ATEX Resources

SEMAFO Reports Cash Flow from Operations of $110 Million in 2018

2019 Forecasts Record Production, Cash Flow and Development Activity

MONTREAL, March 5, 2019 /CNW Telbec/ - SEMAFO Inc. (TSX: SMF) (OMX: SMF) today reported its financial and operational results for the fourth quarter and year ended December 31, 2018.  All amounts are in US dollars unless otherwise stated.

2018 - THE YEAR IN REVIEW

  • Boungou constructed on time, on budget
  • Maiden inferred mineral resource for the Bantou Zone of 361,000 ounces at 5.35 g/t Au
  • Nabanga mineral inferred resource increased by 42% to 840,000 oz at 7.7 g/t Au; PEA in Q3 2019
  • 2018 exploration, development, construction and operational achievements at Boungou, Mana, Bantou and Nabanga laid the groundwork for 2019

2019 - THE YEAR SO FAR & OUTLOOK

  • Combination of Bantou-Savary properties underway to produce a 1,250 km² district scale land package on the prolific Houndé Greenstone Belt
  • Production of 390,000-430,000 ounces at an all-in sustaining cost (AISC) of $685-$735 per ounce expected to be the best in SEMAFO's history

Benoit Desormeaux, President and CEO of SEMAFO, stated, "Congratulations to the entire SEMAFO team for their hard work in 2018. All areas including exploration, development, construction and operations made 2018 a solid year and set the stage for a successful 2019. SEMAFO is set to achieve many milestones in 2019 including record production of 390,000-430,000 ounces of gold at an AISC of $685-$735 per ounce. The combination of Bantou-Savary is in progress and when complete, will result in a 1,250 km² district scale land package on the prolific Houndé Greenstone Belt in a country we know well. Strategic goals for 2019 include increasing and improving mine life at Boungou and Mana and advancing our two development projects, Bantou-Savary and Nabanga."

2018 ANNUAL FINANCIAL & OPERATIONAL HIGHLIGHTS

The following highlights exclude pre-commercial production of 12,000 ounces at the Boungou Mine:

  • Cash flows from operating activities2 of $110.2 million or $0.34 per share1 compared to $107.0 million or $0.33 per share1 for the same period in 2017
  • Consolidated annual gold production of 244,600 ounces, compared to 206,400 ounces for the same period in 2017, in line with 2018 guidance of 235,000 to 265,000 ounces
  • Gold sales of $296.7 million compared to $259.0 million for the same period in 2017
  • All-in sustaining cost1 of $951 per ounce sold compared to $942 for the same period in 2017.

FOURTH QUARTER 2018 FINANCIAL & OPERATIONAL HIGHLIGHTS

  • Cash flows from operating activities2 of $54.9 million or $0.17 per share1 compared to $25.4 million or $0.08 per share1 for the same period in 2017
  • Consolidated gold production of 95,200 ounces, compared to 49,500 ounces for the same period in 2017 due to the first full quarter of production at Boungou
  • Gold sales of $114.7 million compared to $63.0 million for the same period in 2017
  • Production at Boungou totalled 53,100 ounces of gold in the quarter, reflecting average head grade of 6.34 g/t Au
  • All-in sustaining cost1 of $782 per ounce sold compared to $982 for the same period in 2017

2019 Exploration

Initial exploration expenditure for 2019 has been set at $19 million, $9 million of which will be spent at Boungou, $4 million at Mana, $3 million at Bantou, $2 million at Nabanga and the remaining $1 million at Korhogo.

Boungou

At Boungou, the main objective of the 2019 exploration program is to identify new resources within trucking distance of the mill. To this end, this year's program comprises 41,000 meters of reverse-circulation (RC), 1,000 meters of diamond and 100,000 meters of auger drilling. The bulk of the RC drill work will follow up on recent discoveries at Dangou and Tawori and test regional gold anomalies on the Pambourou and 045 Trend Sectors. The auger program will provide a complete coverage of the property and identify future exploration targets.

