The full interim report is found on the company’s website and is in Swedish
only.
Highlights Q1/2013
· Gold production 180.4 kg (168.8), + 7%
· Revenues 40.1 MSEK (34.5), +16%
· EBITDA before unrealized loss on derivatives 8.9 MSEK (1.4)
· Operating result 1.5 MSEK (-7.8)
· Profits after tax from continued operations -5.2 MSEK (-10.0)
· Earnings per share from continued operations -0.07 SEK (-0.13)
· Cash funds at end of Q1 85.5 MSEK (31 December 2012: 69.0)
· Announcement made of intention to a secondary listing on NASDAQ OMX Helsinki
· Directed share issue 45 MSEK in beginning of April
Production guidance and outlook for 2013
· The company expects full year 2013 gold production to be 900 – 1,000 kg
· The company expects the average realized gold price in 2013 to be lower than
in 2012, inter alia, due to the gold price development and to higher gold hedge
volume, 17,500 oz versus 12,000 oz 2012
· Rämepuro industrial scale test mining is planned for summer and autumn 2013
· Endomines invites shareholders and the public to the Open House and
Shareholder’s Days on May 24-25 in Pampalo. Further information will be
presented at the Annual General Meeting on April 23 as well as on the company´s
website www.endomines.com
Subsequent events
· Significant expansion and new long gold intersections within Endomines
Korvilansuo gold property
· Endomines AB and Cove Resources Ltd have agreed terms for early payment of
total acquisition consideration and executed a Deed of Variation to the Sale and
Purchase Agreement for the acquisition of Kalvinit Oy
· Korvilansuo is the main target for the exploration program that commenced in
April
Key financial data
+--------------------------------------------+-----+-----+------+
| | Q1 |
+--------------------------------------------+-----+-----+------+
|MSEK, unless otherwise stated |2013 |2012 |change|
+--------------------------------------------+-----+-----+------+
|Results | | | |
+--------------------------------------------+-----+-----+------+
|Concentrate sales | 54.0| 52.7| 1.3|
+--------------------------------------------+-----+-----+------+
|Gold price hedge |-13.3|-17.8| 4.4|
+--------------------------------------------+-----+-----+------+
|Other revenues | -0.5| -0.5| 0.0|
+--------------------------------------------+-----+-----+------+
|Total Revenues | 40.1| 34.5| 5.7|
+--------------------------------------------+-----+-----+------+
|Revenue, growth, % | 16.5| 33.9| |
+--------------------------------------------+-----+-----+------+
|EBITDA, Pampalo*) | 12.2| 7.1| 5.1|
+--------------------------------------------+-----+-----+------+
|EBITDA, Other | -3.3| -5.8| 2.5|
+--------------------------------------------+-----+-----+------+
|EBITDA before unrealized loss on derivatives| 8.9| 1.4| 7.6|
+--------------------------------------------+-----+-----+------+
|EBITDA margin, % | 22.3| 4.0| |
+--------------------------------------------+-----+-----+------+
|Depreciation and amortization | -8.0| -9.0| 1.0|
+--------------------------------------------+-----+-----+------+
|Unrealized loss on derivatives | 0.6| -0.2| 0.8|
+--------------------------------------------+-----+-----+------+
|EBIT, Group | 1.5| -7.8| 9.4|
+--------------------------------------------+-----+-----+------+
|EBIT, % | 3.8|-22.7| |
+--------------------------------------------+-----+-----+------+
|Net Profit from continuing operations | -5.2|-10.0| 4.8|
+--------------------------------------------+-----+-----+------+
| | | | |
+--------------------------------------------+-----+-----+------+
|Gold production, oz |5,800|5,427| 373|
+--------------------------------------------+-----+-----+------+
|Cash cost (USD per oz) | 832| 878| -46|
+--------------------------------------------+-----+-----+------+
Comments to operations Q1/2012
Pampalo Gold Mine
Mining at Pampalo showed stable progress during the reporting period and was
directed to the lower grade areas according to plan. Open pit mining at Pampalo
continued from the Pampalo East –area and the ore was mostly stockpiled for
later processing.
Continuous safety improvement efforts produced results and Q1/2013 was the
fourth consecutive quarter without any Lost Time Injuries at Pampalo. Overall
Lost Time Injury Frequency Rate (LTIFR[1] (http://#_ftn1)) dropped to zero and
thus the Company has achieved its safety target of “zero accidents”. Our own
workforce has now worked 740 days without accidents and our contractors 400
days.
The actions taken in conjunction with the minor fire that occurred in the
Pampalo underground mine in January confirmed that the safety routines at
Pampalo Gold mine are working according to plan. The incident had no effect on
the production at the mine.
During the reporting period the Company published its updated resources and
reserve statement. Successful mine site exploration during 2012 replaced almost
all the ore reserve mined at Pampalo Gold Mine. The Pampalo mine gold production
in 2012 was 867 kg but the total contained gold in the Pampalo ore reserves was
reduced only by 235 kg. For the updated ore reserves and mineral resources, see
Company website.
