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Crowflight Minerals Inc.: Crowflight Announces First Quarter 2009 Financial Results

^{Published on 2009-05-11 08:16:26, Last Modified on 2009-11-03 07:42:56 - Market Wire}
 

TORONTO, ONTARIO--(Marketwire - May 11, 2009) - CROWFLIGHT MINERALS INC. ("Crowflight", the "Company") (TSX:CML) today announces its financial results for the first quarter of 2009. Crowflight has delivered on its primary milestone for 2009 by becoming Canada's newest nickel producer. Crowflight successfully brought its Bucko Lake Nickel Mine into pre-commercial production during the first quarter of 2009 and continued to expand its resource base in support of extending the life-of-mine plan.

Complete interim financial statements and related Management's Discussion and Analysis will be filed under the Company's profile on [ www.sedar.com ]. All amounts are in Canadian dollars unless otherwise indicated.

Q1 2009 Highlights

During the three months ended March 31, 2009 ("Q1 2009"), Crowflight achieved the following:

- The Company shipped its first railcar of nickel concentrate to Xstrata Nickel's smelter in Sudbury, Ontario on February 13, 2009.

- The Company produced approximately 139,000 pounds of pre-commercial production nickel.

- The Company sold approximately 65,500 pounds of pre-commercial production nickel at an average nickel price of US$4.46/lb.

- Results from a program of surface and underground drilling completed on the property from 2007 to 2009 were used to produce an updated National Instrument (NI) 43-101 compliant Mineral Reserve and Resource estimate. As a result, the estimated fully diluted Proven and Probable Reserves at Bucko have increased to 3,708,000 tonnes grading 1.45% nickel. This represents a 22% increase in contained nickel over the 2007 Bankable Feasibility Study. A forecasted long-term nickel price of US$6.00 and a 0.81 CAD$:US$ exchange rate was assumed. Mining reserves were established using a 1.25% nickel marginal cut-off grade. See press release of March 12, 2009 for further details regarding the reserve estimate.

- The Company monetized all remaining nickel forward sales and foreign exchange contracts for net proceeds of $10.1 million. Of this, $7.6 million was used to pay off the outstanding balance of the debt facility plus accrued interest. Crowflight is now debt-free as a result.

- Subsequent to quarter end, the Company completed two separate private placements. The first one consisted of 46,000,000 units (the "Units") of the Company at a price of $0.17 for each Unit for total gross proceeds of $7,820,000. The second placement consisted of 29,411,765 units (the "Units") of the Company at a price of $0.17 for each Unit for total gross proceeds of $5,000,000 with Dumas Contracting Limited. Each Unit consists of one common share of Crowflight (a "Unit Share") and one-half of one common share purchase warrant (each full warrant, a "Warrant"), each full Warrant being exercisable to acquire one common share of Crowflight at a purchase price of $0.20 for a period of 24 months following the closing date of April 30, 2009. Please see press releases dated April 15, 17, and 30, 2009 for further details.

Financial Results

For the three months ended March 31, 2009, the Company reported a net income of $1.5 million or $0.01 per share, compared to a net loss of $2.8 million or ($0.01) per share in the same period last year. The results for the first quarter of 2009 include a net realized gain of $2.1 million on the monetization of all outstanding forward nickel and currency hedges.

Cash provided by operations for the quarter ended March 31, 2009 was $8.5 million compared to cash provided by operations of ($0.88) million in the same period last year. Cash of $10.1 million was generated from the monetization of the Company's forward nickel and currency contracts.

Working capital deficit was $9.5 million at March 31, 2009, including cash and cash equivalents of $1.6 million.

Outlook

Due to commissioning issues in the first quarter, Crowflight has revised its 2009 guidance from 362,000 tonnes of 1.65% nickel to recover 9.1 million pounds of payable nickel to 326,000 tonnes of 1.59% nickel to recover 7.9 million pounds of payable nickel. Average operating cash cost (after declaration of commercial production) remains unchanged at US$3.61 per pound(1) at an exchange rate of 1.20 to 1.00 Canadian to the US dollar.

(1) Non-GAAP Measure

This press release refers to cash cost per pound which is not a recognized measure under Canadian GAAP. This non-GAAP financial measure does not have any standardized meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable to a similar measure presented by other issuers. Management uses this measure internally. The use of this measure enables management to better assess performance trends. Management understands that a number of investors and others who follow the Company's performance assess performance in this way. Management believes that this is a better indication of its expected performance in future periods. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP.

A number of stoping areas have been developed on the 1,000 and 900 foot levels and a few of them are now available for production mining at Bucko. In addition, ore has been accessed on the 450 foot level and expectations are to open up new production on the 450 to 500 foot horizon in the next few months. Process plant recoveries, throughputs and concentrate quality are meeting expectations more consistently in the last month with throughput rates ranging from 800 to over 1,000 tonnes per day. Recent nickel recoveries since the last week of April have been tracking the grade recovery curve established during the feasibility study. At the targeted grade of 1.59% nickel, the recovery should be 77%.

