Avion Gold Corporation (TSX VENTURE: AVR)(PINK SHEETS:
AVGCF)(OTCQX: AVGCF) ("Avion" or the "Company") today announces its
financial results for the 2nd quarter of 2010.
Complete interim financial statements and related Management's
Discussion and Analysis are filed under the Company's profile on
www.sedar.com. All amounts are in United States dollars unless
otherwise indicated. The key facts are summarized below.
-- During the 2nd quarter, the Company produced 22,222 ounces at a cash
cost per ounce of US$ 596. The Company is forecasting costs of US$ 550
to US$ 600 per oz per quarter for the remaining two quarters in the
year.
-- During the 2nd quarter, the Company sold 21,654 ounces of gold at an
average realized price of US$ 1,197 per ounce, which was higher than the
average London fix of US$ 1,196 over the same period.
-- The Company reported a net loss of $208,350 ($0.00 per share) for the
quarter ended June 30, 2010 which includes a stock-based compensation
expense of $3,860,973 compared to a net loss of $580,694 ($0.00 per
share) for the quarter ended June 30, 2009 which includes a stock-based
compensation expense of $845,480.
-- Gold revenue for the second quarter ended June 30, 2010 was $25.9
million compared to $5.6 million for the comparable quarter last year.
-- Operating cash flow before the working capital adjustment for the second
quarter ended June 30, 2010 was $6.7 million.
-- Net working capital as at June 30, 2010 was $39.9 million (including
cash and cash equivalents of $ 31.2 million).
Commenting on the Q2 2010 results, Avion's President and CEO,
Mr. John Begeman stated: "Second quarter production significantly
increased over the previous quarter. The grade from Segala was as
expected and was supplemented with some tonnage from the Tabakoto
pit. Production in Q3 should be as expected and our guidance
remains to produce between 75,000 and 85,000 ounces for 2010. Avion
is cash flow positive and is in a strong financial position to
proceed with our expansion plans."
There will be a conference call presentation and discussion of
the Q2 results at 10:00am this morning. To participate in the call
please dial:
International: +1 416 695 7848
Toll free: 1 800 952 4972
Toronto Area: 416 695 7848
Andrew Bradfield P.Eng., the Chief Operating Officer of the
Company, and a qualified person under National Instrument 43-101,
has reviewed the scientific and technical information in this press
release.
About Avion Gold
Avion is a Canadian-based gold mining company focused in West
Africa that holds 80% of the Tabakoto and Segala gold projects in
Mali. Gold production commenced at these projects in 2009 with just
over 51,000 ounces produced. 2010 production is estimated at 75,000
to 85,000 ounces of gold. Production sustainability is supported
and enhanced by an aggressive 2010 drill program over an
approximately 600 km2 exploration package that both surrounds and
is near to the Company's existing mine infrastructure.
Additionally, the 1,670 km2 Hounde exploration property in Burkina
Faso, that Avion is in the process of acquiring (see News Release
dated July 5, 2010) is returning good results from an ongoing
exploration program. These properties are the subject of an
approximate US$ 12 million dollar, 60,000 metre plus, drill-focused
exploration program in 2010, which management expects, based on
results to date, to add new resources and future opportunities for
Avion. Avion continues to progress towards its longer term goal of
200,000 ounces of gold per year and is preparing to mine
underground at the Segala and Tabakoto deposits. Avion has a highly
skilled management team, with a focus on growth and consolidation
within West Africa.
Cautionary Notes
The ability of Avion to increase production to 200,000 ounces of
gold per year has not been the subject of a feasibility study and
there is no certainty that the proposed expansion will be
economically viable.
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation.
Forward-looking information includes, without limitation,
statements regarding the impact and timing of the results on the
Company,; statements with respect to the development potential and
timetable of the Mali projects; the future price of gold; the
estimation of mineral resources; conclusions of economic evaluation
(including scoping studies); the realization of mineral resource
estimates; the timing and amount of estimated future production,
development and exploration; costs of future activities; capital
and operating expenditures; success of exploration activities;
mining or processing issues; currency exchange rates; government
regulation of mining operations; and environmental risks.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved". Forward-looking
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, including but not limited to: general
business, economic, competitive, geopolitical and social
uncertainties; the actual results of current exploration
activities; ability to successfully integrate the purchased
properties; foreign operations risks; other risks inherent in the
mining industry and other risks described in the annual information
form of the Company which is available under the profile of the
Company on SEDAR at www.sedar.com. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
Cautionary Non-GAAP Statements
Avion believes that investors use certain indicators to assess
gold mining companies. The indicators are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared with GAAP.
"Cash flow from operating activities before changes in non-cash
working capital" is a non-GAAP performance measure which could
provide an indication of the Company's ability to generate cash
flows from operations, and is calculated by adding back the change
in non-cash working capital to "Cash provided by (used for)
operating activities as presented on the Company's consolidated
statements of cash flows. "Cash cost per ounce produced" is a
non-GAAP performance measure which could provide an indication of
the mining and processing efficiency and effectiveness at the Mine.
It is determined by dividing the relevant mining and processing
costs excluding royalties by the ounces produced in the period.
There may be some variation in the method of computation of "cash
cost per ounce produced" as determined by the Company compared with
other mining companies. In this context, "ounces produced"
in-process and dore inventory along with ounces of gold sold in the
period. "Cash costs per ounce produced" may vary from one period to
another due to operating efficiencies, waste to ore ratios, grade
of ore processed and gold recovery rates in the period.
The following table provides a reconciliation of mining and
processing costs per the financial statements and cash operating
for the purposes of calculating cash costs per ounce produced in
USD.
Mining and processing expenses (USD) 15,401,268
Pre-production costs capitalized (USD) -
Inventory movements and adjustments (2,163,963)
Total cash operating costs (USD) 13,237,305
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE
Contacts: Avion Gold Corporation John Begeman President &
Chief Executive Officer (416) 861-5884 info@aviongoldcorp.com
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