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Pacific Rim Mining Corp. ("Pacific Rim" or "the Company") (TSX:PMU)(AMEX:PMU) is
Pacific
Rim Mining Corp. ("Pacific Rim" or "the Company") (TSX:PMU)(AMEX:PMU)
is pleased to announce its financial results for the three months ended
January 31, 2008 representing the Company's third quarter of fiscal
2008 ("Q3 2008"). Complete financial statements will be included in the
Company's Third Quarterly Report to be mailed to shareholders shortly.
All monetary amounts are expressed in United States ("US") dollars
unless otherwise stated.
Overview
Pacific Rim is a growth-oriented, revenue-generating,
environmentally and socially responsible gold exploration company with
operations in North America and exploration assets in Central and South
America. The Company is expanding and developing its advanced-stage,
high grade El Dorado gold project in El Salvador and is actively
exploring a pipeline of grassroots gold projects. Pacific Rim's goal is
to become a low cost, intermediate level gold producer. The Company's
shares trade under the symbol PMU on both the Toronto Stock Exchange
("TSX") and the American Stock Exchange ("AMEX").
Financial Highlights(i) (all amounts in thousands of US dollars, except per share amounts)
-------------------------------------------------------------------------- Three Months Three Months ended ended Nine Months Nine Months January 31, January 31, ended ended 2008 2007 January 31, January 31, (Q3 2008) (Q3 2007) 2008 2007 -------------------------------------------------------------------------- Revenue $ 2,095 $ 1,044 $ 6,187 $ 5,249 -------------------------------------------------------------------------- Cost of Sales $ 1,807 $ 544 $ 4,208 $ 3,242 -------------------------------------------------------------------------- Exploration expenditures $ 3,273 $ 2,374 $ 8,996 $ 7,007 -------------------------------------------------------------------------- Loss before taxes and discontinued operations $ (3,703) $ (2,884) $ (8,035) $ (7,272) -------------------------------------------------------------------------- Loss for the period $ (3,703) $ (2,974) $ (6,701) $ (6,375) -------------------------------------------------------------------------- Loss per share - basic and diluted $ (0.03) $ (0.03) $ (0.06) $ (0.06) -------------------------------------------------------------------------- Cash Flow used for operating activities $ (3,507) $ (3,214) $ (8,571) $ (5,903) -------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents $ (364) $ (410) $ (1,741) $ (807) -------------------------------------------------------------------------- Weighted Average Common shares outstanding (basic and diluted) 110,053,862 106,883,497 109,920,529 106,519,077 --------------------------------------------------------------------------
-------------------------------------------------------------------------- January 31, 2008 April 30, 2007 -------------------------------------------------------------------------- Cash and cash equivalents $ 755 $ 2,496 -------------------------------------------------------------------------- Total assets $ 14,984 $ 21,494 -------------------------------------------------------------------------- Total liabilities $ 4,104 $ 4,857 -------------------------------------------------------------------------- Working Capital $ 2,279 $ 9,297 -------------------------------------------------------------------------- (i)unaudited
2008 Third Quarter Developments
El Dorado Gold Project, El Salvador
During Q3 2008, Pacific Rim completed an updated resource
estimate for the El Dorado gold project, incorporating the recently
delineated Balsamo deposit into the project's resource base.
The El Dorado project now comprises six defined deposits that together
contain estimated resources of 1.4 million gold equivalent ounces in
the Measured and Indicated categories combined plus an additional 0.3
million gold equivalent ounces in the Inferred category.
The El Dorado drill program is now focused on exploring the
gold-bearing Cerro Alto and La Luz veins immediately east of the
Balsamo vein and on testing the northerly strike extensions of the
Balsamo and Cerro Alto veins.
Santa Rita Gold Project, El Salvador
During Q3 2008 Pacific Rim conducted a trenching and sampling
program at the Santa Rita gold project. Twenty-six trenches were dug,
exposing the full width of the southeast end of the 2 km long Trinidad
vein, which was known from the Company's previous sampling of surface
exposures to contain locally high gold grades. The trenching program
results indicate that the Trinidad vein, where exposed by the trenches,
is up to 5.7 meters wide (compared to 1-2 meters wide as suggested by
the Company's previous surface sampling program), with, in many cases,
high gold grades throughout its width.
