Austral Gold Reports Q3 2018 Results
Austral Gold Reports Q3 2018 Results
Sydney, Australia--(Newsfile Corp. - October 31, 2018) -
Austral Gold Limited (the "Company") (ASX: AGD) (TSXV: AGLD) is
pleased to report results from its activities during its third quarter ended 30 September 2018.
Stabro Kasaneva, CEO of Austral Gold said "We are pleased to confirm the stabilisation of the Guanaco/Amancaya mine
complex by surpassing 15,000 of gold equivalent ounces of production for a second consecutive quarter. Our main challenge
remains the operation of the Casposo mine. Production at Casposo continues to be below expectations and we have
commenced a comprehensive review of the operational and business model. We expect our cash and AISC costs to continue to
decrease in our fourth quarter as we focus on our continuous improvement strategy."
Key Highlights:
Combined
gold
and
silver
production
(100%
basis*)
for
the
September
2018
quarter
was
21,788
gold
equivalent
ounces
(or 16,585 gold ounces and 423,180 silver ounces).
This
represents
an
increase of 23% from the quarter
ended 30 September 2017 and a decrease of 2% from the quarter ended 30 June
2018
.
During the quarter, production at the Guanaco/Amancaya mine complex (Chile) remained stable
at 15,398 gold
equivalent ounces (monthly average of 5,133 ounces)
while production at the Casposo mine (Argentina) was lower
than forecasted
at 6,390 gold equivalent ounces (monthly average of 2,130 ounces)
due to continued setbacks at the
underground mine.
Combined quarterly operating
cash cost (C1) and all-in-sustaining cost (AISC) improved from the June 2018
quarter
by 10% to US$922 (Guanaco/Amancaya:US$775; Casposo:US$1,274) and 6% to US$1,157
(Guanaco/Amancaya:US$930; Casposo:US$1,705) per gold equivalent ounce respectively with average selling prices of
US$1,214 per ounce of gold and US$14.6 per ounce of silver.
Revised combined production guidance for the year is reduced to 88,000-90,000 gold equivalent ounces from former
guidance of 100,000-105,000 gold equivalent ounces (100% basis*) due to a reduction in the forecasted production at the
Casposo Mine. The Company has commenced a comprehensive review of the Casposo operational and business model
and further details will be announced in due course.
Guanaco and Amancaya Mines Production
Quarterly production remained stable at 13,240 gold ounces and 175,718 silver ounces
(15,398 gold equivalent
ounces) compared to production of 13,669 gold ounces and 142,246 silver ounces (or 15,474 gold equivalent
ounces) in the June 2018 quarter.
Quarterly C1 and AISC decreased to US$775 and US$930
respectively per gold
equivalent ounce from US$836 and $991 in the June 2018 quarter. The decrease in costs were mainly driven by
the depreciation of the Chilean peso against the US dollar during the period.
YTD production was 43,724 gold equivalent ounces and is on track to meet our full year 2018 guidance of
62,000 gold equivalent ounces.
Casposo Mine Production
Quarterly production (100% basis*) decreased to 3,345 gold ounces and 247,462 silver
ounces
(6,390 gold
equivalent ounces) compared to the June 2018 quarter where production was 2,479 gold ounces and 342,992 silver
ounces (6,830 gold equivalent ounces). The Company's quarterly share of production (70% basis) was 2,342 gold ounces
and 173,223 silver ounces (4,473 gold equivalent ounces).
Quarterly C1 and AISC
decreased to
US$1,274 and
US$1,705
respectively per gold equivalent ounce from US$1,450 and US$1,742 in the June 2018 quarter. The cost
improvements were mainly due to the increase in the value of the US dollar against the Argentine peso and cost saving
initiatives. The costs were also impacted by the new Argentine export tax implemented in September as a temporary
measure by the Argentine government until December 2020 representing approximately 8% of export sales at the current
exchange rate.
Production remained behind schedule due to operational delays, a change in mining sequence, lower grades and poorer
than forecasted ground conditions.
YTD production was 20,735 (100% basis*) gold equivalent ounces.
The Company estimates that monthly production
will be approximately 2,000 gold equivalent ounces per month for the balance of the year. Therefore, the Company has
revised its forecasted annual production to 26,000-28,000 gold equivalent ounces from previous guidance of 38,000-
43,000 gold equivalent ounces.
With the current challenging macroeconomic environment and operational performance of the mine, management has
commenced a comprehensive review of Casposo. Further details will be announced in due course when the assessment
has been completed.
