Nord Resources Reports First-Quarter 2009 Results



    
    -   Production of copper from newly mined ore commenced in February 2009
    -   Company moving to achieve targeted annual production rate of 25
        million pounds by later this spring
    -   Reports net income for the 2009 quarter primarily due to the gain
        realized on the sale of copper hedges and the capitalization of
        operating costs to mine development costs
    

    TUCSON, AZ, May 15 /CNW/ - Nord Resources Corporation (TSX: NRD / OTC:
NRDS), which is ramping up copper mining and processing operations at Johnson
Camp Mine in Arizona, announced today its financial results for the first
quarter ended March 31, 2009. The unaudited condensed consolidated financial
statements were prepared in accordance with U.S. generally accepted accounting
principles and all currency amounts are in U.S. dollars.
    "During the first quarter, we continued to make good progress in stepping
up our mining and processing operations according to our reactivation plan for
the Johnson Camp Mine," said John Perry, President and Chief Executive
Officer. "Having commenced copper production from newly mined ore in February
2009, we have been focusing on ramping up our operations to achieve our
targeted production rate of 25 million pounds per year by later this spring.
Later this year, we plan to evaluate opportunities to increase production
through small, incremental expansions and, based on the encouraging results of
a scoping study completed in November 2008, to initiate a feasibility study
that potentially could expand production at the Johnson Camp Mine by 60
percent to 40 million pounds per year."

    
    Operating and Other Highlights

    -   In February 2009, Nord began producing copper cathodes from newly
        mined ore.
    -   Nord sold 836,781 pounds of copper cathode in the 2009 first quarter,
        an 18.8% increase from the 704,299 pounds sold in the 2008 fourth
        quarter. The 2009 first-quarter sales represent a 74.1% increase from
        the 480,628 pounds of copper cathode that Nord produced in the 2008
        period when production was based entirely on residual leaching of the
        existing ore heaps at the Johnson Camp Mine.
    -   Nord successfully negotiated two transactions during the quarter that
        provided the company with some additional financial liquidity and
        flexibility.
    

    In March 2009, Nord agreed with Nedbank Limited to amend and restate the
company's $25 million credit agreement. As previously announced, under the
agreement, payments of principal and interest that had been scheduled to be
made on March 31, 2009 and June 30, 2009 have been deferred until December 31,
2012 and March 31, 2013, respectively. Under the amended and restated
agreement, Nord may sell certain copper price hedging instruments that it
holds under copper price hedging agreements maturing on October 1, 2010 or
later, if the net proceeds to the company will be more than $2.2 million,
subject to the proviso that Nord will be required to set aside $2.2 million in
a segregated account to fund its debt service obligations under the credit
facility. The company will begin making principle and interest payments on
September 30, 2009.
    In addition, in March 2009, Nord sold to IRC Nevada Inc. a 2.5 percent
net smelter royalty on the mineral production sold from the existing mineral
rights at the Johnson Camp Mine for net proceeds of $4,950,000.

