Aura Minerals Announces Second Quarter of 2013 Financial and Operating Results

Aura Minerals Announces Second Quarter of 2013 Financial and Operating Results 
TORONTO, ONTARIO -- (Marketwired) -- 08/14/13 -- Aura Minerals Inc.
("Aura Minerals" or the "Company") (TSX:ORA) announces financial and
operating results for the second quarter of 2013. 
This release does not constitute management's discussion and analysis
("MD&A") as contemplated by applicable securities laws and should be
read in conjunction with the MD&A and the Company's condensed interim
consolidated financial statements for the three and six months ended
June 30, 2013, which are available on SEDAR at www.sedar.com and on
the Company's website. 
Highlights: 


 
--  Record gold ounce ("oz") production in the second quarter of 2013 which
    was 24% higher compared to the second quarter of 2012. Average cash cost
    per oz of gold produced(1) in the second quarter of 2013 was 19% lower
    compared to the second quarter of 2012; 
    
--  Net sales revenue in the second quarter of 2013 increased 12% over the
    second quarter of 2012; 
    
--  Copper production at Aranzazu for the second quarter of 2013 and 2012
    was 3,205,000 pounds and 2,960,700 pounds, respectively, an increase of
    8%. On-site average cash cost(1) per pound of payable copper produced,
    net of gold and silver credits was $3.63 for the second quarter of 2013
    compared to $2.92 for the second quarter of 2012; 
    
--  Gross margin of $(14.5) million and $(8.3) million for the three months
    ended June 30, 2013 and 2012, respectively; 
    
--  Loss of $50.1 million or $0.22 per share for the second quarter of 2013
    compared to a loss of $11.5 million or $0.05 per share for the second
    quarter of 2012. The loss for the second quarter of 2013 includes an
    impairment charge of $16.0 million on the Sao Francisco Mine and $40.2
    million on the San Andres Mine resulting from the consensus gold price
    declining significantly to below the gold price assumptions used in the
    most recent annual impairment tests; 
    
--  Operating cash flow(1) of $11.1 million for the second quarter of 2013
    compared to $3.2 million for the second quarter of 2012; and 
    
--  The Company has appointed Banco Itau BBA S.A. and RBC Capital Markets to
    manage the process to maximize the 
value of the Serrote project
    including, but not limited to, a disposal of a majority interest in the
    project equity.

 
Jim Bannantine, the Company's President and Chief Executive Officer
stated, "Aura again achieved record gold production for the second
quarter in a row, surpassing the first quarter's result and we expect
to meet our annual copper and gold guidance with continued efforts
over the second half of the year. A combination of
better-than-expected production and a focus on cost savings at our
existing gold operations as well as Aranzazu producing to
expectations with a substantially reduced arsenic content, has
resulted in the Company continuing to generate cash flow from
operations and yielded a trailing twelve month operating cash flow of
$58.6 million. 
Although the decline in the gold price has led to an accounting
impairment of both San Andres and Sao Francisco, we believe that both
projects will continue to contribute financially to the future cash
flows of the Company. There exist additional opportunities to realize
ounces at Sao Francisco and we expect to implement a small expansion
capital programme and announce an updated NI 43-101 for San Andres in
the later part of Q3 2013. This updated NI 43-101 is expected to
result in increased reserves and resources and extend the life of the
property along with the expansion increasing annual production. 
Aranzazu's full expansion phase, including the installation of the
partial roasting facility and expansion to 4,500 tonnes per day, is
currently on hold pending the outcome of the financing and
refinancing. Management believes that even in today's market
substantial value can be created for our shareholders by accessing
available financing to expand Aranzazu, and we are considering
multiple corporate funding alternatives. Aura is currently in
advanced negotiations with its lenders to finalize an extension to
the forbearance and expects to obtain this imminently. 
The Serrote development project continues to be under its capital
budget and while negotiations for long-term project financing are
progressing, we have appointed two well-placed investment advisors to
manage the process of a sale of a majority interest in Serrote. We
are also exploring options to maximize the value of the Brazilian
Mines in addition to optimizing their near term cash flows." 
Production and Cash Costs 
The Company's production and cash costs for the three and six months
ended June 30, 2013 and 2012 are summarized in the tables below: 


