Aur Resources Inc. Reports Record Net Earnings of US$41.5 Million for the Fourth Quarter and US$142.3 Million for Fiscal 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 -- (All dollar amounts 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 unless otherwise stated) 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) today announced record net earnings for the fourth quarter of US$42 million and record full year net earnings in 2005 of US$142 million. The Company also reported record copper production at its Quebrada Blanca and Andacollo Andacollo is a city in the Coquimbo Region, Chile. It is located at around . Mines 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. which contributed to Aur's record cash flows from operating activities which were $89.3 million for the fourth quarter and $249.8 million for the full year. "Aur's record net earnings and cash flow in 2005 attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as to the success of our strategy of acquiring, developing and operating low cost, reliable mines with sufficient reserves to ensure production throughout the metal price cycles," said Jim Gill gill, in weights and measures gill, in weights and measures: see English units of measurement. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We expect 2006 will be another excellent year for Aur with solid copper production, continuing high metal prices and the scheduled start-up Start-up The earliest stage of a new business venture. of our new 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. copper-zinc mine in Newfoundland Newfoundland, breed of dog Newfoundland, breed of massive, powerful working dog developed in Newfoundland, probably in the 17th cent., and later perfected in England. It stands from 25 to 28 in. (63.5–71. in the fourth quarter." "With our strong balance sheet, cash of $361 million and substantial cash flow, Aur's capacity to continue to grow through exploration and acquisitions has never been better," added Mr. Gill. Fourth Quarter and 2005 Highlights - Copper Production Records at the Quebrada Blanca and Andacollo Mines. - Record Net Earnings of $41.5 million or $0.44 (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. $0.53) per share in the fourth quarter, an increase of 24% compared to 2004. - Record Net Earnings of $142.3 million or $1.49 (CDN$1.80) per share in 2005, an increase of 47% compared to 2004. - Cash Flow from Operating Activities at all time highs of $89.3 million in the fourth quarter and $249.8 million for the full year in 2005, representing increases of 56% and 53%, respectively. - Cash and Working Capital increased to $361.3 million and $341.7 million, respectively, as at December December: see month. 31, 2005. - Cash per Share of $3.75 (CDN$4.52) at December 31, 2005. - Cash Balances increased by $154.8 million in 2005. - Dividends of $11.8 million paid to Aur shareholders in 2005. Financial Results Mining revenues were $132.7 million in the fourth quarter of 2005, compared to $97.9 million for the same period in 2004. Net earnings were $41.5 million, equal to $0.44 per share for the quarter, a 24% increase over net earnings of $33.5 million or $0.36 per share for the same quarter last year. Cash flow from operating activities was $89.3 million, equal to $0.94 (CDN$1.13) per share, compared to $57.1 million or $0.60 per share in the fourth quarter of 2004. 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: cash position at December 31, 2005 increased by $35.1 million to $361.3 million from September September: see month. 30, 2005, and working capital increased by $21.7 million to $341.7 million after the payment of $32.7 million of dividends to the non-controlling shareholders of Quebrada Blanca in December. Aur's consolidated cash exceeded its $125 million senior note debt by $236.3 million at December 31, 2005. Mining revenues for 2005 were $446.9 million, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 33% higher than the $336.9 million in 2004. Net earnings were $142.3 million, equal to $1.49 (CDN$1.80) per share for the year, compared to $96.9 million or $1.03 per share, in 2004. Cash flow from operating activities was $249.8 million, equal to $2.62 (CDN$3.17) per share for 2005, compared to $163.4 million or $1.73 per share in 2004. Aur's consolidated cash position at December 31, 2005 was $361.3 million, an increase of 75%, or $154.7 million, from December 31, 2004. Working capital at December 31, 2005 was $341.7 million, an increase of $120.2 million in 2005. Aur's realized copper price, including cathode sales premiums and quotational period metal pricing adjustments, averaged $2.19 per pound and $1.83 per pound of copper sold in the fourth quarter and for 2005, respectively, compared to the LME See London Metal Exchange. LME See London Metal Exchange (LME). average price for the quarter of $1.95 per pound and $1.67 per pound for the year. The following table presents a summary of Aur's Consolidated Statements of Operations for the periods ended December 31, 2005 and 2004:
Three months ended December 31 Year
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2005 2004 Change 2005 2004 Change
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$000 $000 $000 $000 $000 $000
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Mining
revenues 132,699 97,884 34,815 446,945 336,880 110,065
Mining
expenses (42,851) (41,088) (1,763) (167,230) (146,673) (20,557)
Depreciation
&
amortization (7,974) (2,702) (5,272) (32,820) (30,517) (2,303)
Mine
closure &
restoration (410) (612) 202 (3,499) (2,454) (1,045)
Non-controlling
interests (17,219) (5,563) (11,656) (40,704) (17,672) (23,032)
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Operating
earnings 64,245 47,919 16,326 202,692 139,564 63,128
Business
development (3,047) (1,411) (1,636) (7,402) (4,315) (3,087)
Administ-
ration (2,358) (1,362) (996) (7,191) (6,250) (941)
Interest
on
long-term
debt (2,110) (2,110) - (8,438) (8,438) -
Stock-based
compensation (548) (113) (435) (1,689) (396) (1,293)
Taxes (15,042) (8,950) (6,092) (40,112) (23,269) (16,843)
Interest
and other 373 (435) 808 4,417 39 4,378
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Net
earnings 41,513 33,538 7,975 142,277 96,935 45,342
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Basic
earnings
per share 0.44 0.36 0.08 1.49 1.03 0.46
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Metal Production and Sales Fourth Quarter Aur's share of metal production from the Andacollo and Quebrada Blanca Mines in the fourth quarter of 2005 was 60.3 million pounds of copper, compared to 63.4 million pounds of copper, 3.3 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. , 46,000 ounces of silver and 2,100 ounces of gold in the fourth quarter of 2004 which included production from the Louvicourt Mine which closed on July July: see month. 12, 2005. Aur's share of copper production was 3.1 million pounds lower than the fourth quarter of 2004 due to the Louvicourt Mine closure. Mining revenues were $132.7 million in the fourth quarter of 2005; a $34.8 million increase over the same period in 2004. The increase was primarily due to higher realized copper prices, which were $0.70 per pound higher, partly offset by lower sales volumes from Louvicourt. Minesite cash operating costs operating costs npl → gastos mpl operacionales were $42.9 million in the fourth quarter of 2005, compared to $41.1 million in 2004. Aur's cash operating cost per pound of copper sold was $0.71 for the quarter, $0.11 per pound higher than in the fourth quarter of 2004. The higher unit operating costs resulted primarily from increased energy, acid, foreign exchange and transportation costs. Full Year Aur's share of metal production from the Louvicourt, Andacollo and Quebrada Blanca Mines in 2005 was 240.0 million pounds of copper, 8.8 million pounds of zinc, 138,000 ounces of silver and 4,500 ounces of gold, compared to 236.0 million pounds of copper, 13.6 million pounds of zinc, 188,000 ounces of silver and 7,000 ounces of gold in 2004. Copper production in 2005 was 4.0 million pounds higher than in 2004 despite the closure of the Louvicourt mine in July. Mining revenues were $446.9 million in 2005, an increase of 33% over 2004 revenues of $336.9 million. The increase in mining revenues was primarily due to a $0.45 per pound rise in the realized copper price and 3 million more pounds of copper sales. Higher copper sales and the higher copper price generated $4.1 million and $108.6 million more revenue, respectively, in 2005, compared to 2004. Minesite cash operating costs were $167.2 million in 2005, compared to $146.7 million in 2004. Aur's cash operating cost per pound of copper sold was $0.67 in 2005, compared to $0.57 in 2004. The 3.0 million more pounds of copper sold in 2005 compared to 2004 added $1.8 million to mining expenses with the remaining $18.7 million of higher operating costs resulting primarily from higher costs for energy, consumables and the impact of the strong Chilean peso versus the United States dollar. The following tables present the calculation of cash operating costs per pound of copper sold, net of 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, for the three months and year ended December 31, 2005 and 2004:
Cash Operating Costs (1)
Three Months Ended December 31
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2005 2004
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$000's $/lb. $000's $/lb.
