VANCOUVER, BC, May 10, 2021 /CNW/ - Josemaria Resources
Inc. (TSX: JOSE) (OMX: JOSE) (OTCQB: JOSMF) ("Josemaria
Resources" or the "Company"), is pleased to announce its results
for the three months ended March 31,
2021. View PDF
Adam Lundin, Josemaria Resources'
Chief Executive Officer, comments: "We continue advancing the
Josemaria Project following completion of the Feasibility Study in
the fourth quarter of 2020 and submission of the Environmental and
Social Impact Assessment ("ESIA") in February 2021. Active engagement continues
with federal and San Juan provincial authorities in Argentina, including discussions aimed at
finalizing and securing commercial and fiscal terms applicable to
the project and ESIA approval. We continue to progress the
Josemaria Project as we believe current commodity prices support
our view of a tightening copper market, where there are a limited
number of readily developable projects."
FIRST QUARTER 2021 HIGHLIGHTS
- On February 23, 2021, the Company
announced the completion and presentation of the ESIA to Governor
Sergio Uñac at a ceremony held in
San Juan Province, Argentina.
- On March 18, 2021, the Company
announced that Phil S. Brumit Sr.
and David Ogonowski have joined the
Josemaria team as part of the senior leadership team that will be
responsible for ultimately constructing the Company's 100%-owned
Josemaria Copper-Gold Project in San Juan, Argentina. The addition of Phil and Dave to
the Company to lead the design, engineering, construction and
start-up of the Josemaria Project is another significant milestone
for the Company as it continues to progress engineering studies,
permitting and the negotiation of commercial terms with host
Governments, in advance of a construction decision.
- On April 19, 2021, the Company
successfully closed a private placement of 58,708,900 common shares
of the Company at a price (the "Offering Price") of $0.69 per common share for gross proceeds of
$40.5 million. Concurrently, the
Company also closed a public offering (the "Offering") pursuant to
which a syndicate of underwriters purchased, on a bought deal
basis, 14,500,000 common shares at the Offering Price for gross
proceeds of $10.0 million, plus an
over-allotment option at the Offering Price of an additional
2,175,000 common shares for gross proceeds of $1.5 million, for total combined gross proceeds
of $52.0 million. The Company
estimates related share issuance costs of $1.2 million.
FINANCIAL RESULTS
|
Three months ended
March 31,
|
(in thousands,
except per share amounts)
|
2021
|
2020
|
Exploration and project
investigation expenses
|
5,223
|
19,355
|
General and
administration ("G&A")
|
3,073
|
2,066
|
Foreign exchange and
trading gains realized on equity investments
|
(831)
|
(2,037)
|
Net loss
|
7,950
|
22,959
|
Basic and diluted loss
per share
|
0.03
|
0.09
|
The Company's net loss for the three months ended March 31, 2021 was $8.0
million compared to $23.0
million for the same period in 2020. The decrease in net
loss mainly reflects the Company not having conducted a
comprehensive field program in 2020/2021 as it did in the prior
comparative period. During Q4 2019 and Q1 2020, the Company
conducted a field program which included reserve definition
drilling and advanced ongoing environmental studies in support of
the Feasibility Study for the Josemaria Project, which was
published in October 2020. These work
programs resulted in exploration and project investigation expenses
of $19.4 million during the three
months ended March 31, 2020, as
compared to $5.2 million incurred
during the three months ended March 31,
2021. During Q1 2021, the Company's primary exploration and
project investigation expenses consisted of engineering
optimization, commercial and fiscal studies and negotiations,
environmental baseline studies, roadwork and related studies, and
community relations.
Overall G&A costs for the first three months of 2021 totaled
$3.1 million compared to $2.1 million over the same period in 2020.
Increases in salaries and benefits and share-based compensation
expenses mainly contributed to the increase. Share-based
compensation is a non-cash charge reflecting the expense associated
with the vesting of outstanding stock options during the
period.
From time to time, as part of the capital funding process from
the Canadian parent to the Argentinian subsidiary, the Company will
purchase equity instruments via a third-party investment broker.
The equity instruments are transferred from the parent to the
subsidiary and held for a pre-determined period, typically five
business days, and then sold. The Company conducts such
transactions on an intra-period basis and does not hold the equity
instruments at period end. During the three months ended
March 31, 2021, the Company realized
a trading loss of $0.2 million (2020
– $0.7 million) and a foreign
exchange gain of $1.0 million (2020 –
$2.8 million) as a result of holding
the equity instruments for a net realized gain of $0.9 million (2020 – $2.1
million). The decrease in net gain is the result of the
Company having conducted fewer such transactions during Q1 2021
than in the comparative period.
