CST: 28/06/2016 22:51:34   

SEMAFO Reports Cash Flow From Operations of $147.6 Million in 2015

111 Days ago

Net Income Attributable to Equity Shareholders of $24.9 Million

MONTREAL, QUEBEC--(Marketwired - Mar 9, 2016) - SEMAFO Inc. (TSX:SMF)(OMX:SMF) reported its financial and operational results for the fourth quarter and year ended December 31, 2015. All amounts are in US dollars unless otherwise stated.

2015 - The Year in Review

  • Gold production of 255,900 ounces, a 9% increase compared to 2014
  • Total cash cost1 of $493 per ounce sold and all-in-sustaining cost1 of $645 per ounce sold, which represent year-over-year decreases of 24% and 19%, respectively
  • Achieved production guidance for the eighth consecutive year
  • Gold sales of $300.1 million, a 4% increase compared to 2014
  • Operating income of $66.1 million, a 42% increase compared to the same period in 2014
  • Net income attributable to equity shareholders of $24.9 million, compared to $15.8 million in 2014
  • Cash flows from operating activities from continuing operations2 of $147.6 million, a 22% increase compared to 2014
  • Acquisition of Orbis Gold Limited, which includes the Natougou project
  • Bought deal of common shares for $46.5 million
  • Long-term debt of $90 million

Fourth Quarter 2015 - in Review

  • Gold production of 57,500 ounces, a 7% decrease compared to the same period in 2014
  • Gold sales of $72.5 million, an 8% decrease compared to the same period in 2014
  • Operating income of $12.5 million compared to $14.9 million for the same period in 2014
  • Net income from continuing operations attributable to equity shareholders of $0.5 million or nil per share compared to $4.6 million or $0.02 per share for the same period in 2014
  • Cash flows from operating activities from continuing operations of $39.4 million or $0.13 per share compared to $40.4 million or $0.15 per share for the same period in 2014
1 Adjusted net income attributable to equity shareholders, adjusted basic earnings per share, operating cash flows per share, cash operating cost, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS financial performance measures from continuing operations" section of the Corporation's MD&A, note 21.
2 Cash flows from operating activities from continuing operations exclude changes in non-cash working capital items.

Mana, Burkina Faso

Mining Operations

Year
ended December 31,
2015 2014 Variation
Operating Data
Ore mined (tonnes) 2,390,600 2,190,400 9 %
Ore processed (tonnes) 2,399,100 2,754,400 (13 %)
Waste mined (tonnes) 18,924,700 19,201,500 (1 %)
Operational stripping ratio 7.9 8.8 (10 %)
Head grade (g/t) 3.63 2.90 25 %
Recovery (%) 91 91 -
Gold ounces produced 255,900 234,300 9 %
Gold ounces sold 258,600 230,200 12 %
Statistics (in dollars)
Average realized selling price (per ounce) 1,161 1,257 (8 %)
Cash operating cost (per tonne processed)1 47 49 (4 %)
Total cash cost (per ounce sold)1 493 649 (24 %)
All-in sustaining cost (per ounce sold)1 645 801 (19 %)
Depreciation (per ounce sold)2 337 310 9 %
1 Cash operating cost, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS financial performance measures from continuing operations" section of the Corporation's MD&A, note 21.
2 Depreciation per ounce sold is a non-IFRS financial performance measure with no standard definition under IFRS and represents the depreciation expense per ounce sold.

The total cash cost of $493 per ounce sold and all-in sustaining cost of $645 per ounce sold at our Mana Mine, which represent year-over-year decrease of 24% and 19% respectively, are attributable to the higher head grade as well as the reduction in fuel pricing and the strength of the US dollar relative to the Euro. The increase in head grade in 2015 reflects the greater percentage of high-grade ore processed from the Siou and Fofina pits compared to 2014.