Mining expenses 42,851 0.71 41,088 0.64
By-product credits
Zinc 53 - (1,816) (0.03)
Silver (1) - (344) (0.00)
Gold 7 - (933) (0.01)
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Cash operating costs 42,910 0.71 37,995 0.60
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Copper sold (000's lbs.) 60,567 63,770
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Cash Operating Costs (1)
Full Year Ended December 31
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2005 2004
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$000's $/lb. $000's $/lb.
Mining expenses 167,230 0.70 146,673 0.62
By-product credits
Zinc (5,259) (0.2) (6,564) (0.03)
Silver (961) - (1,256) (0.01)
Gold (1,897) (0.1) (2,897) (0.01)
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Cash operating costs 159,113 0.67 135,956 0.57
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Copper sold (000's lbs.) 239,374 236,414
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(1) Aur, and the mining industry in general, utilize unit cost, net of by-product credits, information to better understand costs and reporting period fluctuations. There are no industry standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. measures used in calculating unit cash costs and this data is intended only to provide information and should not be considered in isolation or as a substitute for measures of performance 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 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . The measures are not necessarily indicative indicative: see mood. of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. or cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses as determined under GAAP. 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 (2) The following table presents a summary of mine operating earnings for the periods ended December 31, 2005 and 2004.
Three months ended
December 31 Year
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2005 2004 Change 2005 2004 Change
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$000's $000's $000's $000's $000's $000's
Louvicourt (91) 6,723 (6,814) 14,145 21,669 (7,524)
Andacollo 20,500 10,913 9,587 62,079 38,201 23,878
Quebrada Blanca 69,439 39,160 30,279 203,491 130,337 73,154
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89,848 56,796 33,052 279,715 190,207 89,508
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(2) Mine operating earnings equals mining revenues less mining
expenses.
Mine 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. Cash flow from mine operating activities was $92.6 million in the fourth quarter of 2005 and $270.0 million for 2005, compared to $51.6 million and $173.1 million, respectively, for the same period last year. Mine operating cash flow increased 79% in the fourth quarter and 56% for the full year 2005 by comparison to 2004. Louvicourt Mine After almost 11 years of production, the Louvicourt Mine ceased operation on July 12, 2005. Decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. work is now in progress. Louvicourt produced 38.0 million pounds of copper and 29.5 million pounds of zinc from 819,920 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 in 2005. 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. was 276,920 tonnes higher than planned and copper and zinc production were 8.8 million pounds and 10.0 million pounds, respectively, higher than planned for 2005 due principally to higher metal prices which allowed the profitable mining of lower grade ore not in the mine plan. Aur's share of Louvicourt's revenues was $27.2 in 2005. Cash operating costs were $0.43 per pound of copper sold, net of by-product credits. Aur's 30% of the cash flow from operating activities was $4.3 million in the fourth quarter of 2005 and $20.7 million for the full year. Cash was $1.5 million and working capital was $0.5 million at December 31, 2005. Comparison of 2005 operating and financial information to 2004 is not considered meaningful due to the Mine closure on July 12, 2005. Andacollo Mine Fourth Quarter The Andacollo Mine produced 13.1 million pounds of LME registered Grade A cathode copper during the fourth quarter of 2005, the same as in the fourth quarter of 2004. A total of 3.9 million tonnes of rock, of which 0.9 million tonnes was ore, was mined at a strip ratio of 3.3:1. A total of 4.7 million tonnes of rock, of which 1.0 million tonnes was ore, was mined at a strip ratio of 3.7:1 in the fourth quarter of 2004. Andacollo's revenues of $29.6 million, generated from the sale of 13.2 million pounds of copper in the fourth quarter of 2005, were $10.0 million higher than the revenues of $19.6 million in the fourth quarter of 2004 as a result of higher copper prices. Cash operating costs were $8.1 million, $1.8 million higher than for the same period in 2004 principally due to higher energy, reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. and labour costs and the negative impact of a strong Chilean peso versus the United States dollar. The cash operating costs in the fourth quarter of 2005 were $0.69 per pound of copper sold, $0.02 per pound higher than in 2004. Cash flow from operating activities was $17.2 million in the fourth quarter of 2005, compared to $9.1 million in 2004. Expenditures on property, plant and equipment were $3.4 million in the fourth quarter, including $1.8 million on the Hypogene hy·po·gene adj. Formed or situated below the earth's surface. Used of rocks. deposit 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. , compared to $0.5 million in 2004 as both the construction of 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 and the Hypogene feasibility study were initiated in 2005. Full Year - Record Copper Production of 51.6 million pounds Andacollo produced 51.6 million pounds of LME registered Grade A cathode copper in 2005, 5.5 million pounds more than in 2004. A new record for copper production was established in 2005 exceeding the previous record of 48.7 million pounds by 6%. A total of 18.0 million tonnes of rock, of which 4.1 million tonnes was ore, was mined at a strip ratio of 3.4:1. A total of 16.1 million tonnes of rock, of which 3.4 million tonnes was ore, was mined at a strip ratio of 3.7:1 in 2004. Andacollo's revenues of $95.3 million, generated from the sale of 46.2 million pounds of copper 2005, were $30.9 million higher than the revenues of $64.4 million in 2004, primarily as a result of higher realized copper prices and higher copper sales. Cash operating costs were $33.2 million, $7.0 million higher than in 2004 due to 5.2 million pounds more copper being sold and to higher energy, reagent and labour costs as well as the negative impact of the strong Chilean peso versus the United States dollar. The cash operating costs in 2005 were $0.65 per pound of copper sold, $0.08 per pound higher than in 2004 for the same reasons. Cash flow from operating activities was $65.1 million in 2005, compared to $33.5 million in 2004. Expenditures on property, plant and equipment were $7.2 million for the year to date, compared to $3.0 million in 2004 as the dump leach facility construction was initiated and $4.2 million was spent on the Hypogene deposit feasibility study in 2005. In October October: see month. 2005, Aur announced an increase in leachable reserves which will extend the life of the supergene su·per·gene n. A group of closely linked genes occupying a large chromosomal segment and frequently functioning as a genetic unit. mine until late 2010 and increase the remaining copper production by 83.4 million pounds, or 58%, to 227.4 million pounds. The dump leach facility and a small heap leach pad expansion are currently under construction to allow for this increased copper production. Quebrada Blanca Mine Fourth Quarter The Quebrada Blanca Mine produced 47.2 million pounds of LME registered Grade A cathode copper in the fourth quarter of 2005, compared to 44.8 million pounds in the fourth quarter of 2004. A total of 9.0 million tonnes of rock, of which 2.1 million tonnes was heap leach ore and 3.2 million tonnes was dump leach ore, was mined at a strip ratio of 0.7:1 in the fourth quarter of 2005, compared to 9.3 million tonnes of rock, of which 1.8 million tonnes was heap leach ore and 2.1 million tonnes was dump leach ore, at a strip ratio of 1.4:1 for the fourth quarter 2004. Quebrada Blanca's revenues, generated from the sale of 47.3 million pounds of copper, were $103.1 million in the fourth quarter of 2005, compared to $66.3 million generated from the sale of 44.8 million pounds of copper in 2004. The $36.8 million increase in revenues was due to a higher realized copper price and the higher sales volumes. Cash operating costs of $32.1 million were $5.9 million higher than in the same period in 2004. Cash operating costs were $0.74 per pound of copper sold, $0.09 per pound higher than in the fourth quarter of 2004 due to significantly higher energy, acid, labour and transportation costs and the negative impact of the strong Chilean peso versus the United States dollar. Cash flow from operating activities was $45.0 million in the fourth quarter of 2005 compared to $24.6 million in 2004. Expenditures on property, plant and equipment were $1.1 million in the fourth quarter, compared to $0.4 million in 2004. Full Year - Record Copper Production of 177.0 million pounds Quebrada Blanca produced a record 177.0 million pounds of LME registered Grade A copper in 2005, compared to 168.0 million pounds produced in 2004. A total of 36.6 million tonnes of rock, of which 7.7 million tonnes was heap leach ore and 12.6 million tonnes was dump leach ore, was mined at a strip ratio of 0.8:1 in 2005. A total of 34.9 million tonnes of rock, of which 7.1 million tonnes was heap leach ore and 7.8 million tonnes was dump leach ore, was mined at a strip ratio of 1.3:1 in 2004. Quebrada Blanca's revenues, generated from the sale of 176.5 million pounds of copper, were $324.4 million in 2005, compared to $231.4 million generated from the sale of 168.3 million pounds of copper in 2004. The $93.0 million revenue increase was due to higher realized copper prices and higher sales volumes. Cash operating costs were $87.2 million, $13.4 million higher than in 2004. Cash operating costs were $0.69 per pound of copper sold in the first nine months of 2005, $0.12per pound higher than last year, for the same reasons as in the fourth quarter. Cash flow from operating activities in 2005 was $118.0 million, compared to $85.6 million in 2004. Expenditures on property, plant and equipment were $1.6 million compared to $1.5 million in 2004. Development Projects Duck Pond - Newfoundland The Duck Pond copper-zinc deposit remains on schedule to begin production in the fourth quarter of 2006. The ramp had advanced to approximately 1,236 metres at the end of January January: see month. 