Athabasca Minerals Inc. Announces Q1 2014 Results and Submits Conservation and Reclamation Business Plan to Alberta Government
28 4월 2014 - 8:00PM
Marketwired Canada
Athabasca Minerals Inc. ("Athabasca" or the "Corporation") (TSX VENTURE:ABM) is
pleased to announce its financial results for the three months ended February
28, 2014. The Corporation's unaudited interim financial statements and
management's discussion and analysis ("MD&A") for the three months ended
February 28, 2014 are available on SEDAR at www.sedar.com and on the Athabasca
Minerals website at www.athabascaminerals.com.
Q1 2014 Highlights
-- Issued common shares for gross proceeds totalling $5.75 million through
a private placement;
-- The Corporation initiated production and sales from its corporate-owned
Cowper aggregate operation, the first operation brought into production
under its agreement with a First Nations company;
-- Built up strategically stockpiled aggregate inventory with cost in
excess of $8.1 million, providing a competitive advantage by ensuring a
guaranteed supply to service construction demand in 2014;
-- Commencement of the winter drilling program at the Richardson Project in
order to further investigate granite and dolomite resource potential;
-- Construction of corporate-owned camp to accommodate employees at Conklin
versus using third party camp facilities in order to reduce
accommodation costs.
Q1 2014 sales from corporate-owned aggregate operations were negatively impacted
as a result of disruption in planned sales activities involving two customer
contracts. A customer suspended a Logan pit contract when they put their project
on hold. Approximately 165,000 tonnes of fully processed gravel remains to be
hauled pending notification of contract resumption from the customer. The
majority of the remaining contract was expected to be delivered and invoiced
during Q1 2014. Secondly, a sales agreement had been reached with a customer to
purchase aggregates produced from the Cowper pit. However, the agreement was
cancelled and as a result, a further amount of Q1 2014 planned sales did not
occur.
Due to the seasonality of the industry, during Q1 2014 Athabasca also focused
effort on equipment repair, and the setup of its corporate-owned Conklin
stockpile work camp to accommodate its workers.
President and CEO Dom Kriangkum states, "While aggregate demand within the
region was considerably lighter than normal during the first fiscal quarter, we
are pleased to see that sales have picked up in the second quarter, both at
Susan Lake and at our corporate-owned pits. During Q1 2014 management had noted
a significant reduction in inventory stockpiling outside of the Susan Lake pit
by our customers in advance of Q2 construction activity. This was seen as a
contributing factor in reduced aggregate sales this past quarter. Despite the
light sales volume in the early months of fiscal 2014, management anticipates
full year results will normalize. As well as focusing on Q2 sales opportunities,
the executive team is currently undertaking a review of current operating
parameters and operational execution intended to identify continued efficiency
improvements. A detailed strategic analysis is being performed to ensure key
performance indicators are being benchmarked, cost control measures are being
achieved and maximum productivity and efficiency are being achieved."
Operations Update
Aggregate demand has begun to ramp up during Q2, and management anticipates
Susan Lake demand will continue to accelerate as Q2 progresses. By the mid-point
of Q2, Susan Lake sales had already surpassed Q1 2014 Susan Lake sales.
Management anticipates further acceleration in Q2 aggregate demand, followed by
strong demand through the remainder of the fiscal year.
Activity at our corporate-owned pits is ongoing.
-- Initial fiscal 2014 sales from the Kearl pit got underway in mid-April,
when hauling of aggregates to its nearby major customer began and
remains in progress;
-- Unsold gravel processed at the Cowper pit has been hauled to a new third
party stockpile site near a major highway north of Conklin, where it is
available for year round delivery. Crushing operations at the now
depleted Cowper pit had concluded during Q2 2014, and reclamation
activity at the pit is currently underway;
-- Some recent tree clearing has been initiated at the corporate-owned
Pelican Hill pit in order to prepare for future production at that
location.
Mining and crushing activity at the Logan and House River pits is not expected
to resume before late fall.
