Alexis Minerals Corporation
TSX : AMC
OTCQX : ASXMF

Alexis Minerals Corporation

April 01, 2010 06:23 ET

Alexis Minerals Announces 2009 Year End and Fourth Quarter Results

TORONTO, ONTARIO--(Marketwire - March 31, 2010) - ALEXIS MINERALS CORPORATION (TSX:AMC)(OTCQX:ASXMF) has reported its 2009 Year End and Fourth Quarter Financial Statements and Management's Discussion and Analysis for the period ended December 31, 2009. The Company achieved record monthly gold production in October at its Lac Herbin mine which completed its first full year of production in December 2009, and continues to produce gold on schedule. Also, during the quarter Alexis announced a key strategic step to becoming a mid-tier mining company with its offer to acquire Garson Gold Corp. The Company is successfully continuing with its key strategic priorities, increasing annual gold production and expanding it resources. These quarterly result documents can be reviewed in full on SEDAR (www.sedar.com) or on the Company's website at www.alexisminerals.com.

[Note: All figures are reported in Canadian dollars, unless otherwise noted].

2009 Year End and Fourth Quarter Highlights:

During the three and twelve months ended December 31, 2009 the following occurred at Alexis Minerals:

  • The Company reported revenue of $12.11 million for the 4th Quarter and $32.03 million for the year ended December 31, 2009
  • The Company sold 11,075 ounces of gold at an average realized price of $ 1,144 (USD $1,081/oz.) for the 4th Quarter and 30,400 ounces at an average realized price of $ 1,106 (USD $982) for the year.
  • Lac Herbin, in Val-d'Or, Quebec, continued operating at full production producing 32,999 oz. of gold in 2009. This was slightly lower than target as grades achieved were marginally lower than planned.
  • Cash cost (see non-GAAP measures) of sales per ounce of the Lac Herbin gold sold was $757 for the quarter and $774 for the full year, 2.2% higher than the Year 1 project estimate of $757 in feasibility. This is on budget to achieve the Life of Mine average cost per ounce of $567, and without considering the expected reduction by milling our own ore (see Aurbel mill, below). Cash cost per tonne for the year was $145/tonne compared to the Year 1 projection of $156/tonne.
  • At Lac Herbin, results from delineation and exploration drilling continued to return typical mine gold grades in extensions to previously established Reserve areas and in new discovery areas adjacent to the mine.
  • The Company mined a company quarterly record of 8,960 oz. of gold in the fourth quarter; and achieved a company record monthly production of 4,291 oz. gold in October.
  • The Company continued the refurbishment of its wholly owned Aurbel Gold Mill, which was mechanically completed in January, 2010 on schedule and on budget; commissioning began in early March, 2010; with an expected reduction in annual operating costs at Lac Herbin by an estimated $50/ozAu (10%).
  • The Company commenced a bulk sample at the Lac Pelletier gold project, mining 1,874 ounces of gold; with anticipated commercial production by mid-2010.
  • The Company completed a total 8,371 metres of exploration and delineation drilling during the 4th Quarter for an annual total of 63,052 metres drilled.
  • The Company raised $10.0 million through a private placement of 20 .0 million flow-through shares at a price of $0.50 per share during the 4th quarter and $10.0 million in the third quarter consisting of 11.66 million shares at $0.50 and 7.45 million flow-through shares at $0.56 for a total of $20.0 during the year.
  • Subsequent to the end of the quarter, the Company confirmed it had acquired over 95% of the outstanding shares of Garson Gold Corp. ('Garson') by converting Garson shares submitted to Alexis' take-over offer to acquire Garson Gold Corp. Once concluded, this acquisition has the potential to at least double the gold resources of Alexis, provide the Company with additional mine development programs which will allow Alexis to grow production levels to in excess of 150,000 ounces of gold per year by 2011, and, lead Alexis to an expected share price re-rating as a mid tier status gold producer.

