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CALGARY, May 31 /CNW/ - Whitemud Resources Inc. ("Whitemud" or "the Company") (TSXV:WMK) provides summary financial results and an operations update for the three months ended March 31, 2010.
Financial highlights and results for the quarter ending March 31, 2010:
- Revenue for the quarter was $161,581 compared to $101,431 in 2009
- The net loss for the first quarter amounted to $1,902,892 ($0.11 per
share) compared to $1,585,181 ($0.09 per share) in the first quarter
of 2009. The Company had an additional $430,473 in finance charges,
including debenture interest for the first quarter compared to the
same period last year
- Cost reduction initiatives have resulted in a reduction of salaries,
general and administrative expenses by 46% in the first quarter
compared to the same period in the previous year
- As of March 31, 2010 the Company had working capital of $955,750 with
$339,042 in cash available for operations. Whitemud currently has a
$2 million credit facility with its bank to supplement working capital
Subsequent to the end of the quarter a settlement was reached over a dispute between the Company and contractors arising from refractory failures in the Company's kiln during the start-up of the plant in 2008. As a result, Whitemud received $630,000, which eliminated a payable of $385,000 and provided net $245,000 in cash.
The Company continues to move towards the completion of a supply and distribution agreement with a key North American concrete industry supplier for the distribution of Whitemud(MK). The completion of this agreement would bring additional resources to marketing metakaolin in North America and is expected to help accelerate sales growth. This partner has initiated discussions to supply Whitemud(MK) for a number of large projects and applications in the U.S. Whitemud expects the two parties to complete a supply and distribution agreement in the second quarter of 2010 which is anticipated to lead to additional sales by the third quarter.
The Company recently initiated shipments to a new customer in Ontario for use in ready mixed concrete and other concrete products. Sales to the oil well service industry are also expected to grow significantly in 2010. Whitemud continues to focus on increasing the number of customers and the scope of applications, including into the U.S for its Whitemud(MK) product.
First quarter sales were up a modest 60%. This increase was during the low activity levels associated with the seasonality of the construction industry. Whitemud(MK) has demonstrated cost-effective performance benefits in a growing number of projects and applications and is expected to translate into good sales growth in 2010. The three main drivers of sales growth are increased use in the Canadian construction industry, growth in oil well services industry, and sales to the U.S. through the new marketing relationship.
The outlook for the Company continues to improve based on growing interest for Whitemud(MK) and the expected growth in sales. However, additional capital will be required to meet the Company's future obligations and to sustain operations. Management continues to develop and implement a strategy to raise additional financing.
This financial summary should be read in conjunction with the Company's March 31, 2010 Interim Financial Statements and Management's Discussion and Analysis, both of which are available on www.sedar.com.
About Whitemud Resources
Whitemud Resources Inc. (www.whitemudresources.com) is a Canadian-based corporation that is exploiting a large kaolin deposit in southern Saskatchewan. The Company produces Whitemud(MK), a high-reactivity, cement-grade metakaolin that enhances the performance of cement used in construction and in oil and gas wells. The Company is positioned to benefit from expanding North American infrastructure needs and growing environmental pressures.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
This press release may contain forward-looking statements which may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact, including without limiting the generality of the foregoing, and in particular comments relating to expectations relating to completion of a supply and distribution agreement with a key North American concrete industry supplier, timing for the completion of the same, anticipated resulting additional sales, the growing demand for the application of its Whitemud product, expansion in the oil well service industry, the expected increase in customers and scope of applications (including into the US), the outlook for the Company, and the requirements for additional financing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of Whitemud may be affected by a variety of variables and risks associated with ability to access sufficient debt and equity capital from internal and external sources, ability to expand in the marketplace, and anticipated opportunities for strategic relationships, strategy for additional financing, growing acceptance of the Company's product, expectations of customers to expand use of the Company's product, oil well service industry and infrastructure projects upon which Whitemud is dependent for the consumption of its Whitemud product. As such the future plans and objectives of Whitemud are forward-looking statements that involve risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in such statements. The Company has, in part, relied on information provided to it by its customers and potential customers, as well as reports and forecasts provided by parties involved in infrastructure projects, the precast concrete industry and oil well service industry and the trend in current sales of the Company's product in order to develop its forward-looking statements and there is no assurance that the assumptions, forecasts or information relied upon by the Company is correct, or will not be affected by events or circumstances beyond the control of the Company. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise.
For further information on Whitemud, go to www.whitemudresources.com
For email alerts regarding Whitemud Resources, please go to Whitemud Resources Inc. - Email Alerts
SOURCE WHITEMUD RESOURCES INC.
For further information: For further information: Burl Aycock, CEO, Whitemud Resources, Telephone: (403) 695-1012 or Kelly Babichuk, President and COO, Whitemud Resources, Telephone: (403) 517-0040