Positive cash flow in the third quarter
Third quarter
* Net turnover amounted to MSEK 32.7 (MSEK 0).
* Result after financial items amounted to - MSEK 25.5 (- MSEK
6.6), which included non-recurring preparation and environmental
costs of MSEK 21.5
* Free cash flow amounted to MSEK 1.6 (- MSEK 54.0).
* Investments stood at MSEK 6.8 (MSEK 56.1)
* Gold production was 108 kg.
* The company received MSEK 82.4 through a new share issue, which
it is going to use to develop the Fäboliden project by updating
the existing feasibility study and to finance the continued
development of the company's other activities.
Period January - September
* Net turnover amounted to MSEK 75.5 (MSEK 0).
* Result after financial items amounted to - MSEK 57.5 (- MSEK
-19.2), of which non-recurring preparation and environmental
costs were MSEK 55.2.
* Free cash flow amounted to MSEK -86.1 (- MSEK 120.0).
* Gold production was 477 kg.
* Investments stood at MSEK 19.9 (MSEK 110.7).
* The company received MSEK 170.8 through a new share issue (before
share issue costs).
Events after the end of the report period
The company made its first assessment of the gold mineral resources
at the Ersmarksberget deposit. It estimates the Mineral Resource to
448,000 tonnes, with 2.85 gram of gold per tonne, which will form the
basis for continuous mining, starting in 2010. This means that the
planned production for two month during the latter part of 2009 has
been abandoned. As a result, the annual production for 2009 is
estimated to be 700 kg instead of the previously published figure of
900 kg.
Work on updating the feasibility study for Fäboliden has now got
underway. The company has also started work on evaluating the
different financing options that are available to start construction
of the project as soon as possible after the updated feasibility
study is complete.
Words from the CEO, Kjell Larsson
- In this period we passed important milestones in our strategy - to
become a growing, producing gold company.
The company has made its first assessment of the gold mineral
resources in the Ersmarksberget deposit, which is essential for
continuous mining operation in Blaiken in the future. A comprehensive
update of the profitability study for the Fäboliden project is now
underway, which is core to our growth strategy.
We report a positive cash flow for the third quarter. The result for
the quarter was negative, despite the strong gold market. This is
partly due to temporarily low gold grades in Pahtavaara, which is
being resolved, the extensive costs involved in preparing our
continuous and expanding production and the considerable costs when
implementing environmental measures, that are essential in enabling
the company to move into its next phase, says Kjell Larsson, CEO.
Key ratio
Jul-Sept Jul-Sept Jan-Sept Jan-Sept Full year
2009 2008 2009 2008 2008
Net turn over 32 709 0 75 527 0 6 507
Operating profit/losss
(EBITDA) -23 101 -6 308 -51 171 -18 830 -29 778
Profit/loss after
financial items -25 484 -6 646 -57 543 -19 183 -35 625
Equity/Debt ratio 67,7% 75,0% 67,7% 75,0% 62,6%
Debt/Equity ratio 38,1% 31,7% 38,1% 31,7% 46,3%
Free Cash Flow 1 637 -54 000 -86 097 -119 968 -120 940
Gold Production (kg) 108 0 477 0 65
Gold Sales (kg) 151 0 324 0 35
Gold Sales (TSEK) 32 709 0 74 230 0 6 507
Average gold price
(TSEK) per kg 216 0 229 0 184
STATUS OF OPERATIONAL UNITS AND PROJECTS
Gold production amounted to 108 kg during the third quarter. During
the same period, 151 kg were sold at an average price of TSEK 216 per
kg. During the first nine months of the year, a total of 477 kg gold
was produced, of which 324 kg were sold at an average price of TSEK
229 per kg. Sales contracts for supplying gold concentrate were
negotiated during this period, guaranteeing continued deliveries of
all product qualities from Pahtavaara.
Pahtavaara
During the quarter production at Pahtavaara was affected by mining
taking place in an area that had a lower gold content than originally
planned. Measures were taken to increase the grade that, after the
end of the period, has led to higher grades and improved production
results.
Exploration in order to find new resources at the mine has been
carried out since June, and the results from this drilling will be
part of the reserve and resource assessment that will be carried out
at the end of the year. The drilling has resulted in positive
indications at the near surface target at Länsi, a mineralisation
just north-west of the old open pit mine.
Blaiken
The company has used results from previous drilling and the drilling
from the third quarter to make its first mineral resource assessment
of gold. The mineral resource is 448,000 tonnes with 2.85 gram of
gold per tonne. Drilling will continue to increase the two hundred
meter deep mineralisation that is open towards depth and along
strike. The Company expect to start continual mining operation before
end of third quarter of 2010. The concentrating plant in Blaiken with
its large production capacity is well-equipped for expansion of
future production. Henrik Grind was employed as the President of
Lappland Goldminers Sorsele AB.
During this nine-month period, gold was extracted from a stock pile
of previously mined material. The quality in this material was
uneven, with a fluctuating gold content due to inclusions of zinc,
lead and graphite in the stock pile. A total of 92,000 tonnes were
enriched, compared with the estimated 65,000 tonnes, and there was an
average gold content of 1.5 gram per tonne. A total of 94 kg of gold
was extracted, of which 45 kg was sold.
