VANCOUVER, British Columbia, Nov. 27, 2017 (GLOBE NEWSWIRE) -- Contact Gold Corp. (the "Company" or "Contact Gold") (TSXV:C) is pleased to announce its financial and operating results for the nine months ended September 30, 2017.
As of September 30, 2017, the Company has approximately $9 million available in cash and cash equivalents, with no significant balance of accounts payable or accruals due.
An aggressive 8,000-9,000 metre reverse circulation ("RC") and core drill program designed to offset and expand the footprint of gold mineralization continues at the Company’s Pony Creek gold project on the South Carlin Trend in Nevada. The program began on July 24, 2017, and is expected to run into December 2017.
Highlights of results reported (see news releases dated October 4, 2017 and November 2, 2017) to date include:
- 2.82 grams per tonne ("g/t") gold ("Au") over 45.72 metres in drill hole PC17-010
- 0.78 g/t Au over 79.25 metres in drill hole PC17-007
- 1.36 g/t Au over 43.74 metres in drill hole PC17-024
- 0.65 g/t Au over 65.53 metres in drill hole PC17-03
- 0.41 g/t Au over 47.24 metres in drill hole PC17-01
- 0.61 g/t Au over 47.24 metres in drill hole PC17-017
- 0.82 g/t Au over 19.81 metres in drill hole PC17-014
- 0.92 g/t Au over 15.24 metres in drill hole PC17-09
To date, the Company has completed 23 RC and 3 core holes totaling approximately 6,300 metres of drilling, with an expected 2,600 metres remaining in the 2017 program. Exploration activities and the related budget for the remainder of 2017 will continue to focus on Pony Creek with drilling planned at the Bowl zone, host to a historical mineral resource, and in follow-up on results from historic drilling at the "Pony Creek North" target, approximately three kilometres to the north of the Bowl zone. Geophysical, geochemical, permitting and target generation activities are also expected to continue through the end of the year.
Results from ten drill holes are currently pending; all drill holes drilled and reported by Contact Gold have intersected gold mineralization. The Company expects to report drill results regularly through the remainder of 2017 and into 2018 as programs continue.
The 2017 exploration budget is approximately $4.2 million, of which approximately $3.5 million has been spent.
Selected financial data
Details of financial results for the three and nine months ended September 30, 2017 are described in the unaudited condensed interim consolidated financial statements and related notes thereto (the “Interim Financial Statements”), and the corresponding MD&A, copies of which are available on SEDAR at www.sedar.com.
The following selected financial data is derived from the Interim Financial Statements, as prepared in accordance with International Financial Reporting Standards. All dollar amounts are presented in Canadian dollars unless otherwise stated.
| Attributable to shareholders: | Three months ended September 30, 2017 |
Nine months ended September 30, 2017 |
||
| Loss for the period | $163,165 | $1,000,611 | ||
| Loss and comprehensive loss for the period | $1,663,222 | $4,069,546 | ||
| Basic and diluted loss per share | $ 0.00 | $ 0.03 | ||
| As at September 30, 2017 | As at December 31, 2016 | ||||
| Cash | $8,989,141 | $ -nil | |||
| Working capital/(deficit) | $9,082,615 | ($1,005,471) | |||
| Total assets | $48,070,297 | $731,673 | |||
| Current liabilities | $706,493 | $1,005,471 | |||
| Preferred shares | $10,363,508 | $ -nil | |||
| Shareholders’ equity/(deficit) | $37,000,296 | ($273,798) | |||
Consistent with IFRS accounting standards for a reverse takeover (“RTO”) transaction, the number of common shares issued and outstanding at September 30, 2017 (50,346,986)(and that which is reflected at December 31, 2016, having adjusted retrospectively for the 8-for-1 share rollback: 2,769,486) are those of Contact Gold, the legal entity, while the values reflected are those of Carlin Opportunities Inc., the accounting acquirer.
