|
TORONTO, ONTARIO--(Marketwire - Aug. 15, 2011) -
(All currency figures are in Canadian dollars unless otherwise noted)
High River Gold Mines Ltd. ("High River" or the "Company") (News - Market indicators) today reported its financial results and operational highlights for the three month period ended June 30, 2011. The Unaudited Interim Consolidated Financial Statements and related Notes along with the Management's Discussion and Analysis have been filed with SEDAR (www.sedar.com) and can be viewed on the Company's website at www.hrg.ca.
HIGHLIGHTS FOR THE SECOND QUARTER 2011
Financial Results
- Net gold revenue of $136.2 million, an increase of 11% from $122.4 million in Q1 2011, an increase of 20% from $113.8 million in Q2 2010.
- Net income of $41.4 million ($0.05 per share) compared to a net income of $37.3 million ($0.04 per share) in Q1 2011 and a net income of $37.5 million ($0.05 per share) in Q2 2010.
- Cash flow from operations of $42.9 million, down from $53.5 million in Q1 2011, and down from $48.8 million in Q2 2010.
- Cash and cash equivalents increased to $207.2 million from $204.1 million at the end of Q1 2011, and up from $92.7 million at the end of Q2 2010.
- Working capital increased to $307.2 million from $287.0 million at the end of Q1 2011 and from $150.9 million at the end of Q2 2010.
- Current and long term debt increased to $24.0 million from $23.5 million at the end of Q1 2011 and decreased from $31.5 million at the end of Q2 2010.
- In June 2011, High River agreed to settlement terms with its former contractor in respect of a previously disclosed action brought against Somita. As previously disclosed, a claim regarding services which were delivered to Somita was filed against Somita before an arbitrator in South Africa in 2009. The aggregate amount of the claim was US$3.7 million and High River filed a statement of defense and counterclaim for damages. The settlement agreement provides for full and final settlement of the contractor's claim against Somita for a settlement amount of US$1.35 million.
Operations
- Total gold production increased 5% to 96,093 (Q1 2011 – 91,756) ounces (100%). Total cash cost per ounce increased 25% to US$704 (Q1 2011 – US$560 per ounce).
- The Zun-Holba and Irokinda Gold Mines produced 33,594 ounces (Q1 2011 – 31,855) (100%) at a total cash cost of US$778 per ounce.
- The Taparko-Bouroum Gold Mine produced 33,753 ounces (Q1 2011 – 36,456) (100%) at a total cash cost of US$556 per ounce.
- Gold production at Berezitovy was 28,746 ounces (Q1 2011 – 23,445 ounces) (100%) at a total cash cost of US$792 per ounce.
- High River's subsidiary in Burkina Faso, Bissa Gold S.A. ("Bissa Gold"), was granted the mining license for the Bissa Gold Project by the governmental authorities of Burkina Faso for a term of 20 years with a possibility of renewal. Bissa Gold has engaged the EPCM (Engineering, Procurement, and Construction Management) contractor and the ball mills supplier for the Project.
Subsequent Events
- In July 2011, Bissa Gold engaged the mining fleet supplier and power plant constructor for the Bissa Gold Project.
DISCUSSION OF FINANCIAL RESULTS
Selected Financial Results
The Company reported a net income of $41.4 million ($0.05 per share) in Q2 2011 compared to a net income of $37.3 million ($0.04 per share) during Q1 2011 and net income of $37.5 million ($0.05 per share) in Q2 2010.
| In thousands of Canadian dollars |
Three months ended |
Six months ended |
| (except per share amounts) |
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
| Gold revenue |
$ |
136,204 |
$ |
113,808 |
$ |
258,566 |
$ |
211,464 |
| Net income (loss) |
|
41,375 |
|
37,456 |
|
78,674 |
|
67,877 |
| Net income (loss) per share (basic) |
|
0.05 |
|
0.05 |
|
0.09 |
|
0.08 |
| Cash provided by (used in) operating activities |
|
42,893 |
|
48,800 |
|
96,410 |
|
80,299 |
| Weighted average number of shares outstanding (basic) |
|
840,218,962 |
|
799,327,755 |
|
840,218,962 |
|
799,327,755 |
About High River
High River is an unhedged gold company with interests in producing mines, development and advanced exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has a 90% interest in a development project, the Bissa gold project in Burkina Faso, and a 50% interest in an advanced exploration project with NI 43-101 compliant resource estimates, the Prognoz silver project in Russia.
