Rusoro Mining Reports Its 2010 Financial Results
18 April 2011 - 10:00PM
Marketwired Canada
Rusoro Mining Ltd. ("Rusoro" or the "Company") (TSX VENTURE:RML) is pleased to
report its financial results for the year ended December 31, 2010. The Company's
audited consolidated financial statements and management's discussion and
analysis ("MD&A") for the year ended December 31, 2010 have been filed on SEDAR
(www.sedar.com).
All amounts set out in the Company's consolidated financial statements are
audited and in United States dollars ("USD"), unless otherwise stated.
The following is a synopsis of the year ended December 31, 2010 and related
information. For detailed information regarding Rusoro's 2010 year-end, please
refer to the audited consolidated financial statements and related MD&A which
have been filed on SEDAR at www.sedar.com and can be found on the Company's
website at www.rusoro.com.
The Company's highlights for 2010 were:
-- Average realized gold price per ounce sold of $965 (2009: $696) and cash
cost per ounce sold of $739 (2009: $338). The higher average realized
gold price is a result of a higher international spot price per ounce of
gold during 2010. The higher cash cost per ounce sold is mainly due to
the increase in labour costs resulting from the Venezuelan inflation
rate, lower ore grade, and the change in the rate used to translate
transactions and balances to US Dollars (see "Consolidated Results of
Operations" section of the MD&A).
-- Gold production of 101,183 ounces of finished gold (dore form) (2010
guidance: 110,000 ounces) (2009: 150,460 ounces) and gold sold of
148,928 ounces (2009: 104,036 ounces).
-- Completion of a pre-feasibility study and National Instrument 43-101
("NI 43-101") technical report on the San Rafael El Placer ("SREP")
project, including completion of a mine plan for the existing indicated
resources resulting in a probable reserve of 1,157,000 tonnes grading
10.1 g/t gold (375,700 ounces). The results were reported in a news
release dated May 11, 2010; the news release, technical report and pre-
feasibility study titled, Bried, B., M. Cullen, G. Hawthorn, and S.
Januszewski, 2010; Preliminary Feasibility Study NI43-101 Technical
Report on the San Rafael and El Placer Deposits, State of Bolivar,
Venezuela. By Whillans Mines Studies Ltd. Report for Rusoro Mining Ltd.
May 7, 2010, are available on www.sedar.com.
-- Repayment of $30 million principal of the convertible loan and
refinancing of the remaining $30 million principal portion until June
2011.
-- In July 2010 an updated resource estimate ("the Updated Estimate")
prepared by Micon International Limited was released for the Choco Mine
resulting in a 78% increase in measured and indicated resources to 8.3
million ounces of gold (139.9 million tonnes grading 1.85 g/t) with an
additional 2.8 million ounces of gold inferred (59.2 million tonnes
grading 1.48 g/t). The results were reported in a news release dated
July 6, 2010 and the technical information on the Updated Estimate is
detailed in a NI 43-101 compliant technical report titled "Technical
Report on the Mineral Resources of the Choco 10 Deposits, Bolivar State,
Venezuela" dated August 18, 2010, both of which are available on
www.sedar.com.
-- Central Bank of Venezuela ("CBV") Resolution No. 10-07-01 and an updated
Exchange Agreement No. 12 became effective August 12, 2010. The
resolution increases the portion of the Company's gold production that
can be exported and the updated exchange agreement provides greater
flexibility to the Company's use of proceeds from exports. Further
details on this resolution and the updated exchange agreement are
provided in the "Venezuelan Currency Exchange and Gold Sales" section of
this MD&A.
-- The Ministry of the People's Power for the Environment ("MinAmb") issued
the authorization to affect natural resources for the Company's
Increible 6 gold project. The granting of the permit was the final step
in the permitting process toward the commencement of mining activities
at Increible 6, which is located 6km from the Company's mill at the
Choco Mine ("the Choco Mine Mill").
-- During the three months ended December 31, 2010 ("Q4 2010") the Company
exported 4,924 ounces of finished gold at the international spot price
per ounce, less associated costs and commissions.
The Company's highlights subsequent to 2010 were:
-- During the three months ended March 31, 2011 (Q1 2011), the Company
exported 11,817 ounces of finished gold at the international spot price
per ounce, less associated costs and commissions.
Results for 2010
-- Effective May 17, 2010, the Venezuelan government enacted a law that
effectively closed the swap market which eliminated the implicit
exchange rate previously used to translate transactions and balances. As
a result of this change, translation of transactions and balances into
US Dollars are done using the official rate of BsF 4.30/$1.00 which
significantly increased the US Dollar revenues, costs, expenses, and
balance sheet amounts ("the Change in Translation Rate") (see "Venezuela
Currency Exchange and Gold Sales" section in the MD&A).
-- Revenue increased to $143.7 million (148,928 ounces sold) in 2010 from
$72.4 million (104,036 ounces sold) in 2009 due to having sold more gold
in 2010 compared to 2009, the increase in the average international spot
price of gold to $1,225 during 2010 from $972 during 2009, and due to
the Change in Translation Rate. Ounces sold increased as the Company
sold a substantial portion of its 2009 finished gold production in 2010.
-- During 2010 the Company recorded a net loss of $86.8 million compared to
a net loss of $15.3 million during 2009, which increased significantly
as a result of an unrealized foreign exchange loss originated by the
Change in Translation Rate.
-- Mining operating expenses and mining amortization increased to $111.5
million and $21.4 million respectively in 2010 from $39.4 million and
$10.2 million in 2009. This cost increase is primarily due to having
sold more gold in 2010 compared to 2009 and the Change in Translation
Rate. Operational factors impacting the amount of tonnes mined and
processed and grade as discussed below in the Choco Mine and Isidora
Mine results also negatively impacted production costs in 2010.
