Augen Capital Reports Second Quarter Results



    Shares outstanding: 36,615,615

    TORONTO, Aug. 29 /CNW/ - Augen Capital Corp. ("Augen") (TSX-V: AUG) today
announced its unaudited interim consolidated financial results for the second
quarter and six month period ended June 30, 2008.
    Note: The adoption of CICA Handbook Section 3855, which requires the
reporting of unrealized fluctuations in the fair value of the Merchant Banking
investment portfolio, has resulted in greater volatility in the net earnings
of Augen since it was adopted in the first quarter of 2007. While these
accounting standards provide insight into the current fair value of the
Merchant Banking (MB) investment portfolio, they do not necessarily provide an
accurate indication of the ultimate realized gain or loss, which will be
different.

    
    Second Quarter Results
    ----------------------
    
    In the quarter ended June 30, 2008 Augen's income was $694,099, compared
with $1.815 million in the same period of 2007. This variance was mainly the
result of a realized gain of more than $1 million from the partial disposition
of Energy Fuels Inc. and a complete disposition of Goldquest Mining Corp. in
the MB segment, in the second quarter of 2007. Also contributing to the change
in income was a decline in consulting and due diligence fees of approximately
$167,000 in the Managed Products (MP) segment, in the second quarter of 2008.
    Augen's MB segment generated quarterly earnings of $167,025, before
income taxes, non-recurring charges, unrealized losses on investments,
adjustment of the fair value of liabilities, and amortization, compared with
earnings of $895,962 in the same period of 2007.
    In the MP segment, the loss before income taxes, non-recurring charges
and amortization was $271,088 compared with earnings of $153,142 in the second
quarter of 2007.
    The Company incurred a total of $503,712 in non-recurring charges in the
quarter, 50% of which were allocated to each of the Company's operating
segments. The non-recurring charges include expenses relating to the 2008
Annual and Special Meeting of Shareholders.
    For the second quarter of 2008, net loss before income taxes was
$1.258 million compared with a loss of $261,626 in the same quarter of 2007.
    Net loss in the quarter was $958,814, compared with a net loss of
$249,415 in the second quarter of 2007.

    
    -------------------------------------------------------------------------
    Consolidated Statements of Earnings
    -------------------------------------------------------------------------
                              Managed Products          Merchant Banking
    For the three months
     ended June 30,           2008         2007         2008         2007
                                $            $            $            $
    -------------------------------------------------------------------------
    Income (loss)             235,176      399,484      458,923    1,415,926
    Expenses                  506,264      246,342      291,898      519,964
    -------------------------------------------------------------------------
    Earnings (loss)
     before undernoted
     items                   (271,088)     153,142      167,025      895,962
    Unrealized loss on
     investments held
     for trading                    -            -      707,426    1,747,072
    Non-recurring charges     251,856            -      251,856            -
    Adjustment to fair
     value of liabilities           -            -      (60,769)    (439,981)
    Amortization                1,601        1,820        1,601        1,819
    -------------------------------------------------------------------------
    Earnings (loss)
     before income taxes     (524,545)     151,322     (733,089)    (412,948)
    -------------------------------------------------------------------------
    Income taxes
      Current
      Future
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net earnings (loss)
     and comprehensive
     earnings (loss)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -----------------------------------------------
    Consolidated Statements of Earnings
    -----------------------------------------------
                                    Total
    For the three months
     ended June 30,           2008         2007
                                $            $
    -----------------------------------------------
    Income (loss)             694,099    1,815,410
    Expenses                  798,162      766,306
    -----------------------------------------------
    Earnings (loss)
     before undernoted
     items                   (104,063)   1,049,104
    Unrealized loss on
     investments held
     for trading              707,426    1,747,072
    Non-recurring charges     503,712            -
    Adjustment to fair
     value of liabilities     (60,769)    (439,981)
    Amortization                3,202        3,639
    -----------------------------------------------
    Earnings (loss)
     before income taxes   (1,257,634)    (261,626)
    -----------------------------------------------
    Income taxes
      Current                (204,939)     139,904
      Future                  (93,881)    (152,115)
    -----------------------------------------------
                             (298,820)     (12,211)
    -----------------------------------------------
    Net earnings (loss)
     and comprehensive
     earnings (loss)         (958,814)    (249,415)
    -----------------------------------------------
    -----------------------------------------------
    

