Q2 2013 Financial Results

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Information about Q2 2013 Financial Results

Published on August 9, 2013

Author: AuricoGold

Source: slideshare.net

Description

Q2 2013 Financial Results

Q2 2013 Financial Results Conference Call and Webcast August 9, 2013

FORWARD LOOKING STATEMENTS Certain information included in this presentation constitutes forward-looking statements, including any information as to our projects, plans and future financial and operating performance. All statements, other than statements of historical fact, are forward-looking statements. The words "expect", "believe", "anticipate", "will", "intend", "estimate", "forecast", "budget" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: changes to current estimates of mineral reserves and resources; fluctuations in the price of gold; changes in foreign exchange rates (particularly the Canadian dollar, Mexican peso and U.S. dollar); the impact of inflation; changes in our credit rating; any decision to declare a quarterly dividend; employee relations; litigation; disruptions affecting operations; availability of and increased costs associated with mining inputs and labour; development delays at the Young-Davidson mine; operating or technical difficulties in connection with mining or development activities; inherent risks associated with mining and mineral processing; the risk that the Young-Davidson and El Chanate mines may not perform as planned; uncertainty with respect to the future potential of the Kemess project, uncertainty with the Company’s ability to secure capital to execute its business plans; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits; contests over title to properties; changes in national and local government legislation in Canada, Mexico and other jurisdictions in which the Company does or may carry on business in the future; risk of loss due to sabotage and civil disturbances; the impact of global liquidity and credit availability and the values of assets and liabilities based on projected future cash flows; risks arising from holding derivative instruments; and business opportunities that may be pursued by the Company. Many of these uncertainties and contingencies can affect our actual results, dividend policy, development and operating plans and other elements of our business and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Cautionary Note to U.S. Investors Concerning Measured, Indicated and Inferred Resources This presentation uses the terms "measured," "indicated" and "inferred” resources. We advise investors that while those terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. 2

Scott Perry President & CEO Conference Call and Webcast August 9, 2013

Corporate Update • Solid Q2 results in-line with targeted levels • Young-Davidson underground ramping up to targeted levels • Highly productive bulk mining methodologies with low manning requirements • Reviewing capital and mine plans for further optimization in a lower gold price environment • Solid growth profile and corresponding reduction in capital investments • Second quarter dividend paid (July 29) • Launched a dividend reinvestment plan (DRIP) • Flexible dividend linked to operating cash flow (2014) • Alan Edwards appointed non-executive Chairman (July 1) 4 1. Production figures include gold ounces only. Production at the Young-Davidson mine includes pre-production ounces, which include ounces produced prior to the declaration of commercial production on September 1, 2012, as well as all ounces produced from the underground mine. 26,363 28,281 29,252 2012 Q4 2013 Q1 2013 Q2 Young-Davidson Mine(1) 14,782 17,889 18,751 2012 Q4 2013 Q1 2013 Q2 El Chanate Mine Total Gold Ounces Produced

Rob Chausse Chief Financial Officer Conference Call and Webcast August 9, 2013

Continuing Operations Highlights(1) Quarter Ended Quarter Ended (in thousands, except ounces and per share amounts) June 30, 2013 June 30, 2012 Revenue from mining operations $57,660 $27,458 Total gold ounces sold 50,968 21,713 Total gold ounces produced 48,003 29,832 Adjusted operating cash flow(2) $18,691 $987 Adjusted operating cash flow per share, basic(2) $0.08 $0.00 Net earnings / (loss) ($103,491) $6,640 Net earnings / (loss) per share, basic ($0.42) $0.03 Adjusted net earnings(3) $6,122 ($921) Adjusted net earnings per share, basic(3) $0.02 ($0.00) 1. Continuing operations include the Young-Davidson and El Chanate mine operations. 2. See the table on slide 15 for a reconciliation of adjusted operating cash flow and refer to the discussion of Non-GAAP measures in the Company’s Q2 2013 Financial Results Press Release. 3. See the table on slide 9 for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures in the Company’s Q2 2013 Financial Results Press Release. 6

