TORONTO,
Dec. 18, 2013 /PRNewswire/ - Cerro
Grande Mining Corporation (the "Company" or "CEG") (TSX: CEG)
(OTCQX: CEGMF) announced today its audited Consolidated Financial
Statements and Management Discussion and Analysis for its fourth
quarter and year ended September 30,
2013 with the comparatives for the same periods in 2012
which have been filed on SEDAR. The Company refers the reader to
those materials for additional information.
The Company also announced that it has filed its
Annual Information Form for its year ended September 30, 2013, dated December 18, 2013 and its NI 43-101 Technical
Report entitled "A Technical Report On The Pimenton Mine, The
Surrounding Pimenton Property And The Nearby Tordillo Property In
Central Chile", dated December 17, 2013.
The table below sets out the consolidated profit
and loss for the fourth quarter and year ended September 30, 2013 with comparatives for the same
periods in 2012.
(Expressed in thousands of US dollars except per
share amounts)
| Revenue |
Three months ended |
|
Twelve months ended |
| September 30, |
September 30, |
|
September 30, |
September 30, |
| 2013 |
2012 |
|
2013 |
2012 |
| $ |
$ |
|
$ |
$ |
| |
|
|
|
|
|
| Sales |
3,598 |
7,675 |
|
18,677 |
25,549 |
| Services |
0 |
0 |
|
101 |
1,896 |
| |
3,598 |
7,675 |
|
18,778 |
27,445 |
| Expenses |
|
|
|
|
|
| Operating costs |
3,659 |
5,655 |
|
18,581 |
21,100 |
| Operating costs for services |
0 |
0 |
|
85 |
1,760 |
| Reclamation and remediation |
10 |
3 |
|
42 |
58 |
| General, sales and administrative |
529 |
960 |
|
3,499 |
3,368 |
| Foreign exchange |
50 |
10 |
|
16 |
126 |
| Interest |
80 |
23 |
|
315 |
127 |
| Other gains and losses (net) |
(5) |
(1) |
|
42 |
96 |
| Impairment charges |
0 |
0 |
|
2,140 |
0 |
| Exploration costs |
81 |
371 |
|
1,186 |
3,392 |
| |
4,404 |
7,021 |
|
25,906 |
30,027 |
| Loss and comprehensive loss before income
taxes |
(806) |
654 |
|
(7,128) |
(2,582) |
| Income tax expense |
(43) |
(205) |
|
(201) |
(249) |
| Deferred income tax |
839 |
(881) |
|
1,109 |
(881) |
| Loss and comprehensive loss for the
period |
(10) |
(432) |
|
(6,220) |
(3,712) |
| 1) |
Consolidated statements
of income (loss) and other comprehensive income (loss) for the
three month periods ended September 30, 2013 and 2012: (Expressed
in thousands of US dollars) |
| |
|
|
| |
a) |
Revenue for the three month period ended September 30, 2013
decreased over the same period in 2012 due to a decrease in gold
sales to 3,031 oz compared to 6,620 oz in the three month period
ended September 30, 2012. This, combined with a drop in the gold
price from an average closing price on the LME of $1,522 for the
quarter ended September 30, 2013 (2012-$1,660). |
| |
|
|
| |
b) |
Operating expenses for the three months ended September 30,
2013 were $3,659 compared to $5.655 for the same period in 2012.
The decrease of $1,996 consists of decreases in direct costs of
$833; labor cost of $548 net smelter return of $233; indirect costs
of $262, of which $55 related to mine insurance and $128 related to
a measurement and monitoring program. In addition, refining and
metallurgical charges decreased by $44 and inventory variation
decreased by $183. These decreases were offset by an increase of
depreciation and amortization of $107. |
| |
|
|
| |
c) |
General and administrative costs for the three months ended
September 30, 2013 were $529 compared to $960 for the same period
in 2012. This $431 decrease was due to decreases of $57 in stock
based compensation; professional fees of $206; salaries of
$92. These were offset by increases in insurance and other
expenses of $119 and an increase in sales expenses of $43. |
| |
|
|
| |
d) |
The Company expenses its exploration costs on all properties
until a NI 43 -101 compliant resource has been established on a
property. As a result, during the three month period ended
September 30, 2013, the Company expensed $81 (2012 - $371) of
exploration costs as follows: La Bella $nil (2012 - $59);
Bandurrias $2 (2012 - $2); Santa Cecilia $6 (2012 - $240); Tordillo
$3 (2012- $nil); and other $70 (2012 -$70). |
| |
|
| 2) |
Consolidated statements
of income (loss) and other comprehensive income (loss) for the year
ended September 30, 2013 and 2012: (Expressed in thousands of US
dollars) |
| |
|
|
| |
a) |
Revenue for the year ended September 30, 2013 decreased
compared to the same period in 2012 due to lower gold sales of
10,591 oz compared to 13,576 oz in the year ended September 30,
2012. This combined with a lower average closing price of gold on
the LME of $1,536 for the year ended September 30, 2013 (2012 -
$1,646) |
| |
|
|
| |
b) |
Operating expenses for the year ended September 30, 2013 were
$18,581 compared to $21,100 for the same period in 2012. The change
of $2,519 consists of decreases in labor costs of $460; direct
costs of $529; indirect costs of $197; refining and metallurgical
charges of $38; net smelter return of $398; inventory variation of
$1,016 and expansion cost of $133. This was offset by an
increase in depreciation and amortization in the amount of $252.