    For the three months ended June 30, 2008, cash used in operations,
excluding changes in non-cash working capital, was $610,300, compared with
cash generated by operations of $199,600 in the same period of 2007. The
variation was primarily the result of a decline in net earnings and
comprehensive earnings of $709,400, an increase in income taxes of $81,700,
and a reduction of $35,400 in net realized and unrealized losses on
investments held for trading in 2008.
    "The second quarter of 2008 saw continued fluctuations in the prices of
metals. Concerns over the U.S. economy and a global credit crunch exacerbated
the market volatility. Our business was affected by this, both in our Merchant
Banking segment and our Managed Product segment," said J. David Mason,
Chairman of the Board of Augen. "Facing a challenging operating environment,
we continued to reduce normal operating expenses, and this was reflected by a
23% decrease in normal operating expenses in the first half of 2008, from the
same period of 2007. Despite recent volatility, we expect the mining sector
will eventually return to historical norms. We believe that the abrupt decline
in the mining sector represents an investment opportunity for our two
operating segments."

    
    Year-to-Date Results
    --------------------
    
    Augen's income in the first six months of 2008 was $901,614, compared
with $2.483 million in the same period of 2007. Among other items, the
variance was mainly the result of $1.4 million of realized gains on the sale
of investments in the MB segment, which increased income in the first half of
2007.
    In the first half of 2008, the Company's MB segment reported a loss of
$191,626 before income taxes, non-recurring charges, unrealized losses on
investments, adjustment of the fair value of liabilities, and amortization,
compared with earnings of $762,156 in the first half of 2007. The loss in the
first half of 2008 was mainly the result of the disposition of non-performing
investments, which created additional liquidity in the portfolio. Augen
intends to use this additional liquidity to pursue new merchant banking
investment opportunities. Net realized gain on the sale of certain MB
investments was $108,900 in the first half of 2008, compared with net realized
gains of $1.442 million in the same period of 2007.
    In the MP segment, the loss before income taxes, non-recurring charges
and amortization was $532,970 in the first half of 2008, compared with a loss
of $69,804 in the same period a year earlier.
    Net loss, before income taxes, non-recurring charges and before the
unrealized loss in the MB segment investment portfolio resulting from the
adoption of the new accounting policy, was $469,537 compared to net earnings
of $695,657 in the same period of 2007.
    For the first half of 2008, net loss was $1,704,798, compared with
$779,685 in the first half of 2007.

    
    -------------------------------------------------------------------------
    Consolidated Statements of Earnings
    -------------------------------------------------------------------------

                              Managed Products          Merchant Banking
    For the six months
     ended June 30,           2008         2007         2008         2007
                                $            $            $            $
    -------------------------------------------------------------------------
    Income (loss)             455,324      903,843      446,290    1,578,774
    Expenses                  733,235      970,342      637,916      816,618
    -------------------------------------------------------------------------
    Earnings (loss)
     before undernoted
     items                   (277,911)     (66,499)    (191,626)     762,156
    Unrealized loss on
     investments held
     for trading                    -            -     1,276,190   2,007,840
    Non-recurring charges     251,856            -       251,856           -
    Adjustment to fair
     value of liabilities           -            -       (87,481)   (439,981)
    Amortization                3,203        3,305         3,202       3,304
    -------------------------------------------------------------------------
    Earnings (loss)
     before income taxes     (532,970)     (69,804)   (1,635,393)   (809,007)
    -------------------------------------------------------------------------
    Income taxes
      Current
      Future
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net earnings (loss)
     and comprehensive
     earnings (loss)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -----------------------------------------------
    Consolidated Statements of Earnings
    -----------------------------------------------
                                    Total
    For the six months
     ended June 30,           2008         2007
                                $            $
    -----------------------------------------------
    Income (loss)             901,614    2,482,617
    Expenses                1,371,151    1,786,960
    -----------------------------------------------
    Earnings (loss)
     before undernoted
     items                   (469,537)     695,657
    Unrealized loss on
     investments held
     for trading            1,276,190    2,007,840
    Non-recurring charges     503,712            -
    Adjustment to fair
     value of liabilities     (87,481)    (439,981)
    Amortization                6,405        6,609
    -----------------------------------------------
    Earnings (loss)
     before income taxes   (2,168,363)    (878,811)
    -----------------------------------------------
    Income taxes
      Current                (259,390)      95,444
      Future                 (204,175)    (194,570)
    -----------------------------------------------
                             (463,565)     (99,126)
    -----------------------------------------------
    Net earnings (loss)
     and comprehensive
     earnings (loss)       (1,704,798)    (779,685)
    -----------------------------------------------
    -----------------------------------------------
    

