News Feed Item

Alhambra Resources Ltd. Year 2013 Financial and Operational Results

CALGARY, ALBERTA -- (Marketwired) -- 07/03/14 -- Alhambra Resources Ltd. (TSX VENTURE:ALH) ("Alhambra" or the "Corporation"), announces its financial and operating results for the year ended December 31, 2013. All amounts related to the financial results are expressed in thousands of United States dollars unless otherwise indicated.


--  Mining operations were suspended during the year 
--  Stacked 42,630 tonnes ("t") of ore on the heaps at an average grade of
    0.43 grams per tonne gold ("g/t Au") 
--  Production was estimated at 383 ounces ("ozs") of gold 
--  Revenue from gold sales amounted to $2.9 million based on the sale of
    2,091 ozs at an average gold price of $1,389 per ounce ("/oz") 
--  Cash operating costs were $1,028/oz of gold sold 
--  The Corporation recorded a net loss of $22.4 million ($0.21/share) 
--  Kazakhstan mining operations reported a net loss of $20.5 million
--  Incurred an inventory write-down of $9.3 million due to a write-down of
    6,050 ozs of gold in work in progress ("WIP") 
--  The estimated recoverable gold in WIP as of December 31, 2013 was 30,000
--  Recorded an impairment loss on property, plant and equipment of $22.6


The financial results for 2012 and 2013 are for the period January 1 to December 31.

  (in thousands of US$     Three Months ended       Year ended December 31  
     except per share          December 31                                  
                                2013         2012         2013         2012 
Gross revenue                  $ 412      $ 1,438      $ 2,905      $ 9,518 
Net income/loss            $ (20,101)    $ (3,343)   $ (22,365)    $ (4,980)
  Per share (basic and                                                      
   diluted)                    (0.19)       (0.03)       (0.21)       (0.05)
Weighted average shares                                                     
 outstanding             104,132,059  104,132,059  104,132,059  104,132,059 
Shares outstanding at                                                       
 end of period           104,132,059  104,132,059  104,132,059  104,132,059 

In 2013, the Corporation recognized $2.9 million in revenue from the sale of 2,091 ozs of gold at an average price of $1,389/oz. This compares to $9.5 million in revenue from the sale of 5,702 ozs of gold at an average price of $1,669/oz during 2012.

For the year ended December 31, 2013, the net loss for the Corporation was $22.4 million ($0.21/basic and diluted share) compared to a net loss in 2012 of $5.0 million ($0.05/basic share and diluted share).


During 2013 the Corporation continued to experience financial hardships which prevented it from satisfying some of its outstanding obligations. Due to these financial constraints, the Corporation continued to suspend mining of new material to conserve cash until the Corporation could raise sufficient funds to pay outstanding obligations. The Corporation continues to pursue financing alternatives. Should a financing be completed, a portion of the proceeds will go towards the resumption of the mining of ore.

In 2013, the Corporation stacked a total of 42,630 t of ore at an average grade of 0.43 g/t Au onto the pad. The estimated recoverable gold mined totaled 383 ozs. As of December 31, 2013, the estimated recoverable gold classified as WIP was 30,000 ozs.


Operating costs for the year 2013 were $2.3 million or $1,099/oz of gold sold as compared to $5.0 million or $882/oz of gold sold for 2012. The 2013 figure includes $0.4 million ($179/oz) of mining costs charged directly to operating costs for the months in which there was no new ore mined. This compares to $0.2 million ($38/oz) of mining costs charged directly to operating costs for the year 2012.

Included in the 2013 operating cost amount is $0.1 million or $71/oz related to the amortization of the bump-up to fair value from the estimated cost of WIP on re-valuation on September 15, 2009. Cash operating costs were therefore $1,028/oz. In 2012, $0.4 million or $75/oz of similar costs were included in operating costs resulting in the cash cost of gold sold for this period of $807/oz.

For more details on operating expenses, see the Corporation's 2013 audited financial statements and MD&A.


At December 31, 2013 the Corporation reviewed the estimated quantity of gold contained in WIP and in addition performed the net realizable test on the value of that gold. As mining operations had been suspended due to issues relating to the Corporation's current financial condition, the Corporation was better able to analyze the quantity of gold contained in various processes more specifically, gold in circuit and in concentrate. The Corporation determined that it should reduce the quantity of gold in WIP to 30,000 ozs from the 36,050 ozs previously recorded. This write down is reflective of an estimated recovery rate of 65% for gold that is mined and stacked on the heap leach pads. The Corporation had adjusted the recovery from 70% to 65% on September 15, 2009 when the assets were revalued in connection with the court decision which returned the assets to the Corporation. Up until that date the recovery rate used was 70%. The Corporation has reported a loss of $7.7 million in connection with this adjustment.

In addition to the adjustment made related to gold contained in WIP, the Corporation determined that the net realizable value of the WIP required a further adjustment to reflect the current gold prices. As a result an additional write off of $1.5 million was taken at December 31, 2013. This write down reflects the decrease in estimated gold price. The gold price assumed in the net realizable value analysis was $1,255/oz.

The total write off of WIP inventory was $9.3 million.


