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Re: News Release - Thursday, August 13, 2009
Crowflight Announces Second Quarter 2009 Financial Results
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CROWFLIGHT MINERALS INC. ("Crowflight" the "Company") (TSX: CML) today
announces its financial results for the second quarter of 2009.
Complete interim financial statements and related Management's
Discussion and Analysis will be filed under the Company's profile on
www.sedar.com. All amounts are in Canadian dollars unless otherwise
indicated.
Q2 2009 Financial Highlights:
- On June 10, 2009, the Company announced that, as of June 1st,
commercial production was achieved at the Bucko Lake Nickel Mine
(Bucko), commercial production being defined as greater than 60% mill
nameplate capacity. Shipments of nickel concentrate continue to be
delivered to Xstrata Nickel Plc ("Xstrata").
- The Company reported a net loss of $3,265,507
($0.01 per share - diluted) for the quarter ended June 30, 2009
compared to a net loss of $1,529,939 (loss of $0.01 per share) for
the quarter ended June 30, 2008.
- For the quarter ended June 30, 2009, there was 254,139 pounds of
commercial production nickel sold as compared to nil in the second
quarter of last year as the mine was not yet in production.
- Revenue for the quarter ended June 30, 2009 was $2.0 million compared
to nil for second quarter last year.
- Operating cash flow for the quarter ended June 30, 2009 was $1.5
million compared to operating cash flow of negative $1.1 million in
the second quarter last year.
- Loss for the quarter ended June 30, 2009 was $3.3 million or ($0.01)
per share compared to net loss of $1.5 million or $($0.01) per share
in the second quarter last year.
- Commercial nickel sales settled during the quarter ended June 30,
2009 were realized at an average price of US$6.62 per pound. Nickel
sales not settled as at June 30, 2009 were provisionally valued at
the three month forward rate of approximately $6.79 per pound. The
Company's performance is highly correlated to nickel metal prices as
it continues to sell all its metal production into the spot markets.
- Net working capital as at June 30, 2009 was negative $8.8 million
(including cash and cash equivalents of $1.6 million) compared to
$7.7 million as at December 31, 2008.
- In April 2009, the Company closed two private placement financings.
The Company raised $7,820,000 through the issuance of 46,000,000
units of the Company. Each Unit consists of one common share of
Crowflight (a "Unit Share") and one-half of one common share
purchase warrant (each full warrant, a "Warrant"), each full Warrant
being exercisable to acquire one common share of Crowflight at a
purchase price of $0.20 until April 30, 2011. As well, the Company
issued 29,411,765 units for gross proceeds of $5,000,000. Each Unit
consists of one common share of Crowflight (a "Unit Share") and
one-half of one common share purchase warrant (each full warrant, a
"Warrant"), each full Warrant being exercisable to acquire one common
share of Crowflight at a purchase price of $0.21 until April 30,
2011.
- Subsequent to the quarter's end, in July 2009, the Company announced
a private placement financing to raise $15,000,000 through the
issuance of 60,000,000 units of the Company with Pala Investments
Holdings Limited ("Pala"). Each Unit consists of one common share of
the Company and one-half of one common share purchase warrant (each
full warrant, a "Warrant"), each whole Warrant being exercisable to
acquire one common share of the Company at a price of $0.30 until
July 23, 2011. Pursuant to the terms of the Offering, Mike Hoffman
and Lewis MacKenzie resigned from the Company's Board of Directors,
effective as of closing of the Offering. Pala nominated Michael
Barton and Jan Castro to the Company's Board of Directors in their
place. Please see the press release dated July 23, 2009 for details
of this financing.
