SAS reports 2012 fourth quarter and year end results, beating cash cost guidance, generating $17.5 million in net cash flow and provides 2013 guidance

All dollar amounts are stated in Canadian dollars, unless otherwise indicated

TORONTO, Feb. 14, 2013 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") earned net income attributable to shareholders for the fourth quarter of 2012 ("Q4 2012") of $12.6 million or $0.03 per share, as compared to net income of $12.9 million, or $0.04 on a per share basis, for the fourth quarter of 2011 ("Q4 2011"). Operating cash flow in the quarter was $21.7 million or $0.06 per share, compared to operating cash flow for the same period last year of $14.0 million, or $0.04 per share.

For the fiscal year 2012 ("FY 2012"), SAS earned net income attributable to shareholders of $26.0 million or $0.07 per share as compared to net income of $17.2 million or $0.05 per share for fiscal year 2011 ("FY 2011"). SAS generated $54.1 million in cash flow from operations(1), or $0.15 on a per share basis, compared to $23.4 million or $0.06 per share in FY 2011.

SAS is providing 2013 production guidance of between 95,000 - 105,000 ounces of gold, an increase over 2012 with similar cash cost guidance of between US$800-US$850 per ounce, before royalties.

"We had a great fourth quarter and a very good year overall", said Jacques Perron, President and CEO of SAS. "We saw a steady increase in production and as expected, our mine cash costs in the fourth quarter reduced to under US$800 per ounce. Holt continues to perform well and we were operating at approximately 1,000 tonnes per day at the end of the fourth quarter. We had a solid operational performance in 2012 and are committed to continue to improve at each operation during 2013. We have met our 2012 production and unit cost guidance and look to meet our 2013 goals and objectives in the same manner. Once more, I want to thank all the members of the SAS team for their commitment to achieving success. "

Fourth Quarter 2012 and FY 2012 Highlights

Highlights       Q4 2012 and FY 2012 Achievements
Produced 25,829 ounces of gold from three operations (Holt, Holloway and Hislop mines) in Q4 2012. Record gold production of 95,604 ounces, achieving the middle range of 2012 guidance. A record year of commercial production representing a 29% increase in gold production over the previous year and reaching an annual production rate of approximately 100,000 ounces of gold.
Sold 26,050 ounces of gold for Q4 2012 and 94,067 ounces of gold in FY 2012,  at an average realized price per ounce of gold sold(1) of US$1,667 per ounce for revenues of $156.4 million. An increase in gold sales revenue by 40% over the previous year.
Q4 2012 mine cash cost of US$745 per ounce and a royalty cost of US$139 per ounce, for a total cash cost per ounce of gold sold(1) of US$884 per ounce for Q4 2012. FY 2012 total cash cost per ounce of gold sold(1) of US$919 per ounce. Cash costs decreased quarter over quarter in FY 2012 and beat guidance as production continued to ramp up at the Holt Mine.
Earned cash margin from mine operations (1) of $21.5 million for Q4 2012, and $69.9 million or a cash margin of US$748 per ounce of gold sold(1) for FY 2012. An increase of $32.3 million or 86% in cash margin from mine operations (1) when compared to FY 2011.
Generated operating cash flow of $21.7 million for Q4 2012. Operating cash flow for FY 2012 was $54.1 million or $0.15 per share(1). A record year of operating cash flow since the restart of mine operations in 2009. Cash flow from operations increased by $30.6 million or doubled on a per share basis over the previous year.
Generated net cash flow(1) of $10.5 million and $17.5 million for Q4 2012 and FY 2012, respectively. Increase of $13.0 million in cash. SAS started net cash flow generation in Q2 2012, and ended 2012 with $30.7 million in cash and cash equivalents
Incurred total capital expenditures of $39.3 million in FY 2012, including $6.7 million to advance the Taylor Project. Total capital expenditures for Q4 2012 was $11.9 million. Completed approximately 4,000 metres of capital development at the Holt and Holloway mines, allowing for four production areas at the Holt Mine and the substantial completion of development at the Smoke Deep Zone at the Holloway Mine.
Announced a Pre-Feasibility study on the Taylor Project in February 2012 and extracted the first bulk sample program at the end of the year. Extracted a 15,000 tonne bulk sample from the Taylor Project, which will be sampled and processed during the first quarter of 2013. 
Obtained a US$25.0 million secured bank facility in May 2012 and retired all the outstanding Gold Notes. Utilized US$15.0 million of the term credit facility to retire the Gold Notes liability in full. The US$10.0 million revolving credit facility remains undrawn.

(1) See pages below for an explanation of non-GAAP measures

Holt Mine, Operations and Financial Review
The Holt Mine ("Holt") produced 15,082 ounces of gold in Q4 2012 from processing 89,901 tonnes of ore with an average head grade of 5.51 g/t Au which was above the Zone 4 average reserve grade of 5.18 g/t Au. Mill recoveries were at their expected levels of approximately 94%. Gold produced during Q4 2012 increased by 15% over the third quarter of 2012 ("Q3 2012") and increased by 32% over Q4 2011 due to increased throughput of 12% and 33% respectively. Holt produced at approximately 1,000 tonnes per day ("tpd") during Q4 2012.

Gold sales in Q4 2012 increased by 28% over Q3 2012 and 21% over Q4 2011, mainly due to the increased production as discussed above. The average realized price per ounce of gold sold(1) for Q4 2012 increased by US$70 per ounce when compared to Q3 2012 and increased by US$20 per ounce when compared to Q4 2011. This led to an increase in gold sales revenue of $5.6 million when compared to Q3 2012, and $4.5 million when compared to Q4 2011. Gold sales for FY 2012 were 87% greater than that achieved during FY 2011, as a result of the 36% increase in throughput, a 13% improvement in head grade, combined with the increase in the average realized price per ounce of gold sold(1).

