Vancouver, British Columbia (FSCwire) - FIORE GOLD LTD. (TSXV: F) (OTCQB: FIOGF) (“Fiore” or the “Company”) is pleased to announce that its financial statements and management’s discussion and analysis for financial year ended September 30, 2017 (“FY2017”) have been filed with the securities regulatory authorities and are available at www.sedar.com and on the Company’s website.
2017 Production and Financial Highlights
(all figures in US dollars unless otherwise indicated)
The 2017 financial year saw a number of important milestones for Fiore Gold, including:
- The successful restart of the Pan Mine in Nevada in March 2017.
- The rehabilitation of the existing Phase I leach pad, and the implementation of a carefully-controlled ore blending program coupled with rigorous heap operating practices and controls to achieve and maintain the design percolation rates for leach solutions.
- An increase in the mining rate from the North and South pits to a sustained 14,000 tons per day (tpd) of ore in September 2017.
- The successful negotiation of a two-year contract mining contract at Pan.
- Construction of the Phase II heap leach pad at the Pan mine with construction substantially completed on December 22, 2017, adding an additional 2.2 million square feet of leach pad.
- Completion of the Plan of Arrangement with Fiore Exploration Ltd. on September 26, 2017, to create Fiore Gold Ltd. with shares trading on the TSX Venture Exchange under the symbol “F” and on the OTCQB under the symbol “FIOGF”.
- Cash proceeds of $5.24 million raised through the issuance of Special warrants.
- Cash proceeds of $13.72 million raised under the Financing terms of the Arrangement with Fiore Exploration Ltd.
- Issued 28,676,883 common shares and 22,214,910 common share warrants under the Arrangement with Fiore Exploration Ltd.
- Financial highlights for FY2017 include:
- Revenues of $10.70 million from the sale of 8,452 gold ounces.
- An additional 1,237 gold ounces were sold prior to the commencement of commercial production from October 1, 2016 through March 1, 2017.
- Inventory of 7,126 estimated recoverable ounces placed on the leach pad at Pan as of September 30, 2017.
- Working capital of $19.78 million as of September 30, 2017, with a cash balance of $15.12 million.
At our nearby Gold Rock project, the Nevada State Office of the Bureau of Land Management has completed its review of the Final Environmental Impact Statement (“FEIS”) and advanced it to the Washington DC office for final review and publication. The process to publish the FEIS is anticipated to be completed in the first quarter of 2018, with the Record of Decision (“ROD”) to follow within 45 days of publication. We believe actions by the US government to expedite this review process provides optimism that the process to issue the ROD will proceed in a timely manner.
Tim Warman, Chief Executive Officer of Fiore, commented: “2017 was a transformative year for Fiore Gold, with the successful restart and ramp-up of the Pan Mine in Nevada. Having achieved steady-state production at the end of FY2017, and completed the Phase II leach pad expansion, the Pan Mine is now performing as expected and generating positive cash-flow. With the start-up year behind us, and the company debt-free, Fiore Management will be focused on executing our growth strategy through advancement of our Gold Rock project and strategic acquisitions of producing or near-production assets.”
FY2017 Results
| Year Ended September 30, | ||
| Financial Position as of: | 2017 | 2016 |
| Select Items - On a Consolidated Basis | $000's | $000's |
| Cash | 15,124 | 4,269 |
| Inventories | 5,849 | 174 |
| Mineral Property, Plant and Equipment, net | 21,841 | 6,274 |
| Total Assets | 46,866 | 14,066 |
| Total Current Liabilities | (3,521) | (1,013) |
| Warrant Derivative Liabilities | (6,589) | - |
| Accrued Reclamation and Remediation | (2,670) | (2,341) |
| Working Capital Surplus | 19,784 | 5,489 |
| Year Ended September 30, | ||
| Financial Results of Operations | 2017 | 2016 |
| Select Items - On a Consolidated Basis | $000's | $000's |
| Revenue | 10,696 | - |
| Gross Profit | 1,804 | - |
| Loss from Operations | (4,127) | (1,273) |
| Listing Expense1 | (13,354) | - |
| Unrealized Loss on Change in FV of Warrant Derivative | (1,069) | - |
| Net Loss | (18,992) | (1,353) |
1Total consideration paid for Fiore Exploration Ltd. was $41.68 million, the net fair value of assets received was $28.33 million. As discussed in further detail in the Company’s Management’s Discussion & Analysis for the year ended September 30, 2017, the $13.35 million difference has been recorded as a “non-cash” listing expense which is not capitalizable per IFRS; however, the Company feels other factors were valuable attributes of the transaction, including access to public markets, immediate cash to expand the leach pad at Pan, bringing together a team of investors and seasoned advisors to help lead the Company forward with its strategic plans, acquisition of four exploration properties in Chile, including one which is a large land package adjacent to and on strike with an existing, silver-rich mine.
FY2018 Guidance
Mining production is expected to range between 4.75 and 5.25 million tons of ore at a strip ratio of between 1.47 and 1.53. Gold production is anticipated to range from 35,000 to 40,000 ounces during fiscal year 2018 at an expected total cash cost of approximately $742 per gold ounce sold. Fiscal year 2018 guidance is summarized below.
| 2018 | ||
| Guidance | ||
| Ore Tons Mined | ('000) | 4,750 - 5,250 |
| Waste Tons Mined | ('000) | 7,250 - 7,750 |
| Total Tons Mined | ('000) | 12,000 - 13,000 |
| Gold Ounces Mined | (oz) | 75,000 - 83,000 |
| Ore Grade Mined | (oz/t) | 0.014 - 0.017 |
| Strip Ratio | Waste : Ore | 1.47 - 1.53 |
| Gold Ounces Produced | (oz) | 35,000 - 40,000 |
| Gold Ounces Sold | (oz) | 35,000 - 40,000 |
| Total Cash Costs per Ounce | $/oz sold | 742 |
| Total Costs of Sales per Ounce | $/oz sold | 826 |
| All-in Sustaining Costs1 | $/oz sold | 957 |
| Mine Production Costs | $ millions | 32.9 |
| Royalties and Treatment/Refining Costs | $ millions | 2.0 |
| Inventory Movements | $ millions | (6.6) |
| Total Production Costs | $ millions | 28.3 |
| Capital Expenditures | $ millions | 5.5 |
1All-in sustaining costs are presented as defined by the World Gold Council (“WGC”) less corporate general and administrative expenses.
Corporate Strategy
Our corporate strategy is to grow Fiore Gold into a 150,000 ounce per year gold producer. To achieve this, we intend to:
- increase gold production at the Pan Mine from a planned 35-40,000 ounces in fiscal 2018 to between 40-50,000 ounces per year by fiscal 2019;
- advance exploration and development of the nearby Gold Rock project, with a resource update planned for late 2018; and
- acquire additional production or near-production assets in Nevada and surrounding states.
Qualified Person
The scientific and technical information relating to Fiore Gold’s properties contained in this press release was approved by Ken Brunk (MMSA) Fiore Gold’s Technical Advisor and a "Qualified Person" under National Instrument 43-101.
