(In US Dollars unless otherwise
stated)
TORONTO, May 12, 2020 /CNW/ - Superior Gold
Inc. ("Superior Gold" or the "Company") (TSXV:SGI) announced
today its financial and operating results for the first quarter
2020. 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 March 31, 2020. These documents will be posted on
the Company's website at www.superior-gold.com and SEDAR at
www.sedar.com.
First Quarter Highlights:
- Remained at full production whilst operating under COVID-19
restrictions
- Produced 16,351 ounces of gold at a record average realized
gold price of $1,570/oz
- Sold 16,850 ounces of gold at total cash costs1 of
$1,291 per ounce sold and all-in
sustaining costs1 of $1,416 per ounce sold
- Net loss for the period of $0.04
per share and adjusted net loss of $0.00 per share
- Exploration results of up to 27.9 g Au/t over 4.10 metres
continued to demonstrate the potential to expand mineralization at
Plutonic with step out drill results between the Indian and Baltic
Zones
Chris Bradbrook, President and
CEO of Superior Gold stated: "We are pleased to have exceeded our
first quarter production guidance despite a number of one time
unexpected events that impacted the Plutonic Gold operations during
the quarter (detailed in the press release dated March 13, 2020).
We remain focused on continued improvements from underground
including grade and development rates. As previously indicated, we
are forecasting a steady increase in underground production rates
on a quarterly basis over the course of the year. We anticipate
that the second quarter of 2020 will be an improvement over the
first quarter and expect production of 16,500 to 18,500 ounces.
We remain fully committed to the health and safety of our
employees and communities and we are pleased to report that there
have been no incidences of infection from COVID-19 ("COVID") at
either our operations or corporate offices. We are operating
normally at Plutonic. We will continue to monitor the supply chain
and work to ensure the ongoing availability of critical
supplies.
In order to minimize the risk of exposure to COVID, to date we
have only allowed site access to employees, contractors and
suppliers that are deemed essential. Consequently, access for the
contractors required for open pit development has been delayed. We
are now targeting the commencement of production from the open pits
in the second half of 2020. As a result, the lower end of our
production guidance is likely to be at the higher end of production
for the year.
We continue to be excited by our ongoing underground exploration
results. On February 10, 2020, we
announced intersections of up to 27.9 g Au/t over 4.10 metres and
22.2 g Au/t over 2.60 metres in an area over a strike length of
more than 150 metres and a vertical extent of more than 100 metres
between the Indian and Baltic Zones. We believe these results
illustrate the potential to connect the Indian and Baltic Zones,
which are key components of our Life of Mine plan.
The decrease in cash and cash equivalents at quarter end
relative to year end 2019 was the result of a combination of the
effect of foreign exchange movements, the timing of payables
relative to quarter end and repayment of a portion of the ounces
sold forward to Auramet.
Finally, as a result of progress made with the Global Resource
calculation, the Company has decided to include it as part of its
2019 Year End Reserves and Resources Estimate. This will be
available later in the second quarter, together with details of the
plans for the open pit operations."
Summary of Financial and Operational Results:
|
Three months
ended March 31,
2020
|
All amounts in $
millions except where noted
|
|
Financial
|
|
Revenue
|
26.5
|
Cost of
sales
|
23.7
|
General and
administrative
|
1.0
|
Operating income
(loss)
|
1.1
|
Income (loss) before
taxes
|
(3.8)
|
Net income
(loss)
|
(3.8)
|
Earnings (loss) per
share - basic and diluted
|
(0.04)
|
Adjusted net income
(loss)1
|
(0.1)
|
Adjusted net income
(loss) per share - basic1
|
(0.00)
|
Cash flow from
operations
|
(0.9)
|
Cash and cash
equivalents
|
16.3
|
Weighted average
number of common shares outstanding (basic)
|
97,065,989
|
|
|
Operational
|
|
Gold produced
(ounces)
|
16,351
|
Gold sold
(ounces)
|
16,850
|
Total cash costs
($/ounce)1
|
1,291
|
All-in sustaining
costs ($/ounce)1
|
1,416
|
Average realized
price1 ($/ounce)
|
1,570
|
Total underground
material mined (Kt)
|
181
|
Total material milled
(Kt)
|
366
|
Grade milled (g/t
gold)
|
1.7
|
Recovery
(%)
|
82
|
Plutonic Gold Operations
The Plutonic Gold Operations produced and sold 16,351 and 16,850
ounces of gold, respectively, for the first quarter of 2020. Total
cash costs1 of $1,291/ounce sold and all-in sustaining costs of
$1,416/ounce were below the realized
gold price1 of $1,570/ounce for the three-month period ending
March 31, 2020. In comparison, 22,474
and 22,504 ounces of gold were produced and sold, respectively for
the first quarter of 2019. Total cash costs1 of
$1,145/ounce sold and all-in
sustaining costs of $1,246/ounce were
below the realized gold price1 of $1,305/ounce for the three-month period ending
March 31, 2019.
