KGI13 Sep 2012 08:36
KEY HIGHLIGHTS OF THE QUARTER
* Net loss before income taxes for the quarter ended July 31, 2012 was $0.3 million, which compares to
net income before taxes of $9.0 million for Q1 of fiscal 2012 and $4.1 million for the previous quarter (Q4 of fiscal
2012). Costs incurred during the eleven day power and production outage in May and lower revenues due to lower grades in the
quarter contributed to the loss in the quarter.
* Cash flows generated from operating activities were $2.4 million for the quarter compared to $11.4
million for the previous quarter and $6.2 million in Q1 of fiscal 2012.
* Operating costs for the quarter were $316 per ton of ore ($1,276 per ounce of gold). Total cash
production costs for the quarter were $317 per ton of ore ($1,280 per ounce of gold). Costs per ton and per ounce in this
quarter increased due to the power outage where costs were incurred without offsetting production.
* The Company is planning to replace the ten ton skips in the existing shaft conveyance arrangement with
newly designed 12.5 ton skips in December 2012. This is in addition to other previously announced upgrades. Slight
modifications to the shaft loading chairs will be required at the same time. Commissioning of the service cage
compartment is scheduled to begin in October.
* During the quarter, 70,201 tons of ore were produced at a head grade of 0.26 ounces of gold per ton
(opt) and a gold recovery rate of 95.2% to produce 17,396 ounces of gold. Ounces sold in the quarter were 19,964 ounces.
Recovered ounces decreased over the previous quarter due to lower ore grades, primarily in the SMC; and also due to lower
ore tonnages produced, as a result of the eleven day forest fire power outage in May. The ability to utilize waste
fill more effectively in the lower grade Main Break area of the mine resulted in some overproduction of ore from this
area, which also slightly impacted quarterly head grades.
* The early trials of the prototype battery scoop underground have been very positive, and this program
is currently running well ahead of requirements at this time.
* The number of ore mining workplaces active in the production cycle at quarter end was 35, with 15
additional ore mining workplaces being actively developed. Another 13 workplaces are available for development or
production, but are not currently producing. Some of these are higher grade faces in the SMC that are being held to allow
nearby lower grade workplaces to catch up in the mine sequence to maintain ground stability by reducing the seismic risk.
Some low grade faces in both the SMC and the Main Break areas are also being mined very aggressively at the same time
because they can take development waste as fill. With hoisting capacity for waste currently limited, aggressive mining
of these faces allows critical expansion related development to continue.