Click here to close now.

SYS-CON MEDIA Authors: Liz McMillan, Pat Romanski, Carmen Gonzalez, Kevin Jackson, Peter Silva

News Feed Item

Elgin Mining Reports Second Quarter 2014 Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/12/14 -- Elgin Mining Inc. ("Elgin Mining" or the "Company") (TSX: ELG) reports its financial and operational results for three and six months ended June 30, 2014. Elgin Mining owns and operates the Bjorkdal gold mine ("Bjorkdal Mine") in Sweden, and holds the past-producing Lupin gold mine ("Lupin") and the Ulu gold property in Nunavut, Canada. All figures are in United States dollars ($ or USD) unless otherwise indicated.

A copy of the Company's financial statements and Management's Discussion and Analysis ("MD&A") can be viewed on the Company's website at www.elginmining.com or on SEDAR at www.sedar.com.

Second Quarter 2014 Financial and Operational Highlights


--  Gold production of 12,098 ounces, an increase of 12% from first quarter
    gold production of 10,812 ounces;
--  Cash cost of $993 and all-in sustaining cost ("AISC") of $1,197 per gold
    ounce produced;
--  Cash cost of $1,009 and AISC of $1,214 per gold ounce sold;
--  Cash flow from operating activities was $3.4 million, which decreases to
    $2.5 million when non-cash working capital movements are excluded;
--  Cash improved by $1.5 million during the quarter after debt repayments
    of $0.3 million;
--  Open pit ("OP") operations performed well in the quarter with head
    grades remaining strong and above plan due to the Company's continuing
    grade control programs and mine planning efforts;
--  Underground ("UG") operations have improved from the previous quarter
    with an increase in both UG head grades and gold production from the
    previous quarter's results. However, UG head grades, ore production and
    unit mining costs remained below target for the quarter as results were
    impacted by repairs to mobile equipment used in stoping activities, and
    from challenging ground conditions which resulted in delays in full
    production from one of the main stope areas, which have now been
    rectified. Higher labour and equipment productivity, and better head
    grades are predicted for the last half of 2014 as the Company continues
    to resolve these issues over the third quarter;
--  The process plant continues to operate well with minimal stoppages and
    sustained increased daily throughput without any loss in the plant's
    metallurgical recovery rate due to improvements made to the plant's
    flotation and other circuits since the start of the year; and
--  Permit application to expand the plant's annual throughput limit from
    1.3 million tonnes to 1.5 million tonnes was filed in late May 2014 with
    receipt of the expansion permit anticipated by the end of 2014.

Re-affirmation of Bjorkdal Mine 2014 Guidance

Gold production in H1-2014 totalled 22,910 ounces at a per ounce cash cost of $1,019 and per ounce AISC of $1,237 on a gold produced basis.

The Company anticipates increased UG gold production in the second half of 2014 from improved labour and equipment productivity, and from higher head grades as ground and sequencing issues experienced in the first half of the year are rectified. These changes will lead to lower per tonne operating costs and along with a weaker Swedish krona ("SEK"), will have a positive effect on the Company's reported gold production costs for the last half of 2014.

Specifically, all of the Bjorkdal Mine's gold production costs are denominated in SEK except for off-site treatment and refining charges and corporate administration costs which are denominated in Euros and Canadian dollars, respectively. As of August 12, 2014, the SEK per USD exchange rate stood at 6.88, a 5.5% drop from the exchange rate assumption of 6.50 used in the Company's 2014 guidance below.

The Company's 2014 guidance for gold production and unit cash cost remain as follows:


----------------------------------------------------------------------------
2014 Gold Production Guidance        Production Low-end  Production High-end
----------------------------------------------------------------------------
Gold production (ounces)                   44,000              49,000
----------------------------------------------------------------------------
Cash cost per gold ounce produced
 (USD/ounce)                                $982                $886
----------------------------------------------------------------------------
AISC per gold ounce produced
 (USD/ounce)                               $1,227              $1,106
----------------------------------------------------------------------------
AISC per gold ounce produced
 excluding non-cash accretion and
 share-based payment expense
 (USD/ounce)                               $1,207              $1,088
----------------------------------------------------------------------------
Sustaining capital (USD)                $7.9 million        $7.9 million
----------------------------------------------------------------------------
SEK per USD FX rate assumption              6.50                6.50
----------------------------------------------------------------------------
CAD per USD FX rate assumption              1.10                1.10
----------------------------------------------------------------------------

The above AISC guidance includes all capital expenditures (including capitalized exploration) expected to be incurred at the Bjorkdal Mine for 2014, and all general and administration costs incurred at the Company's corporate office in Canada.

