TORONTO, ON--(Marketwired - March 13, 2018) - BRIO GOLD INC. (TSX: BRIO) ("BRIO GOLD" or the "Company") announces its fourth quarter and full year 2017 financial and operating results. All dollar figures are in U.S. dollars unless otherwise indicated.
Q4 and Full Year 2017 Summary Financial Results
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For the three months For the twelve months
ended December 31 ended December 31,
In thousands of U.S. Dollars 2017 2016 2017 2016
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Revenues from mining
operations $ 51,413 $ 59,510 $ 217,891 $ 232,356
Mine operating
(loss)/earnings $ 8,587 $ (122,379) $ 28,250 $ (90,074)
Net loss $ (8,870) $ (22,115) $ (21,000) $ (16,859)
Adjusted loss (1) $ (4,552) $ (28,897) $ (9,514) $ (17,925)
Adjusted EBITDA(1) $ 3,719 $ 8,622 $ 30,556 $ 67,379
Cash flow from operating
activity $ 10,406 $ 31,225 $ 11,732 $ 70,086
Cash flow from operating
activities before changes
in working capital $ 10,956 $ 20,024 $ 41,572 $ 70,470
(1) A non-GAAP financial measure. For a reconciliation of non-GAAP measures,
please see the end of this press release.
Revenues from mining operations were $217.9 million on the sale of 176,069 ounces for the year ended December 31, 2017, compared to $232.4 million on the sale of 192,524 ounces for the comparable period in 2016.
Net loss in 2017 was $21.0 million or $0.18 per share, compared to a net loss of $16.9 million or $0.37 per share for 2016.
The Adjusted Loss in 2017 was $9.5 million, compared to a loss of $17.9 million for the same period of 2016 as the decrease in revenues from mining operations was offset by lower depletion, depreciation and amortization expense. See the end of this press release for a reconciliation of net loss to Adjusted Loss.
Cash flow from operating activities after changes in working capital for 2017 was an inflow of $11.7 million, compared to an inflow of $70.1 million in 2016 due to reduced cash flow from operating activities and a $29.8 million increase in working capital, largely due to a build up of ore stockpile at the RDM Mine and a reduction in trade accounts payable. Cash flow from operating activities before changes in working capital for 2017 was an inflow of $41.6 million, lower compared to an inflow of $70.5 million in 2016 due to higher per unit costs, and higher general and administrative expenses due to one-time costs associated with the transition of Brio Gold becoming a stand alone public company.
Full Year 2017 Summary Operational Results
For the three months For the twelve months
ended December 31, ended December 31,
Consolidated Operating
Statistics 2017 2016 Change 2017 2016 Change
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Gold production (oz.) (1) 40,350 50,477 (20)% 178,025 189,662 (6)%
Gold sales (oz.) 40,455 50,093 (19)% 176,069 192,524 (9)%
Average realized gold price
per ounce sold(2) $1,286 $1,199 7% $1,250 $1,219 3%
Cost of sales including
depletion, depreciation and
amortization per gold ounce
sold $1,059 $1,421 (9)% $1,076 $1,099 (2)%
Cash cost per gold ounce
produced(2) $806 $832 (3)% $846 $746 13%
All-in sustaining costs per
ounce of gold produced(2) $1,150 $1,106 4% $1,126 $985 14%
Notes:
(1) Operating statistics only include RDM from the date that it was
acquired on April 29, 2016.
(2) A non-GAAP financial measure. Please see the end of the press release
for a reconciliation.
Production during the year of 2017 from the Company's three producing mines was lower than the comparative year of 2016 by 6% due to lower production at the Fazenda Brasileiro Mine and the Pilar Mine, partially offset by higher production at the RDM Mine.
At the Fazenda Brasileiro Mine, the annual production in 2017 was 60,978 ounces of gold, 14% lower than the same period last year primarily due to lower feed grades from mine sequencing. The grade in the fourth quarter improved significantly over the previous quarter and the Company expects grade to continue to show improvements in 2018. For 2018, the Company expects production at the Fazenda Brasileiro Mine to be 65,000 to 75,000 ounces of gold.
At the Pilar Mine, lower overall grade was a result of increased production from the lower grade Maria Lazara deposit. During the fourth quarter, the company started restructuring the operation, which included halting development at Maria Lazara. The Company is now mining out the developed reserves at Maria Lazara and will be focusing production going forward on the higher grade HG1 and HG2 zones at the main Pilar mine as well as the development of the Tres Buracos open pit. The Maria Lazara mine currently has one year of developed reserves that will be mined out in 2018 and the satellite operation will then be put on care and maintenance. Pilar is expected to produce 65,000 to 75,000 ounces of gold in 2018.
