Orosur Mining Regulatory News (OMI)

13 Aug 2008 07:00

Uruguay Mineral Exploration Inc. ("UME" or the "Company") (TSX VENTURE:UME)(LSE:UGY), a South American gold production and exploration company, todayreported results for the year ended May 31, 2008. David Fowler, UME's Chief Executive Officer, commented: "We have developed afour-year mine plan at San Gregorio which anticipates 240,000 ounces ofproduction based on existing deposits. This establishes a clear base from whichto build improvements through exploration, resource conversion, undergroundmining and process improvements. As a result of these activities, we areconfident that actual production will exceed the current profile and the minelife will be extended. "No dividend will be declared for the second half of the fiscal year," Mr.Fowler continued. "We believe that, in the coming years, cash will best bedirected at exploration and development activities and we therefore have madethe decision to cease dividend payments." Tony Shearer, UME Chairman, said, "In the last few months, the hard work of ourfirst class exploration team has begun to show real results: -- We are having success developing higher-grade ore near the mine, at Polvorin, Castrillon, Veta A and Arenal down plunge. As a result, we are confident that the mine life will be considerably longer than the current plan to produce a total of 240,000 ounces of gold over four years; -- The programme to the east of the San Gregorio/Arenal trend at Los Castillos, shows promising results, and leads us to believe that we have found the eastern extensions of an area that has already produced over 900,000 ounces; -- At Presidente Terra, anomalous mineralization has been encountered in the majority of the targets tested to date; -- Our drill results at Lascano are very encouraging; and -- Field work at Casupa/Crucera has identified promising targets and drilling will start as soon as permits are granted." \* T Three-months Fiscal Year ended May 31, ended May 31, -------------- ------------- Q4 2008 Q4 FY FYSummary of Results(1) 2007 2008 2007----------------------------------------------------------------------Operating ResultsGold produced Ounces 20,713 29,265 90,668 96,420Average cash cost US$/oz 540 273 413 294Average price received US$/oz 926 658 814 610Financial ResultsRevenue $US '000s 22,408 21,840 79,061 63,056Net income for the period $US '000s (3,737) 6,337 7,798 14,554Cash flow from operations(2) $US '000s 11,804 11,356 33,067 24,177Basic earnings (loss) per share $US (0.08) 0.13 0.16 0.30Cash at the end of the period $US '000s 18,601 13,978 18,601 13,978Total debt at the end of the period $US '000s 2,300 3,385 2,300 3,385======================================================================(1) Results are based on Canadian GAAP and expressed in U.S. dollars.(2) Before non-cash working capital movements.\* T REVIEW FOR THE FISCAL YEAR ENDED 31 MAY 2008 Operations Gold production for the full year was 90,668 ounces compared to our target of95,000 ounces. This shortfall resulted from a 10-day industrial dispute in April2008, when no production occurred, and lower than anticipated grade in the laterpart of the year. The 10-day work stoppage was disappointing, particularlybecause it occurred against a background of three years of constructive unionnegotiations. This action, by a minority of the workforce, followed thedismissal of an employee for a series of safety breaches. From UME'sperspective, the right to take disciplinary action for repeated safety breachesis fundamental to ensuring a safe work environment. That right was ultimatelyupheld in tripartite negotiations convened by the Ministry of Labour. Whilst gold prices increased significantly during this period, from $US 659 at 1June 2007 to $US 886 at 31 May 2008, margins have suffered from a substantialincrease in unit costs. For the fiscal year, cash costs were $US 413 per ounce,above the forecast range of $US 360 to $US 380 per ounce expected at thebeginning of the period. This was principally due to a 5,000 ounce shortfall inanticipated production for the fourth quarter, increases in energy andconsumable costs, and the appreciation of the Uruguayan peso against the $US. Areconciliation of the cash cost per ounce of $US 413 for fiscal 2008 and theforecast of $US 345 per ounce at the beginning of the financial year is shownbelow. \* T $US per ounce produced----------------------------------------------------------------------Average cash costs forecast for the 2008 financial year 