Business
Gammon to Record a Non-Cash Goodwill and Asset Impairment Charge Relating to El Cubo
Gammon to Record a Non-Cash Goodwill and Asset Impairment Charge Relating to El Cubo
About this update from Auq Gold Mining Inc.
[{"type":"text","content":"\n\n\n\n Aug. 6, 2010 (Canada NewsWire Group) -- \n\n \n \n \nTR.cnwUnderlinedCell TD {\n BORDER-BOTTOM: #000000 1px solid\n}\nTR.cnwDoubleUnderlinedCell TD {\n BORDER-BOTTOM: #000000 3px double\n}\nTR.cnwBoldUnderlinedCell TD {\n BORDER-BOTTOM: #000000 3px solid\n}\nTD.cnwUnderlinedCell {\n BORDER-BOTTOM: #000000 1px solid\n}\nTD.cnwDoubleUnderlinedCell {\n BORDER-BOTTOM: #000000 3px double\n}\nTD.cnwBoldUnderlinedCell {\n BORDER-BOTTOM: #000000 3px solid\n}\n\nTORONTO, Aug. 6 /CNW/ - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): As previously announced on June 17, 2008, the Company has indefinitely suspended operations at the El Cubo mine, located in Guanajuato State, Mexico. This decision was a result of continued labour disruptions by the unionized workforce and rising operating costs associated with the failure of the unionized workforce to achieve expected productivity levels.\nThis event was considered a triggering event for the purpose of assessing whether the carrying value of the El Cubo mine's long-lived assets and goodwill were impaired. As a result, the Company conducted a long-lived asset impairment test whereby future life of mine cash flows reflecting recent union productivity experience were determined and compared to El Cubo's carrying value. Based on this test, the Company will record a goodwill and asset impairment charge of US$193.3 million in the second quarter ending June 30, 2010. The remaining carrying value of the El Cubo mine's long-lived assets will be US$60.9 million. While the charge will reduce second quarter reported earnings by US$193.3 million, it is a non-cash accounting adjustment and will not affect reported cash flows, cash balance, or proven & probable reserves.\nFurther details will be provided in the Company's second quarter financial statements and Management's Discussion and Analysis for the three and sixth month period ended June 30, 2010. These financial statements will be released before the market opens on Tuesday, August 10, 2010 and will be available on the Company's website at www.gammongold.com or www.sedar.com.\n\nSecond Quarter 2010 Conference Call\n\n-------------------------------------------------------------------------\n\nA webcast and conference call will be held on Tuesday, August 10, 2010 starting at 10:00 am Eastern Time (11:00 am Atlantic Time). Senio...