INCREASED UNDERGROUND STOPE GRADE FOR THIRD
CONSECUTIVE QUARTER AND IMPROVED CASH POSITION
(In US Dollars unless otherwise
stated)
TORONTO, April 11, 2021 /CNW/ - Superior Gold Inc.
("Superior Gold" or the "Company") (TSXV: SGI) announces detailed
production results for the first quarter of 2021 for the Company's
100%-owned Plutonic Gold Operations, located in Western Australia.
First Quarter Highlights
- Production of 17,603 ounces, an 11% increase over the prior
quarter, with sales of 17,538 ounces
- Stope grade increased by a further 13% to 3.5 g/t gold
representing an improvement for a third consecutive quarter and
in-line with the Company's near-term goal of continuing to target
higher grade, higher margin ounces
- Process recovery increased to 86%, in part due to the
finalization of re-commissioning of the gravity circuit in the
prior quarter and increase in oxide stockpile ore
- The third underground drill, which is dedicated to exploring
for new mining fronts, intersected 21.8 g/t gold over 8.3
metres at the Baltic Gap Mining Front1 and 13.7
g/t gold over 8.8 metres at the Western Mining
Front2
- Improved cash position, exiting the quarter with a strong
financial position of $17.9 million
in cash and cash equivalents
- Repayment of Auramet gold loan nearing completion with the
$2.0 million remaining outstanding at
the end of the first quarter to be fully repaid by June 30, 2021
- Recorded zero incidences of COVID-19 infection for a fifth
consecutive quarter
Tamara Brown, Interim CEO of
Superior Gold stated: "We are delighted to report a third
consecutive quarter of improving production at our Plutonic Gold
Operations. Importantly, we improved our cash position
relative to year end 2020 as a result of first quarter production
of 17,603 ounces, which represented an 11% quarter-over-quarter and
8% year-over-year increase. The strategic projects and
operational initiatives that we put in place last year have
resulted in a steady improvement in our stope grade which has also
increased for a third consecutive quarter and represents a 47%
improvement relative to the second quarter of 2020 when we
initiated a number of changes at the Company (Figure 1).
We continue to advance the strategic projects necessary to
reposition Plutonic for sustainable, long term success. This
includes opening new underground mining fronts plus the
re-commencement of open pit mining mid-year, resulting in an
expected improvement in our grade profile moving forward. In
addition, an improved understanding of the mineralization at
Plutonic and specifically the northwest trending faults that
control the concentration of higher-grade gold mineralization, has
led to many of our recent exploration successes (at the Baltic Gap
and Western Mining Front) and identification of higher-grade stopes
on the operational front.
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1
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Refer to the
Company's news release on March 29, 2021 for additional
information.
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2
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Refer to the
Company's news release on March 1, 2021 for additional information.
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Ultimately, these investments and an improved understanding of
mineralization at Plutonic 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, is
expected to result in an improvement in our overall financial
performance over the course of 2021 and beyond."
The Company expects to release its complete financial and
operating results for the first quarter in May 2021.
First Quarter Production Details
Preliminary production details are summarized in the table
below.
Operating
Parameters1
|
Three Months
Ended
December 31,
2020
|
Three Months
Ended
March 31,
2021
|
Stope material mined
(Tonnes)
|
139,159
|
137,191
|
Stope grade mined
(g/t Au)
|
3.12
|
3.54
|
Development material
mined (Tonnes)
|
56,952
|
49,771
|
Development grade
mined (g/t Au)
|
1.75
|
1.30
|
Surface material
milled (Tonnes)2
|
167,501
|
154,089
|
Surface material
grade (g/t Au)2
|
0.34
|
0.41
|
Total material milled
(Tonnes)
|
365,520
|
355,678
|
Grade milled (g/t
Au)
|
1.61
|
1.78
|
Gold recovery
(%)
|
84
|
86
|
Gold Produced
(ounces)
|
15,838
|
17,603
|
Gold Sold
(ounces)
|
15,855
|
17,538
|
Cash and Cash
Equivalents ($ million)
|
17.3
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17.9
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1
|
Numbers may not add
due to rounding.
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2
|
Surface material
milled in Q1 2021 is primarily the processing of low-grade
stockpile.
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Open Pit Production Commencing in
Mid-2021
As part of the Company's strategy to expand production and fully
utilize the existing infrastructure at the Plutonic Gold
Operations, work continued during the first quarter of 2021 on
optimizing several potential open pit sources and finalizing
resources and scheduling. These open pits are comprised of the
Plutonic East, Perch and Salmon pits on the Plutonic Mine property,
along with the Hermes and Hermes South open pits to the
southwest. As planned, the Company expects to begin mining
the Plutonic East open pit in mid-2021, with grade control drilling
having been completed during the first quarter. 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.
Expanding into New Mining Fronts
During the first quarter of 2021, the Company released two
exploration updates containing important high-grade drill results
from its underground drill program as part of its strategy to
identify new mining fronts to allow for improved mining grades and
productivity and reduced reliance on remnant mining.
The Company announced results from the Western Mining Front,
northwest of the Baltic zone,
which were highlighted by 13.7 g/t gold over 8.8 metres
(UDD23656) and 52.7 g/t gold over 1.0 metres
(UDD23653)3. These intercepts are outside of existing
Mineral Resources but are within only 50 metres of existing
infrastructure and can therefore be accessed with minimal
capital. Encouragingly, it is worth noting that all of the
drill holes completed to target depth hit significant
intercepts.
Towards the end of the first quarter, the Company announced
results from the Baltic Gap, which were highlighted by 21.8 g/t
gold over 8.3 metres and 13.4 g/t gold over 5.0 metres
(UDD23880) and 20.7 g/t gold over 2.1 metres
(UDD23820)4. The results represent the
identification of a potential new mining front with mineralization
extending up to 165 metres outside of the current Mineral Resource
envelope. Similar to the results released last year, which
were highlighted by 40.4 g/t gold over 6.5 metres
(UDD22310)5, these latest intercepts are outside of
existing Mineral Resources, but are within only 50 metres of
existing underground infrastructure.
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3
|
Refer to the
Company's news release on March 1, 2021 for additional
information.
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4
|
Refer to the
Company's news release on March 29, 2021 for additional
information.
|
5
|
Refer to the
Company's news release on June 24, 2020 for additional
information.
|
Strategic Review Update
The Company wishes to provide an update on its strategic review
process to explore and evaluate a broad range of potential
alternatives to maximize shareholder value, which was originally
announced in July 2020. Since the
bought deal offering in October 2020
- which the Company used to purchase a 2% royalty on the Plutonic
Gold Operations, revitalize its underground mining fleet and add a
third drill rig dedicated to exploration - the Company has advanced
projects to assess opportunities to consolidate the
Plutonic-Marymia gold belt and surrounding regions and further
advance the strategic review process in Australia. The Company is also well
advanced with its search for a permanent CEO. While the
process is ongoing, there is nothing requiring disclosure at the
present time. There can be no assurance that the strategic review
process will result in any transaction. The Company does not intend
to comment further unless the Board of Directors of the Company has
approved a specific course of action or the Company has determined
further disclosure is appropriate.
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 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