Orosur Mining Orosur Mining Inc. - Full Year 2017 Results: US$9.7M Cash from Operations, US$2M Profit before Tax

 
TIDMOMI 
 
 

Orosur Mining Inc. ("Orosur" or "the Company") (TSX: OMI) (AIM: OMI), the South American-focused gold producer, developer and explorer is pleased to announce the results for the fiscal year ended May 31, 2017 ("FY17").

Highlights

Financial & Operational Results

 
 
    -- FY17 production of 35,371 oz (within stated guidance of 35-40 koz) 

following a significant increase in production in Q4 (10,748 oz).

 
    -- FY17 Operating cash cost guidance of US$829 (confirmed within stated 

guidance of US$800 - 900/oz) and representing an improvement on FY16:

US$877.

 
    -- Average gold price received of US$1,258/oz (FY15: US$1,154/oz). 
 
    -- Cash flow generated by operations was US$9.7M (FY16: US$7.6M) due to 

better operating performance and gold price in FY17.

 
    -- Profit before tax was US$2.0M (FY16: loss of US$3.2M) due to higher 

gold price at $1,258/oz (FY16: $1,154/oz) and lower overall costs of

sales.

 
    -- Successfully built and developed the San Gregorio West underground 

mine in Uruguay ("SGW UG") from internally generated funds (total

investment in SGW UG during FY17 was US$5.9M).

 
    -- The Company invested US$10.8M in capital and US$2.6M in exploration 

(FY16: US$3.9M and US$2.8M, respectively). In addition to the

construction of the SGW UG mine, the Company invested in the

completion of the construction of phase 4A of the new tailings dam

during FY17.

 
    -- All-In-Sustaining Costs ("AISC") of US$1,228/oz (FY16: US$1,069/oz). 

The increase was due mainly to the additional development capex

associated with building the SGW UG mine.

 
    -- Cash balance at the end of May 2017 was US$3.4M (Q3 US$2.4M and FY 

2016 US$4.3M) with debt of just US$0.4.

Exploration and Corporate

 
 
    -- Following completion of the equity raise announced on August 11th, 

2017, the company is in the process of ramping up drilling in Colombia

and plans to update the market on recent Exploration progress in both

Colombia and Uruguay in short order.

Ignacio Salazar, CEO of Orosur, commented:

"We are very pleased to report a successful FY17 having achieved a number of important corporate milestones whilst simultaneously delivering in line with production and cost targets for the fourth consecutive year.

Cost management and technical excellence remain central to our strategy, demonstrated by successfully building and opening of the second UG mine in Uruguay during the year.The completion of the recent financing announced on August 11th 2017, which was oversubscribed and at a premium to the prevailing market when negotiated, is an important step to support our growth strategy.

The quality of our assets, our track record on delivery and the recent financing position the Company well forFY18 to make significant progress towards its growth potential and we look forward to reporting results from the resource definition in Colombia, tapping the potential of the highly prospective 100km greenstone belt we control in Uruguay and advancing Anillo in Chile,"

 
Operational & Financial Summary1                 Fiscal Year (FY) 
                                                 ended May 31 
                                                 2017    2016     Change 
Operating Results 
Gold produced                          Ounces    35,371  35,773   (402) 
Operating Cash cost3                   US$/oz    829     877      (48) 
Total Cash cost                        US$/oz    882     891      (9) 
AISC                                   US$/oz    1,228   1,069    159 
Average price received                 US$/oz    1,258   1,154    104 
Financial Results 
Revenue                                US$ '000  44,226  42,866   1,360 
Net income (loss) before tax           US$ '000  2,028   (3,158)  5,186 
Cash flow from operations2             US$ '000  9,664   7,603    2,061 
Cash & Debt at the end of the period             2017    2016     Diff 
Cash balance                           US$ '000  3,357   4,320    (963) 
Total Debt                             US$ '000  403     352      51 
Cash net of debt                       US$ ´000  2,954   3,968    (1,014) 
 
 

1 Results are based on IFRS and expressed in US dollars2 Before non-cash working capital movements3 Operating cash cost is total cost discounting royalties and capital tax on production assets.

FY18 Outlook & Guidance

The Company expects production from the San Gregorio mine in Uruguay for FY18 to be between 30,000 - 35,000 ounces of gold, with operating costs of US$800 - US$900 per ounce.

