Primero Reports Third Quarter 2012 Results; and Maintains Annual Production Guidance
Primero Mining Corp. ("Primero" or the "Company") (TSX:P)( PPP) today reported financial results for the third quarter ended September 30, 2012. The Company reported net earnings of $11.6 million ($0.12 per share) and operating cash flows2 of $16.2 million ($0.17 per share).
"Primero has been transformed since the end of the second quarter 2012," stated Mr. Joseph F. Conway, President and Chief Executive Officer. "With a successful advance tax ruling, we have eliminated a significant liability for Primero and dramatically improved our silver leverage. This, combined with the decision to expand the San Dimas mine and mill to 2,500 tonnes per day by the end of the first quarter of 2014 with a very low capital cost, resulted in a significant share price improvement for our shareholders. We have remained focused on operating improvements at San Dimas, with year to date operating cash flow up 14% compared to last year, while the gold price has risen only 8%. Production in the third quarter was slightly impacted by delayed development as a result of power interruptions. We are very encouraged by the initial results of our optimization program that began in the third quarter with the San Dimas mill operating at above its nameplate capacity in the month of October and lower mining dilution rates are being observed. We remain confident in our production guidance for 2012 and continue to expect to produce more than 110,000 gold equivalent ounces."
Third Quarter Highlights:
Production: Production of 18,890 ounces of gold and 1.14 million ounces of silver at cash costs of $699 per gold equivalent ounce;
Silver Sales at Spot Prices: Primero sold 246,230 ounces of silver at spot prices in the third quarter, resulting in 716,230 ounces of silver being sold at spot prices in 2012;
Cash Position Increases: Cash balance increased to $133.1 million at September 30, 2012, from $125.7 million at June 30, 2012;
Reserves and Resources Increased: Mid-Year Reserve and Resource update indicated the Company replaced six month gold depletion by 265%;
Convertible Note Repaid: Primero repaid the outstanding $30 million convertible note, issuing 8,422,460 common shares to Goldcorp who subsequently sold them in a secondary offering on a bought deal basis;
Production Guidance Maintained: Primero expects to achieve the mid to low end of its annual production guidance range of 110,000 to 120,000 gold equivalent ounces.
Subsequent to Third Quarter:
Positive Advance Tax Ruling: Mexican tax authorities confirmed the Company can record revenues and taxes from sales under the silver purchase agreement5 at realized prices;
San Dimas Expansion Announced: The Company announced the expansion of the San Dimas mine and mill to 2,500 tonnes per day ("TPD") by end of the first quarter 2014, with a project IRR of 150%.
"Grades were slightly higher in the third quarter 2012 than the third quarter 2011. Gold and silver grades were lower in the third quarter 2012 than the second quarter and first quarter 2012. This was partially due to mining lower grades than planned as a result of the lack of access to higher grade ore due to safety concerns. Remote access equipment has been delivered to site and mining of higher grade pillars expects to continue in the fourth quarter."
Dropped ~10% at one point. Nibbled a little. |