Management forecasts that full year gold production will be at the high end of the range while AISC per gold ounce produced will be at the low-end of the range provided. Production in the third quarter to August 11, 2014 totalled 5,232 gold ounces which included the processing of 33,508 tonnes of lower-grade stockpiled ore (approximately 22% of plant ore feed for the quarter-to-date) in July 2014. In Sweden, July is an important vacation month for both staff and contractors, resulting in reduced OP and UG mining activities. Despite that, July production was well above budget.

Patrick Downey, President and CEO, commented, "We are pleased that the Bjorkdal Mine had another positive quarter of generating net free cash flow resulting from strong quarterly gold production, improvements in head grades, and tight control over costs. The plant and open pit are performing very well and we expect this performance to continue for the remainder of 2014. Underground production and grades should see significant improvement in the second half now that the temporary issues concerning equipment availability and ore dilution are addressed.

"We also announced the proposed acquisition of the Company by Mandalay Resources Corporation and anticipate that the closing of the arrangement will occur on or around September 10, 2014, assuming the requisite shareholder and regulatory approvals are received. The Mandalay team has demonstrated an excellent track record of unlocking immense value on under-capitalized and under-explored gold operations, and we are convinced that they will do the same for the Bjorkdal Mine for the mutual benefit of both companies' stakeholders."

Second Quarter and First Half 2014 Financial and Operational Summaries


                          For the       For the
                            three         three   For the six   For the six
                           months        months        months        months
                            ended         ended         ended         ended
                         June 30,      June 30,      June 30,      June 30,
                             2014          2013          2014          2013
----------------------------------------------------------------------------
FINANCIAL DATA
Revenue              $ 15,257,878  $ 13,989,813  $ 30,141,973  $ 30,591,472
Production costs,
 excluding
 depreciation and
 depletion           $ 11,006,973  $ 14,005,564  $ 21,542,123  $ 27,201,178
Income (loss) from
 mining operations   $  2,208,543  $ (2,915,413) $  3,265,252  $ (1,963,928)
Exploration expense  $     33,260  $    193,816  $     36,199  $    316,698
Corporate
 administration      $    645,431  $  1,663,793  $  1,322,140  $  2,939,236
Lupin care and
 maintenance         $    425,979  $  1,190,730  $    816,697  $  3,675,925
Coal reclamation
 costs               $          -  $     60,844  $  7,801,733  $     60,844
Net loss             $    (71,056) $(10,353,917) $ (8,486,750) $(13,923,762)
Net loss per share   $          -
- Basic              $      (0.00) $      (0.07) $      (0.05) $      (0.09)
- Diluted            $      (0.00) $      (0.07) $      (0.05) $      (0.09)
Cash flow provided by
 operating activities$  3,368,874  $  1,828,034  $  5,375,041  $   (944,360)
Cash and cash
 equivalents         $ 13,969,737  $  7,777,509  $ 13,969,737  $  7,777,509
Working capital      $  3,633,476  $  8,162,212  $  3,633,476  $  8,162,212
Long-term debt, non-
 current             $  2,663,847  $  3,027,210  $  2,663,847  $  3,027,210
Capital expenditures $  1,738,489  $  8,975,881  $  3,547,399  $ 11,755,824
----------------------------------------------------------------------------

----------------------------------------------------------------------------
OPERATING DATA
Gold ounces produced       12,098        12,343        22,910        22,377
Gold ounces sold           12,027        11,945        23,163        22,589
Average realized gold
 price (USD per
 ounce)              $      1,316  $      1,219  $      1,348  $      1,409
Cash cost per gold
 ounce sold (USD per
 ounce)(1)           $      1,009  $      1,194  $        972  $      1,218
All-in sustaining
 cost per gold ounce
 sold (USD per
 ounce)(1)           $      1,214  $      1,841  $      1,187  $      1,729
Cash cost per gold
 ounce produced (USD
 per ounce)(1)       $        993  $      1,129  $      1,019  $      1,226
All-in sustaining
 cost per gold ounce
 produced (USD per
 ounce)(1)           $      1,197  $      1,755  $      1,237  $      1,743
----------------------------------------------------------------------------

(1) Refer to page 13 of the Company's MD&A for additional details on non-IFRS measures

Elgin Mining Inc.

Elgin Mining is a Canadian based company focused on production at the Bjorkdal gold mine in Sweden. In addition, Elgin Mining's portfolio includes the Lupin and Ulu gold projects located in Nunavut, Canada.

