VANCOUVER, BC, Aug. 29,
2022 /CNW/ - Elevation Gold Mining Corporation
(TSXV: ELVT) (OTCQX: EVGDF) (the "Company" or "Elevation
Gold") announces operating and financial results for the
quarter ended June 30, 2022.
All figures are expressed in US dollars unless otherwise noted.
Summary for the Three Months Ended June 30, 2022
- Elevation produced 6,809 ounces of gold and 28,115 ounces of
silver during Q2 2022 from 768,997 ore tonnes processed with
average grades of 0.42 g/t gold and 2.86 g/t silver.
- The Company generated total revenue of $14.4 million on 6,998 ounces of gold and 60,903
ounces of silver sold. The average realized price of gold per ounce
sold (1) was $1,864.
- Gold production is expected to materially increase in the
second half of 2022 as the Company began mining higher-grade ore
sourced from the East Pit at the end of June
2022.
- Q2 2022 operating loss of $7.3
million and net loss of $33.8
million, or $0.31 per share.
The net loss was driven by a non-cash impairment of mineral
properties of $33.9 million
(discussed below).
- Total Cash Costs per ounce of gold sold (1) of
$1,661 and all-in sustaining costs
("AISC") per ounce of gold sold (1) of $2,599. The Company expects to improve on
its per ounce metrics in the second half of 2022, with the addition
of higher-grade ore sourced from East Pit, and the reduction of
capital expenditure requirements as the majority of the Company's
major capital projects were completed in Q2 2022 and early Q3
2022.
- Completed a multi-phase infill and resource expansion drilling
program at the Moss Mine, which included 17,197 meters of
reverse circulation drilling up to the end of May 2022. In
July 2022, the Company began its
maiden exploration program at Florence Hill.
|
(1)
|
Refer to the
Company's Management Discussion and Analysis for the three and six
months ended June 30, 2022 and 2021 for a reconciliation
to non-IFRS performance measures.
|
Tim Swendseid, Elevation Gold
President, stated "Our Q2 financial results were negatively
affected by the non-cash write downs of our heap leach inventory
and mineral properties, as a consequence of inflationary pressures
and lower long term gold price assumptions. With these write
downs behind us, I am extremely optimistic about our future
production prospects for the remainder of 2022 and beyond."
Mr. Swendseid continued, "With our major capital projects for 2022
now completed and with a shift in mining to higher grade east pit
ore, we are forecasting a material increase in gold production, at
lower costs, over the last 6 months of the year. Gold sales for
2022 are now expected to total between 32,000 and 34,000
ounces. Thanks to our outstanding Moss Mine team we are
now functioning at consistent levels with increased crusher
throughput, higher gold and silver grades and are well positioned
to reach our 2022 production goals."
Dr. Warwick Board, Vice
President Exploration, commented: "The first diamond core drill
hole at Florence Hill is progressing well, with approximately 730
metres having been drilled to date. We are extending this 45-degree
inclined-to-the-northeast drill hole to test a geophysical anomaly
at around 1,300 metres down hole based on encouraging structural,
vein, and alteration features that are intensifying with depth. We
anticipate releasing results for the Florence Hill drilling in Q1
2023, considering drilling rates, assay turn around, data
compilation and interpretation requirements."
Outlook
Following the completion of the Company's equity financing in
late March 2022 (see Recent
Corporate Developments section above for details), the Company
completed a number of key capital projects during Q2 2022, some of
which will extend into Q3 2022, including the completion of the
construction of the new heap leach pad 2C in July 2022. The
Company also completed five new monitoring wells in Q2 2022 and
expects to bring on-line two production water wells during Q3
2022. The monitoring wells were a requirement of our Aquifer
Protection Permit, while the production water well project will
secure water for operations, as well as allow current operating
water wells to be removed as part of the mine expansion at the Moss
Mine.
