Athabasca Minerals Inc. ("Athabasca" or the "Corporation") (TSX VENTURE:ABM) is
pleased to announce its financial results for the fourth quarter and year ended
November 30, 2013. The Corporation's audited financial statements and
management's discussion and analysis ("MD&A") for the year ended November 30,
2013 are available on SEDAR at www.sedar.com and on the Athabasca Minerals
website at www.athabascaminerals.com.
Q4 2013 Highlights
-- During Q4 2013, Athabasca generated net aggregate sales of $3,698,041
from corporate-owned aggregate operations versus $989,513 during Q4
2012, an increase of $2,708,528 or 273.7%.
-- The Corporation delivered 136,993 tonnes from corporate-owned aggregate
operations in Q4 2013 versus the delivery of 63,945 tonnes during Q4
2012, an increase of 73,048 tonnes or 114.2%.
-- Total aggregate production at the Kearl aggregate operation was
significantly increased, with Q4 gravel production of 307,000 tonnes
accounting for 62% of total gravel produced during fiscal 2013. An
additional 123,000 tonnes of processed sand was also produced during Q4.
-- During Q4, substantial improvement in cost efficiency was realized with
Kearl pit aggregate processing, through the increase in total production
with a decrease in the cost per tonne of aggregate produced.
Fiscal 2013 Year End Highlights
-- Athabasca generated record total revenue of $25,118,000 for the fiscal
year ended November 30, 2013, an increase of $10,395,325 or 70.6% over
the prior year.
-- During the fiscal year ended November 30, 2013, the Corporation
generated net aggregate sales of $14,698,719 from corporate-owned
aggregate operations versus $3,040,328 during fiscal 2012, an increase
of $11,658,391 or 383.5%.
-- By fiscal 2013 year-end, Athabasca had successfully processed and
stockpiled finished goods inventory with a cost of nearly $7.5 million.
This crushed gravel and sand inventory is available for sale to meet
regional aggregate demand.
-- The Corporation continued to significantly benefit from cash flow
collected from its land use agreement for work camp purposes, with more
than $525,000 cash received during fiscal 2013.
-- The Corporation was strengthened through the addition of previously
announced appointments to its board of directors, its advisors, and
senior management
-- Communication with Alberta Environment and Sustainable Resources
Development resulting in notification during February 2014 that the
department has completed its review of the Firebag Project, enabling the
Corporation to next provide a Conservation and Reclamation Business Plan
to the department for their review before final approval.
President and CEO Dom Kriangkum states; "We are pleased with the Corporation's
progress in supplying gravel, sand and industrial minerals in Alberta. We
continue to grow and improve our efficiency at aggregate production, while
identifying new sources of industrial minerals, including aggregates, required
for oil sands projects, infrastructure and oil and gas exploration. In
particular, we are working hard to transition from aggregate pit management
toward further developing and increasing aggregate production from
Athabasca-owned pits where the opportunity for greater margins are higher. With
our growth from less than 20 employees to a current staff of greater than 60
members, we look forward to continuing to increase our productivity and to
service regional product requirements."
Operations Update
Susan Lake aggregate management operations are ongoing, while at a slower pace
than normal, as light aggregate demand within the region has been experienced
thus far in 2014. From discussions with its major customers, and from other
external sources, management anticipates a near term ramp-up in aggregate
demand, followed by strong demand through the remainder of the fiscal year.
Activity at our corporate-owned pits is ongoing with the planned temporary
suspension of crushing operations at Kearl pit, which began in mid-December
2013, is expected to continue through approximately May 2014, at which time
spring conditions and dewatering at the pit will be addressed. Thereafter,
Athabasca intends to process aggregate at its Kearl pit during the period June
through mid- December 2014.
Management intends to have completed all crushing operations at the Cowpar pit,
a pit that was made available through a joint venture announced March 4, 2014,
before removing its crushing spread during March 2014. Management then intends
to haul its crushing spread to the Conklin stockpile site for maintenance and
storage before it is transported to the Kearl pit for set-up in late May.
Activity from our Logan pit is now complete for the winter season with hauling
of aggregate expected to resume in late fall 2014, at such time that winter
roads can be accessed and product is deliverable.
