Alacer Gold files third quarter financial results and related management's discussion and analysis

Nov 14, 2012, 07:45 ET from ALACER GOLD CORP.

TORONTO, Nov. 14, 2012 /CNW/ - Alacer Gold Corp. ("Alacer Gold" or the "Corporation") [TSX: ASR and ASX: AQG] today announced that it has filed its third quarter 2012 financial results and related management's discussion and analysis ("MD&A"). This news release should be read in conjunction with the Corporation's complete unaudited interim consolidated financial statements for the period ended September 30, 2012 and the related MD&A which are available on and on

Alacer Gold will host a conference call on Wednesday, November 14 at 5:00 pm (North America Eastern Standard Time) and Thursday, November 15 at 9:00 am (Australian Eastern Daylight Time). Conference call details are provided below.

Mr. David Quinlivan, President and CEO of Alacer Gold stated, "The Corporation maintained its strong balance sheet and saw improved production out of its South Kalgoorlie Operations in Western Australia.  Higher grade ore production is expected at both Higginsville and Çöpler in the fourth quarter of 2012 and we remain on track to meet our previously released full-year 2012 production and cost guidance on an aggregate basis.

Our focus is to produce the highest margin ounces available in order to improve total shareholder returns. I am confident the measures we are putting in place to cut costs and improve grades across all of our operations should improve the Corporation's operating and financial performance.

Further to the above measures, I have realigned the Corporation's operational executive management structure on geographical lines to provide greater role clarity and accountability. The newly-created positions are President - Turkish Operations, President - Australian Operations and a global role of Chief Technical Services Officer."

Third Quarter 2012 Performance Summary

Financial Performance

  • Sold 99,355 attributable1 ounces of gold, (108,310 on 100% basis)
  • Gold sales revenue of $179.5 million
  • Realized attributable net profit of $23.4 million ($0.08 per share)
  • Generated mining gross profit of $50.9 million
  • Cash of $280.0 million at September 30, 2012

Operational Performance

  • Produced 90,951 attributable1 gold ounces, (99,120 on 100% basis)
  • Attributable Cash Operating Costs2 of $747 per ounce and attributable Total Cash Costs2 of $841 per ounce
  • Çöpler Total Cash Costs2 of $416 per ounce
  • Australian mines Total Cash Costs2 of $1,080 per ounce

Business Update

  • Increased Çöpler Measured and Indicated Resource estimate of 8.0 million ounces as at June 30, 2012
  • Çöpler Sulfide Feasibility Study on track for completion in late 2012
  • On an aggregate basis, the Corporation remains on track to meet guidance
  • 2013 production and cost guidance and will be released to the market in Q1 2013

Operations Management Realignment

The Corporation's executive management positions of Chief Operating Officer, Chief Development Officer and Executive Vice President - Mine Performance have been eliminated and, effective November 1, 2012, replaced on geographical lines with the positions of President - Turkish Operations and President - Australian Operations.  Howard Stevenson is serving as President - Turkish Operations and Tony James is serving as President - Australian Operations.  Messrs. James and Stevenson will be responsible, respectively, for all capital works and ongoing operations at our existing mine sites in Australia and Turkey.  In addition, Louw Smith has been named Chief Technical Services Officer with responsibility to ensure consistency of processes and standards across the Turkish and Australian Business Units. These three positions will report directly to the President and Chief Executive Officer.

Australian Business Unit ("ABU") Review

As previously disclosed, a strategic and operational review is currently in progress to identify opportunities to improve the cash generation and profit contribution from the Corporation's ABU.  This review is being conducted in conjunction with the Corporation's 2013 budgeting process. The results of the review will be incorporated into the ABU's budget for 2013 and will be released to the market during Q1 2013.  This review encompasses a full range of strategic and operational options in order to maximize value and shareholder return from these assets.

