Primero Reports First Quarter 2014 Results; San Dimas Expansion
Completed and Black Fox Added to Portfolio
(Please note that all dollar amounts in this news release are
expressed in U.S. dollars. Refer to the first quarter 2014
management discussion and analysis (MD&A) and audited financial
statements for more information.)
TORONTO, ONTARIO--(Marketwired - May 8, 2014) - Primero Mining
Corp. ("Primero" or the "Company") (TSX:P)(NYSE:PPP) today reported
operational and financial results for the first quarter ended March
31, 2014. During the first quarter the Company completed the
acquisition of Brigus Gold Corp. ("Brigus"), reported strong
production of 39,758 gold equivalent ounces1 compared to 27,656
gold equivalent ounces in the same period of 2013 and an adjusted
net loss2 of $2.9 million ($0.02 per share).
"Primero continues
to focus on delivering on our operating commitments," stated Mr.
Joseph F. Conway, President and Chief Executive Officer. "During
the first quarter we completed the expansion of the San Dimas mill
which has subsequently operated in excess of its new nameplate
capacity of 2,500 tonnes per day. We also completed the acquisition
of Brigus Gold, adding to our portfolio the producing Black Fox
mine and nearby promising exploration properties. We immediately
began investing at Black Fox in order to return production to
mid-2013 levels and we remain confident in the upside potential of
this asset. During the quarter we also announced a significant
increase in reserves and resources at San Dimas, an impressive
return on our investment in exploration at the property. Goldcorp
also successfully sold their remaining stake in Primero, allowing
entry for a number of supportive long-term shareholders and
significantly improving our trading liquidity."
First Quarter
Highlights:
- Brigus Acquisition Completed: Creating a diversified Americas
based mid-tier gold producer with production of between 225,000 to
245,000 gold equivalent ounces in 2014, compared to 143,114 gold
equivalent ounces in 2013;
- Production Growth: Production increased to 39,758 gold
equivalent ounces (32,278 ounces of gold and 1.5 million ounces of
silver), compared to 27,656 gold equivalent ounces in the same
period of 2013;
- Earnings and Cash Flow: Adjusted net loss2 of $2.9 million
($0.02 per share) which includes higher stock-based compensation
due to a 71% appreciation in the Company's share price in Q1 2014
and operating cash flow before working capital changes3 of $6.5
million ($0.05 per share);
- Strong Balance Sheet: Cash position of $86.4 million at March
31, 2014 with total debt including finance leases of $112.7
million;
- San Dimas Phase 1 Expansion Completed: Expansion of the San
Dimas mill to 2,500 tonnes per day ("TPD") was completed;
- Increased Spot Silver Sales: Silver contract annual threshold
achieved earlier than 2013, resulting in higher expected silver
sales at spot market prices of between 1.0 and 1.5 million ounces
in 2014, compared to 1.0 million ounces in 2013;
- Increased Reserves and Resources: San Dimas Gold Mineral
Reserves increased by 32% and Gold Mineral Resources increased by
28% as of December 31, 2013;
- Goldcorp Secondary Sale Completed: Goldcorp Inc. ("Goldcorp")
sold their remaining 31.2 million shares in Primero, resulting in
significantly increased trading liquidity.
San Dimas Mine and
Mill Operating at Expanded Rate; Investment Initiated at Black
Fox
San Dimas produced
35,662 gold equivalent ounces3 (28,182 ounces of gold and 1.51
million ounces of silver) during the first quarter of 2014, 29%
more than the same period in 2013. The increase in production was
due to 8% higher throughput, 198,570 tonnes up from 183,811 tonnes
in 2013, a 13% higher gold grade and 7% higher silver grade when
comparing the same periods.
San Dimas total cash
costs4 on a gold equivalent and by-product basis declined in the
first quarter 2014 to $632 and $455 per ounce, respectively, down
12% and 23% from $719 and $589 per ounce, respectively, in the
first quarter 2013. Higher operating costs were offset by a 29%
increase in gold equivalent ounces produced. All-in sustaining
costs5 at San Dimas were $893 per ounce in the first quarter 2014,
compared with $914 per ounce in the same period of 2013, as
increased sustaining capital expenditures were offset by a 20%
increase in gold ounces produced in the first quarter of 2014
compared with the first quarter of 2013.
The San Dimas mine
operated in excess of 2,400 TPD during the first quarter of 2014
and a stock-pile of approximately 45,000 tonnes exists outside of
the San Dimas mill. The San Dimas mill expansion to 2,500 TPD was
completed during the first quarter, with an additional leach tank
and a thickener to be commissioned in the second quarter. The mill
has subsequently operated in excess of this nameplate capacity for
short periods. The San Dimas mine and mill are on track to operate
at the expanded capacity of 2,500 TPD during the second quarter of
2014 and recoveries are expected to improve again with the
completion of the additional leach tank and thickener.
During the first
quarter of 2014 the Company owned the Black Fox mine for 26 days.
In this short time period, Black Fox produced 4,096 ounces of gold.
Total gold production from the Black Fox mine in Q1 2014 was 13,298
ounces, 49% lower than Q1 2013 due to 19% lower tonnes milled and
38% lower mill head grade. The lower tonnage and grade were mainly
as a result of insufficient investment in underground development
and exploration by the mine's former owners after Q2 2013 and this
led to a lack of available stopes for mining. In Q1 2014 23% of the
total tonnes milled were mined from the higher grade underground
mine, 72% from the medium grade from the open-pit mine and the
remaining 5% from the lower grade from the open-pit mine, compared
with 37%, 63% and 0%, respectively, in Q1 2013. Since acquiring the
Black Fox mine, the Company plans a significant increase in the
investment in underground development and exploration, which
management believes will allow the mine to return to higher
production levels within a six month period.
