Every other producer I follow just says x number of ozs at y cost /oz, but not this one.
Hate to state the obvious but if I must:
Results of Operations
For the quarter ended March 31st, 2011, San Gold processed 82,792 tons at 6.47 g/tonne to produce 14,688 oz. gold. Over 1,381 meters (4,531 feet) of primary development was achieved during the quarter.
The quarter was positive from an operating cash flow perspective with the comprehensive loss almost equal to the quarterly spend on exploration – the implication being that the Company is covering all of its non-discretionary expenses. Operating profit margin (please see discussion of Non-IFRS Financial Measures) per ounce is calculated as $665 in comparison to a $3 per ounce loss in the same quarter last year. Cash cost was $862 per ounce and $146 per ton. This represents a 60% reduction in cash cost per ton in comparison to last year and a 35% reduction in the cash cost per ounce. This is consistent with management’s guidance of reducing costs this year as we transition to a steady state producer. (Please see discussion on Non-IFRS financial measures for a detailed calculation and reconciliation of these figures to our IFRS financial statements). The operations at the Hinge continue to demonstrate better economic viability in the short term than the deeper historical Rice Lake mine. Careful scrutiny is also being applied across the Rice Lake Project to identify opportunities for efficiency improvements. Additionally, the near surface deposits of Hinge, 007 and Cohiba have the near term potential to feed more of the mill capacity. At quarter end, a significant stockpile existed which will provide consistent mill feed into the beginning of the second quarter.
A new jaw and cone crusher have been installed in the crushing circuit to improve reliability and throughput. A tertiary crusher and new screening plant will be commissioned in the second quarter to further improve the circuit towards 1,800 tons per day.
For the quarter, San Gold employees had 1 medical aids (MA’s) and no lost time accidents (LTA’s) for frequencies of 1.02 and 0.00 respectively. This is another new record for safety at San Gold Corporation.
