Central Sun Mining Inc. ("Central Sun" or the "Company") (TSX:
CSM)(TSX: CSM.WT)(NYSE-A: SMC) reports its financial results for
the nine months ended September 30, 2008 (currency figures in U.S.
dollars). The consolidated financial statements along with
management's discussion and analysis are available for viewing on
the Central Sun website at www.centralsun.ca. The documents have
been filed with SEDAR (www.sedar.com) and should be available on
SEDAR no later than 24 hours from dissemination of this release.
Note: A conference call for analysts and investors is scheduled
for Monday, November 17, 2008 at 2:00 p.m. (EST).
Financial Highlights
The following are highlights of financial results for the third
quarter of 2008 ("Q3 2008") compared to results for the third
quarter of 2007 ("Q3 2007"). The operating results for Q3 2008
reflect only the Limon Mine compared to the two operating mines
(Bellavista and Limon mines) in Q3 2007. All expenditures incurred
prior to April 30, 2008 on the Orosi Mill Project development costs
have been charged to income as these were prior to the receipt of a
positive feasibility study.
Q3 2008 Highlights
- Gold production was 10,409 ounces at a cash cost of $610 per
ounce in Q3 2008 compared to 13,295 ounces at a cash cost of to
$569 per ounce in Q3 2007
- Gold sales of 11,829 ounces at $863 per ounce in Q3 2008
compared to 13,268 ounces at $684 per ounce in Q3 2007
- Income from mining operations increased to $1.7 million in Q3
2008 compared to a loss of $0.6 million in Q3 2007
- Revenue increased 12% to $10.2 million in Q3 2008 compared to
revenue of $9.1 million in Q3 2007
- Net income was $0.4 million (or $nil income per share) in Q3
2008 compared to a loss of $60.2 million (or $1.75 loss per share)
in Q3 2007
- Cash used in operations totalled $0.7 million in Q3 2008
compared to $4.5 million used in Q3 2007
The following are highlights of financial results for the nine
months ended September 30 2008 ("Q3 2008 YTD") compared to results
for the nine months ended September 30 2007 ("Q3 2007 YTD").
Similarly, the operating results for Q3 2008 YTD reflect only the
Limon Mine compared to three operating mines in Q1 of 2007 and two
operating mines in Q2 and Q3 2007. Also, all expenditures, other
than the cost of physical assets, incurred prior to April 30, 2008
on the Orosi Mill Project have been charged to income as these were
prior to the receipt of a positive feasibility study.
Q3 2008 YTD Highlights
- Gold production was 29,555 ounces at a cash cost of $563 per
ounce in Q3 2008 YTD compared to 65,436 ounces at a cash cost of to
$484 per ounce in Q3 2007 YTD
- Gold sales of 33,704 ounces at $887 per ounce in Q3 2008 YTD
compared to 65,892 ounces at $663 per ounce in Q3 2007 YTD
- Income from mining operations increased 350% to $7.2 million
in Q3 2008 YTD compared to $1.6 million in Q2 2007 YTD
- Revenue decreased 32% to $29.9 million in Q3 2008 YTD compared
to revenue of $43.7 million in Q3 2007 YTD
- Net loss in Q3 2008 YTD was $10.6 million (or $0.18 loss per
share) compared to a loss of $58.2 million ($1.69 loss per share in
Q3 2007 YTD)
- Cash used in operations totalled $11.9 million in Q3 2008 YTD
compared to $0.6 million used in Q3 2007 YTD
Cash on hand totalled $2.9 million as at September 30, 2008
compared to $16.8 million as at December 31, 2007.
Consolidated Statements of Operations (Unaudited)
(US Dollars and shares in thousands, except per share amounts)
Three months ended Nine months ended
September 30 September 30
--------------------- ----------------------
2008 2007 2008 2007
Sales $ 10,207 $ 9,072 $ 29,899 $ 43,682
---------- --------- ---------- ----------
Cost of sales 7,752 8,908 20,441 39,633
Royalties and production taxes 561 405 1,724 1,890
Depreciation and depletion 49 10 82 30
Accretion expense 150 364 448 497
---------- --------- ---------- ----------
8,512 9,687 22,695 42,050
---------- --------- ---------- ----------
Income (loss) from mining
operations before the
undernoted items: 1,695 (615) 7,204 1,632
---------- --------- ---------- ----------
Expenses and other income:
General and administrative 1,010 1,458 3,821 4,037
Bellavista Mine write-down - 53,797 - 53,797
Orosi Mine - Mill Project 453 377 7,242 618
Care and maintenance 1,497 2,287 3,829 3,052
Stock based compensation 615 270 2,826 933
Exploration 1,247 530 3,640 1,483
Net insurance recovery (3,191) - (3,191) -
Other (income) expense (312) 858 (384) (6,172)
---------- --------- ---------- ----------
1,319 59,577 17,783 57,748
---------- --------- ---------- ----------
Income (loss) from continuing
operations, before taxes 376 (60,192) (10,579) (56,116)
Income tax expense - - - (1,865)
---------- --------- ---------- ----------
Income (loss) from continuing
operations, after taxes 376 (60,192) (10,579) (57,981)
Loss from discontinued
operations, net of taxes - (46) - (170)
---------- --------- ---------- ----------
Net income (loss) for the
period $ 376 $(60,238) $(10,579) $(58,151)
---------- --------- ---------- ----------
---------- --------- ---------- ----------
Loss per share from
continuing operations
- basic and diluted $ - $ (1.75) $ (0.18) $ (1.69)
Loss per share from
discontinued operations,
net of tax - basic and
diluted - - - -
---------- --------- ---------- ----------
Loss per share - basic and
diluted $ - $ (1.75) $ (0.18) $ (1.69)
---------- --------- ---------- ----------
---------- --------- ---------- ----------
Weighted average number of
shares outstanding 59,910 34,475 59,554 34,446
Limon Mine
For the three month period ended September 30, 2008, the Limon
Mine has increased gold ounces sold by 54% (Q3 2008 - 11,829; Q3
2007 - 7,678) and increased gold ounces produced by 30% (Q3 2008 -
10,409; Q3 2007 - 7,992). Similarly, for the nine month period
ended September 30, 2008, the Limon Mine has increased gold ounces
sold by 24% (Q3 2008 YTD - 33,704; Q3 2007 YTD - 27,149) and
increased gold ounces produced by 6% (Q3 2008 YTD - 29,555; Q3 2007
YTD -27,928).
