Austral Gold Announces Filing of 2017 Financial Year Annual Report
Austral Gold Announces Filing of 2017 Financial Year
Annual Report
Vancouver, British Columbia--(Newsfile Corp. - September 29, 2017) - Austral Gold Limited (TSXV: AGLD) (ASX: AGD) ('the
Company" or "Austral or "the Group"") is pleased to announce that the Annual Report for June 30, 2017 has been filed on the
Australian Stock Exchange (
www.asx.com.au
) and SEDAR under the Company's profile name (
www.sedar.com
).
Highlights
for 2017 FY (July 1 2016- June 30, 2017)
:
Commenced open pit mining operations on the Central Vein at Amancaya, which is a high grade gold and silver vein
hosted deposit approximately 70 kilometres from the Guanaco mine.
The pre-feasibility study completed for the combined operation of both Guanaco and Amancaya has demonstrated robust
economics and a life of mine of five years from current reserves. The Amancaya ore is being trucked to the nearby plant at
Guanaco, which has greatly reduced the capital expenditure.
Completed construction of the 1,500 tonnes per day agitation leach and Merrill-Crowe processing plant in Chile to process
production from our Guanaco and Amancaya mining operations.
Connected to the Taltal Wind Farm and commenced a power supply agreement with the northern Chile power grid. This
grid connection should not only decrease current power consumption costs by more than 50%, but it should also
significantly reduce the carbon footprint of the Guanaco operation by avoiding the diesel consumption that is currently used
to generate power at the on-site power plant.
Following the acquisition of our initial interest in the Casposo mine from Troy Resources in FY16, we exercised the option
to acquire a further 19% in March 2017. There have now been three full quarters of production at Casposo and Austral
Gold personnel have acted quickly to enhance the operations and spearhead the resumption of gold and silver production.
Ramped up exploration activities throughout the year with the most prospective results realised to date including the
discovery of a new high grade gold vein at the Amancaya property.
Our CEO, Stabro Kasaneva structured and strengthened the corporate and technical teams to manage the scale up of our
operations, and to lead efforts to continuously improve operations and pursue further value adding opportunities.
Major work was done to establish a platform of long term reserves at our operations. During FY17, a maiden reserve and
resource estimate, in accordance with both NI 43-101 and JORC2012, for both the Guanaco and Amancaya mines was
completed. Similarly, for the re-commissioned Casposo mine, a new resource and reserve estimate was completed by
independent consultants in September 2016 which coincided with the relaunch of production at the Casposo mine.
Completed the acquisition of Argentex Mining Corporation in August 2016, which owns the Pingüino Project, an advanced
stage Silver-Gold-Zinc-Lead-Indium development project located in Santa Cruz, Argentina. In the last 15 years, 6 mines
have been constructed in Santa Cruz, making it one of the most prolific precious metal provinces in the world, including
world class deposits such as Cerro Vanguardia and Cerro Negro.
Successfully dual listed on the TSX-V, a key exchange for resource stocks, under the ticker AGLD. The Company now
trades on both the ASX (AGD) and the TSX-V.
Eduardo Elzstain, Chairman of Austral Gold said
"
The 2017 financial year ('FY17') has been another year of significant
progress for Austral Gold. We expanded our asset base, constructed a new processing facility at our flagship Guanaco mine
in Chile and
strengthened our team. Combined, these put us in a solid position as we look to continue to grow and seek value
enhancing opportunities.
Austral Gold continued to deliver stable production and FY17 was the fifth consecutive year where
we met or exceeded production guidance. We expect to be able to grow future production as Austral Gold realises the
benefits from the investment we have made in expanding production capacity in Chile, and from the increase in our
ownership of the Casposo mine in Argentina from 51% to 70%.
