TORONTO, Feb. 27, 2019 /CNW/ - Anaconda Mining Inc.
("Anaconda" or the "Company") – (TSX: ANX) (OTCQX: ANXGF) is
pleased to report its financial and operating results for the three
months and year ended December 31,
2018. In 2017, the Company changed its fiscal year end to
December 31, from its previous fiscal
year end of May 31. For comparative
purposes, the results for the year ended December 31, 2018, have been compared to the
seven months ended December 31, 2017
and the year ended May 31, 2017.
All dollar amounts are in Canadian Dollars. This press release
should be read in conjunction with the Company's audited
consolidated financial statements, management discussion and
analysis, and annual information form, which will be available
today at www.sedar.com and the Company's website
www.anacondamining.com.
Highlights for the Year Ended December
31, 2018
- Anaconda produced an annual record of 20,149 ounces of gold
during 2018, surpassing production guidance of 18,000 ounces.
- The Company sold a record 19,290 ounces of gold in 2018,
generating $31.7 million in total
revenue at an average sales price of C$1,638 (US$1,264)
per ounce of gold. As at December 31,
2018, the Company also had over 860 ounces in gold doré
inventory, which was subsequently sold in early January.
- At the Point Rousse Project, EBITDA* for the year ended
December 31, 2018 was $12.2 million, while consolidated EBITDA was
$6.8 million.
- The Pine Cove Mill achieved record annual throughput of 461,439
tonnes during 2018, reflecting a throughput rate of 1,317 tonnes
per day. It also achieved a record quarterly recovery in Q4 2018 of
89.1% as a result of processing higher grade ore from Stog'er
Tight, contributing to an annual record recovery of 86.7%, a 1.4%
increase over the comparative period.
- Operating cash costs per ounce sold* at the Point Rousse
Project for the year ended December 31,
2018, was $978 (US$755), achieving guidance of under
$1,000.
- All-in sustaining cash costs per ounce sold*, including
corporate administration and sustaining capital expenditures, was
$1,392 (US$1,074) for the year ended December 31, 2018, compared to $1,297 (US$1,020)
for the prior fiscal year.
- In December 2018, the Company
filed an updated Mineral Resource Estimate for the 100%-owned
Goldboro Gold Project, with a 15% increase in Measured and
Indicated Mineral Resources and a 30% increase in Inferred Mineral
Resources, in addition to an improved after-tax preliminary
economic analysis.
- The Company has completed mining activities in Q1 2019 for a
10,000-tonne underground bulk sample at Goldboro, and in February commenced a
feasibility study on the Project.
- Net loss for the year ended December 31,
2018 was $1,693,413, or
$0.01 per share, compared to net
income of $904,635 or $0.01 per share, for the seven months ended
December 31, 2017. Excluding
transaction costs, net loss for the year ended December 31, 2018 was $839,282, or $0.01
per share.
- As at December 31, 2018, the
Company had a cash balance of $6.4
million, working capital* of $3.2
million, and additional available liquidity of $1,000,000 from an undrawn revolving line of
credit facility.
*Refer to Non-IFRS
Measures section below
|
"Our team had a great year, generating over $12.2 million of project-level EBITDA on the back
of over 20,000 ounces of gold produced, while making significant
advancements at the Goldboro Gold Project. Record production
exceeded our original production guidance of 18,000 ounces, and we
achieved low operating cash cost per ounce of $978, or US$755,
which led to the generation of $8.9
million in cash flow from operations. Anaconda begins the
2019 year with a robust balance sheet, including $6.4 million of cash and an undrawn $1 million line of credit, which will enable us
to continue to develop Goldboro
towards production, funded by our existing cash balance and
continued cash flow generated by the Point Rousse Project."
~ Dustin Angelo, President and
CEO
2019 Guidance
In 2019, the Company projecting to produce and sell between
19,000 and 20,000 ounces of gold from continued mining at Stog'er
Tight and pushbacks to the Pine Cove Pit. Development at Argyle is
expected towards the middle of the year, with ore production
commencing in the third quarter. The Argyle project has been
released, subject to certain conditions, from environmental
assessment and is working towards the receipt of final permits.