Losses attributable to shareholders for the three and nine months ended September 30, 2017 of $0.16 million and $1.00 million, respectively, reflect primarily (i) non-cash expenses arising from the RTO transaction ($2.2 million “listing expense”), (ii) exploration and evaluation of the Company’s exploration property interests ($1.94 million and $2.02 million for the three and nine months ended September 30, 2017, respectively), and (iii) costs incurred for professional, legal and advisory fees, wages and salaries and for investor relations activities, net of a fair value adjustment recognized on the embedded derivatives within the Preferred Shares (gain of $2.61 million and $4.48 million for the three and nine months ended September 30, 2017, respectively) and foreign currency gains of $0.28 million and 0.62 million for the three and nine months ended September 30, 2017, respectively). During the nine months ended September 30, 2017, exploration and evaluation expenditures predominantly related to activity at the Pony Creek property with the commencement of an active drill program in July. Approximately $1.82 million in expenditures had been incurred through period end for exploration at Pony Creek.
Other comprehensive loss attributable to shareholders for the three and nine months ended September 30, 2017, was $1.50 million and $3.07 million respectively, and reflects the foreign currency impact arising on the post-acquisition carrying value of the Contact Gold Properties.
Net cash operating outflows for the nine-month period ended September 30, 2017 of $3.33 million reflects settlement of balances due to service providers and vendors after closing of the transactions to create Contact Gold (the “Transactions”).
The Company’s has elected to capitalize mineral property acquisition costs and expense exploration expenditures as incurred. Total assets at September 30, 2017 comprise primarily the exploration and evaluation assets of $38.09 million, including the acquisition “bump” of $35.01 million attributed to, and subsequently allocated across, the individual properties acquired by Contact Gold, net of a $3.07 million foreign currency adjustment, and $8.99 million in cash and cash equivalents. At December 31, 2016, total assets included $0.72 million in expenditures deferred in advance of closing the Transactions. Some of the deferred balance at year end was subsequently included as part of the $0.59 million in cost capitalized to the acquisition of the Contact Gold Properties, while a portion was included within the total of $1.56 million share issue costs, offsetting the value of share capital.
Total liabilities at September 30, 2017 and December 31, 2016, include the value of the Preferred Shares ($10.36 million), and accounts payable and accruals ($0.71 million). The Preferred Shares were concluded to be a form of obligation, and have been included as a non-current liability. The terms and conditions of the Preferred Shares are detailed in the Interim Financial Statements. The accounting value of the Preferred Shares reflects both a “host” component of the instrument and certain embedded derivatives. At inception these were determined to be $8.14 million and $6.85 million, respectively. The fair values of each will change from period to period, including (i) an accretion to the host, (ii) a fair value adjustment, and the (iii) the impact of foreign exchange on the embedded derivatives ($0.46 million, $4.48 million gain, and $0.62 million gain, respectively in the period from issuance to September 30, 2017).
Options award
The Company also announces that its Board of Directors has resolved to grant an aggregate of 200,000 incentive stock options ("Options") to acquire common shares of the Company pursuant to the Company's Stock Option Plan (the "Plan") to certain employees of the Company, subject to the applicable policies of the TSX Venture Exchange.
The Options were awarded are exercisable at $0.58 per share, vesting in thirds at the end of each successive year, and will expire in accordance with the Plan and not later than November 24, 2022.
About Contact Gold Corp.
About Contact Gold Corp. Contact Gold is a gold exploration company focused on leveraging its properties, people, technology and capital to produce district scale gold discoveries in Nevada. Contact Gold’s extensive land holdings are on the prolific Carlin, Independence and Northern Nevada Rift gold trends which host numerous gold deposits and mines. Contact Gold’s land position comprises 29,530 hectares (295 square kilometres) of target rich mineral tenure hosting numerous known gold occurrences, ranging from early- to advanced-exploration and resource definition stage.
