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RNC Announces Year End 2017 Results

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RNC Announces Year End 2017 Results

Canada NewsWire

RNC will host a call/webcast on April 3 at 10:00 a.m. (Eastern Time) to discuss 2017 results. North American callers please dial:  1-888-231-8191, international callers please dial: (+1) 647-427-7450. For the webcast of this event click [here] (replay access information below).

TORONTO, April 3, 2018 /CNW/ - RNC Minerals (TSX:RNX) ("RNC") announces its review of activities and financial results for the year ended December 31, 2017. All amounts are expressed in Canadian dollars, unless otherwise noted, and are based on the audited financial statements for the year ended December 31, 2017.

Mark Selby, President and CEO, commented, "RNC announced an important shift on March 22, that its central strategic focus going-forward will be the advancement of the Dumont Nickel-Cobalt Project, which is the largest undeveloped nickel and cobalt reserve in the world and one of the few large-scale shovel-ready projects positioned to deliver large quantities of nickel and cobalt to market in the next few years. This should allow RNC shareholders to participate in the excellent future for nickel and cobalt enhanced by the growth of electric vehicles over the next few years."

Mr. Selby also commented: "With the shift in focus, the Beta Hunt Mine is considered to be non-core to RNC. A strategic alternatives process is underway, which may include the sale of all or a portion of Beta Hunt. Several parties have already expressed interest in participating in the process, which we expect to be completed by early Q3 2018. For accounting purposes, RNC has taken a non-cash charge to write down its investment in Beta Hunt based on the depletion of the historical resource estimate released in February 2016. An updated resource including the drilling completed in 2017 is expected to be released shortly."

Mr. Selby continued, "Quarter-over-quarter production improvements at Beta Hunt are expected to continue during 2018. March 2018 production rates of approximately 2,200 tonnes per day will drive record monthly production and a fifth consecutive quarter-over-quarter production increase in the first quarter of 2018. A further increase is expected in the second quarter with payable gold production expected to reach an annualized rate of approximately 63,000 payable ounces. Nickel production is also expected to improve during the second quarter to approximately 800,000 pounds as the first nickel from the newly developed 1826 area has been produced with grades in excess of 3.5%, contributing to improved cash flows during the second quarter. In light of the strategic alternatives process under way for Beta Hunt, RNC will not be providing full year 2018 production guidance."

2017 and Recent Highlights

  • Gold sales were 33,578 ounces in 2017, up 60% compared to 20,958 ounces in 2016 including 12,896 ounces in the fourth quarter. Commercial production of gold commenced on 1 July 2017. As previously reported, throughput levels and costs were adversely affected as slower than expected ramp up in development activity and equipment availability issues delayed new production stopes. Reference is made to the Non-IFRS Measures section in RNC's MD&A for the period ended December 31, 2017.

  • Beta Hunt 2017 nickel in concentrate production was 0.80 kt. As previously reported, Management reduced nickel production during the 1st half of 2017 due to depressed nickel prices and in order to focus on gold production.

  • Mined gold production at Beta Hunt during the fourth quarter was 12,722 ounces, up 21% compared to 10,489 ounces in the third quarter of 2017. Gold tonnes mined were 160 kt in the fourth quarter of 2017, up 10% compared to 146 kt in the third quarter of 2017. Gold sales were 12,896 ounces, an increase of 49% compared to 8,659 ounces sold in the third quarter of 2017.

  • For 2017, gold mining cash cost per ounce decreased to $763 in December 2017 and $882 in the fourth quarter of 2017 versus $1,347 in the first quarter of 2017 as throughput and grades improved during the year. All-in sustaining costs net of by-product credits were US$1,617 per ounce sold, compared to US$1,608 in 2016 as lower average grades for the overall year largely offset higher production rates. 2017 costs reflect the average grade milled of 2.16 g/t and production rate of 1.4 ktpd which is much lower than the 2.39 g/t grade milled and production rate of 1.7 ktpd in the fourth quarter of 2017 and the 2.7 g/t milled and 1.9 kptd production rate in December 2017. Unit costs are expected to decline with higher production volumes and grades through 2018. Reference is made to the Non-IFRS Measures section in RNC's MD&A for the period ended December 31, 2017.