Sale of the Denton-Rawhide Open Pits
During Q3 2008, Pacific Rim announced that the Rawhide Joint
Venture partners (Pacific Rim and Kennecott Rawhide Mining Company)
signed an amendment to the October 2004 Property Purchase and Sale
Agreement with Nevada Resource Recovery Group LLC ("NRRG") of Reno, NV
extending the closing date of the sale of the lands comprising the
Denton-Rawhide open pits to on or before October 31, 2008.
Financing
In February, 2008, subsequent to the end of the Company's third fiscal
2008 quarterly period, the Company announced its intention to raise up
to CDN $5,040,000 by way of a non-brokered private placement of
4,800,000 Units, consisting of one share plus one share purchase
warrant. As a result of strong investor interest, the financing was
subsequently increased to a maximum of 6,711,000 Units or CDN
$7,046,550.
Results of Operations
Overview - Three Month Period
For the three month period ended January 31, 2008, Pacific Rim recorded
a net loss of $3.7 million or $(0.03) per share, compared to a net loss
of $3.0 million or $(0.03) per share for the three month period ended
January 31, 2007. Sales revenues more than doubled quarter over quarter
($2.1 million for Q3 2008 compared to $1.0 million for Q3 2007) but
this increase was offset by substantially higher cost of sales ($1.8
million for Q3 2008 compared to $0.5 million for Q3 2007), leading to a
$0.2 million decrease in mine operating income from $0.5 million in Q3
2007 to $0.3 million for Q3 2008. Exploration expenditures increased to
$3.3 million for Q3 2008 (compared to $2.4 million for Q3 2007), which,
when combined with the decrease in mine operating income, led to a net
loss of $3.7 million for Q3 2008 (compared to $3.0 million for Q3
2007).
Overview - Nine Month Period
For the nine months ended January 31, 2008, the Company recorded
a net loss of $6.7 million or $(0.06) per share compared to net loss of
$6.4 million or $(0.07) per share for the same period a year earlier.
Revenues from gold production were higher for the current nine month
period ($6.2 million for the first nine months of fiscal 2008 compared
to $5.2 million for the same period the year earlier), despite
decreased production, due to the slight increase in volume of gold
sales and significant improvement in the realized gold price period
over period. Mine operating income was $2.0 million in each of the nine
month periods ended January 31, 2008 and January 31, 2007, as sales and
cost of sales both increased by similar amounts in both periods. Higher
cost of sales reflects increased operating costs associated with the
decrease in production period over period (6,548 ounces of gold during
the first nine months of fiscal 2008 compared to 9,183 ounces of gold
in the same period a year earlier). Exploration expenditures increased
($9.0 million for the first nine months of fiscal 2008 compared to $7.0
million for the first nine months of fiscal 2007) but this increase was
offset in part by $0.6 million unrealized foreign exchange gain during
the first nine months of fiscal 2008 (compared to an unrealized foreign
exchange loss of $0.6 million for the same period a year earlier)
reflecting the impact of the US-Canadian dollar exchange rate on the
Company's Canadian dollar-denominated investments on hand period over
period. The Company recorded a loss before discontinued operations of
$8.1 million for the first nine months of fiscal 2008 (compared to $7.4
million for the same period a year earlier), which was offset by
recovery of investment in the Andacollo Mine ($1.4 million for the
current period compared to $1.0 million for the same period a year
earlier), leading to the net loss for the nine month period ended
January 31, 2008 of $6.7 million ($6.4 million for the same period a
year earlier).
Q3 2008 Revenue
Revenue, consisting entirely of the sale of gold and silver from
the Denton-Rawhide mine, was $2.1 million in Q3 2008, compared to $1.0
million in Q3 2007. While gold production decreased significantly
during Q3 2008 (1,683 ounces) compared to the same period a year
earlier (3,159 ounces) the amount of gold sold was substantially higher
during the current quarterly period (2,300 ounces for Q3 2008 compared
to 1,000 ounces for Q2 2007) and the average gold price realized per
ounce increased (from $631 per ounce in Q3 2007 to $802 per ounce in Q3
2008) leading to the approximately two-fold increase in revenues
quarter over quarter.
