Spur Ventures Fourth Quarter 2006 And 2006 Annual Results

    All amounts are expressed in U.S. dollars unless otherwise stated

    SVU: TSX

    VANCOUVER, March 30 /CNW/ - Spur Ventures Inc. ("Spur" or the "Company")
(TSX -SVU, NASDAQ OTC BB- SPVEF) today announced its results for the financial
year ending December 31, 2006. Revenues for 2006 were up by 13.1% to
$7,697,039 versus $6,802.849 in 2005 and $3,695,981 in 2004, resulting in
gross profit of $174,381 versus $67,422 in 2005 and ($38,615) in 2004.
    Management is required on an ongoing basis to determine if the
undiscounted cash flows of each asset are less than its carrying value and, if
so, to estimate and record an impairment charge. The carrying cost of YSC is
justified when YSC production reaches 70,000 mt/yr. Over the last three years
production has averaged less than 40,000 mt each year due a series of one-time
events including interruptions in electrical supply, slowness in the transfer
of the mining licenses and an undisclosed loan by its joint venture partner,
YPCC plus plant down time for our Q01, 2006 debottlenecking project. Spur
management has thus decided to take a conservative approach and has booked a
non-cash impairment charge of $4,328,622, or 51% of the book value of YSC even
though YSC should produce 70K mt/yr by 2008. As a result of this impairment
charge, annual net income was ($6,469,804) or ($0.11) per share. Before this
impairment charge annual net income was ($2,161,523) or ($0.04) per share, a
significant improvement compared to ($2,818,806) or ($0.06) per share in 2005
and ($1,864,038) or ($0.05) per share in 2004.
    Revenues for the quarter ending December 31, 2006 were $2,381,878 versus
$1,241,160 in 2005, a 92% increase. Net income for Q4, adjusted for the
impairment charge, was ($4,764,608) or ($0.08) per share versus (711,477) or
($0.01) per share in Q4 2005.

                               KEY DEVELOPMENTS

    YSC Continues to Improve Despite Challenges

    In 2006 Yichang Spur Chemicals produced 39,844 mt of NPK's, a 19.1%
increase over 2005, despite being shut down for 69 days in mid-summer for
extended maintenance and inventory control and experiencing sporadic shortages
of electricity in November and December. Sales volume was 34,695 mt, a 16.4%
increase over 2005.
    "There are two simple ways for YSC to now improve its profitability even
without our own rock phosphate supply. The first is to run the plant at high
production rates which not only reduces cost of product sold but also improves
product quality" Dr. Rob Rennie, Spur's President & CEO explained. The second
is to ensure we have a good marketing team which can establish a strong brand
for Spur in the eyes of our customers and deliver the product on time.
    "Spur invested $200,000 in YSC in Q1 2006 to ensure that the plant would
operate sustainably at maximum capacity. The results were new daily (313 mt)
and monthly (6161 mt) production records and a 13% increase in revenues"
Rennie said. "These results demonstrate that YSC can reach name plate capacity
under optimal operating conditions although 80,000 mt/yr is a more reasonable
target in Hubei Province and that is well above Chinese average production
rates", Rennie continued.
    "Chinese farmers are beginning to recognize the value of product quality
and then to pay a premium for it. Our increased production rates allowed Spur
to reduce its off-spec from 20% to 5% of total production thus beginning to
establish a reputation for product quality with our customers."
    Spur is implementing a market-oriented, customer-focused attitude at YSC.
Cui Zhifeng joined YSC from Spur's merger partner, Hebei Tianren in early
October and by December had driven sales up to 7,500 mt a month. David Zeng, a
specialty fertilizer expert who joined Spur in January of 2007, arranged
Spur's first sales into the high cash value citrus markets of southern China.
    Rennie stated, "We also resolved outstanding loan issues between the
Agricultural Bank and our partner YPCC, and restructured a working capital
loan with the Industrial and Commercial Bank of China (ICBC).
    The result was a strengthening of YSC's credit rating. YSC then obtained a
$1.0 M working capital loan from the Yichang Commercial Bank, whose largest
shareholder is the City of Yichang, demonstrating the continued support for
Spur from the City.
    Spur always knew YSC would not be profitable until the phosphoric acid
plant was operating at full capacity and the Company had its own phosphate
rock supply" Rennie explained. "The delay in the mining license transfer is a
major reason for the impairment charge for YSC and does not reflect Spur's
optimism that YSC, with our planned future investments, will be profitable".