Financial Highlights
Three months ended February 28
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Q1 2014 Q1 2013
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Aggregate management fees $ 554,567 $ 1,489,017
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Net aggregate sales $ 2,863,278 $ 5,194,379
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Total revenue $ 3,417,845 $ 6,683,396
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Aggregate operating expenses $ 4,576,715 $ 5,810,597
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Gross (loss) profit $ (1,158,870) $ 872,799
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Total aggregate tonnes sold 578,537 1,516,224
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Net loss from land use agreement $ Nil $ (227,796)
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Net loss from aggregate operations $ (1,910,393) $ (146,786)
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Net loss and comprehensive loss $ (1,910,393) $ (374,582)
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Basic loss per common share $ (0.063) $ (0.013)
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Basic cash flow per share $ (0.029) $ 0.026
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The $3,265,551 decline in Q1 2014 revenue compared to Q1 2013 was the primary
reason for the resulting net loss of $1,910,393, an increase of $1,535,811 over
Q1 2013. The sales decline includes a $934,450 reduction in aggregate management
fees, resulting from a 62.5% reduction in aggregate tonnes sold from Susan Lake;
and, a $2,331,101 reduction in net aggregate sales, resulting from a 57.2%
reduction in aggregate tonnes sold from corporate-owned pits. Aggregate
operating expenses during Q1 2014 had decreased by $1,233,882 compared to Q1
2013, primarily as a result of reduced costs associated with lower sales volume
from corporate-owned pits.
Management attributes the sales decline to a reduction in inventory stockpiling
outside of the Susan Lake pit, and a slower ramp up of civil projects during Q1
2014 in the Fort McMurray area.
Outlook
Athabasca's core business relies on aggregate demand from Alberta's oil, natural
gas and mining industries in addition to municipal and road construction
projects. Historically Athabasca has stronger third and fourth quarters
following typically slower first and second quarters due to seasonal
considerations such as winter conditions and spring break-up conditions.
The Corporation determines demand for the year by discussing expected aggregate
requirements with its major customers.
-- Improving sales demand during Q2 and expected strong demand during Q3
and Q4 is expected to offset the Q1 sales shortfall.
-- Existing inventory turnover during fiscal 2014, along with the efficient
production of further processed aggregates from its corporate-owned pits
is a management priority;
-- Cost savings have been targeted for near term implementation, including
equipment repair and maintenance costs, work crew accommodation costs,
and reduced hauling rates for aggregates delivery. These initiatives
will provide improved productivities and increased efficiencies,
resulting in measurable performance gains;
-- Athabasca plans for strategic crushing at its corporate-owned pits
during Q2 and continuing through Q4 based on market demand.
The conservation, reclamation and business plan (CRBP) for the Firebag Project
has now been submitted for government approval; meanwhile further work will be
performed for the 43-101 resource report.
AGGREGATE OPERATIONS:
Corporate-Owned Pits
Management is focussed on opportunities to sell its existing aggregate
inventory, and is actively negotiating with various customers who have expressed
interest for the purchase of aggregates, which involves all of the Corporation's
inventory locations.
Currently, processed and stockpiled inventory includes approximately 530,000
tonnes of gravel and 440,000 tonnes of sand located across Athabasca's
corporate-owned pits and stockpile sites. This leaves the Corporation well
positioned to supply aggregates to regional customers from its existing
inventory of processed aggregate products.
-- Fiscal 2014 Kearl pit sales are now underway, with current hauling in
progress to its nearby major customer. Based on additional purchasing
interest expressed by other parties for its crushed aggregate products,
management anticipates strong overall sales at the Kearl pit during
fiscal 2014 from its inventory which includes over 250,000 tonnes of
gravel and 389,000 tonnes of sand;
-- Logan pit inventory sales discussions are occurring with oil and gas
developers in the area. The majority of aggregate sales are expected to
resume in late fall 2014 when winter haul road conditions improve access
to the pit. Currently 121,000 tonnes of gravel remains available for
sale at the Logan pit;
-- 68,000 tonnes of gravel at Athabasca's Conklin stockpile site is
currently available for year round sales and delivery;
-- 50,000 tonnes of processed sand remaining onsite at Athabasca's Cowper
pit. A further 46,000 tonnes of processed gravel and 20,000 tonnes of
pit run is now available at a stockpile site near Conklin, Alberta for
year round sales.
The Logan pit is currently accessible only during the winter months. The
Corporation is considering the construction of an all-season road during the
summer of 2014, to allow for year round access and product delivery, and help
enable an earlier sale of its existing inventory.
Under an agreement with a First Nations company, the Corporation is awaiting
approval from the Alberta Government to open a second new pit later this year,
and anticipates the pit will be available to commence production during fiscal
2014.
During fiscal 2014 Athabasca seeks to improve its corporate pit cost
efficiencies, through its improved Kearl pit dewatering method, and other
experience gained during its first year of operation within the pit. Improvement
in the overall rate of aggregate processing is anticipated, resulting in a
reduction in production cost per tonne.
Susan Lake Public Pit
Q1 2014 was subject to frozen conditions and periods of extreme cold and snow
resulting in very little construction activity requiring sand and gravel.