To date, the Corporation has implemented a number of cost-saving initiatives in Australia, including demobilizing two open-pit mining fleets at South Kalgoorlie Operations ("SKO") and reducing the workforce at both SKO and Higginsville by a total of 108 persons. Costs saving initiatives are currently focused on evaluating and optimizing underground mine development layouts at Higginsville and maximizing open-pit mining grade at SKO.

Çöpler Update and New Developments

An updated Çöpler resource estimate was released during the quarter. The Measured and Indicated  Resources increased to 182.6 million tonnes at a grade of 1.4g/t gold, containing a total of 8.0 million ounces (inclusive of reserves) as at June 30, 2012. This resource will form the basis of the mine plan in the Çöpler Sulfide Feasibility Study.

The Çöpler Sulfide Feasibility Study was initiated in January 2012 and is on track for completion in December 2012.  The Corporation expects to disclose the results and next steps of the Feasibility Study during Q1 2013.  Pilot plant pressure oxidation tests were completed in Q2 2012.  Based on the results of the pilot plant and ongoing process test work, the Corporation expects that the twin horizontal autoclaves envisaged in the Çöpler Sulfide Pre-Feasibility Study ("PFS") will be replaced with two lines of vertical autoclaves.  This will facilitate transportation to site and reduce risks associated with on-site fabrication.  In addition, the throughput of the pressure oxidation plant was envisaged to be 8,000 tonnes per day in the PFS. Detailed costing is now progressing on a throughput scenario of 10,000 tonnes per day.  Facility layouts and equipment selection are underway in preparation for developing cost estimates consistent with feasibility study standards.  Initial indications are that capital estimates for construction of the sulfide treatment plant will be higher than those estimated in the PFS as a result of the proposed increase in throughput, the revised plant arrangements and general cost escalation since the PFS costs were estimated in Q3 2010. A scoping study is in progress to evaluate the construction of a separate mill to treat the higher grade oxide material which is expected to be completed in conjunction with the Sulfide Feasibility Study. The Corporation has expended $12.0 million on the feasibility study and expects the final feasibility study cost to be $18.0 million, which is less than the budgeted $25.5 million.

The Sulfidization, Acidification, Recirculation and Thickening ("SART") plant is currently scheduled to be commissioned in Q3 2013.  Detailed design engineering has advanced to 95% completion.  All required permitting and regulatory approvals have now been received for this plant.  The SART plant baseline estimated cost is $32.2 million and construction has been approved by the Corporation's Board of Directors.  To date, the Corporation has committed $5.8 million for time sensitive equipment and engineering, of which $2.4 million has been spent.

Engineering design work for a stand-alone clay sizer/crushing and materials handling circuit continued during the quarter.  The circuit will supplement the existing crushing and materials handling facilities to offer increased options for handling the various ore types encountered at the Çöpler mine.  The capital cost associated with this project is estimated to be $13 million and the work is expected to be complete in Q2 2013.

Preliminary evaluation on how to optimize the throughput capacity of the carbon-in-column circuit commenced in the quarter.


Higher grades are expected at Higginsville and Çöpler in Q4 2012.  On an aggregate basis, the Corporation remains on track to meet the previously released full-year 2012 production and cost guidance. The Corporation's previously announced guidance on an aggregate basis for 2012 is set forth immediately below.

Category 2012 Guidance
Production Ounces 385,000 - 403,000
Cash Operating Costs4/ounce $649 - $675
Total Cash Costs4/ounce $755 - $781
Total (100% basis)
Production Ounces 423,000 -  443,000
Cash Operating Costs4/ounce $619 - 644
Total Cash Costs4/ounce $719 - 744

Conference Call Details

Alacer Gold will host a conference call on Wednesday, November 14 at 5:00 pm (North America Eastern Standard Time) and Thursday, November 15 at 9:00 am (Australian Eastern Daylight Time).