    Spur Retains Its Strong Working Capital Position

    As of December 31, 2006, Spur had cash and cash equivalents and short-term
investments of $26.5 million ($0.45 per share), of which $21.0 M is held in
Canadian banks and $5.5 M in China.
    Total Assets were $39.0M versus Liabilities of $3.67 M, of which $1.27 M
were bank loans.
    "We are pleased that we have retained a majority of the cash we raised
during our summer 2005 equity offering through our continued focus on
controlling our costs and exercising the discipline to not make major
investments before the mining licenses have been formally transferred to YMC"
Rennie emphasized. "Many of our competitors have built new facilities that now
operate at 50% capacity because they do not have secure access to phosphate
rock" Rennie said. "Spur has no intention of following that investment model."

    Mining License Transfer to Yichang Maple Leaf Chemicals Finally

    The mining licenses for the Shukongping and Dianziping mines were issued
by Central Land and Resources Department to Spur's JV partner YPCC in February
and October of 2004 respectively. In March of 2005 the official transfer
process from YPCC to YMC began when Spur contributed its first 15% of
Registered Capital ($10.5M) to YMC.
    Spur is pleased to report that after very thorough due diligence the first
approval stage was finally completed in late December 2006 when Yiling County
(Dianziping mine site) and Xinshang County (Shukongping mine site) officially
approved the transfer to the Yichang City level. Yichang City has now also
completed its own due diligence on the transfer and is in a position to
recommend the transfer to Hubei Province Land and Resources. "Under today's
regulations in China, Hubei L&R has the legal right to make the final decision
on the transfer but it could also require subsequent review in Beijing."
    "The key to Yichang City recommending the Mining License Transfer to Hubei
Province Land and Resources is now the formal renewal of the YMC Business
License" Rennie said.

    YMC Business License Renewal

    Hubei Administration for Industry and Commerce (AIC) extended YMC's
Business License until March 31, 2007 by the direction of Central Ministry of
Commerce based on a strong letter of support from the City of Yichang. This
extension gave YPCC time to complete its first Registered Capital
Contribution. The authorities have acknowledged that Spur has been in
compliance since March of 2005 at which time Spur's Registered Capital
Contribution totaled $15.32 M in cash. YPCC made its first required Registered
Capital contribution valued at $.3.69M for prior R&D expenses and $1.05M of
other expenses in February of 2007. YPCC's contribution has recently been
approved by Hubei AIC thus completing the requirements for the renewal of the
YMC Business License which should be issued in the near future. If there is
further delay, Spur anticipates that the authorities will grant another
extension. YPCC's next and last Registered Capital contribution will be the
two mining licenses.

    Spur-Hebei Tianren Merger

    The Chinese government implemented new regulations for share for share
purchases in September of 2006 which clarified the process but required Spur
and Hebei Tianren to commence a new application procedure. Spur knew this
would be a pioneering approval process and it has turned out to be just that.
    Formal applications have now been approved by the Qinhuangdao City
Ministry of Commerce for Tianding Chemical Company and Tianren Agriculture
Franchise Company and by Yichang City for Hubei Yichang Tianlong Industry
Company ("Tianlong") and all are being reviewed by the relevant provincial
    Xinjiang Tianren Chemical Company and its 100,000 mt NPK plant in
northwest China will no longer be part of our transaction and the share
allocation has been reduced accordingly from 15.5 M to 13.3M shares. New
government policies in Xinjiang Uygur Autonomous Region dictating a switch
from natural gas to coal to produce nitrogen for the NPK plant have made this
entity no longer economically attractive to Spur.
    Additional approvals under China's WTO accession guidelines (which came
into effect on December 11, 2006) will also be required for Tianlong, because
it has a sulphuric acid import license, and for the Ag Franchise because it
has distribution and sales rights in China.
    To accommodate the additional time required for these Chinese approvals
the merger deadline has been extended until September 30, 2007.
    Approvals at the provincial and then central Ministry of Commerce levels
are anticipated to be completed by mid-year.
    "I want to remind investors that that Spur will retain earnings for the
four Tinaren companies from June 01, 2006 until the merger is finally
approved. However, because of a significant down turn in the commodity
fertilizer cycle in China, 2006 and 2007 earnings will be less than 50%
compared to 2005 when the merger process began", Rennie cautioned. These lower
earnings are a disappointment to Spur and are being reviewed in the context of
the original perceived value of the merger.

