Yellowhead Mining Inc. Reports Financial and Operating Results for Fourteen
Months Ended December 31, 2012
VANCOUVER, March 28, 2013 /CNW/ - Yellowhead Mining Inc. ("Yellowhead" or the
"Company") (TSX: YMI, OTCQX: YHMGF) is pleased to report its results of
operations for the fourteen months ended December 31, 2012.
For the full consolidated Financial Statements and Management Discussion &
Analysis, please visit SEDAR at www.sedar.com or the Company's web site,
Key highlights for the fourteen months ended December 31, 2012 and subsequent
-- Detailed NI 43-101 compliant amended feasibility study was
completed and filed on March 29, 2012 and restated and amended
as of January 25, 2013 (the "Feasibility Study").
-- Released an updated Resource estimate with Measured and
Indicated Resources at a 0.2% copper cut-off grade are
estimated as: Copper - 5.3 Billion pounds, Gold - 838,600
ounces and Silver - 34 Million ounces.
-- Purchased a former Weyerhaeuser Company Ltd. sawmill property
which has a 1,880m rail siding connecting to the Canada
National Railway's transcontinental mainline. This property
will be used for a rail load-out facility located 25km by road
from the Harper Creek project mill site, as a staging area
during construction and for a mine administration office.
-- The Environmental Assessment study at Harper Creek was advanced
with the completion of a comprehensive baseline study program.
The application will be filed in the second quarter of 2013.
-- Changed the financial year end from October 31 to December 31
effective for the 2012 financial year.
-- Adopted a shareholder rights plan to ensure the fair treatment
of all shareholders in the event of a takeover bid or change of
-- Common shares began trading on the Toronto Stock Exchange
("TSX") main board, previously listed on the TSX Venture board.
-- Common shares began trading on the OTCQX International
-- Completed a non-brokered private placement of 8,032,307 common
shares of the Company at an issue price of $0.65 per common
share for gross proceeds of $5,221,000 and 2,141,403
flow-through common shares of the Company at an issue price of
$0.70 per flow-through common shares for gross proceeds of
-- Engaged Evercore Group L.L.C. to provide financing advisory
services and to assist in the evaluation of strategic
partnership and financing alternatives for Harper Creek.
The Company's plans for 2013 and beyond are to:
-- Explore financing options in order to finance the development
of Harper Creek, including but not limited to: strategic
investors and/or partnerships, project and equipment financing,
stock offerings and off-take agreements.
-- Continue the process of environmental permitting through 2013
following the submission of the Environmental Assessment
application in the second quarter of 2013.
-- Prepare and submit the Company's applications for a British
Columbia Mines Act Permit for Harper Creek.
-- Continue consultation with the First Nations and local
communities to address any potential environmental and
socio-economic impacts of Harper Creek and the Company's
-- Continue negotiations with the local First Nations working
towards conclusion of a long term Benefits Agreement.
-- Continue exploration activities to better define the
resource/reserve at Harper Creek.
Summary of Key Financial Highlights
Yellowhead has no revenue from operations. Results can fluctuate
significantly from period to period due to the level of engineering and
environmental study effort and resource drilling.
The Company's expenditures on the Harper Creek project for the fourteen months
ended December 31, 2012, were as follows:
Capitalized Evaluation and expenditures
Mineral exploration on Harper
interests expenses Creek
Balance, October 31, 2011 $ 834,026 $ 19,704,383 $ 20,538,409
Net Additions 51,209 9,593,257 9,644,466
Balance, December 31, 2012 $ 885,235 $ 29,297,640 $ 30,182,875
The Company's net loss for the three months ended December 31, 2012, three
months ended September 30, 2012, three months ended June 30, 2012, three
months ended March 31, 2012, two months ended December 31, 2011 and the
quarterly periods from the prior fiscal year are as follows:
2012 (1)) 2011
Quarter Ended 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 31-Oct 31-Jul 30-Apr 31-Jan
expenses $ 1,881 $ 908 $ 1,139 $ 994 $ 691 $ 878 $ 1,423 $ 1,816 $ 679
expenses 2,845 2,093 913 1,520 2,222 3,091 3,822 1,367 1,362
(income) (11) (14) 6 (13) (25) (62) (55) (21) 1,177
Net loss and
loss for the
period 4,715 2,987 2,058 2,501 2,888 3,907 5,190 3,162 3,218
per share for
the period $ 0.08 $ 0.06 $ 0.04 $ 0.05 $ 0.05 $ 0.07 $ 0.13 $ 0.09 $ 0.10
(1) Due to the Company's prospective change in fiscal year end from
October 31, 2012 to December 31, 2012, the period ended
December 31, 2011 is two months long and all other disclosed
periods are three months long.
