GOLDEN, Colo., Nov. 14 /CNW/ -- Atna Resources Ltd. ("Atna" or the
"Company") (TSX: ATN) today reported unaudited financial results for the
Company's third quarter ended September 30, 2008.Highlights for the Period
-- Closed the US$20 million sale of a royalty portfolio, including the
Wolverine Royalty.
-- Accelerated the Briggs Gold Mine re-start with a portion of the
proceeds from the sale of royalties.
-- Permitting activities at the Reward Gold Project has rapidly advanced
with the completion of several major permits, receipt of a Biologic
Opinion and filing of a number of additional permit applications.
-- Commenced new infill drilling under the main pit at the Briggs Mine
and new step out drilling at its satellite deposit Cecil R.
-- Yamana Gold Inc. commenced a second round of drilling on Atna's Clover
Project in Elko County, Nevada.
-- Lowlight: US Supreme Court denied grant of Certiorari in the McDonald
takings case.
Third Quarter Financial Results:All amounts expressed in Canadian dollars, unless otherwise noted and on
a Canadian GAAP basis. At September 30, 2008, cash and short term investments
totaled $24.5 million, which represented a net increase of $17.1 million
during the third quarter. The net increase was due primarily to the sale of
the royalties for $21.1 million, offset by cash used in operating activities
of $2.1 million, capital expenditures of $1.5 million and the negative effect
of exchange rate changes on cash of $0.4 million.
For the third quarter ended September 30, 2008, Atna recorded a net gain
of $19.3 million, or a basic gain per share of $0.23, on proceeds from the
sale of royalties of $21.1 million. This compares to a net loss of $1.0
million, or a basic loss per share of $0.01, on revenues of nil for the third
quarter ended September 30, 2007. The positive variance of $20.3 million in
net gain was due primarily to the following factors:-- Positive variance of $20.9 million in gain on asset disposals due to
the sale of royalties.
-- Negative variance of $0.4 million in other operating categories due to
increased general and administrative cost due to the consolidation of
Canyon's costs and other Canyon related operating costs partially
offset by cost reductions in the Atna operations, lower exploration
expenses and reduced asset write downs.
-- Negative variance of $0.3 million in other income and expense due to
increased loss on foreign exchange and reduced interest income.Operating Activities and Other Developments:
Sale of Royalties Package including the Wolverine Royalty, YukonIn September 2008, the Company sold a portfolio of royalty interests for
US$20 million. The royalty package was comprised of four royalty interests; a
sliding scale precious metal net smelter return ("NSR") royalty on the
Wolverine Project located in the Yukon Territory, a three percent NSR royalty
on portions of the McDonald gold property in Montana, and royalty interests on
properties in the Dominican Republic and Argentina. The sale closed in two
parts, with US$19.9 million closed in September and US$0.1 million closed in
October. The sale of the royalties resulted in a gain of approximately $20.9
million in the third quarter.Columbia Gold Property Claims (Formally Seven-Up Pete Gold Property)In June 2008, the Company acquired certain claims at the Columbia gold
property in order to consolidate the land package containing the known body of
mineralization. An historic, noncompliant NI43-101 technical report, estimate
of mineralized material for Columbia, including the newly acquired claims, was
completed by Phelps Dodge Corporation in 1991 and 1993. This estimate totaled
23.7 million tons grading 0.035 ounces of per ton gold ("opt") and containing
837,000 ounces gold at a 0.02 opt gold cutoff grade. Approximately 28 percent
of this total is attributed to the newly acquired claims. The aggregate
acquisition cost was US$500,000 in cash and 604,308 common shares of Atna. The
seller retained a four percent net smelter return royalty on the claims
purchased.
Atna is consolidating, compiling, reviewing, and analyzing all of the
Columbia project data to provide an estimate of resources for the property
that is compliant with the Canadian National Instrument 43-101 Technical
Reporting standards.Asset SalesAtna is marketing non-core assets from the merged companies to focus on
core operations including development of the Briggs Mine, Reward, Pinson and
Columbia gold projects. Atna has entered into an agreement to sell
approximately 880,000 acres from its portfolio of severed fee mineral rights
in the state of Montana to a private Wyoming corporation. This cash
transaction totals $US6.0 million and will net approximately $US5.5 million
after brokerage fees and expenses. No guarantee can be made at this time that
this transaction will close due to difficulties in arranging financing in the
current financial environment.Development Activities
Briggs Mine, CaliforniaA technical report detailing the estimation of open pit and underground
reserves and resources at the Briggs Mine in Inyo County, California, was
completed in April 2008. The report estimates that a good economic return may
be achieved from the re-start of mining operations at the wholly-owned Briggs
Mine. The company has sufficient cash to fully fund the re-start of operations
at the Briggs Mine.
