Its Out As we suspected... sorry had trouble posting the tables..
Highlights:
El Valle-Boinas/Carles ("EVBC") Mine in Spain has been in production since August 2011. Cash costs were $1,088 per ounce of gold net of by-products for the first quarter of fiscal 2012;
Commissioning of the Upper Mineralized Zone ("UMZ") of the Don Mario Mine continues;
Total production was 9,937 ounces of gold, 3,231,000 pounds of copper and 82,654 ounces of silver for the first quarter of fiscal 2012;
Revenue for the quarter ended December 31, 2011 was $15,373 and was generated from EVBC's sale of concentrate and gold/silver dore containing 8,276 ounces of gold, 9,283 ounces of silver, and 691,000 pounds of copper;
Gross profit for the quarter ended December 31, 2011 was $354;
Net loss for the quarter ended December 31, 2011 was $4,505, resulting primarily from the loss on the mark-to-market revaluation and settlement of derivative contracts and finance costs on borrowings;
Cash and cash equivalents, were $13,763 at December 31, 2011 compared to $12,244 at September 30, 2011;
Increased EVBC reserve estimates announced - measured and indicated gold ounces increased by 95,000 ounces to 1,300,000 ounces and proven and probable reserve estimate increased by 28,000 ounces of gold to 812,000 ounces;
Draft mining permit for the Copperwood copper project, a key permitting milestone in the process of developing the Copperwood Mine, was received from the Michigan Department of Environmental Quality.
"Although the production at EVBC did not meet our targets, underground development advanced well and progress on the shaft proceeded on schedule with commissioning expected during the third quarter of fiscal 2012," said Bill Williams, President and Chief Executive Officer. "Gold head grades are improving. At Don Mario, although the performance of the leach-precipitation-flotation process circuit improved during the quarter, events during January and February led management to decide to start processing the mixed oxide-sulphide, or transition ore by using the flotation-only process. Copperwood continues to advance on schedule and we are exploring all alternatives to finance the project."
During the first quarter of fiscal 2012, concentrate production was 727,525 pounds of copper, 4,499 ounces of gold, and 17,880 ounces of silver. Recoveries for gold, copper, and silver were 92%, 80% and 70%, respectively. Cash operating costs, including royalties, were $1,088 per ounce of gold, net of by-product revenues. During January, cash operating costs, including royalties, were $710 per ounce of gold, net of by-product revenues (refer to the press release dated February 21, 2012).
EVBC gold head grades are expected to steadily increase over the next few months and gold production for the fiscal year ending September 30, 2012 is targeted to be approximately 60,000 ounces.
2. Don Mario Mine - UMZ
Start-up of the LPF mill and a sulphuric acid plant, which began in April 2011, continued through their commissioning stage, which has been slower than planned due to initial operating issues with the sulphuric acid plant, issues related to the delivery of supplies, and lower than planned copper recovery. Because of the low copper recovery, gold/silver dore cannot be produced. Nevertheless, cash operating costs were approximately $1.65/lb. copper net of by-product revenues. Production data is found in the table below
Revenues for the first quarter ended December 31, 2011 were $15,373 on sales of 8,276 ounces of gold, 9,283 ounces of silver, and 691,000 pounds of copper. The first quarter results excluded revenue from the Don Mario UMZ Mine as these sales are credited against commissioning costs on the balance sheet until commercial production commences.
For the three months ended December 31, 2012 gross profit was $354. The net loss for the first quarter ended December 31, 2011 was $4,505 (
.03 loss per share), resulting primarily from the loss on the settlement and mark-to-market revaluation of derivative contracts and finance costs on borrowings.
Cash provided by operating activities was $5,290 for the quarter ended December 31, 2011.
Capital expenditures were $8,174 for the quarter ended December 31, 2011. Expenditures included $960 on the development of the Don Mario UMZ, $6,316 on the development of the EVBC Mine and $898 on the Copperwood Project.
Cash and cash equivalents amounted to $13,763 at December 31, 2011 compared to $12,244 at September 30, 2011.
Subsequent to the end of the quarter, the Company entered into a $5,000 secured loan facility with its majority shareholder, Fabulosa Mines Limited ("Fabulosa"). The loan was subsequently amended, including increasing it to $6,500 and converting it to a term loan with a maturity date of July 1, 2013. Concurrently, the Company entered into a directors' nomination agreement with Fabulosa. The terms of the loan and the nomination agreement are summarized in the MD&A.
The consolidated financial statements and Management's Discussion & Analysis for the period ended December 31, 2011 are available on SEDAR and at www.orvana.com.
Outlook:
The forward looking statements made in this section are intended to provide an overview of management's expectations with respect to certain future operating activities of the Company and may not be appropriate for other purposes.
In the short term, Orvana is focused on its operations at the EVBC gold-copper-silver mine in northern Spain and its Don Mario Mine copper-gold-silver mine in eastern Bolivia as well as advancing its Copperwood copper project in Michigan.
In Spain, the Company commenced production start-up and commissioning at the EVBC Mine in May 2011 and advanced to the production stage on August 1, 2011.
During fiscal 2012, the Company expects gold production from EVBC to be about 60,000 ounces per annum, copper production about 2,000 tonnes per annum, and silver production about 125,000 ounces per annum. As head grades improve, cash cost per ounce of gold produced is expected to decrease. Mine life is now projected at 10 years. Beyond 2012, Orvana will continue to work on improving head grade, increasing gold production and reducing cost per ounce of gold produced. Completing the shaft, which is anticipated to take place during the third quarter of fiscal 2012, will allow for more efficient ore extraction, resulting in improved flexibility, increased mine production, and reduced costs. Orvana will also investigate alternatives to maximize the mill output and enhance recoveries, including a possible expansion of the mill in the future.
During fiscal 2012, the Company's focus at Don Mario will be on improving recoveries for both the LPF and flotation-only processing. Production in fiscal 2012 is expected to be about 6,000 tonnes copper, 11,000 ounces of gold, and 400,000 ounces of silver, respectively.
The Copperwood permitting process will continue during the third quarter of fiscal 2012. The Company will continue to investigate means of financing the estimated $213,000 pre-production capital expenditure, including a joint venture partnership, debt financing, off-take agreement, and equity financing.
Orvana projects total annual gold production to be approximately 70,000 ounces, total copper production to be 8,000 tonnes, and total silver production to be 525,000 ounces.
The Company will hold a conference call on Friday March 16, 2012 at 10:00 a.m. (Eastern Time) to discuss the fiscal 2011 first quarter results. Following the presentation there will be a question and answer period for analysts and investors.
The conference call can be accessed at 1-416-695-7806 or the North American toll-free number at 1-888-789-9572, using the pass code 7100 584 followed by the number sign.