An impairment test was triggered because the carrying amount of property, plant and equipment was more than the Corporation's market capitalization at December 31, 2013 indicating that the assets may be impaired. As a result a detailed test was carried out and based on the results of the test, the Corporation recorded an impairment charge of $22.6 million. The impairment was primarily the result of a delay in timing of the planned development of the transitional and sulphide zones of Uzboy due to the Corporation's financial condition together with general market conditions that are impacting junior gold mining companies. Another factor that impacted the impairment test was the recent decline in the Corporation's long term gold price assumption. The key assumptions and estimates used in the impairment test to determine the net asset value are commodity prices, discount rates, operating costs, exchange rates and capital expenditures. For purposes of the test for impairment at December 31, 2013, the Corporation assumed a gold price of $1,250/oz for 2014 and $1,300/oz thereafter and an after tax discount rate of 14%.


During 2013, no field work was carried out in Kazakhstan. This was as a result of the Corporation's lack of financial resources as described previously.


As of December 31, 2013 there were a number of outstanding creditor actions which had been filed against Saga Creek and there were unpaid salaries which had been securitized by the property of the Corporation.

For details related to these legal challenges, see the Corporation's 2013 audited financial statements and MD&A.


On December 20, 2013 the Corporation entered into agreements to issue up to C$5.65 million in convertible notes (the "Notes") plus 5.625 million warrants (the "Warrants"). The Notes have a term of three years from the date of issue with interest calculated using the nominal interest method at a rate of 12% per annum. Interest and principle under the notes are convertible into the common shares of the Corporation at the option of the holder at C$0.25 per common share during the term of the Notes. The Corporation has the right to pay interest on the Notes in cash or shares. The Corporation also has a right to force conversion of the principal and accrued and unpaid interest under the notes into the shares of Alhambra at a minimum price of US$0.20 per share. If the weighted average trading price of the Corporation's common shares for any five trading days within ten consecutive trading days equals or exceeds C$0.35 per common share, any outstanding balance owing on the Notes will automatically convert to common shares.

The Warrants have an exercise price of C$0.30 per common share and are exercisable for three years from the date of issue of related Notes. Similar to the terms attached to the Notes, if the weighted average trading price of the Corporation's common shares for any five trading days within ten consecutive trading days equals or exceeds C$0.35 per common share, the Warrant holder is required to convert any Warrants outstanding at that time.

Subsequent to December 31, 2013 the Corporation completed the issue of the C$5.65 million of the Notes and the 5.65 million Warrants. In consideration for issuing the Notes and Warrants, the Corporation received C$0.65 million in cash and 2,764,500 ordinary shares of Global Resources Investment Trust plc ("GRIT") at a deemed price of GBP 1 per GRIT share. GRIT is a new investment trust established to seek to exploit investment opportunities in the junior mining and natural resources sectors and whose ordinary shares trade on the London Stock Exchange's main market for listed securities. At the time the Corporation sells the 2,764,500 of GRIT ordinary shares, the terms related to the issue for cash of the C$0.65 in Notes require that the Corporation repay any principal balance plus accrued interest outstanding on the C$0.65 Notes plus C$0.0325 million in early redemption fees. Upon repayment, any Warrants then outstanding related to the C$0.65 in Notes will expire.


Currently Alhambra's efforts are focused on arranging financing, the use of proceeds from which will be directed towards the settlement of outstanding accounts payable, the re-initiation of the stacking of ore on the heap leach pads and the resumption of exploration and development programs. The Corporation has identified a number of exploration targets it wishes to drill once funds have been raised. In addition the Corporation plans to begin a pre-feasibility study directed towards bringing into production the transitional and sulphide zones of Uzboy. However, these programs as well as the Corporation's ability to continue on as a going concern are dependent on Alhambra completing one or more of the financing transactions it is currently investigating. While the Corporation has been successful in the past, there is no guarantee that the Corporation will be successful in the future in raising sufficient funds to continue as a going concern.


The Corporation's 2013 audited financial statements and MD&A are available on the Corporation's website, can be obtained on application from the Corporation and are available under the Corporation's profile on SEDAR at www.sedar.com.


Alhambra is a Canadian based international exploration and production corporation in Kazakhstan.

Alhambra common shares trade in Canada on The TSX Venture Exchange under the symbol ALH, in the United States on the Over-The-Counter Pink Sheets Market under the symbol AHBRF and in Germany on the Frankfurt Open Market under the symbol A4Y. The Corporation's website can be accessed at www.alhambraresources.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements regarding the formalization of a financing, re-initiation of the stacking of ore on the heap leach pads, the resumption of exploration and development programs, initiating the Uzboy pre-feasibility study, availability of capital to fund ongoing projects and other factors and events described in this news release should be viewed as forward-looking statements to the extent that they involve estimates thereof. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the formalization of a financing, the re-initiation of the stacking of ore on the heap leach pads, the resumption of exploration and development programs, initiating the Uzboy pre-feasibility study, the availability of capital to fund exploration and production development; political, social and other risks inherent in carrying on business in a foreign jurisdiction and such other business risks as discussed herein and other publicly filed disclosure documents. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.

This news release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. When used herein, words such as "intended" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on assumptions by and information available to the Corporation. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Alhambra Resources Ltd.
Ihor P. Wasylkiw
VP & Chief Information Officer
+1 (403) 508-4953

Alhambra Resources Ltd.
Donald D. McKechnie
VP Finance & Chief Financial Officer
+1 (403) 228-2855

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
“Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CloudBerry Backup is a leading cross-platform cloud backup and disaster recovery solution integrated with major public cloud services, such as Amazon Web Services, Microsoft Azure and Google Cloud Platform.
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue an...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
SYS-CON Events announced today that Cemware will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Use MATLAB functions by just visiting website mathfreeon.com. MATLAB compatible, freely usable, online platform services. As of October 2016, 80,000 users from 180 countries are enjoying our platform service.
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.