Anfield Provides Update on Operations
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 15, 2014) -
Anfield Nickel Corp. (TSX-VENTURE:ANF) ("Anfield" or the "Company")
hereby provides the following update with respect to its ongoing
operations, specifically with respect to its license applications
in Guatemala and the Company's current working capital (including
its impairment of the Mayaniquel Project in Guatemala), each of
which was previously reported in the Company's management
discussion and analysis dated March 21, 2014, which is available on
SEDAR at www.sedar.com.
Update on Licensing
On July 8, 2013, the Company received the Sechol mining
exploitation license which gives it the right to mine the area for
a period of 25 years with an option to renew the license for an
additional 25-year period. The Company has analyzed the terms of
the license and determined the different remaining actions required
in order to comply with its terms, including final land change
permits, forest land use permits, the granting of an export
license, entering into land access agreements with the local
communities and commencing development of the license area within
one year of permit award, and commencing mining activities on the
license area within three years of permit award. Accordingly, the
Company has taken steps to obtain the various licenses and permits
required to commence development of the license area. The Company
has also reviewed, and continues to analyze, the merits of a direct
shipping ore ("DSO") operation (for export of unprocessed
mineralized materials that do not provide the value added benefit
of processing ferronickel as contemplated in the PFS (as defined
below)). Undertaking such an operation would require the Company to
raise additional financing, which may not be available to it.
The Company is continuing the process of obtaining the
exploitation licenses on the areas, in addition to Sechol, that
contain the mineral reserves reported in the Company's
prefeasibility study ("PFS") on the Mayaniquel Project.
The Company is aware of the Guatemalan government's desire for
the Company to proceed with the development of a mine on the Sechol
license area. The PFS contemplated development of all the mineral
reserves in the three exploitation license areas (Sechol, Tres
Juanes and Amanecer) in the Mayaniquel Project economic evaluation
and project plans. The PFS did not evaluate and made no assumptions
concerning the development and mining of individual license areas
as stand-alone projects. Accordingly, notwithstanding the grant of
the existing exploitation license, all three exploitation licenses
are required to develop the Mayaniquel Project as contemplated in
the PFS.
The Company submitted its two additional exploitation license
applications to the Guatemalan Ministry of Energy and Mines ("MEM")
in August 2012 and submitted EIAs to the Guatemalan Ministry of
Environment ("MARN") for the Tres Juanes and Amanecer license areas
in October 2012. The EIA for Tres Juanes was approved by the MARN
on February 21, 2014 and the Company was notified of the approval
of the Amanecer EIA on March 19, 2014. No date has been set by the
MEM for the approval of either of the outstanding exploitation
license applications, but the Company expects them to be approved
prior to the commencement of any feasibility study on the
Mayaniquel Project. Based on past experience, the Company expects
that the exploitation license applications will require a
significant amount of time prior to MEM approval.
The Company has experienced lengthy delays in permitting. The
receipt of the Sechol exploitation license, without receiving, on a
timely basis, the Tres Juanes and Amanecer exploitation licenses,
has changed the current scope of the Mayaniquel Project.
Development and production of just DSO without processing at the
Sechol license area is very different in scope to the operations
contemplated by the Company's PFS. Should the Tres Juanes and
Amanecer exploitation licenses either (i) not be granted or (ii) be
granted only after substantial delay, it is possible that the
Mayaniquel Project will be further materially adversely
impacted.
Furthermore, the government in Guatemala has submitted a
proposal for a moratorium on acceptance of new licenses pending
reforms of the Mining Law of Guatemala (the "Mining Law"). On July
9, 2013, the President of Guatemala announced that the Government
would be sending a proposal for a moratorium on new mining
licenses, including exploitation and exploration licenses, to the
Congress for approval. The proposed moratorium would give the
Congress up to two years to enact reforms to the Mining Law. The
proposed moratorium would expire at the earlier of (i) a new Mining
Law being enacted or (ii) two years after the moratorium goes into
effect. There is no certainty, however, as to whether, and when,
the Guatemalan Congress will enact the moratorium or that any such
moratorium would, if enacted, be enacted in the form as currently
proposed. The bill has been under evaluation by the Energy and
Mines Committee since August 2013. If a temporary moratorium is
enacted, the Company may be denied, or may be substantially delayed
in obtaining, approval for pending exploration and exploitation
licenses, which could materially adversely impact the Company's
ability to achieve its plans on a timely basis, including its
potential to advance the development of the Mayaniquel Project as
currently contemplated, as well as materially adversely impact the
Company's operations and potential profitability.
