NELSON, BC, June 10 /CNW/ - Oromonte Resources Inc. ("Oromonte" or the
"Company") (ORR:TSX-V; OF6:FRA) announces the filing of its financial
statements and results for the year ended December 31, 2007.
The Company's performance was dramatically affected by the government
change in Ecuador in 2007. While the situation may stabilize by the second
half of 2008, the Ecuador government's initiation of radical change to the
country's constitution, taxation, environmental and mining laws created an
uncertain business and mining industry environment throughout 2007. This
uncertainty has had a negative effect on the foreign investment community that
has resulted in Oromonte's stock price reduced over the year. Additionally,
the uncertainty and mining industry regime change underway in Ecuador resulted
in the Company's environmental study approvals and related mining permit
applications being stalled within government. Consequently, the Company's 2007
exploration plans were set back, including drilling plans which could not
proceed during the year.
The Company recorded a loss of $3,184,201 for the 12 months ended
December 31, 2007. Working capital at year end was $1,742,441. The Company has
sufficient working capital to meet all of its foreseeable obligations based on
its plans for the next twelve months.
The financial results for the year ended December 31, 2007 reflect the
costs of property acquisition, exploration expenses and administrative costs
for managing the Company's properties and associated activities. As well, a
write-down of mineral properties and deferred exploration costs and a loss on
disposal are reflected in the results. Operating and general expenses were
$1,255,708, write-down of mineral properties and deferred exploration $570,021
and loss on disposal of the Nambija interests $1,094,466 for the year,
resulting in the loss of $3,184,201. This compares with expenses for the same
period in 2006 of $1,013,098 and a loss of $1,190,620. The primary reasons for
the change in expenses are increased exploratory activity for the year
compared to 2006, travel expenses relating to visits to Ecuador by senior
management, legal costs and stock-based compensation. There was a decrease in
costs for stock based compensation to $323,635 ($371,738. in 2006) for the
year as fewer options were granted.
The reason for the write-down in mineral properties is due to the
political changes in Ecuador and the Company's decision not to maintain its
interests in less prospective properties. The loss on disposal was a result of
the difference in the valuation of the Company's investment in Canuc Resources
Corporation ("Canuc") and the carrying value of the Company's investment in
the Nambija Property that was transferred to Canuc in October 2007. Value was
attributed to shares in Canuc, share purchase warrants in Canuc and cash
received to reimburse the Company for taxes paid for the Nambija Property, but
no value was attributed to future royalties that could be received from Canuc.
As previously announced, in March 2008 the Company focused its Ecuadorean
exploration targets on the most promising concessions and anomalous areas
within the Company's property portfolio. It thereby reduced its annual patent
payments and its property portfolio by 39,600.90 hectares. The Company's total
property portfolio in Ecuador is now 53,751 hectares subject to any future
impacts caused by the Government of Ecuador's April 18, 2008 Mining Mandate
previously announced by the Company. To date the Company has not received
notification that any of its mining concessions for which it has paid the 2008
annual patents have been cancelled. Given the force majeure created by the
Mining Mandate, the Company has instructed its legal counsel to notify the
seller of its Chimbuza Property that no further payments will be made for the
property at least until the current mining moratorium is concluded.
Oromonte has taken action to mitigate the risks to the Company by
reducing its holdings in Ecuador, funding its operations on an as-needed
basis, and cutting staff and exploration expenditures until there is a more
stable mining environment. The Company has also begun to acquire prospective
exploration properties within North America. On April 10, 2008, the Company
announced that it had staked nine claims encompassing 215 contiguous units
consisting of approximately 4462 hectares in the prolific Tillicum Mountain
area in the West Kootenay region of southeastern British Columbia. This is the
initial Canadian acquisition for Oromonte as it begins implementing its
pro-active development strategy outside Ecuador.
The Company remains committed to the creation of shareholder value
through the exploration and development of base and precious metals in an
environmentally, economically and socially responsible manner within its host
countries and communities.
The Company's annual Consolidated Financial Statements and Management
Discussion and Analysis (MD&A) for the year ended December 31, 2007 are
available at www.sedar.com.
Oromonte expects to file its financial statements for the three month
period ended March 31, 2008 shortly. All material information concerning the
affairs of Oromonte has been disclosed to the public through news releases and
filed on SEDAR.
Oromonte Resources Inc. is a mineral exploration company engaged in the
acquisition, development and exploration of mining properties. The Company has
acquired mining concessions consisting of four consolidated properties in
Ecuador, namely: Chimbuza Property, Marissa Property, Pangui Property, and
Virgen del Cisne Property. The related projects are in early stage
development. The Company has also begun acquiring mining property interests
outside Ecuador. The Company trades common shares and warrants on the TSX
Venture Exchange under the symbol ORR and common shares on the Frankfurt Stock
Exchange under the symbol OF6.
For further information you can visit the Company's website at:
The TSX Venture Exchange has not reviewed, and does not accept
responsibility for the adequacy or accuracy of this release.
No stock exchange, securities commission or other regulatory authority
has approved nor disapproved the information contained herein. The News
Release includes certain "forward looking statements". All statements other
than statements of historical fact, included in this release, including,
without limitation, statements regarding potential mineralization and
reserves, exploration results, and future plans and objectives of Oromonte,
are forward looking statements that involve risks and uncertainties. There can
be no assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those anticipated in
such statements. Important factors that could cause actual results to differ
materially from Oromonte's expectations are exploration risks detailed from
time to time in the filings made by Oromonte with securities regulations.
For further information:
For further information: Bruce Cottingham, CEO, Oromonte Resources Inc.,
Suite 206, 507 Baker Street, Nelson, British Columbia, Canada, V1L 4J2, Tel:
(250) 352-9923, Fax: (250) 352-9926