Wednesday, Canadian mining company Greystar Resources Ltd. (GSL.TO, GSL.L) reported a wider loss for its fourth quarter, which reflected increased exploration expenditure and costs for the prefeasibility study.
The Vancouver, British Columbia-based company's fourth-quarter net loss was C$5.94 million or C$0.13 per share, compared to a loss of C$3.13 million or C$0.07 per share in the year-ago quarter. Being a development stage company, Greystar did not record any operating revenue in the quarter.
Exploration expenditures increased to C$5.53 million from C$3.27 million in the previous year, and general and administrative expenses grew to C$690,730 from C$434,423 last year.
In the quarter, the company's interest income fell to C$276,536 from C$581,923 a year ago, and other income was C$12,800. Foreign exchange loss widened to C$12,864 from last year's C$5,219.
In the preceding third quarter, Greystar's loss widened to C$5.78 million or C$0.13 per share from loss of C$4.48 million or C$0.10 per share last year, mainly on higher exploration expenditures. Loss before other items widened to C$6.05 million from prior year's C$5.02 million.
For the fiscal year 2008, Greystar's loss was C$21.95 million or C$0.48 per share, compared to loss of C$14.64 million or C$0.35 per share in the previous year. Yearly loss before other items widened to C$23.35 million from prior year's loss of C$16.21 million. In the year, exploration expenditures were C$20.43 million, up from C$14.05 million last year.
As of December 31, 2008, Greystar's cash and cash equivalents were C$27.26 million, down from restated C$48.62 million in the same period a year ago.
Further, the company said it has forecast financial results and cash flows for 2009 in the midst of current economic climate and difficult capital market conditions, based on which the company currently expects that sufficient liquidity is available to meet its obligations in 2009.
Based on preliminary estimates and subject to additional financing, exploration, development and feasibility related expenditures are expected to be about C$31.50 million for 2009. Property payments are expected to be approximately C$1 million, and administrative costs about C$3 million. Due to the low interest rates currently being paid by financial institutions, interest income can be expected to decline in
Greystar added that with the March 20 financing, it has sufficient funds to pay for anticipated costs of exploration programs, including the feasibility study, and administration to the end of 2009. However, additional financing will be required in 2010 to fund ongoing exploration work and costs of the feasibility study.
In a different development, on Tuesday, Greystar announced that it has appointed a syndicate of agents led by Ocean Equities Ltd., including RBC Capital Markets and Scotia Capital Inc., to act on a best efforts agency basis in connection with a marketed private placement of up to 12.5 million common shares at a price of C$4.01 per share.
The company expects the offering to close on or about the week of April 20th, and that the net proceeds from the offering will be used to advance its Angostura project in Colombia through final feasibility, and for general working capital.
GSL.TO closed Tuesday's regular trading session at C$4.10, same as previous day's close, on a volume of 29 thousand shares.
On the London Stock Exchange, GSL.L last traded on March 30 at 227.50 pence.
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