TORONTO, Aug. 3 /PRNewswire-FirstCall/ --
Jericho Diamond Mine
- Continued improvement in all areas, including gains in tonnes
processed, plant availability, carat production, grade, and diamond
values.
- Achieved commercial production on July 1, 2006. As a result, pre-
production operating costs offset by proceeds from diamond
production continued to be capitalized to construction in progress
until June 30, 2006.
- Replacement primary crusher is expected to be available in late
August 2006 to improve availability and operation of the crusher to
allow for increasing throughput rate from 1,600 tonnes per day, to
the planned average rate of 2,000 tonnes per day.
- Processed tonnes and carats produced during the second quarter rose
to 147,000 tonnes and 98,600 carats respectively, from 63,000 tonnes
and 28,318 carats in the first quarter of 2006.
- Processed material was predominately from the lower grade zones of
the kimberlite with the remaining material coming from the higher
grade central zone.
- Total capitalized costs relating to construction of the Jericho
Diamond Project were approximately $128.0 million at June 30, 2006
(net of depreciation of $2.4 million). Subsequent proceeds received
from sales of diamonds produced in the first half of 2006 will be
offset against this figure. That total is expected to be
approximately $5.5 million, which would result in a total capital
cost of approximately $122.5 million at June 30, 2006.
- Pre-production operating costs for the three and six months ended
June 30, 2006 were approximately $12.2 and $21.6 million
respectively. Non-cash costs for the same periods were $0.23 and
$0.68 million respectively. Resulting diamond production was valued
at $10.0 and $13.0 million for the three and six months ended
June 30, 2006. June 2006 was the first month in which the Company's
value of production exceeded the related cash production cost.
- As previously reported, the shortened availability of the 2006
winter road resulted in a reduced supply of fuel being mobilized to
site. Based on current fuel inventory and consumption to date, the
Company expects to be able to reach the next winter road with only
minor additional fuel being flown into site.
- The highlight of the second quarter production was a 59 carat
gemstone with excellent shape, and good colour and clarity that was
valued in excess of $400,000 USD. The presence of large high value
diamonds is consistent with the modeled diamond valuation approach
utilized in the October 2004 Preliminary Assessment Plan. In
addition, two stones weighing 101 and 103 carats were recovered
during the quarter, although they were lower quality stones. These
stones are two significant parts of an over 200 carat octahedron
stone.
- The most recent production parcel from the Jericho Diamond Mine
exhibited an improved size distribution pattern versus earlier
parcels, resulting in the highest average diamond valuation to date.
Exploration, Muskox Kimberlite
- Extraction of the 900-tonne Muskox kimberlite bulk sample was
completed during the second quarter. This sample was shipped to Rio
Tinto's diamond laboratory in Thunder Bay, Ontario during May and
June and is currently being processed.
- Muskox results are expected later this year.
- Tahera earned a 50% interest in the Polar project in the second
quarter by surpassing the cumulative spending threshold of $11
million on the property.
Corporate
- Tahera's shareholders approved a 1-for-5 stock consolidation at its
annual and special meeting of shareholders on May 15, 2006.
- A flow-through share issuance was completed in June 2006 resulting
in the issuance of 2.2 million common shares for gross proceeds of
$8.36 million.
- The Company amended the credit facility with Tiffany to provide an
$8 million working capital facility.
- The official opening ceremony for the Jericho Diamond Mine is
scheduled for August 17, 2006.
Tahera has scheduled a conference call at 10:00 a.m. Eastern Standard Time on Friday August 4, 2006. Interested parties are invited to participate in the call by dialing 416-644-3416 or toll-free 1-800-814-4861. To access a conference replay (available at 12:00 p.m. EST) dial 416-640-1917 or toll-free 1-877-289-8525 and enter pass code 21196024, followed by the number sign.
2006 Second Quarter Results
At June 30, 2006, Tahera's cash and cash equivalents balance is $11,141,000, a decrease of $4,304,000 from the balance at December 31, 2005. Capital and other non-current assets increased by $43,510,000 during the six months ended June 30, 2006, primarily due to the capital additions and pre-production operating costs associated with the Jericho Diamond Project. The Company recorded a net loss of $879,000 ($0.01 per share) for the quarter ended June 30, 2006, as compared to a loss of $866,000 ($0.01 per share) for the quarter ended June 30, 2005. Operating expenses increased to $1,247,000 for the quarter ended June 30, 2006, compared to $1,016,000 for the second quarter of 2005.
Financial Statement Highlights (in thousands of
Canadian dollars, except for per share data):
As at As at
Jun. 30, Dec. 31,
2006 2005
(unaudited)
Current Assets $ 22,266 $ 22,810
Capital and Other Assets 211,579 168,069
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$ 233,845 $ 190,879
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Current Liabilities $ 24,794 $ 11,496
Long-Term Liabilities 39,692 31,149
Share Capital - Common Shares 167,545 148,599
Common Share Purchase Warrants 245 1,290
Contributed Surplus 4,329 3,658
Deficit (2,760) (5,313)
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$ 233,845 $ 190,879
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Six Months Six Months
Ended Ended
Jun. 30, Jun. 30,
2006 2005
(unaudited) (unaudited)
Operating Expenses $ (2,711) $ (1,981)
Other Items 327 222
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Loss for the Period before Income Taxes (2,384) (1,759)
Recovery of (Provision for) Income Taxes
- Current 82 (57)
Recovery of Income Taxes - Future 4,855 1,084
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Net Income (Loss) for the Period $ 2,553 $ (732)
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Earnings (Loss) per Share -
Basic and Diluted(1) $ 0.02 $ (0.01)
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Cash Flows From (Used In):
Operating Activities $ 466 $ (1,168)
Investing Activities (36,169) (55,908)
Financing Activities 31,399 25,929
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Net Decrease in Cash and Cash Equivalents (4,304) (31,147)
Cash and Cash Equivalents
- Beginning of Period 15,445 57,889
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Cash and Cash Equivalents - End of Period $ 11,141 $ 26,742
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(1) Per share information has been retroactively restated to give
effect to the one-for-five share consolidation that was approved by
the Company's shareholders on May 15, 2006.
Please refer to Tahera's website (http://www.tahera.com/) or http://www.sedar.com/ to view the complete second quarter report.
Forward-Looking Statements
This press release contains "forward looking statements" that reflect Tahera Diamond Corporation's current expectations and projections about its future results. When used in this press release, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements, which are based on the opinions and estimates of management at the date the statements are made. By their very nature, they are not guarantees of Tahera's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause Tahera Diamond Corporation's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to the inherent risks involved in the exploration, development and mining of mineral properties, the uncertainties involved in interpreting drilling results and other data, fluctuating commodity prices, unforeseeable adverse climate conditions, the possibility of cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and changes to regulations affecting the Jericho Diamond Mine and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this press release and Tahera's latest Annual Information Form filed on http://www.sedar.com/, actual events may differ materially from current expectations. Tahera Diamond Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
On Behalf of the Board,
R. Peter Gillin Chairman and CEO
Tahera Diamond Corporation
