- Consolidated income for January - December 2009 amounted to TSEK 366,694
(TSEK 102,606). A one-off negative goodwill dissolution item amounting to TSEK
195,396 (TSEK 0) is included in the income for the report period and applies to
Q1. The consolidated income excluding the negative goodwill was 171,298 TSEK
- For the quarter October-December 2009, consolidated income amounted to TSEK
61,415 (TSEK 12,001).
- The net result after tax and minority interest for January-December 2009 was
TSEK 142,213 (TSEK -57,368). Excluding negative goodwill effect, the result was
-53,183 TSEK for the twelve-month period.
- For the quarter October - December 2009, the net result was TSEK -6,858 (TSEK
-40,944).
- EPS was SEK 8.27 (SEK -3.82) for January-December 2009. For the quarter
October-December 2009 EPS amounted to SEK -0.39 (SEK -2.73).
- Approved gold reserves C1/C2 on current licenses are expected to reach 30 -
35 tons during 2010. As per the report date they amount to approximately 24
tons.
- Gold sales was 666 kg (276 kg) during the twelve months of 2009, whereof 282
kg (126 kg) were sold during Q4.
- A reversed split 200:1 was carried out in July 2009. The new number of
outstanding shares is thereafter 17,653,125.
- Management change took place during the Q4 when Preston Haskell, the main
owner of CAG, was appointed as new CEO. Lars Guldstrand was appointed as new
chairman of the board, Pavel Olishevski was appointed as new COO (Chief
Operational Officer) and Håkan Claesson was appointed as new CFO (Chief
Financial Officer).
Comments by the Managing Director
The year 2009 has been unsatisfactory from an operating point of view. The
merger of the companies dragged out in time longer than initially expected,
resulting in that preparation and operation started too late in the year, this
in addition to some severe weathers did hurt the 2009 performance.
During the 4th quarter we have seen some stabilization and improvement of the
operations, but more importantly in 2009 is the work done to secure the
operation and development for the future. We have spent a significant amount of
time ensuring and assessing technology in order to optimize mineral extraction
for the future.
This review of the company's licenses and previous work has brought us to
change the company's strategy for the next few years. This strategy is a
combination of increased production with focus on ore mining to capitalize on
established minable reserves, together with a systematic exploration of the
license areas with the objective to unlock a multimillion oz potential implied
by favorable geological settings and numerous gold occurrence.
With the new strengthened organization under Pavel Olishevki's management I'm
confident we have the team needed to be able to execute on the plan.
Development plans for 2010 are focused on:
1. Launching two Heap Leach (HL) operations:
a. A new Tardan HL plant sized for an annual production capacity of 1200 kg,
built in 2 stages
i. 2010 - crushing, stacking, HL, ADR (no mining; ore and tailings stocks use)
ii. 2011 - mining, copper removal, plant building
b. Solcocon HL Plant restart with a 250 kg annual production target.
2. Continue alluvial gold mining at Irkutsk and Chita regions in 2010 with
profitability being the single criteria for operations to go on.
3. Resuming exploration at the company's sizeable license areas.
4. Evaluate acquisition opportunities of gold exploration properties.
All licenses- Uzhunzhul, Tardan, Kara-Beldir, and Staroverinskaya - were
initially identified and acquired as a prospective, large size early-stage
exploration properties which can potentially host a multimillion oz deposits.
Yet exploration programs so far were targeted at detailed studies of the
historically localized ore bodies with little or no systematic studying of the
license areas.
This strategy gave us current minable reserves at Tardan and Staroverinskaya -
the value of which the company is keen to capture in the years to come through
Tardan and Solcocon heap leach projects.
At the same time, the localized exploration programs of the previous years did
not allow us to make any significant development in terms of resources
addition, with an exception of Kara-Beldyr, where exploration in cooperation
with Centerra Gold was active in 2009 with verygood results.
We are currently focusing on the preparation for the start of production on
current assets, as well as the design, plans, suppliers and financing of the
Tardan build out, with target to have the plant ready by Q3 2010.
Even though we don't have the full capacity in Tardan until 2011, our plan for
the consolidated company in 2010, is to increase gold production with more than
+50% on year-to-year basis to a total in excess of 1000 kg.
I'm convinced that the activities combined have created a strong platform that
can be leveraged going forward towards a solid cash generating business with
great reserves
- we have just begun our journey.
Preston Haskell, Managing Director
(FOR FULL REPORT, SEE ATTACHED FILE)
