TORONTO, ONTARIO--(CCNMatthews - Aug. 7, 2007) - Nuinsco Resources Limited (TSX:NWI)(www.nuinsco.ca) today announced financial results for the three and six months ended June 30, 2007. During and subsequent to the period, the Company:
- Completed its earn-in, from Xstrata Copper, of a 100% interest in the Elmalaan copper-zinc-gold- silver property in northeastern Turkey.
- Intersected mineralization over significant widths at Elmalaan, including 2.43% zinc, 0.50g/t gold and 31.07g/t silver over 10.10 metres, with zinc values peaking at 9.25%, gold at 2.85g/t and silver at 211g/t.
- Raised gross proceeds of $6.0 million in an oversubscribed "bought deal" private placement.
- Highlighted the potential of the Berta property in Turkey by Intersecting 710.9 metres of 0.28% copper with grades up to 30.0% copper and 7.19% zinc.
- Began surface sampling over the entire Prairie Lake intrusion to follow up on initial sampling that returned uranium values up to 0.08% U308 (1.656 lb/tonne) and completed an initial 15-hole drill program at the 100%-owned Prairie Lake uranium property in northwestern Ontario.
- Completed its earn-in from Campbell Resources Inc. ("Campbell") of a 50% carried interest in the high-grade Corner Bay copper deposit near Chibougamau, Quebec which should generate significant cash to Nuinsco's account starting next year.
"Nuinsco's long-term strategy is to minimize equity dilution to shareholders going forward by creating an exploration company that is in large part self-financing," said CEO Rene Galipeau. "Our equity holdings in Victory Nickel and Campbell which can be monetized and cash flow from Corner Bay are a significant part of this strategy that will enable us to continue to aggressively explore our uranium and gold projects in Canada and our high-grade copper-zinc properties in Turkey."
Financial Performance
For the three months ended June 30, 2007, the Company had a net loss of $129,000, or $0.00 per share, compared with net income of $928,000, or $0.01 per share, in the same period of 2006. The net income in 2006 included a gain on the sale of marketable securities of $694,000. No such gain was realized in the current period.
The current three-month period results also include the Company's share of Victory Nickel Inc.'s ("Victory Nickel") loss for the three months ended June 30, 2007 in the amount of $100,000. The Company currently owns approximately 22% of the outstanding common shares of Victory Nickel. At June 30, 2007, this ownership interest had a quoted market value of $30,416,000.
At June 30, 2007, the Company had working capital of $14,317,000, including cash and cash equivalents and cash for exploration expenditures totaling $9,415,000. Given its current cash position, the Company is sufficiently financed to fund its anticipated future administration and exploration costs unless a decision is made to advance one or more of its projects to production.
Outlook
The Company is pleased with the progress it is making in advancing its projects in Canada and Turkey as well as with its strategy to accumulate interests in liquid assets and cash generating assets to finance exploration activity while minimizing dilution to shareholders. Programs planned and ongoing in the third quarter are as follows:
COPPER, ZINC
Elmalaan: With the completion of its 100% earn-in at Elmalaan, the Company is in the process of establishing a Turkish subsidiary to hold and operate the project going forward. Upon establishment of this company and the transfer of ownership from Xstrata Copper, Nuinsco will proceed with a drill program to follow up on the positive results from drilling to date.
Berta: At Berta, the Company is in discussions with joint venture partner Xstrata Copper concerning the drill program to follow up on the spectacularly mineralized hole SD-07-08 that intersected 710.9 metres grading 0.28% copper and 0.07 g/t gold between 3.80 metres and 714.7 metres. The intercept included: 6.85 metres grading 3.79% copper, 0.22 g/t gold, 11.6 g/t silver and 1.05% zinc; 5.90 metres grading 2.60% copper, 1.14 g/t gold and 8.3 g/t silver; and 9.0 metres grading 1.03% copper. Copper values peaked at 30% over 0.25 metres between 592.10 and 592.35 metres down hole. The Company anticipates establishing the follow-up program in the third quarter, with drilling to follow thereafter.
URANIUM
Diabase Peninsula: The Company is very positive about the prospects at the Diabase Peninsula uranium property. Past work has identified numerous indicators of uranium mineralizing processes on the property, and the 5,000 metre, $2.5 million drill program scheduled for September 2007 will follow up on these significant results.
Prairie Lake: The Company will assess the results of the initial 15-hole diamond drill program completed in the second quarter in conjunction with the results of the property-wide surface sampling program to determine the best strategy for continued evaluation of the Prairie Lake project. At present, a small portion of the Prairie Lake Property hosts a near-surface non-NI-43-101-compliant resource of over 180,000 tonnes grading 0.09% U308 and 0.25% niobium.
