China Gold International Reports Year-End 2016 Results and Provides 2017 Outlook
VANCOUVER, March 30, 2017 - China Gold International Resources Corp. Ltd. (TSX: CGG; HKEx: 2099) (the “Company” or “China Gold International Resources”) is pleased to report Year-End 2016 results and provide 2017 Outlook.
FINANCIAL, PRODUCTION AND OPERATION HIGHLIGHTS
2016 Fourth quarter highlights
- Revenue increased by 18% or US$14.6 million, from US$79.0 million to US$93.6 million.
- Mine operating earnings increased by 210% to US$13.0 million from US$4.2 million for the same period in 2015.
- Gold production from the CSH Mine decreased by 5% to 52,828 ounces from 55,673 ounces for the same period in 2015.
- Copper production from the Jiama Mine increased by 1% to 4,364 tonnes (approximately 9.62 million pounds) from 4,339 tonnes (approximately 9.56 million pounds) for the same period in 2015.
2016 Annual highlights
- Revenue remained constant at US$338.6 million from US$339.9 million for the same period in 2015.
- Mine operating earnings decreased by 11% to US$56.2 million from US$62.8 million for the same period in 2015.
- Gold production from the CSH Mine decreased by 9% to 185,052 ounces from 204,471 ounces for the same period in 2015.
- Copper production from the Jiama Mine increased by 6% to 18,321 tonnes (approximately 40.4 million pounds) from 17,284 tonnes (approximately 38.1 million pounds) for the same period in 2015.
- The cash production cost, and total production cost for the CSH Mine are presented in the table below. The cash production cost, and total production cost of gold per ounce both increased in 2016 compared with the same period in 2015. The major cause of the increase was higher waste rock removal costs.
|CSH Mine||Year ended December 31,|
|Total production cost (US$) of gold per ounce||1,054||884|
|Cash production cost* (US$) of gold per ounce||764||652|
- The cash production cost, and total production cost for the Jiama Mine are presented in the table below. Both cash production cost and total production cost per pound of copper decreased due to the higher grade of ore mined and processed during the year.
|Jiama Mine||Year ended December 31,|
|Total production cost* (US$) of copper per pound||2.49||2.84|
|Total production cost* (US$) of copper per pound
after by-products credits***
|Cash production cost** (US$) per pound of copper||2.09||2.39|
|Cash production cost** (US$) of copper per pound
after by-products credits***
* Production costs include expenditures incurred at the mine sites for the activities related to production including mining, processing, mine site G&A and royalties etc.
** Non-IFRS measure
*** By-products credit refers to the sales of gold and silver during the corresponding period.
LIQUIDITY AND CAPITAL RESOURCES
- At December 31, 2016, The Company had an accumulated surplus of US$172 million, working deficit of US$339 million and borrowings of US$1,155 million. The Company’s cash balance at December 31, 2016 was US$60 million.
- The Company’s borrowings are comprised of US$596 million of short term debt facilities and US$559 million of long term debt facilities, with interest rates ranging from 2.35% to 4.35% per annum, arranged through various banks in China. The Company had approximately US$496 million unutilized bank facilities available at December 31, 2016.
Mr. Bing Liu, CEO of the Company, commented, "I am very pleased that the Company has made steady and measurable progress in the last year. The production commissioning of Jiama’s Phase II Series I laid a solid foundation for the Jiama expansion plan which will reach its design capacity in the middle of 2017. The Company’s operations continued to expand and efforts from the entire team contributed to the successful achievements of construction and operational goals.
I strongly believe that with the re-optimization of Jiama’s mine plan and the continuing support from the local community and China National Gold Group, the Jiama Phase II expansion will reach its full capacity efficiently and economically. We will also continue to improve the operation at the CSH mine and create more value for our shareholders and local community by thriving to deliver stronger results in 2017. In an effort to consistently grow, the Company will continue to review possible acquisition targets both inside China and globally.”
2017 PRODUCTION AND OPERATING OUTLOOK:
- The Company will continue to leverage the technical and operating experience of the Company’s controlling shareholder, China National Gold Group Corporation (“CNG”), to improve operations at its mines, increase production and minimize costs.
- To fulfill its growth strategy, the Company is continually working with CNG and other interested parties to identify potential international mining opportunities, mainly outside of China, which can be readily and quickly brought into production with the possibility of further expansion through continued exploration.
- The 2017 copper production for the Company is expected to be approximately 79 million pounds.
- The 2017 gold production for the CSH Mine is expected to be approximately 193,000 ounces.
- The Company’s consolidated gold production from both mines will be 218,700 ounces.
ANNUAL RESULTS INVESTOR AND MEDIA PRESENTATION
Management will hold its 2016 Annual Results Investor and Media Presentation in Hong Kong on April 6, 2017 at 10 a.m. (Hong Kong time). Year-End 2016 results and performance will be discussed with a question and answer period.
For a detailed look at the financial statements and MD&A for the year ended December 31, 2016, please visit the Company's website at www.chinagoldintl.com, The Stock Exchange of Hong Kong Limited’s website at www.hkex.com.hk or SEDAR at www.sedar.com.
About China Gold International Resources
China Gold International Resources Corp. Ltd. is based in Vancouver, BC, Canada and operates two growing mines, the CSH Gold Mine in Inner Mongolia, and the Jiama Copper-Polymetallic Mine in Tibet Autonomous Region of the People’s Republic of China. The Company’s objective is to continue to build shareholder value by growing production at its current mining operations, expanding its resource base, and aggressively acquiring and developing new projects internationally. The Company is listed on the Toronto Stock Exchange (TSX: CGG) and the Main Board of The Stock Exchange of Hong Kong Limited (HKEx: 2099).
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Cautionary Note About Forward-Looking Statements
Certain information regarding China Gold International Resources contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although China Gold International Resources believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. China Gold International Resources cautions that actual performance will be affected by a number of factors, most of which are beyond its control, and that future events and results may vary substantially from what China Gold International Resources currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration results, continued availability of capital and financing and general economic, market or business conditions. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date.