TORONTO, March 3, 2015 /PRNewswire/ - Cerro Grande Mining
Corporation (the "Company" or "CEG") (CSE-CEG; OTCQB-CEGMF)
reported its unaudited results for its first fiscal quarter ended
December 31, 2014 compared to same
period in 2013. The Company's financial statements and MD&A for
its fiscal first quarter ended December 31,
2014 compared to the comparable quarter in 2013 have been
filed on SEDAR. The Company refers the reader to those materials
for additional information.
Revenues totalled US $2,464,000
for the Company's first fiscal quarter ended December 31, 2014 which includes gold sales of
US$2,159,000 (1,745 ozs of gold) and
copper and silver sales of US$305,000
compared to revenues in its first quarter ended December 31, 2013 of US $4,541,000 which includes gold sales of US
$3,884,000 (3,088ozs of gold) and
copper and silver sales of US $657,000.
Net loss before income taxes for the first fiscal quarter ended
December 31, 2014 was US $1,415,000 compared to a loss of US $1,086,000 in the comparable period a year ago.
Net loss after taxes was US $1,415,000 after depreciation and amortization
charges of US $597,000 and
exploration expense of US $nil. This compares to the same period a
year ago when loss after taxes was US $1,086,000 after depreciation and amortization
charges of US $724,000 and
exploration expenses of US $2,000.
At December 31,2014 the Company
had a negative working capital position of US $1,576,000 compared to a negative US $2,747,000 at September
30, 2014.
On a standalone basis, the Pimenton mine had a net loss for its
first fiscal quarter ended December 31,
2014 of US $1,108,000 after
depreciation and amortization expense of US $597,000 compared to the same period in 2013 when
the net loss was US $683,000after
deducting depreciation and amortization expense of US $716,000.
Overview
The Company is an exploration, development and mining
corporation focused in Chile. The Company's primary asset is
an operating gold and copper mine in Chile (the "Pimenton Mine"). The
Pimenton mine is a narrow high-grade gold and copper mine located
in the high mountain range of Chile and encompasses 3,121 hectares (7,708
acres).
The Company's other major assets are a porphyry copper deposit
(the "Pimenton Porphyry") and other projects in various stages of
exploration and development in Chile which include "Santa Cecilia",
"Tordillo", and two limestone deposits "Catedral" and "Cal
Norte".
Operational Highlights
- Gold produced by the Pimenton Mine for the three months ended
December 31, 2014 was 1,822 oz
compared to 2,558 oz produced in the prior quarter.
- Pimenton's cash cost for the first quarter ended December 31, 2014 was $1,119 per ounce of gold produced net of by
product credits, compared to $991 per
oz in the prior quarter.
- Pimenton's production cost, which includes depreciation and
amortization, for the first quarter ended December 31, 2014, was $1,444 per ounce of gold produced net of by
product credit, compared to $2,002
per oz in the prior quarter.
- The average gold recovery for the three months ended
December 31, 2014 was 95.10% compared
to 94.28% in the prior quarter.
- The Company expects the mine to maintain milling rates of 120
tons per day depending on the rate of conversion of its known
resources to reserves.
- Currently the plant has been permitted to operate at an average
of 166 tons per day. The Company has prepared but not yet submitted
permits to take the mine up to 500 tons per day.
Financial Highlights
- Loss before income taxes for the three months period ended
December 31, 2014 was $1,415,000 compared to a loss of $1,086,000 in the same three month period in
2013.
- Average price per ounce of gold sold for the three months ended
December 31, 2014 was $1,207 (2013 - $1,258).
- Net loss after income taxes for the three months ended
December 31, 2014 was $1,415,000 compared to $1,086,000 in the same three month period in
2013.
- Basic loss per share for the three months ended December 31, 2014 was a loss of 0.008 cents per share (2013 – 0.011).
- At December 31, 2014, the Company
had cash and cash equivalents of $245,000 compared to $87,000 at September 30,
2014.
- Cash flow provided by operating activities for the quarter
ended December 31, 2014 was
$202,000 (2013 - $750,000).
Other Highlights
- Management believes that the values of the Pimenton gold mine,
the potential porphyry copper deposit, the Santa Cecilia project,
Tordillo exploration and the Catedral/Rino and Cal Norte limestone
deposits are not reflected in the Company's market capitalization.
The Company will continue its effort to enhance the underlying
values of its assets.
- On October 24, 2014 Mr.
David Thomson and Mr. Mario Hernandez, both Officers and Directors of
the Company, through their respective companies have (i) Subscribed
to a Private Placement of units of the Company for cash proceeds of
US$700,000 (the "Placement"), and
(ii) extinguish certain outstanding indebtedness owed to the
Directors by issuing common shares of the Company (each, a "Common
Share") in settlement of such debt (the "Debt Settlement"). The
Placement and Debt Settlement has been completed in order to
immediately improve the financial position of the Company given the
serious financial difficulties it is currently facing, and with a
view of setting the Company on firm financial ground to carry out
its mining business in Chile in
the future.
- Pursuant to the Placement the Company has issued an aggregate
of 15,743,000 units of securities of the Company (each, a "Unit")
at CDN$0.05 per Unit, with each Unit
comprising one Common Share and one Common Share purchase warrant
(each, a "Warrant"), with each Warrant exercisable for a period of
5 years to purchase one Common Share at CDN$0.07. Proceeds of the Placement are expected
to be used for general working capital purposes, including, but not
limited to, corporate and administrative purposes.
- Pursuant to the Debt Settlement, the Company has extinguished
outstanding indebtedness in the aggregate amount of US$2,162,000 owed to these Directors, such
indebtedness being made up of accrued but unpaid royalty payments
and service fees owed to the Directors and cash advances made to
the Company by the Directors and interest thereon, by issuing an
aggregate of 48,645,220 Common Shares (representing an issue price
of CDN$0.05 per share) in full and
final settlement thereof. All dollar amounts have been converted at
an exchange rate of CND$1.1245 per US$1.
- In January 2015 the Company was
successful in extending its labour contract with the Union at the
Pimenton mine by one year (February
2016 to February 2017). The
agreed extension was due to the Pimenton mine's management agreeing
to a 7 by 7 shift compared to the actual 10 by 5 shift along with a
3% increase in base wages. The Company believes the small
adjustment in wages will be more than offset through adjustments to
plant and mine operations and an increased productivity of the mine
workers.
Cerro Grande Mining Corporation is a minerals producing,
exploration and development company with properties and activities
currently focused in Chile.
Cautionary Statement on Forward-looking Information:
This news release contains "forward-looking information",
which may include, but is not limited to, statements with respect
to the future financial or operating performance of CEG. Often, but
not always, forward-looking statements can be identified by the use
of words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative 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 statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of CEG to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Forward-looking statements contained herein are made as of the date
of this press release based on current expectations and beliefs and
CEG disclaims, other than as required by law, any obligation to
update any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if
management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, the reader is cautioned not to place undue reliance on
forward-looking statements.
SOURCE Cerro Grande Mining Corporation