San Gold Reports 2013 First Quarter Results

San Gold Reports 2013 First Quarter Results 
WINNIPEG, MANITOBA -- (Marketwired) -- 05/09/13 -- San Gold
Corporation (TSX:SGR)(OTCQX:SGRCF) today reported 2013 first quarter
financial and operating results.  
During the quarter, the Company produced 17,354 ounces of gold with
an average milled grade of 4.15 grams per tonne and recognized a
quarterly total and comprehensive loss of $9.7 million for the
quarter. Included in this amount is the recognition of employee
severance and other charges of approximately $2.5 million which are
expected to result in annual cost savings of approximately $3.0
million.  
The Company also moved forward with its capital plan for the Rice
Lake mining complex during the quarter. This plan includes the
development of operational access beneath the current mining areas
within the 007 and Hinge mines while extending the 16 and 26 levels
in order to accelerate access to the down dip extensions of these
deposits to more than 1,200 metres below surface. 
2013 First Quarter Highlights: 


 
--  Appointed Mr. Ian Berzins as President and CEO effective March 25, 2013.
--  Produced 17,354 ounces of gold. 
--  Recognized quarterly revenue of $24.3 million on gold sales of 15,353
    ounces at a realized price of $1,584 per ounce. 
--  Had a cash and cash equivalents balance of $33.7 million as at March 31,
    2013. 
--  Achieved average mill throughput of 1,733 tons per day for the quarter. 
--  Recognized quarterly loss from operations of $0.04 million. 
--  Recognized quarterly total and comprehensive loss of $9.7 million 
--  Cash flow used by operating activities before changes in non-cash
    working capital of $2.2 million. 
--  Total cash costs of $1,113 per ounce of gold sold. 
--  Realized a cash operating margin of $471 per ounce of gold sold with a
    realized price of $1,584 per ounce through the quarter. 
--  Completed approximately 62,000 metres of exploration and definition
    diamond drilling. 
--  Initiated comprehensive review of operations with a mandate to improve
    performance. 