Mana

The 2019 exploration program at Mana includes 18,600 meters of RC and 58,000 meters of auger drilling. The RC program will be dedicated to identifying satellite deposits near existing operations with a particular emphasis on the Pompoi area, located ~3 kilometers east of the Yaramoko Mine. The Pompoi program will focus on previous results of up to 7.40 g/t Au over 2 meters coincident with auger anomalies identified in 2018, with the objective of finding intrusive-hosted, high-grade mineralization.

____________________

1

All-in sustaining cost, adjusted operating income, adjusted net income attributable to shareholders of the Corporation, adjusted basic earnings per share and operating cash flows per share are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS Financial Performance Measures" defined at the end of this press release.

2

Cash flows from operating activities exclude changes in non-cash working capital items and are a non-IFRS performance measure.

 

Bantou and Consolidation of South Houndé Belt

In February 2019, SEMAFO and Savary Gold Corp. entered into a non-binding letter of intent (LOI) contemplating the acquisition by SEMAFO of all of the outstanding common shares of Savary not already owned by SEMAFO. Savary's Karankasso project is contiguous to the Bantou Zone. Both projects are located approximately 170 kilometers south of Mana. Given the prospectivity of the combined Savary-Bantou properties, the Bantou exploration budget of $3 million will be enhanced when the Savary proposed acquisition closes in April 2019.

Nabanga

The 2019 program on Nabanga will test the northern extension, further explore the down-plunge extensions confirmed by recent drilling, and test drill auger geochemical anomalies proximal to the deposit for satellite mineralization. We continue to work on expanding the resource, and we will complete a PEA in the third quarter of 2019.

Boungou, Burkina Faso

Mining Operations

   
 

2018

Operating Data

 

Mining

 

Waste mined (tonnes)

4,035,200

Ore mined (tonnes)

568,300

Operational stripping ratio

7.1

Capitalized Stripping Activity

 

Waste material – Boungou (tonnes)

4,143,200

   

Total strip ratio

14.4

   

Processing

 

Tonnes processed (tonnes)

368,100

Head grade (g/t)

5.75

Recovery (%)

94

Gold ounces produced1

63,600

Gold ounces sold2

54,300

   

Statistics (in dollars)

 

Average realized selling price (per ounce)

1,233

Cash operating cost (per tonne processed)2

56

Cash operating cost, including stripping (per tonne processed)2

79

Total cash cost (per ounce sold)2

403

All-in sustaining cost (per ounce sold)2

596

Depreciation (per ounce sold)3

400

 

____________________

1

Gold ounces produced exclude pre-commercial production of 12,000 ounces.

2

Cash operating cost, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS Financial Performance Measures" defined at the end of this press release.

3

Depreciation per ounce sold is a non-IFRS financial performance measure with no standard definition under IFRS and represents the depreciation expense per ounce sold.

Boungou, Burkina Faso

Mining Operations

Boungou construction was completed on-time and on-budget in 2018. During the pre-commercial period from June to the end of August, Boungou produced 12,000 ounces of gold. Commercial production in the last four months of 2018 delivered 63,600 ounces of gold. Grade in the four months averaged 5.75 g/t Au, increasing in the fourth quarter as the mine plan reached higher grade zones. During the last fourth months of 2018, ramp-up economics were still tracking ahead of schedule with some minor optimizations still to be realized in 2019. The variation between gold ounces sold and gold ounces produced during the year is due to the timing of delivery and the build-up of gold in circuit. As at December 31, 2018, the stockpile held slightly more than 500,000 tonnes of ore with an average grade of 2.0 g/t Au.

Mana, Burkina Faso

Mining Operations

           
 

2018

 

2017

 

Variation

Operating Data

         

Mining

         

Waste mined (tonnes)

17,802,100

 

16,913,100

 

5%

Ore mined (tonnes)

2,109,700

 

2,268,100

 

(7)%

Operational stripping ratio

8.4

 

7.5

 

12%

Capitalized Stripping Activity

         

Waste material – Siou (tonnes)

4,200,500

 

12,607,300

 

(67)%

Waste material – Wona (tonnes)

11,643,400

 

9,189,900

 

27%

 

15,843,900

 

21,797,200

 

(27)%

Total strip ratio

15.9

 