The Company's operations continue to focus on overall
efficiencies including drilling and blasting improvements that lead
to increases in ore processing rates. For Q1 2022, the mine
averaged 7,977 stacked ore tonnes per day, an increase of 5.6% from
the year ended December 31,
2021. This rate increased further for Q2 2022 to an average
of 8,451 stacked ore tonnes per day as the Company continues to
improve quality control for mine drilling and blasting and
maintains meticulous oversight on scheduled crusher
maintenance. Mining operations also continue to progress,
with higher-grade ore mined from the East Pit by the end of Q2
2022. The Company expects the higher-grade ore mined from
East Pit for the remainder of the year will be blended with West
Pit ore, which is lower-grade but more abundant. The overall
blended ore crushed and placed on the pad is expected to
significantly increase gold ounces produced for the second half of
2022.
With its multi-phase infill and resource expansion drilling
program at the Moss Mine completed in May
2022, the Company began its maiden exploration program at
Florence Hill (see news release dated July
25, 2022).
Consolidated Financial Results
Summary
The following table provides a summary of the components of the
Company's net income (loss) for the three and six months ended
June 30, 2022 and 2021. For
further details, refer to the Company's condensed interim
consolidated financial statements and Management Discussion and
Analysis ("MD&A") for the same periods.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
(in
thousands of dollars)
|
2022
|
|
2021
|
2022
|
2021
|
|
Revenue
|
$
|
14,386
|
$
|
16,590
|
$
|
27,920
|
$
|
32,991
|
|
Production costs
(1)
|
|
(17,583)
|
|
(10,710)
|
|
(28,982)
|
|
(20,913)
|
|
Royalties
|
|
(726)
|
|
(852)
|
|
(1,344)
|
|
(1,753)
|
|
Mine operating (loss)
income before
depreciation and depletion
|
|
(3,923)
|
|
5,028
|
|
(2,406)
|
|
10,325
|
|
Depreciation and
depletion (1)
|
|
(2,402)
|
|
(2,286)
|
|
(4,009)
|
|
(4,463)
|
|
(Loss) earnings from
mine operations
|
|
(6,325)
|
|
2,742
|
|
(6,415)
|
|
5,862
|
|
Corporate
administrative expenses
|
|
(1,001)
|
|
(1,238)
|
|
(1,752)
|
|
(2,811)
|
|
Finance
costs
|
|
(1,878)
|
|
(1,618)
|
|
(3,417)
|
|
(3,184)
|
|
Impairment of mineral
properties (2)
|
|
(33,850)
|
|
-
|
|
(33,850)
|
|
-
|
|
Gain (loss) on
revaluation of derivative
liabilities
|
|
9,253
|
|
805
|
|
10,023
|
|
(834)
|
|
Other
|
|
(3)
|
|
50
|
|
(100)
|
|
133
|
|
Income (loss) for the
period
|
$
|
(33,804)
|
$
|
741
|
$
|
(35,511)
|
$
|
(834)
|
|
1)
|
During the six months
ended June 30, 2022, the Company conducted an independent study
which reviewed the Company's estimated recoverable gold and silver
ounces in its heap leach ore inventory on June 30, 2022.
Based on the findings in the study, the Company has written down
heap leach ore inventory by $4.0 million for six months ended June
30, 2022. In addition, for the six months ended June 30,
2022, the Company recorded a net realizable value write-down
associated with its heap leach ore and doré inventory totalling $2.6 million. The
write-down to net realizable value was the result of higher mining
and processing costs incurred over the period, lower gold prices in
the three months ended June 30, 2022, and lower-grade ore mined for
the six months period ending June 30, 2022.
|
|
|
|
As a result of the
above, for the six months ended June 30, 2022, the Company recorded
a total write-down to heap leach ore
and doré inventory of
$6.6 million , of which $5.8 million was included in production
costs and $0.8 million was included in depletion and depreciation
(the three months ended June 30, 2022 includes the write-down of
$6.0 million, of which $5.3 million was included in production
costs and $0.7 million was included in depletion and
depreciation). There were no amounts written down for the
three or six months ended June 30, 2021.
