TORONTO, ONTARIO, May 17, 2010 (Marketwire) -- CROWFLIGHT MINERALS INC. ("Crowflight" or the "Company") (TSX:CML) today announces its financial results for the first quarter of 2010.
Complete interim financial statements and related Management's Discussion and Analysis will be filed under the Company's profile on www.sedar.com. All amounts are in Canadian dollars unless otherwise indicated.
Q1 2010 Financial and Operational Highlights
-- The Bucko Lake Nickel Mine ("Bucko") located in the Thompson Nickel Belt
near Wabowden, Manitoba resumed milling operations and shipments of
nickel concentrate during the first quarter of 2010. This marks the
first shipments of nickel concentrate since milling operations resumed
at the Bucko Mine earlier this year.-- For the quarter ended March 31, 2010, there were 141,970 pounds of
nickel produced, and 117,600 pounds of commercial production nickel sold
as compared to 138,956 pounds of nickel produced and 65,498 of pre-
production nickel sold in the first quarter of last year when the mine
was not yet in production.
-- Total metal revenue for the quarter ended March 31, 2010 was $1.2
million compared to nil for the first quarter last year.
-- Operating cash flow for the quarter ended March 31, 2010 was negative
$8,944,040 compared to operating cash flow of $8,491,474 in the first
quarter last year.
-- Loss for the quarter ended March 31, 2010 was $6.2 million or ($0.01)
per share compared to net income of $1.5 million or $0.01 per share in
the first quarter last year (due to a gain on derivative instruments in
the first quarter of 2009).
-- Commercial nickel sales settled during the quarter ended March 31, 2010
were realized at an average price of US$9.77 per pound compared with
pre-production nickel sales in the first quarter of 2009 which were
realized at an average price of US$4.46 per pound.
-- Net working capital as at March 31, 2010 was $4.0 million (including
cash and cash equivalents of $9.2 million) compared to $3.2 million as
at December 31, 2009.
2010 Quarterly Bucko Mine Operations Production and Financial Data----------------------------------------------------------------------------
Q1-2010
----------------------------------------------------------------------------
Operating Statistics:
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Tonnes ore mined 11,177
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Average Nickel head grade (%Ni) 1.02%
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Tonnes ore milled 9,431
----------------------------------------------------------------------------
Average Recovery 66.94%
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Nickel pounds:
----------------------------------------------------------------------------
Produced 141,970
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Payable sold(1) 117,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
Commercial Production Metal Sales Revenue:
----------------------------------------------------------------------------
Average Ni price (US$/lb) $ 9.77
----------------------------------------------------------------------------
CAD/US exchange rate $ 1.04
----------------------------------------------------------------------------
Nickel revenue 893,266
----------------------------------------------------------------------------
Pricing adjustments(3) 304,756
----------------------------------------------------------------------------
Total metal revenue 1,198,022
----------------------------------------------------------------------------
Cost of sales(2) 3,867,822
----------------------------------------------------------------------------
Temporary shutdown costs 4,480,891
----------------------------------------------------------------------------
Depreciation, depletion, and amortization 36,432
----------------------------------------------------------------------------
Gross profit (7,187,123)
----------------------------------------------------------------------------
Net earnings (loss) before tax (8,935,360)
----------------------------------------------------------------------------
Basic and diluted earnings (loss per share) $ (0.01)
----------------------------------------------------------------------------
Cash flow from operating activities (8,944,040)
----------------------------------------------------------------------------
USD Cash Cost of sales per pound sold(1,4) $ 31.53
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(1) Includes settlement of prior quarter sales
(2) Other metal revenue is recorded as an offset to cost of sales in the
Company's financial statements
(3) Pricing adjustments reflect final pricing/volume adjustments on lots
sold in prior quarters
(4) Non-GAAP Measure - see "Non-GAAP Measures" section-- On January 27, 2010, the Company received a non-binding expression of
interest from Pala regarding the direct or indirect acquisition of the
Bucko Deposit and certain surrounding exploration areas held by the
Company in the Thompson Nickel Belt, including the M11A and Apex
deposits, collectively the "Bucko Assets". Subsequent to the quarter's
end, discussions with Pala were terminated. Please see press releases
dated January 27 and 28, 2010 and May 10, 2010.-- On February 19, 2010, the Company announced it had closed a private
placement financing by issuing an aggregate of 72,200,000 common shares
of the Company at a price of $0.16 per share for gross proceeds of
$11,552,000. Pala purchased 21,356,250 of the 72,200,000 common shares
resulting in it holding approximately 25.3% of the issued and
outstanding shares of the Company (based on Pala's public disclosure of
its security holdings).-- On February 4, 2010 and March 4, 2010, Crowflight reported assay results
from a program of drilling at the Company's M11A North deposit, located
5 kilometres from the Bucko mine site. Drilling results from this
program are to be used to update resource calculations later this year.
