TORONTO, Nov. 2, 2006 (Canada NewsWire via COMTEX News Network) -- Jericho Diamond Mine:
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- Commercial production declared on July 1, 2006. As a result, the
Company recognized its first revenues from diamond production
in the third quarter.
- Replacement primary crusher installed and operational by late
September. Throughput for the quarter improved modestly from
approximately 145,000 tonnes in the second quarter to 157,000
tonnes in the third quarter.
- Year-to-date grade per tonne of kimberlite ore processed was
0.61 carats per tonne and 0.62 carats per tonne for the third
quarter. The grade per tonne of ore processed was lower than
expected due to an inability to fast-track higher grade kimberlite
material into processing as a result of the lower fuel supply,
processing of lower grade extra material not included in the
resource model, and processing of the lower grade upper benches of
the kimberlite.
- The overall expected grade of the Jericho kimberlite resource
material remains at 0.85 carats per tonne as per the October 2004
Preliminary Assessment resource grade estimate.
- Value per carat increased to approximately $107 CAD for the third
quarter compared with $105 CAD for the second quarter.
- Carat production decreased slightly from 98,600 carats during the
second quarter to 96,500 carats in the third quarter of 2006.
- Processed material continued to be predominantly sourced from the
lower grade zones of the kimberlite with the remaining material
coming from the higher grade central zone.
- Cash operating cost for the three months ended September 30, 2006
was approximately $85 per tonne ore processed, excluding
amortization and depletion.
- Official mine opening ceremony held on August 17, 2006.
Corporate:
- Due to lower than expected cash flows from operations, the Company
initiated financing discussions. As part of these deliberations
the Company has approached Tiffany & Co. with respect to deferring
scheduled repayments of its credit facility until the second half
of 2007. A decision with respect to these alternatives is expected
in the near future.
Exploration, Muskox Kimberlite:
- Processing of the Muskox kimberlite bulk sample began during the
third quarter of 2006 and was completed at the end of October
2006. Approximately 865 dry tonnes from the MKU-A unit and 63 dry
tonnes from the MKU-B unit were extracted. The material larger
than 0.85 mm was processed through a Dense Media Separation plant.
The MKU-A unit yielded 13,890 stones representing 455.3 carats for
a recovered sample grade of 0.53 carats per tonne. The MKU-B unit
yielded 692 stones representing 21.8 carats for a recovered sample
grade of 0.35 carats per tonne. Detailed analysis of the diamond
recovery, diamond characteristics, processing and metallurgical
data will have to be undertaken to understand the difference
between the bulk sample data and previous grade modelling and to
fully understand the potential of the deposit. This analysis will
take place in the coming months and will determine the extent and
timing of further sampling of the kimberlite. Diamond valuation,
detailed diamond description and characterization as well as
further analysis of the diamond recovery will be reported in early
2007. For more information regarding complete results and analysis
of the sample processing and procedures related thereto, please
refer to Tahera's press release dated November 2, 2006.
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Note that any potential quantity and grade that may be inferred from the data is conceptual in nature and readers are reminded that there has been insufficient exploration to define a mineral resource for the Muskox kimberlite. It is uncertain if further exploration of the Muskox kimberlite will result in the delineation of a mineral resource.
Mr. Dale Mah, P. Geol., is Tahera's qualified person as defined in National Policy 43-101 for its exploration programs and has supervised the preparation of the exploration information included in this press release. Mr. Mah is an employee of Tahera and is not considered independent of Tahera.
Mr. Dan Johnson is Tahera's qualified person as defined in National Policy 43-101 for its Jericho property and has supervised the preparation of the technical information included in this press release. Mr. Johnson is an officer of Tahera and is not considered independent of Tahera.
Tahera has scheduled a conference call at 10:00 a.m. Eastern Standard Time on Friday, November 3, 2006. Interested parties are invited to participate in the call by dialing 416-644-3419 or toll-free 1-800-814-4890. To access a conference replay (available at 12:00 p.m. EST), dial 416-640-1917 or toll-free 1-877-289-8525 and enter pass code 21206774, followed by the number sign.
2006 Third Quarter Results
The commencement of commercial production at the Jericho Diamond Mine as of July 1, 2006 had a significant impact on the Company's third quarter consolidated financial statements. At September 30, 2006, Tahera's current assets total $30,029,000, an increase of $7,219,000 from the total at December 31, 2005. The increase is primarily due to the recognition of diamond inventory for the first time at September 30, 2006. Capital and other non-current assets increased by $36,950,000 during the nine months ended September 30, 2006, primarily due to the capital additions and pre-production operating costs associated with the Jericho Diamond Mine. The third quarter represented the first period in which the Company began recognizing revenues from the sale of diamonds and the associated cost of goods sold. The Company recorded a net loss of $10,771,000 ($0.07 per share) for the quarter ended September 30, 2006, as compared to a loss of $658,000 ($0.00 per share) for the quarter ended September 30, 2005.
