Alexander Nubia International Reports First Quarter Financial Results, Provides Update On Key Projects In Egypt And Announces Closing Of Convertible Debenture And Warrant Private Placement
Toronto, Ontario CANADA, May 29, 2012 /FSC/ - Alexander Nubia International Inc. (AAN - TSX Venture), today reported its financial results for the three-month period ended March 31, 2012. All amounts are in Canadian currency unless otherwise noted.
Key Operational and Financial Highlights of the Quarter
* Finalized and released property-first NI 43-101-compliant inferred resource estimate of 397,000 ounces of gold+gold equivalent(1) on the Abu Marawat gold-copper-zinc-silver deposit
* Invested $0.4 million in initial exploration activities at Hamama deposit
* Preliminary results more significant than anticipated - Hamama deposit:
- Completed first pass trenching program;
- Main VMS horizon is continuous and is traceable on surface for at least 3,000 metres;
- Three distinct zones identified within the Main VMS horizon (the Western, Central and Eastern VMS zones);
- The Western VMS Zone trench results confirm broad gold-silver mineralization - a zone 650 metres along strike and averaging 60 metres wide contains relatively uniform mineralization averaging 1.15 g/t gold and 19.4 g/t silver ;
- Drilling in the Central VMS Zone confirm moderate to high-grade gold-zinc exhalite mineralization from surface to a depth of at least 125 m. The deepest drill hole, AHA-005, intersected 16.0 metres grading 4.71% Zn, 0.22% Cu, 0.81 g/t Au, 16.2 g/t Ag; and
* Maintained a low burn-rate and incurred a loss of $182,220.
(1) Gold-Equivalent Calculation
As disclosed in the Abu Marawat Technical Report, the Abu Marawat deposit inferred mineral resource is: 2.9 million tonnes at an average grade of 1.75 g/t Au, 29.3 g/t Ag, 0.77 % Cu and 1.15 % Zn, containing 162 thousand ounces Au, 2.7 million ounces Ag, 49 million pounds Cu, and 73 million pounds Zn. The gold equivalencies of silver, copper, and zinc are based on the metal prices used in the NSR model as follows: Au US$1400/ounce, Ag US$26/ounce, Cu US$3.50/pound, Zn $1.15/pound, reasonable metal recoveries, and normal smelter and refinery terms.
Key Operational and Financial Highlights Subsequent to Quarter
* Hamama deposit - Technical Highlights
- Stacking of numerous visually identified VMS lenses north of the Main VMS horizon within a zone up to 2,000 metre along strike
- Western VMS zone -extended to 1,100 metre strike length
- Contains a broad, high-grade zone 650 metre along strike and averaging 60 metre in width of relatively uniform mineralization of 1.15 g/t gold and 19.4 g/t silver
- Eastern VMS zone - extended by 125 metre further east for a total length of 500 metre and open to the east
- Contains high-grade zinc plus anomalous copper and gold over 48 metre at the contact between the stringer zone and the VMS horizon
- Stringer-style alteration zones in the footwall of the VMS horizon have elevated commonly highly anomalous values in zinc and moderately anomalous values in gold
- A number of additional alteration zones, visually similar, have been identified throughout the property
* Completed a private placement of convertible debentures and warrants for gross proceeds of $215,000 on May 29, 2012
* Initiated a cost reduction and cash conservation program in order to minimize its burn rate
Selected Financial Metrics
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Q1 2012 Q1 2011
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Exploration expenditures in the quarter $ 593,159 $ 741,571
Net earnings (loss) for the quarter $(182,220) $(175,688)
Earnings (loss) per basic share for the quarter $(0.0017) $(0.0022)
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March 31, 2012 December 31, 2011
Total cash on hand (Cash &
cash equivalents plus restricted cash) $251,237 $1,232,268
Current liabilities $241,907 $481,291
Working Capital $86,411 $821,107
Total capitalized exploration expenditures $7,925,104 $7,331,946
Total Assets $8,595,115 $9,016,719
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Review of Financial Performance for the Quarter
For the three months ended March 31, 2012, the Company incurred $593,159 in exploration expenditures (including initial exploration costs at the Hamama deposit of $313,451). This compares to $741,571 for the comparable period of 2011. The decrease is primarily attributable to the completion of the Company's Phase 2 drill program at the Abu Marawat deposit in late 2011. These expenditures bring total exploration costs less impairment provisions since commencement of exploration in Egypt to $7.9 million.
As is expected for an early-stage mineral exploration company, Alexander Nubia incurred a loss of $182,220 for Q1 2012, which is comparable to the loss incurred for Q1 2011 of $175,688.
At March 31, 2012, after incurring $593,159 in exploration costs in the quarter and using $141,537 to fund operations, the Company had working capital of $86,411, including cash and cash equivalents of $176,531, and restricted cash of $74,706. The restricted cash is pledged in support of a guarantee provided to the Egyptian Mineral Resource Authority ("EMRA") and is released as exploration expenditures are incurred at the Abu Marawat Concession. Substantially all of the original amount of US$1,065,131 has now been released. The remaining $74,706 will be used to fund a training program for EMRA officials as provided in the concession agreement for the Abu Marawat Concession.