 
"We have already made significant progress with our development
efforts during the first quarter. Despite a temporary reduction in
grade, our material handling capacity has been improved and we have
managed to reduce our overall oper
ating costs compared to the same
period last year. This is consistent with our goal to optimize our
Rice Lake operations and I expect significantly improved financial
results as grades return to normalized levels," said Ian Berzins,
President and Chief Executive Officer of San Gold. "The Company
remains on track to produce 75,000 and 90,000 in 2013, at cash costs
of between $800 and $900." 
Review of 2013 First Quarter Results 
The Company reports quarterly loss from operations of $0.04 million
and a total and comprehensive loss of $9.7 million, compared to
income from operations of $7.1 million and a total and comprehensive
loss of $0.7 million in the first quarter of 2012. The decrease is
primarily attributable to reduced gold sales in the quarter as well
as severance and other charges of approximately $2.5 million incurred
in the quarter associated with staff reductions and corporate
administrative overhead. The Company expects these reductions will
result in cost savings of approximately $3 million annually. 
The Company earned quarterly revenue of $24.3 million, a 31% decrease
over revenue of $35.5 million in the first quarter of 2012. This
change was a result of lower gold sales and lower gold price. The
Company sold 15,353 ounces of gold in the first quarter of 2013, a
28% decrease compared with sales of 21,322 ounces in the first
quarter of 2012. The decrease in gold sales was a result of decreased
production, a result of lower than planned grade from the Hinge, L10
and 007 mines and a smaller contribution of Rice Lake ore compared to
the previous period. The Company expects that grade will return to
more normalized levels as the year progresses. The Company realized
$1,584 per ounce of gold sold in the first quarter of 2012, a 5%
decrease compared to the $1,665 the Company realized per ounce in the
first quarter of 2012.  
The Company used $2.2 million of cash flow from operating activities
before changes in non-cash working capital in the first quarter of
2013, compared with $10.0 million generated in the first quarter of
2012. After changes in non-cash working capital, operating activities
used $6.5 million in the first quarter of 2013, compared to $14.2
million generated in the first quarter of 2012.  
Capital spending in the first quarter of 2012 was focused on mine
development, increasing mining capability, improving key
infrastructure, and sustaining capital. The Company invested $15.6
million in mine development activities and recognized related
depletion of $5.5 million compared with an investment of $14.6
million and related depletion of $7.8 million in the first quarter of
2012. The Company also capitalized $3.3 million of property, plant,
and equipment during the first quarter of 2013 compared to $3.7
million in the first quarter of 2012. The Company is taking a
critical review on all subsequent capital development and property,
plant and equipment spending for the year and may elect to defer or
cancel previously planned projects. 
Outlook 
The Company is in the process of implementing reductions to its
operating, capital, corporate overhead, and exploration costs as well
as evaluating investments that do not directly contribute to the
Company's core operations. The focus will be to optimize margins per
ounce and find the most direct path to achieving free cash flows. 
For the balance of 2013, to combat lower than planned grade, the
Company will concentrate on the 007 complex and bringing Rice Lake
production back on stream at a more accelerated rate. Mining
operations will continue in the Rice Lake mine alongside ongoing
capital development projects to provide operational access beneath
the current mining areas within the 007 and Hinge mines and extend
the 16 and 26 levels in order to accelerate access to the down dip
extensions of these deposits. The Company expects the changes to
ultimately result in increased grade for the balance of the year, a
further decrease in capital development spending and PPE spending
requirements while maintaining the production guidance of 75,000 to
90,000 ounces. 
Exploration activities for the remainder of the year will continue to
focus on definition and extension drilling for both production
planning and exploration purposes at the San Antonio Mining Unit, the
Shoreline Basalt Unit, the Normandy Creek Shear Zone, and within the
intermediate volcanic rock unit north of the Shoreline Basalt Unit.
The objectives of the Company's exploration program is to develop a
larger mine complex that can be exploited through existing
infrastructure. 
Underground drill bays constructed during the first quarter are
providing better access for definition drilling of the 007 structures
at depth. The Company has improved confidence about the resource
potential at depth as recent drill results below 26 Level confirm
continuity of the geological structures hosting the 007 and Hinge
deposits. 
2013 Q1 Financial Results Conference Call 
The Company's senior management plans to host a conference call on
May 10, 2013 at 10:00 am Eastern Standard Time to discuss the 2013
first quarter financial results, and to provide an update of the
Company's operating, exploration, and development activities. 
Participants may join the conference call by di
aling 1 (866) 225-2055
or 1 (416) 340-8410 for participants outside of Canada and the United
States. The conference call will also be available by webcast on the
Company's website at www.sangold.ca. 
A recorded playback of the conference call can be accessed after the
event until May 26, 2013 by dialing 1 (800) 408-3053 or 1 (905)
694-9451 for calls outside Canada and the United States. The pass
code for the conference call playback is 8568217. The archived audio
webcast will also be available on the Company's website at
www.sangold.ca. 
About San Gold 
San Gold is an established Canadian gold producer, explorer, and
developer that owns and operates the Rice Lake Mining Complex near
Bissett, Manitoba. The Company employs more than 450 people and is
committed to the highest standards of safety and environmental
stewardship. San Gold is on the Toronto Stock Exchange under the
symbol "SGR" and on the OTCQX under the symbol "SGRCF". 
This press release should be read in conjunction with the Company's
consolidated financial statements for the quarter ended December 31,
2012 and associated Management's Discussion and Analysis ("MD&A"),
which are available from the Company's website (www.sangold.ca), in
the "News & Reports" section under "Financial Statements", and on
SEDAR (www.sedar.com). 
For further information on San Gold, please visit www.sangold.ca. 
Cautionary Non-IFRS Statements 
The Company believes that investors use certain indicators to assess
gold mining companies. They are intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared with International
Financial Reporting Standards ("IFRS"). "Total cash operating costs"
as used in this analysis is a non-IFRS term typically used by gold
mining companies to assess the level of gross margin available to the
Company per ounce of gold by subtracting these costs from the unit
price realized during the period. This non-IFRS term is also used to
assess the ability of a mining company to generate cash flow from
operations. There may be some variation in the method of computation
of "total cash operating costs" as determined by the Company compared
with other mining companies. In this context, "total cash operating
costs" reflects the per ounce cash costs allocated from in-process
and dore inventory associated with ounces of gold sold in the period
and net royalties. "Total cash operating costs" may vary from one
period to another due to operating efficiencies, quantity of ore
processed, grade of ore processed, and gold recovery rates. 
Cautionary Note Regarding Forward-Looking Statements 
This news release includes certain "forward-looking statements". All
statements, other than statements of historical fact included in this
release, including, without limitation, statements regarding forecast
gold production, gold grades, recoveries, cash operating costs,
potential mineralization, mineral resources, mineral reserves,
exploration results, and future plans and objectives of the Company,
are forward-looking statements that involve various risks and
uncertainties. These forward-looking statements include, but are not
limited to, statements with respect to mining and processing of mined
ore, achieving projected recovery rates, anticipated production rates
and mine life, operating efficiencies, costs and expenditures,
changes in mineral resources and conversion of mineral resources to
proven and probable mineral reserves, and other information that is
based on forecasts of future operational or financial results,
estimates of amounts not yet determinable and assumptions of
management. 
Any statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as "expects" or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"estimates" or "intends", or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or
be achieved) are not statements of historical fact and may be
"forward-looking statements." Forward-looking statements are subject
to a variety of risks and uncertainties that could cause actual
events or results to differ from those reflected in the
forward-looking statements. 
There can be no assurance that forward-looking statements will prove
to be accurate and actual results and future events could differ
materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from the
Company's expectations include, among others, the actual results of
current exploration activities, conclusions of economic evaluations
and changes in project parameters as plans continue to be refined as
well as future prices of precious metals, as well as those factors
discussed in the section entitled "Other MD&A Requirements and
Additional Disclosure and Risk Factors" in the Company's most recent
quarterly Management's Analysis and Discussion ("MD&A"). Although the
Company has attempted to identify important factors that could cause
actual results to differ materially, there may be other factors that
cause results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. 
Exploration results that include geophysics, sampling, and drill
results on wide spacings may not be indicative of the occurrence of a
mineral deposit. Such results do not provide assurance that further
work will establish sufficient grade, continuity, metallurgical
characteristics, and economic potential to be classed as a category
of mineral resource. A mineral resource that is classified as
"inferred" or "indicated" has a great amount of uncertainty as to its
existence and economic and legal feasibility. It cannot be assumed
that any or part of an "indicated mineral resource" or "inferred
mineral resource" will ever be upgraded to a higher category of
resource. Investors are cautioned not to assume that all or any part
of mineral deposits in these categories will ever be converted into
proven and probable reserves. 
Cautionary Note to United States and Other Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources: 
This press release uses the terms "Measured", "Indicated", and
"Inferred" resources. United States investors are advised that while
such terms are recognized and required by Canadian regulations, the
United States Securities and Exchange Commission does not recognize
them. "Inferred Mineral Resources" have a great amount of uncertainty
as to their existence, and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form
the basis of feasibility or pre-feasibility studies. United States
investors are cautioned not to assume that all or any part of
Measured or Indicated Mineral Resources will ever be converted into
M
ineral Reserves. United States investors are also cautioned not to
assume that all or any part of a Mineral Resource is economically or
legally mineable. 
Table 1: 2013 First Quarter Income Statement 