During 2015, more ore was mined compared to 2014 when the mine plan sequence was modified in order to reassign a portion of the Wona-Kona mining fleet to the development of the Siou and Fofina deposits in the first quarter of 2014. The decrease in throughput in the year is due to the processing of ore through the secondary ball mill during the five-week shutdown of the SAG mill and the mining sequence.

2015 Reserves and Resources

As at December 31, 2015, consolidated proven and probable mineral reserves stood at 3,265,000 ounces of gold. The reserve grade increased by 10% to 3.32 g/t Au. Consolidated measured and indicated mineral resources increased by 8% to 2,969,900 ounces.

The changes in reserves are net of 2015 depletion due to production and mainly result from the addition of a maiden reserves statement for Natougou. All mineral resources reported are exclusive of mineral reserves. Reserves and resources were estimated using a gold price of $1,100 and $1,400 per ounce, respectively.

Positive Feasibility Study for Natougou

Highlight of the first quarter of 2016 is our announcement of a positive feasibility study and funding for the Natougou project.

With mineral reserves of 9.6 million tonnes at 4.15 g/t Au for 1.3 million ounces, Natougou represents one of the highest grade open-pit projects in West Africa. Results from the feasibility study, which include an after-tax IRR of 48%, 5% NPV of $262 million and a payback period of 1.5 years, demonstrate strong economic support for proceeding with the project and a solid foundation from which to expand its potential.

In the first quarter of 2016, we entered into a commitment letter with Macquarie Bank Limited to amend our credit facility ("Facility") to $120 million. Closing of the amended Facility is anticipated on or about March 31, 2016 and drawdown of the incremental $60 million is subject to conditions precedent customary in a transaction of this nature. Coupled with our $167 million cash position at year-end 2015 and anticipated cash flow from Mana operations, we estimate we have sufficient funds to bring Natougou into production.

Natougou Milestones

  • Complete permitting by year-end 2016
  • Complete detailed engineering in fourth quarter of 2016
  • Construction start-up by year-end 2016
  • Ongoing exploration with the aim of increasing reserves and resources and enhancing economics as of the fourth year of the mine life

SEMAFO's Management's Discussion and Analysis, Consolidated Financial Statements and related financial materials are available in the "Investor Relations" section of the Corporation's website at www.semafo.com. These and other corporate reports are also available on www.sedar.com.

Fourth Quarter and Year-End Conference Call

A conference call will be held today, Wednesday, March 9, 2016 at 10:00 EST to discuss this press release. Interested parties are invited to call the following telephone numbers to participate in the conference:

Tel. local & overseas: +1 (647) 788 4922
Tel. North America: 1 (877) 223 4471
Webcast: www.semafo.com
Replay number: 1 (800) 585 8367 or +1 (416) 621 4642
Replay pass code: 23405759
Replay expiration: March 30, 2016

Annual General Meeting of Shareholders

SEMAFO's Annual General Meeting of Shareholders will be held on Thursday, May 12, 2016 at 10:00 EDT at Club Saint-James, Salon Midway, 1145 avenue Union, in Montreal, Quebec. Attendees will have the opportunity to ask questions and meet the management team and members of the board of directors.

