Orvana Reports Higher Revenues and 42% Higher Net Income for the First Quarter Ended December 31, 2005.TORONTO -- Orvana Minerals Corp. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ORV ORV abbr. off-road vehicle ) announced today that it earned net income of US$2.7 million (US$0.02 per share) on revenues of US$8.5 million for the quarter ended December 31, 2005 ("first quarter 2006") compared to net income of US$1.9 million (US$0.02 per share) on revenues of US$6.2 million for the quarter ended December 31, 2004 ("first quarter 2005"). Cash provided by operating activities amounted to US$3.2 million in the first quarter 2006 compared to US$3.6 million in the first quarter 2005. Dollar amounts in the remainder of this news release are in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollars unless stated otherwise, and fine troy ounces Noun 1. troy ounce - a unit of apothecary weight equal to 480 grains or one twelfth of a pound apothecaries' ounce, ounce troy unit - any of the unit of the troy system of weights of gold are referred to as "ounces". The Company produced 20,270 ounces of gold and sold 17,939 ounces in the first quarter 2006 compared to 14,047 ounces produced and 14,360 ounces sold in the first quarter 2005. Orvana President and Chief Executive Officer, T. Sean Harvey Sean Harvey (b.1970) is a former Mayor of the City of Vernon, British Columbia. He served as mayor from 1999 to 2005, and also served as a director on the North Okanagan Regional District board. said, "We are obviously very happy with the increases in both revenues and net income as a result of not only higher gold prices but also significant improvements in head grades and recoveries experienced in the first quarter 2006. We are also confident that efforts and focus in the past six months on mine development will also help to ensure continuing strong production results. I am also pleased to announce, on behalf of the Board of Directors, the appointment of Michael Hodgson Michael Hodgson (born November 5, 1979 in Newcastle, NSW, Australia) is an Australian National Rugby League player. He plays the position of Second Row for the Canberra Raiders Rugby League Club. as Vice President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Malcolm King as Vice President and Chief Financial Officer, effective immediately. Both Mr. Hodgson and Mr. King joined the Company in June 2005 and I look forward to their continuing contribution to our objectives of growing our company and driving shareholder value." Don Mario Mine Operations In the first quarter 2006, a total of 63,281 tonnes of ore were treated compared to 59,386 tonnes in the first quarter 2005.
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3 months ended December November October 3 months ended
Dec. 31, 2005 2005 2005 2005 Dec. 31, 2004
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Under- tonnes 46,919 15,348 12,258 19,313 41,330
ground -------------------------------------------------------------
mine g/t 11.89 11.83 12.28 11.68 8.50
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Mini- tonnes 16,362 5,709 8,923 1,730 18,056
pit & -------------------------------------------------------------
stock-
pile g/t 7.68 6.55 8.31 8.15 7.72
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Total tonnes 63,281 21,057 21,181 21,043 59,386
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g/t 10.80 10.40 10.61 11.39 8.26
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Recovery rate 92.3% 93.1% 90.9% 92.7% 89.0%
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Gold produced
- ounces 20,270 6,554 6,570 7,146 14,047
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The following table shows the cash costs for the first quarter 2006 compared to the first quarter 2005. These calculations represent Non-GAAP information, which should not be construed as an alternative to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). reporting of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and may not be comparable to similar measures presented by other issuers (see "Non-GAAP Measures" below).
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3 months ended December 31
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2005 2004
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Costs Cost/oz. Costs Cost/oz.
