TORONTO, March 27 /CNW/ -
Jericho Diamond Mine
- Completed construction of the Jericho Diamond Mine and related
infrastructure for a total capital cost of $116 million.
- 539,000 tonnes of kimberlite were processed, resulting in production
of 296,000 carats for a grade of 0.55 carats per tonne (cpt). These
diamonds were sold for an average of $93.00 USD per carat at an
average exchange rate of 1.12, resulting in total value of production
of $31 million CAD.
- Experienced start-up difficulties, which persisted through to year-
end. Shorter than expected 2006 winter road access resulted in a fuel
and explosives shortage, which restricted the mine plan and thereby
negatively impacted ore exposure, and carat production.
- The average recovered grade was 76% of the SRK estimated resource and
reserve grade of 0.75 cpt for the material mined in 2006. Tahera
believes that the estimated actual recovered grade per geological
unit was 89% to 95% of the revised modeled grade when applying a
predictive block model using vertical grade variations. Refer to the
MD&A for a discussion of the grade reconciliation analysis.
- Based on the above analysis, the grades recovered are considered
normal variations from the overall modeled resource grade, and lie
within the expected confidence levels for the reserve and resource
estimates. Management believes that the life of mine expected grade
of the Jericho kimberlite resource and reserve material is 0.85 cpt
as per the SRK resource and reserve estimates.
- A 59-carat gem stone, which sold for $450,000 USD, was the most
valuable diamond recovered in 2006. The largest diamonds recovered
include three low quality stones in excess of 100 carats each.
- Strategic alliance with Teck Cominco Limited completed in December
2006. In addition to an equity investment by Teck, the partnership
enables Tahera to draw on the expertise of one of the world's leading
- Tahera completed a 1-for-5 stock consolidation approved by its
shareholders at its annual and special meeting on May 15, 2006.
- A flow-through share issuance was completed in June 2006, resulting
in the issuance of 2.2 million common shares for gross proceeds of
- The Company amended the credit facility with Tiffany & Co. to provide
an $8 million working capital facility and defer the repayment of
certain principal and interest payments until September 2007.
- Extraction and processing of the 900-tonne Muskox kimberlite bulk
sample was completed.
- Tahera earned a 50% interest in the Polar project by surpassing the
cumulative spending threshold of $11 million on the property.
Events Subsequent to Year-end
- Full requirements for fuel and other supplies have been transported
to the Jericho mine-site on the 2007 winter road.
- Commenced measures to improve performance of the Jericho Diamond Mine
operations utilizing the Teck technical support agreement.
- Robust long term rough diamond market outlook, diamond prices
expected to strengthen in 2007 and beyond.
- Continued evaluation of prospective exploration projects (JD-3,
Anuri, Muskox) to increase the Company's diamond resource base
- Bulk sample of diamondiferous JD-3 kimberlite (located 7 km west
of Jericho) is underway
- Further Anuri kimberlite sampling is underway
- Analysis of the 2006 Muskox kimberlite sample data
- The cost of the fuel and explosives airlift program, and negative
cash flow in late 2006 and early 2007, has led to a current need for
additional financing. Tahera is reviewing a Convertible Debt
financing offer made by Teck that would provide up to $10 million in
additional funds for the Jericho Diamond Mine operations. Tahera's
board of directors has formed a special committee to examine the Teck
financing proposal and consider alternative financing methods
available to fund the Company's short-term financing needs.
Mr. Dale Mah, P. Geol., is Tahera's qualified person as defined in
National Policy 43-101 for its exploration programs and has supervised the
preparation of the exploration information included in this press release. Mr.
Mah is an employee of Tahera and is not considered independent of Tahera.
Mr. Daniel Johnson, P.Eng., is Tahera's qualified person as defined in
National Policy 43-101 for its Jericho property and has supervised the
preparation of the technical information included in this press release. Mr.
Johnson is an officer of Tahera and is not considered independent of Tahera.
Tahera has scheduled a conference call at 2:00 p.m. Eastern Standard Time
on Tuesday, March 27th, 2007. Analysts and investors are invited to
participate in the call by dialing 416-644-3424 or toll-free 1-800-590-1508.
To access a conference replay (available at 4:00 p.m. EST) dial
416-640-1917 or toll-free 1-877-289-8525 and enter pass code 21224144,
followed by the number sign.
2006 Year-end Results
At December 31, 2006, Tahera's cash and cash equivalents balance is
$27,557,000, an increase of $12,112,000 from the balance at December 31, 2005.
