Sirocco Reports Record Revenues and Results for Q1 2012
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/09/12 -- Sirocco Mining Inc. (TSX VENTURE: SIM) ("Sirocco" or "the Company") is pleased to report financial and operating results for the quarter ended March 31, 2012. The consolidated financial statements together with Management's Discussion and Analysis will be available on the Company's web site (www.siroccomining.com) and on SEDAR (www.sedar.com).
In Q1 2012, the first full quarter under new the Sirocco management team, the Company experienced excellent production along with record quarterly revenue, gross profit and cash flow from operations.
Highlights of the quarter include:
-- Record quarterly gross profit of $9.5 million (Q1 2011: $1.4 million)
-- Record quarterly net income of $5.0 million (Q1 2011: loss of $0.5
million)
-- Record quarterly cash flow from operations of $8.2 million (Q1 2011:
$0.4 million)
-- Iodine production of 344 tonnes (Q1 2011: 367 tonnes)
-- Receipt of proceeds from CAD $60 million private placement
-- Bank loan reduction of $5.3 million (Q1 2011: increase of $0.9 million)
-- Closing of acquisition of Sirocco Gold Inc.
Financial Results
The tables below summarize key financial and operating results of the Company for the Quarter.
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Three Months Ended Three Months Ended
March 31, 2012 March 31, 2011
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Tonnes Mined (000t) 1,219 1,052
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Iodine Grade (ppm) 483 586
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Iodine Produced (t) 344 367
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Iodine Sold (t) 302 350
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Cash operating costs per kg
(note 1) 30 23
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Sales Revenue ($'000) 19,613 10,036
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Gross Profit ($'000) 9,501 1,391
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Net Income/(loss) ($'000) 4,982 (461)
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Comprehensive Income ($'000) 6,127 259
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Diluted Income/(loss) per
share ($) 0.02 (0.00)
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Total Assets ($'000) 187,684 113,691
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Net Assets ($'000) 157,639 89,793
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Note 1: Cash operating costs per kg is calculated by dividing cost of sales,
adjusted for related depreciation and stock-based compensation, by
quantities of iodine sold in the period.
Iodine production in Q1 2012 reflects the operating improvements made in the six months since the new Sirocco management team assumed control. Aguas Blancas produced 24% more Iodine in Q1 2012 as compared to Q4 2011 and the Q1 2012 production was the second highest quarterly production since the mine commenced operations in 2002. These production levels were achieved despite scheduled lower grade material being processed in Q1 2012 as compared to Q1 2011.
Modifications to the crushing and screening circuits of the Agitated Leach Plant ("ALP") designed to achieve 50% capacity were completed in late February with commissioning completed by the end of Q1 2012. Detailed engineering of the crushing and screening circuits to increase ALP throughput to 100% capacity is underway. The ALP is expected to be operating at full capacity in Q1 2013.
Cash operating costs of $30 per kilogram for Q1 2012 include ALP related costs, although plant production was very limited due to the completion and commissioning of planned modifications. This notwithstanding, cash operating costs showed a significant improvement over the second half of 2011 where costs averaged $38 per kilogram. Q1 2011 standalone cash operating costs for heap leaching were $23 per kilogram.
Iodine prices realized for the quarter were $65 per kilogram. Iodine prices are expected to remain robust for 2012 and the Company will continue to focus on unit cost reduction.
Sirocco stands at 31 March 2012 with a strong balance sheet that includes $76.5 million in cash and working capital of $90.6 million.
In January 2012, following the receipt of shareholder approval, the Company completed the acquisition of Sirocco Gold Inc. and now holds exploration interests in Mauritania and Cote D'Ivoire, in addition to the Aguas Blancas project in Chile.
Outlook for remainder of 2012
The Company remains solidly on track to achieve its forecasted levels of production for the year of 1,350 to 1,450 tonnes of Iodine. Work continues on increasing the ALP throughput to capacity by early 2013.
Studies have commenced to evaluate the feasibility of nitrate and sulphate production at Aguas Blancas as well as further expansion of Iodine operations.
As part of an annual exploration budget of $750,000, the Company is targeting the conversion of inferred resources at Aguas Blancas to the measured and indicated categories.
In Africa, exploration is ongoing at the Company's projects in Mauritania and Cote D'Ivoire.
Corporately, M&A opportunities in both Africa and South America continue to be evaluated and assessed.
A conference call to discuss the financial and operating results will be held at 8am PST on Wednesday May 9, 2012. Participants should dial in on 1 800 814 4860 or 416 644 3416 and follow the prompts. A replay of the call will be available until midnight on May 16, 2012 by dialing 416 640 1917 or 1 877 289 8525, passcode 4534635.
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 Brazil and 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, CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Sirocco Mining Inc.
Simon Jackson
President
(604) 689-7842
(604) 689-4250 (FAX)
www.siroccomining.com