345----------------------------------------------------------------------Difference due to lower production for the year (assuming 95,000 full year) 19----------------------------------------------------------------------Cost changes 49----------------------------------------------------------------------Actual cash costs for the 12-month period ended May 31, 2008 413----------------------------------------------------------------------\* T In 2008 we continued to work hard to focus on productivity, systems and trainingto minimize the impact of cost increases and we will continue to do so in 2009.Initiatives to increase silver recoveries and marginally increase process plantthroughput are also expected to form part of our plans to mitigate costincreases beyond fiscal 2009. Financial Performance UME reported a net profit after tax for the financial year to May 31 2008 of $US7.8 million or $US 0.22 basic earnings per share. We have elected to take aconservative position on the exploration portfolio and this result includes awrite down of exploration expenditure of $US 11.1 million, including allremaining historical expenditures on nickel, base metals and diamonds. Operational cash flows were $US 26.5 million in 2008. Of this amount, $US 9.3million was invested in property plant and equipment, and $US 9.6 million inexploration throughout Uruguay. An additional $US 2.7 million was returned toshareholders as dividends and a further $US 0.4 million was used to repurchaseshares. We ended the year with a net increase of $US4.5 million in cashbalances. Cash on hand at year end totalled $US 18.5 million, up from $US14.0 million atthe beginning of the year. In the first quarter of the current financial year wepaid down $US 2.1 million of convertible notes, totally eliminating debt. We believe that in the coming years cash will best be directed at explorationand development activities and we have therefore taken the prudent decision tocease dividend payments and suspend the repurchase of the company's share buyback program. SAN GREGORIO DEVELOPMENT The San Gregorio operation has historically produced in excess of 900,000 ouncesof gold. Our base case mine plan over the next four years shows a further240,000 ounces will be produced, albeit at lower grades. As outlined last year,our challenge remains to develop additional resources and to look at alternativemining or processing methods to improve production levels and extend mine life. During 2008 we completed studies, test work and benchmarking of processingalternatives. This analysis justifies a capital investment of $US 25 million toupgrade the plant to a capacity of 1.9 million tonnes per annum if we canidentify a further 2 million tonnes of ore at more than 2 g/t equivalent (about130,000 ounces). This remains a real possibility as we continue to make progressin exploration. Heap leach test work has now commenced and the results of thistesting will be incorporated into future mine development scenarios asappropriate. The review of processing alternatives, in turn, identified two potentiallybeneficial enhancements to the current processing plant. The first is a $US 2.5million investment in an expanded elution circuit that, together with theaddition of oxygen to the circuit, has the potential to increase gold recoveryby half a percent and increase silver recovery from 40% to 80%. The second is a$US 1 million investment to add a secondary crushing circuit stage to increasethroughput by approximately 10%. Evaluation of these two opportunities isexpected to be completed in the first half of the 2009 financial year andimplementation would be in the second half, if justified. Our current four-year mine plan of 240,000 recovered ounces over four yearsassumes a gold price of $750 per ounce. Additional resources could convert toreserves at higher gold prices. By way of example, modeling during the yearexamined the potential of pit cutbacks to further extend the mine plan. Thismodeling demonstrated that at Arenal a pit cutback would produce additionalreserves of over 2 million tonnes at approximately 1 g/t (about 62,500 ounces)at a gold price of $800 per ounce. Initial results of potential underground mining scenarios for Arenal lead us tobelieve that underground mining is likely to produce better returns thandeepening existing pits. Deep drilling and mine planning will be completed atArenal in the first half of 2009. In the Rieles area of San Gregorio wecurrently have a resource in excess of 2 million tonnes above 1 g/t that is notincluded in the mine plan. Additional