Exploration expenditures made in 2009 entitle Crowflight to vest its
initial 35% interest in the combined land package in the Thompson Nickel
Belt as per the terms of its option agreement with Xstrata.-- On March 23, 2010, the Company announced the appointment of Steve
Davies, P.Eng. as Chief Operating Officer of Company.-- Subsequent to the quarter's end, the Company received an offer from
Jinchuan Group Ltd. ("Jinchuan") to acquire all of the common shares of
Crowflight in consideration for an aggregate cash payment of
$150,000,000. Based on the current number of Crowflight common shares
outstanding, this Offer equates to approximately $0.26 per common share.
The Offer represents a premium of 47.3% to the closing price on the
Toronto Stock Exchange for the Company's common shares on April 2, 2010
and a premium of 56.8% to the 20 day volume weighted average trading
price. On a partially diluted basis, taking into account the outstanding
convertible securities of the Company that have an exercise price of
equal to or less than $0.22, the Offer equates to approximately $0.22
per share. On this basis, the Offer represents a premium of 27.0% to the
closing price on the Toronto Stock Exchange for the Company's common
shares on April 2, 2010 and a premium of 35.1% to the 20 day volume
weighted average price. Please see press release dated April 6, 2010.-- Subsequent to the quarter's end, the Company announced the resignation
of Greg Collins, Vice President of Exploration for Crowflight, effective
April 30th.-- Subsequent to the quarter's end, the Company entered into a series of
financial instruments to price protect nickel sales from July 2010 -
June 2011. The Company has hedged approximately 850,000 pounds of nickel
at prices ranging from US$9.00 - $11.00 per pound of nickel.-- Subsequent to the quarter's end, the TSX announced that it had completed
its review of the listing of the common shares of the Company and
determined that Crowflight meets TSX's continued listing requirements.
Outlook
Crowflight does not expect to meet its 2010 guidance as previously disclosed in February 2010 (please see press release dated February 24, 2010). The Company is currently reviewing its 2010 production plan and costs for the remainder of this year, and expects to give updated guidance later this year.
Non-GAAP Measures
This press release refers to net working capital and cash cost per pound, which are not recognized measures under Canadian GAAP. These non-GAAP performance measures do not have any standardized meaning prescribed by Canadian GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Management uses these measures internally. The use of these measures enables management to better assess performance trends. Management understands that a number of investors and others who follow the Company's performance assess performance in this way. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP.
Qualified Person/Quality Control Procedures
This press release has been prepared and reviewed by Steve Davies, P.Eng, Chief Operating Officer of Crowflight, who is a Qualified Person under the National Instrument 43-101 guidelines.
About Crowflight Minerals
Crowflight Minerals Inc. (TSX:CML) is a Canadian junior mining company that owns the Bucko Lake Nickel Mine near Wabowden, Manitoba that recently resumed production. The Company also holds nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.
Cautionary Note on Forward-Looking Information
This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the Company's development potential and timetable of the Company's properties, including the Bucko Lake Project; the future price of nickel and other minerals; foreign exchange rates; the estimation of mineral reserves and mineral resources; conclusions of economic evaluations; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Bucko Lake Project are based on assumptions underlying mineral reserve and mineral resource estimates and the probability of realizing such estimates that are set out herein. Capital and operating cost estimates are based on extensive research of the Company, purchase orders placed by the Company to date, recent estimates of construction and mining costs and other factors that are set out herein. Production estimates are based on mine plans and production schedules, which have been developed by the Company's personnel and independent consultants. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events and delays during construction, expansion and start-up; variations in mineral grade and recovery rates; receipt and revocation of government approvals; timing and availability of external financing on acceptable terms; actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of minerals, particularly nickel; failure of plant, equipment or processes to operate as anticipated; reliance on joint venture partners; accidents, labour disputes and other risks of the mining industry and those other risks of the Company described in its annual information form that is available under its profile on SEDAR at www.sedar.com. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause 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 differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
Further information is available on the Company's website at www.crowflight.com.