    Cash used in operating activities, before changes in non-cash working
capital, during the first half of 2008 was $677,800, compared with cash from
operations, before changes in non-cash working capital of $2,300 for the same
period of 2007. This was mainly the result of a decline in net earnings and
comprehensive earnings, a decline in stock-based compensation and a change in
income taxes.
    Consolidated assets decreased by 16.4% to $9.436 million on June 30,
2008, from $11.284 million on December 31, 2007. Augen continues to maintain a
solid balance sheet with more than $5 million in current assets and no
long-term debt.

    
    -------------------------------------------------------------------------
    Consolidated Assets
    -------------------------------------------------------------------------
                                Managed Products          Merchant Banking
                             June 30,  December 31,    June 30,  December 31,
    As at,                    2008         2007         2008         2007
                                $            $            $            $
    -------------------------------------------------------------------------
    Total assets              595,886      733,415    8,839,706   10,550,270
    -------------------------------------------------------------------------

    Shareholders' equity
     per share ((*))
    -------------------------------------------------------------------------
    (*) Defined as shareholders' equity per
     financial statements, divided by common
     shares outstanding
    -------------------------------------------------------------------------



    -----------------------------------------------
    Consolidated Assets
    -----------------------------------------------
                                    Total
                             June 30,  December 31,
    As at,                    2008         2007
                                $            $
    -----------------------------------------------
    Total assets            9,435,592   11,283,685
    -----------------------------------------------
    Shareholders' equity
     per share ((*))             0.25         0.29
    -----------------------------------------------
    (*) Defined as shareholders' equity per
     financial statements, divided by common
     shares outstanding
    -----------------------------------------------
    

    The full unaudited interim consolidated financial statements for the
period ended June 30, 2008 are available at www.augencc.com or at
www.sedar.com.

    
    About Augen Capital
    -------------------
    
    Augen Capital Corp. ("Augen") (TSX-V: AUG) is a Toronto-based public
merchant bank specializing in the financing of and investment in emerging
resource companies. Augen manages a merchant banking hard dollar portfolio of
emerging resource stocks including private companies and is an industry
performance leader in tax-advantaged flow-through investments in Canada's
resource sector having raised over $58 million in flow-through limited
partnership assets since inception. Augen currently has $40 million in
flow-through investment consulting assets, including $17 million raised in
2008 by Augen and its sales and distribution partner. Augen holds over one
hundred gold, base metals and uranium exploration and development public and
private companies with direct holdings in its merchant banking portfolio and
consulting assets in flow-through limited partnerships.

    For more information on Augen Capital, visit our website at
www.augencc.com.
    The Company's public documents may be accessed at www.sedar.com.

    
    The TSX Venture has not reviewed and does not accept responsibility for
    the adequacy or accuracy of this release.
    

    -------------------------------------------------------------------------
    This news release contains forward-looking statements. These statements
are based on certain factors and assumptions as set forth in this news release
including expected growth, results of operations, performance and business
prospects and opportunities. While the Company considers these factors and
assumptions to be reasonable based on information currently available, they
may prove to be incorrect. A number of factors could cause actual results to
differ materially from those in the forward-looking statements, including, but
not limited to results of exploration, project development, reclamation and
capital costs of the companies in the merchant banking portfolios ("investee
companies"), and the Company's financial condition and prospects, could differ
materially from those currently anticipated in such statements for many
reasons such as: changes in general economic conditions and conditions in the
financial markets; changes in demand and prices for the minerals the investee
companies expect to produce; litigation, legislative, environmental and other
judicial, regulatory, political and competitive developments; technological
and operational difficulties encountered in connection with the activities of
the Company and investee companies. Additional risks and uncertainties can be
found in our 2008 Management's Discussion and Analysis and in filings with the
Canadian provincial securities commissions. Forward-looking statements are
given only as at the date of this news release and the Company disclaims any
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.





For further information:

For further information: J. David Mason, Chairman, Tel: (416) 479-3300;
John Lute, Lute & Company, Tel: (416) 929-5883 x 222;
investorrelations@augencc.com

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