TORONTO, Dec. 18, 2013 /CNW Telbec/ - Cerro Grande Mining Corporation
(the "Company" or "CEG") (TSX: CEG) (OTCQX: CEGMF) announced today its
audited Consolidated Financial Statements and Management Discussion and
Analysis for its fourth quarter and year ended September 30, 2013 with
the comparatives for the same periods in 2012 which have been filed on
SEDAR. The Company refers the reader to those materials for additional
information.
The Company also announced that it has filed its Annual Information Form
for its year ended September 30, 2013, dated December 18, 2013 and its
NI 43-101 Technical Report entitled "A Technical Report On The Pimenton
Mine, The Surrounding Pimenton Property And The Nearby Tordillo
Property In Central Chile", dated December 17, 2013.
The table below sets out the consolidated profit and loss for the fourth
quarter and year ended September 30, 2013 with comparatives for the
same periods in 2012.
(Expressed in thousands of US dollars except per share amounts)
|
Revenue
|
Three months ended
|
|
Twelve months ended
|
|
September 30,
|
September 30,
|
|
September 30,
|
September 30,
|
|
2013
|
2012
|
|
2013
|
2012
|
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
Sales
|
3,598
|
7,675
|
|
18,677
|
25,549
|
|
Services
|
0
|
0
|
|
101
|
1,896
|
|
|
3,598
|
7,675
|
|
18,778
|
27,445
|
|
Expenses
|
|
|
|
|
|
|
Operating costs
|
3,659
|
5,655
|
|
18,581
|
21,100
|
|
Operating costs for services
|
0
|
0
|
|
85
|
1,760
|
|
Reclamation and remediation
|
10
|
3
|
|
42
|
58
|
|
General, sales and administrative
|
529
|
960
|
|
3,499
|
3,368
|
|
Foreign exchange
|
50
|
10
|
|
16
|
126
|
|
Interest
|
80
|
23
|
|
315
|
127
|
|
Other gains and losses (net)
|
(5)
|
(1)
|
|
42
|
96
|
|
Impairment charges
|
0
|
0
|
|
2,140
|
0
|
|
Exploration costs
|
81
|
371
|
|
1,186
|
3,392
|
|
|
4,404
|
7,021
|
|
25,906
|
30,027
|
|
Loss and comprehensive loss before income taxes
|
(806)
|
654
|
|
(7,128)
|
(2,582)
|
|
Income tax expense
|
(43)
|
(205)
|
|
(201)
|
(249)
|
|
Deferred income tax
|
839
|
(881)
|
|
1,109
|
(881)
|
|
Loss and comprehensive loss for the period
|
(10)
|
(432)
|
|
(6,220)
|
(3,712)
|
|
1)
|
Consolidated statements of income (loss) and other comprehensive income
(loss) for the three month periods ended September 30, 2013 and 2012:
(Expressed in thousands of US dollars)
|
|
|
|
|
|
|
a)
|
Revenue for the three month period ended September 30, 2013 decreased
over the same period in 2012 due to a decrease in gold sales to 3,031
oz compared to 6,620 oz in the three month period ended September 30,
2012. This, combined with a drop in the gold price from an average
closing price on the LME of $1,522 for the quarter ended September 30,
2013 (2012-$1,660).
|
|
|
|
|
|
|
b)
|
Operating expenses for the three months ended September 30, 2013 were
$3,659 compared to $5.655 for the same period in 2012. The decrease of
$1,996 consists of decreases in direct costs of $833; labor cost of
$548 net smelter return of $233; indirect costs of $262, of which $55
related to mine insurance and $128 related to a measurement and
monitoring program. In addition, refining and metallurgical charges
decreased by $44 and inventory variation decreased by $183. These
decreases were offset by an increase of depreciation and amortization
of $107.