 
                      For the three months ended  For the three months ended
                            June 30, 2013               June 30, 2012       
                             Oz                          Oz                 
                       Produced    Cash Costs(1)   Produced    Cash Costs(1)
----------------------------------------------------------------------------
San Andres               15,374    $       1,146     18,131    $         918
Sao Francisco            26,771            1,053     15,826            1,752
Sao Vicente              10,280            1,153      8,404            1,581
----------------------------------------------------------------------------
Total / Average          52,425    $       1,100     42,361    $       1,361
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                       For the six months ended    For the six months ended 
                            June 30, 2013               June 30, 2012       
                             Oz                          Oz                 
                       Produced    Cash Costs(1)   Produced    Cash Costs(1)
----------------------------------------------------------------------------
San Andres               31,088    $       1,131     31,517    $       1,008
Sao Francisco            52,423            1,190     31,175            2,083
Sao Vicente              19,328            1,273     17,256            1,567
----------------------------------------------------------------------------
Total / Average         102,839    $       1,188     79,948    $       1,548
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Gold production at San Andres in the second quarter of 2013 decreased
by 15% over the comparable period primarily due to significantly
below average recoveries. The cause at the ADR plant has been
identified and the solution is being implemented and is in progress.
Average cash cost per oz of gold produced(1) in the second quarter of
2013 increased 25% over the second quarter of 2012. 
Gold production at Sao Francisco in the second quarter of 2013 was
49% higher than the second quarter of 2012 due to higher plant
throughput and grade and the recovery of additional gold from the
staged leach on the heap. The second quarter of 2012 operations
continued to reflect that quarter's recovery to normalized operations
from the structural failure of the primary crusher feed bin in early
February 2012, whi
ch resulted in Sao Francisco not having use of the
primary crusher for 47 days during the first quarter of 2012. The
structural issues were rectified and the repaired crusher was
re-installed in late-March 2012 and resumed operation. Average cash
cost per oz of gold produced(1) in the second quarter of 2013 was 40%
lower than the second quarter of 2012. The higher average cash cost
per oz of gold produced(1) in the second quarter of 2012 was
primarily due to lower leached gold after the structural failure of
the primary crusher during the first quarter of 2012 while Q2 2013's
average cash cost was improved by the weakening of the Brazilian
real. 
Mining at Sao Francisco is expected to continue to the end of August
2014 as exploration drilling in Q1 and Q2 of 2013 has located
additional mineralized material below the ramp in the northwest area
of the pit. An updated reconciliation indicates that certain waste
and low grade zones could potentially convert to additional plant
feed. Indications are that the plant processing at SF could extend to
Q4 2014 as a result. 
During the second quarter of 2013, 22% more gold oz were produced at
Sao Vicente as compared to the second quarter of 2012. The average
cash cost per oz of gold produced(1) in the second quarter of 2013
was 27% lower than the average cash cost(1) in the second quarter of
2012. 
There is sufficient feed material in stockpiles at Sao Vicente to
keep the plant full at 120,000 tonnes per month until late 2013. The
heap leach pads will continue to operate with cyanide addition in
early 2014, while we continue to irrigate the heap. 
At Aranzazu, copper concentrate production increased by 10% in the
second quarter of 2013 as compared to the second quarter of 2012 and
the copper recovery increased by 6%. Average cash cost per payable
pound of copper produced(1) for the three months ended June 30, 2013
increased by 24% as compared to the three months ended June 30, 2012. 


 
(1) Please see cautionary note at the end of this press release.            

