RECORD REVENUE OF $115.6 MILLION
ACHIEVES FULL YEAR REVISED PRODUCTION AND
COST GUIDANCE
(In US Dollars unless otherwise
stated)
TORONTO, March 13, 2020 /CNW/ - Superior Gold Inc.
("Superior Gold" or the "Company") (TSXV: SGI) announced today its
financial and operating results for the fourth quarter and year
ended 2019. This release should be read in conjunction with the
Company's Management Discussion and Analysis ("MD&A") and
consolidated financial statements for the year ended December 31, 2019. These documents will be posted
on the Company's website at www.superior-gold.com and SEDAR at
www.sedar.com.
Full Year Highlights:
- Production of 83,035 ounces of gold which generated record
revenue of $115.6 million
- Record realized gold price1 of $1,387 per ounce
- Cash, cash equivalents and restricted cash of $22.3 million at year end
Fourth Quarter Highlights:
- Produced 20,084 ounces of gold representing a 21% increase over
the prior quarter
- Sold 18,899 ounces of gold at an average record realized gold
price1 of $1,478 per
ounce
- Delivered a 5-year underground mine plan for Plutonic
underground in October 2019
- Completed the AUD$15 million Auramet gold loan financing in
November 2019
Chris Bradbrook, President and
CEO of Superior Gold stated: "We are pleased to report record
revenues for 2019 which was the result of achieving our full year
revised production and cost guidance coinciding with a record
realized gold price. We exited the year with a cash balance of
$22.3 million. Looking ahead, our
focus in 2020 remains on completing the development work required
to execute our five year underground Life of Mine ("LOM") plan that
was announced in late 2019. The rising gold price environment,
especially in terms of the Australian dollar denominated gold
price, continues to put us at an advantage relative to our peer
group.
In the January 15, 2020 press
release, where the Company's 2020 guidance was outlined, it was
indicated that the first quarter of 2020 would be the weakest of
the year as most of the production during that quarter was planned
to source mineralized areas that are outside of the LOM plan.
Additionally, the Plutonic Gold operations suffered some unexpected
power outages and higher than anticipated arsenic content in some
of the mined areas, which exhibited lower recoveries, in addition
to heavy rains delaying production. These combined to lower our
anticipated production from the quarter to between 15,000 to 16,000
ounces. However, with a continued emphasis on improved underground
development rates and the execution of our five year LOM plan, we
anticipate a progressive improvement in our quarterly production
results over the course of 2020 and beyond."
The Company will announce the results of its 2019 Year End
Reserves and Resources Estimate in early second quarter of 2020
along with its plan for the open pit operations.
Summary of Financial and Operational Results:
|
Three
months
ended December
31,
2019
|
Twelve
months
ended December
31,
2019
|
All amounts in $
millions except where noted
|
|
|
Financial
|
|
|
Revenue
|
28.0
|
115.6
|
Cost of
sales
|
29.1
|
122.7
|
General and
administrative
|
1.2
|
3.8
|
Operating income
(loss)
|
(3.1)
|
(13.6)
|
Income (loss) before
taxes
|
(3.6)
|
(14.7)
|
Net income
(loss)
|
(3.4)
|
(12.0)
|
Earnings (loss) per
share - basic and diluted
|
(0.03)
|
(0.12)
|
Adjusted net income
(loss)1
|
(3.2)
|
(11.6)
|
Adjusted net income
(loss) per share - basic1
|
(0.03)
|
(0.12)
|
Cash flow from
operations
|
10.5
|
15.9
|
Weighted average
number of common shares
outstanding
(basic)
|
96,982,473
|
96,864,062
|
|
|
|
Operational
|
|
|
Gold produced
(ounces)
|
20,084
|
83,035
|
Gold sold
(ounces)2
|
18,899
|
83,241
|
Total cash costs
($/ounce)1,2
|
1,317
|
1,284
|
All-in sustaining
costs ($/ounce)1,2
|
1,424
|
1,387
|
Average realized
price1 ($/ounce)
|
1,478
|
1,387
|
Total underground
material mined (Kt)
|
214
|
808
|
Total material milled
(Kt)
|
418
|
1,681
|
Grade milled (g/t
gold)
|
1.8
|
1.8
|
Recovery
(%)
|
84
|
86
|
Plutonic Gold Operations
The Plutonic Gold operations produced and sold 20,084 and 18,899
ounces of gold, respectively, for the fourth quarter of 2019.
Total cash costs1 of $1,317/ounce sold and all-in sustaining
costs1 of $1,424/ounce
were below the realized gold price1 of $1,478/ounce for the three-month period ending
December 31, 2019. Had gold sales
been able to match production, both total cash costs1
and all-in sustaining costs1 would have been
lower. Additionally, production costs were negatively
affected by the costs of processing Hermes stockpiled material. In
comparison, 20,541 and 19,305 ounces of gold were produced and
sold, respectively for the fourth quarter of 2018. Total cash
costs1 of $1,442/ounce
sold and all-in sustaining costs1 of $1,577/ounce were above the realized gold
price1 of $1,237/ounce for
the three-month period ending December
31, 2018.