Mill throughput is expected to remain consistent throughout the
year, with marginal ore stockpiles available to supplement mill
feed, although the Company continues to investigate opportunities
to defer marginal ore feed. Operating cash costs for the full year
are expected to be between $1,050 and
$1,100 per ounce of gold sold
(US$800 - US$835 at an approximate exchange rate of
0.76).
In 2019 at the Goldboro Gold Project, Anaconda is committed to
completing and publish a full feasibility study on the Project, and
in parallel continue with the permitting process such that
Goldboro is in a shovel-ready
state by the end of the year.
Consolidated Results Summary
Financial
Results
|
Three months
ended
December 31,
2018
|
Four months
ended December
31, 2017
|
Year ended
December 31,
2018
|
Seven months
ended December
31, 2017
|
Year ended May
31, 2017
|
Revenue
($)
|
9,759,181
|
8,042,324
|
31,731,136
|
16,169,776
|
26,634,718
|
Cost of operations,
including depletion
and depreciation ($)
|
8,490,772
|
6,455,603
|
25,826,099
|
13,765,473
|
24,790,421
|
Mine operating income
($)
|
1,268,409
|
1,586,721
|
5,905,037
|
2,404,303
|
1,844,297
|
Net (loss) income
($)
|
(356,333)
|
1,228,668
|
(1,693,413)
|
904,635
|
(3,602,188)
|
Net (loss) income per
share ($/share)
– basic and
diluted
|
(0.00)
|
0.01
|
(0.01)
|
0.01
|
(0.07)
|
Cash generated from
operating
activities ($)
|
3,385,823
|
1,495,034
|
8,894,347
|
2,035,506
|
4,782,426
|
Capital investment in
property, mill and
equipment ($)
|
284,911
|
347,647
|
2,023,857
|
527,118
|
3,414,163
|
Capital investment in
exploration and
evaluation assets ($)
|
4,057,912
|
1,260,414
|
8,024,095
|
1,942,146
|
2,868,112
|
Average realized gold
price per ounce*
|
US$1,207
|
US$1,284
|
US$1,265
|
US$1,270
|
US$1,255
|
Operating cash costs
per ounce sold*
|
US$805
|
US$692
|
US$755
|
US$719
|
US$809
|
All-in sustaining
cash costs per ounce
sold*
|
US$1,014
|
US$1,020
|
US$1,074
|
US$1,020
|
US$1,272
|
Total
assets
|
|
|
57,942,367
|
49,927,877
|
46,074,065
|
Non-current
liabilities
|
|
|
5,290,646
|
5,511,935
|
5,801,863
|
*Refer to Non-IFRS
Measures section below
|
Operational
Results
|
Three months
ended
December 31,
2018
|
Four months
ended
December 31,
2017
|
Year ended
December 31,
2018
|
Seven months
ended December
31, 2017
|
Year ended May
31, 2017
|
Ore mined
(t)
|
99,998
|
223,254
|
328,291
|
382,111
|
432,081
|
Waste mined
(t)
|
300,952
|
328,434
|
1,288,306
|
692,814
|
2,197,251
|
Strip
ratio
|
3.0
|
1.5
|
3.9
|
1.8
|
5.1
|
Ore milled
(t)
|
110,547
|
156,239
|
461,439
|
275,640
|
423,204
|
Grade (g/t
Au)
|
1.93
|
1.29
|
1.56
|
1.32
|
1.33
|
Recovery
(%)
|
89.1
|
85.0
|
86.7
|
85.8
|
85.0
|
Gold Oz
Produced
|
6,125
|
5,421
|
20,149
|
10,002
|
15,566
|
Gold Oz
Sold
|
6,120
|
4,786
|
19,290
|
9,509
|
15,562
|
Review of the Year Ended December 31,
2018
Operational Performance - Anaconda produced
an annual record of 20,149 ounces of gold in 2018, exceeding
original production guidance of 18,000 ounces by 12%, as a result
of higher grades from mining at the bottom of the Pine Cove Pit,
higher ore production than planned from the higher-grade Stog'er
Tight Mine, and record mill throughput and recovery rates.
