GOLDEN, Colo., March 31 /CNW/ -- Atna Resources Ltd. ("Atna" or the
"Company") (TSX: ATN) today reported audited financial results for the
Company's fourth quarter and year end results for the period ended December
31, 2008. Unless otherwise designated all amounts are in Canadian dollars.Highlights for the Year 2008
-- Merger with Canyon Resources Corporation ("Canyon") closed March 18,
2008 (the "Canyon Merger").
-- Commenced mining and ore crushing operations at the Briggs Mine.
-- Increased proven and probable reserves by 77 percent in the Briggs
Mine; completed an updated mine plan.
-- Yamana Gold Inc. drilled an encouraging second round on Atna's Clover
project in Elko County, Nevada and made a US$150,000 option payment.
-- Pinson Mining Company ("PMC"), a subsidiary of Barrick Gold, provided
notice that they completed their US$30 million work program at the
Pinson gold project to earn a 70% interest in the project. Atna will
retain 30% interest in the project.
-- Drilling beneath the main pit at the Briggs Mine outlined additional
mineralization; new drilling at Cecil R, a satellite project to
Briggs,
began in early 2009.
-- Closed the US$20 million sale of a royalty portfolio, including the
Wolverine Royalty.
-- Acquired the remaining land position at the Columbia gold property
(formally known as Seven-Up Pete gold property) which contains
significant gold resources.
-- Reward Gold Project feasibility study completed, reserves were
disclosed; major permits have been granted with final approval
expected
in the second quarter 2009.
-- Optioned the Adelaide and Tuscarora gold properties in Nevada to
Golden
Predator for work commitments and other compensation.
-- Cash balances for the Company as of March 23, 2009 are approximately
$12.0 million. The reduction in cash since December 31, 2008
primarily
reflects ongoing development and start-up costs at the Briggs Mine.
Financial Results:Results of Operations - Year Ended December 31, 2008 versus Year Ended
December 31, 2007For the year ended December 31, 2008, Atna recorded net income of $20.3
million, or basic income per share of $0.26, on proceeds of $21.0 million from
the sale of royalties. This compares to a net loss of $3.3 million, or a basic
loss per share of $0.05, on revenues of nil for the year ended December 31,
2007. The positive variance of $23.6 million 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 $2.4 million in selling, general and
administrative expenses due to the consolidation of Canyon's costs and
other Canyon related operating costs partially offset by cost
reductions in the Atna operations.
-- Positive variance related to new income tax benefits of $3.7 million,
related to available tax net operation losses carry forwards that are
expected to be utilized in the future.
-- Negative variance of $1.5 million in provision for final site
restoration due to an increase in expected final reclamation costs at
the Kendall Mine that was acquired in the Canyon Merger.
-- Negative variance of $0.6 million in reduced property write-downs.
-- Negative variance of $0.4 million due to the accretion expense related
to the Briggs and Kendall mines acquired in the Canyon Merger.
-- Positive variance of $2.4 million in other income and expense,
excluding the impact of the royalty sale. The variance was due
primarily to a $3.2 million positive variance in foreign exchange
gains
as a result of a weakening Canadian dollar on the proceeds of the
royalty sale that was held in U.S. dollars partially offset by an $0.8
million negative variance from reduced gains on sale of marketable
securities, write-off of marketable securities related shares held in
Canadian exploration companies and reduced net interest income.
-- Positive variance of $1.3 million due to a decrease in exploration
spending due to the focus on the Briggs restart.
Conference CallManagement will host a conference call on Tuesday, March 31, 2009 at 2:00
pm Eastern, to discuss these results and general corporate and project
activities. Participants in the US and Canada dial (877) 559-1977,
International callers dial (660) 422-4979. Please reference conference ID #
92099685.Audio of the call will be webcast and available through www.atna.com. A
replay of the call will be available two days following the call by dialing
(800) 642-1687 or (706) 645-9291, reference conference ID # 92099685.Operating Activities and Other Developments:
Atna - Canyon MergerAtna and Canyon signed an Agreement and Plan of Merger on November 16,
2007. The transaction closed on March 18, 2008. The Canyon Merger
significantly increased the gold reserves and resources controlled by the
Company and will provide near term gold production opportunities from the
Briggs Mine and the Reward Gold Project.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.Development Activities
Briggs Mine, CaliforniaAn updated technical report detailing the estimation of open pit and
underground reserves and resources at the Briggs Mine, was completed in May
2008, which is available on SEDAR at www.sedar.com, and an updated reserve and
mine plan was announced on February 18, 2009. Restart activities commenced and
the first gold pour is expected during the second quarter of 2009. Production
during 2009 is forecast to be approximately 19,000 ounces. Highlights of the
Briggs Mine include:-- Open pit proven and probable reserves containing 267,000 ounces of
gold
with an average grade of 0.021oz/ton based on a gold price of
US$750/oz, a 77 percent increase over the previous reserve estimate,
dated May 8, 2008.