About SEMAFO

SEMAFO is a Canadian-based mining company with gold production and exploration activities in West Africa. The Corporation operates the Mana Mine in Burkina Faso, which includes the high-grade satellite deposits of Siou and Fofina, and is developing the advanced gold deposit of Natougou. SEMAFO's strategic focus is to maximize shareholder value by effectively managing its existing assets as well as pursuing organic and strategic growth opportunities.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements include words or expressions such as "expand", "potential", "anticipated", "estimate", "aim", "target", "committed", "evolve", "become", "pursuing", "growth", "opportunities" and other similar words or expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the forward-looking statements include the ability to generate an after-tax IRR of 48% with a payback period of 1.5 years and an after-tax NPV of $262 million, the ability to bring Natougou into production with the combination of our cash position at year-end 2015, anticipated cash flow from production and the amended Macquarie Facility, the ability to close the Macquarie amended Facility and to meet the various conditions precedent to drawdown, the ability to complete permitting by year-end 2016, the ability to complete detailed engineering in fourth quarter of 2016, the ability to start construction by year-end 2016, the ability to increase reserves and resources, the ability to enhance economics as of fourth year of the mine life, the ability to execute on our strategic focus, fluctuation in the price of currencies, gold or operating costs, mining industry risks, uncertainty as to calculation of mineral reserves and resources, delays, political and social stability in Africa (including our ability to maintain or renew licenses and permits) and other risks described in SEMAFO's documents filed with Canadian securities regulatory authorities. You can find further information with respect to these and other risks in SEMAFO's 2015 Annual MD&A, and other filings made with Canadian securities regulatory authorities and available at www.sedar.com. These documents are also available on our website at www.semafo.com. SEMAFO disclaims any obligation to update or revise these forward-looking statements, except as required by applicable law.

The information in this release is subject to the disclosure requirements of SEMAFO under the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was publicly communicated on March 9, 2016 at 7:00 a.m., Eastern Standard Time.

Financial and Operating Highlights

2015 2014 2013
Gold ounces produced 255,900 234,300 158,600
Gold ounces sold 258,600 230,200 161,300
(in thousands of dollars, except amounts per ounce, per tonne and per share)
From Continuing Operations
Revenues - Gold sales 300,129 289,349 226,618
Operating income 66,066 46,359 18,942
Net income (loss) attributable to equity shareholders 24,910 15,812 (9,227 )
Basic earnings (loss) per share 0.09 0.06 (0.03 )
Diluted earnings (loss) per share 0.09 0.06 (0.03 )
Adjusted net income (loss) attributable to equity shareholders1 40,956 29,603 (13,468 )
Per share1 0.14 0.11 (0.05 )
Cash flows from operating activities2 147,561 120,730 77,562
Per share1 0.51 0.44 0.28
Average realized selling price (per ounce) 1,161 1,257 1,405
Cash operating cost (per tonne processed)1 47 49 40
Total cash cost (per ounce sold)1 493 649 777
All-in sustaining cost (per ounce sold)1 645 801 1,242
From Discontinued Operations
Net loss attributable to equity shareholders3 - (11,339 ) (75,995 )
Total
Net income (loss) attributable to equity shareholders 24,910 4,473 (85,222 )
Basic earnings (loss) per share 0.09 0.02 (0.31 )
Diluted earnings (loss) per share 0.09 0.02 (0.31 )
Total assets 781,513 618,302 567,546
Cash dividends declared per share - - 0.02
1 Cash operating cost, total cash cost, all-in sustaining cost, adjusted net income attributable to equity shareholders, adjusted basic earnings per share and operating cash flows per share are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS financial measures from continuing operations" section of this MD&A, note 22.
2 Cash flows from operating activities from continuing operations exclude changes in non-cash working capital items.
3 The year ended December 31, 2014 includes a non-cash amount of $9,691,000 regarding the reversal of the non-controlling interest as a result of the sale of the Kiniero Mine.

