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Roxgold reports year-end 2013 financial results

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SOURCE Roxgold Inc.

TORONTO, April 24, 2014 /PRNewswire/ - Roxgold Inc. ("Roxgold" or "the Company") (TSX.V: ROG) today reported its financial results for the twelve months ended December 31, 2013, including development highlights from its Yaramoko Gold Project in Burkina Faso, West Africa. 

Over the year Roxgold made significant progress in advancing the 55 Zone deposit at the Yaramoko property, including delivering a Preliminary Economic Assessment and commencing work on its Feasibility Study, which has since been completed (for more details please refer to the Company's April 22, 2014 news release). 

The Company also delivered two resource updates for the 55 Zone.  Resources in the indicated category have increased by 141% since the maiden resource in 2012 and a comprehensive regional exploration program, which has so far yielded promising targets such as Bagassi South, is currently underway.  Over 2013, the Company also raised $28.5 million towards further project advancement, in line with its development timelines.

For complete details of the audited Consolidated Financial Statements and associated Management's Discussion and Analysis please refer to the Company's filings on SEDAR (www.sedar.com) or the Company's website (www.roxgold.com).

FISCAL 2013 FINANCIAL HIGHLIGHTS

  • On February 11, 2013, pursuant to a bought deal private placement financing, Roxgold issued 14,973,214 common shares and received gross proceeds of $10,481,000.
  • On August 1, 2013, pursuant to a bought deal private placement financing, The Company issued 25,625,000 common shares and received gross proceeds totalling $10,250,000.
  • On December 31, 2013, Roxgold announced the completion of the acquisition of XDM Royalty Corp. ("XDM") and issued 15,153,752 common shares for net assets totalling $7,954,000 including cash and cash equivalents amounting to $8,367,000.
  • At December 31, 2013, The Company had $17,720,000 in cash and cash equivalents.
  • Expenditures on the Yaramoko exploration property totalled $19,475,000 for year ended December 31, 2013 compared to $31,570,000 during the fourteen-month period ended December 31, 2012.
  • Net loss for the year ended December 31, 2013 amounted to $5,321,000 compared to $30,570,000 for the fourteen-month period ended December 31, 2012.

FISCAL 2013 CORPORATE AND OPERATING HIGHLIGHTS

  • On March 4, 2013, Roxgold announced a first updated resource estimate on the 55 Zone of its Yaramoko permit. The estimate was undertaken by AGP Mining Consultants Inc. and prepared in accordance with National Instrument 43-101 Standards for Disclosure of Mineral Properties. The estimate was based on 81,105 metres of drilling in 213 diamond drill holes. The updated resource estimate on the 55 Zone returned an indicated resource estimate of 1,343,000 tonnes at 15.7 gpt for 679,000 contained ounces of gold and an inferred resource estimate of 751,000 tonnes at 8.9 gpt for 216,000 contained ounces of gold, reported at a 3 grams per tonne ("g/t") gold cut-off. The full report was filed on SEDAR on April 18, 2013.

  • On May 22, 2013, Roxgold received a three-year extension to the 100% owned Yaramoko exploration permit. The Yaramoko permit is now valid until September 8, 2016.

  • On August 27, 2013, Roxgold announced a second updated resource estimate of 1,904,000 tonnes at 13.88 gpt totalling 850,000 gold ("Au") ounces in the indicated category at a 3.0 gram per tonne ("gpt") cut-off grade representing a 143% increase in indicated ounces compared to the maiden resource estimate dated August 7, 2012, while the inferred category included an estimated 860,000 tonnes at 9.88 gpt totalling 273,000 inferred ounces. A total of 243 drill holes were used for this resource update, with an aggregate length of 99,077 metres. The full Preliminary Economic Assessment report, which contained the resource update data, was filed on SEDAR on October 29, 2013.

  • On September 16, 2013, The Company released the results of its Preliminary Economic Assessment ("PEA").  For more details on the PEA see the technical report entitled "NI 43-101 Preliminary Economic Assessment for the Yaramoko Project, Burkina Faso" (the "Technical Report") dated October 29, 2013 and available on SEDAR at www.sedar.com and on the Company's website at www.roxgold.com.