2006, the power line has been completed and energized, the mill building is essentially enclosed en·close also in·close tr.v. en·closed, en·clos·ing, en·clos·es 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. and the major mill equipment is on site. Communications, camp facilities, water lines and laydown areas are operational and site clearing for the tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. pond POND. A body of stagnant water; a pool. 2. Any one has a right to erect a fish pond; the fish in ii are considered as real estate, and pass to the heir and not to the executor. Ow. 20. See Pool; River; Water. is in progress. Key senior operating staff are on site with total manpower including contractors now totalling 130 people. Capital expenditures were $30.4 million in 2005. In order to optimize optimize - optimisation mine production in 2007 and improve flexibility in the mine a decision was made to accelerate underground development in 2006. This additional work, at a cost of $3.7 million, will include 430 metres of underground development as well as approximately 20,000 metres of definition drilling originally planned for 2007. A decision was also made to purchase rather than lease the mine mobile equipment which will increase the initial capital by $7.2 million but reduce cash operating costs going forward. The total pre-commercial capital investment will therefore be $72.2 million for the original scope of work plus $11.8 million of additional expenditures for the scope of work changes, less pre-commercial production net revenues of $6.0 million, for a total of $78.0 million. In 2006, 5.6 million pounds of copper and 10.2 million pounds of zinc, in concentrate, are scheduled to be produced at Duck Pond, the estimated revenues from which will be credited against the capital expenditures. The net capital development costs for Duck Pond are now forecast to be $82.2 million. In January 2006, Aur sold forward 256.4 million pounds (116,300 tonnes) of zinc to be produced from the Duck Pond Mine during the period July 2007 to December 2011. These forward sales forward sales npl → ventas fpl a término , which represent 75% of the planned zinc production during this period, have been made on an equal monthly basis at an average price of $0.84 per pound in 2007, $0.78 in 2008, $0.72 in 2009, $0.67 in 2010 and $0.63 in 2011. The weighted average sales price is $0.72 per pound ($1,580 per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. ). Andacollo Hypogene Copper Deposit - Chile The final feasibility study for the Andacollo Hypogene copper deposit is progressing and is expected to be completed near the end of March 2006. In 2005, approximately $4.2 million of the $5.0 million budget for this work was spent. The final feasibility study is well advanced with respect to mine planning and capital cost estimates and the environmental permitting procedures have been initiated. The major construction work to prepare this deposit for production consists of the construction of a 50,000 tonne per day flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. mill to produce copper concentrates and a facility to store mill tailings. The Andacollo Hypogene copper deposit has the potential to produce approximately 175 million pounds of copper and 59,000 ounces of gold annually for a period of over 20 years. A decision with respect to the development of this large deposit is expected to be made following completion of the final feasibility study. Other Financial Information Business Development Aur's expenditures on its exploration projects and the identification and evaluation of acquisitions were $3.0 million and $7.4 million in the fourth quarter and in 2005, respectively. Drilling is now in progress on the Juan Juan (IPA: [xwan]) is a Spanish form of the given name John (q.v.). It was the 55th most popular name in the United States as of 2003. Godoy copper project in Chile. Progress on resolving the land access issues at 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 has been slow and drilling to evaluate the copper discovery made earlier this year remains suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. . The search for development stage deposits 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. producing mines which will meet Aur's investment criteria criteria (krītēr´ē  ),n. continues and includes Africa, 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. and CIS countries There are two lists concerning CIS countries:
See America. . A number of assets have been identified and are under evaluation. Administration Administration expenses were $2.4 million and $7.2 million in the fourth quarter and in 2005, respectively, compared to $1.4 million and $6.3 million, respectively, in 2004. Expenditures were higher due to the increased level of business activity and additions to senior management staff during the year. Depreciation and amortization Depreciation and amortization expenses were, as expected, $8.0 million and $32.8 million in the fourth quarter and in 2005 respectively, compared to $2.7 million and $30.5 million, respectively, in 2004. Mine closure and site restoration Non-cash mine closure and site-restoration expenses were $0.4 million and $3.5 million in the fourth quarter and in 2005, respectively, compared to $0.6 million and $2.5 million in the same periods of 2004. 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 $125 million senior notes debt was $2.1 million and $8.4 million in the fourth quarter and for the year, respectively, in both 2005 and 2004. Stock-based compensation Stock-based compensation expense was $0.5 million and $1.6 million in the fourth quarter and for the year, respectively, compared to $0.1 million and $0.4 million for the same periods in 2004. Other expenses (revenues) The net amount of other expenses and revenues was positive $0.4 million and 4.4 million in the fourth quarter and for 2005, respectively, compared to negative $0.4 million and $0.0 million, for the same periods in 2004. Net revenues in the fourth quarter were primarily due to interest income of $3.4 million, a gain on the sale of property, plant and equipment of $0.2 million, partially offset by a $2.9 million copper price participation amount payable to ENAMI ENAMI Empresa Nacional de Mineria (National Mining Company; Chile) by Quebrada Blanca, and interest and financing costs of $0.1 million. For the full year, net revenues consisted primarily of interest income of $9.5 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 $1.9 million and a gain on the sale of property, plant and equipment of $0.7 million partially offset by a $6.0 million copper price participation payable to ENAMI by Quebrada Blanca in 2006. Provision for income and resource taxes Provision for taxes was $15.0 million in the fourth quarter and $40.1 million for the year, respectively, compared to $9.0 million and $23.3 million, respectively, in 2004. Cash taxes totaled $32.5 million, of which $28.0 million related to Quebrada Blanca, $2.4 million related to Andacollo and $2.4 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 totaled $7.6 million. Cash taxes totaled $2.6 million in 2004. The higher tax expense in 2005 is a result of higher earnings. Non-controlling interests Non-controlling interests expense, related to the interests of Aur's partners in the Andacollo and Quebrada Blanca Mines, was $17.2 million and $40.7 million in the fourth quarter and for 2005, respectively, compared to $5.6 million and $17.7 million for the same periods in 2004. Cash payments to non-controlling interests totaled $36.3 million for the year compared to $16.9 million in 2004. The debt obligations of both Andacollo and Quebrada Blanca were fully repaid in June June: see month. 2005 and, as a result, Aur then became 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: to receive 76.5% and 63% of Quebrada Blanca's and Andacollo's future cash distributions, respectively. As at December 31, 2005, the entitlement An individual's right to receive a value or benefit provided by law. Commonly recognized entitlements are benefits, such as those provided by Social Security or Workers' Compensation. of the non-controlling interests to cash distributions was $6.5 million. A cash distribution in the form of dividends of $32.7 million was made to non-controlling interests in the Quebrada Blanca Mine in December 2005. Working capital Working capital increased $21.7 million during the fourth quarter to $341.7 million at December 31, 2005, primarily due to increased cash balances resulting from operating activities. Property, plant and equipment Investments in property, plant and equipment totaled $49.1 million in 2005, compared to $6.1 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 2005 copper price participation amount payable 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 Limited in January 2006, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the purchase of Quebrada Blanca in 2000, $30.4 million invested at Duck Pond, $7.2 million invested at Andacollo and $1.6 million invested at Quebrada Blanca. 