At current gold prices this will allow the Company to continue to focus on expanding its resource base in Uruguay both from underground and surface operations, with the aim of increasing its mine life and/or increasing production by utilising the spare capacity in the San Gregorio plant.

As in the past, variations in production and unit costs will occur quarter on quarter as the mine plan draws ore from several sources at varying grades and stages of development or stripping. The Company plans to achieve its production and cost targets over the course of the year.

The Company is preparing to commence a 15,000m drilling campaign in its highly prospective Anzá project in the mid-cauca belt of Colombia. The Company will update the market with drilling results during the year as the program advances.

FY17 Financial Summary

Cash operating costs for the year were $829/oz (FY16: $877/oz), a reduction of 6%, due primarily to lower operating costs related to lower tonnes transported, processed at higher grades during the year and continuous technical improvements and cost management efforts. The Company successfully reached its cash operating cost guidance of US$800 - 900/oz for the year.

All-in-sustaining costs ("AISC") were $1,228/oz (FY16: $1,069/oz). The increase was due mainly to the additional development capex associated with the SGW UG mine, including ramp, access and ventilation work while at the same time in FY17 the company did not have the benefit of the exemption of the royalty granted for FY16. AISC peaked at $1,345/oz in Q2 17 and since then, the Company started to reduce capital investment during the remainder of FY17.

Cash flow generated by operations before working capital investment was US$9.7M (FY16: US$7.6M) due to better operating performance in FY17 as explained above.

Contribution margin FY17 was US$11.1 (FY16: US$6.8M) and Profit before tax was US$2.0M (FY16: loss of US$3.2M) due to higher gold price at $1,258/oz (FY16: $1,154/oz) and lower costs of sales overall. Net profit after tax for the year was US$2.6M (FY16: loss of US$1.2M).

The Company invested US$10.8M in capital and US$2.6M in exploration (FY16: US$3.9M and US$2.8M, respectively). In addition to the construction of the SGW UG mine, the Company invested during FY17 in completing the construction of the phase 4A of the new tailings dam.

Cash balance at the end of the year was US$3.4M compared to US$4.3M at May 31, 2016. The decrease in cash was mainly due to the development of the SGW UG mine (total investment in SGW UG during the year 2017 was US$5.9M). The SGW UG mine was financed fully from cash from operations. Total debt as at May 31, 2017 was US$0.4M compared to US$0.4M at May 31, 2016. This debt relates to leases on small vehicles and equipment.

The Company has a US$1.5M committed and undrawn line of credit with Banco Santander available as at May 31, 2017, and as of the date hereof.

Exploration Update

Following the equity raise announced on August 11th, 2017, the company is in the process of ramping up drilling in Colombia and plans to update the market on recent Exploration progress in both Colombia and Uruguay in short order.

Forward Looking Statements

All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. There can be no assurance that such statements will prove to be accurate. Such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements include, without limitation success of exploration activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on insurance coverage. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.

About Orosur Mining Inc.

Orosur Mining Inc. is a fully integrated gold producer, developer and exploration company focused on identifying and advancing gold projects in South America. The Company operates the only producing gold mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in Uruguay, Chile and Colombia. The Company is listed in Canada (TSX: OMI) and London (AIM: OMI).

For more information please visit www.orosur.ca

Orosur Mining IncIgnacio Salazar, [phone]Chief Executive [e-mail] Fitzgerald Europe - Nomad & Joint BrokerDavid Porter/Keith Dowsing, [phone]orNumis Securities Limited - Joint BrokerJohn Prior / James Black / Paul Gillam, [phone]orFTI ConsultingBen Brewerton / Oliver Winters / Sara Powell / Emerson Clarke, [phone]