SIGNIFICANT EVENTS SUBSEQUENT TO DECEMBER 31, 2013

A.  Bought deal offering
On March 25, 2014, Roxgold completed a public offering ("Offering") of 49,680,000 common shares pursuant to its short form prospectus dated March 17, 2014 and raised gross proceeds of $28,814,000.  The Company intends to use the net proceeds of the Offering to advance the Yaramoko gold project and complete further exploration at the property, as well as for general working capital purposes.

B.  Feasibility study
On April 22, 2014, The Company announced the results of its feasibility study for the Yaramoko Gold Project (the "Feasibility Study"). The study envisions an underground mining scenario with an initial mine life of over seven years. The Study also outlined:

IRR

  • Pre-tax IRR  of 53.7% with a 1.5 year payback on initial capital
  • After-tax IRR of 48.4% with a 1.6 year payback on initial capital

NPV

  • Pre-tax NPV5% of $300 million
  • After-tax NPV5% of $250 million 

Production Costs1

  • Average Total Cash Costs of $467/oz (including royalties)
  • Average All-in Sustaining Costs of $590/oz 

Capex

  • Pre-Production capital of $106.5 million

Production

  • Estimated average annual gold production of 99,500 ounces

Mine Life

  • Current study mine life of 7.4 years

Probable Mineral Reserves

  • 1.996Mt @ 11.8 g/t Au containing 759,000 ounces Au

Recoveries

  • Average metallurgical recoveries of 96.9% gold

1 Production costs are presented in accordance with World Gold Council standards and are non-IFRS financial performance measure with no standard definition under IFRS.


The economic parameters presented above are based upon 100% ownership of the Yaramoko gold project. Under the Mining Code of Burkina Faso, the Government of Burkina Faso is entitled to a 10% interest in the project upon formal award of an exploitation permit. On a 90% basis, the After-tax NPV5% of the Company's interest in the project is $232 million under the base case scenario. The Government of Burkina Faso is estimated to receive an undiscounted $143 million from Yaramoko in the form of dividends, taxes, VAT, duties and levies.

Several key assumptions utilized in the Feasibility Study were a gold price of $1,300 per ounce sold, a diesel price of $1.58 per litre delivered to site as well as an electricity tarrif of $0.171 per kWhr and a royalty rate of 5%.

More information on the Feasibility Study can be found in the April 22, 2014 press release available on SEDAR at www.sedar.com and on our website at www.roxgold.com.

C.  Environmental and Social Impact Assessment ("ESIA")
In March 2014, Roxgold made a provisional submission of its ESIA to the environmental regulator (BUNEE) in Burkina Faso. The Company expects to finalize this submission shortly while advancing other aspects of in-country permitting. Discussions with community members regarding income restoration and compensation for land disturbed by the planned mining activities are well advanced. No relocations are required as part of the proposed development.

NEAR TERM CORPORATE OBJECTIVES

The Company will continue to advance its Yaramoko gold project throughout 2014 in line with several development goals for this year.  These include:

  • Completing detailed engineering in the second quarter
  • Finalizing project financing, which is expected by the second or third quarter.
  • Finalizing permitting, which is expected in the third quarter.

In addition, Roxgold continues to explore on its 167 km2 permit where it has identified eight priority drill targets that will be tested within Q2 2014. Most notably these targets include the QV1 target at Bagassi South where recent drilling has returned high grade results including 19.94 gpt over 3.7 metres (See the Company's press release dated Feb 20, 2014) and 41.7 gpt over 4.4 metres (see the Company's press release dated Jul 09, 2013).

SELECTED FINANCIAL DATA

The following table and contained data is derived from the Company's financials for the years ended December 31, 2013, 2012 and 2011, prepared in accordance with IFRS reporting standards.  All amounts are expressed in US dollars unless otherwise stated.



For the

year ended

December 31

2013

$

For the

fourteen-month

period ended

December 31,

2012

$

Cost of operations



General and administrative expenses

3,312,000

3,739,000

Contested annual general meeting related costs

-

1,876,000

Severance pay

68,000

1,888,000

Depreciation

90,000

38,000

Share-based payments

1,664,000

8,685,000

Impairment (recovery) of exploration & evaluation assets

-

14,850,000

Operating loss for the period

5,134,000

31,076,000

Other expenses (income)

65,000

(506,000)

Loss before income taxes

5,199,000

30,570,000

Income tax expense

122,000

-

Net loss for the period

5,321,000

30,570,000




Loss per share (basic and diluted)

0.03

0.26





December 31,

2013

$

December 31,

2012

$




Cash and cash equivalents

17,720,000

8,565,000

Other current assets

489,000

1,890,000

Total current assets

18,209,000

10,455,000

Property and equipment

1,252,000

697,000

Exploration and evaluation assets ("E&E")

84,197,000

60,071,000

Total assets

103,658,000

71,223,000

Total liabilities

4,410,000

2,510,000

Total shareholders' equity

99,248,000

68,713,000




General and administrative expenses decreased slightly, compared to the same period in 2012, mainly owing to the fact that some administrative expenses are now directly performed in Burkina Faso and accordingly are being capitalized in owners' costs as part of exploration and evaluation assets.

