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Operations

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Mineral Ridge

Current Operations
SECOND QUARTER 2017

Production at Mineral Ridge in Q2 of 2017 totalled 4,660 ounces of gold and 2,505 ounces of silver. Total gold production for H1 now stands at 10,401 ounces.

The Company's annual production forecast for 2017 is currently expected to be at the low end of the previous production guidance provided of 20,000 to 25,000 ounces of gold (as reported in the Company's May 30, 2017 news release). Total cash costs are expected to be $1,050 - $1,100 per ounce of gold sold. This increase in costs is due to the projected lower production level in 2017 while fixed costs remain relatively constant. The Custer pit and other areas for which permitting is outstanding, are not included in this production estimate and will be evaluated for economics of associated mining timelines when permits are received.

Based on the Company's updated mine plan, the Company currently anticipates mining of gold at Mineral Ridge through October 2017, after which there will be residual but diminishing gold recoveries from the leach pads. One of the initiatives undertaken by the Company to address the going concern issue is the engagement of three firms to complete a NI 43-101 compliant Bankable Feasibility Study, ("BFS") based on an internal economic assessment and the Mine Technical Services resource confirmation. The BFS, when complete will provide the mill facility design and related economics for processing the leach pad material. It is anticipated that the BFS will also provide the basis for the Company to raise the capital required for the project. It is estimated that the BFS will be complete by mid September 2017.

A summary of the Q2 2017 operating and financial results is presented in the Company's August 8, 2017 and August 29, 2017 news releases with complete details provided in the Q2 2017 Financial Statements and Management Discussion & Analysis.

HIGHLIGHTS FOR THE SECOND QUARTER ("Q2") ENDED JUNE 30, 2017 AND SUBSEQUENT EVENTS
  • 4,660 ounces of gold were produced at the Mineral Ridge mine during Q2 of 2017, compared to 10,089 ounces during Q2 of 2016.
  • Revenue of $6.3 million, compared to $12.4 million during Q2 of 2016.
  • Total cash cost per ounce of gold sold(1) of $968 compared to $879 during Q2 of 2016.
  • Mine operating earnings of $1.1 million compared to $3.1 million during Q2 of 2016.
  • Net loss of $0.3 million ($0.00 basic and diluted per share), compared to net earnings of $1.2 million ($0.01(2) basic and diluted per share) during Q2 of 2016.
  • Adjusted net earnings(1) of $0.5 million ($0.00 basic and diluted per share) compared to $2.2 million ($0.01 basic and diluted per share) for Q2 of 2016.
  • Adjusted EBITDA(1) of $1.0 million ($0.00 basic and diluted per share) compared to $2.8 million ($0.02 basic and diluted per share) during Q2 of 2016.
  • On July 12, the Company reported a measured and indicated mineral resource estimation of 121,700 ounces of gold contained on the heap leach pads at the Mineral Ridge Mine.
  • August, the Company announced the initiation of a bankable feasibility study with the objective to support the proposed financing and construction of a mill facility at Mineral Ridge to process the heap leach material and potentially mineralized material mined in the future.

HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2017
  • 10,401 ounces of gold were produced at the Mineral Ridge mine, compared to 18,597 ounces produced during the six months ended June 30, 2016.
  • Revenue of $16.2 million, compared to $21.9 million during the six months ended June 30, 2016.
  • Total cash cost per ounce of gold sold(1) of $911, compared to $844 during the six months ended June 30, 2016.
  • Mine operating earnings of $3.5 million, compared to $4.9 million during the six months ended June 30, 2016.
  • Net loss of $0.2 million ($0.00 basic and diluted per share), compared to net earnings of $2.3 million ($0.01 basic and diluted per share) during the six months ended June 30, 2016.
  • Adjusted net earnings(1) of $1.9 million ($0.01 basic and diluted per share), compared to $3.3 million ($0.02 basic and diluted per share) during the six months ended June 30, 2016.
  • Adjusted EBITDA(1) of $3.0 million ($0.02 basic and diluted per share), compared to $4.4 million ($0.02 basic and diluted per share) million during the six months ended June 30, 2016.
(1)This is a non-IFRS measure; refer to Non-IFRS Measures section of this press release and the Company's Management Discussion & Analysis for Q2 of 2016 for a complete definition and reconciliation to the IFRS results reported in the Company's financial statements for Q2 of 2016.
(2) Please see Equity section of the MD&A.




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