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Message: Announces Results For The Year Ended December 31, 2008
| March 30, 2009 | |
| Athabasca Potash Inc. Announces Results For The Year Ended December 31, 2008 | |
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SASKATOON, SASKATCHEWAN--(Marketwire - March 30, 2009) - Athabasca Potash Inc. ("API" or the "Company") (TSX:API) announces that it has filed the Audited Financial Statements, MD&A and Annual Information Form for the year ended December 31, 2008 all of which will be available at www.sedar.com or athabascapotash.ca. Highlights for the fiscal year include: - An updated National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43101") compliant technical report entitled NI 43-101 Technical Report for a Resource Estimation on the Burr Project, Athabasca Potash Ltd., Saskatchewan, Canada, (the "Technical Report") was announced. The Technical Report was prepared by AMEC Americas Limited ("AMEC") and provided an updated potash resource estimate for the Burr Project. The Lower Patience Lake Sub-Member ("LPL") contains Indicated Mineral Resources of 241,200,000 tonnes with a grade of 23.3% K2O and an Inferred Mineral Resource of 183,100,000 tonnes with a grade of 23.2% K2O. - The composites for the LPL all have averaged grades between 20.40% and 25.19% K2O and interval thicknesses between 4.20 meters and 5.53 meters. These grades and thicknesses of the sylvinite mineralization are reasonable and are within 3% of the grades mined at the nearby PotashCorp Lanigan mine(1). - Environmental baseline studies were initiated in early 2008 and the Saskatchewan Minister of Environment issued the Project Specific Guidelines for the Burr Project in mid 2008. - API made three significant appointments to its management team. Mr. Bradley Fettis was appointed Chief Mine Development Engineer (and subsequently Vice-President, Mining), Mr. Terry Walbaum was appointed Chief Operating Officer and Mr. James Davidson was appointed Chief Financial Officer. - Cash expenditures on mineral properties totalled $17,017,955, including $15,023,026 on the Burr Project, for the year ended December 31, 2008. - Working capital was $30.4 million at December 31, 2008. The Company's current working capital position is expected to be sufficient to fund the completion of the pre-feasibility studies, the environmental impact studies and supporting activities currently being undertaken on the Burr Project. In addition, there is projected to be sufficient working capital to support the general and administrative activities of the Company beyond the end of 2010. - Issued and outstanding shares of 36,918,083 on December 31, 2008. Subsequent to December 31, 2008 API announced the following developments: - Preferred shaft and mill site were identified and approved for the Burr Project. - SNC-Lavalin was engaged to provide pre-feasibility study services on the Burr Project. - Thyssen Mining ("TMCC") was awarded the contract for the shaft, hoist and headframe sections of the pre-feasibility study. TMCC is a leading North American mining contractor, and part of the Thyssen Group, one of the world's most experienced shaft sinking contractors in the potash industry. Overview Burr Project Advanced Exploration and Development Program During 2008, API continued to focus on the exploration program being conducted at its 100% owned Burr Project. The updated Technical Report was issued with an effective date of September 18, 2008 and incorporated results from the five historical wells completed in 1950s, the five wells drilled by API in 2007 and the four wells completed in 2008. The last three wells drilled in 2008 were drilled after the effective date of the Technical Report and were not included in the updated resource estimate. The Lower Patience Lake Sub-Member ("LPL") contains Indicated Mineral Resources of 241,200,000 tonnes with a grade of 23.3% K2O and an Inferred Mineral Resource of 183,100,000 tonnes with a grade of 23.2% K2O. There is an additional Inferred Mineral Resource of 39,300,000 tonnes, with a grade of 13.2% K2O in the Upper Patience Lake Sub-Member ("UPL"). The potash wells have all encountered stable overlying rocks which is an important consideration for reasonable prospects of economic extraction. The geological setting and favourable mineralization shown at the Burr Project are consistent with characteristics of existing Saskatchewan potash mines. The confidence level and sufficient tonnage of the Indicated Resource of 241,200,000 tonne allowed API to commence pre-feasibility studies. In early 2009, SNC-Lavalin was engaged to provide pre-feasibility services on the Burr Project. SNC-Lavalin, other consultants and API will each address specific elements of the pre-feasibility studies being undertaken. SNC-Lavalin's services will address the surface processing plant and infrastructure. Other consultants and API are responsible for the environmental and other aspects of the pre-feasibility study to include geology, process technology, underground mine development, resource assessment, shaft, tailings management facilities and transportation. Based on this work SNC-Lavalin will develop capital and operating cost estimates with an intended accuracy of ±25% and a preliminary project execution schedule. API intends to file a new NI 43-101 compliant technical report in connection with the pre-feasibility study. Results from the last three wells drilled in 2008 will be also included in the updated report. The pre-feasibility study is scheduled for completion in the third quarter of 2009. Financial Results As of December 31, 2008, API's cash and cash equivalents balance decreased to $31,577,777 during the year ended December 31, 2008. At December 31, 2008, the Company had a working capital balance of $30,368,175, a decrease of $12,478,176 from $42,846,351 at December 31, 2007. The Company raised capital for gross proceeds of $7,154,391 during 2008. This capital was derived from the exercises of the over-allotment, stock options and broker warrants related to the IPO completed in December 2007. API recorded a net loss of $534,683 ($0.015 per share) compared to a net loss of $2,696,523 ($0.155 per share) for the same period in 2007. API's source of income is the result of investing excess cash reserves in short-term deposits and farm rents on surface lands owned. For the year ending December 31, 2008, the Company reported interest revenue of $1,478,800 compared to $293,380 and rents of $108,843 for the year ending