Cost of sales was $1.8 million in Q3 2008 compared to $0.5 million in
the same period a year earlier. The $1.2 million increase in operating
costs is due to booking of costs in the current period related to
ounces sold from inventory in the same period (see Section 5 - Summary
of Quarterly Results). Although the cost of Denton-Rawhide's property,
plant and equipment has been almost completely amortized as the mine
nears the end of its projected life, the mine continues to conduct
various capital projects and as such, depreciation, depletion and
amortization costs at Denton-Rawhide increased marginally (from a
negligible amount in Q3 2007 to $0.1 million in Q3 2008).
The $1.1 million improvement in revenue was more than offset by
the $1.3 million increase in cost of sales, which led to a $0.2 million
decrease in mine operating income from $0.5 million in Q3 2007 to $0.3
million in Q3 2008.
Q3 2008 Expenses
Net non-operating expenses were $4.0 million during Q3 2008
compared to $3.4 million for the same period a year earlier.
Exploration expenditures increased by $0.9 million quarter over quarter
($3.3 million for Q3 2008 compared to $2.4 million for Q3 2007) due to
increased expenditures related to the Company's community relations
initiatives in El Salvador. General and administrative costs were
unchanged quarter over quarter ($0.6 million for each of Q3 2008 and Q3
2007). The Company booked an unrealized foreign exchange loss of $0.3
million during Q3 2008 (compared to an unrealized foreign exchange loss
of $0.5 million for the same period a year earlier) reflecting the
impact of the US-Canadian dollar exchange rate on the Company's
Canadian dollar-denominated investments on hand quarter over quarter.
Q3 2008 Summary
The net effect of the $0.2 million decrease in mine operating income
and $0.6 million increase in non-operating expenses, plus $0.1 million
decrease in income taxes ($0.1 million for Q3 2007 compared to nil for
Q3 2008) is a $0.7 million increase in net loss for the three month
period ended January 31, 2008 of $3.7 million (compared to $3.0 million
for the same period a year earlier).
Liquidity and Capital Resources
Cash
At January 31, 2008 Pacific Rim's cash and cash equivalents
totaled $0.8 million, a decrease of $0.3 million from the $1.1 million
balance as of October 31, 2007 (the end of the Company's second quarter
of fiscal 2008) and a decrease of $1.7 million from the April 30, 2007
balance of $2.5 million, (the end of the Company's previous fiscal
year). At January 31, 2008, temporary investments and bullion were $1.6
million and $1.2 million respectively, compared to $4.8 million and
$1.4 million respectively at October 31, 2007 and $7.9 million and $0.8
million respectively at April 30, 2007. The total of cash and cash
equivalents, temporary investments and bullion (which in the Company's
opinion are collectively equivalent to cash, being immediately
available to cover short-term cash requirements) at January 31, 2008
was $3.5 million compared to $7.3 million at October 31, 2007 and $11.2
million at April 30, 2007, a decrease of $3.8 million over the three
months ended January 31, 2008 and $7.7 million over the nine months
ended January 31, 2008.
The Company's temporary investments consist of bankers
acceptances guaranteed by large North American banking institutions,
are callable on demand and pay interest for the period of the
investment. The Company has no exposure to asset backed commercial
paper.
During Q3 2008 the Company received cash flow from the
following sources: $3.1 million from the redemption of temporary
investments; and $0.3 million from the Denton-Rawhide residual leach
operation. Outlays of cash during Q3 2008 included: $3.3 million in
direct exploration expenditures; and $0.5 million on direct general and
administrative expenses. The net of these cash inflows and outlays was
a decrease in cash and cash equivalents during Q3 2008 of $0.3 million.
