Athabasca Potash Inc. ("API" or the "Company") (TSX:API) announces that it has
filed the Audited Financial Statements, MD&A and Annual Information Form for the
year ended December 31, 2008 all of which will be available at www.sedar.com or
athabascapotash.ca.
Highlights for the fiscal year include:
- An updated National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43101") compliant technical report entitled NI 43-101 Technical
Report for a Resource Estimation on the Burr Project, Athabasca Potash Ltd.,
Saskatchewan, Canada, (the "Technical Report") was announced. The Technical
Report was prepared by AMEC Americas Limited ("AMEC") and provided an updated
potash resource estimate for the Burr Project. The Lower Patience Lake
Sub-Member ("LPL") contains Indicated Mineral Resources of 241,200,000 tonnes
with a grade of 23.3% K2O and an Inferred Mineral Resource of 183,100,000 tonnes
with a grade of 23.2% K2O.
- The composites for the LPL all have averaged grades between 20.40% and 25.19%
K2O and interval thicknesses between 4.20 meters and 5.53 meters. These grades
and thicknesses of the sylvinite mineralization are reasonable and are within 3%
of the grades mined at the nearby PotashCorp Lanigan mine(1).
- Environmental baseline studies were initiated in early 2008 and the
Saskatchewan Minister of Environment issued the Project Specific Guidelines for
the Burr Project in mid 2008.
- API made three significant appointments to its management team. Mr. Bradley
Fettis was appointed Chief Mine Development Engineer (and subsequently
Vice-President, Mining), Mr. Terry Walbaum was appointed Chief Operating Officer
and Mr. James Davidson was appointed Chief Financial Officer.
- Cash expenditures on mineral properties totalled $17,017,955, including
$15,023,026 on the Burr Project, for the year ended December 31, 2008.
- Working capital was $30.4 million at December 31, 2008. The Company's current
working capital position is expected to be sufficient to fund the completion of
the pre-feasibility studies, the environmental impact studies and supporting
activities currently being undertaken on the Burr Project. In addition, there is
projected to be sufficient working capital to support the general and
administrative activities of the Company beyond the end of 2010.
- Issued and outstanding shares of 36,918,083 on December 31, 2008.
Subsequent to December 31, 2008 API announced the following developments:
- Preferred shaft and mill site were identified and approved for the Burr Project.
- SNC-Lavalin was engaged to provide pre-feasibility study services on the Burr
Project.
- Thyssen Mining ("TMCC") was awarded the contract for the shaft, hoist and
headframe sections of the pre-feasibility study. TMCC is a leading North
American mining contractor, and part of the Thyssen Group, one of the world's
most experienced shaft sinking contractors in the potash industry.
Overview
Burr Project Advanced Exploration and Development Program
During 2008, API continued to focus on the exploration program being conducted
at its 100% owned Burr Project. The updated Technical Report was issued with an
effective date of September 18, 2008 and incorporated results from the five
historical wells completed in 1950s, the five wells drilled by API in 2007 and
the four wells completed in 2008. The last three wells drilled in 2008 were
drilled after the effective date of the Technical Report and were not included
in the updated resource estimate. The Lower Patience Lake Sub-Member ("LPL")
contains Indicated Mineral Resources of 241,200,000 tonnes with a grade of 23.3%
K2O and an Inferred Mineral Resource of 183,100,000 tonnes with a grade of 23.2%
K2O. There is an additional Inferred Mineral Resource of 39,300,000 tonnes, with
a grade of 13.2% K2O in the Upper Patience Lake Sub-Member ("UPL").
The potash wells have all encountered stable overlying rocks which is an
important consideration for reasonable prospects of economic extraction. The
geological setting and favourable mineralization shown at the Burr Project are
consistent with characteristics of existing Saskatchewan potash mines. The
confidence level and sufficient tonnage of the Indicated Resource of 241,200,000
tonne allowed API to commence pre-feasibility studies.
In early 2009, SNC-Lavalin was engaged to provide pre-feasibility services on
the Burr Project. SNC-Lavalin, other consultants and API will each address
specific elements of the pre-feasibility studies being undertaken. SNC-Lavalin's
services will address the surface processing plant and infrastructure. Other
consultants and API are responsible for the environmental and other aspects of
the pre-feasibility study to include geology, process technology, underground
mine development, resource assessment, shaft, tailings management facilities and
transportation. Based on this work SNC-Lavalin will develop capital and
operating cost estimates with an intended accuracy of �25% and a preliminary
project execution schedule. API intends to file a new NI 43-101 compliant
technical report in connection with the pre-feasibility study. Results from the
last three wells drilled in 2008 will be also included in the updated report.
The pre-feasibility study is scheduled for completion in the third quarter of
2009.
Financial Results
As of December 31, 2008, API's cash and cash equivalents balance decreased to
$31,577,777 during the year ended December 31, 2008. At December 31, 2008, the
Company had a working capital balance of $30,368,175, a decrease of $12,478,176
from $42,846,351 at December 31, 2007. The Company raised capital for gross
proceeds of $7,154,391 during 2008. This capital was derived from the exercises
of the over-allotment, stock options and broker warrants related to the IPO
completed in December 2007.
API recorded a net loss of $534,683 ($0.015 per share) compared to a net loss of
$2,696,523 ($0.155 per share) for the same period in 2007. API's source of
income is the result of investing excess cash reserves in short-term deposits
and farm rents on surface lands owned. For the year ending December 31, 2008,
the Company reported interest revenue of $1,478,800 compared to $293,380 and
rents of $108,843 for the year ending December 31, 2008 compared to nil in the
prior year.
Operating costs increased to $2,717,055 (before stock based compensation in the
amount of $598,293) for the year ended December 31, 2008, compared to $551,666
for 2007 (before stock based compensation of $2,913,437). This increase was
reflected in all cost categories as API significantly expanded operations.
