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SUPERIOR GOLD REPORTS SOLID FIRST QUARTER RESULTS

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SUPERIOR GOLD REPORTS SOLID FIRST QUARTER RESULTS

 

 

 

 

 

 

IMPROVED WORKING CAPITAL WHILE SUCCESSFULLY COMPLETING A 15-DAY MILL MAINTENANCE SHUTDOWN. FURTHER OPERATING GROWTH TARGETED FOR THE REMAINDER OF 2022

 

(In US Dollars unless otherwise stated) 

 

Superior Gold Inc. (TSX-V: SGI) (OTCMKTS: SUPGF) announces financial results for the first quarter of 2022 for the Company’s 100%-owned Plutonic Gold Operations, located in Western Australia.

 

First Quarter Highlights

  • Production of 16,747 ounces, a 5% decrease over the comparative quarter of 2021 due to the planned 15-day mill maintenance shutdown in the first quarter of 2022
  • Sold 15,823 ounces of gold at total cash costs1 of $1,558 per ounce sold, which was in line with management’s expectations, an increase of $172 per ounce sold or 12% in comparison to the first quarter of 2021
  • All-in sustaining costs1 increased by $219 per ounce sold or 15% in comparison to the first quarter of 2021 to $1,729 per ounce sold, below the realized gold price1 of $1,910 per ounce, in line with management’s expectations which included higher sustaining exploration and capital expenditures1
  • Increase in working capital1 of $0.8 million to $11.2 million despite the planned mill maintenance shutdown
  • Solid cash and cash equivalents of $20 million
  • Net income for the period was $0.01 per share and Adjusted net income1 was $0.01 per share
1 Refer to the Non-IFRS Performance Measures disclosure included in this MD&A for a description and calculation of these measures.

 

Chris Jordaan, President, and CEO of Superior Gold stated: “Despite completing the planned and scheduled preventative maintenance mill shut down, we still delivered a strong quarter, maintaining a solid cash position of $20 million and improving our working capital to over $11 million. The increase in AISC per ounce was expected due to lower ounces sold in the first quarter, and we remain on track to deliver on our annual cost guidance. Production from underground exceeded our plan for the quarter, with stope grades in line with plan, and increases in tonnes and grade are expected for the remainder of the year as we develop into newly defined mineralized zones and enter the Main Pit Deeps.

 

COVID-19 continues to challenge Western Australia as it opened its borders and saw an increase in cases. The health and safety of our employees is paramount, and we continue to employ in-transit and on-site controls to ensure cases on-site are minimized in an attempt to reduce the impact to the Company in the second quarter of 2022 and beyond.

 

Looking ahead, we are continuing with our strategy, and we are targeting production and cash flow increases in the three subsequent quarters of 2022, confirming our annual production guidance as well as our annual cash cost and all-in sustaining cost guidance as shown later in this news release.

 

The 15-day mill shutdown was a success and consistent with the Company’s strategy to invest in the fixed plant for long-term reliable and sustainable operations, providing the opportunity to increase throughput to the mill to its installed capacity. This will be considered as the Company moves toward increased underground tonnage in the latter half of 2022 and through the addition of higher-grade open pit feed from the early entry into the Main Pit Deeps project.

 

The Company also continues to benefit from block model improvements designed to better forecast the spatial positioning of the ore at Plutonic and the identification of larger more productive stopes to be developed and mined.

 

In 2021, the Company delivered on the first goal of its growth strategy, namely a safe and sustainable operation with 77,321 ounces of gold delivered for the full year. In 2022 the Company remains on track to progress towards delivering the second goal of its growth strategy to deliver an operation of scale. The first phase of the second goal is to increase production to an annualized rate of approximately 100,000 ounces per annum in the second half of the year by increasing production from the underground mine and identifying and mining higher grade open-pit targets in the Main Pit Deeps project and other near-mill open pit targets. The investments we are making this year are designed to improve on the Company’s strategy to fully optimize the underground operation and when combined with the addition of new sources of open-pit feed, are expected to positively contribute to the Company’s overall profitability.”