-- General and administrative expenses remained consistent at $9.2 million
in 2010 compared to $9.4 million in 2009.
-- Stock-based compensation decreased to $1.4 million in 2010 from $6.8
million in 2009 due to the issuance and vesting of stock-options with
significantly lower values than those issued in 2009.
-- Interest on the Company's convertible loan decreased to $8.0 million in
2010 from $13.0 million in 2009 due to the partial retirement of the
convertible loan.
-- Foreign exchange loss was $100.8 million in 2010 compared to a foreign
exchange gain of $1.1 million in 2009, due significantly to the effect
of the Change in Translation Rate on the Company's future income tax
liability and the resulting unrealized foreign exchange loss.
-- Income tax recovery increased to $22.9 million in 2010 from $1.0 million
in 2009 due to declining results at the Choco Mine and the Isidora Mine
and due to the Change in Translation Rate.
Operating Performance
The following table summarizes summarizes key operating statistics for 100% of
the Choco Mine and 50% of the Isidora Mine:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
12 Months Ended 12 Months Ended
December 31, December 31,
2010 2009
------------------------------------------------
Choco Isidora Total Choco Isidora Total
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Ore tonnes mined ('000 t) 1,790 27 1,817 2,374 31 2,405
Ore tonnes milled ('000 t) 1,833 25 1,858 2,056 35 2,091
Average grade (g/t) 1.62 16.71 1.82 1.97 24.63 2.35
Average recovery rate (%) 92 90 92 90 90 90
Gold produced (ounces) 90,087 11,096 101,183 125,714 24,746 150,460
Gold sold (ounces) 130,890 18,038 148,928 85,057 18,979 104,036
Total mining operating
expenses $(000) 92,277 19,238 111,515 28,246 11,144 39,390
asset retirement
obligations accretion
$(000) (540) (266) (806) (314) (266) (580)
impairment of inventories
$(000) - (605) (605) - - -
fair value differential
of inventory acquired
$(000)(1) - - - - (3,603) (3,603)
---------------------------------------------------------------------------
Total cash costs $(000)(2) 91,737 18,367 110,104 27,932 7,275 35,207
---------------------------------------------------------------------------
Total cash costs per ounce
sold $(3) 701 1,018 739 328 383 338
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Average spot gold price per
ounce $ n/a n/a 1,225 n/a n/a 972
Average realized gold price
per ounce sold $ 949 1,081 965 698 683 696
---------------------------------------------------------------------------
The following notes are applicable to the above tables:
1. In calculating cash costs per ounce sold for 2009 the Company has
excluded the difference between the book value and fair value of
inventory acquired at the date of acquisition of the 50% interest in the
Isidora Mine.
2. Total cash costs used in the calculation of cash costs per ounce is
calculated as mining operating expenses from the consolidated statement
of operations excluding accretion expense related to the asset
retirement obligations and expense of the fair value differential
between the book value and fair value of inventory acquired at the date
of acquisition of the 50% interest in the Isidora Mine.
3. Cash costs per ounce sold is a non-GAAP measure. Total cash costs per
ounce sold as shown above is calculated by dividing the total cash costs
by the gold ounces sold during the period. Cash costs per ounce sold
includes all expenditures related to the mine such as mining,
processing, administration, royalties and production taxes but excludes
reclamation, capital and exploration expenditures, impairments of
inventories, and the fair value differential between the book value and
fair value of inventory acquired at the date of acquisition of the 50%
interest in the Isidora Mine.
Outlook
During 2011, the Company expects to produce 120,000 ounces of gold from the
Choco Mine and its 50% interest in the Isidora Mine. Total cash costs per ounce
sold for 2011 are expected to be $830 per ounce as discussed in the Outlook
section of the MD&A. Cash costs per ounce sold for 2011 are expected to decrease
from 2010 due to factors described in the Outlook section of the MD&A.
Qualified person
Mr. Gregory Smith, P.Geo., the Vice-President of Exploration of the Company, is
a "qualified Person" as defined in NI 43-101, and is responsible for the
accuracy of the scientific and technical information contained within this news
release.
Cautionary non-GAAP measures
Total cash costs per ounce sold is a non-GAAP measure. The Company believes
that, in addition to conventional measures, prepared in accordance with GAAP,
certain investors use the cash costs per ounce data to evaluate the Company's
performance and ability to generate cash flow. Accordingly, it 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 GAAP as it
does not have any standardized meaning prescribed by GAAP. Data used in the
calculation of total cash costs per ounce may not conform to other similarly
titled measures provided by other precious metals companies.
ON BEHALF OF THE BOARD
Andre Agapov, President & CEO
Forward-looking statements: This document contains statements about expected or
anticipated future events and financial results that are forward-looking in
nature and as a result, are subject to certain risks and uncertainties, such as
general economic, market and business conditions, the regulatory process and
actions, technical issues, new legislation, competitive and general economic
factors and conditions, the uncertainties resulting from potential delays or
changes in plans, the occurrence of unexpected events, and the Company's
capability to execute and implement its future plans. Actual results may differ
materially from those projected by management. For such statements, we claim the
safe harbour for forward-looking statements within the meaning of the Private
Securities Legislation Reform Act of 1995.
Cobra Venture (TSXV:CBV)
Historical Stock Chart
From May 2024 to Jun 2024
Cobra Venture (TSXV:CBV)
Historical Stock Chart
From Jun 2023 to Jun 2024