                                 2007 Outlook

    "Spur firmly believes that only those firms that control of their own raw
materials, have production facilities with economies of scale and that can
deliver their products effectively to the market, will be successful" Rennie
claimed. "Because of these first two criteria Spur is focusing on the YMC
Project and the latter criteria is the reason for the merger with Hebei
    Spur is exploring new territory accessing a natural resource in China and
seeking approval for a share for share purchase under new Chinese guidelines.
    "I know many of our investors feel Spur has been pursuing the mining
licence transfer for a number of years, but in reality the clock started
ticking in early 2005 after the two mining licenses had been formally issued
and Spur made its first Registered Capital contribution. It has been two years
since the mining license transfer process was initiated, and that is not a
long time for the transfer of a natural resource anywhere in the world and
certainly not in China" Rennie explained.
    The key drivers for the YMC Project remain the continued growth of the
12 million mt/yr NPK market in China. NPK demand has been growing at
approximately 10% each year but still represents only 20% of the compound
fertilizers sold in China. The Chinese government wants this to increase to
50% by 2010 to ensure a 25% increase in crop production to feed China's
growing population. In 2006 China imported 1.95 million mt of NPK's at an
average price 15% higher than domestic NPK product so there is another growth
opportunity through import substitution.
    "We view both the trend towards higher quality and analysis fertilizers
and the import substitution opportunity as strong justification for Spur
continuing its work at both YSC and YMC" Rennie said.
    In addition, global fertilizer markets had a very strong showing in 2006
with today's DAP prices up from 35% (fob Morocco) to 60% (fob Tampa) and urea
up approximately 45% year over year." Rennie said. Because of these strong
international prices Chinese DAP producers are exporting more DAP which is
resulting in stronger NPK demand in China in 2007.
    The focus of Spur's strategy remains the Yichang Integrated Phosphate
Project of YMC. That means Spur will be fully integrated from mining through
flexible manufacturing to the market place. Flexible manufacturing means that
Spur may produce MAP rather than NPK's because MAP can be sold directly to
other NPK producers or exported to SE Asia. MAP represents 90% of the
phosphate source for NPK production.
    "After continued electrical interruptions in January and the traditional
shut down during the Chinese New Year festivities in February, YSC is now back
at full operational capacity and is on track to produce and sell in excess of
6,000 mt in March" Rennie said. If market conditions remain favourable, YSC's
production should exceed 50,000 mt this year, a 20% increase over 2006.
    "While Spur continues to work on the YMC Project, we are also advancing
our vision to be "The Fastest Growing Integrated Supplier of Plant Nutrients
for the Chinese Farmer." In January, David Zeng joined Spur to lead our drive
to supply specialty plant nutrient products as Spur develops its "bundling"
concepts and drives down the value chain.
    "We are continuing our transition from being a mining company to being
fully integrated from mining through production into the market place, with an
emphasis on being a market driven and customer focused company" Rennie

    More information can be found in the audited financial statements and the
related notes and the management discussions and analysis of the period filed
with Canadian regulators on SEDAR at www.sedar.com and on the company's
website: www.spur-ventures.com

    Spur Ventures Inc. aims to be the premier integrated fertilizer
manufacturer in China, with plans to produce up to one million tonnes per year
of high -quality NPK fertilizer for domestic consumption in the central
province of Hubei, China. These expansion plans include the development of the
largest phosphate deposit in China, located near Yichang City.

    The Toronto Stock Exchange has not reviewed nor accepted responsibility
for the adequacy or accuracy of the contents of this news release, which has
been prepared by management. Statements contained in this news release that
are not historical facts are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from estimated results. Such risks and
uncertainties are detailed in the Company's filings with the TSX and on SEDAR.
Forward-looking statements are based on the beliefs, estimates and opinions of
the Company's management on the date the statements are made. The Company
undertakes no obligation to update these forward-looking statements if
management's beliefs, estimates or opinions, or other factors, should change.

For further information:

For further information: Dr. Robert Rennie, rrennie@spur-ventures.com;
Mr. Michael Kuta, (604) 697-6201, mkuta@spur-ventures.com

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