Orosur Mining Inc. Announces Results for the Fi...

Orosur Mining Inc. Announces Results for the First Quarter Ended August 31, 2011

Orosur Mining Inc.

Orosur Mining Inc. (“OMI” or “the Company”), today announced results for the first fiscal 2012 quarter ended August 31, 2011.

Operating and Financial Summary

Key Results Summary1   Quarter 1

Ended Aug 31

  2011   2010

Operating Results

       
Gold produced   Ounces   12,488   12,937
Cash Operating cost   US$/oz   944   799
Average price received   US$/oz   1,612   1,216

Financial Results

           
Revenue   US$ ‘000s   21,026   18,213
Net income (loss) for the period   US$ ‘000s   4,412   3,526
Cash flow from (used by) operations2   US$ ‘000s   5,572   5,410
Cash at the end of the period   US$ ‘000s   20,286   10,746
Total Debt at the end of the period3   US$ ‘000s   3,849   negligible
     

1Results are based on IFRS and expressed in US dollars
2Before non-cash working capital movements
3 HSBC loan and finance lease.

David Fowler, Chief Executive Officer commented:

“It has been an exciting quarter for Orosur. The successful fund raising of US$ 13.5 million through a private placing demonstrated the support of our existing shareholders and attracted new investors, and their support resulted in the successful acquisition of Talca, a gold project in Chile which we believe will, long term, enhance our production potential. We have made good progress at Arenal Deeps and have delivered the first development ore to the plant and are on schedule to commence stope mining in November. In addition, exploration results from San Gregorio have confirmed the potential to continue extending mine life. All in all, it has been a successful start to our financial year and I am looking forward to updating the market on our continuing progress.”

Highlights

Production

  • Production for the quarter of 12,488 ounces in line with management expectation
  • Cash operating costs increase to US$ 944 while maintaining operating margins, in line with management expectation
  • Arenal Deeps on track to start production in November 2011

Financial

  • Revenue of US$ 21.0m (US$ 18.2 m in Q1 2010/11), an increase of 15 per cent with realized gold price up significantly to US$ 1,612/oz (US$ 1,216/oz in Q1 2010/11)
  • Net profit after tax for the quarter was US$ 4.4m (US$ 3.5m in Q1 2010/11), an increase of 25 per cent
  • Cash flow from operations for the quarter was US$ 5.6m (US$ 5.4m in Q1 2010/11)
  • Cash balance at the quarter end of US$ 20.3m (US$ 10.7m in Q1 2010/11), following which a further US$ 13.5m private placement was completed

Exploration and development

  • Positive infill drill programs on San Gregorio, Sobresaliente and Vaca Muerta and encouraging results on Santa Maria project including 25 meters at 1.72 g/t au in hole SMRC005 and 12 meters at 4.79 g/t from 78 meters in hole SMRC022.

Corporate

  • Acquisition of the Talca gold property in Chile, with estimated high grade artisanal production of 300,000 ounces of gold
  • Successfully raised gross proceeds of US$ 13.5m through a private placing with new and existing investors

Production and Costs

Production for the quarter was 12,488 ounces of gold which is 3.5 per cent lower than the corresponding quarter of the previous year of 12,937 ounces. This production level is at the upper end of the Company´s expectations of 12,000 to 12,500 ounces for the quarter.

Cash operating cost for the quarter was US$ 944 per ounce of gold which was in line with expectations. The increase when compared to the prior year cost of US$ 799 per ounce of gold was attributable to lower grade ore mined and increased costs due to exchange rate variations and inflation in Uruguay. The grade processed for the quarter was 18 per cent lower than the corresponding quarter of the previous financial year. This was partially offset with a 12 per cent increase in throughput.

