Maudore Announces First Quarter 2013 Results

MONTREAL, June 5, 2013 /CNW Telbec/ - Maudore Minerals Ltd. (MAO: TSX-Venture; MAOMF: US OTC; M6L: Frankfurt Exchange) ("Maudore" or the "Company") today announced the financial results for the first quarter ended March 31, 2013.

In releasing the financial results, Chairman and CEO Kevin Tomlinson said, "the first quarter of the year was an active time for Maudore that brought positive changes to the Company, in spite of a challenging junior mining sector."

In March, Maudore purchased from North American Palladium Ltd. (the "NAP Acquisition") all the shares of NAP Quebec Mining Inc. - recently renamed Aurbec Mines Inc  ("Aurbec") - resulting in the acquisition of the Vezza Project (trial mining underway), Sleeping Giant Processing Facility, Sleeping Giant Gold Mine (Past Producer on care and maintenance), Discovery and Flordin Projects.  Maudore increased its land position by 50% to 144,000 ha and added four advanced gold projects and an operating gold mill.

"Maudore's goal is to become a leading Canadian gold producer generating cash flow and increasing shareholder value," Mr. Tomlinson said. He added:  "Our new President and CEO, Greg Struble, an experienced mining engineer, will work with management to optimize production at Vezza and efficiency at the Sleeping Giant Mill." Mr. Struble will officially take the helm as CEO on June 11, 2013. Mr. Tomlinson will remain Executive Chairman.

Financial results

The financial details of the NAP acquisition, which was accounted for as a business combination, are:

     
    $
Fair value of consideration transferred:    
  Cash   18,000,000
  Common shares (1,500,000 shares)   1,518,000
    19,518,000
Consideration that will be transferred subsequently and funded from the sale
of the related gold
   
  In-circuit gold inventory   1,737,000
  In-liner gold inventory   94,171
Total consideration transferred   21,349,171
     
     
Fair value assigned to identifiable assets and liabilities    
  Tax credits receivable   4,996,912
  Accounts receivable   2,337,310
  Sales tax receivable   434,095
  Inventories   4,070,743
  Prepaid expenses   296,717
  Current assets   12,135,777
       
  Exploration and evaluation assets   5,900,000
  Property, plant & equipment   17,083,000
  Non-current assets   22,983,000
       
  Bank indebtedness   (179,159)
  Accounts payable and accrued liabilities   (6,942,345)
  Current portion of obligations under finance leases   (183,087)
  Current liabilities   (7,304,591)
       
  Other liabilities   (152,510)
  Obligation under finance leases   (158,393)
  Mine restoration provision   (6,154,112)
  Non-current liabilities   (6,465,015)
     
Identifiable assets and liabilities   21,349,171
Difference - goodwill or (bargain purchase price)   -
     
    $
     
Consideration transferred settled in cash   18,000,000
Cash and cash equivalents acquired   -
Net cash outflow on acquisition   18,000,000
Acquisition costs charged to expenses   2,139,447
Net cash paid related to acquisition   20,139,447
     

The Company funded the acquisition of Aurbec's shares through a senior secured credit facility of $22 million provided to the Company by FBC Holdings Sarl ("FBC").

On April 12, 2013, the Company completed a brokered private placement of units, each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share for a period of 24 months at a purchase price of $1.13. The Company issued an aggregate of 17,039,835 units at an issue price of $0.91 per unit for aggregate gross proceeds of $15,506,250.

The Company reported a loss of $2,749,719 for the three-month period ended March 31, 2013 compared to a loss of $37,100 during the three-month period ended March 31, 2012. Under IFRS, the acquisition costs relating to the acquisition of Aurbec are recorded as expenses for $2,139,447.

Vezza project

Mining is underway at Vezza, but the project has not yet commenced commercial production. The revenues from the sale of any finished products generated by the project have been deducted, net of the cost of inventories, from the related development cost capitalized in the statement of financial position. The $68,940 loss from mining operations represents residual costs relating to the Sleeping Giant mine.