Diamond inventory at December 31, 2006 of $10,498,000 represents diamonds
produced and held for sale at the balance sheet date. Capital and other
non-current assets increased by $35,000,000 during 2006, primarily due to the
capital and pre-production operating costs associated with the commissioning
of the Jericho Diamond Mine and the commencement of operations. Diamond
revenues are reported when diamonds are sold and title has transferred. The
Company realized revenues of $5,618,000 and an operating loss of $24,358,000
during the six-month period in 2006 that followed the achievement of
commercial production on July 1, 2006. The Company recorded a net loss for the
year of $25,596,000 ($0.16 per share), as compared to a loss of $2,771,000
($0.02 per share) for the year ended December 31, 2005.
Financial Statement Highlights (in thousands of Canadian dollars, except
for per share data):
Dec. 31, Dec. 31,
Current Assets $ 44,885 $ 22,810
Capital and Other Assets 203,069 168,069
$ 247,954 $ 190,879
Current Liabilities $ 31,469 $ 11,496
Long-Term Liabilities 43,624 31,149
Share Capital - Common Shares 189,509 148,599
Common Share Purchase Warrants 9,212 1,290
Contributed Surplus 5,049 3,658
Deficit (30,909) (5,313)
$ 247,954 $ 190,879
Year Ended Year Ended
Dec. 31, Dec. 31,
Revenues $ 5,618 $ -
Cost of Goods Sold (29,976) -
Operating Loss (24,358) -
Corporate, General and Administrative Expenses (4,660) (3,777)
Other Items (1,516) 210
Loss for the Year before Income Taxes (30,534) (3,567)
Recovery of Income Taxes 4,938 796
Net Loss for the Year $ (25,596) $ (2,771)
Loss per Share - Basic and Diluted $ (0.16) $ (0.02)
Cash Flows From (Used In):
Operating Activities $ (5,658) $ (4,236)
Investing Activities (49,020) (97,994)
Financing Activities 66,790 59,786
Net Increase (Decrease) in Cash and
Cash Equivalents 12,112 (42,444)
Cash and Cash Equivalents - Beginning of Year 15,445 57,889
Cash and Cash Equivalents - End of Year $ 27,557 $ 15,445
Please refer to Tahera's website (www.tahera.com) or www.SEDAR.com to
view the complete year-end financial report.
Cautionary Statement Regarding Forward Looking Information
This press release contains "forward-looking information" that reflects
Tahera Diamond Corporation's current beliefs, plans, objectives, estimates,
intentions, expectations and projections about its future results. When used
in this press release, words such as "estimate", "intend", "expect",
"anticipate" and similar expressions are intended to identify forward-looking
information, which is based on the opinions and estimates of management at the
date the statements are made. By its very nature, forward-looking information
is subject to risks and uncertainties and other factors that could cause
Tahera Diamond Corporation's actual results, performance, prospects or
opportunities to differ materially from those expressed in, or implied by,
forward-looking information. These risks, uncertainties and factors may
include, but are not limited to exposure to interest rate fluctuations,
foreign currency risks, changes in federal, provincial and territorial laws,
rules and regulations relating to the Company's business and environmental
matters, changes in tax regulations and accounting pronouncements, the
inherent risks involved in the exploration, development, and mining of mineral
properties, the uncertainties involved in interpreting drilling results and
other data, fluctuating commodity prices, unforeseeable adverse climate
conditions, the possibility of cost overruns or unanticipated costs and
expenses, uncertainties relating to the availability and costs of financing
needed in the future, other factors and the accuracy of management's
Specifically, in making statements concerning future estimated grades the
Company has assumed that mining operations will proceed in the normal course
according to schedule and that the statistical computations and the
assumptions used and judgments made in interpreting engineering and geological
information will prove to be correct. There is significant uncertainty in any
mineral resource/reserve estimate and the actual deposits encountered may
differ materially from the Company's estimates. With respect to statements
concerning diamond prices, Tahera has assumed that current world economic
conditions and current rough diamond supply and demand fundamentals will not
materially change. Operating cost estimates have been based on the Company's
experience to date; however increases in labour and fuel costs and any
unforeseen mining issues could materially impact these forecasts. While the
Company considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release or as of the date otherwise specifically indicated herein. Due to
risks and uncertainties, including the risks and uncertainties identified
above and elsewhere in this press release, actual events may differ materially
from current expectations. Tahera Diamond Corporation disclaims any intention
or obligation to update or revise any forward-looking information, whether as
a result of new information, future events or otherwise.
The above press release makes reference to certain non-GAAP financial
measures such as cash operating costs and value of production, to assist the
reader in assessing the Company's financial performance. Non-GAAP financial
measures do not have any standard meaning prescribed by GAAP and are therefore
unlikely to be comparable to similar measures presented by other issuers. See
"Non-GAAP Financial Measures" in our accompanying Management's Discussion &
On Behalf of the Board,
R. Peter Gillin Chairman and CEO
Tahera Diamond Corporation
Grant Ewing Executive Vice President
For further information:
For further information: Investor Relations, Tel: (416) 777-1998, Fax:
(416) 777-1898, Toll free: (877) 777-2004, Email: