ENHANCED CASH POSITION AND CASH FLOW FROM
OPERATIONS
(In US Dollars unless otherwise
stated)
TORONTO, Nov. 16, 2021 /CNW/ - Superior Gold Inc.
("Superior Gold" or the "Company") (TSXV: SGI) announces financial
results for the third quarter of 2021 for the Company's 100%-owned
Plutonic Gold Operations, located in Western Australia.
Third Quarter Highlights
- Production of 19,379 ounces, a marginal increase over the prior
quarter and 23% increase over the comparative quarter of 2020
- Stope grade of 2.95 g/t gold in the third quarter and 3.23 g/t
year to date as the Company continues to target an average stope
grade of 3.0 g/t gold
- Initiated mining of the Perch open pit on schedule, the
Company's second open pit in 2021
- Reduced All-In Sustaining Cost1 ("AISC") by 10% from
the comparative quarter of 2020 to $1,453 per ounce
- Achieved a realized gold price1 of $1,772 per ounce, resulting in an AISC margin of
$319 per ounce
- Net income for the period of $0.01 per share and adjusted net income of
$0.01
- Generated cash flow from operations of $6.3 million after working capital changes, an
increase from $0.4 million in the
prior year period
- Strong financial position with $20.5
million in cash and cash equivalents, a 19% or $3.2 million increase over the December 31, 2020 position, and zero term
debt
- Continued high-grade exploration results from two new
underground mining fronts
- Recorded zero incidences of COVID-19 infection for a seventh
consecutive quarter
Chris Jordaan, President and CEO
of Superior Gold stated: "We are very pleased to report our fifth
quarter-over-quarter increase in production which has led to a
steady improvement in our financial position. Our third quarter
production of 19,379 ounces when combined with the operational
initiatives that were put in place has led to a decrease in our
costs for the third quarter with an AISC per ounce decreasing to
$1,453 per ounce from $1,519 per ounce in the second quarter of 2021.
Year to date AISC per ounce is $1,494
per ounce, below the bottom end of our cost guidance. We continue
to track towards the upper end of our production guidance for the
full year 2021. In addition, with the improved performance and the
full repayment of the gold loan at the end of the second quarter of
2021, operating cash flow for the third quarter of 2021 increased
to $6.3 million after working capital
changes from $2.7 million in the
second quarter of 2021. This demonstrates the ability of Plutonic
to generate meaningful cash flow when performing at consistent
levels and it is a testament to the site team's continued execution
of the improvement initiatives put in place.
Technical work related to a better understanding the Plutonic
orebody, including the impact of the northwest trending faults that
control the location and concentration of higher-grade gold
mineralization continues. Phase one of this work has been completed
on four main mining areas that are likely to form the basis of our
2022 production plan. The proximity of these areas to existing
workings is expected to enable quick, low-cost entry with the
objective of allowing for less reliance on remnant mining beginning
in 2022.
An operational review, initiated in the third quarter, is
nearing completion and has identified a number of additional growth
and productivity improvement projects. The completion of open pit
mining at Plutonic East followed by the restart of Perch in
September was completed on schedule. For the third quarter of 2021
these open pits provided sufficient surface material to the mill to
fully displace all low-grade stockpile resulting in higher grade
feed to the mill. When combined with the opening of new underground
mining fronts being planned, it is expected to continue to improve
our grade profile and future ability to generate significant
operating cash flow over the remainder of 2021 and beyond."
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's prior MD&A's for
a description of these measures.
