Nuinsco Reports 2007 Financial Results, Provides Summary of Activities
TORONTO, ONTARIO–( EMWNews – March 31, 2008) – Nuinsco Resources Limited (TSX:NWI)(www.nuinsco.ca) today announced financial results for the fiscal year ended December 31, 2007. During the year, the Company achieved the following:
– Created Victory Nickel Inc. (“Victory Nickel”), a pure nickel company.
– Obtained TSX listing for Victory Nickel (“symbol Ni”).
– Distributed 75% ownership of Victory Nickel to shareholders of Nuinsco.
– Raised gross proceeds of $6.0 million in an oversubscribed “bought deal” private placement.
– Re-aligned the management team to better reflect the Company’s exploration focus.
– Promoted Paul Jones from Vice-President, Exploration to the position of President, and appointed Chris Wagg as Manager, Canadian Exploration; Laird Tomalty as Logistics Coordinator and Field Manager; and Laura Giroux as Project Geologist and Data Manager.
– Reported net income of $1.1 million, or $0.01 per share.
Prairie Lake – Ontario
– Completed surface uranium exploration.
– Completed a second round of surface sampling over the entire Prairie Lake intrusion.
– Announced positive results from the programs with values in several interesting mineral elements.
Diabase – Athabasca Basin – Saskatchewan
– Completed two drill programs in early 2007 with positive results.
– Began a $2.5 million diamond drilling program of at least 5,000 metres in October 2007 to follow up on positive results.
Copper, Gold and Zinc
Elmalaan – Turkey
– Completed the earn-in of a 100% interest, subject to Xstrata’s back-in rights.
– Announced positive results from drill programs.
Berta – Turkey
– Completed drill program.
– Announced a significant continuous domain of strong sulphide mineralization.
Cameron Lake – Ontario
– Engaged Wardrop Engineering Inc. to complete a closure plan in preparation for application for a dewatering permit.
Campbell Resources Inc.
– Completed earn-in of a 50% carried interest in the high-grade Corner Bay copper deposit near Chibougamau, Quebec.
– Development of Corner Bay commenced in May 2007 with production having started in March, 2008.
– Increased holdings to approximately 11% of Campbell’s outstanding common shares through exercise of 4,000,000 warrants in 2007 and the acquisition of 600,000 common shares in February, 2008.
“In 2007, we took the first step in our strategy of unlocking value for shareholders through the creation and distribution to shareholders of Victory Nickel; we re-aligned our management team to better focus on our strength in exploration; we advanced our projects in Canada and Turkey through systematic exploration and we made significant progress through our investment in Campbell which culminated in early 2008 with the Corner Bay copper deposit becoming Nuinsco’s first production asset,” said Rene Galipeau, Vice-Chairman and CEO. “As we move forward in 2008, we will continue to identify ways to use our exploration programs and operating and financial expertise to crystallize value for shareholders.”
For the year ended December 31, 2007, the Company had net income of $1,058,000, or $0.01 per share, compared with net income of $2,213,000 or $0.02 per share, in 2006. Although the Company has no income generating activities other than receiving fees for providing consulting services to Campbell, various transactions in 2006 and 2007 generated income based on generally accepted accounting principles which may not be recurring going forward. The net income in 2007 includes a dilution gain with respect to the Company’s equity-accounted investment in Victory Nickel of $2,071,000 and the net income in 2006 includes aggregate gains on the sale of marketable securities of $2,567,000; no such marketable security gains were realized in 2007. Interest income earned in 2007 totaled $581,000, versus $178,000 in 2006, reflecting the higher level of cash invested in interest-bearing instruments in 2007. On May 1, 2006 the Company began providing operating consulting services to Campbell which resulted in consulting fees totaling $707,000 during 2007, compared with $715,000 in 2006.
General and administrative expenses totaled $1,463,000 in 2007 versus $2,282,000 in 2006, reflecting overhead recoveries from Victory Nickel that, in 2007 aggregated $1,272,000. Following the formation of Victory Nickel on February 1, 2007, the Company shares management, administrative assistance and facilities with Victory Nickel pursuant to a management agreement. These overhead recoveries were offset by increases in general and administrative expenses prior to such recoveries of approximately $367,000, primarily as a result of increased salary costs reflecting additional hires and salary increases and the commencement of the cash payment of Directors’ fees in the current period totaling $176,000 (nil in 2006).
The aggregate share of losses of equity-accounted investees totaled $868,000. The Company’s share of Victory Nickel’s loss for the period from its inception, February 1, 2007, to December 31, 2007 totaled $520,000. Victory Nickel’s loss included stock option compensation of $1,369,000. The Company commenced accounting for its investment in Campbell using the equity method effective December 1, 2007. Its share of Campbell’s loss for the one month period in 2007 was $348,000.
The Company recognized income tax recoveries in 2007 of $337,000, compared with income tax recoveries of $1,854,000 in 2006, representing, in 2007, the tax benefits realized from the renunciation of Canadian exploration expenses to investors in flow-through financing. In 2006, the income tax recoveries comprised $1,076,000 relating to flow-through share renunciations plus further income tax recoveries of $778,000 resulting from the utilization of prior year tax losses.