2009 Quarterly Bucko Mine Operations Production and Financial Data
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Q1-2009 Q2-2009
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Pre- Pre- June
production production
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Pre-production Operating Statistics:
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Tonnes ore mined 31,091 42,224 18,377
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Average Nickel head grade (%Ni) 0.95% 1.25% 0.93%
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Tonnes ore milled 29,303 35,490 18,390
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Average Recovery 31.97% 61.40% 62.62%
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Nickel pounds:
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Produced 138,956 441,200 234,920
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Payable sold 65,498 268,636 254,139
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Pre-production Metal Sales Revenue:
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Average Ni price (US$/lb) $ 4.46 $ 5.73
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CAD/US exchange rate 1.26 1.15
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Nickel revenue(1) $ 368,318 $ 1,939,400
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Other metals revenue(2) $ 5,935 86,700
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Total metal revenue $ 374,253 $ 2,026,100
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Commercial Production Metal Sales
Revenue:
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Average Ni price (US$/lb) $ 6.79
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CAD/US exchange rate 1.16
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Nickel revenue 2,007,450
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Total metal revenue 2,007,450
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Cost of sales 2,445,213
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Accretion -
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Depreciation, depletion, and amortization 336,093
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Gross profit (773,856)
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Net earnings (loss) (3,193,607)
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Basic and diluted earnings (loss per share) $ (0.01)
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Cash flow from operating activities 1,590,159
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USD Cash Cost of sales per pound sold(2,3) $ 8.28
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1. Includes settlement of Q1 pre-production sales
2. Other metal revenue is recorded as an offset to COGS in the
Company's financial statements
3. Non-GAAP Measure
This MD&A refers to cash cost per pound which is not a recognized
measure under Canadian GAAP. This non-GAAP financial measure does
not have any standardized meaning prescribed by Canadian GAAP and is
therefore unlikely to be comparable to a similar measure presented
by other issuers. Management uses this measure internally. The use
of this measure enables management to better assess performance
trends. Management understands that a number of investors and others
who follow the Company's performance assess performance in this way.
Management believes that this is a better indication of its expected
performance in future periods. This data is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with Canadian GAAP.
Outlook
In late June, the mill throughput was negatively affected due to a
ground failure in the drift accessing the main ore stope, which
necessitated the driving of a new access into the stope containing
blasted and broken ore. The mill subsequently started up again on
August 4, 2009.
As a result of this and slower than anticipated mine ramp and
underground development, Crowflight has revised its 2009 guidance from
326,000 tonnes of 1.59% nickel to recover 7.9 million pounds of payable
nickel to 144,000 tonnes of 1.65% nickel to recover approximately 4.1
million pounds of payable nickel. Average operating cash cost2 (after
declaration of commercial production) is revised to US$4.80 - 5.25 per
pound at an exchange rate of 1.10 to 1.00 Canadian to the US dollar.
Crowflight currently estimates capital requirements for the remainder
of 2009 to be approximately $12.5 million.
Mike Kelly commented, "Commercial production was achieved in May when
the mill throughput averaged just over 600 tonnes per day and was a
critical milestone for the operation. However, the "ramp up" to full
production of 1,000 tonnes per day on a sustainable basis requires
additional mine development that is currently ongoing. It is
anticipated that by first quarter 2010 the mine will be sufficiently
developed and have adequate working places (stopes) available to
sustain the full production rate of at least 1,000 - 1,200 tonnes per
day."
Qualified Person/Quality Control Procedures
This press release has been prepared and reviewed by Mr. Greg Collins,
P.Geo. (APGO/APEGM) and VP Exploration of Crowflight, a Qualified
Person under the National Instrument 43-101 guidelines.
Crowflight Minerals - Canada's Newest Nickel Producer
Crowflight Minerals Inc. (TSX: CML) is a Canadian junior mining company
that is producing nickel at the Bucko Lake Nickel Mine near Wabowden,
Manitoba. Crowflight began full commercial production at Bucko in the
second quarter of 2009. The Company is also focused on nickel, copper
and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt
and Sudbury Basin.
Cautionary Note on Forward-Looking Information
This press release contains forward-looking statements under Canadian
securities legislation. Forward-looking statements include, but are not
limited to, statements with respect to the Company's development
potential and timetable of the Company's properties, including the
Bucko Lake Project; the future price of nickel and other minerals; the
estimation of mineral reserves and mineral resources; conclusions of
economic evaluations; the realization of mineral reserve estimates; the
timing and amount of estimated future production; costs of production;
capital expenditures; success of exploration activities; mining or
processing issues; currency exchange rates; government regulation of
mining operations; and environmental risks. Generally, forward-looking
statements can be identified by the use of forward-looking terminology
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or variations of
such words and phrases or statements that certain actions, events or
results "may", "could", "would", "might" or "will be taken", "occur" or
"be achieved". Forward-looking statements are based on the opinions and
estimates of management as of the date such statements are made.