Operating Results and Dividends
30 June 2017
30 June 2016
US$000
US$000
Revenue
104,008
55,865
Gross profit
12,569
4,648
Gross profit %
12.1%
8.3%
Adjusted gross profit (excluding depreciation)
42,562
19,263
Adjusted Gross profit %
40.9%
34.5%
EBITDA
24,490
42,818
EBITDA per share (basic)
4.80c
8.9c
Adjusted EBITDA*
26,752
10,595
Adjusted EBITDA per share (basic)
5.20c
2.20c
(Loss) profit attributed to shareholders
(4,380)
25,130
(Loss) profit attributed to non-controlling interests
(100)
(724)
(Loss) earnings per share (Basic)
(0.85)c
5.25c
(Loss) earnings per share (Diluted)
(0.85)c
5.25c
Comprehensive loss (income)
(3,905)
33,146
*excluding gain/(loss) on movements in financial assets and gain on acquisition of subsidiary
Note: Readers are cautioned that net/(loss) profit before finance costs, income tax expense and depreciation ('Adjusted
EBITDA') do not have standardised meanings as prescribed by IFRS and may not be comparable to similar measures
presented by other companies. Further, readers are cautioned that Adjusted EBITDA should not replace profit or loss or cash
flows from operating, investing and financing activities (as determined in accordance with IFRS), as an indicator of the
Company's performance.
Net loss attributable to shareholders for FY17 was US$4.4 million (FY16: net profit US$25.1 million).
Revenue of US$104m in FY17 (FY16: US$55.9m) as production increased to 81,591 AuEq oz (FY16: 40,395AuEq oz). The
increase of US$48m was due to (i) the re-commissioning of the Casposo mine during the period (+US$38m increase vs. FY16);
(ii) the sales volume and average gold price achieved at Guanaco (+ US$7m), and (iii) the US$2.5m revenue from collection of
silver tax credits at Casposo.
Cost of production increased by 79% which is attributable to the start-up of the Casposo mine. Casposo averaged cash costs of
US$998/AuEq oz in the three quarters of production during FY17. Guanaco mine maintained its cash cost levels (US$759/AuEq
oz in FY17 compared to 761/AuEq oz in FY16).
Gross profit of US$12.6m or 12.1% (including US$29.9m of depreciation) during FY17 (FY16: US$4.6m or 8.3% and
US$14.6m respectively). Excluding deprecation, a gross profit of US$42.6m or 40.9% (FY16:US$19.3m or 34.5%) was earned.
FY17 administration expenses increased by 87% to US$15.5m (FY16: US$8.3m) while costs remained constant as a % of
revenue at 15%. Higher administration costs were mainly due to additions to the corporate team to manage the expansion of
operations, restructuring of operations at Casposo, costs related to the acquisition of Argentex, the cost of technical reports and
higher public company costs resulting from the company's listing on the TSX.V.
The loss in the fair value of financial assets of US$2.3m in FY17 was due to a decrease in the number and fair value of the
Fortuna shares and warrants held during the period.
Finance costs increased by US$273k in FY17 to US$729k mainly due to an increase in borrowings during the period used to
finance operations and the building of the new agitation leach plant at Guanaco mine site.
An interim unfranked dividend of A$0.009 (US$$0.006) per ordinary share or A$4,670,849 US$3,361,656) was paid on 1
February 2017.
FY2017 Production Summary
Guanaco
Casposo*
Casposo
Attributable**
Total Group
Ore Processed (t)
505,711
248,109
148,144
753,820
Average plant grade (g/t Au)
3.96
2.55
2.55
3.50
Average plant grade (g/t Ag)
8.44
215.49
215.49
76.59
Gold produced (oz)
44,275
16,793
9,622
61,068
Silver produced (oz)
58,832
1,411,292
811,662
1,470,124
Gold-Equivalent (oz)
45,098
36,493
20,952
81,591
C1 Cash Cost (US$/AuEq oz)
759
998
998
849
All-in Sustaining Cost (US$/Au oz)
908
1,280
1,280
1,049
Realised gold price (US$/Au oz)
1,250
Realised silver price (US$/Ag oz)
17
* Casposo production includes the last three Quarters. Production during recommissioning is not included in these figures.
** Austral Gold owned 51% of Casposo from commissioning until Feb,
20
17, when it increased its stake in Casposo to 71%
*** AuEq is based on a gold:silver ratio of 1:72
Financial Position
The net assets of Austral have decreased by US$4.5 million since 30 June 2016 to US$103.4m at 30 June 2017 (2016:
US$107.9m).
The decrease in financial assets is mainly explained by the sale of the Fortuna shares during FY2017 and the 19.9% investment
in Argentex through a private placement no longer classified as a financial asset as a result of the transaction to acquire the
remaining shares of Argentex not held by Austral in August 2016.
The increase in inventory is mainly explained by (i) the stock pile of Amancaya (partially offset by the reduction of the stock pile at
Casposo); and (ii) the higher gold/silver in process in Guanaco due to production cut-off dates. Materials and spare parts remain
at similar levels as previous year despite an increase in the allowance for inventory obsolescence (increased by US$~800K at
Casposo).
