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Gold/Mining/Energy : Anadime (C.AEM) -- Ignore unavailable to you. Want to Upgrade?

To: The Vet who wrote (47)	11/11/1997 7:35:00 PM
From: Nexus	Read Replies (1) \| Respond to of 54

Anadime Corp AEM Shares issued 48744746 1997-11-10 close $1.02 Tuesday Nov 11 1997 Mr Owen Pinnell reviews the company During the third quarter ended September 30 1997, high levels of oilfield activity, technology improvements at the company's plants and an enthusiastic focus on customer service have all contributed to improved performance. All of the plants exceeded budget during the third quarter. The $1.2 million plant expansion at Niton Junction during the summer has increased the waste processing capacity of the plant by over 100%. The expanded facility commenced operating during October and it is already evident that monthly plant revenue will be up substantially. Also at Niton Junction, the pipeline capacity for clean oil is being increased by 75% to meet the demands of customers developing new reserves in the area. This expansion should be complete by early January. At Provost, the installation of an MCS three-phase centrifuge has allowed the company to increase throughput and improve recovery of heavy slop oil. The recently announced partnership with MCS Technologies of Houston, has given Anadime exclusive access to this unique slop oil technology. Business at Hays and Stettler has been steady during the quarter. Construction recently commenced on both the Elk Point and Cold Lake facilities. Management expects the Elk Point plant to be operational by mid January, while the Cold Lake plant will start up several months later. The removal of chlorides from produced sand is essential if sand disposal costs are to be lowered to acceptable levels. This proprietary sand washing technology will also be made available to heavy oil producers who require on-site sand washing capability. Two competitors also have plants under construction in this marketplace, although Anadime's Elk Point plant will probably be in operation before the other two. To maintain a balance between heavy oil facilities and conventional oil facilities, the company is pursuing the permitting of several projects in light oil areas. This approach provides a degree of security in the event that the spread between heavy and light oil prices affects the profitability of heavy oil production. As at September 30 1997 the company has a working capital deficiency of $892,362. Of this sum, approximately $800,000 is related to capital projects for which long term bank financing has been arranged. Management has drawn down $200,000 of the loan facility in September and will use the remaining $1.8 million term loan facility as the payables become due. On an adjusted basis, the company is close to achieving a working capital ratio of 1:1. The improvement in working capital is primarily due to operational gains. For the third quarter, cash flow from operations was $1,189,137 as compared to $736,117 reported for the previous quarter, exclusive of the $519,929 gain on settlement of a loan receivable reported in June. Also, $431,000 was added to working capital through the exercise of warrants and options. In the fourth quarter of 1997 the company expects to spend approximately $2.5 million on capital projects, including the construction of the Elk Point facility. $1 million of the required capital will come from the existing term loan facility, with operations contributing the balance. Anadime expects to end the year with a small working capital deficit. Given that management plans to have a sixth facility operational by the end of the first quarter 1998, the company will most likely consider additional debt or equity financing to finance portions of its 1998 capital program in order to maintain a reasonable working capital ratio. The company has a debt to equity ratio of 0.23:1 as at September 30 1997, and the addition of a further $1.8 million in term debt in the fourth quarter will increase this ratio to approximately 0.40:1.