Despite the soft first quarter in 2014, the Corporation is observing increased
activity at the Susan Lake gravel pit during Q2. Increasing demand for aggregate
is evident as Q2 Susan Lake sales to date have already surpassed what was sold
during all of Q1. Indications from its customers point to a return to solid
demand for aggregates beginning in Q2, with strong sales in Q3 and Q4.
The Corporation has received sand and gravel orders from existing users for
significant quantities to be fulfilled during fiscal 2014. Management also
received substantial gravel requests from new customers who are bidding on works
for a new oil sands project at the north end of the Susan Lake pit. Management
anticipates construction of the project will last between two to three years
before being placed into production. Oil sands projects typically consume 5 to 8
million tonnes of aggregates for plant construction and another 0.5 to 1.0
million tonnes annually to maintain roads and other infrastructure.
INDUSTRIAL METALLIC MINERALS PROJECTS:
Firebag Project (Silica Sand)
-- The Firebag silica sand has been tested and found to be suitable as frac
sand for the oil and gas industry;
-- In February 2014 the Corporation received notification from Alberta
Environment and Sustainable Resources Development ("ESRD") that the
department has completed its review of Athabasca's silica sand surface
material lease application at the Firebag Project. The notice confirms
that ESRD has, in principle, completed its review of the lease boundary
that is approximately 80 acres in size, and forms a part of the larger
Firebag Project;
-- Athabasca previously submitted a technical memo documenting development
and reclamation.
-- On April 23, 2014 the Corporation submitted a Conservation and
Reclamation Business Plan ("CRBP") to ESRD for their review before
receiving final approval. The CRBP is a normal course requirement of the
approval process;
-- The Corporation is currently in discussion with a major engineering firm
being considered to perform a preliminary economic assessment of the
Firebag Project in order to confirm the economic potential of the
Firebag deposit.
Athabasca has also been in discussion with a major railway company for
developing a future frac sand trans-loading facility, wet sand facility, drying
facility and storage terminal east of Fort McMurray, within a strategically
situated location. Management is preparing preliminary cost estimates and
examining alternatives for processing and trans-loading of products.
Next steps include progress towards the completion of a National Instrument
43-101 resource report for the Firebag Project.
The Firebag project consists of a silica sand deposit located 139 km north of
Fort McMurray and is accessible via Highway 63. The Corporation has completed
laboratory testing of silica sand from the Firebag project as previously
disclosed. Testing indicates the viability as a potential frac sand for use in
hydraulic fracking for the oil and gas industry.
Richardson Project (Granite and Dolomite)
Work continues on development of the Richardson Project.
-- Detailed core logging and sampling has recently been completed at
Athabasca's Edmonton facility;
-- Samples are next being sent to a major independent testing lab in
Calgary in order to verify the materials are suitable as aggregate for
use in concrete, asphalt and road base.
These 2014 drill holes coupled with additional drilling from the same area in
2013 will provide the information necessary to complete a National Instrument
43-101 (NI 43-101) resource estimate for the Richardson granite and dolomite in
fiscal 2014. Following completion of the NI 43-101 report, the Corporation
intends to apply for a mineral lease on a portion of the Richardson Project
currently held by Athabasca under mineral permits; and subsequently, the
submission of a development application to operate a hard rock quarry.
The complete financial statements for Athabasca for the three months ended
February 28, 2014 and Management's Discussion & Analysis for the same period are
available for viewing on the Corporation's website at www.athabascaminerals.com
and on SEDAR at www.sedar.com.
About Athabasca Minerals
The Corporation is a resource company involved in the management, exploration
and development of aggregate projects. These activities include contracts works,
aggregate pit management, aggregate production and sales from corporate-owned
pits, new aggregate development and acquisitions of sand and gravel operations.
The Corporation also has industrial mineral land holdings for the purpose of
locating and developing sources of industrial minerals and aggregates essential
to high growth economic development.
Neither the TSX Venture nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture) accepts responsibility for the
adequacy or accuracy of this release.
This news release contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially from those
anticipated by the Corporation. The forward-looking statements or information
contained in this news release are made as of the date hereof and the
Corporation does not undertake any obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
The securities of Athabasca have not been, nor will be, registered under the
United States Securities Act of 1933, as amended, and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
absent U.S. registration or an applicable exemption from U.S. registration
requirements. This release does not constitute an offer for sale of securities
in the United States.
FOR FURTHER INFORMATION PLEASE CONTACT:
Athabasca Minerals Inc.
Dean Stuart
403-517-2270
dean@boardmarker.net
www.athabascaminerals.com
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