New Pacific Metals Corp. Announces Results for the Second Quarter Ended December 31, 2010
New Pacific Metals Corp. announces its unaudited consolidated financial results for the second quarter ended December 31, 2010. All references to dollars or monies are expressed in Canadian Dollars.
SECOND QUARTER HIGHLIGHTS
The Company:
– successfully acquired 100% of issued and outstanding shares of Tagish Lake Gold Corp. (“TLG”), a Canadian publicly traded company involved in the exploration and development of gold-silver mineral deposits in Yukon Territory, Canada. TLG’s main assets consist of three identified gold and gold-silver mineral deposits: Skukum Creek, Goddell Gully, and Mount
Skukum; and
– completed a 18 million share private placement for gross proceeds of $24.3 million, which will be used to finance continuing exploration and
development activities of the Company.
During the quarter, loss from continuing operations increased by $593,967 to $945,479, compared to the three months ended December 31, 2009 (“Q2 2010″) of $351,512, mainly due to the following:
– interest and finance charge increased by $88,339 to $88,679 (Q2 2010 – $340) due to the interest and termination fees paid on a $2.1 million
loan from Silvercorp Metals Inc. (“SVM”);
– legal and professional fees increased by $158,960 to $164,536 (Q2 2010 – $5,576). The increase was primarily attributed to professional fees
incurred in connection with TLG’s CCAA proceeding;
– salaries and benefits expenses increased by $126,400 to $207,953 (Q2 2010 – $81,553). In connection with the acquisition of TLG, the Company assembled a core team of professionals to carry out the exploration and
development of the TLG property; and
– stock-based compensation increased by $204,353 to $332,784 (Q2 2010 – $128,431). With the expansion of the Company’s operations, the Company granted more stock options to newly appointed directors and officers. The increase was also caused by the immediate recognition of stock-based compensation expense of $141,715 related to the previously unvested portion of cancelled options and $195,528 related to previously unvested
portion of amended options.
Loss from discontinued operations, Yunnan Jin Chang Jiang Mining Co. Ltd and Sichuan Huaxi Mining Co. Ltd, were $210,242 (Q2 2010 – $87,939).
As of December 31, 2010, the Company had a working capital position of $20,716,257 (June 30, 2010 – $8,964,681). Cash and cash equivalents plus short term investments amounted to $24,451,086 (June 30, 2010 – $9,237,514) and are unencumbered.
OUTLOOK
Beginning early in 2011, the Company plans to initiate an aggressive program to move the newly acquired TLG Property towards timely gold and silver production. A highly experienced team with expertise in the areas of gold exploration, mining, and metallurgy, as well as community development and the environment, is being assembled to assist in bringing the Company’s existing gold and silver resources to development and discovering new ones. High priority will be given to compiling, reviewing, and synthesizing the vast amount of drill core and surface exploration results amassed from three decades of exploration and underground development. This work will underpin a major surface and underground drilling campaign to explore the priority targets generated during the data review. The Company also intends to file for additional permits to support on-going exploration and development on the TLG Property, and will initiate a major program directed to permitting a mine and mill, including First Nations consultations, community, government and stakeholder engagement, and a wide variety of hydrological, wildlife socio-economic and other studies necessary to support a mining application.
