Aur Resources Inc. Reports Net Earnings Of $33.3 Million And Cash Flow From Operating Activities Of $43.8 Million In The First Quarter Of 2005.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Aur Resources Aur Resources Inc. (TSX: AUR) is a Toronto, Ontario, Canada, based, international mining company active in the acquisition, exploration, development and mining of mineral properties. Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AUR) - (All dollar amounts unless otherwise stated are expressed in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. currency) First Quarter Highlights - 2005 - Net earnings were $33.3 million or $0.35 (CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $0.43) per share in the first quarter of 2005. - Cash flow from operating activities was $43.8 million in the first quarter of 2005. - Cash and working capital increased to $228.6 million and $257.1 million, respectively, as at March 31, 2005. - Aur's cash per share increased to CDN$2.91 as at March 31, 2005. - Aur's share of copper production was 60.7 million pounds in the first quarter of 2005. - Aur realized $1.62 per pound of copper sold in the first quarter of 2005. - Aur paid $7.8 million in dividends (CDN$0.10 per share) to shareholders on January January: see month. 1, 2005. - A new copper discovery was made on the La Verde Verde (vûrd`ē, vĕrd`ē), river, c.190 mi (310 km) long, rising in central Ariz. and flowing S to the Salt River. The valley supported early Native American civilizations and is dotted with ruins, such as those at Tuzigoot National property in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . Financial Highlights Mining revenues were $96.5 million in the first quarter of 2005 compared to $88.8 million for the same period in 2004. Net earnings were $33.3 million, equal to $0.35 per share for the quarter, a 25% increase over net earnings of $26.6 million or $0.28 per share for the same quarter last year. Cash flow from operating activities was $43.8 million, equal to $0.46 (CDN$0.57) per share, compared to $40.5 million or $0.43 per share in the first quarter of 2004. Aur's cash position at March 31, 2005, after the payment of $7.8 million of dividends to shareholders and the $10.0 million copper price participation obligation to Teck Cominco Teck-Cominco TSX | TCK.B[1], NYSE: TCK) is a Canadian mining company. It was formed from the amalgamation of Teck and Cominco in 2001. Cominco started in 1906 as The Consolidated Mining and Smelting Company of Canada, formed by the amalgamation of several , increased by $22.1 million to $228.6 million from December December: see month. 31, 2004. Working capital increased by $35.5 million to $257.1 million. Aur's cash exceeded its $125 million Senior Note debt by $103.6 million at March 31, 2005. Aur's realized copper price, including sales premiums and quotation QUOTATION, practice. The allegation of some authority or case, or passage of some law, in support of a position which it is desired to establish. 2. Quotations when properly made, assist the reader, but when misplaced, they are inconvenient. period adjustments, averaged $1.62 per pound of copper sold in the first quarter compared to the LME See London Metal Exchange. LME See London Metal Exchange (LME). average price of $1.48 per pound. In the first quarter of 2004, Aur realized an average price of $1.37 per pound of copper sold compared to the LME average price of $1.24 per pound. The following table presents a summary of and changes between Aur's Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations for the three months ended March 31, 2005 and 2004:
2005 2004 Change
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$000's $000's $000's
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Mining revenues 96,513 88,826 7,687
Mining expenses (37,974) (36,914) (1,060)
Depreciation and amortization (8,451) (9,963) 1,512
Mine closure and site restoration (786) (458) (328)
Non-controlling interests (5,664) (4,933) (731)
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Operating earnings 43,638 36,558 7,080
Business development (1,272) (1,033) (239)
Administration (2,163) (1,597) (566)
Interest on long-term debt (2,109) (2,109) -
Stock-based compensation (577) (90) (487)
Taxes (7,332) (5,361) (1,971)
Other 3,075 266 2,809
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Net earnings 33,260 26,634 6,626
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Basic earnings per share 0.35 0.28 0.07
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Metal Production and Sales Aur's share of metal production from the Louvicourt, Andacollo Andacollo is a city in the Coquimbo Region, Chile. It is located at around . and Quebrada Blanca Mines in the first quarter of 2005 was 60.7 million pounds of copper, 3.8 million pounds of zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. , 52,000 ounces of silver and 2,100 ounces of gold, compared to 62.6 million pounds of copper, 2.3 million pounds of zinc, 36,000 ounces of silver and 1,600 ounces of gold in the first quarter of 2004. Copper production was 1.9 million pounds lower than the first quarter of 2004 due principally to lower ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly from the Louvicourt Mine. Mining revenues were $96.5 million in the first quarter of 2005, compared to $88.8 million for the same period in 2004. Mining revenues were $7.7 million higher in the first quarter of 2005, primarily due to a $0.25 per pound higher realized copper price and $1.6 million of additional by-product by·prod·uct or by-prod·uct n. 1. Something produced in the making of something else. 2. A secondary result; a side effect. by-product Noun 1. credits offset in part by the lower copper production. Copper sales of 57.4 million pounds were 6.1 million pounds lower in the first quarter of 2005 compared to the first quarter of 2004 due to lower production during the quarter and higher cathode copper inventories at March 31, 2005. Cathode copper inventory increased by 3.3 million pounds to 6.4 million pounds at March 31, 2005. Minesite cash operating costs operating costs npl → gastos mpl operacionales were $38.0 million in the first quarter of 2005, compared to $36.9 million in 2004. Aur's cash operating cost per pound of copper sold was $0.60, $0.03 per pound higher than budget, for the quarter and $0.05 per pound higher than in the first quarter of 2004. Mining expenses were $1.1 million higher in the first quarter of 2005, compared to the same period last year and resulted from $4.6 million of higher operating costs offset by $3.5 million of lower mining expenses resulting from the 6.1 million fewer pounds of copper sold, principally at Quebrada Blanca. The following table presents the calculation of cash operating costs per pound of copper sold for the three months ended March 31, 2005 and 2004.
2005 2004
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$/lb. $/lb.
Mining expenses 0.66 0.58
By-products credits
Zinc (0.04) (0.02)
Silver (0.00) (0.00)
Gold (0.02) (0.01)
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Cash operating costs 0.60 0.55
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Copper sold (000's lbs.) 57,388 63,459
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The following table presents a summary of and changes between mine operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (1) for the three months ended March 31, 2005 and 2004.