|
|
|
|
|
|
|
c)
|
General and administrative costs for the three months ended September
30, 2013 were $529 compared to $960 for the same period in 2012. This
$431 decrease was due to decreases of $57 in stock based compensation;
professional fees of $206; salaries of $92. These were offset by
increases in insurance and other expenses of $119 and an increase in
sales expenses of $43.
|
|
|
|
|
|
|
d)
|
The Company expenses its exploration costs on all properties until a NI
43 -101 compliant resource has been established on a property. As a
result, during the three month period ended September 30, 2013, the
Company expensed $81 (2012 - $371) of exploration costs as follows: La
Bella $nil (2012 - $59); Bandurrias $2 (2012 - $2); Santa Cecilia $6
(2012 - $240); Tordillo $3 (2012- $nil); and other $70 (2012 -$70).
|
|
|
|
|
2)
|
Consolidated statements of income (loss) and other comprehensive income
(loss) for the year ended September 30, 2013 and 2012: (Expressed in
thousands of US dollars)
|
|
|
|
|
|
|
a)
|
Revenue for the year ended September 30, 2013 decreased compared to the
same period in 2012 due to lower gold sales of 10,591 oz compared to
13,576 oz in the year ended September 30, 2012. This combined with a
lower average closing price of gold on the LME of $1,536 for the year
ended September 30, 2013 (2012 - $1,646)
|
|
|
|
|
|
|
b)
|
Operating expenses for the year ended September 30, 2013 were $18,581
compared to $21,100 for the same period in 2012. The change of $2,519
consists of decreases in labor costs of $460; direct costs of $529;
indirect costs of $197; refining and metallurgical charges of $38; net
smelter return of $398; inventory variation of $1,016 and expansion
cost of $133. This was offset by an increase in depreciation and
amortization in the amount of $252. Costs from services provided by
Pimenton to CDM including management, machinery and equipment rent was
$85 (2012 - $1,760).
|
|
|
|
|
|
|
c)
|
General and administrative costs for the year ended September 30, 2013
were $3,499 compared to $3.368 for the same period in 2012. This $131
increase was due to increases of $62 in salaries; listing fees $55 and
stock based compensation of $305. This was offset by reductions in
professional fees of $262 and sales and office expenses of $29.
|
|
|
|
|
|
|
d)
|
The Company expenses its exploration costs on all properties until a NI
43 -101 compliant resource has been established on a property. As a
result, during the year ended September 30, 2013, the Company expensed
$1,186 (2012 - $3,392) of exploration costs as follows: La Bella $142
(2012 - $637); Bandurrias $28 (2012 - $33); Santa Cecilia $343 (2012 -
$2,313); Tordillo $308 (2012- $68); Catedral $58 (2012 - $56); Cal
Norte $5 (2012 - $5); and other $302 (2012 -$280).
|
|
|
|
|
|
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e)
|
Non-current assets are tested for impairment when events or changes in
circumstance suggest that the carrying amount may not be recoverable.
During the current year ended September 30, 2013, it was determined
there are potential indicators of impairment. The recoverable amount is
calculated using the value-in-use method, which is the expected present
value of future cash flows from the asset, using a pre-tax discount
rate of 10.8%. In the current year, the Company recorded an impairment
charge of $2,140 related to the Pimenton project, primarily as a result
of the decrease in long-term gold and copper prices.
|
|
|
|
|
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3)
|
Consolidated Cash flow for the year ended September 30, 2013
|
|
|
|
|
|
Cash generated by the Pimenton Mine decreased due to operational
problems and the drop in the price of gold. The operational problems
related to delays in a main drive to reach known ore shoots below the
existing levels.
|
|
|
|
|
|
David Thomson and Mario Hernandez, both Officers and Directors of Cerro
Grande Mining Corporation through their respective companies have made
cash advances to the Company to sustain its operations and keep its
obligations to outside creditors up to date.
|
|
|
|
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4)
|
Consolidated Statement of Financial Position as at September 30, 2013
(Expressed in thousands of US dollars)
|
|
|
|
|
|
As at September 30, 2013, the Company had a positive working capital of
$187 (2012-$223). David Thompson and Mario Hernandez provided funds for
working capital during the current and prior year. $2,585 of these
funds have been converted to a loan which will be repaid in July 2016
at a 5% interest rate.
|
Operational Highlights
-
Gold produced by the Pimenton Mine for the year ended September 30, 2013
was 10,835 oz compared to 12,583 oz in the prior year.