The Company is on target and good progress has been made at the Arenal Deeps underground mine, with 1,274 metres of decline development completed to the end of September 2011 which is in line with the Company’s budget. The entire new mining fleet has been ordered and most of the key equipment for mine development has been commissioned. The second Jumbo is clearing customs in Montevideo and is expected to be commissioned this month, while the third haulage truck is expected to be delivered in November 2011. The main ventilation shaft broke through to surface this week and is expected to be operational by the end of November 2011. Also the final permit from DINAMIGE to start exploiting ore is expected to be granted by the end of this month. Production of ore from the room and pillar sections is planned to start on schedule during November 2011. Construction of the new tailings storage facility is also progressing in accordance with expectations and is anticipated to be commissioned by the end of calendar 2011. Capital expenditure commitments for the Arenal Deeps and tailings dam projects are in accordance with budgets.

The Company's forecast gold production for the 2011/2012 financial year remains in the range of 57,500 to 60,000 ounces at an operating cash cost per ounce of approximately US$ 810 per ounce. Production for the second quarter is expected to be 12,750 to 13,250 ounces. Production is forecast to increase in the second half of the year as Arenal Deeps starts contributing to output and planned additional higher grade ore is accessed from open pit sources. Variations in production and costs between quarters will occur as the mine plan draws ore from several pits at different grades and stages of stripping and the company manages its mine plans to achieve production and cost targets over the course of the year.

Financial Performance

Net profit after tax for the quarter was US$ 4.4 million. The improvement over the prior year resulted from an increase in sales prices, partially offset by an increase in operating costs. The average price of gold sold increased from US$ 1,216 per ounce in Q1, 2010/11 to US$1,612 per ounce in Q1, 2011/12.

The company generated US$ 5.6 million in cash flow from operations during this quarter. Capital expenditures for the quarter were US$ 4.3 million on exploration and development, including the Talca payments of US$ 1.14 million, and US$ 8.9 million in property plant and equipment mostly on Arenal Deeps development and the construction of the new tailings dam.

OMI ended the quarter with US$ 20.3 million in cash compared to US$ 14.2 million at the beginning of the financial year. Cash levels were in accordance with expectations and at 31 August 2011 the Company has US$ 3.9 million debt. A financing facility of US$ 5.5 million established with HSBC to finance Arenal Deeps equipment will be used post quarter end during the current financial year

The Company raised gross proceeds of US$ 13.5 million through a private placement with new and existing shareholders and these will be used to fund the Company’s investment in Talca and to target further growth. Investment in Arenal deeps, construction of the new tailings facility and existing exploration projects will be funded from cash flow from operations during 2012.

Canadian publicly accountable enterprises are required to apply IFRS standards effective for years beginning on or after January 1, 2011. On that basis, the Company commenced reporting on an IFRS basis in the current quarter financial statements. Note 18 of the Company´s Financial statements explains the principal adjustments made to the Company’s consolidated balance sheet as at June 1, 2010 previously prepared in accordance with Canadian GAAP and its previously published Canadian GAAP consolidated financial statements for the three months ended August 31, 2011 and the year ended May 31, 2011

Uruguay Exploration

Exploration for the quarter focused on San Gregorio, Santa Maria, San Antonio, Zapucay and Vaca Muerta.

During the quarter drilling at the San Gregorio deposit totaled 4,553.2 metres comprising 2750 metres of reverse circulation ("RC") drilling in 15 holes and 1,803.2 metres of diamond drilling ("DD") in 13 holes with 4 of these holes being RC/DD (RC precollars and DD tails). The programme infilled known mineralization and tested for down-dip extensions of the known ore bodies.

Notable results from this drill campaign are reported in the following table:

Hole id   From (m)   Intercept (m @ g/tAu)   Notes
SGRC047   14   10 @ 1.68   incl. 4m @ 2.57 g/t
SGRC050   156   7 @ 3.91   incl. 3m @ 6.78
SGRC051   154   20 @ 1.90   incl. 2 m @ 3.96
SGRC051           incl. 1 m @ 5.70
SGRC051           incl. 1 m @ 3.26
SGRC053   205   4 @ 2.00   incl. 1 m @ 4.4
SGDD033   157.65   6 @ 1.58   incl. 1 m @ 3.79
SGDD033           incl. 1 m @ 3.16
SGDD033   170.65   11.75 @ 3.27   incl. 1.35 m @ 6.63
SGDD033           incl. 1 m @ 15.27
SGDD033           incl. 1 m @ 3.83
SGDD035   146.5   16.2 @ 1.90   incl. 3 m @ 3.81
SGDD035           incl. 2.4 m @ 3.16
SGRC056   175   23 @ 1.06    
SGRC057   113   19 @ 1.09    
SGRC058   163   14 @ 1.18    
SGRC059   151   11 @ 2.11   incl. 3.0 m @ 2.54
SGRC059           incl. 5.0 m @ 3.03
* intercepts consider a cut-off grade of 0.4 g/t and may include up-to 2 meters of low grade
 

The San Gregorio deposit includes the San Gregorio Main, Reiles and San Gregorio East pits and has historically produced in excess of 500,000 ounces. This infill drilling was designed to provide a resource update and allow optimization work to be completed in order to establish if the remaining ore zones should be mined by open pit or underground mining methods. Feasibility work planned during the remainder of fiscal 2012 will be incorporated into an updated mine plan.

Santa Maria

The Santa Maria project is located along trend 500 metres to the north west of Santa Teresa. The pyritic, quartz vein stockwork, gold mineralization is similar to San Gregorio and is located within the deformed and faulted contact zone between a Monzonite/Diorite Intrusion and granitic basement rock.

A combined RC-DD drill programme during the first quarter and into September 2011 was designed to expand the known surface mineralization and define a shallow resource. Mineralized zones vary from two metres to 20 metres wide and dip 25-45Ëš with known mineralization extending 150 metres east-west. A total of 781 meters of drilling was completed (17 holes for a total of 701 metres of reverse circulation ("RC") drilling and one diamond drill (DD) hole for a total of 80 metres).

Notable Results from this drill campaign are reported in the following table:

Hole id   From (m)   Intercept (m @ g/t Au)   Notes
SMRC002   24   10 @ 0.91    
SMRC005   0   25 @ 1.72   Incl. 6 @ 3.43
SMRC005   9       Incl. 4 @ 2.81
SMRC010   4   2 @ 2.02   incl. 1m @ 3.55
SMRC011   8   16 @ 0.68    
SMRC013   27   1 @ 5.91    
SMRC018   44   5 @ 1.71   incl. 1m @ 6.18
SMRC019   21   11 @ 1.58   incl. 1m @ 5.53
SMRC019           incl. 1m @ 4.69
SMRC022   78   12 @ 4.79   incl. 6m @ 8.47
SMRC024   20   23 @ 0.82    
SMRC024   46   9 @ 0.99   incl. 1m @ 4.24
* intercepts consider a cut-off grade of 0.4 g/t and may include up-to 2 meters of low grade
 

Sobresaliente

The Sobresaliente project is located five killometres north of the San Gregorio Operation and comprises four discrete orebodies; North, East, Central and East Zones. The mineralization is located at the contact of two regional structural trends where faulting and deformation have produced intense cataclasis and brecciation. An updated measured and indicated resource of 2,067,000 tonnes at 1.05 g/t Au for 71,000 ounces was defined at Sobresaliente during fiscal 2011.

A combined RC-DD drill programme was completed in the first quarter to infill known mineralization within the East Zone, test for expansion down-dip and tighten the resource model. Mineralized zones vary from 2 metres to 15 metres wide, dip 60-70Ëš and trend north-south. A total of 838.8 meters (six holes for a total of 515 metres of RC drilling and 2 holes for a total of 323.8 metres of diamond drilling) was completed.