2005 2004 Change
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$000's $000's $000's
Louvicourt 6,646 6,699 (53)
Andacollo 12,499 11,448 1,051
Quebrada Blanca 39,394 33,765 5,629
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58,539 51,912 6,627
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(1) Mine operating earnings equal mining operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. less mining operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Cash flow from mine operating activities was $53.1 million in the first quarter of 2005, compared to $47.3 million for the same period last year. Louvicourt Mine The Louvicourt Mine produced 16.9 million pounds of copper and 12.7 million pounds of zinc from 382,453 tonnes of ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. milled during the first quarter of 2005. Copper production was 5.6 million pounds lower and zinc production was 5.1 million pounds higher than for the same period in 2004. Copper production was 1.3 million pounds higher than budgeted for the first quarter, due to the significantly higher mill throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. , partially offset by the lower grade ore. Higher than budgeted zinc production resulted from higher mill throughput. Aur's share of Louvicourt's revenues was $11.9 million in the first quarter of 2005, compared to $12.3 million in 2004. The lower revenue was due to the 25% lower sales volume largely offset by higher metal prices. Cash operating costs, net of by-product credits of $0.30 per pound of copper sold for the quarter, were $0.21 lower than the corresponding period in 2004, principally due to $1.6 million higher by-product credits. Aur's cash flow from Louvicourt's operating activities was $5.2 million in the first quarter of 2005, compared to $2.7 million in 2004. There were no expenditures on property, plant and equipment in either the first quarter of this year or last year. The Louvicourt Mine is expected to close near the end of June June: see month. 2005. Aur holds a 30% interest in and is the operator of the Louvicourt Mine. The Louvicourt Mine operating performance was exceptional in the first quarter of 2005. Louvicourt is forecast to produce approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 32 million pounds of copper and 26 million pounds of zinc and, at a copper price of $1.40 per pound for the balance of the year, to generate approximately $19 million of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for Aur in 2005. Andacollo Mine The Andacollo Mine had an excellent first quarter of 2005. Copper production was 12.9 million pounds of LME registered Grade A cathode copper, 0.2 million pounds more than in the first quarter of 2004 and was 1.6 million pounds higher than budgeted. A total of 4.8 million tonnes of rock, of which 1.1 million tonnes was ore, was mined at a strip ratio of 3.5:1. A total of 4.3 million tonnes of rock, of which 1.0 million tonnes was ore, was mined at a strip ratio of 3.5:1 in the first quarter of 2004. Andacollo's revenues of $20.8 million, generated from the sale of 12.9 million pounds of copper in the first quarter of 2005, were $3.0 million higher than the revenues of $17.8 million in the first quarter of 2004 as a result of higher copper prices and sales. Revenues were $6.4 million higher than budget as a result of higher copper prices and 1.3 million more pounds of copper sold. Cash operating costs were $8.3 million, $2.0 million higher than for the same period 2004, principally due to the higher tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. mined and higher energy and labour costs. The cash operating costs in the first quarter of 2005 were $0.65 per pound of copper sold, $0.02 per pound higher than budgeted and significantly higher than the $0.49 per pound for the same period in 2004. Cash flow from operating activities was $12.3 million in the first quarter of 2005, compared to $10.5 million in 2004. Expenditures on property, plant and equipment were $0.3 million in the first quarter compared to $1.3 million in 2004. An evaluation of establishing a dump leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. facility at Andacollo to process lower grade copper ore and thereby extend the heap leach mining into 2010 is expected to be completed in July July: see month. 2005. A bankable bank·a·ble adj. 1. Acceptable to or at a bank: bankable funds. 2. Guaranteed to bring profit: a bankable movie star. feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. for the large hypogene hy·po·gene adj. Formed or situated below the earth's surface. Used of rocks. copper deposit is also in progress (see Development Projects). The Andacollo Mine is now expected to produce 49 million pounds of copper at a cash operating cost of $0.62 per pound of copper sold in 2005. At a copper price of $1.40 per pound for the balance of 2005, operating cash flow is forecast at approximately $44 million. Quebrada Blanca Mine The Quebrada Blanca Mine produced 42.7 million pounds of LME registered Grade A cathode copper in the first quarter of 2005, 2.6 million pounds less than budgeted, compared to 43.1 million pounds in the first quarter of 2004. A total of 9.1 million tonnes of rock, of which 1.8 million tonnes was heap leach ore and 2.6 million tonnes was dump leach ore, was mined at a strip ratio of 1.1:1 in the first quarter of 2005, compared to 8.0 million tonnes of rock, of which 1.8 million tonnes was heap leach ore and 1.6 million tonnes was dump leach ore, and a strip ratio of 1.4:1 for the first quarter of last year. Quebrada Blanca's revenues, generated from the sale of 39.5 million pounds of copper, were $63.8 million in the first quarter of 2005, compared to $58.8 million generated from the sale of 43.9 million pounds of copper for the same period in 2004. The $5.0 million increase in revenue is due to a $0.28 per pound higher realized copper price offset by 4.4 million fewer pounds of copper sold. Operating revenues were $7.1 million higher than budget, principally due to realized copper prices being $0.37 per pound higher than budget, partially offset by 5.8 million fewer pounds of copper sold. Cathode copper inventories were 5.8 million pounds at March 31, 2005 approximately 3.6 million pounds higher than budgeted. Cash operating costs of $24.4 million were $0.6 million lower than in 2004. Cash operating costs were $0.62 per pound of copper sold, $0.05 per pound higher than in the first quarter of 2004 due to higher energy, acid, labour and transportation costs. Cash flow from operating activities was $35.6 million in the first quarter of 2005 compared to $34.1 million in 2004. Expenditures on property, plant and equipment were $0.05 million in the first quarter of 2005, compared to $0.03 million in 2004. The Quebrada Blanca Mine had solid operating performance in the first quarter of 2005 and is expected to produce 176 million pounds of copper at a cash operating cost of $0.62 per pound of copper sold in 2005. At a copper price of $1.40 per pound for the balance of the year operating cash flow is expected to be approximately $147 million. Development Projects Duck Pond A duck pond is a pond for ducks and other water birds. Often such ponds are artificial and ornamental in nature, in public parks for example. Sometimes they may be less ornamental, in a farmyard for example. Some duck ponds are purposefully built for the shooting of duck. The CDN$92 million capital development program was fully activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. in January 2005. Detailed engineering, site preparation, ramp portal construction and related work are proceeding as planned. Agreement to purchase the mill, mobile equipment and related items from the Louvicourt Mine, much of which will be utilized at Duck Pond, was reached. Senior