Trading Symbol: ADA:TSX; C2Z-Frankfurt
Shares Outstanding: 142,312,907
HALIFAX, May 16 /CNW/ - Acadian Mining Corporation (TSX: ADA) ("Acadian" or the "Company") announced its first quarter financial results for the three months ended March 31, 2008 and information on its Scotia Mine operations, highlights of which are presented in Tables 1 & 2 below. Complete financial statements, management's discussion and analysis of results, and letter to shareholders are available on the regulatory filing site, www.sedar.com and the Company's website, www.acadianmining.com, and should be read in conjunction with this news release.
The Company realized net income of $912,173 on revenues of $9,832,088 from zinc and lead concentrate sales for the quarter. This quarter marks the first profits the Company has had as a producer of base metals.
<< Table 1 - Financial Highlights ------------------------------------------------------------------------- Quarter ended March 31 ------------------------------------------------------------------------- 2008 2007 ------------------------------------------------------------------------- $ $ ------------------------------------------------------------------------- Revenue 9,832,088 - ------------------------------------------------------------------------- Operating income (loss) 950,997 (867,370) ------------------------------------------------------------------------- Net income 912,173 600,061 ------------------------------------------------------------------------- Income per share 0.01 0.01 ------------------------------------------------------------------------- March 31, 2008 December 31, 2007 ------------------------------------------------------------------------- Cash and equivalents 1,285,667 3,022,687 ------------------------------------------------------------------------- Working capital 5,483,883 6,920,319 ------------------------------------------------------------------------- Total assets 64,223,241 63,043,437 ------------------------------------------------------------------------- >>
Operating profit of $950,997 did not meet management's target for the period and was principally due to the unanticipated interruption of operations in the pit. This event resulted from extreme volumes of run-off water due to heavy rains and spring thaw which overwhelmed the polishing pond discharge weir, necessitating shutting down the pit pumps. While corrective measures were implemented to avoid future problems of this nature, this event also negatively impacted production levels for much of April, during which time the plant processed material from low grade, higher level pit benches and stock piles. The mine returned to normal operating conditions in late April, and as such, improvements in production and financial results are anticipated in the second quarter of 2008.
Cash cost per pound of payable metal (zinc and lead) sold for the period was $0.72, which exceeded the cost for the six month operating period in 2007 by $0.04. The slightly increased cost of production reflects the above described production issues experienced in March.
Operational highlights for the quarter are presented in Table 2 below.
Table 2 - Operational Highlights - Quarter ended March 31, 2008
<< ------------------------------------------------------------------------- Production Q1 - 2008 YE - 2007 ---------- ------------------------------------------------------------------------- Ore milled Tonnes 173,433 336,534 ------------------------------------------------------------------------- Head grade - zinc Percent 1.99 2.13 ------------------------------------------------------------------------- Head grade - lead Percent 1.09 0.88 ------------------------------------------------------------------------- Recovery - zinc Percent 75.21 73.11 ------------------------------------------------------------------------- Recovery - lead Percent 87.42 76.41 ------------------------------------------------------------------------- Zinc concentrate Tonnes dry 4,253 9,200 ------------------------------------------------------------------------- Zinc concentrate Grade % 54.64 55.49 ------------------------------------------------------------------------- Zinc metal Tonnes 2,324 5,105 ------------------------------------------------------------------------- Zinc metal Pounds 5,123,862 11,255,307 ------------------------------------------------------------------------- Lead concentrate Tonnes dry 2,116 3,579 ------------------------------------------------------------------------- Lead concentrate Grade % 70.15 60.43 ------------------------------------------------------------------------- Lead metal Tonnes 1,484 2,163 ------------------------------------------------------------------------- Lead metal Pounds 3,272,680 4,768,537 ------------------------------------------------------------------------- Metals Sold - Cost of Production -------------------------------- ------------------------------------------------------------------------- Zinc Tonnes 2,568 4,910.7 ------------------------------------------------------------------------- Zinc Pounds 5,661,589 10,826,085 ------------------------------------------------------------------------- Lead Tonnes 1,895 1,140.0 ------------------------------------------------------------------------- Lead Pounds 4,178,026 2,515,440 ------------------------------------------------------------------------- Zinc & lead Total pounds 9,839,615 13,341,525 ------------------------------------------------------------------------- Cost of production sold $7,124,843 $9,068,838 ------------------------------------------------------------------------- Cost of production sold Per pound zinc & lead $ 0.72 $ 0.68 ------------------------------------------------------------------------- Cost of production sold Per tonne milled $ 35.06 $ 32.36 ------------------------------------------------------------------------- >>
The Company's first quarter zinc and lead production was 34% and 22%, respectively, below target, which was due to a combination of not reaching the planned mine benches in accordance with the pit schedule and operational disruptions described above. Failing to reach the planned mine benches in accordance with the pit schedule resulted in lower head grades to the mill. The average zinc head grade for the period was 2.00%, which was 77% of plan for the period and the average lead head grade was 1.09% which was 84% of plan. Zinc and lead recoveries in the mill were 75.21% and 87.42% respectively, which was 11.7% and 2.9% below plan, and can be attributed principally to lower head grades during the month of March. Improvements in recoveries continue to be made with May (month to date) zinc recoveries at 83.38% with a concentrate grade of 59.13% zinc, and lead recoveries at 89.34% with a concentrate grade of 71.61%. Mill throughput for the quarter averaged 2,000 tpd at 95% mill availability. Planned improvement to the crushing circuit in Q2 is expected to increase throughput to 2,400-2,500 tpd.
