COEUR D'ALENE, ID, Aug. 11, 2011 /CNW/ - WGI Heavy Minerals, Incorporated ("WGI") (TSX: WG) today reported a gain for the quarter ending June 30, 2011 of $0.013 per share ($0.32 million) compared to earnings of $0.010 per share ($0.22 million) for the same quarter in 2010.

WGI recorded its highest quarterly revenue in the history of the Company, reaching $10.97 million. Corporate revenues continue to grow as global markets continue to recover and the Company's strategies to grow volumes are realized.  Revenues increased 29.6% from Q2 2010 and 16.6% from Q1 2011. The strongest growth is being realized around our garnet business with other abrasives also growing but at lower rates.  Growth in the waterjet abrasive product lines lags behind our blasting abrasive product line growth.

In the second quarter of 2011, earnings from operations increased 16.6% to $0.40 million from $0.34 million in Q2 2010.  The improvement is primarily driven by an increase in sales volume compounded by lower exploration and stock-based compensation costs offset by an increase of sales and general and administrative ("SG&A") expenses of 4.3%.  Consolidated net income for the quarter was $0.32 million ($0.013 earnings per share) compared to income of $0.22 million in the second quarter of 2010 (earnings per share of $0.010).

For the first six months of 2011, earnings from operations increased 28.4% to $0.69 million from $0.54 million in the same period in 2010.  This improvement was primarily due to an increase in sales volume, higher profits in abrasives and lower exploration and stock-based compensation costs.  These improvements were partially offset by a modest increase in SG&A expenses of 3.2%.  During the first quarter in order to functionally align and streamline the Company's efforts in Europe, the Company restructured the management of its German subsidiary, Kominex.  The restructuring resulted in the removal of the resident Managing Director for Kominex and non-recurring costs of $0.32 million.  Consolidated net income for the period was $0.24 million ($0.010 earnings per share) compared to income of $0.34 million in the first six months of 2010 (earnings per share of $0.014).

"We are pleased with the progress we are making with our continued sales growth. We continue to invest in our global sales and marketing group to expand our reach in both the garnet and corundum markets to realize continued growth" said Greg Emerson, President and CEO.  "We are also expanding our exploration in an effort to further expand our resource base over the next several years."

Highlights

• Revenues grew by 16.6% in Abrasives and 27.2% in Waterjet parts over the same quarter in 2010.
• The Company continues to add sales personnel and seek additional sales talent to foster the Company's revenue growth.
• The Company filed placer claims on an additional 25,000 hectares in British Columbia, Canada.  The Company is on track to begin exploration on its initial placer claims of 12,960 hectares imminently.

Outlook
WGI's garnet and waterjet businesses in 2011 are expected to grow as long as the overall economic climate continues to improve. Sales are forecasted to increase over 2010 primarily through increased volumes of garnet, although sales are expected to increase at a slower rate than in the last quarter due to uncertain market conditions.  Logistics costs and fuel prices remain volatile and along with pricing competition are expected to continue to keep pressure on margins through the year.

In 2011 the Company continues to implement operational improvements at its various operating units in addition to the identification of new resources through expanded mineral exploration. WGI will investigate regional garnet deposits where the Company can use its expertise to bring new multi-mineral resources into operation. We will be active in expanding our waterjet parts and component offerings to broaden our market space. The Company will continue its efforts to cross sell both garnet and waterjet parts to customers of either product thereby increasing our value to the customer.

The Company continues to strive to keep SG&A costs in line with revenues while expanding its sales and marketing department.  In addition, the Company is in the process of restructuring its European operations.  As a percentage of revenues SG&A is expected to decline in 2011 while exploration costs are expected to increase.

Selected Financial Information
The selected quarterly information of operating results and financial position should be read in conjunction with the unaudited consolidated financial statements of the Company for the three-month period ended June 30, 2011, as well as the accompanying notes, (the "Consolidated Financial Statements") which are reported in U.S. dollars and have been prepared in accordance with International Financial Reporting Standards ("IFRS").

About WGI
The principal business of WGI Heavy Minerals, Incorporated is the processing and sale of industrial abrasive minerals and the sourcing, assembly and sale of ultra-high pressure waterjet cutting machine replacement parts and components.  The Company, through its subsidiaries, markets and sells abrasive products and services and waterjet replacement parts globally.

This news release contains forward-looking statements concerning the business, operations, and financial performance and condition of WGI Heavy Minerals, Incorporated. A number of the matters discussed and statements made in the press release contain forward-looking statements reflecting current expectations regarding future assets. When used in this press release, the words "believe", "anticipate", "intend", "estimate", "expect", "project", and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements are based on current expectations and are naturally subject to risks, uncertainties, and changes in circumstances beyond management's control that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to: exploration and development risks; risks related to permits and title to property; risks related to foreign countries and regulatory requirements; operating hazards; foreign currency fluctuations; competition; fluctuations in the market price of mineral commodities and transportation costs; uncertainty as to calculations of mineral deposit estimates; uninsured risks; and dependence upon key management personnel and executives.  Actual results may differ materially from those expressed here. You should not place undue reliance on such forward-looking statements. The Company is under no obligation to update or alter such forward-looking statements, whether as a result of new information, future events, or otherwise.

Expressed in U.S. dollars unless otherwise stated.