Maudore has completed an updated mineral resources estimate for the Vezza project and retained Christian D'Amours, BSc, PGeo, GeoPointCom, to update the mineral resources estimate following Maudore's acquisition of Aurbec. Indicated Resources are currently estimated at 586,070 t at 6.3 g/t Au and Measured Resources estimated at 658,780 t at 6.5 g/t Au.  There are no Mineral Reserves defined to date at Vezza.

Maudore is trial mining and trucking rock from Vezza to the Company's processing facility, located 85 kilometres south of Vezza on Highway 109 at the former Sleeping Giant mine.

During the period from March 23 to March 31, 2013, 2,640 tonnes of rock were extracted at Vezza and trucked to the Sleeping Giant Mill producing 418 ounces of gold after accounting for inventory changes incurred at the time of purchase from North American Palladium Ltd.

Sleeping Giant Mill

The mill, designed to operate at a rate of 900 tonnes per day (tpd), is currently processing between 350-600 tpd with +/- 92% gold recovery, five days per week, treating underground rock from the Vezza gold project as it continues to ramp up to a production footing.  Material is fed through a grizzly into a crushing plant with a primary jaw crusher and two cone crushers with screening, then to a rod mill and two ball mills to produce a pulp that undergoes conventional leaching followed by a CIP (carbon in pulp) circuit, stripping facilities, electrowinning and an induction furnace to produce gold doré.

During the period from March 23 to March 31, 2013, 2,212 tonnes of rock were milled at the facility with a recovery rate of 91.7% for a total production of 418 ounces of gold after accounting for inventory changes incurred at the time of purchase from NAP.

About Maudore Minerals Ltd.

Maudore is a Quebec junior gold company with more than 23 exploration projects, of which five are at an advanced stage of exploration with reported current and historical resources. The Company's projects span some 120 kilometers, east-west, of the underexplored Northern Volcanic Zone of the Abitibi Greenstone Belt and cover a total area of 144,000 hectares (1,440 km2) with the Sleeping Giant Processing Facility within trucking distance of key projects.

Quebec is consistently ranked amongst the best locations worldwide for mineral exploration and development, with low cost power, proper infrastructure, mining-oriented local communities and a skilled workforce.

Cautionary Statement Regarding Forward-Looking Statements
This release and other documents filed by the Company contain forward-looking statements. All statements that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "intend", "anticipate", "believe", "expect", "estimate", "plan" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements include, without limitation, performance and achievements of the Company, business and financing plans, business trends and future operating revenues. These statements are inherently uncertain and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, financial related risks, unstable gold and metal prices, operational risks including those related to title, significant uncertainty related to inferred mineral resources, operational hazards, unexpected geological situations, unfavourable mining conditions, changing regulations and governmental policies, failure to obtain required permits and approvals from government authorities, failure to obtain any required approvals of the TSXV, failure to obtain any required shareholder approvals, failure to obtain any required financing, failure to complete any of the transactions described herein, increased competition from other companies many of which have greater financial resources, dependence on key personnel and environmental risks and the other risks described in the Company's annual information forms and other continuous disclosure filings with securities regulators available under the Company's profile at www.sedar.com. It is recommended not to place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. The Company does not assume any obligation to update any forward-looking statements contained in this release, except as required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

MAUDORE MINERALS LTD.
Consolidated Statements of Financial Position
(unaudited, in Canadian dollars)

       
    March 31,
2013
December 31,
2012
    $ $
ASSETS      
Current      
Cash and cash equivalents   2,048,276 3,126,129
Tax credits receivable   5,276,541 149,286
Accounts receivable   990,096 -
Sales tax receivable   631,788 211,700
Inventories   4,823,251 -
Prepaid expenses   373,200 40,513
    14,143,152 3,527,628
Non-current      
Restricted cash   1,880,084 -
Exploration and evaluation assets   50,565,521 44,480,107
Property, plant and equipment   17,522,221 -
    69,967,826 44,480,107
       