Black Fox total cash
costs per gold ounce increased 115% from $656 in Q1 2013 to $1,409
in Q1 2014. This increase is primarily due to the significantly
lower gold production in Q1 2014 as well as higher open-pit mining
costs (partially due to a higher operating strip ratio in the
quarter), and higher electric power/propane/diesel costs. All-in
sustaining costs5 at Black Fox were $1,825 per gold ounce in Q1
2014 ($1,480 per ounce for the period owned by the Company),
compared with $1,056 per gold ounce in Q1 2013 for the reasons
described above for the increase in cash costs, partly offset by
lower sustaining capital expenditures in Q1 2014 than Q1 2013.
The Company incurred
total cash costs per gold equivalent ounce of $686 in Q1 2014,
compared with $719 in Q1 2013. On a by-product basis, total cash
costs per gold ounce were $543 in Q1 2014, compared with $589 in Q1
2013. All-in sustaining costs5 per gold ounce increased to $1,381
in Q1 2014 from $1,236 in Q1 2013.
Q1 2014 Earnings and
Cash Flow Impacted by Acquisition Expenses
Revenues in the
first quarter of 2014 were $48.3 million as a result of selling
30,583 ounces of gold at an average realized price of $1,295 per
ounce, and 1.34 million ounces of silver at an average realized
price of $6.44 per ounce. Revenue was $46.3 million for the same
period in 2013 from selling 24,736 ounces of gold at an average
realized price of $1,626 per ounce and 1.48 million ounces of
silver at an average realized price of $4.12 per ounce. Gold
produced at Black Fox is subject to a gold purchase agreement7 and
as a result 315 ounces were sold to Sandstorm Gold Ltd.
("Sandstorm") at a fixed price of $504 per ounce. Silver produced
at San Dimas is subject to a silver purchase agreement6 and as a
result 1.15 million ounces of silver were sold at a fixed price of
$4.16 per ounce in the first quarter of 2014 and all of the silver
ounces in the first quarter of 2013 were sold at a fixed price of
$4.12 per ounce.
Operating cash flow
before working capital changes in the first quarter of 2014 was
$6.5 million ($0.05 per share), compared to $19.3 million ($0.20
per share) in 2013. The decrease was mainly due to $3.3 million
lower cash earnings from mine operations, $6.7 million of
transaction costs related to the Brigus acquisition and $2.0
million higher PSU payouts.
The Company reported
a net loss of $9.1 million ($0.07 per share) for the three months
ended March 31, 2014 compared with net income of $17.3 million
($0.18 per share) for the three months ended March 31, 2013. The
loss was primarily as a result of a $3.5 million loss from
operations at the newly acquired Black Fox mine, $6.7 million of
transaction costs related to the Brigus acquisition and the
recognition of $8.0 million of share-based payment expense due to
the 71% increase in the Company's share price.
The adjusted net
loss, which primarily excludes transaction costs and the impact of
foreign exchange rate changes on deferred tax balances, was $2.9
million ($0.02 per share) for the first quarter 2014, compared with
adjusted net earnings of $9.4 million ($0.10 per share) for the
same period in 2013. The first quarter adjusted net loss includes a
stock-based compensation expense of $8.1 million ($0.06 per share).
The decrease in adjusted net income in Q1 2014 is mainly due to the
loss from operations at the Black Fox mine as well as the
significant share-based payment expense in the period.
Balance Sheet
Remains Strong
The Company's cash
position was $86.4 million at March 31, 2014 down from the December
31, 2013 balance of $110.7 million. The cash balance decreased in
Q1 2014 mainly as a result of $20.7 million of cash used for Brigus
transaction costs and severance payments as well as Cdn$10 million
to capitalize the spin-off exploration company Fortune Bay Corp.,
of which the Company owns 9.9%.
Capital expenditures
during the first quarter 2014 totaled $20.3 million, 132% higher
than the $8.7 million spent in the same period in 2013. The
spending increase was partly as a result of spending on the Black
Fox and Cerro del Gallo properties, neither of which was owned in
the same period of 2013, and partly due to increased expenditure at
the San Dimas mine as part of the expansion to 2,500 TPD. In 2014,
capital expenditures are expected to total approximately $80.0
million excluding capitalized exploration expenses of $35.0
million.
On March 14, 2014,
the Company made a change of control offer for Brigus' outstanding
senior secured term notes ($20.9 million at March 31, 2014) at 105%
of the principal amount in accordance with their senior secured
facility agreement dated October 29, 2012. The note holders
accepted the offer and the notes, plus accrued interest, were
repaid on April 3, 2014. On April 4, 2014, the Company also made a
change of control offer for Brigus' outstanding $50 million 6.5%
convertible senior unsecured debentures in accordance with their
trust indenture dated March 23, 2011. The Company's offer to
purchase the debentures remains open until May 12, 2014 and as at
the date of this news release no holders had tendered their
debentures.
The Company expects
to close a $75 million line of credit this month that will enhance
the Company's financial flexibility. With its cash balance,
anticipated cash flows and the availability of a line of credit,
management believes the Company is well positioned to execute on
its strategy.
Outlook for 2014
Primero maintains
its production guidance of between 225,000 and 245,000 gold
equivalent ounces, an increase of up to 70% over 2013. Cash costs
for 2014 are expected to be in the range of $650 to $700 per gold
equivalent ounce.
