Lake Shore Gold Reports Strong First Quarter Operating and
Financial Results
TORONTO, ONTARIO--(Marketwired - May 6, 2014) - Lake Shore Gold
Corp. (TSX:LSG)(NYSEMKT:LSG) ("Lake Shore Gold" or the "Company")
today announced financial and operating results for the first
quarter of 2014. Full details of the results are provided in the
Company's Management's Discussion & Analysis, which is
available on the Company's website at www.lsgold.com and on SEDAR
at www.sedar.com.
Key highlights of the results include:
- Gold production of 44,600 ounces (283,800 tonnes @ 5.1 grams
per tonne), a 92% increase from the first quarter of 2013
("Q1/13")
- Gold poured of 45,700 ounces, more than double the 20,530
ounces poured in Q1/13
- Gold sales of 43,000 ounces, 65% higher than in Q1/13
- Cash operating cost(1) of US$621 per ounce sold, a 37%
improvement from Q1/13 and below full-year 2014 guidance of US$675
- US$775 per ounce
- All-in sustaining cost(2) of US$960 per ounce sold, 38% better
than in Q1/13 and in the low end of the Company's full-year 2014
guidance of US$950 - US$1,050 per ounce
- Total production costs of $29.6 million compared to $26.1
million in Q1/13 reflecting higher volumes
- Cash earnings from mine operations(3) of $32.0 million, a 90%
improvement from Q1/13
- Net earnings of $4.7 million compared to net loss of $0.6
million in Q1/13
- Cash flow from operating activities, not including working
capital movements, of $24.9 million, more than double the level in
Q1/13
- Capital expenditures of $13.0 million, in line with target
levels and down 66% from Q1/13
- Total debt repayments of $3.7 million
- New exploration program leads to identification of new
high-grade structures near current mining operations at Bell
Creek.
Cash and
Bullion
The Company's cash position strengthened during the first
quarter of 2014 and has continued to improve during the second
quarter of the year. As at May 6, 2014, cash and bullion totaled
approximately $48 million, an increase of $14 million from the
beginning of the year.
Tony Makuch, President and CEO of Lake Shore Gold, commented:
"We reported strong results in the first quarter of 2014 and
continued to execute our plan to grow the value of our company. The
key drivers include consistently achieving our production and cost
targets, increasing our cash position through strong internal cash
generation, reducing debt and achieving success advancing our
projects and drilling our exploration targets. An important
strength of our company is that we are both a producer that
generates free cash flow and a leading exploration and growth story
in our sector.
"Based on our first quarter results, our production is tracking
to the top end of our full-year guidance for 2014. Our cash
operating costs during the first quarter were better than our
target range for the full year, while all-in sustaining costs were
at the low end of expected levels. We have increased our cash and
bullion, which today stands at close to $50 million, and have
repaid around $5.0 million of debt so far this year ($3.7 million
during the first quarter). In addition, from a new drill program
launched in January, we have already reported encouraging drill
results at the Bell Creek Labine Deposit."
Outlook
At the end of the first quarter of 2014, the Company was on
track to achieve its guidance for the year, including:
- Gold production of 160,000 - 180,000 ounces;
- Average mill throughput of 3,200 to 3,300 tonnes per day;
- Average grade of 4.5 to 5.0 grams per tonne;
- Cash operating cost per ounce sold of US$675 to US$775;
- All-in sustaining cost per ounce sold between US$950 and
US$1,050;
- Total production costs of $128.0 million;
- Total principal debt repayments of $20 to $25 million;
- Increasing cash position (cash and bullion of approximately $48
million at May 6, 2014 compared to $34 million at December 31,
2013); and
- Exploration success from a drill program launched in January at
Timmins West and Bell Creek mines aimed at identifying new areas of
mineralization and replenishing resources.
This Company's Outlook section contains forward-looking
information within the meaning of certain securities laws. The
Outlook section, also included in the Company's MD&A,
represents the Company's guidance and forms the basis for most of
the forward-looking information disclosed elsewhere in these
documents and in other areas such as other press releases,
newsletters, fact sheets and the Company's website. Readers are
directed to the Forward-Looking Statements advisory at the end of
this press release for cautionary language relating to
forward-looking information.
