An anonymous director reports
ARIS GOLD ANNOUNCES 2020 FINANCIAL RESULTS
Aris Gold Corp. has released fourth quarter and full-year 2020 financial results from its wholly owned Marmato mine in Colombia. The company's 2020 management's discussion and analysis (MD&A) and financial statements have been filed under the company's profile on SEDAR and are available on the company's website.
Since the launch of the company in February, 2020, significant achievements and rapid progress have been made:
Completed a preliminary feasibility study (PFS) for the expansion of the Marmato mine, which focused on the development of the Marmato Deep zone (MDZ) mineralization, construction of a new 4,000-tonne-per-day (tpd) plant, new dry stack tailings storage facilities and the use of efficient mechanized mining methods;
Established a new life-of-mine plan for the Marmato mine based on a total mineral reserve (1) of 2.0 million contained ounces (oz) gold from exploration drilling results to mid-March, 2020;
Launched a 35,000-metre drill program at Marmato, which commenced in May, 2020, with the principal objective of converting inferred mineral resources to indicated mineral resources while also testing several newly discovered areas; drilling results during 2020 included high-grade mineralization over broad widths, demonstrating potential to extend the 13-year mine life outlined in the PFS; as of March, 2021, this drill program was approximately 50 per cent complete;
Acquired the Juby gold project in July, 2020, an advanced-stage exploration project in Northeastern Ontario, and completed an updated mineral resource estimate (the Juby MRE), which is included in the Juby technical report (as defined herein); the Juby MRE included indicated resources of 770,000 contained ounces gold based on 21.3 million tonnes at an average grade of 1.13 grams per tonne and inferred resources of 1,488,000 contained oz of gold based on 47.1 million tonnes at an average grade of 0.98 g/t;
Completed three financings for gross proceeds of $186.5-million, which included:
$50.0-million ($37.4-million (U.S.)) bought deal financing;
$83.1-million senior secured gold-linked-note (GLN) financing;
$85.0-million ($66.0-million (U.S.)) private placement led by the current board and management;
Arranged a $110.0-million precious metal streaming financing, the completion of which is subject to certain customary conditions;
Achieved the revised 2020 gold production guidance at the Marmato Upper zone mine despite challenges associated with COVID-19;
Negotiated a 30-year extension of the mining title at the Marmato mine to October, 2051, which included an agreement with the Agencia Nacional de Mineria (ANM) for the creation of a social investment fund with a defined contribution formula based on gold production rates.
FINANCIAL AND OPERATING HIGHLIGHTS
2020 2019 2020 2019
Financial position, as at Dec. 31 ($000s)
Cash and cash equivalents $32,007 $2,672
Cash in escrow (1) 142,096 -
Total, cash, cash equivalents and cash in escrow 174,103 2,672
Precious metal streaming financing (2) 110,000 -
Long-term debt 81,742 -
Gold produced (oz) 7,181 7,057 23,832 25,750
Average realized gold price ($/oz sold) $1,870 $1,470 $1,767 $1,387
Cash costs ($/oz sold) (3) 1,238 927 1,168 983
AISC ($/oz sold) (3) 1,941 1,281 1,653 1,222
Financial data ($000s, except per-share amounts)
Revenue $12,550 $9,896 $42,790 $35,648
Cost of sales 9,958 7,454 33,789 29,870
Social programs 448 - 931 -
------- ------- ------- -------
Income from mining operations 2,144 2,442 8,070 5,778
Adjusted EBITDA (3) 768 2,686 5,238 6,743
Net (loss) income (4) (33,744) 1,551 (83,114) 3,605
Per share -- basic and diluted (0.32) 0.05 (1.25) 0.13
(1) The net proceeds from the $85-million private placement and the $83-million (U.S.) in gold-linked
notes were released from escrow on Feb. 4, 2021.
(2) The company has entered into a definitive precious metal purchase agreement with Wheaton Precious
Metals International Ltd., the closing of which is subject to certain customary conditions. On
closing, $38-million (U.S.) will be paid to the company with the remaining amount to be paid in
(3) For full details on cash costs, AISC (all-in sustaining cost) and adjusted EBITDA calculations,
see "Non-IFRS Measures" on pages 24 to 26 of the company's management's discussion and analysis,
available on SEDAR and on the company's website. The company has changed its methodology of
calculating cash costs and AISC. Historical amounts have been updated for the purposes of comparison.