Primero's 2014
production outlook is summarized in the following table:
Outlook 2014 |
Black Fox |
San Dimas |
Total |
Attributable gold equivalent production1 (gold
equivalent ounces) |
70,000-80,000 |
155,000-165,000 |
225,000-245,000 |
|
Gold production (ounces) |
70,000-80,000 |
115,000-125,000 |
185,000-205,000 |
|
Silver production4 (million ounces) |
- |
6.25-6.50 |
6.25-6.50 |
Total cash costs2,3 (per gold equivalent ounce) |
$850-$900 |
$575-$600 |
$650-$700 |
All-in Sustaining Costs2,3 (per gold ounce) |
$1,300-$1,400 |
$725-$825 |
$1,100-$1,200 |
Material assumptions
used to forecast total cash costs for 2014 include: an average gold
price of $1,200 per ounce; an average silver price of $7.96 per
ounce (calculated using the silver purchase agreement contract
price5 of $4.16 per ounce and assuming excess silver beyond
contract requirements is sold at an average silver price of $21 per
ounce); and foreign exchange rates of 1.07 Canadian dollars and 13
Mexican pesos to the US dollar.
San Dimas Reserves
and Resources Increase
On March 5, 2014 the
Company announced 2013 year-end Mineral Reserves and Mineral
Resources for its San Dimas mine. The Company reported that Proven
and Probable Gold Mineral Reserves increased 32% over year-end
2012, to 870,000 ounces, at a 23% higher grade. Measured and
Indicated Gold Mineral Resources increased 28% over year-end 2012
to 997,000 ounces (inclusive of Mineral Reserves), with additional
Inferred Gold Mineral Resources of 998,000 ounces.
The 2013 Black Fox
Mineral Reserves and Mineral Resources as published in the
Company's Annual Information Form have not been updated with any
drilling information from 2011, 2012 or 2013. They are the Mineral
Reserves and Mineral Resources estimated for Black Fox at October
31, 2010, updated to reflect depletion from production from October
31, 2010 to December 31, 2013.
The Company expects
to release updated 2013 year-end Mineral Reserves and Mineral
Resources for Black Fox including recent drill data by July
2014.
San Dimas Phase II
Expansion to 3,000 TPD Decision Mid-2014
After completing its
2013 Mineral Reserve and Mineral Resource estimation earlier this
year the Company is updating its internal five year mine plan in
order to assess a potential further expansion of San Dimas to 3,000
TPD. The Company expects to be in a position to make a potential
construction decision in Q3 2014.
The majority of the
San Dimas mill components already have a capacity of 3,000 TPD,
including grinding and tailings management. Management expects that
the only components required for an expansion to 3,000 TPD are
front-end crushing and extra leach capacity.
Assuming a positive
construction decision by mid-2014 the San Dimas mine could be
operating at 3,000 TPD by the end of 2015, increasing production
levels at current grades to approximately 200,000 gold equivalent
ounces per year.
Black Fox Represents
another Opportunity to Create Value
After acquiring the
Black Fox Complex in March 2014 the Company immediately began to
invest in underground development, definition and delineation
drilling. In 2014 Primero will increase exploration and delineation
drilling and exploration drifting at Black Fox in order to open new
mining faces and expand underground production. Additional
underground equipment will also be acquired to increase
productivity. The Company has a target of producing approximately
1,000 TPD from the Black Fox underground by the end of 2014.
Primero is also
focused on investing in exploration at Black Fox in order to extend
the known mineralization both laterally and at depth. Comparable
regional underground mines extend to an average depth of 1.6
kilometres, while the Black Fox deposit is currently only defined
to a depth of 500 metres.
The Company's 2014
$16.8 million exploration program at the Black Fox Complex includes
over 132,000 metres of diamond drilling. This is more drilling than
the total amount completed over the last few years at the mine, and
the most aggressive diamond drilling campaign to ever occur at the
Black Fox Complex.
Exploration drifting
will include opening the 500 level in the East Zone. This drift is
designed so that underground drilling can test for the extension of
the mine at depth across the strike length of the property,
specifically surrounding the two high-grade drill intercepts
reported in late 20138 including 40.7 grams per tonne ("g/t") over
26.7 metres and 18.1 g/t over 37.8 metres.
Primero is also
assessing the expansion opportunity of the Black Fox open-pit,
currently in its third push back. Drilling from surface is planned
to test for potential east and west extensions of the current pit.
Drilling will be completed in 2014 to determine if a fourth push
back of the open-pit is possible or whether the near-surface
material will be mined from underground.
Primero raised Cdn$9
million in March 2014 in a flow-through financing, in order to
invest in an aggressive exploration program at the Grey Fox, Pike
River and Stock Mill properties. The Grey Fox exploration program
includes exploration, delineation and some condemnation drilling.
The Company aims to increase the total defined Mineral Resources
and convert Inferred Mineral Resources to the Measured and
Indicated categories at Grey Fox.
Cerro del Gallo
Project Update
The Company has
progressed the development of the Cerro del Gallo project in Q1,
2014, spending $1.4 million out of the total planned $12.9 million
including exploration.
Primero has advanced
land acquisition, process water drilling, permitting and
engineering efforts (including mine plan optimization, process
optimization to improve recovery, optimization of initial and
sustaining capital investment and operating costs) in order to
advance the project to a construction decision by mid-2014.
The exploration
program covering the Cerro del Gallo deposit and regional
epithermal mineralized veins that commenced in 2013 continued in Q1
2014. Approximately $2.5 million is budgeted for exploration
drilling and surface mapping and sampling at Cerro del Gallo in
2014.
Conference Call and
Webcast Details
The Company's senior
management will host a conference call today, Thursday, May 8, 2014
at 9:00 a.m. ET to discuss the first quarter operating and
financial results.
Participants may
join the call by dialing North America toll free 1 (866) 229-4144
or 1 (416) 216-4169 for calls outside Canada and the U.S., and
entering the participant passcode 8103 601#.
