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Scorpio Gold (TSXV:SGN) reported its full-year and Q4 financial results for 2014. The company reported revenues of approximately $52 million for 2014 and $13.377 million for the fourth quarter.
As quoted in the press release, highlights from 2014 included:
- 40,814 ounces of gold produced at the Mineral Ridge mine compared to 39,160 ounces during 2013.
- Revenue of $52.0 million compared to $54.6 million during 2013, as a result a 10% decline in gold prices, partially offset by the sale of 5% more gold ounces in 2014 than 2013.
- Total cash cost per ounce of gold sold (1) of $845 compared to $734 during 2013, mainly attributable to lower head grades.
- Mine operating earnings (1) of $3.1 million compared to $10.8 million during 2013.
- Net loss of $27.4 million ($0.16 basic and diluted per share) after non-cash impairment charge of $28.2 million, compared to a net loss of $ 6.8 million ($0.05 basic and diluted per share) after a non-cash impairment charge of $12.6 million during 2013.
- Adjusted net earnings (1) of $0.3 million ($0.00 basic and diluted per share) compared to $6.3 million ($0.03 basic and diluted per share) during 2013.
- Adjusted EBITDA (1) of $12.3 million ($0.06 basic and diluted per share) compared to $25.2 million ($0.14 basic and diluted per share) during 2013, mainly as a result of higher unit costs per ounce of gold sold and lower realized gold prices.
- Cash flow from operating activities (1) of $16.2 million compared to $22.9 million during 2013, mainly as a result of higher cash costs per ounce of gold sold and lower realized gold prices, offset by a favorable change in inventory.
- On November 5, 2014, the Company received 1,250,000 additional common shares of Gold Standard Ventures Corp. (“Gold Standard”) as bonus consideration pursuant to the sale agreement in respect of the Pinon property. The Company held an aggregate of 6,750,000 common shares of Gold Standard as at December 31, 2014.
- During Q1 of 2015, the Company received proceeds of $3.3 million from the sale of all of the common shares of Gold Standard, and also received payment from Gold Standard of the debt represented by the CAD$2.5 million promissory note received as part of the sale of the Pinon property.
- On March 11, 2015, the Company’s long-term debt owing to Waterton Global Value LP (“Waterton”) was fully repaid.
- On March 6, 2015, the Company announced a strategic financing to raise $15 million from the issuance of equity to Coral Reef Capital LLC (“Coral Reef”). This financing was thereafter terminated and as such the Company is obligated to pay a break fee of $500,000 along with approximately $100,000 of related due diligence costs incurred by Coral Reef.
Highlights from the fourth quarter included:
- 10,258 ounces of gold produced at the Mineral Ridge mine compared to 11,348 ounces in Q4 of 2013, a decrease of 10% due to a lower head grade in 2014 along with a lower number of ore tonnes mined during Q4 of 2014 compared to Q4 of 2013. Significantly more effort was put towards mine development during Q4 of 2014 compared to Q4 of 2013.
- Revenue of $13.4 million in Q4 of 2014 compared to $13.7 million during Q4 of 2013. During Q4 of 2014, the Company sold 11,344 gold ounces at an average price of $1,173 per ounce compared to 10,895 gold ounces at an average price of $1,254 per ounce during Q4 of 2013.
- Total cash cost per ounce of gold sold (1) of $898 in Q4 of 2014 compared to $732 during Q4 of 2013. This increase is mainly attributable to lower head grades during Q4 of 2014.
- Mine operating loss (1) of $0.5 million compared to mine operating earnings (1) of $1.8 million during Q4 of 2013, as a result of higher cash cost and lower average gold prices, partly offset by the higher number of ounces sold.
- Net loss of $28.7 million ($0.16 basic and diluted per share), compared to $2.0 million ($0.02 basic and diluted per share) during Q4 of 2013. During Q4 of 2014, impairments of $26.9 million and $1.3 million, respectively, were recorded on the mining assets and available-for-sale investments. During Q4 of 2013 a non-cash impairment charge of $2.7 million was recorded on the Pinon assets, which were subsequently disposed of in 2014.
- Adjusted net loss (1) of $1.1 million ($0.01 basic and diluted per share) compared to adjusted net earnings (1) of $0.8 million ($0.00 basic and diluted per share) during Q4 of 2013.
- Adjusted EBITDA (1) of $1.5 million ($0.01 basic and diluted per share) compared to $4.8 million ($0.03 basic and diluted per share) during Q4 of 2013 mainly as a result of higher cash cost per ounce of gold sold and lower average gold prices, partly offset by the higher number of ounces sold.
- Cash flow from operating activities (1) of $5.8 million compared to $4.8 million in Q4 of 2013, mainly as a result of a favorable change in inventory partially offset by the higher cash costs per ounce of gold sold and lower realized gold prices during Q4 of 2014 compared to Q4 of 2013.
Scorpio Gold CEO, Peter Hawley, said:
The Company continued to increase its gold production during 2014 and generated $16.2 million of cash flow from operating activities despite lower gold prices. As with many other companies in the industry, the Company recorded a non-cash impairment during 2014. The Company continues to focus on operational excellence along with safe mining practices. In addition, an aggressive drilling program has been planned for 2015 at the Mineral Ridge project with the objective of increasing its life of mine. The Company remains on target to meet its guidance of 40-45,000 ounces of gold production at a cost of $800-$850 per ounce in 2015.
Click here to read the Scorpio Gold (TSXV:SGN) press release