Interim Results For The First Quarter Ended March 31, 1999 |
05/12/1999 |
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Amalgamation to Create Tahera Corporation
On February 5, 1999 shareholders of Lytton Minerals Limited ("Lytton") and New Indigo Resources Inc. approved the amalgamation of the two companies to create Tahera Corporation ("Tahera"). Following court and regulatory approvals, the amalgamation became effective on February 28, 1999 and Tahera Corporation began trading on the Toronto Stock Exchange under the symbol "TAH" on March 2, 1999. The amalgamation consolidated the ownership of the Jericho Diamond Project under one corporate entity, and created a company with greater access to capital markets and improved liquidity for its shareholders.
Summary of Financial Results
For the three months ended March 31, 1999 Tahera recorded a loss of $607,000, or $0.005 per share. As the amalgamation has been accounted for as a purchase transaction, Tahera's loss in the first quarter of 1999 is compared to Lytton's loss for the first quarter of 1998 which was $371,000, or $0.003 per share. Operating expenses for the first quarter of 1999 were $683,000, compared to $834,000 in 1998. Higher depreciation costs were recorded in 1999 as Tahera purchased the North Vancouver laboratory facilities in February, 1998. Increased salaries and directors' fees and expenses, resulting from additional staff and increased directors' meetings, were offset by savings in travel and general office expenses.
In the three month period ended March 31, 1999, Tahera reduced the amount of its deficit by $35,186,000, and applied that amount against its stated capital. This reduction was approved by the shareholders at a special meeting held on February 5, 1999.
Jericho Diamond Project
The Jericho Diamond Project, located in the north central region of the Slave Structural Province of Nunavut, approximately 420 km northeast of Yellowknife, NWT, and 170 km northeast of Ekati, Canada's first diamond mine, is wholly owned by Tahera Corporation. The Jericho Project encompasses approximately 275,000 hectares (680,000 acres) that is subdivided into three main properties: the Jericho Group, the Contwoyto Group, and the Burnside Group.
Jericho Group:
During Tahera's 1999 winter/spring exploration program, currently underway, kimberlite targets that lie in close proximity to the Jericho kimberlites have been drill tested. The targets were prioritized following a program of prospecting and geological mapping, kimberlite mineral indicator train analysis and various geophysical surveys. The program will be complete by the middle of May 1999.
Contwoyto Group:
During the first quarter of 1999, 1890 meters of delineation core drilling were completed on the Contwoyto-1 kimberlite. The kimberlite was probed to a maximum depth of 220 meters and remains open at depth. The drilling confirmed that the pipe is pear shaped and has horizontal dimensions of approximately 60 by 80+ meters. The diamond drill core from the program is currently being processed for micro-diamond analysis. When complete, a decision to proceed with a 100 tonne mini-bulk sample will be made. The 100 tonne test-sample will allow Tahera to make a preliminary grade estimate for the Contwoyto-1 pipe, which may lead to a large bulk sample for diamond valuation purposes later in the year. During the current exploration program, three additional kimberlite targets in the immediate Contwoyto-1 area were tested.
Feasibility Study Initiated on the Jericho Diamond Project
Tahera Corporation has initiated a feasibility study on the Jericho Diamond Project. The feasibility study will consider the economics of constructing a modest sized open-pit diamond mining operation based on the land-based Jericho kimberlite pipe.
Tahera plans to file a formal project proposal for the Jericho Diamond Project with the relevant authorities in May. This filing will mark the formal commencement of the environmental assessment and regulatory approval process for the proposed Jericho Diamond mine.
Tahera Exploration
In conjunction with the development plans, Tahera will continue to focus its exploration efforts on areas in close proximity to the existing kimberlite occurrences. Current plans call for a summer program of geological mapping, prospecting, additional till sampling and geophysics to commence in early June 1999.
Strategic Alliances
Kennecott Canada Exploration Inc. ("Kennecott") is in the third year of a joint venture agreement with Tahera that entitles it to earn a 50% interest in three extensive properties encompassing approximately 770,000 hectares (1.9 million acres) in Nunavut and the Northwest Territories. Kennecott can earn a 50% interest in the Ice Claims, Rocking Horse Properties and the Hood River Properties by making expenditures of $50 million by 2008, of which approximately $12 million has been spent to date.
Kennecott has carried out an exploration drilling program on the Hood River and Rocking Horse Properties, and the Ice Claims during the first quarter of 1999. Two new kimberlites were discovered during the current exploration program (Vega kimberlite - Ice Claims and Altair kimberlite - Rocking Horse Property), bringing the total to seven kimberlites discovered on the properties. Drill core from the discovery hole of each kimberlite has been sent to Kennecott's laboratory for caustic fusion analysis. The current exploration program will continue until the end of May 1999.
Corporate Matters
On March 8, 1999 one of Tahera's predecessor companies (Lytton) issued five million shares to the Fern Trust at a price of $0.15 per share in respect of the costs for an oppression action that was settled by way of an agreement dated November 16, 1998. In addition, costs totaling $163,414 relating to a dissident proxy solicitation undertaken by the Fern Trust and Howard Miller were paid following shareholder approval on February 5,1999. All litigation relating to the oppression action has been settled.
On May 7, 1999 Tahera announced a private placement of up to 10 million flow through or common shares at $0.20 per share for gross proceeds of $2 million. As a placement fee, 500,000 warrants, exercisable for an equal number of common shares until May 3, 2001 at $0.23 per share, were granted.
The Toronto Stock Exchange neither approves nor disapproves of the information contained herein.
For further information, please contact:
Grant Ewing
VP Investor Relations and Corporate Development
Email: investor@tahera.com
Web site www.tahera.com
Tel: (416) 777-1998
Fax: (416) 777-1898
Toll Free: (877) 777-2004
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