Mr. Robert Wunder reports
RED TIGER REPORTS Q4 2013 AND Q1 2014 RESULTS
Red Tiger Mining Inc. has released its financial and operating results for the year ended Dec. 31, 2013, and for the three months ended March 31, 2014. This press release should be read in conjunction with the company's audited financial statements for the year ended Dec. 31, 2013, the unaudited financial statements for the three months ended March 31, 2014, and management's discussion and analysis for the corresponding periods, available on the company's website and on SEDAR.
Fourth quarter 2013 highlights:
- Commercial production reached on June 30 (declared July 1);
- Comex Grade 1 copper cathodes production of 3,320 tonnes for the second half of 2013;
- Copper sales of $23,875,486 for the second half of 2013 at an average realized price of $3.26 per pound;
- Total cash costs per copper pound of $1.50 and average realized margin of $1.76 per pound for the second half of 2013;
- Net loss of $993,424 or one cent per share for the year ended Dec. 31;
- Adjusted earnings before interest, taxes, depreciation and amortization of $8,402,653 or adjusted EBITDA per share of nine cents for the year ended Dec. 31;
- Cash of $1,064,381 as at Dec. 31.
First quarter 2014 highlights:
- Comex Grade 1 copper cathodes production of 1,619 tonnes for the three months ended March 31, 2014;
- Copper sales of $10,955,699 for the three months ended March 31, 2014, at an average realized price of $3.07 per pound;
- Total cash costs per copper pound of $1.33 and average realized margin of $1.74 per pound for the three months ended March 31, 2014;
- Net loss of $59,460 or nil per share for the three months ended March 31, 2014;
- Adjusted EBITDA of $4,486,110 or adjusted EBITDA per share of four cents for the three months ended March 31, 2014;
- Cash of $1,116,016 as at March 31, 2014.
Subsequent to March 31, 2014, events
On May 2, 2014, the Ontario Securities Commission issued a management cease trade order, as a result of the corporation not filing its audited financial statements for the year ended Dec. 31, 2013, and management's discussion and analysis relating to the audited annual financial statements for the year ended Dec. 31, 2013, within the prescribed period. The MCTO imposes restrictions on trading in the corporation's securities by the company's chief executive officer, Robert Wunder, and its chief financial officer, David Lurie. Each of the proposed directors, being Mr. Finskiy, Mr. Hulley, Mr. Scola, Mr. Tchetvertnykh and Mr. Wunder, was a director of the corporation at the time the MCTO was made. As of the date of this MD&A report, the MCTO remains in effect.
Under the Deutsche Bank loan agreement, the company is in breach of the loan covenant that requires the company to provide DB the audited consolidated financial statements for the year ended Dec. 31, 2013, and the condensed interim consolidated financial statements for the three-month period ended March 31, 2014. Under the loan agreement, the company is required to file the audited consolidated financial statements within 120 days of year-end and the condensed interim consolidated financial statements within 60 days of quarter-end. As a result, the company obtained a waiver from DB, which extended the delivery date of filing the audited consolidated financial statements for the year ended Dec. 31, 2013, to July 31, 2014, and the condensed interim consolidated financial statements for the three-month period ended March 31, 2014, to Aug. 31, 2014.
Restatement
The company has reassessed the accounting for the following: its derivative financial instruments, relating to the copper collar swap derivative, copper call option derivative and derivative asset. The company had previously not recorded the fair value of these derivative financial instruments for the three months ended March 31, 2013. The company also had previously not recorded the fair value of the derivative asset for the three and six months ended June 30, 2013, and the three and nine months ended Sept. 30, 2013. As a result, the company's consolidated statement of financial position and consolidated statement of operations and comprehensive (loss) earnings did not reflect the appropriate fair value liability and gains (losses) for the related periods. This has been corrected retrospectively in accordance with IAS 8 (accounting policies, changes in accounting estimates and errors), resulting in the adjustment of 2013 financial information.
On Sept. 30, 2013, the company reassessed the timeline to repay the principal and cash interest to Gerald Metals. As of Dec. 31, 2012, management had estimated that the repayment would occur on June 30, 2014; however, after reviewing the company's estimated future monthly cash flows, it has determined that the repayment of principal debt and cash interest will occur on May 31, 2016, one month after the DB loan is repaid, at which point the Gerald Metals debt is no longer subordinated to the DB loan. As a result, the company's consolidated statement of financial position and consolidated statement of operations and comprehensive income (loss) earnings did not reflect the appropriate Gerald Metals loan liability and gains (losses) for the three and nine months ended Sept. 30, 2013. This has been corrected retrospectively in accordance with IAS 8 (accounting policies, changes in accounting estimates and errors), resulting in the adjustment of 2013 financial information.
On declaring commercial production on July 1, 2013, the company had incorrectly capitalized certain expenditures during the three and nine months ended Sept. 30, 2013, and adjusted the inventory recovery rates from 78 per cent to 75 per cent as at June 30, 2013, and Sept. 30, 2013, which resulted in restatement of accounting for inventory accounts. As a result, the company's consolidated statement of financial position and consolidated statement of operations and comprehensive (loss) earnings did not reflect the appropriate carrying values and gains (losses) for the three and nine months ended Sept. 30, 2013. This has been corrected retrospectively in accordance with IAS 8 (accounting policies, changes in accounting estimates and errors), resulting in the adjustment of 2013 financial information.
SELECTED OPERATIONAL AND FINANCIAL INFORMATION
Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013
Operating results
Mining
Ore mined tonnes 331,465 293,355 248,342 230,432 185,742
Waste rock mined and removed tonnes 1,297,719 997,378 1,333,793 1,047,433 821,973
Total mined tonnes 1,629,184 1,290,733 1,582,135 1,277,865 1,007,715
Waste-to-ore ratio 3.9 3.4 5.4 4.5 4.4
Average grade of mined ore total copper 0.91% 0.84% 0.96% 1.25% 0.84%
Crushing and stacking
Ore crushed and stacked tonnes 319,457 292,329 241,599 230,326 181,992
Average grade of stacked ore total copper 1.03% 0.97% 0.96% 1.50% 0.99%
Copper cathodes produced tonnes 1,619 1,784 1,536 1,108 949
Financial results
Copper sales $ $10,955,699 $12,884,804 $10,990,682 -- --
Production costs $ 4,058,486 6,861,256 2,329,048 -- --
Net earnings (loss) $ (59,460) (5,121,019) 3,014,042 $(350,792) $1,464,345
Total cash costs per copper pound $/pound 1.33 1.78 1.12 -- --
Average realized price $/pound 3.07 3.28 3.24 -- --
Average realized margin $/pound 1.74 1.50 2.12 -- --
We seek Safe Harbor.
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