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Press release from CNW Group

New Dawn Reports Revenue of $14.86 Million for the Quarter Ended March 31, 2012

Tuesday, May 15, 2012

New Dawn Reports Revenue of $14.86 Million for the Quarter Ended March 31, 201208:30 EDT Tuesday, May 15, 2012Highlights - Fiscal 2nd Quarter Ended March 31, 2012$14.86 million in revenues from gold sales ($13.55 million attributable)$0.35 million of net income$1.26 million of EBITDA8,736 ounces of gold produced (8,043 ounces attributable)Operating cash flows being re-invested in Zimbabwe to fund 2012 expansion and development plans8,000 meter exploration project at Camperdown Mine gold project underwayTORONTO, May 15, 2012 /CNW/ - New Dawn Mining Corp. (TSX: ND) ("New Dawn" or the "Company"), a junior gold company with an expanding base of assets and operations in Zimbabwe, announced that its financial results and corresponding Management's Discussion and Analysis for the quarter ended March 31, 2012 have now been filed on SEDAR (www.sedar.com) and are also available to view on the Company's web-site at www.newdawnmining.com.Effective October 1, 2011, the beginning of the Company's 2012 fiscal year, the Company, as required, has presented its financial statements based on International Financial Reporting Standards ("IFRS"), instead of Canadian Generally Accepted Accounting Principles ("Canadian GAAP") applied in previous reporting periods.  Comparative figures for the fiscal year ended September 30, 2011 and its component fiscal quarters, originally prepared and reported under Canadian GAAP, have been restated to conform to IFRS.All amounts presented herein are in United States dollars.NEW DAWN'S OPERATIONS AND FOCUSNew Dawn is a Zimbabwe-focused junior gold company that is currently implementing a program to expand sustainable gold production at its properties in Zimbabwe.  Other than the Turk and Angelus Mine, for the reasons described herein at "Gold Production", the Company's mining operations had a combined increase in gold production of approximately 14.5% during the quarter ended March 31, 2012, as compared to the previous quarter ended December 31, 2011.  On balance, and subject to the factors noted below, the Company expects to report continuing improvement in future periods from its Zimbabwe operations as it implements its plans to increase sustainable gold production across multiple mines though development of the substantial opportunities presented within the Company's three gold camps in Zimbabwe.As part of the Company's development efforts, in April 2012, the Company commenced an 8,000 meter diamond drilling program at its Camperdown Mine gold project, which is part of the Company's Gweru Gold Camp located in the Shurugwi District of Zimbabwe.  Contingent on drilling parameters, this program is expected to take up to six months, with the analysis of the results expected to be completed by the end of December 2012.  Based on the results of this drilling program, the Company may consider additional exploratory work to further define and develop this opportunity.These efforts are premised, in part, on access to adequate debt and/or equity financing, as well as approval and implementation of the Company's proposed Plan of Indigenisation (see "Indigenisation"). These efforts could also be impacted by various other factors, including, for example, the world price of gold, taxes and royalties, mining fees, power and labour costs, the Zimbabwe operating environment, and potential changes to environmental regulations in Zimbabwe, which could effect operations and require revisions to the Company's capital allocation budget.Selected unaudited quarterly information is presented below.Fiscal 2012, By Quarter    March 31, 2012December 31, 2011Operations   Revenue      $14,857,212      $15,440,766 Net income for the period$347,652$2,298,880 Earnings per common share - basic and diluted$0.00$0.05 Weighted average common shares outstanding:    Basic43,039,08242,949,736  Diluted43,039,08243,841,661 Common shares outstanding - quarter end43,612,38342,949,736   EBITDA (1)$1,262,829(4)$3,583,788   Balance sheet   Total assets$65,273,988$62,935,726 Total liabilities$24,457,590$22,697,021   Other measures   Gold produced (ounces)8,7369,095 Gold sold (ounces)8,8169,171 Revenue per ounce (3)$1,685$1,684 Cash costs per ounce (1)$1,151$1,029   Attributable (2)   Revenue$13,551,287$14,238,642 Gold produced (ounces)7,9268,399 Gold sold (ounces)8,0438,459    (1)     EBITDA and Cash Costs per Ounce measures are not recognized accounting measures under IFRS (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months and six months ended March 31, 2012 and 2011). See also "Cash Costs Per Ounce".