Whitemud Resources Reports Operations Update and 2008 Second Quarter Financial Results



    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/
    

    CALGARY, Aug. 26 /CNW/ - Whitemud Resources Inc. ("Whitemud" or "the
Company") (TSXV:WMK) is pleased to provide an operations update and summary
financial results for the three and six months ended June 30, 2008.

    Operations Update

    Marketing

    The Company has made significant progress in marketing its cement grade
metakaolin, Whitemud(MK), during the quarter. "Whitemud(MK) is increasingly
recognized as a cost-effective concrete additive by customers in our target
markets, and by a number of other industrial users," said Mr. Burl Aycock,
Chairman and CEO of Whitemud Resources. "In particular, we are encouraged by
customer response following field trials in the US and Canada. We are
completing storage arrangements at several ready mix plants and expect
commercial deliveries to commence in September 2008."
    Whitemud(MK) has been delivered to concrete companies in Alberta, British
Columbia, Ontario, Quebec and the US Midwest, and field trials are underway.
Importantly, silo capacity at several customer-owned concrete plants is being
made available so that Whitemud(MK) can be utilized in concrete on a
commercial scale. Some companies in Alberta are nearing completion of field
trials to offer the product on a commercial basis. It is expected that
companies will complete initial field trials in September and commercial sales
will follow those trials. Whitemud is working closely with a number of large
engineering and construction firms to include Whitemud(MK) in the concrete
specifications of a number of large projects. We are confident these
relationships will accelerate the acceptance of Whitemud(MK) in the market.
    Saskatchewan Minister of Highways and Infrastructure, the Honourable
Wayne Elhard announced on August 21, 2008 at the Company's official grand
opening ceremony that "we will be approving Whitemud metakaolin as an additive
in the concrete products we purchase. Our next step will be to identify a
major project on the provincial highway system in which metakaolin will be
used. This will provide Whitemud Resources with the opportunity to showcase
the Saskatchewan project to transportation agencies, concrete suppliers and
the heavy construction industry across North America."
    The Company believes infrastructure will be a major component of
Whitemud's future customer base. A number of engineering and construction
companies have acknowledged that Whitemud(MK) should provide cost-effective
benefits for concrete used in transportation infrastructure, including roads
and bridges. The use of Whitemud(MK) for this application requires approval by
the department of transportation (DOT) of the respective jurisdictions.
Whitemud has initiated application to a number of DOTs to have Whitemud(MK)
approved and, to date, has received approval from the state of Oregon.
    Oil well cementing companies in Canada and the US are verifying the
performance of Whitemud(MK) from recent and current production at the Gollier
Creek Plant, and are designing blends for oil well applications. The first
field trials are scheduled to begin early in September.
    We are encouraged that the limited field trials to date have quickly
resulted in interest in using Whitemud(MK) in an expanding number of
applications. Initial field trials included precast concrete bases and
residential construction. The Company is now pursuing specific opportunities
to deliver product to projects that are under construction, including
multi-story commercial buildings, parkades, and shotcrete applications in
commercial buildings. Customers report the benefits of Whitemud(MK) to include
increased compressive strength, lower cost than competing products, improved
sustainability qualities, and improved handling and finishing characteristics.

    Processing Plant

    Whitemud has been operating the Gollier Creek processing plant at a
stabilized rate since the July 20, 2008 installation of new refractory bricks
in the rotary kiln. Additional modifications and equipment-tuning are underway
to improve plant efficiency.

    
    Financial highlights and results for the three and six months ended
    June 30, 2008

    -  The Company entered into a bought deal private placement of 2,143,000
       special warrants at $7.00 during the quarter for gross proceeds of
       $15,001,000 ($13,961,459 net of offering costs to date). These funds
       were used to repay the capital financing facility while the remainder
       of the funds will be used for minor modifications of the plant,
       operating efficiencies and to provide working capital for the Company.
    -  As a result of the funds received from the issue of the special
       warrants, the Company has $nil funds drawn on either of its capital or
       operating facilities.
    -  Net loss for the three and six months ended June 30, 2008 amounted to
       $1,966,058 ($0.13 per share) and $3,886,747 ($0.25 per share)
       respectively compared to $748,760 ($0.05 per share) and $1,262,437
       ($0.09 per share) in the prior periods. In 2007 the Company was
       growing and beginning the construction of the plant and mine whereas
       in 2008 the Company is fully staffed with construction and
       commissioning complete, making comparisons between the two periods
       very difficult.
    -  The largest component of both the loss for the three and six months
       ended June 30, 2008 and the increased loss from the prior periods
       relates to non-cash stock-based compensation expense. The non-cash
       stock-based compensation expense amounted to $629,010 and $1,258,020
       respectively for the three and six months ended June 30, 2008 compared
       to only $226,327 for the three and six months ended June 30, 2007.