Fäboliden
Work with updating the current feasibility study got underway after
the end of the period, with two well-known engineering companies, SRK
Consulting and Golder Associates, competing in the first step, the
review. In parallel with this work, the company is starting to
evaluate different financing options that are available to enable the
company to start building the project as soon as possible after the
updated feasibility study is complete. The gold price is currently
around 30 percent higher, and there are indications of much lower
input costs than when the feasibility study was carried out. The aim
for the update and possible revision of this study, according to
current plans, is to be complete during the first half of 2010.
OUTLOOK
As previously disclosed the company expects to report a gold
production of about 700 kg for the current year.
Results for the period
Result after financial items for third quarter was MSEK -25.5 (-6.6)
and -57.5 (-19.2) MSEK for the period as a whole.
During the January-September period, the environmental costs amounted
to MSEK 17.5, of which MSEK 13.6 was in the January-June period. The
preparation costs for production amounted to MSEK 37.7, of which MSEK
20.1 was in the January-June period. The environmental and
preparation costs amounted to a total of MSEK 55.2.
The environmental costs relate to handling a leaking pile of mine
waste as well as the cost of running surface water through an ore
concentration plant, which used to flow directly into the river
Juktan. These costs will continue in the fourth period, but to a
lesser extent.
Cash flow and financing
The company reported a positive cash flow of MSEK 0.3 (MSEK 2.1) for
the third quarter and a free cash flow of MSEK 1.6 (- MSEK 54.0)
The cash flow from operating activities amounted to - MSEK 75.5 (-
MSEK 9.3) for the whole period. The free cash flow amounted to - MSEK
86.1 (- MSEK 120.0), where the net result for the period was affected
by - MSEK 57.5, changes in operating capital by -MSEK 11.4,
investments by - MSEK 19.9 and depreciation and amortisation by MSEK
2.8. Environmental costs and preparation costs for production in this
period affected results by - MSEK 55.2. This is a result of the
company preparing and starting production in Pahtavaara during the
year, and not completing the planned and partly prepared production
in Blaiken before the end of the year.
The nature of the sales process affects our stocks and therefore our
cash flow, as the time to receive payment, for most of the products
supplied, is at least a month and in some cases longer.
Free cash flow is defined as the total of the period's net results,
restored depreciation, changes in operating capital and investments.
Investments
Investments for the third quarter amounted to MSEK 6.8 (MSEK 56.1)
and MSEK 19.9 (MSEK 110.7) for the whole period, and relate to mining
and prospecting.
Equity
The company received an injection of capital on three occasions
during the year, including a directed share issue of MSEK 134.2 and a
preferential share issue of MSEK 36.6 (a total of MSEK 170.8 before
issue costs). The equity ratio amounted to 67.7 percent at the end of
the period.
Share capital development during the third quarter
Activity Issue Increase in number Total number Share capital Quota
rate of of SEK value
shares shares per
share,
SEK
New share 10.7 7,700,000 83,327,509 1,666,550.18 0.02
issue
Employees
The company has 61 employees (47 last year). The company also
continually hires consultants and contractors for different projects.
In total, the number of full-time employees at the company
corresponds to 110 (75 last year).
Reporting dates
Notice of year-end statement 2009 19
February 2010
Accounting principles
The accountings has been prepared according to (ÅRL- Annual Accounts
Act), RFR 2.1 "Reporting for legal entities", International Financial
Reporting Standards (IFRS) and interpretations by International
Financial Reporting Interpretations Committee (IFRIC), as adopted by
EU, and according to RFR 1.1 "Complementary reporting principles for
groups". The parent company also applies to RFR 2.1 "Reporting for
legal entities" and Årsredovisningslagen (ÅRL - Annual Accounts Act).
This report has been prepared in compliance with IAS 34 - Interim
Financial Reporting.
Same accounting principles have been applied as in the last issued
Annual Report.
For detailed information regarding accounting principles, refer to
Annual Report 2008.
The annual report and the group report have been approved for issue
by the Board on April 8, 2009. The group Income statements and
balance sheet and the parent company income statements and balance
was adopted at the Annual General Meeting on May 28, 2009.
Lycksele, November 30, 2009
Kjell Larsson
Chief Executive Officer
The Interim Report for January to September 2009 has been subject to
special examination by the Company's auditors.
For further information please contact:
Kjell Larsson, Tel: E-mail:
CEO 0950-275 kjell.larsson@lgold.se
06,
070-385
03 57
Ulf Ericsson, Chairman of the Board Tel: E-mail:
070-529 09 ulf.ericsson@lgold.se
59
Lappland Goldminers AB (publ)
Org nr 556544-3339
Storgatan 36
SE-921 31 Lycksele
Tel: 0950-275 00
www.lapplandgoldminers.se
Lappland Goldminers AB is a gold exploration company with producing
mines. Lappland Goldminers strategy is to develop a profitable,
producing gold company with centrally located processing plants in
areas with gold deposits. The company is strategically positioned
with Blaiken processing plant and the fully permitted Fäboliden
project on the Gold Line in Sweden, with Pahtavaara mine in northern
Finland and the gold deposits in the Haveri area in southern Finland.