drilling and resource modeling will becompleted in this area as well as at the Ombu and Santa Teresa deposits duringthe 2009 fiscal year to try to convert additional resources to reserves throughopen pit or underground means. The San Gregorio operation represents a significant asset in that incrementalfeed for the process plant could be sourced from anywhere within Uruguay,without having to invest the significant capital required by a new plant or theneed to obtain more onerous environmental permits. Assuming a gold price of$US700 per ounce, it is estimated that the cost of transporting ore at currentfuel prices from remote sources is equivalent to 0.9 g/t for every 100kilometres of haulage. This represents 2.9 g/t for a project such as PresidenteTerra, 320 kilometres by road to the south. Transportation costs can be furtherreduced if those sources are metallurgically amenable to concentration prior tohaulage. GROWTH Over the past two years our priority has been to achieve organic growth throughexploration discovery. While this is always challenging, we believe that we haveprogressed and there are real opportunities for discovery and value creation inour existing exploration portfolio. The area near the San Gregorio mine is structurally complex and highly anomalousfor gold mineralisation. Our focus during 2007 and 2008 has been to betterunderstand the structural setting and ore controls within the district and touse this knowledge, together with field mapping and sampling, to re-examine oldtargets and define new ones. This process has allowed us to successfully developa structural model, and target and define modest new resources at Veta A, VetaSur, Polvorin and Castrillon. It also is being used to define new bulk targetsalong strike to the east of Arenal in areas such as Los Castillos. Work willcontinue in these areas to define targets for drilling in the first half offiscal 2009. Our regional exploration program in the Isla Cristalina has defined drilltargets at seven projects in the central, western and eastern parts of IslaCristalina Belt that we plan to drill in the first half of the 2009 financialyear. Additional areas are also in the pipeline to be developed as drill targetsfor the second half of the year. Outside the Isla Cristalina Belt we spent most of 2007 defining targets and in2008 we restarted our drill testing. The best results to date have been obtainedat Presidente Terra with a number of good intercepts. Drilling programmes willcontinue and we are optimistic that we can convert this initial success into aresource by the end of fiscal 2009. Drilling is expected to recommence in theCasupa/Crucera district in the first half of fiscal 2009, where our objectivewill also be to define resources during 2009. The proximity of these two areas,approximately 100 kilometres apart, provides good potential for the combineddevelopment of a project in southern Uruguay. The detailed geological work completed at Lascano during 2008 confirms that wehave a relatively young intrusive - approximately 120 million years old, in arift setting. This work, together with the alteration and mineralisation profileis suggestive of an IOCG or porphyry copper setting and provides significantencouragement as we start our second phase drilling. The initial three holes inthis programme have encountered modest amounts of hydrothermal alteration andassays are pending. We also completed field visits or desktop evaluations of 10 gold developmentprojects outside Uruguay during 2008. The objective of these evaluations was andis to acquire projects which have the potential to add to our productionprofile. We also have seen a growth of project acquisition opportunities amongthe junior mining companies over the past six months, as market conditions havebecome less favourable. EXPLORATION HIGHLIGHTS Key exploration highlights for fiscal 2008: -- Deep drilling at Arenal has identified a zone of higher grade mineralisation down plunge of the existing ore body that has the potential to be mined as an underground operation. -- Higher grade resources defined at Castrillon, Polvorin and Veta Sur during the year. These deposits will provide mine feed for San Gregorio operation in the coming years. -- Generative work east of Arenal at Los Castillos has identified anomalous gold in rock chips associated with a potential continuation of the Arenal/San Gregorio thrust system. -- Exploration work at Presidente Terra and in the Casupa district is defining high potential exploration targets. -- Detailed geological