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Brigus Gold Reports Q2 Financial Results

Brigus Gold Corp. (NYSE MKT: BRD; TSX: BRD) (“Brigus” or the “Company”) announces results for the second quarter (“Q2-12”) of 2012.

This press release should be read in conjunction with the Company’s June 30, 2012 consolidated financial statements and associated Management’s Discussion and Analysis (“MD&A”), which are available from the Company's website ( www.brigusgold.com) and on SEDAR ( www.sedar.com). All dollar amounts are expressed in US dollars unless otherwise specified. All financial results are presented in accordance with International Financial Reporting Standards (“IFRS”).

Key accomplishments for the quarter include achieving gold production of 18,254 ounces, meeting the Company’s Q2 production target, and averaging grades of 6.31 grams per tonne (gpt) from the underground mine.

“We are pleased with our results for the first half of the year,” said Wade Dawe, President and CEO of Brigus. “We met our second consecutive production target, underground grades are meeting expectations and cash costs are lower than projected. We are focused on completing development of the underground mine and optimizing production at Black Fox. I am confident that we will continue on this path as operations at Black Fox strengthen through the year.”

Second Quarter 2012 Financial Highlights

  • Gold sales improved by 21% to 18,419 ounces of gold, compared to 15,178 ounces sold in Q2-11.
  • Average realized gold price increased by 5% to $1,543 per ounce compared to $1,463 in Q2-11.
  • Reduced cash costs to $799 per ounce, an 8% reduction in cash costs from Q2-11 which were $865 per ounce and a 7% reduction from cash costs in Q1-12 which were $858 per ounce.
  • Generated cash flow from operations, before working capital adjustments, of $12.6 million, compared to $3.6 million in the same period in 2011.
  • Increased operating margin by 24% to $744 per ounce, compared to $598 per ounce in Q2-11.
  • Generated positive income from operations of $4.7 M, compared to a net operating loss of $2.9 M in Q2-11.
  • Capital additions totalled $16.0 million, consisting of $13.4 million in capital expenditures at Black Fox related to property, plant and equipment and $2.6 million related to exploration and development expenditures.

Consolidated Financial Results

($ thousands, except per share and ounces)   For the three months ended   For the six month ended
  June 30, 2012   June 30, 2011 June 30, 2012   June 30, 2011
Revenue from the sale of gold $   28,422 $   17,863 $   54,245 $   31,433
Operating costs $ 23,736 $ 20,754 $ 46,079 $ 37,700
Income (loss) from operations $ 4,686 $ (2,891) $ 8,166 $ (6,267)
Net income (loss) and comprehensive income (loss) $ 416 $ (3,972) $ 5,936 $ 289
Basic earnings (loss) per share $ 0.00 $ (0.02) $ 0.03 $ 0.00
Cash flows from operations $ 10,407 $ 4,055 $ 17,328 $ 7,470
Gold sales in ounces   18,419   15,178   34,452   25,181
Total cash cost per ounce of gold sold $ 799 $ 865 $ 826 $ 969

Second Quarter 2012 Operational Highlights

  • Produced 18,254 ounces of gold, consistent with quarterly production guidance, a 16% increase over Q2-11.
  • The underground mined 36,604 ore tonnes and achieved an average grade of 6.31 gpt, an increase of 19.5% over Q1-12.
  • The open pit mined 192,041 ore tonnes at an average grade of 2.16 gpt, a 119% increase over the ore tonnes mined in Q2-11.
  • The Black Fox Mill processed 178,002 tonnes of ore at an average grade of 3.31 gpt and an average recovery of 96.5%.
  • Continued positive drilling results on the Grey Fox property, including 11.68 gpt gold over 26.0 m from the 147 Zone.

Results from Operations

    For the three months   For the six months ended
June 30, 2012   June 30, 2011 June 30, 2012   June 30, 2011
Metal Sales
Gold (ounces)     18,419     15,178     34,452     25,181
Silver (ounces)   1,191   469   2,049   905
Average realized gold price $ 1,543 $ 1,463 $ 1,575 $ 1,421
Production
Open pit ore tonnes mined   192,041   87,760   412,621   117,569
Open pit operating waste tonnes mined   1,332,625   1,553,069   2,659,987   1,624,136
Open pit capital stripping tonnes mined   691,635   712,273   1,444,995   2,602,724
Open pit overburden tonnes mined   -   -   -   293,680
Total open pit tonnes mined   2,216,301   2,333,102   4,517,603   4,638,109
Total underground ore tonnes mined   36,604   30,316   71,751   39,132

Total tonnes mined

  2,252,905   2,363,418   4,589,354   4,677,241
Milling
Tonnes milled   178,002   181,488   358,967   360,717
Tonnes milled per day   1,956   1,994   1,972   1,993
Head grade of ore (gpt)   3.31   2.86   3.17   2.26
Recovery (%)   96%   94%   96%   93%
Gold ounces produced   18,254   15,688   35,176   24,460
 
Total cash costs ($/ounce): $ 799 $ 865 $ 826 $ 969
Operating Margin ($/ounce): $ 744 $ 598 $ 749 $ 452

Outlook

Operations at the Black Fox Mine continue to ramp up and will deliver increased gold production quarter over quarter in 2012. Brigus is forecasting 2012 gold production of 77,000 to 85,000 ounces, at a cash cost per ounce of $775 - $825 as follows:

2012   Low   High   Actual   Cash Costs / ounce
Q1 15,500 17,000 16,922 $858
Q2 18,000 21,000 18,254 $799
Q3 21,500 23,000    
Q4 22,000 24,000    
Total 77,000 85,000    

During the second quarter the Company reviewed its 2012 capital budget. As a result of this review, the Company expects capital development costs in the underground to be $29 million and spending on plant, property and equipment to be $13 million. Capital development in the underground has increased as a result of changes to mining techniques and additional development activity. The original budget for the underground mine called for the use of mechanized cut and fill techniques throughout the mine. In Q1 2012, the Company identified that it would be more appropriate to mine the west side of the mine using long-hole techniques, which require more up-front development, but provide a lower overall mining cost and higher ore recovery rates. Development of the long-hole stope on the west side of the mine is on-going and production from the west side long-hole will commence in Q4 2012. Additionally, an exploration drift was added to the east ramp to facilitate an underground exploration program while enabling definition drilling on existing reserves. Finally, the original mine plan did not include development within the upper workings of the mine which were initially mined from 1997-2001. The Company has recently revisited this area and identified potential new mining zones. In order to mine these zones the Company will require additional up-front capital investment. Increases in the budget for plant, property and equipment also include an upgrade to the electrical system at the mine and improvements to the tailing facilities.

Stock quotes in this article: BRD 

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