Stockholm, Sweden, 2011-08-18 09:47 CEST (GLOBE NEWSWIRE) --
Central Asia Gold AB (publ)
Interim report for the six-month period from January – June 2011
- Consolidated total income for the reporting period amounted to MSEK 95.3 (MSEK 74.4) and to MSEK 60.9 (MSEK 44.2) for the second quarter.
- Total production from current production units during January-June 2011 was 172 kg (181 kg) out of which 120 kg (133 kg) was produced in the second quarter.
- The amount of gold produced from hard rock gold mining operations during January-June 2011 was 152 kg (123 kg) of which 100 kg (55 kg) was produced in the second quarter.
- EBITDA for the period January-June 2011was MSEK -23.7 (MSEK 7.5) and for the second quarter MSEK -17.7 (MSEK 6.4).
- The net result, after tax and non-controlling interest, was MSEK -29.3 (MSEK -11.4) for the reporting period and MSEK -18.2 (MSEK 6.0) for the second quarter.
- Earnings per share for the period January-June 2011 was SEK -1.83 (SEK -0.65) and SEK -1.14 (SEK -0.34) for the second quarter.
- In May, 30% of the shares in the alluvial producing subsidiary LLC Artelj Lena was sold for MRUB 30, approx. MSEK 6.8.
Significant events after the end of the reporting period
- In July 2011, Sibirskoe Zoloto acquired the remaining 70% of the shares in LLC Artelj Lena from LLC Tardan Gold for MRUB 70, approx. MSEK 15.9.
- A directed new share issuance of MSEK 28 to a limited number of selected qualified investors was completed on July 28, 2011.
Comments by the CEO
Dear fellow shareholders,
We are currently approaching the completion of the commissioning of the heap-leaching facility at Tardan. The launch of the Tardan facility will significantly increase the year round gold production at CAG and thus generate stable operating cash flows for the company
Despite repeated representations by the company’s central and local operational directors for completion of the plant by early July, (originally April / May) the company has continued to experience cost overruns and non-performance in our project management capacity. I have since the end of June personally together with a core team,taken an on-site active responsibility at Tardan to ensure as fast as possible the completion of the construction and commissioning of the plant, and thereby achieving this important milestone for the company.
In addition to further augmenting controls over the local construction we have engaged with local and federal authorities to ensure that all is being done to secure the required permissions. It is our view that the first phase of the construction process will be completed by the end of Q3 and the plant commissioned and operational during Q4 of this year.
The Q2 results have been negatively impacted by the delays in revenues and preparation of leachable ore at Tardan, in addition to the cost overruns and provisions made for the project management oversight during the construction of the plant. At Tardan, in addition to the mining, crushing and agglomeration of ore in preparation for the leaching we have also prepared for stacking the high value tailings from the gravitational plant, which contain about 600 kg of leachable gold.
I am happy to confirm that Solcocon is performing well, re-affirming our strategy of divesting from the company’s alluvial projects and focusing on ore mining. Whilst the costs of production are currently high, we expect these costs to significantly reduce during the 2nd half of the year as we further exploit efficiencies at the production site.
As the major shareholder of CAG, I remain confident that the company is well positioned to deliver attractive returns to shareholders in what is currently a historically attractive macro environment for gold producers.
As such I appreciate the patience and perseverance shown by investors and can assure you all that the team and I are committed to the delivery of a profitable future for the company and its shareholders.
Preston Haskell
Chief Executive Officer
For more information, please contact:
Lars Guldstrand, Chairman of the Board of Central Asia Gold AB, phone +46 70 528 8181
E-mail: lars.guldstrand@centralasiagold.se
Preston Haskell, CEO of Central Asia Gold AB, phone +46 76 890 5549
E-mail: preston.haskell@centralasiagold.se
Website: www.centralasiagold.se, Postal and visiting address: Engelbrektsplan 2, 4tr
SE-114 34 Stockholm
