This release should be read in conjunction with our
2019 Fourth Quarter and Full-year highlights:
- Production: 28,300 ounces of gold in the fourth quarter of 2019 and 124,200 ounces in the full year 2019
- Revenue: $38.9 million in the fourth quarter of 2019 and
$174.2 million in the full year 2019 - Cost of sales: $1,909 per ounce in the fourth quarter of 2019 and
$1,499 per ounce in the full year 2019 - All-in sustaining cost: $1,584 per ounce in the fourth quarter of 2019 and
$1,490 per ounce in the full year 2019 (see "Non-IFRS Performance Measures") - Cash flow (outflow) from operating activities: $(6.8) million in the fourth quarter of 2019 and
$30.2 million in the full year 2019 - Comprehensive net (loss): $(245.2) million, or
$(1.40) per share in the fourth quarter of 2019, and$(263.3) million , or$(1.51) per share, in the full year 2019 (including the effect of the impairment charge discussed below) - Impairment Charge: Non-cash impairment charge of
$235.0 million in the fourth quarter of 2019 - Cash and cash equivalents:
$22.1 million atDecember 31, 2019 and no debt
Business Overview
In 2019, we were faced with many challenges, both from an operational and management perspective. The significant and ongoing reviews of mine plans during the year negatively impacted our ability to practically implement a plan at the mine, leading to lower than anticipated productivity performance, the mining of satellite ore bodies with mixed success, and the processing of ore from low grade stockpiles.
We continued to review a significant number of mine plans and scenarios during the first quarter of 2020 to find a mine sequence with continuous ore release while safely progressing waste stripping of the next phase of open pit mining, but concluded that these objectives were not achievable in tandem. The life of mine plan developed by
Transaction Update and Upcoming Shareholder Meeting
As announced on
The closing of the Arrangement is subject to satisfaction of certain conditions, including the approval of 66⅔% of votes cast by shareholders of the Company, obtaining court and regulatory approvals and other customary conditions for a transaction of this nature to be satisfied or waived.
We have scheduled an annual and special meeting for
Outlook for 2020
On
In addition, given the current travel restrictions, and the funding gap for the next phase of the New LOM Plan, the next phase of mine development will not proceed until these restrictions are lifted. This will result in a period of care and maintenance at site once Rory's Knoll Phase 4 is completed and satellite ore and low-grade stockpiles are depleted in the second quarter of 2020. Thereafter, a period of care and maintenance of more than a quarter will likely result in no further production from the open pit in 2020. Production, prior to care and maintenance, is estimated to total approximately 35,000 to 45,000 ounces in the first half of 2020. The site will continue to be maintained and environmental risks managed to ensure safety and security of the mine until operations can be resumed.
CEO Commentary
"Following a challenging 2019 we are pleased to be moving forward with implementing the arrangement transaction with Silvercorp. This transaction will allow the citizens and the Government of
Disclosure Update
As disclosed on
The Company is also delaying the filing of its statement of executive compensation as otherwise required by subsections 9.3.1(2) and (2.2) of National Instrument 51-102 Continuous Disclosure Obligations in reliance on Ontario Instrument 51-504 Temporary Exemptions from Certain Requirements to File or Send Securityholder Materials of the
About
Any questions regarding the Annual and Special Shareholder Meeting can be directed to our strategic shareholder advisor and proxy solicitation agent
Non-IFRS Performance Measures
The Company has included certain non-IFRS performance measures in this news release including AISC per ounce. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not defined under IFRS and are not necessarily comparable to similarly titled measures reported by other issuers. For a reconciliation of these numbers please refer to the Company's most recent management discussion and analysis.
Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (together, "forward-looking statements") within the meaning of applicable securities laws. Forward-looking statements may include, but are not limited to, statements and information with respect to financial and operational results, the duration of governmental actions; plans for care and maintenance; the duration and scope of travel restrictions and other statements with respect to the COVID-19 pandemic; statements about the Arrangement including receiving approvals and the date of the Meeting and closing; Silvercorp's plans in respect of the
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others: the Company's ability to complete the Arrangement and draw down under the Bridge Loan Facility and the conditions precedent thereto; the results of the Company's ongoing comprehensive mine plan and cost review; Silvercorp's decisions in respect of the
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
SOURCE
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