Dia Bras Announces Record Operating Cash Flow in Second Quarter 2012 Financial Results

TSX Venture Exchange - DIB
Bolsa de Valores de Lima - DIB

TORONTO, Aug. 30, 2012 /PRNewswire/ - Dia Bras Exploration Inc. (TSXV: DIB) (BVL: DIB) ("Dia Bras") (the "Company") is pleased to announce the filing of its unaudited Financial Statements and Management Discussion and Analysis ("MD&A") for the second quarter of 2012. All amounts are presented in Canadian dollars unless otherwise stated. For the full Financial Statements or MD&A please visit the Company's website www.diabras.com or SEDAR at www.sedar.com

Daniel Tellechea, President and CEO of Dia Bras, commented: "Dia Bras achieved record operating cash flow in the second quarter of 2012 with substantial increases in adjusted net income as a result of the Corona acquisition and the production ramp up at Bolivar. These results combined with the closing of its recent equity financing have substantially strengthened the Company's liquidity position. Dia Bras is well financed to complete its aggressive exploration and development plans in Peru and Mexico that will focus on consolidating mining operations and increasing reserves and resources at the Yauricocha mine in Peru, the Bolivar mine and Cusi property in Mexico."

The following table sets out selected information for the quarter and first half ending June 30, 2012:

       Three months ended June 30       Six months ended June 30 
(In thousands of dollars, unless stated)     2012     2011     2012     2011
                         
Revenue    $   43,955    $   17,646   $    90,243    $   21,692
EBITDA     18,962     2,559     40,881     (1,342)
Cash flow from continuing operations     18,182     13,746     25,399     12,109
Adjusted net income attributable to shareholders1     15,651     (7,802)     24,244     (7,802)
Non-cash charge on Corona acquisition     (19,625)     (4,037)     (38,110)     (4,037)
Gross profit     2,465     208     7,285     544
Net loss attributable to shareholders     (3,974)     (11,839)     (7,866)     (13,518)
Cash cost per oz of Ag (Yauricocha)   US$    (17.03)       -    US$   (21.70)       - 
Cash cost per lb of Cu (Bolivar)   US$    0.52     US$   0.72     US$   0.96     US$   1.31 
                         
                         
      June 30,     December 31,            
(In thousands of dollars, unless stated)     2012     2011            
                         
Cash and cash equivalents   $  93,654   $    20,156            
Assets     553,734     558,023            
Liabilities     242,649     281,283            
Equity     311,085     276,740            
                         
                         

1 Adjusted net income attributable to shareholders is defined as the net income shown
in the financial statements plus non-cash depletion charge due to the acquisition of Corona. 
   

Financial Highlights

  • Adjusted net income attributable to shareholders of $15.6 million or $0.11 per share for the second quarter of 2012 compared to an adjusted loss of $7.8 million ($0.07 per share) for the same period in 2011. Adjusted net income attributable to shareholders is defined as the net income shown in the financial statements plus non-cash depletion charge due to the acquisition of Corona ($24.2 million and $(7.8) million, for the first half of 2012 and 2011, respectively).
  • Cash flow generated from continuing operations of $18.2 million for the second quarter of 2012 compared to $13.7 million for the same period in 2011 ($25.4 million and $12.1 million, for the first half of 2012 and 2011, respectively).
  • EBITDA of $19.0 million for the second quarter of 2012 compared to $2.6 million for the same period in 2011 ($40.9 million and $1.3 million, for the first half of 2012 and 2011, respectively).
  • Net loss attributable to shareholders of $4.0 million or $0.03 per share for the second quarter of 2012 compared to a loss of $11.8 million ($0.12 per share) for the same period in 2011 (net loss of $7.9 million and $13.5 million, for the first half of 2012 and 2011, respectively).
  • A large component of the net loss for 2011 is a non-cash depletion charge in Peru of $19.6 million. This depletion charge has been calculated based on the units of production of the fair valued $363.9 million mineral property asset purchased in the acquisition of Corona on May 26, 2011. Management expects that Yauricocha's life-of-mine will increase going forward as additional mineral reserves and resources are confirmed. If this occurs, non-cash depletion charges would be reduced in future periods.
  • Cash and cash equivalents of $93.7 million at the end of the second quarter in 2012 compared to $20.2 million for the same period in 2011.
  • Revenues of $44.0 million for the second quarter of 2012 compared to $17.6 million for the same period in 2011 ($90.2 million and $21.7 million, for the first half of 2012 and 2011, respectively).
  • A negative silver ("Ag") cash cost of US$17.03 per ounce ("oz") in Yauricocha in the second quarter of 2011 (negative US$ 21.70 for the first half of 2012) and copper ("Cu") cash cost of US$0.52 per pound ("lb") at Bolivar for the second quarter of 2012 (US$ 0.96 per pound for the first half of 2012).

