Sirocco Releases 2011 Financials
03 Aprile 2012 - 2:30PM
Marketwired Canada
Sirocco Mining Inc. (TSX VENTURE:SIM) ("Sirocco" or "the Company") is pleased to
report financial and operating results for the year ended December 31, 2011. The
2011 consolidated financial statements together with Management's Discussion and
Analysis will be available on the Company's web site (www.siroccomining.com) and
on SEDAR (www.sedar.com).
2011 was a year of change for the Company, culminating in the appointment of a
new Management Team on October 24, 2011. The new team includes the entire senior
management team of Red Back Mining Inc. Since the management change, a number of
significant events have occurred:
-- At Aguas Blancas, major alterations have been made to the crushing and
screening sections of the agitated leach plant ("ALP"). These have
resulted in a successful commissioning of the ALP in the first quarter
of 2012.
-- A private placement equity financing resulting in the issuance of 50
million subscription receipts at an issue price of $1.20 for gross
proceeds of $60 million was closed on December 20, 2011. The proceeds
were released from escrow to the Company and common shares issued on
January 23, 2012.
-- The Company changed its name to "Sirocco Mining Inc." on January 24,
2012.
-- Concurrent with the appointment of the Management Team, the Company
completed the acquisition of Sirocco Gold Inc., a private company
formally controlled by the Management Team, with early-stage exploration
projects in Africa.
-- A detailed review of the carrying value of the Company's assets was
undertaken in connection with the preparation of the annual financial
statements.
Financial Results
The tables below summarize key financial and operating results of the Company
for the last quarter and the year.
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Three Months Three Months
Ended Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2011 2010 2011 2010
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Tonnes Mined
(000's t) 1,311 1,033 4,488 3,804
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Iodine Grade
(ppm) 586 570 581 623
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Iodine Produced
(t) 277 345 1,122 1,256
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Iodine Sold (t) 260 325 1,134 1,244
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Iodine production for 2011 included a minimal amount of production from the ALP.
The majority of forecast production growth in 2012 will come from the recently
commissioned ALP. It is expected that heap leach production will remain at
similar levels to 2011.
Increased iodine prices during the year contributed to 33% higher revenues in
2011. Iodine prices averaged $40 per kilogram in 2011 compared to $27 in 2010.
Higher revenues were partially offset by increased production costs as the
Company experienced higher power, personnel and camp costs in the year.
Iodine prices are expected to remain robust for 2012 and the Company will
continue to focus on unit cost reduction.
A number of material non-recurring charges were recorded in Q4 2011 as a result
of an operational and financial review undertaken by the Management Team and the
accounting treatment of the acquisition of Sirocco Gold Inc. These are detailed
in Management's Discussion and Analysis and summarized below:
-- Stock-based compensation of $18.2 million recognized as a result of the
appointment of the Management Team;
-- Capital asset write-off of $6.5 million relating to obsolete portions of
the ALP, following a review of the ALP in the last quarter of the year;
and
-- Commissioning costs of $1.0 million for the transition from contractor
to owner-mining.
Year ended Year ended Year ended
December 31, December 31, December 31,
2011 2010 2009
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Statement of Operations Data
(000's)
Total Revenue $ 45,076 $ 33,989 $ 29,426
Net Income (loss) $ (24,312) $ (2,380) $ 2,867
Data per Common Share
Basic Income (Loss) per share $ (0.15) $ (0.01) $ 0.02
Diluted Income (Loss) per share $ (0.15) $ (0.01) $ 0.02
Balance Sheet Data (000's)
Total Assets $ 127,689 $ 112,246 $ 136,561
Long Term Liabilities $ 10,861 $ 5,048 $ 11,601
(i) The comparative numbers for the year ended December 31, 2009 have been
presented under Canadian Generally Accepted Accounting Principles before
implementation of IFRS
A conference call to discuss the financial and operating results will be held at
8am PST on Tuesday April 3, 2012. Participants should dial in on 1 888 340 9642
or 416 340 8527 and follow the prompts. A replay of the call will be available
until midnight on April 17, 2012 by dialing 905 694 9451 or 1 800 408 3053,
passcode 3210496.
Strong Financial Position
The Company stands at 31 December 2011 with a strong balance sheet that includes
$22.2 million in cash. The net proceeds of the $60 million private placement
financing were received by the Company on January 23, 2012 further increasing
the cash and working capital position of Sirocco.
Outlook for 2012
At Aguas Blancas, we continue to optimise the mine operations with the objective
of maximising production from available water sources. Through a combination of
heap leaching and the ALP processing, production is expected to increase to
between 1,350 and 1,450 tonnes of iodine, a projected 25% increase from 2011, at
a cash operating cost of $30 - $35 per kilogram.
Following the appointment of the Management Team, the ALP was taken off line to
carry out alterations to the crushing and screening sections of the plant. These
alterations have increased the plant availability to near 90%, at 50%
throughput. Phase II of the ALP modifications will focus on expanding the screen
area and increasing residence time. These modifications are scheduled to be
completed in early Q1 2013.
As part of an exploration budget of $750,000, the Company is targeting the
conversion of inferred resources at Aguas Blancas to the measured and indicated
categories.
Exploration is ongoing at the Company's projects in Mauritania and Cote
D'Ivoire. Total exploration on these projects is expected to be in the $5.0
million range.
Corporately, M&A opportunities in both Africa and South America continue to be
evaluated and assessed.
About the Company
Sirocco Mining Inc. is a Canadian company which produces iodine from its Aguas
Blancas mine in northern Chile. In addition, the Company has exploration
interests in Brazil and West Africa and is actively assessing other
opportunities in the resource sector.
Cautionary Statements
This news release contains forward-looking statements concerning the Company's
plans for its business and properties. These forward-looking statements are
subject to a variety of risks and uncertainties which could cause actual events
or results to differ materially from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties relating to
political risks involving the Company's exploration and development of its
properties, the inherent uncertainty of cost estimates and the potential for
unexpected costs and expenses, commodity price fluctuations, the inability or
failure to obtain adequate financing on a timely basis and other risks and
uncertainties, including those described in the Company's periodic filings with
the British Columbia Securities Commission. Such information contained herein
represents management's best judgment as of the date hereof based on information
currently available. The Company does not intend to update this information,
except as required by law, and disclaims any legal liability to the contrary.
On behalf of the Board,
Lukas Lundin, Chairman
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