TORONTO, ONTARIO, Dec 4, 2008 (Marketwire via COMTEX News Network) --
Orvana Minerals Corp. (TSX:ORV) announced operating results today for the year ended September 30, 2008. Dollar amounts in this news release are in thousands of United States dollars unless stated otherwise, and fine troy ounces of gold are referred to as "ounces". Highlights for the year are:
- Revenues of $69.1 million on sales of 79,813 ounces for fiscal 2008 compared to $55.9 million on sales of 86,322 ounces for fiscal 2007;
- Production of 79,604 ounces at a total cash cost of $240.63 (including $47.95 resulting from a new mining royalty tax) per ounce for fiscal 2008 compared to 86,322 ounces produced at a total cash cost of $156.53 per ounce for fiscal 2007;
- Net income of $25.7 million ($0.22 per share) for fiscal 2008, slightly lower than net income of $26.0 million ($0.23 per share) a year ago;
- Cash provided by operating activities amounted to $41.2 million for fiscal 2008 compared to $31.5 million in fiscal 2007;
- Cash and cash equivalents of $91.0 million at September 30, 2008 compared to $55.7 million last year.
Orvana President and Chief Executive Officer, Carlos Mirabal said, "We are satisfied with results for the year. High gold prices throughout fiscal 2008 helped us achieve record revenues and cash generated from operating activities despite a decline in production compared to fiscal 2007.
But the end of fiscal 2008 marks a strategic turning point for the Company. The Company's gold production will begin to decline year-over-year during the next two years and, at current rates of production, we estimate that gold-bearing ore will be depleted by the end of the third quarter of fiscal 2010.
We finished fiscal 2008 with $91.0 million available to invest in mining operations and to diversify. We are looking at the Don Mario Mine's copper-bearing Upper Mineralized Zone in Bolivia and many opportunities outside Bolivia that have begun to appear.
The Don Mario Mine Upper Mineralized Zone Feasibility Study is almost complete. It is anticipated that the UMZ Feasibility Study will demonstrate that a multi-year, multi-metal mining operation will be viable using current metal prices.
Management is devoting considerable time and effort to investigate numerous investment opportunities that we have identified in the Americas. We believe that the turmoil in the financial markets and its impact on the availability of project financing will provide us with even more opportunities for investment. Still, we have hard work ahead of us to identify the best opportunities and to make sure that we acquire them at fair prices."
According to Bill Williams, Orvana's Vice President, Corporate Development, "The Company continues to actively evaluate and negotiate the acquisition of mining properties that fit our investment criteria. Current capital market conditions are advantageous to the execution of the Company's strategy.
Additionally, we were very pleased to acquire the Copperwood project in the Upper Peninsula of the State of Michigan. An Environmental Impact Assessment study is underway and a National Instrument 43-101 study is expected to begin in fiscal 2009. Our target is to begin production on this copper property during fiscal 2013."
Don Mario Mine Operations
In fiscal 2008, a total of 253,217 tonnes of ore were treated, compared to 253,469 tonnes a year ago.
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Quarters ended
Year ------------------------------------ Year
ended ended
September Sept. 30, June 30, Mar. 31, Dec. 31, September
30, 2008 2008 2008 2008 2007 30, 2007
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Underground Tonnes 244,734 63,599 58,993 59,334 62,808 241,218
mine ----------------------------------------------------------------
g/t 10.67 9.21 11.44 11.05 11.06 11.91
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Minipit & Tonnes 8,483 285 2,104 2,321 3,773 12,251
stockpile ----------------------------------------------------------------
g/t 1.94 1.87 1.95 1.95 1.94 2.00
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Total tonnes Tonnes 253,217 63,884 61,097 61,655 66,581 253,469
treated ----------------------------------------------------------------
g/t 10.38 9.18 11.12 10.72 10.54 11.43
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Gold recovery rate 94.2% 93.6% 95.6% 94.0% 93.5% 92.7%
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Gold production
- ounces 79,604 17,656 20,877 19,988 21,083 86,381
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Gold production for fiscal 2008 was 8% lower, at 79,604 ounces, compared to 86,381 ounces for fiscal 2007 due primarily to lower head grades.
The following table shows the cash costs for the fourth quarter and fiscal year 2008. The Company prepares its financial statements in accordance with Canadian generally accepted accounting principles ("GAAP"). The calculations below represent non-GAAP information, which should not be construed as an alternative to GAAP reporting of operating expenses, and may not be comparable to similar measures presented by other issuers (see "non-GAAP measures" below).
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Year ended Quarter ended
Sept. 30, 2008 Sept. 30, 2008
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Costs Cost/oz. Costs Cost/oz.
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Direct mine operating costs $ 13,032 $ 163.71 $ 3,784 $ 214.31
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Third-party smelting, refining
and transportation costs 231 2.90 56 3.19
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Cash operating costs 13,263 166.61 3,840 217.50
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Royalties and mining rights 2,075 26.07 433 24.57
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Mining royalty tax 3,817 47.95 1,109 62.79
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Total cash costs 19,155 240.63 5,382 304.86
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Depreciation and amortization 7,736 97.18 1,901 107.66
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Total production costs $ 26,891 $ 337.81 $ 7,283 $ 412.52
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Unit costs for the fourth quarter at $412.52 reflect the impact of lower production on all elements of total production costs. For the full fiscal year 2008, total production costs per ounce at $337.81 were higher due to lower production compared to fiscal 2007 (79,604 ounces in fiscal 2008 compared to 86,381 ounces in fiscal 2007). Price increases also contributed to higher unit costs, but the single biggest factor in the increase in both total production costs and unit costs was the new mining royalty tax, which added $3,817, or $47.95 per ounce, to production costs.
Fiscal Year Financial Highlights
Orvana's financial highlights for the year ended September 30, 2008 compared to the year ended September 30, 2007 are summarized below:
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Year Ended September 30
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2008 2007
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Revenue $ 69,064 $ 55,920
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Net income 25,707 26,023
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Net income per share - basic and diluted $ 0.22 $ 0.23
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Cash provided by operating activities $ 41,212 $ 31,488
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Cash and cash equivalents 91,041 55,667
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Total assets 120,685 81,153
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Long-term debt 4,245 -
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Shareholders' equity 96,862 70,956
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Quarterly Financial Highlights
Orvana's financial highlights for the fourth quarter ended September 30, 2008 compared to the fourth quarter ended September 30, 2007 are summarized below:
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Fourth quarter ended September 30
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2008 2007
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Revenue $ 15,681 $ 14,183
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Net income 4,605 6,944
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Net income per share - basic and diluted $ 0.04 $ 0.06
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Cash provided by operating activities $ 7,559 $ 7,042
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Audited consolidated financial statements and Management's Discussion & Analysis for the fiscal year ended September 30, 2008 are available on SEDAR and at www.orvana.com.
About Orvana
Orvana Minerals Corp. is a Canadian mining and exploration company based in Toronto, Canada, involved in the evaluation, development and mining of precious and base metal deposits in the Americas. The Company owns and operates the Don Mario Mine in eastern Bolivia. Orvana's long-term goal is to become a low cost, long-life, multi-mine gold and base metals producer in the Americas. Orvana's shares have been listed on the Toronto Stock Exchange since 1992 under the trading symbol ORV.
Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections