(All figures are in US dollars unless stated otherwise)
Vancouver, British Columbia, March 17, 2008 - Peak Gold
Ltd. (PIK:TSX-V) ("Peak Gold") today reported net earnings of $14.6
million or 3 cents per share for the thirteen months ended December 31, 2007.
Production in 2007 from the date of acquisition of the Amapari and Peak mines
was 149,830 ounces of gold at a total cash cost of $349 per ounce.
2007 Financial and Operational Highlights
The highlights presented below include the operating results of the Amapari
and Peak mines from the dates of their acquisition, which are April 3, 2007 and
April 27, 2007, respectively.
- Net earnings of $14.6
million after charges of $6.2 million in stock-based compensation
- Gold production of 149,830
ounces
- Total cash costs of $349
per ounce (net of by-product sales) (1)
- Consolidated operating cash
flow of $26.6 million
- In April 2007, Peak Gold
completed a Cdn$326.5 million financing of 435 million subscription
receipts (each subscription receipt comprised of one common share and
one-half of one common share purchase warrant of Peak Gold) at a price of
Cdn$0.75 per subscription receipt. The proceeds were used to
partially finance the acquisition of the Amapari and Peak mines for
consideration of 155 million common shares with a value of $100 million
and $200 million in cash
- In November 2007, Peak Gold
completed a financing of 147,723,334 special warrants for
net proceeds to Peak Gold of Cdn$104.2 million. On February 28,
2008, the special warrants were automatically exercised into 147,723,334
common shares and 73,861,667 common share purchase warrants of Peak Gold.
The proceeds will be used for future acquisitions of mineral properties
and capital expenditures
Fourth Quarter Highlights
- Net earnings of $14.8
million after charges of $1.0 million in stock-based compensation
- Gold production of 53,430
ounces
- Gold sales of 52,351 ounces
- Total cash costs of $398
per ounce (net of by-product sales) (1)
- Consolidated operating cash
flow of $12.9 million
Robert Gallagher, Peak Gold President and CEO, made the following comments
in relation to year-end and the fourth quarter results:
"Following the acquisition of the company's first operating assets in
April, strong cash flow generation and improving operating costs have
characterized Peak Gold's first year of operation. At the end of a year
in which management and operating teams were strengthened and two financings
were completed, the company is well positioned for future growth both
internally and externally. With our operating assets continuing to
generate strong cash flow to the company, full exposure to the gold market and
cash and short term investments of $182 million, Peak Gold is well positioned
for what should be an exciting 2008."
Operational Review
The full year operational highlights for the Amapari and Peak mines, which
include the period prior to their acquisition by Peak Gold, are as follows:
- Gold production for 2007
was 212,933 ounces compared to 206,800 ounces in 2006
- Gold sales for 2007 were
214,398 ounces compared to 200,000 ounces in 2006
- Copper production for 2007
was 7.5 million pounds with sales of 7.3 million pounds compared to 6.5
million pounds produced and sold in 2006
- Total cash costs in 2007
were $364 per ounce compared to $355 per ounce in 2006 (net of by-product
sales) (1)
For the full year at Peak Mines in Australia, including the period prior to
acquisition by Peak Gold, production was 116,533 ounces of gold and 7.5 million
pounds of copper. Record annual mill throughput of 709,230 tonnes reflects
consistent underground production and increased milling capacity. Production
for the fourth quarter was 29,030 ounces of gold and 1.8 million pounds of
copper. Total cash costs for the full year were $243 per ounce and for the quarter
were $258 per ounce. The strengthening of the Australian dollar throughout the
year negatively impacted total cash costs per ounce sold. Operating costs were
reasonably consistent through the year with cost control remaining a key focus
for management.
Production for the full year at the Amapari mine in Brazil, including the
period prior to acquisition by Peak Gold, was 96,400 ounces, a 15% increase
from 2006. Production for the fourth quarter was 24,400 ounces. Total cash
costs for the year were $515 per ounce and for the quarter were $583 per ounce.
Cash costs in 2007 were adversely affected by the strengthening of the
Brazilian currency (real) related to the U.S. dollar. The Brazilian currency
strengthened by approximately 16% during the year. Peak Gold continues to study
the viability of alternative processes to improve the efficiency and costs of
its operations at Amapari.
