TSX:YMI, OTCQX:YHMGF
VANCOUVER, Aug. 7, 2013 /CNW/ - Yellowhead Mining Inc. ("Yellowhead" or the "Company") (TSX: YMI, OTCQX:
YHMGF) is pleased to report its results of operations for the three and six
months ended June 30, 2013.
For the full condensed consolidated interim Financial Statements and
Management Discussion & Analysis, please visit SEDAR at www.sedar.com or the Company's web site, www.yellowheadmining.com.
Highlights
Key highlights for the six months ended June 30, 2013 and subsequent
weeks include:
-
Detailed NI 43-101 compliant amended feasibility study was completed and
filed on March 29, 2012 and restated and amended as of January 25,
2013.
-
In April 2013, the Company submitted the application for an
Environmental Assessment ("EA") Certificate for the Harper Creek
Project to the Environmental Assessment Office ("EAO"). In May 2013,
the EAO identified a number of deficiencies with, and provided comments
on, the Company's EA Application. The Company is currently working to
address the deficiencies raised and comments received in order to
resubmit the application to the EAO.
-
Engaged Evercore Group L.L.C. to provide financing advisory services and
to assist in the evaluation of strategic partnership and financing
alternatives for Harper Creek.
-
Completed all the drilling for the in-fill drilling program announced in
November 2012, with an additional 35 holes drilled for a total of
11,969m.
-
Executed a memorandum of understanding with a local First Nation for
involvement in the EA process and Benefits Agreement ("BA")
negotiations.
-
Appointed Frank Wheatley as CEO and a member of the Board of Directors
effective July 1, 2013.
-
As at June 30, 2013, the Company's had cash and cash equivalents of
$4.09M.
Outlook
The Company's plans for 2013 and beyond are to:
-
Explore financing options in order to finance the development of Harper
Creek, including but not limited to: strategic investors and/or
partnerships, project and equipment financing stock offerings and
off-take agreements.
-
Explore short-term financing options to increase the Company's working
capital.
-
Continue through the process of environmental permitting with
resubmission of the Company's EA Application.
-
Prepare and submit the Company's applications for a British Columbia
Mines Act Permit for Harper Creek.
-
Ongoing consultation with the First Nations and local communities to
address any potential environmental and socio-economic impacts of
Harper Creek and the Company's mitigation strategies.
-
Continue negotiations with the local First Nations on a Benefits
Agreement.
-
Continue exploration activities to better define the resource/reserve at
Harper Creek including the preparation of an updated resource report
incorporating all new drilling.
-
Issue an updated NI 43-101 compliant feasibility study for Harper Creek.
The extent of the work to be undertaken on the aforementioned activities
is subject to and contingent on the Company's ability to raise
additional financing.
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 six
months ended June 30, 2013 and cumulative to date were as follows:
| Capitalized Mineral interests | | Evaluation and exploration expenses | | Total expenditures on Harper Creek |
| | | | | | | | |
Balance, December 31, 2012 |
$
|
885,235
|
|
$
|
29,297,640
|
|
$
|
30,182,875
|
Net Additions
| |
-
|
| |
2,402,812
|
| |
2,402,812
|
Balance, June 30, 2013 |
$
|
885,235
|
|
$
|
31,700,452
|
|
$
|
32,585,687
|
The Company's net loss for the three months ended June 30, 2013 and the
eight prior quarterly periods are as follows:
(Amounts are expressed in thousands of Canadian dollars, except
per-share amounts)
| | | | | | | | | | | |
| 2013 | | 2012 | 2011 (1) | | 2011 |
Quarter Ended | 30-Jun | 31-Mar | | 31-Dec | 30-Sep | 30-Jun | 31-Mar | 31-Dec | | 31-Oct | 31-Jul |
Administrative expenses
|
$
|
789
|
$
|
984
|
|
$
|
1,881
|
$
|
908
|
$
|
1,139
|
$
|
994
|
$
|
691
|
|
$
|
878
|
$
|
1,423
|
Evaluation and exploration expenses
| |
447
| |
1,956
|
| |
2,845
| |
2,093
| |
913
| |
1,520
| |
2,222
|
| |
3,091
| |
3,822
|
Other expenses/(income)
| |
3
| |
(129)
|
| |
(11)
| |
(14)
| |
6
| |
(13)
| |
(25)
|
| |
(62)
| |
(55)
|
Net loss and comprehensive loss for the period
| |
1,239
| |
2,811
|
| |
4,715
| |
2,987
| |
2,058
| |
2,501
| |
2,888
|
| |
3,907
| |
5,190
|
Basic and diluted loss per share for the period
|
$
|
0.02
|
$
|
0.04
|
|
$
|
0.08
|
$
|
0.06
|
$
|
0.04
|
$
|
0.05
|
$
|
0.05
|
|
$
|
0.07
|
$
|
0.13
|
(1)
| Due to the Company's change in fiscal year end from October 31, 2012 to
December 31, 2012, the period ended December 31, 2011 is two months long and all other disclosed periods are three months
long. |
The Company's administrative expenses for the three months ended June
30, 2013 ("Q2") were approximately $195K lower than for the three
months ended March 31, 2013 ("Q1"). This decrease was primarily due to
the following items: (1) The Company received a $174K refund from BC
Hydro in Q2 related to some funds it had advanced in 2011 and 2012 for
various studies; (2) The TSX filing fees for the Company were $37K
higher in Q1 compared to Q2; (3) The Company paid $27K in Q1 and $nil
in Q2 related to its CEO recruitment effort; (4) The investor relations
costs were $44K higher in Q2 as compared to Q1 due to additional
investor relations activities being undertaken.