Notable Results from this drill campaign are reported in the following tables:

Hole id   From (m)   Intercept (m @ g/t Au)   Notes
SSRC082   42   4 @ 1.41    
SSRC082   48   10 @ 1.87   incl. 3m @ 3.77 g/t
SSRC082   60   7 @ 1.60   incl. 2m @ 3.50 g/t
SSRC083   68   2 @ 2.24   incl. 1m @ 3.96
SSRC084   72   5 @ 2.94   incl. 3m @ 3.01
SSDD034   28   4 @2.65   Incl. 1m @ 8.81g/t
* intercepts consider a cut-off grade of 0.4 g/t and may include up-to 2 meters of low grade
 

Vaca Muerta

Vaca Muerta is located in the Isla Cristalina greenstone belt some 85 kilometres east of the Company's San Gregorio gold mine in northern Uruguay. Mineralization is generally similar in style to the San Gregorio deposits with strongly foliated and sheared granitic host rocks containing zones of quartz/iron oxide/sericite/pyrite veining.

A RC and diamond drill programme was completed during the quarter to infill known mineralization and test for strike extensions. A total of 1,098 metres (14 holes for a total of 1,098 metres of reverse circulation ("RC") drilling and 8 holes for a total of 496 metres of diamond ("DD") drilling) was completed. Infill drilling results improved the definition of the deposit.

Notable Results from this drill campaign are reported in the following tables:

Hole id   From (m)   Intercept (m @ g/t Au)   Notes
VMDD006   41   13 @ 1.45    
VMDD006   57   7.2 @ 1.70    
VMDD006   67.2   3.8 @ 1.75    
VMDD007   16   33 @ 2.77   incl. 1 m @ 12 g/t
VMDD007           incl. 1 m @ 11.33 g/t
VMDD013   36   11 @ 1.34   incl. m @
VMRC037   32   4 @ 6.11   Incl. 1 m @ 19 g/t
VMRC037   55   7 @ 1.355    
VMRC040   23   12 @ 3.31   incl. 1 m @ 5.61 g/t
VMRC040           incl. 1 m @ 18.91 g/t
VMRC041   15   10 @ 1.67    
VMRC041   26   5 @ 3.00    
VMRC041   33   11 @ 2.46    
VMRC043   66   14 @ 2.06    
* intercepts consider a cut-off grade of 0.4 g/t and may include up-to 2 meters of low grade
 

Pantanillo Chile

During the 2011 drilling campaign, one diamond drill hole was selected exclusively for metallurgical test work (PNN-11-50DDH). Samples from different ore zones from that hole were sent to SGS, Chile for grinding tests and to McClelland, USA for column leach tests.

Test results are presented in the following table:

Ore Zone   Oxide   Mixed   Sulfide
Au (g/t)   0.50   0.74   0.48
Work Index (kw h/t)   17.2   14.3   18.7
Abrasion Index   .162   .065   .181
Crushing Index   7.2   11.2   15.7
Specific Gravity   2.56   2.57   2.60
Uniaxial compressive strength   20.04   25.05   83.62
     

Conclusions from this work are that

  • Work index results indicate that samples are moderately hard.
  • Samples presented low abrasion indices.
  • Samples presented an increasing resistance to impact breakage from oxide to sulphide. Oxide classifies as soft and sulphide classifies as hard.

McClelland lab performed a bottle roll exploratory test at 1.7 mm to define lime and cyanide consumptions and is currently running column tests with a P80 of 1 inch. Results

are as follows:

Ore Zone   Bottle roll recovery (%)   Column test recovery (%) – 40 days
Oxide   79   79
Mixed   59   44
Sulfide   53   18 *

* 45 days

 [Graph Omitted]

For the Oxide sample, recovery reached 79 per cent after only 40 days of column testing, matching up well with the Bottle Roll testing recovery for the same ore type. These results are very encouraging, indicating that Heap Leaching even for a coarser crushed product size such as one inch could be applicable for the Oxide ore at Pantanillo. Mixed ore results are broadly in line with expectations and indicate additional time/finer crushing will be required to achieve higher recoveries. Sulfide results indicate low recoveries at one inch crush size and have not been evaluated in scoping studies. Leach testing will continue to determine ultimate likely recoveries for mixed and sulfide ores at a one inch crush size.

