Wednesday August 07, 2:10 pm Repadre reports 2nd quarter financial results
TORONTO, Aug. 7 /CNW/ - Repadre Capital Corporation reports earnings of $3.1 million
or $0.09 per share for the three month period ended June 30, 2002 compared to earnings of
$1.3 million or $0.05 per share for the same period in 2001. Gross income for the
second quarter totaled $4.1 million compared to $2.2 million in the second quarter of
2001.
Summarized Financial Information
Quarter Ended Quarter Ended
June 30, 2002 June 30, 2001
-------------- --------------
Royalty Revenue $ 592 $ 605
Income from Working Interests 4,117 1,732
Investment Income (636) (120)
-------------- --------------
Gross Income 4,073 2,217
Net Income $ 3,086 $ 1,345
Average shares outstanding 35,729,000 28,929,000
Earning per share
Basic $ 0.09 $ 0.05
Diluted $ 0.08 $ 0.05
Repadre Capital Corporation is a natural resource royalty company listed
on the Toronto Stock Exchange (TSX:RPD) whose principal activity is the
creation and purchase of royalties and non-operating interests on a global
basis. In addition to its interests in the Tarkwa/Damang gold complex, and
other precious metal projects, the Corporation holds a one percent royalty on
production from the Diavik diamond mine in Canada, expected to begin
production in early 2003.
Management's Discussion and Analysis
Overview
Net income for the second quarter of 2002 was $3.1 million or $0.09 per
share. The increase in earnings is attributable to i) a higher realized gold
price, ii) higher income from the Company's interest in Gold Fields Ghana
Limited ("GFGL"), and iii) a full quarter of income from the Company's 18.9%
interest in Abosso Goldfields Limited ("Abosso") acquired January 23, 2002.
Summarized Financial Results
(in $000's except per share amounts)
2001 2002
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr
------- ------- ------- ------- ------- -------
(Restated)
-------------------------
Income 2,357 2,217 3,055 2,706 3,982 4,073
Net Income 1,460 1,345 1,604 1,767 2,924 3,086
Net Income per share 0.05 0.05 0.06 0.06 0.09 0.09
Cash and bullion
balance 3,314 3,032 3,534 1,760 3,691 44,440
The price of gold was 16% higher in the second quarter of 2002 as
compared to the second quarter of 2001, averaging US$312 per ounce versus
US$268 for the earlier period.
Income
Royalty revenue in the second quarter of 2002 was steady at $592,000, a
level comparable to the levels achieved in prior quarters. The Company expects
that the Magistral project in Mexico will begin production in the fourth
quarter of this year and will provide enhanced royalty revenue at that time.
The Company also expects to receive additional royalty revenue in 2003 with
the commencement of production at the Diavik diamond mine in the Northwest
Territories and the Don Mario gold operation in Bolivia.
Investment income for the quarter was negative due to unrealized foreign
exchange losses resulting from an appreciating Canadian dollar. The Canadian
dollar stood at US$0.63 at the start of the quarter and ended the quarter at
US$0.66.
Royalty Revenue and Investment Income
(in $000's)
2001 2002
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr
------- ------- ------- ------- ------- -------
(Restated)
-------------------------
Royalty revenue 555 605 679 507 539 592
Investment income 330 (120) 317 50 778 (636)
Income from the Company's interest in GFGL for the second quarter 2002
was $2.9 million compared to $1.7 million for the second quarter of 2001. The
increase in income is primarily attributable to the increase in the price of
gold and a recapture of previously provided deferred taxes. The level of gold
production at Tarkwa is expected to gradually increase in future periods due
to improvement in the level of gold recovery from the ore heaps. Distributions
of cash in excess of the needs of the operation commenced during the second
quarter with Repadre receiving US$4.0 million as its proportionate share. The
cash balances within GFGL were US$16.6 million at June 30, 2002.
Gold Fields Ghana Limited
Summarized Results
2001 2002
100% basis 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr
------- ------- ------- ------- ------- -------
Ore crushed (000t) 3,327 3,761 3,805 3,636 3,700 3,727
Yield (g/t) 1.38 1.25 1.33 1.29 1.26 1.17
Gold production
(oz) 115,000 117,000 150,000 145,000 129,000 120,000
Cash cost (US$/oz) 148 169 163 175 165 184
Repadre - 18.9%
basis
Income from
GFGL ($000's) 1,472 1,732 2,059 2,149 2,316 2,906
A full quarter of income from the Company's interest in Abosso (acquired
Jan 24, 2002) was recognized in the second quarter and totaled $1.2 million,
as compared to $0.3 million of income from the partial first quarter. The
transition of the operation to new ownership has progressed smoothly and
production at an annualized rate of approximately 325,000 ounces of gold is
expected to continue. During the second quarter, Abosso repaid all of its bank
indebtedness, which totaled US$15.0 million. The cash balances within Abosso
were US$12.7 million at June 30, 2002. Distributions of cash in excess of the
needs of the operation will commence during the third quarter.