work at Lascano completed during 2008 confirms potential for IOCG or porphyry copper system. -- The Company increased its investment in acquisition evaluation throughout the year with numerous projects in regional countries being visited. Efforts will continue to find value enhancing projects for our shareholders. A total of $US 9.6 million was invested in exploration during fiscal 2008 andincluded 63,721 meters of drilling. UME's aggressive exploration programmeincluded over 40 projects evaluated and 20 of them drill tested over the last 12months. The most important projects are summarised in the table below. \* T Project Activities 2007 / 2008 2008/2009 Permitting Results----------------------------------------------------------------------Isla Cristalina Near Mine----------------------------------------------------------------------Arenal 5,155 Defining down 4,325 Granted meters dip/ plunge meters drilled extension of drilling----------------------------------------------------------------------San Gregorio 5,794 Deep drilling 2,400 Granted meters encountered meters drilled mineralization. of Foot wall drilling exploration with no significant results----------------------------------------------------------------------Santa Teresa 621 meters Veta exploration 2,200 Granted drilled with no meters significant of results drilling----------------------------------------------------------------------Polvorin 5,665 Discovered and 200 Granted meters defined vein meters drilled like of mineralization drilling----------------------------------------------------------------------Veta Sur 7,323 Defined resource 750 Granted meters meters drilled of drilling----------------------------------------------------------------------Veta A 1,344 Exploration on 750 Granted meters extension with meters drilled limited success of drilling----------------------------------------------------------------------Cross Hill 2,697 No significant meters results drilled----------------------------------------------------------------------Nueva Australia Surface 3,300 Granted sampling meters and of mapping drilling----------------------------------------------------------------------Los Castillos Surface Discovery of a 6,500 H1 2009 sampling number of meters and different of mapping targets drilling----------------------------------------------------------------------Isla Cristalina Central----------------------------------------------------------------------Argentinita/Zapucay 10,004 Drilling defined 3,000 Granted meters remnant meters drilled resources of drilling----------------------------------------------------------------------Lavadero, Tortoni, 9,790 No significant No Granted Papagayo, Laureles meters results drilling drilled planned----------------------------------------------------------------------Tito Lopez, Zaballa Mapped and Drill targets 2,500 H1 2009 sampled defined meters of drilling----------------------------------------------------------------------Isla Cristalina West----------------------------------------------------------------------Veta Rodrigo 1,114 Mineralization 1,850 H2 2009 meters encountered and meters drilled to be further of defined drilling----------------------------------------------------------------------Castrillon 2,974 Resource and 1,000 meters reserve being meters drilled defined of drilling----------------------------------------------------------------------Isla Cristalina Eastern----------------------------------------------------------------------Curtume Mapped and Drill targets 1,500 Granted sampled defined meters of drilling----------------------------------------------------------------------Vaca Muerta Mapped and Drill targets 1,500 H1 2009 sampled defined meters of drilling----------------------------------------------------------------------Vichadero Mapped and Drill targets 3,000 H1 2009 sampled defined meters of drilling----------------------------------------------------------------------Cerro Chato Generative Encouraging H2 2009 work in results progress reported----------------------------------------------------------------------Don Feliciano, Florida and Arroyo Grande Belts----------------------------------------------------------------------Presidente Terra Mapped and Vein 8,000 Two thirds sampled. mineralization meters granted, Drilling defined of H2 2009 commenced drilling with 1,550 meters drilled----------------------------------------------------------------------Bragado 1,474 No significant Granted meters gold results