Welcome To The Orvana Minerals HUB On AGORACOM

Operations: Copper-gold-silver-mine in Bolivia, Gold/copper mine/Mill in Spain and its developing copper project in Michigan

Free
Message: Reports Operating Results for the First Quarter Ended December 31, 2008
Reply New Message
Prev Message Back To Forum Threaded View Next Message

Reports Operating Results for the First Quarter Ended December 31, 2008

posted on Feb 13, 2009 04:49AM
February 13, 2009
Orvana Reports Operating Results for the First Quarter Ended December 31, 2008
TORONTO, ONTARIO--(Marketwire - Feb. 13, 2009) - Orvana Minerals Corp. (TSX:ORV) announced operating results today for the first quarter ended December 31, 2008. Dollar amounts in this news release are in thousands of United States dollars unless stated otherwise, and fine troy ounces of gold are referred to as "ounces". Highlights for the first quarter are:

- Revenues of $14.2 million on sales of 17,678 ounces for the first quarter of fiscal 2009 compared to $16.1 million on sales of 20,607 ounces for the first quarter of fiscal 2008;

- Production of 18,025 ounces at a total cash cost of $281.04 per ounce for the first quarter of fiscal 2009 compared to 21,083 ounces produced at a total cash cost of $174.25 per ounce for the first quarter of fiscal 2008;

- Net income of $3.9 million ($0.03 per share) for the first quarter of fiscal 2009, lower than net income of $6.9 million ($0.06 per share) for the same period a year ago;

- Cash provided by operating activities amounted to $7.8 million for the first quarter of fiscal 2009 compared to $12.6 million in the first quarter of fiscal 2008;

- Cash and cash equivalents of $96.6 million at December 31, 2008 compared to $67.3 million at December 31, 2007.

In the first quarter of fiscal 2009, revenues decreased by 12% on 14% lower gold sales offset by higher average gold prices realized. New Bolivian mining royalty taxes and a higher Bolivian rate of income tax also affected results in the first quarter this year but these were partially offset by decreases in other costs. The new mining royalty taxes and higher income tax rate were only in effect for the last two weeks of the comparative first quarter of fiscal 2008.

Orvana President and Chief Executive Officer, Carlos Mirabal said, "I am pleased with the operating results at the Don Mario mine as well as the recent announcements regarding updated estimates of reserves on the Lower Mineralized Zone and resources on the Las Tojas deposit; our evaluation of the Upper Mineralized Zone and the environmental impact study at Copperwood.

These incremental resources and the anticipated approval of the Upper Mineralized Zone project will serve to partially offset the year-over-year decline in production from the Company's Don Mario operations.

Finally, to further enhance long term shareholder value, Orvana continues to accumulate strategic investment capital and management is devoting considerable time and effort to investigate numerous investment opportunities. While this is a very interesting financial environment overlaying the normal mining cycle, we will be selective and will ensure that we acquire mining assets at fair prices."

Don Mario Mine Operations

In the first quarter of fiscal 2009, a total of 64,238 tonnes of ore were treated, compared to 66,581 tonnes for the same period a year ago.

                    -------------------------------------------------------
                                         Months ended
                     Three months  -------------------------  Three months
                            ended  Dec. 31, Nov 30, Oct. 31,         ended
                    Dec. 31, 2008     2008    2008     2008  Dec. 31, 2007
---------------------------------------------------------------------------
             Tonnes        53,126   13,906  19,544   19,676         62,808
Underground  --------------------------------------------------------------
 mine           g/t         10.72    15.20    8.67     9.60          11.06
---------------------------------------------------------------------------
             Tonnes        11,112    6,598   2,207    2,307          3,773
Mini pit     --------------------------------------------------------------
 & stockpile    g/t          2.15     2.34    1.77     1.99           1.94
---------------------------------------------------------------------------
Total        Tonnes        64,238   20,504  21,751   21,983         66,581
 tones       --------------------------------------------------------------
 treated        g/t          9.24    11.06    7.97     8.80          10.54
---------------------------------------------------------------------------
Gold recovery rate           94.5%    92.7%   95.3%    95.8%          93.5%
---------------------------------------------------------------------------
Gold production
 - ounces                  18,025    6,759   5,312    5,954         21,083
---------------------------------------------------------------------------
Gold production for the first quarter of fiscal 2009 was 15% lower, at 18,025 ounces, compared to 21,083 ounces for the first quarter of fiscal 2008 due primarily to lower head grades.

