Capital Gold Corporation (NYSE AMEX:  CGC; TSX: CGC)Reports 95% Cash Flow Increase

Capital Gold Corporation (NYSE AMEX: CGC; TSX: CGC)Reports 95% Cash Flow Increase-Image by hto2008 via Flickr

Capital Gold Corporation (NYSE AMEX: CGC; TSX: CGC) (“Capital Gold” or the “Company”) reported today approximately a 42%  increase in revenue for fiscal 2010 and a 95% increase in cash flow from operations for fiscal 2010 compared to the previous year.  The Company recorded gold sales of 54,304 ounces for fiscal year end July 31, 2010, and expects to produce between 65,000-70,000 gold ounces in fiscal 2011.

Below is a table comparing both fiscal 2009 and 2008 performance to fiscal 2010.

For the year

ended

July 31,

2010

For the year

ended

July 31,

2009

For the year

ended

July 31,

2008

Summary of Annual Results

(000’s except per share data and ounces sold)

Revenues 60,645 42,757 33,104
Net Income 11,994 10,407 6,364
Basic net income per share 0.25 0.22 0.15
Diluted net income per share 0.25 0.21 0.13
Gold ounces sold 54,304 48,418 39,102
Average price received $1,117 $883 $847
Cash cost per ounce sold(1) $391 $271 $276
Total cost per ounce sold(1) $444 $314 $335
(1) “Cash costs per ounce sold” is a Non-GAAP measure, which includes all direct mining costs, refining and transportation costs, by-product credits and royalties as reported in the Company’s financial statements.  It also excludes intercompany management fees.  “Total cost per ounce sold” is a Non-GAAP measure which includes “cash costs per ounce sold” as well as depreciation and amortization as reported in the Company’s financial statements.

The following table reconciles the Non-GAAP measure “Cash costs per ounce sold” to the GAAP measure of “Costs applicable to sales per ounce sold”:

Reconciliation from non-GAAP measure to US GAAP For the year

ended

July 31,

2010

For the year

ended

July 31,

2009

For the year

ended

July 31,

2008

Cash cost per ounce sold $391 $271 $276
Intercompany management fee 12 14 10
Other 2 2 (13)
Costs applicable to sales per ounce sold(2) $405 $287 $273
(2)  This measurement excludes depreciation and amortization

“This has been an exceptionally productive year for Capital Gold,” said Company President Colin Sutherland.  “We continue to develop the Orion and Saric exploration projects and optimize operations at our El Chanate open pit mine as we increase production in order to achieve our fiscal year 2011 goal of producing 65,000 to 70,000 ounces of gold.”

Highlights from the year ended July 31, 2010, as compared to the prior year include:

  • Cash flow from operations increased 95%
  • Revenue increased 42%
  • Net income increased 15%
  • Basic net income per share increased 14%
  • Gold ounces sold increased 12%

Outlook and Strategy

  • The Company expects fiscal 2011 gold sales of 65,000 to 70,000 ounces;
  • Cash costs per ounce sold for fiscal 2011 are expected to be approximately $485 per ounce;
  • We anticipate capital expenditures of approximately $12,500 in fiscal 2011 with $7,200 being allocated to leach pad expansion, $1,500 for the addition of agglomeration equipment, $750 in property interest payments; and $600 for additional conveyors; (3)
  • Repayments on Credit Facility of approximately $3,600 during fiscal 2011. (3)

(3)  These amounts are in the 000’s.

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