Financial Highlights
Q4 and Year Ended November 30
------------------------------------------------------
YE Nov 30, YE Nov 30,
Q4 2013 Q4 2012 2013 2012
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Aggregate management
fees $ 2,882,736 $ 3,311,716 $10,419,281 $11,682,347
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Net aggregate sales $ 3,698,041 $ 989,513 $14,698,719 $ 3,040,328
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Total revenue $ 6,580,777 $ 4,301,229 $25,118,000 $14,722,675
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Aggregate operating
expenses $ 3,774,204 $ 1,429,184 $16,606,177 4,915,191
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Gross profit $ 2,806,573 $ 2,872,045 $ 8,511,823 $ 9,807,484
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Total aggregate tonnes
sold 2,704,301 3,124,134 9,911,381 10,936,767
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Net (loss) income from
land use agreement $ (143,127) $ 467,119 $ (406,646) $ 1,018,019
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Net income from
aggregate operations $ 532,442 $ 693,482 $ 2,328,286 $ 3,692,390
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Net income and
comprehensive income $ 389,315 $ 1,160,601 $ 1,921,640 $ 4,710,409
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Basic income per
common share $ 0.014 $ 0.042 $ 0.068 $ 0.171
----------------------------------------------------------------------------
Basic cash flow per
share $ 0.064 $ 0.070 $ 0.216 $ 0.231
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Net income during fiscal 2013 decreased to $1,921,640 from $4,710,409 in the
prior year, a reduction of $2,788,769. There were two primary contributing
factors: 1) a $1,263,066 reduction in aggregate management fees resulting from a
1,263,031 (11.9%) reduction in aggregate tonnes sold from Susan Lake; 2) a
$1,424,665 reduction in net income from the land use agreement compared to 2012,
resulting from both permanent and expected temporary lodge closures at the
Poplar Creek work camp. While net aggregate sales from corporate-owned pits rose
by $11,658,391 during fiscal 2013, related aggregate operating expenses
increased by approximately the same amount. During fiscal 2013 both the Kearl
and Logan corporate-owned pits were brought into their first full year of
operation. Management has identified opportunities for improved cost savings
that are expected to be realized over the course of their second full year of
operations during fiscal 2014.
Outlook
The Corporation determines demand for the year by discussing expected aggregate
requirements with its major customers. Regional demand for aggregate slowed near
the end of 2013, and sales have remained lighter than usual thus far in fiscal
2014, due to light customer demand being experienced within the region. Through
discussions with some major customers regarding their full year anticipated
aggregate requirements, despite light sales volume in the early months of fiscal
2014, aggregate demand is expected to ramp up so that full year results will
normalize. A recent industry survey conducted with its member companies, reports
that the 2014 oilsands capital budget is forecast to be $25 billion, a near
all-time high.
Athabasca's core business relies on aggregate demand from Alberta's oil, natural
gas and mining industries in addition to municipal and road construction
projects. Historically Athabasca has stronger third and fourth quarters
following typically slower first and second quarters due to seasonal
considerations such as winter conditions and spring break-up conditions.
AGGREGATE OPERATIONS:
- Corporate-Owned Pits
Currently, processed and stockpiled inventory includes approximately 600,000
tonnes of gravel and 400,000 tonnes of sand located across Athabasca's corporate
pits and stockpile sites. In conjunction with its transition to corporate-owned
aggregate operations, by fiscal 2013 year-end, Athabasca had successfully
processed and stockpiled nearly $7.5 million of crushed gravel and sand
inventory. These aggregate finished products are available for sale without
further production cost to be incurred. It will be a management priority to turn
over its existing inventory during fiscal 2014, along with the efficient
production of further processed aggregates from its corporate-owned pits. In
order to assist our sales efforts we are initiating a new sales division over
the summer with further announcements to follow.
Near the end of Q4 2013, Athabasca announced the resumption of gravel delivery
from its Logan pit to a regional customer. Gravel hauling continued for a period
of time until the customer suspended the operation when they put their project
on hold. The undelivered quantity is fully processed and is available to be
hauled pending contract resumption from the customer. Meanwhile, this processed
gravel is also being marketed for sale to other regional customers. A portion of
the gravel has been hauled from the Logan pit to Athabasca's Conklin stockpile
site in preparation for year round sales and
delivery. Management is focused on marketing this undelivered inventory to serve
regional demand. Since the haul road from the Logan pit is accessible only
during the winter months, the Corporation is considering improving the existing
road to be an all season road, should demand justify the activity.
Through a joint venture agreement with a First Nation's company, Athabasca
opened up its new "Cowpar" gravel pit during Q1 2014. Sales to regional
customers were billed during Q1 and Q2 and the Corporation is currently hauling
the remaining processed aggregate to a stockpile site near a major highway north
of Conklin, Alberta for year round sales. The Cowpar pit has been depleted of
gravel, and pit reclamation is in progress at this time. Under the same joint
venture agreement, the Corporation is awaiting approval from the Alberta
Government to open a second new pit later this year.
Significant quantities of processed sand and gravel inventory are stockpiled at
the Kearl pit. The Corporation anticipates sales and delivery of sand and gravel
from these stockpiles to a major customer beginning in Q2 2014 and throughout
the remainder of the year. The Corporation's crushing spread is to be mobilized
to the Kearl pit, with scheduled production at that location to begin in Q3
2014, for additional sand and gravel processing for regional customers.