 

Summary of Financial and Operational Results:

 

Three months
ended March 31,
2022
All amounts in $ millions except where noted
Financial
Revenue 30.2
Cost of sales 26.7
General and administrative 1.5
Operating income (loss) 1.4
Income (loss) before taxes 1.3
Net income (loss) 1.4
Earnings (loss) per share – basic and diluted 0.01
Adjusted net income (loss)1 1.4
Adjusted net income (loss) per share – basic1 0.01
Cash flow from operations 0.4
Weighted average number of common shares outstanding (basic) 122,888,508
Operational
Gold produced (ounces) 16,747
Gold sold (ounces) 15,823
Total cash costs ($/ounce)1 1,558
All-in sustaining costs ($/ounce)1 1,729
Average realized price1 ($/ounce) 1,910
Total underground material mined (Kt) 220
Total material milled (Kt) 360
Grade milled (g/t gold) 1.7
Recovery (%) 85
1 This is a Non-IFRS measure. Refer to Non-IFRS measures section of the Company’s MD&As for a description of these measures.

 

Plutonic Gold Operations

 

The Plutonic Gold Operations produced and sold 16,747 and 15,823 ounces of gold, respectively, for the first quarter of 2022, a decrease of 5% and 10% respectively over the comparative prior-year period due to the completion of a planned 15-day mill maintenance shutdown. Total cash costs1 of $1,558/ounce sold and AISC5 of $1,729/ounce sold were below the realized gold price5 of $1,910/ounce for the three-month period ending March 31, 2022.

 

In comparison, 17,603 and 17,538 ounces of gold were produced and sold, respectively for the first quarter of 2021. Total cash costs5 of $1,386/ounce sold and AISC5 of $1,510/ounce sold were below the realized gold price5 of $1,777/ounce for the three-month period ending March 31, 2021.

 

Total cash costs5 and AISC5 increased over the prior period primarily as a result of fewer ounces sold in the current quarter due to the planned mill maintenance shutdown, which reduced production and the number of gold ounces available for sale.

 

The Company generated net cash from operations before working capital changes of $3.5 million for the three months ended March 31, 2022.

 

Exploration Activities

 

During 2021 the Company accelerated its exploration program to focus on organic growth and opening new mining fronts in the underground mine. This work continued during the three months ended March 2022 and for the quarter, the Company operated two underground diamond drilling rigs with 18,676 metres of drilling completed in 268 holes. Of the total, 12,930 metres were drilled for grade control and stope design in 223 holes. The remaining 5,746 metres were drilled for reserve and resource expansion in 45 holes. The first 167 metres of 7 planned diamond drill holes were drilled in surface exploration. The Company continues its focus on underground reserve and resource expansion by completing in-fill drilling and exploration drilling of new underground mining fronts, specifically the Western Mining Front, the Baltic Gap, and the Eastern Mining Front.

 

Drilling during the quarter was partly focused on infilling the 2.4-kilometre-long Eastern Mining Front (refer to News Release dated April 21, 2022). These new drill intersections potentially expand the Eastern Mining Front by a further 180 metres adjacent to existing underground infrastructure. The second set of results also announced after the quarter-end, continue to demonstrate high-grade drill results along the 1.6 kilometre long Western Mining Front in the underground mine (refer to News Release dated April 27, 2022). The results expand the Western Mining Front by a further 130 metres. An 85-metre exploration drill drive was started in Q1 with drilling planned to commence in the second quarter.

 

2022 Guidance

 

The Company continues to maintain its 2022 guidance which was previously announced on January 17, 2022. Details of production and cost guidance for the year are summarized in the table below.

 

_____________________
1 This is a Non-IFRS measure. Refer to Non-IFRS measures section of the Company’s MD&As for a description of these measures.
6 Refer to the Company’s news release on March 1, 2021 for additional information.
7 Refer to the Company’s news release on March 29, 2021 for additional information.
8 Refer to the Company’s news release on June 24, 2020 for additional information.

 

2022 Operating Parameters Low High
Production (oz of Gold) 80,000 90,000
Cash Costs ($/oz)1 $1,300 $1,450
All In Sustaining Costs ($/oz)1 $1,450 $1,600
1 This is a Non-IFRS measure. Refer to Non-IFRS measures section of the Company’s prior MD&A’s for a description of these measures. Calculated at a US$/AU$ exchange rate of 0.75:1

 

Qualified Person

 

The scientific and technical information in this news release has been reviewed and approved by Ettienne Du Plessis, who is a “qualified person” as defined by NI 43-101. Mr. Du Plessis is not independent of the Company within the meaning of NI 43-101.

 

About Superior Gold

 

Superior Gold is a Canadian-based gold producer that owns 100% of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects including the Plutonic Main Pit push-back project, the Hermes open pit projects, and an interest in the Bryah Basin joint venture. Superior Gold is focused on expanding production at the Plutonic Gold Operations and building an intermediate gold producer with superior returns for shareholders.

 

Posted May 25, 2022

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