December 31, 2008 compared to nil in the prior year. Operating costs increased to $2,717,055 (before stock based compensation in the amount of $598,293) for the year ended December 31, 2008, compared to $551,666 for 2007 (before stock based compensation of $2,913,437). This increase was reflected in all cost categories as API significantly expanded operations. Management salary, wages and benefits increased by $653,153 to $885,915 in 2008 from $232,762 for 2007 as a result of growth in the Company's management team and personnel levels. Increased reliance on legal and accounting services caused professional fees to increase to $591,070 from $88,632 last year. Business development, investor relations and advertising expenses increased to $386,655 for 2008, from $81,847 for 2007 as a result of increased expenditures associated with operating as a public company. The need for increased office space, and related supplies and other expenses, resulted in office and administration costs increasing to $229,877 for 2008 from $36,038 in 2007. Directors' fees also increased during 2008 and totalled $263,278 compared to nil for 2007. Selected Financial Highlights include:
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Balance Sheet December 31, 2008 December 31,2007
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Current Assets $ 31,874,836 $ 44,625,755
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Total Assets 62,279,671 55,285,777
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Current Liabilities 1,506,661 1,779,404
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Future income tax liability 1,031,703 -
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Share capital 57,222,369 51,762,028
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Contributed surplus 5,805,227 4,495,951
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Deficit (3,286,289) (2,751,606)
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Year Ended
Statements of Income December 31, Year Ended
(loss) 2008 December 31, 2007
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Revenues $ 1,587,643 $ 293,380
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Operating Expenses 3,315,348 3,465,103
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Loss for the period before income taxes (1,727,705) (3,171,723)
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Net Income (Loss) for the period (534,683) (2,696,523)
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Basic Earnings (Loss) per share (0.015) (0.155)
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Year Ended
December 31, Year Ended
Statements of Cash Flows 2008 December 31, 2007
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Cash flows from Operating Activities $ (1,139,199) $ (208,119)
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Cash flows from Investing activities (18,142,755) (6,922,316)
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Cash flows from Financing Activities 6,595,806 50,147,924
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Increase (Decrease) in cash and cash
equivalents (12,686,148) 43,017,489
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Cash, beginning of period 44,263,925 1,246,436
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Cash, end of period 31,577,777 44,263,925
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While continuing to advance the Burr Project, API is exercising financial caution and will continue to manage cash conservatively and focus available human resources and short-term expenditures on the most critical activities. The Company's current working capital position is expected to be sufficient to fund the completion of the pre-feasibility study, the environmental impact study report and supporting activities that will create additional value to the Burr Project through the end of 2009. A new NI 43-101 compliant technical report, prepared in connection with the pre-feasibility studies being undertaken on the Burr Project, is expected to be available in the third quarter of 2009. In addition, there is projected to be sufficient working capital to support the general and administrative activities of the Company beyond the end of 2010. With the completion of the geological exploration and a mineral resource estimate of sufficient quality to support a pre-feasibility study and a feasibility study, API is advancing its search for a strategic alliance to develop the Burr Project. Scientific and Technical Information The potash resource estimate and scientific and technical information contained in this press release is based upon the NI 43-101 compliant technical report (the "Technical Report") entitled NI 43-101 Technical Report for a Resource Estimation on the Burr Project, Athabasca Potash Inc., Saskatchewan, Canada, with an effective date of September 18, 2008, available at www.sedar.com or www.athabascapotash.ca. The Technical Report was prepared by AMEC Americas Limited ("AMEC"). Susan Lomas, P.Geo. of Lions Gate Geological Consulting Inc., is the independent Qualified Person (as defined by NI 43-101) for the Technical Report, and prepared the potash resource estimate and the scientific and technical information contained in this press release. (1). The reported grades of estimated Inferred and Indicated Mineral Resources for the Burr Project are not directly comparable to the reported grades of estimated Proven and Probable Mineral Reserves from PCS Lanigan. Proven and Probable Mineral Reserves are diluted, estimated over mineable widths and have economics applied to them. Inferred and Indicated Mineral Resources are undiluted, not estimated over mineable widths and have not been subjected to any economic considerations. In addition, the thickness of the potash horizon between these two projects is not directly comparable, because economic considerations have been applied to the mined thickness at Lanigan which will result in a narrower reported thickness than that intersected by historic drilling on the Burr Project, which has not been subject to economic considerations. About Athabasca: Athabasca Potash Inc. is a Canadian based corporation and was founded with a goal of establishing itself as a preeminent Canadian public company engaged solely in potash exploration and development with focus on the Company's wholly owned Burr Project, and to provide its shareholders with a unique investment opportunity focused entirely on potash |
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