Sirocco Mining Inc.

Sirocco Mining Inc.

May 13, 2013 08:15 ET

Sirocco Releases Q1 2013 Financials

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2013) - Sirocco Mining Inc. (TSX:SIM) ("Sirocco" or "the Company") is pleased to report financial and operating results for the three month period ended March 31, 2013. The consolidated financial statements together with Management's Discussion and Analysis will be available on the Company's web site ( and on SEDAR (

Iodine production in the first three months of 2013 ("Q1 2013") increased 6% to 363 tonnes over the same period in 2012 ("Q1 2012"). Sirocco is on target with forecast production of 1,600 tonnes for the year. Iodine sales of 217 tonnes averaged $55 per kilogram in Q1 2013 (Q1 2012: $65, an all-time high).

Iodine sales in Q1 2013 were negatively affected by a Chilean port strike, effectively deferring shipments of 108 tonnes of iodine to April, and revenues of $5.6 million and after tax profits of $1.0 million to Q2 2013. Operating costs in Q1 2013 reflected the processing costs and depreciation from the agitated leach plant ("ALP"), which was not operational in Q1 2012.

Key operating statistics and financial results for Q1 2013 and Q1 2012 are provided in the table below.

Three Months Ended Mar-13 Mar-12
Tonnes mined ('000t) 829 1,218
Average grade of ore mined (ppm) 603 483
Iodine produced (t) 363 344
Iodine sold (t) (Note 1) 217 302
Iodine avg. price ($/kg) 55 65
Cash operating cost ($/kg) (Note2) 35 30
Total revenues ($000's) (Note 3) 11,984 19,613
Gross profits ($000's) (Note 3) 2,288 9,501
Net income (Loss) ($000's) (Note 3) (1,048 ) 4,982
Income (loss) per share basic and diluted ($) (0.00 ) 0.02
Total assets ($000's) 193,784 187,684
Long-term liabilities ($000's) 9,928 10,925
Note 1: 108 tonnes of iodine produced in March were not shipped until April due to port strike in Chile.
Note 2: this is a non-GAAP measure. It was calculated by dividing cost of sales, adjusted for related depreciation and stock-based compensation, by quantities of iodine sold in the period.
Note 3: compared to Q1 2012, Q1 2013 financial results were negatively affected by iodine sales deferred to Q2 2013 (see note 1), reduced iodine prices and high exploration costs. See Q1 2013 financial statements and MD&A for complete details.

Commenting on the results, Rick Clark, CEO, stated: "Production in Q1 2013 was very strong, a 29% improvement over Q4 2012. Gross profits as a percentage of sales also improved in Q1 2013 compared to the last quarter in 2012 notwithstanding a decrease in iodine prices from the all time highs achieved in 2012. The Company is poised to have a very strong second quarter with increased production expected from the ALP on commissioning of the slurry plant, resulting in lower unit production costs for the quarter and the balance of the year".

The capital expansion projects for 2013 are continuing on schedule and on budget. The installation of a SAG mill, due to be commissioned in Q1 2014, will enable the ALP to operate at a throughput of 400 tonnes of ore per hour, increasing total production rates to over 2,000 tonnes of iodine per annum. The first phase of expanding the mining fleet is also complete, with the second phase scheduled for the second quarter. The fleet expansion is being financed through leases.

The nitrate feasibility study is progressing on time and on budget with laboratory testwork and construction of a pilot plant on site underway. This study is expected to be complete by year end.

On April 2, 2013, the Company announced a new resource and reserve estimate at Aguas Blancas based on the drilling campaign of 2012. Measured and indicated resources increased by 86% to 105Mt grading 426ppm of iodine. Reserves have increased 57% to 82.9Mt grading 463ppm of iodine.

Sirocco stands at March 31, 2013 with a strong balance sheet that includes $67 million in cash and working capital of $80 million.

A conference call to discuss the financial and operating results will be held at 7am PDT on Monday May 13, 2013. Participants should dial in on 1 416 644 3414 or Toll Free 1 800 814 4859 and follow the prompts. A replay of the call will be available until midnight on May 20, 2013 by dialing 1 416 640 1917 or Toll Free 1 877 289 8525, Passcode: 4615452#.

About the Company

Sirocco Mining Inc. is a Canadian company which produces iodine from its Aguas Blancas mine in northern Chile. In addition, the Company has exploration interests in West Africa and is actively assessing other opportunities in the resource sector.

Cautionary Statements

This news release contains forward-looking statements concerning the Company's plans for its business and properties,. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to political risks involving the Company's exploration and development of its properties, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, the inability or failure to obtain adequate financing on a timely basis and other risks and uncertainties, including those described in the Company's periodic filings with the British Columbia Securities Commission. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information, except as required by law, and disclaims any legal liability to the contrary.

On behalf of the Board,

Rick Clark, President and CEO

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