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On May 13, 2009,
reported that its Q1 FY09 earnings plunged 69.1%, hurt largely by non-cash performance-based compensation charges, one-time transactional costs and reduced foreign exchange gains when compared to the same quarter last year. Net income for the quarter stood at $2.63 million or $0.02 per share compared to $8.49 million or $0.07 per share in the prior year's quarter. The latest quarterly earnings missed the most recent consensus estimate of $0.06 per share.
Revenue from mining operations dropped 7.8% to $47.35 million from $51.37 million a year ago due to lower metal prices, particularly for silver, which declined 29.0%. Gold production increased 11.3% to 36,829 ounces from 33,099 ounces in the year-ago quarter. Similarly, silver production climbed 3.1% to 1.35 million ounces from $1.31 million ounces. Gold equivalent production declined 4.3% to 55,480 ounces from 57,946 ounces due to an unfavorable gold-to-silver ratio of 72:1 as compared to 53:1 in Q1 FY08. Moreover, average realized gold price dipped 2.7% to $903.00 per ounce from $928.00 per ounce, while average realized price for silver was $12.63 per ounce, down 28.6% year-over-year from $17.69.
During Q1 FY09, Gammon Gold Inc. terminated its discussions regarding the previously announced proposed acquisition of Capital Gold. Also, GRS was included in the S&P/TSX Global Gold Index. Cash flow from operations soared 30.8% to $19.03 million from $14.56 million a year ago.
Recently, the company completed 34,000 meters of drilling at Ocampo as part of its 2009 drilling program.
The company forecasts gold production of 185,000 to 205,000 ounces in FY09, while 200,000 to 220,000 in both FY10 and FY11. Furthermore, silver production is estimated to be 8.17 million to 8.95 million ounces in FY09, 8.50 million to 9.28 million ounces in FY10 and 9.00 million to 9.78 million ounces in FY10.