 
Brazilian Assets - Value Maximization 
The Company has been investigating multiple options to maximize the
disposal and closure value of the assets of the Sao Francisco and Sao
Vicente mines, including selling the plant and equipment and
utilizing key members of their operating teams in our other group
locations. The Company is considering options to maximize the value
of Serrote including, but not limited to, a disposal of a majority
interest in the project equity and has appointed Banco Itau BBA S.A.
and RBC Capital Markets to manage this process. 
Revenues and Cost of Goods Sold 
Revenue for the three months ended June 30, 2013 and 2012 was
$81,256,000 and $72,594,000, respectively. The Company's revenue for
the second quarter 2013 is comprised of sales of gold from the
Company's gold mines of $73,020,000 and copper concentrate sales from
Aranzazu of $8,236,000 compared to $63,782,000 from the gold mines
and $8,812,000 from Aranzazu for the second quarter of 2012. 
Revenues for the three months ended June 30, 2013 increased 12%
compared to the three months ended June 30, 2012. The increase in
revenues resulted from a 14% increase in gold sales partially offset
by a 7% decrease in copper concentrate sales. 
The increase in gold sales is mainly attributable to a 27% increase
in oz sold partially offset by a 10% decrease in the realized average
gold price per oz. 
The decrease in copper concentrate sales is attributable to a 21%
decrease in realized revenue per DMT of copper concentrate partially
offset by an 18% increase in DMT sold. Total revenues for the three
months ended June 30, 2013 at Aranzazu related to the shipment of
6,301 DMT of copper concentrate compared to 5,338 DMT of copper
concentrate for the prior comparable period. Total concentrate
shipment revenues for the three months ended June 30, 2013 and 2012
were $1,307 per DMT and $1,651 per DMT, respectively. The lower
concentrate shipment revenue per DMT is due to lower commodity prices
on current shipments as well as price adjustments of $347 per DMT
resulting therefrom and the full effect of the arsenic-related
treatment and refining charges and penalties (such charges were
implemented mid-way through Q2 2012) and improvements to off-take
contracts only being in effect in the later part of Q2 2013. 
At San Andres, for the three months ended June 30, 2013 and 2012,
total cost of goods sold was $22,801,000 or $1,319 per oz compared to
$16,143,000 or $1,163 per oz, respectively. For the three months
ended June 30, 2013 and 2012, cash operating costs were $1,163 per oz
and $982 per oz, respectively, while non-cash depletion and
amortization charges were $156 per oz and $181 per oz, respectively. 
At the Brazilian Mines, total cost of goods sold for the three months
ended June 30, 2013 and 2012 were $53,832,000 or $1,573 per oz and
$51,922,000 or $1,940 per oz, respectively. Cash operating costs for
the three months ended June 30, 2013 and 2012 were $1,204 per oz and
$1,589 per oz, respectively, while non- cash depletion and
amortization charges were $370 per oz and $351 per oz, respectively.
The cash operating costs for the three months ended June 30, 2013
included a write-down of $12,349,000 or $361 per oz to bring
production inventory to its net realizable value (2012: $4,329,000 or
$162 per ounce). The depreciation portion of the inventory write-down
during the three months ended June 30, 2013 totalled $8,453,000 or
$247 per oz (2012: $620,000 or $23 per oz). 
At Aranzazu, total cost of goods sold for the three months ended June
30, 2013 and 2012 were $19,112,000 or $3,033 per DMT and $12,808,000
or $2,399 per DMT, respectively. Cash operating costs for the three
months ended June 30, 2013 and 2012 were $2,525 per DMT and $1,926
per DMT, respectively, while non-cash depletion and amortization
charges were $508 per DMT and $473 per DMT, respectively. The cash
operating costs for the three months ended June 30, 2013 included a
write-down of $4,699,000 or $746 per DMT to bring production
inventory to its net realizable value (2012: $1,302,000 or $244 per
DMT of concentrate). The depreciation portion of the inventory
write-down during the three months ended June 30, 2013 totalled
$3,130,000 or $497 per DMT (2012: $708,000 or $133 per DMT). 
Additional Highlights 
Other expense items for the second quarter of 2013 include general
and administrative expenses of $4,325,000 (2012: $3,892,000) and
exploration expenses of $687,000 (2012: $1,298,000). Salaries, wages
and benefits increased 41% due to an increase in the annual
short-term incentive plan payments and employee relocation costs.
Share-based payment expense decreased 47% as a result of no stock
options being granted in the second quarter of 2013. The decrease in
exploration costs for Serrote and Aranzazu reflect the completion of
the feasibility study and PEA, respectively. 
For the three months ended June 30, 2013, the Company recorded an
impairment charge of $16,021,000 related to the long-lived assets of
the Sao Francisco Mine and $40,172,000 related to the long-lived
assets of the San Andres Mine. 
Additionally, for the second quarter of 2013, the Company recorded
finance costs of $1,948,000 (2012: $1,056,000), interest and other
income of $54,000 (2012: $27,000), and other gains of $10,654,000
(2012: $1,564,000). Loss 
before income taxes for the second quarter
of 2013 was $66,934,000 (2012: $11,507,000). 
Income tax recovery for the three months ended June 30, 2013 was
$16,856,000 and consisted of $484,000 in current income tax expense
related to San Andres, and $17,342,000 in deferred tax recovery,
which primarily related to the impairment charge recorded at San
Andres. Income tax recovery for the three months ended June 30, 2012
was $1,427,000 and consisted of $1,489,000 in current income tax
expense related to San Andres, and $2,916,000 in deferred tax
recovery, which primarily relates to deferred tax assets recognized
for Aranzazu during the period. 
For the three months ended June 30, 2013 the Company recorded a loss
of $50,078,000, which compares to a loss of $11,507,000 for the three
months ended June 30, 2012. 
Outlook and Strategy 
Aura Minerals' future profitability, operating cash flows and
financial position will be closely related to the prevailing prices
of gold and copper. Key factors influencing the price of gold and
copper include the supply of and demand for these commodities, the
relative strength of currencies (particularly the U.S. dollar) and
macroeconomic factors such as current and future expectations for
inflation and interest rates. Management believes that the
short-to-medium term economic environment is likely to remain
relatively supportive for both gold and copper prices but with
continued volatility for both commodities. In order to decrease risks
associated with gold price volatility the Company will evaluate
entering into additional hedging programs. 
Other key factors influencing profitability and operating cash flows
are production levels (impacted by grades, ore quantities, labour,
plant and equipment availabilities, and process recoveries) and
production and processing costs (impacted by production levels,
prices and usage of key consumables, labour, inflation, and exchange
rates). 
Aura Minerals' production and cash cost per oz guidance for the 2013
year has not changed from previous guidance and is as follows: 