operating staff have been hired, underground development plans organized and preparations for major construction work in 2005 made. The budget for 2005 is CDN $51.7 million, of which $1.5 million was expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. in the first quarter of 2005. Duck Pond is scheduled to commence production in the fourth quarter of 2006 with annual production of 41 million pounds of copper and 76 million pounds of zinc. Andacollo Hypogene Copper Deposit The update of the 1998 pre-feasibility study for the Andacollo hypogene copper deposit was completed in March 2005. On the basis of the results of this study, a decision was made to carry out a full bankable feasibility study budgeted to cost approximately $5.0 million. The feasibility study is in progress and is scheduled to be completed in the first quarter of 2006. The feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. update indicated that the hypogene deposit could be developed into a mine which would produce, on average, approximately 170 million pounds of copper and 59,000 ounces of gold, contained in concentrates, annually over a mine life of 21 years. The capital investment was estimated at $312 million, including a contingency contingency n. an event that might not occur. amount of $42 million. The internal rate of return on the capital investment is expected to exceed Aur's minimum target of 15% at a copper price of $1.00 per pound and a gold price of $400 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. . The hypogene copper deposit, which underlies the supergene su·per·gene n. A group of closely linked genes occupying a large chromosomal segment and frequently functioning as a genetic unit. deposit currently being mined at Andacollo, represents a long life source of potential copper production for Aur. The reserves incorporated in the mine plan were 421 million tonnes at an average grade of 0.43% Cu and 0.13 g/t Au. The resources upon which the reserves in the mine plan were developed totalled 888 million tonnes at an average grade of 0.35% Cu and 0.07 g/t Au. The reserves include 650 million tonnes of inferred resources and, as such, do not conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" NI 43-101 standards. The reserves will be upgraded to such standards as part of the ongoing feasibility study. Other Financial Information Business Development Aur's $10 million 2005 business development program was active in the first quarter of 2005. Significant new copper mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. was discovered on the La Verde property in Mexico, exploration work, in preparation for drilling, was carried out on three copper projects in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. and one gold project in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. and our acquisitions program in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , CIS countries There are two lists concerning CIS countries:
At La Verde, located in west-central Adj. 1. west-central - of a region of the United States usually including Colorado; Nevada; Utah western - of or characteristic of regions of the United States west of the Mississippi River; "a Western ranch" Mexico approximately 300 kilometres west of Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi , nine drill holes confirmed the presence of known copper breccia breccia: see conglomerate. breccia Coarse sedimentary rock consisting of angular or nearly angular fragments larger than 0.08 in. (2 mm). Breccia commonly results from processes such as landslides or geologic faulting, in which rocks are fractured. mineralization where previous owners had outlined a near surface mineral resource of 72.6 million tonnes at an average grade of 0.7% copper. These holes all intersected significant copper-gold mineralization, the best intersections being 115.1 metres grading 1.15% Cu, 0.06 g/t Au in Hole # 3, 179.4 metres grading 1.02% Cu, 0.06 g/t Au in Hole # 6 and 115.5 metres grading 0.72% Cu, 0.09 g/t Au in Hole # 4. A geophysical survey Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms. was carried out in late 2004, which outlined a large IP anomaly Abnormality or deviation. Pronounced "uh-nom-uh-lee," it is a favorite word among computer people when complex systems produce output that is inexplicable. See software conflict and anomaly detection. covering an area of approximately 4.0 kilometers in length from 750 - 1,500 metres wide surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. this known mineralization. This anomaly is continuous and is located at a greater depth than all previous drilling carried out on the property. Hole # 9, drilled to test this IP anomaly, intersected 426.1 metres of mineralization at an average grade of 0.49% Cu, 0.12 g/t Au and was stopped in mineralization at a depth of 681 metres. The copper mineralization was principally chalcopyrite chalcopyrite (kăl'kəpī`rīt, kăl`kōpī'rīt) or copper pyrites (pīrī`tēz, pə–), brass-yellow mineral, sometimes with an iridescent tarnish. and bornite bornite Common copper-ore mineral, copper and iron sulfide (Cu5FeS4). Typical occurrences are found in Mount Lyell, Tasmania; Chile; Peru; and Butte, Mont. Bornite may form isometric crystals but occurs most commonly as irregular masses. hosted in an altered and brecciated brec·ci·ate tr.v. brec·ci·at·ed, brec·ci·at·ing, brec·ci·ates To form (rock) into breccia. brec multiphase Mul´ti`phase a. 1. (Elec.) Having many phases; Adj. 1. multiphase - of an electrical system that uses or generates two or more alternating voltages of the same frequency but differing in phase angle intrusive in·tru·sive adj. 1. Intruding or tending to intrude. 2. Geology Of or relating to igneous rock that is forced while molten into cracks or between other layers of rock. 3. Linguistics Epenthetic. complex. The extent of this new copper discovery is unknown at this time, however, there is potential for a large tonnage copper deposit to exist on the La Verde property. The 2005 drilling program has now been expanded to 40 holes totaling 15,000 metres in order to accelerate the evaluation of the copper mineralization on the La Verde property. Details of these results are contained in Aur's press release of May 3, 2005 entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: AUR RESOURCES INTERSECTS SIGNIFICANT COPPER MINERALIZATION ON THE LA VERDE COPPER PROPERTY IN MEXICO. Administration Administration expenses were $2.2 million in the first quarter of 2005, compared to $1.6 million in 2004. These expenses are expected to be as budgeted at $6.2 million for the year. Depreciation and amortization Depreciation and amortization expenses were $8.5 million in the first quarter of 2005, compared to $10.0 million in 2004. These expenses are forecast to total $29 million in 2005. Mine closure and site restoration Mine closure and site-restoration expenses were $0.8 million in the first quarter of 2005, compared to $0.5 million in 2004. These expenses are forecast to be $2.5 million in 2005. Interest on long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. Interest expense on Aur's long-term debt was as budgeted at $2.1 million in both the first quarter of 2005 and 2004, and will be as budgeted at $8.4 million for the year. Stock-based compensation Stock-based compensation expense was $0.6 million in the first quarter of 2005, compared to $0.1 million in the first quarter of 2004. Based upon options granted during the period January 1, 2003 to March 31, 2005, stock-based compensation expense for the year will total $1.5 million in 2005 for the options granted during the period January 1, 2003 to March 31, 2005. Other expenses (revenues) Other expenses (revenues) were a net revenue of $3.1 million in the first quarter of 2005, compared to a net revenue of $0.3 million in the first quarter