Non-current assets increased by US$26.7m in FY17 compared to the prior year primarily due to an increase in capital
expenditures at Guanaco as a result of the construction of the new agitation leach plant.
Provisions increased by US$4.5m in FY17 due to an increase in the mine closure provision for Guanaco. The increase in
liabilities by $24.4m in FY17 is mainly due to financing required to construct the agitation leach plant at Guanaco and for short-
term working capital at both Casposo and Guanaco.
As at 30 June 2017, the Austral Group had a current ratio equal to 1.4x along with US$6m cash and cash equivalents. The
Group used part of its FY17 operating cashflows of US$27.7 m (FY16: US$15.5m), proceeds from the sale of financial assets
and increase in short-term credit facilities to meet its final commitments regarding deferred consideration for the acquisitions of
Cachinalito and Amancaya and for capital expenditures to support production and construction of the new plant at Guanaco and
support the work on recommissioning the Casposo mine.
About Austral Gold
Austral Gold Limited is a growing precious metals mining, development and exploration company building a portfolio of
quality assets in Chile and Argentina. The Company's flagship Guanaco
mine
in Chile is
operated with the Amancaya mine
with processing of ore from both mines at a new agitation leach plant at Guanaco. There is significant
exploration upside
at
and around both operations, with a new vein discovery at Amancaya
.
The Company
also
owns 70% and is
operator of the
underground silver-gold Casposo mine in San Juan, Argentina. With an experienced local technical team and highly
regarded major shareholder, Austral's goal is to continue to strengthen its asset base through acquisition and discovery.
Austral Gold Limited is listed on the TSX Venture Exchange (TSXV: AGLD), and the Australian Securities Exchange (ASX:
AGD). For more information, please consult the company's website
:
www.australgold.com
Neither 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.
On behalf of Austral Gold Limited:
"Stabro Kasaneva"
CEO
For Further Information Please Contact:
Mike Brown, VP Corporate Development
Canada: +1 604 568 2496
Argentina: + 54 11 4323 7558
Forward Looking Statements
Statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements are
statements that are not historical, and consist primarily of projections - statements regarding future plans, expectations and
developments. Words such as "expects", "intends", "plans", "may", "could", "potential", "should", "anticipates", "likely",
"believes" and words of similar import tend to identify forward-looking statements. Forward-looking statements in this news
release include: our belief that the grid connection with the Northern Chile power grid should not only decrease current power
consumption costs by more than 50%, but it should also significantly reduce the carbon footprint of the Guanaco operation by
avoiding the diesel consumption that is currently used to generate power at the on-site power plant, we are
in a solid position as
we look to continue to grow and seek value enhancing opportunities, our expectation to be able to grow future production as
Austral Gold realises the benefits from the investment we have made in expanding production capacity in Chile, and from the
increase in our ownership of the Casposo mine in Argentina from 51% to 70%.
"
All of these forward-looking statements are
subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ
from those expressed or implied, including, without limitation, business integration risks; uncertainty of production, development
plans and cost estimates, commodity price fluctuations; political or economic instability and regulatory changes; currency
fluctuations, the state of the capital markets, uncertainty in the measurement of mineral reserves and resource estimates,
Austral's ability to attract and retain qualified personnel and management, potential labour unrest, reclamation and closure
requirements for mineral properties; unpredictable risks and hazards related to the development and operation of a mine or
mineral property that are beyond the Company's control, the availability of capital to fund all of the Company's projects and other
risks and uncertainties identified under the heading "Risk Factors" in the Company's continuous disclosure documents filed on
SEDAR. You are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.
Austral cannot assure you that actual events, performance or results will be consistent with these forward-looking statements,
and management's assumptions may prove to be incorrect. Austral's forward-looking statements reflect current expectations
regarding future events and operating performance and speak only as of the date hereof and Austral does not assume any
obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should
change other than as required by applicable law. For the reasons set forth above, you should not place undue reliance on
forward-looking statements.
Au
st
r
al
G
ol
d
L
i
m
i
ted
ABN 30 075 860 472
ASX
:
A
GD
T
S
X
V
:
A
G
L
D
Suite 203, 80 William St, Sydney NSW 2011 | T +61 2 9380 7233 | F +61 2 8354 0992 |
|
www.australgold.com.au