Limon Mine cash operating cost for the first nine months of 2008
were $563 per ounces compared to $511 in the same comparable period
in 2007.
Projected gold sales for fiscal 2008 are now expected to be in
the range of 43,000 to 44,000 ounces. As a result of ongoing
increases in production input costs, Central Sun estimates a
revised full year cash operating cost of approximately $560 - $590
per ounce. Many production inputs, such as fuel, hydro and
consumables have been increasing steadily over the past few years.
With the recent decreases in commodity prices, the Company is
beginning to see decline in the cost of fuel, oil, consumables and
other products.
Orosi Mill Project
On September 10, 2008, the Company announced that it had entered
into a non-binding term sheet with a banking institution with
respect to a $22.5 million debt financing to complete the Orosi
Project. However, as announced on October 16, 2008, due to the
current global financial situation, the banking institution was
unable to proceed with the debt financing. Consequently, the
Company has temporarily suspended the Orosi Project and implemented
various cost cutting strategies in light of this announcement. The
Company is in active discussions with various other financial
institutions with respect to debt or other financing for the Orosi
Project including ongoing discussions with the current bridge loan
lenders.
Conference call
Central Sun has scheduled a conference call for analysts and
investors on Monday, November 17, 2008 at 2:00 p.m. (EST) to
discuss its third quarter 2008 results and provide an update on its
exploration and operations activities.
Messrs. Peter Tagliamonte, President and Chief Executive
Officer; Bill Pearson, Executive Vice President, Exploration;
Graham Speirs, Chief Operating Officer and Denis Arsenault, Chief
Financial Officer will be available to answer questions during the
call.
To participate in the conference call, please dial 416-695-9753
or 1-877-461-2814 about five minutes prior to the start of the
call.
A live audio webcast of the conference call will be available at
www.centralsun.ca.
An archived recording of the call will be available at
416-695-5800 or 1-800-408-3053 (Passcode 3275221#) until November
24, 2008 11:59 p.m. (EST) An archived recording of the webcast will
also be available on the Company's website.
About Central Sun Mining Inc.
The Company is a growing gold producer with mining and
exploration activities focused in Nicaragua. The Company operates
the Limon Mine in Nicaragua and is converting the Orosi Mine in
Nicaragua to conventional milling to increase the annual gold
output. It also holds an interest in the Mestiza-La India, a gold
property which is located 70 kilometres east of the Limon Mine. The
Company is focused on efficient and productive mining practices to
establish high quality and cost effective operations. Central Sun
Mining is committed to growth by optimizing current operations,
expanding mineral reserves and resources at existing mines,
exploring its extensive land holdings and seeking strategic mergers
or acquisitions in the Americas.
Cautionary Note Regarding Forward-Looking Statements: This press
release contains "forward-looking statements", within the meaning
of the United States Private Securities Litigation Reform Act of
1995 and applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to,
statements with respect to the completion of the Company's new
strategic plan, the ability to secure additional funding for the
Orosi Mine Project, the future financial or operating performance
of the Company, its subsidiaries and its projects, the future price
of gold, estimated recoveries under the milling plan, 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 for the mill
project, operating and exploration expenditures, costs and timing
of the development of new deposits, outcome, costs and timing of
future exploration, requirements for additional capital, government
regulation of mining operations, environmental risks, reclamation
expenses, title disputes or claims, limitations of insurance
coverage and the timing and possible outcome of pending litigation
and regulatory matters. 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 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 the
Company to be materially different from those expressed or implied
by such forward-looking statements, including but not limited to:
general business, economic, competitive, political and social
uncertainties; the actual results of current exploration
activities; actual results of reclamation activities; conclusions
of economic evaluations; changes in project parameters as plans
continue to be refined; future prices of gold; possible variations
of ore grade or recovery rates; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes and
other risks of the mining industry; political instability,
insurrection or war; delays in obtaining governmental approvals or
required financing or in the completion of development or
construction activities, as well as those factors discussed in the
section entitled "General Development of the Business - Risks of
the Business" in the Company's annual information form for the year
ended December 31, 2007 on file with the securities regulatory
authorities in Canada and the Company's Form 40-F on file with the
Securities and Exchange Commission in Washington, D.C. 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 that
are incorporated by reference herein, except in accordance with
applicable securities law.
Cautionary Note to U.S. Investors Concerning Estimates of
Measured, Indicated or Inferred Resources
The information presented uses the terms "measured", "indicated"
and "inferred" mineral resources. United States investors are
advised that while such terms are recognized and required by
Canadian regulations, the United States Securities and Exchange
Commission does not recognize these terms. "Inferred mineral
resources" have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United States investors are also cautioned not to
assume that all or any part of an inferred mineral resource exists,
or is economically or legally mineable.
Contacts: Central Sun Mining Inc. Peter W.Tagliamonte President
and Chief Executive Officer (416) 860-0919 Central Sun Mining Inc.
Denis C. Arsenault Chief Financial Officer (416) 860-0919 (416)
367-0182 (FAX) Email: ir@centralsun.ca Website:
www.centralsun.ca
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