of 2004. Net revenues in the first quarter were primarily due to interest income of $1.1 million, a gain on the sale of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $1.1 million, foreign exchange gains of $0.7 million and proceeds of $0.2 million from property option payments resulting from the optioning of certain of Aur's Val d'Or Val d'Or (väl dôr), town (1991 pop. 23,842), SW Que., Canada, SE of Rouyn-Noranda. It is a mining center. Gold was discovered in the region in 1909; copper, zinc, lead, and molybdenum are also mined. properties in 2004. Other expenses (revenues) are forecast to be a net revenue of $6.8 million for the year, primarily due to interest income earned on Aur's substantial cash balances. Provision for income and resource taxes Provision for taxes was $7.3 million in the first quarter of 2005, $1.8 million higher than budget and $1.9 million higher than the $5.4 million in the first quarter of 2004. Cash taxes, totalled $5.5 million, of which $4.6 million related to Quebrada Blanca and $0.8 million related to Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. mining duties on Aur's share of Louvicourt's income, while non-cash future taxes totalled $1.8 million. Cash taxes in the first quarter of 2004 totalled $0.2 million. The higher tax expense in 2005 is as a result of higher earnings. At an LME average copper price of $1.40 per pound for the balance of 2005, the provision for taxes is expected to be $22.2 million for cash taxes and $14.6 million for future taxes in 2005. Non-controlling interests Non-controlling interests expense, related to Aur's partners' interests in the Andacollo and Quebrada Blanca Mines, was $5.7 million in the first quarter of 2005. Non-controlling interests expense was $4.9 million in 2004. Cash payments to non-controlling interests totalled $3.2 million in the first quarter, compared to $2.8 million in 2004. Due to preferential pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. rights to cash flows related to the $1.3 million balance of the shareholder debt of Andacollo at March 31, 2005, Aur has the right to receive 70% of the next $1.3 million of Andacollo's net cash flow and 63% of all cash distributions thereafter. Due to preferential rights to cash flows related to the $11.0 million balance of the shareholder debt of Quebrada Blanca at March 31, 2005, Aur has the right to receive, as at March 31, 2005, the next $11.0 million, plus interest, of Quebrada Blanca's net cash flow and 76.5% of all cash distributions thereafter. The debt obligations of both Andacollo and Quebrada Blanca are expected to be fully repaid during the second quarter of 2005. Working capital Working capital increased $34.5 million during the first quarter to $257.1 million at March 31, 2005, primarily due to increased cash balances resources resulting from operating activities. Property, plant and equipment Investments in property, plant and equipment totalled $11.8 million in the first quarter of 2005, compared to $0.6 million in 2004. These investments included a $10.0 million accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for the expected copper price participation amount payable to Teck Cominco in January 2006 for 2005, $1.5 million invested at Duck Pond and $0.3 million invested at Andacollo. Aur anticipates that expenditures on property, plant and equipment in 2005 will be as budgeted at $38.3 million at Duck Pond, $2.7 million at Quebrada Blanca and the $10 million copper price participation payment to Teck Cominco in January 2005. Andacollo's expenditures of $5.8 million are expected to be $4.1 million higher than budget, principally due to $3.9 million of expenditures on the bankable feasibility study on the Andacollo hypogene copper deposit approved in March 2005. As the copper price is now expected to average above $1.25 per pound in 2005, a $10 million copper price participation will become payable to Teck Cominco in January 2006 for the 2005 year. This amount has been provided for as a non-cash investment in property, plant and equipment. Contingency The disputed reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of guarantee fees issued by the Chilean Internal Revenue Service (the "IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. ") to Compania Minera Minera (Welsh: Mwynglawdd) is a small village in the county borough of Wrexham in north-east Wales. It borders Coedpoeth to the east and Bwlchgwyn to the west. Quebrada Blanca S.A. ("CMQB"), as described in note 17 to Aur's audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the year ended December 31, 2004, has not been resolved to date. It is the opinion of management and CMQB's legal counsel that CMQB's income tax filings to 1997 with respect to the guarantee fees are correct and that no amounts are owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the IRS. Aur's first quarter analyst conference call will be held at 9:00 a.m., ET, on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 6, 2005. This listen-only webcast can be accessed by going directly to CCN CCN Cloud Condensation Nuclei CCN Church Communication Network CCN Conseil Canadien des Normes (Standards Council of Canada) CCN Critical Care Nurse CCN Certified Clinical Nutritionist CCN Community Care Network CCN Cyclin Matthews Matthews may refer to: In places:
This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based on current expectations and which involve risks and uncertainties, including those referred to in Aur's 2004 Annual Report and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. in Aur's Annual Information Form dated March 31, 2005 and filed with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward looking statements. Such forward-looking statements include statements regarding financial results and expectations for 2005 and include among other things, statements regarding targets, estimates and/or assumptions in respect of copper production and/or copper prices, cash operating costs, expenditures on property, plant and equipment, increases and decreases in production, reserves and/or resources and anticipated grades and recovery rates and are or may be based on assumptions and/or estimates related to future economic, market and other conditions. Factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, the factors described or referred to elsewhere herein and/or in the AIF AIF Annual Information Form AIF Apoptosis-Inducing Factor AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony) AIF Australian Imperial Force and include unanticipated and/or unusual events. Many of such factors are beyond Aur's ability to control or predict. Actual results may differ materially from those anticipated. Readers are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Aur disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Additional information, including the quarterly and annual Consolidated Financial Statements, AIF, Management Information Circular Information Circular A document sent to shareholders outlining important matters to be discussed at the annual shareholders' meeting. Notes: Sent along with a proxy, the information circular may cover matters such as the election of the Board of Directors, possible and other disclosure documents, may also be examined and/or obtained through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by accessing Aur's website at www.aurresources.com or by accessing the Canadian System for Electronic Document Analysis and Retrieval The System for Electronic Document Analysis and Retrieval (SEDAR) is a mandatory document filing and retrieval system for Canadian public companies. Similar to EDGAR, SEDAR is operated by the Canadian Securities Administrators, a coordinating body comprising the 13 Canadian (SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review ) website at www.sedar.com.
