Orosur Mining Orosur Mining Inc. - Q1 2017 Results: Net Profit US$2.8M & Cash Operating Costs US$693/oz

 
TIDMOMI 
 
 

Orosur Mining Inc. ("Orosur" or the "Company") (TSX/AIM: OMI), a South American-focused gold producer, developer and explorer is pleased to announce the results for its 2017 first quarter ended August 31, 2016 ("Q1 17" or the "Quarter").

Highlights of Q1 FY17

 
 
    -- Gold production of 9,950 oz, on the higher end of the Company's 35,000 

- 40,000 oz guidance for the full year (Q1 16: 12,471 oz).

 
    -- Cash operating costs of US$693/oz, significantly beating guidance of 

between US$800 to US$900/oz (Q1 16: US$954/oz).

 
    -- All-In-Sustaining costs ("AISC") of US$989/oz (Q1 16: US$1,166/oz). 

The Company has maintained AISC below US$1,000/oz for the last three

consecutive quarters now.

 
    -- Net profit after tax of US$2.8M (Q1 16: loss of US$1.7M). 
 
    -- Cash generated from operations of US$4.8M (Q1 16: US$0.2M). 
 
    -- Total cash balance of US$5.0M (Q1 16: US$4.3M). 
 
Operational &                   Quarter ended August 31 
Financial 
Summary1 
Operating Results 
                                2017             2016          Diff 
Gold produced         Ounces    9,950            12,471        (2,521) 
Operating cash        US$/oz    693              954           (261) 
cost3 
AISC                  US$/oz    989              1,166         (177) 
Average price         US$/oz    1,324            1,147         177 
received 
Financial Results 
Revenue               US$ '000  12,658           14,465        (1,807) 
Net profit/(loss)     US$ '000  2,759            (1,726)       4,485 
after tax 
Cash flow from        US$ '000  4,795            173           4,622 
operations2 
Cash & Debt                     August 31, 2016  May 31, 2016  Diff 
Summary 
Cash balance          US$ '000  4,982            4,320         662 
Total debt            US$ '000  289              352           (63) 
Cash net of debt      US$ '000  4,693            3,968         725 
 
 
1   Results are based on IFRS and expressed in US dollars 
2   Before non-cash working capital movements 
3   Operating cash cost is total cost discounting royalties 
    and  capital tax on production assets. 
 
 

Ignacio Salazar, CEO of Orosur, said:

"We are very pleased to announce a strong quarter with cash operating costs below US$700/oz, AISC below US$1,000/oz, net profit US$2.8M and cash from operations of US$4.8M. The commitment, additional work load and the tough decisions the team has had to assume during the past year has positioned the Company well to take advantage of gold price improvements this year and we are delighted to be seeing the benefits.

I believe the financial results speak for themselves, and taken together with the exploration and development progress we reported last week, show this is an exciting time for the Company. That said, we remain as pro-active as ever and are committed to making the most of the current position of the Company for the benefit of our shareholders and team. I very much look forward to the work and results ahead."

FY17 Outlook & Guidance

The Company's forecast production guidance for FY17 remains between 35,000 to 40,000 oz of gold at operating cash costs of between US$800 - US$900/oz.

As in the past, variations in production and unit costs are expected to occur, quarter on quarter, as the mine plan draws ore from multiple sources at varying grades, stages of development and stripping factors. The Company expects to have higher unit costs in Q2 as underground staff and equipment are transferred from the Arenal UG operation in its final months of production to the SGW UG development which is expected to commence production by the end of November 2016.

Q1 17 Financial Summary

Cash flow from operations before working capital was US$4.8 million compared to US$0.2 million for Q1 16, mainly as a result of the higher gold prices received in Q1 17 and lower production rates year over year. Net profit after tax was US$2.8 million compared with a loss of US$1.7 million in Q1 16.

The Company invested US$1.9 million in capital expenditures and US$0.6 million in exploration expenditures compared with US$1.0 million and US$1.0 million respectively in Q1 16. During the Quarter, the Company advanced the development of the ramp and access in the San Gregorio underground mine as planned and on budget and commenced the construction of the phase 4A of the tailings dam.

The cash balance at the end of the Quarter was US$5.0 million compared with US$4.3 million at May 31, 2016. The Company's debt balance was US$0.3 million compared to US$0.4 million at May 31, 2016.

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 explorer 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

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

 
Orosur Mining Inc. 
Condensed Interim Consolidated 
Unaudited 
Statements of Financial  Position 
Thousands of United States Dollars, 
except where indicated 
                                            As at August 31,  As at May 31, 
                                            2016 ($)          2016 ($) 
Assets 
Cash                                        4,982             4,320 
Accounts receivable and other assets        1,983             1,770 
Inventories                                 12,794            12,069 
Total current assets                        19,759            18,159 
Accounts receivable and other assets        550               550 
Property plant and equipment                10,209            10,106 
and development costs 
Exploration and evaluation costs            17,729            17,250 
Deferred income tax assets                  2,534             2,534 
Restricted cash                             229               221 
Total non-current assets                    31,251            30,661 
Total assets                                51,010            48,820 
Liabilities and Shareholders' Equity 
Trade payables and other                    10,112            10,586 
accrued liabilities 
Current portion of long-term debt           237               253 
Environmental rehabilitation provisions     360               360 
Total current liabilities                   10,709            11,199 
Long-term debt                              52                99 
Environmental rehabilitation provisions     5,281             5,327 
Total non-current liabilities               5,333             5,426 
Total liabilities                           16,042            16,625 
Capital stock                               60,849            60,751 
Contributed surplus                         5,878             5,925 
Deficit                                     (30,738)          (33,497) 
Currency translation reserve                (1,021)           (984) 
Total shareholders' equity                  34,968            32,195 
Total liabilities and                       51,010            48,820 
shareholders' equity 
 
