WGI Heavy Minerals announces first half 2007 results

    COEUR D'ALENE, ID, Aug. 9 /CNW/ - WGI Heavy Minerals, Inc. (TSX: WG)
today announced results for the second quarter and first half ended June 30,
2007. All dollar amounts are in United States dollars unless otherwise
indicated. A summary of key financial results for the quarter and first half
is as follows:

    -  Revenues increased 31.6% for the quarter to $7.3 million from
       $5.5 million in the same period a year ago. Revenues for the first
       half of 2007 increased 27% to $13.5 million from $10.7 million in
    -  Gross margin increased to 19.5% for the quarter from 12.6% in the same
       period last year. For the first half of 2007 gross margins increased
       to 22.9% from 9.7% a year ago.
    -  The Company posted a net loss for the first half of $0.3 million or
       $0.01 per share. This has significantly improved from the year ago
       period's net loss of $2.8 million or $0.12 per share.
    -  Generated cash flows of $0.3 million or $0.01 per share during the
       first half of 2007.
    -  At June 30, 2007 the Company had a cash position (including short term
       investments) of $18.6 million.

    Management Overview

    Financially, the consolidated balance sheet and the Company's net cash
position remain strong, our second quarter builds on the success of the first.
Our systems and management performance are improving. We will continue to
invest in better processes and systems. One area of growth for the company is
its evolution from a pure producer/seller to one that purchases for resale as
well as producing. We anticipate further growth from the sale of both minerals
and parts sourced from others.
    Very recently we have initiated a revised and improved long-range
strategic analysis and planning effort throughout the company. All aspects of
the business are being reviewed in detail. A template has been provided and we
intend to improve both the communications and synergy between the operating
portions of the company. As well, we shall look very carefully at our cost
structure to determine better ways to gain value from our expenditures or to
reduce them.
    We do not expect immediate results. We do believe our investment and
effort will provide the basis for developing ways of better managing and
growing the company and, we expect, highly useful insights into creative ways
of enhancing shareholder value in the next fiscal year.

    Events In India

    The political and legal environment vis-a-vis mining in India continues
to evolve. It has been reported that the Indian National Cabinet will approve
and, later this year, the Indian Parliament will proclaim the expected changes
to the Mining act, including the Beach Sands portions thereof. We have been
anticipating that for 18 months now. Should it happen, the position of foreign
investors in mining in India should improve significantly. However, there
continue to be stresses between the desires of the central government to
foster foreign investment and the development of the Indian mining sector and
the more parochial interests at the state and local level. It is to be
expected that the national interest will prevail. We shall be patient. We
intend to stay the course and to do all we can to ensure and benefit from
constructive changes as they occur.
    Meanwhile, we are vigorously defending our interests and the rule of law
in India by taking the State of Andhra Pradesh et al to court to prevent the
state, the Andhra Pradesh Minerals Development Corporation and some private
companies from unlawfully usurping our position in fact and law and thus our
ability to obtain leases applied for and to conduct our mining operations.
Thus far, we have been successful in our proceedings and have received several
positive judgments.


    For 2007, the company is targeting a modest sales increase. The Company
continues to look for additional land to strengthen its reserves in Tamil
Nadu, India and to continue to manufacture in Tamil Nadu. Recent results have
been encouraging. Should this land and necessary mining leases be obtained on
a timely basis, improvements in profitable sales are expected. The Andhra
Pradesh, India project may take the Company several years to sort out the
critical issues before the Company.
    The Company is making strides in its effort to return to profitability at
its Emerald Creek Garnet facility through reinvestment in exploration and in
the facility and improved procedures. The Company is seeing continued
improvement in volume and profitability from International Waterjet Parts.
Sales volumes in Europe and the Far East continue to grow in all product
    The focus of the Company continues to be on increasing lease holdings and
the efficiency of our operations and improving shareholder value. Progress is
being made in areas of opportunity in all business units of the Company to
continue this improvement.

    Management's Discussion and Analysis

    The Company's unaudited consolidated financial statement and the
management's discussion and analysis for the six months ended June 30, 2007
are available on the Company's website at www.wgiheavyminerals.com. Additional
information related to the Company is also available on the SEDAR website at
    WGI Heavy Minerals, Inc. is a fully integrated miner, producer, and
marketer of industrial-grade minerals and replacement parts for ultra-high
waterjet cutting systems. The Company's operations include mining and
processing facilities in Idaho, U.S. (Emerald Creek Garnet), Tamil Nadu, India
(Bengal Bay Garnet) and Ermsleben, Germany (Kominex) and a manufacturing
facility in Washington, U.S. (International Waterjet Parts).