PRODUCTION STATISTICS
Three months ended March 31
---------------------------------------------------------------------
Quebrada
2005 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) 382,453 1,067,007 1,792,317 n/a
Grade
Copper (%) 2.11 0.79 1.32 n/a
Soluble copper (%) n/a 0.67 1.19 n/a
Zinc (%) 1.78 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.80 - - n/a
Copper (pounds)
Produced 5,060,000 12,912,000 42,678,000 60,650,000
Sold 5,060,000 12,854,000 39,474,000 57,388,000
Less:
non-controlling
interests - (3,856,000) (3,947,000) (7,803,000)
---------------------------------------------------
Net to Aur 5,060,000 8,998,000 35,527,000 49,585,000
Inventory 613,000 5,754,000 6,367,000
Other metals
produced and sold
Zinc (pounds) 3,803,000 - - 3,803,000
Gold (ounces) 2,100 - - 2,100
Silver (ounces) 52,000 - - 52,000
Cost per pound of
copper sold 0.30 0.65 0.62 0.60
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) 305,174 994,459 1,745,886 n/a
Grade
Copper (%) 3.46 0.83 1.27 n/a
Soluble copper (%) n/a 0.73 1.10 n/a
Zinc (%) 1.40 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.72 - - n/a
Copper (pounds)
Produced 6,748,000 12,710,000 43,127,000 62,585,000
Sold 6,748,000 12,835,000 43,876,000 63,459,000
Less:
non-controlling
interests - (3,850,000) (4,388,000) (8,238,000)
---------------------------------------------------
Net to Aur 6,748,000 8,985,000 39,488,000 55,221,000
Inventory - 577,000 2,057,000 2,634,000
Other metals
produced and sold
Zinc (pounds) 2,270,000 - - 2,270,000
Gold (ounces) 1,600 - - 1,600
Silver (ounces) 36,000 - - 36,000
Cost per pound of
copper sold $0.51 $0.49 $0.57 $0.55
---------------------------------------------------------------------
Notes: 1. Tonnes of ore milled at Louvicourt and stacked at Andacollo
and Quebrada Blanca and all metal production figures are
shown on a 100% basis with the exception of metal
production figures for Louvicourt, which represents Aur's
30% joint venture interest. Net copper to Aur represents
Aur's 30%, 70% and 90% beneficial interests in Louvicourt,
Andacollo and Quebrada Blanca, respectively. At Quebrada
Blanca, the ore is material stacked in the period and
excludes 2,594,052 tonnes (2004-1,605,127 tonnes) of dump
leach ore.
2. Cash operating cost per pound of copper sold includes
smelting, refining, transportation and marketing costs,
settlement adjustments, provisional pricing, and is net
of by-product credits where applicable.
AUR RESOURCES INC.
UNAUDITED INTERIM CONSOLIDATED STATEMENTS
March 31, 2005
(Expressed in thousands of United States dollars)
These interim financial statements have not been audited or reviewed
by the Corporation's external auditors.
Consolidated Statements of Operations
(in thousands of United States dollars Three months ended
except earnings per share) March 31
--------------------------
(Unaudited) 2005 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $
Mining revenues 96,513 88,826
---------------------------------------------------------------------
Expenses
Mining 37,974 36,914
Business Development 1,272 1,033
Administration 2,163 1,597
Depreciation and amortization 8,451 9,963
Mine closure and site restoration 786 458
Interest on long-term debt 2,109 2,109
Stock-based compensation 577 90
Other expenses (revenues) (note 7) (3,075) (266)
---------------------------------------------------------------------
50,257 51,898
---------------------------------------------------------------------
Earnings before taxes and non-controlling
interests 46,256 36,928
Income and resource taxes (7,332) (5,361)
---------------------------------------------------------------------
Earnings before non-controlling interests 38,924 31,567
Non-controlling interests (5,664) (4,933)
---------------------------------------------------------------------
Net earnings for the period 33,260 26,634
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic and diluted earnings per share
(note 6(b)) 0.35 0.28
---------------------------------------------------------------------
---------------------------------------------------------------------
Consolidated Statements of Retained Earnings Three months ended
(in thousands of United States dollars) March 31
--------------------------
(Unaudited) 2005 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
Retained earnings - beginning of period 128,646 39,667
Net earnings for the period 33,260 26,634
---------------------------------------------------------------------
Retained earnings - end of period 161,906 66,301
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Operations for the three
months ended March 31
(in thousands of United States dollars)
(Unaudited)
---------------------------------------------------------------------
Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues 11,899 20,794 63,820 - 96,513
---------------------------------------------------------------------
Expenses
Mining 5,253 8,295 24,426 - 37,974
Business Development - - - 1,272 1,272
Administration - - - 2,163 2,163
Depreciation and
amortization 588 2,442 5,312 109 8,451
Mine closure and
site restoration 138 158 490 - 786
Interest on
long-term debt - - - 2,109 2,109
Stock-based
compensation - - - 577 577
Other expenses
(revenues) 5 (126) (461) (2,493) (3,075)
---------------------------------------------------------------------
5,984 10,769 29,767 3,737 50,257
---------------------------------------------------------------------
Earnings (loss)
before taxes 5,915 10,025 34,053 (3,737) 46,256
Income and
resource taxes (2,491) (530) (5,905) 1,594 (7,332)
---------------------------------------------------------------------
Earnings (loss)
before
non-controlling
interests 3,424 9,495 28,148 (2,143) 38,924
Non-controlling
interests - (2,849) (2,815) - (5,664)
---------------------------------------------------------------------
Net earnings (loss) 3,424 6,646 25,333 (2,143) 33,260
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues 12,287 17,779 58,760 - 88,826
---------------------------------------------------------------------
Expenses
Mining 5,588 6,331 24,995 - 36,914
Business Development - - - 1,033 1,033
Administration - - - 1,597 1,597
Depreciation and
amortization 596 2,265 6,482 620 9,963
Mine closure and
site restoration 44 117 297 - 458
Interest on
long-term debt - - - 2,109 2,109
Stock-based
compensation - - - 90 90
Other expenses
(revenues) - 87 (104) (249) (266)
---------------------------------------------------------------------
6,228 8,800 31,670 5,200 51,898
---------------------------------------------------------------------
Earnings (loss)
before taxes 6,059 8,979 27,090 (5,200) 36,928
Income and resource
taxes (2,159) - (4,700) 1,498 (5,361)
---------------------------------------------------------------------
Earnings (loss)
before
non-controlling
interests 3,900 8,979 22,390 (3,702) 31,567
Non-controlling
interests - (2,694) (2,239) - (4,933)
---------------------------------------------------------------------
Net earnings (loss) 3,900 6,285 20,151 (3,702) 26,634
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Balance Sheets
(in thousands of United States dollars) As at
--------------------------
March 31 December 31
2005 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
(Unaudited)
$ $
Assets
Current
Cash 228,584 206,520
Receivables 17,041 14,242