Conference Call &
Webcast
Lake Shore Gold will also host a conference call and webcast on
Wednesday, May 7, 2014 at 3 pm EST to discuss the Company's first
quarter financial and operating results (see call-in numbers
below). The call will also be webcast and available on the
Company's website.
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Participant call-in: 416-340-2216 or 866-223-7781 |
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Replay number: 905-694-9451 or 800-408-3053 |
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Re-dial ID: 4840351 |
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Available until: 11:59 pm (May 14, 2014) |
Qualified
Person
Scientific and technical information contained in this press
release related to reserves has been reviewed and approved by Dan
Gagnon, P.Geo., Senior Vice-President, Operations, and Natasha Vaz,
P.Eng., Vice-President, Technical Services, both of whom are
employees of Lake Shore Gold Corp., and "qualified persons" as
defined by National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101").
Scientific and technical information related to resources,
drilling and all matters involving mine production geology
contained in this press release, or source material for this press
release, was reviewed and approved by Eric Kallio, P.Geo.,
Vice-President, Exploration. Mr. Kallio is an employee of Lake
Shore Gold Corp., and is a "qualified person" as defined by NI
43-101.
About Lake Shore
Gold
Lake Shore Gold is a gold mining company that is in production
and is generating net free cash flow from its wholly owned
operations in the Timmins Gold Camp. The Company is in production
at both the Timmins West and Bell Creek mines, with material being
delivered for processing to the Bell Creek Mill. In addition to
current operations, the Company also has a number of highly
prospective projects and exploration targets, all located in and
around the Timmins Camp. The Company's common shares trade on the
TSX and NYSEMKT under the symbol LSG.
Footnotes
- Cash operating costs and cash operating cost per ounce are
Non-GAAP measures. In the gold mining industry, cash operating
costs and per ounce are common performance measures but do not have
any standardized meaning. Cash operating costs are derived from
amounts included in the Consolidated Statements of Comprehensive
Income (Loss) and include mine site operating costs such as mining,
processing and administration as well as royalty expenses, but
exclude depreciation, depletion and share-based payment expenses
and reclamation costs. Cash operating costs per ounce are based on
ounces sold and are calculated by dividing cash operating costs by
commercial gold ounces sold; US$ cash operating costs per ounce
sold are derived from the cash operating costs per ounce sold
translated using the average Bank of Canada C$/US$ exchange rate.
The Company discloses cash operating costs and per ounce as it
believes the measures provide valuable assistance to investors and
analysts in evaluating the Company's operational performance and
ability to generate cash flow. The most directly comparable measure
prepared in accordance with GAAP is total production costs. A
reconciliation of cash operating cost per ounce to amounts included
in the Consolidated Statements of Comprehensive Loss (Income) for
the three months ended March 31, 2014 and 2013 is set out on page
14 of the Company's MD&A filed on SEDAR at www.sedar.com and at
www.lsgold.com.
- All-in sustaining costs and all-in sustaining cost per
ounce are Non-GAAP measures. These measures are intended to assist
readers in evaluating the total costs of producing gold from
current operations. While there are no standardized meanings across
the industry for these measures, the Company's definitions conform
to the all-in sustaining costs definition as set out by the World
Gold Council in its guidance note dated June 27, 2013. The Company
defines all-in sustaining costs as the sum of production costs,
sustaining capital (capital required to maintain current operations
at existing levels), corporate general and administrative expenses,
in-mine exploration expenses and reclamation cost accretion related
to current operations. All-in sustaining costs exclude growth
capital, reclamation cost accretion not related to current
operations, interest expense, debt repayment and taxes. The costs
included in the calculation of all-in sustaining costs are divided
by commercial gold ounces sold; US$ all-in sustaining cost per
ounce sold is translated using the average Bank of Canada C$/US$
exchange rate. A reconciliation of all-in
sustaining cost per ounce to amounts included in the Consolidated
Statements of Comprehensive Loss (Income) for the three months
ended March 31, 2014 and 2013 is set out on page 14 of the
Company's MD&A filed on SEDAR at www.sedar.com and at
www.lsgold.com.