At December 31, 2007, the Company had working capital of $8,165,000, compared with $21,694,000 at December 31, 2006. In February, 2007, $12,668,000 was distributed on the formation of Victory Nickel. Given its current cash position, the Company is sufficiently financed to fund its anticipated future administration and exploration costs unless a decision is made to advance one or more of its projects to production.
Full financial statements and management’s discussion and analysis will be posted on the Company’s website and at www.sedar.com.
2007 was a significant year for Nuinsco, with the Company not only actively exploring its uranium, copper, gold and zinc prospects in Canada and Turkey, but successfully achieving its goal of creating, financing and building its first pure-play spinoff company, Victory Nickel.
In 2008, the Company will continue to aggressively explore its existing projects, while identifying and evaluating additional assets to expand its exploration portfolio.
In an environment where strong metal pricing continues to prevail due to increasing global commodities demand, access to equipment and to people remains an industry-wide issue. This reality hampered Nuinsco’s ability to secure drills and drillers in order to begin its program at the Diabase Peninsula uranium property in the Athabasca Basin during 2007. However, as 2008 began, a 5,000-6,000 metre drill program was underway at Diabase to follow up on past drilling and surface exploration successes.
In 2008, the Company will also continue to advance its Turkish properties through diamond drilling and additional exploration. Nuinsco considers Turkey a very favourable environment with geology that offers the potential for significant mineral discoveries, and is evaluating the potential to add to its property position in Turkey as well as in the surrounding region.
Nuinsco is focused on identifying mineral investment opportunities worldwide using its exploration programs and operating and financial expertise to crystallize value for its shareholders. In addition to its exploration assets, the Company holds significant equity interests in Victory Nickel and in copper and gold producer Campbell, as noted above.
Nuinsco remained involved with Campbell during 2007, both operationally and by expanding its equity position. The Company’s arrangement with Campbell offers exciting prospects for the future, both in terms of enhanced production from existing assets (the Copper Rand Mine, Merrill Island Pit and Corner Bay copper deposit (Nuinsco has a 50% carried interest in Corner Bay) and via new opportunities in the prolific mining camp of Chibougamau, Quebec.
Campbell announced in early 2008 that development in ore had begun at Corner Bay, as had shipments to the Copper Rand Mill. This milestone makes Corner Bay Nuinsco’s first production asset, and is expected to begin generating cash flow to the Company’s account in 2009.
Nickel prices continued to set records in 2007. While prices pulled back somewhat from record levels, indications are that the robust nickel market will continue due to strong demand in China, India and other growing international markets. The creation of Victory Nickel resulted in an immediate benefit to shareholders, and Nuinsco’s equity interest continues to provide shareholders with leverage to a strong nickel price as the need for nickel concentrates continues to grow.
The formation of Victory Nickel was the first step in Nuinsco’s strategy to unlock the value of its assets through the creation of pure-play companies. Nuinsco continues to own a wealth of assets in a variety of metals, and management intends to further this strategy by using its other assets to unlock value for shareholders as we move through 2008 and beyond.
About Nuinsco Resources
Nuinsco is focused on identifying mineral investment opportunities worldwide using its exploration programs and operating and financial expertise to crystallize value for its shareholders. In addition to its property holdings in Canada and Turkey, Nuinsco owns approximately 22% of the outstanding common shares of Victory Nickel Inc. (TSX:NI) and approximately 11% of the outstanding common shares of gold and copper producer Campbell Resources Inc. (TSX:CCH). Shares of Nuinsco trade on the Toronto Stock Exchange under the symbol NWI.
The Prairie Lake resource estimate quoted herein is based on prior data and reports obtained and prepared by previous operators and the Company. The Company has not completed the work necessary to verify the classification of the mineral resource estimates. The Company is not treating the mineral resource estimates as NI 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. These properties require considerable further evaluation which Nuinsco’s management and consultants intend to carry out in due course.
FORWARD-LOOKING STATEMENTS: This news release contains certain “forward-looking statements.” All statements, other than statements of historical fact, that address activities, events or developments that Nuinsco believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend” and statements that an event or result “may,” “will,” “can,” “should,” “could,” or “might” occur or be achieved and other similar expressions. These forward-looking statements reflect the current expectations or beliefs of Nuinsco based on information currently available to Nuinsco. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of Nuinsco to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Nuinsco. Factors that could cause actual results or events to differ materially from current expectations include, among other things, failure to successfully complete financings, capital and other costs varying significantly from estimates, production rates varying from estimates, changes in world copper and/or gold markets, changes in equity markets, uncertainties relating to the availability and costs of financing needed in the future, equipment failure, unexpected geological conditions, imprecision in resource estimates, success of future development initiatives, competition, operating performance of facilities, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and approvals from government authorities, and other development and operating risks. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Nuinsco disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Nuinsco believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
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