A live and archived
webcast of the conference call will also be available at
www.primeromining.com under the News and Events section or by
clicking here:
http://event.onlineseminarsolutions.com/r.htm?e=776622&s=1&k=5F6369F193482EB449D0C807038E3551
A recorded playback
of the Q1 2014 results call will be available until August 7, 2014
by dialing 1 (888) 843- 7419 or 1 (630) 652-3042 and entering the
call back passcode 8103 601#.
This release should
be read in conjunction with Primero's first quarter 2014 financial
statements and MD&A report on the Company's website,
www.primeromining.com, in the "Financial Reports" section under
"Investors", or on the SEDAR website at www.sedar.com, or on the
Edgar website www.sec.gov.
(1) "Gold equivalent
ounces" include silver ounces produced, and converted to a gold
equivalent based on a ratio of the average commodity prices
realized for each period. The ratio for the first quarter 2014 was
based on realized prices of $1,300 per ounce of gold and $6.44 per
ounce of silver. The ratio used for the 2014 guidance projection is
151:1 based on estimated average prices of $1,200 per ounce of gold
and $7.96 per ounce of silver.
(2) Adjusted net income (loss) and adjusted net income (loss)
per share are non-GAAP measures. Neither of these non-GAAP
performance measures has any standardized meaning and is therefore
unlikely to be comparable to other measures presented by other
issuers. The Company believes that, in addition to conventional
measures prepared in accordance with GAAP, the Company and certain
investors use this information to evaluate the Company's
performance. Accordingly, it is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. Refer to the first quarter 2014 MD&A for a reconciliation
of adjusted net income (loss) to reported net income (loss).
(3) "Operating cash flow" is operating cash flow before working
capital changes. This and operating cash flows before working
capital changes per share are non-GAAP measures which the Company
believes provides a better indicator of the Company's ability to
generate cash flow from its mining operations. See the first
quarter 2014 MD&A for a reconciliation of operating cash flows
to GAAP.
(4) Total cash costs per gold equivalent ounce and total cash
costs on a by-product basis are non-GAAP measures. Total cash costs
per gold equivalent ounce is defined as cost of production
(including refining costs) divided by the total number of gold
equivalent ounces produced. Total cash costs on a by-product basis
are calculated by deducting the by-product silver credits from
operating costs. The Company reports total cash costs on a
production basis. In the gold mining industry, these are common
performance measures but do not have any standardized meaning, and
are non-GAAP measures. The Company follows the recommendations of
the Gold Institute standard. The Company believes that, in addition
to conventional measures, prepared in accordance with GAAP, certain
investors use this information to evaluate the Company's
performance and ability to generate cash flow. Accordingly, it is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. See the first quarter
2014 MD&A for a reconciliation of total cash costs to reported
operating expenses (the nearest GAAP measure).
(5) The Company, in conjunction with an initiative undertaken
within the gold mining industry, has adopted an all-in sustaining
cost non-GAAP performance measure that the Company believes more
fully defines the total cost associated with producing gold;
however, this performance measure has no standardized meaning.
Accordingly, it is intended to provide additional information and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. The
Company reports this measure on a gold ounces produced basis. For
the purposes of calculating all-in sustaining costs at individual
mine sites, the Company does not include corporate general and
administrative expenses. Corporate general and administrative
expenses are included in the computation of all-in sustaining costs
per consolidated gold ounce. Refer to the Company's first quarter
2014 financial statements and MD&A for a reconciliation of
all-in sustaining costs per gold ounce.
(6) According to the silver purchase agreement between the
Company and Silver Wheaton Corp., until August 6, 2014 Primero will
deliver to Silver Wheaton a per annum amount equal to the first 3.5
million ounces of silver produced at San Dimas and 50% of any
excess at $4.12 per ounce (increasing by 1% per year). Thereafter
Primero will deliver to Silver Wheaton a per annum amount equal to
the first 6.0 million ounces of silver produced at San Dimas and
50% of any excess at $4.20 per ounce (increasing by 1% per year).
The Company will receive silver spot prices only after the annual
threshold amount has been delivered.
(7) Black Fox was subject to a gold purchase agreement which
continues and was assumed by the Company upon its acquisition of
the mine. According to the gold purchase agreement, Sandstorm is
entitled to 8% of production at the Black Fox mine and 6.3% at the
Black Fox Extension.
(8) Refer to the Brigus Gold Corp. news releases "Brigus Drills
40.71 gpt Gold Over 26.75 Metres at Black Fox & Reports High
Grade Drilling Results at Grey Fox" dated October 16, 2013 and
"Brigus Drills 18.09 gpt Gold Over 37.80 Metres & Announces
Underground Exploration Program at Black Fox" dated October 31,
2013, filed on SEDAR at www.sedar.com.
About Primero
Primero Mining Corp.
is a Canadian-based precious metals producer that owns 100% of the
San Dimas gold- silver mine and the Cerro del Gallo
gold-silver-copper development ‐ project in Mexico and 100% of the
Black Fox mine and adjoining properties in the Township of Black
River Matheson near Timmins, Ontario, Canada. Primero offers
immediate exposure to un-hedged, below average cash cost gold
production with a substantial resource base in politically stable
jurisdictions. The Company is focused on becoming a leading
intermediate gold producer by building a portfolio of high quality,
low cost precious metals assets in the Americas.
Primero's website is
www.primeromining.com.
