Alacer Gold announces 2011 year-end financial results
TORONTO, March 21, 2012 /PRNewswire/ - Alacer Gold Corp ("Alacer" or the "Corporation") [TSX: ASR and ASX: AQG] announced financial results today for the year ended December 31, 2011, with Alacer adding $63 million in cash during the fourth quarter to finish the year with $250 million in cash.
Mr. Edward Dowling, President and CEO of Alacer stated, "2011 was a busy and exciting year for Alacer. The Corporation successfully brought the Çöpler Gold Mine into production and completed the merger with Avoca Resources Limited, catapulting the new Alacer into the mid-tier gold producer ranks."
2011 production totaled 421,204 gold ounces, with 411,933 ounces attributable to Alacer. This exceeded revised guidance of 405,000 attributable ounces. Cash operating costs1 per ounce sold and total cash costs1 per ounce sold were $550/ounce and $650/ounce, respectively, consistent with revised guidance. The successful ramp up at Çöpler continued with production of 57,800 ounces in the fourth quarter, a 9% increase over the previous quarter.
Alacer's mines generated a mining gross profit of $228 million for the year, or $662/ounce. Alacer reported adjusted net profit2 attributable to owners of the Corporation of $130 million, or $0.50 per share. Net profit attributable to owners of the Corporation was $75 million, or $0.29 per share.
Mr. Dowling added, "Our exploration efforts during 2011 were successful and we have recently announced resource and reserve increases in both Turkey and Australia and the new Corona discovery at Higginsville."
All financial amounts are presented on an unaudited basis.
Conference Call Details
The Corporation will host a conference call on Wednesday, March 21 at 5:00 pm (North American Eastern Daylight Time) and Thursday, March 22 at 8:00 am (Australian Eastern Daylight Time). The presentation for the conference call is available at www.AlacerGold.com.
You may participate in the conference call by dialing:
for U.S. and Canada
for Hong Kong
for United Kingdom
If you are unable to participate in the call, a recording of the call will be available on Alacer's website at www.AlacerGold.com or through replay until April 4, 2012 by calling:
for U.S. and Canada
for Hong Kong
for United Kingdom
1 Cash operating cost and total cash cost are non-IFRS financial performance measures with no standardized definitions under IFRS. For further information and detailed reconciliations, please see the "Non-IFRS Measures" section of this press release.
2 Adjusted net profit attributable to owners of the Corporation is a non-IFRS financial performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation, please see the "Non-IFRS Measures" section of this press release.
The Corporation has identified certain measures that it believes will assist understanding the performance of the business. As the measures are not defined under IFRS, they may not be directly comparable with other companies' adjusted measures. The non-IFRS measures are not intended to be a substitute for, or superior to, any IFRS measures of performance, but management has included them as these are considered to be important comparables and key measures used within the business for assessing performance. These measures are explained further below:
Cash Operating Cost and Total Cash Cost are non-IFRS measures. Cash Operating Cost and Total Cash Cost are calculated using guidance issued by the Gold Institute. The Gold Institute was a non-profit industry association comprising leading gold producers, refiners, bullion suppliers and manufacturers. This institute has now been incorporated into the National Mining Association. The guidance was first issued in 1996 and revised in November 1999.
Cash Operating Cost, as defined in the Gold Institute's guidance, includes mining, processing, transport and refinery costs, mine site administrative costs, movement in production inventories, by-product credits, and transfers to and from deferred stripping, where relevant.
Total Cash Cost, as defined in the Gold Institute's guidance, includes all of the total Cash Operating Cost noted above, plus royalties and severance taxes.