Total cash costs and all-in sustaining cash costs decreased over
the prior period primarily as a result of an increase in
underground tonnes processed at higher grade, partially offset by
lower grades and fewer tonnes from the Hermes stockpiles. The
variance from prior period for underground tonnes milled was caused
by more available stopes to be mined as the Company focused its
efforts on development and sequencing necessary to deliver on the
new long-term plan released on October
23, 2019.
The Company generated net cash from operations after working
capital changes of $10.5 million for
the three months ending December 31,
2019 after factoring in the gold loan financing with
Auramet.
The Plutonic Gold operations produced and sold 83,035 and 83,241
ounces of gold, respectively, for the twelve months ended
December 31, 2019. Total cash
costs1 of $1,284/ounce
sold and all-in sustaining costs of $1,387 were below and equal to, respectively, the
realized gold price1 of $1,387/ounce for the twelve-month period ending
December 31, 2019. In
comparison, 90,101 and 89,884 ounces of gold were produced and
sold, (including 4,968 pre-production Hermes ounces) respectively
for the twelve months ended December 31,
2018. Total cash costs1 were $1,155/ounce sold and all-in sustaining costs
were $1,266/ounce in comparison to
the realized gold price1 of $1,265/ounce for the twelve-month period ending
December 31, 2018.
Total cash costs and all-in sustaining cash costs increased over
the prior period primarily due to higher payroll, maintenance and
mining costs, despite an increase in tonnes milled. Partially
offsetting these increases were lower General and administrative
costs. Lower General and administrative costs was due to lower
compensation and consulting costs in 2019. The reduction stems from
the finalization of senior management's short-term incentive
compensation in 2019 as a result of short-term incentives not being
awarded to executives for 2018 performance and higher consulting
costs in the first three months of 2018 due to administrative
projects, which did not reoccur in the first quarter of
2019.
The Company generated net cash from operations after working
capital changes of $15.9 million for
the twelve months ended December 31,
2019.
Exploration Activities
During the fourth quarter, the Company announced results from
the ongoing underground diamond drill program focused on reserve
and resource expansion. The drilling was targeting potential
extensions to the Baltic
mineralization.
The drilling was focused on the area between the deepest parts
of the Baltic Zone and the upper parts of the Baltic Deeps Zone,
where no previous drilling had taken place. The deepest mining to
date (700 metres) previously took place at the Baltic Zone.
Additionally, the drilling was targeting the hanging wall area of
the Baltic Zone where only limited drilling had taken place.
The following key findings were noted:
- 39 intersections encountered more than 5g Au/t
- 22 intersections encountered more than 10g Au/t
- 9 intersections encountered more than 25g Au/t
- 3 intersections encountered more than 50g Au/t
- 3 intersections encountered more than 100g Au/t
Highlights of the drill results included:
- 26.0 g Au/t over 5.55 metres
- 210.0 g Au/t over 0.6 metres
- 13.2 g Au/t over 6.7 metres
The drilling was completed over a strike length of more than 150
metres and a vertical extent of more than 100 metres where
mineralization remains open up and down dip and along strike. The
Company expects to release other drilling results in some of the
other key areas of the LOM plan, including Timor, Indian and
Baltic in the near future.
Outlook
The Company intends to focus on re-establishing the Plutonic
Gold Operations as a stable gold producer capable of producing at
least 100,000 ounces of gold annually. To achieve this goal, the
Company intends to focus on its growth strategy which includes:
- Delivery on its 5-year guidance for the underground operations
as announced in its press release dated October 23, 2019
- Improve reconciliation between mined and reserve/resource
grade
- Improve mining practices to minimize dilution and increase
grade
- Improve maintenance and equipment availability
- Focus on open pit opportunities with the most optimal financial
returns
- Accelerate exploration activities in 2020
With the Company's cash position and the ongoing cash from
operations, the Company will continue towards executing on these
growth and exploration objectives.
Conference Call
Management will host a conference call and webcast on
Friday March 13, 2020 at 10:00AM ET to discuss the fourth quarter and full
year 2019 financial and operating results.
Conference Call and
Webcast
|
Date:
|
Friday March 13, 2020
10:00AM ET
|
Toll-free North
America:
|
(888)
231-8191
|
Local or
International:
|
(647)
427-7450
|
Webcast:
https://event.on24.com/wcc/r/2177843/6092AB58E06733B83F9A3107F69CBD7D
|
Conference Call
Replay
|
Toll-free North
America:
|
(855)
859-2056
|
Local or
International:
|
(416)
849-0833
|
Passcode:
|
9159048
|
The conference call replay will be available from 1:00PM ET on March 13,
2020 until 23:59PM ET on
March 27, 2020.
The presentation will be available on the Company's website at
www.superior-gold.com.
______________________________________________
(1)
|
Refer to the Non-IFRS
Performance Measures disclosure included in this MD&A for a
description and calculation of these measures.
|
(2)
|
Includes 4,968 ounces
sold from Hermes pre-commercial production.
|
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).
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 press 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 in this news release includes, but is
not limited to, the Company's objectives, goals or future plans,
and statements regarding exploration results and exploration
plans.
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.
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. Except as
required by law, the Company does not assume any obligation to
release publicly any revisions to forward-looking information
contained in this press 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