(2)     Attributable ounces of gold are calculated on the basis of the Company's proportionate ownership of total ounces, after adjusting for the non-controlling interests' share of gold production and sales (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months and six months ended March 31, 2012 and 2011).(3)     Revenue per ounce is calculated by dividing revenue by the ounces of gold sold.(4)     Includes impairment expense relating to abandoned exploration properties of $631,451.Fiscal 2011, By Quarter      September 30, 2011June 30, 2011March 31, 2011December 31, 2010Operations     Revenue      $14,059,739$9,791,973      $7,983,223$6,458,735 Net income for the period$2,450,305  $430,729$1,214,352$212,661 Earnings per common share - basic and diluted$0.06$0.01$0.03$0.01 Weighted average common shares outstanding:      Basic42,949,73642,204,84342,204,84340,706,123  Diluted43,740,59543,315,08743,108,34341,512,819 Common shares outstanding - quarter end42,949,73642,204,84342,204,84342,204,843     EBITDA (1)$2,702,477$1,412,643$1,875,553$1,010,375     Balance sheet     Total assets$57,606,554 $53,510,642    $50,064,249$50,310,262 Total liabilities$19,756,788      $19,127,662      $17,290,900$18,226,327     Other measures     Gold produced (ounces)8,814 6,8416,2264,808 Gold sold (ounces)8,2466,4585,7474,715 Revenue per ounce (3)$1,705$1,516$1,389$1,370 Cash costs per ounce (1)$1,038$1,024$799$821     Attributable (2)     Revenue$13,145,209$9,197,031$7,510,160$6,184,661 Gold produced (ounces)8,2126,3555,8544,577 Gold sold (ounces)7,7126,0675,4064,515      (1) EBITDA and Cash Costs per Ounce measures are not recognized accounting measures under IFRS (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months and six months ended March 31, 2012 and 2011). See also "Cash Costs Per Ounce".(2)     Attributable ounces of gold are calculated on the basis of the Company's proportionate ownership of total ounces, after adjusting for the non-controlling interests' share of gold production and sales (see "Non-IFRS Measures" in Management's Discussion and Analysis for the three months and six months ended March 31, 2012 and 2011).(3)     Revenue per ounce is calculated by dividing revenue by the ounces of gold sold.GOLD PRODUCTIONConsolidated gold production was 8,736 ounces of gold (7,926 ounces attributable) for the quarter ended March 31, 2012, as compared to 6,226 ounces of gold (5,853 ounces attributable) for the comparable quarter ended March 31, 2011, an increase of 40.3% (35.4% increase on an attributable basis).Consolidated gold production for the current quarter ended March 31, 2011 decreased by 4.0% (5.6% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of 9,095 ounces (8,399 ounces attributable).Other than at the Turk and Angelus Mine, the Company's mining operations had a combined increase in gold production of approximately 14.5% during the quarter ended March 31, 2012, as compared to the previous quarter ended December 31, 2011.Gold production at the Company's Turk and Angelus Mine for the quarter ended March 31, 2012 was 2,763 ounces of gold, as compared to 3,879 ounces of gold for the previous quarter ended December 31, 2011, a decrease of 1,116 ounces of gold or approximately 28.8%. This production decrease was the result of the impact of a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood.  The production decrease also had an adverse impact on operating costs at the Turk and Angelus Mine.  The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues.  The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters. Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine. The process of implementing this plan may result in the Company identifying additional issues that could require further analysis or the Company encountering problems that could result in delays.GOLD SALESConsolidated gold sales were $14,857,212 ($13,551,287 attributable) for the quarter ended March 31, 2012, as compared to $7,983,223 ($7,510,160 attributable) for the comparable quarter ended March 31, 2011, an increase of 86.1% (80.4% increase on an attributable basis).  