Business / Companies
New Dawn revenue increases to $14.86 million for the quarter ended March
15 May 2012 at 12:06hrs | Views
New Dawn's consolidated gold production was 8,736 ounces of gold (7,926 ounces attributable) for the quarter ended March 31, 2012, as compared to 6,226 ounces of gold (5,853 ounces attributable) for the comparable quarter ended March 31, 2011, an increase of 40.3% (35.4% increase on an attributable basis).
Consolidated gold production for the current quarter ended March 31, 2011 decreased by 4.0% (5.6% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of 9,095 ounces (8,399 ounces attributable).
Other than at the Turk and Angelus Mine, the Company's mining operations had a combined increase in gold production of approximately 14.5% during the quarter ended March 31, 2012, as compared to the previous quarter ended December 31, 2011.
Gold production at the Company's Turk and Angelus Mine for the quarter ended March 31, 2012 was 2,763 ounces of gold, as compared to 3,879 ounces of gold for the previous quarter ended December 31, 2011, a decrease of 1,116 ounces of gold or approximately 28.8%. This production decrease was the result of the impact of a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood.
The production decrease also had an adverse impact on operating costs at the Turk and Angelus Mine. The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues. The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters. Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine. The process of implementing this plan may result in the Company identifying additional issues that could require further analysis or the Company encountering problems that could result in delays.
Gold Sales
Consolidated gold sales were $14,8 million ($13,6 million attributable) for the quarter ended March 31, 2012, as compared to $7,983,223 ($7,510,160 attributable) for the comparable quarter ended March 31, 2011, an increase of 86.1% (80.4% increase on an attributable basis). The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,389 for the quarter ended March 31, 2011.
Consolidated gold sales for the current quarter ended March 31, 2012 decreased by 3.8% (4.8% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of $15.4 million ($14.2 million attributable). The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,684 for the quarter ended December 31, 2011.
The decrease in gold sales during the quarter ended March 31, 2012, as compared to the quarter ended December 31, 2011, was a result of the production issues related to the Turk and Angelus Mine described herein at "Gold Production".
100% of sale proceeds were received in US dollars.
Net Income and Ebitda
For the quarter ended March 31, 2012, consolidated net income was $347,652, as compared to $2.299 million for the previous quarter ended December 31, 2011, a decrease of $1.95 million or 84.9%. Consolidated net income for the quarter ended March 31, 2012 was adversely impacted by production issues at the Turk and Angelus Mine and the Dalny Mine (see "Gold Production" and "Gold Sales"), as well as an impairment expense for abandoned exploration properties of $631,451 and additional royalty expense of approximately $370,000 as a result of the increase in royalty rates effective January 1, 2012 from 4.5% to 7.0%.
The Company also provides a non-IFRS financial metric, EBITDA, to assist investors in assessing the Company's operating performance. EBITDA eliminates the impact of income taxes, as well as certain other defined operating and financing costs. EBITDA was $1,262,829 for the current quarter ended March 31, 2012, as compared to $3,583,788 for the previous quarter ended December 31, 2011, a decrease of $2,320,959 or 64.8%, and as compared to $1,875,553 for the comparable quarter ended March 31, 2011, a decrease of $612,724 or 32.7%.
Cash costs per ounce
The cash costs per ounce of gold produced for all of the Company's mines were $1,151 for the quarter ended March 31, 2012, as compared to $799 for the comparable quarter ended March 31, 2011, and as compared to $1,029 for the previous quarter ended December 31, 2011.
Cash costs per ounce were adversely impacted in 2012 in part as a result of significant increases in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these operating costs in 2012, as well as a potential increase in environmental costs.
Operating costs at the Turk and Angelus Mine were adversely impacted during the quarter ended March 31, 2012 by a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood. The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues. The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters. Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine.
The Dalny Mine, which the Company acquired as part of the Central African Gold transaction in June 2010, experienced elevated operating costs during the quarter ended March 31, 2012 as a result of the ongoing dewatering process (currently below the 17 level), the continuing program of repair and maintenance of underground equipment to offset the effects of prolonged immersion in water, the failure of previous management to adequately invest in and maintain the mining infrastructure, and the costs associated with resuming and ramping up operations.
Once the Company has completed this process of overhaul and refurbishment, which is expected to take twelve to eighteen months, underground mining operations are expected to stabilize and operating costs are expected to begin to decline. In addition, as gold production moves toward higher normalized levels, the Company expects to realize increased operating efficiencies, with an expected corresponding downward trend in cash costs per ounce.
Developments
As part of the Company's development efforts, in April 2012, the Company commenced an 8,000 meter diamond drilling program at its Camperdown Mine gold project, which is part of the Company's Gweru Gold Camp located in the Shurugwi District of Zimbabwe. Contingent on drilling parameters, this program is expected to take up to six months, with the analysis of the results expected to be completed by the end of December 2012. Based on the results of this drilling program, the Company may consider additional exploratory work to further define and develop this opportunity.
