The year was characterized by a substantial decline in the gold price
The full interim report, in Swedish only, is available on the Company´s website,
www.endomines.com
Highlights Q4/2013
· Gold production 213.0 kg (277.4), -23 %
· Revenues 41.4 MSEK (74.4), -44% due to lower gold production and price
· EBITDA before unrealized losses/gains on derivatives –12.0 MSEK (31.6)
· Profit after tax -41,9 MSEK (26.2)
· Earnings per share -0.48 SEK (0.33)
· Total investments 9.6 MSEK (13.8)
· Total cash flow -38.1 MSEK (-5.1)
· Rämepuro satellite mine test mining was completed during Q4/2014
Highlights January-December 2013
· Gold production 790.0 kg (866.5), -9 %
· Revenues 164.1 MSEK (235.1), -30 %
· EBITDA before unrealized losses/gains on derivatives -24.2 MSEK (88.4)
· Profit after tax -63,8 MSEK (18.9)
· Earnings per share from SEK -0.75 (0.23)
· Total investments 42.5 MSEK (40.1)
· Total cash flow -24.1 MSEK (24.5)
· Cash funds at end of 2013 45.9 MSEK (31 December 2012: 69.2)
· Write down due to lower gold price 32,5 MSEK
Subsequent events
· Exploration activities refocused to the Pampalo mine site and its immediate
surroundings
· The codetermination negotiations that the Company has initiated in order to
carry out cost saving initiatives and improve overall efficiency are expected to
be completed in February
· New mining permits granted for the Hosko and Muurinsuo deposits
· Encouraging assay results from the extended exploration program
Outlook for 2014
· The production guidance for 2014 is in line with 2013 gold production (790
kg)
· Mineral resource and reserve update is expected to be published during
Q1/2014
Key financial data
Q4 Q1 - Q4
MSEK, unless otherwise 2013 2012 change 2013 2012 change
stated
Revenues 41.4 74.4 -33.0 164.1 235.1 -71.0
OPEX -53.4 -42.8 -10.7 -188.3 -146.7 -41.6
EBITDA before unrealised -12.0 31.6 -43.7 -24.2 88.4 -112.6
result on derivative
instruments
Depreciation and write-down -44.3 -9.4 -34.9 -71.4 -36.3 -35.2
Unrealised result on 5.1 7.8 -2.7 19.4 -24.4 43.7
derivative instruments
EBIT -51.3 30.0 -81.3 -76.3 27.7 -104.0
Net result -41.9 26.1 -68.1 -63.8 18.9 -82.7
Earnings per share -0.48 0.33 -0.81 -0.75 0.24 -0.99
Total cash flow -38.1 -5.1 -33.0 -24.1 24.5 -48.6
Cash funds at end of period 45.9 69.2 -23.3 45.9 69.2 -23.3
Other key financial data
Gold production, kg 213.0 277.4 -23% 790.0 866.5 -9%
Cash Cost, USD/oz 1,351 686 97% 1,197 753 59%
Average gold price (USD/oz) 1,273 1,721 -26% 1,411 1,669 -15%
Average gold price (EUR/oz) 935 1,328 -30% 1,063 1,298 -18%
Comments to operations
Pampalo Gold Mine
The production for the fourth quarter was 213 kg and for the full year 790 kg
gold.
The Pampalo processing plant capacity expansion project was completed during the
second quarter. The design capacity is 50 tonnes/hour equalling an annual
capacity of 420,000 tonnes. The Company expects to operate the plant at an
annual capacity utilization of up to 380,000 tonnes in accordance with the
current environmental permit.
Rämepuro satellite mine test mining was completed during Q4/2014. The test
mining campaign tonnage and grade (20 000 t @ 2.1 g/t) were as planned and ore
processing at Pampalo was done satisfactorily. The project included initially
construction of infrastructure such as roads and power lines, as well as other
extensive preparations such as overburden removal. In order to accelerate the
test mining, the contractor previously engaged at the open pit at Pampalo East
was transferred to Rämepuro in the summer. As a consequence less ore was mined
in the Pampalo East open pit during the second half of the year. Thus, the total
ore tonnage from the open pit decreased and the cost increased as the ore was
mined in the underground mine.