Continuing Operations Highlights(1) Six-months Ended Six-months Ended (in thousands, except ounces and per share amounts) June 30, 2013 June 30, 2012 Revenue from mining operations $122,545 $60,731 Total gold ounces sold 98,941 40,374 Total gold ounces produced 94,173 48,925 Adjusted operating cash flow(2) $38,813 $6,865 Adjusted operating cash flow per share, basic(2) $0.15 $0.02 Net earnings / (loss) ($85,217) ($6,958) Net earnings / (loss) per share, basic ($0.34) ($0.02) Adjusted net earnings(3) $17,719 $4,578 Adjusted net earnings per share, basic(3) $0.07 $0.02 1. Continuing operations include the Young-Davidson and El Chanate mine operations. 2. See the table on slide 15 for a reconciliation of adjusted operating cash flow and refer to the discussion of Non-GAAP measures in the Company’s Q2 2013 Financial Results Press Release. 3. See the table on slide 10 for a reconciliation of adjusted net earnings and refer to the discussion of Non-GAAP measures in the Company’s Q2 2013 Financial Results Press Release. 7

Continuing Operations Highlights(1) (in thousands, except ounces, average realized prices and total cash costs) Young- Davidson El Chanate Q2 2013 Q2 2012(2) Gold ounces produced 19,435 18,751 38,186 17,882 Pre-production gold ounces produced 9,817 - 9,817 11,950 Total gold ounces produced 29,252 18,751 48,003 29,832 Gold ounces sold 19,490 22,050 41,540 16,504 Pre-production gold ounces sold 9,428 - 9,428 5,209 Total gold ounces sold 28,919 22,050 50,968 21,713 Cash costs per ounce, before NRV(3),(4),(5) $716 $602 $655 $457 Revenue from mining operations $26,670 $30,990 $57,660 $27,458 Average realized price per ounce $1,366 $1,373 $1,369 $1,610 1. Continuing operations include the Young-Davidson and El Chanate mine operations. 2. Certain comparative information has been restated as a result of the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine, which was applied prospectively to production stripping costs incurred on or after January 1, 2012. For further details, refer to the Critical Accounting Estimates, Policies and Changes section on page 21 in the Company’s Management’s Discussion & Analysis or note 3(a) to the Company's condensed consolidated financial statements for the three and six months ended June 30, 2013. 3. 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. 4. Gold ounces used to calculate cash costs include ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine. 5. The Young-Davidson mine declared commercial production on September 1, 2012 however the Young-Davidson underground mine remains in the pre-production period. Pre- production ounces produced and sold are excluded from the calculation of cash costs as they are credited against capitalized project costs. 8

Continuing Operations Highlights(1) (in thousands, except ounces, average realized prices and total cash costs) Young- Davidson El Chanate Six-months Ended June 30, 2013 Six-months Ended June 30, 2012(2) Gold ounces produced 39,987 36,640 76,627 36,975 Pre-production gold ounces produced 17,546 - 17,546 11,950 Total gold ounces produced 57,533 36,640 94,173 48,925 Gold ounces sold 41,920 38,953 80,873 35,165 Pre-production gold ounces sold 18,068 - 18,068 5,209 Total gold ounces sold 59,988 38,953 98,941 40,374 Cash costs per ounce, before NRV(3),(4),(5) $705 $585 $645 $435 Revenue from mining operations $63,435 $59,110 $122,545 $60,731 Average realized price per ounce $1,507 $1,481 $1,494 $1,670 1. Continuing operations include the Young-Davidson and El Chanate mine operations. 2. Certain comparative information has been restated as a result of the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine, which was applied prospectively to production stripping costs incurred on or after January 1, 2012. For further details, refer to the Critical Accounting Estimates, Policies and Changes section on page 21 in the Company’s Management’s Discussion & Analysis or note 3(a) to the Company's condensed consolidated financial statements for the three and six months ended June 30, 2013. 3. 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. 4. Gold ounces used to calculate cash costs include ounces sold at the El Chanate mine and ounces produced at the Young-Davidson mine. 5. The Young-Davidson mine declared commercial production on September 1, 2012 however the Young-Davidson underground mine remains in the pre-production period. Pre-production ounces produced and sold are excluded from the calculation of cash costs as they are credited against capitalized project costs. 9

