-- Production increased 63% to 68,301 ounces of gold-- Total cash costs decreased 18% to $535 per ounce-- 100% hedge free as hedge book is eliminated-- Cash and bullion receivable balance increased 28% to $57.4 million-- Agreement with the Republic of Senegal secures basis to increase reserves and production in Senegal-- Finalized $50 million Equipment Finance Facility-- Reduced discretionary spending
Sabodala Gold Operation
(All amounts are in US$ unless otherwise stated)
-- Gold production for the three months ended March 31, 2013 increased 63 percent to 68,301 ounces of gold compared to the same prior year period due to the processing of higher grade ore combined with higher mill throughput as a result of the completion of the mill expansion.-- Gold sold for the three months ended March 31, 2013 increased 98 percent to 69,667 ounces compared to the same prior year period. Ounces sold during the first quarter were slightly higher than production for the period due to a draw-down of gold in circuit inventory. At March 31, 2013, gold in circuit and gold bullion inventory amounted to 11,883 ounces.-- Total cash costs for the three months ended March 31, 2013 decreased 18 percent to $535 per ounce sold compared to the same prior year period. While gross mine site costs increased 35 percent due to higher mining and processing rates, the decrease in total cash costs per ounce was mainly due to higher gold ounces sold and capitalization of production phase stripping costs. Total cash costs have been adjusted for the adoption of IFRIC 20 for capitalization of a portion of production phase stripping costs.-- Total tonnes mined for the three months ended March 31, 2013 were 19 percent higher compared to the same prior year period due to the increase in hauling and drilling capacity of the mining fleet during 2012 and first quarter 2013.-- Ore tonnes mined were 17 percent higher compared to the prior year period while grades mined were 36 percent higher resulting in an increase in ounces mined of about 60 percent.-- Mining rates are expected to decrease by about 5 percent in the second quarter through the balance of the year despite the commissioning of 3 haul trucks and 1 shovel as the Company lowers its mining rate to maximize free cash flow in 2013 but maintain production guidance.-- Ore tonnes milled for the three months ended March 31, 2013 were 21 percent higher than the same prior year period due to an increase in mill capacity as a result of the completion of the mill expansion in the second quarter of 2012.-- Transfer chute design upgrades and the addition of more durable liners in the high wear points through the plant commenced with a comprehensive planned shutdown in January 2013, with further work to continue during planned shutdowns in both the second and third quarters 2013. These changes are anticipated to help reduce the frequency and duration of unplanned downtime allowing the design targets to be achieved. Crusher operating time is the key to meeting design target throughput rates.-- During the first quarter of 2013, the average realized gold price was $1,090 per ounce with 45,289 ounces delivered into gold hedge contracts at an average price of $806 per ounce and 24,378 ounces sold at an average spot price of $1,619 per ounce. During the same prior year period, 35,268 ounces were sold at an average price of $1,712 per ounce.-- As of April 15, 2013, the Company is 100 percent hedge free after having bought back the remaining "out of the money" gold forward sales contracts.-- During the first quarter of 2013, the Company entered into a new $50 million finance lease facility with Macquarie Bank Limited ("Macquarie"). The lease facility replaces the finance lease facility previously in place with Societe Generale ("SocGen"), which was assigned and novated to Macquarie. The proceeds will be put towards additional equipment for the Sabodala pit as well as the new equipment required for the Gora deposit that is currently being permitted. In total, $22.7 million was outstanding at March 31, 2013, including $10.5 million novated from SocGen during the quarter. A further $4.3 million will be drawn down in the second quarter when final delivery of Sabodala equipment is received. The balance of $23 million will be reserved for future drawn downs for purchases of mining equipment, as required.