Analysis of the Q4 PeriodAnalyst Daniel Earle has released an analysis of the Q4 period.
- Q4/14 production of 43.2 koz was slightly below our estimate of 44.5 koz as result of lower grades of 4.2 g/t versus our estimate of 4.6 g/t.
- 2014 production of 186 koz was in line with our estimate of 187 koz and beat the top end of the company's guidance of 160–180 koz, as expected.
- Total debt repayments in 2014 were ~$45mm, exceeding the company's target of $20-$25mm due to the company pre-paying the $20mm outstanding balance on its standby line of credit with Sprott on December 31, 2014.
Lake Shore previously announced its 2015 production guidance of 170-180 koz gold at cash costs of US$650-700/oz (AISC US$950-US$1000/oz), with head grades averaging 4.4 g/t.
Daniel Earle has rated this impact as NEUTRAL.
In Q4/14, production of 43.2 koz was based on 331,400 tonnes processed (3,600 tpd) at an average grade of 4.2 g/t with mill recoveries of 96.7%. Throughput was better than Daniel Earle anticipated, while grades and production were slightly lower.
In 2014, the company produced 185.6 koz at an average grade of 4.8 g/t, which was roughly in line with Daniel Earle's estimates of 187.0 koz at an average grade of 4.9 g/t and above Lake Shore's full-year guidance estimate of 160–180 koz. The company ended the year with $60mm in cash (up from $34mm at the end of 2013) and total debt repayments in 2014 were approximately $45mm.
In 2015 the company is expected to be focused on replacing Reserves at Timmins West and Bell Creek, with an update expected shortly. Additionally, Daniel Earle expects an update in H1/14 on an initial Resource estimate for the 144 Gap Zone discovery, but that the conversion to reserves could be completed by year-end.