Emerging gold producer, San Gold (SGR.TSXV), announced financial and operating results for the third quarter of 2009. The gold mining company reported record quarterly revenue of $8.8 million, a 419% increase over the third quarter of 2008. San Gold also earned its first ever quarterly operating profit of $0.2 million, which the company stated indicates “what management expects is an inflection point toward higher levels of performance.“ As of the beginning of the quarter San Gold transitioned to commercial production in its accounting for activities at the Hinge, which the gold mining company said was partially responsible for the operating profit. The company reported a net loss of $5.0 million, or $0.02 per share, compared to a net loss of $9.8 million, or $0.04 per share, for the third quarter of 2008.
San Gold sold 8,398 ounces of gold during the quarter, a 369% increase versus its third quarter of 2008 gold sales. The realized price of gold for the quarter was $1,053 per ounce, compared to $922 per ounce during the same period in 2008. Gold in process inventory was $7.5 million compared to $3.0 million as of September 30, 2008, a result of higher levels of production activity. The company milled 52,429 tons in the quarter, a 195% increase over the comparable period in 2008. The recovered grade was 0.198 compared to 0.066 in the third quarter of 2008.
From an operational perspective, San Gold has completed several projects year to date, including:
1) The development of permanent mine openings and development drifts at the Hinge Zone and Rice Lake mines
2) Ventilation raise and heaters at the Hinge Zone
3) Power distribution upgrade
4) Development of new core handling facility
5) Acquisition of equipment including 1 boom jumbo, longhole drill buggy and scoop
6) Completion of 67 man camp commissioning bringing total capacity of camp to 180 beds
7) Implementation of a new ERP system that was scheduled to go live on November 1, 2009
The company also stated that it is planning for continued incremental underground development, and continued incremental investment in equipment - as San Gold plans activities at the new discoveries at the Cohiba zone and at L-13. San Gold is also planning further enhancements to the transformer and electrical capacities of its physical plant at an estimated investment of $1.0 million.
Shares of San Gold have steadily appreciated throughout 2009 as CEO and geologist Dale Ginn and his exploration team continue to discover high-grade gold ore within the confines of the existing infrastructure at Rice Lake. There are several analysts and fund managers that compare San Gold’s consistent discoveries of high-grade gold veins to Goldcorp’s Red Lake discoveries of a decade ago. San Gold, who has been drilling and defining one of Canada’s highest-grade gold discoveries in years, the Hinge, continues to raise its profile in the gold mining sector. The company’s share price is up 172% this year as Mr. Ginn continues to mobilize drill rigs and drill new potential gold discoveries - as the land package controlled by San Gold continues to demonstrate significant blue-sky potential.
San Gold is a Canadian-based mining company focused on gold exploration and mining in the Rice Lake Greenstone Belt in SE Manitoba, Canada. San Gold owns or controls nearly 15,000 hectares of exploration lands along the Rice Lake Greenstone Belt of SE Manitoba. In afternoon trading shares of SGR.TSXV were up 8.6%, or $0.26, to C$3.29, while the gold price was up $19.91 to a new all-time high of $1,138.68 per ounce.