Key production figures[1]
Q1-2013 Q2-2013 Q3-2013 Q4-2013 FY 2013 FY 2012
Milled ore 58,856 80,939 93,460 96,328 329,583 249,949
(tonnes)
Head grade (Au 3.5 2.3 3.0 2.6 2.8 4.0
gram/tonne)
Gold recovery (%) 88.4 86.7 82.6 82.8 84.8 86.1
Hourly utilization 88.8 92.7 92.7 87.5 90.4 91.0
(%)
Gold production 180.4 168.1 228.5 213.0 790.0 866.5
(kg)
Gold production 5,800 5,405 7,346 6,848 25,399 27,860
(oz)
LTIFR (12 month 9 0 8 8 8 9
rolling)[2]
OPEX/ (EUR/tonne) 57 69 57 56 60 59
OPEX/ (SEK/tonne) 483 592 498 499 518 513
Cash cost (USD/oz) 745 954 998 1,197 1,197 753
rolling 12 months
Cash Cost (USD/oz) 1,081 1,441 983 1,351 1,197 753
The process plant production showed positive results. Due to the capacity
increase, it has been possible to increase the quantity of milled ore by more
than 30% compared to previous year. Despite this, gold production during the
quarter did not reach the target level due to lower than expected head grade as
well as an unplanned stoppage due to main transformer problems at the processing
plant.
Exploration and other Karelian Gold Line development
Following the share issue in April the exploration drilling program has been
carried out along Karelian Gold Line and the received assay results at an early
stage are encouraging. The mineral rights of the drilled properties are fully
owned by the Company.
Because most companies have reduced their exploration programs due to the
general recession in the mining business, 2013 was a favourable year for
exploration works. Contractors with drilling rigs as well as assay services have
been available at reasonable rates. The drilling program has been conducted with
two rigs from Pöyry Finland Oyj and one rig from MK-Drilling Oy.
The drillings aimed to discover new or extend the previously discovered target
areas. Totally 149 diamond core holes were drilled, amounting to a total of
15,248 drilling meters. All of the cores have been logged and 11,750 samples
have been sent for assays. The results are encouraging. The detailed drilling
results are expected to be published within February.
The Karelian Gold Line Environmental Impact Assessment (EIA) that was completed
and submitted to North Karelian Centre for Economic Development, Transport and
the Environment in May has been formally approved by the relevant authorities.
The environmental impacts of mining and ore transports from the currently known
gold deposits Hosko, Kuivisto, Pampalo NW, Rämepuro, Muurinsuo, Korvilansuo and
Kuittila to the Pampalo processing plant, as well as the impact on local living
conditions have been thoroughly researched in the report. The analysis is
covering the entire life cycle of the project, from mining preparation
activities to site rehabilitation. The analysis covers a time frame extending to
2020.
[image]
Source: The London Bullion Market Association
In 2013 the gold price had its largest annual drop in more than three decades
and this marked the end of a 12-year increase of the gold price.
The average price for gold has dropped by 26 per cent during the last quarter
compared to the same quarter 2012. For the full year the average price was 15
per cent lower in 2013, expressed in US dollars, when compared to previous year.
Gold price development
(Average price according to LBMA) 2013 2012 %
Q1 1,631 1,691 -4
Q2 1,415 1,610 -12
Q3 1,326 1,653 -20
Q4 1,273 1,721 -26
Full year 1,411 1,669 -15
Health and Safety
The Company’s safety performance continues on a good level. The overall “LTIFR”
rate is 7.5. The company remains committed to our overall safety target of “zero
accidents – zero harm”.
Personnel
By the end of the reporting period the number of personnel was 86 employees of
which 72 were working at the Pampalo Gold Mine, 10 people were employed in
exploration and 4 people in the administration in Stockholm and Ilomantsi. The
contractors working at the Pampalo Gold Mine had 46 employees.
Company
The planned sale of Kalvinit to Cove Resources Ltd was not completed. During the
agreement period, from July 2012, Cove has undertaken Feasibility Studies toward
development which has been provided to the Company under the terms of the
agreement. Endomines has started the search for a new partner in order to
continue developing the project. Meanwhile Kalvinit will continue to develop the
deposit and is proceeding with the mining concession application in cooperation
with local landowners.
In March the Company completed a directed new share issue raising a net of 45
MSEK. The purpose of the share issue was to finance accelerated exploration
along the Karelian Gold Line. There was significant interest for this issue and
an allotment of 7,944,000 shares was made to mainly Swedish and Finnish
investors. Following the issue, the number of shares amounts to 87,385,625 of
which the new shares correspond to approximately 9.1 per cent of the share
capital. The Company’s share capital was increased by SEK 23.8 MSEK to SEK 262.2
MSEK.
