New Sleeper Gold Corporation Announces Results for the Second Quarter Ended September 30, 2005.
All financial results are expressed in Canadian dollars unless otherwise indicated.
For the three-month period ended September 30, 2005, the Company incurred a loss of $540,100 or $0.01 per share compared to a loss of $876,400 or $0.02 per share for the three-month period ended September 30, 2004. For the first six months of the year, the net loss totaled $769,700 or $0.02 per share compared to a net loss of $1,189,400 or $0.03 for the first six months ended on September 30, 2004. The lower net loss is the reflection of a reduction in administrative expenses consequent to reduced ground exploration activities, and in loss on foreign exchange.
Interest income related to the average cash equivalent available to the Company for the quarter amounted to $24,300 ($59,600 for the first six months of 2005) and $42,000 for the period ended September 30, 2004 ($86,200 for the first six months of 2004).
For the quarter, the Company incurred administrative expenses of $294,700 and business development expenses amounted to $186,200 compared to $366,900 and $129,000 respectively in the previous corresponding quarter ended September 30, 2004. For the year-to-date, administrative expenses and business development expenses amounted to $485,900 and $302,000 respectively, compared to expenses of $684,400 and $251,600 incurred during the corresponding period in 2004.
Stock-based compensation related to options to purchase shares granted in 2004 (see note 5c to the Consolidated Financial Statements) amounted to $21,400 for the quarter and to $66,100 for the same period in 2004. The contributed surplus was increased by the same amounts.
Loss on foreign exchange for the period amounted to $95,300 compared to $347,300 for the previous period and resulted mostly from timing differences between the date where investments in monetary items denominated in US dollars were made and the exchange rate as at September 30, 2005.
Consolidated Cash Flows
After making adjustments in respect of stock-based compensation, depreciation and amortization, loss on foreign exchange, future income tax recovery and other non-cash items, cash used in operations totalled $461,400 for the quarter ended September 30, 2005 ($666,800 for the first six months of 2005), compared to $572,700 for the previous period ($835,300 for the first six months of 2004). After changes in working capital items, cash flows used in operating activities amounted to $282,000 for the three-month period ended September 30, 2005 and to $719,000 for the previous period ($592,500 for the first six months in 2005 compared to $1,299,600 for the corresponding period in 2004).
For the three-month period ended September 30, 2005, the participation of the Company in exploration expenditures on the property amounted to $558,300 ($712,500 in cash), of which $246,600 for geology and $96,200 in drilling and assaying costs. On a year-to-date basis, the Company's portion of exploration expenditures totalled $1,468,400 ($1,712,000 in cash), of which $611,800 was spent on geology and $371,800 on drilling and assaying activities.
Investments on the property are summarized in the "Consolidated Expenditures on Exploration Projects" statement included in the accompanying interim financial statements for the quarter ended September 30, 2005.
There was no financing activity during the three-month period ended September 30, 2005 and none in the corresponding period in 2004.
Consolidated Balance Sheet
At September 30, 2005, the Company's assets stood at $31,401,400 ($32,402,100 at March 31, 2005) including $1,862,800 in cash and cash equivalents ($4,198,700 at March 31, 2005) and $26,258,400 in exploration projects ($24,790,000 at March 31, 2005).
At September 30, 2005, working capital stood at $1,988,700, net of current liabilities amounting to $301,600.
As at September 30, 2005, the capital stock amounts to $34,096,200. The contributed surplus related to stock base compensation amounts to $1,064,000 and the deficit totals $7,731,200.
The Company had liquidity of $1,862,800 at the end of September 2005 and believes that it will be able to meet its commitments through the first quarter of 2006.
The Company's efforts during the remainder of 2005 will be focused on continuing to find sufficient gold mineralization at Sleeper to justify redevelopment of a mine. The sources of this mineralization could be known areas in the vicinity of the mined-out pit which are currently the subject of a resource calculation exercise, or the discovery of a "new" Sleeper-style gold deposit. A resource calculation is due for completion in the fourth quarter of calendar 2005.In addition to the resources themselves, some potential economics of mining and processing will be investigated. No assurance can be given that minerals resources will be defined at the New Sleeper Project or that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.
In addition, the Company's management has identified a number of other projects that are attractive to the Company. Management believes that it is prudent to diversify the Company's portfolio, provided strict criteria are met for any new projects. On July 14, 2005, the Company entered into an option agreement pursuant to which it may acquire up to a 70% interest in the Clover project located in Nevada and on September 22, 2005, the Company signed a Letter of Intent to enter into an option agreement to earn a 50% interest in the Jersey project, also located in Nevada.
The Company's operations and activities are financed through cash resources generated by equity issues.While the Company believes it has sufficient resources to fund its commitments and current planned activities, through the first quarter of 2006, it is anticipated that the Company will have to raise further capital in early 2006 in order to fund future operation and exploration activities. The availability of such funding is dependent not only on exploration success but on certain factors beyond its control, such as general market liquidity, price of gold, and willingness of investors to make more speculative exploration investments.Management will use its best efforts to obtain funding and utilize this funding on projects it believes justify such investment.
Some of the statements contained in this press release are forward-looking statements.Forward-looking statements are not historical facts, and are subject to a number of risks and uncertainties beyond the Company's control, including statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of the Company.There is no assurance that mineral resources or probable or proven reserves will be defined at the Sleeper Project.The successful exploration and development of the Sleeper Project will depend on many factors, including successful completion of a feasibility study, substantial additional financing for exploration and development ofa mine at the Sleeper Project, unpredictable fluctuations in the gold price and currency exchange rates; and the additional risks and information described in detail in the "Risk Factors" section of the Filing Statement filed by New Sleeper Gold Corporation on March 19, 2004 accessible at www.sedar.com.
Forward-looking statements contain in this release are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. There can be no assurance that such statements will prove accurate. Actual results may differ materially from those anticipated or projected.
Additional information about the Company is available through regular filings and press releases on SEDAR (www.sedar.com) and on the Company's website (www.newsleepergold.com).
The TSX Venture Exchange does not accept responsibility for the ad equacy or accuracy of this release.
New Sleeper Gold Corporation (TSX VENTURE:NWS)
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|Date:||Nov 18, 2005|
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