Working Capital
At January 31, 2008 the book value of Pacific Rim's current assets
stood at $4.0 million compared to $11.8 million at April 30, 2007. The
decrease in current assets is primarily a result of decreases in cash
and cash equivalents (from $2.5 million at April 30, 2007 to $0.8
million at January 31, 2008) and temporary investments (from $7.9
million at April 30, 2007 to $1.6 million at January 31, 2008), offset
in part by increases in bullion inventory ($0.8 million at April 30,
2007 compared to $1.2 million at January 31, 2008). The Company's total
assets at January 31, 2008 were $15.0 million compared to $21.5 million
at April 30, 2007, with property, plant and equipment increasing by
$0.9 million (from $6.3 million at April 30, 2007 to $7.2 million at
January 31, 2008), and closure fund balances increasing from $3.4
million at April 30, 2007 to $3.8 million at January 31, 2008.
At January 31, 2008, Pacific Rim had current liabilities of
$1.8 million, a $0.7 million decrease from the April 30, 2007 amount of
$2.5 million. The Company has no debt.
The $7.8 million decrease in current assets combined with the
$0.8 million reduction in current liabilities, resulted in a $7.0
million reduction in working capital from $9.3 million at April 30,
2007 to $2.3 million at January 31, 2008.
The Company's exploration plans for the remainder of the current fiscal year and into fiscal 2009 are:
- to resume work on the El Dorado project feasibility study,
incorporating the updated resource estimate, which will consider an
expanded operation with greater annual throughput than that envisioned
in the January 2005 pre-feasibility study. The El Dorado feasibility
study commenced in late fiscal 2006 and was originally expected to be
completed during fiscal 2007 before being temporarily halted in March
2007 in order to include the important Balsamo deposit discovery
- to continue exploration drilling within the El Dorado project and
test high priority gold targets in the central and southern part of the
El Dorado district
- to continue exploration work, including resumption of a Phase 1 drill program, at the Santa Rita project
- to generate drill targets on the Company's grassroots projects, and identify additional project acquisition opportunities
The Company's anticipated fiscal 2008 exploration budget of $8.0
million has been exceeded by approximately $0.9 million to the end of
Q3 2008. The Company anticipates its exploration plans for the
remainder of fiscal 2008, as outlined above, plus general and
administrative expenditures will cost approximately $3.0 million and
$0.5 million respectively, which will be financed from the proceeds of
the Company's recent private placement financing, plus cash flows from
the Denton-Rawhide operation.
A majority of the Company's exploration expenditures are
discretionary and can be adjusted according to short-term cash flow
availability. In order to continue its exploration programs in the
longer term, as well as meet its other expense obligations, the Company
may require additional financing or alternatively may be required to
reduce its expenditures.
Pacific Rim forecasts production levels, revenue and cash flow
from the Denton-Rawhide gold mine roughly 6 months in advance due to
the variability in recoveries that are inherent in a residual heap
leach operation, and the volatility in gold price. Denton-Rawhide is
expected to continue to contribute funds in fiscal 2008 and beyond that
will be used for exploration and/or general and administrative
expenses. The Company also anticipates cash flow from tipping fees
related to the sale of the Denton-Rawhide open pits, if as and when the
Denton-Rawhide Property Purchase and Sale Agreement closes. Additional
financing will be required when the Company is able to commence
development activities (construction of an access / haulage ramp) at El
Dorado.
Production
Pacific Rim is 49% owner of the Denton-Rawhide gold mine, located near
Fallon, Nevada. Kennecott Minerals Company, a subsidiary of Rio Tinto
Plc, is 51% owner and operator of the mine. Denton-Rawhide is a
residual heap leach operation that ceased active mining in October
2002. Crushing and stacking of a low-grade ore stockpile continued
until May 2003 at which time the operation commenced the residual leach
and reclamation phase.
Pacific Rim's share of production from the Denton-Rawhide
operation during the third quarter of fiscal 2008 was 1,683 ounces of
gold and 10,342 ounces of silver at a total cash production cost of
$896 per ounce of gold produced (net of silver credits). During the
third quarter of fiscal 2007 Pacific Rim's share of production was
3,158 ounces of gold and 27,742 ounces of silver at a total cash
production cost of $278 per ounce of gold produced (net of silver
credits).
