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SEMAFO (TSX: SMF | Quote | Chart | News | PowerRating) today reported its second quarter financial and operational results for the three-month period ended June 30, 2009. All amounts are in US dollars unless otherwise stated.
Highlights for the Three-Month and Six-Month Periods Ended June 30, 2009
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- Record gold production, with a total of 64,100 ounces for the three-
month period ended June 30, 2009, representing an 18% increase over the
corresponding period in 2008 and 10% over the previous quarter.
- For the first half of 2009, production from all mines totalled
122,200 ounces, an increase of 47% over the first six months of 2008.
- Gold sales revenues totalled $58.6 million for the second quarter,
representing a 31% increase over the corresponding period in 2008 and
18% over Q1 2009. For the first six months of 2009, gold sales revenues
totalled $108.1 million, representing a 54% increase over the same
period in 2008.
- Operating income increased by 23% to $17 million in the second quarter
2009 compared to the same period the year prior; and by 70%, to
$28.2 million, for the first six-month period of 2009 compared to the
same period in 2008. Operating income increased by 53% over Q1 2009.
- Net income reached $10.7 million, an increase of 20% over the previous
quarter of 2009. Net income totalled $19.6 million for first six months
of 2009.
- Cash flow from operating activities reached $25.4 million for the
second quarter and $43.9 million since the beginning of 2009. This
represents an increase of 32% over the same period last year and 37%
when compared with the first quarter of 2009.
- The Company's cash operating cost for the quarter decreased to $419 per
ounce from $460 in the first quarter of 2009.
- Net income per share of $0.05 and $0.08 respectively.
- Close-out of hedge program; the Company is 100% unhedged.
- Commencement of extensive exploration program on the high potential
Houndé belt in Burkina Faso.
- Positive at-depth drilling results at Mana.
- Improved balance sheet - with a 20% debt to equity ratio, compared to
38% as at December 31, 2008.
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A Word from the CEO
SEMAFO continued to build on the positive momentum established in 2008. Our second quarter 2009 results created a new precedent for our Company, bringing the cash flow from operating activities to more than $25.4 million, representing a 37% increase over the previous quarter. In fact, our Q2 cash flow from operating activities was equivalent to the total cash flow from operating activities of the first six-month period of 2008.
We delivered on our objective to efficiently and effectively manage our existing assets; realizing the lowest production costs of the last three quarters, while achieving our best production results ever.
The second quarter of 2009 not only brought us to new heights with regard to our performance and the results achieved; but also saw us successfully close out the remaining ounces of the Company's hedge program. Moving forward, the completion of this obligation will allow the Company to benefit from the spot gold price and improve cash generation.
At Mana we continue to build for the future with an extensive exploration program initiated during the second quarter on the Houndé belt, while ongoing drilling continues to confirm at depth high-grade mineralization.
SEMAFO's balance sheet is stronger than ever as our debt-equity ratio now stands at 20% compared to 38% as at December 31, 2008. SEMAFO is well positioned for the future and remains committed to increase shareholder value via the effective management of existing assets and the active pursuit of accretive opportunities in West Africa.
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Consolidated Results and Mining Operations
Three-month period Six-month period
ended June 30 ended June 30
---------------------------------------------
Varia- Varia-
2009 2008 tion 2009 2008 tion
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Operating Highlights
Gold ounces produced 64,100 54,500 18% 122,200 83,200 47%
Gold ounces sold 63,000 49,600 27% 116,600 77,800 50%
(In thousands of dollars,
except amounts per ounce
and per tonne)
Revenues - Gold sales 58,646 44,826 31% 108,141 70,366 54%
Operating costs 29,320 22,582 30% 56,835 39,711 43%
Operating income 17,043 13,822 23% 28,216 16,623 70%
Net income 10,721 11,681 (8%) 19,623 24,183 (19%)
Basic and diluted net
income (loss) per share 0.05 0.05 - 0.08 0.11 (14%)
Cash flow from operating
activities(1) 25,444 19,304 32% 43,944 25,427 73%
Average selling price
(per ounce) 931 904 3% 927 905 2%
Cash operating cost
(per ounce produced)(2) 419 394 6% 439 441 -
Cash operating cost
(per tonne processed)(2) 31 35 (11%) 31 31 -
Total cash cost
(per ounce sold)(3) 465 455 2% 487 510 (5%)
(1) Cash flow from operating activities excludes changes in non-cash
working capital items and settlement of liabilities related to asset
retirement obligations.
(2) Cash operating cost is calculated using ounces produced and tonnes
processed. See the section "Non-GAAP measures"
(3) Total cash cost represents the cash operating cost plus royalties and
selling expenses as well as the effects of inventory adjustments.
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Outlook
In July 2009, the Mana mine produced 12,900 ounces of gold, making a significant contribution to the Company's overall monthly production total of 21,300 ounces of gold; the second highest production month ever for the Company.
Management anticipates ongoing stable production and remains confident that the Company will attain its 2009 production guidance of between 220,000 and 240,000 ounces of gold.
A conference call will be held at 10:00 a.m. on Wednesday, August 12, 2009 to discuss the Company's quarterly results. Details to access the call can be found on the home page of the Company's website at www.semafo.com. SEMAFO'S consolidated financial statements, together with Management's Discussion and Analysis, are available on its website or at www.sedar.com.
About SEMAFO
SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Company currently operates three gold mines in Burkina Faso, Niger and Guinea. SEMAFO is committed to evolve in a conscientious manner to become a major player in its geographical area of interest, while maintaining principles and strengthening relationships to increase shareholder value.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company's expectations as to the market price of gold, strategic plans, future commercial production, production targets, timetables, mining operating expenses, capital expenditures, and mineral reserve and resource estimates. Forward-looking statements involve known and unknown risks and uncertainties and accordingly, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, fluctuations in the market price of precious metals, mining industry risks, uncertainty as to calculation of mineral reserves and resources, risks related to hedging strategies, risks of delays in construction, requirements of additional financing and other risks described in the Company's documents filed from time to time with Canadian securities regulatory authorities. Although the Company is of the opinion that these forward-looking statements are based on reasonable assumptions, those assumptions may prove to be incorrect. Accordingly, readers should not place undue reliance on forward-looking statements. Readers can find further information with respect to risks in the Company's Annual Information Form and other filings with Canadian securities regulatory authorities available at www.sedar.com. The Company disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.
SOURCE: SEMAFO INC.
SEMAFO: Benoit La Salle, President & CEO, (514) 744-4408, Toll-Free: 1 (888) 744-4408, blasalle@semafo.com; Jean-Paul Blais, Communications, (514) 744-4408, Toll-Free: 1 (888) 744-4408, jpblais@semafo.com
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