Fourth Quarter Financial and Operating Highlights


Three-month period
ended December 31,


2015 2014 Variation
Gold ounces produced 57,500 61,800 (7 %)
Gold ounces sold 65,500 65,500 -
(in thousands of dollars, except amounts per ounce, per tonne and per share)
Revenues - Gold sales 72,475 78,591 (8 %)
Operating income 12,549 14,873 (16 %)
Net income attributable to equity shareholders 476 4,609 (90 %)
Basic earnings per share - 0.02 (100 %)
Diluted earnings per share - 0.02 (100 %)
Adjusted net income attributable to equity shareholders1 3,270 9,898 (67 %)
Per share1 0.01 0.04 (75 %)
Cash flow from operating activities2 39,430 40,416 (2 %)
Operating cash flow per share1 0.13 0.15 (13 %)
Average realized selling price (per ounce) 1,106 1,200 (8 %)
Cash operating cost (per tonne processed)1 42 51 (18 %)
Total cash cost (per ounce sold)1 493 596 (17 %)
All-in sustaining cost (per ounce sold)1 719 700 3 %
1 Adjusted net income attributable to equity shareholders, adjusted basic earnings per share, operating cash flows per share, cash operating cost, total cash cost and all-in sustaining cost are non-IFRS financial performance measures with no standard definition under IFRS. See the "Non-IFRS financial measures from continuing operations" section of the Corporation's MD&A, note 21.
2 Cash flows from operating activities from continuing operations exclude changes in non-cash working capital items.
Consolidated Statement of Financial Position
(Expressed in thousands of US dollars)
As at
December 31,
As at
December 31,
2015 2014
$ $
Assets
Current assets
Cash and cash equivalents 167,166 127,928
Trade and other receivables 17,028 21,470
Income tax receivable 1,634 12,086
Inventories 53,200 59,729
Other current assets 2,622 2,311
241,650 223,524
Non-current assets
Advance receivable 4,532 4,229
Restricted cash 4,388 3,726
Property, plant and equipment 529,087 382,388
Intangible asset 1,856 1,915
Other non-current assets - 2,520
539,863 394,778
Total assets 781,513 618,302
Liabilities
Current liabilities
Trade payables and accrued liabilities 35,869 49,530
Current portion of long-term debt 29,052 -
Restricted and deferred share unit liabilities 1,360 1,938
Provisions 6,346 6,579
72,627 58,047
Non-current liabilities
Long-term debt 59,379 -
Restricted share unit liabilities 4,485 3,967
Provisions 7,313 6,917
Deferred income tax liabilities 31,846 18,766
103,023 29,650
Total liabilities 175,650 87,697
Equity
Equity Shareholders
Share capital 516,070 466,861
Contributed surplus 10,685 10,889
Retained earnings 48,242 25,932
574,997 503,682
Non-controlling interests 30,866 26,923
Total equity 605,863 530,605
Total liabilities and equity 781,513 618,302
Consolidated Statement of Income
For the years ended December 31, 2015 and 2014
(Expressed in thousands of US dollars, except per share amounts)
Year
ended December 31,
2015 2014
$ $
Revenue - Gold sales 300,129 289,349
Costs of operations
Mining operation expenses 127,618 149,305
Depreciation of property, plant and equipment 87,689 72,195
General and administrative 13,559 17,432
Corporate social responsibility expenses 857 826
Share-based compensation 4,340 3,232
Operating income 66,066 46,359
Other expenses (income)
Finance income (748 ) (343 )
Finance costs 3,846 1,646
Foreign exchange loss 8,161 5,251
Income before income taxes 54,807 39,805
Income tax expense
Current 10,510 1,382
Deferred income tax liabilities 13,744 19,028
24,254 20,410
Net income from continuing operations 30,553 19,395
Net loss from discontinued operations - (1,648 )
Net income for the year 30,553 17,747
Net income from continuing operations attributable to:
Equity shareholders 24,910 15,812
Non-controlling interests 5,643 3,583
30,553 19,395
Net income (loss) from discontinued operations attributable to:
Equity shareholders - (11,339 )
Non-controlling interests - 9,691
- (1,648 )
Net income for the year attributable to:
Equity shareholders 24,910 4,473
Non-controlling interests 5,643 13,274
30,553 17,747
Basic earnings per share from continuing operations 0.09 0.06
Basic loss per share from discontinued operations - (0.04 )
Basic earnings per share 0.09 0.02
Diluted earnings per share from continuing operations 0.09 0.06
Diluted loss per share from discontinued operations - (0.04 )
Diluted earnings per share 0.09 0.02
Consolidated Statement of Cash Flows
For the years ended December 31, 2015 and 2014
(Expressed in thousands of US dollars)
Year
ended December 31,
2015 2014
$ $
Cash flows from (used in):
Operating activities
Net income for the year from continuing operations 30,553 19,395
Adjustments for :
Depreciation of property, plant and equipment 87,689 72,195
Share-based compensation 4,340 3,232
Write-off of other non-current assets related to financing fees 2,520 -
Unrealized foreign exchange loss 7,612 6,799
Deferred income taxes expense 13,744 19,028
Other 1,103 81
147,561 120,730
Changes in non-cash working capital items 4,756 1,140
Net cash provided by operating activities from continuing operations 152,317 121,870
Net cash used in operating activities from discontinued operations - (2,088 )
Net cash provided by operating activities 152,317 119,782
Financing activities
Financing fees - (1,020 )
Long-term debt 90,000
Long-term debt transaction costs (1,200 ) -
Proceeds on issuance of share capital, net of expenses 44,305 5,700
Dividends paid to non-controlling interest and withholding taxes (2,656 ) -
Net cash provided by financing activities 130,449 4,680
Investing activities
Acquisition of Orbis Gold Limited (154,550 ) -
Acquisitions of property, plant and equipment (79,449 ) (68,591 )
Advance made to Sonabel (566 ) (2,068 )
Increase in restricted cash (1,017 ) (641 )
Net cash used in investing activities (235,582 ) (71,300 )
Effect of exchange rate changes on cash and cash equivalents (7,946 ) (7,833 )
Change in cash and cash equivalents during the year 39,238 45,329
Cash and cash equivalents - beginning of year 127,928 82,599
Cash and cash equivalents of continuing operations - end of year 167,166 127,928
Interest paid 4,578 -
Interest received 450 343
Income tax paid 1,131 5,276

