TORONTO, ONTARIO — (Marketwire) — 12/21/12 — Orvana Minerals Corp. (TSX: ORV) (the „Company“) announced today financial and operating results for the fourth quarter („Q4 2012“) and fiscal year ended September 30, 2012.
The Company reported adjusted net income for Q4 2012 of $0.09 per share excluding the unrealized loss from the revaluation of the Company-s derivative instruments and the tax effect thereof and the one-time expense associated with the conversion of an outstanding debenture relating to a royalty.
The audited consolidated financial statements for the fiscal year („2012 Financials“) and Management-s Discussion & Analysis related thereto („2012 MD&A“) are available on SEDAR and at .
Dollar amounts (other than per ounce/pound and per share amounts) are in thousands of U.S. dollars unless stated otherwise, and fine troy ounces of gold and silver are referred to as „ounces“.
Q4 2012 Operating and Financial Highlights
2012 Annual Operating and Financial Highlights
„Our financial performance greatly improved in the fourth quarter, ending the 2012 fiscal year on a positive note,“ said Bill Williams, President and Chief Executive Officer. „With the UMZ operation stabilized and EVBC Mine recovering from the ground stability issues, in addition to getting the shaft operational, we expect fiscal 2013 to be very successful both operationally and financially.“
OVERALL PERFORMANCE
The key factors affecting Orvana-s operating and financial performance are tonnages mined and treated, metal grades and recoveries, quantities of metal produced and sold, realized metals prices, cost of supplies including labour and energy, mine development and other capital expenditures, foreign exchange rates, financial instruments and tax rates.
The Company-s operating and financial performance for the fourth quarters ended September 30, 2012 and 2011 and the 2012, 2011 and 2010 fiscal years are summarized in the table below:
EVBC Mine, Spain
Through its wholly-owned subsidiary, Kinbauri Espana S.L.U. („Kinbauri“), the Company owns and operates the EVBC Mine, which is located in the Rio Narcea Gold Belt in northern Spain and consists of 14 exploitation concessions comprising 4,298 hectares and two investigation permits comprising 754 hectares.
The following table includes operating and financial performance data for the EVBC Mine for the third and fourth quarters of fiscal 2012, the fourth quarter of fiscal 2011 and the 2012 and 2011 fiscal years. The EVBC Mine reached commercial production in August 2011.
UMZ Mine, Bolivia
Through its wholly-owned subsidiary, Empresa Minera Paititi S.A. („EMIPA“), the Company owns and operates the UMZ Mine in south-eastern Bolivia. The UMZ Mine reached commercial production in January 2012, thus sales therefrom were recorded as revenue for the full second, third and fourth quarters of fiscal 2012.
A Leach-Precipitation-Flotation („LPF“) circuit, which included conventional flotation circuits, was installed to process the oxide and transition ores from the UMZ Mine. As a result of higher than expected acid consumption, it was realized that the LPF process could not be run on a continuous basis monthly as the sulphuric acid plant could not supply the necessary quantities to operate the mill at high availability. In March 2012, the Company commenced processing the transition ore, which includes both copper in oxide minerals and copper in sulphide minerals, by flotation-only as well as oxides through the LPF process. Processing ore through both the LPF and flotation-only circuits allows the plant to operate at greater than 90% availability. As a result of the LPF low copper recovery, gold-silver dore cannot be produced.
On December 13, 2012, the Company announced National Instrument („NI“) 43-101-compliant updated resource and reserve estimates for the UMZ. This Technical Report is available on and the Company-s website at . During 2012, EMIPA made significant changes to the mining and processing aspects of the operation thus warranting an update.
The following table includes operating and financial performance data for the UMZ Mine for the third and fourth quarters of fiscal 2012 and the 2012 and 2011 fiscal years. The UMZ Mine was not in commercial production during the third and fourth quarters of fiscal 2011, accordingly, this comparative information has not been provided.
Copperwood Project
Through its wholly-owned subsidiary, Orvana Resources US Corp., Orvana entered into long-term mineral lease agreements covering 936 hectares within the Western Syncline, which is located in the Upper Peninsula of the State of Michigan, USA, comprising the „Copperwood Project“. In addition, the Company purchased the surface rights on about 700 hectares that secured access to the Copperwood Project and additional space for infrastructure.
On February 7, 2012, the Company announced positive results in an NI 43-101-compliant feasibility study, which included a reserve estimate. The Company has achieved the following major permitting milestones during the fiscal year:
Total capital expenditures in respect of the Copperwood Project during the fourth quarter of fiscal 2012 were $2,597 for a total of $5,842 in fiscal 2012. Orvana is continuing to investigate a variety of possible options to enhance the value of the Copperwood Project to Orvana-s shareholders, including financing options such as the sale of an equity interest and debt and equity financing should it determine to proceed to bring the Copperwood Project into production.