|
|
|
|
2)
|
During the three and
six months ended June 30, 2022, the Company recognized a non-cash
impairment of mineral properties of $33.9 million. Management
of the Company completed an assessment of impairment indicators for
the Moss Mine cash generating unit ("CGU"), as the Company's market capitalization fell below
the carrying value of net assets. Accordingly, the Company
estimated the recoverable amounts of
the CGU and compared
them to the carrying value of the CGU. Upon completion of the Company's impairment
assessment, it was determined that the Moss
Mine CGU was impaired by
a total of $33.9 million, which resulted in a charge of the same
amount to the Company's statement of income and loss.
|
|
|
|
The projected cash
flows used in impairment testing are significantly affected by
changes in assumptions. The analysis reflects the lower gold prices
and inflationary pressures resulting in increases to commodity
prices most recently encountered in the second quarter of
2022. Key assumptions included by management in the
discounted cash-flow model included a gold price ranging from
$1,750 to $1,800, gold and silver recoveries of 80% and 43% as
indicated in life of mine plans, and real after-tax discount rate
of 5%. The Company performed a sensitivity analysis on these key
assumptions. Based on the impairment testing performed at June 30,
2022, the sensitivity to changes in these key assumptions is as
follows:
|
|
• a 10% decrease
in the short and long term gold price would result in an additional
impairment of $14.7 million,
|
|
• a 10% decrease
in gold recoveries would result in an additional impairment of
$17.4 million, and
|
|
• a 5% increase
in the real after-tax discount rate would result in an additional
impairment of $4.1 million.
|
Consolidated Operational Results
Summary
The following table provides a summary of the Company's
operational statistics for the three and six months ended
June 30, 2022 and 2021. For
further details, refer to the Company's MD&A for the same
periods.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
2021
|
|
2022
|
2021
|
|
Ore tonnes
mined
|
t
|
726,226
|
682,970
|
|
1,461,443
|
1,388,624
|
|
Ore tonnes
stacked
|
t
|
768,997
|
640,358
|
|
1,486,895
|
1,333,045
|
|
Contained gold ounces
stacked
|
oz
|
10,456
|
9,700
|
|
18,506
|
20,404
|
|
Gold grade
|
g/t
|
0.42
|
0.47
|
|
0.39
|
0.48
|
|
Gold ounces
produced
|
oz
|
6,809
|
7,054
|
|
13,077
|
15,842
|
|
Gold ounces
sold
|
oz
|
6,998
|
8,045
|
|
13,510
|
16,166
|
|
Average realized gold
price (1)
|
($/oz)
|
$ 1,864
|
$ 1,793
|
|
$ 1,872
|
$ 1,797
|
|
Cash costs per ounce
of gold sold (1)
|
($/oz)
|
$ 1,661
|
$ 1,168
|
|
$ 1,623
|
$ 1,158
|
|
AISC per ounce of gold
sold (1)
|
($/oz)
|
$ 2,599
|
$ 2,127
|
|
$ 2,399
|
$ 2,181
|
|
(1) Refer
to the Company's Management Discussion and Analysis for the three
and six months ended June 30, 2022 and 2021 for a reconciliation to
non-IFRS performance measures.
|
Qualified Persons
Unless otherwise indicated, all technical data contained in this
press release that relates to geology, exploration and mineral
resources has been reviewed and approved by Dr. Warwick Board, P.Geo, Vice President
Exploration of Elevation Gold. Dr. Board is a Qualified
Person as defined by National Instrument ("NI") 43-101 and is
responsible for the Moss Regional and Hercules Exploration
Projects.
Unless otherwise indicated, the technical disclosure contained
within this press release that relates to the Company's operating
mine has been reviewed and approved by Tim
J. Swendseid, President of the Company and a Qualified
Person for the purpose of NI 43-101.
Full condensed interim consolidated financial statements for the
three months and six months ended June 30,
2022 and 2021 and related MD&A for the same period can
be found at www.sedar.com and the Company's website
at www.elevationgold.com.
