Last checked at 14 Jun 2012 07:05
Orosur Mining Inc. ('OMI' or 'the Company') (TSX: OMI) (AIM: OMI), a South American-focused gold producer and explorer, announces that the production amount for the fourth quarter ended May 31st was 17,387 ounces Au which is 27 per cent higher than the previous quarter (13,688 ounces).
For the fiscal year to 31 May 2012, full year production was increased to 55,458 ounces. This production level is in accordance with guidance of 55,000 to 57,500 ounces for the year.
In the year 1,619,510 tonnes of ore were processed at a gold grade of 1.15 grams per tonne (g/t) with recovery averaging 92.8 per cent. This compares to 1,535,468 tonnes at a gold grade of 1.21 g/t with recovery averaging 93.4 per cent for the prior financial year when 55,820 ounces were produced.
Production for this quarter benefitted from planned output from Arenal Deeps stopes and the commencement of mining from the relatively high grade ore produced from the Crucera pit (400 km south of San Gregorio). Arenal ore production has ramped up from 37,808 tonnes in the third quarter to 85,855 tonnes in the fourth quarter, which was in accordance with plan for the quarter and has now reached levels consistent with design capacity for the project.
During the second half of the fiscal year, productivity on development metres has been less than planned. A total of 3,729 metres were completed in the year to 31 May versus the plan of 4,161 metres. This shortfall and cost overruns by the contractor of approximately $US 3 million (18%), have increased cost per meter developed during the 2012 fiscal year increasing capital expenditure and operating cost. This performance is also expected to have an impact on the fiscal year to 31 May 2013 as it will reduce ounces produced from Arenal Deeps and increase costs. As a result Orosur has entered into discussions with the contractor to plan for a transition to owner mining.
Management Forecasts for 2012/2013
The Company's forecast production for the 2013 fiscal year is 63,000 to 68,000 ounces of gold at an operating cash cost of approximately US$ 975 per ounce.
Production from Arenal Deeps for the 2013 fiscal year is expected to be 25,000 ounces at a cash cost of $US 900 per ounce reflecting higher cost per meter of ore development, increased electricity costs (have increased 30% since feasibility) and increased labour costs. Approximately 50% of the fiscal 2013 production will come from development ore and 50% from stope production. Early in the following fiscal year ore development will be completed for the life of mine and cash operating costs are expected to fall. Production for the 2014 fiscal year is expected to be 42,000 ounces at a cash cost of $US 550 per ounce for the 2014 fiscal year. Total production for the 2014 fiscal year is expected to be 70,000 to 75,000 ounces.
Open pit mining will contribute the balance of the production profile for the 2013 and 2014 fiscal years with cash costs similar to the 2012 fiscal year.
David Fowler, Chief Executive Officer commented:
"We are pleased with the ramp up in stope production at Arenal Deeps in the last quarter. Production was in accordance with plan for the quarter and total production of 55,485 ounces for the 2012 fiscal year was within our guidance of 55,000 to 57,500 ounces. In accordance with our objective of increasing production we plan to produce 63,000 to 68,000 ounces in fiscal 2013 and 70,000 to 75,000 ounces in fiscal 2014".
Forward-Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. There can be no assurance that such statements will prove to be accurate; such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements include, without limitation success of exploration activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on insurance coverage. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.
About Orosur Mining Inc.
Orosur Mining Inc. is a fully integrated gold producer and exploration company focused on identifying and developing gold projects in Latin America. The Company operates the only producing gold mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in Uruguay and Chile. The Company is quoted in Canada (TSX: OMI) and London (AIM: OMI).
Orosur Mining IncDavid Fowler, CEO + 598 2601 6354Ignacio Salazar, CFO + 598 2601 6354info@orosur.caorCanaccord Genuity Limited (Nominated Adviser & Broker)+44 (0) 20 7523 8000Rob CollinsAndrew ChubborBlythe Weigh Communications (Public Relations and Investor Relations)Tim Blythe: +44 (0) 7816 924626Rob Kellner
Copyright Business Wire 2012