Apr 2 2013
QMX GOLD CORPORATION ("QMX Gold" or the "Company") is announcing fourth quarter financial and operational results for the period ending December 31, 2012. All figures are reported in Canadian dollars, unless noted otherwise.
Financial Summary of the Company for the Year Ending December 31, 2012:
- The Company recovered 20,112 ounces of gold, which is almost double the amount of gold recovered in 2011, and realized an average recovery rate of 89.7%.
- Revenue from mine operations was $30.89 million on the sale of 19,564 ounces of gold.
- Average cash costs for 2012 were $1,555 (see non-GAAP measures).
- QMX reported a net loss for the year of approximately $16.2 million which includes mine operating expenses of approximately $30.4 million and impairments charges of approximately $5.7 million.
2012 Year-End Financial Results
In the twelve months ending December 31, 2012, QMX Gold sold a total of 19,564 ounces of gold generating $30.89 million in revenue for the Company. This aggregate revenue number is up from revenue of $15.54 million in the corresponding period of 2011 and represents a 99% increase. Positive revenue figures can be attributed to an increase in gold production from 10,268 ounces in 2011 to 20,112 ounces in 2012 and an increase in average recovery rates from 85.2% in 2011 to 89.7% in 2012. The average sale price was $1,661 per ounce of gold.
In this same period, mine operating expenses totaled $30.43 million and depreciation amounted to $5.41 million for a gross loss for the year of $4.95 million and a net loss of $16.16 million or $0.54 per share. Of this loss, $4.29 million can be attributed to financing costs relating to short term loans and $5.66 million for impairment charges on mineral properties.
The production target for 2012 was set at 18,500 to 20,500 ounces of gold produced, which was achieved. Cash cost targets were set at $1,300 to $1,500 and, based on fourth quarter results, were slightly higher than budgested at $1,555 per ounce.
Fourth Quarter Financial Summary:
- The Aurbel Gold Mill recovered 3,995 ounces and realized an average recovery rate of 87.8%.
- Revenue from mining operations was approximately $6.3 million for the quarter on the sale of 3,982 ounces of gold at an average realized price of $1,698 per ounce.
- Cash cost per ounce of gold production from Lac Herbin was $2,006 per ounce (see non-GAAP measures).
- The Company reported a net loss for the quarter of $4.2 million which includes a loss of $2.72 million from mine operations.
- QMX Gold entered into a bridge financing arrangement with Third Eye Capital Partners for $17.5 million.
Fourth Quarter Financial Results
QMX Gold sold 3,982 ounces of gold to generate $6.34 million in revenue from mining operations during the fourth quarter of 2012 with an average gold sale price of $1,698 (USD $1,714) per ounce. Mine operating expenses were $7.99 million and depreciation and depletion amounted to approximately $1.07 million resulting in an aggregate gross loss of $2.72 million. The cost of sales per ounce sold during the current quarter, excluding depreciation and depletion, was $2,006 per ounce (see non-GAAP Measures). Cash costs were negatively affected this quarter by lower than expected grades which impacted average recovery rates.
QMX Gold recorded a net loss for the quarter of $4.19 million or $0.14 per share. This includes gains on investments of $694,000, which includes the recently acquired Falco Pacific shares (see press release of September 24, 2012). General and administrative expenses were $147,000, which were significantly reduced through the quarter by focusing on cost reductions outside of mine operations.
Commenting on the results, Francois Perron, President and CEO said: "The turnaround plan set out for Lac Herbin was challenged in the fourth quarter as we experienced lower than expected grades that affected our recovery rates and ultimately our cash costs. We had a positive start to 2012 and met our production guidance, but average costs were higher than anticipated. This has affected Lac Herbin's profitability and, as a result, management will continue to review the decision to maintain the operation with higher expectations of profitability throughout 2013. For now, Lac Herbin will continue to implement a number of measures to try to obtain future growth and, at this time, we expect production for 2013 to be between 20,500 and 23,500 ounces with a cash cost of $1,200 to $1,400."
Mr. Perron continued: "The slowed equity markets have delayed the advancement of the Snow Lake project, and we continue to pursue financing for the Project, which is an attractive investment given its significantly advanced stage of development. At this time, our focus has shifted to seeking out private equity and strategic investors."
Complete audited annual financial statements and related Management's Discussion and Analysis documents are available under the Company's profile on www.sedar.com and at the Company's website www.qmxgold.ca.
Non-GAAP Measures
The Company has included certain non-GAAP performance measures, namely, cash costs per gold ounce sold throughout this document. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are non-GAAP measures. In addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company's performance and ability to generate cash, profits and meet financial commitments. These non-GAAP measures are 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. The following tables provide a reconciliation of cash costs per gold ounce sold for the nine months ended September 30, 2011 and 2010.