Announces First Quarter Results

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Announces First Quarter Results

posted on May 16, 2009 02:13AM

May 15, 2009

Athabasca Potash Inc. Announces First Quarter Results

SASKATOON, SASKATCHEWAN--(Marketwire - May 15, 2009) - Athabasca Potash Inc. ("API" or the "Company") (TSX:API) announces that it has filed the results of API's operations for the three months ended March 31, 2009 all of which will be available at www.sedar.com or www.athabascapotash.ca.

Highlights for the first quarter include:

- Preferred shaft and mill site identified and selected for the Burr Project.

- SNC-Lavalin Inc. ("SNC-Lavalin") engaged to provide pre-feasibility study services on the Burr Project.

- Thyssen Mining Construction of Canada Ltd. ("TMCC") awarded the contract for the shaft, hoist and headframe sections of the pre-feasibility study. TMCC is one of the world's most experienced shaft sinking contractors in the potash industry.

- Expenditures on mineral properties totalled $3,393,050 for the quarter.

- Cash and cash equivalents of $28,173,042 at March 31, 2009.

- Issued and outstanding shares of 37,070,041 at March 31, 2009.

Burr Project

During the first quarter of 2009 API continued to focus on its 100% owned Burr Project. The Burr Project site is located 107 km (140 km by highway) east of the City of Saskatoon in the Province of Saskatchewan, Canada. The southern boundary of the project area is located 13.5 km north of the Lanigan Mine headframe (owned and operated by Potash Corporation of Saskatchewan) and 26 km NW of the town site of Lanigan.

The environmental impact studies (EIS) and tailings management and siting study are continuing to be conducted in connection with the Environmental Assessment and Permitting Report. Environmental baseline field studies initiated in early 2008 are now complete. As well, a tailings management siting study was carried out during 2008 with a preferred site selected to support the completion of an Environmental Assessment and Permitting Report for the Burr Project. The Company intends to submit an environmental impact study report on the Burr Project to the Ministry of Saskatchewan Environment for environmental permitting in the third quarter of 2009.

API initiated pre-feasibility studies on the Burr Project in the quarter. The Company, SNC-Lavalin, MDH Engineered Solutions Corp., TMCC and other consultants will each address specific elements of the pre-feasibility study (the "Study"). Based on this work SNC-Lavalin will develop capital and operating cost estimates with an intended accuracy of plus or minus 25% and a preliminary project execution schedule. The Company intends to file a new NI 43-101 compliant technical report in connection with the Study. The Study is scheduled for completion in the third quarter of 2009.

Quarter End Results ($ 000's)

As of March 31, 2009, API's cash and cash equivalents balance decreased to $28,173 from $31,578 at December 31, 2008. At March 31, 2009, API's working capital position decreased to $26,315 from $30,368 at December 31, 2008. The Company raised a small amount of capital for gross proceeds of $52 during 2009 derived from exercised stock options and broker warrants related to the IPO completed in December 2007.

API recorded a net loss of $1,004 or ($0.03) per share compared to a gain of $956 or $0.03 per share for the same period in 2008 due in part to increased activities in all areas of the Company's operations. Income for the quarter resulted from the Company's investments of excess cash reserves in short-term deposits. For the quarter ending March 31, 2009, the Company reported interest revenue of $93 compared to $534 for the quarter ending March 31, 2008.

Total operating costs for the quarter ending March 31, 2009 equalled $1,405 compared to $425 in the first quarter of 2008. This represents an increase of $980 reflecting an increase in the majority of the Company's categories of operations. Significant increases occurred for governance ($135), office and administration ($115) and professional fees ($470). These increases reflect the impact of increased administrative, professional and governance support.

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Balance Sheet ($ 000)                     March 31, 2009  December 31, 2008
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Current Assets                                    28,340             31,578
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Total Assets                                      61,713             62,280
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Current Liabilities                                2,025              1,507
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Future income tax liability                          724              1,032
----------------------------------------------------------------------------
Share capital                                     57,281             57,222
----------------------------------------------------------------------------
Contributed surplus                                5,973              5,805
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Deficit                                           (4,290)            (3,286)
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----------------------------------------------------------------------------
                                             For the Three Months Ended
Statements of Income                      March 31, 2009     March 31, 2008
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Interest Income                                       93                534
----------------------------------------------------------------------------
Operating Expenses                                 1,405                425
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Loss for the period before income taxes           (1,312)               109
----------------------------------------------------------------------------
Net (Loss) income for the period                  (1,004)               956
----------------------------------------------------------------------------
(Loss) income per share                             (.03)               .03
----------------------------------------------------------------------------


----------------------------------------------------------------------------
                                             For the Three Months Ended
Statements of Cash Flows                  March 31, 2009     March 31, 2008
----------------------------------------------------------------------------
Cash flows from operating activities                (562)                88
----------------------------------------------------------------------------
Cash flows from investing activities              (2,895)            (3,993)
----------------------------------------------------------------------------
Cash flows from financing activities                  52              6,418
----------------------------------------------------------------------------
Increase (Decrease) in cash and cash
 equivalents                                      (3,405)             2,513
----------------------------------------------------------------------------
Cash and cash equivalents - beginning of
 period                                           31,578             44,264
----------------------------------------------------------------------------
Cash and cash equivalents - end of period         28,173             46,777
----------------------------------------------------------------------------

Outlook

API has adopted a cash conservative approach, focusing available human resources and short-term expenditures on the most critical activities. Efforts continue on the environmental impact studies and tailings management and siting study being conducted in connection with the Environmental Assessment and Permitting Report and the pre-feasibility study for the Burr Project. The Company intends to file a new NI 43-101 compliant technical report in connection with the pre-feasibility studies being undertaken on the Burr Project. This NI 43-101 technical report is expected to be available in the third quarter of 2009. 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 in the last fiscal year, API has had constructive preliminary discussions with third parties regarding potential strategic alliances to develop the Burr Project and will continue to pursue such discussions in 2009.

Dawn Zhou, President and CEO, states "The strong interest in Saskatchewan potash from global mining and fertilizer companies show their understanding of the long term industrial fundamentals and the potential of Saskatchewan potash resources. API is focused on the creation of shareholder value through adding value and a business strategy to advance the Burr Project into future development."

About Athabasca:

Athabasca Potash Inc. is a Canadian based corporation and was founded with a goal of establishing itself as a pre-eminent 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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