Operating development in Q4 2012 reduced by approximately 33% from Q3 2012 which resulted in a decrease in mine cash cost per ounce of gold sold of US$135 per ounce or 19% over Q3 2012. Operating development caught up with budgeted amounts during Q4 2012, and as such, SAS reduced contracted development mining in the quarter. It is foreseen that the development advancement achieved in Q4 2012 will remain at a similar level in 2013. SAS is currently developing Zone 6 in order to bring it into production at the beginning of the fourth quarter of 2013.

Mine cash cost per ounce of gold sold for FY 2012 was US$651 per ounce as compared to US$785 per ounce in FY 2011. The 17% reduction in mine cash cost per ounce of gold sold(1) was the result of increased throughput, improved head grade and mill recovery, which was partially offset by a slight increase in the Canadian dollar to US dollar exchange rate. Royalty costs for Q4 2012 were consistent with the level incurred in Q3 2012 and Q4 2011.

Cash margin from mine operations(1) in Q4 2012 increased by $5.3 million over Q3 2012 as a result of an increase in gold sales and a decrease in unit operating costs. When compared to Q4 2011, cash margin from mine operations(1) increased by 21% due to the increase in production in Q4 2012. Holt contributed a cash margin from mine operations(1) of $41.7 million for FY 2012 as compared to $19.3 million achieved for FY 2011.

Holt contributed 50,445 ounces, or approximately 53% of the annual gold production for 2012. (see Operating and Financial Statistics - Holt Mine on page 12)

Holloway Mine, Operations and Financial Review
The Holloway Mine ("Holloway") produced 5,240 ounces of gold from processing 46,606 tonnes of ore with an average head grade of 3.90 g/t Au from the Smoke Deep Zone ("Smoke Deep") with minor contributions from the Middle Zone. Recoveries were approximately 90%, which exceeded the Company's forecast due to favourable mineralogy. Gold production during Q4 2012 decreased by 3% over Q3 2012 as a result of lower head grades and decreased by 14% over Q4 2011 due to lower throughput and head grade.

Gold sales during Q4 2012 decreased by $0.8 million or 9% over Q3 2012 mainly as a result of lower head grade, offset by a 4% increase in the average realized price per ounce of gold sold(1). When compared to Q4 2011, gold sales for Q4 2012 decreased by 21% primarily due to a 17% decrease in throughput. Gold sales revenue for FY 2012 decreased by 4% over FY 2011, primarily due to a 10% decrease in commercial gold production sold, which was the result of a 6% reduction in throughput.

When compared to Q3 2012, mine cash cost per ounce of gold sold increased by US$88 per ounce mainly due to a 6% decrease in head grade and a reduction in the mining rate. Mine cash cost per ounce of gold sold(1) for FY 2012 was US$820 per ounce as compared to US$894 per ounce achieved for FY 2011. The decrease in mine cash cost per ounce of gold sold(1) was the result of higher mill recovery and head grade, and a 1% increase in the Canadian dollar to US dollar exchange rate in FY 2012. Royalty cash cost per ounce of gold sold(1) for Q4 2012 increased by US$17 per ounce of gold sold when compared to Q3 2012 and increased by US$38 per ounce of gold sold in FY 2012 as a result of the increasingly higher gold price during 2012.

Cash margin from mine operations(1) for Q4 2012 was $3.3 million, a decrease of $0.6 million from Q3 2012 and $0.9 million when compared to Q4 2011, mainly due to the decrease in gold sales and higher cash costs. Holloway contributed a cash margin from mine operations(1) of $13.4 million for FY 2012 as compared to $12.0 million for FY 2011 due to a decrease in operating unit costs.

Holloway contributed 21,629 ounces, or approximately 22% of the annual gold production for 2012. (see Operating and Financial Statistics - Holloway Mine on page 13)

Hislop Mine, Operations and Financial Review
The Hislop Mine ("Hislop") produced 5,507 ounces of gold during Q4 2012. The head grade averaged 2.22 g/t Au, which was 18% higher than the average reserve grade of 1.88 g/t Au. Recovery for Hislop averaged approximately 81% during the quarter, which was below expectations due to the processing of a significant amount of green carbonate-syenitic ore where the size fraction of the gold was finer than usual.

When compared to Q3 2012, gold sales revenue in Q4 2012 decreased by 10% due to a 12% decrease in head grade as well as a 7% decrease in throughput. When compared to Q4 2011, gold sales revenue improved by 19% due to a 14% improvement in head grade and a 3% increase in throughput. Gold sales revenue for FY 2012 increased by 25% when compared to FY 2011 due to a 17% increase in gold production and a 5% increase in the average realized price per ounce of gold sold(1). The increase in production in FY 2012 was also the result of a 31% improvement in head grade, partially offset by the reduced throughput.

Mine cash cost per ounce of gold sold(1) was 24% higher than Q3 2012 mainly due to a 23% decrease in gold production. Mine cash cost per ounce of gold sold(1) in Q4 2012 was 8% lower than Q4 2011 due to the continued improvement in head grade, increased throughput, and a decrease in the Canadian dollar to US dollar exchange rate. Mine cash cost per ounce of gold sold(1) for FY 2012 was US$1,034 per ounce as compared to US$1,272 per ounce achieved for FY 2011. The reduction in unit cost was the result of improved head grade, offset partially by a reduction in throughput and a slight increase in the Canadian dollar to US dollar exchange rate.

