Minefinders Delivers Solid 2011 Financial and Operating Results
Minefinders Corporation Ltd. reported its financial and operating results for the fourth quarter and year ended December 31, 2011.
Fourth Quarter 2011 Highlights
-- Revenue of $62.0 million on the sale of 37,000 gold equivalent ounces.
-- Gold production of 20,531 ounces.
-- Silver production of 918,737 ounces.
-- Net income of $59.6 million or $0.72 per share.
-- Adjusted net income of $23.7 million or $0.29 per share.
-- Cash flow provided by operating activities before changes in working capital of $40.4 million or $0.49 per share.
-- Operating cash cost of $424 per gold equivalent ounce sold.
-- Settled the 2011 convertible notes in full in December 2011.
-- Subsequent to year end, realized cash proceeds of CDN$14.1 million following the exercise of the remaining outstanding warrants.
Full Year 2011 Highlights
-- Revenue of $241.2 million on the sale of 155,498 gold equivalent ounces.
-- Gold production of 74,193 ounces.
-- Silver production of 3,572,357 ounces.
-- Net income of $91.1 million or $1.12 per share.
-- Adjusted net income of $82.5 million or $1.02 per share.
-- Cash flow provided by operating activities before changes in working capital of $147.0 million or $1.81 per share.
-- Operating cash cost of $464 per gold equivalent ounce sold.
Commenting on the annual results, Mark Bailey, President and CEO, stated: "We set specific objectives for the Company in 2011 and I am very pleased to report that we achieved them. We exceeded our production forecast for the year and despite increasing pressures on operating costs being experienced in our industry, we also met our cash cost forecast for 2011. Furthermore, we advanced all of our near-term growth projects. It is in the context of these results that I would like to recognize the significant contributions of Laurence Morris, our Vice President, Operations and the team of professionals he has assembled at the Dolores Mine. These results would not have been possible without them."
Plan of Arrangement with Pan American Silver Corp.
On January 22, 2012, the Company entered into a definitive agreement whereby Pan American Silver Corp. ("Pan American") will acquire all of the issued and outstanding common shares of the Company by way of a plan of arrangement. All current details on the transaction are available at www.sedar.com and on the Company's website at www.minefinders.com.
"The proposed combination with Pan American represents an exciting next step for our shareholders as they gain exposure to a diverse portfolio of world class low cost producing and development assets," said Mr. Bailey. "As part of the combined company, Dolores will continue to add value and help Pan American move closer to achieving its goal of becoming the largest, low cost primary silver producer."
2012 Production Forecast
In 2012 the Company expects to produce and sell approximately 75,000 to 80,000 ounces of gold and approximately 3.5 million to 4.0 million ounces of silver. All production is expected to be sourced from the Dolores Mine and is unhedged. The forecast represents full year estimates and actual production will vary by quarter.
Operating costs and the timing and amount of capital expenditures for 2012 are currently being evaluated in the context of the proposed transaction with Pan American.
Special Meeting
The Company will host a special meeting of securityholders on Monday, March 26, 2012 relating to the proposed transaction with Pan American. The meeting will be held at 11:00 a.m. at the Vancouver Marriott Pinnacle Downtown Hotel, 1128 West Hastings Street, Vancouver, British Columbia. The record date has been set as Tuesday, February 14, 2012 and meeting materials will be mailed to shareholders by Wednesday, February 29, 2012.
Conference Call
The investor conference call which was previously scheduled for Friday, February 24, 2012 will not be held due to the current plan of arrangement with Pan American.
Summary of Financial and Operating Results(1)
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In millions, except
ounces, per share
amounts, per ounce
amounts and average Three months ended Year ended
realized prices. December 31, December 31,
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2011 2010 2011 2010
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Ore tonnes crushed and
stacked 1,469,894 1,420,804 6,041,410 5,554,293
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Gold grade per tonne
stacked 0.53 0.60 0.53 0.48
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Silver grade per tonne
stacked 46.70 56.96 45.38 40.91
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Strip ratio (waste to ore) 1.31 1.48 1.79 2.10
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Gold ounces produced 20,531 16,102 74,193 56,110
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Silver ounces produced 918,737 511,544 3,572,357 1,218,664
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Gold ounces sold 20,664 14,150 74,372 55,977
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Silver ounces sold 887,007 423,950 3,552,031 1,153,547
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Gold equivalent ounces
sold(2) 37,000 22,690 155,498 75,767
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Sales proceeds $62.0 $31.3 $241.2 $92.9
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Income from operations $35.7 $14.3 $131.4 $21.5
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Adjusted net income $23.7 $11.3 $82.5 $6.8
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Adjusted net income per
share $0.29 $0.17 $1.02 $0.10
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Net Income (loss) $59.6 $(6.7) $91.1 $(4.0)
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Net Income (loss) per
share $0.72 $(0.10) $1.12 $(0.06)
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Cash flow provided by
operating activities
before changes in working
capital $40.4 $16.9 $147.0 $31.2
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Operating cost per gold
equivalent ounce sold(2) $424 $472 $464 $585
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Total cash cost per gold
equivalent ounce sold(2) $470 $511 $505 $620
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Average realized gold
price (per oz) $1,676 $1,375 $1,561 $1,212
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Average realized silver
price (per oz) $30.87 $27.72 $35.22 $21.63
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1. As of January 1, 2011, the Company's financial results are prepared in accordance with International Financial Reporting Standards ("IFRS"). As
a result, accounting policies, presentation, financial statement captions and terminology used in this news release, the year-end
financial statements and Management's Discussion and Analysis differ from those used in financial reporting in previous years. Further details on the transition to IFRS are included in the Changes in Accounting Policies section beginning on page 19 of Management's Discussion and Analysis and in note 22 of the financial statements. The complete financial statements and accompanying Management's Discussion and Analysis are available at www.sedar.com or on the Company's website at www.minefinders.com.
2. Gold equivalent ounces sold includes gold ounces sold and silver ounces sold converted to a gold equivalent based on the ratio of actual
realized gold price to actual realized silver price. Gold equivalent ounces sold in the fourth quarter and twelve-month period of 2011 were estimated using a 54 to one silver to gold ratio and a 44 to one silver to gold ratio, respectively (2010 - 50 to one ratio and 58 to one ratio, respectively).
Working Capital and Liquidity
At December 31, 2011, the Company had $239.2 million in cash, cash equivalents and short-term investments, up from $166.9 million as at December 31, 2010, and working capital of $310.9 million, up from $167.4 million as at December 31, 2010.
Posted March 2, 2012
