| ||May 30, 2005|
MBMI Reports Financial Results For Year-End Jan 31 2005
| ||MBMI RESOURCES INC. (MBR-TSXV) "MBMI" reports its audited financial results for the year ended January 31, 2005. Full results and additional information related to the Company may be found on SEDAR at www.sedar.com. |
The Company recorded a net loss for 2005 of $291,564 ($0.02 per share), compared with $605,711 in 2004 ($0.06 per share). Generally the Company's administration expenses increased due to increasing activity in the Philippines, the corresponding increase in consulting fees paid to directors, and investor communications activities during the year. The decrease in the Company's net loss was largely due to a lower expense of the Company's Stock Option Compensation of $52,385 over the prior year (2004: $134,379), foreign currency losses in the prior year (2004: $97,605 loss) compared to a foreign exchange gain of $75 in 2005, a write off of payables in respect of the Philippine Celestial operations and payables to the former principal shareholder in 2005 of $230,147 and $259,515 respectively. This was partly offset by the write off in the deferred Celestial property costs of $119,280 in 2005.
Net expenditures on mineral properties increased during 2005 to $447,115 from $177,751 in 2004. Net expenditures consists of $59,835 in option payments made to Celestial, and $95,711 in acquisition costs to Olympic Mines & Development Corporation, $25,000 in option payments received from Young-Shannon Gold Mines Ltd ($10,000 cash plus 150,000 shares in Young-Shannon at a value of $15,000), $199,410 of exploration costs on the Tri-Energy properties, $35,420 of exploration costs on the Celestial property, and $81,739 of expenditures on the Olympic properties. The Celestial costs incurred in 2005 of $95,255 and 2004 costs of $24,025, totaling $119,280 were written off during the year ended January 31, 2005. As at January 31, 2005, the Company had a working capital deficiency of $95,854 (including cash of $18,545), whereas in 2004 the Company's working capital deficiency was $181,844. This is primarily due to the write-off of the payables in respect of the Philippine operations and payable to the former principal shareholder of the Company totaling $489,662. The accumulated deficit increased to $9,908,407 from $9,616,843 in 2004. Aside from the write-off of payables, the most significant component of the change in working capital was the decrease in cash to $18,545 from $469,816 in 2004.
In September the Company completed a Joint Venture Agreement with Olympic Mines and Development Corp (Olympic) comprising three nickel laterite properties on Palawan Philippines. The agreement enables MBMI to hold an initial 60% interest in the joint venture. The Company will be responsible for project funding and may, under certain circumstances, and upon hitting certain milestones, dilute Olympic to a royalty interest of 2.5% net revenue return. MBMI will focus on the potential for Direct Shipping Ore (DSO) nickel laterite material from these properties. Currently, the Company holds a 33.3% interest in the Philippine Holding Company, Sara-Marie Mining Properties Ltd. Upon incorporation of the development company in the Philippines (not yet incorporated), the Company will hold directly and indirectly 60% in the Olympic joint venture.
MBMI has now secured an interest in an additional four Philippine nickel properties covering a total area in excess of 22,000 hectares. (See subsequent events). The most recent acquisitions significantly advance the Company's objective of becoming a supplier of high-grade nickel material to the primary nickel consumers in Asia.
During the year, the Company was unsuccessful in restructuring its Celestial nickel project which has been largely inactive for the past three years.
A seven-hole drilling program on its Sudbury, Ontario McMillan Gold Mine project costing approximately $120,000, tested for extensions of the gold mineralization and structure on strike from areas previously mined. The program extended the zone to the east, and to the west for a total strike length of over 400 meters. The best result obtained was 7.91g/t (0.23oz) gold over 10.85 meters. Management was successful in optioning the McMillan property to Young- Shannon Gold Mines, Limited in November, 2004. Young-Shannon has the option to earn a 50% interest in the McMillan property over a three year period for staged payments of $75,000 in cash and 650,000 common shares plus a three year work commitment of $900,000. Young-Shannon has the option to increase its interest to 60% by issuing an additional 250,000 common shares and spending $400,000 more on the property.
A 10 hole, 775 meter drilling program on the Copper Prince property in Sudbury, Ontario was completed in mid December. The program costing approximately $90,000 was designed to test near surface geophysical copper/gold and platinum group metals targets. Two zones containing numerous quartz veins containing Chalcopyrite, Pyrite, and Pyrrhotite mineralization were encountered.
In November the Company announced that it had signed a memorandum of understanding with Goldspring Inc., a US OTC corporation, to joint venture and acquire an interest of 50% in the Big Mike Copper Project in Nevada, USA. MBMI has subsequently decided not to pursue this venture.
During the fiscal year ended January 31, 2005, the Company issued 4,995,000 common shares in connection with net proceeds of $541,133 in new equity funding.
Subsequent to the year end:
The Company completed a non-brokered Private Placement financing on March 3, 2005 of 5,700,000 Units at $0.10 per Unit for gross proceeds of $570,000. Each Unit consists of one Common Share and one half (1/2) Common Share Purchase Warrant. Each whole Warrant will entitle the holder to purchase one Common Share for a period of 2 years at a price of $0.15 during the first year and $0.20 in the second year. Finders' fees of $28,500 and 80,000 broker warrants were paid. All securities issued are subject to a four month hold period expiring July 2, 2005.
- MBMI completed a joint venture agreement with Palawan Alpha South Resource Development Corporation (Alpha) pursuant to which MBMI holds a 60% interest in the Alpha nickel property. The Alpha property is located in Palawan, Philippines and is adjacent to MBMI's Bethlehem nickel laterite property acquired through the Olympic joint venture. The agreement is subject to regulatory approval.
- MBMI entered into a Memorandum of Agreement (MOA) with Falcon Ridge Resources Management Corporation (Falcon Ridge) of the Philippines, within which MBMI can earn a major interest in three Southern Samar, Philippines nickel properties comprising a combined area of 10,146 Hectares. The MOA, which enables MBMI to hold an initial 60% interest in the joint venture, is subject to completion of a definitive joint venture agreement, Board of Directors and regulatory approval.
For further information:
David G. Tafel - VP Corporate Development
Tel: 604-683-1991; Fax: 604-683-8544; Toll free: 1-877-399-1991
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.
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