Cash margin from mine operations(1) increased by $1.2 million in Q4 2012 when compared to Q4 2011 as a result of the increased gold sales and lower cash costs mentioned above. When compared to Q3 2012, cash margin from mine operations(1) decreased by $1.5 million as a result of decreased production.  Hislop contributed a cash margin from mine operations(1) of $14.7 million in FY 2012 compared to $6.3 million achieved for FY 2011 as a result of improved head grade.

Hislop contributed 23,530 ounces, or approximately 25% of the annual gold production for 2012. (see Operating and Financial Statistics - Hislop Mine on page 14)

Taylor Project
The Company extracted a 15,000 tonne bulk sample in Q4 2012, and is currently sending the material through a sampling tower which is used to generate a more representative sample than solely using chip samples from the mineralized face or muck samples taken from loading or trucking equipment. SAS expects to process the bulk sample during the first quarter of 2013. Results of the bulk sample program will be released once the material has been processed and all the data has been received and reviewed.

Exploration Programs
Exploration activities during 2012 were focused on surface drilling at the Ghost Zone and Zone 4 targets near Holt and Holloway and the Hislop North Project located northwest of the Hislop open pit. During 2012, SAS conducted approximately 54,000 metres of surface drilling, consisting of 95 drill holes on the Company's exploration targets. For 2013, the near mine targets remain the focus of the exploration program, and will include some of the regional exploration targets.

Capital Resources
During FY 2012 SAS generated $17.5 million in net cash flow(1), of which $10.5 million was generated in Q4 2012. Working capital at the end of 2012 improved by $10.3 million as compared to working capital last year of $7.9 million, when adjusted for the current portion of the Gold Notes of $12.6 million, which were repaid in full in May 2012. At the end of FY 2012, the Company had cash and cash equivalents of $30.7 million. The Company has access to additional cash resources by way of a US$10.0 million revolving credit facility, and in conjunction with the expected cash flows from operations, the Company is well positioned to finance its ongoing capital programs at the mines and to finance the further advancement of Taylor and other advanced stage exploration projects, without the need for external financing.

Conference Call Information
A conference call will be held Friday, February 15, 2013 at 10:00 a.m. (EST) to discuss the fourth quarter and annual 2012 results. Participants may access the webcast via the SAS website at www.sasgoldmines.com.

A recorded playback of the call will also be available via the website and will be posted within 24 hours of the call.

Qualified Person
Production at the Holt, Holloway and Hislop mines, processing at the Holt Mill and development at the Taylor Project are being conducted under the supervision of Duncan Middlemiss, P.Eng, the Company's COO and VP Operations. The exploration programs on the Company's various mineral properties are under the supervision of Douglas Cater, P.Geo, the Company's VP Exploration. Messrs. Middlemiss and Cater are qualified persons as defined by National Instrument 43-101, and have reviewed and approved this news release.

Non-GAAP Measures
The Company has included the following non-GAAP performance measures: adjusted net earnings ; operating cash flow per share; net cash flow; average realized price per ounce of gold sold; total cash cost per ounce of gold sold; cash margin from mine operations; cash margin per ounce of gold sold; and mine-site cost per tonne milled throughout this press release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to pages 8-11 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2012 Annual Financial Statements.

The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and twelve months ended December 31, 2012, can be found on pages 15-17 .

To review the complete 2012 Annual Financial Statements and the Annual Management's Discussion and Analysis for 2012, please see SAS's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

About SAS
SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.

SAS owns and operates the Holt, Holloway and Hislop mines with annual gold production of approximately 100,000 ounces. The Company is also advancing the Taylor Project and is conducting aggressive exploration across 120km of land straddling the Porcupine-Destor Fault Zone.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including the Company's production budgets, and planned gold production levels in 2013; the time necessary to process the bulk sample from the Taylor Project and the results thereof; the extent of the exploration programs in 2013; and the sufficiency of the Company's capital resources to carry out its planned objectives.

This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; the Company's dependence on key employees and changes in the availability of qualified personnel; fluctuations in gold prices and exchange rates; insufficient funding or delays or inability to raise additional financing on satisfactory terms if required; operational hazards and risks, including the inability to insure against all risks; changes in laws, regulations and the risks of obtaining necessary licenses and permits; changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates, the ability of the Company to retain and attract qualified personnel, the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities, the availability of additional financing on acceptable terms if and as required and the level of stability of general business and economic conditions. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forward‐looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.

NON-GAAP MEASURES

Adjusted net earnings
Adjusted net earnings are calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency price protection derivative contracts, one-time gains or losses on the disposition of non-core assets, and expenses and significant tax adjustments not related to current period's earnings, as detailed in the table below.  Adjusted net earnings does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. The Company discloses this measure, which is based on its Financial Statements, to assist in the understanding of the Company's operating results and financial position.