Despite reduced levels of production in March and April, the Company remains confident of achieving the targeted production of 30,000 tonnes of zinc concentrate and 12,000 tonnes of lead concentrate in 2008. The projected production is approximately 31.6 million pounds of payable zinc and 16.7 million pounds of payable lead.
Management Opinion
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Will Felderhof, President & CEO stated: "Despite various challenges that surfaced during Q1 we are pleased with the present status of operations. The outlook for Acadian Mining in 2008 remains positive."
Proposed Spinout of Gold Assets
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The Company recently announced the proposed spin-out of its gold assets into a separate public company, Annapolis Gold Corporation ("Annapolis"), shares of which will be distributed to shareholders on the basis of one share of Annapolis for every four shares held in Acadian. The proposed "plan of arrangement" is subject to receipt of all necessary shareholder, court and regulatory approvals. For details, see the Company's News Release No. 05-08, April 18, 22008 and the Management Information Circular recently mailed to shareholders and filed on SEDAR. Shareholders are being asked to approve this corporate restructuring at the Company's Annual and Special Meeting scheduled for June 9, 2008.
About the Company
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Acadian is a Halifax, Nova Scotia, Canada based mining company which operates a zinc-lead mine (Scotia Mine) at Gays River, Nova Scotia and is exploring and developing gold, zinc-lead, and barite properties in Atlantic Canada.
The Scotia Mine operates as an open pit mine and is expected to produce 30,000 tonnes of high grade zinc concentrate and 12,000 tonnes of high grade lead concentrate per year. See the Company's News Release No. 16-06, July 17, 2006 for further details.
The Company is also focused on developing four advanced gold properties, Beaver Dam, Tangier, Forest Hill and Goldenville, which form the core holdings of the Scotia Goldfields project. Each of the four advanced properties host gold resources described in technical reports prepared in compliance with National Instrument 43-101 and are available on www.sedar.com. A summary of gold resources for Goldenville, Forest Hill and Tangier is provided in News Release No. 01-06, January 5, 2006, under the paragraph titled "About Acadian Gold". A summary of gold resources for Beaver Dam is provided in News Release No. 23-07, July 16, 2007. The Company is bringing a new approach to the development of Nova Scotia gold deposits by pursuing a multiple mine, central processing, managing and servicing strategy.
The Company holds a 44.42% equity interest in Royal Roads Corp. ("Royal Roads") (RRO-TSX-V). Royal Roads' principal asset is a 16,075 hectare (approximately 32 km x 5 km) mineral property known as the Tulks North property which is strategically located in the centre of the world-class Buchans base metal camp in central Newfoundland, Canada. In addition, Royal Roads holds a 26.4% equity interest in Buchans River Ltd. ("Buchans River") (BUV-TSX-V), which also holds a highly prospective property portfolio in the Buchans camp. Acadian's indirect interest in Buchans River is 11.7%.
Forward Looking Statement
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Certain information regarding the Company contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. Discussion of the various factors that may affect future results is contained in the Company's 2006 Annual Report which is available at www.sedar.com. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.
For additional information on the Company's properties and activities, please visit our web site at www.acadianmining.com. If you wish to be added to the Company's e-mail or fax distribution list for future news releases and updates, please contact Acadian at phone: 902 444-7779 , fax: 902 444-3296, email: mail@acadianmining.com.
No regulatory authority has approved or disapproved the contents of this
release.
For further information: G. William Felderhof, President & CEO; Terry F. Coughlan, Vice President, (902) 444-7779 , Toll Free: (877) 444-7774 , mail@acadianmining.com