Medoro Announces 2010 Second Quarter Financial Results
TORONTO, ONTARIO -- (Marketwire) -- 08/16/10 -- All amounts are in Canadian dollars, unless otherwise stated.
Medoro Resources Ltd. (TSX VENTURE: MRS) announced today unaudited consolidated financial results for the three and six month periods ended June 30, 2010 ('Q1 2010'). For Q2 2010, Medoro reported a net loss of $2.7 million or $0.01 per share compared to a net loss of $2.1 million or $0.01 per share in Q1 2010. For the six months ended June 30, 2010, the Company reported a loss of $4.8 million or $0.01 per share as compared to a loss of $1.2 million or $0.01 per share in the same period last year.
The increase in net loss of $0.6 million was primarily a result of administrative expenses incurred due to increased exploration and mining activities in Colombia as well as depreciation expense on the Mineros Nacionales mineral rights offset by increased gross profit from mining activities as well as the effects of foreign exchange gains on US cash equivalents.
As at June 30, 2010, the Company had $32 million net working capital, including cash and short-term investments of $41.4 million and no debt. Mineros Nacionales S.A., which was acquired on February 15, 2010, owns the Zona Baja license at the Marmato Project and operates the Mineros Nacionales underground gold mine. During the three months ended June 30, 2010, Mineros Nacionales produced 6,907 ounces of gold and 10,917 ounces of silver, and sold 6,618 ounces of gold and 10,505 ounces of silver at weighted average prices of approximately US$1,197 per ounce and US$18.43 per ounce, respectively. The weighted average cash cost(1) per ounce of gold produced was approximately US$844, net of silver by-product credits. The Company had no revenues in Q2 2009.
Medoro is in the process of completing an agreement with Gran Colombia Gold S.A. under which Medoro and Gran Colombia Gold will establish a joint venture to operate and develop the Frontino Gold Mines Ltd. gold assets, expected to be acquired by Gran Colombia later this week. Pursuant to the joint venture agreement, also expected to be executed later this week, Gran Colombia will hold 95% of the joint venture company ('JVCo') and Medoro will retain a full 5% interest in JVCo until the earlier of one year after the Effective Date (the 'Expiry Date') or the date that Medoro exercises its Back-In Right. In terms of its Back-In Right, Medoro has up to one year from the Effective Date to acquire a further 45% of the then issued and outstanding shares of JVCo. After the Expiry Date Medoro's 5% interest becomes a participating interest and the Company will be obliged to make pro rata contributions to the capital and operating costs of JVCo or be diluted. For further information please refer to Medoro's website at www.medororesources.com or review the company's profile on SEDAR at www.sedar.com.
As of August 4, 2010 all of the issued and outstanding common shares of Medoro were consolidated on a three-for-one basis.
(1) Non-GAAP Measures
This press release refers to cash cost per ounce of gold produced because certain investors may use this information to assess the Company's performance and also determine the Company's ability to generate cash flow for investing activities. This measurement captures all of the important components of the Company's production costs. In addition, management utilizes this metric as an important management tool to monitor cost performance of the Company's operations. This measurement has no standardized meaning under Canadian generally accepted accounting principles ('Canadian GAAP') and is therefore unlikely to be comparable to similar measures presented by other companies. This measurement is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP.
About Medoro Resources Ltd.
Medoro Resources Ltd. is a gold exploration, development and mining company with a primary emphasis on Colombia. The Company operates the producing Mineros Nacionales gold mine located in Zona Baja at Marmato and is conducting an exploration and in-fill drilling program at its Marmato Project to upgrade and expand its gold resources there.
Medoro also holds a 100% interest in the Lo Increible 4A and 4B concessions in Venezuela where it is continuing its efforts to obtain an exploitation permit to allow development of these gold properties when circumstances in Venezuela allow. Medoro owns interests in gold exploration properties in Mali in respect of which it is seeking possible joint venture partners to further explore these properties.
Additional information on Medoro Resources Ltd. can be found on the Company's website at www.medororesources.com and by reviewing the Company's profile on SEDAR at www.sedar.com.
This news release contains 'forward-looking information', which may include, but is not limited to, statements with respect to the future financial or operating performance of Medoro and its projects, and transactions which have not yet closed. Often, but not always, forward-looking statements can be identified by the use of words such as 'plans', 'expects', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates', or 'believes' or variations (including negative variations) of such words and phrases, or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Medoro to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Medoro disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Medoro Resources Ltd.
John Hick
President & CEO
(416) 603-4653
Medoro Resources Ltd.
Linda Dorrington
Director, Investor Relations
(416) 603-4653