2015 Reserves and Resources

Table 1 - Consolidated Reserves and Resources

PROPERTY Mana 1,2,4,5,6 Tapoa 1,2,4,5,6
(Natougou Project)
Yactibo 1,3,4,5,7
(Nabanga Project)
Total
MINERAL RESERVES
Proven
Tonnes 12,655,000 1,583,000 14,238,000
Grade (g/t Au) 3.15 6.46 3.52
Ounces 1,281,400 329,000 1,610,400
Probable
Tonnes 8,325,000 7,984,000 16,309,000
Grade (g/t Au) 2.64 3.69 3.16
Ounces 707,600 947,000 1,654,600
TOTAL MINERAL RESERVES
Tonnes 20,980,000 9,567,000 30,547,000
Grade (g/t Au) 2.95 4.15 3.32
Ounces 1,989,000 1,276,000 3,265,000
MINERAL RESOURCES (exclusive of reserves)
Measured
Tonnes 8,751,000 77,000 8,828,000
Grade (g/t Au) 1.67 1.84 1.67
Ounces 470,800 5,000 475,800
Indicated
Tonnes 33,526,000 2,564,000 36,090,000
Grade (g/t Au) 2.13 2.44 2.15
Ounces 2,293,100 201,000 2,494,100
TOTAL M&I
Tonnes 42,277,000 2,641,000 44,918,000
Grade (g/t Au) 2.03 2.42 2.06
Ounces 2,763,900 206,000 2,969,900
Inferred
Tonnes 13,041,000 2,683,000 1,840,000 17,564,000
Grade (g/t Au) 2.82 3.99 10.00 3.75
Ounces 1,184,200 345,000 590,000 2,119,200
1 The Corporation indirectly owns a 100% interest in all of its permits, except for the permits held by SEMAFO Burkina Faso S.A. in which the Government of Burkina Faso holds a 10% interest.
2 Mineral reserves and resources at Mana and at Tapoa (Natougou project) were estimated using a gold price of $1,100 and $1,400 per ounce, respectively.
3 Mineral resources at Yactibo Permit Group (Nabanga poject) were reported above a 5.0 g/t Au cut-off grade.
4 Rounding of numbers of tonnes and ounces may present slight differences in the figures.
5 All mineral resources reported are exclusive of mineral reserves.
6 As of December 31, 2015.
7 As of June 30, 2015.

