VANCOUVER, BRITISH COLUMBIA, Jun. 2, 2010 (Marketwire) -- Majestic Gold Corp. (TSX VENTURE:MJS) ("Majestic") is pleased to announce its financial and operating results for the second quarter ended March 31, 2010.
Majestic generated gold revenue of $1,730,392 derived from the sale of 1,531.8oz Au, and incurred a total operating cost of $1,467,325 and no additional exploration cost. Majestic reported a net loss of $502,128, and the operating loss for the period was negligible, at $24,480. The main adjustments leading to the second quarter net loss were: non-controlling interest expense of $111,274, loss on foreign exchange of $131,045, and interest and financing cost of $170,036.
On a consolidated basis, Majestic's financial position has significantly improved when compared to the same period in 2009. As a result of the sale of its Sawayaerdun Project, Majestic reported working capital of $3,037,399 for its second quarter, compared to a working capital deficit of $4,882,075 for the corresponding period in 2009. As soon as practical, management intends to use the funds due from the sale of the Sawayaerdun project to repay its outstanding loan and to further develop the Song Jiagou Mine.
Subsequent to recommencing mining operations at Dahedong Smelter mills at their designed capacity of 1,400 tpd, Majestic signed an agreement to acquire the remaining 40% of Yantsai Zhongia Mining Enterprise ("JVCo"). Majestic is currently fast tracking operation at the Song Jiagou Mine through expansion of milling capacity, improving infrastructure, and developing pit models, mine plans and pre-feasibility studies based on its recently announced revised resource estimate, which will be used to initially expand production to 5,000 tpd.
Rod Husband, P.Geo, and President, stated, "We are extremely pleased with the results of the second quarter and we look forward to becoming a positive cash flow company in the near future. Our immediate focus is on improving efficiency at the mine, repaying our outstanding loan (which will significantly reduce our expenses), and closing of the acquisition of the outstanding 40% interest at Song Jiagou."
On Behalf of the Board of Directors
MAJESTIC GOLD CORP.
Rod Husband, P.Geo, President
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
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