drilled----------------------------------------------------------------------Volcadero 965 meters No significant Granted drilled gold results----------------------------------------------------------------------Texas Mapped, Encouraging 1,000 H2 2009 sampled results meters and reported of generative drilling work in progress----------------------------------------------------------------------Casupa Mapped, Vein 5,000 H2 2009 Sampled mineralization meters Generative defined of work in drilling progress----------------------------------------------------------------------Crucera 3,940 Vein 3,000 H2 2009 meters mineralization meters drilled defined of drilling----------------------------------------------------------------------Nueva Helvecia Mapped, Weak 750 Granted sampled mineralization meters with 1,826 encountered of meters drilling drilled----------------------------------------------------------------------Arroyo Grande Belt Generative Encouraging 5,000 H2 2009 work in results meters progress reported of drilling----------------------------------------------------------------------Chamizo/Mahoma Mapped and Weak 3,000 H2 2009 sampled mineralization meters reported of drilling----------------------------------------------------------------------Lascano 2,414 Weak 7,000 Granted meters mineralization meters drilled reported of drilling----------------------------------------------------------------------\* T For a detailed review of exploration progress for fiscal 2008, please refer tothe Company's Exploration Report published on July 17, 2008. OUTLOOK UME is committed to increasing shareholder value through increasing resourcesand reserves and growing its production profile. The Company's strategy toachieve this objective is organic growth through successful exploration inUruguay, optimisation of and the development of our San Gregorio Operations andacquisition of properties throughout Latin America that are in production or canbe brought into production within a three year timeframe. The Company expects to produce 80,000 ounces of gold during fiscal 2009 year ata cash cost per ounce target of $US 575 per ounce. This cost assumes that wastemining costs are expensed and that fuel prices are the equivalent to $US 122 perbarrel and the Uruguayan Peso to $US exchange rate is 19.5. Production isexpected to be 17,000 ounces in the first quarter of fiscal 2009. FOURTH QUARTER 2008 EARNINGS CONFERENCE CALL UME will hold its fiscal 2008 fourth quarter earnings conference call onWednesday, August 13, 2008 at 10:00 Toronto time, 15:00 UK time. During the call management will discuss its year-end results as well as itsfour-year base case mine plan and strategies to improve this plan. The conference call can be accessed by dialing +1 718 354 1361 (Canada and US)or +44 (0)20 7138 0821 (UK) and giving passcode 5432796. All participants willbe required to register with the operator. A live web cast of the conference call and replay will be available athttp://www.uruguayminerals.com. You will need to have Windows Media Playerinstalled on your computer and you will also be required to complete aregistration page in order to log on to the webcast. A slide presentation will also be available for download from 09:00 Torontotime, 14:00 UK time from the investor relations section of UME's corporatewebsite at: http://www.uruguayminerals.com/investors/presentations/ A replay of the call will be available until midnight (UK time) on August 24,2008. The replay is accessible by dialing +1 718 354 1112 (Canada & US) or +44(0)20 7806 1970 (UK) and entering passcode 5432796#. Qualified Person's Statement The technical information presented in this press release has been reviewed andverified by Mr. John Sadek, Vice President Operations and a Mining Engineer, andMr. George Schroer Vice President Exploration and a Certified ProfessionalGeologist. Mr. Sadek and Mr. Schroer are the Qualified Persons for the purposesof the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Mr.Sadek has a Bachelor of Engineering (Mining) from the University of Sydney andis a member of the AusIMM and SME. He has over 20 years of internationalexperience in mining. Mr. Schroer has a Masters of Science in Geology fromColorado State University and is a member of SEG and AIPG. He has over 20 yearsof international experience in exploration. Forward Looking Statements All statements, other than statements of historical fact, contained orincorporated by reference in this news release, including any information as tothe future financial or operating