                             
Amounts in thousands of Canadian dollars, except per share amounts       Q4 2012     Q4 2011     FY 2012     FY 2011
                           
Net income (loss) per Financial Statements     $ 12,632   $ 12,921   $ 25,992   $ 17,173
Reversal of income and mining tax asset valuation allowance       (8,312)     (433)     (8,312)     (18,455)
Mark-to-market loss (gain) on gold-linked liabilities       (151)     (1,414)     1,667     3,347
Mark-to-market loss (gain) on foreign currency derivatives       333     (3,436)     (2,061)     3,869
Proceeds from insurance claim       -     -     -     (338)
Loss (gain) on the divestiture of non-core assets       272     (1,049)     (247)     304
Write-down of mining assets       -     -     -     300
Impairment loss on available-for-sale investment       825     -     825     -
Tax effect of above items       (114)     1,475     160     (1,871)
Adjusted net earnings     $ 5,485   $ 8,064   $ 18,024   $ 4,329
                           
Weighted average number of shares outstanding (000s)                          
  Basic       368,245     368,067     368,246     367,912
  Diluted       368,691     368,739     368,604     369,945
                           
Adjusted net earnings per share - basic and diluted     $ 0.01   $ 0.02   $ 0.05   $ 0.01
                           

 

Total cash cost per ounce of gold sold
Total cash cost per ounce of gold sold is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following table provides a reconciliation of total cash costs per ounce of gold sold to production expenses per the Financial Statements for Q4 2012, Q4 2011 as well as for FY 2012 and FY 2011:

                           
Amounts in thousands of Canadian dollars, except where indicated       Q4 2012     Q4 2011     FY 2012     FY 2011
                           
Mine site operating costs per Financial Statements     $ 19,242   $ 18,452   $ 73,769   $ 66,098
Production royalties per Financial Statements       3,590     3,285     12,753     8,222
Adjustments (1)       -     70     (99)     99
Total cash costs     $ 22,832   $ 21,807   $ 86,423   $ 74,419
                           
Divided by gold ounces sold (2)       26,050     23,368     94,067     69,528
                           
Total cash cost per ounce of gold sold (Canadian dollars)     $ 876   $ 933   $ 919   $ 1,070
                           
Average CAD:USD exchange rate     $ 0.99   $ 1.02   $ 1.00   $ 0.99
                           
Total cash cost per ounce of gold sold (US$)     $ 884   $ 912   $ 919   $ 1,081
                           
Breakdown of total cash cost per ounce of gold sold (US$)                          
Holt Mine(2)                          
  Mine cash costs     $ 573   $ 556   $ 651   $ 785
  Royalty costs       168     166     166     167
      $ 741   $ 722   $ 817   $ 952
Holloway Mine                          
  Mine cash costs     $ 834   $ 853   $ 820   $ 894
  Royalty costs       221     203     209     171
      $ 1,055   $ 1,056   $ 1,029   $ 1,065
Hislop Mine                          
  Mine cash costs     $ 1,100   $ 1,196   $ 1,034   $ 1,272
  Royalty costs       -     -     -     -
      $ 1,100   $ 1,196   $ 1,034   $ 1,272
Total                          
  Mine cash costs     $ 745   $ 772   $ 783   $ 960
  Royalty costs       139     140     136     121
      $ 884   $ 912   $ 919   $ 1,081
                           
Notes:
(1)   In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011. This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively.
(2)    Commercial operations at Holt commenced on April 1, 2011.

Mine-site cost per tonne milled
Mine-site cost per tonne milled is a non-GAAP performance measure and may not be comparable to information in other gold producers' reports and filings. As illustrated in the table below, this measure is calculated by adjusting Production Costs, as shown in the statements of operations for inventory level changes and then dividing by tonnes processed through the mill. Since total cash cost per ounce of gold sold data can be affected by fluctuations in foreign currency exchange rates, Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure eliminates the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled in order to be economically viable. Management is aware that this per tonne milled measure is impacted by fluctuations in throughput and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.

                           
Amounts in thousands of Canadian dollars, except per tonne amounts       Q4 2012     Q4 2011     FY 2012     FY 2011
                           
Holt Mine (2)(3)                          
Mine-site costs     $ 8,546   $ 6,936   $ 31,941   $ 20,223
Inventory adjustments (1)       (230)     (483)     617     (124)
Mine site operating costs     $ 8,316   $ 6,453   $ 32,558   $ 20,099
                           
Divided by tonnes of ore milled       89,901     67,778     316,486     188,872
                           
Mine-site cost per tonne milled     $ 93   $ 95   $ 103   $ 106
                           
Holloway Mine                           
Mine-site costs     $ 4,119   $ 5,418   $ 17,513   $ 20,949
Inventory adjustments (1)       277     (181)     309     (944)
Mine site operating costs     $ 4,396   $ 5,237   $ 17,822   $ 20,005
                           
Divided by tonnes of ore milled       46,606     56,225     191,472     204,258
                           
Mine-site cost per tonne milled     $ 94   $ 93   $ 93   $ 98
                           
Hislop Mine                          
Mine-site costs     $ 6,577   $ 6,098   $ 24,315   $ 24,926
Inventory adjustments (1)       (391)     (563)     (80)     269
Mine site operating costs     $ 6,186   $ 5,535   $ 24,235   $ 25,195
                           
Divided by tonnes of ore milled       95,515     92,794     389,550     432,087
                           
Mine-site cost per tonne milled     $ 65   $ 60   $ 62   $ 58
                           
Notes:
(1)     This inventory adjustment reflects production costs associated with unsold bullion and in-circuit inventory.
(2)    Commercial operations at Holt commenced on April 1, 2011.
(3)    Excludes 43,458 tonnes of development ore processed while Holt was in pre-production producing 5,435 ounces of gold in 2011.

 

Cash margin from mine operations
Cash margin from mine operations is a non-GAAP measure which may not be comparable to information in other gold producers' reports and filings. It is calculated as the difference between gold sales and production costs (comprised of mine-site operating costs and production royalties) per the Company's Financial Statements. The Company believes it illustrates the performance of the Company's operating mines and enables investors to better understand the Company's performance in comparison to other gold producers who present results on a similar basis.