Cash Operating Cost/ounce and Total Cash Cost/ounce are calculated by dividing the relevant Cash Operating Cost and Total Cash Cost, as determined using the Gold Institute guidance, by gold ounces sold for the periods presented. The data does not have a meaning prescribed by IFRS and therefore amounts presented may not be comparable to data presented by gold producers who do not follow the guidance provided by the Gold Institute. In particular, depreciation, amortization and share-based payments would be included in a measure of total costs of producing gold under IFRS, but are not included in Cash Operating Cost/ounce and Total Cash Cost/ounce under the guidance provided by the Gold Institute. Furthermore, while the Gold Institute has provided definitions for the calculation of Cash Operating Cost, Total Cash Cost, Cash Operating Cost/ounce and Total Cash Cost/ounce, the calculation of these numbers may vary from company to company and may not be comparable to other similarly titled measures of other companies. However, Alacer believes that Cash Operating Cost/ounce and Total Cash Cost/ounce are useful indicators of performance as they provide an indication of a company's profitability and efficiency, the trends in cash costs as the Corporation's operations mature, and a benchmark of performance to allow comparison to other companies.
The following tables reconcile these non-IFRS financial measures to the consolidated statements of operations.
|Pre-Merger production costs1||36,426|
|Merger-related purchase step-up adjustments impacting cost of sales||(13,778)|
|Less: Non-controlling interest||(3,078)|
|Total Cash Cost||$||257,391|
|Divided by: gold ounces sold2||395,948|
|Total Cash Cost per ounce||$||650|
|Total Cash Cost||$||257,391|
|Less royalties and severance taxes||(39,527)|
|Cash Operating Cost||$||217,864|
|Divided by: gold ounces sold||395,948|
|Cash Operating Cost per ounce||$||550|
1Represents estimated production costs for the pre-Merger period of January 1, 2011 through February 17, 2011, based on management reports. This adjustment is made to reflect total cash costs associated with the full-year gold ounces sold and to provide comparability with future quarter results.
2 YTD 2011 gold ounces sold include ounces sold for the pre-Merger period of January 1, 2011 through February 17, 2011.
Adjusted net profit and adjusted net profit per share attributable to owners of the Corporation are non-IFRS measures and reflect net profit attributable to owners of the Corporation as adjusted for non-recurring items, mark-to-market adjustments for the convertible debentures, and normalization of tax expense to reflect statutory rates by jurisdiction. Management believes that in addition to profit and related per share disclosures prepared in accordance with IFRS, these adjusted measures provide a basis for further evaluation of the Corporation's performance. Presentation of these adjusted measures is not a substitute for reported amounts presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. The terms "Adjusted profit attributable to owners of the Corporation" and "Adjusted profit per share attributable to owners of the Corporation" do not have standardized meanings prescribed by IFRS. Therefore, the Corporation's definitions are unlikely to be comparable to similar measures presented by other companies or as used by various readers of these adjusted measures.
The following table reconciles profit attributable to owners of the Corporation to these non-IFRS financial measures.
|Profit (loss) attributable to owners of the Corporation||$||75,249|
|Add back tax expense (benefit)||(9,981)|
|Pretax profit (loss) attributable to owners of the Corporation||65,268|
|Adjustments (pretax basis):|
|Çöpler pre‐commercial production||2||22,930|
|Unrealized gain/loss on non-hedge financial instruments||3||11,527|
|Estimated profit on gold inventory marked to market at Merger date||4||5,603|
|Non-controlling interest portion of adjustments||5||(1,147)|
|Adjusted pretax profit (loss) attributable to owners of the Corporation||174,555|
|Tax expense on adjusted pretax profit (loss)||6||(44,502)|
|Adjusted profit (loss) attributable to owners of the Corporation||$||130,053|
|Divided by: Weighted average common shares outstanding||259,121,410|
|Adjusted net profit (loss) per share||$||0.50|
|Note 1||Merger-related expenses were directly related to the Merger of Alacer with Avoca Resources Limited (the "Merger") and are non-recurring in nature. These amounts were expensed as prescribed by IFRS.|
|Note 2||Prior to achieving commercial production at Çöpler revenues and production costs were recorded to Mineral Properties rather than through earnings. The adjustment above represents the mining gross profit for Çöpler during Q1 2011. Commercial production was achieved effective April 1, 2011, after which, mining gross profit was reflected through earnings. This amount is non-recurring in nature.|
|Note 3||The unrealized gain/loss on non-hedged financial instruments reflects the period gain or loss resulting from the mark to market adjustment made in connection with the Debentures. These amounts are non-cash in nature and reflect periodic changes in the fair value of the option component of the Debentures.|
|Note 4||Estimated profit on gold inventory marked to market at Merger date reflects a purchase price adjustment associated with the Merger. This adjustment resulted in a gold inventory valuation step‐up, which flowed through to production costs during 2011. This amount is non-recurring in nature.|
|Note 5||These adjustments reflect the non-controlling interest associated with other adjustments for Çöpler (see Note 2).|
|Note 6||This adjustment applies income taxes to pretax profit (loss) attributable to owners of the Corporation at applicable statutory rates for each jurisdiction. Statutory income tax rates for Australia and Turkey were 30% and 20%, respectively. No income tax benefit for Corporate (generally Canada) was recognized on its losses.|
The table below sets out this statutory income tax calculation for 2011.