    A summary of financial results is presented below:

    -------------------------------------------------------------------------
    Income Statement Summary         For the Three Months  For the Six Months
                                            Ended                Ended

    -------------------------------------------------------------------------
                                       June 30,  June 30,  June 30,  June 30,
                                          2008      2007      2008      2007

                                             $         $         $         $
    -------------------------------------------------------------------------
    Interest and miscellaneous income   40,820   392,039    89,449   570,254
    -------------------------------------------------------------------------
    Expenses                         2,006,878 1,140,799 3,976,196 1,832,691
    -------------------------------------------------------------------------
    Non-cash stock based compensation
     expense (included above)          629,010   226,327 1,258,020   226,327
    -------------------------------------------------------------------------
    Net loss                         1,966,058   748,760 3,886,747 1,262,437
    -------------------------------------------------------------------------
    Net loss per share                    0.13      0.05      0.25      0.09
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Balance Sheet Summary      As at June 30, 2008   As at December 31, 2007

                                                 $                         $
    -------------------------------------------------------------------------
    Working capital                     10,319,269                 5,076,996
    -------------------------------------------------------------------------
    Total assets                        73,058,483                67,014,124
    -------------------------------------------------------------------------
    Shareholder equity                  69,859,976                58,246,618
    -------------------------------------------------------------------------

    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.
    

    Forward Looking Information

    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, those statements made under
the heading "Operations Update", concerning the timing of commercial
deliveries, the availability of customers' silo capacity for Whitemud(MK),
timing of completion of customers' initial field trials, the makeup of
Whitemud's future customer base, and the commencement of first field trials by
oil well cementing companies. 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 including its ability to deliver commercial shipments of
product and attain, achieve or accomplish the completion of various trials
successfully and within the stated timeframe may be affected by a variety of
variables and risks factors, including without limitation, risks associated
with the fact that decision making as to the success of the various field
trials are largely in the customers' control, results obtained to date have
been from limited initial field trials, the economic and market risks
associated with mining and mineral processing industry in general, the
potential loss of market to the Company's competition, the Company's ability
to access sufficient debt and equity capital from internal and external
sources to fund development and growth, the Company's ability to expand in the
marketplace, and the anticipated capital expenditures and financing thereof,
as well as risks associated with the fact that timing for the necessary
approvals by government and other regulatory bodies for various applications
made by the Company are not within the direct control of the Company. 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 forgoing list of risk factors is not
exhaustive. Additional information on risk factors is included in the
Company's Annual Information Form and other public documents available under
the Company's profile on SEDAR. Although the Corporation has attempted to
identify important factors that could cause actual actions, events or results
to differ materially from those described in the forward looking statements,
there may be other factors that cause actions, events or results to differ
from those anticipated, estimated or intended. In making its forward-looking
statements, the Corporation used, among others, the following material factors
or assumptions to develop forward-looking information enumerated above: the
target market for Whitemud will accept Whitemud's metakaolin for its stated
purpose, the results of the limited field trials to date reflect the results
to come from other trials, use of metakaolin remains economic, government
regulations governing Whitemud's title to mineral properties and the potential
use of Whitemud in infrastructure will not change, its permits and plant
operations will not change, and that the various independent reviews conducted
on the Company's products and resources, and customer feedback on the trials
provided to the Company are accurate. 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

    %SEDAR: 00024724E




For further information:

For further information: Burl Aycock, Chairman & CEO, Whitemud
Resources, Telephone: (403) 695-1012; Ron Love, Vice President, Finance and
CFO, Whitemud Resources, Telephone: (403) 517-0040; Kelly Babichuk, President
and COO, Whitemud Resources, Telephone: (403) 517-0040; Kevin Graham, Vice
President, Communications, Whitemud Resources, Telephone: (403) 517-0040

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WHITEMUD RESOURCES INC.

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