Genco Reports Results for 2007
Wed Apr 9, 4:26 PM
ca.news.finance.yahoo.com
VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 9, 2008) - Genco Resources Ltd. (TSX: GGC.TO) today announced results for the financial year ended December 31, 2007. Genco had another successful year reporting an operating profit from its Mexican silver mining operations of $132,618.
The following table contains selected highlights from Genco's consolidated income statement and consolidated balance sheet for the financial years ended December 31, 2007 and December 31, 2006.
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December 31,
2007 2006
---------- ----------
C$ C$
Total revenue 6,212,545 8,568,324
Operating profit 132,618 2,967,581
General & administrative costs (4,085,402) (1,824,602)
Income (loss) before other items (3,952,784) 1,142,979
Other income (expense) (1,785,583) (2,635,371)
Net income (loss) (5,738,367) (1,492,392)
Net income (loss) per-share (0.16) (0.05)
Total assets 46,022,662 22,445,075
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Revenues in 2007 fell as a result of several factors including the mining of lower grade ore as part of the surface test mining program conducted during the first four months of the year, producing fewer silver and gold ounces, a direct result of higher metal prices allowing for a lower cut-off grade. Increased staffing and activities related to Genco's planned mine expansion contributed to the increase in general and administrative costs.
The following table highlights production achievements during the last two fiscal years.
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2007 2006
Tonnes milled 59,342 53,873
Silver equivalent ounces 572,788 777,710
Silver ounces 304,368 532,506
Gold ounces 5,177 4,705
Silver equivalent grade (grams/tonne) 358 501
Average realized silver price (US$) 13.39 11.54
Average realized gold price (US$) 694.39 601.70
Gold$/Silver$ equivalency factor 51.84 52.12
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At La Guitarra Mine, the total tonnes milled increased 10% while average silver equivalent grade fell from 501 grams per tonne ("g/t") in 2006 to 358 g/t in 2007. This drop in grade was a result of several factors including: the surface test mining during the first four months of the year; lower economic cut-off grade; a drop in the average silver grade; and the limited introduction of lower cost underground bulk mining methods allowing for the economic mining of lower grade ores. Genco believes the value of cost and recovery information gained during test mining operations and the introduction of lower cost mining methods compensates for any short term drop in metal production.
Management's commitment to controlling costs in a difficult inflationary environment has continued. The table below summarizes Genco's mining costs in US dollars for the past two financial years on a cost per silver equivalent ounce basis.
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2007 2006
(US$) (US$)
Cash operating cost 6.12 5.26
Total cash cost 6.62 5.61
Total production cost 8.36 6.53
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Total 2007 production costs were higher than 2006 as lower production costs at La Guitarra Mine were offset by increased third party smelting and refining costs.
During 2007, Genco continued with aggressive exploration and development programs at La Guitarra Mine. Genco remains focused on the completion of a Feasibility Study in mid 2008, significant expansion of La Guitarra Mine and the continued growth of reserves and resources in the Temascaltepec Mining District of Mexico.
See attached balance sheet and income statement for details. Full financial statements are available on SEDAR at sedar.com and on Genco's website at www.gencoresources.com.
GENCO RESOURCES LTD.
Consolidated Balance Sheets
As at December 31, 2007 and December 31, 2006
(Expressed in Canadian dollars)
December 31 December 31
2007 2006
$ $
----------- -----------
Assets
Current assets
Cash 12,556,146 2,184,209
Accounts receivable 567,372 960,855
Taxes receivable 1,918,349 777,460
Inventory 708,447 481,821
Prepaid expenses and deposits 419,093 399,128
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16,169,407 4,803,473
Mineral property interests 45,975 44,974
Property, plant, and equipment 29,807,280 17,596,628
Future income tax - 407,340
----------- -----------
46,022,662 22,852,415
----------- -----------
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 4,130,633 2,695,089
Current portion of long term debt 664,325 582,650
----------- -----------
4,794,958 3,277,739
Long term debt 1,411,800 1,992,789
Asset retirement obligation 214,109 171,057
Future income tax 1,482,775 1,249,336
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7,903,642 6,690,921
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Shareholders' equity
Share capital 43,352,639 21,357,790
Contributed surplus 7,638,029 1,936,985
Retained earnings (deficit) (12,871,648) (7,133,281)
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38,119,020 16,161,494
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46,022,662 22,852,415
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GENCO RESOURCES LTD.
Consolidated Statements of Operations and Deficit
For the 12 Months Ended December 31, 2007 and December 31, 2006
(Expressed in Canadian dollars)
December 31 December 31
2007 2006
$ $
----------- -----------
Sales 6,212,545 8,568,324
Cost of sales 6,079,927 5,600,743
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Gross profit 132,618 2,967,581
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Operating expenses
Administration expenses 4,085,402 1,824,602
Stock-based compensation 1,240,485 1,666,470
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5,325,887 3,491,072
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Operating income (loss) (5,193,269) (523,491)
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Other income (expense)
Accretion on long term debt (107,940) (119,072)
Gain (loss) on sale of property - (5,105)
Interest and other income 334,628 48,281
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226,688 (75,896)
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Net income (loss) before tax (4,966,581) (599,387)
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Income tax expense
Current 131,007 51,009
Future 640,779 841,996
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771,786 893,005
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Net income (loss) (5,738,367) (1,492,392)
Retained earnings (deficit), beginning (7,133,281) (5,640,889)
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Retained earnings (deficit), ending (12,871,648) (7,133,281)
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Earnings (loss) per share
Basic (0.16) (0.05)
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Fully diluted (0.15) (0.05)
----------- -----------
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Weighted average number of common shares
outstanding
Basic 36,415,304 28,322,405
----------- -----------
----------- -----------
Fully diluted 37,638,305 30,802,801
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GENCO RESOURCES LTD.
Consolidated Statements of Cash Flows
For the 12 Months Ended December 31, 2007 and December 31, 2006
(Expressed in Canadian dollars)
December 31 December 31
2007 2006
$ $
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Cash provided by (used for) operating activities
Net income (loss) (5,738,367) (1,492,392)
Adjustments
Accretion on long term debt 107,940 119,072
Amortization and accretion 975,160 769,886
Future income tax 640,779 841,996
Loss on disposal of property - 5,105
Stock-based compensation 1,240,485 1,666,470
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(2,774,003) 1,910,137
Changes in non-cash working capital 448,966 (149,275)
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(2,325,037) 1,760,862
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Cash provided by (used for) investing activities
Deferred exploration and development (9,792,537) (3,483,174)
Mine development changes in accounts payable (7,419) 737,616
Mineral properties (1,001) (1,499)
Other investments - -
Purchase of property, plant, and equipment (3,350,223) (2,261,660)
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(13,151,180) (5,008,717)
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Cash provided by (used for) financing activities
Long term debt principal repayments (594,229) (564,222)
Shares issued for cash (less costs) 26,455,408 5,271,529
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25,861,179 4,707,307
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Increase (decrease) in cash during the period 10,384,962 1,459,452
Effect of changes in foreign exchange rates (13,025) -
Cash, beginning 2,184,209 724,757
----------- -----------
Cash, ending 12,556,146 2,184,209
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The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.
Contacts
Wayne Moorhouse
Genco Resources Ltd.
Chief Financial Officer
(604) 682-2205
(604) 682-2235 (FAX)
Email: gencoinfo@telus.net
Website: www.gencoresources.com