                                 
Amounts in thousands of Canadian dollars             Q4 2012     Q4 2011     FY 2012     FY 2011
                                 
Gold sales per Financial Statements     [A]     $ 44,332   $ 40,435   $ 156,391   $ 111,858
                                 
Mine site operating costs per Financial Statements             19,242     18,452     73,769     66,098
Production royalties per Financial Statements             3,590     3,285     12,753     8,222
      [B]       22,832     21,737     86,522     74,320
Cash margin from mine operations     [A] - [B]     $ 21,500   $ 18,698   $ 69,869   $ 37,538
                                 
Breakdown of cash margin from mine operations by mines:                                
  Holt Mine           $ 14,538   $ 12,054   $ 41,728   $ 19,260
  Holloway Mine             3,262     4,117     13,394     11,985
  Hislop Mine             3,700     2,527     14,747     6,293
            $ 21,500   $ 18,698   $ 69,869   $ 37,538
                                 

 

Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-GAAP measure and is calculated by dividing gold sales as reported in the Company's Financial Statements by the gold ounces sold. It may not be comparable to information in other gold producers' reports and filings.

Cash margin per ounce of gold sold
Cash margin per ounce of gold sold is a non-GAAP measure, and is calculated by subtracting the total cash costs per ounce of gold sold from the average realized gold price per ounce of gold sold.

                                         
Amounts in United Sates dollars             Q4 2012     Q3 2012     Q2 2012     Q1 2012     FY 2012
                                         
Per ounce of gold sold:                                      
  Average realized price per ounce of gold sold     [A]     $ 1,710   $ 1,640   $ 1,620   $ 1,695   $ 1,667
  Total cash cost per ounce of gold sold     [B]     $ 884   $ 895   $ 919   $ 996   $ 919
Cash margin per ounce of gold sold     [A] - [B]     $ 826   $ 745   $ 701   $ 699   $ 748
                                         
                Q4 2011     Q3 2011     Q2 2011     Q1 2011     FY 2011
Per ounce of gold sold:                                      
  Average realized price per ounce of gold sold     [A]     $ 1,690   $ 1,715   $ 1,507   $ 1,391   $ 1,592
  Total cash cost per ounce of gold sold     [B]     $ 912   $ 1,132   $ 1,277   $ 1,079   $ 1,081
Cash margin per ounce of gold sold     [A] - [B]     $ 778   $ 583   $ 230   $ 312   $ 511
                                         

 

Net cash flow
Net cash flow is a non-GAAP measure and is calculated by taking cash flow from operating activities less cash used in investing activities as reported in the Company's Financial Statements. It may not be comparable to information in other gold producers' reports and filings.

                             
Amounts in thousands of Canadian dollars       Q4 2012     Q4 2011     FY 2012     FY 2011
                             
Cash flow from operating activities per Financial Statements     $ 21,737   $ 13,981   $ 54,085   $ 23,446
Less:                          
  Cash used in investing activities per Financial Statements       11,282     11,260     36,599     36,552
      $ 10,455   $ 2,721   $ 17,486   $ (13,106)
                             

 

Operating cash flow per share
Operating cash flow per share is a non-GAAP measure and is calculated by dividing cash flow from operating activities in the Company's Financial Statements by the weighted average number of shares outstanding for each year.  It may not be comparable to information in other gold producers' reports and filings.

                           
Amounts in thousands of Canadian dollars, except per share amounts       Q4 2012     Q4 2011     FY 2012     FY 2011
                           
Cash flow from operating activities per Financial Statements     $ 21,737   $ 13,981   $ 54,085   $ 23,446
                           
Weighted average number of shares outstanding (000s)       368,246     368,067     368,246     367,912
                           
Operating cash flow per share     $ 0.06   $ 0.04   $ 0.15   $ 0.06
                           

 

Operating and Financial Statistics - Holt Mine

                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2012     Q3 2012     Q2 2012     Q1 2012     FY 2012
                                 
Tonnes milled       89,901     80,219     78,429     67,937     316,486
Head grade (g/t Au)       5.51     5.40     4.71     5.36     5.25
Average mill recovery       94.7%     94.4%     94.2%     94.1%     94.4%
                                 
Gold produced (ounces)       15,082     13,145     11,193     11,025     50,445
Commercial gold production sold (ounces) (1)       15,043     12,373     11,073     10,674     49,163
                                 
Gold sales revenue (1)     $ 25,584   $ 20,000   $ 18,250   $ 18,015   $ 81,849
                                 
Cash margin from mine operations (2)     $ 14,538   $ 9,250   $ 8,886   $ 9,054   $ 41,728
                                 
Mine-site cost per tonne milled (2)     $ 93   $ 112   $ 96   $ 114   $ 103
                                 
Total cash cost per ounce of gold sold (US dollars)(2):                                
  Mine cash costs     $ 573   $ 708   $ 671   $ 670   $ 651
  Royalty costs       168     165     166     168     166
Total cash cost per ounce of gold sold (2)       741     873     837     838     817
  Depreciation and depletion       200     186     161     145     176
Total production cost per ounce of gold sold (US dollars)     $ 941   $ 1,059   $ 998   $ 983   $ 993
                                 
Average CAD:USD exchange rate       0.99     0.99     1.01     1.00     1.00
                                 
Capital expenditures     $ 4,536   $ 4,990   $ 5,036   $ 3,177   $ 17,739
                                 
                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2011     Q3 2011     Q2 2011     Q1 2011     FY 2011
                                 