The RDM Mine was put on care and maintenance for close to 5 months in 2017 due to a lack of water. The new water dam/reservoir is operating well, as the region's rainy season allowed adequate water reserves to build up. The operation has been running continuously since December 1st and the company expects that to continue into the foreseeable future. Consistent production at low cost is expected going forward, with Brio Gold forecasting a full year of production at RDM in 2018 with guidance set at 75,000 to 85,000 ounces of gold.
Overall cash costs and all-in sustaining costs per gold ounce for the year were higher than the comparative period of 2016 due to lower overall gold feed grades causing increased costs per ounce as the fixed component of production costs was allocated over fewer ounces. In addition, operating costs increased due to the strengthening of the Brazilian real against the U.S. dollar. Cost of sales including depletion, depreciation and amortization per gold ounce were lower than the comparative period of 2016 due to lower depletion, depreciation, and amortization.
Break down by Mine
For the three months For the twelve months
ended December 31, ended December 31,
2017 2016 Change 2017 2016 Change
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Gold production
(oz.)(1)
Pilar Mine 14,115 22,170 (36)% 73,931 87,061 (15)%
Fazenda Brasileiro
Mine 16,100 18,279 (12)% 60,978 70,887 (14)%
RDM Mine 10,135 10,028 1% 43,116 31,714 36%
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Total gold production 40,350 50,477 (20)% 178,025 189,662 (6)%
Gold sales (oz.)(1)
Pilar Mine 15,041 21,837 (31)% 73,753 86,126 (14)%
Fazenda Brasileiro
Mine 16,345 19,110 (14)% 59,631 73,517 (19)%
RDM Mine 9,069 9,146 (1)% 42,685 32,881 30%
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Total gold sales 40,455 50,093 (19)% 176,069 192,524 (9)%
Cost of sales
including depletion,
depreciation and
amortization per gold
oz sold (1)
Pilar Mine $ 1,393 $ 1,687 (17)% $ 1,220 $ 1,195 2%
Fazenda Brasileiro
Mine 978 1,074 (9)% 974 949 3%
RDM Mine 628 1,494 (58)% 971 1,183 (18)%
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Cost of sales
including depletion,
depreciation and
amortization per gold
oz sold $ 1,059 $ 1,421 (9)% $ 1,076 $ 1,099 (2)%
Cash cost per gold
ounce produced(1,2)
Pilar Mine $ 983 $ 872 13% $ 852 $ 742 15%
Fazenda Brasileiro
Mine 821 753 9% 862 689 25%
RDM Mine 536 888 (40)% 814 881 (8)%
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Total cash cost per
gold ounce produced $ 806 $ 832 (3)% $ 846 $ 746 13%
All-in sustaining
costs per ounce of
gold produced(1,2)
Pilar Mine $ 1,186 $ 1,150 3% $ 1,064 $ 951 12%
Fazenda Brasileiro
Mine 973 1,018 (4)% 1,033 918 13%
RDM Mine 879 1,006 (13)% 989 1,001 (1)%
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Total mine all-in
sustaining costs per
ounce of gold
produced $ 1,024 $ 1,074 (5)% $ 1,035 $ 947 9%
Consolidated all-in
sustaining costs per
ounce of gold
produced $ 1,150 $ 1,106 4% $ 1,126 $ 985 14%
Notes:
(1) Operating statistics only include RDM from the date that it was
acquired on April 29, 2016.
(2) A non-GAAP financial measure. See "Management's Discussion and
Analysis - Non-GAAP Financial Measures" or the end of this press
release for a reconciliation of cost of sales including depletion,
depreciation and amortization to cash costs consolidated and on a per
mine basis, and reconciliation of cost of sales including depletion,
depreciation and amortization to all-in sustaining costs consolidated
and on a per mine basis.