-- Mine life of six years.
-- Planned production of approximately 210,000 ounces of gold with an
average full year production rate that ranges between 40,000 to 50,000
ounces.
-- Life-of-mine cash cost and full cost is projected to be US$470 and
US$590 per ounce of gold, respectively.
-- Life-of-mine pre-tax cumulative cash flow at a gold price of US$750 is
approximately US$36 million.
-- Total project pre-tax cash flow increases by approximately US$20
million for every US$100 increase in gold price.
-- Key site management and support positions are in place.Ore is being loaded on the leach pad and gold production is expected to
increase to an annualized rate of between 40,000 to 50,000 ounces per year.
Approximately 50 percent of existing plant capacity will be utilized at these
production rates, allowing for a possible increase in production, if
additional reserves can be developed. A total of approximately US$10 million
has been spent on the Briggs project through February 2009. Additional capital
and working capital spending at the Briggs Mine is projected to be about US$7
million for the remainder of 2009. The new, expanded mine plan is located
entirely within the existing permit boundary area. However, a portion of the
expansion area will require an amendment to the existing reclamation plan and
placement of additional reclamation bonds prior to mining.Beginning in October 2008, the Company commenced a new drill campaign at
the Briggs Gold Mine and its satellite project Cecil R. Results of this
program are positive, confirming deeper gold mineralization beneath the
current minable reserves in the Briggs Main pit. Atna has intersected this new
Briggs Main Deep ("BMD") zone with fourteen holes. The BMD drill holes
intersected a gently dipping tabular zone over an area 800 feet (north-south)
by 700 feet wide. Apparent thickness of the zone ranges from 30 to 90 feet.
The mineralized horizon comes within 40 to 50 feet of the US$750/oz-gold
design pit bottom. The BMD remains open for expansion to the north, south and
east of the current intercepts.The Cecil R satellite project is located four miles north of the Briggs
Mine. Drilling at Cecil R is designed to expand the existing mineralized zone
to the south and to define the gold mineralization limits. The Company expects
to commence preparation of a NI 43-101 compliant technical report that would
include an estimate of mineral resources at Cecil R at the completion of this
drilling program.Pinson Project, NevadaOn January 15, 2009, Atna reported that it has received notice from
Pinson Mining Company ("PMC"), a subsidiary of Barrick Gold, that it has
completed the required $30 million expenditure at the Pinson property. Under
the terms of the Exploration Agreement with Option for Mining Venture between
PMC, Atna Resources Inc. and Atna Resources Ltd., dated August 14, 2004,
fulfillment of this expenditure entitles PMC to increase its interest in the
Pinson project from 30% to 70%, thereby reducing Atna's interest from 70% to
30%. The Mining Venture Agreement between PMC and Atna is currently being
finalized. A forward looking program and budget for the project will be
forwarded by PMC as manager of the project.Construction of a mineralized material stockpile area, four de-watering
wells, settling ponds and associated pipelines were completed in 2008.
Additional water rights are being obtained to facilitate further de-watering
of the resource zone for deepening of underground workings. Approximately
2,000 feet of new underground drifting was completed by a contract mining
company and a second access portal was collared, but not connected to existing
workings. Total drilling from the inception of the project amounted to
approximately 197,000 feet in 300 holes. During 2008, a total of 35,000 feet
of RC drilling and 54,000 feet of core drilling were completed.Reward Project, NevadaIn March 2008, the Company completed a positive economic feasibility
study for the Reward Gold Project, the results of which are contained in
technical report dated March 21, 2008 prepared by Chlumsky, Armbrust & Meyer,
LLC. titled "NI 43-101 Technical Report - Reward Gold Project, Nye County,
Nevada," which is available on SEDAR at www.sedar.com. The feasibility study
recommends development of a conventional open pit mining, ore crushing, and
heap leach gold production operation. Operating synergies and cost benefits
from the nearby Briggs Mine will positively impact the operation.Proven and probable mineral reserves estimated in the feasibility study
total 6.4 million tons averaging 0.024 oz/ton containing 157,000 ounces of
gold based on a gold price of US$700 per ounce, a cut-off grade of 0.01 oz/ton
and a strip ratio of 2.2 tons of waste per ton of ore. The Reward operation is
expected to produce approximately 125,900 ounces of gold over a four year mine
life at estimated average cash cost of US$435 per ounce of gold produced.