Abosso Goldfields Limited
Summarized Results
2002
100% basis 1st Qtr 2nd Qtr
-------- --------
Ore milled (000t) 728 1,224
Grade (g/t) 2.41 2.46
Gold production (oz) 55,600 85,700
Cash cost (US$/oz) 216 190
Repadre - 18.9% basis
Income from Abosso ($000's) 349 1,221
Expenses
General and administrative expenses for the second quarter of 2002 were
$823,000 compared to $678,000 in the second quarter of 2001.
Cash Flow
Cash flow provided by operations was $5.8 million ($0.16 per share) for
the second quarter of 2002 compared to negative $0.3 million for the second
quarter of 2001. The increased operating cash flow is almost entirely
attributable to the start of cash distributions from GFGL. Cash flow was
supplemented during the quarter by the sale of $1.0 million of marketable
securities from the Company's portfolio of stock holdings. The Company's
convertible debenture was fully repaid in the second quarter with the
disbursement of the final $1.7 million to the debenture holder.
Liquidity and Capital Resources
In June, the Company issued 3,450,000 common shares from treasury. These
shares were sold to the public by a syndicate of underwriters at a price of
$8.20 per common share. In April, the majority of the outstanding share
purchase warrants issued in conjunction with the 1999 acquisition of Golden
Knight Resources Inc. were exercised at a price of $4.00 per share. These two
items, along with the cash distributions from GFGL, augmented the Company's
treasury to $44 million by the end of the quarter. With the final payment made
on the convertible debenture, the Company is now debt-free and possesses a
strong balance sheet.
Risks and Uncertainties
Commodity Price Risks
The price of gold, although currently improving, has gone through a
period of depressed prices from 1998 to 2001 and could revert to these lower
price levels in future. The Company does not use any derivative products to
mitigate its exposure to changes in the price of gold.
Foreign Currency Exchange Risk
The value of the Canadian dollar appreciated by 5% during the quarter. As
100% of the Company's royalty revenue and income from GFGL and Abosso was
based on the US dollar, this appreciation had a negative impact on earnings.
The Company does not currently use any derivative products to manage its
exposure to changes in US$ exchange rates.
Earnings Sensitivity (based upon 2002 Plan)
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Annual Impact on
Category Change After-Tax Income
-------- ------ ----------------
(in millions)
Gold Price US$ 10 per ounce $1.5
US$/C$ Exchange Rate 0.6667 to 0.6567 $0.2
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Outlook
The financial results of the company are currently largely influenced by
the results of GFGL's and Abosso's operations in Ghana. These operations are
providing good levels of performance which are expected to continue for the
foreseeable future. All production from Tarkwa and Damang are free of price
hedges and will fully participate in the benefits of any rally in the price of
gold. The Company's treasury has grown during the quarter to $44 million. The
improved treasury allows the Company to become more aggressive in its search
for new investment opportunities.
