San Gold releases Q1 results on liquidation basis

2015-06-05 17:13 ET - News Release

An anonymous director reports

SAN GOLD REPORTS 2015 FIRST QUARTER RESULTS

San Gold Corp. has released its 2015 first quarter financial and operating results.

On March 5, as part of the company's continuing court-ordered restructuring process pursuant to its application under part III, division I of the Bankruptcy and Insolvency Act (Canada), the company undertook a sale and investor solicitation process to seek investment, or bids for the acquisition of the company's assets, sufficient to satisfy priority obligations and enable a viable proposal to be made to unsecured creditors.

No third party bids were received by the May 26, 2015, bid deadline and as a result, it is expected that the company's secured lenders will seek court approval for a transaction by which the assets of the company will be acquired by a nominee of the company's principal secured lenders in exchange for secured debt. In such event, the company will have no ability to make a viable proposal to its creditors and will become bankrupt upon the expiry of the stay period.

The company has determined that the going concern assumption is no longer appropriate in this context and has changed the basis of presenting its financial statements from a going concern basis to a liquidation basis effective Jan. 1, 2015.

2015 first quarter financial and operating summary:

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• Announced on April 15, 2015, the suspension of all mining and milling operations;
• Obtained an extension to the court-ordered stay period until June 22, 2015, for the company's proposal trustee to file a proposal to creditors;
• Announced on May 28, 2015, that no third party bids were received from the SISP and that the company will become bankrupt upon the conclusion of the stay period.

This press release should be read in conjunction with the company's consolidated financial statements for the quarter ended Dec. 31, 2014, and associated management's discussion and analysis (MD&A), which are available on the company's website and on SEDAR.

                     INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
                     
                                                                              For the three-month period ended March 31,
                                                                                              2015                 2014

Revenue                                                                           $     14,074,324    $      14,936,099
Operations
Operations                                                                              11,325,466           17,732,481
Income (loss) from operations                                                            2,748,858           (2,796,382)
Exploration                                                                                 73,327               21,595
General and administrative                                                               1,690,925            3,259,813
Income (loss) before other income and expenses                                             984,606           (6,077,790)
Other income and expenses
Finance income -- net                                                                       35,229              289,195
Finance costs                                                                           (2,968,154)          (1,929,852)
Foreign exchange gain (loss)                                                            (2,827,306)              19,164
Gain on asset disposal                                                                      73,419                    -
Net (loss) applied to estimated revenue and expenses to liquidation                      4,702,206                    -
Net (loss) and comprehensive (loss) for the period                                $              -    $      (7,699,283)
Net (loss) per common share
Basic                                                                             $              -    $           (0.02)
Diluted                                                                           $              -    $           (0.02)

Effective Jan. 1, 2015, San Gold changed the basis of presenting its financial statements from a going concern basis to a liquidation basis.

                                               FINANCIAL HIGHLIGHTS
                                                                                                         Q1          Q1
                                                                                                       2015        2014

Total and comprehensive income (loss) (000)                                                              $0     ($7,699)
Items not affecting cash (000)                                                                        ($221)     $2,114
Cash provided (used) by operating activities before changes in non-cash working capital (000)         ($221)    ($5,585)
Net change in non-cash working capital (000)                                                           $209        $432
Cash provided (used) by operating activities (000)                                                     ($12)    ($5,153)
Earnings (loss) per share
Basic                                                                                                 $0.00      ($0.02)
Diluted                                                                                               $0.00      ($0.02)


          PRODUCTION SUMMARY AND STATISTICS

                                     Q1            Q1
                                   2015          2014

Ore milled (tons)                81,427       119,996
Head grade (g/t Au)                3.91          3.67
Contained gold (ounces)           9,261        12,830
Ounces of gold produced           8,631        12,083
Ore mined (tons)                 88,002       123,868
Ore milled per day (tons)           905         1,333
Ore mined per day (tons)            978         1,376
Mill recovery (%)                    93%           94%


                          QUARTERLY PRODUCTION SUMMARY AND STATISTICS
                                                                              
                                Q1      Q4       Q3       Q2        Q1        Q4         Q3       Q2
                              2015    2014     2014     2014      2014      2013       2013     2013

Ore milled (tons)           81,427  78,117   76,649  115,802   119,996   148,042   175,3111   62,344
Head grade (g/t Au)           3.91    3.77     4.63     4.18      3.67      3.78       4.24     5.05
Contained gold (ounces)      9,261   8,763   10,488   12,115    12,830    16,308     21,672   23,964
Ounces of gold produced      8,631   8,407   10,025   11,375    12,083    15,118     20,220   22,526
Ore mined (tons)            88,002  79,663   73,397  112,018   123,868   144,165   167,9371   73,350
Ore milled per day (tons)      905     849      833    1,273     1,333     1,609      1,906    1,784
Ore mined per day (tons)       978     866      798    1,231     1,376     1,567      1,825    1,905
Mill recovery (%)               93%     96%      96%      94%       94%       93%        93%      94%