2006 Outlook Aur has used a copper price of $2.00 per pound in developing this 2006 outlook. Aur expects its share of the scheduled 227 million pounds of copper production from the Andacollo and Quebrada Blanca Mines in 2006 to total 167 million pounds of copper. Copper production and cash operating costs per pound of copper sold are forecast to average $0.69 per pound in 2006 with fluctuations from quarter to quarter. An additional 5.6 million pounds of copper and 10.2 million pounds of zinc is scheduled to be produced from the Duck Pond Mine in the fourth quarter of 2006, the revenue from which will be credited against the capital development costs. Revenue is forecast to be approximately $464 million. Mine operating costs are expected to be $158 million. Operating profit, after business development, administration and senior notes interest costs of $26.3 million, is expected to be approximately $280 million. Net earnings, after other expenses including depreciation and amortization, mine closure, income tax provision and non-controlling interests totaling $142 million, are forecast to be approximately $138 million, equal to $1.43 or CDN$1.79 per share. Cash flow from operating activities is projected to be approximately $247 million. Cash expenditures associated with financing activities are expected to total $62 million and are comprised of $15 million for dividends for Aur shareholders, $3 million for capital leases and $44 million to non-controlling interests. Cash expenditures on investing activities are expected to total $91 million in 2006, comprised of $61 million at Duck Pond, $14 million at the Quebrada Blanca and Andacollo Mines and $16 million to Teck Cominco and ENAMI for the 2005 copper price participations. Aur's cash balance at December 31, 2006 is forecast to be $455 million. Dividends of CDN$0.20 per share totaling approximately $15 million are scheduled to be paid in 2006. These dividends are comprised of CDN$0.15 per share declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. in November November: see month. and paid on January 1, 2006 and the regular dividend of CDN$0.05 per share to be paid in July 2006. The Andacollo Mine is forecast to produce approximately 51 million pounds of 100% LME Grade A cathode copper at a cash operating cost of $0.62 per pound of copper in 2006. Expenditures on property, plant and equipment are expected to be $6 million in 2006 to complete the dump leach facility, the heap leach pad expansion and the feasibility study for the Hypogene deposit. Should a decision be made to develop the Hypogene deposit, additional capital expenditures in the $10 to $15 million range could be invested in 2006 to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. this mine development project. The Quebrada Blanca Mine is forecast to produce approximately 176 million pounds of 100% LME Grade A cathode copper at a cash operating cost of $0.71 per pound of copper in 2006. Expenditures on property, plant and equipment are expected to be $8 million in 2006. The Duck Pond Mine is currently being constructed and is on schedule to begin production in the fourth quarter of 2006. The mine plan provides for underground mining at a rate of 1,800 tonnes per day, and processing of the ore in a flotation mill, to produce 41 million pounds of copper and 76 million pounds of zinc plus precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. annually, in concentrates, for sale to smelters, during the period 2007 to 2014. Copper and zinc production are expected to be 5.6 and 10.2 million pounds, respectively, in 2006 with commercial production to be reached by early 2007. Aur's $10 million business development program will continue to focus on exploration and the search for acquisitions in 2006. Copper projects in Chile and a precious metal 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. will be drilled in 2006, and the search for new exploration projects will continue to be carried out in Chile, Peru, 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. , Argentina and Central America Central America, narrow, southernmost region (c.202,200 sq mi/523,698 sq km) of North America, linked to South America at Colombia. It separates the Caribbean from the Pacific. . A substantial drilling program at the La Verde Copper deposit in Mexico will be carried out as soon as the land access issues are resolved. The 2006 exploration program is expected to cost approximately $6 million. Aur's acquisition search for development stage and producing mines will be carried out in the Americas, Africa, Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , CIS countries and Eastern Europe in 2006 at a cost of $4 million. The focus of this initiative is copper projects with a minimum 10 year life and an after tax rate of return of at least 15% on invested capital. This will be the second year of Aur's five year, $50 million commitment to increasing Aur's profitable metal production for the future. Administration expense is forecast to be $8 million in 2006. Depreciation and amortization expenses are expected to be approximately $33 million in 2006. Forecast mine closure and site restoration expenses are $2 million in 2006. Cash income and resource tax expense is expected to amount to approximately $54 million, with 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. non-cash future income tax recoveries of $4 million in 2006. Non-controlling interests expense attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Aur's partners at the Andacollo and Quebrada Blanca Mines is forecast to be $56 million in 2006.
Estimated Effect of a $0.50/lb Change in the Price of Copper
------------------------------------------------------------
$1.50/lb $2.00/lb $2.50/lb
$millions $millions $millions
Statement of operations
Operating revenues 350.8 464.3 577.8
Expenses before taxes 210.4 216.5 222.6
---------------------------------------------------------------------
Earnings before taxes 140.4 247.8 355.2
Taxes:
Cash (38.2) (57.0) (75.8)
Future 3.5 3.5 3.5
---------------------------------------------------------------------
Earnings before
non-controlling interests 105.7 194.3 282.9
Non-controlling interests (33.7) (56.4) (79.1)
---------------------------------------------------------------------
Net earnings 72.0 137.9 203.8
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic earnings per share 0.75 1.43 2.11
---------------------------------------------------------------------
---------------------------------------------------------------------
Cash flow from operating
activities
Andacollo 44.6 67.8 91.0
Quebrada Blanca 107.8 197.4 287.0
Corporate (19.4) (18.2) (17.0)
---------------------------------------------------------------------
Total 133.0 247.0 361.0
---------------------------------------------------------------------
---------------------------------------------------------------------
Cash balance 340.1 454.7 569.3
---------------------------------------------------------------------
---------------------------------------------------------------------
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 in Aur's Annual Information Form dated March 31, 2005 ("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 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 2006 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 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 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 , 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. Aur's fourth 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 , February February: see month. 10, 2006. This listen-only webcast can be accessed by going directly to CCNMatthews web site at www.ccnmatthews.com or by going to the home page of Aur's web site.
PRODUCTION STATISTICS
Three months ended December 31
---------------------------------------------------------------------
Quebrada
2005 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) - 915,878 2,086,608 3,002,598
Grade
Copper (%) - 0.84 1.38 n/a
Soluble copper (%) - 0.70 1.20 n/a
Zinc (%) - - - n/a
Gold (oz/t) - - - n/a
Silver (oz/t) - - - n/a
Copper (pounds)
Produced - 13,121,000 47,165,000 60,286,000
Sold - 13,231,000 47,336,000 60,567,000
Less:
non-controlling
interests - (4,895,000) (11,124,000) (16,019,000)
---------------------------------------------------
Net to Aur - 8,336,000 36,212,000 44,548,000
Inventory - 628,000 3,060,000 3,688,000
Other metals
produced and sold
Zinc (pounds) - - - -
Gold (ounces) - - - -
Silver (ounces) - - - -
Cost per pound of
copper sold - 0.69 0.71 0.71
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) 316,640 966,826 1,832,181 n/a
Grade
Copper (%) 2.92 0.82 1.31 n/a
Soluble copper (%) n/a 0.69 1.17 n/a
Zinc (%) 1.84 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.77 - - n/a
Copper (pounds)
Produced 5,870,000 12,725,000 44,756,000 63,351,000
Sold 5,870,000 13,110,000 44,790,000 63,770,000
Less:
non-controlling
interests - (3,933,000) (4,479,000) (8,412,000)
---------------------------------------------------
Net to Aur 5,870,000 9,177,000 40,311,000 55,358,000
Inventory - 554,000 2,551,000 3,105,000
Other metals
produced and sold
Zinc (pounds) 3,248,000 - - 3,248,000
Gold (ounces) 2,100 - - 2,100
Silver (ounces) 46,000 - - 46,000
Cost per pound of
copper sold $0.36 $0.67 $0.61 $0.60
---------------------------------------------------------------------
Notes: 1. Tonnes of ore milled at Louvicourt and stacked Stacked is an American television sitcom that premiered on Fox on April 13, 2005. On May 18, 2006, Stacked was cancelled, leaving five episodes unaired in the United States. The last episode aired on January 11, 2006. 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 3,231,576 tonnes (2004 - 2,051,492 tonnes) of dump leach ore. 2. Cash operating cost per pound of copper sold includes smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. , refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , transportation and marketing costs, settlement adjustments, provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. pricing, and is net of by-product credits where applicable.
