- Revenues of $77.1 million.
- Adjusted net earnings (1) of $29.5 million, or $0.10 per share.
- Consolidated production of 51,103 gold ounces (2) and 478,497 silver ounces, or 59,727 gold equivalent ounces (2) using the actual gold equivalency ratio of 56:1 realized in the quarter.
- Consolidated cash costs of $625 per gold equivalent ounce (realized) (1), prior to the reversal of a net realizable value adjustment on the Ocampo ore-in-process heap leach inventory. Inclusive of the reversal, cash costs were $553 per gold equivalent ounce (realized) (1).
- Operating cash flow (before changes in working capital) of $40.6 million, or $0.14 per share.
- Cash costs from continuing operations of $504 per gold ounce (3).
- Average realized margin from continuing operations of $1,169 per ounce, or 70%.
(1) See the table at the end of this press release for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures below. (2) Includes 7,922 pre-commercial production gold ounces produced at Young-Davidson. (3) Continuing operations include the Young-Davidson and El Chanate mine operations."During the quarter we announced the sale of the Ocampo mine, which is expected to close in mid-December. Following the completion of the transaction, the Company will focus on delivering reliable, stable and consistent performance from our two remaining low-cost, long-life, core assets located in Canada and Mexico, which will underpin our commitment to shareholder friendly initiatives. Our expanding production base, strong cash position and growing free cash flow profile should provide a platform for shareholder value creation," said Scott Perry, Chief Executive Officer. He continued, "Our production growth profile is primarily driven by the recently commissioned Young- Davidson mine, which reported solid production and cash cost results in its first month of commercial production. In the latter part of October, the first two underground stopes in the Upper Boundary Zone came into production and as a result, we expect strong production performance at the Young- Davidson mine due to the contribution of this higher grade underground ore during the fourth quarter." Third Quarter Highlights
Nine Months Nine Months Quarter Ended Quarter Ended Ended Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2012(1) 2011(1) 2012(1) 2011(1) Revenue from mining operations $77,063 $112,087 $368,051 $295,304 Average realized gold price per ounce $1,664 $1,704 $1,666 $1,552 Average realized silver price per ounce $29.87 $38.15 $30.95 $36.37 Earnings from operations $16,967 $52,793 $80,113 $120,154 Net earnings from continuing operations $43,018 $20,626 $36,199 $6,268 Net (loss) / earnings from discontinued operations ($7,781) $41,988 $22,475 $92,655 Total net earnings $35,237 $62,614 $58,674 $98,923 Net earnings per share from continuing operations, basic $0.15 $0.12 $0.13 $0.04 Net (loss) / earnings per share from discontinued operations, basic ($0.03) $0.24 $0.08 $0.58 Total net earnings per share, basic $0.12 $0.36 $0.21 $0.62 Adjusted net earnings(2) $29,491 $34,767 $111,152 $91,416 Adjusted net earnings per share(2) $0.10 $0.20 $0.39 $0.57 Total operating cash flow $6,170 $51,713 $85,531 $139,747 Total net free cash flow ($103,433) $12,251 ($343,056) $38,280 (1) The information in this table includes the results of both continuing and discontinued operations, except where indicated. (2) See the table at the end of this press release for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures below.Operational Results - Continuing Operations
Quarter ended Sept 30/12 El Chanate Young-Davidson Total Gold oz. produced 19,388 9,903 29,291 Gold oz. sold 19,121 3,999 23,120 Pre-commercial production gold oz. produced(1) - 7,922 7,922 Pre-commercial production gold oz. sold(1) - 8,701 8,701 Total cash costs per gold oz.(2)(3)(4) $434 $639 $504 Margins per gold oz. $1,221 $1,117 $1,169TABLE CONTINUED...
