Rusoro Mining Reports Q2 2008 Financial Results
August 28 2008 - 8:27PM
Marketwired
Rusoro Mining Ltd. (TSX VENTURE: RML) ("Rusoro" or the "Company"),
is pleased to report its financial results for the quarter ended
June 30, 2008. The Company's Q2 consolidated financial statements
and management's discussion and analysis (MD&A) for the three
and six months periods ended June 30, 2008 have been filed on SEDAR
(www.sedar.com).
All amounts set out in the Company's financial statements and
MD&A are unaudited and in United States dollars, unless
otherwise stated.
Q2 2008 Highlights
- On June 10, 2008, the Company closed an $80 million syndicate
financing led by Peter Hambro Mining Plc. The proceeds were raised
for asset acquisitions and for corporate development projects.
- On July 8, 2008, the Company closed the acquisition of 100% of
the outstanding shares of El Callao Gold Mining Ltd. and
Drake-Bering Holdings B.V. (the "Hecla-Venezuela" Acquisition) in
consideration of $20 million paid in cash and $5 million paid by
the issuance of 4,273,504 common shares of the Company. The main
assets being acquired with the Hecla-Venezuela Acquisition are the
Block B - Isidora mining leases and the La Camorra mill facility in
Bolivar State, Venezuela (the "Hecla-Venezuela" assets).
- On July 4, 2008 the Company entered into an agreement with the
Venezuelan Ministry of Mines and Basic Industries ("MIBAM") to
establish a mixed enterprise (the "Mixed Enterprise") to carry on
with gold exploration, development and mining of the
Hecla-Venezuela assets. The Mixed Enterprise will be owned 50% by
the Company and 50% by Empresa Minera Nacional ("EMN"), a company
owned by MIBAM. The Mixed Enterprise is expected to be created
within 6 months of the date of the agreement with MIBAM. None of
the Company's existing assets, such as the Choco 10 mine, are to be
contributed to the Mixed Enterprise.
- During Q2 2008, all Venezuelan operations, development and
exploration projects were hit by higher than expected costs due to
the depreciation of the U.S.-dollar-to-Venezuela-bolivar exchange
rate from 4.98 during Q1 2008 to 3.51 bolivars per dollar during Q2
2008. Steps are underway to mitigate this situation by changing the
nature and currency of some of the major mining, development and
exploration contracts.
- Some mine fleet equipment ordered in Q4, 2007, started to
arrive on site at Choco 10 mine towards the latter part of Q2 2008
and is being readied for trials and production. Although the
Company has suffered delays in the importation of key equipment
into Venezuela, it is expected that most of the ordered equipment
will arrive in the next several weeks.
- Choco 10 mill performed beyond expectations with another
record performance of a monthly average of 209,414 Mt tonnes
treated in Q2 2008.
- During Q2 2008, the Company awarded the mandate to complete
scoping and feasibility studies for Choco 10 mine to Micon
International Ltd.
- Significant gold exploration discoveries were made at the
Valle Hondo, Increible 14 and Yuruan projects during Q2 2008.
Results of Operations and Financial Position:
During the three months ended June 30, 2008, the Company sold
36,343 ounces of gold for a total amount of revenue of $23.2
million. Net loss for the three months ended June 30, 2008 was
$36.8 million, which includes non-cash expenses such as
amortization of $10.8 million, stock based compensation of $18.4
million and an impairment adjustment of $1.6 million to write down
gold inventories to net realizable value.
Net cash used in operating activities during the three months
period ended June 30, 2008 was $6.8 million, cash generated in
financing activities was $76.4 million and cash used in investing
activities amounted $18.7 million. As at June 30, 2008 the Company
had a cash position of $62.5 million to be used to finalize the
funding of the Hecla-Venezuela Acquisition and for corporate
development projects.
About Rusoro
Rusoro Mining is a junior gold producer with a large land
position in the prolific Bolivar State region of Venezuela. The
Company operates the Choco 10 and Isidora Mines. The Company has
significant 43-101 compliant gold resources and will produce
approximately 150,000 oz/Au in 2008.
ON BEHALF OF THE BOARD
George Salamis, President
Forward-looking statements: This document contains statements
about expected or anticipated future events and financial results
that are forward-looking in nature and as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, the regulatory process and actions,
technical issues, new legislation, competitive and general economic
factors and conditions, the uncertainties resulting from potential
delays or changes in plans, the occurrence of unexpected events,
and the Company's capability to execute and implement its future
plans. Actual results may differ materially from those projected by
management. For such statements, we claim the safe harbour for
forward-looking statements within the meaning of the Private
Securities Legislation Reform Act of 1995.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
Contacts: Rusoro Mining Limited George Salamis President (604)
632-4044 or Toll Free: 1-800-668-0091 (604) 632-4045 (FAX) Email:
info@rusoro.com Website: www.rusoro.com
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