Exploration costs were $1,509K lower in Q2 as compared to Q1. This
decrease is related primarily to the conclusion of the infill drilling
program announced by the Company in November 2012 and completed in
March 2013. The Company also incurred $76K less in environmental
assessment costs in Q2 as compared to Q1 as the Company filed its
initial application into screening in April 2013.
Other expenses were $132K higher in Q2 as compared to Q1 primarily due
to the due to the recognition into income of the flow-through share
premium liability in Q1. The recognition of the liability was related
to the expenditure in the period of all funds raised through the sale
of flow-through shares in December 2012. Completion of the required
expenditures led to the recognition of the flow-through share premium
liability in Q1.
Cash and Cash Equivalents
The Company had cash and cash equivalents of $4.09M as at June 30, 2013,
as compared to cash and cash equivalents of $5.08M as at March 31,
2013. As at June 30, 2013, the Company had working capital of $3.80M,
as compared to working capital of $4.63M as at March 31, 2013.
The Company's focus going forward, is expediting the development of the
Harper Creek project. Major activities include completing the
Environmental Assessment process, advancing the Mine Permitting process
and pursuing funding activities to increase its working capital and
develop the Harper Creek project.
About Yellowhead Mining Inc.
Yellowhead's Harper Creek Project is a copper-gold-silver volcanogenic
sulphide deposit located in south-central British Columbia,
approximately 150 kilometers by highway north of Kamloops. The
Feasibility Study, dated and filed on SEDAR on March 29, 2012 and
restated and amended as of January 25, 2013 (and available for review
on SEDAR and Yellowhead's website) shows an after-tax NPV8 of US$465.3 million with an IRR of 17.0% based on long-term metal price
projections of US$2.50/lb Cu, US$1,250/oz Au and US$20/oz Ag, and a
US$:Cdn$ exchange rate of 0.86:1. The Feasibility Study demonstrated a
28 year project life at a milling rate of 70,000 tpd (25.55Mt/y). The
project as designed is expected to produce a total of 3.63 billion
pounds of copper, 372,000 ounces of gold and 14 million ounces of
silver contained in concentrate.
At a 0.14% Cu cutoff, Proven Reserves are estimated at 401.18Mt @
0.272% Cu, 0.031g/t Au and 1.15g/t Ag; Probable Reserves 303.22Mt @
0.248% Cu, 0.027g/t Au and 1.13g/t for a total Proven and Probable
Reserve of 704.4Mt @ 0.262% Cu, 0.029g/t Au and 1.14g/t Ag.
The Feasibility Study is based on an updated resource. At a 0.20% Cu
cutoff Measured Resources are estimated at 348.5Mt at 0.31 % Cu,
0.034g/t Au, 1.3g/t Ag; Indicated Resources at 466.5Mt at 0.28% Cu,
0.03g/t Au, 1.3g/t Ag for a total Measured and Indicated Resource of
815Mt at 0.29% Cu, 0.032g/t Au and 1.3g/t Ag (5.26 billion pounds of
copper contained). A further 80.17Mt at 0.30% Cu, 0.033g/t Au, and
1.4g/t Ag are estimated in the Inferred Resource category (0.53 billion
pounds of copper contained) and are reported as waste in the mine
production schedule until they can be upgraded by additional infill
drilling.
Yellowhead has a 100% interest in the Harper Creek Project (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 1.5 Mt of
ore which is expected to be mined beginning in year 16 of the
Feasibility Study mine plan).
T. Gregory Hawkins, Chairman of the Board of Directors of the Company
and a Qualified Person under NI 43-101, has reviewed and approved the
technical content of this press release.
Forward Looking Statements
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 projected 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
mineral resources and reserves, with respect to the Harper Creek
Project. Yellowhead's disclosure of mineral resource and reserve
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 resource 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.
SOURCE: Yellowhead Mining Inc.
<p> <b>Ronald Handford, Executive Vice President, Corporate Development</b><br/> 604.681.1709 Ext. 204<br/> <b>Email</b>: <a href="mailto:rhandford@yellowheadmining.com">rhandford@yellowheadmining.com</a><br/> <b>Website</b>: <a href="http://www.yellowheadmining.com">www.yellowheadmining.com</a><br/> <b>Twitter</b>: <a href="http://twitter.com/#!/YMI_Mining">http://twitter.com/#!/YMI_Mining</a> </p>