GoGold Announces Financial Results and Record Production for the Year Ending
GoGold Announces Financial Results and
Record Production for the Year Ending
September 30, 2018
Trading Symbol: TSX: GGD
Shares Outstanding: 171,776,481
HALIFAX
,
Dec. 21, 2018
/CNW/ -
GoGold Resources Inc. (TSX: GGD) ("GoGold", "the
Company")
is pleased to announce the release of financial results for the quarter and year ending
September 30, 2018
with record revenue of
$21.0 million
(All amounts are in U.S. dollars) from the
sale of 781,672 silver ounces and 6,933 gold ounces during the year.
Financial Highlights for the year ending
September 30, 2018
:
Record production of 774,590 silver and 6,655 gold ounces, providing 1,300,046 silver
equivalent ounces at Parral
Record revenue of
$21.0 million
from the sale of 781,672 silver ounces and 6,933 gold ounces,
a realized price of
$15.79
per silver equivalent ounce and a net loss of
$43.7 million
.
Executed agreement for sale of the 2% net smelter royalty on
Santa Gertrudis
for gross
proceeds of
$12 million
which closed on
November 7, 2018
which brings the total proceeds on
the sale of
Santa Gertrudis
project to
$92 million
.
Cash flow from operations before changes in non-cash working capital of
$3.0 million
, or
2
cents
per basic share
Adjusted cash cost per ounce of silver, net of gold by-product credits was
$6.24
Adjusted cash cost per silver equivalent ounce was
$10.20
Adjusted all in sustaining cost per silver equivalent ounce was
$14.46
Ended the year with a strong balance sheet with
$8.3 million
in cash plus
$12 million
in proceeds
from the sale of the net smelter royalty that closed subsequent to the year end and no debt
Mr.
Brad Langille
, CEO stated, "The Company is in a very strong financial position and is actively
looking at opportunities to add quality undervalued assets. I am very pleased with the pace at which
production is increasing as Parral gets back up to normal production levels. We expect production
for the current quarter to be between 325,000 and 355,000 silver equivalent ounces."
GoGold generated record revenue from record production for the year end
September 30, 2018
,
with low adjusted cash costs per silver equivalent ounce. The monetization of the sale of
Santa
Gertrudis
was completed with the final sale of the 2% net smelter royalty for
$12 million
which
closed on
November 7, 2018
. The royalty sale brought the total proceeds on the disposition of
Santa
Gertrudis
to
$92 million
which the Company purchased in 2014 for
$11 million
and invested an
additional
$9 million
for a total investment of
$20 million
.
The net loss for the year includes a non-cash impairment of
$48.2 million
, a write-down of the leach
pad inventory of
$13.9 million
and a net realizable value adjustment related to inventory of
$12.7
million
. These amounts were all non-cash and had no impact on the Company's strong cash
position. Parral was constructed and operated according to independent third party technical studies
undertaken prior to construction. The technical studies did not scale in the field as expected and over
the past number of years the operating protocols have been overhauled a number of times, before
concluding on the current procedures that are delivering results. The inventory write down is
associated with specific areas of the leach pad stacked in 2016 and 2017 where agglomeration was
poor and the material was compacted for the second lift. The material stacked at the end of 2018
continues to recover in accordance with expectations.
Production for the quarter ending
September 30, 2018
was 240,939 silver equivalent ounces which
was the lowest production quarter for the year. The final test required on the heap leach pad took
place in
April 2018
where the Company began irrigating the second lift on a non-compacted first lift
to test whether compaction of the first lift is required. The results of this test concluded that
compaction of the first lift will be required as without compaction, there is a delay in the recovery of
metal from the material processed above on the second lift. During the third quarter, the Company
began compacting the first lift and placed drainage pipes on top before the second lift is placed.
This will replicate single lift leaching, which has been proven to perform well. The Company has been
stacking on the first lift or above a compacted lower lift with additional drainage between lifts and
production continues to increase back to normal levels.
Financial Highlights for the quarter ending
September 30, 2018
:
Revenue of
$3.5 million
from 241,774 silver equivalent ounces, a realized price of
$14.44
per
silver equivalent ounce
Adjusted cash cost per ounce of silver, net of gold credits was
$1.07
Adjusted cash cost per silver equivalent ounce was
$7.92
Adjusted all in sustaining cost per silver equivalent ounce was
$12.50
Produced 105,623 silver and 1,665 gold ounces, providing 240,939 silver equivalent ounces
Summarized Consolidated Financial Information
Three months ended
September 30
Year ended September 30
(in thousands USD, except per share amounts)
2018
2017
2018
2017
Revenue
$
3,492
$
4,444
$
21,016
$
17,045
Cost of sales
1
$
25,610
$
13,183
$
45,294
$
23,179
Operating loss
$
(23,089)
$
(10,227)
$
(28,412)
$
(9,743)
Net loss
2
$
(68,520)
$
(1,501)
$
(43,693)
$
(584)
Basic net loss per share
$
(0.39)
$
(0.01)
$
(0.43)
$
(0.003)
Cash flow from operations, before changes in non-cash working capital
$
1,660
$
2,091
$
3,038
$
3,551
1
Cost of sales in the quarter ended September 30, 2018 includes an inventory writedown of $13,893.
2
Net loss in the year ended 2018 includes an impairment charge of $48.2 million.