|
Summary of Financial and Operational Results:
|
Three
months ended Sept 30,
2021
|
All amounts in $
millions except where noted
|
|
Financial
|
|
Revenue
|
34.2
|
Cost of
sales
|
28.3
|
General and
administrative
|
1.4
|
Operating
income
|
3.6
|
Income before
taxes
|
2.4
|
Net
income
|
1.1
|
Earnings per share -
basic and diluted
|
0.01
|
Adjusted net
income1
|
1.8
|
Adjusted net income
per share - basic1
|
0.01
|
Cash flow from
operations
|
6.3
|
Weighted average
number of common shares outstanding (basic)
|
122,309,562
|
|
|
Operational
|
|
Gold produced
(ounces)
|
19,379
|
Gold sold
(ounces)
|
19,282
|
Total cash costs
($/ounce)1
|
1,341
|
All-in sustaining
costs ($/ounce)1
|
1,453
|
Average realized
price1 ($/ounce)
|
1,772
|
Total underground
material mined (Kt)
|
207
|
Total material milled
(Kt)
|
405
|
Grade milled (g/t
gold)
|
1.7
|
Recovery
(%)
|
86
|
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's MD&As for a
description of these measures.
|
Plutonic Gold Operations
The Plutonic Gold Operations produced and sold 19,379 and 19,282
ounces of gold, respectively, for the third quarter of 2021. Total
cash costs1 of $1,341/ounce sold and AISC of $1,453/ounce sold were below the realized gold
price1 of $1,772/ounce for
the three-month period ending September 30,
2021.
In comparison, 15,699 and 15,492 ounces of gold were produced
and sold, respectively for the third quarter of 2020. Total cash
costs1 of $1,471/ounce
sold and AISC1 of $1,617/ounce sold were below the realized gold
price1 of $1,756/ounce for
the three-month period ending September 30,
2020.
Total cash costs1 and AISC1 decreased over
the prior period primarily as a result of a higher number of ounces
of gold sold, partially offset by the strengthening of the
Australian dollar relative to the U.S. dollar in comparison to the
third quarter of 2020.
The Company generated net cash from operations after working
capital changes of $6.3 million for
the three months ending September 30,
2021.
1 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's prior MD&A's for
a description of these measures.
|
Exploration Activities
During the third quarter of 2021, the Company provided an
exploration update on drilling along the Western Mining Front and
Baltic Gap1. The targeted drilling is consistent with
the Company's stated exploration strategy to accelerate exploration
and identify new mining fronts to ultimately allow for improved
mining grades, increased productivity and reduced reliance on
remnant mining.
The latest drilling results released in the third quarter show
continued extensions of the western edge of the Plutonic deposit a
further 60 metres along the entire Western Mining Front. Results
such as drill hole UDD24141 in the Caspian zone, which intersected 42.2 g/t
gold over 5.6 metres, and drill hole UDD24376 in the Baltic
Extension zone, which intersected 17.7 g/t gold over 6.4
metres gives the Company further confidence in mining higher
grades at Plutonic in the future1.
The Company continues to be focused on reserve and resource
expansion by completing in-fill drilling and exploration drilling
of new mining fronts. These drill intersections, along with
previous announced drill intersections in 2021 have not been
reflected in Mineral Resource estimates.
1 Refer to the News Release dated
August 17, 2021, entitled 'Superior Gold intersects 42.2 g/t
over 5.6 metres and 17.7 g/t over 6.4 metres as it opens 1.6km long
Western Mining Front at Plutonic'.
|
2021 Guidance
The Company is tracking towards the upper end of its 2021
production guidance which is summarized in the table below.
Operating
Parameters
|
Low
|
High
|
Production (oz of
Gold)
|
65,000
|
75,000
|
Cash Costs
($/oz)1, 2
|
$1,350
|
$1,450
|
All In Sustaining
Costs ($/oz)1, 2
|
$1,500
|
$1,600
|
Exploration
Expenditure ($ million)3
|
$3.5-6.5M
|
Sustaining Capital
Expenditures ($ million)
|
$4.0-4.5M
|
Non Sustaining
Capital Expenditures ($ million)4
|
$3.0-5.0M
|
1 Assumes AU$:US$ exchange rate of
0.73:1.
|
2 This is a Non-IFRS measure. Refer
to Non-IFRS measures section of the Company's MD&A's for a
description of these measures.
|
3 Exploration expenditures could
increase with positive exploration results.
|
4 Non
sustaining capital expenditures are primarily related to
pre-production capital for Plutonic East and underground
development.
|
Conference Call
Management will host a conference call and webcast on
Tuesday November 16, 2021 at
10:00AM ET to discuss the third
quarter 2021 financial and operating results.
