Geomark Announces Second Quarter 2012 Results
14 Août 2012 - 11:45PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
Geomark Exploration Ltd. (TSX VENTURE:GME) (Geomark or the Company) is pleased
to announce its operating and financial results for the three months and six
months ended June 30, 2012. The quarterly report is summarized in this release,
with the complete version of the related condensed consolidated financial
statements and notes, as well as management's discussion and analysis, available
on the System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com and on Geomark's website at www.geomark.ca
Financial and Operational Highlights
As at and for the periods ended Three Months ended Six Months ended
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June 30, June 30, June 30, June 30,
2012 2011 2012 2011
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Financial ($ 000s, except $ per
share)
Revenue
Mineral Division(1) 170 177 339 352
Oil and Gas Division 893 547 1,419 961
Funds Flow(2) 69 270 320 392
Per Share Basic and Diluted 0.00 0.01 0.01 0.01
Cash Flow (Deficiency) From
Operations (227) (24) (272) (186)
Per Share Basic and Diluted (0.00) (0.00) (0.01) (0.00)
Net Earnings 629 141 659 114
Per Share Basic and Diluted 0.01 0.00 0.01 0.00
Capital Expenditures
Mineral Division 431 616 458 1,292
Oil and Gas Division 3 10 20 15
Total Assets
Mineral Division 41,091 41,170
Oil and Gas Division 11,617 13,589
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Oil and Gas Operations
Barrels of Oil Equivalent (BOE) per
day(3) 122 124 123 131
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(1) Geomark is a junior mineral exploration company with mineral revenue
currently from non-production sources.
(2) Funds flow is not a recognized measure under IFRS. For these purposes,
the Company defines funds flow as funds provided by operations after
including investment dividend and interest income and the changes in
non-cash investing working capital related to these sources of
investment income.
(3) Barrels of Oil Equivalent (BOE) are calculated using a conversion ratio
of 6 MCF to 1 barrel of oil. The conversion is based on an energy
equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead and as such may
be misleading if used in isolation.
Business Development
-- Geomark's business strategy continues to be by acquisitions or joint
venture arrangement whereby the Company will have majority interests in
either early stage or smaller advanced stage precious metal properties.
The Company has been selective with regard to the geological potential
of the various exploration plays compared to the overall deal terms.
-- During the second quarter, Geomark acquired a 100 percent working
interest in the Kings Canyon gold property in southwest Utah. These
properties cost Cdn $325,000. They have net smelter royalties on them
that range from two to five percent. The purchase includes the right to
assume an existing option to acquire a 100 percent interest in a claim
block (and historical gold resource) by paying U.S. $1.0 million to the
option holder prior to December 6, 2013. The option property carries two
net smelter royalties totaling five percent.
-- Geomark's goal with the Kings Canyon property is to develop a critical
mass of near surface, low grade gold mineralization of sufficient size
to justify a low cost heap leaching operation. Several zones of gold
mineralization, located outside of the existing resource, have been
identified on the claim block and the property has good exploration
potential. As such, the Company initiated a drilling program in late
July 2012 which is currently ongoing.
-- The drilling contractor has mobilized a Schramm 450 reverse circulation
drill to the Kings Canyon property. A minimum drill program of 5,000
metres is planned for the first phase of drilling. A total of 11 holes
(approximately 1,500 metres) has been completed as of August 9, 2012.
Samples will be assayed and results for the first batch are expected in
September.
-- The main objective of the Phase 1 program is to extend the strike of
known mineralization in the two main zones identified on the property;
the Crown and Royal Zones. Meterage has also been allocated to screen
prospective areas for new mineralized zones. The Phase 1 drilling is
expected to be completed by mid to late September and based on those
results a second Phase 2 program may be initiated later in the fall.
-- During the quarter, Geomark also conducted a geophysical program on two
of its Ontario gold properties, Whitney and Tisdale. After an initial
review of the results, no drilling is planned in the near future.