CONSOLIDATED BALANCE SHEETS
(unaudited)
As at
----------------------------------------------------------------------------
March 31, December 31,
2010 2009
ASSETS
Current
Cash and cash equivalents $ 9,176,773 $ 10,040,475
Amounts receivable 828,895 1,291,687
Inventory 1,976,731 1,031,734
Prepaid expenses and deposits 345,515 135,290
----------------------------------------------------------------------------12,327,914 12,499,186
Deposits and advances 534,709 534,709
Property, plant and equipment 140,600,300 138,568,967
Exploration and development property and
deferred expenditures 14,978,545 14,704,437
----------------------------------------------------------------------------$ 168,441,468 $ 166,307,299
----------------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ 8,244,136 $ 9,282,060
Equipment leases 46,422 45,371
----------------------------------------------------------------------------
8,290,558 9,327,431Equipment leases 49,115 61,281
Asset retirement obligations 938,213 918,387
Future income tax liability 3,246,000 6,000,200
----------------------------------------------------------------------------
12,523,886 16,307,299
----------------------------------------------------------------------------SHAREHOLDERS' EQUITY
Common shares 150,240,172 138,758,903
Warrants 10,195,919 10,195,919
Contributed surplus 16,353,704 15,698,606
Retained Earnings (20,872,213) (14,653,428)
----------------------------------------------------------------------------155,917,582 150,000,000
----------------------------------------------------------------------------$ 168,441,468 $ 166,307,299
----------------------------------------------------------------------------
These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com and
on the Company's website at www.crowflight.com.
Consolidated Statements of Shareholders' Equity
(unaudited)
Common Shares Warrants
----------------------------------------------------------------------------
No. $ $
----------------------------------------------Balance, December 31, 2008 293,304,323 99,289,864 4,944,374
Private placement 215,411,765 47,820,000 -
Value of warrants granted - (4,842,336) 4,842,336
Value of warrants granted - - 107,597
related to debt facility
Exercise of stock options 245,000 49,000 -
Valuation allocation on - 18,586 -
exercise of stock options
Stock based compensation - 562,464 113,130 -
shares
Stock based compensation - - - -
options
Flow through share tax - (2,982,000) -
effect
Value of broker warrants - (301,612) 301,612
Share issue costs - (523,400)
Tax effect of cost of issue - 117,671 -
Loss for the period - -
----------------------------------------------------------------------------Balance, December 31, 2009 509,523,552 138,758,903 10,195,919
Private placement 72,200,000 11,552,000 -
Stock based compensation - 97,909 16,644 -
shares
Stock based compensation - - - -
options
Share issue costs - (125,000) -
Tax effect of cost of issue - 37,625 -
Loss for the period - - -
----------------------------------------------------------------------------Balance, March 31,
2010 581,821,461 150,240,172 10,195,919----------------------------------------------------------------------------
These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com and
on the Company's website at www.crowflight.com.Consolidated Statements of Shareholders' Equity
(unaudited)
Contributed Accumulated Shareholders'
Surplus Deficit Equity
----------------------------------------------------------------------------
$ $ $
----------------------------------------------Balance, December 31, 2008 13,485,751 12,327,459 130,047,448
Private placement - - 47,820,000
Value of warrants granted - - -
Value of warrants granted - - 107,597
related to debt facility
Exercise of stock options - - 49,000
Valuation allocation on (18,586) - -
exercise of stock options
Stock based compensation - - - 113,130
shares
Stock based compensation - 2,231,441 - 2,231,441
options
Flow through share tax - (2,982,000)
effect
Value of broker warrants - - -
Share issue costs (523,400)
Tax effect of cost of issue - - 117,671
Loss for the period - (26,980,887) (26,980,887)
----------------------------------------------------------------------------Balance, December 31, 2009 15,698,606 (14,653,428) 150,000,000
Private placement - - 11,552,000
Stock based compensation - - - 16,644
shares
Stock based compensation - 655,098 - 655,098
options
Share issue costs - - (125,000)
Tax effect of cost of issue - - 37,625
Loss for the period - (6,218,785) (6,218,785)
----------------------------------------------------------------------------Balance, March 31,
2010 16,353,704 (20,872,213) 155,917,582----------------------------------------------------------------------------
These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com and
on the Company's website at www.crowflight.com.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(unaudited)
For the three months ended March 31,----------------------------------------------------------------------------
2010 2009
