SECOND CONSECUTIVE QUARTER OF STRONG CASH
FLOW FROM OPERATIONS
(In US Dollars unless otherwise
stated)
TORONTO, Aug. 10, 2021 /CNW/ - Superior Gold
Inc. ("Superior Gold" or the "Company") (TSXV: SGI) announces
financial results for the second quarter of 2021 for the Company's
100%-owned Plutonic Gold Operations, located in Western Australia.
Second Quarter Highlights
- Increased production by 28% over prior year period and 10% over
the first quarter of 2021 to 19,356 ounces, with sales of 19,099
ounces
- Maintained strong mined stope grade of 3.3 g/t gold in the
second quarter
- Commenced open pit mining at Plutonic East on schedule
increasing surface feed grade
- Metallurgical recovery increased to 88% from 86% in the first
quarter of 2021 as a result of higher head grades due to the
contribution of Plutonic East open pit ore
- Realized a record average gold price of $1,801/ounce above All-In Sustaining
Cost1 ("AISC") of $1,519/ounce
- Net income for the period of $0.01 per share and adjusted net income of
$0.01 per share
- Generated cash flow from operations of $4.9 million after working capital changes prior
to the repayment of the gold loan
- Early full repayment of the Auramet gold loan and exited the
second quarter with zero term debt
- Strong financial position of $17.4
million in cash and cash equivalents
- Announced additional positive exploration results which
included 14.8 g/t gold over 13.4 metres at the Baltic Gap
Mining Front2
- Recorded zero incidences of COVID-19 infection for a sixth
consecutive quarter
Chris Jordaan, President and CEO
of Superior Gold stated: "We are very pleased to report our fourth
quarter-over-quarter increase in production. The operational
initiatives that we put in place last year are resulting in a
steady improvement in our operating results, including a 21%
increase in mined stope grade year-to-date compared to 2020. These
operational improvements continue to drive our increasing cash flow
from operations which has resulted in an increase of the Company's
working capital position to $4.8
million in the second quarter.
In addition, we have further advanced our geological
understanding of the Plutonic orebody, including the northwest
trending faults that control the location and concentration of
higher-grade gold mineralization. This has led to a number of
strategically significant exploration results, demonstrating that
there are a number of new high-grade mining fronts potentially
opening at Plutonic, as well as the identification of higher-grade
stopes on the operational front. During the quarter, we provided an
exploration update at the Baltic Gap Mining Front where we have
expanded the known high-grade Plutonic mineralization as part of
our strategy to identify new mining fronts to allow for improved
mining grades and productivity and reduced reliance on remnant
mining.
We also continue to advance other strategic projects necessary
to reposition Plutonic for sustainable, long-term success. The
restart of open pit mining at Plutonic East was completed on
schedule. The displacement of low-grade stockpile with higher grade
open pit feed, in conjunction with the opening of new underground
mining fronts, is expected to continue to improve our grade profile
and ability to generate operating cash flow over the remainder of
2021 and beyond."
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's prior MD&A's for
a description of these measures.
|
2 Refer to the News Release dated
June 23, 2021.
|
Summary of Financial and Operational Results:
|
Three
months ended June 30,
2021
|
All amounts in $
millions except where noted
|
|
Financial
|
|
Revenue
|
34.4
|
Cost of
sales
|
29.5
|
General and
administrative
|
1.6
|
Operating
income
|
2.7
|
Income before
taxes
|
1.7
|
Net
income
|
1.2
|
Earnings per share -
basic and diluted
|
0.01
|
Adjusted net
income1
|
1.7
|
Adjusted net income
per share - basic1
|
0.01
|
Cash flow from
operations
|
2.7
|
Weighted average
number of common shares outstanding (basic)
|
121,828,973
|
|
|
Operational
|
|
Gold produced
(ounces)
|
19,356
|
Gold sold
(ounces)
|
19,099
|
Total cash costs
($/ounce)1
|
1,412
|
All-in sustaining
costs ($/ounce)1
|
1,519
|
Average realized
price1 ($/ounce)
|
1,801
|
Total underground
material mined (Kt)
|
212
|
Total material milled
(Kt)
|
359
|
Grade milled (g/t
gold)
|
1.9
|
Recovery
(%)
|
88
|
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's MD&As for a
description of these measures.
|
Plutonic Gold Operations
The Plutonic Gold Operations produced and sold 19,356 and 19,099
ounces of gold, respectively, for the second quarter of 2021. Total
cash costs1 of $1,412/ounce sold and AISC1 of
$1,519/ounce sold were below the
realized gold price1 of $1,801/ounce for the three-month period ending
June 30, 2021.
In comparison, 15,177 and 15,536 ounces of gold were produced
and sold, respectively for the second quarter of 2020. Total cash
costs1 of $1,426/ounce
sold and AISC1 of $1,547/ounce sold were below the realized gold
price1 of $1,608/ounce for
the three-month period ending June 30,
2020.
Total cash costs1 and AISC1 decreased over
the prior period primarily as a result of a higher number of ounces
of gold sold, partially offset by the strengthening of the
Australian dollar relative to the U.S. dollar in comparison to the
second quarter of 2020, which contributed $208/ounce and $215/ounce, respectively to the increase in total
cash costs and AISC.
The Company generated net cash from operations after working
capital changes of $4.9 million for
the three months ending June 30,
2021, excluding the repayment of $2.2
million under the gold loan.
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's prior MD&A's for
a description of these measures.
|
Exploration Activities
During the second quarter of 2021, the Company provided an
exploration update at the Baltic Gap Mining Front containing
important high-grade drill results from its underground drill
program as part of its strategy to identify new mining fronts to
allow for improved mining grades and productivity and reduced
reliance on remnant mining.