17.1

 

(7)%

           

Processing

         

Ore processed (tonnes)

2,356,400

 

2,136,100

 

10%

Low grade material (tonnes)

217,500

 

603,800

 

(64)%

Tonnes processed (tonnes)

2,573,900

 

2,739,900

 

(6)%

Head grade (g/t)

2.36

 

2.46

 

(4)%

Recovery (%)

93

 

95

 

(2)%

Gold ounces produced

181,000

 

206,400

 

(12)%

Gold ounces sold

181,100

 

205,300

 

(12)%

           

Statistics (in dollars)

         

Average realized selling price (per ounce)

1,268

 

1,261

 

1%

Cash operating cost (per tonne processed)¹

51

 

46

 

11%

Cash operating cost, including stripping (per tonne processed)1

68

 

62

 

10%

Total cash cost (per ounce sold)¹

786

 

655

 

20%

All-in sustaining cost (per ounce sold)¹

1,056

 

942

 

12%

Depreciation (per ounce sold)²

451

 

460

 

(2)%

Mana, Burkina Faso

Mining Operations

As expected, in 2018, the tonnes processed decreased by 6% due to the ore hardness. In 2018, gold sales amounted to $229,713,000 compared to $258,993,000 for 2017. The decrease is mainly due to the lower gold ounces produced and sold in line with the mine plan, partially offset by the higher average realized selling price. The variation between gold ounces sold and gold ounces produced in 2018 is due to the timing of delivery. The decrease in depreciation of property, plant and equipment mainly reflects the lower capitalized stripping ratio from Wona in 2018 compared to the higher capitalized stripping ratio from Siou at depth in 2017. As expected, in 2018, the all-in sustaining cost1 reached $1,056 per ounce sold compared to $942 per ounce sold in 2017. The result is attributable to an increase in security expenses and a lower recovered head grade.

____________________

1

Cash operating cost, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS Financial Performance Measures" defined at the end of this press release.

Depreciation per ounce sold is a non-IFRS financial performance measure with no standard definition under IFRS and represents the depreciation expense per ounce sold.

Siou Underground Development

During the fourth quarter of 2018, underground development continued to advance well, in line with our goal of achieving production in the first quarter of 2020. Specifically, the following milestones were completed:

  • Development on budget with $10.7 million of the $51.7 million budget incurred
  • 1,050 meters of development completed at year-end
  • Construction of permanent contractor surface infrastructure
  • Receipt of favorable opinion from Ministry of Environment regarding the Environmental and Social Impact Assessment (ESIA) study - final hearing with Mines Commission is expected shortly

2018 Reserves and Resources - as at December 31, 2018

As at December 31, 2018, total proven and probable mineral reserves stood at 2,909,000 ounces of gold. Measured and indicated mineral resources totalled 3,031,300 ounces. Inferred mineral resources increased by 48% to 2,141,100 ounces compared to year-end 2017.

Changes in reserves are net of 2018 depletion due to production. All mineral resources reported are exclusive of mineral reserves. Mineral reserves and resources reported at Mana and at Tapoa (Boungou Project) were estimated using a gold price of $1,200 and $1,400 per ounce, respectively.

Tapoa (Boungou Project)

Total proven and probable reserves at the Boungou Project were 10,939,000 tonnes averaging 3.94 g/t Au for 1,387,000 ounces of gold, compared to 11,195,000 tonnes at 4.11 g/t Au for 1,479,000 ounces. The slight decrease mainly represents depletion of the 75,600 ounces produced in 2018, which includes the pre-commercial production.

Mana

At year-end 2018, Mana's mineral reserves totalled 15,987,000 tonnes at an average grade of 2.96 g/t Au for 1,522,000 ounces, compared to 18,231,000 million tonnes averaging 2.92 g/t Au for 1,710,300 ounces.

Mana's mineral resources remained constant at 43,467,000 million tonnes at an average grade of 1.93 g/t Au for 2,695,300 ounces.