Production costs per ounce of gold at the Denton-Rawhide operation
increased markedly quarter over quarter reflecting the increase in
per-ounce costs associated with declining production (typical of
residual leach operations nearing the end of its mine life) and the
impact on both production and costs of the replacement of the
Merrill-Crowe circuit with an expansion of the existing carbon circuit.
For the nine months ended January 31, 2008, Pacific Rim's share
of production from Denton-Rawhide was 6,548 ounces of gold and 48,687
ounces of silver at a total cash production cost of $526 per ounce,
compared to 9,183 ounces of gold and 84,262 ounces of silver at a total
cash production cost of $354 per ounce for the nine months ended
January 31, 2007. As described above, production costs per ounce have
increased period over period due primarily to decreases in production.
Gold production from Denton-Rawhide during the third quarter of
fiscal 2008 was approximately 47% lower than in the same quarter of
fiscal 2007; a continuation of the predominant trend toward declining
production at Denton-Rawhide typical of the natural slowdown in
recovery that occurs in the residual leach phase of a heap leach
operation. While production at Denton-Rawhide is on a downward trend,
it dropped significantly below the trend line during Q2 2008 and
remained lower than anticipated during Q3 2008. This marked production
decrease is in part attributable to the replacement during Q2 2008 and
into Q3 2008 of the Merrill-Crowe circuit and expansion of the existing
carbon circuit in the mine's processing facility, reconfiguration of
the heap leach pad that reduced the surface area for leaching, and the
typical cyclical production decline that occurs at Denton-Rawhide
during the winter months.
In lieu of the Merrill-Crowe, the carbon circuit is currently
being expanded, which is expected to cut processing costs by reducing
the cost of consumables. Silver production will decline under this
processing plan, however, the cost savings are expected to exceed the
value of silver no longer recovered. The Denton-Rawhide mine operators
are testing a number of production optimization techniques in order to
maximize the recovery of gold from the heap leach pile. While these
efforts have in the past resulted in short term improvements in
production and may do so in the future, recoveries are expected to
continue to decline overall as the residual leaching process continues.
For the purposes of internal short term cash flow budgeting, the
Company's projections for Denton-Rawhide production look forward no
more than six months at a time.
Outlook
Pacific Rim's available funds include current cash and cash
equivalent balances, short term liquid investments, and projected cash
flow from gold production at the Denton-Rawhide mine, which is expected
to continue through fiscal 2008 and beyond, albeit with decreasing
production rates and cash flows as the operation progresses through the
residual leaching phase.
A substantial portion of these funds, which include the proceeds of the
private placement financing that was conducted subsequent to the end of
Q3 2008, will be spent on the El Dorado gold project, on the Company's
ongoing exploration drill program that is currently testing the strike
extensions of the Balsamo vein as well as other newly discovered
gold-bearing veins at depth. The Company anticipates resuming work on
its El Dorado feasibility study during the fourth quarter of fiscal
2008 or first quarter of fiscal 2009. Depending on the availability of
the Company's engineering consultants, the feasibility study requires
roughly four to six months of additional work beyond what is currently
completed. The El Dorado feasibility study will consider the economic
impact of including the South Minita and Balsamo deposits in the El
Dorado mine plan as envisioned in the January 2005 prefeasibility study
and the possibility of expanding the annual throughput of the proposed
operation. In addition the Company intends to continue exploration
drilling within the El Dorado project, concentrating on testing the
high priority gold targets it has defined in the southern part of the
El Dorado district and will continue its social and environmental
initiatives.
The Company plans to continue its exploration work at the Santa
Rita gold project during the remainder of fiscal 2008, concentrating on
continuing its trenching program of the Trinidad vein, before
initiating a Phase 1 drill program to test this exciting prospect.
The Company's ability to fund its exploration activities in the
long term is dependent upon the level of discretionary exploration and
general and administrative expenditures and the level of cash flow
provided by the Denton-Rawhide operation to supplement its available
cash on hand. In order to carry out its longer term exploration plans,
additional financing may be required and/or or the Company's
exploration plans curtailed until such financing is obtained. While the
Company has been successful in obtaining its required funding in the
past, there is no assurance that sufficient funds will be available to
the Company in the future. The Company's currently available funds are
not sufficient to conduct development activities at El Dorado.
