Yellowhead Mining Inc. Reports Financial and Operating Results for Two Months Ended December 31, 2011
Feb 27, 2012, 17:00 ET
VANCOUVER, Feb. 27, 2012 /CNW/ - Yellowhead Mining Inc. ("Yellowhead" or the "Company") (TSX.V: YMI) is pleased to report its results of operations for the two months ended December 31, 2011.
For the full two month Financial Statements and Management Discussion and Analysis, please visit SEDAR at www.sedar.com or the Company's web site, www.yellowheadmining.com.
Highlights and Outlook:
- Released an updated Resource estimate with contained copper within the Measured and Indicated Resource categories at a 0.2% copper cut-off grade increasing by 1.67 billion pounds or 47% compared to the previously completed estimate in the PEA at a 0.2% copper cut-off grade;
- Detailed Feasibility Study was significantly advanced with an estimated completion date of on or before March 31, 2012;
- In support of the Feasibility Study and to expand the resource, the Company has completed a total of 15,148 metres of drilling for the 2011 drilling year including:
- Resource confirmation: 33 holes for a total of 8,191m
- Condemnation: 8 holes for a total of 1,791m
- Resource expansion: 11 holes for a total of 4,725m
- Metallurgical sampling: 4 holes for a total of 441m;
- The Environmental Assessment study at Harper Creek was significantly advanced with an ongoing comprehensive baseline study program;
- Completed the purchase of the Weyerhaeuser property in Vavenby for the concentrate rail load-out. The property has approximately 1,880m of rail siding connecting to the Canadian National Railway's transcontinental line that passes through Vavenby;
Summary of Key Financial Highlights
Yellowhead has no revenue from operations. Results can fluctuate significantly from period to period due to the level of engineering and environmental study effort and resource drilling.
The Company's expenditures on the Harper Creek project for the two months ended December 31, 2011, were as follows:
| Evaluation and
|Balance, October 31, 2011||$ 834,026||$ 19,704,383|| $ 20,538,409
|Net Additions||51,210||2,222,014|| 2,273,224
|Balance, December 31, 2011||$ 885,236||$ 21,926,397||$ 22,811,633|
The Company's net loss for the two months ended December 31, 2011 and the quarterly periods from the prior fiscal year are as follows:
|Quarter Ended||31‐Dec||31‐Oct||31‐Jul||30‐Apr|| 31‐Jan
|Administrative expenses||$ 691||$ 878||$ 1,423||$ 1,816|| $ 679
|Evaluation and exploration expenses||2,222||3,091||3,822||1,367|| 1,362
|Other expenses /(income)||(25)||(62)||(55)||(21)|| 1,177
|Net loss and comprehensive loss for the period||2,888||3,907||5,190||3,162|| 3,218
|Basic and diluted loss per share for the period||$ 0.05||$ 0.07||$ 0.13||$ 0.09||$ 0.10|
The Company's administrative expenses for the two months ended December 31, 2011, were in line with the three months ended January 31, 2011.
Exploration costs were higher in the two months ended December 31, 2011 compared to the three months ended January 31, 2011 due to increased activity as the Company moves towards completion of its Feasibility Study.
Other expenses/(income) were significantly higher in the three months ended January 31, 2011 as compared to the two months ended December 31, 2011, due to a one-time charge associated with the reverse take-over completed by the Company in the three months ended January 31, 2011.
Cash and Cash Equivalents
The Company had cash and cash equivalents of $10,491,895 as at December 31, 2011 compared to cash and cash equivalents of $15,668,987 as at October 31, 2011.
The Company's focus going forward, is expediting the development of the Harper Creek project. Major activities include completion of the Feasibility Study, submittal of the Environmental Assessment report, and project financing. The Company believes that it has sufficient funds on hand to complete the definitive Feasibility Study and to advance through the permitting process.
International Financial Reporting Standards ("IFRS")
The Company has completed its transition to IFRS with a transition date of November 1, 2010. Details of the adjustments under IFRS and reconciliations between previously reported numbers under Canadian GAAP and IFRS are provided in Note 15 of the Company's condensed consolidated interim financial statements for the two months ended December 31, 2011.
Fiscal year end change
The Company is switching its fiscal year end date from October 31st to December 31st on a go forward basis. In accordance with relevant legislation the Company will prepare condensed consolidated interim financial statements for the periods ending and as at December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012 for the current fiscal year. The Company's next annual financial statements will be for the fourteen months ended December 31, 2012.
About Yellowhead Mining Inc. and the Harper Creek Project
The Harper Creek Project is a copper-gold-silver volcanogenic sulphide deposit with an updated Measured and Indicated Resource of 815 million tonnes grading 0.29% Cu (5.26 billion pounds of copper) plus 0.032 g/t gold and 1.3 g/t silver, plus an Inferred Resource of 80.2 million tonnes grading 0.30% Cu (0.53 billion pounds of copper), announced in a news release dated February 16, 2012 entitled "Yellowhead Mining Updates Mineral Resource Estimate For Harper Creek Project". The Harper Creek Project is located in south-central British Columbia, approximately 150 kilometers by highway north of Kamloops.
Yellowhead has a 100% interest in the Harper Creek development project(1). A Preliminary Economic Assessment Report ("PEA"), which demonstrated the technical and economic viability of the Project, was completed at the end of March and filed on SEDAR on April 1, 2011 and can be viewed on www.sedar.com. The PEA demonstrated a 22 year project life based on a Measured & Indicated resource of 532 million tonnes at a grade of 0.31%, a milling rate of 70,000 tonnes per day, producing 149 million lbs. copper in concentrate per year for years one to eight, (132Mlb/year life-of-mine), a life-of-mine stripping ratio 0.88:1, a pre-tax IRR of 19.8% with a base case copper price of US$2.66/lb., an NPV8 of US$598 million and a capital cost of C$759 million in Q4 2010 dollars, including contingency, with a 4 year payback(2).
1 (Subject to the payment of a 3% NSR royalty capped at $2.5 million, adjusted for inflation and an additional 2.5% NSR royalty on an estimated 3.3 million tonnes of ore which is expected to be mined beginning in year nine within the NI 43-101 resource.)
2 Mineral resources are not mineral reserves and do not have demonstrated economic viability.
FORWARD-LOOKING STATEMENTS AND CAUTIONARY DISCLAIMER
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, including, among others, the accuracy of mineral grades and related assumptions, inherent operating risks, planned expenditures, proposed exploration and development at the Harper Creek Project, operating and economic aspects of the Harper Creek Project, as well as those risk factors identified in the Company's Annual Information Form filed under the Company's SEDAR profile. Yellowhead undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Yellowhead.
This news release includes disclosure of scientific and technical information, as well as information in relation to the calculation of re-sources, with respect to the Harper Creek Project. Yellowhead's disclosure of mineral resource information is governed by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). There can be no assurance that mineral resources will ultimately be converted into mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. This news release uses the terms "measured", "indicated" and "inferred" resources. U.S. persons are advised that while such terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. "Inferred Resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resources will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or other economic studies. U.S. persons are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. U.S. persons are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information:
Ronald Handford, Executive Vice President, Corporate Development:
Tel. 604.681.1709 ext. 204
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