ALTYNGOLD PLC 29 April 2016
GoldBridges Global Resources Plc("GoldBridges" or the "Company")
Results for the year ended 31 December 2015
GoldBridges, the underground gold mining and development company, is pleased to announce its 2015 results.
Highlights Company HighlightsDetailed plans developed internally using advice from external consultants leading to a revised approach to the development of the mine and a reduction in capex requirement. Expansion capex now reduced to an external funding requirement of US$20-US$30m, of which US$10m was raised in 2016.
Approximately 570m of development undertaken on second transportation decline to date.
Transportation decline on track for completion by May 2016, allowing an underground production run rate of 500,000 t/ year.
The Company is actively pursuing the balance of funds, the expected requirement is in H2 2017.
Financial Highlights20,890 oz of gold sold (2014: 27,959oz), a reduction of 7,069oz.
Turnover decreased in the year to US$24m (2014: US$35.2m), principally a reflection of the time and resources spent on the development of the underground workings.
Decrease in finished gold stockholding to 1,819oz (2014: 7,307oz), a reflection of decreased production.
Average gold price achieved (including silver as a by-product), US$1,151/oz, (2014: US$1,258/oz).
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortisation), of US$(2.3m) (2014: positive US$5.3m).
Loss of US$10.2m (2014: US$(0.25m)), and a total comprehensive loss to include exchange differences of US$(40m) (2014: US$(9m)).
Equity raising of US$5.1m completed in April 2015.
Net asset value decreased as the Kazakh Tenge devalued against the US dollar - however, no practical impact on the Company's value.
Operational HighlightsGold poured 15,534oz, (2014: 32,994oz) a 52.9% decrease year-on-year, principally due to the winding down of the open pit and development of the underground.
Gold grade 1.12g/t, (2014: 1.81g/t). The reduction is a reflection of the processing of the lower grade ore from the open pit and use of low grade ore stock piles, in order to maximise throughput while the underground developments continue.
Cash cost of production US$837/oz (2014: US$834/oz).
Gold recovery rate 76.04% (2014: 83.3%) was due to variable grade and ore composition. Recovery is expected to increase again to over 80% after plant improvements.
"While our gold production from Sekisovskoye fell year on year, we regard 2015 as a successful year of transition for GoldBridges. Our open pit mine wound down and is set to close, as planned, and we are pleased to report that significant progress has been made in developing our new underground mine. This operation will secure our long term future and we expect our gold production to begin to increase again in H2 2016. "
For further information please contact: GoldBridges Global Resources Plc Louise Wrathall+44 (0) 207 932 2456
Cantor Fitzgerald EuropeStewart Dickson
+44 (0) 207 894 7000
Information on the CompanyGoldBridges is a gold mining, exploration and development group based in Kazakhstan. Whilst the Company was initially established to exclusively develop and operate the Sekisovskoye gold and silver mine in the East Kazakhstan Region, it is now actively targeting additional gold mining opportunities in Kazakhstan. This includes the adjacent prospective Karasuyskoye Ore Fields, on which GoldBridges was recently awarded the tender to perform further confirmatory testing in order to gain the sub-soil user licence.
The Company holds a 100 per cent shareholding in DTOO Gornorudnoe Predpriatie Sekisovskoye ("DGPS") which holds a subsoil use contract in relation to the Sekisovskoye deposit, covering a total area of 0.855km². The subsoil use contract for Sekisovskoye is valid until 2020 and the Company currently intends to seek to extend the contract in accordance with its terms. The Company also holds a 100 per cent shareholding in DTOO Altai Ken-Bayitu LLP which owns and operates the processing plant at the Sekisovskoye deposit. The Sekisovskoye deposit is located at the village of Sekisovka, approximately 40km north of the town of Ust-Kamenogorsk, the capital city of the East Kazakhstan Region.
The company is in transition moving from open pit production to underground development of the mine. The operations are expected to be fully underground from H2 2016 onwards.
As at 31 May 2014, the Company's proven and probable reserves consisted of 2.3Moz of gold and 3.0Moz of silver, and the Company's measured, indicated and inferred resources consisted of 5.1Moz of gold and 3.5Moz of silver, in each case as classified in accordance with JORC.
In the year ended 31 December 2015, the Company's consolidated revenue was US$24million and its EBITDA was US$(2.3) million.
Chairman's StatementDuring the year, we continued with the move from the open pit gold mine at Sekisovskoye to a solely underground operation, and this process is to be completed in the near term. Mid-year, we announced our decision to access our substantial gold reserves by developing a decline underground, rather than by sinking a shaft as described in the Venmyn Deloitte CPR that we released in November 2014.
In that report, the overall capital expenditure (capex) outlay was estimated to be US$130m for the shaft based solution. Based on our current plans, the overall capex requirement to achieve 100,000oz of production in three years is now only estimated to be US$42m, of which only US$20-US$30m needs to be externally funded. US$10m of this total has already been successfully raised.
As previously announced, GoldBridges has already commenced development of the new transportation decline, improving access to its significant deeper gold reserves. Development of the decline is well underway.
Construction of the portal in the open pit, which is in the process of being closed, has already commenced. As part of the preparation of the underground mine for more extensive mining in 2016, the company is in the process of sourcing the capital equipment required from various providers. It will include the purchase of larger 30 tonne underground trucks, a load-haul-dumper and associated equipment. A drilling rig is already commissioned for underground works. On completion of the second decline development, the company will have the capacity to significantly increase gold production from Sekisovskoye. This is expected to have a marked effect on production in H2 2016.
Unsurprisingly, our gold production fell from 32,994oz in 2014 to 15,534oz in 2015 as the open pit part of Sekisovskoye wound down and is expected to close.
In April 2015, we announced a successful capital raising of £3.4m (US$5.1m), through the placing of 123m new shares at a price of 2.8p/share, and we thank our existing and new shareholders for their support and belief in our business. The net proceeds of this placing have been used to fund working capital and the expansion of our underground mine.
In terms of the gold market, we have witnessed another challenging year as the gold price fell by around US$200/oz during the course of 2015, putting more pressure on higher cost producers. Currently the gold price is in the range of US$1,200-1,250oz.
Fortunately for Kazakh mine operators, our local currency, the Tenge, fell from around 182KZT to 339KZT to the US dollar in 2015 and has further weakened to current levels of about 340KZT to the US dollar. This devaluation was due to the National Bank of Kazakhstan taking the decision to allow the currency to float. This was as a result of weakening currencies of some of Kazakhstan's key trading partners, such as China and Russia, and the National Bank of Kazakhstan will now target inflation rate control rather than its currency valuation. Given that a significant portion of our operating costs are Tenge denominated, while the sales of gold are linked to US dollar prices, this has aided us in lowering costs in US dollar terms.
With recent currency based developments in mind, we continue to believe that we are located in the right country in terms of our gold operations, and will continue to focus on Kazakhstan and other neighbouring Central Asia countries for our business development going forwards. Kazakhstan is immensely resource rich, has a motivated and able mining workforce, and is becoming even more cost effective. Changes to
GoldBridges Global Resources plc issued this content on 29 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 April 2016 16:02:57 UTC
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