expenditures ($ million)
|
$6.0-8.0M
|
Non-Sustaining
Capital Expenditures ($ million)3
|
$8.00-10.0M
|
1 This is a
Non-IFRS measure. Refer to Non-IFRS measures section of the
Company's prior MD&A's for a description of these measures.
Calculated at a US$/AU$ exchange rate of 0.75:1
|
2 Exploration
expenditures could increase with positive exploration
results.
|
3 Non-sustaining
capital expenditures are primarily related to underground
capitalized development for new mining fronts, pre-production
capital for Main Pit Deeps and other site upgrades.
|
Expanding into New Mining Fronts
During the fourth quarter of 2021, the Company continued with
its underground exploration drilling program. It provided an
exploration update for the Western Mining Front and the Indian
Access Mining Front, both containing important high-grade drill
results from its underground drill program. The drilling program is
a key component of the Company's strategy to expand into new
underground mining fronts, improve mining grades and productivity,
and reduce reliance on remnant mining.
The drill results released on November
29, 2021, and December 13,
2021, showed continued extensions and infill drilling of the
Western Mining Front from the Caspian zone, down through the Indian and
Baltic zones to the Baltic extension (covering up to a
1.6-kilometre-long northwest extension of the Western Mining Front)
and the Indian Access Mining Front. The results from these news
releases support the hypothesis that the highest grades at Plutonic
are controlled by the northwest trending faults. In addition, the
location of both mining fronts are adjacent to existing underground
infrastructure, thus requiring minimal capital expenditures to
infill drill and develop the areas.
Key results such as drill hole UDD24581, which intersected 53.6
g/t gold over 2.7 metres, drill hole UDD24589A, which intersected
11.9 g/t gold over 7.6 metres, and drill hole UDD24725, which
intersected 20.4 g/t gold over 3.5 metres, and drill hole UDD24555,
which intersected 11.9 g/t gold over 4.3 metres give the Company
further confidence in mining higher grades at Plutonic in the
future.3 The results announced throughout 2021
support the Company's view that the Western Mining Front and Indian
Access Mining Front are potentially important new areas for future
production at Plutonic. The Company expects to provide additional
exploration updates over the coming months in 2022.
Appointment of Vice President, Investor Relations
The Company is pleased to announce the appointment of Mr.
Mike McAllister, CPIR, to the
position of Vice President Investor Relations. Mr. McAllister has
over 18 years of experience working with public mining companies,
the last 11 as a mining specialized investor relations and
corporate development professional. He previously worked for Sierra
Metals where he helped the Company complete the dual US listing
progress and helped see the Company progress from a small to a
mid-tier diversified producer. Mr. McAllister also has worked at
Avion Gold Corp., acquired by Endeavour Mining. Previously, Mr.
McAllister worked at BMO Capital Markets in the Metals & Mining
Group. Mr. McAllister holds the Certified Professional Investor
Relations (CPIR) designation completed at the Ivey School of
Business, University of Western
Ontario.
The Company will grant Mr. McAllister, subject to the terms and
conditions of its Stock Option Plan and the receipt of regulatory
approval, options to purchase 150,000 common shares of the Company
within a five-year term.
Qualified Person
Scientific and technical information in this news release has
been reviewed and approved by Ettienne Du Plessis, who is a
"qualified person" as defined by NI 43-101. Mr. Du Plessis is not
independent of the Company within the meaning of NI 43-101.
Web: www.superior-gold.com | Twitter:
@SuperiorGoldInc | Facebook: SuperiorGoldInc | Instagram:
SuperiorGoldInc | LinkedIn: Superior Gold Inc.
____________________________
|
3 Refer to the News Releases dated
November 29, 2021, and December 13, 2021, for additional
information.
|
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, numerous open pit projects including the Plutonic Main Pit
push-back project, 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.
Forward-looking information includes information with respect to
guidance as to projections, outlook, guidance, forecasts,
estimates, and other statements regarding future or estimated
financial and operational performance, gold production and sales,
revenues and cash flows, and capital costs (sustaining and
non-sustaining), including projected cash operating costs and
all-in sustaining costs) as well as statements with respect to the
mine-plan, exploration, drilling, operating and organizational
matters and activities relating to the Plutonic Gold Operations and
the Company generally, including its liquidity and capital
requirements and financial results. 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. Readers are encouraged to refer to the Annual
Information Form of the Company for a discussion of other risks
including outbreaks or threats of outbreaks of viruses, other
infectious diseases or other similar health threats, such as the
novel coronavirus outbreak, which could have a material adverse
effect on the Company by causing operational and supply chain
delays and disruptions, labour shortages, shutdowns, inflationary
pressures on operating or capital costs, 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 not 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.
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