Total assets   84,110,978 48,007,735
       
LIABILITIES      
Current      
Accounts payable and accrued liabilities   12,662,446 2,370,541
Term loans   3,336,078 -
Current portion of obligations under finance leases   182,894 -
    16,181,418 2,370,541
Non-current      
Term loans   - 3,091,383
Credit facility   18,814,719 -
Obligations under finance leases   153,624 -
Mine restoration provision   6,156,360 -
Other liabilities   246,681 -
Deferred tax liabilities   4,061,837 5,040,954
    29,433,221 8,132,337
       
Total liabilities   45,614,639 10,502,878
       
EQUITY      
Share capital   46,738,195 43,348,994
Contributed surplus   6,024,738 5,979,425
Warrants   906,464 599,777
Deficit   (15,173,058) (12,423,339)
Total equity   38,496,339 37,504,857
       
Total liabilities and equity   84,110,978 48,007,735
       

MAUDORE MINERALS LTD.
Consolidated Statements of Comprehensive Loss
(unaudited, in Canadian dollars)

       
    For the three-month period
ended March 31,
    2013 2012
    $ $
       
MINE OPERATING EXPENSES      
Production costs   (64,137) -
Depreciation and amortization   (4,803) -
Loss from mining operations   (68,940) -
       
OTHER EXPENSES      
General and administrative expenses   (1,057,973) (246,431)
Acquisition related expenses   (2,139,447) -
Exploration and evaluation expenses   (69,824) -
Loss from operations   (3,336,184) (246,431)
       
OTHER INCOME OR EXPENSES      
Interest expense   (460,524) -
Finance costs on mine restoration provision   (2,248) -
Interest income   3,206 29,583
Loss before income taxes   (3,795,750) (216,848)
       
Recovery of deferred income taxes and mining duty taxes   1,046,031 179,748
       
NET LOSS AND COMPREHENSIVE LOSS   (2,749,719) (37,100)
       
       
Weighted average number of basic and diluted outstanding shares   27,267,587 26,716,357
Basic and diluted loss per share   (0.10) -

MAUDORE MINERALS LTD.
Consolidated Statements of Comprehensive Loss
(unaudited, in Canadian dollars)

       
    For the three-month period
ended March 31,
    2013 2012
    $ $
OPERATING ACTIVITIES      
Net loss   (2,749,719) (37,100)
       
Adjustments:      
Recovery of deferred income taxes   (979,117) (179,748)
Accrued interest related to term loans and credit facility   177,534 -
Structuring fees related to term loans and credit facility   282,990 -
Depreciation   4,803 -
Accretion on mine restoration provision   2,248 -
Changes in working capital items   2,020,807 8,368
    (1,240,454) (208,480)
       
INVESTING ACTIVITIES      
Acquisition of Aurbec Mines Inc.   (18,000,000) -
Additions to exploration and evaluation assets   (252,535) (3,047,564)
Additions to property, plant and equipment   (321,619) -
Mine restoration deposit   (1,885,844) -
Bank indebtedness assumed following the acquisition of Aurbec  Mines inc.   (179,169) -
Tax credits received (paid)   (15,371) 3,682,447
    (20,654,538) 634,883
       
FINANCING      
Term loans structuring fees   (107,451) -
Issue of credit facility   22,000,000 -
Credit facility structuring fees   (1,040,859) -
Repayment of obligation under finance leases   (4,952) -
Issue of shares through exercise of share options   - 56,625
Share issue expenses   (29,599) (101,825)
    20,817,139 (45,200)
       
Net change in cash and cash equivalents   (1,077,853) 381,203
Cash and cash equivalents, beginning of period   3,126,129 15,169,610
Cash and cash equivalents, end of period   2,048,276 15,550,813

 

SOURCE: Maudore Minerals Ltd.

For further information:

Kevin Tomlinson
Chairman and CEO
Email: kevin.tomlinson@maudore.com

George Fowlie
Deputy Chairman of the Board and Director of Corporate Development
Email: george.fowlie@maudore.com
+1 416 587 9801

Deborah Thompson
Investor Relations
Deborah.Thompson@maudore.com

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Maudore Minerals Ltd.

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