The Company awaits receipt of an exploitation concession for the
central El Dorado project area, which application is currently in
process. The Company intends to commence development activities
(construction of an access / haulage ramp) on the El Dorado property
once it is able to evaluate the detailed economics outlined in the full
feasibility study and will further depend on obtaining the required
mining and environmental permits and sufficient financing to proceed.
Outside of the El Dorado and Santa Rita projects, during the
remainder of fiscal 2008 the Company intends to spend a portion of its
available funds on early stage exploration initiatives in the lead up
to exploration drilling at its other grassroots projects in El Salvador
and continue project generation initiatives in El Salvador and
elsewhere in North, Central and South America.
National Instrument 43-101 Disclosure
Mr. William Gehlen, Vice President Exploration, supervises
Pacific Rim's exploration work on the El Dorado project. Mr. Gehlen is
a Certified Professional Geologist with the AIPG (No. 10626), an
employee of Pacific Rim and a Qualified Person as defined in NI 43-101.
Mr. David Ernst, Chief Geologist, supervises Pacific Rim's project
generation initiatives. Mr. Ernst is geologist licensed by the State of
Washington, an employee of Pacific Rim Mining Corp. and a Qualified
Person as defined in National Instrument 43-101.
Pacific Rim's sampling procedures follow the Exploration Best Practices
Guidelines outlined by the Mining Standards Task Force and adopted by
The Toronto Stock Exchange. Samples are assayed using fire assay with a
gravimetric finish on a 30-gram split. Quality control measures,
including check- and sample standard-assaying, are being implemented.
Samples are assayed by Inspectorate America Corporation in Reno, Nevada
USA, an ISO 9002 certified laboratory, independent of Pacific Rim
Mining Corp.
The January 2008 El Dorado resource estimate was prepared by
Mr. Steven Ristorcelli, P.Geo., of Mine Development Associates, Reno,
Nevada and conforms to current CIM Standards on Mineral Resources and
Reserves. Mr. Ristorcelli is an independent Qualified Person as defined
in NI 43-101. Mr. Ristorcelli and others at Mine Development Associates
have verified the data used to tabulate these resources by auditing the
Company's drill results database, reviewing drill sections, and
examining drill core. A technical report in support of the January 2008
El Dorado resource estimate, entitled Technical Report Update on the El
Dorado Project Gold and Silver Resources, Department of Cabanas,
Republic of El Salvador was filed with SEDAR on March 3, 2008. The
report was co-authored by Mr. Steven Ristorcelli, P.Geo., and Mr. Peter
Ronning, P.Eng., each of whom are independent Qualified Persons as
defined in NI 43-101.
The July 2006 El Dorado resource estimate was prepared by Mr.
Steven Ristorcelli, P.Geo., of Mine Development Associates, Reno,
Nevada. Mr. Ristorcelli is an independent Qualified Person as defined
in NI 43-101. The resource estimate conforms to current CIM Standards
on Mineral Resources and Reserves. A technical report in support of the
updated El Dorado resource estimate presented above was filed with
SEDAR on July 31, 2006. The report was co-authored by Mr. Steven
Ristorcelli, P.Geo., and Mr. Peter Ronning, P.Eng., each of whom are
independent Qualified Persons as defined in NI 43-101.
The January 2005 El Dorado pre-feasibility study is supported
by a technical report prepared for Pacific Rim Mining Corp. by SRK
Consulting (US) Inc. of Denver Colorado, entitled "Pre-Feasibility
Study, El Dorado Project, El Salvador", dated January 21, 2005 and
publicly available on SEDAR (www.sedar.com). The primary author of the
report is Mr. William F. Tanaka, a Qualified Person independent of
Pacific Rim, as defined in NI 43-101. Mr. Tanaka is a member of the SME
and the mAUSIMM.
