TORONTO, ONTARIO -- (Marketwired) -- 08/09/13 -- Orvana Minerals Corp. (TSX: ORV) (the "Company" or "Orvana") announced today financial and operating results for the third quarter ended June 30, 2013 ("Q3 2013"). The Company reported record gold production from its El Valle-Boinas and Carles mines in Spain ("EVBC").
The Company reported net income for Q3 2013 of $11.3 million and adjusted net loss of $0.7 million excluding certain non-recurring items.
The unaudited consolidated interim financial statements for Q3 2013 ("Q3 Financials") and management's discussion & analysis related thereto ("Q3 2013 MD&A") are available on SEDAR and at www.orvana.com.
Dollar amounts (other than per ounce/pound and per share amounts) are in thousands of U.S. dollars unless stated otherwise, and fine troy ounces of gold and silver are referred to as "ounces" or "oz".
Q3 2013 Operating and Financial Highlights
-- Record gold production from EVBC of 18,439 ounces.-- Strong total metals production of 22,319 ounces of gold, 4.6 million pounds of copper and 303,704 ounces of silver compared to 18,344 ounces of gold, 5.1 million pounds of copper and 248,908 ounces of silver in the third quarter of fiscal 2012. (1)-- On June 16, 2013, there was a significant hoist incident at the Boinas Mine at EVBC. A fully loaded skip failed to stop going into the surface dump, crashed into the top of the headframe and dropped down the shaft when the wire rope attachment failed. Preliminary findings show no damage to the hoist or shaft but significant damage to the steel sets at the shaft bottom and to the loading pocket. Repairs are expected to take approximately six months at a cost of up to $3,500. Underground production from the Boinas Mine has continued since the shaft accident using truck haulage through the existing underground ramp access with efforts to increase tonnage from higher grade skarns and oxide areas. Production at the Carles Mine is unaffected and options to expand its production are underway. Due to the hoist incident at the Boinas Mine, production is forecasted to drop to about 90% of former levels at EVBC until the repairs are completed. The Company, however, remains on track to meet its original total metals production guidance for fiscal 2013.-- Following the end of the third quarter, as part of the Company's ongoing operational optimization initiatives, the Company suspended the operations of its sulphuric acid plant at the UMZ Mine used to process oxides. LPF processing costs were significantly higher than flotation- only processing costs and throughput of the LPF circuit was approximately half that of the flotation-only circuit. The Company recorded an impairment charge of the LPF plant and related consumables of $6,423. The Company will continue to process transition and sulphide ores now by the flotation-only circuits. This suspension of the LPF plant will result in increased production of about 5% per quarter.-- Sales of 20,480 ounces of gold, 4.1 million pounds of copper and 303,733 ounces of silver compared to 16,842 ounces of gold, 5.5 million pounds of copper and 284,440 ounces of silver in the third quarter of fiscal 2012. (1)-- Consolidated revenue of $35,414 compared to $43,691 in the third quarter of fiscal 2012, a decrease of 19%.-- Net income of $11,315 compared to $12,118 in the third quarter of fiscal 2012.-- Adjusted net loss of $654 compared to adjusted net income of $3,611 in the third quarter of fiscal 2012. The adjusted net loss excludes certain non-recurring items including (i) the unrealized gains from the revaluation of the Company's financial instruments and the tax effect thereof, (ii) the non-cash impairment charge of $6,423 in connection with the suspension of the operations of the sulphuric acid plant at the UMZ Mine, (iii) the non-cash de-recognition of a portion of the Boinas Mine hoist of $3,500 as a result of the hoist incident, (iv) the cash union payment provision of $1,384 at the UMZ Mine, and (v) the non-cash provision for potentially uncollectible VAT at the UMZ Mine of $1,387. (2)-- Cash flows provided by operating activities of $10,845 compared to $12,366 in the third quarter of fiscal 2012 and cash flows provided by operating activities before changes in non-cash working capital of $4,604 compared to $10,929 in the third quarter of fiscal 2012. (2)-- Capital expenditures of $4,283 and $17,265 for the three and nine months ended June 30, 2013 consisting mostly of primary development at EVBC.-- Debt net of cash, cash equivalents and restricted cash for debt repayment of $44,400 at June 30, 2013.-- Payment of principal and interest on its long-term debt of $11,099 in the nine months ended June 30, 2013.-- During the quarter, the announcement of a potential reduction in quantitative easing in the United States. This, along with other macroeconomic indicators in the United States, suggested the United States economy was improving. In response, gold prices declined sharply during June closing below $1,200 at the end of the quarter. Other commodity prices were similarly affected. Operational and corporate reviews have been initiated to seek means to reduce operating and capital costs to improve liquidity and cash flows given the recent declines and continued volatility in the metals markets.(1) For a description of EVBC and the UMZ Mine, please see "Overall Performance - EVBC" and "Overall Performance - UMZ Mine".(2) Adjusted net income (loss) and cash flows from operating activities before changes in non-cash working capital are non-IFRS performance measures with no standard definition under IFRS. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance including the Company's ability to generate cash flows from its mining operations. Accordingly, it is intended to provide additional information and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS. For further information and a detailed reconciliation, please see the "Other Information - Non-IFRS Measures" section of the Q3 MD&A.