 
                            SAN GOLD CORPORATION                            
  INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE   
               LOSS FOR THE THREE MONTH PERIOD ENDED MARCH 31               
                                (Unaudited)                                 
                                                                            
----------------------------------------------------------------------------
                                                        2013           2012 
                                               -----------------------------
                                                                            
                                                                            
REVENUE                                        $  24,320,028  $  35,501,860 
                                                                            
OPERATIONS                                                                  
  Operations (Note 16)                            24,359,074     28,364,890 
                                                                            
INCOME (LOSS) FROM OPERATIONS                        (39,046)     7,136,970 
                                                                            
  Exploration                                      4,651,837      4,601,290 
  General and administrative (Note 17)             5,434,601      3,825,372 
                                                                            
LOSS BEFORE OTHER INCOME AND EXPENSES             10,125,484      1,289,692 
                                                                            
OTHER INCOME AND EXPENSES                                                   
  Finance income - net (Note 18)                    (406,936)       298,713 
  Finance costs (Note 18)                           (623,158)      (114,831)
  Equity loss of associate (Note 8)                        -     (1,000,000)
                                               -----------------------------
                                                                            
LOSS BEFORE INCOME TAX                            11,155,578      2,105,810 
                                                                            
Income tax recovery on flow-through shares         1,487,621      1,415,612 
                                               -----------------------------
                                               -----------------------------
                                                                            
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $   9,667,957  $     690,198 
                                               -----------------------------
                                               -----------------------------
                                                                            