    This press release contains forward-looking statements concerning the
business, operations, and financial performance and condition of WGI Heavy
Minerals, Incorporated. A number of the matters discussed and statements made
in the press release contain forward-looking statements reflecting current
expectations regarding future assets. When used in this press release, the
words "believe", "anticipate", "intend", "estimate", "expect", "project", and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such words. These
forward-looking statements are based on current expectations and are naturally
subject to risks, uncertainties, and changes in circumstances beyond
management's control that may cause actual results to differ materially from
those expressed or implied by such forward-looking statements. Factors that
may cause such differences include but are not limited to: exploration and
development risks; risks related to permits and title to property; risks
related to foreign countries and regulatory requirements; operating hazards;
foreign currency fluctuations; competition; fluctuations in the market price
of mineral commodities and transportation costs; uncertainty as to
calculations of mineral deposit estimates; uninsured risks; and dependence
upon key management personnel and executives. Actual results may differ
materially from those expressed here. You should not place undue reliance on
such forward-looking statements. The Company is under no obligation to update
or alter such forward-looking statements, whether as a result of new
information, future events, or otherwise.

                       WGI Heavy Minerals, Incorporated

                            Financial Information
                 (in thousands, except for per share amounts)
                                                                       As at
                                                             As at  December
                                                           June 30,       31,
    Consolidated Balance Sheet                                2007      2006
    Cash and Short term deposits                            18,613    18,321
    Other Current Assets                                     8,153     8,136
    Total Current Assets                                    26,766    26,456

    Property, plant and equipment                            7,916     7,279
    Goodwill and Intangible Assets                           2,005     2,049
    Other Assets                                                 -         -
    Total Assets                                            36,688    35,784

    Liabilities & Equity
    Current Liabilities                                      5,022     4,226
    Long-term debt                                             825     1,067
    Total Liabilities                                        5,847     5,293

    Capital stock                                           53,388    53,432
    Stock-based compensation                                 2,309     2,088
    Deficit                                                (24,843)  (24,510)
    Foreign currency translation account                       (13)     (519)
    Total Equity                                            30,841    30,491
    Total Liabilities & Equity                              36,688    35,784

                                      3 months  3 months  6 months  6 months
                                         ended     ended     ended     ended
    Consolidated Statements of         June 30,  June 30,  June 30,  June 30,
    Operations and Deficit                2007      2006      2007      2006
    Sales                                7,287     5,537    13,506    10,674
    Operating Costs                      5,569     4,213     9,833     8,369
    Depreciation, depletion and
     amortization                          299       629       574     1,268
    Gross Margin                         1,419       696     3,099     1,037
    Gross Margin %                       19.5%     12.6%     22.9%      9.7%

    Operating G&A                        1,041     1,288     2,094     2,367
    Corporate G&A                          436       522       679       795
    Interest Income                       (218)     (205)     (442)     (403)
    Interest Expense                        33        40        76        92
    Stock based compensation               120       598       221       728
    Development costs                      125        28       417        90
    Other Expenses/(income)                124        79       187       102
    Total                                1,661     2,350     3,232     3,771

    Loss before taxation &
     Non-controlling interest             (243)   (1,654)     (134)   (2,735)
    Taxes & Non-controling loss            108        20       200        98
    Loss for the period                   (351)   (1,675)     (334)   (2,833)

    Basic and diluted loss per
     common share                       $(0.01)   $(0.07)   $(0.01)   $(0.12)

                                      3 months  3 months  6 months  6 months
                                         ended     ended     ended     ended
    Consolidated Statements of         June 30,  June 30,  June 30,  June 30,
    Cash Flows                            2007      2006      2007      2006
    Cash flows from operating
     activities                            824      (801)    1,359    (1,577)
    Cash flows from investing
     activities                           (684)     (280)     (960)     (768)
    Cash flows from financing
     activities                           (283)     (466)     (138)     (635)
    Effect of exchange reate on
     cash and cash equivalents             (32)       24        32         6
    Net increase (decrease) in cash
     & ST Investments                     (174)   (1,523)      292    (2,974)
    Cash $ ST Investments
     - beginning of period              18,787    21,146    18,321    22,597
    Cash & ST Investments
     - end of period                    18,613    19,623    18,613    19,623

         All figures stated in U.S. dollars unless noted otherwise.

For further information:

For further information: Karla Wright Hayden, CFO, 1875 N. Lakewood
Drive, Suite 201, Coeur d'Alene, ID, 83814, U.S.A., (208) 666-6000 ext. 204,
Fax (208) 666-4000, www.wgiheavyminerals.com, E-Mail cfo@wgiheavyminerals.com;
Covell Brown, Chairman, (208) 699-8470, E-mail covell@wgiheavyminerals.com; Ed
Kok, Investor Relations, (208) 666-6000 ext 39, E-Mail

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