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Financial Statement Highlights (in thousands of Canadian dollars,
except for per share data):
As at As at
Sep. 30, 2006 Dec. 31, 2005
(unaudited)
Current Assets $ 30,029 $ 22,810
Capital and Other Assets 205,019 168,069
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$ 235,048 $ 190,879
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Current Liabilities $ 38,405 $ 11,496
Long-Term Liabilities 37,520 31,149
Share Capital - Common Shares 167,610 148,599
Common Share Purchase Warrants 245 1,290
Contributed Surplus 4,799 3,658
Deficit (13,531) (5,313)
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$ 235,048 $ 190,879
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Nine Months Nine Months
Ended Sep. 30, Ended Sep. 30,
2006 2005
(unaudited) (unaudited)
Revenues $ 1,279 $ -
Cost of Goods Sold 10,131 -
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Operating Loss (8,852) -
Corporate, General and Administrative Expenses (3,641) (2,518)
Amortization of Non-Operating Assets (249) (142)
Other Items (414) 359
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Loss for the Period before Income Taxes (13,156) (2,301)
Recovery of (Provision for) Income Taxes -
Current 83 (173)
Recovery of Income Taxes - Future 4,855 1,084
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Net Loss for the Period $ (8,218) $ (1,390)
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Loss per Share - Basic and Diluted(1) $ (0.05) $ (0.01)
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Cash Flows From (Used In):
Operating Activities $ 6,704 $ (1,753)
Investing Activities (47,816) (73,232)
Financing Activities 36,525 25,733
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Net Decrease in Cash and Cash Equivalents (4,587) (49,252)
Cash and Cash Equivalents - Beginning of Period 15,445 57,889
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Cash and Cash Equivalents - End of Period $ 10,858 $ 8,637
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(1) Per share information has been retroactively restated to give effect
to the one-for-five share consolidation that was approved by the
Company's shareholders on May 15, 2006.
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Please refer to Tahera's website (www.tahera.com) or www.SEDAR.com to view the complete third quarter report.
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking information" that reflects Tahera Diamond Corporation's current beliefs, plans, objectives, estimates, intentions, expectations and projections about its future results. When used in this press release, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking information, which is based on the opinions and estimates of management at the date the statements are made. By its very nature, forward-looking information is subject to risks and uncertainties and other factors that could cause Tahera Diamond Corporation's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, forward-looking information. These risks, uncertainties and factors may include, but are not limited to exposure to interest rate fluctuations, foreign currency risks, changes in federal, provincial and territorial laws, rules and regulations relating to the Company's business and environmental matters, changes in tax regulations and accounting pronouncements, the inherent risks involved in the exploration, development, and mining of mineral properties, the uncertainties involved in interpreting drilling results and other data, fluctuating commodity prices, unforeseeable adverse climate conditions, the possibility of cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, other factors and the accuracy of management's assumptions.
Specifically, in making statements concerning future estimated grades the Company has assumed that mining operations will proceed in the normal course according to schedule and that the statistical computations and the assumptions used and judgments made in interpreting engineering and geological information will prove to be correct. There is significant uncertainty in any mineral resource estimate and the actual deposits encountered may differ materially from the Company's estimates. With respect to statements concerning diamond prices, Tahera has assumed that current world economic conditions and current rough diamond supply and demand fundamentals will not materially change. Operating cost estimates have been based on the Company's experience to date; however increases in labour and fuel costs and any unforeseen mining issues could materially impact these forecasts. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this press release, actual events may differ materially from current expectations. Tahera Diamond Corporation disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The above press release makes reference to certain non-GAAP financial measures such as cash operating costs and value of production, to assist the reader in assessing the Company's financial performance. Non-GAAP financial measures do not have any standard meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. See "Non-GAAP Financial Measures" in our accompanying Management's Discussion & Analysis.
On Behalf of the Board,
R. Peter Gillin Chairman and CEO
Tahera Diamond Corporation
Grant Ewing Executive Vice President
%SEDAR: 00003313E
SOURCE: Tahera Diamond Corporation
Investor Relations, Tel: (416) 777-1998, Fax: (416) 777-1898, Toll free: (877)
777-2004, Email: investor_relations@tahera.com
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