SEMAFO Delivers Cash Flow of $39.3 Million in Third Quarter 2016
Adjusted Net Income Attributable to Equity Shareholders of $14.9 Million
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 11/09/16 -- SEMAFO Inc. (TSX: SMF)(OMX: SMF) today reported its financial and operational results for the three-month period ended September 30, 2016. All amounts are in US dollars unless otherwise stated.
Third Quarter 2016 - in Review
Natougou Development:
Mana, Burkina Faso
Mining Operations
2016 Third Quarter Results
SEMAFO's third quarter 2016 gold production was 62,500 ounces compared to 67,200 ounces in the prior-year quarter. During the third quarter of 2016, the ore processed increased and the head grade decreased compared to the same period in 2015. This results from a decision to take advantage of higher gold prices and available milling capacity in order to generate additional cash flow. We achieved this by adding 127,400 tonnes of low-grade material to the mix in the third quarter of 2016. Absent the impact of this decision, the head grade would have been 3.1 g/t in the third quarter of 2016. The decrease in cash operating cost per tonne processed to $41 relative to the third quarter of 2015 was expected and is attributable to the lower operational stripping ratio and the positive volume effect of the higher throughput.
During the third quarter, we resumed development of the Wona North pit. As a result, 891,100 tonnes of waste material were extracted from the Wona North pit during this pre-stripping phase.
The Corporation's third quarter gold sales increased relative to 2015 as an increase in the average realized selling price partially offset the lower gold ounces sold. Relative to the third quarter of 2015, the average realized selling price increased by $218 per ounce of gold or 19%.
Mining operating expenses increased during the third quarter of 2016 compared to the third quarter of 2015 mainly as a result of the higher throughput. Third quarter adjusted operating income increased by 21% compared to the same period in 2015, primarily as a result of higher revenues.
In the third quarter of 2016, the Corporation's cash flow generated by operating activities increased by 13% to $39.3 million on the back of higher sales.
Year-to-Date Operational Results and 2016 Guidance
In the first nine months of 2016, SEMAFO produced 185,100 ounces of gold, in line with its full-year production guidance of 225,000 to 245,000 ounces. For the nine-month period ended September 30, 2016, SEMAFO's all-in sustaining cost of $730 per ounce and total cash cost of $542 per ounce were higher than those in the prior year and within our 2016 cost guidance ranges. The increase in our total cash cost to $542 per ounce was anticipated and is due to lower head grade, partially offset by a lower cash cost operating cost per tonne. The increase in all-in sustaining cost is mainly attributable to an increase in the capitalized stripping expenditure and to the higher total cash cost.
Debt Amendment
In March 2016, the Corporation entered into an amendment of its Original Credit Facility with Macquarie Bank Limited that increased the available credit facility to $120 million. We have already drawn down $60 million and have the option of drawing down the incremental $60 million by June 30, 2017. The interest rate was reduced to LIBOR plus 4.75% per annum, with the principal repayable in eight equal quarterly installments of $15 million, starting on March 31, 2019.
A second amendment occurred in September 2016 under which the principal will be repayable in eight quarterly installments of $7.5 million as of March 31, 2019, provided no drawdown of the incremental $60 million has taken place.
Development Resumed at Wona North
As announced in September, in light of the commencement of stripping at Wona, the annual mining capacity at Mana will increase to 40 million tonnes for the next three years in order to produce over 200,000 ounces of gold per year. As a result, in order to reach this mining capacity in 2017, we will purchase mining equipment at a cost of $10 million and we have established development capital expenditures at Mana of $2.7 million.
In 2017, the Mana Mine should process ore from the Fofina, Siou and Wona North pits with the Fofina deposit expected to be depleted in the first half of 2017. As of December 31, 2015, mineral reserves at Wona totalled 12.7 million tonnes at an average grade of 2.30 g/t Au for 935,100 ounces of gold contained.
The table below presents the 2016 production guidance in addition to consolidated production targets for the coming three years:
Natougou Development
In the third quarter, the Corporation made steady progress with regard to the Natougou Project and continues to target construction start-up by year-end 2016. To date, the following milestones have been achieved:
Exploration
Mana Project, Burkina Faso
In the quarter, the RC drill program on the Mana Project was primarily carried out within trucking distance of the Mana Mill such as to the northeast of Wona-Kona, on strike. Year to date, a total of 29,620 meters of RC drilling has been effected on the Mana Project, mostly on the Fobiri II and Kona Ble permits.
