QMX GOLD CORPORATION (TSX VENTURE:QMX) ("QMX" or the "Company") sold 22,209
ounces of gold at an average price of $1,428 for revenue of $30.62 million in
2013. All figures are reported in Canadian dollars, unless noted otherwise.
2013 Financial Summary:
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Year ending
December 31,
Q4 2013 Q3 2013 Q2 2013 Q1 2013 2013
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Revenue (net of
royalties and
refining) $8.73 M $8.11 M $7.38 M $6.40 M $30.62 M
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Mine Operating
Earnings (loss) $0.972 M $0.634 M ($0.990) M ($1.04) M ($0.422) M
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Ounces Poured 7,260 5,549 5,275 4,141 22,225
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Ounces Sold 6,858 5,885 5,366 4,100 22,209
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Average Sale
Price $1,337 $1,362 $1,456 $1,641 $1,428
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Cash Cost Per
Ounce(i) $870 $978 $1,283 $1,568 $1,127
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Cash Flow from
Operating
Activities
Before Working
Capital
Adjustments(i) $2.32 M $1.48 M ($0.17) M ($0.74) M $2.89 M
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Working Capital
Adjustments(i) ($2.43) M $0.54 M $1.40 M $3.06 M $2.57 M
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Cash Flow from
Operating
Activities ($0.11) M $2.02 M $1.23 M $2.31 M $5.45 M
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Net (Loss) ($0.10) M ($31.85) M ($6.38) M ($4.04) M ($42.37) M
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(i)See Non-IFRS Measures
Financial Results for the Year Ended December 31, 2013
QMX generated $30.62 million in revenue from the sale of 22,209 ounces of gold
and through its custom milling agreements. The average sale price for the year
was $1,428 per ounce, down significantly from $1,661 in 2012. The comprehensive
net loss for the year end was $42.37 million, or $1.32 per share, which included
a $31.61 million impairment charge against the Snow Lake Property and a $1.55
million reversal on an impairment charge on Lac Herbin. Mine operating expenses
totaled $25.04 million and depreciation amounted to $6.00 million. Due to the
intense focus on cost reduction over the course of the year, the average cash
cost per ounce decreased to $1,127 (See non-IFRS measures below). Cash generated
by operating activities for the year was $5.46 million.
Fourth Quarter Financial Results
Revenue from mining in the fourth quarter was $8.73 million, generated from the
sale of 7,260 ounce of gold and an average sale price of $1,337 per ounce, down
from an average sale price of $1,367 per ounce in Q3 2013. Mine operating
expenses, which include amortization and depletion of $1.79 million, were $7.76
million, generating an operating income of $0.97 million for the quarter. The
comprehensive net loss for the quarter was $0.10 million or ($0.00) per share
and included a $1.55 million reversal of an impairment charge against the Lac
Herbin property. Cash used by operating activities for the quarter was $0.11
million compared to cash generated by operations of $2.02 million for Q3 2013.
The cash cost per ounce during the quarter was $870 per ounce (see non-IFRS
measures), a further decrease from $978 per ounce in the third quarter of 2014.
Operational Outlook
Lac Herbin
The Lac Herbin mine continues to operate under cost reduction measures, which
have had a positive impact on the Company's operational cash costs, but at the
expense of continuing operations past Q4 2014. Production guidance for 2014 has
been estimated at 16,500 to 17,500 ounces of gold.
Snow Lake
QMX and Northern Sun Mining Corp. ("Northern Sun") have agreed to extend the
closing of the proposed acquisition by Northern Sun of the Snow Lake property to
May 31, 2014. The terms of the sale are detailed in the press release dated
October 2, 2013. The closing of this transaction remains subject to a number of
conditions, including and without limitation, receipt of all necessary
government and regulatory approvals in Canada and China and Northern Sun
securing the financing necessary to complete the acquisition.
Proceeds from the sale are intended to be used to pay out the short term lending
facility with Third Eye Capital ("Third Eye") in full. The lending facility was
due on March 31; however, the Company expects that it will imminently execute an
amendment to the facility to extend the closing date to May 30, 2014. The
facility is expected remain subject to the terms and conditions outlined in the
Company's press release dated October 9, 2013.
Commenting on the financial results, Brett New, President and CEO, said: "2013
was a difficult year for the Company with the decision to discontinue
development at the Lac Herbin Mine and the sale of the Snow Lake Property.
However, QMX was still able to meet its production goals by producing over
22,000 of gold at operating cash cost of just over $1,100 per ounce through the
dedication of our staff and employees. With 2014 underway, QMX is continuing to
pursue the sale of the Snow Lake property which will eliminate the bridge loan
and allow the Company to focus on its Quebec operations by investigating other
acquisition opportunities in the area and to uncover other custom milling
contracts to generate cash flow in short term. I believe that 2014 will see QMX
following a new path to becoming a cash flow positive producer in the Val D'Or
region."
