World Wide Minerals Ltd
WWS
Shares issued 58,839,225
1998-12-24 close $0.035
Tuesday Dec 29 1998
Mr. Paul Carroll reviews the company
During the third quarter, conditions in the international uranium market went from bad to worse. At
Sept. 30th, the spot price of uranium fell below $10.00 and the trend has continued. Many producers
have shut down or curtailed production from existing mines and plans for new mines have been put on
hold, aggregating well over 10 per cent of current world production. These conditions primarily result
from uncertainty as to the method and timing of sale of uranium from the Russian military stockpile,
especially in light of economic conditions in that country, potential similar dispositions from the U.S.
stockpile and concern over uranium sales by the recently-privatized USEC, Inc., all exacerbated by
gloomy capital markets for metals producers. These developments are likely to lead to upward price
momentum in the uranium market in the longer term.
Faced with these conditions, the company has been forced to extend indefinitely the standby status at the
Dornod uranium mine in Mongolia and to furlough its workforce other than a skeleton security force.
Arrangements are being pursued to finance the minimum carrying costs of Dornod, without recourse to
World Wide.
The Kazakhstan government appears to have decided to dig in its heels on its claim for reimbursement of
our $22-million investment plus damages of $200-million. Settlement discussions recently evaporated as
the financial condition and economic prospects of Kazakhstan have been materially affected by low
commodity prices, the flow-through effects of the Russian and Asian financial crises and the
recently-called early presidential election in that country. Therefore, for the near term, World Wide is
concentrating on preparation for hearings that will be required in December in the U.S. federal court if
Kazakhstan defends the lawsuit. In the meantime, we are taking steps to exercise our ownership and
security rights in all uranium that is shipped from Kazakhstan and to intercept any shipments to Western
utilities and converters.
Efforts to separate the company's gold assets in Libra Gold are proceeding with a view to a business
combination or an agreement. In the third quarter we farmed out the Easter project in Nevada to Aur
Resources Inc. Aur may acquire a 70 per cent interest for option payments to Libra Gold and expending
$1.0-million on the property over five years. Similar efforts are being made to sell or joint venture the Yi
Chuan project in Bolivia.
The company recorded a net loss of $921,000 or two cents per share in the third quarter of 1998
compared to a net loss of $194,000 in the comparable quarter of 1997. For the first nine months,
operating profit was $755,000 on revenue of $12.9-million. After corporate costs, interest and other
items the net loss was $2,560,000 or four cents per share compared to a net loss of $461,000 or one
cent per share in the first nine months of 1997.
Administration costs aggregated $589,000 for the quarter compared with $496,000 during the
comparable period of 1997. The increased costs reflect costs associated with the recovery of the
company's investment in Kazakhstan. Commencing in Aug. 1998, the Dornod mine was placed on
standby until such time as uranium markets improve or project financing is arranged. All costs
associated with mine operations during the standby period will be expensed as incurred.
At Sept. 30, 1998 the company's working capital deficit totalled $11.9-million, including a $6.9-million
($10.5-million (Canadian)) loan, with interest accrued, from Dundee Bancorp Inc. which was to have
matured on July 31st. Dundee Bancorp has agreed to extend the loan on a demand basis. During the
quarter, the company received $500,000 (Canadian) in finances which are included in the demand loan.
In the event of a favourabie Kazakhstan settlement, the company is required to repay the loan from the
proceeds recovered. During the quarter the company agreed with Deutsche Bank to temporarily suspend
its revolving inventory-financing facility. Consequently, fees associated with this facility are no longer
accruing.
Management is considering alternatives for refinancing and repositioning the company to reflect the
reality of current metals and capital markets. A key component of any plan includes the ability of the
company to recover its investment in Kazakhstan.
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Sept. 30
(in U.S. dollars)
1998 1997
Revenue
Sales $ - $ -
Interest and
other income 57,230 374,386
---------- ----------
57,230 374,386
---------- ----------
Expenses
Product sold - -
Standby costs 420,074 -
General and
admin 589,391 496,031
Foreign
exchange
(gain) loss (334,549) 54,018
Amortization 15,739 18,569
Interest 287,224 -
---------- ----------
977,879 568,618
---------- ----------
Net loss
for the period $ (920,649) $ (194,232)
========== ==========
Net loss
per share (2 cents) (0 cent)
CONSOLIDATED STATEMENT OF OPERATIONS
Nine months ended Sept. 30
(in U.S. dollars)
1998 1997
Revenue
Sales $12,906,500 $ -
Interest and
other income 59,598 959,723
----------- ----------
12,966,098 959,723
----------- ----------
Expenses
Product sold 12,151,758 -
Standby costs 420,074 -
General and
admin 2,197,587 1,376,261
Foreign
exchange
(gain) loss (451,879) 4,557
Amortization 46,738 40,264
Interest 1,162,043 -
----------- ----------
15,526,320 1,421,082
----------- ----------
Net loss
for the period $(2,560,222) $ (461,359)
========== ==========
Net loss
per share (4 cents) (1 cent)
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