The Company's current working capital is insufficient to fund the Company's planned exploration and operating activities for the next 12 months. To alleviate the burn rate, and the resulting demands on its working capital, the Company is minimizing its operating costs by reducing its exploration activities and operating obligations
until such time as the Company is able to raise additional funds. The Company is exploring various financing options which management believes that it can complete in the near future.
Closing of Convertible Debenture and Warrant Private Placement
On May 29, 2012, the Company completed a private placement of 215 units ("Units") to raise gross proceeds of $215,000, with each Unit consisting of (i) one $1,000 principal amount 12.0% unsecured convertible debenture of the Company (each, a "Debenture") which matures on the date which is two years from the closing date; and (ii) 10,000 common share purchase warrants (each common share purchase warrant, a "Warrant"), each Warrant being exercisable for a period which commences on the date which is six months after the closing date and ends on the date which is two years from the closing date at an exercise price of $0.10 per share.
Insiders of the Company subscribed for an aggregate of 65 Units in the private placement, or approximately 30% of the total number of Units issued pursuant to the private placement. The Company is relying on the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") from the formal valuation and minority approval requirements of MI 61-101 based on a determination that the securities of the Company are only listed on the TSX Venture Exchange and that the fair market value of the private placement, insofar as it involves interested parties, does not exceed 25% of the market capitalization of the Company.
The net proceeds of the private placement will be used for general working capital.
Outlook
"We achieved significant progress at Hamama during Q1-2012. Our exploration program has proven to be successful in identifying a number of at surface mineralized horizons including a new discovery - the Western VMS Zone. A deep-channel sampling program is currently underway in this zone and others, which will provide a better indication of the near-surface mineralization. While we continue towards advancing our projects, we also intend to remain relatively cautious of our capital expenditures, given the current economic environment. If necessary, we are prepared to make adjustments in our burn-rate." said Mr. Massoud. He also said, "We are looking forward to the conclusion of the Egyptian Presidential elections as of a July 1, 2012 and confident that the nation will experience a positive political transformation."
The business objectives of the Company for the next 12 months are as follows:
Hamama Deposit
* Continued trenching and mapping program to identify and explore the property extensions;
* A geophysical program to identify potential massive sulphide pods at depth; and
* Diamond drilling to test the new Western VMS zone, numerous alteration zones and the stacked VMS lenses, north of the Main VMS horizon.
Abu Marawat Deposit
* Stage 3 diamond drilling program to upgrade resources from inferred to measured and indicated;
* Exploration drilling to test two new vein zones identified by deep trenching laterally from the main zone; and
* A preliminary economic assessment, contingent on developing a sufficient increase from the current inferred mineral resource.
General Business Objectives
* To continue exploration for precious and base metals within the other targets; and
* To raise funds required to advance exploration programs.
Alexander Nubia will file its interim financial report for the first quarter ended March 31, 2012 and related management's discussion and analysis on www.sedar.com and on its website within prescribed regulatory timelines. Readers are advised that, due to the summary nature of this release, these highlights should be read in conjunction with our interim management's discussion and analysis, and the interim unaudited condensed consolidated financial statements.
Qualified Person
The technical information contained in this news release was prepared or reviewed under the direct supervision of Mr. Ralph Gonzalez (P.Geo.), the Company's Project Manager for exploration in Egypt. Mr. Gonzalez is a qualified person within the meaning of NI 43-101.
About Alexander Nubia International Inc.
Alexander Nubia International Inc. (TSX-V: AAN) is a Canadian mineral exploration Company focused on rapidly advancing exploration projects in the Eastern Desert in Egypt. The Company's exploration concessions cover an area of over 2,772 km2. Located within the Abu Marawat concession are the Company's two key assets, the Abu Marawat deposit and the Hamama deposit. At the Abu Marawat deposit an NI 43-101 inferred resource of 397,000 oz. of gold+gold-equivalent(1) was identified. At the Hamama deposit, initial drill results have confirmed precious and base metal mineralization from surface to the greatest depth of drilling.
For more information on Alexander Nubia please contact:
A. Alexander Massoud
President and Chief Executive Officer
Egypt: (0) 22 287 6914
Canada: (877) 607-4747
Email: amassoud@alexandernubia.com
Donald M. Cameron, CA
CFO
Canada: (877) 607-4747
Email: dcameron@alexandernubia.com
Nisha Hasan
TMX Equicom
416-815-0700 ext. 258
Email: nhasan@equicomgroup.com
Cautionary Note Regarding Forward-Looking Statements
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. The securities of Alexander Nubia International Inc. described herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Source: Alexander Nubia International Inc. (TSX.V - AAN) http://www.alexandernubia.com
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