TORONTO--(BUSINESS WIRE)--Almonty Industries Inc. (“Almonty” or the “Company”) (TSX-V:AII) today announced the filing of its audited consolidated financial statements, management discussion & analysis (“MD&A”) and annual information form (“AIF”) for the year ended September 30, 2016. Unless otherwise indicated, all currency amounts contained in this news release are in thousands of Canadian dollars.
The following financial information is for the three months and years ended September 30, 2016, and 2015:
| Three Months | Three Months | Three Months | Year | Year | |||||||
| Ended | Ended | Ended | Ended | Ended | |||||||
| 30-Sep-16 | 30-Sep-15 | 30-Jun-16 | 30-Sep-16 | 30-Sep-15 | |||||||
| $'000 | $'000 | $'000 | $'000 | $'000 | |||||||
| Gross Revenue | 10,472 | 8,415 | 8,280 | 37,310 | 36,142 | ||||||
| Mine production costs | 4,996 | 10,930 | 6,733 | 26,204 | 31,192 | ||||||
| Inventory write-down | 1,650 | 6,551 | - | 6,765 | 6,551 | ||||||
| Mine impairment | 5,345 | 1,708 | - | 5,345 | 1,708 | ||||||
| Depreciation and amortization | 2,011 | 2,413 | 1,089 | 8,200 | 8,545 | ||||||
| Earnings (loss) from mining operations | (3,530) | (13,187) | 458 | (9,204) | (11,854) | ||||||
| General and administrative costs | 2,645 | 1,871 | 2,561 | 8,962 | 6,339 | ||||||
| Earnings (loss) before the under noted items | (6,175) | (15,058) | (2,103) | (18,166) | (18,193) | ||||||
| Interest expense | 1,044 | 564 | 574 | 2,709 | 1,404 | ||||||
| Foreign exchange (gain) loss | 490 | 1,017 | 28 | (360) | 1,313 | ||||||
| Non-controlling interest | - | (774) | - | - | (747) | ||||||
| Tax provision | 676 | (2,684) | 376 | 660 | (618) | ||||||
| Net income (loss) for the period | (8,385) | (13,181) | (3,081) | (21,175) | (19,545) | ||||||
| Income (loss) per share basic | ($0.08) | ($0.22) | ($0.05) | ($0.22) | ($0.38) | ||||||
| Income (loss) per share diluted | ($0.08) | ($0.22) | ($0.05) | ($0.22) | ($0.38) | ||||||
| Dividends | - | - | - | - | - | ||||||
| Cash flows provided by (used in) operating activities | 560 | 2,088 | (2,544) | (1,566) | 798 | ||||||
| Cash flows provided by (used in) investing activities | (3,382) | (4,671) | (3,918) | (13,030) | (16,116) | ||||||
| Cash flows provided by (used in) financing activities | 1,957 | (800) | 8,008 | 17,926 | 727 | ||||||
| 30-Sep-16 | 30-Sep-15 | ||||
| $'000 | $'000 | ||||
| Cash | 4,215 | 866 | |||
| Restricted cash | 1,336 | 1,223 | |||
| Total assets | 167,766 | 117,527 | |||
| Bank indebtedness | 4,456 | 1,794 | |||
| Long-term debt | 56,497 | 44,435 | |||
| Shareholders’ equity | 35,569 | 49,002 | |||
| Other | |||||
| Outstanding shares (‘000) | 110,896 | 86,482 | |||
| Weighted average outstanding shares (‘000) | |||||
| Basic | 107,871 | 51,787 | |||
| Fully diluted | 107,871 | 51,787 | |||
| Closing share price | $0.27 | $0.68 |
Earnings from mining operations, excluding non-cash impairment charges and inventory write-downs, was $3,465 during Q4, 2016 as a result of the addition of the more cost-efficient production from the Company’s Panasqueira Mine and the curtailment of production at the Company’s higher cost Wolfram Camp Mine when compared to a loss of ($4,928) in Q4 2015
This represents an increase of $8,393, a 170% reversal of the loss form Q4 2015. The positive earnings from mining operations, excluding non-cash impairment charges and inventory write-downs, in Q4 2016 would have been higher had the price of APT remained constant as opposed to decreasing to US$190 per MTU of APT during Q4 2016, a decrease of over 9% when compared to the price of US$209 experienced during Q4 2015.