The decrease in severance pay and share-based payment expenses results from change of control provisions being triggered in employment agreements following the change in the Company's Board of Directors at the 2012 Annual General Meeting ("AGM"). The remaining variation relates to one-time costs incurred in 2012.  These costs were associated with the contested AGM and the fact that at December 31, 2012 the Company determined that the Solna and Bissa West properties were impaired.  The Company considered that substantive exploration and evaluation expenditures were neither budgeted nor planned for the next 18 months, and that minimal expenditures were incurred in 2012 compared to its Yaramoko project on which currently all efforts are deployed. Accordingly, at December 31, 2012, Roxgold recorded $14,850,000 in impairment for the Solna and Bissa West properties.

The other expenses incurred during the year reflect lower interest income compensated by transaction costs incurred for the acquisition of XDM when compared to the comparative period.  Current income tax relates to withholding taxes on management fee recharges to the subsidiary in Burkina Faso.

As a result, the Company's net loss for the year ended December 31, 2013 totalled $5,321,000 or a loss of $0.03 per share compared to $30,570,000 for the fourteen-month period ended December 31, 2012 or a loss of $0.26 per share.

Total current assets have increased between December 31, 2012 and December 31, 2013 mainly owing to XDM acquisition made as of December 31, 2013. Total assets increased during the current year ended December 31, 2013 when compared to the previous period due to on-going investments in Yaramoko's exploration and evaluation assets. This reflect the focus Roxgold puts on this property which was the subject of a positive PEA and recent positive feasibility study as per the press releases dated September 16, 2013 and April 22, 2014, respectively.

At December 31, 2013, Roxgold had $17,720,000 in cash and cash equivalents with no long-term debt. As an exploration and evaluation stage Company equity financings have been its sole source of funds.

QUALIFIED PERSONS
Pierre Desautels, P.Geo, of AGP Mining Consultants Inc., and Jean François Couture, P.Geo of SRK Consulting Canada, Qualified Persons within the meaning of National Instrument 43-101 and independent consultants to the company, have verified and approved the technical data disclosed in the press releases included herein by reference. This includes the sampling, analytical and test data underlying the information.

About Roxgold
Roxgold is a gold exploration and development company with its key asset, the high grade, 100% owned Yaramoko Gold Project located in the Houndé greenstone region of Burkina Faso, West Africa. The Company is currently advancing Yaramoko's 55 Zone through permitting and expects to commence development in Q4 2014. Roxgold trades on the TSX Venture Exchange under the symbol ROG.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

This news release contains forward-looking information. Forward looking information contained in this new release includes, but is not limited to, statements with respect to: (i) the estimation of inferred and indicated mineral resources and probable mineral reserves; (ii) the success of exploration activities; (iii) the completion and timing of the environmental assessment process (iv) the results of the Feasibility Study including statements about future production, future operating and capital costs, the projected IRR, NPV, payback period, and production timelines for the 55 Zone on the Yaramoko permit.

These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. In certain cases, forward-looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves, the realization of resource estimates and reserve estimates, gold metal prices, the timing and amount of future exploration and development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Yaramoko project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the environmental assessment process, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Yaramoko project, risks relating to variations in mineral resources and mineral reserves, grade or recovery rates resulting from current exploration and development activities, risks relating to changes in gold prices and the worldwide demand for and supply of gold, risks related to increased competition in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources and mineral reserves, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Yaramoko project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, and environmental risks. Please refer to the Company's Short Form Prospectus dated March 17, 2014 filed on SEDAR at www.sedar.com for political, environmental or other risks that could materially affect the development of mineral resources and mineral reserves.  This list is not exhaustive of the factors that may affect any of the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking information. The Company does not undertake to update any forward-looking information that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

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