In July 2009 a company named Consorcio Lumax (CL) requested water exploration rights over a prospective area in Cienaga Redonda basin. In January 2010, OMI requested water exploration rights over the same area. According to Chilean law, the water exploration rights have to be put up for auction when more than one party is bidding over the same area. To resolve this impasse, CL and OMI agreed to create a joint venture to jointly conduct water exploration activities. Both companies have agreed to hire Geohidrología Consultores to complete a hydrogeological study of the area.

A contract has been signed stating that OMI and CL will share the water rights discovered by the joint venture equally for water flows of up to 120 L/s. If instant water flow exceeds 120 L/s, OMI would cap its interest at 60 L/s and costs will be split proportional to the amount of water rights allocated to each company.

IAL Ambiental has continued to perform the base line studies of the project. The Autumn Report was issued and at the beginning of October the winter campaign will be performed, which is the last part of the study.

OMI has retained Whittle Consulting Ltd (“WCL”) to perform an NPV optimization of the Pantanillo project, to incorporate new metallurgical results and understand the impact of different size and processing scenarios on NPV. WCL will work with AMEC to finalise a preliminary economic assessment of the project and prepare a NI 43-101 compliant report for the preferred development route. This work and the final report are expected to be completed by the end of Calendar 2011.

Talca - Chile

On August 30, 2011 OMI announced that it has signed a definitive acquisition agreement for 100 per cent interest in the Talca gold property (“Talca”) in Chile’s Region IV. The Company and the vendors agreed to create a new company (“SCM”) to act as a holding company for the licenses covering Talca. OMI has agreed to acquire, in installments, 25 per cent of SCM plus and land and easements to develop the project, for a total consideration of US$ 3,790,000. The Company has also agreed to an exclusive and irrevocable option to acquire the remaining 75 per cent of SCM and land for a total of US$ 3,782,000 and a one per cent NSR royalty. The option must be exercised within a period of five years from the date of the definitive acquisition agreement. Further details of the terms of the transaction are detailed in the Company’s financial statements for the quarter ended August 31, 2011.

Talca is located 375km North of Santiago in Region IV of northern Chile and covers 1,680 hectares. The property is located 15 km to the west of Ruta 5 along the Chilean Pacific coast line in the Coastal Cordillera. The Tellos family has owned and operated the property for approximately 40 years, having produced an estimated 300,000 ounces of gold. Gold veins on the property are hosted in several rock types including Paleozoic meta-arenites, phyllites, cherts,and smeta-basalts all of which have been intruded by granodioritic and gabbroic intrusives of Triassic-Jurassic age.

The principal structural controls on the property are two NNW (320° - 350°) trending shear/fault zones, 2-4 metres wide and between 0.7 and 1.2 km apart, that can be traced from 4 to 8 killometres along the strike. Secondary structural control is marked by multiple E/W (260° - 285°) striking quartz veins 0.3 – 2 metres wide. Gold has been historically mined on both of these structural trends to depths of up to 250 metres. Production grades between 10 – 20 g/t gold have been reported from some of the veins. Visible gold is common. Other historical and currently operating mines in the district have been mined to depths of up to 600 metres.

Although significant artisan mining has been undertaken over the years at Talca, the project has never been explored with modern technology and practices.

OMI has made significant progress on an accelerated exploration programme including the completion of underground mine topography and sampling in some of the workings, surface geologic mapping, a 480 line km ground magnetic survey, structural interpretation and surface rock sampling. Several targets came out of this work and the Company has commenced a first pass exploration drill campaign which will consist of approximately 7,500 metres of RC and diamond drilling. Initial results are expected to be received in November 2011.

As core drill samples are obtained and as results warrant, OMI will commence a metallurgical test work programme so that data is generated to support the forthcoming engineering studies on the project in a timely manner. Environmental base line data collection is also scheduled to be initiated in the second fiscal quarter 2012 to support the permitting process. The property is fully licensed from the existing operations and it may be possible to submit an upgrade of the current environmental license, rather than a full application, which OMI expects will take less than a year following submission to relevant authorities.