During fiscal 2014 Athabasca seeks to improve its corporate pit cost
efficiencies, through its improved Kearl pit dewatering method, which should
improve the overall rate of aggregate processing. Other primary targeted cost
reductions are with equipment repair and maintenance costs, work crew
accommodation costs, and reduced hauling rates for aggregates delivery.
- Susan Lake Public Pit
Q1 2014 was subject to frozen conditions and periods of extreme cold and snow
resulting in very little construction activity requiring sand and gravel.
Despite the soft first quarter in 2014, the Corporation anticipates that the
activities in the Susan Lake gravel pit will ramp up during Q2 and become
increasingly active during the third and fourth quarters. The Corporation has
recently received sand and gravel orders from existing users for significant
quantities to be fulfilled during fiscal 2014. Management also received
substantial gravel requests from new customers who are bidding on works for a
new oil sands project at the north end of the Susan Lake pit.
INDUSTRIAL METALLIC MINERALS PROJECTS:
- Firebag Project (Silica Sand)
The Firebag silica sand was tested and found to be suitable as frac sand for the
oil and gas industry. In February 2014 the Corporation received notification
from Alberta Environment and Sustainable Resources Development ("ESRD") that the
department has completed its review of Athabasca's silica sand surface material
lease application at the Firebag Project. The notice confirms that ESRD has, in
principle, completed its review of the lease boundary that is approximately 80
acres in size, and forms a part of the larger Firebag Project. Athabasca
previously submitted a technical memo documenting development and reclamation
and will now provide a Conservation and Reclamation Business Plan ("CRBP") to
ESRD for their review before receiving final approval. The CRBP is a normal
course requirement of the approval process.
Next steps include the completion and submission of the Firebag CRBP in the
second quarter of 2014 and progress towards the completion of a National
Instrument 43-101 resource report in respect of the Firebag Project.
The Corporation has also been in discussion with a major railway company for
developing a future frac sand trans-loading facility in Fort McMurray, within a
27 acre strategically situated miscellaneous lease that Athabasca has applied
for. Management is currently preparing preliminary cost estimates and examining
alternatives for processing and trans-loading of products.
- Richardson Project (Granite and Dolomite)
To locate a suitable long term aggregates source for the oil sands industry, the
Corporation has identified an area 70 kms north of the Susan Lake Gravel pit
that contains suitable bedrock for a quarry operation. In March 2014 the
Corporation announced the completion of its Richardson Project winter drilling
program. A total of eight vertical core holes were drilled for a total of 843
metres over a 20 square km area. All holes successfully cored the dolomite and
all but one intersected the granite basement rocks. All holes were drilled to a
maximum depth of 144 metres. The dolomite and granite were penetrated at similar
depth levels attesting to the uniformity of the units across the Richardson
property area that was tested by drilling. The location is strategically located
to serve continuing oil sands and infrastructure development within the Fort
McMurray region once the Susan Lake pit becomes depleted. We are working toward
getting the resource developed so that an alternative source of aggregate will
be available to supply regional needs at that time.
Next steps include the detailed core logging and sampling which will commence
shortly at Athabasca's Edmonton facility, to be followed up by independent
analytical test work. These 2014 drill holes coupled with additional drilling
from the same area in 2013 will provide the information necessary to complete a
National Instrument 43-101 resource estimate for the Richardson granite and
dolomite in fiscal 2014. Following completion of the 43-101 the Corporation
intends to apply for a mineral lease on a portion of the Richardson Project
currently held by Athabasca under mineral permits; and subsequently, the
submission of a development application to operate a hard rock quarry.
The complete financial statements for Athabasca for the year-ended November 30,
2013 and Management's Discussion & Analysis for the same period are available
for viewing on the Corporation's website at www.athabascaminerals.com and on
SEDAR at www.sedar.com.
About Athabasca Minerals
The Corporation is a resource company involved in the management, exploration
and development of aggregate projects. These activities include contracts works,
aggregate pit management, aggregate production and sales from corporate-owned
pits, new aggregate development and acquisitions of sand and gravel operations.
The Corporation also has industrial mineral land holdings for the purpose of
locating and developing sources of industrial minerals and aggregates essential
to high growth economic development.
Neither the TSX Venture nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture) accepts responsibility for the
adequacy or accuracy of this release.
This news release contains forward-looking statements that involve risks and
uncertainties. Forward- looking statements or information are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially from those
anticipated by the Corporation. The forward-looking statements or information
contained in this news release are made as of the date hereof and the
Corporation does not undertake any obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
The securities of Athabasca have not been, nor will be, registered under the
United States Securities Act of 1933, as amended, and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
absent U.S. registration or an applicable exemption from U.S. registration
requirements. This release does not constitute an offer for sale of securities
in the United States.
FOR FURTHER INFORMATION PLEASE CONTACT:
Dean Stuart
403- 517-2270
dean@boardmarker.net
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