ACHIEVES FULL YEAR 2020 REVISED GUIDANCE
UNDERGROUND STOPE GRADE IMPROVES FOR SECOND
CONSECUTIVE QUARTER
(In US Dollars unless otherwise
stated)
TORONTO, Jan. 18, 2021 /CNW/ - Superior Gold
Inc. ("Superior Gold" or the "Company") (TSXV: SGI) announces
detailed production results for the fourth quarter and full year
2020 and provides full year 2021 guidance for the Company's
100%-owned Plutonic Gold operations, located in Western
Australia.
Fourth Quarter Highlights
- Recorded zero incidences of COVID-19 ("COVID") infection for a
fourth consecutive quarter
- Production of 15,838 ounces was in line with the Company's
internal plan with sales of 15,855 ounces
- Stope grade increased by a further 5% to 3.1 g/t gold
representing an improvement for a second consecutive quarter and in
line with the Company's near-term goal of targeting higher grade,
higher margin ounces
- Strengthened the Company's financial position with the
completion of a C$17.3 million equity
financing
- Completed an accretive transaction through the repurchase of
the 2% net smelter royalty for A$6.5
million
- Announced positive results for the Plutonic Main Pit Push-Back
Preliminary Economic Assessment ("PEA") with an after-tax Net
Present Value (5% discount rate) of A$120
million and an after-tax Internal Rate of Return of 35% at a
gold price of $1,505 per ounce
- Updated Measured and Indicated Mineral Resources at the
Plutonic Gold Operations of 1.89 million ounces of gold (16.3
million tonnes at a 3.6 g/t Au grade)
- Updated Inferred Mineral Resources at the Plutonic Gold
Operations of 3.07 million ounces of gold (30.6 million tonnes at a
3.1 g/t Au grade)
- Arrival of new underground mobile equipment resulting in
significant increase in productivities and equipment availability
in the latter part of the fourth quarter
- Arrival of a third underground drill late in the fourth
quarter, which is dedicated to exploring for new mining fronts
Full Year Highlights
- Safely operated through the global pandemic with zero
incidences of COVID
- Achieved full year revised guidance with production of 63,065
ounces and sold 63,732 ounces
- Repaid $8.0 million of the
Auramet gold loan, with the remaining $4.4
million scheduled to be fully repaid by June 30, 2021
- Exited the year with a strong financial position of
$17.3 million in cash and cash
equivalents after the repurchase of the 2% net smelter royalty,
delivery into hedges as part of the Auramet gold loan, and capital
expenditures necessary to improve performance and accelerate
underground development
Tamara Brown, Interim CEO of
Superior Gold stated: "We are very pleased to have achieved our
revised 2020 production guidance while also advancing the strategic
projects necessary to reposition Plutonic for sustainable, long
term success. The operational initiatives that we put in
place in mid-2020 have begun to have a positive impact. Our
productivities improved during the fourth quarter with the arrival
of new mining equipment and our underground stope grade increased
for a second consecutive quarter, improving by 9% in the second
half of the year over the first half, highlighting our renewed
focus on profitability.
During the quarter, we invested in upgrading our underground
fleet, completing a raise at the TSF, upgrading our airstrip and
announced the PEA results for the Plutonic Main Pit push-back
project. This project has the potential to provide a steady
open pit feed supply for six years, which we believe starts to
unlock the significant value sitting within the Plutonic Gold
Operations (refer to the press release dated December 2nd, 2020). It is a
technically simple, high-return, brownfield gold project in one of
the most favourable mining jurisdictions in the world, with all
necessary infrastructure already in place. Looking forward,
we will continue our work to further enhance the economics of the
project through the removal of open pit constraints, resource
expansion, and exploration drilling.
Our 2021 guidance reflects additional investment to open new
underground mining fronts plus the commencement of open pit mining
mid-year, resulting in an expected improvement in our grade profile
due to less mineralized waste being processed. These
investments will ensure that a fully optimized underground
operation, combined with the addition of new sources of open pit
feed and the repayment of our gold loan by mid-2021, will result in
a significant improvement in our overall profitability over the
course of 2021 and beyond."
The Company will be releasing its complete financial and
operating results for the fourth quarter and full year 2020 in
March 2021.