Tonnes milled       67,778     66,556     54,538     43,458     232,330
Head grade (g/t Au)       5.57     5.01     3.39     4.15     4.63
Average mill recovery       94.1%     93.4%     92.5%     93.6%     93.5%
                                 
Gold produced (ounces)       11,421     10,012     5,508     5,435     32,376
Commercial gold production sold (ounces) (1)       12,175     8,870     4,979      -     26,024
                                 
Gold sales      $ 21,060   $ 15,449   $ 7,284      N/A   $ 43,793
                                 
Cash margin from mine operations (2)     $ 12,054   $ 6,625   $ 581      N/A   $ 19,260
                                 
Mine-site cost per tonne milled (2)     $ 95   $ 106   $ 121      N/A   $ 106
                                 
Total cash cost per ounce of gold sold (US dollars)(2):                                
  Mine cash costs     $ 556   $ 833   $ 1,255      N/A   $ 785
  Royalty costs       166     181     136      N/A     167
Total cash cost per ounce of gold sold (2)       722     1,014     1,391      N/A     952
  Depreciation and depletion       129     134     130      N/A     132
Total production cost per ounce of gold sold (US dollars)     $ 851   $ 1,148   $ 1,521      N/A   $ 1,084
                                 
Average CAD:USD exchange rate       1.02     0.98     0.97     0.99     0.99
                                 
Capital expenditures     $ 4,250   $ 1,841   $ 1,963   $ 1,740   $ 9,794
                                 
Notes:
(1)    Holt commenced commercial production on April 1, 2011. The operating results for the mine prior to April 1, 2011, were classified as site maintenance and pre-production expenditures.    
(2)    Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 8-11 for an explanation of non-GAAP measurements).

Operating and Financial Statistics - Holloway Mine

                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2012     Q3 2012     Q2 2012     Q1 2012     FY 2012
                                 
Tonnes milled       46,606     44,546     53,169     47,151     191,472
Head grade (g/t Au)       3.90     4.15     3.80     3.77     3.90
Average mill recovery       89.7%     91.0%     91.2%     88.6%     90.2%
                                 
Gold produced (ounces)       5,240     5,408     5,923     5,058     21,629
Commercial gold production sold (ounces) (1)       4,981     5,749     5,744     4,907     21,381
                                 
Gold sales revenue (2)     $ 8,473   $ 9,267   $ 9,467   $ 8,275   $ 35,482
                                 
Cash margin from mine operations (3)     $ 3,262   $ 3,835   $ 3,805   $ 2,492   $ 13,394
                                 
Mine-site cost per tonne milled (3)     $ 94   $ 92   $ 82   $ 105   $ 93
                                 
Total cash cost per ounce of gold sold (US dollars)(3):                                
  Mine cash costs     $ 834   $ 746   $ 771   $ 948   $ 820
  Royalty costs (4)       221     204     205     209     209
Total cash cost per ounce of gold sold (3)       1,055     950     976     1,157     1,029
  Depreciation and depletion       399     410     376     368     389
Total production cost per ounce of gold sold (US dollars)     $ 1,454   $ 1,360   $ 1,352   $ 1,525   $ 1,418
                                 
Average CAD:USD exchange rate       0.99     0.99     1.01     1.00     1.00
                                 
Capital expenditures     $ 1,443   $ 1,794   $ 2,539   $ 4,342   $ 10,118
                                 
                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2011     Q3 2011     Q2 2011     Q1 2011     FY 2011
                                 
Tonnes milled       56,225     49,437     47,971     50,625     204,258
Head grade (g/t Au)       4.03     3.71     3.43     4.13     3.84
Average mill recovery       84.1%     85.2%     85.0%     86.4%     85.2%
                                 
Gold produced (ounces)       6,126     5,026     4,497     5,813     21,462
Commercial gold production sold (ounces) (1)       6,208     5,130     4,996     7,364     23,698
                                 
Gold sales     $ 10,750   $ 8,828   $ 7,272   $ 9,996   $ 36,846
                                 
Cash margin from mine operations (2)     $ 4,116   $ 2,931   $ 1,822   $ 3,115   $ 11,984
                                 
Mine-site cost per tonne milled (2)     $ 93   $ 98   $ 90   $ 111   $ 98
                                 
Total cash cost per ounce of gold sold (US dollars)(2):                                
  Mine cash costs     $ 853   $ 960   $ 964   $ 834   $ 894
  Royalty costs       192     212     164     114     167
Total cash cost per ounce of gold sold (2)       1,045     1,172     1,128     948     1,061
  Depreciation and depletion       368     540     462     345     418
Total production cost per ounce of gold sold (US dollars)     $ 1,413   $ 1,712   $ 1,590   $ 1,293   $ 1,479
                                 
Average CAD:USD exchange rate       1.02     0.98     0.97     0.99     0.99
                                 
Capital expenditures     $ 3,666   $ 2,938   $ 2,986   $ 2,779   $ 12,369
                                 
Notes:
(1)    Holloway commenced production in October 2009.
(2)    Excluding the three months ended March 31, 2012 and June 30, 2012, gold sales include 1,860 ounces of gold delivered to the Gold Note holders in each of the quarters during 2011.
(3)    Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations, are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 8-11 for an explanation of non-GAAP measurements).
(4)    In the first quarter of 2012, the Company accrued a royalty liability of $99 at Holloway which was incurred during the period from August 2011 to December 2011.  This amount has been retroactively applied to the calculation of the total cash cost per ounce of gold sold for each of these quarters, respectively.