Non-IFRS Performance
Measures
The following tables represent the calculation of certain
Non-IFRS Financial Measures as referenced in this news
release. For further discussion and analysis of all non-IFRS
performance measures, refer to the Company's financial statements
and MD&A for the three and six months ended June 30, 2022.
Reconciliation of Cash Costs and AISC
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
(in thousands of
dollars, except per ounce figures)
|
2022
|
2021
|
|
2022
|
2021
|
|
Gold ounces
sold
|
6,998
|
8,045
|
|
13,510
|
16,166
|
|
Cost of
sales
|
$
20,711
|
$
13,848
|
|
$
34,335
|
$
27,130
|
|
Less: Heap leach
and doré adjustment *
|
(5,343)
|
-
|
|
(5,769)
|
-
|
|
Less:
Depreciation and depletion
|
(2,402)
|
(2,286)
|
|
(4,009)
|
(4,463)
|
|
Add: Refining
and transportation
|
80
|
57
|
|
129
|
151
|
|
Less: Silver and
other bi-product revenue
|
(1,421)
|
(2,219)
|
|
(2,756)
|
(4,092)
|
|
Total Cash
Costs
|
11,625
|
9,400
|
|
21,930
|
18,726
|
|
Sustaining
capital expenditures
|
5,422
|
6,410
|
|
8,460
|
13,591
|
|
Accretion
|
143
|
66
|
|
262
|
134
|
|
Corporate
administration
|
1,001
|
1,238
|
|
1,752
|
2,811
|
|
Total
AISC
|
$
18,191
|
$
17,114
|
|
$
32,404
|
$
35,262
|
|
Cash Costs per ounce
of gold sold
|
$
1,661
|
$
1,168
|
|
$
1,623
|
$
1,158
|
|
AISC per ounce of
gold sold
|
$
2,599
|
$
2,127
|
|
$
2,399
|
$
2,181
|
|
* Adjustment for
heap leach and doré write-down and net realizable value impairment
discussed in Consolidated Financial Results Summary above.
|
Reconciliation of Average Realized Price of Gold per Ounce
Sold
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in thousands of
dollars, except per ounce figures)
|
2022
|
2021
|
|
2022
|
2021
|
|
Gold revenue
|
$
13,045
|
$
14,428
|
|
$
25,293
|
$
29,050
|
|
Gold ounces
sold
|
6,998
|
8,045
|
|
13,510
|
16,166
|
|
Average realized price
per ounce sold
|
$
1,864
|
$
1,793
|
|
$
1,872
|
$
1,797
|
|
|
|
|
|
|
|
ON BEHALF OF THE BOARD OF
ELEVATION GOLD MINING CORPORATION
"Tim J. Swendseid"
Tim J. Swendseid, President of
Elevation Gold Mining Corporation
About Elevation Gold Mining
Corporation
Elevation Gold is a publicly listed gold and silver producer,
engaged in the acquisition, exploration, development and operation
of mineral properties located in the United States. Elevation
Gold's common shares are listed on the TSX Venture Exchange
("TSXV") in Canada under the
ticker symbol ELVT and on the OTCQX in the United States under the ticker symbol
EVGDF. The Company's principal operation is the 100% owned
Moss Mine in the Mohave County of Arizona. Elevation also
holds the title to the Hercules exploration property, located in
Lyon County, Nevada.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Statement on
Forward-Looking Information
Certain of the statements made and information contained
herein is "forward-looking information" within the meaning of
applicable Canadian securities laws. All statements other than
statements of historical facts included in this document constitute
forward-looking information, including but not limited to
statements regarding the Company's plans, prospects and business
strategies; the Company's guidance on the timing and amount of
future production and its expectations regarding the results of
operations; expected costs; permitting requirements and timelines;
timing and possible outcome of Mineral Resource and Mineral Reserve
estimations, life of mine estimates, and mine plans; anticipated
exploration and development activities at the Company's projects;
net present value; design parameters; economic potential;
processing mineralized material; the potential of robust economic
potential at the Moss Mine Project. Words such as "believe",
"expect", "anticipate", "contemplate", "target", "plan", "goal",
"aim", "intend", "continue", "budget", "estimate", "may", "will",
"can", "could", "should", "schedule" and similar expressions
identify forward-looking statements.
