Athabasca Minerals Inc. announced its financial results for the fourth quarter and 12 months ended Dec. 31, 2015.
Net loss during fiscal period ending Dec. 31, 2015, increased to $7.314 million from a net loss of $0.831) million in the prior 13-month period ending Dec. 31, 2014, an increase of $6.483 million.
The primary contributing factors:
- A $1.278 million reduction in aggregate management fees resulting from a 1,300,000 tons (17 percent) reduction in aggregate tons sold from Susan Lake.
- A $5.600 million reduction in aggregate sales revenue resulting from a 186,883 (33 percent) reduction in aggregate tons sold from corporate pits.
- Lower share-based compensation expense of $0.89 million due to the non-cash expense booked on the options issued in 2014 and 2015.
- Other expenses of $7.79 million for inventory impairment of $2.87 million, Susan Lake goodwill impairment $2.54 million, exploration resource property write-down of $2.14 million and others netting to $0.24 million.
- An income tax recovery of $1.17 million as a result of the losses.
Operations Update
Susan Lake managed sales volumes in 2015 of 6.2 million tons were 17 percent lower than 2014 managed sales volumes of 7.5 million tons. Management maintained operations at historical base levels, with demand levels being impacted by lower oil prices in 2015. Athabasca maintains year-round operations at Susan Lake, and has cleared and stripped the majority of the pit.
Corporate-owned pits aggregate sales in 2015 decreased to 384,610 tons from 571,493 tons in 2014. Management continued the implementation of cost improvement strategies that enabled the corporation to produce gravel at a lower operating cost per ton. Through the optimization of production levels at the crusher, labor requirements were reduced and associated equipment hours were minimized reducing maintenance and operational costs.
Firebag Silica Sand Project
The corporation’s Firebag silica sand project is located 95 km north of Fort McMurray, Alberta, Canada, and is accessible via Highway 63. The planned operation is for the production of industrial proppants for use in the hydraulic fracturing of oil and gas wells. Independent testing by both Stim Lab and Proptester confirm a high quality product with crush strength meeting or exceeding American Petroleum Institute and International Standards Organization standards for frac sand.
A Preliminary Economic Assessment (PEA) confirmed that the corporation’s Firebag Project has considerable potential for development as a frac sand resource, which includes the potential for a large, highly economical deposit with high margin, rapid payback and 25 years of open pit mining.
The PEA was prepared by Norwest Corp., headquartered in Calgary, Alberta, Canada.
With the uncertainty in oil prices the corporation will be limiting any capital spending on this project until greater certainty surrounding pricing and domestic frac sand demand is established.