Update on Working Capital and Impairment of Mayaniquel
Project
Effective December 31, 2013, management identified that there
were indicators of impairment concerning the Mayaniquel Project, as
well as lack of available equity financing. International Financing
Reporting Standards requires management to establish the carrying
value based on the higher of (i) fair value less costs of disposal
or (ii) value in use. The carrying value of the Mayaniquel Project
has been determined primarily on the fair value less costs of
disposal methodology, based upon efforts of management to seek a
strategic transaction. As a result, an impairment provision of
$17,990,555 was recorded against exploration and evaluation asset
and $332,652 against plant and equipment for the year ended
December 31, 2013.
As at December 31, 2013, the Company had cash and cash
equivalents of $342,536 compared to cash and cash equivalents of
$3,569,098 at December 31, 2012. The Company's working capital at
December 31, 2013 was a deficit of $4,034,175 compared to positive
working capital of $2,933,272 at December 31, 2012. The Company's
cash and current assets are not sufficient to meet the Company's
current liabilities without raising additional capital or extending
or increasing the scope of its existing debt to its major
shareholder.
While the Company's existing debt is sufficient to cover the
immediate working capital needs of the Company, additional capital
or other financing will be required for the Company to continue its
current forecast activity levels. The Company is currently
evaluating alternatives to secure long-term financing or may need
to seek to extend or increase its existing debt.
To date, the capital requirements of Anfield have been met by
equity or loan proceeds. The Company has incurred cumulative losses
of $27,169,422 as at December 31, 2013 and has reported a net loss
of $19,443,461 during the year then ended. The Company's ability to
continue as a going concern is dependent upon successfully
obtaining additional financing, a joint venture, a merger or other
business combination transaction involving a third party, sale of
all or a portion of the Company's assets, the outright sale of the
Company or a combination thereof. At the current time the Company
is dependent on loans advanced by its major shareholder. The
Company will require additional capital in the near term in order
to continue its operations and to repay its existing debt. In light
of current depressed commodity prices and limited ability of junior
mining issuers to access capital markets, the Company is exploring
equity financing and alternative ways to advance its corporate
objectives, including a joint venture, a merger or other business
combination transaction involving a third party, the sale of all or
a portion of the Company's assets, the outright sale of the
Company, debt financing, or any combination thereof. There are no
assurances or guarantees: (i) that an alternative transaction will
be undertaken; or (ii) as to the terms or timing of such
alternative transaction, if undertaken. To date, the Company has
not identified an alternative transaction that would generate
shareholder value equal to or greater than the Company's current
market capitalization.
Anfield Nickel Corp.
David Strang
CAUTION REGARDING FORWARD-LOOKING INFORMATION: Information and
statements in this news release that are not historical facts are
"forward-looking information" within the meaning of the applicable
Canadian securities legislation. This news release contains
forward-looking information such as estimates and statements that
describe Anfield's future plans, objectives or goals, including
words to the effect that Anfield or management expects a stated
condition or result to occur. Generally, this forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects" or "does not expect", "is
expected", "estimates\", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "can", "could", "would",
"might" or "will be taken", "occur" or "be achieved". Examples of
forward-looking information in this news release include, but are
not limited to statements with respect to Anfield's plans and
expectations for the Mayaniquel Project; Anfield's ability to raise
additional debt or equity financing or seek alternative ways to
advance its corporate objectives, including a joint venture, a
merger or other business combination transaction involving a third
party, the sale of all or a portion of the Company's assets, the
outright sale of the Company, or any combination thereof; Anfield's
plans related to mine development and design, operations,
equipment, and infrastructure; Anfield's applications for two
exploitation licenses (Tres Juanes and Amanecer) and the timing and
receipt of such licenses and the related impact of receipt of such
licenses; the potential imposition and effect on Anfield of a
temporary moratorium in Guatemala on the granting of new
exploitation and exploration licenses; Anfield's plans relating to
exploration and development of the Mayaniquel Project, including
permitting and regulatory requirements related to any such plans;
Anfield's plans to complete work required for a feasibility study
and the timing thereof; Anfield's plans related to the Sechol