Crowflight expects to declare commercial production at Bucko shortly.

Qualified Person/Quality Control Procedures

This press release and the technical information contained therein has been prepared and reviewed by Mr. Greg Collins, P.Geo. (APGO/APEGM) and VP Exploration of Crowflight and Paul Keller, P. Eng. and COO of Crowflight, both of whom are Qualified Person(s) under the NI 43-101 guidelines.

Crowflight Minerals -- Canada's Newest Nickel Producer

Crowflight Minerals Inc. (TSX:CML) is a debt-free Canadian junior mining company that is producing nickel at the Bucko Lake Nickel Mine near Wabowden, Manitoba. Crowflight expects to achieve full commercial production at Bucko in the second quarter of 2009. The Company is also focused on nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.

Cautionary Note on Forward-Looking Information

This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the Company's development potential and timetable of the Company's properties, including the Bucko Lake Project; the future price of nickel and other minerals; the estimation of mineral reserves and mineral resources; conclusions of economic evaluations; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Bucko Lake Project are based on assumptions underlying mineral reserve and mineral resource estimates and the probability of realizing such estimates that are set out herein. Capital and operating cost estimates are based on extensive research of the Company, purchase orders placed by the Company to date, recent estimates of construction and mining costs and other factors that are set out herein. Production estimates are based on mine plans and production schedules, which have been developed by the Company's personnel and independent consultants.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events and delays during construction, expansion and start-up; variations in mineral grade and recovery rates; receipt and revocation of government approvals; timing and availability of external financing on acceptable terms; actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of minerals, particularly nickel; failure of plant, equipment or processes to operate as anticipated; reliance on joint venture partners; accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

Further information is available on the Company's website at [ www.crowflight.com ].

CONSOLIDATED BALANCE SHEETS
As at
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 March 31, December 31,
 2009 2008
ASSETS (unaudited) (audited)
Current
 Cash and cash equivalents $ 1,610,809 $ 10,607,543
 Restricted cash (Note 7) - 2,999,998
 Amounts receivable 606,878 607,125
 Inventory (Note 3) 958,541 268,285
 Prepaid expenses and deposits 353,676 138,463
 Derivative asset (Note 4) - 8,668,392
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 3,529,904 23,289,806

Deposits and advances 536,709 536,709
Equipment (Note 3) 100,059 109,241
Exploration and development property, plant
 and equipment and deferred expenditures
 (Note 5) 165,718,779 153,939,715
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 $ 169,885,451 $ 177,875,471
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LIABILITIES
Current
 Accounts payable and accrued liabilities
 (Note 10) $ 13,009,346 $ 14,950,385
 Equipment leases (Note 6) 42,477 48,129
 Derivative liability (Note 4) - 624,223
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 13,051,823 15,622,737

Equipment leases (Note 6) 96,173 107,286
Long term debt (Note 7) - 7,600,000
Asset retirement obligations (Note 8) 914,026 359,000
Future income tax liability (Note 11) 26,855,000 24,139,000
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 40,917,022 47,828,023
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SHAREHOLDERS' EQUITY
Common shares (Note 9(a)) 96,342,779 99,289,864
Warrants (Note 9(b)) 4,944,374 4,944,374
Contributed surplus (Note 9(d)) 13,830,633 13,485,751
Retained Earnings/(Deficit) 13,850,643 12,327,459
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 128,968,429 130,047,448
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 $ 169,885,451 $ 177,875,471
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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at [ www.sedar.com ] and
on the Company's website at [ www.crowflight.com ].



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)

 Common Shares Warrants
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 No. $ $
 ------------------------------------

Balance, December 31, 2007 249,978,487 86,671,512 2,025,712
 -
 Private placement 39,680,000 15,251,000 -
 Value of warrants granted related to
 debt facility - - 3,719,479
 Value of warrants to be granted - - 849,709

 Exercise of warrants and broker
 warrants 1,115,836 446,334 -

 Valuation allocation on exercise of
 warrants - 118,742 (118,742)
 Exercise of stock options 2,530,000 569,531 -
 Valuation allocation on exercise of
 stock options - 979,566 -
 Stock based compensation - - -
 Flow through share tax effect - (3,563,000) -
 Value of broker warrants - (375,186) 375,186
 Valuation allocation on expiry of
 warrants and broker warrants - - (1,906,970)
 Share issue costs - (1,198,635) -
 Tax effect of cost of issue - 390,000 -
 Income for the period - - -
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Balance, December 31, 2008 293,304,323 99,289,864 4,944,374

 Stock based compensation - shares 174,572 34,915 -
 Stock based compensation - options - - -
 Flow through shares tax effect - (2,982,000) -
 Income for the period - - -
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Balance, March 31, 2009 293,478,895 96,342,779 4,944,374

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)

