| Tue 19 Aug 2008, 8:30 | | SIM - Simmer & Jack Mines Limited - Simmers Repor |
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SIM
SIIF
SIM - Simmer & Jack Mines, Limited - Simmers Reports Results For First
Quarter Ended 30 June 2008
Simmer & Jack Mines, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share Code: SIM & ISIN: ZAE000006722
("Simmers" or "the Company" or "the Group")
SIMMERS REPORTS RESULTS FOR FIRST QUARTER ENDED 30 JUNE 2008
For a full discussion of the quarter`s results, please refer to the
Management Discussion and Analysis on the Company`s website,
www.simmers.co.za, under `Latest Results`.
Simmer & Jack Mines, Limited (Simmers or the Group) today announced its
financial results for the quarter ended 30 June 2008 (Q1 F2009) as detailed
in the latest Management Discussion and Analysis, which can be found on the
Company`s website. The Company is currently focused on the rehabilitation of
the high grade No. 5 shaft at its Buffelsfontein Gold Mine (BGM) in the
North West, and getting its surface operations up and running at Transvaal
Gold Mining Estates (TGME) in Mpumalanga. Its 62.3%-held subsidiary, First
Uranium Corporation (FIU) intends to commission uranium production in
October this year at the Ezulwini Mine, following the successful
commissioning of Ezulwini`s gold plant in July. At Mine Waste Solutions
(MWS), FIU is in the process of doubling the current design capacity of the
gold plant, and is on track to begin uranium production at the end of the
current financial year, 31 March 2009.
Highlights
- Fatality-free quarter
- Produced 38 410 ounces of gold for the Group - in line with guidance
given in Q4 of F2008 - of which 35 199 ounces is attributable to
Simmers
- Revenue of R260 million as compared to R266 million in the previous
quarter
- Phase 1 of BGM`s No. 5 shaft rehabilitation project completed in June
2008
- Production from TGME`s Dukes Hill mine to begin sooner than anticipated
- On-site gold production commenced at First Uranium`s Ezulwini Mine in
July 2008
- plant commissioned but uranium production delayed by two months to
October 2008 due to late delivery of certain equipment; delay
unlikely to impact uranium shipping volumes for F2009
- Refurbishment of both Ezulwini`s main and ventilation shafts on
schedule for completion by the end of F2009
- Filed updated independent technical reports on 5 June 2008 for both
Ezulwini and MWS
- Ezulwini`s NPV of $667 million; IRR of 336%
- MWS NPV of $413 million; IRR of 70%
- Completed commissioning of MWS` Phase 1A gold plant expansion to a
processing rate of 7.6 million tonnes per annum
- gold production and costs running at planned levels
- 1.5 MTPA uranium plant and expansion of the gold plant by 7.8 MTPA
on schedule for completion
- MWS No.5 tailings dam upgraded to enable deposition rate of 633 000
tonnes of material per month
During Q2 F2009, the Group plans to:
- Produce between 43 000 and 47 000 ounces of gold, excluding any ounces
from Ezulwini
- Hoist approximately 83 300 tonnes of ore at the Ezulwini Mine, of which
approximately 65 500 tonnes would comprise gold and uranium bearing ore
from the ME reef horizon and approximately 17 800 tonnes would comprise
gold bearing ore from the UE reef horizon
- Process approximately 17 200 tonnes of gold bearing-ore through the
newly commissioned gold plant at the Ezulwini Mine
- Commission the second 50 000 tonnes per month mill module at the
Ezulwini Mine during September 2008
- Publish an updated technical report for the Ezulwini Mine
- Begin producing from the high grade No. 5a sub shaft at BGM
- Initiate the leach process at TGME`s Elandsdrift heap leach pad
- Initiate mining from Duke`s Hill at TGME
"The highlight of the quarter was undoubtedly the first gold pour at First
Uranium`s Ezulwini Mine, which took place in July as planned," said Gordon
Miller, Chief Executive of Simmers.
"Although the final commissioning stages of the uranium plant at Ezulwini
have been delayed for two months until October this year, First Uranium is
of the view that the delay will not affect its planned production rates for
the year."
While the Group achieved its production target for the first quarter, rising
costs and a marginally lower gold price resulted in a 2% decline in revenue.
During Q1 F2009, Simmers` recorded total production of 38 410 ounces (1
195kg), which was sold at an average price of R217 261 per kilogram. This
translated into gold revenue of R260 million, compared to R266 million in
Q4.
"Production from Buffelsfontein was down 2% quarter on quarter as a result
of us taking some fairly drastic action to ensure that the underground grade
exceeded pay limit. This involved closing approximately 15% of the mine`s
total face length in order to make sure that this problem did not carry over
into Q2 and if the first month`s results are anything to go by, we`ve been
successful.
"The challenge at BGM remains to create sufficient face length at, or above,
the average reserve grade, in order to achieve the mine`s budgeted
production levels. This effort will receive a major boost when the
rehabilitation of the high grade No. 5 shaft is concluded. We have completed
Phase 1 of the rehabilitation programme and are currently busy with Phase 2
which will continue into Q2 F2009, resulting in significant face length
gains by Q3 F2009," said Miller.