exploitation license, including investigation of the terms of the
license, steps to acquire operating permits and the development of
plans related to future operations; the adequacy of the Company's
working capital; and the Company's ability to continue as a going
concern. These forward-looking statements are based, in part, on
assumptions and factors that may change, thus causing actual
results or achievements to differ materially from those expressed
or implied by the forward-looking statements. Such factors and
assumptions include, but are not limited to: nickel prices and iron
by-product credits; that the existing exploitation license is
maintained and not revoked; short and long term power and coal
prices; mine plans and production scheduling; process and
infrastructure design and implementation; accuracy of the
estimation of operating and capital costs; applicable tax and
royalty rates; accuracy of mineral reserve and resource estimates
and reserve and resource modeling; reliability of sampling and
assay data; representativeness of mineralization; accuracy of
metallurgical test work; amenability of upgrading and blending
mineralization; ability to comply with current and future
environmental, safety and other regulatory requirements and to
obtain and maintain timely receipt of regulatory approvals,
including fulfillment of the terms and conditions of exploration
and exploitation licenses related to the Mayaniquel Project; no
moratorium on granting new exploitation and exploration licenses in
Guatemala is implemented; ability to maintain and secure the
requisite surface access rights to conduct future work and carry
out plans for the Mayaniquel Project; and ability to successfully
raise additional capital. Forward-looking information is subject to
known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of Anfield Nickel Corp. to be materially different
from those expressed or implied by such forward-looking
information, including but not limited to: risks relating to the
Company's working capital deficit; risks relating to nickel, iron
and other mineral price fluctuations; risks relating to estimates
of mineral reserves and resources, production, purchases, costs,
decommissioning or reclamation expenses, proving to be inaccurate;
the inherent operational risks associated with mining and mineral
exploration, development, mine construction and operating
activities, many of which are beyond Anfield's control, including,
the ability to secure the requisite surface access rights to
conduct future work and carry out plans; risks relating to
Anfield's ability to enforce Anfield's legal rights under permits
or licenses; risks that current litigation in which Anfield is a
party will have a negative outcome; risks that Anfield will become
subject to new litigation or arbitration and that these processes
will have adverse outcomes; risks relating to the Mayaniquel
Project being in Guatemala, including political, social, economic,
security and regulatory instability; risks relating to the
uncertainty of applications to extend and renew exploration
licenses, applications for new exploration licenses, and
applications for exploitation licenses for the Tres Juanes and
Amanecer license areas, including the effect of a government
proposed temporary moratorium in Guatemala on the granting of
exploitation and exploration licenses; risks relating to potential
challenges to Anfield's right to explore and/or develop the
Mayaniquel Project; risks relating to Anfield's ability to fulfill
the terms and conditions of exploitation and exploration licenses,
including the Sechol exploitation license; risks relating to
Anfield's operations being subject to environmental and remediation
requirements, which may increase the cost of doing business and
restrict Anfield's operations; risks relating to being adversely
affected by environmental, safety and regulatory risks, including
increased regulatory burdens or delays and changes of law; risks
relating to the fact that Anfield's properties are not yet in
commercial production; risks relating to the uncertainty as to
whether Anfield will be granted permits required to further explore
and develop the Mayaniquel Project and risks related to the
permitting timelines; and risks relating to Anfield's ability to
raise funding to continue its exploration, development and mining
activities, as well as those factors discussed in the sections
relating to risk factors of our business filed in Anfield Nickel
Corp.'s required securities filings on SEDAR. Although Anfield
Nickel Corp. has attempted to identify important factors and risks
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors that cause results to be materially different from those
anticipated, described, estimated, assessed or intended.
There can be no assurance that any forward-looking information
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information. Anfield Nickel Corp. does not
undertake to update any forward-looking information that are
incorporated by reference herein, except in accordance with
applicable securities laws.
Neither the 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 news release.
Anfield Nickel Corp.David Strang+ 604 646-1899+ 604 687-7041
Anfield Nickel Corp. (TSXV:ANF)
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