Augen reports Q2 2007 results



    Shares outstanding: 36,170,615

    TORONTO, Aug. 24 /CNW/ - Augen Capital Corp. ("Augen") (TSX-V: AUG) is
pleased to announce its interim consolidated financial results for the second
quarter ended June 30, 2007. The highlights are as follows:

    
    -   Income for the quarter increased to $1.8 million from $1.6 million
        for the same quarter in 2006;

    -   Net realized gain (loss) on the sale of MB investments rose 47% to
        $1.3 million, offset by unrealized loss of $1.7 million reflecting
        the unrealized fluctuations in the fair value of the Merchant Banking
        portfolio;

    -   Expenses for the quarter declined to $0.8 million from $1.0 million
        for the same quarter in 2006;

    -   Fair value of Assets increased 44% to $14.9 million at June 30, 2007
        from $10.3 million at December 31, 2006.
    

    The 2007 adoption of CICA Handbook Section 3855, which now requires the
reporting of unrealized fluctuations in the fair value of the Merchant Banking
("MB") investment portfolio, has resulted in greater volatility in the net
earnings of Augen since Q1 2007. The newly adopted accounting standards
provide insight into the current fair value of the MB investment portfolio but
do not necessarily provide an accurate indication of the ultimate realized
gain or loss, which will be different. This is the first year in which
unrealized fluctuations in the MB investment portfolio have been recorded.
    The Q2 2007 net earnings, before unrealized loss on MB investments of
$1.7 million as described above, were $1.5 million or $0.04 per share,
reflecting a sharp increase in earnings as compared to $0.5 million or $0.02
per share in Q2 2006. Net realized gain (loss) on the sale of MB investments
rose 44% to $1.3 million for the quarter as compared to $0.9 million in 2006,
reflecting strong performance and active trading of the MB investment
portfolio. Net loss for the quarter was $0.3 million as compared to net income
of $0.5 million in 2006, representing $0.01 loss per share as compared to
earnings of $0.02 per share.
    Unrealized loss on MB investments was $1.7 million for the quarter which
reflects the unrealized decline in the fair value of the MB investment
portfolio during the quarter. There is no comparative in 2006 due to the
prospective application of CICA Handbook Section 3855. The fair value of
liabilities, previously reported in the amount of $0.9 million in Q1 2007 and
charged directly to retained earnings as a transitional adjustment under CICA
Handbook Section 3855, was adjusted to $0.5 million during the quarter by way
of a charge to the Statement of Earnings and Comprehensive Income. The
corresponding future taxes were also adjusted during the current quarter.
    The Augen Limited Partnership 2007 offering had its second and final
close on April 30, 2007 raising a total of $12 million, making it the most
successful flow-through offering in Augen's history, despite the weaker demand
for flow through product in the first half of the year. Setup fee income has
been reported during the quarter and the increase in assets will result in
recurring Managed Products advisory fees over the life of the partnership.
    "We are pleased to report the results for Q2, 2007. Quarter over quarter
results prior to unrealized losses are strong and up over last year.
Unrealized gains in the merchant banking portfolio, reported in retained
earnings in Q1, 2007, continue to be substantial despite downward fluctuations
during this quarter but are expected to result in cash flow in future
quarters," said J. David Mason, Chairman of Augen.
    The interim consolidated financial statements for the quarter ended
June 30, 2007 are available at www.augencc.com or at www.sedar.com. Attached
below are extracts from the interim consolidated financial statements for the
quarter ended June 30, 2007:

    
    Consolidated Statements of Earnings and Comprehensive Income

    -------------------------------------------------------------------------
    For the periods                   Three Months                Six Months
     ended June 30,              2007         2006         2007         2006
                                    $            $            $            $
    -------------------------------------------------------------------------

    Income                  1,815,410    1,648,760    2,482,617    2,490,409

    Expenses                  766,306    1,006,029    1,786,960    1,321,134
    -------------------------------------------------------------------------

    Earnings (loss) before
     undernoted items       1,049,104      642,731      695,657    1,169,275

      Unrealized loss on
       investments held
       for trading          1,747,072            -    2,007,840            -
      Adjustment to fair
       value of liabilities  (439,981)           -     (439,981)           -
      Amortization              3,639        3,107        6,609        6,214
    -------------------------------------------------------------------------

    Earnings (loss) before
     income taxes            (261,626)     639,624     (878,811)   1,163,061

    Income taxes
      Current                 139,904            -       95,444            -
      Future                 (152,115)      85,989     (194,570)     163,695
    -------------------------------------------------------------------------
                              (12,211)      85,989      (99,126)     163,695
    -------------------------------------------------------------------------

    Earnings (loss) before
     non-controlling
     interest                (249,415)     553,635     (779,685)     999,366
    -------------------------------------------------------------------------

    Non-controlling interest        -       32,343            -      139,246
    -------------------------------------------------------------------------

    Net earnings (loss)
     and comprehensive
     income (loss)           (249,415)     521,292     (779,685)     860,120
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per
     share - basic and
     diluted                    (0.01)        0.02        (0.02)        0.03
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                        June 30, December 31,
    As at,                                                 2007         2006
                                                              $            $
    -------------------------------------------------------------------------
    ASSETS

    Current assets
      Cash and equivalents                            5,214,997    3,833,786
      Prepaid expenses and deposits                      18,362       54,000
      Receivables                                        44,893    1,436,347
      Due from related parties                          274,009    1,615,538
      Income taxes receivable                           447,815            -
    -------------------------------------------------------------------------
                                                      6,000,076    6,939,671
    -------------------------------------------------------------------------

    Investments                                       8,130,841    2,659,709
    -------------------------------------------------------------------------

    Mineral properties and deferred costs               534,561      509,044
    -------------------------------------------------------------------------

    Property, plant and equipment, net                   52,831       46,284
    -------------------------------------------------------------------------

    Future income taxes                                       -       52,414
    -------------------------------------------------------------------------

    Goodwill                                             62,014       62,014
    -------------------------------------------------------------------------

    Total assets                                     14,780,323   10,269,136
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Augen Capital is a Toronto-based merchant bank which finances early stage
resource companies. Augen is an industry leader in tax-advantaged flow-through
investments in Canada's resource sectors having raised over $58 million in
flow-through limited partnership assets since inception. Augen manages a core
portfolio of emerging resource stocks, two resource flow-through Limited
Partnerships, and its mutual fund, Augen Resource Strategy Fund.
    Augen has holds over 100 gold, base metals and uranium exploration and
development public companies directly in its merchant banking portfolio and,
indirectly, through fees earned on its structured products.

    For more information on Augen Capital, visit our website at
    www.augencc.com
    The company's public documents may be accessed at www.sedar.com

    The TSX Venture has not reviewed and does not accept responsibility for
    the adequacy or accuracy of this release.
    -------------------------------------------------------------------------

    %SEDAR: 00008335E




For further information:

For further information: J. David Mason, Chairman, Tel: (416) 777-2007
Ext. 223, investorrelations@augencc.com

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