GOLD
Cameron Lake: Located near Kenora in northwestern Ontario, Cameron Lake hosts a NI 43-101-compliant measured and indicated gold resource of 572,000 tonnes grading 6.51 g/t and an inferred resource of 1,012,000 tonnes grading 5.22 g/t. Approximately $24 million was spent in the 1980s by a former partner of Nuinsco to develop the mine to the 865 foot level, and drilling has demonstrated that gold mineralization extends to greater than 700 metres. In 2006, the Company engaged Wardrop Engineering Inc. ("Wardrop") to obtain the permits required for the dewatering of the underground workings at Cameron Lake. The process to obtain the required permits is on hold pending clarification of the procedures to satisfy both the provincial government and the First Nations. The Company intends to proceed with securing the permits as it is able, and continues to evaluate other options to further the exploration of the Cameron Lake deposit at depth in the absence of dewatering permits.
About Nuinsco Resources
Nuinsco is a growth-oriented, multi-commodity mineral exploration and development company that is prepared for production and focused on growth through nickel, copper, zinc, uranium and gold exploration and development in world-class mineralized belts in Canada and Turkey. Shares of Nuinsco trade on the Toronto Stock Exchange under the symbol NWI.
The Prairie Lake resource estimate quoted herein is based on prior data and reports obtained and prepared by previous operators and the Company. The Company has not completed the work necessary to verify the classification of the mineral resource estimates. The Company is not treating the mineral resource estimates as NI 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. These properties require considerable further evaluation which Nuinsco's management and consultants intend to carry out in due course. FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking statements." All statements, other than statements of historical fact, that address activities, events or developments that Nuinsco believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can," "should," "could," or "might" occur or be achieved and other similar expressions. These forward-looking statements reflect the current expectations or beliefs of Nuinsco based on information currently available to Nuinsco. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of Nuinsco to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Nuinsco. Factors that could cause actual results or events to differ materially from current expectations include, among other things, failure to successfully complete financings, capital and other costs varying significantly from estimates, production rates varying from estimates, changes in world copper and/or gold markets, changes in equity markets, uncertainties relating to the availability and costs of financing needed in the future, equipment failure, unexpected geological conditions, imprecision in resource estimates, success of future development initiatives, competition, operating performance of facilities, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and approvals from government authorities, and other development and operating risks. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Nuinsco disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Nuinsco believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
NUINSCO RESOURCES LIMITED
CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
December
June 30, 2007 31, 2006
--------------
(unaudited)
ASSETS
Current
Cash and cash equivalents $ 3,855 $ 20,045
Cash for exploration expenditures 5,560 -
Due from Victory Nickel Inc. (Note 10) 259 -
Marketable securities (Notes 4 and 5) 5,011 2,976
Accounts receivable 381 105
Prepaid expenses and deposits 28 199
---------- ------------
Total Current Assets 15,094 23,325
Investment in Victory Nickel Inc. (Note 3) 4,239 -
Convertible Debenture of Campbell Resources Inc.
(Note 5) 2,000 -
Exploration Advances - 1,368
Exploration and Development Projects (Note 6) 5,621 8,483
Property and Equipment 134 61
Other Deferred Costs (Note 3) - 377
---------- ------------
$ 27,088 $ 33,614
---------- ------------
---------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Deferred revenue $ - $ 113
Accounts payable and accrued liabilities 777 1,318
Convertible notes - current portion (Note 7) - 200
---------- ------------
Total Current Liabilities 777 1,631
---------- ------------
Shareholders' Equity (Note 7)
Share capital 90,539 83,887
Stock option compensation 1,435 1,458
Share purchase warrants 163 348
Contributed surplus 1,234 1,233
Deficit (68,957) (54,943)
Accumulated other comprehensive income (Note 8) 1,897 -
---------- ------------
Net Shareholders' Equity 26,311 31,983
---------- ------------
$ 27,088 $ 33,614
---------- ------------
---------- ------------
Nature of Operations (Note 1)