The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,389 for the quarter ended March 31, 2011.Consolidated gold sales for the current quarter ended March 31, 2012 decreased by 3.8% (4.8% decrease on an attributable basis), as compared to the previous quarter ended December 31, 2011 of $15,440,766 ($14,238,642 attributable). The average sales price per ounce of gold sold was $1,685 for the quarter ended March 31, 2012, as compared to $1,684 for the quarter ended December 31, 2011.The decrease in gold sales during the quarter ended March 31, 2012, as compared to the quarter ended December 31, 2011, was a result of the production issues related to the Turk and Angelus Mine described herein at "Gold Production".100% of sale proceeds were received in US dollars.NET INCOME AND EBITDAFor the quarter ended March 31, 2012, consolidated net income was $347,652, as compared to $2,298,880 for the previous quarter ended December 31, 2011, a decrease of $1,951,228 or 84.9%.  Consolidated net income for the quarter ended March 31, 2012 was adversely impacted by production issues at the Turk and Angelus Mine and the Dalny Mine (see "Gold Production" and "Gold Sales"), as well as an impairment expense for abandoned exploration properties of $631,451 and additional royalty expense of approximately $370,000 as a result of the increase in royalty rates effective January 1, 2012 from 4.5% to 7.0%.The Company also provides a non-IFRS financial metric, EBITDA, to assist investors in assessing the Company's operating performance.  EBITDA eliminates the impact of income taxes, as well as certain other defined operating and financing costs.  EBITDA was $1,262,829 for the current quarter ended March 31, 2012, as compared to $3,583,788 for the previous quarter ended December 31, 2011, a decrease of $2,320,959 or 64.8%, and as compared to $1,875,553 for the comparable quarter ended March 31, 2011, a decrease of $612,724 or 32.7%.CASH COSTS PER OUNCEThe cash costs per ounce of gold produced for all of the Company's mines were $1,151 for the quarter ended March 31, 2012, as compared to $799 for the comparable quarter ended March 31, 2011, and as compared to $1,029 for the previous quarter ended December 31, 2011.Cash costs per ounce were adversely impacted in 2012 in part as a result of significant increases in various base costs, including labour, power and mine supplies. The Company expects continuing upward pressure on these operating costs in 2012, as well as a potential increase in environmental costs.Operating costs at the Turk and Angelus Mine were adversely impacted during the quarter ended March 31, 2012 by a short-term work stoppage in January 2012, and certain geological, structural and technical mining issues at the Turk and Angelus Mine that are now largely identified and understood. The Company is in the process of implementing a new mine plan that addresses the aforementioned technical mining issues. The Company does not expect a significant improvement in production or operating costs at the Turk and Angelus Mine until this plan has been fully implemented over the next several quarters.  Once implemented, the Company expects improved operating results and decreased operating costs at the Turk and Angelus Mine.The Dalny Mine, which the Company acquired as part of the Central African Gold transaction in June 2010, experienced elevated operating costs during the quarter ended March 31, 2012 as a result of the ongoing dewatering process (currently below the 17 level), the continuing program of repair and maintenance of underground equipment to offset the effects of prolonged immersion in water, the failure of previous management to adequately invest in and maintain the mining infrastructure, and the costs associated with resuming and ramping up operations. Once the Company has completed this process of overhaul and refurbishment, which is expected to take twelve to eighteen months, underground mining operations are expected to stabilize and operating costs are expected to begin to decline.  In addition, as gold production moves toward higher normalized levels, the Company expects to realize increased operating efficiencies, with an expected corresponding downward trend in cash costs per ounce.SUPPORT OF ZIMBABWE ECONOMYDuring the quarter ended March 31, 2012, the Company's Zimbabwe operations paid approximately $3,500,000 in respect of royalties, taxes, licence fees, levies and other amounts to the Government of Zimbabwe and to various local authorities.  In addition, the Company sources a majority of its operational supplies and services from local Zimbabwean businesses and employs a total of 2,704 workers at its various operations in Zimbabwe.INDIGENISATIONNew Dawn is continuing to engage in confidential discussions with the Government of Zimbabwe regarding its proposed Plan of Indigenisation.  