Estimates regarding the anticipated timing, amount and cost of mining
at the Bucko Lake Project are based on assumptions underlying mineral
reserve and mineral resource estimates and the probability of realizing
such estimates that are set out herein. Capital and operating cost
estimates are based on extensive research of the Company, purchase
orders placed by the Company to date, recent estimates of construction
and mining costs and other factors that are set out herein. Production
estimates are based on mine plans and production schedules, which have
been developed by the Company's personnel and independent consultants.
Forward looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to risks related
to: unexpected events and delays during construction, expansion and
start-up; variations in mineral grade and recovery rates; receipt and
revocation of government approvals; timing and availability of external
financing on acceptable terms; actual results of current exploration
activities; changes in project parameters as plans continue to be
refined; future prices of minerals, particularly nickel; failure of
plant, equipment or processes to operate as anticipated; reliance on
joint venture partners; accidents, labour disputes and other risks of
the mining industry. Although management of the Company has attempted
to identify important factors that could cause actual results to differ
materially from those contained in forward-looking statements, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. The Company does not undertake to update any
forward-looking statements, except in accordance with applicable
securities laws.
Further information is available on the Company's website at
www.crowflight.com or contact:
Michael Kelly
President and CEO
Crowflight Minerals
Tel: (416) 861-2964
Heather Colpitts
Manager, Investor and Public Relations
Crowflight Minerals
Tel: (416) 861-5803
info@crowflight.com
CONSOLIDATED BALANCE SHEETS
As at
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June 30, December 31,
2009 2008
ASSETS (unaudited) (audited)
Current
Cash and cash equivalents $ 1,658,745 $ 10,607,543
Restricted cash - 2,999,998
Amounts receivable 2,877,742 607,125
Inventory 1,895,225 268,285
Prepaid expenses and deposits 244,199 138,463
Derivative asset - 8,668,392
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6,675,911 23,289,806
Deposits and advances 534,709 536,709
Property, plant and equipment 157,914,985 109,241
Derivative assets - -
Exploration and development property and
deferred expenditures 16,736,098 153,939,715
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$ 181,861,703 $ 177,875,471
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LIABILITIES
Current
Accounts payable and accrued
liabilities $ 14,117,234 $ 14,950,385
In-process working capital facility 965,643 -
Current portion of long term debt - -
Equipment leases 35,730 48,129
Derivative liability 349,085 624,223
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15,467,692 15,622,737
Equipment leases 92,412 107,286
Long term debt - 7,600,000
Asset retirement obligations 918,387 359,000
Future income tax liability 26,757,000 24,139,000
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43,235,491 47,828,023
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SHAREHOLDERS' EQUITY
Common shares 106,366,145 99,289,864
Warrants 7,528,173 4,944,374
Contributed surplus 14,146,758 13,485,751
Retained Earnings 10,585,136 12,327,459
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138,626,212 130,047,448
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$ 181,861,703 $ 177,875,471
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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com
and on the Company's website at www.crowflight.com.