    Financial Highlights

    As Nord had not commenced commercial production of new copper ore in the
2009 first quarter, its reported sales do not fully reflect the progress being
made by the company. Nord will consider itself to have begun commercial
production from the mining of new ore when either it has achieved operating
levels at a minimum of 75 percent of designed capacity or it is generating
positive cash flow from operations for at least 30 days.
    Net sales in the 2009 first quarter were $1,417,419, including $572,966
from the sale of copper hedging derivatives. The quarter's sales resulted from
the sale of 556,053 pounds of copper cathodes. Additional revenues of $742,237
earned from the sale of 280,728 pounds of copper cathodes prior to the
commencement of commercial production (including $271,897 from the sale of
copper hedging derivatives) were capitalized as mine development costs.
    During the 2009 first quarter, Nord recognized $2,106,102 from its copper
hedging program. Of that amount, $572,966 has been included in revenue and
$271,897 has been capitalized as mine development costs. During the quarter,
contracts representing approximately 579 metric tons of copper originally
designated as cash flow hedges were reclassified to trading securities because
Nord's forecasted production of copper during the period no longer matched its
hedged position, with the result that the underlying derivative contracts were
deemed to be ineffective. As a result, the realized gains from the sale of
these contracts in the amount of $1,261,239 have been reclassified and
reported as miscellaneous income.
    In comparison, first-quarter 2008 net sales were $1,540,154, realized
from the sale of 421,905 pounds of copper after the company commenced
commercial production from residual leaching of the existing ore heaps during
the period from February 1, 2008 through March 31, 2008. Revenues earned from
the sale of 58,723 pounds of copper cathodes produced in January 2008 in the
amount of $209,907 were capitalized as mine development costs.
    In the first quarter 2009, Nord's gross margin declined to $425,757 from
$742,838 in the 2008 period due primarily to a decrease in copper prices,
which was offset in part by a slight reduction in costs applicable to sales on
a per-pound basis.
    Costs applicable to sales are the expenses incurred in converting both
new and old ore on the leach pads into saleable copper cathode. First-quarter
2009 costs amounted to $991,662 based on sales realized from the sale of
copper cathode produced from residual leaching. Additionally, the company
incurred net pre-production costs of $1,526,317, which were capitalized and
will be amortized over the expected life of the Johnson Camp Mine beginning
once it achieves commercial production levels based on newly mined ore.
    In the 2008 first quarter, Nord incurred costs from February 1 through
March 31 of $797,316 applicable to the sales realized from the commencement of
commercial production from residual leaching. Operating costs incurred from
December 1, 2007 through January 31, 2008 in the amount of $572,765 (net of
pre-commercial revenue) were capitalized to be amortized over the expected
life of production of copper cathodes from existing heaps.
    General and administrative operating expenses declined to $783,372 in the
2009 first quarter, compared with $1,405,183 in the 2008 period. The decline
is due to several factors, including the fact that the 2008 first quarter
included $267,373 of expenses related to the company's listing on the Toronto
Stock Exchange, lower employee compensation resulting from a reduction in the
amortization of options previously issued and the reclassification of the
reporting of property and casualty insurance charges ($57,293) from general
and administrative expenses to cost of sales, effective with the 2009 first
quarter.
    Depreciation and amortization expense increased to $184,409 in the 2009
first quarter from $53,852 in the 2008 period. With the investment being made
in plant and equipment to reactivate mining and processing at the Johnson Camp
Mine, Nord Resources showed the gross value of its property and equipment on
its balance sheet at the end of the 2009 first quarter of $45.9 million,
compared with $4.7 million a year earlier.
    Interest expense rose to $135,423, compared with $75,116 in the 2008
first quarter as the company reclassified a loss in the amount of $66,095 from
accumulated other comprehensive income to interest expense from the scheduled
maturity of its interest rate swap derivative.
    Miscellaneous income amounted to $1,335,452 in the 2009 first quarter,
compared with $116,766 in the prior-year period. This increase is due
primarily to the $1,261,239 gain attributable to the company's copper hedge
program as discussed above.
    The company's net income in the 2009 first quarter was $655,324 ($0.01
per basic and diluted share), compared with a net loss in the 2008 quarter of
$674,547 ($0.01 per basic and diluted share). The net income for the quarter
was significantly impacted by the gains realized on the sale of copper hedges
and the capitalization of certain operating costs to pre-production cost.
Consequently, the results of operation for this quarter may not be indicative
of results of operations in future quarters.