Operating and Financial Statistics - Hislop Mine

                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2012     Q3 2012     Q2 2012     Q1 2012     FY 2012
                                 
Overburden stripped (m3)       -     (32,205)     29,236     4,212     1,243
                                 
Tonnes mined                                
  (ore)       101,617     99,287     76,764     118,918     396,586
  (waste)       453,629     513,988     536,015     680,221     2,183,853
        555,246     613,275     612,779     799,139     2,580,439
                                 
Waste-to-Ore Ratio       4.5     5.2     7.0     5.7     5.5
                                 
Tonnes milled       95,516     102,191     97,183     94,660     389,550
Head grade (g/t Au)       2.22     2.53     2.21     1.88     2.21
Average mill recovery       80.8%     86.5%     85.6%     86.4%     84.8%
                                 
Gold produced (ounces)       5,507     7,189     5,899     4,935     23,530
Commercial gold production sold (ounces) (1)       6,026     7,075     5,678     4,744     23,523
                                 
Gold sales revenue     $ 10,275   $ 11,423   $ 9,356   $ 8,006   $ 39,060
                                 
Cash margin from mine operations (2)     $ 3,700   $ 5,165   $ 3,505   $ 2,377   $ 14,747
                                 
Mine-site cost per tonne milled (2)     $ 65   $ 62   $ 61   $ 61   $ 62
                                 
Total cash cost per ounce of gold sold (2)(3)     $ 1,100   $ 889   $ 1,020   $ 1,185   $ 1,034
  Depreciation and depletion       332     234     238     186     250
Total production cost per ounce of gold sold (US dollars)     $ 1,432   $ 1,123   $ 1,258   $ 1,371   $ 1,284
                                 
Average CAD:USD exchange rate       0.99     0.99     1.01     1.00     1.00
                                 
Capital expenditures     $ (39)   $ 390   $ 970   $ 463   $ 1,784
                                 
                                 
Amounts in thousands of Canadian dollars, except where indicated       Q4 2011     Q3 2011     Q2 2011     Q1 2011     FY 2011
                                 
Overburden stripped (m3)       103,346     300,249     472,214     291,307     1,167,116
                                 
Tonnes mined                                
  (ore)       107,827     109,457     114,849     117,138     449,271
  (waste)       599,330     738,054     1,303,072     927,216     3,567,672
        707,157     847,511     1,417,921     1,044,354     4,016,943
                                 
Waste-to-Ore Ratio       5.6     6.7     11.3     7.9     7.9
                                 
Tonnes milled       92,794     107,741     120,677     110,875     432,087
Head grade (g/t Au)       1.94     1.68     1.53     1.66     1.69
Average mill recovery       83.0%     85.4%     87.2%     88.0%     86.0%
                                 
Gold produced (ounces)       4,803     4,980     5,192     5,209     20,184
Commercial gold production sold (ounces) (1)       4,985     5,260     5,185     4,376     19,806
                                 
Gold sales     $ 8,625   $ 9,068   $ 7,579   $ 5,947   $ 31,219
                                 
Cash margin from mine operations (2)     $ 2,527   $ 2,432   $ 1,000   $ 334   $ 6,293
                                 
Mine-site cost per tonne milled (2)     $ 60   $ 59   $ 55   $ 61   $ 58
                                 
Mine cash cost per ounce of gold sold (2)     $ 1,196   $ 1,286   $ 1,311   $ 1,301   $ 1,272
  Depreciation and depletion       177     150     104     95     134
Total production cost per ounce of gold sold (US dollars)     $ 1,373   $ 1,436   $ 1,415   $ 1,396   $ 1,406
                                 
Average CAD:USD exchange rate       1.02     0.98     0.97     0.99     0.99
                                 
Capital expenditures     $ 701   $ 2,822   $ 5,244   $ 1,885   $ 10,652
                                 
Notes:
(1)      Hislop commenced commercial production on July 1, 2010.
(2)      Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 8-11 for an explanation of non-GAAP measurements).
(3)      Hislop is subject to a 4% net smelter return royalty ("NSR") which includes a minimum Advance royalty payment obligation.

Statements of Operations (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars except per share information

                             
Three months ended December 31,   Year ended December 31,
        2012     2011         2012     2011
                               
Gold sales   $ 44,332   $ 40,435       $ 156,391   $ 111,858
                               
Operating costs and expenses:                            
  Mine site operating     19,242     18,452         73,769     66,098
  Production royalty     3,590     3,285         12,753     8,222
  Site maintenance and pre-production     232     180         684     264
  Exploration     2,149     1,443         7,040     8,367
  Corporate administration     2,340     1,277         7,491     6,203
  Depreciation and depletion     7,127     5,014         23,481     16,665
  Write-down of mining assets     -     -         -     300
        34,680     29,651         125,218     106,119
Operating income      9,652     10,784         31,173     5,739
                               
Finance costs     (507)     (1,112)         (2,687)     (4,304)
Mark-to-market gain (loss) on gold-linked liabilities     151     1,414         (1,667)     (3,347)
Mark-to-market gain (loss) on foreign currency derivatives     (333)     3,436         2,061     (3,869)
Foreign exchange gain (loss)     4     (1,120)         (323)     1,134
Gain (loss) on divestiture of non-core assets     (272)     1,049         247     (304)
Impairment loss on available-for-sale investment     (825)     -         (825)     -
Finance income and other     77     42         260     687
Income (loss) before taxes     7,947     14,493         28,239     (4,264)
Deferred taxes     4,685     (1,572)         (2,247)     21,437
Net income for the period   $ 12,632   $ 12,921       $ 25,992   $ 17,173
                               
