Patagonia Gold Plc (AIM:PGD), the mining and development company with gold and silver projects in Argentina, Chile and Uruguay, announces its audited financial results for the year ended 31 December 2018.
These results are presented in United States dollars (“$”) unless otherwise stated.
The full audited report, including the consolidated Financial Statements shown below, is also available on the Company’s website at www.patagoniagold.com.
2018 Financial Highlights
- Revenues of $48.1 million (2017: $31.9 million) as a result of record production from Cap-Oeste and a higher gold price
- Operating cash costs reduced to $507/oz AuEq (2017: $1,500/oz AuEq) as a result of increased production and lower overall costs primarily due to the continued devaluation of the Argentine Peso
- Gross profit of $18.6 million (2017: $15.2 million)
- Foreign exchange loss for the year of $14.4 million
- Hyper-inflationary net monetary position: loss of $1.7 million
- Debt levels reduced by $3.6 million during the period
- Record production at Cap-Oeste amounting to 42,906 oz AuEq (5 per cent below the production guidance of 45,000 oz AuEq for 2018)
- Following the end of the reporting period, as announced on 19 February 2019, the decision was taken to close Lomada and put Cap-Oeste on care and maintenance as in 2019 neither operation had met its production targets and costs exceeded revenue
- Work continues to identify a viable option to mine the high-grade deposit that lies beneath the completed open pit at Cap-Oeste
- At Calcatreu, a 6,495m drill programme commenced in October 2018, with a view to converting a portion of the inferred resources into the indicated category
- Operations at Lomada were resumed at the end November 2018 and for the one month of operation in 2018, 486 oz Au were produced
- Exploration continued at the Company’s newly named Dream Walker project in Uruguay and at La Manchuria and Sarita, where drill programmes are being prepared
- In May 2018, the Company completed a Capital Reorganisation to reduce the number of Ordinary Shares in issue in order to improve its marketability
- In December 2018, the COSE-associated 1.5% net smelter returns royalty was sold to Metalla Royalty and Streaming Ltd for $1.5 million
- Also in December 2018, the Company announced the acquisition of four exploration blocks from Goldcorp Inc. in exchange for a 1% net smelter royalty on any future production
- In addition, in March 2019, the Company entered into a $15 million two-year loan facility with its largest shareholder, Cantomi Uruguay S.A., a company owned and controlled by Carlos Miguens, the Company’s non-executive Chairman
Christopher van Tienhoven, CEO of Patagonia Gold, commented:
“While the closure of our two operating mines is disappointing, the financial arrangement with our major shareholder will ensure that we can progress the important drill programme and advance the Feasibility Study at Calcatreu. At the same time, we will carry on with our other exploration commitments in Santa Cruz. These opportunities, together with the high-grade underground potential at Cap-Oeste, provide us with reasons for optimism for the year ahead.”
The Annual Report and Accounts for the year ended 31 December 2018 will be available on the Company’s website and will be posted shortly to shareholders. The Annual General Meeting of the Company will be convened in due course.