Subsequent to year-end, QMX provided Forbes & Manhattan, Inc. ("F&M") a note
debenture in the amount of US$1,552,453.87, representing the 2% net smelter
royalty that has accrued from gold sales from Lac Herbin. The note is not
convertible into securities of the Company, does not accrue interest and is due
and payable on December 31, 2015, subject to the repayment of the facility to
Third Eye. The security interest of F&M will rank subordinate to existing
security interest registered against the assets of the Company. F&M and QMX are
at arm's length under TSX Venture Exchange policy.
Complete annual financial statements and related Management's Discussion and
Analysis are available under the Company's profile on www.sedar.com and at the
Company's website www.qmxgold.ca.
About QMX
QMX Gold Corporation is a Canadian mining company traded on the TSX-V under the
symbol "QMX". The company is focusing on mine development and exploration in
Quebec and is actively looking for other mining projects for acquisition in the
Val D'or area. QMX Gold continues mining activities at its Lac Herbin property
in Val d'Or with production estimated at 16,500 - 17,500 ounces of gold in 2014.
Qualified Person
Technical programs and information included in this release have been reviewed
and approved by Patrick Sevigny, eng., Vice President of Quebec Operations and a
Qualified Person as defined under NI 43-101.
Non-IFRS Measures
The Company has included certain non-IFRS performance measures, namely, cash
costs per gold ounce sold and cash flows from operating activities before and
after working capital adjustments, throughout this document. In the gold mining
industry, this is a common performance measure but does not have any
standardized meaning. It is a non-IFRS measure. In addition to conventional
measures prepared in accordance with IFRS, the Company and certain investors use
this information to evaluate the Company's performance and ability to generate
cash, profits and meet financial commitments. This non-IFRS measure is intended
to provide additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance with IFRS.
The following tables provide a reconciliation of cash costs per gold ounce sold
and cash flows from operations for the three and twelve months ended December
31, 2013 and 2012.
Cash cost per ounces sold:
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Three Three Twelve Twelve
months months months months
ending Dec ending Dec ending Dec ending Dec
Period ending 31, 2013 31, 2012 31, 2013 31, 2012
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Ounces sold 6,858 3,982 22,209 19,564
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Mine operating expenses (CAD
000's) $5,967 $7,988 $25,038 $30,428
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Cash cost per ounce sold
(CAD) $870 $2,006 $1,127 $1,555
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(mining operating expenses
divided by ounces sold)
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Net cash flow from operating activities:
----------------------------------------------------------------------------
Three Three Twelve Twelve
months months months months
ending Dec ending Dec ending Dec ending Dec
Period ending 31, 2013 31, 2012 31, 2013 31, 2012
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Cash flow provided by (used
in) operating activities
before working capital
adjustments (CAD 000's) $2,318 ($2,538) $2,889 ($2,736)
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Cash flow provided by (used
in) working capital
adjustments (CAD 000's) ($2,489) $881 $2,570 ($154)
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Net cash flow from operating
activities (CAD 000's) ($111) ($1,657) $5,459 ($2,890)
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Cautionary Note Regarding Forward-Looking Information and Mineral Resources:
This press release contains or may be deemed to contain "forward-looking
information" within the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, statements (express
or implied) relating to financial results, production results and/or the impact
of such production results with respect to the mine at Lac Herbin, the timing,
cost and/or amount of future exploration and development of the property, the
closing of the Snow Lake sale transaction, the processing of more custom mill
feed, the timing, cost and/or amount of future production, the future price of
gold or other minerals, the mineral resource estimates, the successful
implementation of development plans at any of the Company's properties and/or
the future financial or operating performance of QMX Gold, its properties and/or
its projects. 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".
Forward looking information is 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, its properties and/or its projects
to be materially different from those expressed or implied by such
forward-looking information, including but not limited to those risks described
in the annual information form of the Company, which is available under the
profile of the Company on SEDAR. Although the Company has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors that
cause results not to be as anticipated, estimated or intended. There can be no
assurance that such information 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
information. The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities laws. It should
also be noted that mineral resources that are not mineral reserves do not have
demonstrated economic viability.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
QMX Gold Corporation
Brett New
President and CEO
(416) 861-5904
QMX Gold Corporation
Louis Baribeau
Public Relations
(514) 667-2304
QMX Gold Corporation
Rob Hopkins
Investor Relations
(416) 861-5899
QMX Gold Corporation
Toll Free: +1 877-717-3027
info@qmxgold.ca
www.qmxgold.ca
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