Consolidated Statements of Shareholders' Equity
(unaudited)
Common Shares Warrants
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No. $ $
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Balance, December 31, 2007 249,978,487 86,671,512 2,025,712
-
Private placement 39,680,000 15,251,000 -
Value of warrants granted
related to debt facility - - 3,719,479
Value of warrants to be granted - - 849,709
Exercise of warrants and broker
warrants 1,115,836 446,334 -
Valuation allocation on
exercise of warrants - 118,742 (118,742)
Exercise of stock options 2,530,000 569,531 -
Valuation allocation on
exercise of stock options - 979,566 -
Stock based compensation - - -
Flow through share tax effect - (3,563,000) -
Value of broker warrants - (375,186) 375,186
Valuation allocation on expiry
of warrants and broker
warrants - - (1,906,970)
Share issue costs - (1,198,635) -
Tax effect of cost of issue - 390,000 -
Income for the period - - -
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Balance, December 31, 2008 293,304,323 99,289,864 4,944,374
Private placement 75,411,765 12,820,000 -
Value of warrants to be granted - (2,174,590) 2,174,590
Value of warrants granted
related to debt facility - - 107,597
Stock based compensation -
shares 355,812 71,164 -
Stock based compensation -
options - - -
Flow through shares tax effect - (2,982,000) -
Value of broker warrants - (301,612) 301,612
Share issue costs - (526,581)
Tax effect of cost of issue - 169,900 -
Income for the period - - -
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Balance, June 30, 2009 369,071,900 106,366,145 7,528,173
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Contributed Accumulated Shareholders'
Surplus Deficit Equity
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$ $ $
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Balance, December 31, 2007 10,193,512 (22,151,940) 76,738,796
Private placement - - 15,251,000
Value of warrants granted related
to debt facility - - 3,719,479
Value of warrants to be granted - - 849,709
Exercise of warrants and broker
warrants - - 446,334
Valuation allocation on exercise
of warrants - - -
Exercise of stock options - - 569,531
Valuation allocation on exercise
of stock options (979,566) - -
Stock based compensation 2,364,835 - 2,364,835
Flow through share tax effect - - (3,563,000)
Value of broker warrants - - -
Valuation allocation on expiry
of warrants and broker
warrants 1,906,970 - -
Share issue costs - - (1,198,635)
Tax effect of cost of issue - - 390,000
Income for the period - 34,479,399 34,479,399
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Balance, December 31, 2008 13,485,751 12,327,459 130,047,448
Private placement - - 12,820,000
Value of warrants to be granted - - -
Value of warrants granted related
to debt facility - - 107,597
Stock based compensation - shares - - 71,164
Stock based compensation
- options 661,007 - 661,007
Flow through shares tax effect - (2,982,000)
Value of broker warrants - - -
Share issue costs (526,581)
Tax effect of cost of issue - - 169,900
Income for the period - (1,742,323) (1,742,323)
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Balance, June 30, 2009 14,146,758 10,585,136 138,626,212
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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com
and on the Company's website at www.crowflight.com.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(unaudited)
For the three and six months ended June 30,
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Three months Six months
ended June 30, ended June 30,
2009 2008 2009 2008
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Revenue
Nickel sales $ 2,007,450 $ - $ 2,007,450 $ -
Operating costs and
expenses
Cost of sales
(excludes accretion,
depreciation,
depletion and
amortization) 2,445,213 - 2,445,213 -
Depreciation, depletion
and amortization 336,093 - 336,093 -
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(773,856) (773,856)
Other expenses
Professional, consulting
and management fees 707,173 1,218,541 1,291,467 1,937,882
General and office 703,061 127,356 827,527 199,644
Shareholder
communications and
investor relations 118,320 158,407 204,426 248,247
Travel 68,282 52,688 118,686 110,232
Interest expenses and
bank charges 42,006 2,802 76,848 5,209
Amortization 201 1,437 1,154 4,123
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1,639,043 1,561,231 2,520,108 2,505,337
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(Loss) before the
undernoted (2,412,899) (1,561,231) (3,293,964) (2,505,337)
Interest income 2,000 80,835 23,511 132,521
Interest on long term
debt (481) (355,761) (48,673) (418,831)
General exploration - - (50,000) -
Debt facility
transaction costs (383,142) (4,297) (383,142) (2,045,202)
Write down of
exploration property
and deferred
expenditures (50,000) - (50,000) -
Accretion - (482,485) 57,416 (489,485)
Recovery of expenditures - - 66,958 -
Net gain (loss) on
derivative
instruments (349,085) - 1,741,471 -
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Loss before income
taxes (3,193,607) (2,322,939) (1,936,423) (5,326,334)
Future income taxes (71,900) 793,000 194,100 956,000
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Loss for the period (3,265,507) (1,529,939) (1,742,323) (4,370,334)
RETAINED EARNINGS/
(DEFICIT), beginning
of period 13,850,643 (24,992,335) 12,327,459 (22,151,940)
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RETAINED EARNINGS/
(DEFICIT), end of
period $ 10,585,136 $(26,522,274) $10,585,136 $(26,522,274)
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Earnings/(loss) per
share - basic &
diluted $ (0.01) $ (0.01) $ (0.01) $ (0.02)
Weighted average
number of shares -
basic & diluted 319,225,711 263,221,172 319,225,711 256,914,970
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These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis available online at www.sedar.com
and on the Company's website at www.crowflight.com.
CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
For the three and six months months ended June 30,
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Three months Six months
ended June 30, ended June 30,
2009 2008 2009 2008
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OPERATING ACTIVITIES:
Net income/(loss) for
the period $(3,265,507) $(1,529,939) $(1,742,323) $(4,370,334)
Charges not affecting
cash:
Amortization 336,294 1,437 337,247 4,123
Stock-based
compensation expense 352,374 1,016,030 717,921 1,538,587
Warrants issued on
In-process working
capital facility 107,597 - 107,597 -
Accretion - 482,485 (57,416) 489,485
Debt facility
transaction costs - 4,297 - 2,045,202
Capitalized interest - 355,761 - 418,831
Change in value of
derivative
instruments 349,085 - 8,393,254 -
Future income tax
recovery 71,900 (793,000) (194,100) (956,000)
Net change in non-cash
working capital 3,557,416 (604,891) 2,438,453 (1,120,426)
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1,509,159 (1,067,820) 10,000,633 (1,950,532)
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FINANCING ACTIVITIES:
Debt facility, net of
transaction costs - 7,255,703 (7,600,000) 23,173,352
Common shares issued
through private
placements 7,293,420 10,184,706 7,293,420 10,184,706
Shares issued from
exercise of warrants
and options - 569,169 - 1,004,616
Payments on equipment
leases (10,508) (20,235) (27,273) (47,344)
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7,282,912 17,989,343 (333,853) 34,315,330
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INVESTING ACTIVITIES:
Exploration and
development property,
plant and equipment,
and deferred
expenditures (9,164,180) (19,150,500) (20,308,323) (35,920,758)
(Increase) decrease in
deposits and prepaid
exploraton expenditure - 318,554 - 318,554
(Decrease)/Increase in
accounts payable
attributable to
property development
and exploration 420,045 (1,885,577) (1,307,253) 1,604,140
Release of restricted
cash - - 2,999,998 -
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(8,744,135) (20,717,523) (18,615,578) (33,998,064)
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CHANGE IN CASH AND
CASH EQUIVALENTS 47,936 (3,796,000) (8,948,798) (1,633,266)
CASH AND CASH
EQUIVALENTS, beginning
of period $ 1,610,809 $ 11,167,522 10,607,543 9,004,788
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CASH AND CASH
EQUIVALENTS, end of
period $ 1,658,745 $ 7,371,522 $ 1,658,745 $ 7,371,522
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Cash and cash
equivalents consist
of:
Cash 1,350,858 1,903,334 1,350,858 1,903,334
Cash equivalents 307,887 5,468,188 307,887 5,468,188
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$ 1,658,745 $ 7,371,522 $ 1,658,745 $ 7,371,522
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SUPPLEMENTAL
INFORMATION:
Warrants granted
related to debt
facility 107,597 - 107,597 3,719,479
Warrants granted as
cost of issue 301,612 244,831 301,612 244,831
Stock based
compensation charged
to exploration
properties - - 14,250 -
Amortization of assets
deferred to
exploration properties 604 7,195 8,833 14,389
Interest received 2,000 80,392 23,511 138,803
Interest paid 9,969 828 60,520 158,221
Income taxes paid - - - -
Common shares issued
for settlement of
accounts payable 5,000,000 - 5,000,000 -
These financials should be read in conjunction with the Notes and
Management's Discussion and Analysis, available online at www.sedar.com
and on the Company's website at www.crowflight.com.
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Copyright (c) 2009 CROWFLIGHT MINERALS INC. (CML) All rights reserved.
For more information visit our website at http://www.crowflight.com/
or send mailto:info@crowflight.com
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