High River Gold Reports 2011 Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 03/30/12 -- (All currency figures are in Canadian dollars unless otherwise noted)
High River Gold Mines Ltd. (TSX: HRG)("High River" or the "Company") today reported its financial results and operational highlights for the year ended December 31, 2011. The Consolidated Financial Statements and related Notes along with the Management's Discussion and Analysis have been filed under the Company's profile at and can be viewed on the Company's website at .
HIGHLIGHTS FOR 2011
Financial Results
Operations
2011 total operating and non-operating cash costs reached US$671 per ounce. Non-operating cash costs per ounce mainly represent corporate administration, exploration, and other expenses such as realized foreign exchange losses.
Corporate
DISCUSSION OF FINANCIAL RESULTS
Selected Financial Results
(in thousands of Canadian dollars except per share amounts)
The Company's consolidated net gold revenue for 2011 increased to $563.8 million from $435.6 million in 2010. An increase in the gold price was the main growth factor. The average realized price was US$1,543 per ounce compared to US$1,238 per ounce in 2010.
The Company reported a net income of $170.4 million ($0.20 per share) in 2011 compared to a net income of $111.6 million ($0.13 per share) during 2010.
Cash flow from operations of $188.9 million, up from $ 154.3 million in 2010.
OVERVIEW OF OPERATIONS
Underground Mines
The Company's attributable gold production from Buryatzoloto was 112,016 ounces in 2011, compared to 115,209 ounces in 2010. Buryatzoloto continues to be profitable and in general achieved its production objectives for 2011, with 131,877 ounces (100%) of gold produced at an estimated total cash cost of US$673 per ounce as compared to 135,636 ounces of gold produced at a total cash cost of US$628 per ounce in 2010. (See the section Non-IFRS Financial Measures regarding total cash costs.)
Unit cash cost increase in 2011 was caused mainly by macroeconomic factors such as local currency inflation and its strengthening against the US dollar. Inflation rate is on average around 10% per annum in Russia but could be higher for some inputs used in mining industry. In particular salary inflation was the case for Buryatzoloto in 2011 as well. Russian currency strengthened against the US Dollar during 2011 making US dollar denominated unit cash cost higher.
Buryatzoloto continues to operate close to its full capacity. The Company's goal is to maintain historic production levels. The amount of mineable reserves is a concern for the management. An exploration program to extend the life of the mines is underway at Zun-Holba and Irokinda mines and the Company expects the new reserve and resource estimates for Buryatzoloto mines in 2012.
Open Pit Mines
Berezitovy Mine (Russia)
Berezitovy continued to experience technical problems during 2011. However, higher gold grade and recovery rate as compared to 2010 made it possible to reduce the decline in gold production against the plan to 12%. Berezitovy, like Buryatzoloto, was affected by stronger local currency and inflation. However, unit cash cost growth at Berezitovy compared to 2010 was limited by higher gold grade (which required fewer tons to be processed) and a significant production increase (due to the effect of fixed costs which do not depend on production variance and therefore scale back cost per unit of production).
Taparko-Bouroum Mine (Burkina Faso)
Somita was 17% behind production plan in 2011 due to lower ore processing caused by lower availability of loading equipment in mining and lower gold recovery rate caused by the increase of the processing rate up to 200 tons per hour partially balanced by higher ore grade. At the same time, gold production increased as compared to 2010 due to the higher amount of processed ore partially offset by lower gold recovery rate and grade. Unit cash cost increase at Somita in 2011 was caused by several factors, among them lower gold recovery rate, lower ore grade, local currency inflation and its strengthening against the US dollar. Lower gold recovery rate and lower ore grade mean that to produce the same amount of gold higher volume of mining and processing is needed, which therefore pushes up the unit cost.
Exploration Projects
In 2010, the Company applied for a mining license in relation to the Bissa project and the license was granted in June 2011. At the same time, High River continues exploration at the Bissa group permits. In Q1 2011, a new technical report compliant with National Instrument 43-101 -Standards of Disclosure for Mineral Properties ("NI 43-101") was released, which included mineral resource estimates for the Bissa project and some exploration properties in Burkina Faso (Yeou, Ankouma, Bouly, Gougre, Zinigma).
AMENDED STATEMENT OF EXECUTIVE COMPENSATION
The Company has re-filed on SEDAR an amended and restated Form 51-102F6 Statement of Executive Compensation for the year ended December 31, 2010 (the "Executive Compensation Statement"). The original Executive Compensation Statement was filed on March 31, 2011. The revised Executive Compensation Statement now provides disclosure that complies with Item 1.3(4) of Form 51-102F6 regarding external management companies and includes compensation of the Company's officers that is paid by the Company's controlling shareholder to such officers and is attributable to services provided to the Company by such officers.
CLARIFICATION OF BOULY RESOURCE DISCLOSURE BY NORD GOLD
The Company wishes to clarify the statements made by Nikolai Zelenski, the Chief Executive Officer of Nord Gold N.V., the Company's controlling shareholder, at the European Gold Forum in Zurich, Switzerland in April 2011. During his presentation, Mr. Zelenski referred to estimated mineral resources at the Company's Bouly property that were higher than the mineral resources disclosed in the Company's public record. Although the Company believes that its public record in respect of its Bouly property complies with the standards prescribed by NI 43-101, it felt a clarification was appropriate following discussions with certain shareholders and the Ontario Securities Commission. Mr. Zelenski's statement was informed by the Russian reporting standards rather than NI 43-101, which standards include conceptual "prognostic resources" that are similar to "exploration targets" as defined in NI 43-101. The mineral resources that Mr. Zelenski was referring to were equivalent to "exploration targets" and therefore should be considered by investors as "exploration targets" rather than mineral resources, since the potential quality and grade of such exploration targets is conceptual in nature. In addition, the Company expects to prepare an updated mineral resources estimate for its Bouly property in Q2 2012, which shall be released shortly thereafter.
About High River
High River is an unhedged gold company with interests in producing mines, development and advanced exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has a 90% interest in a development project, the Bissa gold project in Burkina Faso, and a 50% interest in an advanced exploration project with NI 43-101 compliant resource estimates, the Prognoz silver project in Russia.
FORWARD LOOKING INFORMATION
This release contains forward-looking statements. Wherever possible, words such as "intends", "expects", "scheduled", "estimates", "anticipates", "believes", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, High River cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause High River's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although High River has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended, including those risk factors discussed in the Company's 2011 Annual Information Form. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and High River assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.
Contacts:
High River Gold Mines Ltd.
Yury Lopukhin
CFO
011 7 495 981 0910 ext. 6821
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Datum: 31.03.2012 - 03:15 Uhr
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News-ID 130652
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