PRODUCTION STATISTICS
Year ended December 31
---------------------------------------------------------------------
Quebrada
2005 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) 819,820 4,016,561 7,610,675 n/a
Grade
Copper (%) 2.20 0.84 1.31 n/a
Soluble copper (%) n/a 0.72 1.15 n/a
Zinc (%) 1.85 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.95 - - n/a
Copper (pounds)
Produced 11,403,000 51,561,000 176,992,000 239,956,000
Sold 11,403,000 51,488,000 176,483,000 239,374,000
Less:
non-controlling
interests - (17,298,000) (29,916,000) (47,214,000)
---------------------------------------------------
Net to Aur 11,403,000 34,190,000 146,567,000 192,160,000
Inventory - 628,000 3,060,000 3,688,000
Other metals
produced and
sold
Zinc (pounds) 8,842,000 - - 8,842,000
Gold (ounces) 4,500 - - 4,500
Silver (ounces) 138,000 - - 138,000
Cost per pound
of copper sold 0.43 0.65 0.69 0.67
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Total
---------------------------------------------------------------------
Ore (tonnes) 1,227,575 3,323,818 7,079,852 n/a
Grade
Copper (%) 2.80 0.79 1.25 n/a
Soluble copper (%) n/a 0.68 1.10 n/a
Zinc (%) 2.00 - - n/a
Gold (oz/t) 0.03 - - n/a
Silver (oz/t) 0.85 - - n/a
Copper (pounds)
Produced 21,914,000 46,094,000 168,004,000 236,012,000
Sold 21,914,000 46,242,000 168,258,000 236,414,000
Less:
non-controlling
interests - (13,873,000) (16,826,000) (30,699,000)
---------------------------------------------------
Net to Aur 21,914,000 32,369,000 151,432,000 205,715,000
Inventory - 554,000 2,551,000 3,105,000
Other metals
produced and
sold
Zinc (pounds) 13,635,000 - - 13,635,000
Gold (ounces) 7,000 - - 7,000
Silver (ounces) 188,000 - - 188,000
Cost per pound
of copper sold $0.40 $0.57 $0.60 $0.57
---------------------------------------------------------------------
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 12,604,240 tonnes (2004 -7,777,161 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
December 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
except earnings per share)
Three months ended Year ended
December 31 December 31
----------------------------------------
2005 2004 2005 2004
--------------------------------------------------------------------
--------------------------------------------------------------------
$ $ $ $
(Unaudited)
Mining revenues 132,699 97,884 446,945 336,880
--------------------------------------------------------------------
Expenses
Mining 42,851 41,088 167,230 146,673
Business Development 3,047 1,411 7,402 4,315
Administration 2,357 1,362 7,191 6,250
Depreciation and
amortization 7,975 2,702 32,820 30,517
Mine closure and site
restoration 410 612 3,499 2,454
Interest on long-term
debt 2,110 2,110 8,438 8,438
Stock-based compensation 548 113 1,689 396
Interest and other (note 7) (373) 435 (4,417) (39)
--------------------------------------------------------------------
58,925 49,833 223,852 199,004
--------------------------------------------------------------------
Earnings before taxes and
non-controlling interests 73,774 48,051 223,093 137,876
Income and resource taxes (15,042) (8,950) (40,112) (23,269)
--------------------------------------------------------------------
Earnings before
non-controlling interests 58,732 39,101 182,981 114,607
Non-controlling interests (17,219) (5,563) (40,704) (17,672)
--------------------------------------------------------------------
Net earnings for the
period 41,513 33,538 142,277 96,935
--------------------------------------------------------------------
--------------------------------------------------------------------
Basic earnings per share
(note 6(b)) 0.44 0.36 1.49 1.03
--------------------------------------------------------------------
--------------------------------------------------------------------
Diluted earnings per
share (note 6(b)) 0.43 0.35 1.48 1.02
--------------------------------------------------------------------
--------------------------------------------------------------------
Consolidated Statements of Retained Earnings
(in thousands of United
States dollars)
Three months ended Year ended
December 31 December 31
------------------------------------------
2005 2004 2005 2004
--------------------------------------------------------------------
--------------------------------------------------------------------
$ $ $ $
(Unaudited)
Retained earnings -
beginning of period 225,593 103,064 128,646 39,667
Net earnings for the period 41,513 33,538 142,277 96,935
Dividends on common shares (12,324) (7,956) (16,141) (7,956)
--------------------------------------------------------------------
Retained earnings - end
of period 254,782 128,646 254,782 128,646
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Operations for the three
months ended December 31
(in thousands of United States dollars)
(Unaudited)
Quebrada Corpo-
2005 Louvicourt Andacollo Blanca rate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues (52) 29,629 103,122 - 132,699
---------------------------------------------------------------------
Expenses
Mining 39 9,128 33,684 - 42,851
Business development - - - 3,047 3,047
Administration - - - 2,357 2,357
Depreciation and
amortization - 1,703 6,183 89 7,975
Mine closure and site
restoration 5 124 281 - 410
Interest on long-term
debt - - - 2,110 2,110
Stock-based compensatio - - - 548 548
Interest and other (286) (198) 2,105 (1,994) (373)
---------------------------------------------------------------------
(242) 10,757 42,253 6,157 58,925
---------------------------------------------------------------------
Earnings (loss) before
taxes 190 18,872 60,869 (6,157) 73,774
Income and resource taxes (198) (4,278) (10,585) 19 (15,042)
---------------------------------------------------------------------
Earnings (loss) before
non-controlling interests (8) 14,594 50,284 (6,138) 58,732
Non-controlling interests - (5,404) (11,815) - (17,219)
---------------------------------------------------------------------
Net earnings (loss) (8) 9,190 38,469 (6,138) 41,513
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada Corpo-
2004 Louvicourt Andacollo Blanca rate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues 11,903 19,678 66,303 - 97,884
---------------------------------------------------------------------
Expenses
Mining 5,180 8,765 27,143 - 41,088
Business development - - - 1,411 1,411
Administration - - - 1,362 1,362
Depreciation and
amortization 755 (238) 1,944 241 2,702
Mine closure and site
restoration 122 190 300 - 612
Interest on long-term
debt - - - 2,110 2,110
Stock-based compensation - - - 113 113
Interest and other 7 153 795 (520) 435
---------------------------------------------------------------------
6,064 8,870 30,182 4,717 49,833
---------------------------------------------------------------------
Earnings (loss) before
taxes 5,839 10,808 36,121 (4,717) 48,051
Income and resource
taxes (2,284) (2,215) (6,269) 1,818 (8,950)
---------------------------------------------------------------------
Earnings (loss) before
non-controlling
interests 3,555 8,593 29,852 (2,899) 39,101
Non-controlling interests - (2,578) (2,985) - (5,563)
---------------------------------------------------------------------
Net earnings (loss) 3,555 6,015 26,867 (2,899) 33,538
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Operations for the years
ended December 31
(in thousands of United States dollars)
Quebrada Corpo-
2005 Louvicourt Andacollo Blanca rate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues 27,211 95,316 324,418 - 446,945
---------------------------------------------------------------------
Expenses
Mining 13,066 33,237 120,927 - 167,230
Business development - - - 7,402 7,402
Administration - - - 7,191 7,191
Depreciation and
amortization 766 8,494 23,310 250 32,820
Mine closure and site
restoration 502 554 2,443 - 3,499
Interest on long-term
debt - - - 8,438 8,438
Stock-based compensation - - - 1,689 1,689
Interest and other (1,076) 243 4,923 (8,507) (4,417)
---------------------------------------------------------------------
13,258 42,528 151,603 16,463 223,852
---------------------------------------------------------------------
Earnings (loss) before
taxes 13,953 52,788 172,815(16,463) 223,093
Income and resource
taxes (2,116) (8,151) (29,870) 25 (40,112)
---------------------------------------------------------------------
Earnings (loss) before
non-controlling
