Geomark Announces First Quarter 2011 Results
02 Giugno 2011 - 11:00PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
Geomark Exploration Ltd. (Geomark or the Company) (TSX VENTURE:GME) is pleased
to announce its operating and financial results for the first quarter ended
March 31, 2011. The quarterly report is summarized in this release, with the
complete version of the related condensed consolidated financial statements and
notes, as well as management's discussion and analysis, available on the System
for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on
Geomark's website at www.geomark.ca
Highlights
December 31, March 31,
As at and for the three months March 31, 2010 2010
ended 2011 Restated (1) Restated (1)
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Financial ($ 000s, except $ per share)
Revenue
Mineral Division 175 179 70
Oil and Gas Division 414 443 573
Funds Flow (2) 122 300 204
Per Share Basic (3) 0.00 0.01 0.00
Per Share Diluted (3) 0.00 0.01 0.00
Cash Flow (Deficiency) from Operations (162) (1) 23
Per Share Basic (3) (0.00) (0.00) 0.00
Per Share Diluted (3) (0.00) (0.00) 0.00
Net Earnings (Loss) (27) 186 (166)
Per Share Basic (3) (0.00) 0.00 (0.00)
Per Share Diluted (3) (0.00) 0.00 (0.00)
Capital Expenditures
Mineral Division 677 179 -
Oil and Gas Division 4 8 157
Total Assets
Mineral Division 40,826 40,382 30,843
Oil and Gas Division 13,320 12,641 9,991
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Oil and Gas Operations
Barrels of Oil Equivalent (BOE)
per day (4) 139 125 161
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(1) The comparative highlights have been restated with the adoption of
International Financial Reporting Standards (IFRS).
(2) Funds flow is not a recognized measure under IFRS. For these purposes,
the Company defines funds flow as funds provided by operations after
including investment dividend and interest income and the changes in
non-cash investing working capital related to these sources of
investment income.
(3) Geomark issued one common share upon incorporation on April 20, 2010,
and on July 6, 2010 issued 52,039,760 common shares as consideration
for the net investment in Geomark Operations with an ascribed net book
value of $21,152,000 as at December 31, 2009 and cancelled the original
common share. For purposes of the per share calculations, it was
assumed that all 52,039,760 shares issued have been outstanding since
January 1, 2010.
(4) Barrels of Oil Equivalent (BOE) are calculated using a conversion ratio
of 6 MCF to 1 barrel of oil. The conversion is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead and as such
may be misleading if used in isolation.
Operational and Financial Highlights
- Geomark is a publicly traded mineral exploration company that emerged from
Comaplex Minerals Corp. (Comaplex) following the successful July 2010 sale of
Comaplex's five million ounce Meliadine gold deposit to Agnico-Eagle Mines
Limited (Agnico-Eagle).
- Geomark is well-financed with proven management, experienced staff, a large
cash position, and immediate cash flow from its oil and gas and investment
assets. The history of success and proven capabilities of the Geomark team will
assist in advancing the Company. The entire Comaplex exploration team is now
employed by Geomark.
- Geomark's assets include:
-- Working capital and investments of approximately $52 million (which includes
a short-term $20 million loan to Bonterra Energy Corp.);
-- Mineral properties located in Ontario, the Northwest Territories and Nunavut;
-- Oil and gas properties located primarily in the Harmattan area of
south-western Alberta; and
-- Oil and gas properties, dividends and interest income are projected to
generate annual income of approximately $2.5 million.
- In the latter half of 2010, Geomark completed the consolidation of all eight
of its currently held Timmins area gold properties (interests now ranging from
90 to 100 percent). The Timmins assets are relatively small properties that have
undergone varying degrees of exploration over the years. The majority of the
historical drilling on the Carr Wilkie, Thorneloe, and Deloro properties has
been within 350 metres of surface; however, some of the recent gold discoveries
in the Timmins area by other companies have been at considerable depths (below
500 metres from surface). Geomark is presently targeting the deeper, down-dip
extensions of the known mineralized trends on its Ontario properties.
- In November 2010, the Company commenced geophysical surveys (Titan 24 DC/IP
and MT resistivity surveys) on four of the Timmins area assets - Thorneloe,
Deloro, Carr-Wilkie and Cody Nighthawk. The surveys were completed in the first
quarter of 2011 and IP anomalies were obtained on three of the four properties.
- Based on the results of the surveys and a review of previous geological
information, a 4,000 metre diamond drilling program commenced in March 2011 on
two of these properties - one of which is in the currently active West Timmins
area near the Lake Shore Gold Corp. properties. Three drill holes totaling 1,687
metres were completed on the Carr-Wilkie property. The Company is presently
compiling the results, but has been hampered by very slow sample turnaround at
the lab.
- Four drill holes, approximately 2,600 metres, are planned on the Thorneloe
property. To date, two of the four holes (1,392 metres) have been completed. The
program is ongoing and results will be released as they are received and
verified. The drill program will be extended if results warrant it. The other
Ontario properties are in the process of further review and should the results
be positive, further work, including geophysics and diamond drilling, will be
completed on them as quickly as possible.