The Company’s objective is to define a first NI43-101 by mid calendar 2012 and target the commencement of a scoping study during the second calendar quarter of 2012.

Anillo - Chile

A second RC drill campaign of 4,676 metres was completed during the quarter at Anillo. The programme included deep holes (up to 500 metres) drilled in fences to test mineralized N/S oriented structures where anomalous Ag and Au values had been encountered in previous drilling. The most notable intercepts were 2 metres at 2.67 g/t Au from 22 metres in hole AN1107 and 2 meters at 100 g/t Ag from 224 metres in hole AN1108. Drill results are being evaluated to determine the next steps. Yamana continues with an extensive drill campaign in the area with drilling to within 100 metres of Orosur’s property boundary.

Annual General Meeting

The Company will provide a full presentation including quarter one results and information on exploration and development activities at its annual general meeting to be held at the Grand Connaught Rooms, 61 - 65 Great Queen Street, London, England WC2B 5DA, on Tuesday, October 18, 2011 at the hour of 4:15 p.m. (UK time). The presentation by the Company’s CEO David Fowler will be video webcast. Instructions to participate in the webcast will be provided on the company’s website on the day of the annual general meeting. As a result no webcast and conference call will be provided for the quarter one results.

Qualified Person's Statement

The information presented in this press release has been reviewed by William F. Lindqvist, Director of OMI, Mr Luis Tondo, COO and Mr. Randall Corbett, general manager, San Gregorio, and is considered to be in compliance with NI 43-101 reporting guidelines. Dr. Lindqvist holds a Ph.D. in Applied Geology from Imperial College, London, has been a member of the AusIMM for 46 years, and has had 40 years of experience in international minerals exploration and property evaluation Mr Tondo holds a Master of Engineering Science Degree (from the University of Queensland, Australia, is a registered fellow of the Aus IMM and has over 22 years of international operational, metallurgy and development experience. Mr. Corbett has a Bachelor of Engineering (Mining) Degree from Technical University of Nova Scotia (T.U.N.S.), is a Professional Engineer (P. Eng.) registered in the Province of Ontario and has more than 25 years operational, engineering and development experience.

Forward Looking Statements

All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. There can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements include, without limitation success of exploration activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on insurance coverage. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Orosur Mining Inc.

Orosur Mining Inc. is a fully integrated gold producer and exploration company focused on identifying and developing gold projects in Latin America. The Company operates the only producing gold mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in Uruguay and Chile. The Company is quoted in Canada (TSX-Venture Exchange: OMI) and London (AIM: OMI).

Financial Statements Follow

   
Orosur Mining Inc.
 

Condensed Interim Consolidated Statement of Financial Position

(Unaudited)

(Thousands of United States Dollars, except where indicated)

 
As at
August 31,   May 31, June 1,
    2011   2011   2010
$ $ $
Assets
 
Current assets
Cash 20,286 14,178 8,691
Accounts receivable (Note 5) 1,567 2,473 2,351
Inventories (Note 6) 17,141 17,363 18,090
Prepaid expenses 1,274 1,074 1,220
Debenture receivable (Note 5) 1,000 0 0
Short term investments 90   90   0
Total current assets 41,358 35,178 30,352
 
Property plant and equipment and mineral properties (Note 7) 37,364 29,836 18,757
Deferred exploration (Note 8) 29,576 23,888 23,076
Deferred income tax assets (Note 15) 6,122 5,148 4,181
Restricted cash 234   223   191
Total non-current assets 73,296 59,095 46,205
         
Total Assets 114,654   94,273   76,557
 
             
 
Liabilities and Shareholders’ Equity
 
Current liabilities
Accounts payable and accrued liabilities (Note 5) 9,988 12,362 11,510
Current portion of long term debt (Note 11) 1,872   14   19
Total current liabilities 11,860 12,376 11,529
 