  • Reed Mine 2017 copper contained in concentrate production was 9.9 million pounds (4.5 kt) (30% basis) compared to the 2016 period of 7.5 million pounds (3.4kt) (30% basis). Cash costs increased by 25% to US$1.75 per pound sold and all-in sustaining costs increased by 20% to US$1.79 per pound sold, compared to US$1.40 and US$1.49 in 2016. The Corporation's share of gold in concentrate production for 2017 from the Reed Mine was 1,194 ounces. Reference is made to the Non-IFRS Measures section in RNC's MD&A for the period ended December 31, 2017.

  • On October 30, 2017, the Corporation reported that Orford Mining announced the results of a successful summer 2017 gold exploration program at its high-grade gold Qiqavik Project. Drilling has supported the subsurface extent of the structures and the mineralization associated with the 2016 surface gold discoveries at Esperance, Esperance West, and Aurora. Additionally, five new high-grade gold surface prospecting discoveries were made that remain untested by drilling.

  • Adjusted EBITDA for the year ended December 31, 2017 was a loss of $12.2 million or $0.04 per share compared to a loss of $4.5 million or $0.02 per share in 2016. Reference is made to the Non-IFRS Measures section in RNC's MD&A for the period ended December 31, 2017

  • Non-cash impairment charges of $59.4 million on Beta Hunt gold and nickel mines, and VMS exploration properties, and one-time financing and restructuring charges of $9.5 million contributed to the Corporation incurring a net loss of $91.1 million ($0.31 per share) for the year ended December 31, 2017, compared to a net loss of $28.6 million ($0.13 per share) for the same period in 2016. Included in the 2016 loss were, compared to $17.4 million non-cash impairment charges related to the acquisitions of SLM and VMS and the sale of 50% of Dumont to Waterton (described below) in 2016.

2017 Results

The following is a summary of full year and Q4 Production from Beta Hunt Mine:

Beta Hunt Gold and Nickel Operation

Q4 2017

Q4 2016

YTD 2017

YTD 2016

Gold tonnes mined (000s)

160

104

531

371

Gold mined grade (g/t)1

2.47

2.26

2.17

2.30

Gold tonnes milled (000s)

158

90

507

354

Gold mill grade (g/t)1

2.39

2.26

2.16

2.29

Gold milled (ounces)

12,128

6,526

35.307

23,002

Gold mined (ounces)1,2

12,722

7,553

37,027

27,882

Gold sales (ounces)

12,896

4,571

33,578

20,958

Nickel tonnes mined (000s)

8.6

11.7

33.8

73.3

Nickel tonnes milled (000s)

7.0

11.7

33.7

73.9

Nickel mill grade, nickel (%)

2.64

2.80

2.73

2.72

Nickel in concentrate tonnes (000s)

0.16

0.29

0.80

1.80

 

Beta Hunt Gold and Nickel Operation5

YTD 2017

YTD 2016

Gold mining cash cost per ounce (US$ per ounce mined)

$1,008

$1,190

Gold all-in sustaining cost, net of by-product credits (US$ per ounce sold) 3,4,5

$1,617

$1,608

Gold C1 cash operating cost, net of by-product credits (US$ per ounce sold) 3,4

$1,520

$1,331

Nickel C1 cash operating cost (US$ per lb. sold)4

$2.98

$2.20

Nickel C1 cash operating cost (US$ per tonne sold)4

$6,573

$4,854

Nickel all-in sustaining cost (AISC) (US$ per lb. sold)4

$3.27

$2.23

Nickel all-in sustaining cost (AISC) (US$ per tonne sold)4

$7,202

$4,927



1.

The difference in gold sales ounces and gold mined ounces is due to timing differences in receipt of gold sales depending on completion date of tolling campaigns.

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