Whitemud Resources Reports Operations Update and 2009 Second Quarter Financial Results



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

    CALGARY, Aug. 21 /CNW/ - Whitemud Resources Inc. ("Whitemud" or "the
Company") (TSXV:WMK) presents an operations update and summary financial
results for the second quarter ending June 30, 2009.
    Whitemud has made significant progress in advancing Whitemud(MK) into the
North American construction industry despite the current economic downturn
that has adversely affected the construction industry and impacted the
Company's efforts. The Company has secured the approval of major engineering
firms and construction companies to include Whitemud(MK) in several large
construction projects in Alberta.
    One notable project is Calgary's landmark Bow Tower project. The
contractor for this 58 story building, which will be the second-largest office
complex in Canada, recently started using Whitemud(MK) in order to meet design
criteria of the concrete floors.
    Users have now reported the product has met performance expectations and
provides a number of opportunities to lower costs. As a result of the
successes, several of the engineers and contractors are evaluating the use of
metakaolin in other major centres across Canada. One of the leading
performance benefits of Whitemud(MK) has been to significantly reduce the
CO(2) footprint of concrete construction projects and this is expected to be a
strong driver of future sales growth.
    The Company believes that a key to increasing sales volumes is to secure
silo capacity at concrete production plants. Since the end of the first
quarter, the company has increased the number of concrete plants that use
Whitemud(MK) from 7 to 21. The Company expects to continue to see growth in
the number of concrete plants that offer Whitemud(MK). The Company believes
that a growing customer base combined with increased market acceptance will
result in accelerated sales growth.
    Local project successes have encouraged interest in eastern Canada and
the northern United States where the Company now has secured silo space in 5
concrete plants.
    The Board of Directors of the Company has taken steps to diversify the
governance responsibilities. Burl Aycock has resigned as Chairman of the Board
and the Board has appointed Barry Lester to the position of Chairman of the
Board. Mr. Aycock will continue as Chief Executive Officer and will remain a
member of the Board of Directors.

    
    Financial highlights and results for the three and six months ended
    June 30, 2009

    -   The Company continued to initiate sales in the three and six months
        ended June 30, 2009 generating $149,679 and $251,110 respectively in
        sales compared to nil in the three and six months ended June 30,
        2008. After distribution and cost of goods sold the Company
        experienced a negative margin of $10,419 and $1,322 respectively.
    -   The Company had a working capital deficit at June 30, 2009 of
        $ 2,466,484 with a cash deficit of $384,960.
    -   To address the working capital deficit the Company closed a
        convertible debenture financing on August 6, 2009 for gross proceeds
        of $10.513 million with proceeds to be used for general working
        capital purposes.
    -   In addition, the Company reached an agreement with its primary lender
        to convert its $2 million bridge facility into a credit facility upon
        closing of the convertible debenture financing.
    -   Net loss for the three and six months ended June 30, 2009 amounted to
        $2,029,881 ($0.12 per share) and $3,615,062 ($0.21 per share)
        respectively compared to $1,966,059 ($0.13 per share) and $3,886,747
        ($0.25 per share) respectively for the three and six months ended
        June 30, 2008.
    -   Decreased stock-based compensation, salaries & benefits and general &
        administration expenses were partially offset by increased
        transportation and logistics, interest & other expenses and decreased
        capitalized salaries & benefit expenses for both periods.
    -   Capital upgrades made to the processing plant were finalized and
        commissioned during the second quarter ended June 30, 2009. The
        Company generated commercial production in the quarter with
        improvements to the effectiveness and efficiency of operations. These
        improvements allowed the Company to replenish inventory levels to
        continue sales and temporarily shut down the plant late in the
        quarter. A summary of financial results is presented below:

    -------------------------------------------------------------------------
    Income Statement          For the Three Months      For the Six Months
    Summary                           Ended                   Ended
    -------------------------------------------------------------------------
                               June 30,    June 30,    June 30,    June 30,
                                 2009        2008        2009        2008
                                   $           $           $           $
    -------------------------------------------------------------------------
    Product Sales                149,679         Nil     251,110         Nil
    -------------------------------------------------------------------------
    Interest and
     miscellaneous income         26,865      40,820      66,293      89,449
    -------------------------------------------------------------------------
    Expenses                   2,046,327   2,006,879   3,680,033   3,976,196
    -------------------------------------------------------------------------
    Non-cash stock based
     compensation expense
     (included above)            362,513     629,010     694,935   1,258,020
    -------------------------------------------------------------------------
    Net loss and comprehensive
     loss                      2,029,881   1,966,059   3,615,062   3,886,747
    -------------------------------------------------------------------------
    Net loss per share              0.12        0.13        0.21        0.25
    -------------------------------------------------------------------------


    -------------------------------------------------
    Balance Sheet Summary       As at       As at
                               June 30,  December 31,
                                 2009        2008

                                   $           $
    -------------------------------------------------
    Working capital          (2,466,484)  1,892,302
    -------------------------------------------------
    Total assets             71,292,472  70,718,171
    -------------------------------------------------
    Shareholder equity       64,246,719  67,052,501
    -------------------------------------------------
    

    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 and
guidance or other statements that are not statements of fact, including
without limiting the generality of the foregoing, statements made with respect
to the expectations of future sales growth, growth in secured silo space at
concrete production plants and growth in the number of concrete plants that
use Whitemud(MK) . There can be no assurance that the Corporation's efforts in
this regard will be successful as it is subject to, among other things, the
current economic conditions affecting the debt and equity markets. The
statements are made in reliance on the assumption that debt and equity markets
will not experience further volatility and that the Company has sufficient
time to pursue a 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. 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





For further information:

For further information: Burl Aycock, 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

Organization Profile

WHITEMUD RESOURCES INC.

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