About Brio Gold
Brio Gold is an established Canadian mining company with significant gold producing, development and exploration stage properties in Brazil. Brio Gold's portfolio includes three operating gold mines and a fully-permitted, fully-constructed mine that was on care and maintenance and currently is in development to be re-started at the end of 2018. Brio Gold is expected to produce 205,000 to 235,000 ounces of gold in 2018 and at full run-rate is expected to produce approximately 400,000 ounces of gold annually in 2019.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains or incorporates by reference "forward-looking statements" and "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to information with respect to the Company's strategy, plans or future financial or operating performance, the outcome of the legal matters involving the damages assessments and any related enforcement proceedings. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the Company's expectations in connection with the production and exploration, development and expansion plans at the Company's projects discussed herein being met, the impact of proposed optimizations at the Company's projects, the impact of the proposed new mining law in Brazil, and the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices (such as gold and silver), currency exchange rates (such as the Brazilian real versus the United States dollar), the impact of inflation, possible variations in ore grade or recovery rates, changes in the Company's hedging program, changes in accounting policies, changes in mineral resources and mineral reserves, risks related to asset disposition, risks related to metal purchase agreements, risks related to acquisitions, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting timelines, government regulation and the risk of government expropriation or nationalization of mining operations, risks related to relying on local advisors and consultants in foreign jurisdictions, environmental risks, unanticipated reclamation expenses, risks relating to joint venture operations, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending and outstanding litigation and labour disputes, risks related to enforcing legal rights in foreign jurisdictions, as well as those risk factors discussed or referred to herein. 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 not to be anticipated, estimated or intended. 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. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company's expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company's plans and objectives and may not be appropriate for other purposes.
Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures including cash costs per ounce of gold produced, all-in sustaining costs per ounce of gold produced, adjusted earnings (loss), and adjusted EBITDA to supplement its consolidated financial statements, which are presented in accordance with IFRS.
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. Non-GAAP financial measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Cash Costs
The Company uses the non-GAAP financial measure "cash costs" on a per ounce of gold produced basis because it believes this measure provides investors and analysts with useful information about the Company's underlying cash costs of operations and is a relevant metric used to understand the Company's operating profitability, and ability to generate cash flow. Cash costs figures are calculated based on the standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard remains the generally accepted standard of reporting cash costs of production in North America. Adoption of the standard is voluntary and the cost measures presented herein may not be comparable to other similarly titled measures of other companies.
Cash costs include mine site operating costs such as mining, processing, administration, production taxes and royalties, which are not based on sales or taxable income calculations, but are exclusive of amortization, reclamation, capital, development, and exploration costs. Cash costs per ounce of gold produced are calculated on a weighted average basis.
The term "cash costs" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
All-in Sustaining Costs
The Company uses the non-GAAP financial measure "all-in sustaining costs", also referred to as "AISC", on a per ounce of gold produced basis because it believes this measure provides investors with useful information about the Company's underlying cash costs of operations, after deducting certain non-discretionary items such as sustaining capital expenditures, exploration expenses and certain general and administrative costs and is a relevant metric used to understand the Company's ability to generate cash flow. All-in sustaining costs are based on cash costs, including cost components of mine sustaining capital expenditures and exploration and evaluation expense. All-in sustaining costs for a mine do not include capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, corporate general and administrative expenses, stock-based compensation, income tax payments, financing costs and dividend payments. Consequently, this measure is not representative of all of the Company's cash expenditures. In addition, the calculation of all-in sustaining costs does not include depletion, depreciation and amortization expense as it does not reflect the impact of expenditures incurred in prior periods. The term "all-in sustaining costs" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