Fourth Quarter and Full Year 2020 Production Details
Preliminary production details are summarized in the table
below.
Operating
Parameters1
|
Three Months
Ended December 31,
2020
|
Twelve Months
Ended December 31,
2020
|
Stope material mined
(Tonnes)
|
139,159
|
600,625
|
Stope grade mined
(g/t Au)
|
3.12
|
2.90
|
Development material
mined (Tonnes)
|
56,952
|
243,093
|
Development grade
mined (g/t Au)
|
1.75
|
1.93
|
Surface material
milled (Tonnes)2
|
167,501
|
681,227
|
Surface material
grade (g/t Au)2
|
0.34
|
0.31
|
Total material milled
(Tonnes)
|
365,520
|
1,505,350
|
Grade milled (g/t
Au)
|
1.61
|
1.58
|
Gold recovery
(%)
|
84
|
83
|
Gold Produced
(ounces)
|
15,838
|
63,065
|
Gold Sold
(ounces)
|
15,855
|
63,732
|
Cash and Cash
Equivalents ($ million)
|
17.3
|
17.3
|
1Numbers
may not add due to rounding.
|
2Surface
material milled in Q4 and full year 2020 is primarily the
processing of low-grade stockpile.
|
2021 Guidance
Details of production, cost and capital expenditure guidance for
2021 are summarized in the table below. It is anticipated that the
first quarter will be the weakest, but progressively improve as we
commence open pit mining mid-year and continue to build up
developed underground inventory.
Operating
Parameters
|
Low
|
High
|
Production (oz of
Gold)
|
65,000
|
75,000
|
Cash Costs
($/oz)1
|
$1,350
|
$1,450
|
All In Sustaining
Costs ($/oz)1
|
$1,500
|
$1,600
|
Exploration
Expenditure ($ million)2
|
$3.5-6.5M
|
Sustaining Capital
Expenditures ($ million)
|
$4.0-4.5M
|
Non Sustaining
Capital Expenditures ($ million)3
|
$3.0-5.0M
|
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.
|
2 Exploration
expenditures could increase with positive exploration
results.
|
3 Non sustaining
capital expenditures are primarily related to pre-production
capital for Plutonic East and underground
development.
|
Open Pit Production in 2021
Detailed work is ongoing to optimize several potential open pit
sources and to finalize resources and scheduling. These pits are
comprised of the Plutonic East, Perch, and Salmon pits on the
Plutonic Mine property, along with the Hermes and Hermes South pits
to the southwest. It is anticipated that production from the
Plutonic East pit will commence in mid-2021, as final mining
permits have already been received. The Company aims to utilize the
production from these open pits plus the Main Pit push-back, along
with operational improvements from the underground, to return the
Plutonic Gold Operations to a state of significant free cash flow
generation.
Qualified Person
The updated Mineral Resource estimate and PEA were completed
under the supervision of Stephen
Hyland, FAusIMM who is a "qualified person" as defined by NI
43-101 and is independent of the Company. Mr. Hyland is a
Fellow of the Australasian Institute of Mining and Metallurgy
(FAusIMM) and a member of the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) and a "qualified person" within the
meaning of NI 43-101. Mr. Hyland is employed by Hyland Geological
and Mining Consultants (HGMC) and has been engaged on the basis of
professional association between client and independent
consultant.
The PEA was prepared under the supervision of the Qualified
Person, Mr. Hyland by the following individuals at RPM Global, all
of whom are Qualified Persons under the terms of NI 43-101:
- Mining: Mr Igor Bojanic,
FAusIMM
- Processing and Infrastructure: Dr Andrew Newell, MAusIMM (CP), MIE(CP)
Though the RPM Global team were not designated Qualified Persons
for the purposes of this PEA, they do meet the requirements for
Qualified Persons under the terms of NI 43-101.
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 NI 43-101. Mr. Boyle is not
independent of the Company within the meaning of 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, 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. Such Forward-looking
information also includes information related to the Company's
previously announced strategic review process, the potential
outcome of such process and the intended maximization of
shareholder value that the Company believes may result from such
process. 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, 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.
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SOURCE Superior Gold