BGM expects to produce between 30 000 and 34 000 ounces in Q2 F2009 at a
cash cost of between US$780 and US$800 per ounce. Mine Waste Solutions is
expected to continue its upward production trend, with a forecast of 12 000
ounces for Q2, compared to the 8 530 ounces produced in Q1.
At TGME, production was in line with guidance given that production from
Frankfort Mine is being scaled back until such time as the BIOX plant is
commissioned. To replace declining production from Frankfort, opening up
operations at Dukes Hill were accelerated during the quarter and mining
commenced ahead of schedule in Q2 F2009.
The Group`s net loss before taxation increased from R70 million in Q4 F2008
to R89.3 million, of which R24 million was as a result of the net realizable
value adjustment on the stockpile at Ezulwini. At BGM, capital expenditure
has declined, with the mine having spent 39% less on CAPEX in Q1 compared to
Q4 of F2008.
Overall production costs for the Group increased from R225 million in Q4
F2008, to R266 million.
As at 30 June 2008, the Group was in a strong financial position with total
assets of R3.9 billion, total liabilities of R1.7 billion and shareholders`
equity of R2.2 billion. At the end of the first quarter, the Group had cash
and cash equivalents of R1 billion.
"Given the excellent performance by MWS and the progress being made in terms
of the opening up and development at BGM`s No. 5 shaft, I am confident that
the Group will produce between 43 000 and 47 000 ounces in the current
quarter," said Miller.
Conference Call
Simmers will conduct a conference call with investors to discuss the
information in this news release at 15h00 SA time, and 08h00 local Toronto
time, this afternoon, Tuesday 19 August 2008. The conference call will be
available simultaneously to all interested investors and the media.
- Callers may dial as follows: 0800 200 648 (South Africa); 1 866 519
5086 (Canada);
- 1800 350 100 (Australia); 0800 917 7042 (UK) or 1800 860 2442 (USA).
A digital replay of the call will be available one hour after the call for
72 hours. Thereafter it will be available on the Simmers website -
www.simmers.co.za. To access the replay, callers may dial + 27 11 305 2030.
Callers from the USA should dial 1 412 317 0088 and 0808 234 6771 from the
UK.
Access to the replay will require the code 2544, followed by #.
Forward-looking Information
This MD&A and financial statements for the quarter ended 30 June 2008
contain certain forward-looking statements. Forward-looking statements
include but are not limited to those with respect to the price of uranium
and gold, the estimation of mineral resources and reserves, the realization
of mineral reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing of
development of new deposits, success of exploration activities, permitting
time lines, currency fluctuations, requirements for additional capital,
government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations
on insurance coverage and the timing and possible outcome of pending
litigation. In certain cases, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of such
words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved. Forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of
Simmers to be materially different from any future results, performance or
achievement expressed or implied by the forward-looking statements. Such
risks and uncertainties include, among others, the actual results of current
exploration activities, conclusions of economic evaluations, changes in
project parameters as plans continue to be refined, possible variations in
grade and ore densities or recovery rates, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes or other
risks of the mining industry, delays in obtaining government approvals or
financing or in completion of development or construction activities, risks
relating to the integration of acquisitions, to international operations, to
prices of uranium and gold. Although Simmers 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 as
anticipated, estimated or intended. It is important to note, that: (i)
unless otherwise indicated, forward-looking statements indicate the Mines`
expectations as at 14 August 2008; (ii) actual results may differ materially
from the Mine`s expectations if known and unknown risks or uncertainties
affect its business, or if estimates or assumptions prove inaccurate; (iii)
the Mine cannot guarantee that any forward-looking statement will
materialize and, accordingly, readers are cautioned not to place undue
reliance on these forward-looking statements; and (iv) the Mine disclaims
any intention and assumes no obligation to update or revise any forward-
looking statement even if new information becomes available, as a result of
future events or for any other reason.
About Simmers
Simmer & Jack is a gold and uranium company with operations in South
Africa`s Gauteng, North West and Mpumalanga provinces. The Group two wholly-
owned gold operations: Buffelsfontein Gold Mine (BGM) in Stilfontein, near
Klerksdorp and Transvaal Gold Mining Estates (TGME) in the Pilgrim`s
Rest/Sabie area. As of 30 June 2008, Simmers had a 62.3% stake in Toronto
Stock Exchange and JSE-listed First Uranium Corporation (FIU) which has two
projects: the Ezulwini gold and uranium mine near Westonaria, and Mine Waste
Solutions (MWS), a tailings re-treatment operation at Stilfontein.
For further information, please contact:
Simmers: Gail Strauss, Group Communications at +27 11 830 0390 (office),
+2784 777 4060 (mobile) or gail@simmers.co.za
First Uranium: Bob Tait, VP Investor Relations at 416 342-5639 (office), 416
558-3858 (mobile) or bob@firsturanium.ca
Date: 19/08/2008 08:30:01 Produced by the JSE SENS Department.
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