In May the Company was secondary listed on NASDAQ OMX Helsinki. First day of
trading was 14 May 2013. The Company shall maintain its primary listing on
NASDAQ OMX Stockholm. No new shares were issued in connection with the secondary
listing.
Outlook for 2014
The production guidance for 2014 is in line with 2013 gold production (790 kg).
Decided cost savings measures are expected to have positive impact on among
other things Cash Cost.
Subsequent events
Exploration activities refocused to the Pampalo mine site and its immediate
surroundings. Drilling at Korvilansuo area and development works at Hosko
deposit will currently be put on hold as well as all green field exploration
activities. The reason behind these decisions is recent and near term future
expected low gold price. The company has decided to reduce its exploration
spending and preserve cash to be better prepared for the low gold price period.
To support the Company´s cost saving initiatives and overall efficiency and in
response to the continuing low gold price, Endomines Oy has invited employee
representatives to start cooperation negotiations in order to reduce staff in
accordance with applicable Finnish law (which is equivalent to The Co
-determination at Work Act in Sweden). The Company considers the negotiations
necessary to keep all options open. In the negotiations all cost saving
opportunities will be considered to adjust the production cost to the current
gold price in order to secure continued operations.
Invitation to investors
Dr. Warren Pratt, the new geological consultant for Endomines, will present 'the
true potential of Karelian Gold Line' on the 17th March in Stockholm. Dr Pratt
consults at numerous mines and advanced projects around the world, including
Scandinavia; this includes World Class deposits, such as Navidad, Argentina. The
Igor project, in Peru (c. 750,000 oz gold-equivalent) is among his most recent
discoveries. His specialty is finding new orebodies.
Calendar 2014
2014-03-17 Investor meeting in Stockholm
Week 14 Annual report 2013
2014-04-24 Annual General Meeting
2014-05-12 Q1 Quarterly report
2014-08-14 Q2 Quarterly report
2014-11-05 Q3 Quarterly report
For further information, please contact:
Markus Ekberg
CEO of Endomines AB
tel. +358 40 706 48 50
or visit the Company´s home page: www.endomines.com
About Endomines AB
Endomines AB is a Nordic mining and exploration company with its first operating
gold mine in production since February 2011. The mine is located in Eastern
Finland, on the Karelian Gold Line, a 40 km long gold critical belt, where
Endomines controls all currently known gold deposits.
The company’s business practices and mining operations are based on sustainable
principles and on minimizing the impact on the environment.
Endomines applies SweMin’s & FinnMin's respective rules for reporting (public
mining & exploration companies). It has chosen to report mineral resources and
ore reserves according to the JORC-code, which is the internationally accepted
Australasian code for reporting ore reserves and mineral resources.
The shares of Endomines AB are quoted on NASDAQ OMX Stockholm under ticker ENDO
and on NASDAQ OMX Helsinki under ticker ENDOM. Pareto Öhman acts as Liquidity
Provider in Stockholm.
________________________________________________________________
This news release may contain forward-looking statements, which address future
events and conditions, which are subject to various risks and uncertainties. The
Company's actual results, programs and financial position could differ
materially from those anticipated in such forward-looking statements as a result
of numerous factors, some of which may be beyond the Company's control. These
factors include: the availability of funds; the timing and content of work
programs; results of exploration activities and development of mineral
properties, the interpretation of drilling results and other geological data,
the uncertainties of resource and reserve estimations, receipt and security of
mineral property titles; project cost overruns or unanticipated costs and
expenses, fluctuations in metal prices; currency fluctuations; and general
market and industry conditions.
Forward-looking statements are based on the expectations and opinions of the
Company's management on the date the statements are made. The assumptions used
in the preparation of such statements, although considered reasonable at the
time of preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements.
________________________________________________________________
Endomines AB discloses the information provided herein pursuant to the Swedish
Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The
information was submitted for publication at 08:45 CET on February 10th, 2013.
----------------------------------------------------------------------
[1] Production figures for Q4/2013 are based on company own assaying and not
confirmed by any external laboratory. Figures are individually rounded off.
[2] LTIFR = The Lost Time Injury Frequency Rate is based on reported lost time
injuries on a rolling 12-month bases resulting in one day/shift or more off work
per 1,000,000 hours worked. LTIFR has been calculated for the whole company
including exploration.
SUMMARY OF YEAR-END REPORT 2013
| Source: Endomines AB
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