2015 Reserves and Resources (continued)

Table 2 - Mana, Burkina Faso 1,2,3

DECEMBER 31, 2015
DEPOSITS PROVEN RESERVES PROBABLE RESERVES TOTAL RESERVES
Tonnage Grade
(g/t Au)
Ounces 4 Tonnage Grade
(g/t Au)
Ounces 4 Tonnage Grade
(g/t Au)
Ounces 4
WONA-KONA 6,107,000 2.35 460,700 6,558,000 2.25 474,400 12,665,000 2.30 935,100
NYAFÉ 263,000 5.85 49,400 4,000 5.02 700 267,000 5.84 50,100
FOFINA 1,146,000 2.74 100,800 39,000 2.30 2,900 1,185,000 2.72 103,700
SIOU 4,800,000 4.17 644,000 1,724,000 4.14 229,600 6,524,000 4.16 873,600
ROMPAD 339,000 2.43 26,500 - - - 339,000 2.43 26,500
TOTAL MANA 12,655,000 3.15 1,281,400 8,325,000 2.64 707,600 20,980,000 2.95 1,989,000
DECEMBER 31, 2015
DEPOSITS MEASURED INDICATED TOTAL RESOURCES
Tonnage Grade
(g/t Au)
Ounces 4 Tonnage Grade
(g/t Au)
Ounces 4 Tonnage Grade
(g/t Au)
Ounces 4
WONA-KONA 1,427,000 1.95 89,500 20,962,000 2.55 1,715,300 22,389,000 2.51 1,804,800
NYAFÉ 300,000 5.60 54,100 230,000 5.84 43,100 530,000 5.70 97,200
FOFINA 1,061,000 2.99 102,000 425,000 3.87 52,800 1,486,000 3.24 154,800
YAHO 4,654,000 1.05 157,200 9,895,000 0.99 316,200 14,549,000 1.01 473,400
FILON 67 26,000 2.72 2,300 9,000 3.59 1,000 35,000 2.93 3,300
FOBIRI 469,000 1.80 27,100 114,000 1.52 5,600 583,000 1.74 32,700
SIOU 814,000 1.47 38,600 1,891,000 2.62 159,100 2,705,000 2.27 197,700
TOTAL MANA 8,751,000 1.67 470,800 33,526,000 2.13 2,293,100 42,277,000 2.03 2,763,900
DECEMBER 31, 2015
DEPOSITS INFERRED
Tonnage Grade (g/t Au) Ounces 4
WONA-KONA 3,010,000 2.91 281,600
NYAFÉ 151,000 5.86 28,400
FOFINA 162,000 4.33 22,600
YAHO 471,000 1.45 22,000
FILON 67 6,000 6.32 1,100
FOBIRI 578,000 1.39 25,800
MAOULA 2,628,000 1.62 137,100
SIOU 6,035,000 3.43 665,600
TOTAL MANA 13,041,000 2.82 1,184,200
1 The Corporation indirectly owns a 100%interest in all of its permits, except for the permits held by SEMAFO Burkina Faso S.A., in which the Government of Burkina Faso holds a 10% interest.
2 Mineral reserves and resources were estimated using a gold price of $1,100 and $1,400 per ounce, respectively.
3 All mineral resources reported are exclusive of mineral reserves.
4 Rounding of numbers of tonnes and ounces may present slight differences in the figures.

SEMAFO
Robert LaValliere
Vice-President, Corporate Affairs & Investor Relations
Cell: +1 (514) 240 2780
Robert.Lavalliere@semafo.com
Ruth Hanna
Analyst, Investor Relations
Ruth.Hanna@semafo.com
Tel. local & overseas: +1 (514) 744 4408
North America Toll-Free: 1 (888) 744 4408
www.semafo.com