-
Pimenton's cash cost for the year ended September 30, 2013 was $1,191
per ounce of gold produced net of by product credits, compared to
$1,086 per oz in the prior year.
-
Pimenton's production cost, which includes depreciation and
amortization, for the year ended September 30, 2013 was $1,422 per
ounce of gold produced net of by product credit compared to $1,203 per
oz in the prior year.
-
The average gold recovery for the year ended September 30, 2013 was
94.28% compared to 94.17% in the prior year.
-
The Company expects the mine to maintain milling rates of 120 tons per
day depending on the rate of conversion of its known resources to
reserves.
-
Currently the plant has been permitted to operate at an average of 166
tons per day. The Company has prepared but not yet submitted permits to
take the mine up to 500 tons per day.
Financial Highlights
-
Loss before income taxes for the year was $7,128 which included an
impairment charge of $2,140 (2012 - $2,582). Loss before income taxes
for the three month ended September 30, 2013 was $806 (2012 - income
$654).
-
Average price per ounce of gold sold for the 2013 fiscal year was $1,536
(2012 - $1,646). Average price per ounce during the three months ended
September 30, 2013 was $1,327 (2012- $1,668).
-
Net loss after income taxes for the 2013 fiscal year was $6,220 compared
to $3,712 in fiscal 2012. Net loss after income taxes for the three
months ended September 30, 2013 was $10 compared to $432 in the same
three month period in 2012.
-
Basic loss per share for fiscal 2013 was a loss of 0.06 cents per share
compared to a loss of 0.04 cents per share in 2012.
-
At September 30, 2013, the Company had cash and cash equivalents of $53
compared to $1,336 at September 30, 2012.
-
Cash flow from operations as at September 30, 2013 was negative $2,338
(2012- positive $626).
Cerro Grande Mining Corporation is a minerals producing, exploration and
development company with properties and activities currently focused in
Chile.
Cautionary Statement on Forward-looking Information
This news release contains "forward-looking information", which may
include, but is not limited to, statements with respect to the future
financial or operating performance of CEG. Often, but not always,
forward-looking statements can be identified by the use of words such
as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or "believes" or
variations (including negative variations) of such words and phrases,
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of CEG to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Forward-looking statements contained herein
are made as of the date of this press release based on current
expectations and beliefs and CEG disclaims, other than as required by
law, any obligation to update any forward-looking statements whether as
a result of new information, results, future events, circumstances, or
if management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, the
reader is cautioned not to place undue reliance on forward-looking
statements.
SOURCE Cerro Grande Mining Corporation
Registered Office:
ROYAL BANK PLAZA
SOUTH TOWER
200 BAY STREET, SUITE 3800
TORONTO, ONTARIO M5J 2Z4
CANADA
Santiago Office:
AVDA. SANTA MARIA 2224
PROVIDENCIA, SANTIAGO,
CHILE
Telephone: 56-2-2569 6200
Toronto Office:
1 KING STREET, OF. 4009
TORONTO, ONTARIO M5H 1A1
CANADA
For further information, contact:
Stephen W. Houghton, CEO
David R. S. Thomson, EVP
E-Mail: ceg@cegmining.com
Telephone: 56-2-2569 6200
Website: www.cegmining.com
Renmark Financial Communications Inc.
Barry Mire : bmire@renmarkfinancial.com
Tel: (416) 644-2020 or (514) 939-3989
www.renmarkfinancial.com
Copyright CNW Group 2013