Gold and copper production in 2008 for both the Amapari and Peak mines are
expected to be in line with 2007 production. Production in 2008 is expected to
be 210,000 to 220,000 ounces at a cash cost of $345 to $365 per ounce.
Cash costs in 2008 are expected to decline from 2007 levels as a result of cost
saving programs implemented in 2007. A further weakening of the U.S. dollar will
continue to have a negative impact on Peak Gold's cost structure. A significant
increase in gold production is expected from 2009 onwards.
Peak Gold will hold a conference call on Monday, March 17, 2008 at 10:00
a.m. Pacific time to discuss these results. You may join the call by dialing
toll free 1-888-789-9572 or 1-604-639-5228 for calls from outside Canada and
the U.S. You can listen to a recorded playback of the call after the event
until April 17, 2008 by dialing 1-800-408-3053 or 1-416-695-5800 for calls
outside Canada and the U.S. Passcode: 3252883#.
Click here to view the unaudited Statement of Operations, Other
Comprehensive Income and Deficit, Statement of Cash Flows, Balance Sheet and
Financial/Operational Highlights.
http://files.newswire.ca/692/summarizedfinancial.pdf
http://files.newswire.ca/692/operationalreview.pdf
The Audited Financial Statements and Management Discussion & Analysis
will be filed on SEDAR in approximately one week.
Peak Gold is a new intermediate gold producer with a strong foundation for
growth. To learn more about us, please visit our website at www.peakgold.com.
(1) Peak Gold has included a
non-GAAP performance measure, total cash costs per gold ounce, throughout this
news release. Peak Gold reports total cash costs on a sales basis. In the gold
mining industry, this is a common performance measure but does not have any
standardized meaning, and is a non-GAAP measure. Peak Gold follows the
recommendations of the Gold Institute standard. Peak Gold believes that, in
addition to conventional measures, prepared in accordance with GAAP, certain
investors use this information to evaluate Peak Gold's performance and ability
to generate cash flow. Accordingly, it is intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This News Release
contains "forward looking statements", within the meaning of
applicable Canadian Securities legislation. Forward-looking statements include,
but are not limited to, statements with respect to the future price of gold and
copper, the estimation of mineral reserves and resources, the realization of
mineral reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing of the
development of new deposits, success of exploration activities, permitting time
lines, currency exchange rate fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations on
insurance coverage. Generally, these forward looking statements can be
identified by the use of forward-looking terminology such as "plans",
"expects", or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts"
,"intends" ," anticipates", or "does not
anticipate", or "believes", or variations of such words and
phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will" or
"will be taken", "occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or
achievements of Peak Gold to be materially different from those expressed or
implied by such forward-looking statements, including but not limited to: risks
related to the integration of acquisitions; risks related to international
operations; actual results of current exploration activities; actual results of
current reclamation activities; conclusions of economic evaluations; changes in
project parameters as plans continue to be refined; future prices of gold and
copper; possible variations in ore reserves, grade or recovery rates; failure
of plant; equipment or processes to operate as anticipated; accidents; labor
disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of development or
construction activities, as well as those factors discussed in the section
entitled "Risk Factors" in Peak Gold's Annual Information Form dated
December 18, 2007 and revised on February 25, 2008, available at www.sedar.com. Although Peak
Gold has attempted to identify important factors that would cause actual
results to differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be as
anticipated, estimated, or intended. There can be no assurance that such
statements will prove to be accurate. As actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements that are
incorporated by reference herein, except in accordance with applicable
securities laws.
For further information, please contact:
M�lanie Hennessey
Vice President, Investor Relations
Peak Gold Ltd.
3110-666 Burrard Street
Vancouver, British Columbia, V6C 2X8
Telephone: (604) 696-4100
Toll-free: (888)220-2760
Fax: (604) 696-4110
Email: info@peakgold.com
Website: www.peakgold.com
Vanguard Shareholder Solutions
1205-1095 West Pender Street
Vancouver, British Columbia, V6E 2M6
Telephone: (604) 608-0824
Toll Free: (866) 398-1088
Email: ir@vanguardsolutions.ca