Kongolokoro (Bantou Zone)

At the end of 2018, the Bantou Zone hosted a maiden inferred mineral resource estimate of 2,100,000 tonnes at 5.35 g/t Au for 361,000 ounces of gold. The Bantou Zone, which is located approximately 170 kilometers south of the Mana Mine in Burkina Faso, remains open along strike and at depth.

The mineral resources at Kongolokoro Permit Group (Bantou) were estimated using a gold price of $1,500 per ounce.

Yactibo (Nabanga Deposit)

An infill drilling program and a revised interpretation of the mineralization added 250,000 ounces of inferred mineral resources to Nabanga in 2018.

The updated mineral inferred resource estimation for Nabanga was established at 3,402,000 tonnes grading 7.69 g/t Au for 841,000 ounces of contained gold. The resource estimation update is based on 395 drill holes (RC and DD combined) totalling 57,488 meters, including 67 core holes drilled since the latest estimation completed by Snowden in August 2012, and a revised interpretation of the mineralization that suggests a shallower plunge of the higher-grade zones of gold mineralization.

The mineral resource estimate is reported above a cut-off grade of 3,0 g/t Au based on the assumption most of the resource would likely be mined by selective underground mining techniques. For further details, refer to the February 20, 2019 press release.

SEMAFO's Management's Discussion and Analysis, Consolidated Financial Statements and related financial materials are available in the "Investor Relations" section of the Corporation's website at www.semafo.com. These and other corporate reports are also available on www.sedar.com.

Fourth Quarter and Year-End 2018 Conference Call

A conference call will be held tomorrow, Wednesday, March 6, 2019 at 10:00 EST, to discuss this press release. Interested parties are invited to call the following telephone numbers to participate in the call:.

Tel. local & overseas: +1 (647) 788 4922
Tel. North America: 1 (877) 223 4471
Webcast: Click Here
Replay number: 1 (800) 585 8367 or +1 (416) 621 4642
Replay pass code: 6388407
Replay expiration: April 6, 2019

Annual General Meeting of Shareholders

SEMAFO's Annual General Meeting of Shareholders will be held on Thursday, May 9, 2019 at 10:00 EDT at Club Saint-James, Salon Midway, 1145 avenue Union, in Montreal. Attendees will have the opportunity to ask questions and meet the management team and members of the board of directors.

About SEMAFO

SEMAFO is a Canadian-based intermediate gold producer with over twenty years' experience building and operating mines in West Africa. The Corporation operates two mines, the Boungou and Mana Mines in Burkina Faso. SEMAFO is committed to building value through responsible mining of its quality assets and leveraging its development pipeline.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "forecasts", "development", "laid the groundwork", "outlook", "underway", "expected", "set the stage", "set to achieve", "milestones", "in progress", "goals", "increasing", "improving", "advancing", "initial", "will", "objective", "targets", "identifying", "focus", "contemplating", "committed", "building", "leveraging" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to achieve record production, cash flow and development activity in 2019, the ability to produce 390,000-430,000 ounces at an AISC of $685-$735 per ounce, the ability to consummate the proposed transaction with Savary Gold Corp., the ability to increase and improve mine life at Boungou and Mana and advance our Bantou-Savary and Nabanga projects, the ability of our 2019 Exploration Program to meet its various objectives, the ability to achieve production from the Siou Underground in the first quarter of 2020,  the ability to execute on our strategic focus, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2018 Annual MD&A, and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.

Financial and Operating Highlights

           
 

2018

 

2017

 

2016

Gold ounces produced¹

244,600

 

206,400

 

240,200

Gold ounces sold2

235,400

 

205,300

 

240,600

           

(in thousands of dollars, except amounts per ounce and per share)

         

Revenues – Gold sales

296,679

 

258,993

 

300,483

Operating income

10,321

 

11,494

 

60,086

             

Net (loss) income attributable to shareholders of the Corporation

(8,192)

 

20,036

 

34,219

Basic (loss) earnings per share

(0.03)

 

0.06

 

0.11

Diluted (loss) earnings per share

(0.03)

 

0.06

 

0.11

           

Adjusted operating income3

8,494

 

10,659

 

70,989

Adjusted net (loss) income attributable to shareholders of the Corporation3

(4,462)

 