 
Orosur Mining Inc. 
Condensed Interim Consolidated 
Unaudited Statements of 
profit/  (loss) and Comprehensive profit/(loss) 
Thousands of United States Dollars, 
except for per share amounts 
                                                     Three months ended 
                                                     August 31, 
                                                     2016 ($)  2015 ($) 
Sales                                                12,658    14,465 
Cost of sales                                        (9,243)   (15,015) 
Gross profit/(loss)                                  3,415     (550) 
Corporate and administrative expenses                (467)     (631) 
                                                     124       (1,114) 
                                                     (9)       (18) 
                                                     (88)      - 
                                                     350       554 
Net finance cost                                     (45)      (61) 
Derivative loss                                      (420)     - 
Net foreign exchange (loss)/gain                     (101)     78 

                                                     (656)     (1,192) 
Profit/(loss) before income tax                      2,759     (1,742) 
Recovery/(Provision) for income taxes                -         16 
Total profit/(loss) for the period                   2,759     (1,726) 
Other comprehensive loss 
Cumulative translation adjustment                    (37)      (713) 
Total comprehensive profit/(loss)                    2,722     (2,439) 
for the period 
Profit/(loss) per common share 
Basic and fully diluted                              0.03      (0.02) 
 
 
Orosur Mining Inc. 
Condensed Interim Consolidated Unaudited 
Statements of Cash Flows 
Thousands of United States Dollars, except where indicated 
                                                    Three months ended 
                                                    August 31, 
                                                    2016 ($)  2015 ($) 
Net inflow/(outflow) of cash related 
to the following activities 
 
Cash flow from operating activities 
Net profit/(loss) for the period                    2,759     (1,726) 
Adjustments to reconcile net income to net 
cash provided from  operating activities: 
Depreciation                                        1,766     1,814 
Exploration and evaluation expenses written off     9         18 
Obsolescence provision                              88        - 
Fair value of derivatives                           94        - 
Accretion of asset retirement obligation            19        6 
Stock based compensation                            28        7 
Gain on sale of property, plant and equipment       -         (20) 
Other                                               32        74 
Subtotal                                            4,795     173 
Changes in working capital: 
Accounts receivable and other assets                (308)     (175) 
Inventories                                         (812)     1,349 
Trade payables and other accrued liabilities        (474)     56 
Net cash generated from operating activities        3,201     1,403 
Cash flow from financing activities 
Loan payments                                       (63)      (355) 
Proceeds on sale of common shares of Anillo SPA     -         714 
Net cash used in financing activities               (63)      359 
Cash flow from investing activities 
Purchase of property, plant and equipment           (1,862)   (913) 
and development costs 
Environmental tasks                                 (65)      (81) 
Proceeds from the sale of fixed assets              -         33 
Exploration and evaluation expenditure assets       (549)     (966) 
Net cash used in investing activities               (2,476)   (1,927) 
Increase/ (decrease) in cash                        662       (165) 
Cash at the beginning of period                     4,320     4,787 
Cash at the end of period                           4,982     4,622 
 
 
Orosur Mining Inc. 
Condensed Interim Consolidated Unaudited Statements of Changes in  Shareholders' Equity 
Thousands of United States Dollars, except where indicated 
                                          Three months ended 
                                          August 31, 
                                          2016 ($)  2015 ($) 
 
Capital stock 
Balance at beginning of period            60,751    60,544 
Exercise of stock options                 75        - 
Grant of shares                           23        - 
Balance at end of period                  60,849    60,544 
Broker warrants 
Balance at beginning of period            -         62 
Balance at end of period                  -         62 
Contributed surplus 
Balance at beginning of period            5,925     5,824 
Stock based compensation recognized       28        7 
Exercise of stock options                 (75)      - 
Balance at end of period                  5,878     5,831 
(Deficit) Retained earnings 
Balance at beginning of period            (33,497)  (32,287) 
Net profit/(loss) for the period          2,759     (1,726) 
Balance at end of period                  (30,738)  (34,013) 
Currency translation reserve              (1,021)   (970) 
Shareholders' equity at end of period     34,968    31,454 
 
 

Orosur Mining IncIgnacio Salazar, [phone]Chief Executive [e-mail] Fitzgerald EuropeDavid Porter / Craig Francis / Philip DaviesTel: [phone]orFTI ConsultingBen Brewerton / Oliver Winters / Sara Powell / Emerson ClarkeTel: [phone]

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October 17, 2016 02:00 ET (06:00 GMT)