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 ( and on SEDAR ( 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
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
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


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.

The revised capital budget for 2012 is $60 million, consisting of $29 million related to underground development, $12 million related to open pit capital stripping, $3 million related to Phase 3 overburden removal, $8 million related to mining equipment purchases and overhauls, $3 million for electrical upgrades, $2 million for Grey Fox development, and $3 million relating to the completion of the mill expansion.

The mill optimization program is progressing according to plan and is expected to be completed and in service during the second half of 2012. Processing capacity and recovery will increase through optimization of existing equipment, equipment additions and reduction of production losses. The optimization is expected to increase mill processing capacity by 5-10%, up to 2,200 tpd.

Planning is underway to develop the Grey Fox Mine located on the southeast portion of the Black Fox Complex. The initial resource estimate from this area, announced in December 2011, added more than 50 percent to the gold resource at the Black Fox Complex. Brigus is in the process of expanding the resource and converting Inferred ounces to Indicated ounces through systematic in‐fill drilling. An updated resource estimate will be released in September. Initial engineering studies have also been initiated and will continue through 2012 to determine project economics as well as development and production timelines. A preliminary economic assessment (“PEA”) for Grey Fox will be released in Q4, and will incorporate the new resource.

The Black Fox underground ore body is open for expansion with grades that trend higher at depth. The Company began underground exploration drilling from the east ramp in June with the objective of increasing the reserves and extending the mine life. Exploration drilling with a second underground drill will commence from the west ramp in September.

Second Quarter Webcast and Conference Call

A webcast and conference call will be held Monday, August 13, 2012 at 12 noon Atlantic time (11:00 a.m. Eastern time).

To attend by webcast please visit

To attend by phone, dial toll free 1-877-407-8133 (international 201-689-8040) at least 10 minutes prior to the start of the call. No pass code is required.

About Brigus Gold

Brigus is a growing gold producer committed to maximizing shareholder value through a strategy of efficient production, targeted exploration and select acquisitions. The Company operates the wholly owned Black Fox Mine and Mill in the Timmins Gold District of Ontario, Canada. The Black Fox Complex encompasses the Black Fox Mine and adjoining properties in the Township of Black River-Matheson, Ontario, Canada. Brigus is also advancing the Goldfields Project located near Uranium City, Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In Mexico, Brigus has granted Cangold Limited the option to acquire a 75% interest in the Company’s Ixhuatan Project located in the state of Chiapas. In the Dominican Republic, Brigus has signed an agreement to sell its remaining interests in three mineral exploration projects.

Cautionary Note to U.S. Investors Concerning Estimates of Mineral Resources

This news release uses the term mineral “resources”. The Company advises U.S. investors that while these terms are defined in and required by Canadian regulations, these terms are not defined terms under the U.S. Securities and Exchange Commission (“SEC”) Industry Guide 7 and are generally not permitted to be used in reports and registration statements filed with the SEC. The SEC generally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant “reserves” as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Cautionary and Forward-Looking Statements

Statements contained in this news release, which are not historical facts, are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All statements regarding the ability of the Company to achieve its production, total cash costs, steady state annual production and mining rate estimates; estimated average gold grades for the open pit and underground operations; increase in gold production; increase in profitability; exploration drill results and resource additions, are forward-looking statements and estimates that involve various risks and uncertainties. This forward-looking statements include, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the outcome of legal proceedings, the issue of permits, the size and quality of the Company's mineral resources, progress in development of mineral properties, future production and sales volumes, capital and mine production costs, demand and market outlook for metals, future metal prices and treatment and refining charges, and the financial results of the Company.

Important factors that could cause actual results to differ materially from these forward-looking statements include environmental risks and other factors disclosed under the heading “Risk Factors” in Brigus’ most recent Annual Information Form and Management Discussion and Analysis filed under the Company’s name at and annual report on Form 40-F filed with the United States Securities and Exchange Commission at as well as elsewhere in Brigus’ documents filed from time to time with the Toronto Stock Exchange, the NYSE Amex Equities, the United States Securities and Exchange Commission and other regulatory authorities. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.

Copyright Business Wire 2010

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