 
Gold Mines                     Cash Cost per oz              2013 Production
----------------------------------------------------------------------------
San Andres                      $1,000 - $1,150           60,000 - 65,000 oz
Sao Francisco                   $1,100 - $1,250           78,000 - 88,000 oz
Sao Vicente                      $ 950 - $1,100           28,000 - 32,000 oz
----------------------------------------------------------------------------
Total                           $1,050 - $1,200         166,000 - 185,000 oz
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Aranzazu's production for 2013 is expected to be between 13,000,000
and 15,000,000 pounds of copper at a range of $2.90 to $3.40 average
cash cost per payable pound of copper, which has remained unchanged
since our guidance in the first quarter of 2013. 
For the remainder of 2013, total capital spending is expected to be
$13 million. This amount relates to growth and sustaining capital for
existing mines - including $5 million on the development of Aranzazu
and $8 million on completing Phase V of the heap leach expansion,
installation of a second secondary crusher and community expenditures
at San Andres. These capital expenditures are expected to be funded
by a combination of internal cash flows and external financing and
may be delayed if financing is not obtained. The Company has also
delayed previously planned development expenditures at Serrote until
project financing is completed. 
Conference Call 
Aura Minerals' management will host a conference call and audio
webcast for analysts and investors on Thursday, August 15, 2013 at
9:00 a.m. (Eastern Time) to review the second quarter 2013 results.
Participants may access the call by dialing 416-340-8530 or the
toll-free access at 1-888-340-9642. Participants are encouraged to
call in 10 minutes prior to the scheduled start time to avoid delays. 
The call is being webcast and can be accessed at Aura Minerals'
website at www.auraminerals.com. Those who wish to listen to a
recording of the conference call at a later time may do so by dialing
905-694-9451 or 1-800- 408-3053 (Passcode 6892960#). The conference
call replay will be available from 2:00 p.m. on August 15, 2013,
until 11:59 p.m. (EST) on August 29, 2013. 
Non-GAAP Measures 
This news release includes certain non-GAAP performance measures, in
particular, the average cash cost of gold per oz, average cash cost
per payable pound of copper and operating cash flow which are
non-GAAP performance measures. These non-GAAP measures do not have
any standardized meaning within IFRS and therefore may not be
comparable to similar measures presented by other companies. The
Company believes that these measures provide investors with
additional information which is useful in evaluating the Company's
performance and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. 
Average cash costs per oz of gold or per payable pound of copper are
presented as they represent an industry standard method of comparing
certain costs on a per unit basis. Total cash costs of gold produced
include on-site mining, processing and administration costs, off-site
refining and royalty charges, reduced by silver by-product credits,
but exclude amortization, reclamation, and exploration costs, as well
as capital expenditures. Total cash costs of gold produced are
divided by oz produced to arrive at per oz cash costs. Similarly,
total cash costs of copper produced include the above costs, and are
net of gold and silver by-products, but include offsite treatment and
refining charges. Total cash costs of copper produced are divided by
payable pounds of copper produced to arrive at per payable pound cash
costs. 
Operating cash flow is the term the Company uses to describe the cash
that is generated from operations excluding depletion and
amortization, stock based compensation, impairment charges and the
effect of changes in working capital. 
About Aura Minerals Inc. 
Aura Minerals is a Canadian mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. The Company's producing assets
include the copper- gold-silver Aranzazu mine in Mexico, the San
Andres gold mine in Honduras and the Sao Francisco and Sao Vicente
gold mines in Brazil. The Company's core development asset is the
copper-gold-iron Serrote project in Brazil. Recent achievements on
the Serrote project include: completion of basic engineering;
significant progress on land acquisitions and community resettlement,
with approximately 70% of the project area now acquired; and
engineering-only award of long lead equipment. Detailed negotiations
for debt and equity financing of the project are continuing. 
National Instrumen
t 43-101 Compliance 
Unless otherwise indicated, Aura Minerals has prepared the technical
information in this press release ("Technical Information") based on
