Montreal, Quebec, November 10, 2010 – SEMAFO (TSX: SMF) today announced its third quarter financial and operational results for the three-month period ended September 30, 2010. All amounts are in US dollars unless otherwise stated.
Third Quarter 2010 Highlights
In the third quarter 2010, SEMAFO produced 65,500 ounces of gold and achieved gold sales of $86.2 million, compared to gold production of 62,300 ounces and sales of $59.4 million for the corresponding period in 2009. Highlights for this third quarter include:
• Gold production of 65,500 ounces, a 5% increase year over year
• Record quarterly production at Mana of 46,400 ounces of gold
• Gold sales of $86.2 million, an increase of 45% year over year
• Cash operating cost of $454 per ounce, an improvement of 4% compared to $472 for the same period in 2009
• Operating income of $38.6 million, an increase of 154% year over year
• Net income of $28.8 million or $0.11 per share, a 115% improvement year over year
• Quarterly cash flow from operating activities of $40.0 million or $0.15 per share, a 65% increase year over year
• Continued exploration success at Mana
• Successful completion of Phase II of the Mana plant expansion
• Encouraging exploration results at Samira Hill
A Word from the CEO
SEMAFO is committed to deliver consistently strong operating results and the third quarter of 2010 was no exception. We continue to run our operations at maximum capacity, availing us the opportunity to benefit from an increasingly strong gold market. Our disciplined growth strategy continued to positively impact operations, resulting in an 8% improvement in gold production for the nine months ended September 30, 2010 over the corresponding period in 2009.
We achieved significant year-over-year increases for the third quarter: revenues improved by 45%, operating income increased 154%, net income rose by 115%, and earnings per share were up 120%. Our cash flow from operating activities surpassed third quarter 2009 results by 65%, while our cash operating cost per ounce produced decreased by 4%.
SEMAFO’s average realized gold price for the third quarter 2010 was $1,241 per ounce, $14 above the London Gold Fix and representing $31 over Q2 2010. As a result of our effective gold selling strategy, SEMAFO’s average realized gold price surpassed the average London Gold Fix for a seventh consecutive quarter.
During the quarter, we produced a record 46,400 ounces of gold at our flagship Mana Mine, representing 71% of our three-month production total. For the nine months ended September 30, 2010, Mana generated 67% of our total gold production.
Our investment in organic growth is gathering momentum. Earlier in the year, we announced an additional $9.0 million to fund ongoing exploration at Mana bringing the total 2010 Mana exploration budget to $18.2 million. The 2010 exploration program objectives include advancing early stage targets, further expanding the Wona Deep deposit and ultimately increasing reserves and resources. Results during the quarter included core drilling at Wona SW, which confirmed high grade mineralization with values of up to 7.32 g/t Au across 8.8 meters and 4.20 g/t Au over 32 meters.
The new Fofina Zone demonstrated good continuity with values of up 4.44 g/t Au over 23 meters and the Fobiri Zone returned significant drill intersections.
During the quarter, we increased liquidity and improved our total cash margin by 61% over the third quarter 2009. Our balance sheet is stronger than ever as our debt to equity ratio now stands at 4% compared to 17% for the corresponding period last year.
The third quarter is a testimony to our commitment to increase shareholder value through a disciplined growth strategy and by delivering on our promises. We are well positioned to continue to benefit from favorable gold prices as well as to deliver significant long-term value to our shareholders.
Consolidated Results and Mining Operations
TRIMESTRALE PAZZESCA!!!!!
