SASKATOON, Nov. 14 /CNW/ - Athabasca Potash Inc. ("Athabasca" or the "Company") announces that it has filed the unaudited results of Athabasca's operations for the quarter ended September 30, 2008 and may be viewed at www.sedar.com.
A summary of key financial and operating results for the quarter are as follows:
Highlights
- Indicated Mineral Resource of 241,200,000 tonnes at a grade of 23.3%
K(2)O containing 89,000,000 tonnes of KCl on the Burr Project based
on 14 potash test wells. These results included four successful
potash test wells drilled in the quarter. Athabasca now has an
adequate resource to begin its pre-feasibility studies on the Burr
Project.
- The composites for the Lower Patience Lake Sub-member all have
averaged grades between 20.40 and 25.19% K(2)O and interval
thicknesses between 4.20 meters and 5.53 meters. These grades and
thicknesses of the sylvinite mineralization are reasonable and the
ranges are similar to the average reported values of the grades mined
at PCS Lanigan.
- In total 5,420 acres of surface lands were acquired within the
central parts of the Burr Project area, as were an additional
640 acres of freehold mineral rights and 3,020 acres of crown lands.
- MDH Engineered Solutions have completed regional hydrogeological
drilling on the Burr Property as part of a Siting Study which will
assist in siting the future facilities and shafts. MDH Engineered
Solutions also have completed a development plan for the Tailings
Management Area.
- Appointment of James Davidson as Chief Financial Officer.
- Cash and Cash Equivalents of $38,388,163 at September 30, 2008.
- The issued and outstanding shares were 36,903,083 at September 30,
2008.
Burr Project
Athabasca continued to focus on the exploration and development of its 100% owned Burr Project. During the quarter, AMEC Americas Limited ("AMEC") provided an updated potash mineral resource estimate based on 14 potash test wells completed to date on the Burr Project. The Lower Patience Lake Sub-Member ("LPL") contains Indicated Mineral Resources of 241,200,000 tonnes with a grade of 23.3% K(2)O and an Inferred Mineral Resource of 183,100,000 tonnes with a grade of 23.2% K(2)O. There is an additional Inferred Mineral Resource of 39,300,000 tonnes, with a grade of 13.2% K(2)O in the Upper Patience Lake Sub-Member ("UPL").
The potash wells have all encountered stable overlying rocks which is an important consideration for reasonable prospects of economic extraction. The geological setting and favourable mineralization shown at the Burr Project are consistent with characteristics of existing Saskatchewan potash mines. Proven and Probable Mineral Reserves are diluted, estimated over mineable widths and have economics applied to them. Inferred Mineral Resources and Indicated Mineral Resources, such as estimated for the Burr Project, are undiluted, not estimated over mineable widths and have not been subjected to economic considerations.
Quarter End Results
As of September 30, 2008, Athabasca's cash and cash equivalents balance totalled $38,388,163 for the quarter ended. The Company recorded a net loss of $574,511 ($0.02 per share) compared to a net loss of $457,831 ($0.01 per share) for the same period in 2007. The Company's source of income is the result of investing excess cash reserves in short-term deposits. For the quarter ending September 30, 2008, the Company reported interest revenue of $330,770, compared to $108,518 for the quarter ending September 30, 2007.
Total operating costs for the quarter ending September 30, 2008 equalled $1,017,731 compared to $566,349 for the quarter ended September 30, 2007. This represents an increase of $451,382 and reflects increases in majority of all categories of expenditures associated with the administration of a public company. Management fees and wage expense increased from $52,016 in the third quarter of 2007 to $223,036 for the quarter ending September 30, 2008. The $171,020 increase resulted primarily from the growth of the Company's management and technical team. Business development and investor relations increased to $136,883 during the third quarter of 2008 compared to $20,337 for the same period in 2007 as a result of the Company's additional promotion and travel expenses as a public company.