864

 

48,109

Per share3

(0.01)

 

 

0.15

           

Cash flows from operating activities4

110,203

 

107,023

 

142,222

Per share3

0.34

 

0.33

 

0.45

           

Average realized selling price (per ounce)

1,260

 

1,261

 

1,249

Total cash cost (per ounce sold)3

698

 

655

 

548

All-in sustaining cost (per ounce sold)3

951

 

942

 

720

           
           

Total assets

1,034,275

 

1,028,363

 

895,276

Non-current liabilities

142,904

 

180,595

 

102,091

____________________

1

Gold ounces produced exclude pre-commercial production of 12,000 ounces from Boungou in 2018

2

Gold sales exclude sales resulting from pre-production activities that were offset against capitalized construction costs and amounted to $14,994,000.

3

Adjusted operating income, adjusted net (loss) income attributable to shareholders of the Corporation, adjusted basic earnings per share, operating cash flows per share, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS Financial Measures" defined at the end of this press release.

4

Cash flows from operating activities exclude changes in non-cash working capital items and are a non-IFRS performance measure.

 

Fourth Quarter Financial and Operating Highlights

     
 

Three-month periods

   
 

ended December 31,

   
 

2018

 

2017

 

Variation

Gold ounces produced

95,200

 

49,500

 

92%

Gold ounces sold

92,900

 

49,200

 

89%

           

(in thousands of dollars, except amounts per ounce and per share)

         

Revenues – Gold sales

114,692

 

62,960

 

82%

Operating income

21,431

 

2,215

 

868%

           

Net income attributable to shareholders of the Corporation

 

6,486

 

1,649

 

293%

Basic earnings per share

0.02

 

0.01

 

100%

Diluted earnings per share3

0.02

 

0.01

 

100%

           

Adjusted operating income1

20,957

 

2,405

 

771%

Adjusted net income (loss) attributable to shareholders of the Corporation1

7,754

 

(315)

 

Per share1

0.02

 

 

           

Cash flow from operating activities2

54,932

 

25,409

 

116%

Per share1

0.17

 

0.08

 

113%

           

Average realized selling price (per ounce)

1,234

 

1,278

 

(3)%

Total cash cost (per ounce sold)¹

559

 

667

 

(16)%

All-in sustaining cost (per ounce sold)¹

782

 

982

 

(20)%

____________________

1

Adjusted operating income, adjusted net income (loss) attributable to shareholders of the Corporation, adjusted basic earnings per share, operating cash flows per share, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS Financial Measures" defined at the end of this press release.

2

Cash flows from operating activities exclude changes in non-cash working capital items and are a non-IFRS performance measure.

 

Non-IFRS Financial Performance Measures

Some of the indicators used by us to analyze and evaluate our results represent non-IFRS financial measures. We provide non-IFRS financial performance measures as they may be used by some investors to evaluate our financial performance. Since the non-IFRS performance measures do not have any standardized definition prescribed by IFRS, they may not be comparable to similar measures presented by other companies. Accordingly, they are 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. For the non-IFRS financial performance measures not already reconciled within the document, we have defined the IFRS financial performance measures below and reconciled them to reported IFRS measures.

 

Cash Operating Cost

 

A reconciliation of cash operating cost calculated in accordance with the Gold Institute Standard to the operating costs is included in the following table:

       
 

2018

 

2017

Per tonne processed

Boungou

 

Mana

 

Mana

Tonnes of ore processed

368,100

 

2,573,900

 

2,739,900

           

(in thousands of dollars except per tonne)

         

Mining operation expenses (relating to ounces sold)

21,902

 

142,307

 

134,385

Government royalties, development taxes and selling expenses

(3,537)

 

(10,592)

 

(11,364)

Effects of inventory adjustments (doré bars and gold in circuit)

2,323

 

36

 

3,184

           

Operating costs (relating to tonnes processed)

20,688

 

131,751

 

126,205

           

Cash operating cost (per tonne processed)

56

 

51

 

46

 

Cash Operating Cost, including stripping

       
 

2018

 

2017

 

Boungou

 

Mana

 

Mana

Per tonne processed

         

Tonnes of ore processed

368,100

 

2,573,900

 

2,739,900

           

(in thousands of dollars except per tonne)

         

Stripping cost

8,497

 

42,608

 

44,615

Stripping cost (per tonne processed).

