RNC Exceeds 2H19 Guidance with Production of 51,090 oz After Record December Monthly Production Since HGO Acquisition; Pays Down $3M in Debt Early to Reduce Interest Costs
TORONTO, January 8, 2020 - RNC Minerals (TSX: RNX) ("RNC" or the “Company") is pleased to announce record consolidated gold production, since acquiring the HGO mine and mill, of 9,620 ounces for the month of December 2019 from its Beta Hunt and Higginsville mines in Western Australia.
For the fourth quarter of 2019, production was 26,874 ounces. For the second half of 2019, production totaled 51,090 ounces, exceeding company guidance of 42,000 to 49,000 ounces. Full year 2019 production was 64,277 ounces.
Given the strong cash generation from its operations, during December 2019 RNC elected to pay down $3 million in debt early (thereby reducing 2020 interest costs), finishing the year with a strong cash balance of $34 million.
Paul Andre Huet, Chairman & CEO, commented: “The gold production results for the second half of 2019 were very strong, with a total of 51,090 ounces produced exceeding the upper end of the range of our previously announced second half 2019 guidance of 42,000 to 49,000 ounces. The monthly production results for December continue to demonstrate the consistently improving production RNC has achieved since the acquisition of the Higginsville Gold Mine and Mill.
We are also very pleased to have been able increase our cash position to $34 million at year end, $9 million higher than $25 million at September 30, 2019. This strong cash position is net of an early $3 million debt payment we elected to make to reduce our interest costs in 2020.”
Mr. Huet continued, “I would also like thank all our personnel at our Western Australian operations for demonstrating true resilience in the face of a very difficult situation with respect to the ongoing wildfire situation throughout Australia. The first priority at RNC is the health and safety of our personnel, and we implemented our multi-stage fire safety plan to ensure this. Our personnel have been in direct contact with the relevant Australian authorities during this challenging period and have also provided direct assistance to DFES (Department of Fire and Emergency Services) via the use of some of our heavy equipment and resources.
With respect to operations, we experienced minor disruptions in ore haulage from Beta Hunt due to road closures in the region, however we continued to process ROM stockpiles and Baloo material throughout this period. We are pleased to report that ore supply from Beta Hunt and the delivery of reagents to the mill has been restored and our mill is operating at full capacity with feed from both sites.
Overall the impact of the fires on HGO is not expected have any material impact on our first quarter production nor our anticipated 2020 plans thanks to the outstanding efforts of firefighters, volunteers on the ground and the HGO team.
Lastly, we look forward to providing 2020 annual production and cost guidance to investors in the coming weeks.”
As initially stated in RNC's third quarter 2019 results news release dated November 6, 2019, and regularly since, RNC will now be transitioning to quarterly reporting of production results, effective January 1, 2020. In keeping with standard industry practice, the Company will also provide annual production and cost guidance for 2020 during the first quarter of 2020.
About RNC Minerals
RNC is focused on growing gold production and reducing costs at its integrated Beta Hunt Gold Mine and Higginsville Gold Operations ("HGO") in Western Australia. The Higginsville treatment facility is a low-cost 1.4 Mtpa processing plant which is fed at capacity from RNC's underground Beta Hunt mine and open pit Higginsville mine. At Beta Hunt, a robust gold mineral resource and reserve is hosted in multiple gold shears, with gold intersections along a 4 km strike length remaining open in multiple directions. HGO has a substantial historical gold resource and highly prospective land package totaling approximately 1,800 square kilometers. In addition, RNC has a 28% interest in a nickel joint venture that owns the Dumont Nickel-Cobalt Project located in the Abitibi region of Quebec. Dumont contains the second largest nickel reserve and ninth largest cobalt reserve in the world. RNC has a strong Board and management team focused on delivering shareholder value. RNC's common shares trade on the TSX under the symbol RNX. RNC shares also trade on the OTCQX market under the symbol RNKLF.
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" including without limitation statements relating to the liquidity and capital resources of RNC, production guidance and the potential of the Beta Hunt Mine, Higginsville Gold Operation and Dumont Nickel Project.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of RNC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect the outcome include, among others: future prices and the supply of metals; the results of drilling; inability to raise the money necessary to incur the expenditures required to retain and advance the properties; environmental liabilities (known and unknown); general business, economic, competitive, political and social uncertainties; results of exploration programs; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; or delays in obtaining governmental approvals, projected cash operating costs, failure to obtain regulatory or shareholder approvals. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to RNC's filings with Canadian securities regulators, including the most recent Annual Information Form, available on SEDAR at www.sedar.com.
Although RNC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and RNC disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
Cautionary Statement Regarding the Beta Hunt Mine and Higginsville
The decision to produce at the Beta Hunt Mine was not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, which include increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on SLM’s cash flow and future profitability. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions. It is further cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.
A production decision at the Higginsville gold operations was made by previous operators of the mine, prior to the completion of the acquisition of the Higginsville gold operations by RNC and RNC made a decision to continue production subsequent to the acquisition. This decision by RNC to continue production and, to the knowledge of RNC, the prior production decision were not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, which include increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on the Corporation’s cash flow and future profitability. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions.
For more information, please contact:
Director, Investor Relations
T: (416) 363-0649