Selected Financial Highlights include:
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September 30, December 31,
Balance Sheet 2008 2007
Current Assets $ 39,024,053 $ 44,625,755
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Total Assets 65,545,420 55,285,777
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Current Liabilities 4,089,647 1,779,404
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Future income tax liability 1,168,634 -
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Share capital 57,203,926 51,762,028
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Contributed surplus 5,662,917 4,495,951
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Deficit (2,579,704) (2,751,606)
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For the Three Months For the Nine Months
Ended September 30 Ended September 30
Statements of
Income 2008 2007 2008 2007
Interest Income $ 330,770 $ 108,518 $ 1,244,858 $ 135,898
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Operating Expenses 1,017,731 566,349 2,129,048 728,031
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Loss for the period
before income taxes (686,961) (457,831) (884,190) (592,133)
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Net Income (Loss)
for the period (574,511) (457,831) 171,902 (583,333)
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Basic Earnings
(Loss) per share (0.02) (0.01) 0.00 (0.01)
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For the Three Months For the Nine Months
Ended September 30 Ended September 30
Statements of
Cash Flows 2008 2007 2008 2007
Cash flows from
Operating
Activities $ (518,003) $ (54,159) $ (619,234) $ (188,160)
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Cash flows from
Investing
Activities (6,726,470) (3,296,828) (11,747,716) (4,573,172)
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Cash flows from
Financing
Activities (26,972) 192,066 6,584,556 10,306,795
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Increase (Decrease)
in cash and cash
equivalents (7,271,445) (3,158,921) (5,782,394) 5,545,463
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Cash, beginning
of period 45,659,608 9,950,820 44,170,557 1,246,436
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Cash, end of
period 38,388,163 6,791,899 38,388,163 6,791,899
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Outlook
Athabasca has obtained a National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") compliant resource estimate of 241,200,000 tonnes of indicated mineral resource on 14 potash test wells. An additional three potash test wells were drilled after the resource update and were not included.
Pre-feasibility studies for offsite infrastructure, product transportation and logistics, and on site facilities have begun. The field work for the environmental base line studies continue, and a Tailings Management Area and Mill Siting study is in progress to assist in the preparation of an Environmental Impact Assessment and Permitting Report for the Burr Project.
While moving to complete its committed work programs and essential studies, Athabasca's management is responding to today's difficult economic environment by exercising financial caution and will continue to manage our business conservatively. The current working capital position is expected to be sufficient to fund all of the Company's planned activities and overhead operations for the next two years.
Scientific and Technical Information
The potash resource estimate and scientific and technical information contained in this press release is based upon the NI 43-101 compliant technical report (the "Technical Report") entitled NI 43-101 Technical Report for a Resource Estimation on the Burr Project, Athabasca Potash Inc., Saskatchewan, Canada, with an effective date of September 18, 2008, available at www.sedar.com or www.athabascapotash.ca. The Technical Report was prepared by AMEC Americas Limited ("AMEC"). Susan Lomas, P.Geo. of Lions Gate Geological Consulting Inc., is the independent Qualified Person (as defined by NI 43-101) for the Technical Report, and prepared the potash resource estimate and the scientific and technical information contained in this press release.
About Athabasca:
Athabasca Potash Inc. is a Canadian based corporation and was founded with a goal of establishing itself as a pre-eminent Canadian public company engaged solely in potash exploration and development, and to provide its shareholders with a unique investment opportunity focused entirely on potash.
Caution Regarding Forward-Looking Information
Certain of the statements made and information contained herein is "forward-looking information" within the meaning of certain securities laws. This includes statements concerning Athabasca's plans at its mineral properties, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Athabasca, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, exploration risks, lack of historic drill hole documentation, challenges or impairments to title, access to certain potash mineralization must be negotiated, permit requirements, governmental regulations, aboriginal land use, environmental risks and competition in attracting and retaining personnel. In addition, forward-looking information is based on various assumptions. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, Athabasca undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.