(US$'000) (US$'000)
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Direct mine operating costs $2,050 $101.13 $1,567 $111.52
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Third-party smelting,
refining and
transportation costs 42 2.08 46 3.35
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Cash operating costs 2,092 103.21 1,613 114.87
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Royalties and mining rights 339 16.72 215 15.28
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Total cash costs 2,431 119.93 1,828 130.15
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Depreciation and
amortization 1,394 68.75 1,220 86.85
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Total production costs $3,825 $188.68 $3,048 $217.00
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Fiscal Period Financial Highlights Orvana's operating results and financial position for the quarter ended December 31, 2005 compared to the quarter ended December 31, 2004 are summarized below:
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Three months ended December 31
(US$'000 except per share amounts)
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2005 2004
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Revenues $8,519 $6,247
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Net income 2,699 1,900
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Net income per share
- basic and fully diluted $0.02 $0.02
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Cash provided by operating
activities $3,205 $3,567
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Cash and cash equivalents 7,885 6,609
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Total assets 37,521 36,850
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Long-term debt, including
current portion - 12,759
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Revenue for first quarter 2006 increased 36% to $8,519 on 17,939 ounces sold compared to $6,247 on 14,360 ounces sold in the same quarter a year ago. Higher production and higher gold prices both contributed to the improvement in revenues. Tonnes treated in the first quarter 2006 were 63,281 compared to 59,386 in the same quarter a year ago. Gold production for the first quarter 2006 increased 44% to 20,270 ounces compared to 14,047 ounces in the first quarter 2005, primarily due to both higher grades from the underground mine and improved recoveries, but also due to weather conditions in December 2004 that adversely affected production in the first quarter 2005. For the first quarter 2006, cash flow provided by operating activities declined by 10% to $3,205 from $3,567 in the first quarter 2005 due to an increase in non-cash working capital uses of $821 as accounts payable were reduced. However, cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses before working capital changes increased by 13% compared to the first quarter 2005, reflecting improved operating results. Interim unaudited financial statements and Management's Discussion & Analysis for the first quarter 2006 are available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review and at www.orvana.com. About Orvana Orvana Minerals is a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. gold mining and exploration company based in Toronto, Canada, involved in the evaluation, development and mining of precious metal deposits in the Americas. The Company's primary operation is the Don Mario Mine in eastern Bolivia. Orvana's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. goal is to become a low cost, long-life, multi-mine gold producer in the Americas. Orvana's shares have been listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. since 1992 under the trading symbol Trading symbol See: Ticker symbol ORV. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains certain forward-looking information and statements relating but not limited to, operations, anticipated or prospective financial performance, results of operations, business prospects and strategies of Orvana Minerals Corp. ("Orvana"). Forward-looking information typically contains statements with words such as "consider", "anticipate", "believe", "expect", "plan", "intend", "may", "likely" or similar words suggesting future outcomes or statements regarding an outlook or future changes in gold prices, mineral reserves, operating, production and exploration plans, asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. and interest rates, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Although Orvana believes it has a reasonable basis for making the forward-looking statements included in this press release, readers are cautioned not to place undue reliance on such forward-looking information. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements of Orvana to differ materially from those suggested by the forward-looking statements. Substantially all of Orvana's mining operations are located in Bolivia. The Bolivian government has historically been supportive of the mining industry, but particularly in view of the recent change in government and the composition of the Company's shareholder base, there could be changes in governmental regulation or governmental action with respect to such matters as taxation, the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of profits, restrictions on production, export controls, environmental compliance, and expropriation The taking of private property for public use or in the public interest. The taking of U.S. industry situated in a foreign country, by a foreign government. Expropriation is the act of a government taking private property; Eminent Domain is the legal term describing the of property or limitations on foreign ownership, political instability, and labour unrest labour unrest (US), labor unrest n → agitation sociale labour unrest, labor unrest n → agitazioni fpl degli operai . Other business risks include development of mineral deposits, production costs and metal prices, the supply of energy and other consumables, exploration, development and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , water supply, production estimates, mineral reserves and resources, title matters, gold price volatility, competition, additional funding requirements, insurance, currency fluctuations, conflicts of interest, and share trading volatility. The above list of important factors affecting forward-looking information is not exhaustive, and reference should be made to the other risks discussed in Orvana's filings with Canadian securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Orvana undertakes no obligation, except as required by law, to update publicly or otherwise any forward-looking information, whether as a result of new information, future events or otherwise, or the above list of factors affecting this information. Non-GAAP Measures The Company has used Non-GAAP measures including direct mine operating costs operating costs npl → gastos mpl operacionales , cash operating costs, total cash costs and total production costs, and related unit cost information, because it understands that certain investors use this information to determine the Company's ability to generate earnings as cash flow for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP do not fully illustrate the ability of its operating mine to generate cash flow. Non-GAAP measures do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). under Canadian GAAP, should not be construed as an alternative to GAAP reporting of operating expenses, and may not be comparable to similar measures presented by other companies. The measures are not necessarily indicative of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. or cash flow from operations as determined under Canadian GAAP. Cash costs are determined in accordance with the former Gold Institute's Production Cost Standard. For a reconciliation of the non-GAAP costs and unit costs provided above with the Company's GAAP-based statement of operations See Income statement. , please see the Company's Management's Discussion & Analysis for the quarter ended December 31, 2005. Orvana Minerals Corp. (TSX:ORV) |
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