Corporate Reorganization and Formation of Victory
Nickel Inc. (Note 3)
NUINSCO RESOURCES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(unaudited - in thousands of Canadian dollars, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
---- ---- ---- ----
Revenue and Other Income
Consulting fees (Note 3) $ 177 $ 175 $ 401 $ 175
Interest income 158 24 291 38
Gain on sale of
marketable securities - 694 - 1,747
Other - 2 - 5
-------------------------------------------------
335 895 692 1,965
-------------------------------------------------
Costs and Expenses
General and
administrative (Note 10) 338 747 826 1,147
Stock option compensation 12 - 41 -
Amortization 4 3 8 5
Writedown of exploration
and development projects
(Note 4) 10 - 19 -
-------------------------------------------------
364 750 894 1,152
-------------------------------------------------
(Loss) Income Before the
Undernoted (29) 145 (202) 813
Share of Loss of Equity
-Accounted Investee (100) - (358) -
-------------------------------------------------
(Loss) Income Before
Income Taxes (129) 145 (560) 813
Income Tax Recoveries
(Note 7) - (783) (337) (1,859)
(Loss) Net Income for the
Period (129) 928 (223) 2,672
Deficit, Beginning of the
Period (68,828) (55,412) (54,943) (57,156)
Distribution of Net Assets
on Formation of Victory
Nickel Inc. (Note 3) - - (13,791) -
-------------------------------------------------
Deficit, End of the
Period $ (68,957) $ (54,484)$ (68,957) $ (54,484)
-------------------------------------------------
-------------------------------------------------
Income (Loss) Per Share -
Basic and Diluted $ 0.00 $ 0.01 $ 0.00 $ 0.02
-------------------------------------------------
-------------------------------------------------
Weighted Average Common
Shares Outstanding 167,710,000 109,198,000 160,536,000 107,488,000
-------------------------------------------------
-------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited - in thousands of Canadian dollars)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
---- ---- ---- ----
(Loss) Net Income for the Period $ (129) $ 928 $ (223) $ 2,672
Other Comprehensive Income (Note 8) 150 - 1,086 -
---------------------------------------
Comprehensive Income for Period $ 21 $ 928 $ 863 $ 2,672
---------------------------------------
---------------------------------------
NUINSCO RESOURCES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands of Canadian dollars)
--------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------
Cash From (Used By) Operating
Activities 2007 2006 2007 2006
---- ---- ----- -----
Loss (net income) for period $ (129) $ 928 $ (223) $ 2,672
Items not affecting cash:
Expenses settled through
issuance of shares or
warrants - 294 - 294
Consulting fees received in
marketable securities (Note 3) (102) (125) (251) (125)
Stock option compensation 12 - 41 -
Other stock-based compensation 51 - 100 -
Gain on sale of marketable
securities - (694) - (1,747)
Amortization 4 3 8 5
Write-down of exploration and
development projects 10 - 19 -
Share of loss of
equity-accounted investee 100 - 358 -
Income tax recoveries - - (337) (1,076)
Changes in non-cash working
capital (Note 8) (624) 76 (377) (19)
-------- --------- -------- --------
Cash from (used by) operating
activities (678) 482 (662) 4
-------- --------- -------- --------
Financing Activities
Deferred share issue costs - (45) - (45)
Issue of common shares 6,128 1,395 6,441 1,395
-------- --------- -------- --------
Cash from financing activities 6,128 1,350 6,441 1,350
-------- --------- -------- --------
Investing Activities
Advances to Campbell Resources
Inc. (Note 5) - - (2,000) -
Sale of marketable securities - 756 - 1,959
Reimbursement of deferred
costs (Note 3) - - 377 -
Long-term receivables - 250 - 500
Additions to exploration and
development projects (780) (1,066) (2,037) (1,883)
Additions to equipment (60) - (81) (6)
-------- --------- -------- --------
Cash from (used by)
investing activities (840) (60) (3,741) 570
-------- --------- -------- --------
Cash Distributed on Formation
of Victory Nickel Inc.
(Note 3) - - (12,668) -
-------- --------- -------- --------
Net Increase (Decrease) in
Cash During Period 4,610 1,772 (10,630) 1,924
Cash and Cash Equivalents,
Beginning of Period 4,805 2,802 20,045 2,650
-------- --------- -------- --------
Cash and Cash Equivalents,
End of Period $ 9,415 $ 4,574 $ 9,415 $ 4,574
-------- --------- -------- --------
-------- --------- -------- --------
Cash and Cash Equivalents,
End of Period
Cash and Cash Equivalents $ 3,855 $ 2,452 $ 3,855 $ 2,452
Cash for Exploration
Expenditures 5,560 2,122 5,560 2,122
-------- --------- -------- --------
$ 9,415 $ 4,574 $ 9,415 $ 4,574
-------- --------- -------- --------
-------- --------- -------- --------
FOR FURTHER INFORMATION PLEASE CONTACT:
Nuinsco Resources Limited
Bob Wardell
(416) 626-0470
Email: admin@nuinsco.ca
Website: www.nuinsco.ca