The Pine Cove Mill processing facility remains a cornerstone
asset of the Company, achieving a record annual throughput of
461,439 tonnes, and also achieving a record quarterly throughput in
Q2 2018 of 121,299 tonnes, representing a rate of 1,350 tonnes per
day ("tpd"). The Company continues to invest in the Pine Cove Mill,
making upgrades to the regrind motor and jaw and cone crushers,
while continuing to maintain consistent throughput from its crushed
ore stockpiles.
Average grade during 2018 was 1.56 g/t, an increase of 18% over
the previous fiscal year ended December 31,
2017, due to a greater proportion of mill feed from Stog'er
Tight relative to ore stockpiled from the Pine Cove Pit. The mill
achieved an annual record average recovery rate of 86.7% during the
2018 year, reflecting the impact of the higher-grade feed from
Stog'er Tight. The combination of higher throughput, grade, and
recoveries led to record quarterly and annual gold production.
Financial Performance - During 2018, Anaconda sold
19,290 ounces at an average realized gold price of C$1,638, to generate total revenue of
$31.7 million, which included
$100,092 from the sale of waste rock
as aggregate. As at December 31,
2018, the Company also had over 860 ounces of gold doré
which were sold in early January.
Operating expenses for 2018, which include mining, processing
and mine support costs, were $18,626,974, compared to $9,516,731 for the seven-month period ended
December 31, 2017 and $17,525,386 for the year ended May 31, 2017. On a per ounce sold basis,
operating cash costs were $978
(US$755), achieving the Company's
annual 2018 guidance of under $1,000.
Operating cash costs for the seven months ended December 31, 2017 were $914 per ounce sold, which was positively
impacted by higher by-product aggregate sales during the period.
Operating expenses in 2018 also included a royalty expense of
$366,248 on production from Stog'er
Tight, which carries a 3% net smelter return royalty.
Depletion and depreciation was $6,832,877 for the year ended December 31, 2018, compared to $4,248,742 for the seven month period ended
December 31, 2017 and $7,262,083 for the year ended May 31, 2017. During the year ended December 31, 2018, the Company reviewed the
residual values of certain buildings, machinery, and equipment at
the Pine Cove Mill. The updated estimated residual values reduced
the depreciation charges by approximately $413,000 for the year ended December 31, 2018. On an annualized basis, the
depletion and depreciation was consistent given the updated
estimated residual values, with generally higher depletion and
depreciation over the past three fiscal periods as a result of the
higher gold ounces sold, which drove higher units-of-production
depreciation.
Mine operating income for the year ended December 31, 2018 was $5,905,037, compared to $2,404,303 for the seven months ended
December 31, 2017 and $1,844,297 for the year ended May 31, 2017. The comparative higher mine
operating income was attributable to higher gold sales combined
with higher productivity in both the mine and mill operations,
resulting in higher throughput, grades, and recovery, at similar or
lower unit costs.
Corporate administration costs in 2018 were $4,025,435, with higher comparative expenditures
reflecting the expanded senior management team to execute the
Company's growth plans and greater market presence and investor
relations activity, particularly since the acquisition of
Goldboro. The Company also incurred research and development
costs of $514,609 in the year ended
December 31, 2018, relating to the
Narrow Vein Mining Project announced in June
2017, and other research and development projects.
Share-based compensation was $544,560 during the year, compared to
$131,676 and $181,225 in the comparative fiscal years,
reflecting the stock options granted during 2018, as well as the
impact of the share consolidation on the fair value of the options
as determined by the Black-Scholes option pricing model.
The drawdown of the deferred premium on flow-through shares
resulted in a recovery of $253,535 in
the year ended December 31, 2018, as
the remaining exploration commitments from the October 31, 2017 flow-through financing were
incurred in the first half of 2018. The Company also recognized a
write-down of exploration and evaluation costs of $240,836 relating to the Anaroc Prospect, which
did not encounter significant assays to justify further exploration
work at this time.