The following table shows the cash costs for the first quarters of the fiscal years 2009 and 2008. The Company prepares its financial statements in accordance with Canadian generally accepted accounting principles ("GAAP"). The calculations below represent non-GAAP information, which should not be construed as an alternative to GAAP reporting of operating expenses, and may not be comparable to similar measures presented by other issuers (see "non-GAAP measures" below).

                                  -----------------------------------------
                                   Three months ended   Three months ended
                                       Dec.  31, 2008        Dec. 31, 2007
                                  -----------------------------------------
                                   Costs      Cost/oz.    Costs    Cost/oz.
---------------------------------------------------------------------------
Direct mine operating costs       $3,536      $196.20    $2,991    $141.85
---------------------------------------------------------------------------
Third-party smelting, refining
 and transportation costs            111         6.15        55       2.62
---------------------------------------------------------------------------
        Cash operating costs       3,647       202.35     3,046     144.47
---------------------------------------------------------------------------
Royalties and mining rights          431        23.88       511      24.23
---------------------------------------------------------------------------
Mining royalty tax                   988        54.81       117       5.55
---------------------------------------------------------------------------
        Total cash costs           5,066       281.04     3,674     174.25
---------------------------------------------------------------------------
Depreciation and amortization      1,209        67.10     2,148     101.91
---------------------------------------------------------------------------
        Total production costs    $6,275      $348.14    $5,822    $276.16
---------------------------------------------------------------------------
For the first quarter of the fiscal year 2009, total production costs per ounce at $348.14 were higher due to lower production compared to the first quarter of fiscal 2008 (18,025 ounces in the first quarter of fiscal 2009 compared to 21,083 ounces in the first quarter of fiscal 2008). Increases in the cost of labour and supplies also contributed to higher unit costs, but the single biggest factor in these increases was the full impact in the current quarter of the new mining royalty tax (which was only in effect for the last 16 days of the first quarter of fiscal 2008), which added $871, or $49.26 per ounce, to production costs in the current quarter.

Quarterly Financial Highlights

Financial highlights for the three months ended December 31, 2008 compared to the three months ended December 31, 2007 are summarized below:

                                             ------------------------------
                                             Three months ended December 31
                                             ------------------------------
                                                        2008           2007
---------------------------------------------------------------------------
Revenue                                              $14,165        $16,077
---------------------------------------------------------------------------
Net income                                             3,914          6,865
---------------------------------------------------------------------------
Net income per share - basic and diluted               $0.03          $0.06
---------------------------------------------------------------------------
Cash provided by operating activities                 $7,806        $12,590
---------------------------------------------------------------------------
Cash and cash equivalents                             96,605         67,370
---------------------------------------------------------------------------
Total assets                                         124,985         90,127
---------------------------------------------------------------------------
Long-term debt                                         3,856              -
---------------------------------------------------------------------------
Shareholders' equity                                 100,801         77,893
---------------------------------------------------------------------------
Unaudited consolidated financial statements and Management's Discussion & Analysis for the period ended December 31, 2008 are available on SEDAR and at www.orvana.com.

About Orvana

Orvana Minerals Corp. is a Canadian mining and exploration company based in Toronto, Canada involved in the evaluation, development and mining of precious and base metal deposits in the Americas. The Company owns and operates the Don Mario Mine in eastern Bolivia. The Company's goal is to become a low cost, long-life, diversified producer primarily focused on precious metals in the Americas. Orvana's shares have been listed on the Toronto Stock Exchange since 1992 under the trading symbol ORV.
11 Recommendations
Reply New Message
Prev Message Back To Forum Threaded View Next Message
Share
Share
New Message
Please login to post a reply