- Geomark's exploration activities and G&A expenses will be funded from its
existing working capital, income from its investments, interest income and from
its oil and natural gas operations.
- Geomark's business strategy also includes the acquisition of additional
mineral interests from unrelated third parties through option/joint venture
agreements and/or acquisitions. Gold and precious metals prices have continued
to remain strong and this higher pricing environment has made the acquisitions
market more expensive and competitive; however, serious effort continues to be
spent in actively assessing and pursuing new precious metal properties that can
be added to the Company's portfolio. Geomark's team has done general reviews of
a large number of plays and numerous properties have been examined in detail.
The search has been concentrated in Canada and the United States, but properties
in all countries with mining friendly jurisdictions are being considered. The
Company remains optimistic that additional opportunities will develop in the
near-term.
- Geomark was pleased to welcome Robb D. Thompson to the Company in February
2011 as Vice President, Finance. Mr. Thompson now holds the position of Chief
Financial Officer and Secretary.
- As a final comment, the first quarter 2011's Management's Discussion and
Analysis (MD&A) and Financial Statements along with the notes thereto, are
reported under International Financial Reporting Standards (IFRS). It is
mandatory that all Canadian publically accountable enterprises prepare their
financial statements in accordance with Canadian Generally Accepted Accounting
Principles (Canadian GAAP) revised to incorporate new accounting standards under
IFRS. This change in accounting principles significantly affected certain
financial information and disclosures from past financial reporting of the
Company and may be confusing to Geomark's shareholders. Reporting under IFRS
will result in Canadian Standards now being more aligned with European and
Australian accounting standards and away from previous Canadian principles and
present United States principles. IFRS permits companies to be flexible with
their reporting and this may result in making it more difficult to compare
Canadian companies with each other, or in some instances, cross border reporting
Canadian companies with their U.S. peers. This change may be regressive for
Canadian investors and companies and it may have been better if the change had
been delayed to coincide with a U.S. conversion.
- Geomark will ensure that appropriate disclosures and discussions are provided
in the MD&A and the financial statements to assist shareholders, analysts and
other parties with their respective evaluations and has provided additional
information in the above "Highlights" section to assist readers with their
reviews.
Cautionary Statement
This summarized news release should not be considered a suitable source of
information for readers who are unfamiliar with Geomark Exploration Ltd. and
should not be considered in any way as a substitute for reading the full report.
For the full report, please go to www.geomark.ca
Use of non-IFRS financial measures
Included in this press release we use the term "funds flow" to analyze the
Company's operating performance. Funds flow is not a standardized measure
recognized under IFRS and does not have a standardized meaning prescribed by
IFRS. This funds flow calculation is considered by management to be informative
for shareholders and analysts. This measure may differ from those made by other
companies and accordingly may not be comparable to such measures as reported by
other companies.
Geomark's funds flow is calculated by adding investment dividend and interest
income and the changes in non-cash investing working capital related to these
sources of investment income to cash flow (deficiency) from operating
activities.
Forward-Looking Statements
Certain statements contained in this press release include statements which
contain words such as "anticipate", "could", "should", "expect", "seek", "may",
"intend", "likely", "will", "believe" and similar expressions, statements
relating to matters that are not historical facts, and such statements of our
beliefs, intentions and expectations about development, results and events which
will or may occur in the future, constitute "forward-looking information" within
the meaning of applicable Canadian securities legislation and are based on
certain assumptions and analysis made by us derived from our experience and
perceptions. Forward-looking information in this press release includes, but is
not limited to: expected cash provided by continuing operations; future capital
expenditures, including the amount and nature thereof; mineral prices and
demand, oil and natural gas prices and demand; expansion and other development
trends of the mineral and oil and gas industry; business strategy and outlook;
expansion and growth of our business and operations; and maintenance of existing
customer, supplier and partner relationships; supply channels; accounting
policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and
analyses made by us in light of our experience and perception of historical
trends, current conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances. The risks,
uncertainties, and assumptions are difficult to predict and may affect
operations, and may include, without limitation: foreign exchange fluctuations;
equipment and labour shortages and inflationary costs; general economic
conditions; industry conditions; changes in applicable environmental, taxation
and other laws and regulations as well as how such laws and regulations are
interpreted and enforced; the ability of mineral companies to raise capital; the
effect of weather conditions on operations and facilities; the existence of
operating risks; volatility of oil and natural gas prices; oil and gas product
supply and demand; risks inherent in the ability to generate sufficient cash
flow from operations to meet current and future obligations; increased
competition; stock market volatility; opportunities available to or pursued by
us; and other factors, many of which are beyond our control. The foregoing
factors are not exhaustive.
Actual results, performance or achievements could differ materially from those
expressed in, or implied by, this forward-looking information and, accordingly,
no assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of them do, what
benefits will be derived therefrom. Except as required by law, Geomark disclaims
any intention or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this
cautionary statement.
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