LOSS PER COMMON SHARE: (Note 22)                                            
  Basic                                        $       (0.03) $        0.00 
  Diluted                                      $       (0.03) $        0.00 
                                               -----------------------------
                                               -----------------------------
                                                                            
Table 2: Financial Highlights                                               
----------------------------------------------------------------------------
                                                           Q1            Q1 
                                                         2013          2012 
----------------------------------------------------------------------------
                                                                            
Total and comprehensive income (loss) (000)      $     (9,668) $       (690)
Items not affecting cash (000)                   $      7,476  $     10,694 
----------------------------------------------------------------------------
Cash provided (used) by operating activities                                
 before changes in non-cash working capital                                 
 (000)                                           $     (2,191) $     10,004 
                                                                            
Net change in non-cash working capital (000)     $     (4,309) $      4,246 
----------------------------------------------------------------------------
                                                                            
Cash provided (used) by operating activities                                
 (000)                                           $     (6,501) $     14,250 
                                                                            
Earnings (loss) per share                                                   
- basic                                          $      (0.03) $       0.00 
- diluted                                        $      (0.03) $       0.00 
                                                                            
Weighted average number of common shares                                    
 outstanding                                                                
- basic                                           335,230,029   314,566,676 
- diluted                                         335,230,029   314,566,676 
----------------------------------------------------------------------------

 
Table 3: Production Summary and Statistics 


 
                                                                            
----------------------------------------------------------------------------
                                           Q1        Q1    Change    Change 
                                         2013      2012       (#)       (%) 
----------------------------------------------------------------------------
                                                                            
Ore milled (tons)                     156,013   153,537     2,476         2%
Head grade (g/tonne Au)                  4.15      5.35     (1.20)      -22%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contained gold (ounces)                18,884    23,995    (5,111)      -21%
                                                                            
Ounces of gold produced                17,354    22,162    (4,808)      -22%
                                                                            
Ore mined (tons)                      143,859   144,549      (690)     -0.5%
                                                                            
Ore milled per day (tons)               1,733     1,687        46         3%
Ore mined per day (tons)                1,598     1,588        10         1%
Mill recovery (%)                          92%       92%     -0.5%     -0.5%
----------------------------------------------------------------------------

 
Table 4: Quarterly Production Summary and Statistics 


 
----------------------------------------------------------------------------
                                        Q1         Q4         Q3         Q2 
                                      2013       2012       2012       2012 
----------------------------------------------------------------------------
                                                                            
Ore milled (tons)                  156,013    168,088    191,105    116,546 
Head grade (g/tonne Au)               4.15       4.22       5.21       5.70 
----------------------------------------------------------------------------
-------------------------------------------------
---------------------------
Contained gold (ounces)             18,884     20,539     29,029     19,385 
                                                                            
Ounces of gold produced             17,354     19,019     27,084     18,241 
                                                                            
Ore mined (tons)                   143,859    171,351    143,949    155,495 
                                                                            
Ore milled per day (tons)            1,733      1,827      2,077      1,281 
Ore mined per day (tons)             1,598      1,863      1,565      1,709 
Mill recovery (%)                       92%        93%        93%        94%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                        Q1         Q4         Q3         Q2 
                                      2012       2011       2011       2011 
----------------------------------------------------------------------------
                                                                            
Ore milled (tons)                  153,537    141,890    121,844    114,624 
Head grade (g/tonne Au)               5.35       5.36       5.83       6.35 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contained gold (ounces)             23,995     22,190     20,732     21,244 
                                                                            
Ounces of gold produced             22,162     20,359     19,119     20,111 
                                                                            
Ore mined (tons)                   144,549    136,166    124,952    123,261 
                                                                            
Ore milled per day (tons)            1,687      1,542      1,324      1,260 
Ore mined per day (tons)             1,588      1,480      1,358      1,355 
Mill recovery (%)                       92%        92%        92%        95%
----------------------------------------------------------------------------

 
NOTE: Final refinery settlements, or the effects of rounding, may
have resulted in increases or decreases to reported gold production. 
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein. 
Contacts:
San Gold Corporation
Gestur Kristjansson, BA, MBA, CA
Chief Financial Officer
1 (855) 585-4653 
San Gold Corporation, Ian Berzins, B.Sc., P.Eng.
President, Chief Executive Officer and
Chief Operating Officer
1 (855) 585-4653
sgr@sangold.ca
www.sangold.ca
 
 
Press spacebar to pause and continue. Press esc to stop.