For the Three Months ended December 31, 2009

The Company sold 11,075 ounces of gold and generated $12.11 million in revenue from mining operations during the 4th quarter of 2009 Alexis averaged a gold sale price of $1,144 per ounce during Q4-2009. During the comparative quarter of 2008, the Company's first quarter of commercial production, 10,600 ounces of gold were sold generating $10.07 million in revenue. The average sale price realized during the fourth quarter of 2008 was $995. Mine operating expenses were $8.38 million (Q4-2008: $8.33 million) and amortization and depletion amounted to $2.47 million (Q4-2008: $1.36 million). Amortization expense is higher this current quarter as a result of a change in the basis for amortizing deferred exploration costs. The Company was initially using mineral resources of 206,600 ounces as the basis of amortization. During the year, mineral reserves were calculated and confirmed at 146,007 and this became the basis for amortization. Gross profit was $1.25 million during the current quarter compared to $0.38 million during the comparative quarter in 2008, an increase of over 300%. Revenue from mining operations includes $12.67 million from gold sales reduced by $0.56 million in refining and royalty charges. The Company is subject to an NSR of 4.5% on Lac Herbin gold sales. The cost of sales per ounce sold during the current quarter, excluding amortization and depletion, was $757 per ounce compared to $786 per ounce during the comparative quarter (see Non GAAP Measures). 

Alexis recorded a net loss for the quarter ended December 31, 2009 of $2.16 million compared to net earnings of $0.18 million for the quarter ended December 31, 2008. The Company incurred general and administrative expenses of $2.3 million during the quarter (Q4-2008: $1.23 million). As well, the Company recorded a future income tax expense of $1.11 million for the three months ended December 31, 2009 (Q4-2008: a recovery of $1.04 million). 

For the twelve months ended December 31, 2009

The Company commenced commercial production during the fourth quarter of 2008. As such, operating results for the year ended 2008 represent only one quarter's worth of operations.

The Company sold 30,400 ounces of gold and generated $32.03 million in revenue from mining operations during the twelve months ended December 31, 2009 (2008: 15,265 ounces of gold sold and $10.0 million in revenue). The Company commenced commercial production during the fourth quarter of 2008 consequently year-to-date figures for the comparative year reflect three months' worth of production. Alexis averaged a sale price of $1,106 per ounce during the twelve months of 2009 (2008: $964 per ounce). Mine operating expenses were $23.54 million (2008: $8.33 million) and the Company recorded amortization and depletion of operating costs of $6.87 million (2008: $1.36 million). Gross profit was $1.62 million for 2009 compared to $0.38 million for 2008. Revenue from mining operations includes $33.60 million from gold sales reduced by $1.58 million in refining and royalty charges. The Company is subject to an NSR of 4.5% on Lac Herbin gold sales. The cost of sales per ounces sold excluding amortization and depletion was $774 per ounce for the current year (see Non GAAP Measures) compared to $786 per ounce for 2008.

Alexis recorded a net loss for the twelve months ended December 31, 2009 of $4.37 million compared to a net loss of $1.99 million for the twelve months ended December 31, 2008. The Company incurred general and administrative expenses of $5.09 million during the year (2008: $4.03 million). As well, the Company recorded a future income tax expense of $0.91 million for the twelve months ended December 31, 2009 (2008: a recovery of $1.66 million). 

Alexis Minerals Corporation Three months ended Three months ended Twelve months ended Twelve months ended
  31-Dec-09 31-Dec-08 31-Dec-09 31-Dec-08
         
Tonnes of ore mined 47,742 31,823 170,657 80,284
Grade per tonne mined 5.84 6.67 6.01 6.90
Total gold ounces mined 8,960 6,822 32,999 18,115
Tonnes of ore milled 44,327 32,749 156,159 74,799
Grade per tonne milled 6.35 6.67 6.16 6.63
Total gold ounces milled 9,054 7,022 30,925 15,952
Average recovery rate 97.6% 97.5% 97.5% 97.6%
Gold ounces recovered 8,836 6,848 30,150 15,570
Gold ounces sold 11,075 10,600 30,400 15,265
Average realized gold price (per oz CAD) $1,144 $995 $1,106 $964
Revenue from mining operations ( net of Royalties and refining charges CAD 000's) $12,107 $10,079 $32,027 $10,079
Mine operating expenses (excludes depletion and amortization - CAD 000's) $8,382 $8,334 $23,539 $8,334
Amortization and depletion (CAD 000's) $2,475 $1,364 $6,867 $1,364
Gross profit/(loss) (CAD 000's) $1,250 $381 $1,621 $381
Net earnings (loss) (CAD 000's) ($2,160) $185 ($4,370) ($1,995)
Basic and diluted earnings (loss) per share (CAD) ($0.01) $0.00 ($0.03) ($0.02)
Cash flow from operating activates (CAD 000's) $716 $4,558 $4,851 $3,314
*Cost of sales per ounces sold (CAD) $757 $786 $774 $786
         