CAUTIONARY NOTE ON
FORWARD-LOOKING INFORMATION
This news release
contains "forward-looking statements", within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation, concerning the business
and operations of Primero Mining Corp. and its consolidated
subsidiaries (collectively, "Primero" or the "Company"). All
statements, other than statements of historical fact, are
forward-looking statements. Generally, forward-looking statements
can be identified by the use of forward-looking terminology such as
"plans", "expects", "is expected", "if approved", "forecasts",
"intends", "anticipates", "believes", "in order to" or variations
of such words and phrases or statements that certain actions,
events or results "are anticipated", "may", "could", "would",
"might" or "will require", "will allow", "will enhance" or "will
include" or similar statements or the negative connotation thereof.
Forward-looking information is also identifiable in statements of
currently occurring matters which will continue in future, such as
"is updating" or "is also assessing" or other statements that may
be stated in the present tense and are not historical facts or
words with future implication such as "opportunity",
"promising".
Forward-looking
statements in this news release include, but are not limited to,
statements regarding the level and timing of gold equivalent
production at San Dimas and Black Fox; the realization of silver
sales at spot prices; the amount of gold equivalent ounces produced
in 2014, the cash costs and all-in sustaining costs for 2014; the
capital expenditures in 2014; the Company's intentions and
expectations respecting the potential expansion of San Dimas
production to 3,000 TPD; the underground development in 2014; the
amount of ore from the Company's operations in 2014; three-year
plan forecasts; the $75 million line of credit the Company is
arranging and its benefits; the plans for Cero del Gallo and the
intentions to make a construction decision in respect of the
project; the probability of encountering high grade mineralization
in, and the exploration potential of, the Company's exploration
targets and plans; the ability to generate significant free cash
flow while repaying debt and also internally funding future growth;
optimization and expansion initiatives; and the Company's
intentions to become an intermediate gold producer.
The assumptions made
by the Company in preparing the forward-looking information
contained in this news release, which may prove to be incorrect,
include, but are not limited to: the expectations and beliefs of
management; the specific assumptions set forth above in this news
release; that there are no significant disruptions affecting
operations; that development and expansion at San Dimas proceeds on
a basis consistent with current expectations and the Company does
not change its development and exploration plans; that the exchange
rate between the Canadian dollar, Mexican peso and the United
States dollar remain consistent with current levels or as set out
in this news release; that prices for gold and silver remain
consistent with the Company's expectations; that production meets
expectations; that the parties to the $75 million line of credit
will complete and execute definitive documentation to close such
credit facility; the amount of silver that the Company will sell at
spot prices in 2014; that the Company identifies higher grade veins
in sufficient quantities of minable ore in the Central Block and in
Sinaloa Graben; that the Company will be in a position to make
decisions respecting the expansion of San Dimas and the
construction of Cerro del Gallo when anticipated and that such
decisions will be positive; that there are no material variations
in the current tax and regulatory environment ; that the Company
will receive required permits and access to surface rights; that
the Company can access financing, appropriate equipment and
sufficient labour; that the political environment within Mexico
will continue to support the development of environmentally safe
mining projects.
Forward-looking
statements are subject to known and unknown risks, uncertainties
and other important factors that may cause the actual results,
performance or achievements of Primero to be materially different
from those expressed or implied by such forward- looking
statements, including: the Company may not be able to achieve
planned production levels; the Company may not be able to expand
production at San Dimas as anticipated or generate significant free
cash flow; the Company may not be successful in arranging the $75
million line of credit; the Company may not be able to develop the
Cerro del Gallo asset or realize anticipated production levels; the
Company may not be successful in returning the Black Fox mine to
higher production levels within a six month period; the Company may
be required to change its development and exploration plans with a
negative impact on production; the Company may not discover
mineralization in minable quantities; the exchange rate between the
Canadian dollar, the Mexican peso and the United States dollar may
change with an adverse impact on the Company's financial results;
the optimization and expansion initiatives may not provide the
benefits anticipated; the Company may not be able to become an
intermediate gold producer by building a portfolio of high quality,
low cost precious metals assets in the Americas. Certain of these
factors are discussed in greater detail in Primero's registration
statement on Form 40-F on file with the U.S. Securities and
Exchange Commission, and its most recent Annual Information Form on
file with the Canadian provincial securities regulatory authorities
and available at www.sedar.com.
Should one or more
of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements. In addition,
although Primero has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.
Forward-looking
statements are made as of the date hereof and accordingly are
subject to change after such date. Forward-looking statements are
provided for the purpose of providing information about
management's current expectations and plans and allowing investors
and others to get a better understanding of our operating
environment. Primero does not undertake to update any forward-
looking statements that are included in this document, except in
accordance with applicable securities laws.