- Financial Statements Follow -

 
Orosur Mining Inc.Consolidated Statements of  Financial Position(Thousands of United States Dollars,  except where indicated) 
                                                        As at May 312017($)  As at May 312016($) 
Assets 
Cash                                                    3,357                4,320 
Accounts receivable and other assets                    1,519                1,770 
Inventories                                             13,157               12,069 
Total current assets                                    18,033               18,159 
Accounts receivable and other assets                    550                  550 
Property plant and equipment and development costs      16,160               10,106 
Exploration and evaluation costs                        17,677               17,250 
Deferred income tax assets                              3,115                2,534 
Restricted cash                                         229                  221 
Total non-current assets                                37,731               30,661 
Total Assets                                            55,764               48,820 
Liabilities and Shareholders' Equity 
Trade payables and other accrued liabilities            14,518               10,586 
Current portion of long-term debt                       202                  253 
Environmental rehabilitation provision                  243                  360 
Total current liabilities                               14,963               11,199 
Long-term debt                                          201                  99 
Environmental rehabilitation provision                  5,405                5,327 
Total non-current liabilities                           5,606                5,426 
Total liabilities                                       20,569               16,625 
Capital stock                                           61,162               60,751 
Contributed surplus                                     5,836                5,925 
Deficit                                                 (30,913)             (33,497) 
Currency translation reserve                            (890)                (984) 
Total shareholders' equity                              35,195               32,195 
Total liabilities and shareholders' equity              55,764               48,820 
 
 
Orosur Mining Inc. 
Consolidated Statements of Profit/(Loss) 
and Comprehensive  Profit/(Loss) 
(Thousands of United States Dollars except 
for earnings per share  amounts) 
For the years ended May 31                      2017 ($)  2016 ($) 
Sales                                           44,226    42,866 
Cost of sales                                   (40,271)  (42,073) 
Gross profit                                    3,955     793 
 
                                                (2,398) 
Corporate and administrative expenses                     (2150) 
Restructuring costs                             143       (1,709) 
Exploration and evaluation                      (131)     (351) 
costs written off 
Impairment of assets                            -         (4,229) 
Obsolescence provision                          (113)     (39) 
Other income                                    1,527     4,009 
Finance cost net                                (164)     24 
Derivative gain/(loss)                          (458)     158 
Foreign exchange gain/(loss)                    (333)     336 
                                                (1,927)   (3,951) 
Profit/(Loss) before income tax                 2,028     (3,158) 
Recovery for income taxes                       557       1,948 
Total Profit/(loss) for the period              2,585     (1,210) 
Other comprehensive profit/(loss) 
Cumulative translation adjustment               93         (727) 
Total comprehensive profit/(loss)               2,678      (1,937) 
for the period 
Profit/(Loss) per common share 
Basic                                           0.03      (0.01) 
Diluted                                         0.03      (0.01) 
 
 
Orosur Mining Inc. 
Consolidated Statements of Cash Flows 
(Thousands of United States Dollars, 
except where indicated) 
For the years ended May 31                            2017 ($)  2016 ($) 
Net inflow (outflow) of cash related 
to the followingactivities 
Cash flow from operating activities 
Net profit/(loss) for the year                        2,585     (1,210) 
Adjustments to reconcile net income to net 
cash providedfrom  operating activities: 
Depreciation                                          7,143     5,975 
Impairment of assets                                  -         4,229 
Exploration and evaluation expenses written off       131       351 
Obsolescence provision                                113       39 
Fair value of derivatives                             458       (92) 
Accretion of asset retirement obligation              18        (210) 
Deferred income tax assets                            (581)     (1,983) 
Stock based compensation                              93        43 
Loss/(gain) on sale of property,                      (241)     116 
plant and equipment 
Other                                                 (55)      345 
Subtotal                                              9,664     7,603 
Changes in working capital 
Accounts receivable and other assets                  (211)     (38) 
Inventories                                           (1,200)   2,253 
Trade payables and other accrued liabilities          3,932     (3,255) 
Net cash generated from operating activities          12,185    6,563 
Cash flow from investing activities 
Purchase of property, plant and equipment             (10,621)  (3,701) 
anddevelopment  costs 
Payments for environmental rehabilitation             (213)     (241) 
Proceeds from the sale of fixed assets                240       123 
Exploration and evaluation expenditure assets         (2,604)   (2,793) 
Net cash used in investing activities                 (13,198)  (6,612) 
Cash flow from financing activities 
Proceeds on sale of common shares of Anillo SPA       -         710 
Loan proceeds                                         320       - 
Loan payments                                         (270)     (1,128) 
Net cash generated from/(used                         50        (418) 
in) financing activities 
Decrease in cash                                      (963)     (467) 
Cash at the beginning of year                         4,320     4,787 
Cash at the end of year                               3,357     4,320 
 
 
 
 

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August 29, 2017 02:00 ET (06:00 GMT)