Outlook
Orvana-s short-term focus is operational optimization at the EVBC Mine and the UMZ Mine to generate increased operating cash flows in order to pay down debt as well as possibly advance the development of the Copperwood Project. Fiscal 2012 guidance for production was 60,000 ounces of gold, 16.53 million pounds of copper and 700,000 ounces of silver. Mostly due to the delays related to the commissioning of the EVBC shaft and other operational issues at the EVBC Mine, production for fiscal 2012 was 55,929 ounces of gold, 15.4 million pounds of copper and 716,280 ounces of silver. Fiscal 2013 guidance for production is 75,000 ounces of gold, 18 million pounds of copper and 850,000 ounces of silver.
Orvana-s long-term focus is to utilize future cash flow and mining capabilities to build long-term value for its shareholders specifically through organic growth and possibly through certain strategic acquisitions primarily focused on advanced-stage gold and/or copper properties.
The Company will hold a conference call on Friday, January 4, 2013 to discuss the fourth quarter and fiscal 2012 results. Following the presentation there will be a question and answer period for analysts and investors. Participation information will be press released prior to the conference call.
About Orvana
Orvana Minerals is a multi-mine gold and copper producer. Orvana-s primary asset is the El Valle-Boinas/Carles gold-copper Mine in northern Spain. Orvana also owns and operates the Don Mario Mine in Bolivia, processing its copper-gold-silver Upper Mineralized Zone deposit. Orvana is also advancing its Copperwood copper project in Michigan, USA. Additional information is available at Orvana-s website ().
Forward Looking Disclaimer
Certain statements in this press release constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws („forward-looking statements“). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as „believes“, „expects“ „plans“, „estimates“ or „intends“ or stating that certain actions, events or results „may“, „could“, „would“, „might“, „will“ or „are projected to“ be taken or achieved) are not statements of historical fact, but are forward-looking statements.
Forward-looking statements relate to, among other things, all aspects of the development of the Upper Mineralized Zone („UMZ“) deposit at the Don Mario Mine in Bolivia, the El Valle-Boinas/Carles Mine in Spain and the Copperwood project in Michigan and their potential operations and production; the outcome and timing of decisions with respect to whether and how to proceed with such development and production; the timing and outcome of any such development and production; estimates of future capital expenditures; mineral resource estimates; estimates of permitting time lines; statements and information regarding future feasibility studies and their results; production forecasts; future transactions; future metal prices; the ability to achieve additional growth and geographic diversification; future production costs; future financial performance, including the ability to increase cash flow and profits; future financing requirements; and mine development plans.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Orvana as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of Orvana contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in the Company-s most recently filed Annual Information Form, or as otherwise expressly incorporated herein by reference as well as: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the UMZ deposit, El Valle-Boinas/Carles Mine and the Copperwood project being consistent with the Company-s current expectations; political developments in any jurisdiction in which the Company operates being consistent with its current expectations; certain price assumptions for gold, copper and silver; prices for key supplies being approximately consistent with current levels; production and cost of sales forecasts meeting expectations; the accuracy of the Company-s current mineral reserve and mineral resource estimates; and labour and materials costs increasing on a basis consistent with Orvana-s current expectations.
A variety of inherent risks, uncertainties and factors, many of which are beyond the Company-s control, affect the operations, performance and results of the Company and its business, and could cause actual events or results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include fluctuations in the price of gold, silver and copper; the need to recalculate estimates of resources based on actual production experience; the failure to achieve production estimates; variations in the grade of ore mined; variations in the cost of operations; the availability of qualified personnel; the Company-s ability to obtain and maintain all necessary regulatory approvals and licenses; the Company-s ability to use cyanide in its mining operations; risks generally associated with mineral exploration and development, including the Company-s ability to develop the UMZ deposit, the Copperwood project or the El Valle-Boinas/Carles Mine; the Company-s ability to acquire and develop mineral properties and to successfully integrate such acquisitions; the Company-s ability to obtain financing when required on terms that are acceptable to the Company; challenges to the Company-s interests in its property and mineral rights; current, pending and proposed legislative or regulatory developments or changes in political, social or economic conditions in the countries in which the Company operates; general economic conditions worldwide; and the risks identified in Orvana-s Management-s Discussion and Analysis for the period ended September 30, 2012 under the heading „Risks and Uncertainties“. This list is not exhaustive of the factors that may affect any of the Company-s forward-looking statements and reference should also be made to the Company-s Annual Information Form for a description of additional risk factors.
Forward-looking statements are based on management-s current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements.
Contacts: Orvana Minerals Corp. Bill Williams President and Chief Executive Officer (416) 369-1629
Orvana Minerals Corp. Daniella Dimitrov Chief Financial Officer (416) 369-1629
Orvana Minerals Corp. Natalie Frame Investor Relations (289) 200-7640
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