As a result of the rainy season, the auger drill program slowed down in the third quarter, completing 5,580 meters in 622 holes. Year to date, a total of 38,250 meters of auger drilling has been conducted on the Fobiri II, Bombouela Nord, Wona Nyafe and Mana Ouest permits. One RC drill rig is currently active on the Mana Ouest permit.
Natougou Project
In the quarter, we completed a total of 8,360 meters in 86 RC holes across the Tapoa Permit Group. In addition, 1,210 meters of drilling, including 3 core holes, were conducted. Two RC drill rigs are currently in operation on the Tapoa proximal area.
During the third quarter of 2016, we completed an airborne magnetic radiometry survey totalling 4,430 line kilometers over the Tapoa Permit Group. Data from all previously conducted surveys were subsequently compiled in order to produce a full coverage mapping. The Natougou deposit is located to the northwest of a plus 45-degree oriented regional structure. The structure, dubbed Trend 045, is an important deep-seated deformation zone that may have played a role in the formation of the deposit. A series of lineaments are observed across the entire property within a two- to four-kilometer wide corridor.
The lineaments were combined with mapping, soil geochemistry, auger drilling and trenching, which enabled us to identify targets and commence an RC drill program in the fourth quarter of 2016.
West Sector and Boungou Shear Zone
A portion of the RC drilling in the quarter focused on defining the limits of the footwall zone below the Boungou Shear Zone within the pit area and extending the west flank mineralized zone of the Boungou Shear Zone. In addition, three core holes were drilled within the hangingwall zone. At this stage, our objective with regard to the hangingwall zone is to better understand the style of the mineralization, which seems to be different from the Boungou Shear Zone.
In the fourth quarter, we intend to complete a drill program at 80-meter spacing in order to bring the west flank mineralized zone into the inferred resources category by year-end.
Korhogo (Cote d'Ivoire)
An airborne geophysical survey was completed (1,290 line kilometers of magnetic radiometry) over the northern half of the Korhogo Ouest permit in the quarter. Data from this survey are currently being processed. Supplementing the survey, an infill soil sampling program commenced in early October that will better delineate the newly identified gold-in-soil anomalies.
SEMAFO's Management's Discussion and Analysis, Consolidated Financial Statements and related financial materials are available in the "Investor Relations" section of the Corporation's website at . These and other corporate reports are also available on .
Third Quarter Conference Call
A conference call will be held today, Wednesday, November 9, 2016 at 10:00 EST to discuss this press release. Interested parties are invited to call the following telephone numbers to participate in the conference:
About SEMAFO
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Corporation operates the Mana Mine in Burkina Faso, which includes the high-grade satellite deposits of Siou and Fofina, and is developing the advanced gold deposit of Natougou. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "anticipated", "guidance", "expects", "in order to", "should", "expected", "will", "targets", "in line for", "objective", "intend", "pursuing", "growth", "opportunities" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to achieve permitting at Natougou by year-end 2016, the ability to start construction by year-end 2016, the ability to meet our 2016 production guidance of 225,000 to 245,000 ounces, the ability to meet our 2016 total cash cost and all-in sustaining cost guidance, the ability to increase the annual mining capacity at Mana to 40 million tonnes for the next three years, the ability to produce over 200,000 ounces through 2019 at Mana, the ability to meet our consolidated production targets for the coming three years, the ability to better understand the style of mineralization at the hangingwall zone, the ability to bring the west flank mineralized zone into the inferred resources category by year-end, the accuracy of our assumption, the ability to execute on our strategic focus, fluctuation in the price of currencies, gold prices and operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2015 Annual MD&A, as updated in SEMAFO's 2016 First Quarter MD&A, 2016 Second Quarter MD&A, 2016 Third Quarter MD&A and other filings made with Canadian securities regulatory authorities and available at . These documents are also available on our website at . SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
The information in this release is subject to the disclosure requirements of SEMAFO under the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was publicly communicated on November 9, 2016 at 7:00 a.m., Eastern Standard Time.
Consolidated Results and Mining Operations
Financial and Operating Highlights
Contacts:
Robert LaValliere
Vice-President, Corporate Affairs & Investor Relations
Cell: +1 (514) 240 2780
Ruth Hanna
Analyst, Investor Relations
Tel. local & overseas: +1 (514) 744 4408
North America Toll-Free: 1 (888) 744 4408
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Datum: 09.11.2016 - 12:00 Uhr
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