    Liquidity

    Cash flow from operating activities during the 2009 and 2008 first
quarters were ($1,379,766) and ($532,132), respectively. Cash flow from
operating activities in the 2009 first quarter includes net income of
$655,324, offset by an increase in in-process and finished goods copper
inventories of $1,418,132, compared with $246,924 during first quarter of
2008, and the realized gain on the sale of copper hedges of $1,834,205.
    Cash flow from investing activities during the 2009 first quarter were
($5,502,461), which primarily reflects capital expenditures of $7,750,447
related to the reactivation of Johnson Camp during this time period, and
$1,526,317 (net of $742,237 of copper sold during the period) in
pre-commercial production costs incurred prior to the commencement of
commercial production in the mining and processing of new ore and the
reclassification of $1,533,662 in restricted cash and marketable securities to
unrestricted cash.
    In the 2008 first quarter, cash flow from investing activities were
($7,215,218), which primarily reflects capital expenditures of $6,642,453
related to the reactivation of Johnson Camp during this time period and
$572,765 (net of $209,907 of copper produced during the period) in
pre-commercial production costs incurred prior to the commencement of
commercial production.
    Cash flow from financing activities during the first quarter 2009 were
$4,915,629, compared with $6,987,684 for the same period in 2008. In the 2009
first quarter, the company received $4,950,000 in proceeds from the sale of a
2.5 percent net smelter royalty to IRC Nevada on March 31, 2009. In the 2008
first quarter, cash flow from financing activities included a $7,000,000
drawdown from the Nedbank Credit Facility.
    The company had drawn down all of the $25,000,000 in principal under the
Nedbank secured term loan facility as of December 31, 2008, with the result
that no funds were available to us under this facility at March 31, 2009.
    The Annual Meeting of Stockholders of the company will be held in Tucson,
Arizona on June 9, 2009 at 10:00 a.m.

    
    Neither the TSX nor any regulatory authority accepts responsibility for
    the adequacy or accuracy of this release.
    

    About Nord Resources

    Nord Resources Corporation is a copper mining company whose primary asset
is the Johnson Camp Mine, located approximately 65 miles east of Tucson,
Arizona. Nord commenced mining new ore on February 1, 2009. Previously, since
February 1, 2008, the company was commercially producing copper from residual
leaching of the existing ore heaps. The company is ramping up to achieve its
targeted production rate of 25 million pounds later this spring. For further
information and pictures of the reactivation at Johnson Camp, please visit the
company's website at www.nordresources.com.

    Forward-Looking Statements

    This news release includes certain statements that may be deemed
"forward-looking". All statements in this release, other than those of
historical facts, may be considered forward-looking statements, including
those concerning Nord's expectations regarding copper production targets at
the Johnson Camp Mine, and statements concerning the potential of the Johnson
Camp Mine.
    In particular, the scoping study completed in November 2008 is based on
the existing estimated reserves contained in the company's technical report,
"Johnson Camp Mine Project Feasibility Study, Cochise County, Arizona,
Technical Report", dated September 28, 2007. The technical report was prepared
in compliance with National Instrument 43-101 of the Canadian Securities
Administrators, Standards of Disclosure for Mineral Projects, and is available
on the Internet at www.sedar.com. The scoping study estimates that the 60
percent increase in the targeted annual production rate to 40 million pounds
of copper per year can be achieved with an additional capital investment of
approximately $19 million. Such estimates, including the additional capital
investment that would be required, are also forward-looking statements.
    Factors that could cause actual results to differ materially from those
in forward-looking statements include, but are not limited to, the market
prices of copper and sulfuric acid, general economic, market, and business
conditions, ability to reach full production rates, statements or information
with respect to known or unknown risks, uncertainties, and other factors that
may cause the actual results, performance or achievements of the company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements or information. Investors are cautioned that any such statements
are not guarantees of future performance and that actual results or
developments may differ materially from those projected in the forward-looking
statements. In addition, Nord's business and operations are subject to the
risks set forth in Nord's most recent Form 10-K, Form 10-Q, and other SEC
filings which are available through EDGAR at www.sec.gov, and in Nord's
prospectus and other filings with the British Columbia and Ontario Securities
Commissions, which are available through SEDAR at www.sedar.com. Nord assumes
no obligation to update the forward-looking statements except as may be
required by law.