Reconciliation of cost of sales including depletion, depreciation and amortization to cash costs and all-in sustaining costs, consolidated and per mine
(Based on Consolidated Financial Statements unless otherwise noted)
For the three months ended December 31, 2017
(In thousands of U.S. Fazenda
dollars, except per share Brasileiro
and per ounce amounts) Consolidated Pilar Mine Mine RDM Mine
-------------------------------------------------
Cost of sales including
depletion, depreciation
and amortization 42,826 20,957 15,981 5,697
Depletion, depreciation
and amortization (8,133) (4,769) (1,776) (1,397)
Adjustments:
Inventory movement and
adjustments(1) (2,171) (2,313) (987) 1,132
-------------------------------------------------
Cash costs(2) 32,522 13,875 13,218 5,432
General and administrative
expenses attributable to
all-in sustaining costs 6,393 106 73 251
Stock based compensation (1,381) - - -
Sustaining capital
expenditures 8,869 2,759 2,374 3,226
-------------------------------------------------
All-in sustaining costs(2) 46,403 16,740 15,665 8,909
Cost of sales including
depletion, depreciation
and amortization per gold
ounce sold 1,059 1,393 978 628
Cash cost per gold ounce
produced(2) 806 983 821 536
All-in sustaining costs
per ounce produced(2) 1,150 1,186 973 879
Gold ounces produced
during the period (oz.) 40,350 14,115 16,100 10,135
Gold ounces sold during
the period (oz.) 40,455 15,041 16,345 9,069
For the three months ended December 31, 2016
(In thousands of U.S. Fazenda
dollars, except per share Brasileiro
and per ounce amounts) Consolidated Pilar Mine Mine RDM Mine
------------------------------------------------
Cost of sales including
depletion, depreciation
and amortization 71,169 36,843 20,530 13,660
Depletion, depreciation and
amortization (26,275) (17,919) (5,870) (2,477)
Adjustments:
Inventory movement and
adjustments(1) (2,897) 408 (896) (2,278)
------------------------------------------------
Cash costs(2) 41,997 19,332 13,764 8,905
General and administrative
expenses attributable to
all-in sustaining costs 3,232 90 115 144
Stock based compensation (1,742) - - -
Sustaining capital
expenditures 12,341 6,074 4,729 1,039
------------------------------------------------
All-in sustaining costs(2) 55,828 25,496 18,608 10,088
Cost of sales including
depletion, depreciation
and amortization per gold
ounce sold $ 1,421 $ 1,687 $ 1,074 $ 1,494
Cash cost per gold ounce
produced(2) $ 832 $ 872 $ 753 $ 888
All-in sustaining costs per
ounce produced(2) $ 1,106 $ 1,150 $ 1,018 $ 1,006
Gold ounces produced during
the period (oz.) 50,477 22,170 18,279 10,028
Gold ounces sold during the
period (oz.) 50,092 21,837 19,110 9,146
For the twelve months ended December 31, 2017
(In thousands of U.S. Fazenda
dollars, except per share Brasileiro
and per ounce amounts) Consolidated Pilar Mine Mine RDM Mine
-------------------------------------------------
Cost of sales including
depletion, depreciation
and amortization 189,641 89,955 58,069 41,428
Depletion, depreciation
and amortization (37,840) (24,979) (6,728) (5,942)
Adjustments:
Inventory movement and
adjustments(1) (1,192) (1,987) 1,222 (390)
-------------------------------------------------
Cash costs(2) 150,609 62,989 52,563 35,096
General and administrative
expenses attributable to
all-in sustaining costs 23,434 927 742 709
Stock based compensation (7,012) - - -
Sustaining capital
expenditures 33,425 14,747 9,685 6,837
-------------------------------------------------
All-in sustaining costs(2) 200,456 78,663 62,990 42,642
Cost of sales including
depletion, depreciation
and amortization per gold
ounce sold 1,076 1,220 974 971
Cash cost per gold ounce
produced(2) 846 852 862 814
All-in sustaining costs
per ounce produced(2) 1,126 1,064 1,033 989
Gold ounces produced
during the period (oz.) 178,025 73,931 60,978 43,116
Gold ounces sold during
the period (oz.) 176,069 73,753 59,631 42,685
For the twelve months ended December 31, 2016
(In thousands of U.S. Fazenda
dollars, except per share Brasileiro
and per ounce amounts) Consolidated Pilar Mine Mine RDM Mine
-------------------------------------------------
Cost of sales including
depletion, depreciation
and amortization 211,554 102,910 69,754 38,890
Depletion, depreciation
and amortization (66,818) (43,573) (18,702) (4,543)
Adjustments:
Inventory movement and
adjustments(1) (3,248) 5,262 (2,211) (6,406)
-------------------------------------------------
Cash costs(2) 141,488 64,599 48,841 27,941
General and administrative
expenses attributable to
all-in sustaining costs 13,262 264 253 65
Stock based compensation (6,968) - - -
Sustaining capital
expenditures 39,035 17,932 15,980 3,740
-------------------------------------------------
All-in sustaining costs(2) 186,817 82,795 65,074 31,746
Cost of sales including
depletion, depreciation
and amortization per gold
ounce sold 1,099 689 694 1,045
Cash cost per gold ounce
produced(2) 746 742 689 881
All-in sustaining costs
per ounce produced(2) 985 951 918 1,001
Gold ounces produced
during the period (oz.) 189,662 87,061 70,887 31,714
Gold ounces sold during
the period (oz.) 192,524 86,126 73,517 32,881
Notes:
(1) Inventory movement and adjustment represent the difference between
the costs of production (which are based on ounces produced) and the
cost of sales (which is based on ounces sold). The timing difference
between the units sold and the costs of those units requires an
adjustment to reflect the nature of the underlying metric.
