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| June 2, 2011 |
| Geomark Announces First Quarter 2011 Results |
CALGARY, ALBERTA--(Marketwire - June 2, 2011) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Geomark Exploration Ltd. (Geomark or the Company) (TSX VENTURE:GME) is pleased to announce its operating and financial results for the first quarter ended March 31, 2011. The quarterly report is summarized in this release, with the complete version of the related condensed consolidated financial statements and notes, as well as management's discussion and analysis, available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Geomark's website at www.geomark.ca
Highlights
December 31, March 31,
As at and for the three months March 31, 2010 2010
ended 2011 Restated (1) Restated (1)
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Financial ($ 000s, except $ per share)
Revenue
Mineral Division 175 179 70
Oil and Gas Division 414 443 573
Funds Flow (2) 122 300 204
Per Share Basic (3) 0.00 0.01 0.00
Per Share Diluted (3) 0.00 0.01 0.00
Cash Flow (Deficiency) from Operations (162) (1) 23
Per Share Basic (3) (0.00) (0.00) 0.00
Per Share Diluted (3) (0.00) (0.00) 0.00
Net Earnings (Loss) (27) 186 (166)
Per Share Basic (3) (0.00) 0.00 (0.00)
Per Share Diluted (3) (0.00) 0.00 (0.00)
Capital Expenditures
Mineral Division 677 179 -
Oil and Gas Division 4 8 157
Total Assets
Mineral Division 40,826 40,382 30,843
Oil and Gas Division 13,320 12,641 9,991
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Oil and Gas Operations
Barrels of Oil Equivalent (BOE)
per day (4) 139 125 161
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(1) The comparative highlights have been restated with the adoption of
International Financial Reporting Standards (IFRS).
(2) Funds flow is not a recognized measure under IFRS. For these purposes,
the Company defines funds flow as funds provided by operations after
including investment dividend and interest income and the changes in
non-cash investing working capital related to these sources of
investment income.
(3) Geomark issued one common share upon incorporation on April 20, 2010,
and on July 6, 2010 issued 52,039,760 common shares as consideration
for the net investment in Geomark Operations with an ascribed net book
value of $21,152,000 as at December 31, 2009 and cancelled the original
common share. For purposes of the per share calculations, it was
assumed that all 52,039,760 shares issued have been outstanding since
January 1, 2010.
(4) Barrels of Oil Equivalent (BOE) are calculated using a conversion ratio
of 6 MCF to 1 barrel of oil. The conversion is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead and as such
may be misleading if used in isolation.
Operational and Financial Highlights
- Geomark is a publicly traded mineral exploration company that emerged from Comaplex Minerals Corp. (Comaplex) following the successful July 2010 sale of Comaplex's five million ounce Meliadine gold deposit to Agnico-Eagle Mines Limited (Agnico-Eagle).
- Geomark is well-financed with proven management, experienced staff, a large cash position, and immediate cash flow from its oil and gas and investment assets. The history of success and proven capabilities of the Geomark team will assist in advancing the Company. The entire Comaplex exploration team is now employed by Geomark.
- Geomark's assets include:
-- Working capital and investments of approximately $52 million (which includes a short-term $20 million loan to Bonterra Energy Corp.);
-- Mineral properties located in Ontario, the Northwest Territories and Nunavut;
-- Oil and gas properties located primarily in the Harmattan area of south-western Alberta; and
-- Oil and gas properties, dividends and interest income are projected to generate annual income of approximately $2.5 million.
- In the latter half of 2010, Geomark completed the consolidation of all eight of its currently held Timmins area gold properties (interests now ranging from 90 to 100 percent). The Timmins assets are relatively small properties that have undergone varying degrees of exploration over the years. The majority of the historical drilling on the Carr Wilkie, Thorneloe, and Deloro properties has been within 350 metres of surface; however, some of the recent gold discoveries in the Timmins area by other companies have been at considerable depths (below 500 metres from surface). Geomark is presently targeting the deeper, down-dip extensions of the known mineralized trends on its Ontario properties.
- In November 2010, the Company commenced geophysical surveys (Titan 24 DC/IP and MT resistivity surveys) on four of the Timmins area assets - Thorneloe, Deloro, Carr-Wilkie and Cody Nighthawk. The surveys were completed in the first quarter of 2011 and IP anomalies were obtained on three of the four properties.