 Contributed Accumulated Shareholders'
 Surplus Deficit Equity
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 $ $ $
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Balance, December 31, 2007 10,193,512 (22,151,940) 76,738,796

 Private placement - - 15,251,000
 Value of warrants granted related to
 debt facility - - 3,719,479
 Value of warrants to be granted - - 849,709

 Exercise of warrants and broker
 warrants - - 446,334

 Valuation allocation on exercise of
 warrants - - -
 Exercise of stock options - - 569,531
 Valuation allocation on exercise of
 stock options (979,566) - -
 Stock based compensation 2,364,835 - 2,364,835
 Flow through share tax effect - - (3,563,000)
 Value of broker warrants - - -
 Valuation allocation on expiry of
 warrants and broker warrants 1,906,970 - -
 Share issue costs - - (1,198,635)
 Tax effect of cost of issue - - 390,000
 Income for the period - 34,479,399 34,479,399
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Balance, December 31, 2008 13,485,751 12,327,459 130,047,448

 Stock based compensation - shares - - 34,915
 Stock based compensation - options 344,882 - 344,882
 Flow through shares tax effect - (2,982,000)
 Income for the period - 1,523,184 1,523,184
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Balance, March 31, 2009 13,830,633 13,850,643 128,968,429

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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at [ www.sedar.com ] and
on the Company's website at [ www.crowflight.com ].



CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(unaudited)
For the three months ended March 31,
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 2009 2008
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Expenses
Professional, consulting and management fees
 (Note 9(a) and (c)) $ 584,294 $ 719,341
General and office 124,466 72,288
Shareholder communications and investor
 relations 86,106 89,840
Travel 50,404 57,544
Interest expenses and bank charges 34,842 2,407
Amortization 953 2,686
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 881,065 944,106
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(Loss) before the undernoted (881,065) (944,106)

Interest income 21,511 51,686
Interest on long term debt (48,192) (63,070)
General exploration (50,000) -
Debt facility transaction costs - (2,040,905)
Accretion (Note 8) 57,416 (7,000)
Recovery of expenditures 66,958 -
Net gain on derivative instruments (Notes 4) 2,090,556 -
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Income/(loss) before income taxes 1,257,184 (3,003,395)

Future income taxes (Note 11) 266,000 163,000
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Income/(loss) for the period 1,523,184 (2,840,395)

RETAINED EARNINGS/DEFICIT, beginning of
 period 12,327,459 (22,151,940)
 ------------ ---------------

RETAINED EARNINGS/DEFICIT, end of period $ 13,850,643 $ (24,992,335)
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Earnings/(loss) per share -basic $ 0.01 $ (0.01)
Earnings/(loss) per share -diluted $ 0.01 $ (0.01)

Weighted average number of shares - basic 293,306,263 250,608,767
Weighted average number of shares - diluted 293,311,875 250,608,767

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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at [ www.sedar.com ] and
on the Company's website at [ www.crowflight.com ].



CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
For the three months ended March 31,
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 2009 2008
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OPERATING ACTIVITIES:
Net income/(loss) for the period $ 1,523,184 $ (2,840,395)
Charges not affecting cash:
 Amortization 953 2,686
 Stock-based compensation expense (Note 9(a)
 and (c)) 365,547 522,557
 Accretion (Note 8) (57,416) 7,000
 Debt facility transaction costs - 2,040,905
 Change in value of derivative instruments 8,044,169 -
 Future income tax recovery (Note 11) (266,000) (163,000)
Net change in non-cash working capital (1,118,963) (452,465)
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 8,491,474 (882,712)
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FINANCING ACTIVITIES:
Debt facility, net of transaction costs (7,600,000) 15,917,649
Common shares issued through private
 placements - -
Warrants issued through private placements - -
Shares issued from exercise of warrants and
 options - 435,447
Payments on equipment leases (16,765) (27,109)
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 (7,616,765) 16,325,987
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INVESTING ACTIVITIES:
Exploration and development property, plant
 and equipment, and deferred expenditures (11,144,143) (16,770,258)
(Decrease)/Increase in accounts payable
 attributable to property development and
 exploration (1,727,298) 3,489,717
Release of restricted cash 2,999,998 -
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 (9,871,443) (13,280,541)
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CHANGE IN CASH AND CASH EQUIVALENTS (8,996,734) 2,162,734
CASH AND CASH EQUIVALENTS, beginning of
 period 10,607,543 9,004,788
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CASH AND CASH EQUIVALENTS, end of period $ 1,610,809 $ 11,167,522
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Cash and cash equivalents consist of:
 Cash 801,384 9,186,268
 Equivalents 809,425 1,981,254
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 $ 1,610,809 $ 11,167,522
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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis, available online at [ www.sedar.com ]
and on the Company's website at [ www.crowflight.com ].


TSX Trading Symbol: CML
Total Shares Outstanding: 368.9MM
Fully Diluted: 450.3MM
52-Week Trading Range: C$0.09 - $0.80