Operational Highlights

  • Silver production of 670,705 oz in the second quarter of 2012 compared to 268,064 oz for the same period in 2011 (1,254,952 oz and 326,394 oz, for the first half of 2012 and 2011, respectively).
  • Copper production of 4.1 million lb in the second quarter of 2012 compared to 2.6 million lb for the same period in 2011 (8.0 million lb and 3.1 million lb, for the first half of 2012 and 2011, respectively).
  • Lead ("Pb") production of 9.1 million lb in the second quarter of 2012 compared to 3.8 million lb for the same period in 2011 (17.0 million lb and 3.9 million lb, for the first half of 2012 and 2011, respectively).
  • Zinc ("Zn") production of 15.3 million lb in the second quarter of 2012 compared to 7.6 million lb for the same period in 2011 (28.9 million lb and 11.3 million lb, for the first half of 2012 and 2011, respectively).
  • Gold ("Au") production from the Yauricocha Mine was 2,876 oz in the second quarter of 2012 (5,901 oz for the first half of 2012).

The following table sets out consolidated production results for the quarter ended first half ended June 30 2012.

Consolidated Production Three months ended   Six months ended 
  June 30,
2012
June 30,
 2011
Var. %   June 30,
 2012
June 30,
2011
Var. %
               
Silver (oz) 670,705 268,064 150%   1,254,952 326,394 284%
Copper (000 lbs) 4,122 2,586 59%   8,000 3,145 154%
Lead (000 lbs) 9,084 3,751 142%   17,014 3,887 338%
Zinc (000 lbs) 15,282 7,636 100%   28,905 11,270 156%
Gold (oz) 2,876 N.A. N.A.   5,901 N.A. N.A.
               

 

The main drivers affecting the Company's financial and operational changes from the second quarter of 2011 to the second quarter of 2012 are the purchase of Corona in Peru, and the ramp-up of production at its Bolivar mine with its nearby Piedras Verdes mill in Mexico. These developments have transformed Dia Bras into a geographically diversified silver, copper, zinc, lead and gold producer with an attractive growth profile and cash flows available to test the exploration potential at its properties in Peru and Mexico.

Exploration Highlights

  • During the second quarter of 2012 ending June 30, 2012 the Company completed a total of 16,459 metres of exploration drilling. Dia Bras completed 3,732 metres at the Yauricocha Mine in Peru, and 2,137 metres and 10,590 metres at the Bolivar and Cusi properties respectively, in Mexico.
  • On May 3, 2012 the Company announced results from its drill programme to expand resources at the Yauricocha Mine. The results show continued potential for the copper Catas ore body and the newly discovered polymetallic Adriana ore body to depth.
  • On May 14, 2012 the Company announced results from its surface and underground drilling campaign at its Promontorio mine, within our Cusi property in Chihuahua State in Mexico, intercepting evidence of strong silver mineralization.

Corporate Highlights

  • On June 7, 2012 the Company closed a $45.0 million private placement of common shares at an offering price of $3.00 per share ("The Offering") previously announced on May 9th, 2012. The Offering was comprised of a brokered portion of 2,585,316 shares and a non-brokered portion of 12,414,684 shares. The brokered portion of the offering was completed through a syndicate of agents led by RBC Capital Markets and included Continental Bolsa SAB SA, Scotia Capital Inc., Credibolsa Sociedad Agente de Bolsa S,A., Canaccord Genuity Corp. and Dundeee Securities. The agents were paid a cash commission equal to 5% of the gross proceeds derived from the brokered offering. The non-brokered portion of The Offering was purchased by Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF Mexico"). After the closing of the private placement Arias Resource Capital Fund L.P., together with ARCF II and ARCF Mexico funds, owned approximately 51.7% of the Company's common shares.
  • At the Annual Meeting of Dia Bras Shareholders held on June 29, 2012, all of the resolutions tabled at the meeting were approved by shareholders, including the re-election of Alberto Arias, Douglas F. Cater, Steven G. Dean, John S. Donnelly, Guillermo Kaelin, Philip Renaud and Daniel Tellechea as Directors. Included in the resolutions approved at the meeting was the adoption of the Dia Bras restricted share unit (RSU) plan for the benefit of the employees, consultants, officers and directors of the Corporation and its subsidiaries. The RSU plan provides for a maximum number of 5,000,000 restricted share units to be reserved for issuance under the RSU plan.  A reduction of the number of shares reserved under the current stock option plan of the Corporation from 8,300,000 to 3,300,000 was also approved by the shareholders.

Quality Assurance
The technical content of this news release has been approved by Thomas L. Robyn, Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101 and Head of Exploration for Dia Bras Exploration, Inc.

About Dia Bras
Dia Bras Exploration is a Canadian exploration & mining company focused on precious and base metals in Chihuahua State, other areas of northern Mexico, and most recently at its Yauricocha silver-lead-zinc-copper-gold mine in Peru. The Company is accelerating exploration at the Yauricocha property as well as pursuing the development and exploration of its most advanced Mexican assets - the Bolivar Property (copper-zinc-silver) and the Cusi Property (silver-lead) and is exploring in Mexico several precious metal targets such as La Sidra gold project at the Bolivar Property, Las Coloradas silver project at Melchor Ocampo (Zacatecas State), the Bacerac silver project (Sonora State), and the La Verde gold project at the Batopilas Property (Chihuahua State).  Dia Bras is also exploring base metal projects in Mexico such as the Corralitos intrusion-hosted molybdenum deposit (Chihuahua State).

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-looking Statements
Except for statements of historical fact, all statements in this news release without limitation regarding new projects, acquisitions, future plans and objectives are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. 

 

SOURCE Dia Bras Exploration Inc.




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