Galane Gold Ltd. Releases Financial and Operating Results for Second Quarter 2013
August 27, 2013
TORONTO, Aug. 27, 2013 /CNW/ -
A copy of the unaudited condensed consolidated interim financial statements for the three and six months ended
Second Quarter Highlights
- Produced 9,530 ounces of gold an increase of 2,100 ounces compared to Q1 2013.
- Total ore mined of 223,410 tonnes at an average grade of 1.84 grams per tonne.
- 137,451 tonnes of ore at a grade of 2.11 grams per tonne were mined at Tholo (Q1 2013 - 84,435 tonnes of ore at 2.30 grams per tonne). As anticipated the stripping ratio has declined from 20.34 in Q1 2013 to 9.85 in Q2 2013.
- Mining at
Golden Eaglewas suspended as a response to the fall in gold price. Before mining at Golden Eaglewas suspended 85,959 tonnes of ore were mined during the quarter with an average grade of 1.41 grams per tonne.
- Total ore milled of 229,221 tonnes at a head grade of 1.65 grams per tonne.
- Recovery rate at the processing plant of 78.0%. The rate was mainly affected by the switch to processing predominantly Tholo ore which is known to display sulphide characteristics. Sulphide ore bodies are less amenable to cyanidation and as such recovery is reduced.
- Net loss after tax of
- an impairment of
$16,867,329against mining and exploration properties;
- a reduction of
$955,264in the carrying value of inventory to its net realisable value; and
- a reversal of a previously recognised
$1,809,000deferred tax asset.
- an impairment of
- All-in operating cash cost of
$1,449per ounce (excluding royalties)(1)
The mine and processing plan is constantly reviewed in relation to gold price to optimize pit design and plant feed. Given the recent declines and volatility in the gold price, the Company completed an exercise in Q2 2013 to identify optimum plans at different long term gold prices. The Company has determined that the reduction in gold price will require it to utilize the following resources for the remainder of 2013 and 2014:
- Tholo Pit - it is anticipated that it will be providing the majority of the ore feed requirements for the mill in Q3 2013. This ore is of a higher grade than other high volume ore sources available to the Company at this time and thus will have the effect of increasing the process plant head grade. Mining activity from the Tholo pit is anticipated to finish in the first quarter of 2014 but due to the high volumes of ore mined, at the end of the pit life, it is expected that some of the ore mined will be stockpiled for feed throughout 2014.
- High Grade Small Deposits- the Company historically had identified several high grade small deposits that were intended to be included in the mine plan in the future when we had spare capacity both in mining and at the plant. The change in the mine plan has created an opportunity for us to exploit these resources and as such we have incorporated them into our plans for 2013 and 2014. The deposits are within the Company's current mining licenses and we intend to utilize the deposits to supplement the feed to the plant to increase the head grade. We have commenced the work of producing relevant mine plans and it is anticipated that the deposits will start providing ore during Q4 2013.
This mine plan is subject to change according to the prevailing gold price whereby the Company will adopt the appropriate plan for that prevailing gold price environment.
The Company continues to focus on on-going stabilisation and optimisation of the processing operations consistent with the Operational Improvement (OI) program. In Q2 2013 the Company received the results on gravity concentration, flotation and cyanide optimization work on ore samples from Tholo,
The Company's exploration program for 2013 is ongoing and the field phase is effectively complete. The program is now moving to focus on identifying new high grade small deposits on the Company's existing mining licenses. In addition work has commenced to produce a collated database of all new and historic exploration data. This will assist the Company in generating new targets and also identifying further work required to report additional resources.
We are also starting to see the benefit of some of the operational improvements we have put in place and we are expecting to see the improvements in the efficiency of the operation resulting in a reduced cost per ounce.
Similar to many other companies in the mining sector we have reviewed our cost base, a process that was proactively started before the decline in gold price, and have initiated projects that will result in long term cost savings for the Company. I therefore remain optimistic about
|(1)||Total operating cash cost excluding royalties is a non-GAAP measure. Refer to "Supplemental Information to Management's Discussion and Analysis" in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2013 for a reconciliation to measures reported in the Company's financial statements.|
Certain statements contained in this press release constitute "forward-looking statements". All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company's future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the Company's dependence on a single mineral project; gold price volatility; risks associated with the conduct of the Company's mining activities in
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