The Company's administrative expenses for the three months ended December 31,
2012, were approximately $973K higher than for the three months ended
September 30, 2012. This increase was due to three major expenses that were
incurred in the three months ended December 31, 2012 and not incurred in other
periods. These three major expenses were: (1) the Company incurred
approximately $284K related to severance payments to the former CEO; (2) the
Company accrued approximately $202K related to annual bonuses for employees;
and (3) the Company paid approximately $400K to BC Hydro for an Identification
Phase study which is being partially funded by the Company and is studying an
upgrade to the power infrastructure in the North Thompson Valley.
Exploration costs were $752K higher for the three months ended December 31,
2012 compared to the three months ended September 30, 2012. This increase is
due to three main factors: (1) The Company recognized an adjustment of
approximately $652K in the three months ended December 31, 2012 as a result of
an audit of its Mineral Exploration Tax Credit by the Canada Revenue Agency;
(2) The Company spent approximately $717K related to an in-fill drilling
program which started in November; and (3) The Company incurred $596K less in
mine permitting costs in the three months ended December 31, 2012 as compared
to the three months ended September 30, 2012.
Other expenses/(income) for the three months ended December 31, 2012, were in
line with the three months ended September 30, 2012.
Cash and Cash Equivalents
The Company had cash and cash equivalents of $7.06M as at December 31, 2012
compared to cash and cash equivalents of $15.67M as at October 31, 2011.
The Company's focus, going forward, is expediting the development of the
Harper Creek project. Major activities include completing the Environmental
Assessment process, advancing the Mine Permitting process and pursuing funding
activities to develop the Harper Creek project. Following the completion of
the private placement announced by the Company on October 31, 2012, the
Company believes its current working capital is sufficient to keep advancing
its Harper Creek project in the permitting process. However, additional
funding will be required by the Company to finance the development of Harper
International Financial Reporting Standards ("IFRS")
The Company has completed its transition to IFRS with a transition date of
November 1, 2010. Details of the adjustments under IFRS and reconciliations
between previously reported numbers under Canadian GAAP and IFRS are provided
in Note 22 of the Company's consolidated financial statements for the fourteen
months ended December 31, 2012.
Fiscal year end change
The Company has prospectively changed its fiscal year end date from October
31(st) to December 31(st). In accordance with relevant legislation the
Company prepared condensed consolidated interim financial statements for the
periods ending and as at December 31, 2011, March 31, 2012, June 30, 2012 and
September 30, 2012 for the current fiscal year. The Company's annual
financial statements are for the fourteen months ended December 31, 2012.
About Yellowhead Mining Inc.
Yellowhead's Harper Creek Project is a copper-gold-silver volcanogenic
sulphide deposit located in south-central British Columbia, approximately 150
kilometers by highway north of Kamloops. The Feasibility Study, dated and
filed on SEDAR on March 29, 2012 and restated and amended as of January 25,
2013 (and available for review on SEDAR and Yellowhead's website) shows an
after-tax NPV(8) of US$465.3 million with an IRR of 17.0% based on long-term
metal price projections of US$2.50/lb Cu, US$1,250/oz Au and US$20/oz Ag, and
a US$:Cdn$ exchange rate of 0.86:1. The Feasibility Study demonstrated a 28
year project life at a milling rate of 70,000 tpd (25.55Mt/y). The project as
designed is expected to produce a total of 3.63 billion pounds of copper,
372,000 ounces of gold and 14 million ounces of silver contained in
At a 0.14% Cu cutoff, Proven Reserves are estimated at 401.18Mt @ 0.272% Cu,
0.031g/t Au and 1.15g/t Ag; Probable Reserves 303.22Mt @ 0.248% Cu, 0.027g/t
Au and 1.13g/t for a total Proven and Probable Reserve of 704.4Mt @ 0.262% Cu,
0.029g/t Au and 1.14g/t Ag.
