Interim Results for the First Quarter ended March 31, 2000 |
05/18/2000 |
|
Download this Press Release
|
Summary of Financial Results
For the three months ended March 31, 2000 Tahera Corporation ('Tahera') recorded a loss of $896,000 or $0.005 per share compared to a loss of $607,000 or $0.005 per share for the first quarter of 1999. Operating expenses for the first quarter of 2000 were $853,000 compared to $683,000 in the comparable period in 1999. Financing and debenture interest costs were the principal reasons for the increase in costs in 2000. As the secured convertible debentures were issued in the third quarter of 1999, there were no comparable costs in the first quarter of 1999.
Liquidity and Capital Resources
On April 25, 2000 Tahera announced that it had entered into arrangements with an institutional investor under which the investor has loaned Cdn$1,000,000 to Tahera to be used for general corporate and working capital purposes. Tahera intends to repay the loan out of the proceeds of a planned rights issue which the Company proposes to undertake in the near future.
Jericho Diamond Project
Facilities Use Agreement With Echo Bay Mines Ltd.
Echo Bay Mines Ltd. and Tahera Corporation signed a Facilities Use Agreement on October 1, 1996. This agreement provides that, at the election of Tahera, Echo Bay's Lupin Mine Site and facilities will be available to Tahera for the purposes of the construction and operation of a long-term commercial production facility, in consideration for which Echo Bay will receive an up- front fee based on the capital cost of the production facility and an annual fee based on the annual operating costs of the
facility.
The Nunavut Impact Review Board, the Nunavut Water Board and other regulatory bodies provided initial conformity comments on Tahera's draft Environmental Impact Statement (EIS) filed in February 2000, whereafter the Department of Indian Affairs and Northern Development (DIAND) invited Tahera and Echo Bay to submit land use applications in respect of the Jericho Mine and Lupin based processing facility. Tahera provided formal notification to Echo Bay under the Facilities Use Agreement of Tahera's
intention to use the Lupin Site and requested that Echo Bay make formal application to DIAND for DIAND's consent to Tahera's use of the Lupin Site.
Echo Bay provided a response which Tahera considers to be equivocal and unsatisfactory. Faced with this uncertainty concerning Echo Bay's position, Tahera has decided to proceed with the Jericho Project on the basis that the production facility will be located at Carat Lake adjacent to the Jericho kimberlite.
Fortunately, the Facilities Use Agreement with Echo Bay required that Tahera prepare trade-off studies during the Jericho Project conceptual and pre- feasibility study process. The trade-off studies examined the Lupin and the Jericho stand-alone options. For this reason, the engineering and environmental studies for the Jericho stand-alone concept are well advanced. Tahera will now focus on the Jericho stand-alone option, and it is expected that the final Jericho Project feasibility study will only be
delayed by a matter of weeks. A revised EIS will also have to be submitted and it is hoped that this may be completed during the third quarter with a resultant delay in permitting. Tahera is still hopeful that the permitting process will be completed during 2000.
Tahera is still assessing the cost implications of pursuing the Jericho stand-alone option. The prefeasibility study indicated that the capital costs will increase by approximately $4,500,000. Operating costs may decrease due to the elimination of the ore transport costs from the Jericho pit to the Lupin Mine Site, located approximately 28 kilometers south.