(4) The difference between income from mining operations and net (loss) income for the full year is
primarily related to one-time expenses of $75.3-million included in losses on financial instruments
($44.8-million), reverse takeover transaction expense ($16.7-million), and financing fees and
The key achievement of 2020 was the creation of Aris Gold as an independent public company with a strong financial platform to finance growth. During 2021, the focus shifts to improving the operating performance of the Marmato Upper zone mine and to starting to realize the potential of the Marmato Deep zone by starting the development of a new MDZ underground mine and constructing a new processing facility in fourth quarter.
Marmato -- Upper zone operations
During 2021, Aris Gold expects steady improvements of Marmato's current operations through implementation of comprehensive work force training and redirecting site-level operation management while concurrently improving health, safety and environmental performance.
During the continuing modernization and expansion phase of the Marmato mine, the company anticipates elevated AISC (all-in sustaining cost) per ounce due to increased investments in sustaining capital. During 2020, sustaining capital expenditures totalled $6.4-million or $268 per oz sold, and included $4.0-million or $168 per oz sold related to mine infrastructure improvements and equipment. The Marmato mine has been in operation since 1991, and investments are planned to refurbish Upper zone operations in advance of the large-scale MDZ expansion project expected to start in Q4 2021.
Marmato -- developing the MDZ
During 2021, Aris Gold's primary focus is the scheduled start of the Marmato Deep zone project in Q4. The Marmato project team is implementing a comprehensive development plan that includes completing optimization studies, completing the 35,000-metre drill program and subsequently updating the mineral resource and reserve estimates, engaging an EPCM (engineering procurement and construction management) contractor, completing FEL3 design, amending the environmental management plan, and continuing to advance health, safety and community support programs.
Corporate growth strategy
On Feb. 4, 2021, the company changed its name to Aris Gold Corp. in association with the appointment of the current board and management team and the expansion of the corporate growth strategy with the vision of building Aris Gold into its next globally relevant gold producer.
Aris Gold is pursuing a growth strategy of acquiring operating gold mines and projects nearing construction with the goal of creating value through adding scale and diversification. Aris Gold has a solid foundation and experienced team to implement its growth plans.
The scientific disclosure and technical information included in this press release is based upon information included in the technical reports listed below that were prepared in compliance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects):
Marmato technical report entitled "Revised NI 43-101 Technical Report Pre-Feasibility Study, Marmato Project, Colombia," dated Sept. 18, 2020, with an effective date of March 17, 2020; the Marmato technical report was prepared by Ben Parsons, MSc, MAusIMM (CP), Eric J. Olin, MSc (metallurgy), MBA, SME-RM, MAusIMM, Fernando Rodrigues, BS (mining), MBA, MAusIMM, MMSAQP, Jeff Osborn, BEng (mining), MMSAQP, Joanna Poeck, BEng (mining), SME-RM, MMSAQP, Fredy Henriquez, MS Eng, SME, ISRM, Breese Burnley, PE, Cristian A. Pereira Farias, SME-RM, David Hoekstra, BS, PE, NCEES, SME-RM, David Bird, PG, SME-RM, Mark Allan Willow, MSc, CEM, SME-RM, and Tommaso Roberto Raponi, PEng, each of whom is independent of the company within the meaning of NI 43-101 and is a qualified person as such term is defined in NI 43-101;
Juby technical report entitled "Technical Report on the Updated Mineral Resource Estimate for the Juby Gold Project" dated Oct. 5, 2020, with an effective date of July 14, 2020; the Juby technical report was prepared by Joe Campbell, BSc, PGeo, Alan Section, MSc, PGeo, Duncan Studd, MSc, PGeo, and Allan Armitage, PhD, PGeo, each of whom is independent of the company within the meaning of NI 43-101 and is a qualified person as such term is defined in NI 43-101.
About Aris Gold Corp.
Aris Gold is a Canadian mining company listed on the Toronto Stock Exchange under the symbol ARIS. The company is led by an executive team with a demonstrated record of creating value through building globally relevant gold mining companies. Aris Gold operates the Marmato mine in Colombia, where a modernization and expansion program is under way, and the Juby project, an advanced exploration-stage gold project in the Abitibi greenstone belt of Ontario, Canada. Aris Gold plans to pursue acquisition and other growth opportunities to unlock value creation from scale and diversification.
(1) Proven and probable mineral reserves include proven mineral reserves of 807,000 tonnes at 5.13 grams per tonne for 133,000 contained oz and probable mineral reserves of 18,898,000 tonnes at 3.11 g/t for 1,888,000 contained oz. Full details of the Marmato mineral reserve estimate are included in the Marmato technical report.
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