Net loss for the year ended December 31,
2018 was $1,693,413, or
$0.01 per share, compared to net
income for the seven-month period ended December 31, 2017 of $904,635, or $0.01
per share. The comparative period was positively impacted by a
deferred income tax recovery of $1,569,000, while net loss for the year ended
December 31, 2018 reflected a
deferred income tax expense of $617,000 relating to the use of tax loss pools,
and the inclusion of $854,131 in
transaction costs related to the takeover bid of Maritime.
The Company also recognized a current income tax expense of
$1,007,445 at December 31, 2018, reflecting the Company's
estimate of Newfoundland and
Labrador mining taxes payable
based on results for the year.
Review of Fourth Quarter Results
Operational Performance - Anaconda produced
6,125 ounces of gold during the fourth quarter of 2018 and had 860
ounces of gold doré in finished goods at year-end. The Pine Cove
Mill processed 110,547 tonnes of ore during the quarter at a
throughput rate of 1,282 tonnes per operating day, compared to
1,299 tonnes per day during the four months ended December 31, 2017. Mill recovery of 89.1% was a
5% improvement over the comparative period, while average grade of
1.93 g/t for the three months ended December
31, 2018 was 50% higher than the four months ended
December 31, 2017, reflecting the
higher-grade ore being mined from Stog'er Tight relative to the
Pine Cove Pit, which was the main ore feed in the comparative
period.
Mine production of 99,998 tonnes of ore was significantly lower
than the 223,254 tonnes of ore mined during the four months ended
December 31, 2017, notwithstanding
the shorter period, due to the lower-tonnage profile of the Stog'er
Tight mine and the higher relative strip ratio during Q4 2018
compared to the comparative period, when ore was being sourced from
the lower levels of the Pine Cove mine.
Financial Performance – During Q4 2018, the
Company generated $9,754,517 in metal
revenue at an average gold sales price of approximately
$1,594 per ounce. Gold revenue was
26% higher compared to the four months ended December 31, 2017, despite a shorter period, due
to 28% higher gold ounces sold.
Operating expenses were $6,215,098
during Q4 2018, equivalent to $1,063
per ounce sold (US$805), compared to
operating expenses of $4,479,599 for
the four months ended December 31,
2017. The significant change is due to the inventory
adjustment of $1,029,382 during Q4
2018 as the Company drew down on its stockpiles and gold-in-circuit
inventory during the quarter, compared to a negative inventory
adjustment of $1,679,826 in the
comparative period when the Company was building a stockpile from
the Pine Cove mine.
Mine operating income for Q4 2018 was $1,268,409, compared to $1,586,721 for the four months ended December 31, 2017. The comparatively lower mine
operating income in the most recent period, besides being a shorter
period, reflects a royalty expense of $295,803 relating to a 3% net smelter return
royalty on Stog'er Tight production. There was no royalty expense
in the comparative period when the Company was still processing ore
from the Pine Cove Pit.
Net loss for the three months ended December 31, 2018 was $356,333, or $0.00
per share, compared to net income for the four months ended
December 31, 2017 of $1,228,668, or $0.01 per share. The comparative period reflected
higher relative revenue from the sale of waste rock and a deferred
tax recovery of $1,243,000, which was
partially offset by lower comparative corporate administration
costs. Net income in Q4 2018 also reflects a $240,839 write-down of exploration and evaluation
assets.
Non-IFRS Measures
Anaconda has included in this press release certain non-IFRS
performance measures as detailed below. In the gold mining
industry, these are common performance measures but may not be
comparable to similar measures presented by other issuers. The
Company believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance and ability to
generate cash flow. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
Operating Cash Costs per Ounce of Gold – Anaconda
calculates operating cash costs per ounce by dividing operating
expenses per the consolidated statement of operations, net of
silver sales by-product revenue, by the gold ounces sold during the
applicable period. Operating expenses include mine site operating
costs such as mining, processing and administration as well as
royalties, however excludes depletion and depreciation and
rehabilitation costs.