performance of UME, constitute"forward-looking statements" within the meaning of certain securities laws,including the "safe harbour" provisions of the Securities Act (Ontario) and theUnited States Private Securities Litigation Reform Act of 1995 and are based onexpectations estimates and projections as of the date of this news release.There can be no assurance that such statements will prove to be accurate, suchstatements are subject to significant risks and uncertainties, and actualresults and future events could differ materially from those anticipated in suchstatements. Forward-looking statements include, without limitation success ofexploration activities; permitting time lines; the failure of plant; equipmentor processes to operate as anticipated; accidents; labour disputes; requirementsfor additional capital title disputes or claims and limitations on insurancecoverage. UME disclaims any intention or obligation to update or revise anyforward looking statements whether as a result of new information, future eventsand such forward-looking statements, except to the extent required by applicablelaw. ENDS The TSX Venture Exchange has not reviewed and does not accept responsibility forthe adequacy or accuracy of this news release. About Uruguay Mineral Exploration Inc. Uruguay Mineral Exploration Inc. (UME) is a gold production and explorationcompany that identifies and develops mineral opportunities in South America. UMEis a fully integrated mining company, possessing the skills necessary to exploreand develop its discoveries. UME operates San Gregorio, the only producing goldmine in Uruguay, and is the leading mineral exploration company in Uruguay withan exploration portfolio of gold, diamonds and base metal prospects, includingcopper, nickel, lead, and zinc. Uruguay Mineral Exploration Inc. is quoted in Canada (TSXV) and London (AIM) andRBC Capital Markets is its Nominated Adviser and Broker. More information can befound at www.uruguayminerals.com \* TFor further information, please contact Uruguay Mineral Exploration IncTony Shearer, Chairman: +44 (0)20 7602 1570; tonyshearer@btinternet.comDavid Fowler, CEO: + 598 2 6016354; urumin@ume.com.uy Investor/Media RelationsEmily Bruning, Shared Value Ltd: +44 (0) 20 7321 5027; ebruning@sharedvalue.net Investor Relations in North AmericaSusan Borinelli, Breakstone Group: +1 646-330-5907; sborinelli@breakstone-group.com RBC Capital MarketsAndrew Smith: +44 (0) 20 7029 7882; andrew.smith@rbccm.comSarah Wharry: +44 (0)20 7653 4667; sarah.wharry@rbccm.com\* T \* T Uruguay Mineral Exploration Inc. Consolidated Balance Sheets Thousands of United States Dollars, except where indicated As at May 31 2008 2007---------------------------------------------------------------------- Assets Current assets Cash $18,601 $13,978 Accounts receivable (Note 4) 2,810 2,275 Inventories (Note 5) 16,749 8,484 Prepaid expenses and other 1,004 647 ------- ------- 39,164 25,384 Property, plant and equipment and mineral properties (Note 6) 29,681 30,714Deferred exploration (Note 7) 8,948 16,316Future income tax assets (Note 12) 5,375 2,387Restricted cash 191 140 ------- -------Total assets $83,359 $74,941 ---------------------------------------------------------------------- Liabilities and Shareholder's Equity Current liabilitiesAccounts payable and accrued liabilities $8,816 $6,238Current portion of long term debt (Note 8) 2,275 1,231 ------- ------- 11,091 7,469 Long term tax payable (Note 12) 2,414 2,414Long term debt (Note 8) 25 2,154Asset retirement obligation (Note 9) 2,869 2,036 ------- -------Total liabilities 16,399 14,073 Capital stock 35,043 34,592Warrants and Convertible notes (Note 10) 12 12Contributed surplus 3,882 3,297Accumulated other comprehensive income (19) (19)Retained earnings 28,042 22,986 ---------------Total shareholders' equity 66,960 60,868 ------- -------Total liabilities and shareholders' equity $83,359 $74,941----------------------------------------------------------------------\* T For notes, refer to the full financial statements available on the Company'swebsite. \* T Uruguay Mineral Exploration Inc. Consolidated Statements of Income, Comprehensive Income and Retained Earnings (Thousands of United States Dollars, except for earnings per share amounts and weighted average number of shares outstanding) For the years ended May 31 2008 2007---------------------------------------------------------------------- Net sales $79,061 $63,056 Operating expenses 38,947 31,928Amortization and depletion 15,724 8,361 ---------- ----------Operating