interests 11,837 44,637 142,945(16,438) 182,981
Non-controlling interests - (15,261) (25,443) - (40,704)
---------------------------------------------------------------------
Net earnings (loss) 11,837 29,376 117,502(16,438) 142,277
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada Corpo-
2004 Louvicourt Andacollo Blanca rate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Mining revenues 41,150 64,357 231,373 - 336,880
---------------------------------------------------------------------
Expenses
Mining 19,481 26,156 101,036 - 146,673
Business development - - - 4,315 4,315
Administration - - - 6,250 6,250
Depreciation and
amortization 2,560 5,811 20,423 1,723 30,517
Mine closure and site
restoration 223 528 1,703 - 2,454
Interest on long-term
debt - - - 8,438 8,438
Stock-based compensation - - - 396 396
Interest and other (4) 216 1,016 (1,267) (39)
---------------------------------------------------------------------
22,260 32,711 124,178 19,855 199,004
---------------------------------------------------------------------
Earnings (loss) before
taxes 18,890 31,646 107,195(19,855) 137,876
Income and resource
taxes (8,080) (2,215) (18,767) 5,793 (23,269)
---------------------------------------------------------------------
Earnings (loss) before
non-controlling
interests 10,810 29,431 88,428(14,062) 114,607
Non-controlling
interests - (8,829) (8,843) - (17,672)
---------------------------------------------------------------------
Net earnings (loss) 10,810 20,602 79,585(14,062) 96,935
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Balance Sheets As at December 31
(in thousands of United States dollars) --------------------
2005 2004
--------------------------------------------------------------------
--------------------------------------------------------------------
$ $
Assets
Current
Cash 361,263 206,520
Receivables 11,751 14,242
Inventories and prepaid expenses (note 2) 62,934 52,750
--------------------------------------------------------------------
435,948 273,512
Property, plant and equipment 290,919 273,887
Future income and resource taxes 3,387 5,506
Long-term copper inventory and other
(note 3) 23,127 21,748
--------------------------------------------------------------------
753,381 574,653
--------------------------------------------------------------------
--------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current
Accounts payable and accrued liabilities 55,224 28,517
Dividends payable 12,384 7,849
Copper price participations (note 4) 15,959 10,000
Payable to non-controlling interests 6,534 -
Current portion of obligation under
capital lease 3,387 3,847
Current portion of mine closure and site
restoration 718 1,946
--------------------------------------------------------------------
94,206 52,159
--------------------------------------------------------------------
Senior notes (note 5) 125,000 125,000
Obligation under capital leases 6,060 8,952
Future income and resource taxes 24,897 19,396
Mine closure and site restoration 26,831 23,025
Non-controlling interests 33,108 35,258
--------------------------------------------------------------------
215,896 211,631
--------------------------------------------------------------------
310,102 263,790
--------------------------------------------------------------------
Contingency (note 10)
Shareholders' equity
Share capital (note 6) 183,654 178,269
Contributed surplus - stock-based
compensation 2,396 707
Cumulative translation adjustment 2,447 3,241
Retained earnings 254,782 128,646
--------------------------------------------------------------------
443,279 310,863
--------------------------------------------------------------------
753,381 574,653
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Balance Sheet Information as at December 31
(in thousands of United States dollars)
Quebrada Corpo-
2005 Louvicourt Andacollo Blanca rate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Assets
Current
Cash 1,489 45,224 37,805 276,745 361,263
Receivables 233 2,410 6,442 2,666 11,751
Inventories and
prepaid expenses 70 9,798 50,630 2,436 62,934
---------------------------------------------------------------------
1,792 57,432 94,877 281,847 435,948
Property, plant and
equipment - 32,392 219,577 38,950 290,919
Future income and resource
taxes - - - 3,387 3,387
Long-term copper inventory
and other - - 22,057 1,070 23,127
---------------------------------------------------------------------
1,792 89,824 336,511 325,254 753,381
---------------------------------------------------------------------
---------------------------------------------------------------------
Liabilities
Current
Accounts payable and
accrued liabilities 566 7,579 38,740 8,339 55,224
Dividends Payable - - - 12,384 12,384
Copper price participations - - 5,959 10,000 15,959
Payable to non-controlling
interests - - 6,534 - 6,534
Current portion of obligation
under capital leases - - 3,387 - 3,387
Current portion of mine
closure and site
restoration 718 - - - 718
---------------------------------------------------------------------
1,284 7,579 54,620 30,723 94,206
Senior notes - - - 125,000 125,000
Obligation under capital
leases - - 6,060 - 6,060
Future income and resource
taxes - 3,670 21,227 - 24,897
Mine closure and site
restoration 1,364 5,037 19,689 741 26,831
Non-controlling interests - 25,453 7,655 - 33,108
---------------------------------------------------------------------
2,648 41,739 109,251 156,464 310,102
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada Corpo-
2004 Louvicourt Andacollo Blanca rate 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 8,057 28,517
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 and site
restoration 1,946 - - - 1,946
---------------------------------------------------------------------
3,575 2,935 19,743 25,906 52,159
Senior notes - - - 125,000 125,000
Obligation under capital
leases - - 8,952 - 8,952
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 Year ended
December 31 December 31
-----------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $
(Unaudited)
Operating activities
Net earnings for
the period 41,513 33,538 142,277 96,935
Non-cash items -
Depreciation
and amortization 7,974 2,702 32,820 30,517
Future income
and resource taxes 2,549 3,527 7,620 15,190
Mine closure
and site restoration (171) 612 1,983 2,454
Gain on sale of
marketable securities (162) - (1,864) (38)
Gain on disposal
of property, plant
and equipment (64) (34) (684) (82)
Interest on obligation
on property purchased 9 13 35 400
Stock-based compensation 548 113 1,689 396
Copper price participation 2,897 - 5,959 -
Non-controlling
interests 17,219 5,563 40,704 17,672
---------------------------------------------------------------------
72,316 46,034 230,539 163,444
Net change in non-cash
working capital items
(note 8) 16,983 11,098 19,240 (84)
---------------------------------------------------------------------
89,299 57,132 249,779 163,360
---------------------------------------------------------------------
Financing activities
Dividends on common shares - - (11,773) -
Repayments of capital
leases (870) (2,120) (3,711) (5,841)
Payments to non-
controlling interests (32,687) (6,585) (36,276) (16,882)
Common shares issued 2,811 217 5,385 1,109
Foreign exchange and other (576) (662) (747) (2,114)
Advances to Quebrada Blanca
minesite employees (1,929) - (1,929) -
---------------------------------------------------------------------
(33,251) (9,150) (49,051) (23,728)
---------------------------------------------------------------------
Investing activities
Payment of copper price
participation - - (10,000) -
Property, plant and
equipment (12,717) (1,012) (22,586) (4,649)
Mineral property
development (7,981) (722) (16,549) (1,463)
Principal payments on
property purchased (245) (245) (245) (2,495)
Proceeds on sale of
marketable securities (349) - 1,864 38
Proceeds on disposal of
property, plant and
equipment 306 50 1,531 144
---------------------------------------------------------------------
(20,986) (1,929) (45,985) (8,425)
---------------------------------------------------------------------
Increase in cash for
the period 35,062 46,053 154,743 131,207
Cash - beginning of
period 326,201 160,467 206,520 75,313
---------------------------------------------------------------------
Cash - end of period 361,263 206,520 361,263 206,520
