|By Marketwired .||
|July 3, 2014 08:30 AM EDT||
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.
YEAR 2013 HIGHLIGHTS
-- 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 ($0.20/share) -- 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 ozs -- Recorded an impairment loss on property, plant and equipment of $22.6 million
The financial results for 2012 and 2013 are for the period January 1 to December 31.
---------------------------------------------------------------------------- (in thousands of US$ Three Months ended Year ended December 31 except per share December 31 amounts) ---------------------------------------------------------------------------- 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.
WRITE-DOWN OF INVENTORIES
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%.
2013 EXPLORATION DRILLING UPDATES
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.
OUTSTANDING LEGAL CHALLENGES
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.
SUBSEQUENT EVENT - FINANCING
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.
AUDITED FINANCIAL STATEMENTS AND MANAGEMENT DISCUSSION AND ANALYSIS ("MD&A")
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.
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
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
Feb. 12, 2016 06:00 PM EST Reads: 402
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
Feb. 12, 2016 06:00 PM EST
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
Feb. 12, 2016 04:45 PM EST
DevOps is not just last year’s buzzword. Companies with DevOps practices are 2.5x more likely to exceed profitability, market share, and productivity goals. But how do you enable high performance? What can you do right now to start? Find out from DevOps experts including Gene Kim, co-author of "The Phoenix Project," and the Dynatrace Center of Excellence.
Feb. 12, 2016 04:30 PM EST
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Feb. 12, 2016 04:30 PM EST Reads: 191
SYS-CON Events announced today that Column Technologies will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principal...
Feb. 12, 2016 04:15 PM EST
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Feb. 12, 2016 04:15 PM EST Reads: 425
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
Feb. 12, 2016 03:00 PM EST
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
Feb. 12, 2016 02:15 PM EST Reads: 449
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Feb. 12, 2016 02:15 PM EST
As someone who has been dedicated to automation and Application Release Automation (ARA) technology for almost six years now, one of the most common questions I get asked regards Platform-as-a-Service (PaaS). Specifically, people want to know whether release automation is still needed when a PaaS is in place, and why. Isn't that what a PaaS provides? A solution to the deployment and runtime challenges of an application? Why would anyone using a PaaS then need an automation engine with workflow ...
Feb. 12, 2016 01:45 PM EST Reads: 230
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Feb. 12, 2016 01:00 PM EST Reads: 230
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
Feb. 12, 2016 12:30 PM EST Reads: 263
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 12, 2016 12:30 PM EST Reads: 108
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
Feb. 12, 2016 12:00 PM EST Reads: 501