(2) A non-GAAP financial measure.
Quarterly trailing cost of sales including depletion, depreciation and amortization to cash costs consolidated and per mine
(Based on Consolidated Interim Financial Statements unless otherwise noted)
Brio Gold Consolidated
(In thousands of U.S. dollars, except per
share and per ounce amounts) Q4-17 Q3-17 Q2-17 Q1-17
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Cost of sales including depletion,
depreciation and amortization 42,826 48,972 46,871 50,972
Depletion, depreciation and amortization (8,133) (9,287) (9,766) (10,654)
Adjustments:
Inventory movement and adjustments(1) (2,171) (2,093) 883 2,237
--------------------------------
Cash costs(2) 32,522 37,592 37,988 42,555
Cost of sales including depletion,
depreciation and amortization per gold
ounce sold 1,059 1,133 1,098 1,027
Cash cost per gold ounce produced(2) 806 876 859 842
Gold ounces produced during the period
(oz.) 40,350 42,913 44,223 50,540
Gold ounces sold during the period (oz.) 40,455 43,228 42,691 49,615
Brio Gold Consolidated
(In thousands of U.S. dollars, except
per share and per ounce amounts)
Q4-16 Q3-16 Q2-16 Q1-16
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Cost of sales including depletion,
depreciation and amortization 71,169 53,009 54,265 33,111
Depletion, depreciation and amortization (26,275) (13,936) (15,752) (10,855)
Adjustments:
Inventory movement and adjustments(1) (2,897) (1,614) (226) 1,483
-----------------------------------
Cash costs(2) 41,997 37,459 38,287 23,739
Cost of sales including depletion,
depreciation and amortization per gold
ounce sold 1,421 1,085 1,037 803
Cash cost per gold ounce produced(2) 832 813 726 588
Gold ounces produced during the period
(oz.) 50,477 46,075 52,737 40,372
Gold ounces sold during the period (oz.) 50,092 48,837 52,351 41,243
Pilar Mine
(In thousands of U.S. dollars, except
per share and per ounce amounts) Q4-17 Q3-17 Q2-17 Q1-17
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Cost of sales including depletion,
depreciation and amortization 20,957 22,915 23,276 22,804
Depletion, depreciation and amortization (4,769) (6,435) (6,854) (6,921)
Adjustments:
Inventory movement and adjustments(1) (2,313) (387) 436 258
-----------------------------------
Cash costs(2) 13,875 16,093 16,858 16,141
Cost of sales including depletion,
depreciation and amortization per gold
ounce sold 1,393 1,242 1,176 1,114
Cash cost per gold ounce produced(2) 983 845 831 788
Gold ounces produced during the period
(oz.) 14,115 19,045 20,287 20,484
Gold ounces sold during the period (oz.) 15,041 18,444 19,793 20,465
Pilar Mine
(In thousands of U.S. dollars, except
per share and per ounce amounts) Q4-16 Q3-16 Q2-16 Q1-16
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Cost of sales including depletion,
depreciation and amortization 36,843 23,787 22,554 19,726
Depletion, depreciation and amortization (17,919) (9,295) (8,782) (7,577)
Adjustments:
Inventory movement and adjustments(1) 408 1,515 1,713 1,856
-----------------------------------
Cash costs(2) 19,332 16,007 15,485 14,005
Cost of sales including depletion,
depreciation and amortization per gold
ounce sold 1,687 1,152 1,023 914
Cash cost per gold ounce produced(2) 872 791 679 641
Gold ounces produced during the period
(oz.) 22,170 20,237 22,806 21,848
Gold ounces sold during the period (oz.) 21,837 20,656 22,047 21,586
Fazenda Brasileiro Mine
----------------------------------------------------------------------------
(In thousands of U.S. dollars, except
per share and per ounce amounts) Q4-17 Q3-17 Q2-17 Q1-17
-------
Cost of sales including depletion,
depreciation and amortization 15,981 17,596 12,990 11,502
Depletion, depreciation and
amortization (1,776) (1,756) (1,555) (1,641)
Adjustments:
Inventory movement and adjustments(1) (987) (832) 1,135 1,932
-------------------------------------
Cash costs(2) 13,218 15,008 12,570 11,793
Cost of sales including depletion,
depreciation and amortization per
gold ounce sold 978 1,056 1,017 831
Cash cost per gold ounce produced(2) 821 943 892 793
Gold ounces produced during the
period (oz.) 16,100 15,915 14,092 14,872
Gold ounces sold during the period
(oz.) 16,345 16,658 12,776 13,849
Fazenda Brasileiro Mine
(In thousands of U.S. dollars, except
per share and per ounce amounts) Q4-16 Q3-16 Q2-16 Q1-16
----------------------------------------------------------------------------
Cost of sales including depletion,
depreciation and amortization 20,530 17,072 17,784 14,368
Depletion, depreciation and amortization (5,870) (3,792) (5,484) (3,556)
Adjustments:
Inventory movement and adjustments(1) (896) (355) (50) (883)
-----------------------------------
Cash costs(2) 13,764 12,925 12,250 9,929
