TSX: SGR || OTCQX: SGRCF
BISSETT, MB, May 13 /PRNewswire-FirstCall/ - George Pirie, President and CEO of San Gold Corporation, (TSX: SGR) (OTCQX: SGRCF) released the company's first quarter 2011 financial statements today. They reflect a large improvement in performance at the Rice Lake Project in Bissett.
Mr. Pirie said "that San Gold continues to be one of the most exciting gold mining and exploration companies in Canada with huge gold potential. We expect production to increase and cash costs per ounce of gold to decrease substantially throughout the balance of 2011. In addition, we continue with a very aggressive exploration drilling program, on the large prospective land package surrounding the operating mines. This drilling program demonstrates the size and strength of the gold mineralization within the newly discovered Shoreline Basalt and is allowing us to develop a new mine complex along this mafic unit."
The Company recognized revenue of $19.8 MM during the quarter and experienced an operating income from operations of $3.2 MM. The comprehensive loss from operations for the quarter was $5.3 MM. Comparable figures for the first quarter of 2010 are revenue of $14.0 MM, operating loss of $2.3 MM and a comprehensive loss of $2.7 MM.
The quarter generated positive cash flow from operations of $4.4 MM. Cash cost was $862 per ounce and $146 per ton. This represents a 60% reduction in cash cost per ton in comparison to the same quarter last year and a 35% reduction in the cash cost per ounce. This is consistent with management's objective of reducing costs this year as we transition to a steady state producer. (Please see discussion on Non-IFRS financial measures for a detailed calculation and reconciliation of these figures to our IFRS financial statements).
San Gold completed 87,000 metres of diamond during the first quarter of 2011. Of this, about 44,000 metres was drilled underground with the balance of 43,000 metres drilled from surface. These totals are slightly ahead of San Gold's 2011 plan.
San Gold invested $10.7 MM for the purchase of equipment during the quarter and capitalized development on mineral properties of $12.9 MM. This Capital investment positions San Gold well early in 2011 to achieve the budgeted increases in mine and mill production. San Gold maintains its expectation to produce 80,000 ounces during 2011 and approach cash costs of $650 per ounce by year end.
As at March 31st, 2011, the Company had a working capital surplus of $59.0 MM compared to a working capital surplus of $33.2 MM at March 31st, 2010. During the quarter, the Company completed a Flow-Through financing designed to fund exploration expenditure through 2011 and into 2012. Liquidity remains excellent and the Company continues to have sufficient cash reserves to meet currently planned exploration and development activities.
The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied in the forward-looking information.
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SOURCE San Gold Corporation
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