Aurogin Reports First Quarter 2007 Financial Results
Thursday May 31, 1:20 pm ET
TORONTO, ONTARIO--(CCNMatthews - May 31, 2007) - Aurogin Resources Ltd. ("Aurogin" or the "Company") (TSX VENTURE:AUQ - News) has announce its unaudited financial results for the first quarter ended March 31, 2007. The consolidated interim financial statements along with management's discussion and analysis are available on SEDAR at www.sedar.com and on the Company's website at www.aurogin.com (All currency references are to U.S. dollars, unless otherwise noted.)
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Summary of Financial and Operating Highlights(a) Three months ended
March 31,
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2007 2006
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Gold ounces - produced 3,008 -
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Gold ounces - sold 1,241 -
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Average realized gold price ($/ounce) $665 -
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Total cash costs per ounce sold ($/ounce)(b) $290 -
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Metal sales $ 824,575 $ -
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Cost of sales(c) $ 360,300 $ -
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Accretion, depreciation, depletion and amortization $ 137,523 $ -
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Mine operating earnings $ 326,752 $ -
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Net loss for the period $ (105,769)$ (92,553)
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Loss per share (basic and diluted) $ nil $ nil
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Cash flow used in operating activities $ (192,309)$ (76,573)
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(a) As a result of having to fully consolidate the results from the Company's 50% owned El Sastre gold mine, the amounts above represent 100% of the gold ounces produced and sold, metal sales, cost of sales and depreciation, depletion and amortization.
(b) Cost of sales per ounce is calculated by dividing cost of sales as per the consolidated financial statements with gold ounces sold.
(c) Cost of sales excludes, accretion, depreciation, depletion and amortization
"Overall, we were pleased with the progress made during the quarter at our El Sastre operation," said John Paterson, President and CEO of Aurogin. "During the quarter, we mined ore at a much higher grade than forecast in our mine plan. Gold recoveries continue to meet our expectations and we expect to post bottom line earnings in the second quarter."
Mr Paterson noted, "While commercial production commenced in December 2006, work still remained in the first quarter of 2007 to advance the mine to full scale production. Prior to final completion of the leach pad, we took the opportunity in the first quarter to focus our mining efforts on stripping and waste removal, placing only 36,700 tonnes of new ore on the leach pad. Going forward, we expect our stripping ratio to be lower which should result in lower cash costs on a per ounce basis. We also completed construction of the 300,000 tonne leach pad in the quarter. In February and March we placed ore on the leach pad at approximately 70% of our ultimate target mining rate of 25,000 tonnes of ore per month. We are confident that we can achieve our target rate and are working towards that goal. By the end of the quarter, our team had also made significant progress in reducing certain operating costs which will lower cash costs on a per ounce basis going forward."
Quarter over quarter, revenue from gold sales of $824,575 rose 65% due to a 54% increase in the number of ounces sold and a 7% increase in our averaged realized price per ounce sold of $665. This was $15 per ounce better than the average market price of gold per ounce in the quarter.
Cost of sales was $290 per ounce in the quarter. Overall, the average cash cost per ounce sold for all the gold recovered from ore placed on the leach pad prior to December 31, 2006 was $267 per ounce. Going forward, costs on a per ounce basis are expected to decline as the mine achieves target mining rates and forecast stripping ratio and realizes the effects of cost reduction measures.
Exploration efforts during the quarter focused primarily on working towards the completion of the Technical Report on the Bridge property in Guatemala (see Aurogin news release 2007-06 of April 24, 2007) and the Update Report on the El Sastre Exploitation Licence (see Aurogin news release 2007-08 of May 9, 2007). These reports estimated new inferred mineral resources on the Bridge and El Arenal zones and estimated the first mineral reserves on the El Sastre Main Zone. Subsequent to end of the quarter drilling recommenced on the El Sastre property. In addition, we began drilling on our 100% owned Lone Mountain property in Eureka, Nevada (see Aurogin news release 2007-10 of May 16, 2007).
During the first quarter of 2007 (see Aurogin press release of March 5, 2007) Aurogin announced intended plans to merge with Morgain Minerals Inc. Work on this front is ongoing. A shareholders' vote seeking approval for the proposed merger is expected to be held in late July 2007.
Aurogin is a debt free junior gold producer focused on the acquisition and development of profitable gold deposits in the Americas. Its 50% owned El Sastre Main Zone gold mine is only one part of the overall El Sastre Project, an expanding resource that includes at least four mineralized zones.
Issued: 64,994,721 common shares
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OF THIS NEWS RELEASE.
Contact:
John Paterson
Aurogin Resources Ltd.
President
(416) 214-4809 or (direct line (416) 931-7215)
Email: info@aurogin.com
Website: aurogin.com
Source: Aurogin Resources Ltd.
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