information contained in the technical reports and news releases
(collectively the "Disclosure Documents") available under the
Company's profile on SEDAR at www.sedar.com. Each Disclosure Document
was prepared by or under the supervision of a qualified person (a
"Qualified Person") as defined in National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101"). Readers
are encouraged to review the full text of the Disclosure Documents
which qualifies the Technical Information. Readers are advised that
mineral resources that are not mineral reserves do not have
demonstrated economic viability. The Disclosure Documents are each
intended to be read as a whole, and sections should not be read or
relied upon out of context. The Technical Information is subject to
the assumptions and qualifications contained in the Disclosure
Documents. The disclosure of Technical Information in this MD&A has
been reviewed and approved by Bruce Butcher, P. Eng., Vice President,
Technical Services. 
Cautionary Note 
This news release contains certain "forward-looking information" and
"forward-looking statements", as defined in applicable securities
laws (collectively, "forward-looking statements"). All statements
other than statements of historical fact are forward-looking
statements. Forward-looking statements relate to future events or
future performance and reflect the Company's current estimates,
predictions, expectations or beliefs regarding future events and
include, without limitation, statements with respect to: the amount
of mineral reserves and mineral resources; the amount of future
production over any period; the amount of waste tonnes mined; the
amount of mining and haulage costs; cash costs; operating costs;
strip ratios and mining rates; expected grades and ounces of metals
and minerals; expected processing recoveries; expected time frames;
prices of metals and minerals; mine life; and gold hedge programs.
Often, but not always, forward-looking statements may be identified
by the use of words such as "expects", "anticipates", "plans",
"projects", "estimates", "assumes", "intends", "strategy", "goals",
"objectives" or variations thereof or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions. 
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by the
Company, are inherently subject to significant business, economic and
competitive uncertainties and contingencies. Forward-looking
statements in this news release and related MD&A are based upon,
without limitation, the following estimates and assumptions: the
presence of and continuity of metals at the Company's Mines at
modeled grades; the capacities of various machinery and equipment;
the availability of personnel, machinery and equipment at estimated
prices; exchange rates; metals and minerals sales prices; appropriate
discount rates; tax rates and royalty rates applicable to the mining
operations; cash costs; anticipated mining losses and dilution;
metals recovery rates, reasonable contingency requirements; and
receipt of regulatory approvals on acceptable terms. 
Known and unknown risks, uncertainties and other factors, many of
which are beyond the Company's ability to predict or control could
cause actual results to differ materially from those contained in the
forward-looking statements. Specific reference is made to the most
recent Annual Information Form on file with certain Canadian
provincial securities regulatory authorities for a discussion of some
of the factors underlying forward-looking statements, which include,
without limitation, gold and copper or certain other commodity price
volatility, changes in debt and equity markets, the uncertainties
involved in interpreting geological data, increases in costs,
environmental compliance and changes in environmental legislation and
regulation, interest rate and exchange rate fluctuations, general
economic conditions and other risks involved in the mineral
exploration and development industry. Readers are cautioned that the
foregoing list of factors is not exhaustive of the factors that may
affect the forward-looking statements. 
All forward-looking statements herein are qualified by this
cautionary statement. Accordingly, readers should not place undue
reliance on forward-looking statements. The Company undertakes no
obligation to update publicly or otherwise revise any forward-looking
statements whether as a result of new information or future events or
otherwise, except as may be required by law. If the Company does
update one or more forward-looking statements, no inference should be
drawn that it will make additional updates with respect to those or
other forward-looking statements.
Contacts:
Aura Minerals Inc.
Alex Penha
Vice President, Corporate Development
(416) 509-0583 or (416) 649-1033
(416) 649-1044 (FAX)
info@auraminerals.com
www.auraminerals.com
 
 
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