Almonty ceased production at the Wolfram Camp Mine in Q2, 2016 while it continues with the optimization of the milling circuit and revises the mine plan. The Company anticipates that unit production costs will decrease significantly when production restarts once the optimization has been completed.
Almonty also announces that it issued a secured promissory note (the “2017 Note”) for aggregate gross proceeds of US$1.0 million (the “2017 Note Financing”). The Note was issued to Deutsche Rohstoff AG (“DRAG”), an existing shareholder of, and lender to, Almonty, and will mature on January 1, 2019, and bears interest at a rate of 6% per annum, payable semi-annually on July 1, and January 1 each year in cash or, subject to approval of the TSX Venture Exchange, shares at the option of Almonty, up to the maturity date. To the extent interest is paid in shares, such shares would be issued at the 5-day volume weighted average price on the day prior to the issuance.
Almonty has also reached an agreement with DRAG to extend the US$1.0 million promissory note issued on January 1, 2016 (the “2016 Note”) and originally due on January 1, 2017 to January 1, 2019 and to provide for interest to be paid in cash or, subject to approval of the TSX Venture Exchange, shares at the option of Almonty at the maturity date (the “2016 Note Amendments”).
The 2017 Note is secured by the existing security granted to DRAG in connection with their existing $4 million debenture and 2016 Note.
The 2017 Note Financing and 2016 Note Amendments each constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions (“MI 61-101”). For these transactions, Almonty is relying on the exemption from the formal valuation requirements of MI 61-101 contained in section 5.5(b) of MI 61-101 and on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(a) of MI 61-101.
The 2017 Note Financing closed on January 230, 2017 and will be funded in two tranches. The first tranche of US$500,000 was received on closing and the second tranche is due to close on or before March 15, 2017. Almonty intends to use the net proceeds of the 2017 Note Financing for working capital and general corporate purposes
Lewis Black, Chief Executive Officer of Almonty, commented, “These results are testament to the strength of the Almonty team. We have dramatically reduced costs and improved numerous efficiencies in all areas of the company in what has been one of the lowest price environments in Tungsten over the past 30 years. Notwithstanding the various challenges of the past year, we are now uniquely positioned as the largest Non-Chinese multi mine producer to capture the upside of the currently increasing Tungsten price.
Sangdong continues to garnish significant interest, not only from our ongoing negotiations with an Industry participant, but also from numerous other areas within our industry. There is now a serious supply issue for concentrate in the West and multiple parties are expressing significant interest in working with us on the development of Sangdong. We feel that the way Almonty has demonstrated its strength in being able to succeed in this bear market, consolidate the sector and demonstrate cost competitiveness with Chinese producers has built on our reputation within the industry as the leading operator in Tungsten outside of China.
About Almonty
The principal business of Toronto, Canada-based Almonty Industries Inc. is the mining, processing and shipping of tungsten concentrate from its Los Santos Mine in western Spain and its Panasqueira mine in Portugal as well as the refurbishment of its Wolfram Camp Mine in north Queensland, Australia, the development of its Sangdong tungsten mine in Gangwon Province, South Korea and the development Valtreixal tin/tungsten project in north western Spain. The Los Santos Mine was acquired by Almonty in September 2011 and is located approximately 50 kilometres from Salamanca in western Spain and produces tungsten concentrate. The Wolfram Camp Mine was acquired by Almonty in September 2014 and is located approximately 130 kilometres west of Cairns in northern Queensland, Australia and has produced tungsten and molybdenum concentrate, although the Wolfram Camp Mine is not currently producing due to ongoing refurbishment of the processing plant. The Panasqueira mine, which has been in production since 1896, is located approximately 260 kilometres northeast of Lisbon, Portugal, was acquired in January 2016 and produces tungsten concentrate. The Sangdong mine, which was historically one of the largest tungsten mines in the world and one of the few long-life, high-grade tungsten deposits outside of China, was acquired in September 2015 through the acquisition of a 100% interest in Woulfe Mining Corp. Almonty owns 100% of the Valtreixal tin-tungsten project in north-western Spain. Further information about Almonty’s activities may be found at www.almonty.com and under Almonty’s profile at www.sedar.com.
