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April 10, 2014 --- Vol. 08, No. 15April 2014

Alaska News Nuggets

FINANCIAL RESULTS – NovaCopper Inc. April 8 reported its financial results for the first quarter 2014. For the three months ended Feb. 28, NovaCopper reported a net loss of US$2.6 million (US5 cents basic and diluted loss per common share) compared to a net loss of US$6.6 million for the corresponding period in 2013 (US13 cents basic and diluted loss per common share). This variance was primarily due to a non-cash stock-based compensation charge of US$4.1 million during the first quarter of 2013, compared to US$100,000 in the corresponding period in 2014. In November 2013, all employees and directors voluntarily returned options outstanding with an exercise price of C$3.11 totaling 5.71 million stock options in order to create a more sustainable long-term retention strategy. As a result, the expense relating to these options was accelerated and recorded in the year ended Nov.30, 2013. Other differences in the first quarter 2014 compared to the same period last year resulted from a reduction in mineral property expenses and general and administrative expense offset by an increase in professional fees. For the first quarter 2014 NovaCopper reported mineral property expenses of US$600,000 compared to US$800,000 for the corresponding period in 2013. The company spent US$2.1 million on operating activities during the first quarter 2014, compared with expenditures of US$3.5 million for operating activities for the same period in 2013. The majority of cash spent on operating activities during both periods was expended on mineral property expenses, general and administrative, and salaries. A large proportion of the cash spent in the three months ended February 28, 2013 was also spent on a reduction in accounts payable and accrued liabilities of US$1.3 million due to timing of payments. As the exploration field season in the Ambler mining district is between May and early October of each year, a significant portion of the mineral property expenses and operating activities are incurred during this time frame. As at Feb. 28, 2014, NovaCopper had US$4.4 million in cash and cash equivalents, and working capital of US$3.2 million. The company will need to raise additional funds to support further exploration and administration expenses beyond the end of its fiscal year. In February, NovaCopper filed a preliminary prospectus supplement with the intention of raising approximately US$20 million through a combination of a public offering and a private placement with its large shareholders. On March 7, the company cancelled the offering and deferred a decision on financing until the release of the results from the Bornite resource update, which occurred on March 18. During the first quarter of 2014, NovaCopper focused its efforts on supporting Alaska Industrial Development Export Authority (in permitting the Ambler Mining District Industrial Access Road which is expected to provide access to the Upper Kobuk Mineral Projects in Northwest Alaska. NovaCopper said it intends to sign a memorandum of understanding with AIDEA in the first half of 2014 to explore the feasibility of utilizing liquid natural gas trucked from the North Slope LNG plant (Interior Energy Project) to replace diesel as the main source of fuel for any future production at the UKMP projects. In January, AIDEA announced the selection of the commercial participant to develop the North Slope LNG plant and outlined the target for the first gas delivery to Fairbanks in the winter of 2015/2016. NovaCopper said it is currently working to define the 2014 exploration program focus and initiatives.

FINANCIAL RESULTS – Novagold Resources Inc. Nov. 7 released its first-quarter financial results and updates for its 50-percent-owned Donlin Gold project in Alaska and its 50-percent-owned Galore Creek copper-gold-silver project in British Columbia. For the three months ended Feb. 28, Novagold’s loss from operations decreased by 22 percent, resulting from lower general and administrative expense and lower losses from equity investments in the Donlin Gold and Galore Creek projects. General and administrative expense decreased 15 percent due to lower office rent, professional fees and share-based compensation, partially offset by higher salary costs due to personnel additions in the first half of 2013.The company’s share of losses at the Donlin Gold project decreased by US$100,000, as 2014 activities continue to focus primarily on permitting. During the first quarter, permitting activities at Donlin Gold were primarily dedicated to the preliminary draft environmental impact statement, expected to be completed by year’s end. As a routine part of the Donlin Gold EIS process, Novagold provided support for the alternatives analysis being conducted for all major components of the project including the mine, pipeline and transportation infrastructure. The company also reported progress in key Donlin Gold permitting areas, including pipeline, water management, air quality, dam safety and wetlands. At the Galore Creek project located in northwestern British Columbia, Novagold’s share of losses decreased by US$1.7 million due to mobile equipment being fully depreciated in 2013. During the first quarter of 2014, Novagold announced results of Galore Creek’s 2013 drill campaign which identified extensions to the copper-gold mineralization into, as well as adjacent to, the newly-discovered Legacy zone. This campaign also confirmed that Galore Creek has significant exploration upside beyond its current 18-year mine life. Technical studies related to water and waste management as well as site layout for future mining activities at Galore Creek are now underway. As of Feb. 28, 2014, Novagold had US$182.3 million in cash and term deposits compared to US$191.3 million at the beginning of the quarter. The decrease in cash resulted from US$5.2 million used in operating activities for administrative costs and reductions in accounts payable and $3.6 million to fund Donlin Gold and Galore Creek activities. We have sufficient working capital available to repay the remaining US$15.8 million of outstanding notes due in May 2015, advance the Donlin Gold project through the expected remaining permitting process, as well as fund the current activities to further enhance the value of Galore Creek. Novagold said it expects to spend roughly US$12 million on its share of funding at Donlin Gold; approximately US$2.5 million at Galore Creek; and around $15 million for general and administrative expenses, interest on the convertible notes and working capital. Details of Novagold’s financial results for the three-months ended Feb. 28, 2014 will be available on the www.novagold.com, www.sedar.com, and www.sec.gov.

FINANCE – Heatherdale Resources Ltd. April 7 reported plans to raise about C$1 million through a private placement of roughly 14.3 million units priced at C7 cents each. Each unit will consist of one common share and one warrant, with each warrant exercisable to purchase an additional share at a price of C10 cents for three years from the closing of the financing. A 6 percent fee will be paid on a portion of the proceeds. Proceeds from the financing will be used to advance drill target generation at the Niblack Project’s Dama zone and for working capital purposes. Heatherdale anticipates the private placement will close around April 15.

GOLD/SILVER – Coeur Mining Inc. April 7 reported first-quarter production of 4.1 million ounces of silver and 58,836 ounces of gold, or 7.6 million silver-equivalent ounces. The Kensington Mine in Southeast Alaska produced 25,428 ounces of gold during the first quarter, compared to 25,206 during the same period of 2013. Mill throughput at Kensington averaged nearly 1,800 tons per day during the quarter, which is a significant increase compared to prior quarters. Gold grades, at 0.17 ounces per ton, were lower than any quarter over the past year. Coeur said the lower grades more in-line with the average reserve grade of 0.163 ounces per ton. The higher throughput reflects the company’s plan to maximize cash-flow at the gold mine.

NAME CHANGE – Full Metal Zinc Ltd. April 7 changed its name to Aftermath Silver Ltd. The common shares of Aftermath Silver are trading on the TSX Venture Exchange under the symbol “AAG” and the common shares of Full Metal Zinc have been delisted. There is no consolidation of shares.


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