Inventories and prepaid expenses (note 2) 55,120 52,750
---------------------------------------------------------------------
300,745 273,512
Property, plant and equipment 276,906 273,887
Future income and resource taxes 4,976 5,506
Long-term copper inventory and other (note 3) 21,482 21,748
---------------------------------------------------------------------
604,109 574,653
---------------------------------------------------------------------
---------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current
Accounts payable and accrued liabilities 27,876 28,290
Dividends payable - 7,849
Copper price participation (note 4) 10,000 10,000
Current portion of obligation under capital
lease 3,772 3,847
Current portion of mine closure and site
restoration 1,981 1,946
---------------------------------------------------------------------
43,629 51,932
---------------------------------------------------------------------
Senior notes (note 5) 125,000 125,000
Obligation under capital leases 8,066 8,952
Obligation on properties purchased 227 227
Future income and resource taxes 20,662 19,396
Mine closure and site restoration 22,887 23,025
Non-controlling interests 37,682 35,258
---------------------------------------------------------------------
214,524 211,858
---------------------------------------------------------------------
258,153 263,790
---------------------------------------------------------------------
---------------------------------------------------------------------
Contingency (note 10)
Shareholders' equity
Share capital (note 6) 179,759 178,269
Contributed surplus - stock-based
compensation 1,284 707
Cumulative translation adjustment 3,007 3,241
Retained earnings 161,906 128,646
---------------------------------------------------------------------
345,956 310,863
---------------------------------------------------------------------
604,109 574,653
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Balance Sheet Information as at
(in thousands of United States dollars)
March 31, 2005 Quebrada
(Unaudited) Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Assets
Current
Cash 105 2,208 45,315 180,956 228,584
Receivables 11,093 2,365 3,173 410 17,041
Inventories and
prepaid expenses 321 10,802 43,861 136 55,120
---------------------------------------------------------------------
11,519 15,375 92,349 181,502 300,745
Property, plant
and equipment 837 31,296 234,909 9,864 276,906
Future income and
resource taxes - 1,589 - 3,387 4,976
Long-term copper
inventory and other - - 20,223 1,259 21,482
---------------------------------------------------------------------
12,356 48,260 347,481 196,012 604,109
---------------------------------------------------------------------
---------------------------------------------------------------------
Liabilities
Current
Accounts payable
and accrued
liabilities 1,216 2,592 21,479 2,589 27,876
Copper price
participation - - - 10,000 10,000
Current portion of
obligation under
capital leases - 375 3,397 - 3,772
Current portion of
mine closure
& restoration 1,981 - - - 1,981
---------------------------------------------------------------------
3,197 2,967 24,876 12,589 43,629
Senior notes - - - 125,000 125,000
Obligation under
capital leases - 8,066 - 8,066
Obligation on
properties purchased - - - 227 227
Future income and
resource taxes - - 20,662 - 20,662
Mine closure and
site restoration 1,210 4,431 16,534 712 22,887
Non-controlling
interests - 13,436 24,246 - 37,682
---------------------------------------------------------------------
4,407 20,834 94,384 138,528 258,153
---------------------------------------------------------------------
---------------------------------------------------------------------
December 31, Quebrada
2004 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Assets
Current
Cash 461 981 10,988 194,090 206,520
Receivables 10,804 1,116 1,837 485 14,242
Inventories and
prepaid expenses 401 11,716 40,411 222 52,750
---------------------------------------------------------------------
11,666 13,813 53,236 194,797 273,512
Property, plant
and equipment 1,427 33,433 230,607 8,420 273,887
Future income and
resource taxes - 2,119 - 3,387 5,506
Long-term copper
inventory and other - - 20,426 1,322 21,748
---------------------------------------------------------------------
13,093 49,365 304,269 207,926 574,653
---------------------------------------------------------------------
---------------------------------------------------------------------
Liabilities
Current
Accounts payable
and accrued
liabilities 1,629 2,567 16,264 7,830 28,290
Dividends payable - - - 7,849 7,849
Copper price
participation - - - 10,000 10,000
Current portion of
obligation under
capital leases - 368 3,479 - 3,847
Current portion of
mine closure & site
restoration 1,946 - - - 1,946
---------------------------------------------------------------------
3,575 2,935 19,743 25,679 51,932
Senior notes - - - 125,000 125,000
Obligation under
capital leases - - 8,952 - 8,952
Obligation on
properties purchased - - - 227 227
Future income and
resource taxes - - 19,396 - 19,396
Mine closure and
site restoration 1,141 4,424 16,743 717 23,025
Non-controlling
interests - 13,827 21,431 - 35,258
---------------------------------------------------------------------
4,716 21,186 86,265 151,623 263,790
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Statements of Cash Flow
(in thousands of United States dollars) Three months ended
March 31
------------------------
(Unaudited) 2005 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $
Operating activities
Net earnings for the period 33,260 26,634
Non-cash items -
Depreciation and amortization 8,451 9,963
Future income and resource taxes 1,795 4,689
Mine closure and site restoration 786 458
Gain on sale of marketable securities (1,135) -
Gain on disposal of property, plant
and equipment (16) (31)
Interest on obligation on properties
purchased 9 187
Stock-based compensation 577 90
Non-controlling interests 5,664 4,933
---------------------------------------------------------------------
49,391 46,923
Net change in non-cash working capital
items (note 8) (5,584) (6,385)
---------------------------------------------------------------------
43,807 40,538
---------------------------------------------------------------------
Financing activities
Dividends on common shares (7,849) -
Repayments of capital leases (987) (865)
Payments of non-controlling interests (3,239) (2,754)
Common shares issued 1,490 560
Foreign exchange and other (482) (503)
---------------------------------------------------------------------
(11,067) (3,562)
---------------------------------------------------------------------
Investing activities
Payment of 2004 copper price participation (10,000) -
Property, plant and equipment (352) (1,339)
Mineral property development (1,477) (255)
Proceeds on sale of marketable securities 1,135 -
Proceeds on disposal of property,
plant and equipment 18 70
---------------------------------------------------------------------
(10,676) (1,524)
---------------------------------------------------------------------
Increase in cash for the period 22,064 35,452
Cash - beginning of period 206,520 75,313
---------------------------------------------------------------------
Cash - end of period 228,584 110,765
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Cash Flow for the three months