Cost of sales including depletion,
depreciation and amortization per gold
ounce sold 1,074 998 1,008 731
Cash cost per gold ounce produced(2) 753 751 726 536
Gold ounces produced during the period
(oz.) 18,279 17,211 16,873 18,524
Gold ounces sold during the period (oz.) 19,110 17,100 17,650 19,657
RDM Mine
(In thousands of
U.S. dollars,
except per share
and per ounce
amounts) Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16
----------------------------------------------------------------------------
Cost of sales
including
depletion,
depreciation and
amortization 5,697 8,461 10,605 16,666 13,660 12,150 13,080
Depletion,
depreciation and
amortization (1,397) (1,096) (1,357) (2,093) (2,477) (849) (1,217)
Adjustments:
Inventory movement
and adjustments(1) 1,132 (883) (694) 64 (2,278) (2,794) (1,325)
-------------------------------------------------------
Cash costs(2) 5,432 6,482 8,554 14,637 8,905 8,507 10,538
Cost of sales
including
depletion,
depreciation and
amortization per
gold ounce sold 628 1,041 1,048 1,089 1,494 1,096 1,034
Cash cost per gold
ounce produced(2) 536 815 869 964 888 986 807
Gold ounces produced
during the period
(oz.) 10,135 7,953 9,844 15,184 10,028 8,628 13,058
Gold ounces sold
during the period
(oz.) 9,069 8,126 10,122 15,301 9,146 11,081 12,654
Notes:
(1) Inventory movement and adjustment represent the difference between
the costs of production (which are based on ounces produced) and the
cost of sales (which is based on ounces sold). The timing difference
between the units sold and the costs of those units requires an
adjustment to reflect the nature of the underlying metric.
(2) A non-GAAP financial measure.
(3) RDM was acquired during Q2 2016, therefore Q1 2016 is not applicable.
Adjusted EBITDA
The Company uses the non-GAAP financial measure "Adjusted EBITDA" because it believes it provides investors with useful information to evaluate its performance and understand its ability to service and/or incur indebtedness.
The Company defines Adjusted EBITDA as net loss, before income tax recovery (expense), depletion, depreciation and amortization, impairment and reversals of mining properties, interest expense, share-based compensation, and non-recurring provisions and other adjustments.
The term "Adjusted EBITDA" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.
Reconciliation of Net Loss to Adjusted EBITDA
(Based on Consolidated Financial Statements unless otherwise noted)
For the three For the twelve
months ended months ended
December 31, December 31,
(In thousands of U.S. dollars) 2017 2016 2017 2016
----------------------------------------------------------------------------
Net loss (8,870) (28,511) (21,000) (16,859)
Adjustments:
Income tax expense/(recovery) (944) (8,221) (3,618) (23,279)
Depletion, depreciation and
amortization 8,133 26,324 37,840 66,818
Foreign exchange (gain)/loss (2,864) 2,051 (306) 9,239
Impairment of mineral properties - 14,659 - 14,659
Bank, financing fees, interest
expense and other 1,160 601 4,807 2,797
Loss/(gain) on sale of assets 1,001 (680) (3,375) 6
Provision on indirect tax credits 4,353 1,520 4,908 6,972
Stock based compensation 1,380 1,742 7,012 6,968
Legal provisions 1,258 157 2,848 1,078
Unrealized (gain)/loss on hedge
contracts (888) (1,020) 1,440 (1,020)
--------------------------------------
Adjusted EBITDA $ 3,719 $ 8,622 $ 30,556 $ 67,379
======================================
Adjusted Earnings or Loss
The Company uses the non-GAAP financial measure "Adjusted earnings or loss" because it believes this measure provides useful information to investors to evaluate the Company's performance by excluding certain cash and non-cash charges. The presentation of Adjusted earnings or loss is not meant to be a substitute for net earnings or loss or net earnings or loss per share presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Adjusted earnings or loss is calculated as net earnings excluding (a) stock based compensation, (b) unrealized foreign exchange (gains) losses related to revaluation of deferred income tax asset and liability on non-monetary items, (c) unrealized foreign exchange (gains) losses related to other items, (d) impairment losses and reversals, (e) deferred income tax expense (recovery) on the translation of foreign currency inter corporate debt, (f) periodic tax adjustments to historical deferred income tax balances relating to changes in enacted tax rates and (g) non-cash provisions and any other non-recurring adjustments. Non-recurring adjustments from unusual events or circumstances are reviewed from time to time based on materiality and the nature of the event or circumstance. Earnings adjustments for the comparative period reflect continuing operations.