FORWARD LOOKING INFORMATION
This release and subsequent oral statements made by and on behalf of the Company may contain forward-looking statements. Wherever possible, words such as "intends", "expects", "scheduled", "estimates", "anticipates", "believes", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, High River cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause High River's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although High River has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended, including those risk factors discussed in the Company's 2010 Annual Information Form. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and High River assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.
| High River Gold Mines Ltd. |
|
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
|
| As at June 30, 2011 |
|
| (Unaudited, expressed in thousands of Canadian Dollars) |
|
| |
|
|
|
|
| |
|
June 30,
2011 |
December 31,
2010 |
|
| ASSETS |
|
|
|
| Current Assets |
|
|
|
| |
Cash & cash equivalents |
207,264 |
153,964 |
|
| |
Restricted cash |
2,179 |
1,285 |
|
| |
Inventories |
124,104 |
97,663 |
|
| |
Trade and other receivables |
22,003 |
13,639 |
|
| |
Other assets |
18,862 |
15,589 |
|
| |
|
374,412 |
282,140 |
|
| Non-Current Assets |
|
|
|
| |
Exploration and evaluation assets |
124,202 |
119,847 |
|
| |
Mine properties |
71,428 |
67,436 |
|
| |
Property, plant & equipment |
183,912 |
190,256 |
|
| |
Available for sale financial assets |
98,116 |
109,633 |
|
| |
Other assets |
28,599 |
7,986 |
|
| |
Deferred tax asset |
5,080 |
1,596 |
|
| |
|
511,337 |
496,753 |
|
| TOTAL ASSETS |
885,749 |
778,893 |
|
| |
|
|
|
|
| LIABILITIES |
|
|
|
| Current Liabilities |
|
|
|
| |
Accounts payable and accrued liabilities |
37,268 |
33,905 |
|
| |
Loans and other borrowings |
12,826 |
22,686 |
|
| |
Finance Leases |
243 |
607 |
|
| |
Income tax payable |
16,873 |
19,787 |
|
| |
|
67,210 |
76,985 |
|
| Non-Current Liabilities |
|
|
|
| |
Other liabilities |
833 |
696 |
|
| |
Derivative financial liabilities |
|
- |
|
| |
Loans and other borrowings |
10,397 |
1,732 |
|
| |
Provisions |
21,147 |
19,067 |
|
| |
Deferred tax liabilities |
37,619 |
23,595 |
|
| |
|
69,995 |
45,090 |
|
| TOTAL LIABILITIES |
137,205 |
122,075 |
|
| |
|
|
|
|
| EQUITY |
|
|
|
| |
Share Capital |
640,157 |
640,157 |
|
| |
Warrants |
|
- |
|
| |
Contributed surplus |
24,538 |
24,538 |
|
| |
Debenture conversion option |
538 |
538 |
|
| |
Other comprehensive income |
4,819 |
3,023 |
|
| |
Retained Earnings/Deficit |
32,906 |
(45,768 |
) |
| |
Equity attributable to equity holders of the Company |
702,959 |
622,488 |
|
| |
Non-controlling interest |
45,585 |
34,330 |
|
| TOTAL EQUITY |
748,544 |
656,818 |
|
| TOTAL LIABILITIES AND EQUITY |
885,749 |
778,893 |
|
| |
|
| |
|
| High River Gold Mines Ltd. |
|
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|
| for the three months ended June 30, 2011 |
|
| (Expressed in thousands of Canadian Dollars) |
|
| |
|
|
|
|
| |
Three months ended |
|
Six months ended |
|
| |
June 30, 2011 |
|
June 30, 2010 |
|
June 30, 2011 |
|
June 30, 2010 |
|
| Revenue |
|
|
|
|
|
|
|
|
| Gold |
136,204 |
|
113,808 |
|
258,567 |
|
211,464 |
|
| Silver |
2,902 |
|
1,388 |
|
4,902 |
|
2,211 |
|
| |
139,106 |
|
115,196 |
|
263,469 |
|
213,675 |
|
| Cost of sales |
(75,851 |
) |
(60,076 |
) |
(130,356 |
) |
(115,098 |
) |
| Gross Profit |
63,255 |
|
55,121 |
|
133,113 |
|
98,578 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Exploration expenses |
4,036 |
|
(1,892 |
) |
- |
|
(3,152 |
) |
| General and administrative expenses |
(3,686 |
) |
(4,077 |
) |
(8,142 |
) |
(7397 |
) |
| Other expenses |
(5,236 |
) |
(4,239 |
) |
(9,044 |
) |
(4,004 |
) |
| Interest income |
1,251 |
|
663 |
|
3,022 |
|
893 |
|
| Finance costs |
(485 |
) |
(2,969 |
) |
(2,491 |
) |
(7,055 |