A summary of key operational parameters for the September 2018 and September 2017 and June 2018 reporting periods is
set out in the following table for comparative purposes:
Operations
Guanaco/
Casposo
Mine
Net to Austral Gold*
Amancaya Mines
(100% basis)
Sept Quarter
2018
June Quarter
2018
Sept Quarter
2017
Sept Quarter
2018
June Quarter
2018
Sept Quarter
2017
Sept Quarter
2018
June Quarter
2018
Sept Quarter
2017
Processed (t)
76,608
76,072
99,240
46,484
44,499
65,481
109,147
107,221
145,077
Gold produced (Oz)
13,240
13,669
6,086
3,345
2,479
4,396
15,582
15,404
9,163
Silver produced (Oz)
175,718
142,246
44,057
247,462
342,992
505,514
348,941
382,340
397,917
Gold-Equivalent
(Oz) ***
15,398
15,474
6,668
6,390
6,830
11,048
19,871
20,255
14,402
C1 Cash Cost (US$/
AuEq
Oz)
**
775
836
997
1,274
1,450
930
922
1,024
955
All-in Sustaining Cost (US$/Au Oz)
#
930
991
1,229
1,705
1,742
1,043
1,157
1,221
1,113
Realized gold price (US$/Au Oz)
1,214
1,306
1,274
1,215
1,300
1,274
1,214
1,305
1,274
Realized silver price (US$/Ag Oz)
15
17
17
15
17
17
15
17
17
*
Austral Gold owns 70% of Casposo since March 2017
** The cash cost (C1) includes: Mine, Plant, On-Site G&A, Smelting, Refining, and Royalties (excludes Corporate G&A)
# The All-in Sustaining Cost (AISC) includes: C1, Sustaining Capex, Brownfield Exploration, and Mine Closure Amortisation
*** AuEq ratio is calculated at 81:1 Ag:Au for September 2018 Quarter; 80:1 Ag:Au for June 2018 Quarter; 76:1 Ag:Au for September 2017 Quarter
YTD 2018 and Forecasted Calendar 2018 Production and Costs:
The table below provides actual results for 2018 YTD and revised production forecasted for calendar year 2018 due to a
reduction in the estimated production at the Casposo Mine.
Total 2018 YTD combined production was 64,459 gold equivalent ounces (100% basis) or 58,239 (net to Austral Gold*).
Operations
Guanaco/ Amancaya Mines
Casposo Mine (100% basis)
Net to Austral Gold*
YTD 2018Actual
Calendar
2018Forecasted
YTD 2018Actual
Calendar
2018Forecasted
YTD 2018Actual
Calendar
2018Forecasted
Gold produced (Oz)
38,515
56,000
8,476
10,000-12,000
44,448
63,000-64,000
Silver produced (Oz)
417,829
520,000
977,180
1,400,000
1,101,855
1,500,000
Gold-Equivalent (Oz) ***
43,724
62,000
20,735
26,000-28,000
58,239
80,000-82,000
C1 Cash Cost (US$/AuEq Oz) **
861
820-850
1,387
1,270-1,300
1,030
950-990
All-in Sustaining Cost (US$/Au Oz) #
1,006
950-1,000
1,781
1,600-1,650
1,256
1,150-1,200
Sustaining Capital ($000's)
5,468
10,000
8,001
9,000
11,068
16,300
*
Austral Gold owned 70% of Casposo since March 2017
** The cash cost (C1) includes: Mine, Plant, On-Site G&A, Smelting, Refining, and Royalties (excludes Corporate G&A)
# The All-in Sustaining Cost (AISC) includes: C1, Sustaining Capex, Brownfield Exploration, and Mine Closure Amortisation
*** AuEq ratio is calculated at 81:1 Ag:Au for the nine months ended 30 September 2018; 79:1 for the nine months ended 30 September 2017
Financial
Sales proceeds for the quarter were US$27.3m of which the Guanaco/Amancaya mines contributed US$18.5m and the
Casposo mine US$8.8m while total tax recovered, and other export credits totaled US$3.6m.
Cash and cash equivalents at 30 September 2018 was US$2.1m.
Total consolidated financial debt at 30 September 2018 was reduced to US$20.4m (of which US$10m is long-term debt).
Net debt repayments during the quarter totaled US$2m.
The stabilization of the Chilean operations has contributed to higher cash flow and improved liquidity ratios while also
partially offsetting the current net cash outflows at Casposo.
Further details can be found in the Company's Quarterly Activity Report filed at
www.australgold.com
,
http://www.asx.com.au
and
on
www.sedar.com
.
* Non-IFRS Measures
The Company has included certain non-IFRS measures including "Cash cost per gold ounce sold" and "All-in sustaining cost per
gold ounce sold" in this press release. Cash cost per gold ounce sold is equal to production costs less silver sales divided by
gold ounces sold. All-in sustaining cost per gold ounce sold is equal to production costs less silver sales plus general and
administrative expenses, exploration expenses, accretion of reclamation provision and sustaining capital expenditures divided
by gold ounces sold. The Company believes that these measures provide investors with an improved ability to evaluate the
performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS. Therefore,
they may not be comparable to similar measures employed by other companies. The data is intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with IFRS.
Qualified Persons
The scientific and technical content of this news release has been prepared by, or under the supervision of Robert Trzebski,
MAIG, an Independent Director of the Company and has been reviewed and approved by him. Mr Trzebski is a Geologist and
Member of Australian Institute of GeoScientists and a consultant of Austral Gold Limited. Mr. Trzebski is a "qualified person" for
the purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects.
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 project in Chile is a gold and silver producing mine
with further exploration upside. The Company is also 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 additional information please contact:
Jose
Bordogna
Chief Financial Officer
Austral Gold Limited
+54 (11) 4323 7558
Andrew Bursill
Company Secretary
Austral Gold Limited
+61 (2) 9380 7233
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 the Company's 2018 forecasted production guidance and costs, and further details of the Company's
comprehensive review of the Casposo operational and business model will be announced in due course. 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.