SUMMARIZED FINANCIAL
AND OPERATING RESULTS AND FINANCIAL STATEMENTS FOLLOW
SUMMARIZED FINANCIAL
& OPERATING RESULTS
(in thousands of
United States dollars, except per share and per ounce amounts -
unaudited)
SUMMARIZED FINANCIAL DATA |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
20141 |
|
2013 |
Key Performance Data |
|
|
|
Tonnes of ore milled |
|
238,566 |
|
|
183,811 |
Produced |
|
|
|
|
|
|
Gold equivalent (ounces) |
|
39,758 |
|
|
27,656 |
|
Gold (ounces) |
|
32,278 |
|
|
24,190 |
|
Silver (million ounces) |
|
1.51 |
|
|
1.37 |
Sold: |
|
|
|
|
|
|
Gold equivalent (ounces) |
|
37,249 |
|
|
28,474 |
|
Gold (ounces) |
|
30,583 |
|
|
24,736 |
|
Silver (million ounces) |
|
1.34 |
|
|
1.48 |
Average realized prices |
|
|
|
|
|
|
Gold ($/ounce) |
$ |
1,295 |
|
$ |
1,626 |
|
Silver ($/ounce) ² |
$ |
6.44 |
|
$ |
4.12 |
Average gold London PM fix |
$ |
1,293 |
|
$ |
1,632 |
Total cash costs (per gold ounce) |
|
|
|
|
|
|
Gold equivalent basis |
$ |
686 |
|
$ |
719 |
|
By-product basis |
$ |
543 |
|
$ |
589 |
All-in sustaining costs (per gold ounce)3 |
$ |
1,381 |
|
$ |
1,236 |
|
|
|
|
|
|
|
|
Financial Data |
|
|
|
|
|
(in thousands of US dollars except per share
amounts) |
|
|
|
|
|
Revenues |
|
48,269 |
|
|
46,321 |
Earnings from mine operations |
|
8,265 |
|
|
15,706 |
Net (loss) income |
|
(9,087 |
) |
|
17,325 |
Adjusted net (loss) income |
|
(2,882 |
) |
|
9,415 |
Basic (loss) income per share |
|
(0.07 |
) |
|
0.18 |
Diluted (loss) income per share |
|
(0.07 |
) |
|
0.18 |
Adjusted net (loss) income per share |
|
(0.02 |
) |
|
0.10 |
Operating cash flows before working capital
changes |
|
6,509 |
|
|
19,309 |
Assets |
|
|
|
|
|
|
Mining interests |
|
1,067,649 |
|
|
497,300 |
|
Total assets |
|
1,257,431 |
|
|
692,015 |
Liabilities |
|
|
|
|
|
|
Long-term liabilities |
|
133,904 |
|
|
48,745 |
|
Total liabilities |
|
303,157 |
|
|
101,675 |
Equity |
|
954,274 |
|
|
590,340 |
Weighted average shares outstanding (basic)(000's) |
|
128,112 |
|
|
97,252 |
Weighted average shares outstanding
(diluted)(000's) |
|
129,342 |
|
|
98,034 |
(1) Includes the results for the period for
which the Black Fox Complex, acquired on March 5, 2014, was owned
by Primero (March 5, 2014 to March 31, 2014). |
(2) Due to a silver purchase agreement
originally entered into in 2004, Primero sells the majority of
silver produced at the San Dimas mine at a fixed price. |
(3) For the purposes of calculating all-in
sustaining costs at individual mine sites, the Company does not
include corporate general and administrative expenses. Prior period
mine site results have been re-stated to reflect this. |
SUMMARIZED OPERATING DATA |
|
San Dimas |
|
|
|
|
Three months ended |
|
|
|
|
|
|
31-Mar-14 |
|
31-Dec-13 |
|
30-Sep-13 |
|
30-Jun-13 |
|
31-Mar-13 |
|
Key Performance Data |
|
|
|
|
|
|
|
|
|
|
Tonnes of ore mined |
|
218,032 |
|
|
205,345 |
|
|
198,222 |
|
|
207,263 |
|
|
181,408 |
|
Tonnes of ore milled |
|
198,570 |
|
|
181,626 |
|
|
199,812 |
|
|
201,680 |
|
|
183,811 |
|
Average mill head grade (grams/tonne) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
4.76 |
|
|
5.17 |
|
|
5.08 |
|
|
4.25 |
|
|
4.20 |
|
|
Silver |
|
260 |
|
|
292 |
|
|
265 |
|
|
236 |
|
|
242 |
|
Average recovery rate (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
93 |
% |
|
96 |
% |
|
97 |
% |
|
98 |
% |
|
98 |
% |
|
Silver |
|
91 |
% |
|
94 |
% |
|
95 |
% |
|
96 |
% |
|
96 |
% |
Produced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
equivalent (ounces) |
|
35,662 |
|
|
34,371 |
|
|
41,998 |
|
|
39,089 |
|
|
27,656 |
|
|
Gold
(ounces) |
|
28,182 |
|
|
29,097 |
|
|
31,791 |
|
|
26,904 |
|
|
24,190 |
|
|
Silver (million ounces) |
|
1.51 |
|
|
1.60 |
|
|
1.62 |
|
|
1.46 |
|
|
1.37 |
|
Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
equivalent (ounces) |
|
31,926 |
|
|
37,733 |
|
|
40,210 |
|
|
37,555 |
|
|
28,474 |
|
|
Gold
(ounces) |
|
25,260 |
|
|
32,157 |
|
|
30,261 |
|
|
25,692 |
|
|
24,736 |
|
|
Silver at fixed price (million ounces) |
|
1.15 |
|
|
1.69 |
|
|
1.18 |
|
|
0.82 |
|
|
1.48 |
|
|
Silver at spot (million ounces) |
|
0.19 |
|
|
- |
|
|
0.40 |
|
|
0.60 |
|
|
- |
|
Average realized price (per ounce) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
$ |
1,300 |
|
$ |
1,265 |
|
$ |
1,338 |
|
$ |
1,398 |
|
$ |
1,626 |
|
|
Silver |
$ |
6.44 |
|
$ |
4.16 |
|
$ |
8.42 |
|
$ |
11.66 |
|
$ |
4.12 |
|
Total cash operating costs ($000s) |
$ |
22,540 |
|
$ |
22,676 |
|
$ |
21,660 |
|
$ |
21,530 |
|
$ |
19,873 |
|
Total cash costs (per gold ounce)1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
equivalent basis |
$ |
632 |
|
$ |
660 |
|
$ |
516 |
|
$ |
551 |
|
$ |
719 |
|
|
By-product basis |
$ |
455 |
|
$ |
550 |
|
$ |
252 |
|
$ |
167 |
|
$ |
589 |
|