23

 

17

 

16

Cash operating cost (per tonne processed)

56

 

51

 

46

           

Cash operating cost, including stripping (per tonne processed)

79

 

68

 

62

 

Total Cash Cost

       
         
   

2018

 

2017

Per ounce sold

 

Boungou

 

Mana

 

Total

 

Mana

Gold ounce sold

 

54,300

 

181,100

 

235,400

 

205,300

                 

(in thousands of dollars except per ounce)

               

Mining operation expenses

 

21,902

 

142,307

 

164,209

 

134,385

                 

Total cash cost (per ounce sold)

 

403

 

786

 

698

 

655

 

All-in Sustaining Cost

All-in sustaining cost represents the total cash cost plus sustainable capital expenditures and stripping costs per ounce.

               
               
         

2018

 

2017

Per ounce sold

Boungou

 

Mana

 

Total

 

Mana

Gold ounce sold

54,300

 

181,100

 

235,400

 

205,300

               

(in thousands of dollars except per ounce)

             

Sustaining capital expenditure

10,465

 

48,974

 

59,439

 

58,907

               

Sustaining capital expenditure (per ounce sold)

193

 

270

 

253

 

287

               

Total cash cost (per ounce sold)

403

 

786

 

698

 

655

               

All-in sustaining cost (per ounce sold)

596

 

1,056

 

951

 

942

 

Operating Cash Flows per Share

       
 

2018

 

2017

(in thousands except per share)

     

Cash flows from operating activities1

110,203

 

107,023

Weighted average number of outstanding common shares - basic

325,478

 

324,894

       

Operating cash flows per share

0.34

 

0.33

 

Adjusted Accounting Measures

       
 

2018

 

2017

(in thousands of dollars except per share)

     

Net (loss) income attributable to shareholders of the Corporation as per IFRS

(8,192)

 

20,036

       

Foreign exchange loss (gain)

1,613

 

(9,528)

Tax effect of currency translation on tax base

3,944

 

(8,809)

Share-based compensation recovery related to change in the fair value of the share price

(1,827)

 

(835)

       

Adjusted net (loss) income attributable to shareholders of the Corporation

(4,462)

 

864

       

Weighted average number of outstanding shares

325,478

 

324,894

       

Adjusted basic (loss) earnings per share

(0.01)

 

       
 

2018

 

2017

(in thousands)

$

 

$

Operating income as per IFRS

10,321

 

11,494

Share-based compensation recovery related to change in the fair value of the share price

(1,827)

 

(835)

       

Adjusted operating income

8,494

 

10,659

____________________

1

Cash flows from operating activities exclude changes in non-cash working capital items and are a non-IFRS performance measure.

 

Consolidated Statements of Financial Position
(Expressed in thousands of US dollars)

       
 

As at

 

As at

 

December 31,

 

December 31,

 

2018

 

2017

 

$

 

$

       

Assets

     
       

Current assets

     

Cash and cash equivalents

96,519

 

198,950

Trade and other receivables

29,434

 

22,649

Income tax receivable

6,390

 

3,186

Inventories

83,211

 

66,409

Other current assets

5,378

 

4,094

 

220,932

 

295,288

Non-current assets

     

Advance receivable

2,117

 

2,867

Restricted cash

25,340

 

23,237

Property, plant and equipment

782,060

 

703,341

Intangible asset

1,204

 

1,374

Other non-current financial assets

2,622

 

2,256

 

813,343

 

733,075

Total assets

1,034,275

 

1,028,363

       

Liabilities

     
       

Current liabilities

     

Trade payables and accrued liabilities

63,905

 

72,720

Current portion of long-term debt

60,181

 

310

Current portion of finance leases

7,820

 

4,703

Current portion of share unit plan liabilities

3,311

 

6,404

Provisions

3,051

 

3,069

 

138,268

 

87,206

Non-current liabilities

     