) |
| Change in fair value of derivative |
|
|
3,171 |
|
|
|
7,000 |
|
| Profit before income taxes |
59,135 |
|
45,777 |
|
116,458 |
|
84,862 |
|
| Income tax expense |
(14,106 |
) |
(5,899 |
) |
(26,529 |
) |
(11,936 |
) |
| Profit for the period |
45,029 |
|
39,878 |
|
89,930 |
|
72,926 |
|
| |
|
|
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
|
|
|
|
| Non-controlling interest |
3,653 |
|
2,422 |
|
11,255 |
|
5,049 |
|
| Equity shareholders of the Company |
41,375 |
|
37,456 |
|
78,674 |
|
67,877 |
|
| Profit for the period |
45,029 |
|
39,878 |
|
89,930 |
|
72,926 |
|
| |
|
|
|
|
|
|
|
|
| Other Comprehensive Income (loss) |
|
|
|
|
|
|
|
|
| Net gains on available for sale financial assets |
(9,846 |
) |
9,353 |
|
(1,923 |
) |
9,206 |
|
| Exchange differences on translation of foreign operations |
(74,582 |
) |
(11,390 |
) |
(57,380 |
) |
(24,252 |
) |
| |
|
|
|
|
|
|
|
|
| Other comprehensive income, net of tax |
(84,428 |
) |
(2,037 |
) |
(59,303 |
) |
(15,046 |
) |
| |
|
|
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
|
|
|
|
| Non-controlling interest |
3,653 |
|
2,422 |
|
11,255 |
|
5,049 |
|
| Equity shareholders of the Company |
(43,052 |
) |
35,419 |
|
19,372 |
|
52,831 |
|
| Comprehensive Income, net of tax |
(39,399 |
) |
37,841 |
|
30,627 |
|
57,880 |
|
| |
|
| |
|
| High River Gold Mines Ltd. |
|
| CONSOLIDATED STATEMENT OF CASH FLOWS |
|
| (Expressed in thousands of Canadian Dollars) |
|
| (Unaudited) |
Six months ended |
|
| OPERATING ACTIVITIES |
June 30 2011 |
|
June 30 2010 |
|
| |
Profit after income taxes |
89,930 |
|
72,926 |
|
| |
Adjustments to profit for non-cash items |
|
|
|
|
| |
|
Depreciation of property, plant and equipment |
28,397 |
|
31,254 |
|
| |
|
Accretion expense |
952 |
|
931 |
|
| |
|
Write-down of exploration |
(175 |
) |
628 |
|
| |
|
Loss/(gain) on disposal of investments |
(432 |
) |
- |
|
| |
|
Non-cash mining costs |
(1,526 |
) |
(11,776 |
) |
| |
|
Fair value adjustment to financial instruments |
- |
|
|
|
| |
|
Share based payment expense |
- |
|
89 |
|
| |
|
Interest on capital lease |
- |
|
30 |
|
| |
|
Gain/loss on disposal of property, plant and equipment |
(601 |
) |
153 |
|
| |
|
Deferred tax expense |
10,420 |
|
1,011 |
|
| |
|
Other non-cash items |
12,679 |
|
(1,450 |
) |
| |
Working Capital Adjustments |
|
|
|
|
| |
|
Change in trade receivable and other assets |
(6,845 |
) |
4,359 |
|
| |
|
Change in inventories |
(26,441 |
) |
(10,001 |
) |
| |
|
Change in other assets |
(5,499 |
) |
(3,473 |
) |
| |
|
Change in accounts payable and accrued liabilities |
2,994 |
|
(7 |
) |
| |
Income Tax Paid |
(7,436 |
) |
(4,375 |
) |
| NET OPERATING CASH FLOWS |
96,416 |
|
80,299 |
|
| |
|
|
|
|
|
|
| INVESTING ACTIVITIES |
|
|
|
|
| |
Investment in exploration and evaluation assets |
(21,546 |
) |
(4,635 |
) |
| |
Expenditure on property, plant and equipment |
(15,937 |
) |
(13,222 |
) |
| |
Allocation of restricted cash |
(895 |
) |
(238 |
) |
| |
Proceeds on sale of property, plant and equipment |
1,273 |
|
542 |
|
| NET INVESTING CASH FLOWS |
(37,104 |
) |
(17,553 |
) |
| |
|
|
|
|
|
|
| FINANCING ACIVITIES |
|
|
|
|
| |
Payments of loans and borrowings |
(10,283 |
) |
(52,674 |
) |
| |
Joint venture repayment of Prognoz contribution |
18,885 |
|
- |
|
| |
Other Financing activities |
(16,726 |
) |
- |
|
| |
Proceeds from exercise of share options |
- |
|
217 |
|
| NET FINANCING CASH FLOWS |
(8,124 |
) |
(52,457 |
) |
| |
|
|
|
|
|
|
| Increase (decrease) in cash and cash equivalents |
51,188 |
|
10,289 |
|
| Net foreign exchange difference |
2,113 |
|
381 |
|
| Cash and cash equivalents, beginning of the period |
153,964 |
|
82,061 |
|
| Cash and cash equivalents, end of the period |
207,264 |
|
92,731 |
|
High River Gold Mines Ltd.
Konstantin Sobolevskiy
CEO
011 7 495 981 0910 ext. 6676
info@hrg.ca
www.hrg.ca
| |