The latest drilling results show continued growth of the new
Baltic Gap Mining Front, which now extends over an interpreted
strike length of 350 metres and up to 200 metres down dip, while
remaining open along strike and at depth. Results such as drill
hole UDD24342, which intersected 14.8 g/t gold over 13.4
metres, gives the Company further confidence in mining higher
grades at Plutonic in the future1.
The Baltic Gap Mining Front extends approximately 700 metres
along the northern edge of the Baltic zone of the Plutonic orebody and
remains open, with several historic high-grade intercepts
indicating continuity of mineralization outside of the current
Mineral Resource envelope.
1 Refer to the News Release dated
June 23, 2021.
|
2021 Guidance
The Company continues to maintain its 2021 guidance which was
previously announced on January 21,
2021. Details of production, cost and capital expenditure
guidance for the year are summarized in the table below.
Operating
Parameters
|
Low
|
High
|
Production (oz of
Gold)
|
65,000
|
75,000
|
Cash Costs
($/oz)1, 2
|
$1,350
|
$1,450
|
All In Sustaining
Costs ($/oz)1, 2
|
$1,500
|
$1,600
|
Exploration
Expenditure ($ million)3
|
$3.5-6.5M
|
Sustaining Capital
Expenditures ($ million)
|
$4.0-4.5M
|
Non Sustaining
Capital Expenditures ($ million)4
|
$3.0-5.0M
|
1 Assumes AU$:US$ exchange rate of
0.73:1.
|
2 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's MD&A's for a
description of these measures.
|
3 Exploration expenditures could
increase with positive exploration results.
|
4 Non
sustaining capital expenditures are primarily related to
pre-production capital for Plutonic East and underground
development.
|
Conference Call
Management will host a conference call and webcast on
Tuesday August 10, 2021 at
10:00AM ET to discuss the second
quarter 2021 financial and operating results.
Conference Call and
Webcast
|
Date:
|
Tuesday August 10,
2021 10:00AM ET
|
Toll-free North
America:
|
(888)
664-6392
|
Local or
International:
|
(416)
764-8659
|
Webcast:
https://produceredition.webcasts.com/starthere.jsp?ei=1480260&tp_key=079c56cc85
|
Conference Call
Replay
|
Toll-free North
America:
|
(888)
390-0541
|
Local or
International:
|
(416)
764-8677
|
Passcode:
|
141091
|
The conference call replay will be available from 1:00PM ET on August 10,
2021 until 23:59PM ET on
August 24, 2021.
The presentation will be available on the Company's website at
www.superior-gold.com.
Qualified Person
Scientific and technical information in this news release has
been reviewed and approved by Keith
Boyle, P.Eng., Chief Operating Officer of the Company, who
is a "qualified person" as defined by NI 43-101. Mr. Boyle is not
independent of the Company within the meaning of NI 43-101.
About Superior Gold
Superior Gold is a Canadian based gold producer that owns 100%
of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold
Operations include the Plutonic underground gold mine and central
mill, numerous open pit projects including the Plutonic Main Pit
push-back project, the Hermes open pit projects and an interest in
the Bryah Basin joint venture. Superior Gold is focused on
expanding production at the Plutonic Gold Operations and building
an intermediate gold producer with superior returns for
shareholders.
Forward Looking Information
This news release contains "forward-looking information" within
the meaning of applicable securities laws that is intended to be
covered by the safe harbours created by those laws.
"Forward-looking information" includes statements that use
forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential" or the negative
thereof or other variations thereof or comparable terminology.
Forward-looking information includes information with respect to
guidance as to projections, outlook, guidance, forecasts,
estimates, and other statements regarding future or estimated
financial and operational performance, gold production and sales,
revenues and cash flows, and capital costs (sustaining and
non-sustaining), including projected cash operating costs and
all-in sustaining costs) as well as statements with respect to the
mine-plan, exploration, drilling, operating and organizational
matters and activities relating to the Plutonic Gold Operations and
the Company generally, including its liquidity and capital
requirements and financial results. Such Forward-looking
information also includes information related to the Company's
previously announced strategic review process, the potential
outcome of such process and the intended maximization of
shareholder value that the Company believes may result from such
process. By identifying such information in this manner, the
Company is alerting the reader that such information is subject to
known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward-looking information.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made. Furthermore,
such forward-looking information involves a variety of known and
unknown risks, uncertainties and other factors which may cause the
actual plans, intentions, activities, results, performance or
achievements of the Company to be materially different from any
future plans, intentions, activities, results, performance or
achievements expressed or implied by such forward-looking
information. Readers are encouraged to refer to the Annual
Information Form of the Company for a discussion of other risks
including outbreaks or threats of outbreaks of viruses, other
infectious diseases or other similar health threats, such as the
novel coronavirus outbreak, which could have a material adverse
effect on the Company by causing operational and supply chain
delays and disruptions, labour shortages, shutdowns, the inability
to sell gold, capital markets volatility or other unknown but
potentially significant impacts. The Company cannot accurately
predict what effects these conditions will have on the Plutonic
Gold Operations or the financial results of the Company, including
uncertainties relating to travel restrictions to the Plutonic Gold
Operations or otherwise and business closures that have been or may
be imposed by governments. If an outbreak or threat of an outbreak
of a virus or other infectious disease or other public health
emergency occurs, it could have a material adverse effect on the
Company's business, financial condition and results of
operations.
The Company cautions that there can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. Accordingly, investors should not
place undue reliance on forward-looking information as no assurance
can be given that any of the events anticipated by the
forward-looking information will transpire or occur, and if any of
them do so, what benefits the Company will derive therefrom. Except
as required by law, the Company does not assume any obligation to
release publicly any revisions to forward-looking information
contained in this news release to reflect events or circumstances
after the date hereof.
Neither the TSX Venture Exchange not its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Superior Gold