    
                  NORD RE

SOURCES CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2009 AND DECEMBER 31, 2008 March 31, December 31, 2009 2008 -------------- -------------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 2,498,647 $ 4,465,245 Accounts receivable 6,988 320,493 Inventories 1,791,074 221,271 Current portion of derivative contracts 6,059,497 9,604,405 Prepaid expenses and other 515,622 360,901 -------------- -------------- Total Current Assets 10,871,828 14,972,315 -------------- -------------- Property and Equipment, at cost: Property and equipment 45,991,906 4,657,929 Less accumulated depreciation and amortization (1,890,845) (1,614,405) -------------- -------------- 44,101,061 3,043,524 Construction in progress - 36,944,454 -------------- -------------- Net Property and Equipment 44,101,061 39,987,978 -------------- -------------- Other Assets: Restricted cash and marketable securities 686,476 2,220,138 Derivative contracts, less current portion 3,151,830 9,549,697 Debt issuance costs, net of accumulated amortization 953,609 877,249 -------------- -------------- Total Other Assets 4,791,915 12,647,084 -------------- -------------- Total Assets $ 59,764,804 $ 67,607,377 -------------- -------------- -------------- -------------- NORD RE

SOURCES CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2009 AND DECEMBER 31, 2008 (Continued) March 31, December 31, 2009 2008 -------------- -------------- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities: Accounts payable $ 6,350,838 $ 9,694,716 Accrued expenses 1,185,976 887,438 Current portion of deferred revenue 310,222 - Current maturities of accrued interest 270,613 265,442 Current maturities of long-term debt 5,000,000 6,666,667 Current maturities of derivative contracts 274,351 299,717 Current maturities of capital lease obligation 15,808 7,995 -------------- -------------- Total Current Liabilities 13,407,808 17,821,975 -------------- -------------- Long-Term Liabilities: Derivative contracts, less current maturities 120,772 137,367 Long-term debt, less current maturities 20,000,000 18,333,333 Capital lease obligation, less current maturities 41,063 45,015 Deferred revenue, less current portion 4,639,778 - Accrued interest, less current maturities 1,082,454 729,965 Accrued reclamation costs 146,110 144,256 Other 39,184 47,103 -------------- -------------- Total Long-Term Liabilities 26,069,361 19,437,039 -------------- -------------- Total Liabilities 39,477,169 37,259,014 -------------- -------------- Commitments and contingencies Stockholders' Equity: Common stock: $.01 par value, 100,000,000 shares authorized, 69,639,255 and 69,493,635 shares issued and outstanding as of March 31, 2009 and December 31, 2008, respectively 696,392 694,936 Additional paid-in-capital 110,230,067 109,940,000 Accumulated deficit (99,357,892) (100,013,216) Accumulated other comprehensive income 8,719,068 19,726,643 -------------- -------------- Total Stockholders' Equity $ 20,287,635 $ 30,348,363 -------------- -------------- Total Liabilities and Stockholders' Equity $ 59,764,804 $ 67,607,377 -------------- -------------- -------------- -------------- NORD RE

SOURCES CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (Unaudited) 2009 2008 -------------- -------------- Net sales $ 1,417,419 $ 1,540,154 Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below) 991,662 797,316 Operating expenses (includes stock based compensation of $185,523 and $210,822, respectively) 783,372 1,405,183 Depreciation, depletion and amortization 184,409 53,852 -------------- -------------- Loss from operations (542,024) (716,197) -------------- -------------- Other income (expense): Interest expense (135,423) (75,116) Other expenses (2,681) - Miscellaneous income 1,335,452 116,766 -------------- -------------- Total other income 1,197,348 41,650 -------------- -------------- Income (loss) before income taxes 655,324 (674,547) Provision for income taxes - - -------------- -------------- Net income (loss) $ 655,324 $ (674,547) -------------- -------------- -------------- -------------- Net income (loss) per basic and diluted share of common stock: Weighted average number of basic common shares outstanding 69,773,292 66,859,687 Basic earnings (loss) per share of common stock $ 0.01 $ (0.01) Weighted average number of diluted common shares outstanding 70,462,737 66,859,687 Diluted earnings (loss) per share of common stock $ 0.01 $ (0.01)

For further information:

For further information: John Perry, President and Chief Executive
Officer, Nord Resources Corporation, (520) 292-0266, www.nordresources.com;
Investor and Media Relations, Richard Wertheim, Wertheim + Company Inc., (416)
594-1600, or (416) 518-8479 (cell), Or by email at wertheim@wertheim.ca

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