Business
WGI Heavy Minerals announces 2005 results
WGI Heavy Minerals announces 2005 results.
About this update from Nickel Creek Platinum Corp.
[{"type":"text","content":"\n\n\n\n\nwww.wgiheavyminerals.com\n\nCOEUR D'ALENE, ID, April 28 /CNW/ - WGI Heavy Minerals, Inc. (TSX: WG)\ntoday announced results for the fourth quarter and year ended December 31,\n2005.\nIn 2005 there has been a divergence between WGI's operating performance\nand its financial performance. From an operating perspective, the Company has\nshown noticeable improvements: improved cash flow in the face of significantly\nincreased G&A expenses is one symptom of these improvements. All operating\nunits have undergone analysis and management steps have been taken and\ninvestments have been and continue to be made to lay the foundation for\nimproved performance in the coming years.\nIn April 2006, the Company became aware of an error in its reserves\nestimate for its Srikurmam project located in Andhra Pradesh. The initial\nreserve report as prepared in 2002 was based on certain assumptions related to\nthe Company's ability to mine beach areas up to the high-tide line at its\nAndhra Pradesh site. A former employee of the Company's Indian subsidiary,\nTGI, provided invalid information, indicating that the Company had the ability\nto mine those areas. Consequently, the Company has recognized a cumulative\nimpairment loss for costs incurred on Andhra Pradesh up to December 31, 2004\nof $7.3 million and has restated prior years. The effect of these adjustments\non the Company's prior year reported results and balances are shown in Note 3\nof the Consolidated Financial Statements.\nIn India, the Company has carefully and conservatively considered the\nquality of each of the investments in the light of current commercial, legal\nand political realities and, in some cases, opted to write them down. In\naggregate, these write downs are very significant.\nWGI's 2005 financial performance has been seriously disappointing.\nNeither management nor shareholders ever welcome operating losses and material\nwrite-downs. In 2005 WGI has both. However, the Company has preserved the bulk\nof its cash reserves and, we believe, is positioning itself correctly for\nsustained improvements in its operating performance, and there are significant\nopportunities for growth by investments within North America.\n\nResults of Operations\n\nRevenues for 2005 decreased 13 percent to $19.0 million, compared with\n$21.7 million for 2004. Despite strengthening g...