These efforts are premised, in part, on access to adequate debt and/or equity financing, as well as approval and implementation of the Company's proposed Plan of Indigenisation. These efforts could also be impacted by various other factors, including, for example, the world price of gold, taxes and royalties, mining fees, power and labour costs, the Zimbabwe operating environment, and potential changes to environmental regulations in Zimbabwe, which could effect operations and require revisions to the Company's capital allocation budget.
Consolidated gold production for the current quarter ended March 31, 2011 decreased by 4.0% (5.6% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of 9,095 ounces (8,399 ounces attributable).
Other than at the Turk and Angelus Mine, the Company's mining operations had a combined increase in gold production of approximately 14.5% during the quarter ended March 31, 2012, as compared to the previous quarter ended December 31, 2011.
Gold production at the Company's Turk and Angelus Mine for the quarter ended March 31, 2012 was 2,763 ounces of gold, as compared to 3,879 ounces of gold for the previous quarter ended December 31, 2011, a decrease of 1,116 ounces of gold or approximately 28.8%. This production decrease was the result of the impact of a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood.
The production decrease also had an adverse impact on operating costs at the Turk and Angelus Mine. The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues. The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters. Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine. The process of implementing this plan may result in the Company identifying additional issues that could require further analysis or the Company encountering problems that could result in delays.
Gold Sales
Consolidated gold sales were $14,8 million ($13,6 million attributable) for the quarter ended March 31, 2012, as compared to $7,983,223 ($7,510,160 attributable) for the comparable quarter ended March 31, 2011, an increase of 86.1% (80.4% increase on an attributable basis). The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,389 for the quarter ended March 31, 2011.
Consolidated gold sales for the current quarter ended March 31, 2012 decreased by 3.8% (4.8% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of $15.4 million ($14.2 million attributable). The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,684 for the quarter ended December 31, 2011.
The decrease in gold sales during the quarter ended March 31, 2012, as compared to the quarter ended December 31, 2011, was a result of the production issues related to the Turk and Angelus Mine described herein at "Gold Production".
100% of sale proceeds were received in US dollars.
Net Income and Ebitda
For the quarter ended March 31, 2012, consolidated net income was $347,652, as compared to $2.299 million for the previous quarter ended December 31, 2011, a decrease of $1.95 million or 84.9%. Consolidated net income for the quarter ended March 31, 2012 was adversely impacted by production issues at the Turk and Angelus Mine and the Dalny Mine (see "Gold Production" and "Gold Sales"), as well as an impairment expense for abandoned exploration properties of $631,451 and additional royalty expense of approximately $370,000 as a result of the increase in royalty rates effective January 1, 2012 from 4.5% to 7.0%.
The Company also provides a non-IFRS financial metric, EBITDA, to assist investors in assessing the Company's operating performance. EBITDA eliminates the impact of income taxes, as well as certain other defined operating and financing costs. EBITDA was $1,262,829 for the current quarter ended March 31, 2012, as compared to $3,583,788 for the previous quarter ended December 31, 2011, a decrease of $2,320,959 or 64.8%, and as compared to $1,875,553 for the comparable quarter ended March 31, 2011, a decrease of $612,724 or 32.7%.
Cash costs per ounce
The cash costs per ounce of gold produced for all of the Company's mines were $1,151 for the quarter ended March 31, 2012, as compared to $799 for the comparable quarter ended March 31, 2011, and as compared to $1,029 for the previous quarter ended December 31, 2011.
Cash costs per ounce were adversely impacted in 2012 in part as a result of significant increases in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these operating costs in 2012, as well as a potential increase in environmental costs.
Operating costs at the Turk and Angelus Mine were adversely impacted during the quarter ended March 31, 2012 by a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood. The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues. The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters. Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine.
The Dalny Mine, which the Company acquired as part of the Central African Gold transaction in June 2010, experienced elevated operating costs during the quarter ended March 31, 2012 as a result of the ongoing dewatering process (currently below the 17 level), the continuing program of repair and maintenance of underground equipment to offset the effects of prolonged immersion in water, the failure of previous management to adequately invest in and maintain the mining infrastructure, and the costs associated with resuming and ramping up operations.
Once the Company has completed this process of overhaul and refurbishment, which is expected to take twelve to eighteen months, underground mining operations are expected to stabilize and operating costs are expected to begin to decline. In addition, as gold production moves toward higher normalized levels, the Company expects to realize increased operating efficiencies, with an expected corresponding downward trend in cash costs per ounce.
Developments
As part of the Company's development efforts, in April 2012, the Company commenced an 8,000 meter diamond drilling program at its Camperdown Mine gold project, which is part of the Company's Gweru Gold Camp located in the Shurugwi District of Zimbabwe. Contingent on drilling parameters, this program is expected to take up to six months, with the analysis of the results expected to be completed by the end of December 2012. Based on the results of this drilling program, the Company may consider additional exploratory work to further define and develop this opportunity.
These efforts are premised, in part, on access to adequate debt and/or equity financing, as well as approval and implementation of the Company's proposed Plan of Indigenisation. These efforts could also be impacted by various other factors, including, for example, the world price of gold, taxes and royalties, mining fees, power and labour costs, the Zimbabwe operating environment, and potential changes to environmental regulations in Zimbabwe, which could effect operations and require revisions to the Company's capital allocation budget.
Source - Byo24News