All-in sustaining costs (per ounce) ² |
$ |
893 |
|
$ |
1,151 |
|
$ |
751 |
|
$ |
588 |
|
$ |
914 |
|
(1) Total cash costs per gold ounce on a gold equivalent and
by-product basis and all-in sustaining costs are non-GAAP financial
measures. Refer to the Company's first quarter 2014 MD&A for a
reconciliation to operating expenses. |
(2) For the purposes of calculating all-in sustaining costs at
individual mine sites, the Company does not include corporate
general and administrative expenses. Prior period mine site results
have been re-stated to reflect this. |
Black Fox |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period |
|
Three months ended |
|
|
March 5, 2014 - |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2014 |
|
31-Mar-14 |
|
31-Dec-13 |
|
30-Sep-13 |
|
30-Jun-13 |
|
31-Mar-13 |
|
Key Performance Data |
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes of ore mined |
|
63,518 |
|
|
202,964 |
|
|
230,189 |
|
|
227,337 |
|
|
232,441 |
|
|
270,416 |
|
Tonnes of ore milled |
|
39,996 |
|
|
149,803 |
|
|
206,914 |
|
|
207,559 |
|
|
154,667 |
|
|
183,819 |
|
Average mill head grade (grams/tonne) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
3.36 |
|
|
2.96 |
|
|
3.53 |
|
|
4.34 |
|
|
4.97 |
|
|
4.74 |
|
Average recovery rate (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
95 |
% |
|
93 |
% |
|
93 |
% |
|
94 |
% |
|
94 |
% |
|
94 |
% |
Produced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
equivalent (ounces) |
|
4,096 |
|
|
13,298 |
|
|
21,916 |
|
|
27,174 |
|
|
23,304 |
|
|
26,316 |
|
|
Gold
(ounces) |
|
4,096 |
|
|
13,298 |
|
|
21,916 |
|
|
27,174 |
|
|
23,304 |
|
|
26,316 |
|
Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
equivalent (ounces) |
|
5,323 |
|
|
15,620 |
|
|
20,582 |
|
|
28,344 |
|
|
22,490 |
|
|
27,819 |
|
|
Gold
at spot price (ounces) |
|
5,008 |
|
|
14,176 |
|
|
18,992 |
|
|
25,963 |
|
|
20,745 |
|
|
25,630 |
|
|
Gold
at fixed price (ounces) |
|
315 |
|
|
1,444 |
|
|
1,590 |
|
|
2,381 |
|
|
1,745 |
|
|
2,189 |
|
Average realized price (per ounce) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
$ |
1,272 |
|
$ |
1,242 |
|
$ |
1,249 |
|
$ |
1,301 |
|
$ |
1,352 |
|
$ |
1,576 |
|
Total cash operating costs ($000s) |
$ |
4,726 |
|
$ |
18,732 |
|
$ |
20,376 |
|
$ |
16,714 |
|
$ |
19,107 |
|
$ |
17,272 |
|
Total cash costs (per gold ounce) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold equivalent basis ² |
$ |
1,154 |
|
$ |
1,409 |
|
$ |
930 |
|
$ |
615 |
|
$ |
820 |
|
$ |
656 |
|
All-in sustaining costs (per ounce) 3 |
$ |
1,480 |
|
$ |
1,825 |
|
$ |
1,336 |
|
$ |
905 |
|
$ |
1,154 |
|
$ |
1,056 |
|
(1) The Company reports total cash costs on a production basis,
where the prior owner of Black Fox reported total cash costs on a
sales basis, consequently the reported total cash costs, cash costs
per gold ounce, and all-in sustaining costs per ounce for Black Fox
for historical periods will differ from those reported by the prior
owner. |
(2) Total cash costs per gold ounce on a gold equivalent and
by-product basis and all-in sustaining costs are non-GAAP financial
measures. Refer to the Company's first quarter 2014 MD&A for a
reconciliation to operating expenses. |
(3) For the purposes of calculating all-in sustaining costs at
individual mine sites, the Company does not include corporate
general and administrative expenses. Prior period mine site results
have been re-stated to reflect this. |
PRIMERO MINING CORP. |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
AND COMPREHENSIVE (LOSS) INCOME |
THRESS MONTHS ENDED MARCH 31, 2014 AND 2013 |
(In thousands of United States dollars, except for
share and per share amounts) |
(Unaudited) |
|
Three months ended March 31, |
|
|
2014 |
|
2013 |
|
|
|
|
$ |
|
$ |
|
|
|
|
|
Revenue |
48,269 |
|
46,321 |
|
|
|
|
|
|
Operating expenses |
(27,683 |
) |
(22,463 |
) |
Depreciation and depletion |
(12,321 |
) |
(8,152 |
) |
Total cost of sales |
(40,004 |
) |
(30,615 |
) |
|
|
|
|
|
Earnings from mine operations |
8,265 |
|
15,706 |
|
Exploration expenses |
(17 |
) |
- |
|
General and administrative expenses |
(13,335 |
) |
(7,796 |
) |
|
|
|
|
|
(Loss) earnings from operations |
(5,087 |
) |
7,910 |
|
Transaction costs and other expenses |
(7,267 |
) |
(327 |
) |
Foreign exchange loss |
(358 |
) |
(1,360 |
) |
Finance income |
118 |
|
111 |
|
Finance expense |
(524 |
) |
(509 |
) |
Share of equity-accounted investment results |
(602 |
) |
- |
|
|
|
|
|
|
(Loss) earnings before income taxes |
(13,720 |
) |
5,825 |
|
|
|
|
|
|
Income tax recovery |
4,633 |
|
11,500 |
|
|
|
|
|
|
Net (loss) income for the period |
(9,087 |
) |
17,325 |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Items
not subsequently reclassified to profit or loss: |