Long term debt (Note 11) 4,179 0 14
Rehabilitation provisions (Note 9) 3,278   3,474   3,544
Total non-current liabilities 7,457 3,474 3,558
         
Total liabilities 19,317   15,850   15,087
 
Capital stock (Note 12) 55,068 42,692 42,344
Contributed surplus 5,264 5,138 4,632
Retained earnings 35,005   30,593   14,494
Total shareholders’ equity 95,337   78,423   61,470
 
Total liabilities and shareholders’ equity 114,654   94,273   76,557
               
 

Approved by the Board of Directors

“Mario Caron”

                Director               “Juilo Porteiro”               Director            
 
 
 
Orosur Mining Inc.

Condensed Interim Consolidated Statements of Income and comprehensive income

(Unaudited)

(Thousands of United States Dollars, except for earnings per share and weighted average number of shares outstanding)

 

Three months ended

  August 31   August 31
    2011   2010
$   $
 
Net Sales 21,026 18,213
Cost of sales (14,984)   (13,173)
Operating profit 6,042 5,040
 
Other income (expenses)
Derivative loss 0 (212)
Exploration expenses (Note 8) (462) (508)
General and administrative expense (1,181) (791)
Interest expense and rehabilitation accretion (30) (10)
Foreign exchange gain 43 260
Other income 118   280
(1,512) (981)
 
Income before taxes 4,530 4,059
 
Provision for income taxes (Note 15) (118)   (533)
 
Net and comprehensive income for the period attributable to parent 4,412 3,526
 
 
 
         
 
Earnings per common share attributable to parent
Basic and diluted (Note 13) 0.06 0.05
 
Weighted average shares outstanding
Basic 77,740,988 64,795,426
Diluted 78,860,834 64,795,426
 
 
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)

(Thousands of United States Dollars, except where indicated)

 

 

Three months ended
August 31   August 31
  2011   2010
$ $
Operating activities
Net income for the period 4,412 3,526
Adjustments for:
Depreciation 2,000 1,480
Accretion of debt 13 13
Deferred Income taxes (974) 416
Stock based compensation 126 53
Others (5)   (78)
5,572 5,410
Net change in non-cash working capital balances (Note 10) (1,446)   (103)
4,126   5,307
 
Financing activities
Proceeds from the issue of share capital 12,376 0
Loans granted (1,000) 0
Loans received 3,845 0
Debt payment (12)   (3)
15,209   (3)
 
Investing activities
Purchase of property, plant and equipment and development costs (8,911) (994)
Exploration expenditure (4,316)   (2,255)
(13,227)   (3,249)
 
Increase in cash 6,108 2,055
 
Cash at the beginning of period 14,178   8,691
 
Cash at the end of period 20,286   10,746
 
 
Orosur Mining Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(Thousands of United States Dollars, except where indicated)

 

  Three months ended
August 31,   August 31,
2011 2010
    ($)   ($)
 
Common shares
Balance at beginning of period 42,692 42,344
Shares private placement (Note 12) 12,361 0
Exercise of stock options 15   0
Balance at end of period 55,068   42,344
 

Contributed surplus

Balance at beginning of period 5,138 4,632
Employee stock based compensation recognized 126   52
Balance at end of period 5,264   4,684
 

Retained earnings

Balance at beginning of period 30,593 14,494
Net income for the period 4,412   3,526
Balance at end of period 35,005   18,020
 
Shareholders’ equity at end of period 95,337   65,048
 
 

CONTACT:

Orosur Mining Inc.

David Fowler, CEO
Ignacio Salazar, CFO
+ 56 2 9246800

info@orosur.ca

or

Canaccord Genuity Limited (Nominated Adviser & Broker)

Bhavesh Patel or Ryan Cohen, +44 (0) 20 7050 6500
or

Blythe Weigh Communications (Investor Relations)

Tim Blythe: +44 (0) 7816 924626
Ana Ribeiro: +44 (0) 7980 321505
Matthew Neal: +44 (0) 7917 800011

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