Gross Revenue of $48.6M with Cash Cost of $613/Oz
VANCOUVER, Sept. 29, 2014 /CNW/ - Monument Mining
Limited (TSX-V: MMY and FSE: D7Q1) "Monument" or the "Company"
today announced its annual financial results for the year ended
June 30, 2014. All amounts are in
thousands of United States dollars
unless otherwise indicated (refer to www.sedar.com for full annual
financial results).
President and CEO Robert Baldock
commented on fiscal 2014 annual production and financial results:
"While the gold price was low during the year, the Company
continued its gold production with lower grade materials, before
processing sulphide ore which is pending test results from its
R&D programs. The Company will continue to use its surplus cash
from operations for funding upside growth.
Our focus for the year ahead is the strategic development of our
project portfolio and to increase our production profile. During
fiscal 2014 the Company continued to grow its balance sheet with
value added projects being acquired, which is aimed to take
advantage of the downturn in our cyclical industry. The objective
of the diversification strategy by spreading country risk, metal
risk and single cash flow source risk is to become a mid-tier gold
and base metals producer and build its inventory of metals to
enable the ability to deliver sustainable dividends in due
course."
Fiscal 2014 Highlights:
- Profit margin generated from gold production of $16.3 million
- Gold production of 35,983 ounces ("oz") produced at an
average cash cost of $613/oz;
- Gross revenue of $48.6 million, generated from gold sales
of 37,670 oz;
- Net loss attributable to shareholders of $2.6 million or $0.01 loss per share ("EPS");
- Oxide Magnetite purchase and profit sharing agreement completed
at the Mengapur project;
- Continued overhaul of Malaco plant and construction of iron
beneficiation plant at Mengapur aimed at producing saleable
iron products from oxide iron top soils;
- Acquisition of the Murchison Project in Australia and commencement of a targeted
exploration programme; and
- Ongoing exploration at Buffalo Reef, Panau, Madang Ridge, Felda
and Famehub for additional feed for the Selinsing mill.
Fourth Quarter and Fiscal 2014 Production and Financial
Highlights
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|
|
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Three months ended
June 30
|
Year ended June
30
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2014
|
2013
|
2014
|
2013
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Production
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|
|
|
|
Gold
production(1) (ounces)
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7,754
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12,919
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35,983
|
52,982
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Gold sold(2)
(ounces)
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9,400
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14,047
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37,670
|
50,452
|
|
|
|
|
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Financial
|
$'000
|
$'000
|
$'000
|
$'000
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Revenue
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12,147
|
30,506
|
48,583
|
91,276
|
Net income before other
items attributable to shareholders
|
2,092
|
14,937
|
6,881
|
48,292
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Net (loss)/income
attributable to shareholders
|
(4,911)
|
15,060
|
(2,631)
|
32,745
|
Cash flow from
operations
|
4,874
|
27,369
|
16,503
|
54,754
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Working capital
excluding derivative liabilities
|
37,048
|
61,415
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37,048
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61,415
|
|
|
|
|
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EPS before other items
– basic
|
$0.01
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$0.05
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$0.02
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$0.21
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EPS – basic
|
($0.02)
|
$0.05
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($0.01)
|
$0.14
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|
|
|
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Other
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$/oz
|
$/oz
|
$/oz
|
$/oz
|
Average realized gold
price per ounce sold
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1,292
|
1,419
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1,290
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1,576
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Cash cost per
ounce⁽3⁾
|
|
|
|
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Mining
|
262
|
125
|
219
|
112
|
Processing
|
357
|
224
|
326
|
207
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Royalties
|
65
|
49
|
66
|
78
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Operations, net of silver
recovery
|
3
|
1
|
2
|
3
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Total cash cost per
ounce
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$687
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$399
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$613
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$400
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(1)
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Defined as good
delivery gold bullion according to London Bullion Market
Association ("LBMA"), net of gold doŕe in transit and refinery
adjustment
|
(2)
|
Gold sold in fourth
quarter 2013 and fiscal 2013 exclude 7,453oz that were released
from security accounts.
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(3)
|
Total cash cost
includes production costs such as mining, processing, tailing
facility maintenance and camp administration, royalties, and
operating costs such as storage, temporary mine production closure,
community development cost and property fees, net of by-product
credits. Cash cost excludes amortization, depletion, accretion
expenses, capital costs, exploration costs and corporate
administration costs.
|
Production Results
Gold production for fiscal 2014 was 35,983 oz of gold, a
decrease of 32% compared to 52,982 oz in 2013. Gold production for
fourth quarter 2014 was 7,754 oz of gold, a decrease of 40%
compared to 12,919 oz fourth quarter 2013. These decreases are a
result of mining activities occurring in a different ore zone,
contributing lower feed grade as expected in the mine plan. The
lower feed grade along with a higher proportion of low grade
sulphides from the deeper Selinsing ore zones has contributed to a
lower processing recovery rate.