During the three months ended March 31,
2021, the Company recognized a net monetary loss of
$48,913 (2020 – $0.1 million) in relation to the application of
hyper-inflationary accounting for the Company's Argentine
subsidiary, which began July 1, 2018.
In other comprehensive loss, the Company recognized a loss of
$5,956 resulting from the impact of
hyper-inflation which consists of adjustments recognized on the
continuing inflation of opening non-monetary balances during the
three months ended March 31, 2021
(2020 – gain of $1.7 million) and the
ongoing translation of the Company's Argentine subsidiary into the
Canadian dollar presentation currency following July 1, 2018, as mentioned above. A detailed
discussion regarding the application of hyper-inflationary
accounting has been provided in Note 3 to the condensed interim
consolidated financial statements.
SELECTED FINANCIAL INFORMATION
(in
thousands)
|
March
31, 2021
|
December
31,
2020
|
Cash
|
$
|
1,998
|
$
|
6,741
|
Working capital
deficit
|
|
(31,175)
|
|
(24,748)
|
Mineral
properties
|
|
10,275
|
|
10,065
|
Total
assets
|
|
15,015
|
|
19,745
|
Total
liabilities
|
|
(33,612)
|
|
(32,101)
|
The Company does not currently generate income from operations.
The Company anticipates that it will need further funding in order
to advance the Josemaria Project, and for general corporate and
working capital purposes. Historically, capital requirements have
been funded through equity financing, joint ventures, disposition
of mineral properties and investments, and the use of credit
facilities with related parties. While management is confident that
additional sources of funding will be secured to fund planned
expenditures, factors that could affect the availability of
financing include the progress and results of ongoing exploration
and project investigation activities at the Josemaria Project, the
state of international debt and equity markets, investor
perceptions and expectations of the global copper, gold, and/or
silver markets, and the ongoing novel coronavirus pandemic
("COVID-19"). If necessary, the Company may explore opportunities
to revise the due dates of its liabilities, and/or settle its
liabilities through the issuance of common shares and other equity
instruments. Based on the amount of funding raised, the Company's
planned initiatives and other work programs may be postponed, or
otherwise revised, as necessary.
QUALIFIED PERSONS
The technical information in this
press release has been reviewed and approved by Mr. Bob Carmichael, P. Eng. (BC), the Company's Vice
President of Exploration, and Mr. Dustin
Smiley, P. Eng. (BC), the Company's Engineering Manager.
Both Mr. Carmichael and Mr. Smiley are Qualified Persons under
National Instrument 43-101 Standards of Disclosure for Mineral
Projects.
ABOUT JOSEMARIA
Josemaria Resources Inc. is a natural
resources company focused on developing its advanced stage, 100%
owned Josemaria Copper-Gold Project in the San Juan Province of
Argentina. A recently published
Feasibility Study (see "NI 43-101 Technical Report, Feasibility
Study for the Josemaria Copper-Gold Project, San Juan Province,
Argentina" dated effective
September 28, 2020 and filed on
November 5, 2020) demonstrates a
simple and conventional open pit copper-gold project with robust
economics and a rapid payback period. Josemaria is a Lundin
Group company and works in partnership with the Lundin Foundation
to execute best practices in responsible mineral development in
Argentina where the Lundins have a
30-year track record of value creation. The Company is a reporting
issuer in all Provinces and its corporate head office is in
Vancouver, BC. The Company's
shares are listed on the TSX and on Nasdaq Stockholm under the
symbol "JOSE", and trade on the OTCQB under the symbol "JOSMF".
ADDITIONAL INFORMATION
This is information that the
Company is obliged to make public pursuant to the Swedish Financial
Instruments Trading Act. The information was submitted for
publication, through the agency of the contact person set out
below, on May 10, 2021 20:30 EDT.