- Cash earnings from mine operations is a Non-GAAP measure
determined by deducting cash operating costs from revenues
recognized in the period. The Company discloses cash earnings from
mine operations as it believes this measure provides valuable
assistance to investors and analysts in evaluating the Company's
ability to finance its ongoing business and capital
activities. The most directly comparable measure prepared
in accordance with GAAP is earnings from mine operations. A
reconciliation of cash earnings from mine operations to amounts
included in the Consolidated Statements of Comprehensive Loss
(Income) for the three months ended March 31, 2014 and 2013 is set
out on page 14 of the Company's MD&A filed on SEDAR at
www.sedar.com and at www.lsgold.com.
FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact,
contained or incorporated by reference in this press release
including, but not limited to, any information as to the future
financial or operating performance of Lake Shore Gold Corp.,
constitute "forward-looking information" or "forward-looking
statements" within the meaning of certain securities laws,
including the provisions of the Securities Act (Ontario) and the
provisions for "safe harbour" under the United States Private
Securities Litigation Reform Act of 1995, and are based on
expectations, estimates and projections as of the date of this
press release or, in the case of documents incorporated by
reference herein, as of the date of such documents. Forward-looking
statements are provided for the purpose of providing information
about management's expectations and plans relating to the future.
All of the forward-looking statements made in this press release
are qualified by these cautionary statements and those made in our
other filings with the securities regulators of Canada and the SEC
in the United States.
Other than as specifically required by law, the Company does
not intend, and does not assume any obligation, to explain any
material difference between subsequent actual events and such
forward-looking statements, or to update any forward-looking
statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of
unanticipated events, whether as a result of new information,
future events or results or otherwise. These forward-looking
statements represent management's best judgment based on facts and
assumptions that management considers reasonable, including that:
there are no significant disruptions affecting operations, whether
due to labour disruptions, supply disruptions, power disruptions,
damage to equipment or otherwise; permitting, development,
operations, expansion and acquisitions at the Timmins Gold Complex
continue on a basis consistent with the Company's current
expectations; permitting, development and operations at the Bell
Creek Complex continue on a basis consistent with the Company's
current expectations; the exchange rate between the Canadian dollar
and the U.S. dollar stays approximately consistent with current
levels; certain price assumptions for gold and silver hold true;
prices for fuel, electricity and other key supplies remains
consistent with current levels; production and cost of sales
forecasts meet expectations; the accuracy of the Company's current
mineral reserve and mineral resource estimates hold true; and
labour and materials costs increase on a basis consistent with the
Company's current expectations. The Company makes no representation
that reasonable business people in possession of the same
information would reach the same conclusions.
Forward-looking statements include, but are not limited to,
possible events, statements with respect to possible events,
statements with respect to the future price of gold and other
metals, the estimation of mineral resources and reserves, the
realization of mineral reserve and resource estimates, the timing
and amount of estimated future production, costs of production,
expected capital expenditures, costs and timing of the development
of new deposits, success of exploration and development activities,
permitting time lines, currency fluctuations, requirements for
additional capital, government regulation of exploration and mining
operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims, completion of acquisitions and
their potential impact on the Company and its operations,
limitations on insurance coverage and the timing and possible
outcome of pending litigation. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved".
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. As well as
those factors discussed in the section entitled "Risk Factors" in
this press release and the Company's most recently filed AIF, known
and unknown risks which could cause actual results to differ
materially from projections in forward-looking statements include,
among others: fluctuations in the currency markets; fluctuations in
the spot and forward price of gold or certain other commodities
(such as diesel fuel and electricity); changes in interest rates;
changes in national and local government legislation, taxation,
controls, regulations and political or economic developments in
Canada and Mexico or other countries in which the Company may carry
on business in the future; business opportunities that may be
presented to, or pursued by, the Company; the Company's ability to
successfully integrate acquisitions; operating or technical
difficulties in connection with mining or development activities;
employee relations; the speculative nature of gold exploration and
development, including the risks of obtaining necessary licenses
and permits; diminishing quantities or grades of reserves; and
contests over title to properties, particularly title to
undeveloped properties. In addition, there are risks and hazards
associated with the business of gold exploration, development and
mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate insurance, or the
inability to obtain insurance, to cover these risks).
Although the Company has attempted to identify important
factors (which it believes are reasonable) 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
forward-looking 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.
Lake Shore GoldTony MakuchPresident & CEO(416) 703-6298Lake
Shore GoldMark UttingVice-President, Investor Relations(416)
703-6298www.lsgold.com
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