OMX GOLD (TSX:QMX, StockForum) reported third quarter results with quarterly sales of 5,885 ounces gold at an average price of $1,362 per ounce and total revenue coming in at $8.11 million up from $7.38 million generated in the previous quarter. Cash cost for the sold gold totaled $978 per ounce while cash flow from operations topping out at $2.02 million, up from $1.23 million reported in the previous quarter.
This all resulted in a comprehensive net loss for the quarter of $31.74 million or $0.98 per share due to a non-cash impairment charge applied to the pending sale of the Snow Lake property in Snow Lake, Manitoba to Northern Sun Mining (formally Liberty Mines).
According to the company's news release, “As at September 30, 2013, the Company made the required interest payments on its short term loan facility, but continued to be in breach of some covenants contained in the loan agreement. As a result, the lender exercised certain of their rights under the loan agreement and limited the Company's access to certain bank accounts and was controlling certain cash disbursements, including applying funds in such accounts against interest and fees payable to them.”
It also explained, “During the quarter, the Toronto Stock Exchange ("TSX") has informed QMX Gold that it has initiated a delisting review because the market value of publicly held common shares of QMX Gold fell below levels required under TSX listing requirements.”
“The Company has been granted 120 days in which to regain compliance with all requirements for a continued listing.”
“There are no assurances as to the outcome of the delisting review, or as to whether QMX Gold common shares will remain listed on the TSX or whether an alternative listing will be achieved.”
Brett New, president and CEO of QMX GOLD, commented on the quarter, “"The results of our cost reduction plan have shown progress with a decrease in our operational cash costs. I'm also pleased to report that the Aurbel Mill continues to perform well in processing ore from the Lac Herbin mine and under the custom milling arrangement, which has generated additional cash flow for the company.”
Mr. New added, "In the third quarter, QMX Gold continued to be affected by weakness in the price of gold, which hindered the company from finding an equity solution to finance the Snow Lake Mine. Subsequently, an alternate solution had to be found to address the loan facility coming due in November 2013.”
He then concluded, “Because of this, Management and the Board decided that the best option was to divest the Snow Lake property and focus efforts on obtaining further custom milling opportunities, while also looking for other strategic opportunities in Quebec.”
QMX GOLD was in the news recently when they signed a waiver and amendment agreement with Third Eye Capital.
Shares dropped 14.29% on the news to $0.03 per share.
Currently there are 32,542,650 outstanding shares with a market cap of $976,280.