The terms "Adjusted earnings or loss" has no standardized meaning prescribed by IFRS and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies.
For more information, see the Consolidated Financial Statements and the related notes.
Reconciliation of Net Loss to Adjusted Earnings or Loss
(Based on Consolidated Financial Statements unless otherwise noted)
For the three For the twelve
months ended months ended
December 31, December 31,
(In thousands of U.S. dollars) 2017 2016 2017 2016
----------------------------------------------------------------------------
Net loss $ (8,870) $(28,511) $(21,000) $(16,859)
Adjustments:
Net impairment of mineral properties - 14,659 - 14,659
Foreign exchange (gain)/loss (2,864) 2,051 (306) 9,239
Unrealized (gain)/loss on hedge
contracts (888) (1,020) 1,440 (1,020)
Provisions on indirect tax credits 4,353 1,520 4,908 6,972
Loss/(gain) on sale of assets 1,001 (680) (3,375) 6
Reorganization costs 846 2,902 846 6,608
Business transaction costs - - 848 3,706
Stock based compensation 1,380 1,742 7,012 6,968
Tax effect on unrealized foreign
exchange on non-monetary assets 3,422 (3,185) (1,427) (31,346)
Tax impact of adjustments (1,427) (15,905) (1,308) (20,836)
Other (1,505) (2,470) 2,848 3,978
---------------------------------------
Adjusted loss $ (4,552) $(28,897) $ (9,514) $(17,925)
=======================================
Realized Price
The Company uses the non-GAAP financial measure "realized price" on a per ounce of gold sold basis because it believes this measure provides investors and analysts with a more accurate measure with which to compare to market gold prices and to assess the Company's gold sales performance. Management believes that this measure provides a more accurate reflection of past performance and is a better indicator of expected performance in future periods. Realized price excludes the impact of the mining royalty on revenue from mining operations. The term "realized price" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of revenue from mining operations, operating profit or cash flows presented under IFRS.
Reconciliation of Revenue from Mining Operations to Realized Price per Gold Ounce Sold
(Based on Consolidated Financial Statements unless otherwise noted)
For the three For the twelve
months ended months ended
December 31, December 31,
(In thousands of U.S. dollars, except
price per ounce in dollars and ounces
sold) 2017 2016 2017 2016
----------------------------------------------------------------------------
Revenue from mining operations $ 51,413 $ 59,510 $217,891 $232,356
Brazilian mining royalty (CFEM) 621 575 2,273 2,305
-----------------------------------
Revenue from mining operations excluding
CFEM 52,034 60,085 220,164 234,661
Gold ounces sold during the period (oz.) 40,455 50,093 176,069 192,524
Realized price per gold ounce sold
($/oz.) $ 1,286 $ 1,199 $ 1,250 $ 1,219
BRIO GOLD INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31,
(In thousands of United States Dollars) 2017 2016
----------------------------------------------------------------------------
Revenues from mining operations $ 217,891 $ 232,356
Cost of sales excluding depletion, depreciation
and amortization 17) (151,801) (144,736)
----------------------------------------------------------------------------
Gross margin excluding depletion, depreciation
and amortization 66,090 87,620
Depletion, depreciation and amortization (37,840) (66,818)
Impairment of operating mineral properties - (110,876)
----------------------------------------------------------------------------
Mine operating income/(loss) 28,250 (90,074)
Expenses
General and administrative (23,434) (13,262)
Impairment reversal of non-operating mineral
properties - 96,217
Other operating expenses (17,709) (18,500)
----------------------------------------------------------------------------
Operating loss (12,893) (25,619)
Foreign exchange gain/(loss) 306 (9,239)
Unrealized (loss)/gain on hedge contracts (1,440) 1,020
Finance expense (10,591) (6,300)
----------------------------------------------------------------------------
Loss before income taxes (24,618) (40,138)
----------------------------------------------------------------------------
Income tax recovery 3,618 23,279
----------------------------------------------------------------------------
Net loss (21,000) (16,859)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other comprehensive income (loss)
Items that may be reclassified subsequently to
profit or loss:
Change in fair value of hedging instruments,
net of tax 3,993 308
----------------------------------------------------------------------------
Total comprehensive loss (17,007) (16,551)
----------------------------------------------------------------------------
Net loss per share (basic and diluted) (0.18) (0.37)
Weighted average number of shares outstanding
(basic and diluted) 114,540,672 45,878,479
The accompanying notes are an integral part of the consolidated financial statements.