For fiscal 2014 Monument sold 37,670 oz of gold at an average
realized price of $1,290/oz (Fiscal
2013: 50,452 oz of gold, excluding 7,453 oz released from security
accounts, at an average realized price of $1,576/oz). During fourth quarter 2014 Monument
sold 9,400 oz of gold (Q4 2013: 14,047 oz, excluding 7,453 oz
released from security accounts) at an average realized price of
$1,292/oz (Q4 2013: $1,419/oz).
Financial Results and Discussion
Revenue of $48.58 million for
fiscal 2014 was 47% lower than $91.28
million for fiscal 2013. The decrease was primarily due to
decreased gold sales (37,670 oz versus 57,905 oz), and by a lower
average realized gold price year over year ($1,290/oz versus $1,576/oz). Revenue for fourth quarter 2014 was
$12.15 million, 60% lower compared to
$30.51 million in fourth quarter
2013.
Cash costs per ounce sold for fiscal 2014 and the fourth quarter
were $613 and $687 respectively, compared to $400 and $399 for
the corresponding periods last year. The increased cash cost per
ounce is mainly due to a combination of lower head grades and
rising costs on a per ounce basis. Processing costs per ounce were
also higher due to the anticipated lower feed grades and
recoveries.
Income before other items was $6.88
million for fiscal 2014 compared to $48.29 million in fiscal 2013. The decrease in
income before other items is attributable to the lower gross margin
generated from the Selinsing gold mine.
Net loss attributable to common shareholders for fiscal 2014 was
$2.63 million ($0.01 per share - basic) compared to earnings of
$32.75 million ($0.14 per share - basic) for fiscal 2013. The
decrease in fiscal 2014 was also mainly caused by lower income from
operations generated from the Selinsing gold mine.
Cash provided from operating activities was $16.50 million in fiscal 2014 compared to
$54.75 million for the previous year.
The difference was mainly due to lower production in 2014 and the
lower gold price. Working capital as at June 30, 2014 was $37.05
million (2013: $61.42
million).
Acquisitions
Murchison Gold Project
As outlined in previous periods, to take advantage of current
market conditions, the Company has continued to monitor
opportunities for growth in the form of continued acquisition of
mineral resources in other countries (regions) such as Australia and Canada. At closing in February 2014, Monument paid consideration of
AUD$15 million cash in exchange for the Murchison Gold Project,
including a number of mining and exploration tenements and lease
applications covering approximately 98 square kilometers of land.
The tenement package holds a Joint Ore Reporting Committee ("JORC")
compliant historical resource, a fully operational gold processing
plant, a newly developed camp site and all necessary
infrastructure. Without distraction from its present
operational program in Malaysia,
Monument has moved quickly with an exploration program under a
scoping study aimed to place this project into production.
Oxide Magnetite Purchase and Profit-Sharing Agreement
On February 6, 2014, pursuant to
the terms of the Oxide Magnetite Purchase and Profit-Sharing
Agreement with Malaco Mining Sdn. Bhd. ("Malaco"), the Company
issued 25 million fully paid Monument common shares at a deemed
price of CAD$0.50 per share for
certain overburden in top soils of approximately 1.2 million tonnes
that were previously stockpiled at Area C of the Mengapur Project
in conjunction with a profit sharing arrangement for production of
magnetite and other saleable iron species from top soils at the
same area.
This acquisition provides Monument with the potential to turn
overburden mining costs into a profitable operation and add
potentially significant value to the Mengapur Project for the
benefit of all shareholders and investors. The removal of
stockpiled material and overburden represents a large portion of
upfront mine development and operation costs on the Mengapur
Project, as the overburden would need to be removed before hard
rock open pit material could be accessed for mining.
Research and Development
Treatment of Selinsing and Buffalo Reef Sulphide Ore
As mining enters the oxide/sulphide transition zone, the
Selinsing gold processing plant is no longer treating high grade
high recovery oxide ores, but lower grade leachable sulphide ores.
Refractory sulphide mineralization will require different treatment
to sustain gold production. The current mining and processing of
Selinsing pit (sulphide) ores had a significant impact on the
plant's performance that can lead to, if not appropriately handled
through the plant, lower overall gold recovery. The Company has
engaged highly experienced metallurgists during fiscal 2014 and is
carrying out parallel studies for several alternatives including a
flotation approach to produce gold or gold concentrate, and
bio-heap leaching approach without flotation.
Oxide Iron and Copper in Area C
The Mengapur Project continues to represent the most significant
opportunity for a long term mining asset owned by the Company with
downstream commodity products. The preliminary economic assessment
study ("PEA" study) was carried out during the year and is being
continued subsequent to fiscal 2014. The PEA study will define
Copper ("Cu"), Sulfur ("S"), Gold ("Au"), Silver ("Ag") oxide and
sulphide resource under NI43-101 guidance, bringing the historical
resources to current. A part of the R&D program conducted
during the year was to support this study for development of a
number of marketable downstream products. An on-site R&D
laboratory has been built, fully equipped and placed in use during
the year ended June 30, 2014.