ended March 31
(in thousands of United States dollars)
(Unaudited)
Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating activities
Net earnings (loss) 3,424 6,646 25,333 (2,143) 33,260
Non-cash items 2,375 5,978 9,883 (2,105) 16,131
---------------------------------------------------------------------
5,799 12,624 35,216 (4,248) 49,391
Net change in
non-cash working
capital items (624) (309) 429 (5,080) (5,584)
---------------------------------------------------------------------
5,175 12,315 35,645 (9,328) 43,807
---------------------------------------------------------------------
Financing activities
Dividends on common
shares - - - (7,849) (7,849)
Repayments of capital
leases - - (987) - (987)
Payments of
non-controlling
interests - (3,239) - - (3,239)
Common shares issued - - - 1,490 1,490
Foreign exchange and
other 22 (116) (219) (169) (482)
---------------------------------------------------------------------
22 (3,355) (1,206) (6,528) (11,067)
---------------------------------------------------------------------
Investing activities
Payment of copper
price participation - - - (10,000) (10,000)
Property, plant and
equipment - (292) (47) (13) (352)
Mineral property
development - - - (1,477) (1,477)
Proceeds on sale of
marketable securities - - - 1,135 1,135
Proceeds on disposal
of property, plant
& equipment 18 - - - 18
---------------------------------------------------------------------
18 (292) (47) (10,355) (10,676)
---------------------------------------------------------------------
Intersegment
distributions to
corporate (5,571) (7,441) (65) 13,077 -
---------------------------------------------------------------------
Increase (decrease)
in cash for the
period (356) 1,227 34,327 (13,134) 22,064
Cash - beginning of
period 461 981 10,988 194,090 206,520
---------------------------------------------------------------------
Cash - end of period 105 2,208 45,315 180,956 228,584
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating activities
Net earnings (loss) 3,900 6,285 20,151 (3,702) 26,634
Non-cash items 2,163 5,076 13,676 (626) 20,289
---------------------------------------------------------------------
6,063 11,361 33,827 (4,328) 46,923
Net change in
non-cash working
capital items (3,343) (851) 229 (2,420) (6,385)
---------------------------------------------------------------------
2,720 10,510 34,056 (6,748) 40,538
---------------------------------------------------------------------
Financing activities
Repayments of
capital leases - - (865) - (865)
Payments of
non-controlling
interests - (2,550) (204) - (2,754)
Common shares issued - - - 560 560
Foreign exchange
and other (28) (64) (343) (68) (503)
---------------------------------------------------------------------
(28) (2,614) (1,412) 492 (3,562)
---------------------------------------------------------------------
Investing activities
Property, plant
and equipment - (1,305) (27) (7) (1,339)
Mineral property
development - - - (255) (255)
Proceeds on disposal
of property, plant
& equipment - - 70 - 70
---------------------------------------------------------------------
- (1,305) 43 (262) (1,524)
---------------------------------------------------------------------
Intersegment
distributions to
corporate (2,369) (5,903) (417) 8,689 -
---------------------------------------------------------------------
Increase in cash
for the period 323 688 32,270 2,171 35,452
Cash - beginning
of period 303 1,205 10,928 62,877 75,313
---------------------------------------------------------------------
Cash - end of period 626 1,893 43,198 65,048 110,765
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
AUR RESOURCES INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2005 and 2004
(in thousands of United States dollars except where otherwise noted)
(Unaudited)
1. Accounting policies The interim unaudited consolidated financial statements of Aur Resources Inc. ("Aur") have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of using the same accounting policies as those disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in note 1 to Aur's audited consolidated financial statements for the year ended December 31, 2004. These interim unaudited consolidated financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with Aur's audited annual consolidated financial statements included in Aur's Annual Report for 2004.
2. Inventories and prepaid expenses
March 31 December 31
2005 2004
----------------------------
$ $
Cathode copper 4,466 2,183
In-process inventories 39,314 38,375
Mine supplies 10,233 10,488
Prepaid expenses 1,107 1,704
----------------------------
55,120 52,750
----------------------------
----------------------------
The amount of depreciation and amortization capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. to cathode copper and in-process inventories at March 31, 2005 and December 31, 2004 was $6,773 and $6,587, respectively. The depreciation and amortization in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of cathode copper and in-process inventories will be charged to the depreciation and amortization expense category of the statement of operations See Income statement. .
3. Long-term copper inventory and other
March 31 December 31
2005 2004
----------------------------
$ $
Long-term in-process copper inventory 18,747 18,747
Deferred financing cost 1,259 1,322
Other 1,476 1,679
----------------------------
21,482 21,748
----------------------------
----------------------------
4. Copper price participation Teck Cominco Limited ("Teck Cominco") is entitled to a payment of up to $10,000 per year (or after 2006 or the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of the senior notes, $2,500 quarterly) to a maximum of $40,000, should average yearly (or after 2006 or the repayment of the senior notes, quarterly) copper prices equal or exceed $1.22 per pound at December 31, 2004, adjusted for United States inflation until December 31, 2012. Included in current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. at December 31, 2004 was $10,000 pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to this commitment as the actual average copper price per pound for 2004 of $1.30 exceeded the inflation adjusted copper price. The $10,000 was paid on January 7, 2005. Based upon the actual average copper price for the first quarter of 2005 and the period end forward copper price for the balance of the year, the average copper price for 2005 is calculated to exceed the inflation adjusted copper price for 2005. Accordingly, an additional $10,000 liability to Teck Cominco has been accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. at March 31, 2005 with a corresponding increase in property, plant and equipment assets at Quebrada Blanca. 5. Senior notes On March 10, 2003, Aur issued US$125,000 of senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. notes (the "Notes") to a number of U.S. insurance companies. The Notes bear interest at 6.75% per annum Per annum Yearly. , require semi-annual interest payments and are repayable re·pay v. re·paid , re·pay·ing, re·pays v.tr. 1. To pay back: repaid a debt. 2. at any time in whole or in part, subject to certain specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. premiums based on prevailing interest rates at the time of prepayment.