Financial
-- Geomark currently has a positive working capital position of
approximately $39.3 million with additional very liquid investments
presently valued at approximately $9.9 million (total of $49.2M in cash
and investments). Cash flow derived from its oil and gas production,
dividends and interest income will cover all general and administrative
costs on a yearly basis and as well will be used towards exploration
expenses and potential property acquisitions.
Outlook
-- Geomark is a well-financed exploration company with proven management,
experienced staff, a large cash position and immediate cash flow from
its oil and gas and investment assets. The Company's main focus in the
minerals sector is its exploration activities on the Kings Canyon gold
property while also continuing to assess additional properties and their
potential opportunities.
-- The Company's current focus is in the southwest United States where
possible synergies to its Kings Canyon property may be realized.
Continued volatility in the world's economies has restricted the flow of
equity to junior exploration companies and Geomark's solid financial
position remains a highly competitive advantage in the acquisitions
marketplace.
-- The Board and management, however, recognize that the Company's share
price has gone down over the past year to the point where it is trading
well below net asset value. Some of the reduction may be attributable to
general market conditions but the Company is also taking a proactive
perspective and is evaluating various investment opportunities to assist
in maximizing the rate of return from its significant cash balance and
investment assets.
Cautionary Statement
This summarized news release should not be considered a suitable source of
information for readers who are unfamiliar with Geomark Exploration Ltd. and
should not be considered in any way as a substitute for reading the full report.
For the full report, please go to www.geomark.ca
Use of non-IFRS financial measures
Included in this report we use the term "funds flow" to analyze the Company's
operating performance. Funds flow is not a standardized measure recognized under
IFRS and does not have a standardized meaning prescribed by IFRS. This funds
flow calculation is considered by management to be informative for shareholders
and analysts. This measure may differ from those made by other companies and
accordingly may not be comparable to such measures as reported by other
companies.
Geomark's funds flow is calculated by adding investment dividend and interest
income and the changes in non-cash investing working capital related to these
sources of investment income to cash flow (deficiency) from operating
activities.
Forward-Looking Statements
Certain statements contained in this report include statements which contain
words such as "anticipate", "could", "should", "expect", "seek", "may",
"intend", "likely", "will", "believe" and similar expressions, statements
relating to matters that are not historical facts, and such statements of our
beliefs, intentions and expectations about development, results and events which
will or may occur in the future, constitute "forward-looking information" within
the meaning of applicable Canadian securities legislation and are based on
certain assumptions and analysis made by us derived from our experience and
perceptions. Forward-looking information in this report includes, but is not
limited to: expected cash provided by continuing operations; future capital
expenditures, including the amount and nature thereof; mineral prices and
demand, oil and natural gas prices and demand; expansion and other development
trends of the mineral and oil and gas industry; business strategy and outlook;
expansion and growth of our business and operations; and maintenance of existing
customer, supplier and partner relationships; supply channels; accounting
policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and
analyses made by us in light of our experience and perception of historical
trends, current conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances. The risks,
uncertainties, and assumptions are difficult to predict and may affect
operations, and may include, without limitation: foreign exchange fluctuations;
equipment and labour shortages and inflationary costs; general economic
conditions; industry conditions; changes in applicable environmental, taxation
and other laws and regulations as well as how such laws and regulations are
interpreted and enforced; the ability of mineral companies to raise capital; the
effect of weather conditions on operations and facilities; the existence of
operating risks; volatility of oil and natural gas prices; oil and gas product
supply and demand; risks inherent in the ability to generate sufficient cash
flow from operations to meet current and future obligations; increased
competition; stock market volatility; opportunities available to or pursued by
us; and other factors, many of which are beyond our control. The foregoing
factors are not exhaustive.
Actual results, performance or achievements could differ materially from those
expressed in, or implied by, this forward-looking information and, accordingly,
no assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of them do, what
benefits will be derived therefrom. Except as required by law, Geomark disclaims
any intention or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this
cautionary statement.
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