Costs from services provided by Pimenton to CDM including
management, machinery and equipment rent was $85 (2012 -
$1,760). |
| |
|
|
| |
c) |
General and administrative costs for the year ended September
30, 2013 were $3,499 compared to $3.368 for the same period in
2012. This $131 increase was due to increases of $62 in salaries;
listing fees $55 and stock based compensation of $305. This was
offset by reductions in professional fees of $262 and sales and
office expenses of $29. |
| |
|
|
| |
d) |
The Company expenses its exploration costs on all properties
until a NI 43 -101 compliant resource has been established on a
property. As a result, during the year ended September 30, 2013,
the Company expensed $1,186 (2012 - $3,392) of exploration costs as
follows: La Bella $142 (2012 - $637); Bandurrias $28 (2012 - $33);
Santa Cecilia $343 (2012 - $2,313); Tordillo $308 (2012- $68);
Catedral $58 (2012 - $56); Cal Norte $5 (2012 - $5); and other $302
(2012 -$280). |
| |
|
|
| |
e) |
Non-current assets are tested for impairment when events or
changes in circumstance suggest that the carrying amount may not be
recoverable. During the current year ended September 30, 2013, it
was determined there are potential indicators of impairment. The
recoverable amount is calculated using the value-in-use method,
which is the expected present value of future cash flows from the
asset, using a pre-tax discount rate of 10.8%. In the current
year, the Company recorded an impairment charge of $2,140 related
to the Pimenton project, primarily as a result of the decrease in
long-term gold and copper prices. |
| |
|
|
| 3) |
Consolidated Cash flow
for the year ended September 30, 2013 |
| |
|
| |
Cash generated by the
Pimenton Mine decreased due to operational problems and the drop in
the price of gold. The operational problems related to delays in a
main drive to reach known ore shoots below the existing
levels. |
| |
|
| |
David Thomson and Mario
Hernandez, both Officers and Directors of Cerro Grande Mining
Corporation through their respective companies have made cash
advances to the Company to sustain its operations and keep its
obligations to outside creditors up to date. |
| |
|
| 4) |
Consolidated Statement of
Financial Position as at September 30, 2013 (Expressed in thousands
of US dollars) |
| |
|
| |
As at September 30, 2013,
the Company had a positive working capital of $187 (2012-$223).
David Thompson and Mario Hernandez provided funds for working
capital during the current and prior year. $2,585 of these
funds have been converted to a loan which will be repaid in July
2016 at a 5% interest rate. |
Operational Highlights
- Gold produced by the Pimenton Mine for the year ended
September 30, 2013 was 10,835 oz
compared to 12,583 oz in the prior year.
- Pimenton's cash cost for the year ended September 30, 2013 was $1,191 per ounce of gold produced net of by
product credits, compared to $1,086
per oz in the prior year.
- Pimenton's production cost, which includes depreciation and
amortization, for the year ended September
30, 2013 was $1,422 per ounce
of gold produced net of by product credit compared to $1,203 per oz in the prior year.
- The average gold recovery for the year ended September 30, 2013 was 94.28% compared to 94.17%
in the prior year.
- The Company expects the mine to maintain milling rates of 120
tons per day depending on the rate of conversion of its known
resources to reserves.
- Currently the plant has been permitted to operate at an average
of 166 tons per day. The Company has prepared but not yet submitted
permits to take the mine up to 500 tons per day.
Financial Highlights
- Loss before income taxes for the year was $7,128 which included an impairment charge of
$2,140 (2012 - $2,582). Loss before income taxes for the three
month ended September 30, 2013 was
$806 (2012 - income $654).
- Average price per ounce of gold sold for the 2013 fiscal year
was $1,536 (2012 - $1,646). Average price per ounce during the three
months ended September 30, 2013 was
$1,327 (2012- $1,668).
- Net loss after income taxes for the 2013 fiscal year was
$6,220 compared to $3,712 in fiscal 2012. Net loss after income
taxes for the three months ended September
30, 2013 was $10 compared to
$432 in the same three month period
in 2012.
- Basic loss per share for fiscal 2013 was a loss of 0.06 cents per share compared to a loss of
0.04 cents per share in 2012.
- At September 30, 2013, the
Company had cash and cash equivalents of $53 compared to $1,336 at September 30,
2012.
- Cash flow from operations as at September 30, 2013 was negative $2,338 (2012- positive $626).
Cerro Grande Mining Corporation is a minerals
producing, exploration and development company with properties and
activities currently focused in Chile.
Cautionary Statement on Forward-looking Information
This news release contains "forward-looking information", which
may include, but is not limited to, statements with respect to the
future financial or operating performance of CEG. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative 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 involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of CEG to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Forward-looking statements contained herein are made as of the date
of this press release based on current expectations and beliefs and
CEG disclaims, other than as required by law, any obligation to
update any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if
management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, the reader is cautioned not to place undue reliance on
forward-looking statements.
SOURCE Cerro Grande Mining Corporation