This production would provide an undiscounted cash flow of US$40.3 million at
a US$900 gold price. The feasibility study includes capital costs for crushing
and process plants, facilities and infrastructure, mining fleet and
pre-production stripping of US$25.4 million. The undiscounted cash flow
changes by US$12.5 million for every US$100 change in gold price without
allowance for reserve expansion.The project has been carefully designed to create a small environmental
footprint and the permitting process is well advanced. The mine plan of
operations has been declared administratively complete; air pollution and
water pollution control permits, and a water point of discharge permits have
been issued. Biologic assessment studies have been completed and a biologic
opinion has been issued. The environmental assessment study has been completed
and released for public comment.Columbia Project, MontanaIn 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, non NI 43-101 compliant resource for Columbia
was reported in a feasibility study titled "Seven-Up Pete Joint Venture,
Seven-Up Pete Feasibility Study" dated September 1991 by Phelps Dodge
Corporation. The historic estimated mineral resource for Columbia totaled
10.9 million tons of proven and probable resource (approximately equivalent to
Measured and Indicated resource under NI 43-101) grading 0.060 oz/ton gold
(659,000 contained ounces gold). In addition, the report quotes a possible
resource (approximately equivalent to Inferred resource under NI 43-101) of
3.0 million tons grading 0.063 oz/ton gold (190,000 contained ounces gold). A
cutoff grade of 0.02 oz/ton was used in the estimate. The block modeling
methodology used to develop this estimate is consistent with current
estimating methodologies. 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 estimate resources for the property that are
compliant with the NI 43-101 technical reporting standards. Timber logging
operations have commenced at the property due to the start of a pine beetle
infestation. Baseline environmental monitoring studies are starting and
another round of flotation and gravity gold recovery test work is planned for
2009.Exploration Ventures
Clover, NevadaOn November 28, 2006, the Company signed an Earn-in Agreement with
Meridian Gold Incorporated, now a subsidiary of Yamana Gold Inc. ("Yamana")
whereby Yamana can earn a 51% working interest in the Clover property. Yamana
may elect to increase its interest to 70% by completing a prefeasibility study
within 30 months of vesting its initial 51% interest in the project. To earn
51% Yamana must make payments totaling US$0.6 million to the Company and
complete exploration work totaling US$3.3 million over a 4 year period. Atna
received a payment of US$150,000 in January 2009 and there remains US$250,000
to be paid by January 2010.Yamana commenced a second round of drilling in 2008 that included 10
reverse circulation rotary drill holes (8,000 to 9,000 feet) to follow-up
encouraging gold and silver results intersected in 2007 drilling. The ongoing
program will focus on expansion of this zone and test new target areas on the
property. In 2008, Yamana cut several zones of gold mineralization in the
Clover Hill target area including:-- 35 feet grading 0.321 oz/ton gold and 0.54 oz/ton silver (hole CV006)
-- 25 feet grading 0.03 oz/ton gold and 7.97 oz/ton silver (hole CV007)
Adelaide and Tuscarora, NevadaOn February 15, 2008, the Company entered an option agreement whereby
Golden Predator Mines US Inc. ("Golden Predator") a wholly-owned subsidiary of
Golden Predator Mines Inc. (TSX: GP) of Vancouver British Columbia, would
assume the obligation of Canyon regarding the option with Newmont on the
Adelaide and Tuscarora gold exploration properties. Atna received an initial
payment of approximately US$0.5 million on closing of the transaction. Golden
Predator has completed the US$0.4 million commitment for 2008. Pursuant to the
agreement, Atna received 2.1 million common shares of Golden Predator in lieu
of a US$250,000 option payment due in December 2008. On March 5, 2009, Golden
Predator announced that shareholders approved the arrangement between the
Company and Golden Predator Royalty & Development Corp. ("GPRD") The Adelaide
and Tuscarora properties will be operated by GPRD.On January 6, 2009 Golden Predator announced assay results on three core
drill holes and two reverse circulation ("RC") drill holes at the Adelaide
Project, located in Southeastern Humboldt County, Nevada. The diamond drill
results were the first of a 13-hole diamond drilling program currently in
progress, which offset high grade intercepts in previous RC drilling. Core