Forward-looking information is necessarily based upon various
estimates and assumptions including, without limitation, the
expectations and beliefs of management, including that the Company
can access financing, appropriate equipment and sufficient labour;
assumed and future price of gold, silver and other metals;
anticipated costs; ability to achieve goals; and assumptions
related to the factors set forth below. While these factors and
assumptions are considered reasonable by the Company as at the date
of this document in light of management's experience and perception
of current conditions and expected developments, these statements
are inherently subject to significant business, economic and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements and undue reliance
should not be placed on such statements and information. Such
factors include, but are not limited to: risks inherent in mining,
including, but not limited to risks to the environment, industrial
accidents, catastrophic equipment failures, unusual or unexpected
geological formations or unstable ground conditions, and natural
phenomena such as earthquakes, flooding or unusually severe
weather; uninsurable risks; global financial conditions and
inflation; changes in the Company's share price, and volatility in
the equity markets in general; volatility and fluctuations in metal
and commodity prices; the threat associated with outbreaks of
viruses and infectious diseases, including the COVID-19 virus;
delays or the inability to obtain, retain or comply with permits;
risks related to negative publicity with respect to the Company or
the mining industry in general; health and safety risks;
exploration, development or mining results not being consistent
with the Company's expectations; unavailable or inaccessible
infrastructure and risks related to ageing infrastructure; actual
ore mined and/or metal recoveries varying from Mineral Resource and
Mineral Reserve estimates, estimates of grade, tonnage, dilution,
mine plans and metallurgical and other characteristics; risks
associated with the estimation of Mineral Resources and Mineral
Reserves and the geology, grade and continuity of mineral deposits,
including, but not limited to, models relating thereto; ore
processing efficiency; information technology and cybersecurity
risks; potential for the allegation of fraud and corruption
involving the Company, its customers, suppliers or employees, or
the allegation of improper or discriminatory employment practices;
regulatory investigations, enforcement, sanctions and/or related or
other litigation; estimates of future production and operations;
estimates of operating cost estimates; the potential for and
effects of labour disputes or other unanticipated difficulties with
or shortages of labour or interruptions in production; risks
related to the environmental regulation and environmental impact of
the Company's operations and products and management thereof;
exchange rate fluctuations; climate change; risks relating to
attracting and retaining of highly skilled employees; compliance
with environmental, health and safety laws; counterparty and credit
risks and customer concentration; litigation; changes in laws,
regulations or policies including, but not limited to, those
related to mining regimes, permitting and approvals, environmental
and tailings management, and labour; internal controls; challenges
or defects in title; funding requirements and availability of
financing; dilution; risks relating to dividends; risks associated
with acquisitions and related integration efforts, including the
ability to achieve anticipated benefits, unanticipated difficulties
or expenditures relating to integration and diversion of management
time on integration; uncertainties relating to interpretation of
drill results and the geology, continuity and grade of mineral
deposits; uncertainty of estimates of capital and operating costs,
production estimates and estimated economic return; uncertainty of
meeting anticipated program milestones; and other risks and
uncertainties including but not limited to those described the
Company's public disclosure documents which are available on SEDAR
at www.sedar.com under the Company's profile. All of the
forward-looking statements made in this document are qualified by
these cautionary statements. Although the Company has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated, forecast or intended and readers are
cautioned that the foregoing list is not exhaustive of all factors
and assumptions which may have been used. Should one or more of
these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking information. Accordingly,
there can be no assurance that forward-looking information will
prove to be accurate and forward-looking information is not a
guarantee of future performance. Readers are advised not to place
undue reliance on forward-looking information. The forward-looking
information contained herein speaks only as of the date of this
document. The Company disclaims any intention or obligation to
update or revise forward–looking information or to explain any
material difference between such and subsequent actual events,
except as required by applicable law.
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SOURCE Elevation Gold Mining Corp.
