Red Back Reports Record Profits In the Third Quarter
More News related to RBI
- Red Back Mining Inc.: 20% Increase in Tasiast M&I Resources to 5.37 Moz
- Red Back Mining Inc.: 20% Increase in Tasiast M&I Resources to 5.37 Moz
- Sport Supply Group to Participate at the Southwest IDEAS Investor Conference
- Sport Supply Group Announces Record Q1 EPS of $0.37 per Share; Sales Growth of 5.3% in Company's Quarter Ended September 30, 2009
- Southwest IDEAS Conference Announces Presenting Company Lineup, Lunch Programs
More News related to Press Releases
- Wells Fargo Initiates Coverage on American Medical Systems Holdings (AMMD) with an Outperform
- Wells Fargo Initiates Coverage on Varian Medical Systems (VAR) with a Market Perform
- Wells Fargo Initiates Coverage on SAVVIS, Inc. (SVVS) with a Market Perform
- KeyBanc Initiates Coverage on BWAY Holding (BWY) with a Hold; Significant Opportunity, But Near-Term Concerns
- Sidoti & Co Initiates Coverage on Cytec Industries (CYT) with a Neutral
VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 11/03/09 -- Red Back Mining Inc. (TSX: RBI) (the "Company" or "Red Back") is pleased to report net income of $35 million for the three months ended September 30, 2009 ($85 million for the nine months ended September 30, 2009). The 2009 interim consolidated financial statements together with Management's Discussion and Analysis will be available on the Company's web site (www.redbackmining.com) and on SEDAR (www.sedar.com).
Highlights for the Third Quarter
- Net income of $35.1 million (year-to-date: $85.1 million)
- Total gold production of 80,247 oz (year-to-date: 230,892 oz)
- Average realized gold price of $977 per oz (year-to-date: $939 per oz).
- Cash operating costs of $414 per oz (year-to-date: $393 per oz).
- Completion of the Chirano and Tasiast plant expansions.
- Commencement of dump leach operations at Tasiast.
- 33% increase in reserves at Tasiast, now exceeding 3 million oz.
- A major increase in the underground resource at Paboase South, Chirano.
Results of Operations
The results in the third quarter of 2009 show record profits and continued strong operating cash flows. Production at Tasiast was less than anticipated due to delayed permits and start-up issues associated with the plant expansion. These issues have now been resolved and the Company expects increased production levels and lower cash costs in the fourth quarter. Total production for 2009 is now forecasted between 350,000 and 370,000 oz at cash operating costs of $385 per oz.
The tables below summarize the key operating statistics for the quarter and year-to-date.
Three months ended Three months ended
Sept. 30, 2009 Sept. 30, 2008
Chirano Tasiast Total Chirano Tasiast Total
--------------------------------------------------------------------------
Ore tonnes mined
('000t) 839 1,053 2,830 704 527 1,231
Ore tonnes milled
('000t) 645 492 1,137 526 394 920
Average grade (g/t) 2.8 2.3 2.6 1.6 2.9 2.2
Average recovery 90.3% 91.0% 90.6% 92.8% 94.2% 93.4%
Gold produced,
CIL (oz) 49,231 30,272 79,503 25,572 34,251 60,003
Gold produced, dump
leach (oz) - 744 744 - - -
Gold produced,
total (oz) 49,231 31,016 80,247 25,572 34,251 60,003
Gold sold (oz) (Note 2) 40,007 30,791 70,798 27,142 36,362 63,504
Cash operating costs
per oz (Note 3)
Operating $ 392 $ 443 $ 414 $ 596 $ 403 $ 485
Royalties $ 27 $ 58 $ 41 $ 14 $ 25 $ 21
Depreciation,
amortization and
accretion per oz
(Note 3) $ 108 $ 284 $ 184 $ 94 $ 213 $ 162
--------------------------------------------------------------------------
Note 1: Production statistics may not calculate exactly due to rounding.
Note 2: 2009 gold sold at Chirano excludes 9,796 oz recovered from
underground operations and capitalized during pre-production
development.
Note 3: This is a non-GAAP measure. It is calculated by dividing costs on
the statement of income and deficit by gold oz sold. For Tasiast,
approximately $108 per oz (2008: $133 per oz) of depreciation and
amortization are due to the amortization of the fair value excess
on purchase of the Tasiast mineral properties in 2007.
Nine months ended Nine months ended
Sept. 30, 2009 Sept. 30, 2008
Chirano Tasiast Total Chirano Tasiast Total
--------------------------------------------------------------------------
Ore tonnes mined
('000t) 2,477 3,197 5,674 2,246 1,406 3,651
Ore tonnes milled
('000t) 1,841 1,137 2,975 1,666 1,092 2,758
Average grade (g/t) 2.4 3.0 2.6 1.8 3.0 2.3
Average recovery 90.6% 92.2% 91.2% 91.7% 94.1% 92.7%
Gold produced,
CIL (oz) 126,753 99,822 226,575 89,447 98,734 188,181
Gold produced, dump
leach (oz) - 4,317 4,317 - - -
Gold produced,
total (oz) 126,753 104,139 230,892 89,447 98,734 188,181
Gold sold (oz) (Note 2) 112,827 104,798 217,625 91,507 97,274 188,781
Cash operating costs
per oz (Note 3)
Operating $ 442 $ 342 $ 393 $ 472 $ 412 $ 441
Royalties $ 28 $ 37 $ 32 $ 26 $ 27 $ 26
Depreciation,
amortization and
accretion per oz
(Note 3) $ 100 $ 225 $ 160 $ 96 $ 228 $ 164
--------------------------------------------------------------------------
Note 1: Production statistics may not calculate exactly due to rounding.
