SWEF TERRAWINDS RESOURCES CORP. Files Second Quarter Financial Results

TORONTO, Aug. 22, 2013 /CNW/ - SWEF TERRAWINDS RESOURCES CORP. (the "Company") announced today that it has filed with Canadian securities regulators its unaudited interim financial statements and Management's Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2013 and 2012.  These documents will be available at www.sedar.com and www.sweflp.com.

Recent Developments - Termination of Tax Indemnity Fund and Distribution to Investors

On August 1, 2013 the Company confirmed that the period for tax indemnity claims to be filed by SWEF Terrawinds investors ("Investors") expired on July 31, 2013.  New tax indemnity claims received after July 31, 2013 will not be processed.  The filing period for tax indemnity claims was extended in 2010 to expire in July 31, 2012, and was further extended in 2012 to expire on July 31, 2013.  The Company has regularly notified Investors of the extensions of the tax indemnity claims filing period and of their entitlement to indemnification for taxes.  Accordingly, the Company has determined to end the tax indemnity claim filing period and proceed to the next step in the wind-up of the Company.

The Company is now focused on completing the previously announced redemption of its non-voting common shares (each a "Share").  Investors will receive a final cash distribution amount per Share in an amount equal to: (A) the total amount of cash or cash equivalents standing to the credit of the Company, less (i) the amount required to redeem the outstanding preferred shares in the capital of the Company (being $100 in aggregate); and (ii) an amount equal to the existing and contingent liabilities determined by the directors of the Company in good faith; divided by (B) the total number of outstanding Shares.

The redemption of the Shares is part of a wind-up plan of the Company and related entities previously approved by Investors in 2007. The redemption of the Shares is expected to occur prior to the end of 2013. The final cash distribution will be distributed by the Company to Investors' stock brokers who will place the money in Investors' brokerage accounts that hold the Shares.  The Shares will be cancelled upon redemption.

Results of Operations

Three Month Comparison

Net loss for the three months ended June 30, 2013 was $235 thousand compared to a net loss of $88 thousand for the same period in fiscal 2012. The increase in net loss of $147 thousand is due primarily to an increase in tax indemnity payments and related deferred tax recovery when comparing the three months ended June 30, 2013 to the same period ended June 30, 2012.

Interest income for the three months ended June 30, 2013 was $20 thousand, which is comparable to $31 thousand for the same period in fiscal 2012.

Professional fees and other expenses for the three months ended June, 2013 were $158 thousand compared to $129 thousand for the same period in fiscal 2012. The increase in professional fees is attributable to higher legal costs and accounting support costs incurred in the three months ended June 30, 2013 in anticipation of the termination of the tax indemnity claims process and wind-up of the Company.

Deferred income tax recovery for the three months ended June 30, 2013 was $70 thousand, compared to a recovery of $29 thousand for the same period in fiscal 2012. The deferred income tax recovery for the three months ended June 30, 2013 arises due to the tax indemnity claims made in the period. The recovery increased by $41 thousand due to higher tax indemnity claims made in 2013 when compared to 2012.

Six Month Comparison

Net loss for the six months ended June 30, 2013 was $355 thousand compared to a net loss of $233 thousand for the same period in fiscal 2012. The increase in net loss of $122 thousand is due primarily to an increase in tax indemnity payments and related deferred tax recovery when comparing the six months ended June 30, 2013 to the same period ended June 30, 2012.

Interest income for the six months ended June 30, 2013 was $40 thousand, which is comparable to $52 thousand for the same period in fiscal 2012.

Professional fees and other expenses for the six months ended June, 2013 were $306 thousand compared to $253 thousand for the same period in fiscal 2012. The increase in professional fees is attributable to higher legal costs and accounting support costs incurred in the six months ended June 30, 2013 in anticipation of the termination of the tax indemnity claims process and wind-up of the Company.

Deferred income tax recovery for the six months ended June 30, 2013 was $110 thousand, compared to a recovery of $72 thousand for the same period in fiscal 2012. The deferred income tax recovery for the six months ended June 30, 2013 arises due to the tax indemnity claims made in the period. The recovery increased by $38 thousand due to higher tax indemnity claims made in 2013 when compared to 2012.

Forward Looking Statements

This press release contains forward looking information within the meaning of applicable securities laws, including forward looking information relating to: the future performance of the Company; and the expected timing of the redemption of the Shares. All forward-looking statements are inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward looking statements.  We consider the assumptions on which these forward looking statements are based to be reasonable, but caution the reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect.  These forward looking statements involve a number of risks, uncertainties and assumptions, including the risk of future tax assessments, litigation or other unanticipated expenses.

The forward looking information contained in this press release is given as of August 23, 2013. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise, except as required by law.  These risks may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These cautionary statements expressly qualify all forward looking statements attributable to the Company.

SOURCE: SWEF TERRAWINDS RESOURCES CORP.

W. Judson Martin, Chairman SWEF Terrawinds Resources Corp. [email protected]