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,                                                           
 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 
 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
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
DevOps is speeding towards the IT world like a freight train and the hype around it is deafening. There is no reason to be afraid of this change as it is the natural reaction to the agile movement that revolutionized development just a few years ago. By definition, DevOps is the natural alignment of IT performance to business profitability. The relevance of this has yet to be quantified but it has been suggested that the route to the CEO’s chair will come from the IT leaders that successfully ma...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue an...
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and microservices. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your conta...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his session at @DevOpsSummit 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will show how customers are able to achieve a level of transparency that enables everyon...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here