Note 2: 2009 gold sold at Chirano excludes 14,004 oz recovered from
underground operations and capitalized during pre-production
development.
Note 3: This is a non-GAAP measure. It is calculated by dividing costs on
the statement of income and deficit by gold oz sold. For Tasiast,
approximately $93 per oz (2008: $133 per oz) of depreciation and
amortization are due to the amortization of the fair value excess
on purchase of the Tasiast mineral properties in 2007.
Tasiast Gold Mine, Mauritania
For the third quarter, Tasiast produced 31,016 oz at a cash operating cost of $443 per oz. Third quarter production and cash costs were adversely affected by delays in the receipt of operating permits and longer than anticipated commissioning and start up of the expanded facilities. In addition, a rare electrical storm in September damaged equipment preventing full operation of the water borefield, which in turn delayed the irrigation of the dump leach pads, deferring recoveries of gold from dump leaching to the fourth quarter.
With the plant expansion substantially complete and irrigation of the dump leach pads now fully operational, Red Back expects Tasiast production for the last quarter in 2009 to be between 60,000 and 70,000 oz and for the year between 165,000 and 175,000 oz at a cash operating cost of approximately $340 to $350 per oz.
Drilling results to date have expanded the in-situ reserves from 2.3 million oz at December 31, 2008 to 3.0 million oz at August 31, 2009, as detailed in the table below. The existing ore body remains open both at depth and along strike to the north and south.
Tonnes Au Ounces
(Mt) (g/t) (Moz)
----------------------------------------------------------
Total Proven 33.8 1.43 1.56
Total Probable 30.0 1.45 1.40
Total Stockpile 3.7 0.76 0.09
--------------------------------
Total 67.5 1.40 3.05
--------------------------------
Note: the ore reserve estimate used a gold price of US$700,
no change from previous ore reserve estimate
A drilling program to further expand the resource and reserves is currently underway. Recent drill results (News release dated October 27, 2009) at the West Branch deposit confirm the discovery of a new mineralized zone. This new zone is expected to significantly increase resources and reserves at Tasiast.
The Company is also continuing test work to confirm the estimated gold recovery rates of processing low grade fresh ore by heap leaching. Initial results show an average recovery rate of 59% (News release dated October 27, 2009). Completion of this test work and the calculation of an initial heap leach reserve are expected in the first half of 2010.
Chirano Gold Mine, Ghana
For the third quarter, Chirano produced 49,231 oz at a cash operating cost of $392 per oz. Cash operating costs are lower than expected due to increased production and lower electricity charges.
Red Back expects fourth quarter gold production at Chirano to be between 60,000 to 70,000 oz as a result of the expanded plant production capacity and increasing volumes of higher grade ore from Akwaaba Deeps. For the year, Red Back expects production from Chirano to be between 185,000 and 195,000 oz at a cash cost of $440 to $450 per oz.
The Paboase South underground deposit continues to grow (News Release dated October 26, 2009). The mineralized zone has only been partially drilled and remains open to depth and on strike. The Company expects to release an initial reserve for Paboase South in the first quarter of 2010 whereupon a decision will be made to commence development.
Other
On June 1, 2009, Red Back and Moto Goldmines Limited ("Moto") entered into an arrangement agreement (the "Agreement") pursuant to which each outstanding common share of Moto would be acquired by Red Back. On July 27, Moto advised Red Back that it had received a superior proposal. Red Back did not exercise its right to match the superior proposal and, accordingly, the Agreement was terminated and Moto paid Red Back a CAD $15.25 million termination fee on August 5, 2009.
About Red Back
Red Back Mining Inc. is an unhedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana (90% interest) and the Tasiast Gold Mine in Mauritania (100% owned). Major plant expansions at both Chirano and Tasiast are complete. Aggressive exploration programs aimed at increasing the Company's resource and reserve base at both Chirano and Tasiast is continuing.
This News Release contains forward looking statements which are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements. The Company does not intend to update this information and disclaims any legal liability to the contrary.
On behalf of the Board of Directors:
Richard P. Clark, President
Contacts: Red Back Mining Inc. Simon Jackson VP-Corporate Development 604-689-7842 Red Back Mining Inc. Sophia Shane Investor Relations 604-689-7842 (604) 689-5452 (FAX) www.redbackmining.com
Related Categories
Press ReleasesStocks Mentioned
-0.02Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