hole GPAD03, targeting the North Margarite Vein, intersected 14 ft of 0.45
oz/t gold, including 5 ft of 0.93 oz/t gold and 1.2 oz/t silver, from 280 ft
drill depth.Sand Creek and Converse Uranium Joint Ventures, WyomingDrilling has clearly demonstrated the presence of "roll front" style
uranium mineralization on the Sand Creek joint venture property in Wyoming,
which is owned 70% by Atna and 30% by Uranium One Exploration USA Inc., a
subsidiary of Uranium One Inc. (TSX: UUU)Effective February 2, 2009, Atna's subsidiary, Canyon Resources, entered
into an Agreement with New Horizon Uranium Corporation ("New Horizon") (TSXV:
NHU) to terminate the Converse Uranium Project Exploration, Development and
Mine Operating Agreement dated January 23, 2006. New Horizon failed to meet
the spending and work requirements to earn a participating interest in the
project. As part of this Agreement, all of the shares of Horizon Wyoming
Uranium Inc. ("Horizon Wyoming") have been transferred to Atna and Horizon
Wyoming shall become a wholly owned subsidiary. Horizon Wyoming holds
properties, reclamation bonds and permits related to the Sand Creek joint
venture with Uranium One Exploration USA Inc. In addition, New Horizon has
resigned as manager of the Sand Creek joint venture. Horizon Wyoming shall be
the new manager. Atna is working with Uranium One to determine the future
program for this project.For additional information on Atna Resources, please visit our website at
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, the
Company's ability to meet gold production and cost targets at Briggs, the
Company's ability to complete permitting and construction of the Reward
project, developing a forward looking plan and budget at Pinson or development
of positive results at Columbia or the Company's exploration properties, 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 (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 30, 2009.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 CEO - (303) 278-8464
Valerie Kimball, Investor Relations - toll free (877) 692-8182
www.atna.comATNA RESOURCES LTD. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
(Canadian dollars, Canadian GAAP basis)
(Audited)Dec. 31, Dec. 31,
2008 2007
----------- ----------
BALANCE SHEETS
--------------
ASSETS
Current assets $21,800,400 $11,266,500
Noncurrent assets 60,281,800 2,221,200
----------- ----------
Total assets $82,082,200 $13,487,700
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $3,669,100 $695,800
Notes payable - long term 1,004,900 -
Noncurrent liabilities 5,238,900 379,700
Shareholders' equity 72,169,300 12,412,200
----------- ----------
Total liabilities and shareholders' equity $82,082,200 $13,487,700
=========== ===========Three Months Twelve Months
Ended Ended
December 31, December 31,
---------------- ----------------
2008 2007 2008 2007
---- ---- ---- ----
STATEMENTS OF OPERATIONS
------------------------
REVENUE $- $- $156,800 $-
EXPENSES AND
OTHER (INCOME)
Cost of sales - - 150,000 -
Depreciation,
depletion and
amortization 40,300 30,900 133,800 117,200
General and
administrative 1,097,000 441,300 4,319,800 1,928,700
Exploration 100,100 801,400 574,200 1,912,000
Accretion expense 129,400 - 380,100 -
Gain on asset
disposals (8,800) (113,300) (21,011,200) (135,000)
Provision for
final site
restoration 1,482,600 - 1,482,600 -
Write down of assets 553,200 - 553,200 -
Other (income)
expense, net (3,205,400) (391,900) (3,082,300) (474,600)
Income tax benefit (3,659,000) - (3,659,000) -
---------- --------- ---------- ---------
Net income (loss) $3,470,600 $(768,400) $20,315,600 $(3,348,300)
Basic income (loss)
per share $0.04 $(0.01) $0.26 $(0.05)
========== ========== ========== ==========
Basic weighted-
average shares
outstanding 83,291,100 64,701,702 79,166,725 64,581,804
========== ========== ========== ==========CASH FLOWS
----------
Cash and cash
equivalents,
beginning of
period $24,088,000 $1,286,400 $3,516,800 $3,534,800
Effect of exchange
rate changes
on cash 1,802,500 - 1,570,300 -
Net cash used
in operating
activities 1,212,900 86,500 (3,906,500) (4,086,200)
Net cash provided
by (used in)
investing
activities (6,747,700) 2,081,700 18,667,700 3,784,600
Net cash provided
in financing
activities (6,000) 62,200 501,400 283,600
----------- ---------- ----------- ----------
Cash and cash
equivalents,
end of period $20,349,700 $3,516,800 $20,349,700 $3,516,800
=========== ========== =========== ==========
For further information: James Hesketh, President and CEO,
+1-303-278-8464, or Valerie Kimball, Investor Relations, toll free,
1-877-692-8182, both of Atna Resources Ltd. Web Site: http://www.atna.com