Nine months ended Sept. 30/12 El Chanate Young-Davidson Total Gold oz. produced 56,363 9,903 66,266 Gold oz. sold 54,286 3,999 58,285 Pre-commercial production gold oz. produced(1) - 19,872 19,872 Pre-commercial production gold oz. sold(1) - 13,910 13,910 Total cash costs per gold oz.(2)(3)(4) $425 $639 $458 Margins per gold oz. $1,240 $1,117 $1,213
(1) Pre-commercial production ounces produced and sold at Young-Davidson are excluded from consolidated ounces produced and sold, as these ounces are credited against capitalized project costs. (2) Cash costs for the El Chanate mine and Young-Davidson mine are calculated on a per gold ounce basis, using by-product revenues as a cost credit. Refer to the discussion of Non-GAAP measures below. (3) Gold ounces used to calculate cash costs include ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine for the three and nine months ended September 30, 2012. (4) The Young-Davidson mine declared commercial production on September 1, 2012 and therefore, cash costs are calculated on post-commercial production ounces only (9,903 ounces). Pre-commercial production ounces produced are excluded from the calculation of cash costs as they are credited against capitalized project costs.Young-Davidson Update (October)
- On September 1, 2012, the Young- Davidson mine achieved commercial production.
- During October, the Young- Davidson mine produced 9,177 gold ounces.
- Production from the initial two stopes in the Upper Boundary Zone began in the latter part of October. During the fourth quarter the Company has targeted mining 90,000 tonnes at grades in excess of 3.0 grams per tonne gold, including the 12,000 tonnes mined in October at grades averaging 4.0 grams per tonne gold.
- Mill feed grades are continuing to increase, through a combination of higher grade open pit ore and the initial production contribution from the underground.
- The mill facility continued to operate at target levels during October.
- Raise boring of the second leg (450 metres) of the Northgate shaft is progressing well and is expected to be completed in early 2013. Structural work for the new headframe will be completed before year end, with mechanical installations completed in Q1 2013. Construction of the mid-shaft crushing and loading infrastructure is on schedule for commissioning by mid-year 2013.
- On October 9, 2012, the Company entered into a definitive agreement with Minera Frisco, S.A.B. de C.V. (" Minera Frisco"), pursuant to which Minera Frisco will acquire the Company's Ocampo mine and the Venus and Los Jarros exploration properties located in Chihuahua, Mexico, as well as a 50% interest in the Orion advanced development project located in Nayarit, Mexico, for total consideration of $750 million in cash. The transaction is expected to close in December 2012.
- On October 5, 2012, the Company reached an agreement to settle the class action claim filed by Ed J. McKenna, subject to approval of the court and the right of the Company to terminate the agreement under certain circumstances.
- During October 2012, the Company sold its entire equity interest in Endeavour Silver Corp. and Crocodile Gold Corporation on a block trade basis for gross proceeds of $104.6 million.
Young- El Corporate & Continuing Davidson Chanate Other Operations Ocampo Net earnings / (loss) 2,740 16,590 23,688 43,018 (27,282) Adjustments: Unrealized foreign exchange loss - - 7,952 7,952 1,948 Fair value adjustment on option component of convertible senior notes - - (14,416) (14,416) - Unrealized gain on investments - - (20,251) (20,251) - Other unrealized gains and non-recurring expenses - - (1,598) (1,598) - Disposition-related costs - - - - 3,507 Reversal of NRV adjustment on Ocampo heap leach - - - - (6,074) Ocampo outside tax basis adjustment - - - - 39,168 Gain on disposition of El Cubo and GyC - - - - - Tax impact of adjustments - - 2,323 2,323 333 Adjusted net earnings 2,740 16,590 (2,302) 17,028 11,600 Earnings per share $ 0.06TABLE CONTINUED…
Discontinued El Cubo Operations Consolidated Net earnings / (loss) 19,501 (7,781) 35,237 Adjustments: Unrealized foreign exchange loss 242 2,190 10,142 Fair value adjustment on option component of convertible senior notes - - (14,416) Unrealized gain on investments - - (20,251) Other unrealized gains and non-recurring expenses - - (1,598) Disposition-related costs 1,820 5,327 5,327 Reversal of NRV adjustment on Ocampo heap leach - (6,074) (6,074) Ocampo outside tax basis adjustment - 39,168 39,168 Gain on disposition of El Cubo and GyC (24,062) (24,062) (24,062) Tax impact of adjustments 3,362 3,695 6,018 Adjusted net earnings 863 12,463 29,491 Earnings per share $ 0.04 $ 0.10Non-GAAP Measures