CaNickel Announces Second Quarter 2011 Financial Results and Debt Facility Arrangment
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/26/11 -- CANICKEL MINING LIMITED, formerly 'Crowflight Minerals Inc.', ('CaNickel' or the 'Company') (TSX: CML) announce its financial results for the second quarter of 2011 ended June 30, 2011. Complete interim condensed financial statements and related Management's Discussion and Analysis are filed under the Company's profile on www.sedar.com. All amounts are in Canadian dollars unless otherwise indicated.
Highlights for the Second Quarter of 2011
-- Net loss for the three months ended June 30, 2011 was $4.5 million
compared to loss of $5.9 million in same period last year.
-- Mining operation at Bucko Lake Mine was resumed on April 22, 2011 and
mill was re-commissioned on June 16, 2011 after the operation suspended
in October 2010. In the second quarter of 2011, the Company mined 14,192
tonnes of ores and milled 9,723 tonnes of ore to produced 190,304 pounds
of nickel compared to a total of 67,189 tonnes of ore mined, and a total
of 58,605 tonnes of milled to produced a total of 1.2 million pounds of
nickel in same period last year;
-- Exploration program of 5,202 metres diamond drilling completed at M11A
North Deposit of the Company's Thompson Nickel Belt Exploration
Properties and intersected 9.98 metres of 2.35% nickel;
-- Raised US$5.0 million through a loan facility to address any potential
issue during the restart of operation at Bucko Lake Mine; and,
-- Working capital improved to a deficit of $2.5 million with cash and cash
equivalent of $1.1 million on hand as at June 30, 2011 compared to
working capital of deficit of $24.6 million with cash and cash
equivalent of $4.1 million on hand as at December 31, 2010.
Outlook for the Third Quarter of 2011
The Company expects to complete the backfill paste plant upgrade construction and obtain all necessary permits for the expansion of the tailing facilities in the third quarter 2011 or in October 2011.
There is no change to the Company's 2011 production guidance, and the Company expects to ramp up the mining operation to 1,000 tonnes per day in the third quarter 2011 from the current averaging 550 tonnes per day level.
Debt Facility of Up to US$15 Million
The Company also announced that the Company has entered into another one year term debt facility of up to US$15 million (the 'Facility') with Luckyup Investment Limited, an arms' length party based in Hong Kong. The Facility may be drawn down in the option of the Company and bears interest rate of 12% per annum. The Company intends to use the funds from the Facility to meet the capital investment needs of the Company to complete the upgrade of backfill paste plant and the expansion of tailing facilities, and to retire the Loan of US$5.0 million arranged in May 2011 from Hebei Wenfeng Industrial Group Limited ('Hebei Wenfeng'), the largest shareholder of the Company (please also refer to our press release dated May 30, 2011 regarding the loan facility with Hebei Wenfeng), to minimize transactions with related parties.
The Facility involves no equity or voting component and is designed to minimize the dilution to current shareholders' interest but meets the current capital investment needs of the Company.
About CaNickel Mining Limited.
CaNickel Mining Limited, formerly 'Crowflight Minerals Inc.', (TSX: CML) is a Canadian junior mining company that owns and operates the Bucko Lake Nickel Mine near Wabowden, Manitoba. The Company also holds nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.
Further information is available on the Company's website at www.canickel.com.
Cautionary Note on Forward-Looking Information
This press release contains forward-looking statements under Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved'. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks of the Company described in its annual information form that is available under its profile on SEDAR at www.sedar.com. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
Contacts:
CaNickel Mining Limited
Derek Liu
CFO and Corporate Secretary
778-372-1806
604-254-8863 (FAX)
www.canickel.com