Key development activities have commenced with a goal of producing gold
by the end of the first quarter of 2009. A total of $2.7 million in capital
expenditure has been spent on the project through October 2008. The remaining
start-up capital is projected to be about $9 million most of which is expected
to be spent or committed in 2008. Activities at Briggs include:-- Pre-stripping operations that began in mid October will continue
through projected gold production around the end of first quarter
2009.
-- The 1.0 million square foot of leach pad expansion has been
progressing on schedule at a fixed contact cost of $3.8 million.
-- Refurbishment of the Briggs generating, crushing and gold plants.
-- Filling key management and support positions and recruitment of a
labor force.
-- Refurbishment of all major mining units that are now being used in
development operations.
-- An updated mine optimization study, which includes all new drilling
results that is expected to convert underground ore to open pit ore
and to increase reserves. This study which is expected to be released
before the end of 2008 should justify an increase in mineral reserves
available for mining and enable an early increase in the production
rate from the previous study. Capital cost for the project may
increase if additional equipment and waste stripping is required to
implement this new plan.Proven and probable reserves at Briggs are currently estimated to be
151,000 ounces of gold grading 0.034 opt. Additionally, there are an estimated
532,500 gold ounces of measured and indicated resource grading 0.027 opt and
an inferred resource of 314,000 gold ounces grading 0.044 opt. New ore is
forecast to be loaded on the leach pad in the first quarter of 2009 with
production beginning to ramp up to an annualized rate of 25,000 to 35,000
ounces of gold per year. Only 40 percent of existing plant capacity will be
utilized at these production rates allowing for a rapid increase in production
as additional reserves are developed.
During October 2008, the Company commenced a new drill campaign at the
Briggs Gold Mine and its satellite project, Cecil R. The program will include
up to 25,000 feet of reverse circulation rotary drilling. The primary goals of
the drilling program are:-- Exploration of potentially significant gold mineralization beneath the
current proven and probable reserves in the main pit at the Briggs
Mine. This work may add considerably to the mine-life and/or annual
production rate.
-- In-fill drilling at the Briggs Mine to upgrade inferred resources to
proven and probable reserve categories to facilitate cost effective
mine planning.
-- Expansion of the Cecil R project's mineralized zone to the south to
allow completion of an NI 43-101 technical report and resource
estimate for this deposit.
Pinson Project, NevadaPinson Mining Company ("PMC"), a wholly owned subsidiary of Barrick Gold
Corporation, spent US$5.0 million on drilling and development activities at
Pinson in the third quarter of 2008 bringing their total project-to-date
expenditures to US$18.2 million. PMC may earn a 70 percent interest in the
project by spending a total of US$30 million by April 6, 2009, which would
result in Atna retaining a 30 percent interest.
A total of eight drills were active on the property during the quarter,
two water well rigs, two surface RC drills, two surface diamond core drills,
and two underground core drills. The water well drills completed two
de-watering wells and started a third. The RC drills concentrated on drilling
pilot holes for the water wells, and drilling on the Range Front, MAG and CX
resource zones. The surface diamond drills targeted the Range Front, CX and
MAG zones, while the underground diamond drills are in-fill drilling on the
Ogee and Range Front zones. Forty-seven drill holes were completed and five
were in progress at the end of the quarter. A total of 9,895 feet of RC
drilling and 17,122 feet of core were completed.Reward Project, NevadaThe Company completed a positive economic feasibility study for its
Reward Gold Project located near Beatty, Nevada. The feasibility study
recommends development of a conventional open pit mining, ore crushing, and
heap leach gold production operation. The project has good operating synergies
and cost benefits from the nearby Briggs Mine. Permitting activities at the
Reward Gold Project have rapidly advanced with the completion of several major
permits, receipt of a Biologic Opinion and filing of a number of additional
permit applications.
Proven and probable mineral reserves estimated in the feasibility study
total 5.2 million tons averaging 0.027 opt containing 137,700 ounces of gold
based on a gold price of US$575 per ounce and a strip ratio of 2.0 tons of
waste per ton of ore. The Reward operation is expected to produce
approximately 117,000 ounces of gold over a four year mine life at estimated
average cash cost of US$409 per ounce of gold produced. This production would
provide an undiscounted cash flow of US$14.6 million and an internal rate of
return of 13.2 percent at a US$700 gold price. The feasibility study includes
capital costs for crushing and process plants, facilities and infrastructure,
mining fleet and pre-production stripping of US$24.3 million.Conference CallManagement will host a conference call on Monday, November 17, at 2:00
p.m. EST, to discuss the third quarter 2008 results as well as project and
general corporate activities. Shareholders are invited to participate by
dialing US/Canada (888) 355-4499 or (660) 422-4979, Conference ID 73352718.
The call will also be available by webcast, to access please go to
http://www.atna.com and click on "3rd Quarter 2008 Web Cast".