All-In Sustaining Costs per Ounce of Gold – Anaconda
has adopted an all-in sustaining cost performance measure that
reflects all of the expenditures that are required to produce an
ounce of gold from current operations. While there is no
standardized meaning of the measure across the industry, the
Company's definition conforms to the all-in sustaining cost
definition as set out by the World Gold Council in its guidance
dated June 27, 2013. The World Gold
Council is a non-regulatory, non-profit organization established in
1987 whose members include global senior mining companies. The
Company believes that this measure will be useful to external users
in assessing operating performance and the ability to generate free
cash flow from current operations.
The Company defines all-in sustaining costs as the sum of
operating cash costs (per above), sustaining capital (capital
required to maintain current operations at existing levels),
corporate administration costs, sustaining exploration, and
rehabilitation accretion and amortization related to current
operations. All-in sustaining costs excludes capital expenditures
for significant improvements at existing operations deemed to be
expansionary in nature, exploration and evaluation related to
growth projects, financing costs, debt repayments, and taxes.
Canadian and US dollars are noted for realized gold price,
operating cash costs per ounce of gold and all-in sustaining costs
per ounce of gold. Both currencies are considered relevant and the
Company uses the average foreign exchange rate for the period.
Average Realized Gold Price per Ounce Sold – In the gold
mining industry, average realized gold price per ounce sold is a
common performance measure that does not have any standardized
meaning. The most directly comparable measure prepared in
accordance with IFRS is gold revenue. The measure is intended to
assist readers in evaluating the revenue received in a period from
each ounce of gold sold.
Earnings before Interest, Taxes, Depreciation and
Amortization ("EBITDA") - EBITDA is earnings before
finance expense, deferred income tax expense and depletion and
depreciation.
Point Rousse Project EBITDA is EBITDA before
corporate administration and other expenses (income).
Working Capital – Working capital is a common measure of
near-term liquidity and is calculated by deducting current
liabilities from current assets.
ABOUT ANACONDA
Anaconda Mining is a TSX-listed gold mining, development, and
exploration company, focused in the prospective Atlantic Canadian
jurisdictions of Newfoundland and
Nova Scotia. The Company operates
the Point Rousse Project located in the Baie Verte Mining District
in Newfoundland, comprised of the
Pine Cove open pit mine, the Stog'er Tight and Argyle Mineral
Resource, the fully-permitted Pine Cove Mill and tailings facility,
and approximately 5,800 hectares of prospective gold-bearing
property. Anaconda is also developing the Goldboro Gold Project in
Nova Scotia, a high-grade Mineral
Resource, with the potential to leverage existing infrastructure at
the Company's Point Rousse Project.
The Company also has a pipeline of organic growth opportunities,
including the Great Northern Project on the Northern Peninsula of
Newfoundland and the Tilt Cove
Property on the Baie Verte
Peninsula, also in Newfoundland.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking information"
within the meaning of applicable Canadian and United States securities legislation.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "expects", or "does
not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "does not anticipate", or
"believes" or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would",
"might", or "will be taken", "occur", or "be achieved".
Forward-looking information is based on the opinions and estimates
of management at the date the information is made, and is based on
a number of assumptions and is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Anaconda to be
materially different from those expressed or implied by such
forward-looking information, including risks associated with the
exploration, development and mining such as economic factors as
they effect exploration, future commodity prices, changes in
foreign exchange and interest rates, actual results of current
production, development and exploration activities, government
regulation, political or economic developments, environmental
risks, permitting timelines, capital expenditures, operating or
technical difficulties in connection with development activities,
employee relations, the speculative nature of gold exploration and
development, including the risks of diminishing quantities of
grades of resources, contests over title to properties, and changes
in project parameters as plans continue to be refined as well as
those risk factors discussed in Anaconda's annual information form
for the year ended December 31, 2018,
available on www.sedar.com. Although Anaconda has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. 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. Anaconda does not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE Anaconda Mining Inc.