Management salary, wages and benefits increased by $653,153 to $885,915 in 2008
from $232,762 for 2007 as a result of growth in the Company's management team
and personnel levels. Increased reliance on legal and accounting services caused
professional fees to increase to $591,070 from $88,632 last year.
Business development, investor relations and advertising expenses increased to
$386,655 for 2008, from $81,847 for 2007 as a result of increased expenditures
associated with operating as a public company. The need for increased office
space, and related supplies and other expenses, resulted in office and
administration costs increasing to $229,877 for 2008 from $36,038 in 2007.
Directors' fees also increased during 2008 and totalled $263,278 compared to nil
for 2007.
Selected Financial Highlights include:
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Balance Sheet December 31, 2008 December 31,2007
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Current Assets $ 31,874,836 $ 44,625,755
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Total Assets 62,279,671 55,285,777
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Current Liabilities 1,506,661 1,779,404
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Future income tax liability 1,031,703 -
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Share capital 57,222,369 51,762,028
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Contributed surplus 5,805,227 4,495,951
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Deficit (3,286,289) (2,751,606)
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Year Ended
Statements of Income December 31, Year Ended
(loss) 2008 December 31, 2007
----------------------------------------------------------------------------
Revenues $ 1,587,643 $ 293,380
----------------------------------------------------------------------------
Operating Expenses 3,315,348 3,465,103
----------------------------------------------------------------------------
Loss for the period before income taxes (1,727,705) (3,171,723)
----------------------------------------------------------------------------
Net Income (Loss) for the period (534,683) (2,696,523)
----------------------------------------------------------------------------
Basic Earnings (Loss) per share (0.015) (0.155)
----------------------------------------------------------------------------
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Year Ended
December 31, Year Ended
Statements of Cash Flows 2008 December 31, 2007
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Cash flows from Operating Activities $ (1,139,199) $ (208,119)
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Cash flows from Investing activities (18,142,755) (6,922,316)
----------------------------------------------------------------------------
Cash flows from Financing Activities 6,595,806 50,147,924
----------------------------------------------------------------------------
Increase (Decrease) in cash and cash
equivalents (12,686,148) 43,017,489
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Cash, beginning of period 44,263,925 1,246,436
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Cash, end of period 31,577,777 44,263,925
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Outlook
While continuing to advance the Burr Project, API is exercising financial
caution and will continue to manage cash conservatively and focus available
human resources and short-term expenditures on the most critical activities. The
Company's current working capital position is expected to be sufficient to fund
the completion of the pre-feasibility study, the environmental impact study
report and supporting activities that will create additional value to the Burr
Project through the end of 2009. A new NI 43-101 compliant technical report,
prepared in connection with the pre-feasibility studies being undertaken on the
Burr Project, is expected to be available in the third quarter of 2009. In
addition, there is projected to be sufficient working capital to support the
general and administrative activities of the Company beyond the end of 2010.
With the completion of the geological exploration and a mineral resource
estimate of sufficient quality to support a pre-feasibility study and a
feasibility study, API is advancing its search for a strategic alliance to
develop the Burr Project.
Scientific and Technical Information
The potash resource estimate and scientific and technical information contained
in this press release is based upon the NI 43-101 compliant technical report
(the "Technical Report") entitled NI 43-101 Technical Report for a Resource
Estimation on the Burr Project, Athabasca Potash Inc., Saskatchewan, Canada,
with an effective date of September 18, 2008, available at www.sedar.com or
www.athabascapotash.ca. The Technical Report was prepared by AMEC Americas
Limited ("AMEC"). Susan Lomas, P.Geo. of Lions Gate Geological Consulting Inc.,
is the independent Qualified Person (as defined by NI 43-101) for the Technical
Report, and prepared the potash resource estimate and the scientific and
technical information contained in this press release.
(1). The reported grades of estimated Inferred and Indicated Mineral Resources
for the Burr Project are not directly comparable to the reported grades of
estimated Proven and Probable Mineral Reserves from PCS Lanigan. Proven and
Probable Mineral Reserves are diluted, estimated over mineable widths and have
economics applied to them. Inferred and Indicated Mineral Resources are
undiluted, not estimated over mineable widths and have not been subjected to any
economic considerations. In addition, the thickness of the potash horizon
between these two projects is not directly comparable, because economic
considerations have been applied to the mined thickness at Lanigan which will
result in a narrower reported thickness than that intersected by historic
drilling on the Burr Project, which has not been subject to economic
considerations.
About Athabasca:
Athabasca Potash Inc. is a Canadian based corporation and was founded with a
goal of establishing itself as a preeminent Canadian public company engaged
solely in potash exploration and development with focus on the Company's wholly
owned Burr Project, and to provide its shareholders with a unique investment
opportunity focused entirely on potash.
Caution Regarding Forward-Looking Information
This news release contains forward-looking information. Forward-looking
information includes statements concerning Athabasca's plans at its mineral
properties, which involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of
Athabasca, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking information. Forward-looking information is subject to a variety
of risks and uncertainties which could cause actual events or results to differ
from those reflected in the forward-looking information, including, without
limitation, exploration risks, lack of historic drill hole documentation,
challenges or impairments to title, the negotiation of access to certain potash
mineralization, permit requirements, governmental regulations, aboriginal land
use, environmental risks and competition in attracting and retaining personnel.
In addition, forward-looking information is based on various assumptions. Should
one or more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in the forward-looking information contained herein. Accordingly,
readers are advised not to place undue reliance on forward-looking information.
Except as required under applicable securities legislation, Athabasca undertakes
no obligation to publicly update or revise forward-looking information, whether
as a result of new information, future events or otherwise.
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