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Cash Flow for the three months
ended December 31
(in thousands of United States dollars)
(Unaudited)
Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating
activities
Net
earnings (loss) (8) 9,190 38,469 (6,138) 41,513
Non-cash
items (739) 9,146 21,808 588 30,803
---------------------------------------------------------------------
(747) 18,336 60,277 (5,550) 72,316
Net change
in non-cash
working
capital items 5,070 3,771 5,904 2,238 16,983
---------------------------------------------------------------------
4,323 22,107 66,181 (3,312) 89,299
---------------------------------------------------------------------
Financing activities
Repayments of
capital leases - (185) (685) - (870)
Payments to
non-controlling
interests - - (32,687) - (32,687)
Common shares
issued 2,811 2,811
Foreign exchange
and other 77 (106) (396) (151) (576)
Advances to
Quebrada Blanca
minesite employees - - (1,929) - (1,929)
---------------------------------------------------------------------
77 (291) (35,697) 2,660 (33,251)
---------------------------------------------------------------------
Investing activities
Property, plant
and equipment - (3,438) (1,131) (8,148) (12,717)
Mineral property
development - - - (7,981) (7,981)
Payment on
property purchased - - - (245) (245)
Other 306 - - (349) (43)
---------------------------------------------------------------------
306 (3,438) (1,131) (16,723) (20,986)
---------------------------------------------------------------------
Inter-segment
distributions
to corporate (4,236) (415)(106,427) 111,078 -
---------------------------------------------------------------------
Increase
(decrease) in
cash for the
period 470 17,963 (77,074) 93,703 35,062
Cash - beginning
of period 1,019 27,261 114,879 183,042 326,201
---------------------------------------------------------------------
Cash - end
of period 1,488 45,224 37,805 276,745 361,263
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating
activities
Net earnings
(loss) 3,555 6,015 26,867 (2,899) 33,538
Non-cash items 2,659 4,744 6,541 (1,448) 12,496
---------------------------------------------------------------------
6,214 10,759 33,408 (4,347) 46,034
Net change
in non-cash
working
capital items (1,761) (1,636) 4,587 9,908 11,098
---------------------------------------------------------------------
4,453 9,123 37,995 5,561 57,132
---------------------------------------------------------------------
Financing
activities
Repayments of
capital leases - (1,330) (790) - (2,120)
Common shares
issued - - - 217 217
Payments to
non-controlling
interests - (3,000) (3,585) - (6,585)
Foreign exchange
and other (40) - - 42 (662)
---------------------------------------------------------------------
(40) (4,434) (4,935) 259 (9,150)
---------------------------------------------------------------------
Investing
activities
Property, plant
and equipment - (525) (439) (48) (1,012)
Mineral property
development - - - (722) (722)
Payment on
property purchased - - - (245) (245)
Other 50 - - - 50
---------------------------------------------------------------------
50 (525) (439) (1,015) (1,929)
---------------------------------------------------------------------
Inter-segment
distributions to
corporate (4,558) (4,599) (53,722) 62,879 -
---------------------------------------------------------------------
Increase
(decrease) in
cash for the
period (95) (435) (21,101) 67,684 46,053
Cash -
beginning of
period 556 1,416 32,089 126,406 160,467
---------------------------------------------------------------------
Cash - end
of period 461 981 10,988 194,090 206,520
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
Consolidated Segmented Information on Cash Flow for the years
ended December 31
(in thousands of United States dollars)
Quebrada
2005 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating activities
Net earnings (loss) 11,837 29,376 117,502 (16,438) 142,277
Non-cash items (934) 30,097 58,987 112 88,262
---------------------------------------------------------------------
10,903 59,473 176,489 (16,326) 230,539
Net change in
non-cash working
capital items 9,838 5,636 7,652 (3,886) 19,240
---------------------------------------------------------------------
20,741 65,109 184,141 (20,212) 249,779
---------------------------------------------------------------------
Financing activities
Dividends on common
shares - - - (11,773) (11,773)
Repayments of
capital leases - (365) (3,346) - (3,711)
Payments to
non-controlling
interests - (3,589) (32,687) - (36,276)
Common shares issued - - - 5,385 5,385
Foreign exchange and
other 343 (246) (955) 111 (747)
Advances to Quebrada
Blanca minesite
employees - - (1,929) - (1,929)
---------------------------------------------------------------------
343 (4,200) (38,917) (6,277) (49,051)
---------------------------------------------------------------------
Investing activities
Property, plant and
equipment - (7,181) (1,587) (13,818) (22,586)
Mineral property
development - - - (16,549) (16,549)
Copper price
participation
payment to
TeckCominco - - - (10,000) (10,000)
Other 1,531 - - 1,864 3,395
---------------------------------------------------------------------
1,531 (7,181) (1,587) (38,748) (45,985)
---------------------------------------------------------------------
Inter-segment
distributions to
corporate (21,587) (9,485) (116,820) 147,892 -
---------------------------------------------------------------------
Increase (decrease)
in cash for the
period 1,027 44,243 26,817 82,655 154,743
Cash - beginning of
period 461 981 10,988 194,090 206,520
---------------------------------------------------------------------
Cash - end of period 1,488 45,224 37,805 276,745 361,263
---------------------------------------------------------------------
---------------------------------------------------------------------
Quebrada
2004 Louvicourt Andacollo Blanca Corporate Total
---------------------------------------------------------------------
---------------------------------------------------------------------
$ $ $ $ $
Operating activities
Net earnings (loss) 10,810 20,602 79,585 (14,062) 96,935
Non-cash items 8,565 17,382 43,942 (3,380) 66,509
---------------------------------------------------------------------
19,375 37,984 123,527 (17,442) 163,444
Net change in
non-cash working
capital items (3,276) (4,488) 59 7,621 (84)
---------------------------------------------------------------------
16,099 33,496 123,586 (9,821) 163,360
---------------------------------------------------------------------
Financing activities
Repayments of
capital leases - (2,606) (3,235) - (5,841)
Common shares issued - - - 1,109 1,109
Payments to
non-controlling
interests - (9,066) (7,816) - (16,882)
Foreign exchange and
other (69) (150) 1 (217) (435)
Advances to Quebrada
Blanca minesite
employees - - (1,679) - (1,679)
---------------------------------------------------------------------
(69) (11,822) (12,729) 892 (23,728)
---------------------------------------------------------------------
Investing activities
Property, plant and
equipment - (3,022) (1,503) (124) (4,649)
Mineral property
development - - - (1,463) (1,463)
Payments on
properties purchased - - - (2,495) (2,495)
Other 97 - 40 45 182
---------------------------------------------------------------------
97 (3,022) (1,463) (4,037) (8,425)
---------------------------------------------------------------------
Inter-segment
distributions to
corporate (15,969) (18,876) (109,334) 144,179 -
---------------------------------------------------------------------
Increase (decrease)
in cash for the
period 158 (224) 60 131,213 131,207
Cash - beginning of
period 303 1,205 10,928 62,877 75,313
---------------------------------------------------------------------
Cash - end of period 461 981 10,988 194,090 206,520
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes to interim consolidated financial statements.
AUR RESOURCES INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months (unaudited) and years ended December 31, 2005 and 2004 (in thousands of United States dollars except where otherwise noted) 1. Accounting policies The interim unaudited consolidated financial statements of Aur Resources Inc. ("Aur") have been prepared in accordance 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 the year 2004. 2. Inventories and prepaid expenses Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future.