expenses 54,671 40,289 Sub-total 24,390 22,767 Other expenses (income) Stock based compensation expense 792 975 Fair value adjustment for derivatives 0 (2,317) Exploration expenses written off 11,103 2,129 General and administrative expense 4,605 4,347 Interest expense, debt accretion and financing fees 371 314 Interest earned and other income (923) (510) Foreign exchange (238) 225 ---------- ---------- 15,710 5,163 Income before taxes 8,680 17,604 Current income taxes provision (Note 12) 3,870 3,582Future income taxes recovery (Note 12) (2,988) (532) ---------- ---------- Net and comprehensive income for the year 7,798 14,554 Retained earnings, beginning of year 22,986 10,775Dividends (2,742) (2,343) ---------- ---------- Retained earnings, end of year $28,042 $22,986 ---------------------------------------------------------------------- Earnings per common shareBasic (Note 16) 0.16 0.30Diluted (Note 16) 0.16 0.30 Weighted average shares outstandingBasic 48,911,779 48,258,892Diluted 48,924,272 48,668,269----------------------------------------------------------------------\* T For notes, refer to the full financial statements available on the Company'swebsite \* T Uruguay Mineral Exploration Inc. Consolidated Statements of Cash Flows Thousands of United States Dollars, except where indicated For the years ended May 31 2008 2007---------------------------------------------------------------------- Operating activities Net income for the year $7,798 $14,554 Adjustments for : Amortization and depletion 15,724 8,361 Exploration expenses written off 11,103 2,129 Accretion of debt 252 159 Future income taxes (2,988) (532) Tax deferred payment 0 928 Fair value adjustment of derivatives 0 (2,317) Stock based compensation 792 975 Others 386 (80) -------- -------- 33,067 24,177 Net change in non-cash working capital balances (Note 16) (6,579) 1,181 -------- -------- 26,488 25,358 -------- -------- Financing activities Proceeds from the issue of share capital 592 1,515 Share repurchases (Note 10 (c)) (406) 0 Payments of finance lease net of drawdowns (188) (57) Dividends (2,744) (2,343) -------- -------- (2,746) (885) -------- -------- Investing activities Purchase of property, plant and equipment and development costs (9,159) (12,350) Exploration expenditure (9,960) (7,076) -------- -------- (19,119) (19,426) -------- -------- Increase in cash 4,623 5,047 Cash at the beginning of year 13,978 8,931 -------- -------- Cash at the end of year $18,601 $13,978----------------------------------------------------------------------\* T For notes, refer to the full financial statements available on the Company'swebsite. \* T Uruguay Mineral Exploration Inc. Consolidated Statements of Changes in Shareholders' Equity Thousands of United States Dollars, except where indicated May 31, 2008 May 31, 2007For the years ended May 31---------------------------------------------------------------------- Number Amount Number Amount (000's) (000's) Common sharesBalance at beginning of year 48,531 $34,592 47,525 $32,670Exercise of stock options 410 857 756 910Share repurchases (130) (406) 0 0Exercise of warrants 0 0 250 1,012 -------------------------------Balance at end of year 48,811 $35,043 48,531 $34,592 ------------------------------- Warrants and Convertible notes (Note 10)Balance at beginning of year 520 $12 1,000 $188Issued for farm in agreements 0 0 20 12Expired warrants (250) 0 (250) 0Exercise of warrants 0 0 (250) (188) -------------------------------Balance at end of year 270 $12 520 $12 -------------------------------Contributed surplusBalance at beginning of year $3,297 $1,625Employee stock based compensation recognised 792 975Commitment to issue stock options 0 917Transfer to common shares (207) (220)Balance at end of year $3,882 $3,297 ------------------------------- Accumulated other comprehensive incomeBalance at beginning of year $(19) 0Adjustment to opening other comprehensive income 0 (19) -------------------------------Balance at end of year $(19) $(19) ------------------------------- Retained earningsBalance at beginning of year $22,986 $10,775Net income for the year 7,798 14,554Dividends (2,742) (2,343) -------------------------------Balance at end of year $28,042 $22,986 ------------------------------- -------------------------------Shareholders' equity at end of year $66,960 $60,868----------------------------------------------------------------------\* T For notes, refer to the full financial statements available on the Company'swebsite. Copyright Business Wire 2008