Total cash costs and all-in sustaining cash costs increased over
the prior period primarily as a result of no contribution of
tonnages milled from the Hermes Gold Mine for the period (the
Company ceased mining operations at the Hermes Gold Mine in
May 2019) and slightly lower
underground tonnes milled, partially offset by an increase in
underground grade and from the processing of other low grade
stockpiles. The lower underground tonnage resulted from the
limitations imposed as a result of power outages and heavy rains.
The variance from prior period for underground grade was the result
of the Company targeting higher grade areas of the underground mine
where available.
Higher general and administrative costs were due to higher
compensation costs in 2019 which stemmed from the addition of the
Company's Chief Operating Officer.
The Company used net cash in operations after working capital
changes of $863,000 for the three
months ending March 31, 2020.
Exploration Activities
During the first quarter, the Company operated three underground
diamond drilling rigs with 20,396 metres completed. Of the total,
10,229 metres were drilled for grade control and stope design while
10,167 metres were for reserve and resource expansion.
The quarter consisted of drilling new mining fronts in the
Caspian, Indian, Pacific and
Baltic areas. On February 10, 2020, the Company announced high
grade drill results that were located 150m northwest of known mineralization at the
Indian Zone which included 27.9 g/t gold over 4.10 metres, 22.2 g/t
gold over 2.60 metres, and 57.7 g/t over 0.75 metres. Further
results from other zones are pending.
Generative exploration focused on targeting areas with
geological similarities to the current mine including the presence
of the mine mafic and mineralized structures. A particular focus
was on detailed 3D modelling of the mine mafic and interbedded
sediments in the gap between Baltic and Timor.
Surface sampling programs included programs on the Bryah Basin
Joint Venture Jones tenement and around the Plutonic mine. On the
Jones tenement, assays from soil sampling suggest two northeast
trends; one 500m long and the other
800m long both with significant
geochemical anomalies. More soil samples are planned. Around the
Plutonic mine, the focus area was the contact between the
overthrust mafic and hangingwall ultramafic. Significant
geochemical anomalies are present south of the Perch waste dump
where no historical drilling has been conducted.
Outlook
The Company intends to focus on establishing the Plutonic Gold
Operations as a stable gold producer capable of producing up to
100,000 ounces of gold annually. To achieve this goal, the Company
intends to focus on its growth strategy, which aims to:
- Optimize the underground grade
- Improve mining practices to lower costs and increase
production
- Increase operational efficiencies
- Analyze and, where appropriate, advance open pit opportunities
close to the mill
- 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
Tuesday May 12, 2020 at 10:00AM ET to discuss the first quarter 2020
financial and operating results.
Conference Call and
Webcast
|
Date:
|
Tuesday May 12, 2020
10:00AM ET
|
Toll-free North
America:
|
(888)
231-8191
|
Local or
International:
|
647)
427-7450
|
Webcast:
https://produceredition.webcasts.com/starthere.jsp?ei=1309009&tp_key=9f22797741
|
|
|
Conference Call
Replay
|
Toll-free North
America:
|
(855)
859-2056
|
Local or
International:
|
(416)
849-0833
|
Passcode:
|
3351989
|
The conference call replay will be available from 1:00PM ET on May 12,
2020 until 23:59PM ET on
May 26, 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.
|
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 and the Company's
most recent Management's Discussion and Analysis for a discussion
of these risks, both filed on SEDAR at www.sedar.com. Management
cannot accurately predict what impact the novel coronavirus will
have on the Plutonic Gold Operations or the financial results of
the Company.
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