During the fourth quarter, construction of an oxide iron
beneficiation plant was initiated based on the existing processing
plant bought from the Vendor as a part of Mengapur Acquisition, on
which the refurbishment was partially complete in fiscal 2013. The
oxide iron beneficiation plant is designed to separate iron from
copper and other metals in the top soil and fresh rock at the
Mengapur site. The test work will continue during the construction
period to optimize the design and performance of the Plant.
Once complete, the trial run will be expected to start from
1,000tpd, upon successful commissioning, production will begin and
upgraded to 3,000tpd subsequently.
Exploration Progress
Exploration at Selinsing, Buffalo Reef and FELDA lands during
fiscal 2014 were focused on the collation and interpretation of all
geological, geochemical and geophysical data, mapping geological
structures, updating the resource estimate and block model, and
drilling additional oxide targets. The total fiscal 2014
exploration drill program at Selinsing, Buffalo Reef, and FELDA
properties consisted of 119 diamond drill holes totaling 10,039
meters ("m"). An additional 16 metallurgy drill holes totalling
1,254m were also completed at Buffalo Reef during the fiscal year
and 395 drill hole assays from Selinsing, Buffalo Reef, and FELDA
were finalized and received from the SGS Malaysia commercial
lab.
Exploration activities at Mengapur focused on the Company's
previously stated Oxide Magnetite Development Plan, with further
exploration activities being conducted during the year in support
of the sulfide plan. The fiscal 2014 drilling programs included
4,490m of drilling in 50 drill holes with analyses in progress.
Thirty-six of these drill holes focused on the Oxide Magnetite
Development plan. Data collection and analysis continued for
updating the resource estimate and NI 43-101 Technical
Report. During fiscal 2014, 172 drill hole assays from the
Star Destiny and Mengapur (CASB) properties were finalized and
received from the onsite SGS-managed lab.
Exploration activities at Murchison during fiscal 2014 included
a drill programme aimed at confirming historical resources,
infilling current drill spacing for better confirmation of gold
resources, as well as testing potential extensions to the deposit.
This work will provide further confidence of the historical
resources for future planning purposes and will also validate the
previous drilling in order to upgrade the historical resource
estimate to a NI43-101 compliant Mineral Resource. During fiscal
2014, the Company incurred $1.27
million of expenditures on resource confirmation and
exploration activities.
About Monument
Monument Mining Limited (TSX-V:MMY, FSE:D7Q1) is an established
Canadian gold producer that owns and operates the Selinsing Gold
Mine in Malaysia. Its experienced
management team is committed to growth and is advancing several
exploration and development projects including the Mengapur
Polymetallic Project, in Pahang State of Malaysia, and the
Murchison Projects in Burnakura and Gabanintha, Western Australia. The Company employs over
300 people in both regions and is committed to the highest
standards of environmental management, social responsibility, and
health and safety for its employees and neighboring
communities.
Robert F. Baldock,
President and CEO
Monument Mining Limited
Suite 1580 -1100 Melville Street
Vancouver, BC V6E 4A6
"Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release."
Forward-Looking Statement
This news release includes statements containing
forward-looking information about Monument, its business and future
plans ("forward-looking statements"). Forward-looking statements
are statements that involve expectations, plans, objectives or
future events that are not historical facts and include the
Company's plans with respect to its mineral projects and the timing
and results of proposed programs and events referred to in this
news release. Generally, forward-looking information 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 be taken", "occur" or "be
achieved". The forward-looking statements in this news release are
subject to various risks, uncertainties and other factors that
could cause actual results or achievements to differ materially
from those expressed or implied by the forward-looking statements.
These risks and certain other factors include, without limitation:
risks related to general business, economic, competitive,
geopolitical and social uncertainties; uncertainties regarding the
results of current exploration activities; uncertainties in the
progress and timing of development activities; foreign operations
risks; other risks inherent in the mining industry and other risks
described in the management discussion and analysis of the Company
and the technical reports on the Company's projects, all of which
are available under the profile of the Company on SEDAR at
www.sedar.com. Material factors and assumptions used to develop
forward-looking statements in this news release include:
expectations regarding the estimated cash cost per ounce of gold
production and the estimated cash flows which may be generated from
the operations, general economic factors and other factors that may
be beyond the control of Monument; assumptions and expectations
regarding the results of exploration on the Company's projects;
assumptions regarding the future price of gold of other minerals;
the timing and amount of estimated future production; the expected
timing and results of development and exploration activities; costs
of future activities; capital and operating expenditures; success
of exploration activities; mining or processing issues; exchange
rates; and all of the factors and assumptions described in the
management discussion and analysis of the Company and the technical
reports on the Company's projects, all of which are available under
the profile of the Company on SEDAR at www.sedar.com. Although the
Company has attempted to identify important factors that could
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. The Company
does not undertake to update any forward-looking statements, except
in accordance with applicable securities laws.
SOURCE Monument Mining Limited