Geomark Announces Fourth Quarter and Year End 2011 Results
23 March 2012 - 9:40AM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
Geomark Exploration Ltd. (TSX VENTURE:GME) (Geomark) is pleased to announce its
operating and financial results for the fourth quarter and year ended December
31, 2011. The report is summarized in this release, with the complete version of
the related consolidated financial statements and notes, as well as management's
discussion and analysis (MD&A), 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
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As at and for the year December 31, December 31,
ended December 31, 2010 2009
2011 Restated (2) Cdn GAAP(1)
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Financial ($ 000s, except
$ per share)
Revenue
Mineral Division(3) 705 13,958 247
Oil and Gas Division 2,060 2,228 1,898
Funds Flow (4) 952 523 (292)
Per Share Basic and
Diluted (5) 0.02 0.01 (0.01)
Cash Flow (Deficiency)
from Operations (380) (399) (292)
Per Share Basic and
Diluted (5) (0.01) (0.01) (0.01)
Net Earnings (Loss) (845) 13,282 (1,561)
Per Share Basic and
Diluted (5) (0.02) 0.25 (0.03)
Capital Expenditures
Mineral Division 1,837 226 -
Oil and Gas Division 55 166 604
Total Assets
Mineral Division 40,432 40,382 28,241
Oil and Gas Division 12,667 12,641 9,466
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Oil and Gas Operations
Barrels of Oil Equivalent
(BOE) per day (6) 126 148 152
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(1) The comparative highlights for 2009 are under Canadian Generally Accepted
Accounting Principles (GAAP) prior to the adoption of International Financial
Reporting Standards (IFRS).
(2) The comparative highlights have been restated with the adoption of
International Financial Reporting Standards (IFRS).
(3) Geomark is a junior mineral exploration company with mineral revenue
currently from non-production sources.
(4) 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.
(5) 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.
(6) 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.
Geomark's business strategy is to acquire either early stage or smaller advanced
precious metal mineral properties and operate exploration programs on them to
advance the prospects into defined economic deposits or producing assets.
Geomark's exploration focus in 2011 was divided between active exploration of
its existing properties and the search for new mineral projects or companies
through either joint venture, purchase or merger.
2011 Activities
-- During the year, Geomark spent approximately $1.9 million on exploration
activities. Of this total, $1.6 million (approximately 84 percent of the
total 2011 budget) was spent on drilling programs on two Timmins area
exploration projects, Thorneloe and Carr-Wilkie. A total of 6,470 meters
of drilling in 10 drillholes was completed on the two properties. In
2012, Geomark will be evaluating three of its other Timmins area gold
properties, Deloro, Mountjoy and Whitney-Tisdale.
-- The balance of the budget (approximately $300,000) was for expenses
associated with the search for new mineral properties and
assessment/lease costs on other Geomark held projects.
Business Development
-- Another strong focus for Geomark continues to be the joint venture
and/or acquisition of one or more new precious metal (gold preferred)
projects. The company has recently concentrated its efforts in the mid-
western United States (predominantly Nevada, Idaho, Utah and Arizona),
the Carolinas and most of Canada. Geomark has reviewed a large number of
properties and signed Confidentiality Agreements and completed detailed
analysis of approximately one hundred companies and properties. The
company has conducted property visits on projects in Canada, Nevada,
Idaho and Peru and reviewed plays in Canada, the U.S., Europe, Asia and
South/Central America.
-- While there have been several projects of considerable interest, Geomark
to date has been unable to negotiate suitable agreements with the
property holders. This has been somewhat frustrating but is a direct
reflection of the market conditions of late 2010 and 2011, in which
almost any exploration play could readily access project financing. This
situation has now changed.
-- In 2012, access to capital for early stage mineral exploration is now
considerably more difficult. Exploration companies that are having
financing issues for 2012 programs have now started to contact Geomark
directly regarding possible access to its capital through either mergers
or joint ventures. This should provide more opportunities for Geomark.
Financial
-- The Company's solid financial position provides it with the means and
flexibility to act quickly in any future potential deal. Working capital
at December 31, 2011 was approximately $49.7 million, including the
current value of liquid investments of $10.7 million.
-- Geomark's anticipated annual cash flow from its oil and gas operations
and interest and dividend income will be more than adequate to pay all
general and administrative costs on a yearly basis and provide a portion
of the funding for property acquisitions and/or exploration.
Outlook
-- Geomark's significant cash position, along with its oil and gas revenues
and dividend and interest income are obvious benefits in the current
mineral exploration space. Involvement in new exploration opportunities
is the top priority for the company.
-- In this current environment of record high commodity prices and related,
but overheated property valuations, Geomark is committed to maintaining
its prudent approach to joint venture and M&A activity.
-- Geomark has very experienced management and a strong technical team with
a history of success and an enviable balance sheet. The company will
continue to direct its efforts toward precious metal targets in
jurisdictions with favorable geology and low geopolitical risk.
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.
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.
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.
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