Other comprehensive income (loss)                              
Unrealized loss on available for sale investments, net of tax of nil for all periods     (193)     (50)         (596)     (174)
Impairment loss on available for sale investment     825     -         825     -
Unrealized mark-to-market gain (loss) on foreign currency derivatives     (258)     -         433     -
        374     (50)         662     (174)
Comprehensive income for the period   $ 13,006   $ 12,871       $ 26,654   $ 16,999
                               
Basic and diluted earnings per share attributable to shareholders   $ 0.03   $ 0.04       $ 0.07   $ 0.05
                               
Weighted average number of shares outstanding (000's)                            
Basic     368,246     368,067         368,246     367,912
Diluted       368,692     368,739         368,604     369,945
                             
                       

Statements of Cash Flows (unaudited)
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

                                   
    Three months ended December 31,   Year ended December 31,
            2012     2011         2012     2011
Cash provided by (used in):                              
                                   
Operating activities:                              
  Net income for the period     $ 12,632   $ 12,921       $ 25,992   $ 17,173
  Items not affecting cash:                              
    Deferred taxes       (4,685)     1,572         2,247     (21,437)
    Mark-to-market (gain) loss on gold-linked liabilities       (151)     (1,414)         1,667     3,347
    Implicit interest and amortization of transaction costs       235     956         1,723     3,720
    Mark-to-market (gain) loss on foreign currency derivatives       333     (3,436)         (2,061)     3,869
    Repayment of Gold Notes       -     (3,083)         -     (11,522)
    Depreciation and depletion       7,127     5,014         23,481     16,665
    Write-down of mining assets       -     -         -     300
    Loss (gain) on the divestiture of non-core assets       272     (1,049)         (247)     304
    Impairment loss on available-for-sale investment       825     -         825     -
    Share-based payments       272     327         1,018     1,530
    Accretion of asset retirement obligation       134     131         546     522
    Change in non-cash operating working capital and other       4,874     2,042         (733)     8,975
    Interest paid       (131)     -         (373)     -
            21,737     13,981         54,085     23,446
Investing activities:                              
    Additions to exploration and evaluation assets       (3,953)     (184)         (6,774)     (3,005)
    Mine development expenditures       (4,038)     (6,461)         (21,092)     (25,588)
    Additions to plant and equipment       (3,893)     (2,134)         (11,411)     (8,085)
    Amounts payable on capital additions       837     (2,083)         1,136     789
    Net change in cash collateralized for banking facilities       -     (381)         1,685     (646)
    Change in reclamation deposits       (17)     (17)         231     (67)
    Cash advance to joint venture       (218)     -         (374)     -
    Proceeds from the sale of non-core assets       -     -         -     50
            (11,282)     (11,260)         (36,599)     (36,552)
Financing activities:                              
    Repayment of Gold Notes       -     -         (14,775)     -
    Advance royalty payments       (506)     (534)         (1,993)     (1,848)
    Proceeds from term credit facility       -     -         14,975     -
    Bank facility transaction costs       -     -         (644)     -
    Repayment of term credit facility       -     -         (1,966)     -
    Capital lease payments       (11)     (7)         (44)     (31)
    Share purchase warrants and stock options exercised       -     88         -     190
            (517)     (453)         (4,447)     (1,689)
                                   
Increase (decrease) in cash and cash equivalents for the period       9,938     2,268         13,039     (14,795)
Cash and cash equivalents, beginning of period       20,718     15,349         17,617     32,412
Cash and cash equivalents, end of period     $ 30,656     $17,617       $ 30,656   $ 17,617
                                   
                   

Balance Sheets
St Andrew Goldfields Ltd.
Expressed in thousands of Canadian dollars

                         
                         
                December 31, 2012       December 31, 2011
                         
Assets                      
Current assets:                      
  Cash and cash equivalents           $ 30,656     $ 17,617
  Restricted cash             -       1,739
  Accounts receivable             4,475       1,717
  Inventories             8,568       6,369
  Derivative assets             725       103
  Prepayments and other assets             237       900
                44,661       28,445
                         
Exploration and evaluation assets             31,382       24,658
Producing properties             64,363       60,067
Plant and equipment             50,537       45,737
Reclamation deposits             8,307       8,538
Restricted cash             1,695       1,641
Deferred tax assets             18,064       20,365
Investment in joint venture             374       -
Other assets             365       716
              $ 219,748     $ 190,167
                         
Liabilities and Shareholders' Equity                      
Current liabilities:                      
  Accounts payable and other liabilities           $ 15,296     $ 12,754
  Employee-related liabilities             4,613       4,057
  Provisions             669       -
  Derivative liabilities             -       1,914
  Current portion of long-term debt             5,822       14,413
  Current portion of capital lease obligations              51       32
                26,451       33,170
                         
Long-term debt             12,759       5,356
Capital lease obligations             137       67
Asset retirement obligations             11,743       10,678
Deferred tax liabilities             721       -
                51,811       49,271
                         
Shareholders' equity:                      
  Share capital              98,556       98,556
  Contributed surplus             19,892       18,968
  Warrants             -       878
  Stock options              3,676       3,128
  Retained earnings              45,796       20,011
  Accumulated other comprehensive loss             17       (645)
                167,937       140,896
              $ 219,748     $ 190,167
                         

 

 

 

 

 

SOURCE St Andrew Goldfields Ltd.



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