Rusoro Mining News
| ||August 28, 2008|
Rusoro Mining Reports Q2 2008 Financial Results
| ||Rusoro Mining Ltd. ("Rusoro" or the "Company"), is pleased to report its financial results for the quarter ended June 30, 2008. The Company's Q2 consolidated financial statements and management's discussion and analysis (MD&A) for the three and six months periods ended June 30, 2008 have been filed on SEDAR (www.sedar.com).|
All amounts set out in the Company's financial statements and MD&A are unaudited and in United States dollars, unless otherwise stated.
Q2 2008 Highlights
Results of Operations and Financial Position:
- On June 10, 2008, the Company closed an $80 million syndicate financing led by Peter Hambro Mining Plc. The proceeds were raised for asset acquisitions and for corporate development projects.
- On July 8, 2008, the Company closed the acquisition of 100% of the outstanding shares of El Callao Gold Mining Ltd. and Drake-Bering Holdings B.V. (the "Hecla-Venezuela" Acquisition) in consideration of $20 million paid in cash and $5 million paid by the issuance of 4,273,504 common shares of the Company. The main assets being acquired with the Hecla-Venezuela Acquisition are the Block B -- Isidora mining leases and the La Camorra mill facility in Bolivar State, Venezuela (the "Hecla-Venezuela" assets).
- On July 4, 2008 the Company entered into an agreement with the Venezuelan Ministry of Mines and Basic Industries ("MIBAM") to establish a mixed enterprise (the "Mixed Enterprise") to carry on with gold exploration, development and mining of the Hecla-Venezuela assets. The Mixed Enterprise will be owned 50% by the Company and 50% by Empresa Minera Nacional ("EMN"), a company owned by MIBAM. The Mixed Enterprise is expected to be created within 6 months of the date of the agreement with MIBAM. None of the Company's existing assets, such as the Choco 10 mine, are to be contributed to the Mixed Enterprise.
- Some mine fleet equipment ordered in Q4, 2007, started to arrive on site at Choco 10 mine towards the latter part of Q2 2008 and is being readied for trials and production. Although the Company has suffered delays in the importation of key equipment into Venezuela, it is expected that most of the ordered equipment will arrive in the next several weeks.
- Choco 10 mill performed beyond expectations with another record performance of a monthly average of 209,414 Mt tonnes treated in Q2 2008.
- During Q2 2008, the Company awarded the mandate to complete scoping and feasibility studies for Choco 10 mine to Micon International Ltd.
- Significant gold exploration discoveries were made at the Valle Hondo, Increible 14 and Yuruan projects during Q2 2008.
During the three months ended June 30, 2008, the Company sold 36,343 ounces of gold for a total amount of revenue of $23.2 million. Net loss for the three months ended June 30, 2008 was $36.8 million, which includes non-cash expenses such as amortization of $10.8 million, stock based compensation of $18.4 million and an impairment adjustment of $1.6 million to write down gold inventories to net realizable value.
Net cash used in operating activities during the three months period ended June 30, 2008 was $6.8 million, cash generated in financing activities was $76.4 million and cash used in investing activities amounted $18.7 million. As at June 30, 2008 the Company had a cash position of $62.5 million to be used to finalize the funding of the Hecla-Venezuela Acquisition and for corporate development projects.
Rusoro Mining is a junior gold producer with a large land position in the prolific Bolivar State region of Venezuela. The Company operates the Choco 10 and Isidora Mines. The Company has significant 43-101 compliant gold resources and will produce approximately 150,000 oz/Au in 2008.
ON BEHALF OF THE BOARD
George Salamis, President
Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.
"The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release."
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