BRIO GOLD INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31,
(In thousands of United States Dollars) 2017 2016
----------------------------------------------------------------------------
Assets
Current assets:
Cash $ 19,281 $ 7,014
Trade and other receivables 4,398 154
Inventories 40,560 29,620
Derivative assets 5,969 1,328
Other current assets 13,584 12,777
----------------------------------------------------------------------------
83,792 50,893
Non-current assets:
Property, plant and equipment 514,103 481,746
Non-current derivative assets 778 -
Deferred tax assets 7,447 6,167
Other non-current assets 5,835 2,893
----------------------------------------------------------------------------
Total assets $611,955 $541,699
----------------------------------------------------------------------------
Liabilities
Current liabilities:
Trade and other payables $ 50,925 $ 56,066
Income taxes payable 3,433 2,998
Short-term debt 13,663 -
Other financial liabilities 3,631 1,414
Other provisions and liabilities 2,465 5,243
----------------------------------------------------------------------------
74,117 65,721
Non-current liabilities:
Long-term debt 72,600 -
Decommissioning, restoration and similar liabilities 36,884 36,871
Deferred tax liabilities 5,588 11,413
Derivative liabilities 1,315 -
Other non-current provisions and liabilities 9,997 4,902
----------------------------------------------------------------------------
Total liabilities 200,501 118,907
Equity
Share capital 440,975 427,858
Reserves 67,220 70,675
Deficit (96,741) (75,741)
----------------------------------------------------------------------------
Total equity 411,454 422,792
----------------------------------------------------------------------------
Total equity and liabilities $611,955 $541,699
----------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements.
BRIO GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(In thousands of United States Dollars) 2017 2016 ---------------------------------------------------------------------------- Operating activities Loss before income tax expense $ (24,618) $ (40,138) Adjustments to reconcile loss before income taxes to net operating cash flows: Depletion, depreciation and amortization 37,840 66,818 Foreign exchange (gain)/loss (306) 9,239 Unrealized loss/(gain) on hedge contracts 1,440 (1,020) Finance expense 10,591 6,300 Net impairment of mineral properties - 14,659 Other non-cash operating expenses 18,121 19,667 Decommissioning, restoration and similar liabilities paid (1,408) (2,128) Income taxes paid (88) (2,927) ---------------------------------------------------------------------------- Cash flows from operating activities before net change in working capital 41,572 70,470 Net change in working capital (29,840) (384) ---------------------------------------------------------------------------- Cash flows from operating activities 11,732 70,086 ---------------------------------------------------------------------------- Investing activities Acquisition of Mineração Riacho dos Machados Ltda - (51,362) Property, plant and equipment expenditures (80,449) (67,981) ---------------------------------------------------------------------------- Cash flows used in investing activities (80,449) (119,343) ---------------------------------------------------------------------------- Financing activities Proceeds from debt 90,163 - Repayment of debt (1,500) - Related party financing - 51,361 Cost of debt (3,361) - Interest and other finance expenses paid (3,213) - ---------------------------------------------------------------------------- Cash flows from financing activities 82,089 51,361 ---------------------------------------------------------------------------- Effect of foreign exchange on cash (1,105) 944 ---------------------------------------------------------------------------- Increase in cash 12,267 3,048 ---------------------------------------------------------------------------- Cash, beginning of year 7,014 3,966 ---------------------------------------------------------------------------- Cash, end of year $ 19,281 $ 7,014 ----------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Letitia Wong
Vice President, Corporate Development
Telephone: +1 (416) 860-6310
Email: info@briogoldinc.com