Key Performance Indicators
1
Three months ended
September 30
Year ended September 30
(in thousands USD, except per ounce amounts)
2018
2017
2018
2017
Total tonnes stacked
370,558
279,717
1,619,061
1,166,789
Adjusted AISC per silver equivalent ounce
2,4
$
12.50
$
22.42
$
14.46
$
18.31
Adjusted cash cost per silver ounce
3,4
$
1.07
$
4.03
$
6.24
$
1.80
Adjusted cash cost per silver equivalent ounce
2,4
$
7.92
$
10.18
$
10.20
$
9.39
Realized silver price
$
14.44
$
16.96
$
15.79
$
16.40
1
Key performance indicators are unaudited non-GAAP
2
Gold is converted using actual realized prices
3
Using Gold as a by-product credit
4
Adjusted for net realizable value adjustment, see reconciliation in MD&A
This news release should be read in conjunction with the consolidated financial statements for the
year ended
September 30, 2018
, notes to the financial statements, and management's discussion
and analysis for the year ended
September 30, 2018
, which have been filed on SEDAR and are
available on the Company's website.
Technical information contained in this news release with respect to GoGold has been reviewed and
approved by Mr.
Bob Harris
, P.Eng., who is a qualified person for the purposes of NI 43-101.
CAUTIONARY STATEMENT:
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and
may not be offered or sold within
the United States
or to, or for the benefit of, U.S. persons (as
defined in Regulation S under the U.S. Securities Act) except in compliance with the registration
requirements of the U.S. Securities Act and applicable state securities laws or pursuant to
exemptions therefrom. This release does not constitute an offer to sell or a solicitation of an offer to
buy of any of GoGold's securities in
the United States
.
This news release may contain "forward-looking information" as defined in applicable Canadian
securities legislation. All statements other than statements of historical fact, included in this release,
including, without limitation, statements regarding the future plans and objectives of GoGold,
constitute forward-looking information that involve various risks and uncertainties.
Forward-looking
information is based on a number of factors and assumptions which have been used to develop such
information but which may prove to be incorrect, including, but not limited to, assumptions in
connection with the continuance of GoGold and its subsidiaries as a going concern, general
economic and market conditions, mineral prices, the accuracy of mineral resource estimates, and
the ability to satisfy all conditions to funding of the second tranche under the credit
agreement. There can be no assurance that such information will prove to be accurate and actual
results and future events could differ materially from those anticipated in such forward-looking
information.
Important factors that could cause actual results to differ materially from GoGold's expectations
include exploration and development risks associated with the GoGold's projects, the failure to
establish estimated mineral resources or mineral reserves, volatility of commodity prices, variations
of recovery rates and global economic conditions. For additional information with respect to risk
factors applicable to GoGold, reference should be made to GoGold's continuous disclosure
materials filed from time to time with securities regulators, including, but not limited to, GoGold's
Annual Information Form. The forward-looking information contained in this release is made as of the
date of this release.
Cautionary non-GAAP Measures and Additional GAAP Measures
Note that for purposes of this section, GAAP refers to IFRS. The Company believes that investors
use certain non-GAAP and additional GAAP measures as indicators to assess mining companies.
They are intended to provide additional information and should not be considered in isolation or as a
substitute for measures of performance prepared with GAAP. Non-GAAP and additional GAAP
measures do not have a standardized meaning prescribed under IFRS and therefore may not be
comparable to similar measures presented by other companies.
Additional GAAP measures that are presented on the face of the Company's consolidated
statements of comprehensive income include "Operating income (loss)". These measures are
intended to provide an indication of the Company's mine and operating performance. "Cash flow
from operating activities before changes in non-cash working capital" is a non-GAAP performance
measure that 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 "Net cash
used in operating activities" as presented on the Company's consolidated statements of cash flows.
Per ounce measures are calculated by dividing the relevant mining and processing costs and total
costs by the tonnes of ore processed in the period. "Cash costs per ounce" and "all-in sustaining
costs per ounce" as used in this analysis are non-GAAP terms typically used by mining companies to
assess the level of gross margin available to the Company by subtracting these costs from the unit
price realized during the period. These non-GAAP terms are also used to assess the ability of a
mining company to generate cash flow from operations. There may be some variation in the method
of computation of these metrics as determined by the Company compared with other mining
companies. In this context, "cash costs per ounce" reflects the cash operating costs allocated from
in-process and dore inventory associated with ounces of silver and gold sold in the period. "Cash
costs per ounce" may vary from one period to another due to operating efficiencies, grade of
material processed and silver/gold recovery rates in the period. "All-in sustaining costs per ounce"
include total cash costs, exploration, corporate and administrative, share based compensation and
sustaining capital costs. For a reconciliation of non-GAAP and GAAP measures, please refer to the
Management Discussion and Analysis dated
December 20, 2018
, for the year ended
September 30,
2018
, as presented on SEDAR.
SOURCE
GoGold Resources Inc.
View original content:
http://www.newswire.ca/en/releases/archive/December2018/21/c7591.html
%SEDAR: 00029249E
For further information:
Steve Low, Corporate Development, GoGold Resources Inc., T: 416 855
0435, Email : [email protected]; Or visit : www.gogoldresources.com
CO: GoGold Resources Inc.
CNW 16:30e 21-DEC-18