You may participate in the conference call by dialing:

1-800-895-0198           for U.S. and Canada
1-800-144-837           for Australia
800-901-494           for Hong Kong
800-101-2018           for Singapore
0-808-101-1183           for United Kingdom
1-785-424-1053           for International
5434417           Conference ID

If you are unable to participate in the call, a recording of the call will be available on Alacer's website at or through replay until November 28, 2012 by using passcode 5434417 and calling:

1-888-203-1112           for U.S. and Canada
1-800-154-669           for Australia
800-901-108           for Hong Kong
800-101-2009           for Singapore
0-808-101-1153            for United Kingdom 
1-719-457-0820           for International

About Alacer Gold

Alacer Gold Corp. is a leading intermediate gold mining company with interests in multiple mines which provide ore to three processing facilities in Australia and Turkey:

  • 80% interest in the Çöpler Gold Mine;
  • 100% interest in the Higginsville Gold Operations;
  • 100% interest in the South Kalgoorlie Gold Operations; and
  • 49% interest in the Frog's Leg Gold Mine.

Alacer Gold's operations produced a total of 411,193 ounces of gold during 2011.

Alacer Gold is executing a growth strategy through the use of cash flows to grow production and cash margins to generate strong capital returns. While the primary objective is organic growth, the Corporation also identifies and evaluates strategic transactions that will add shareholder value.

Qualified Person

The information in this report which relates to Mineral Resources has been compiled and approved by Chris Newman, a full-time employee of Alacer, who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists.

Mr. Newman has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a qualified person pursuant to National Instrument 43-101 of the Canadian Securities Administrators.  Mr. Newman consents to the inclusion in this release of the matters based on this information in the form and context in which it appears.

Çöpler Mineral Resource

The following Çöpler Mineral Resource was released during Q3 2012.

Mineral Resource for the Çöpler Deposit (100%) as at June 30, 2012
Variable Total Measured 94.0 1.6 4.8 5.1 0.1 3.3
Indicated 88.7 1.1 3.2 2.8 0.1 2.5
Measured + Indicated 182.6 1.4 8.0 3.9 0.1 2.9
Inferred 51.5 0.9 1.6 1.9 0.1 1.7

Note: Resources are quoted after mining depletion and are inclusive of reserves. Resources are shown on a 100% basis, of which Alacer Gold owns 80%.  Resource methodology is summarised in the Technical Procedural Section of this announcement. Stockpiles consist of a ROM stockpile of 38kt at 3.6g/t and a leach pad stockpile estimated at 12.4Mt at 0.18g/t of recoverable gold as of 30 June, 2012. Silver, copper and sulfur grades are not included for stockpiles. Rounding errors will occur.

Further information on this Mineral Resource estimate is available in an announcement dated September 10, 2012.

Cautionary Statements

Except for statements of historical fact relating to Alacer Gold, 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 Gold'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, weather conditions at our operations, 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, including, but not limited in any manner to, those disclosed in any other of Alacer Gold's filings, and include exploration results and the ability to explore, the ultimate determination of mineral reserves, availability and final receipt of required approvals, titles, licenses and permits, sufficient working capital to develop and operate the mines, access to adequate services and supplies, commodity prices, ability to meet production targets, foreign currency exchange rates, interest rates, access to capital markets and associated cost of funds, availability of a qualified work force, ability to negotiate, finalize and execute relevant agreements, lack of social opposition to the mines, lack of legal challenges with respect to the property of Alacer Gold and the ultimate ability to mine, process and sell mineral products on economically favorable terms. 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 Gold's filings at 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.

1 Attributable production and sales includes the Corporation's 80% controlling interest at Çöpler.

2 Cash Operating Costs and Total Cash Costs are non-IFRS financial performance measures with no standardized definitions under IFRS. For further information and detailed reconciliations, see the "Non-IFRS Measures" section of the Corporation's Q3 2012 MD&A.

3 Attributable production includes the Corporation's 80% controlling interest at Çöpler.

4 Cash Operating Costs and Total Cash Costs are non-IFRS financial performance measures with no standardized definitions under IFRS. For further information and detailed reconciliations, see the "Non-IFRS Measures" section of the Corporation's Q3 2012 MD&A.