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Message to Shareholders

2014 Second Quarter Financial and Operating Results

As a result of reworking our mine plan sequence in the first quarter, we delivered the expected strong second quarter in terms of production and total cash costs by achieving the full mining rate at Siou and Fofina.

Second Quarter 2014 in Review

  • Gold production of 72,700 ounces at a cash operating cost1 of $475 per ounce compared to 41,500 ounces at $604 per ounce for the same period in 2013

  • Gold sales of $87.8 million, a 63% increase compared to the same quarter in 2013

  • Operating income from continuing operations of $20.7 million, a 124% increase relative to the same period in 2013

  • Net income from continuing operations attributable to equity shareholders of $13.0 million or $0.05 per share compared to net loss of $12.8 million or $0.05 per share for the same period in 2013

  • Cash flow from operating activities from continuing operations2 of $37.6 million or $0.14 per share3 compared to $21.2 million or $0.08 per share for the same period in 2013

  • Initial Siou infill drilling results in line with expectations

  • Commenced exploration activities on the Banfora Gold Belt

During the second quarter, we achieved gold production of 72,700 ounces at the Mana Mine at a cash operating cost1 of $475 per ounce produced and a total cash cost4 of $602 per ounce sold.

1Cash operating cost is a non-IFRS financial performance measure with no standard definition under IFRS and is calculated using ounces produced. See the ''Non-IFRS financial performance measures'' section of the Corporation's MD&A.
2Cash flow from operating activities from continuing operations excludes changes in non-cash working capital items.
3Operating cash flow per share from continuing operations is a non-IFRS financial performance measure with no standard definition under IFRS. See the ''Non-IFRS financial performance measures'' section of the Corporation's MD&A
4Total cash cost is a non-IFRS financial performance measure with no standard definition under IFRS and represents the mining operation expenses and government royalties per ounce sold.

Considering the notable quarter and despite the rainy season in the third quarter, we expect to attain the upper end of our 2014 production guidance of between 200,000 and 225,000 ounces of gold and the lower end of our 2014 total cash cost4 guidance of between $695 and $745 per ounce.


Exploration at Mana

The Corporation continues to focus on exploration in the vicinity of the Mana processing plant, more specifically on the Siou sector, Pompoi Nord, Pompoi and in the north, on the Bilakongo and Kana permits. An exploration budget of $18.5 million has been allocated for these areas where currently nine auger drills, two reverse-circulation ("RC") drilling rigs and four diamond drill rigs are in operation. This budget includes a $4.5 million provision for an infill core drilling program at Siou.

Initial results from auger drilling enabled us to identify targets for RC drilling, which commenced during the second quarter on the 15-kilometer geochemical anomaly trend to the east of Mana. The ongoing follow-up RC exploration program has returned some good results, more specifically on two drill holes 1.2 kilometers apart in the Pompoi village sector: hole MRC14-3615 with 6.45 g/t Au over 4 meters and hole MRC14-3724 with 3.12 g/t Au over 8 meters. Two RC rigs are active in the area, and results should be forthcoming in the second half of the year.


Initial Infill Drilling Results In Line with Expectations

Last week, the Corporation announced results from initial Siou infill core drilling between 180 and 225 meters vertical depth, with the goal of replacing and increasing the in-pit reserves base at Siou before year-end. Initial results to date are in line with expectations and have yielded very strong results that confirm the continuity of the zone widths and grades with some results exceeding our expectations. To date, we have received final assay results from a total of 4,172 meters in 15 holes, and the program should be completed by early fourth quarter in 2014.


Other Exploration - Outside of Mana

During the second quarter, we entered into agreements for the working rights and rights to acquire 10 exploration permits covering 1,446 square kilometers in the Banfora Gold Belt 200 kilometers southwest of Mana. We have allocated $1.5 million to this exploration program, which currently employs four auger drills on the north and south ends of the Banfora Belt. Priority target areas are along the main shear zones where there is evidence of geochemical anomalies and artisanal mining. Drill results are anticipated in the second half of 2014.


Replacement of the SAG Mill Shell

As a precautionary measure, we have initiated a process to replace the used shell of the semi-autogenous grinding ("SAG") mill at Mana. The SAG mill will be shut down up to five weeks at the beginning of the first quarter of 2015. During the shutdown, we will continue to operate, processing approximately 3,600 tonnes per day of high-grade ore from the Siou and Fofina pits. As a consequence of the shutdown, we will produce approximately 6,500 less ounces from the lower-grade Wona-Kona pit than we would have otherwise produced in 2015. The total cost of the shell replacement will not impact the 2014 capital expenditures guidance.


Connection to the Grid

To date, construction of the transmission line by Sonabel is progressing well, and we expect to be connected to the national power grid in the fourth quarter of 2014.


Consolidated Results and Mining Operations from Continuing Operations

1Cash flow from operating activities from continuing operations excludes changes in non-cash working capital items.
2Operating cash flow per share from continuing operations is a non-IFRS financial performance measure with no standard definition under IFRS. See the "Non-IFRS financial performance measures" section of the Corporation`s MD&A.
3Amounts have been adjusted for the adoption of IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine.
4Amounts have been adjusted to reflect the impact of discontinued operations.