TORONTO, ONTARIO -- (Marketwired) -- 05/14/13 -- Teranga Gold Corporation (TSX: TGZ)(ASX: TGZ) -
For a full explanation of Financial, Operating, Exploration and Development results please see the Interim Condensed Consolidated Financial Statements as at and for the period ended March 31, 2013 and the associated Management's Discussion & Analysis at www.terangagold.com.
Solid first quarter production and cash costs and hedge book eliminated.
-- Consolidated profit for the first quarter of 2013 was $45.0 million ($0.18 per share), compared to a loss of $2.1 million ($0.01 per share) in the same prior year period.-- 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.-- As of April 15, 2013, the Company is 100 percent hedge free.-- 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.-- The Company's cash balance at March 31, 2013 increased to $57.4 million, including $6.4 million in bullion receivables.-- The company signed a long-term comprehensive Agreement in Principle with the Republic of Senegal in early April which sets out a predictable and stable fiscal operating environment for the Company's future investment in exploration, acquisitions and development to increase reserves and production.-- Gold production for 2013 is on track to be in the range of 190,000 - 210,000 ounces at total cash costs of $650 to $700 per ounce in line with 2013 guidance.(1)
(1) Total cash costs per ounce sold is a common financial performance measure in the gold mining industry but has no standard meaning under IFRS. For a definition of this metric, please refer to page 11 of the Company's Management's Discussion and Analysis.
"Sabodala had another strong quarter, providing the foundation for a solid year. Beyond Sabodala, the Agreement in Principle signed between the Company and the Republic of Senegal paves the way for us to invest and develop in order to increase our reserves and production in Senegal for the long-term. Our ability to leverage off our existing mill and infrastructure should allow us to increase reserves, production, earnings, cash flow and free cash flow in the coming years," said Alan R. Hill, Executive Chairman.
Financial Highlights (details on Page 5)
-- Gold revenue for the first quarter of 2013 was $113.8 million compared to $60.5 million in the same prior year period, an increase of 88 percent. The increase in gold revenue was mainly driven by higher gold sales.-- Consolidated profit attributable to shareholders of Teranga for the first quarter of 2013 was $45.0 million ($0.18 per share), compared to a loss of $2.1 million ($0.01 per share) in the same prior year period. The increase in profit and earnings per share were primarily due to an increase in gross profit from an increase in revenues and a significant loss on gold hedge contracts in the prior year.-- Operating cash flow for the first quarter of 2013 was $23.6 million compared to $35.9 million in the same prior year period. The decrease in operating cash flow was mainly due to delivery of 45,289 ounces into the hedge book during the first quarter of 2013 and the timing of working capital receipts and payments.-- Capital expenditures were $22.2 million for the first quarter of 2013, which was $9.3 million lower than the same prior year period. The decrease in capital expenditures was mainly due to higher expenditures in 2012 related to the mill expansion which was completed in second quarter 2012, partially offset by higher capitalized deferred stripping expenditures in first quarter 2013.-- The Company's cash balance at March 31, 2013 increased to $57.4 million, including $6.4 million in bullion receivables.-- 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.-- The gold forward sales contracts declined by 45,289 ounces during the first quarter 2013 to 14,500 ounces at March 31, 2013. 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.