On behalf of the Board of Directors of Josemaria Resources,
Adam Lundin,
President and CEO
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TSX: JOSE | OTCQB: JOSMF | Nasdaq Stockholm: JOSE | WKN: A2PN5S |
ISIN: CA48086P1009
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
This press release includes certain
"forward-looking information" and "forward-looking statements"
(collectively "forward-looking information") within the meaning of
applicable securities legislation. All statements, other than
statements of historical fact, included herein, including, without
limitation, the Company's plans and expectations regarding the
Josemaria Project, future price of copper, gold and silver; the
results of the Feasibility Study and expected timelines; the timing
and amount of estimated future production; net present values and
internal rates of return at the Josemaria Project; recovery rates;
payback periods; costs of production; capital expenditures; costs
and timing of the development of the Josemaria Project; mine life;
the potential future development of the Josemaria Project and the
future operating or financial performance of the Company; the
impact of COVID-19 on the Company's operations, hyper-inflationary
accounting, the effect of government regulations (or changes
thereto) with respect to restrictions on production, export
controls and duties, income taxes, royalties, expropriation of
property, repatriation of profits, environmental legislation, land
use, water use, mine safety, approval processes and the receipt of
necessary permits are forward-looking information.
Forward-looking information is frequently, but not always,
identified by words such as "expects", "anticipates", "believes",
"intends", "estimates", "potential", "possible", and similar
expressions, or statements that events, conditions, or results
"will", "may", "could", or "should" occur or be achieved. These
forward-looking statements may also include statements regarding
perceived merit of properties; exploration plans and budgets;
mineral reserves and resource estimates; work programs; capital
expenditures; timelines; strategic plans; market prices for
precious and base metals; or other statements that are not
statements of fact. In addition, statements relating to "mineral
resources" and "mineral reserves" are deemed to be forward-looking
information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral resources and
mineral reserves described can be profitably produced in the
future.
Forward-looking information involves various risks and
uncertainties. There can be no assurance that such information will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such information.
Important factors that could cause actual results to differ
materially from the Company's expectations include the Company's
ability to finance the development of its Josemaria Project;
commodity price fluctuations; assumptions and discount rates being
appropriately applied to the Feasibility Study, uncertainty as to
whether there will ever be production at the Company's Josemaria
Project and any other future mineral exploration and development
properties; risks related to the Company's ability to commence
production and generate revenues or obtain adequate financing for
its planned exploration and development activities; risks related
to lack of infrastructure including but not limited to the risk
whether or not the Josemaria Project will receive the requisite
permits and, if it does, whether the Company will build the
Josemaria Project; risks related to inclement weather which may
delay or hinder activities at the Company's mineral properties;
risks related to the Company's dependence on third parties for the
development of its projects; uncertainties relating to the
assumptions underlying resource and reserve estimates; mining and
development risks, including risks related to infrastructure,
accidents, equipment breakdowns, labor disputes, bad weather,
non-compliance with environmental and permit requirements or other
unanticipated difficulties with or interruptions in development,
construction or production; the geology, grade and continuity of
the Company's mineral deposits; the uncertainties involving success
of exploration, development and mining activities; permitting
timelines; risks pertaining to the outbreak of the global
pandemics, including COVID-19; government regulation of mining
operations; environmental risks; unanticipated reclamation
expenses; prices for energy inputs, labour, materials, supplies and
services; uncertainties involved in the interpretation of drilling
results and geological tests and the estimation of mineral reserves
and mineral resources; the need for cooperation of government
agencies and indigenous groups in the development and operation of
properties including the Josemaria Project; unanticipated variation
in geological structures, metal grades or recovery rates;
fluctuations in currency exchange rates; unexpected cost increases
in estimated capital and operating costs; the need to obtain
permits and government approvals; uncertainty related to title to
the Company's mineral properties, anticipated use of proceeds from
financings, the ability of the Company to satisfy the conditions of
the terms and conditions of the debentures issued pursuant credit
facilities, including repayment thereof upon their respective
maturity dates and the issuance of Common Shares thereunder and
other risks and uncertainties disclosed in the Company's periodic
filings with Canadian securities regulators and in other Company
reports and documents filed with applicable securities regulatory
authorities from time to time, including the Company's Annual
Information Form available under the Company's profile at
www.sedar.com. In addition, these statements involve assumptions
made with regards to the Company's ability to develop the Josemaria
Project and to achieve the results outlined in the Feasibility
Study; the ability to raise the capital required to fund
construction and development of the Josemaria Project; and the
results and impact of future exploration at the Josemaria Project.
The Company's forward-looking information reflects the beliefs,
opinions, and projections on the date the statements are made. The
Company assumes no obligation to update the forward-looking
information or beliefs, opinions, projections, or other factors,
should they change, except as required by law.
SOURCE Josemaria Resources Inc.