*see Non GAAP Measures and comments under "Executive Summary – Fourth Quarter" section below, regarding Cost of Sales at Lac Herbin  

Non GAAP Measures

The Company has included certain Non-GAAP performance measures, namely cash costs per gold ounce sold and working capital, throughout this document. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are Non-GAAP measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, we and certain investors use this information to evaluate the Company's performance and ability to generate cash, profits and meet financial commitments. These Non GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following tables provide a reconciliation of cash costs per gold ounce sold for the three and twelve months ended December 31, 2009 and 2008, and a reconciliation of working capital to the financial statements for the twelve months ended December 31, 2009 and December 31, 2008.

 
Working Capital (CAD 000's) December 31, 2009 December 31, 2008
Current assets:
Cash and cash equivalents $6,106 $4,529
Amounts receivable 2,083 968
Tax credits receivable 7,465 6,270
Inventory 6,168 2,254
Prepaid expenses 273 177
Investments 122 333
Future income taxes - 662
  22,217 15,193
Current liabilities    
Accounts payable and accrued liabilities $13,687 $4,978
Current portion of capital lease obligations 412 508
Current portion of long-term debt 99 166
Liability component of convertible debenture 6,143 -
  20,341 5,652
     
Working capital    
(current assets less current liabilities) $1,876 $9,541
     
 
Cash cost per ounces sold
    Q4-2009 Q4-2008 2009 2008
Revenue          
From commercial production ounces (CAD 000's)   $12,107 $10,079 $32,027 $10,079
           
Ounces sold   11,075 10,600 30,400 10,600
           
Mine operating expenses (CAD 000's)   $8,382 $8,334 $23,539 $8,334
           
Cash cost per ounce sold (CAD)   $757 $786 $774 $786
(mining operating expenses divided by ounces sold)

Quality Control

The technical and scientific content of this press release has been reviewed by Keith Boyle, P.Eng., Chief Operating Officer, Alexis Minerals and Qualified Person as defined under NI 43-101 guidelines.

About Alexis Minerals

Alexis Minerals Corporation is a Canadian mining company listed on the Toronto Stock Exchange (symbol "AMC") and trades in the US on the Over the Counter QX International platform ("OTCQX:AXSMF") The Company owns one producing gold mine in Val-d'Or and the right to earn a 100% interest in the Lac Pelletier gold property in Rouyn-Noranda. Recently Alexis has acquired over 90% of all shares of Garson Gold Corp and is proceeding with the forced conversion of the remaining outstanding shares. Alexis undertakes exploration in the mineral rich Val-d'Or (100% ownership of 212 sq. km.) and Rouyn-Noranda Mining Camps (50% ownership of 785 sq.km and in joint venture with Xstrata Copper). Anticipated mine development programs in Snow Lake will allow Alexis to grow gold production and achieve mid-tier gold production by 2011. For more information about Alexis Minerals visit www.alexisminerals.com.

Forward looking information

This document may contain or refer to forward looking information within the meaning of applicable securities laws, based on current expectations, including, but not limited to, mineralization projections, future exploration priorities, estimates and costs, projected capital and operating expenditures, future exploration plans and techniques, estimates regarding the timing and costs of exploration, mineral prices, and future mining plans. Forward looking statements are subject to significant risks and uncertainties, including those risks identified in the annual information form of the Company, which is available under the profile of the Company on SEDAR, and other factors that could cause actual results to differ materially from expected results. Estimates and assumptions underlying the mineralization projections are based upon extensive technical and scientific analysis conducted by the management of the Company, the results from drill programs and other exploration, the analysis of external consultants and information obtained by the Company from third parties. Readers should not place undue reliance on forward-looking information. Forward looking information is provided as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances.

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