2005 2004
-----------------
$ $
Cathode copper 2,867 2,183
In-process inventories 43,808 38,375
Mine supplies 12,172 10,488
Prepaid expenses 4,087 1,704
-----------------
62,934 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 was $401 (2004 - $368) and $5,594 (2004 - $6,219), respectively. 3. Long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. copper inventory and other
2005 2004
-----------------
$ $
Long-term in-process copper inventory 18,747 18,747
Deferred financing cost 1,070 1,322
Advances to Quebrada Blanca minesite employees 3,310 1,679
-----------------
23,127 21,748
-----------------
-----------------
4. Copper price participations 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 of which $20,000 had been paid or accrued.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.The actual average copper price per pound for 2005 of $1.84 exceeded the inflation adjusted copper price for 2005 of $1.25.Accordingly, an additional $10,000 liability to Teck Cominco has been accrued at December 31, 2005 with a corresponding increase in Aur's property, plant and equipment assets at Quebrada Blanca. ENAMI is also entitled to receive, under the by-laws BY-LAWS. Rules and ordinances made by a corporation for its own government. 2. The power to make by-laws is usually conferred by express terms of the charter creating the corporation, though, when not expressly granted, it is given by implication, and it is of CompaEE a 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., a per pound price participation in copper sales from the Quebrada Blanca Mine equal to 10% of the amount by which the average realized sales price per pound of copper sold by the Mine in any calendar year exceeds a 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. inflation adjusted indexed price for such year. The average realized copper price for 2005 exceeded the inflation adjusted copper price for the year. Accordingly, a $6.0 million liability to ENAMI has been accrued at December 31, 2005, representing the 2005 obligation with a corresponding increase in the line item entitled "Interest and other" on the Consolidated Statements of Operations.The total liability to ENAMI for 2005 will be determined in March 2006 by which time the realized copper price for 2005 will be known due to the M+2 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 for the bulk of the Quebrada Blanca copper sales. 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 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
2005 2004
-----------------------------------------
Shares Amount Shares Amount
-----------------------------------------
# 000's $ # 000's $
Common shares
Balance - beginning of
period 95,531 180,843 93,849 177,160
Share purchase options
exercised 775 2,811 552 1,109
-----------------------------------------
Balance - end of period 96,306 183,654 94,401 178,269
-----------------------------------------
-----------------------------------------
(b) Earnings per common share
Three months ended Year ended
December 31 December 31
-----------------------------------
2005 2004 2005 2004
-----------------------------------
$ $ $ $
(i) Basic
Numerator
Net earnings available to
shareholders 41,513 33,538 142,277 96,935
Denominator (# 000's)
Weighted average number of
shares 95,307 94,199 95,307 94,199
----------------------------------
Basic earnings per share 0.44 0.36 1.49 1.03
-----------------------------------
-----------------------------------
(ii) Diluted
Numerator
Income available to
shareholders 41,513 33,538 142,277 96,935
-----------------------------------
Denominator (# 000's)
Weighted average number of
shares 95,307 94,199 95,307 94,199
Potential incremental
issuance from stock-based
compensation 126 124 126 124
Potential issuance of shares
from purchase options 401 1,080 401 1,080
-----------------------------------
95,834 95,403 95,834 95,403
-----------------------------------
Diluted earnings per share 0.43 0.35 1.48 1.02
-----------------------------------
-----------------------------------
(c) Stock-based compensation plans At December 31, 2005, Aur had one stock-based compensation plan, a common share purchase option plan (the "Plan"), which is described below. 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 .The following table summarizes information regarding Aur's outstanding and exercisable common share purchase options as at December 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$
2.18 to 3.91 295 23 3.52 115 3.59
4.10 to 5.90 330 33 5.28 161 4.78
6.11 to 8.05 1,771 50 6.67 404 6.54
10.40 to 11.21 480 59 11.17 165 11.19
------ -----
2,876 845
------ -----
------ -----
The number of stock options outstanding at December 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 as at and for the periods ended December 31, 2005:
Three months ended Year ended
--------------------------------------------
Weighted Weighted
average average
exercise exercise
price price
Shares per share Shares per share
-------------------------------------------
# 000's CDN$ # 000's CDN$
Balance - beginning
of period 3,170 5.64 2,465 3.56
Granted 481 11.17 2,316 7.61
Exercised (775) 4.26 (1,905) 3.37
Expired - - - -
------- -------
Balance - end of period 2,876 2,876
------- -------
------- -------
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 1.2% (2004 - 1.2%), 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 - 42%), 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 3.5% (2004 - 2.6%) and expected life of 27 months (2004 - 34 months).
7. Interest and other
Three months ended Year ended
December 31 December 31
-----------------------------------------
2005 2004 2005 2004
-----------------------------------------
$ $ $ $
Interest on obligation
under capital leases 137 125 547 710
Interest and other income (3,417) (869) (9,525) (3,007)
Interest and financing costs 126 160 675 649
Copper price participation 2,897 - 5,959 -
Foreign exchange 13 972 147 1,155
Gain on sale of
marketable securities (64) (38) (1,868) (38)
Gain on disposal of
property, plant and equipment (162) (34) (684) (82)
Miscellaneous 97 119 332 575
-----------------------------------------
(373) 435 (4,417) (38)
-----------------------------------------
-----------------------------------------
8. Supplementary cash flow information
Three months ended Year ended
December 31 December 31
-----------------------------------------
2005 2004 2005 2004
-----------------------------------------
$ $ $ $
Net change in non-cash
working capital:
Receivables 1,914 663 2,491 (2,055)
Inventories (2,979) (5,489) (10,184) (8,198)
Accounts payable and
accrued liabilities 18,048 15,924 26,932 10,169
-----------------------------------------
16,983 11,098 19,239 (84)
-----------------------------------------
-----------------------------------------
Other information:
Interest paid - 8,438 8,438 8,438
Income, resource and
capital taxes paid 289 607 11,776 2,513
9. Fair value of financial instruments The carrying amount 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 maturities of these instruments. 10. Contingency contingency n. an event that might not occur. In 2003, 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. ") issued to CMQB a notice of 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. 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 fees owed to Aur and claimed as expenses by CMQB.CMQB contested such reassessment and, in August, 2005 the Iquique Iquique (ēkē`kā), city (1990 est. pop. 148,500), capital of Iquique prov., N Chile. A port on the Pacific, it exports nitrates and ore from the Atacama Desert. The city, founded in the 16th cent. Tax Court rendered a judgement confirming certain elements of the IRS reassessment.As a consequence of the foregoing, the IRS assessed CMQB with taxes of $1,900, including interest, penalties and inflation adjustment to date.The judgement also determined a reduction of CMQB's tax loss carry forwards in the amount of $17,500.CMQB has appealed such a judgement to the Court of Appeals.It is the opinion of management and CMQB's legal counsel that CMQB's income tax filings with respect to the guarantee fees are correct and that the payment of the guarantee fees should not attract withholding taxes The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. . Should CMQB ultimately be unsuccessful in overturning the judgement of the Tax Court in the Court of Appeals, Aur would record a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge to earnings equal to its proportionate share of the amount of reassessment, plus interest, penalties and inflation adjustment to the date of the Court of Appeals judgement. At this time, the outcome of the appeal and ultimate resolution of this reassessment cannot be determined and, accordingly, the loss, if any, has not been recorded in the consolidated financial statements. 11. Subsequent event In January 2006, Aur entered into monthly forward sales contracts to hedge a portion of the scheduled zinc production from its wholly owned Duck-Pond copper-zinc-silver-gold deposit. Aur's hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. commitments arising from this transaction, which are spread evenly, on a monthly basis, over the period July 2007 through December 2011 and cover approximately 75% of scheduled production during the period are:
Zinc Forward Sales
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Year Hedge Tonnage Average Price Average Price
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$/tonne $/lb
2007 (July-December) 12,700 1,857 0.84
2008 25,900 1,723 0.78
2009 25,900 1,584 0.72
2010 25,900 1,479 0.67
2011 25,900 1,393 0.63
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116,300 1,579 0.72
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Aur Resources Inc. (TSX:AUR) |
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