Long-term debt

57,388

 

115,247

Finance Leases

20,144

 

19,008

Share unit plan liabilities

2,263

 

3,138

Provisions

23,561

 

12,258

Deferred income tax liabilities

39,548

 

30,944

 

142,904

 

180,595

Total liabilities

281,172

 

267,801

       

Equity

     
       

Shareholders of the Corporation

     

Share capital

623,604

 

622,294

Contributed surplus

6,771

 

7,220

Accumulated other comprehensive (loss) income

(18,909)

 

2,256

Retained earnings

109,216

 

97,710

 

720,682

 

729,480

Non-controlling interests

32,421

 

31,082

       

Total equity

753,103

 

760,562

Total liabilities and equity

1,034,275

 

1,028,363

 

Consolidated Statements of (loss) Income
For the years ended December 31, 2018 and 2017
(Expressed in thousands of US dollars, except per share amounts)

 
 

2018

 

2017

 

$

 

$

       

Revenue – Gold sales

296,679

 

258,993

       

Costs of operations

     

Mining operation expenses

164,209

 

134,385

Depreciation of property, plant and equipment

103,758

 

94,722

General and administrative

15,826

 

14,069

Corporate social responsibility expenses

1,262

 

1,097

Share-based compensation

1,303

 

3,226

       

Operating income

10,321

 

11,494

       

Other expenses (income)

     

Finance income

(2,283)

 

(3,294)

Finance costs

5,722

 

1,309

Foreign exchange loss (gain)

1,613

 

(9,528)

       

Income before income taxes

5,269

 

23,007

       

Income tax expense (recovery)

     

Current

2,136

 

4,181

Deferred

9,986

 

(4,737)

 

12,122

 

(556)

       

Net (loss) income for the year

(6,853)

 

23,563

       

Attributable to:

     

Shareholders of the Corporation

(8,192)

 

20,036

Non-controlling interests

1,339

 

3,527

 

(6,853)

 

23,563

       

Earnings (loss) per share

     

Basic

(0.03)

 

0.06

Diluted

(0.03)

 

0.06

 

Consolidated Statements of Cash Flows
For the years ended December 31, 2018 and 2017
(Expressed in thousands of US dollars)

 
 

2018

 

2017

 

$

 

$

Cash flows from (used in):

     
       

Operating activities

     

Net (loss) income for the year

(6,853)

 

23,563

Adjustments for:

     

Depreciation of property, plant and equipment

103,758

 

94,722

Share-based compensation

1,303

 

3,226

Unrealized foreign exchange loss (gain)

1,608

 

(9,480)

Deferred income tax expense (recovery)

9,986

 

(4,737)

Other

401

 

(271)

 

110,203

 

107,023

Changes in non-cash working capital items

(2,279)

 

(30,115)

Net cash provided by operating activities

107,924

 

76,908

       

Financing activities

     

Drawdown of long-term debt

 

60,000

Repayment of equipment financing

(310)

 

(310)

Payments of finance lease

(5,485)

 

(5,128)

Proceeds on issuance of share capital, net of expenses

861

 

255

       

Net cash (used in) provided by financing activities

(4,934)

 

54,817

     

Investing activities

     

Net acquisitions of equity investments

(1,740)

 

Acquisition of property, plant and equipment

(198,740)

 

(201,346)

Increase in restricted cash

(2,491)

 

(16,808)

       

Net cash used in investing activities

(202,971)

 

(218,154)

       

Effect of exchange rate changes on cash and cash equivalents

(2,450)

 

11,607

Change in cash and cash equivalents during the year

(102,431)

 

(74,822)

Cash and cash equivalents – Beginning of year

198,950

 

273,772

Cash and cash equivalents – End of year

96,519

 

198,950

Interest paid

9,850

 

6,576

Interest received

2,464

 

3,360

Income tax paid

5,127

 

12,109

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K2 GOLD (TSX.V: KTO)

K2 Gold

K2 Gold s a junior resource company focused on exploring for gold throughout North America. The company is advancing large-scale projects that offer significant exploration potential in top-tier jurisdictions. K2 currently controls... LEARN MORE