|Profit (loss) attributable to owners of the Corporation||$||17,049||$||172,668||$||(114,468)||$||75,249|
|Add back tax expense (benefit)||8,120||(18,101)||-||(9,981)|
|Pretax profit (loss) attributable to owners of the Corporation||25,169||154,567||(114,468)||65,268|
|Adjustments (pretax basis):|
|Çöpler pre‐commercial production||-||22,930||-||22,930|
|Unrealized gain/loss on non-hedge financial instruments||-||-||11,527||11,527|
Estimated profit on gold inventory marked to market at
|Non-controlling interest portion of adjustments||-||(1,147)||-||(1,147)|
Adjusted pretax profit (loss) attributable to owners of the
|Statutory tax rate applied||30%||20%||-||-|
|Tax expense on adjusted pretax profit (loss)||$||(9,232)||$||(35,270)||$||-||$||(44,502)|
Alacer is an intermediate gold mining company with operations in Australia and Turkey. Production across Alacer's projects is currently forecast to rapidly grow from 421,000 ounces in 2011 to an annualized gold production rate of 800,000 ounces per annum being achieved during 2015.
The 80%-owned Çöpler Gold Mine in Turkey produced 185,000 ounces during 2011 - its first year of production. This heap-leach operation is currently treating oxide ore from an open pit. The Çöpler Sulfide Feasibility Study (due for completion by the end of 2012) is evaluating treatment of sulfide ore that could increase Çöpler's gold production to approximately 400,000 ounces per annum.
The 100%-owned Higginsville and South Kalgoorlie Operations (including the 49%-owned Frog's Leg underground mine) in Australia produced a total 236,000 ounces during 2011. Alacer is targeting gold production from its Australian operations to increase to approximately 400,000 ounces per annum.
Alacer also has a significant pipeline of gold and copper exploration properties in Turkey and Australia.
Except for statements of historical fact relating to Alacer, certain statements contained in this press release constitute forward-looking information, future oriented financial information, or financial outlooks (collectively "forward-looking information") within the meaning of Canadian securities laws. Forward-looking information may be contained in this document and other public filings of Alacer. Forward-looking information often relates to statements concerning Alacer's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", "could", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "projects", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts.
Forward-looking information includes statements concerning, among other things, matters relating to proposed exploration, communications with local stakeholders and community relations, status of negotiations of joint ventures, commodity prices, mineral resources, mineral reserves, realization of mineral reserves, existence or realization of mineral resource estimates, the development approach, the timing and amount of future production, timing of studies and analyses, the timing of construction of proposed mines and process facilities, capital and operating expenditures, economic conditions, availability of sufficient financing, exploration plans and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, regulatory and political factors that may influence future events or conditions. Such forward-looking information and statements are based on a number of material factors and assumptions. While we consider these factors and assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.
You should not place undue reliance on forward-looking information and statements. Forward-looking information and statements are only predictions based on our current expectations and our projections about future events. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in Alacer's filings at www.sedar.com and other unforeseen events or circumstances. Other than as required by law, Alacer does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new information or future events
SOURCE ALACER GOLD CORP.