TAHERA CORPORATION
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2000 1999
ASSETS
Current Assets:
Cash and short-term deposits $ 25,889 $ 1,133,671
Accounts receivable 84,552 157,270
Prepaid expenses 127,756 115,761
238,197 1,406,702
Exploration and Development Projects 57,839,483 56,680,328
Plant and Equipment 1,553,643 1,663,944
Deferred Financing Costs 645,458 682,696
Investments 17,952 17,952
$ 60,294,733 $ 60,451,622
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 2,824,746 $ 2,690,224
Debenture interest payable 69,459 109,259
2,894,205 2,799,483
Secured convertible debentures 3,417,000 3,417,000
6,311,205 6,216,483
SHAREHOLDERS' EQUITY
Share Capital
Common shares 63,182,057 62,537,425
Preferred shares 30,343 30,668
Equity component of secured
convertible debentures 265,360 265,360
63,477,760 62,833,453
Deficit (9,494,232) (8,598,314)
53,983,528 54,235,139
$ 60,294,733 $ 60,451,622
TAHERA CORPORATION
Consolidated Statements of Loss and Deficit
(Unaudited)
Three Months Ended
March 31, March 31,
2000 1999
Revenue
Interest $ 10,623 $ 92,019
Contract processing - 24,000
10,623 116,019
Expenses
Salaries & benefits 220,236 219,288
Office & general 133,757 75,165
Depreciation 114,042 104,226
Debenture interest and financing costs 106,696 -
Travel 86,506 64,659
Legal and audit 59,141 87,515
Financing costs 37,172 -
Directors' fees & expenses 31,843 61,876
Capital tax 28,650 11,000
Consulting 19,057 8,585
Transfer agent and listing fees 10,933 50,622
Interest on short term borrowings 4,508 332
852,541 683,268
Loss for the quarter before income taxes (841,918) (567,249)
Provision for income taxes (54,000) (40,000)
Loss for the period (895,918) (607,249)
Deficit - Beginning of period (8,598,314) (36,489,469)
Capital Reduction - 35,185,943
Assigned value of expired warrants - 45,000
Deficit - End of period $ (9,494,232) $ (1,865,775)
Loss per share $ (0.005) $ (0.005)
TAHERA CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, March 31,
2000 1999
Cash flows from (used in) operating activities:
Loss for the period $ (895,918) $ (607,249)
Items not affecting cash -
Depreciation and amortization 114,042 104,226
Debt principle accretion & financing costs amortization 37,238 -
(744,638) (503,023)
Changes in non-cash working capital items
Accounts receivable 111,112 46,017
Prepaid expenses (11,995) (260,140)
Accounts payable and accrued liabilities 204,994 (780,268)
(440,527) (1,497,414)
Cash flows from (used in) investing activities:
Exploration and development projects (1,137,659) (875,072)
Plant and equipment (33,271) (44,102)
Deferred amalgamation costs - (20,676)
Cash acquired on purchase of New
Indigo Resources Inc. - 13,992
(1,170,930) (925,858)
Cash flows from (used in) financing activities:
Issue of common shares for cash 504,000 -
Redemption of preferred shares (325) -
Due to or from related parties - (516,877)
503,675 (516,877)
Net (Decrease) in Cash (1,107,782) (2,940,149)
Cash - Beginning of Period 1,133,671 3,691,122
Cash - End of Period $ 25,889 $ 750,973
TAHERA CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
Supplemental Disclosure of Non-Cash Investing and Financing Activities
(a) During the quarter ended March 31, 2000:
(i) 761,626 common shares were issued at a price of $0.12 per share for payment of interest on the convertible debentures of $2,817,000 and 136,874 common shares were issued at a price of $0.12 per share for payment of interest on the secured debentures of $600,000. In both cases, the share price was determined in accordance with an agreement between the holder of the debentures and Tahera Corporation which states that the share price is to be based on the aggregate sale price of all
Tahera shares sold or traded during the 20 consecutive trading days ending on the fifth trading day before December 31, 1999 divided by the total number of shares sold or traded during the same period.
(ii) 500,000 common shares were issued at a price of $0.06 per share for payment of H.Miller's 1999 bonus which was payable under the terms of the employment contract between H.Miller and Tahera Corporation. The share price was determined in accordance with the contract, which states that the share price is to be based on the arithmetic average of the closing prices of the Company's shares for the twenty trading days prior to December 1, 1999.
(b) During the quarter ended March 31, 1999:
(i) 5,000,000 common shares were issued at a price of $0.15 per share for the settlement of a liability to the Fern Trust in the amount of $750,000. The share price was based on the market price of the Company's shares at the time the Company agreed to the terms of the settlement.
(ii) The assigned value of $45,000 relating to share purchase warrants that expired during the period was allocated to the deficit.
(iii) 37,154,193 common shares were issued (with a further commitment to issue 1,467,542 common shares) on the business combination with New Indigo Resources Inc..
CONTACT: TEL: (416) 777-1998 Grant Ewing, Vice President Investor Relations
FAX: (416) 777-1898 and Corporate Development
Email: investor@tahera.com
Internet: www.tahera.com
|
|
|