|
|
|
|
|
Exchange differences on translation of foreign operations |
204 |
|
346 |
|
Total comprehensive (loss) income for the period |
(8,883 |
) |
17,671 |
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per share |
(0.07 |
) |
0.18 |
|
Diluted (loss) income per share |
(0.07 |
) |
0.18 |
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
common shares outstanding |
|
|
|
|
|
Basic |
128,112,079 |
|
97,251,956 |
|
|
Diluted |
129,342,456 |
|
98,034,449 |
|
PRIMERO MINING CORP. |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL
POSITION |
(In thousands of United States dollars) |
(Unaudited) |
|
March 31, |
|
December 31, |
|
|
2014 |
|
2013 |
|
|
$ |
|
$ |
|
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
|
Cash
and cash equivalents |
86,372 |
|
110,711 |
|
|
Trade
and other receivables |
5,116 |
|
4,794 |
|
|
Taxes
receivable |
14,226 |
|
10,224 |
|
|
Prepaid expenses |
10,864 |
|
7,729 |
|
|
Inventories |
22,379 |
|
12,171 |
|
Total current assets |
138,957 |
|
145,629 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Restricted cash |
18,517 |
|
- |
|
|
Mining interests |
1,067,649 |
|
636,253 |
|
|
Deferred tax asset |
23,526 |
|
17,898 |
|
|
Inventories |
7,547 |
|
- |
|
|
Equity investment |
460 |
|
1,042 |
|
|
Available for sale investment |
775 |
|
- |
|
Total assets |
1,257,431 |
|
800,822 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade
and other payables |
58,825 |
|
33,958 |
|
|
Taxes
payable |
6,010 |
|
6,735 |
|
|
Current portion of long-term debt |
104,418 |
|
5,000 |
|
Total current liabilities |
169,253 |
|
45,693 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Taxes
payable |
9,569 |
|
8,456 |
|
|
Deferred tax liability |
78,772 |
|
47,660 |
|
|
Decommissioning liability |
31,942 |
|
8,730 |
|
|
Long-term debt |
8,330 |
|
22,214 |
|
|
Other long-term liabilities |
5,291 |
|
6,979 |
|
Total liabilities |
303,157 |
|
139,732 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
850,751 |
|
553,518 |
|
Warrant reserve |
34,782 |
|
34,237 |
|
Share-based payment reserve |
19,807 |
|
15,518 |
|
Foreign currency translation reserve |
(4,440 |
) |
(4,644 |
) |
Retained earnings |
53,374 |
|
62,461 |
|
Total equity |
954,274 |
|
661,090 |
|
Total liabilities and equity |
1,257,431 |
|
800,822 |
|
PRIMERO MINING CORP. |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW
THREE MONTHS ENDED March 31, 2014 AND 2013 |
(In thousands Of United States dollars) |
(Unaudited) |
|
2014 |
|
2013 |
|
|
|
Operating activities |
|
|
|
|
|
(Loss) earnings before income taxes |
(13,720 |
) |
5,825 |
|
|
Adjustments for: |
|
|
|
|
|
|
Depreciation and depletion |
12,321 |
|
8,152 |
|
|
|
Payments relating to decomissioning liability |
- |
|
(53 |
) |
|
|
Share-based payments - Stock Option plan |
153 |
|
56 |
|
|
|
Share-based payments - Phantom Share Unit plan |
7,989 |
|
4,902 |
|
|
|
Payments made under the Phantom Share Unit Plan |
(2,626 |
) |
(650 |
) |
|
|
Unrealized loss on equity accounted investment |
602 |
|
- |
|
|
|
Unrealized loss on available for sale investment |
352 |
|
- |
|
|
|
Loss
on disposal of assets |
20 |
|
65 |
|
|
|
Loss
on write-down of inventory |
1,225 |
|
- |
|
|
|
Unrealized foreign exchange loss |
220 |
|
927 |
|
|
|
Taxes
paid |
(433 |
) |
(313 |
) |
Other adjustments |
|
|
|
|
Finance income (disclosed in investing activities) |
(118 |
) |
(111 |
) |
Finance expense |
524 |
|
509 |
|
Operating cash flow before working capital changes |
6,509 |
|
19,309 |
|
|
|
|
Changes in non-cash working capital |
(13,943 |
) |
(1,601 |
) |
Cash (used in) provided by operating activities |
(7,434 |
) |
17,708 |
|
|
|
Investing activities |
|
|
|
|
|
Expenditures on mining interests |
(20,285 |
) |
(8,744 |
) |
|
Acquisition of Brigus Gold Corp (net) |
(7,773 |
) |
- |
|
|
Interest received |
118 |
|
111 |
|
Cash used in investing activities |
(27,940 |
) |
(8,633 |
) |
|
|
Financing activities |
|
|
|
|
|
Repayment of debt |
(2,611 |
) |
(7,786 |
) |
|
Proceeds on exercise of options |
7,686 |
|
875 |
|
|
Proceeds on issuance of flow-through shares |
8,037 |
|
- |
|
|
Interest paid |
(1,837 |
) |
- |
|
Cash provided by (used in) financing activites |
11,275 |
|
(6,911 |
) |
|
|
Effect of foreign exchange rate changes on cash |
(240 |
) |
(162 |
) |
|
|
(Decrease) increase in cash |
(24,339 |
) |
2,002 |
|
Cash, beginning of period |
110,711 |
|
139,244 |
|
Cash, end of period |
86,372 |
|
141,246 |
|
Primero Mining Corp.Tamara BrownVP, Investor Relations(416) 814
3168tbrown@primeromining.comwww.primeromining.com
Canso Credit Income (TSX:PBY.UN)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Canso Credit Income (TSX:PBY.UN)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024