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Electra Gold earns $101,236 in fiscal Q3 2013
2013-11-28 10:20 ET - News Release
Mr. Johan Shearer reports
ELECTRA GOLD LTD. 3RD QUARTER FINANCIALS
Electra Gold Ltd. has released its financial results for the third quarter of fiscal 2013.
The following is a summary of significant events and transactions that occurred during 2013. Specifically:
- Expiry of 1.9 million warrants on Jan. 21, 2013, and 9,124,999 warrants on Feb. 28, 2013, leaving a balance of nil warrants outstanding;
- On Feb. 11, 2013, announced the acquisition of the Palace claims, which form a 218-hectare potential graphite property in Quebec;
- On Feb. 25, 2013, announced a potential gold property acquisition via on-line staking of 638 hectares near (Monster Lake) Chibougamau, Que.;
- On March 1, 2013, the company discontinued its 70/30 option agreement on the Golden Ridge property with Auracle Resources Ltd. The terms of the agreement were payment of $25,000 cash, a reimbursement of $50,000 for mineral exploration work and 200,000 shares which were not paid;
- On March 15, 2013, the TSX Venture Exchange accepted for filing a purchase agreement dated March 2, 2013, for the 3 Monster property consisting of 10 mineral claims located near Chibougamau, Que. Total consideration was $5,000 and the issuance of two million common shares of the company;
- Barge load No. 111 was shipped on March 16, 2013;
- Barge load No. 112 was shipped on April 20 and barge load No. 113 was shipped on May 19, 2013;
- Barge load No. 114 was shipped on July 20 and barge load No. 115 was shipped on Sept. 19, 2013.
Results of operations
The company has experienced 37 consecutive quarters of commercial production. The volume of chalky geyserite shipped in the third quarter of 2013 was 21,078 tonnes (2012 -- 10,409 tonnes). In 2012, one shipment was made, and in 2013 there were two shipments made.
Cost of sales for the third quarter in 2013 was $312,393 (2012 -- $203,329) which is comparable with the same period of 2012.
Administrative expenses during the quarter ended Sept. 30, 2013, were $11,204 (Sept. 30, 2012 -- $44,941), down $33,737 compared with the same quarter in 2012.
Liquidity and solvency
The company has financed its operations to date primarily through the issuance of common shares, exercise of stock options and the sale of chalky geyserite to cement companies. The company continues to seek capital through various means including the issuance of equity and/or debt.
The financial statements have been prepared on a going-concern basis, which assumes that the company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the company are dependent upon its ability to continue to deliver a satisfactory product, raise adequate financing and to lower production costs to realize overall corporate profitability in the future coupled with lower corporate expenses.
As at Sept. 30, 2013, the company held $2,145 (Dec. 31, 2012 -- $9,901) in cash assets and had a net gain for the quarter of $101,236 (Dec. 31, 2012 -- net loss of $714,741).
Net cash use from investing activities for the period ended Sept. 30, 2013, was $94,657 compared with net cash used by investing activities of $71,900 during the period ended Sept. 30, 2012.
Financing activities during the period ended Sept. 30, 2013, were only in relation to an increase in related-party transactions of $19,325.
Capital resources
The company does not have sufficient funds to meet its operational expenses for 2013 and cover anticipated administrative expenses throughout the year, and will have to complete a financing during the year. In light of a valuation of the PEM 100 quarry completed in January, 2010, the company decided to write off the asset in the amount of $1,159,798 due to the negligible value and drain on cash flow in 2009, and $380,264 in 2010. The company has taken a further writedown during the year ended Dec. 31, 2012, in the amount of $86,849. It will continue the chalky geyserite production at its PEM 100 quarry site in Port Hardy with an effort to lower administrative and production expenses until a suitable arrangement can be found for the property. The company is searching for alternative arrangements for the property to enhance shareholder value and reduce operating expenses.
Outlook
The company's continuing focus will be on sustained production of chalky geyserite at the PEM 100 quarry in Port Hardy. The possible development of a docking port located on the west side of the island will contribute to the reduction of hauling cost for the product. The company is also working with its major customer in pricing of the chalky geyserite to facilitate the sharing of administrative costs. Based on results of current production and new product development, the company remains confident that production will be met for all outstanding orders.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Three months ended Sept. 30, 2013 2012 Sales $ 424,829 $ 207,974 Cost of sales Cost of production 299,746 184,057 Royalties 12,647 19,272 312,393 203,329 Gross profit (loss) 112,436 4,645 Expenses Amortization 6,140 1,596 Consulting fees 3,000 12,500 Directors fees - Filing fees 564 6,571 Management fees - 8,700 Office and general 1,500 9,079 Professional fees - 6,495 11,204 44,941 Other income Interest income 4 61 Unrealized gain on marketable securities - 8,000 Written-off mineral properties - (18,642) 4 (10,581) Net and comprehensive (loss) for the period $ 101,236 $ (50,877) Basic and diluted (loss) per share $ - $ -
We seek Safe Harbor.
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