The conference call will be available for replay through midnight
November 19, 2008, by dialing (800) 642-1687 or (706) 645-9291, Conference ID
73352718.
For additional information on Atna Resources, please visit our website at
http://www.atna.com.This press release contains certain "forward-looking statements," as
defined in the United States Private Securities Litigation Reform Act of
1995, and within the meaning of Canadian securities legislation, relating
to the significant increase in gold resources and leverage to the price of
gold, success in marketing non-core assets, PMC's ability to complete
their earn-in and feasibility study, the Company's plan to re-start mining
operations at the Briggs Mine or the Pinson Gold Project, success of the
Briggs optimization study, closure of the Montana Mineral Rights sale, and
the availability of financing to fund the Company's development plans.Forward-looking statements are statements that are not historical fact.
They are based on the beliefs, estimates and opinions of the Company's
management on the date the statements are made and they involve a number
of risks and uncertainties. Consequently, there can be no assurances that
such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such statements.
The Company undertakes no obligation to update these forward-looking
statements if management's beliefs, estimates or opinions, or other
factors, should change. Factors that could cause future results to differ
materially from those anticipated in these forward-looking statements
include: the Company might encounter problems such as the significant
depreciation of metals prices, changes in equity ownership, accidents and
other risks associated with mining exploration and development operations,
the risk that the Company will encounter unanticipated geological factors,
the Company's need for and ability to obtain additional financing, the
possibility that the Company may not be able to secure permitting and
other governmental clearances necessary to carry out the Company's mine
development plans that will prevent it from re-starting mining operations
at the Company's development projects. The principal risk factors
associated with the Company's business are discussed in greater detail in
the Company's various filings on SEDAR (http://www.sedar.com) with
Canadian securities regulators and its filings with the U.S. Securities
and Exchange Commission, including the Company's Form 20-F dated March 25,
2008.Cautionary Note to U.S. Investors -- The United States Securities and
Exchange Commission permits U.S. mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms in this
report, such as "measured," "indicated," and "inferred" "resources," that
the SEC guidelines strictly prohibit U.S. registered companies from
including in their filings with the SEC.FOR FURTHER INFORMATION, CONTACT:James Hesketh, President and COO - (303) 278-8464
Valerie Kimball, Investor Relations - toll free (877) 692-8182
http://www.atna.comATNA RESOURCES LTD. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
(Canadian dollars, Canadian GAAP basis)
(Unaudited)Sep. 30, Dec. 31,
2008 2007
BALANCE SHEETS
ASSETS
Current assets $25,873,800 $11,266,500
Noncurrent assets 44,457,700 2,221,200
Total assets $70,331,500 $13,487,700
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $2,939,100 $695,800
Notes payable - long term 856,500 --
Noncurrent liabilities 5,289,400 379,700
Shareholders' equity 61,246,500 12,412,200
Total liabilities and shareholders' equity $70,331,500 $13,487,700Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
STATEMENTS OF OPERATIONS
REVENUE $-- $-- $156,800 $--
EXPENSES AND OTHER
(INCOME)
Cost of sales -- -- 150,000 --
Depreciation, depletion
and amortization 34,200 30,000 93,500 86,300
General and
administrative 1,068,800 317,500 3,222,800 1,487,400
Exploration 118,300 442,400 474,100 787,400
Accretion expense 110,600 -- 250,700 --
Gain on asset disposals (20,932,100) (21,700) (21,002,400) (21,700)
Write down of assets -- 187,800 -- 511,000
Other (income) expense,
net 300,600 900 123,100 (270,500)
Net gain (loss) $19,299,600 $(956,900) $16,845,000 $(2,579,900)
Other comprehensive
(loss) gain $(82,500) $51,500 $(336,000) $(345,800)
Comprehensive gain
(loss) $19,217,100 $(905,400) $16,509,000 $(2,925,700)
Basic gain (loss) per
share $0.23 $(0.01) $0.22 $(0.04)
Basic weighted-average
shares outstanding 83,291,100 64,676,800 77,781,900 64,541,400CASH FLOWS
Cash and cash
equivalents, beginning
of period $6,670,300 $3,128,100 $3,516,800 $3,534,800
Effect of exchange rate
changes on cash (361,500) -- (248,600) --
Net cash used in
operating activities (2,132,300) (595,300) (4,993,000) (1,734,100)
Net cash provided by
(used in) investing
activities 19,918,200 (1,246,400) 25,305,400 (735,700)
Net cash provided in
financing activities (6,700) -- 507,400 221,400
Cash and cash
equivalents, end of
period $24,088,000 $1,286,400 $24,088,000 $1,286,400
For further information: James Hesketh, President and COO,
+1-303-278-8464, or Valerie Kimball, Investor Relations, 1-877-692-8182, both
of Atna Resources Ltd. Web Site: http://www.atna.com
