Mr.
Kurt Heikkila reports
NORTH AMERICAN TUNGSTEN REPORTS Q2 2015 RESULTS AND PROVIDES AN OPERATIONAL UPDATE
North American Tungsten Corp. Ltd. had a net loss of $6.4-million or three cents per share for the three months ended March 31, 2015, and a net loss of $6.6-million or three cents per share for the six months ended March 31, 2015. These results are significantly down from net income of $2.5-million and a net loss of $2.1-million for the comparable periods in fiscal 2014.
The company's March 31, 2015, interim consolidated financial statements, and management's discussion and analysis thereon may be accessed under the company's profile on SEDAR and may also be accessed at the company's website.
Despite improvements in mill throughput and metallurgical recovery, the company's production significantly decreased to 70,871 metric ton units (MTUs) during second quarter 2015 (89,116 MTUs in second quarter 2014) driven by a decrease in mill feed grade from 1.22 per cent tungsten trioxide to 0.87 per cent WO3. The company is encouraged with the improvements in mill throughput and metallurgical recovery, as the mine and mill improvement programs are substantially complete.
Revenues were $23.5-million for the quarter compared with $23.1-million, an increase of 2 per cent. While MTUs sold increased 13 per cent, the average realized sales price in U.S. dollars continued its steady decline as average ammonium paratungsten prices fell from $370 (U.S.) per MTU to $282 (U.S.) per MTU, a decrease of 31 per cent. The company benefited from the strengthening of the U.S. dollar by 12 per cent against the Canadian dollar.
With the decrease in production and lower APT prices, operations from Cantung resulted in a gross margin from operations of $1.0-million compared with a gross margin of $5.4-million in second quarter 2014. Cash flows from operations were $2.0-million for second quarter 2015, a slight improvement from an inflow of $1.8-million in the comparable period.
The company continues to incur significant interest and financing costs (second quarter 2015: $2.0-million), and in second quarter 2015, the impact of the strengthening U.S. dollar resulted in a $3.7-million foreign exchange loss related to the U.S.-dollar-denominated debt facilities.
Kurt Heikkila, chairman and chief executive officer, commented: "Results continue to be impacted by lower APT prices and significant fluctuations in the mill feed grade. During this challenging time, management continues to scrutinize capital and operating expenses. The company is initiating a severe cash conservation program, and is considering other operational and financial alternatives."
On May 27, 2015, during a scheduled generator changeover, the Cantung mine site suffered a failure of a generator. This loss of power generation capacity will potentially stop tungsten concentrate production for the remainder of May, further straining the company's cash position.
We seek Safe Harbor.
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