TORONTO, Aug. 21 /CNW/ -
Gutnick Financing
On July 31, 2000, Tahera Corporation finalized a private placementfinancing with Edensor Nominees Limited ('Edensor'), a trustee for the JosephGutnick Family Trust. The issuance of all of the Common Shares related to thefinancing will result in proceeds of $13,000,000. Upon the exercise of theSeries A Warrants issued in connection with the financing, total proceeds willexceed $20,000,000.
Joseph Gutnick is one of Australia's leading mining entrepreneurs. He iscurrently Chairman and Managing Director of eight publicly listed companies.Mr. Gutnick headed the team that was responsible for the discovery anddevelopment of several successful world-class mines in Australia, namely theBronzewing and Jundee gold mines, and the Cawse Nickel Operations.
Tahera will use the proceeds of the financing to fund ongoing explorationactivities over its highly prospective landholdings in Nunavut, to develop itswholly owned Jericho Diamond Project and for general corporate purposes.
Special Shareholders Meeting
A Special Shareholders' meeting will be convened on September 27, 2000for the purpose of approving, among other business, the issuance of theCorporation's Common Shares and Series A Warrants to Edensor in connectionwith the private placement.
Jericho Diamond Project - 50% IRR
The feasibility study completed in June 2000 indicates that the JerichoDiamond Project (the 'Project') is technically and economically robust withpotential production in excess of 3,000,000 carats over 8 years. Based on theresults of a WWW International Diamond Consultants Limited study of theJericho diamonds, the pre-tax internal rate of return for the Project is 50%.Current plans call for receipt of regulatory approvals for the Project during2001 with commercial production commencing in 2003.
Summer Exploration Program Mobilized
As a result of the recent financing, Tahera is well positioned to funddiamond exploration programs over its extensive landholdings. Tahera's summerexploration program, mobilized in early August, will focus on the immediatearea surrounding the Jericho kimberlite. Numerous kimberlite indicator mineraltrains and coincident geophysical anomalies that have been identified in theregion are currently being followed up. Prospective kimberlite drill targetswill be outlined for a drilling program that is scheduled to commence duringthe winter. Any future economic kimberlite discoveries on Tahera'slandholdings in the vicinity of the Jericho diamond pipe will significantlyincrease the upside potential of the Jericho Diamond Project.
Summary of Financial Results
For the three months ended June 30, 2000 Tahera recorded a loss of$1,027,000 or $0.006 per share compared to a loss of $759,000 or $0.005 pershare for the second quarter of 1999. Operating expenses for the secondquarter of 2000 were $997,000 compared to $971,000 for the comparable periodof 1999.
Management Appointments
Tahera is pleased to announce the appointment of Mr. Greg Missal as VicePresident, Nunavut Affairs. Mr. Missal has several years of work experience inNunavut and the Northwest Territories overseeing the Company's land managementand regulatory matters. Mr. Missal will be instrumental in facilitatingTahera's permitting efforts as the Company develops its wholly owned JerichoDiamond Project.
Tahera is also pleased to announce the appointment of Mr. Martin St.Pierre as Manager, Exploration. Mr. St. Pierre has extensive diamondexploration experience in Canada and internationally. He was involved in thediscovery of numerous kimberlites in the Northwest Territories while employedwith BHP Diamonds Inc., and he has consulted for other Canadian andinternational mining companies. Mr. St. Pierre brings a wealth of experienceto Tahera's diamond exploration group.
TAHERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
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June 30, December 31,
2000 1999
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ASSETS
Current Assets
Cash and short-term deposits $ 108,956 $ 1,133,671
Accounts receivable 32,459 157,270
Prepaid expenses 181,640 115,761
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323,055 1,406,702
Exploration and Development Projects 58,677,633 56,680,328
Plant and Equipment 1,441,848 1,663,944
Deferred Financing Costs 759,463 682,696
Investments 17,952 17,952
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61,219,951 60,451,622
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LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 3,207,861 2,690,224
Debenture and interest payable 188,917 109,259
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3,396,778 2,799,483
Secured Convertible Debentures 3,417,000 3,417,000
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6,813,778 6,216,483
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SHAREHOLDERS' EQUITY
Share Capital
Common Shares 63,182,057 62,537,425
Convertible debentures (note) 1,450,000 0
Equity component of secured convertible debentures 265,360 265,360
Preferred shares 30,148 30,668
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64,927,565 62,833,453
Deficit (10,521,392) (8,598,314)
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54,406,173 54,235,139
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61,219,951 60,451,622
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TAHERA CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(unaudited)
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Three Months Ended Six Months Ended
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June 30, June 30, June 30, June 30,
2000 1999 2000 1999
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Revenues
Interest $ 5,451 $ 5,389 $ 16,075 $ 97,408
Other - 261,334 - 285,334
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5,451 266,723 16,075 382,742
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Expenses
Salaries and benefits 192,391 304,400 412,628 523,688
Office and general 206,310 166,308 340,066 241,473
Travel 154,545 90,146 241,051 180,663
Depreciation 111,794 176,184 225,836 280,410
Debenture interest and financing cost amortization 106,696 - 213,393 -
Legal and audit 83,040 61,916 142,181 149,431
Financing costs 80,266 81,284 117,438 81,284
Directors' fees and expenses 29,866 54,475 61,708 90,493
Interest on short term borrowings 29,945 1,272 34,453 1,604
Capital tax (8,067) 13,000 20,583 24,000
Consulting 1,080 7,500 20,137 16,085
Transfer agent and listing fees 8,745 14,884 19,679 65,506
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996,611 971,369 1,849,153 1,654,637
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Loss for the period before income taxes (991,160) (704,646) (1,833,078) (1,271,895)
Provision for income taxes (36,000) (54,000) (90,000) (94,000)
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Loss for the period (1,027,160) (758,646) (1,923,078) (1,365,895)
Deficit - Beginning of period (9,494,232) (1,865,775) (8,598,314) (36,489,469)
Capital Reduction - - - 35,185,943
Assigned Value of Expired Warrants - - - 45,000
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Deficit - End of period $(10,521,392) $ (2,624,421) $(10,521,392) $ (2,624,421)
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Loss per share $ (0.006) $ (0.005) $ (0.011) $ (0.009)
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TAHERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
-------------------------------------------------------------------------
Three Months Ended Six Months Ended
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June 30, June 30, June 30, June 30,
2000 1999 2000 1999
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Cash flows from (used in) operating activities:
Loss for the period $ (1,027,160) $ (758,646) $ (1,923,078) $ (1,365,895)
Items not affecting cash -
Depreciation and amortization 111,794 176,184 225,836 280,410
Debt principle accretion and financing costs amortization 37,238 - 74,476 -
Loss on sale of fixed assets - 379 - 379
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(878,128) (582,083) (1,622,766) (1,085,106)
Changes in non-cash working capital items -
Accounts receivable 14,355 2,604 467 48,620
Prepaid expenses (53,884) (66,528) (65,879) (326,669)
Accounts payable and accrued liabilities 344,460 21,681 549,454 (758,586)
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(573,197) (624,326) (1,138,724) (2,121,741)
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Cash flows from (used in) investing activities:
Exploration and development projects (674,580) (1,434,188) (1,812,239) (2,309,260)
Plant and equipment (17,718) (42,602) (50,989) (86,703)
Proceeds on sale of investment in equity affiliates - - 125,000 -
Investments in equity affiliates - (83,798) - (83,798)
Reclamation deposit - (68,000) - (68,000)
Proceeds on sale of fixed assets - 14,471 - 14,471
Deferred amalgamation costs - - - (20,676)
Cash acquired on purchase of New Indigo Resources Inc. - - - 13,992
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(692,298) (1,614,117) (1,738,228) (2,539,974)
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Cash flows from (used in) financing activities
Convertible debentures (note) 1,500,000 - 1,500,000 -
Issue of common shares for cash - 1,981,625 504,000 1,981,625
Deferred financing costs (151,243) - (151,243) -
Redemption of preferred shares (195) - (520) -
Due to or from related parties - - - (516,877)
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1,348,562 1,981,625 1,852,237 1,464,748
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Net Increase (Decrease) in Cash 83,067 (256,818) (1,024,715) (3,196,967)
Cash - Beginning of Period 25,889 750,973 1,133,671 3,691,122
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Cash - End of Period $ 108,956 $ 494,155 $ 108,956 $ 494,155
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TAHERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Supplemental Disclosure of Non-Cash Investing and Financing Activities
(a) During the period ended June 30, 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 period ended June 30, 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..
NOTE TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
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1. Shareholders' Equity - Convertible Debentures
During the quarter ended June 30, 2000, Tahera issued $1,500,000 in convertible debentures. Under the terms of a proposed private placement the holders of the debentures have agreed to convert $1,450,000 of these debentures into 11,600,000 common shares of the company and 5,800,000 Series A Warrants at the time of the first closing of such private placement, which is expected to be on or about August 28, 2000. The remaining $50,000 will be repaid at the time of conversion.
For further information: Grant Ewing, Vice President Investor Relations and Corporate Development, Tel: (416) 777-1998, Fax: (416) 777-1898, Email: investor@tahera.com, www.tahera.com
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