The Company is also engaging with various indigenous investor groups and potential financing sources with respect to an investment in the Company as part of the implementation of the Company's proposed Plan of Indigenisation.Recently, with respect to the proposed indigenisation structure contained in the Company's previously filed proposed Plan of Indigenisation, the National Indigenisation and Economic Empowerment Board ("NIEEB"), in a letter to the Company dated April 19, 2012, proposed for the Company's consideration a modification in the allocation of equity and the form of consideration to be paid by the respective recipients.  By letter dated April 27, 2012, the Company responded, requesting clarification for the basis of NIEEB's proposal and also noting a number of significant issues that needed to be addressed. The Company regards these communications as part of the continuing process of negotiations. As of the date of this filing, the Company has not received any further clarification, comments or communications from NIEEB.As there continues to be substantial uncertainty surrounding the implementation of the Indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the Indigenisation laws and regulations under commercially viable terms and conditions, or at all.  The Company is currently unable to predict the effect of an inability to arrive at or implement an Indigenisation Plan that is acceptable to all parties involved in the process.  Further information will be provided to shareholders as and when such discussions have been concluded, or when developments otherwise warrant.A comprehensive and up-to-date summary of Indigenisation matters, as of the date of this press release, is contained in the Company's Management's Discussion and Analysis for the three months ended March 31, 2012, as filed on SEDAR and posted on the Company's web-site at www.newdawnmining.com.ABOUT NEW DAWNNew Dawn is a junior gold company currently focused on expanding its gold mining operations in Zimbabwe.  New Dawn owns 100% of the Turk and Angelus Mine, the Old Nic Mine and the Camperdown Mine.  In addition, New Dawn owns approximately 85% of the Dalny Mine, the Golden Quarry Mine, and the Venice Mine (currently not in operation), and a portfolio of prospective exploration acreage in Zimbabwe.  These six mines, five of which are currently operational, are divided into three significant gold camps, and have a combined milling capacity of 2,000 tonnes per day.In addition to gold production, New Dawn is also actively exploring on highly prospective ground employing modern exploration techniques and deploying capital in Zimbabwe, a country that is proven to be geologically rich, highly prospective, and is significantly under explored.New Dawn, with its large gold resource, existing mine sites and production facilities, and current exploration programs, is a growing gold mining company in Zimbabwe, active in both gold production and gold exploration.Additional information on New Dawn's gold reserve and resource estimates is included at the Company's web-site at www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.The contents of this news release were supervised and reviewed by Ian R. Saunders, B.Sc., who is President, Chief Executive Officer, and a Director of New Dawn Mining Corp., and who is a Qualified Person within the meaning of NI 43-101.Special Note Regarding Forward-Looking Statements:  Certain statements included or incorporated by reference in this news release, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements.  The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements.  Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, operating results, capital expenditures, mineral reserves and mineral resources, and anticipated grades and recovery rates.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.  Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company.  Such factors include, among others, risks relating to reserve and resource estimates, gold prices, exploration, development, operating risks, mining risks, political and foreign risk, indigenisation risk, uninsurable risks, competition, environmental regulation and liability, government regulation, currency fluctuations, and dependence on key employees.  See "Risk Factors" in the Company's Annual Information Form - 2011.  Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations.  Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.  Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise. For further information: Investor Relations Contact:  Richard Buzbuzian +1 416.585.7890 President and Chief Executive Officer:  Ian R. Saunders +1 416.585.7890 Visit New Dawn on the internet at:  www.newdawnmining.com E-mail New Dawn at:  info@newdawnmining.com