Welcome!

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
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Businesses are struggling to manage the information flow and interactions between all of these new devices and things jumping on their network, and the apps and IT systems they control. The data businesses gather is only helpful if they can do something with it. In his session at @ThingsExpo, Chris Witeck, Principal Technology Strategist at Citrix, will discuss how different the impact of IoT will be for large businesses, expanding how IoT will allow large organizations to make their legacy ap...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...