- Based on the results of the surveys and a review of previous geological information, a 4,000 metre Diamond drilling program commenced in March 2011 on two of these properties - one of which is in the currently active West Timmins area near the Lake Shore Gold Corp. properties. Three drill holes totaling 1,687 metres were completed on the Carr-Wilkie property. The Company is presently compiling the results, but has been hampered by very slow sample turnaround at the lab.
- Four drill holes, approximately 2,600 metres, are planned on the Thorneloe property. To date, two of the four holes (1,392 metres) have been completed. The program is ongoing and results will be released as they are received and verified. The drill program will be extended if results warrant it. The other Ontario properties are in the process of further review and should the results be positive, further work, including geophysics and Diamond drilling, will be completed on them as quickly as possible.
- Geomark's exploration activities and G&A expenses will be funded from its existing working capital, income from its investments, interest income and from its oil and natural gas operations.
- Geomark's business strategy also includes the acquisition of additional mineral interests from unrelated third parties through option/joint venture agreements and/or acquisitions. Gold and precious metals prices have continued to remain strong and this higher pricing environment has made the acquisitions market more expensive and competitive; however, serious effort continues to be spent in actively assessing and pursuing new precious metal properties that can be added to the Company's portfolio. Geomark's team has done general reviews of a large number of plays and numerous properties have been examined in detail. The search has been concentrated in Canada and the United States, but properties in all countries with mining friendly jurisdictions are being considered. The Company remains optimistic that additional opportunities will develop in the near-term.
- Geomark was pleased to welcome Robb D. Thompson to the Company in February 2011 as Vice President, Finance. Mr. Thompson now holds the position of Chief Financial Officer and Secretary.
- As a final comment, the first quarter 2011's Management's Discussion and Analysis (MD&A) and Financial Statements along with the notes thereto, are reported under International Financial Reporting Standards (IFRS). It is mandatory that all Canadian publically accountable enterprises prepare their financial statements in accordance with Canadian Generally Accepted Accounting Principles (Canadian GAAP) revised to incorporate new accounting standards under IFRS. This change in accounting principles significantly affected certain financial information and disclosures from past financial reporting of the Company and may be confusing to Geomark's shareholders. Reporting under IFRS will result in Canadian Standards now being more aligned with European and Australian accounting standards and away from previous Canadian principles and present United States principles. IFRS permits companies to be flexible with their reporting and this may result in making it more difficult to compare Canadian companies with each other, or in some instances, cross border reporting Canadian companies with their U.S. peers. This change may be regressive for Canadian investors and companies and it may have been better if the change had been delayed to coincide with a U.S. conversion.
- Geomark will ensure that appropriate disclosures and discussions are provided in the MD&A and the financial statements to assist shareholders, analysts and other parties with their respective evaluations and has provided additional information in the above "Highlights" section to assist readers with their reviews.
Cautionary Statement
This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with Geomark Exploration Ltd. and should not be considered in any way as a substitute for reading the full report.
For the full report, please go to www.geomark.ca
Use of non-IFRS financial measures
Included in this press release we use the term "funds flow" to analyze the Company's operating performance. Funds flow is not a standardized measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. This funds flow calculation is considered by management to be informative for shareholders and analysts. This measure may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies.
Geomark's funds flow is calculated by adding investment dividend and interest income and the changes in non-cash investing working capital related to these sources of investment income to cash flow (deficiency) from operating activities.
Forward-Looking Statements
Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this press release includes, but is not limited to: expected cash provided by continuing operations; future capital expenditures, including the amount and nature thereof; mineral prices and demand, oil and natural gas prices and demand; expansion and other development trends of the mineral and oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of mineral companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived therefrom. Except as required by law, Geomark disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
The TSX Venture Exchange does not accept responsibility for the accuracy of this release. | |
| CONTACT INFORMATION:
Geomark Exploration Ltd.
George F. Fink
CEO and Chairman of the Board
403-262-1400
Fax: 403-232-1421
or
Geomark Exploration Ltd.
Mark J. Balog
President and COO
403-262-1400
Fax: 403-232-1421
or
Geomark Exploration Ltd.
Robb D. Thompson
CFO and Secretary
403-262-1400
Fax: 403-232-1421
or
Geomark Exploration Ltd.
Kirsten Lankester
Manager, Investor Relations
403-262-1400
Fax: 403-232-1421
info@geomark.ca
www.geomark.ca
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| INDUSTRY: Manufacturing and Production - Mining and Metals | |
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