----------------------------------------------------------------------------Revenue
Nickel sales $ 893,266 $ -
Pricing adjustments 304,756 $ -
----------------------------------------------------------------------------
Revenue - after pricing adjustments 1,198,022 $ -Cost of sales (excludes accretion, 3,867,822 -
depreciation, depletion and amortization)
Depreciation, depletion and amortization 36,432 -
----------------------------------------------------------------------------
Gross margin - mining operations (2,706,232) -Temporary shutdown costs 4,480,891 -
----------------------------------------------------------------------------
Loss from mining operations (7,187,123) -Other expenses
Professional, consulting and management fees 1,179,818 584,294
General and office 192,804 123,280
Shareholder communications and investor 134,919 86,106
relations
Travel 32,234 50,404
Interest expenses and bank charges 35,847 34,842
Amortization 201 953
----------------------------------------------------------------------------1,575,823 879,879
----------------------------------------------------------------------------(Loss) before the undernoted (8,762,946) (879,879)
Interest income 9,256 21,511
Interest on long term debt - (48,192)
General exploration - (50,000)
Write down of exploration property and deferred (51,771) -
expenditures
Accretion (19,826) 57,416
Recovery of expenditures - 66,958
Net gain on derivative instruments - 2,090,556
Foreign exchange gain/(loss) (110,073) (1,186)
----------------------------------------------------------------------------Income/(loss) before income taxes (8,935,360) 1,257,184
Future income taxes 2,716,575 266,000
----------------------------------------------------------------------------Income/(loss) for the period (6,218,785) 1,523,184
RETAINED EARNINGS/(DEFICIT), beginning of (14,653,428) 12,327,459
period
-----------------------------RETAINED EARNINGS/(DEFICIT), end of period $ (20,872,213) $ 13,850,643
-----------------------------
---------------------------------------------------------------------------------------------------------
Loss per share - basic & diluted $ (0.01) $ 0.01
Weighted average number of shares - basic 544,020,195 293,306,263
Weighted average number of shares - diluted 544,020,195 293,311,875----------------------------------------------------------------------------
These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com and
on the Company's website at www.crowflight.com.
CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
For the three months ended March 31,
----------------------------------------------------------------------------
2010 2009
----------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income/(loss) for the period $ (6,218,785) $ 1,523,184
Charges not affecting cash:
Depreciation, depletion and amortization 36,633 953
Stock-based compensation expense 671,742 365,547
Accretion 19,826 (57,416)
Change in value of derivative instruments - 8,044,169
Future income tax (recovery)/expense (2,716,575) (266,000)
Net change in non-cash working capital (736,881) (1,118,963)
----------------------------------------------------------------------------
(8,944,040) 8,491,474
----------------------------------------------------------------------------FINANCING ACTIVITIES:
Debt facility, net of transaction costs - (7,600,000)
Private placements (net of issue costs) 11,427,000 -
Payments on equipment leases (11,115) (16,765)
----------------------------------------------------------------------------11,415,885 (7,616,765)
----------------------------------------------------------------------------INVESTING ACTIVITIES:
Exploration and development property, plant and (2,342,074) (11,144,143)
equipment, and deferred expenditures
(Decrease) in accounts payable attributable to (993,473) (1,727,298)
property development and exploration
Change in restricted cash. - 2,999,998
----------------------------------------------------------------------------(3,335,547) (9,871,443)
----------------------------------------------------------------------------CHANGE IN CASH AND CASH EQUIVALENTS (863,702) (8,996,734)
CASH AND CASH EQUIVALENTS, beginning of period 10,040,475 10,607,543
----------------------------------------------------------------------------CASH AND CASH EQUIVALENTS, end of period $ 9,176,773 $ 1,610,809
----------------------------------------------------------------------------
Cash and cash equivalents consist of:
Cash 2,441,273 801,384
Cash equivalents 6,735,500 809,425
----------------------------------------------------------------------------
$ 9,176,773 $ 1,610,809----------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION:
Stock based compensation charged to exploration - 14,250
properties
Amortization of assets deferred to exploration 604 8,229
properties
Interest received 9,256 22,191
Interest paid 30,372 50,551These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis,
available online at www.sedar.com and on the Company's website at
www.crowflight.com