For further information, please visit the Company's web site at www.elginmining.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of securities legislation and which are based on the expectations, estimates and projections of management of Elgin as of the date of this news release unless otherwise stated. Forward-looking statements are generally identifiable by use of the words "expect," "anticipate," "continue," "estimate," "objective," "ongoing," "may," "will," "project," "should," "believe," "plans," "intends" or the negative of these words or other variations on these words or comparable terminology. More particularly, and without limitation, this news release contains forward-looking statements and information concerning expectations regarding the consideration to be issued pursuant to the transaction, the ability of Elgin to consummate the transaction on the terms and in the manner contemplated thereby and the expected timing of the closing of the Arrangement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the time required to prepare and mail meeting materials to Elgin shareholders, the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary court, shareholder, stock exchange and regulatory approvals and the ability of the parties to satisfy, in a timely manner, the conditions to the closing of the transaction, as well as other uncertainties and risk factors set out in filings made from time to time by Elgin with the Canadian securities regulators, including, without limitation, Elgin's annual information form dated March 21, 2014, which is available on SEDAR at www.sedar.com. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Akana, formerly SOA Software, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Akana’s comprehensive suite of API Management, API Security, Integrated SOA Governance, and Cloud Integration solutions helps businesses accelerate digital transformation by securely extending their reach across multiple channels – mobile, cloud and Internet of Thi...
SOASTA, the leader in performance analytics, today reported record growth of the CloudTest community, exceeding 30,000 registered users of the CloudTest platform in Q1 2015. SOASTA also announced widespread adoption of its Web and mobile testing solutions, with more than 1,600 customers completing more than 285,000 tests using CloudTest during the quarter. This rapid growth shows that DevOps-driven digital businesses are embracing a more continuous approach to testing, and CloudTest is meeting t...
SYS-CON Events announced today that CommVault has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular In...
ProfitBricks, the provider of painless cloud infrastructure for IaaS, today announced the release of a Node.js SDK written against its recently launched REST API. This new JavaScript based library provides coverage for all existing ProfitBricks REST API functions. With additional libraries set to release this month, ProfitBricks continues to prove its dedication to the DevOps community and commitment to making cloud migrations and cloud management painless. Node.js is an open source, cross-pl...
SYS-CON Events announced today that SafeLogic has been named “Bag Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. SafeLogic provides security products for applications in mobile and server/appliance environments. SafeLogic’s flagship product CryptoComply is a FIPS 140-2 validated cryptographic engine designed to secure data on servers, workstations, appliances, mobile devices, and in the Cloud....
SYS-CON Events announced today that FierceDevOps will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. FierceDevOps keeps software developers and IT operations personnel updated on the latest news and trends around the rapidly evolving role of the traditional IT worker.
SYS-CON Events announced today that StorPool Storage will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. StorPool is distributed storage software that allows service providers, enterprises and other cloud builders to run data storage on standard x86 servers, instead of using expensive and inefficient storage arrays (SAN).
SYS-CON Events announced today that QTS Realty Trust, one of the nation’s largest and fastest-growing providers of data center facilities and cloud services and a leader in security and compliance, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. QTS Realty Trust, Inc. (NYSE: QTS) is a leading national provider of data center solutions and fully managed services, and a leader in security and compliance...
GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools. Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabili...
SYS-CON Events announced today that IndependenceIT, a leading software provider of simplified IT management solutions for workspaces, applications and desktops-as-a-service, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IndependenceIT's Cloud Workspace® Suite combines application, end-user and infrastructure management into a seamless, easy-to-manage platform, with a unified management interface an...
SYS-CON Events announced today that that Innodisk, the service-driven provider of industrial embedded flash and DRAM storage products and technologies, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies. With satisfied customers across the embedded, aerospace and defense, cloud storage markets an...
SYS-CON Events announced today that WSM International (WSM), the world’s leading cloud and server migration services provider, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. WSM is a solutions integrator with a core focus on cloud and server migration, transformation and DevOps services.
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that Site24x7, the cloud infrastructure monitoring service, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Site24x7 is a cloud infrastructure monitoring service that helps monitor the uptime and performance of websites, online applications, servers, mobile websites and custom APIs. The monitoring is done from 50+ locations across the world and from various wireless carr...
SYS-CON Events announced today that Intelligent Systems Services will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Established in 1994, Intelligent Systems Services Inc. is located near Washington, DC, with representatives and partners nationwide. ISS’s well-established track record is based on the continuous pursuit of excellence in designing, implementing and supporting nationwide clients’ mission-cri...