Conference Call and
Webcast
|
Date:
|
Tuesday November 16,
2021 10:00AM ET
|
Toll-free North
America:
|
(888)
664-6392
|
Local or
International:
|
(416)
764-8659
|
Webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1509968&tp_key=3b9757a42f
|
|
|
Conference Call
Replay
|
Toll-free North
America:
|
(888)
390-0541
|
Local or
International:
|
(416)
764-8677
|
Passcode:
|
491712
|
The conference call replay will be available until 23:59PM ET on November 30,
2021.
The presentation will be available on the Company's website at
www.superior-gold.com.
Qualified Person
Scientific and technical information in this news release has
been reviewed and approved by Ettienne Du Plessis, who is a
"qualified person" as defined by NI 43-101. Mr. Du Plessis is not
independent of the Company within the meaning of NI 43-101.
About Superior Gold
Superior Gold is a Canadian based gold producer that owns 100%
of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold
Operations include the Plutonic underground gold mine and central
mill, numerous open pit projects including the Plutonic Main Pit
push-back project, the Hermes open pit projects and an interest in
the Bryah Basin joint venture. Superior Gold is focused on
expanding production at the Plutonic Gold Operations and building
an intermediate gold producer with superior returns for
shareholders.
Forward Looking Information
This news release contains "forward-looking information" within
the meaning of applicable securities laws that is intended to be
covered by the safe harbours created by those laws.
"Forward-looking information" includes statements that use
forward-looking terminology such as "may", "will", "expect",
"anticipate", "believe", "continue", "potential" or the negative
thereof or other variations thereof or comparable terminology.
Forward-looking information includes information with respect to
guidance as to projections, outlook, guidance, forecasts,
estimates, and other statements regarding future or estimated
financial and operational performance, gold production and sales,
revenues and cash flows, and capital costs (sustaining and
non-sustaining), including projected cash operating costs and
all-in sustaining costs) as well as statements with respect to the
mine-plan, exploration, drilling, operating and organizational
matters and activities relating to the Plutonic Gold Operations and
the Company generally, including its liquidity and capital
requirements and financial results. Such Forward-looking
information also includes information related to the Company's
previously announced strategic review process, the potential
outcome of such process and the intended maximization of
shareholder value that the Company believes may result from such
process. By identifying such information in this manner, the
Company is alerting the reader that such 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 to be materially different from those
expressed or implied by such forward-looking information.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made. Furthermore,
such forward-looking information involves a variety of known and
unknown risks, uncertainties and other factors which may cause the
actual plans, intentions, activities, results, performance or
achievements of the Company to be materially different from any
future plans, intentions, activities, results, performance or
achievements expressed or implied by such forward-looking
information. Readers are encouraged to refer to the Annual
Information Form of the Company for a discussion of other risks
including outbreaks or threats of outbreaks of viruses, other
infectious diseases or other similar health threats, such as the
novel coronavirus outbreak, which could have a material adverse
effect on the Company by causing operational and supply chain
delays and disruptions, labour shortages, shutdowns, inflationary
pressures on operating or capital costs, the inability to sell
gold, capital markets volatility or other unknown but potentially
significant impacts. The Company cannot accurately predict what
effects these conditions will have on the Plutonic Gold Operations
or the financial results of the Company, including uncertainties
relating to travel restrictions to the Plutonic Gold Operations or
otherwise and business closures that have been or may be imposed by
governments. If an outbreak or threat of an outbreak of a virus or
other infectious disease or other public health emergency occurs,
it could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company cautions that there can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. Accordingly, investors should not
place undue reliance on forward-looking information as no assurance
can be given that any of the events anticipated by the
forward-looking information will transpire or occur, and if any of
them do so, what benefits the Company will derive therefrom. Except
as required by law, the Company does not assume any obligation to
release publicly any revisions to forward-looking information
contained in this news release to reflect events or circumstances
after the date hereof.
Neither the TSX Venture Exchange not its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Superior Gold