The Feasibility Study is based on an updated resource. At a 0.20% Cu cutoff
Measured Resources are estimated at 348.5Mt at 0.31 % Cu, 0.034g/t Au, 1.3g/t
Ag; Indicated Resources at 466.5Mt at 0.28% Cu, 0.03g/t Au, 1.3g/t Ag for a
total Measured and Indicated Resource of 815Mt at 0.29% Cu, 0.032g/t Au and
1.3g/t Ag (5.26 billion pounds of copper contained). A further 80.17Mt at
0.30% Cu, 0.033g/t Au, and 1.4g/t Ag are estimated in the Inferred Resource
category (0.53 billion pounds of copper contained) and are reported as waste
in the mine production schedule until they can be upgraded by additional
Yellowhead has a 100% interest in the Harper Creek Project (subject to the
payment of a 3% NSR royalty capped at $2.5 million, adjusted for inflation and
an additional 2.5% NSR royalty on an estimated 1.5 Mt of ore which is expected
to be mined beginning in year 16 of the Feasibility Study mine plan).
T. Gregory Hawkins, Interim Chief Executive Officer of the Company and a
Qualified Person under NI 43-101, has reviewed and approved the technical
content of this press release other than the analytical results of the Harper
Creek drill program disclosed in this release.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain
"forward-looking information" within the meaning of applicable securities
laws. Forward-looking information is frequently characterized by words such as
"plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and
other similar words, or statements that certain events or conditions "may" or
"will" occur. Forward-looking statements are based on the opinions and
estimates of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those anticipated in the
forward-looking statements, including, among others, the accuracy of mineral
grades and related assumptions, inherent operating risks, planned
expenditures, proposed exploration and development at the Harper Creek
Project, operating and economic aspects of the Harper Creek Project, as well
as those risk factors identified in the Company's Annual Information Form
filed under the Company's SEDAR profile. Yellowhead undertakes no obligation
to update forward-looking information if circumstances or management's
estimates or opinions should change except as required by law. The reader is
cautioned not to place undue reliance on forward-looking statements. More
detailed information about potential factors that could affect projected
results is included in the documents filed from time to time with the Canadian
securities regulatory authorities by Yellowhead.
This news release includes disclosure of scientific and technical information,
as well as information in relation to the calculation of mineral resources and
reserves, with respect to the Harper Creek Project. Yellowhead's disclosure of
mineral resource and reserve information is governed by National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") under the
guidelines set out in the Canadian Institute of Mining, Metallurgy and
Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as may be amended from time to time by the CIM
("CIM Standards"). There can be no assurance that mineral resources will
ultimately be converted into mineral reserves. Mineral resources are not
mineral reserves and do not have demonstrated economic viability. This news
release uses the terms "measured", "indicated" and "inferred" resources. U.S.
persons are advised that while such terms are recognized and required by
Canadian regulations, the U.S. Securities and Exchange Commission does not
recognize them. "Inferred Resources" have a great amount of uncertainty as to
their existence and as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred resource will ever be upgraded to
a higher category. Under Canadian rules, estimates of inferred resources may
not form the basis of feasibility or other economic studies. U.S. persons are
cautioned not to assume that all or any part of measured or indicated
resources will ever be converted into reserves. U.S. persons are also
cautioned not to assume that all or any part of an inferred mineral resource
exists, or is economically or legally mineable.
Ronald Handford, Executive Vice President, Corporate Development
604.681.1709 Ext. 204 Email:email@example.com
SOURCE: Yellowhead Mining Inc.
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CO: Yellowhead Mining Inc.
ST: British Columbia
NI: MNG ERN
-0- Mar/28/2013 22:30 GMT
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