6. Share capital, earnings per share and stock-based compensation
(a) Issued and outstanding
Three months ended March 31
--------------------------------------
2005 2004
--------------------------------------
Shares Amount Shares Amount
--------------------------------------
# 000's $ # 000's $
Common shares
Balance - beginning of period 94,401 178,269 93,849 177,160
Share purchase options
exercised 775 1,490 259 560
--------------------------------------
Balance - end of period 95,176 179,759 94,108 177,720
--------------------------------------
--------------------------------------
(b) Earnings per common share
Three months ended
March 31
------------------------
2005 2004
------------------------
$ $
(i) Basic
Numerator
Net earnings available to shareholders 33,260 26,634
------------------------
Denominator (# 000's)
Weighted average number of shares 94,869 94,007
------------------------
Basic earnings per share 0.35 0.28
------------------------
------------------------
(ii) Diluted
Numerator
Net earnings available to shareholders 33,260 26,634
------------------------
Denominator (# 000's)
Weighted average number of shares 94,869 94,007
Potential issuance of shares from
purchase options 777 1,294
Potential incremental issuance from
stock-based compensation 275 30
------------------------
95,921 95,331
------------------------
Diluted earnings per share 0.35 0.28
------------------------
------------------------
(c) Stock-based compensation plans At March 31, 2005, Aur had one stock-based compensation plan, a common share purchase option plan (the "Plan"), which is described below. Effective January 1, 2003, Aur adopted the recommendations of the CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) with respect to stock-based compensation and commenced to expense stock options granted since January 1, 2003 using the fair value method. The Plan is for directors, officers and senior management personnel of Aur. Options under the Plan are typically granted in such numbers as reflect the level of responsibility of the particular optionee n. 1. (Finance) A person who holds an option to buy or sell a financial instrument. See option. and his or her contribution to the business and activities of Aur. Options granted under the Plan typically have a five year term and are typically made cumulatively exercisable by the holders thereof as to a proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. part of the aggregate number of shares subject to the option over a specified term. Except in specified circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , options are not assignable and terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. upon the optionee ceasing to be employed by or associated with Aur. The terms of the Plan further provide that the price at which shares may be issued under the Plan cannot be less than the market price of the shares when the relevant options are granted. Aur's common shares are listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and trade in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents ("CDN"). The following table summarizes information regarding Aur's outstanding and exercisable common share purchase options as at March 31, 2005:
Outstanding Exercisable
---------------------------------------------------------------------
Weighted Weighted
Range of Weighted average average
exercise average exercise exercise
prices months price price
per share Shares remaining per share Shares per share
---------------------------------------------------------------------
Cdn$ # 000's # CDN$ # 000's CDN$
1.96 to 2.55 295 10 2.11 286 2.07
3.30 to 3.91 764 34 3.59 519 3.66
4.10 to 5.90 431 43 5.34 170 5.06
6.11 to 6.75 1,376 57 6.42 527 6.43
---------- ----------
2,866 1,502
---------- ----------
---------- ----------
The number of stock options outstanding at March 31, 2005 represents 3.0% of Aur's issued and outstanding common shares. The following table summarizes information regarding Aur's common share purchase options for the three months ended March 31, 2005 and 2004:
2005 2004
-------------------------------------------
Weighted Weighted
average average
exercise exercise
price price
Shares per share Shares per share
-------------------------------------------
# 000's CDN$ # 000's CDN$
Balance - beginning
of period 2,465 3.55 2,553 2.85
Granted 1,175 6.43 100 6.75
Exercised (774) 2.36 (260) 2.64
Expired - - (25) 1.96
-------------------------------------------
Balance - end of period 2,866 5.05 2,368 3.05
-------------------------------------------
-------------------------------------------
For purposes of stock-based compensation, the fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on with the following weighted average assumptions used for grants as follows: dividend yield of 1.4% (2004 - 0%), expected volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of 42% (2004 - 44%), risk-free interest rate Risk-Free Interest Rate Describes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensataes the investor for the temporary sacrifice of consumption. of 3.2% (2004 - 2.4%) and expected life of 24 months (2004 - 36 months).
7. Other expenses (revenues)
Three months ended
March 31
------------------------
2005 2004
------------------------
$ $
Interest on obligation under capital leases 147 227
Interest and other income (1,476) (630)
Interest and financing costs 13 211
Foreign exchange (713) (172)
Gain on sale of marketable securities (1,135) -
Gain on disposal of property, plant
and equipment (16) (31)
Miscellaneous 105 129
------------------------
(3,075) (266)
------------------------
------------------------
8. Supplementary cash flow information
Three months ended
March 31
------------------------
2005 2004
------------------------
$ $
Net change in non-cash working capital items:
Receivables (2,799) (3,465)
Inventories and prepaid expenses (2,370) 1,796
Accounts payable and accrued liabilities (415) (4,716)
------------------------
(5,584) (6,385)
------------------------
------------------------
Other information:
Interest paid 4,219 4,219
Income, resource and capital taxes paid 4,217 220
9. Fair value of financial instruments The carrying amounts of cash, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and current liabilities approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. their fair value due to the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. maturities of these instruments. 10. Contingency In 2003, the Chilean Internal Revenue Service (the "IRS") issued to CMQB a notice of reassessment in respect of the deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of certain components of guarantee fee payments claimed as expenses by CMQB totalling $3,805, thereby reducing by $3,805 of tax loss carryforwards tax loss carryforward See carryforward. that would otherwise be available to CMQB and reassessing CMQB for withholding taxes The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. of $2,480, including interest and penalties, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the payment of the guarantee fees to Aur in 2003. It is the opinion of management and CMQB's legal counsel that CMQB's income tax filings with respect to the guarantee fees are correct and that the payment of the guarantee fees does not attract withholding taxes. Should CMQB ultimately be unsuccessful in overturning the reassessment, Aur would record a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge to earnings equal to its proportionate share of CMQB's expense of $2,480, including interest and penalties. At this time, the outcome of the resolution of this reassessment cannot be determined and, accordingly, the loss, if any, has not been recorded in the consolidated financial statements. Aur Resources Inc. (TSX:AUR) |
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