Vaaldiam Reports 2010 Q3 Financial Results
TORONTO, ONTARIO -- (Marketwire) -- 11/16/10 -- Vaaldiam Mining Inc. ('Vaaldiam' or the 'Company') (TSX: VAA) reports that, for the third quarter ended September 30, 2010, following the sale of certain non-core assets in the period, it has recorded net income of $2,875,000 or $0.04 per share compared to a net loss of $31,347,000 or $0.65 for the same period in 2009.
Vaaldiam ended the third quarter with a strong cash position of $11.2 million and working capital of $9.8 million. Vaaldiam also holds 10.6 million shares in Flemish Gold Corp. ('Flemish'), which is focused on gold exploration in sub- Saharan Africa, marketable securities valued presently at approximately $1.7 million and royalties on two major exploration and development projects. In July, Flemish completed a private placement of approximately $6.6 million at $0.75 per share.
Company Highlights
-- Brauna Bulk Sampling
The Company has completed its bulk sampling program at the Brauna
kimberlite project in Bahia, Brazil, where it has a 20% interest, with
an option to increase its interest to 49%. A total of 4,909.26 dry
tonnes of kimberlite has been processed from the southern and northern
lobes of the 2 hectare Brauna 3 pipe and resulted in the recovery of
1,057.39 carats ('cts'), with an average recovered grade of 21.5 cts per
one hundred tonnes and an average stone size of 0.21 cts per stone.
-- Duas Barras Mine
Pre-production at the Duas Barras mine resumed in the third quarter of
2010, focusing on pre-stripping and plant commissioning. Diamond
recovery during the third quarter pre-production was low, with 643
carats recovered at a grade of 0.03 cts per bank cubic metre ('bcm').
Ore grade improved consistently since September with the opening of a
second mining front that exposed substantial amounts of better quality
gravels. Recovered diamond grade increased to 0.07 cts per bcm of gravel
in October with 1,060 cts being recovered, and 949 cts grading 0.15 cts
per bcm in the first 8 days of November, approaching the average
resource grade of 0.16 cts per bcm. As the wet season approaches,
management continues to monitor Duas Barras closely and may suspend
activities should rainfall prevent the accumulation of a higher grade
ore stockpile. As alluvial mining operations are less predictable than
conventional hard rock mining, management will no longer provide
production forecasts for Duas Barras.
-- Kwale Project in Kenya
On July 30, 2010, the Company closed the sale to Base Resources Limited
(ASX: BSE) ('BRL'), previously Base Iron Limited) whereby BRL would
acquire the Kwale Mineral Sands Project ('Kwale'), all the intellectual
property associated with Vaaldiam's mineral sands projects in Africa and
an option to acquire 100% of Tiomin Kenya Limited ('TKL') for US$3
million in cash on closing and a cash royalty of 1.5% of all product
revenue from Kwale.
Vaaldiam continues to pursue its strategy of using cash flow from disposing of non-core assets and alluvial diamond properties to sustain itself and to advance its high-potential hard rock diamond and gold properties in Brazil. It is well- positioned to exploit the strengthening market for rough diamonds.
Results of Operations
(Expressed in thousands of Canadian dollars):
Three Months Ended Nine months Ended
September September September September
30, 30, 30, 30,
2010 2009 2010 2009
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Income (loss) before income tax 2,875 (31,347) (1,061) (35,339)
Income (loss) per share 0.04 (0.65) (0.02) (0.73)
Selected Financial Information
(Expressed in thousands of Canadian dollars, except share capital amounts):
September
September 30, 30,
2010 2009
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Total assets 31,852 23,659
Working capital 9,787 13,572
Mineral properties 6,796 -
Share Capital:
Common shares (000s) 71,627 48,226
Warrants (000s) 9,844 10,329
Options (000s) 4,807 4,315
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Cash Flow and Liquidity
As at September 30, 2010, Vaaldiam had a working capital surplus of $9.8 million, compared with $13.6 million at September 30, 2009. For the nine months ended September 30, 2010, Vaaldiam generated cash of $9.9 million, which included proceeds of $7.3 million from the sale of the Company's interest in Pukaqaqa project in Peru, proceeds of $3.1 million on the sale of the Kwale project and proceeds of $10.0 million on the maturity of a short-term investment. This was offset by cash used in operating activities of $7.0 million and $0.7 million used in the acquisition of Vaaldiam Resources Ltd. With the current issues in the financial markets, it is important to note that the Company's treasury investment strategy ensured it was never exposed to asset backed commercial papers or sub-prime mortgages.
The information above should be reviewed in conjunction with the Company's unaudited consolidated financial statements and management discussion and analysis for the three months ended September 30, 2010 that will be available shortly on www.sedar.com and www.vaaldiam.com.
Certain of the information contained in this news release constitutes 'forward-looking statements' within the meaning of securities laws. Such forward-looking statements, including but not limited to those with respect to the prices of metals and minerals, purchase payments, royalty payments, estimated future production and estimated costs of future production involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of metals and minerals, the actual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the documents of the Company filed from time to time with the Ontario Securities Commission.
Contacts:
Vaaldiam Mining Inc.
Frances Kwong
VP Finance and CFO
416-363-6927
frances.kwong@vaaldiam.com
Vaaldiam Mining Inc.
Robert Jackson
President and CEO
416-363-6927
rjackson@vaaldiam.com
www.vaaldiam.com