Adjusted Net Earnings Reconciliation 10 Quarter Ended Quarter Ended June 30, 2013 June 30, 2012 Net (loss) / earnings from continuing operations (103,491)$ 6,640$ Adjustments: Foreign exchange loss / (gain) on translation of tax basis recorded in deferred income tax expense 11,852 5,688 Unrealized foreign exchange (gain) / loss (8,741) (4,813) Net realizable value adjustments on inventory 12,245 - Impairment charges 98,688 (Gain) / loss on option component of convertible notes (4,106) (9,618) Unrealized gain on derivatives 123 (896) Unrealized loss on contingent consideration 4,060 - Other (including tax effect of adjustments) (4,508) 2,078 Adjusted net earnings from continuing operations 6,122$ (921)$ Adjusted net earnings from continuing operations, per share 0.02$ $ (0.00) Net earnings from discontinued operations - $15,043 Adjustments: Unrealized foreign exchange (gain) / loss - (2,636) Loss on disposition of Australian operations - 1,736 Net realizable value adjustment on Ocampo HL inventory - 14,366 Impairment of Australian Operations - - Tax Impact - (791) Adjusted net earnings from discontinued operations - $27,718 Adjusted net earnings from discontinued operations, per share - $ 0.10 Adjusted net earnings 6,122$ 26,797$ Adjusted net earnings, per share 0.02$ 0.09$  (in thousands, except per share metrics)

Q&A

Appendix

Adjusted Net Earnings Reconciliation 13 Six Months Ended Six Months Ended June 30, 2013 June 30, 2012 Net (loss) / earnings from continuing operations (85,217)$ (6,958)$ Adjustments: Foreign exchange loss / (gain) on translation of tax basis recorded in deferred income tax expense 12,553 1,097 Unrealized foreign exchange (gain) / loss (9,677) 5,009 Net realizable value adjustments on inventory 12,245 - Impairment charges 98,688 (Gain) / loss on option component of convertible notes (10,975) 4,184 Unrealized gain on derivatives (2,071) (1,193) Unrealized loss on contingent consideration 6,849 - Other (including tax effect of adjustments) (4,675) 2,439 Adjusted net earnings from continuing operations 17,719$ 4,578$ Adjusted net earnings from continuing operations, per share 0.07$ $ 0.02 Net earnings from discontinued operations - $29,856 Adjustments: Unrealized foreign exchange (gain) / loss - 7,281 Loss on disposition of Australian operations - 1,736 Net realizable value adjustment on Ocampo HL inventory - 14,366 Impairment of Australian Operations - 22,857 Tax Impact - (791) Adjusted net earnings from discontinued operations - $75,305 Adjusted net earnings from discontinued operations, per share - $ 0.27 Adjusted net earnings 17,719$ 79,883$ Adjusted net earnings, per share 0.07$ 0.28$  (in thousands, except per share metrics)

Adj. Operating Cash Flow Reconciliation 14 Quarter Ended Quarter Ended June 30, 2013 June 30, 2012 Operating cash flow from continuing operations $13,875 ($4,235) Add back: Non-cash change in operating working capital 4,816 5,222 Operating cash flow (before changes in working capital) from continuing operations $18,691 $987 Operating cash flow (before changes in working capital) from continuing operations, per share 0.08$ 0.00$  (in thousands, except per share metrics) Six Months Ended Six Months Ended June 30, 2013 June 30, 2012 Operating cash flow from continuing operations $26,974 $6,235 Add back: Non-cash change in operating working capital $11,839 $630 Operating cash flow (before changes in working capital) from continuing operations $38,813 $6,865 Operating cash flow (before changes in working capital) from continuing operations, per share $ 0.15 $ 0.02  (in thousands, except per share metrics)

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