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Jericho Diamond Mine:
- The operational review continued through the second quarter, with
excellent progress in a number of areas, including improved grades.
The total number of dry tonnes processed was 95,500 tonnes for the
second quarter of 2007, at an average grade of 0.78 carats per tonne,
resulting in carat production of 74,000 carats. However, if the
re-processing of the coarse processed kimberlite ("PK") stockpile
material is excluded, the total number of dry tonnes processed was
77,000 tonnes, at an average grade of 0.90 carats per tonne. Overall,
total tonnes processed decreased by 42% compared to the first
quarter, mainly due to the plant testing completed during the
quarter. The grade increased by 73% quarter-over-quarter, as a result
of improvements made to the plant and an improved mix of material.
- The value of production for the second quarter of 2007, based on
Government Diamond Valuation ("GDV") values, was US$6.4 million. When
applying exchange rates in effect at the GDV valuation dates, the
equivalent Canadian dollar value of production was $6.9 million. The
total cash operating cost related to the production of these goods
was $16.0 million.
- Mining efforts focused on waste stripping, resulting in the exposure
of the 430-metre bench level, with the exception of the south lobe.
The Company expects that it will now be able to either maintain
exposure to a number of the various ore types or develop sufficient
stockpiles to enable continued blending of ore feed to the processing
plant.
- Screen panels were reduced from 1.25mm aperture screens to 1.00mm
aperture screen panels. In order to test the impact of the smaller
screen panels, the Company conducted audits on the PK stockpile. In
total, 13,455 tonnes of PK material was reprocessed, yielding
3,170 carats, for a grade of 0.236 carats per tonne. These results
help to explain the difference in the grade achieved during 2006 when
compared to the bulk sample results.
- The batching program began with the processing of the central lobe
F6 ("F6") material. In total, 14,303 dry tonnes of F6 material was
processed over a 14-day period, yielding 22,294 carats, for an
average grade of 1.56 carats per tonne. These goods were valued by
the government valuators separately from the normal run-of-mine
production and were assigned a value of US$101 per carat.
- Other improvements during the second quarter include the introduction
of a more rigorous system of tracking, collecting and disseminating
information related to plant performance, the establishment of
regular maintenance procedures, the addition of production geologists
and mine engineers, the repositioning of the pit ramps and the
purchase, mobilization and installation of a jaw crusher.
- During the second quarter, the Company appointed Mr. Michael Johnson
as the Interim Director of Operations at the Jericho Mine site.
Mr. Johnson has been involved with the exploration and data analysis
of the Jericho kimberlite for the past nine years, including
contributing to the development of the feasibility study, and was
recently the exploration manager for the Company from 2002 to early
2007. Mr. Johnson brings an extensive understanding of kimberlite
evaluation and diamond processing to the project.
- During the month of July, the Company processed 40,000 tonnes of
kimberlite at an average grade of 0.88 carats per tonne, resulting in
approximately 35,000 carats.
Corporate:
- The Company has been making excellent progress with its improvement
plan; however, as the plant is not running at full capacity due to
the various tests being performed, additional financial losses have
been incurred, leading to the need for a comprehensive financing plan
involving all of the Company's major stakeholders.
- During the quarter, the Company completed the sale of 22,500,000
units from treasury at a price of $1.00 per unit for gross proceeds
of $22,500,000. Each unit is comprised of one common share and
one-half of one common share purchase warrant.
- Also during the quarter, the Company drew funds totalling $2,500,000
under the working capital facility with Tiffany & Co.
Exploration:
- The 500-tonne bulk sample taken from the JD-3 kimberlite in the first
quarter was processed during the second quarter and the resulting
heavy concentrate has been shipped to the Kennecott Canada Inc.
laboratory in Thunder Bay, where the recovery of diamonds will take
place. This process is expected to take approximately one month, at
which point a diamond grade for the bulk sample will be available.
- Drilling and ground geophysics programs were completed on the
Rockinghorse property during the quarter.
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Please refer to Tahera's website (www.tahera.com) or www.SEDAR.com to view the complete second quarter report including the management discussion and analysis, financial statement and the notes thereto.
Mr. Dale Mah, P. Geol., is Tahera's qualified person, as defined in National Policy 43-101, and has supervised the preparation of the technical information included in this press release. Mr. Mah is an employee of Tahera and is not considered independent of Tahera.
Tahera has scheduled a conference call at 11:00 a.m. Eastern Daylight Time on Wednesday, August 8, 2007. Interested parties are invited to participate in the call by dialing 416-644-3426 or toll-free 1-800-587-1893. To access a conference replay (available at 1:00 p.m. EDT), dial 416-640-1917 or toll-free 1-877-289-8525 and enter pass code 21242752, followed by the number sign.
2007 Second Quarter Results
At June 30, 2007, Tahera's cash and cash equivalents balance is $12,813,000, a decrease of $14,744,000 from the balance at December 31, 2006. The decrease is due primarily to negative cash flows from operations and the significant expenditures made in early 2007 to mobilize fuel, explosives and other supplies on the winter ice road. The Company realized revenues of $15,299,000 and an operating loss of $30,641,000 during the period. The Company recorded a net loss for the first six months of 2007 of $31,676,000 ($0.16 per share), as compared to income of $2,553,000 ($0.02 per share) for the comparable period of 2006.
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Financial Statement Highlights (in thousands of Canadian dollars,
except for per share data):
As at As at
Jun. 30, 2007 Dec. 31, 2006
(unaudited)
Current Assets $ 36,753 $ 44,885
Capital and Other Assets 206,935 203,069
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$ 243,688 $ 247,954
-------------- --------------
-------------- --------------
Current Liabilities $ 46,878 $ 31,469
Long-Term Liabilities 37,126 43,624
Share Capital - Common Shares 205,432 189,509
Common Share Purchase Warrants 11,631 9,212
Contributed Surplus 5,121 5,049
Deficit (62,585) (30,909)
Accumulated Other Comprehensive Income 85 -
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$ 243,688 $ 247,954
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Six Months Six Months
Ended Ended
Jun. 30, 2007 Jun. 30, 2006
(unaudited) (unaudited)
Revenues $ 15,299 $ -
Cost of Goods Sold 45,940 -
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Operating Loss (30,641) -
Corporate, General and Administrative
Expenses (1,968) (2,530)
Amortization of Non-Operating Assets (210) (145)
Other Items (1,877) 291
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Loss for the Period before Income Taxes (34,696) (2,384)
Recovery of Income Taxes - Current - 82
Recovery of Income Taxes - Future 3,020 4,855
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Net (Loss) Income for the Period $ (31,676) $ 2,553
-------------- --------------
-------------- --------------
(Loss) Earnings per Share - Basic and
Diluted $ (0.16) $ 0.02
-------------- --------------
-------------- --------------
Cash Flows From (Used In):
Operating Activities $ (24,200) $ 466
Investing Activities (13,424) (36,169)
Financing Activities 22,880 31,399
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Net Decrease in Cash and Cash Equivalents (14,744) (4,304)
Cash and Cash Equivalents - Beginning of
Period 27,557 15,445
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Cash and Cash Equivalents - End of Period $ 12,813 $ 11,141
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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 the Management's Discussion & Analysis.
On Behalf of the Board,
R. Peter Gillin
Chairman and CEO
Tahera Diamond Corporation
%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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