The terms "measured resource", "indicated resource" and
"inferred resource" used in this document are Canadian mining terms as
defined in NI 43-101 and CIM Standards on Mineral Resources and Mineral
Reserves. Mineral resources that are not mineral reserves have not been
demonstrated to be economically and legally extractable. Mineral
resource estimates do not account for mineability, selectivity, mining
loss and dilution. It should not be assumed that all or any part of a
resource will ever be converted to a reserve. These mineral resource
estimates include inferred mineral resources that are normally
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral
reserves. There is also no certainty that these inferred resources will
be converted to measured and indicated resource categories through
further drilling, or into mineral reserves once economic considerations
are applied.
The term "bankable" in reference to a feasibility study is
defined as a comprehensive analysis of a project's economics and is
used by the banking industry for financing purposes.
On behalf of the board of directors,
Thomas C. Shrake, President and CEO
Forward-Looking Statements
This discussion contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934
concerning the Company's plans for its properties, operations and other
matters. These statements relate to analyses and other information that
are based on forecasts of future results, estimates of amounts not yet
determinable and assumptions of management. Statements concerning
reserves and mineral resource estimates may also be deemed to
constitute forward-looking statements to the extent that they involve
estimates of the mineralization that will be encountered if the
property is developed, and in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that the
mineral deposit can be economically exploited. Any statements that
express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or
future events or performance (often, but not always, using words or
phrases such as "expects" or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans", "estimates" or
"intends", or stating that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved) are
not statements of historical fact and may be "forward-looking
statements." Forward-looking statements are subject to a variety of
risks and uncertainties, which could cause actual events or results to
differ from those reflected in the forward-looking statements,
including, without limitation:
- risks related to gold price and other commodity price fluctuations;
- risks and uncertainties relating to the interpretation of
drill results, the geology, grade and continuity of mineral deposits;
- risks related to the inherent uncertainty of production and
cost estimates and the potential for unexpected costs and expenses;
- results of initial feasibility, prefeasibility and
feasibility studies, and the possibility that future exploration,
development or mining results will not be consistent with the Company's
expectations;
- mining and development risks, including risks related to
accidents, equipment breakdowns, labour disputes or other unanticipated
difficulties with or interruptions in production;
- the potential for delays in exploration or development activities or the completion of feasibility studies;
- the uncertainty of profitability based upon the Company's history of losses;
- risks related to failure to obtain adequate financing on a timely basis and on acceptable terms;
- risks related to environmental regulation and liability;
- risks related to hedging activities;
- political and regulatory risks associated with mining and exploration; and
- other risks and uncertainties related to the Company's prospects, properties and business strategy.
Should one or more of these risks and uncertainties materialize,
or should underlying assumptions prove incorrect, actual results may
vary materially from those described in forward-looking statements.
Forward looking statements are made based on management's beliefs,
estimates and opinions on the date the statements are made and the
Company undertakes no obligation to update forward-looking statements
if these beliefs, estimates and opinions or other circumstances should
change. Investors should review the Company's disclosure of Risks and
Uncertainties in its Annual and Quarterly reports as filed on SEDAR in
Canada and EDGAR in the U.S., and are cautioned against attributing
undue certainty to forward-looking statements.
Cautionary Note to U.S. Investors Concerning Estimates of
Resources We advise U.S. Investors that while the terms "mineral
resource", "measured mineral resource", "indicated mineral resource"
and "inferred mineral resource" are recognized and required to be
reported by Canadian regulations, the U.S. Securities and Exchange
Commission does not recognize them. As such, information contained in
this document concerning descriptions of mineralization and resources
under Canadian standards may not be comparable to similar information
made public by U.S. companies subject to the reporting and disclosure
requirements of the U.S. Securities and Exchange Commission. "Inferred
mineral resources" have a great amount of uncertainty as to their
existence and a great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of a "mineral
resource" will ever be upgraded to a higher category. U.S. investors
are cautioned not to assume that any part or all of an "inferred
mineral resource" exists, or is economically or legally mineable. U.S.
investors are also cautioned not to assume that any part or all of the
mineral deposits in the "measured mineral resource" or "indicated
mineral resource" categories will ever be converted into reserves.