REPADRE CAPITAL CORPORATION
Consolidated Balance Sheets
as at June 30, 2002 (Unaudited) and December 31, 2001
(Expressed in thousands of Canadian dollars)
2002 2001
ASSETS
Current assets
Cash and short-term investments $ 43,756 $ 1,497
Gold and silver bullion 684 263
Loans receivable - 80
Accounts receivable 924 591
Income taxes recoverable 968 970
Prepaid expenses 47 77
-----------------------------
46,379 3,478
-----------------------------
Marketable securities 3,410 4,204
Working interests 73,332 59,647
Net royalty interests 21,460 22,251
Loans receivable 4,128 4,302
Deferred costs - 164
Capital assets 76 89
-----------------------------
$ 148,785 $ 94,135
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 266 $ 490
Convertible debenture - 1,687
-----------------------------
266 2,177
Future income taxes 111 728
Shareholders' equity
Capital stock 147,310 95,382
Other paid-in capital 597 585
Warrants - 772
Retained earnings 501 (5,509)
-----------------------------
148,408 91,230
-----------------------------
$ 148,785 $ 94,135
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REPADRE CAPITAL CORPORATION
Consolidated Statements of Operations
for the six months ended June 30, 2002 and 2001 (Unaudited)
(Expressed in thousands of Canadian dollars)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Restated Restated
Income
Royalty revenue $ 592 $ 605 $ 1,131 $ 1,160
Income from working
interests 4,117 1,732 6,782 3,204
Investment income (636) (120) 142 210
------------------------------------------------
4,073 2,217 8,055 4,574
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Expenses
General and
administrative 823 678 1,589 1,372
Amortization of
royalty interests 202 188 388 350
Amortization
of deferred
financing costs - 29 - 57
Amortization of
capital assets 5 5 9 10
Royalty
development costs - 3 - 24
------------------------------------------------
1,030 903 1,986 1,813
------------------------------------------------
Income before
income taxes 3,043 1,314 6,069 2,761
Income taxes
(recovery) (43) (31) 59 (44)
------------------------------------------------
Net income
for the period $ 3,086 $ 1,345 $ 6,010 $ 2,805
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Number of
common shares
Average outstanding
during period 35,729,000 28,929,000 34,016,000 28,929,000
Outstanding at
end of period 39,186,000 28,930,000 39,186,000 28,930,000
Net income per
common share
Basic $ 0.09 $ 0.05 $ 0.18 $ 0.10
Diluted $ 0.08 $ 0.05 $ 0.17 $ 0.10
Consolidated Statements of Retained Earnings (Deficit)
for the six months ended June 30, 2002 and 2001 (Unaudited)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Retained earnings
(deficit), beginning
of period $ (2,585) $ (10,225) $ (5,509) $ (11,685)
Net income for
the period 3,086 1,345 6,010 2,805
------------------------------------------------
Retained earnings
(deficit), end of
period $ 501 $ (8,880) $ 501 $ (8,880)
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REPADRE CAPITAL CORPORATION
Consolidated Statement of Cash Flows
for the six months ended June 30, 2002 and 2001 (Unaudited)
(Expressed in thousands of Canadian dollars)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Restated Restated
Cash provided by (used for):
Operations
Net income for
the period $ 3,086 $ 1,345 $ 6,010 $ 2,805
Adjustments for
Amortization and
write-offs 207 222 397 417
Unrealized gain on
foreign exchange 820 141 686 (23)
Gain on sale of
royalty interest - - (644) -
Gain on sale of
marketable securities (278) - (225) (78)
Loss on sale of capital
and other assets 3 - 3 -
Income from working
interests 2,144 (1,732) (409) (3,204)
Future income taxes (14) (72) 40 (128)
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5,968 (96) 5,858 (211)
Decrease (increase) in
non-cash working
capital
Gold and silver bullion (169) (246) (421) (411)
Accounts receivable (27) (3) (97) 8
Prepaid expenses 15 14 30 34
Income taxes recoverable (65) (2) 2 (1)
Accounts payable 45 36 (224) (169)
----------------------------------------------
5,767 (297) 5,148 (750)
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Investing
Investment in working
interests - - (24) -
Proceeds on sale of
royalty interest 416 - 1,332 -
Purchase of royalty
interest - - (521) -
Proceeds on sale of
marketable securities 1,035 - 1,154 440
Purchase of marketable
securities - - (135) -
Loans disbursed - - 80 (79)
Increase in
capital assets 4 (2) 1 (8)
----------------------------------------------
1,455 (2) 1,887 353
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Financing
Issuance of
capital stock 35,045 3 36,911 6
Decrease in
long-term debt - (232) - (232)
Decrease in convertible
debenture (1,687) - (1,687) -
----------------------------------------------
33,358 (229) 35,224 (226)
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Increase (decrease)
in cash and short
term investments 40,580 (528) 42,259 (623)
Cash and short term
investments,
beginning of period 3,176 2,783 1,497 2,878
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Cash and short term
investments,
end of period $ 43,756 $ 2,255 $ 43,756 $ 2,255
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Some of the statements contained in this release may be forward-looking
statements, such as estimates and statements that describe Repadre's future
plans, objectives or goals. Since forward-looking statements address future
events and conditions, by their very nature, they involve inherent risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate and that actual results and future events in each case could differ
materially from those currently anticipated in such statements by reason of
such factors as, but not limited to, changes in general economic and market
conditions.
For further information
Joseph F. Conway, President and CEO, Tel: (416) 365-2430, Fax: (416) 365-8065
Grant Edey, Vice President, Finance and CFO, Tel: (416) 365-5161
Website: repadre.com
E-mail: mailto:info@repadre.com |