Table: Key production figures[2] (http://#_ftn2)
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
| |Q1/2012|Q2/2012|Q3/2012|Q4/2012|FY 2012|Q1/2013|Rolling
12 months|
| | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Tonnes mined | 61,134| 57,718| 61,988| 69,950|250,790| 90,386|
280,042|
|(incl. open | | | | | | |
|
|pit) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Tonnes | 61,596| 64,730| 64,177| 59,446|249,949| 58,856|
247,209|
|processed | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Head grade (Au| 3.2| 4.4| 3.2| 5.4| 4.0| 3.5|
4.1|
|g/t) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Gold recovery | 85.6| 86.6| 85.5| 87.2| 86.1| 88.4|
87.0|
|(%) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Hourly | 86.5| 94.2| 95.0| 88.1| 91.0| 88.8|
91.5|
|utilization | | | | | | |
|
|(%) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Gold produced | 168.8| 244.5| 175.8| 277.4| 866.5| 180.4|
878.1|
|kg | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Gold produced | 5,427| 7,862| 5,652| 8,919| 27,860| 5,800|
28,233|
|oz | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|LTIFR (12 | 16| 11| 10| 9| 9| 0|
0|
|month rolling)| | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Opex/tonne | 65| 76| 64| 90| 73| 70|
75|
|processed | | | | | | |
|
|(EUR) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Opex/tonne | 579| 675| 535| 778| 640| 598|
645|
|processed | | | | | | |
|
|(SEK) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
|Cash Cost | 878| 692| 804| 686| 753| 832|
745|
|(USD/oz) | | | | | | |
|
+--------------+-------+-------+-------+-------+-------+-------+----------------
-+
Operating cost per milled ore ton was slightly below average for last year. Cash
cost was 832 USD per oz.
The processing plant capacity expansion project was completed at the end of the
reporting period. The project comprised of installation of the second grinding
mill and additional flotation capacity. Fine tuning and balancing of the process
equipment will continue during the Q2/2013.
The Company has informed the authorities about its intentions to increase the
processing capacity and that the capacity increase will not increase or change
discharge to the nature. North Karelian Centre for Economic Development,
Transport and the Environment has respectively informed that Pampalo production
increase to 380 000 tpa level has no effect on the current permit, as there will
be no increase of discharge to the nature.
Exploration and Karelian Gold Line development
A new resource estimate was prepared for the Korvilansuo target. Within the
Korvilansuo-Elinsuo-Muurinsuo-area all of the results so far obtained support
the Company’s view that the area has a real potential for growing into a
significant and successful gold project. The area has all the typical
characteristics of an Archean greenstone-hosted gold province.
The main target for the coming exploration campaign will be the Korvilansuo
-Elinsuo-Muurinsuo area, where the Company intends to drill at least 12,000
-15,000 meters during year 2013. The Company has secured enough core drilling
contractor capacity as well as all personnel required for this program. The
first drilling-rig is operative and the second is expected by the turn of the
month April-May.
The preparation of the environmental permit application for the Rämepuro deposit
is on-going by Pöyry Finland Oy. The goal is to commence industrial scale test
mining and processing during summer 2013. Test mining can commence upon approval
from the authorities.
Company
During the period the Board of Directors announced its intention to apply for
secondary listing on NASDAQ OMX Helsinki. The shares of Endomines are currently
traded on NASDAQ OMX Stockholm and will continue to do so also after a secondary
listing has been completed. The Company’s ambition is to have the secondary
listing completed during Q2/2013.
In March Endomines 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.
Personnel
The number of personnel at the end of the reporting period was 85 people.
Pampalo Gold Mine had 75 own and 45 contractor employees. Six people were
employed in exploration and four people in general administration in Stockholm
and Ilomantsi.
Subsequent events
Endomines AB and Cove Resources Ltd ("Cove") have agreed terms for early payment
of total acquisition consideration and executed a Deed of Variation to the Sale
and Purchase Agreement for the acquisition of all shares in Kalvinit Oy.
Endomines and Cove have agreed that if Cove completes an equity capital raising
of not less than 3 MAUD (≈ 20.2 MSEK) by 15 May 2013, then Cove will proceed
with the purchase of the Kalvinit Shares by paying the acquisition price in full
at Closing.
Outlook for 2013
The gold price has been in a continuous downward trend in
April[3] (http://#_ftn3). During Q1 the gold price was 1,631 USD/oz in average
according to LBMA. From 1 April to 22 April the average price was 1,501 USD/oz.
The management’s view is that fundamentals for the gold price have not changed
and that the gold price is believed to recover and remain on a relatively high
level.
For further information, please contact:
Markus Ekberg
CEO of Endomines AB
tel. +358 40 706 48 50
_________________________________________________________________________
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 23 April, 2013.
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 SveMin'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.ST. Pareto Öhman acts as Liquidity Provider.
Read more about Endomines on www.endomines.com
__________________________________________________________________________
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.
----------------------------------------------------------------------
[1] (http://#_ftnref1) LTIFR = The Lost Time Injury Frequency Rate (LTIFR) is
calculated as reported lost time injuries resulting in one day/shift or more off
work per 1,000,000 hours worked
[2] (http://#_ftnref2) Production figures for Q1/2013 are based on company own
assaying and not confirmed by an external laboratory. Figures are individually
rounded.
[3] (http://#_ftnref3) An example of theoretical changes in revenues of the
Company for Q1 2013 based on isolated changes of the gold price, shows that
revenues would be reduced by 4.1 MSEK including the effect of the gold hedge if
the average price of gold decreases by 10%.
SUMMARY OF INTERIM REPORT JANUARY – MARCH 2013
| Source: Endomines AB
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