Lappland Goldminers is a member of SveMin and complies with its
reporting rules for public mining and exploration companies. The
Company is listed on First North Premier under the name GOLD with
Mangold Fondkommission AB as the Certified Adviser, and on the
Norwegian OTC list
Income statement -
Group
SEK (,000) 3 month 3 month 9 month 9 month
July-Sept July-Sept Jan-Sept Jan-Sept Full
year
2009 2008 2009 2008 2008
Income
Net turnover 32 709 3 076 75 527 3 076 6 507
Changes in inventory -12 710 2 209 29 475 3 470 5 567
Capitalized work 7 558 239 2 512 2 820
Change in value of 0 0 0 0 311
biological assets
20 005 5 843 105 240 9 057 15 206
Other external costs -34 975 -7 188 -129 519 -15 375 -25 947
Personnel costs -8 131 -4 963 -26 893 -12 512 -19 037
Depreciation of -1 033 -185 -2 827 -439 -1 508
tangible and intangible
fixed assets
Operating Profit/Loss -24 133 -6 494 -53 999 -19 270 -31 287
Financial items:
P/L from financial 0 0 0 0 -2 743
investments:
Financial income 11 4 71 426 455
Financial costs -1 362 -157 -3 616 -340 -2 051
Profit/Loss after -25 484 -6 646 -57 543 -19 183 -35 625
financial items
Taxes 0 0 0 0
Net Profit/Loss for -25 484 -6 646 -57 543 -19 183 -35 625
fiscal period
Number of share before 83 328 63 001 83 328 63 001 63 001
dilution at end of
period , thousand
Number of share after 85 283 64 131 85 283 64 131 64 131
dilution at end of
period , thousand
Average number of 75 754 60 876 68 679 60 758 61 413
shares before dilution,
thousand
Average number of 77 709 62 006 70 342 61 712 62 324
shares after dilution,
thousand
P/L per share before -0,31 -0,11 -0,69 -0,30 -0,57
dilution
P/L per share after -0,30 -0,10 -0,67 -0,30 -0,56
dilution
Balance Sheet - Group
SEK (,000) 30 sept 30 sept Dec 31
2009 2008 2008
Assets
Fixed assets
Intangible fixed assets 261 970 231 385 260 923
Tangible fixed assets 150 351 106 830 134 286
Financial fixed assets 285 3 028 285
412 606 341 243 395 494
Current assets
Inventory 36 411 4 174 6 936
Other receivables 25 112 3 044 4 053
Investments , cash and 57 679 2 657 7 666
bank balances
Total Current assets 119 202 9 875 18 655
Total Assets 531 808 351 118 414 149
Equity and Liabilities
Equity 360 133 263 246 259 353
Allocations 34 508 4 490 34 832
Long-term liabilities 29 542 60 288 51 833
Short-term liabilities 107 625 23 094 68 131
Total Equity and 531 808 351 118 414 149
Liabilities
of which 41 853 29 978 47 611
interest-bearing
Equity per share before 4,32 4,18 3,11
dilution
Equity per share after 4,22 4,10 3,04
dilution
Changes in Equity -
Group
SEK (,000) 3 month 3 month 9 month 9 month Full
year
July-Sept July-Sept Jan-Sept Jan-Sept
2009 2008 2009 2008 2008
Equity at the beginning 311 090 243 742 259 353 256 224 256
of period 224
New issue 82 390 26 000 170 773 26 000 26 000
Issue cost -250 -405 -2 750 -405 -405
Currency -7 613 557 -9 700 611 13 159
effects/acquired equity
P/L of fiscal period -25 484 -6 647 -57 543 -19 184 -57
543
Equity at the end of 360 133 263 246 360 133 263 246 237
period 434
Cash Flow Analysis -
Group
SEK (,000) 3 month 3 month 9 month 9 month Full
year
July-Sept July-Sept Jan-Sept Jan-Sept
2009 2009 2009 2008 2008
Cash flow from operating -32 554 -6 462 -64 060 -18 745 -17
activities before 841
changes in working
capital
Changes in working 32 867 8 548 -11 442 9 445 52 553
capital
Cash flow from operating 313 2 086 -75 502 -9 299 34 712
activities
Free Cash flow 1 637 -54 000 -86 097 -119 968 -120
940
Cash flow from investing -6 778 -56 086 -19 939 -110 670 -139
activities 376
Cash flow from financing 56 524 54 409 145 704 83 883 75 427
activities
Changes in liquid assets 50 059 409 50 263 -36 086 -29
236
Liquid assets at the 10 694 408 7 666 36 902 36 902
beginning of period
Liquid assets at the end 57 679 817 57 679 817 7 666
of period
Undisposed overdraft 15 235 2 983 15 235 2 983 5 000
facilities
Disposable cash at the 72 914 3 800 72 914 3 800 12 666
end of period
The full press release including chart can be downloaded from the
following link.
Lappland Goldminers AB (publ): Interim report January - September 2009
| Source: Lappland Goldminers AB
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