Denison Mines Corp. Atrium on Bay, 595 Bay Street, Suite 402 Toronto, ON M5G 2C2 Ph. 416-979-1991• Fx. 416-979-5893• www.denisonmines.com |
PRESS RELEASE | Trading symbols: DML-T, DNN-A |
• | Revenue was $39.2 million for the three months and $128.3 million for the year ended December 31, 2010. |
• | Net loss was $12.3 million or $0.04 per share for the three months and $14.2 million or $0.04 per share for the year ended December 31, 2010. |
• | Cash flow from operations was $7.0 million for the three months and $35.6 million for the year ended December 31, 2010. |
• | Production for the quarter totaled 234,000 pounds of uranium oxide (“U3O8”) and 391,000 pounds of vanadium blackflake (“V2O5”). For the year, production totaled 1,442,000 pounds U3O8 and 2,347,000 pounds V2O5. |
• | Uranium sales in the quarter were 449,000 pounds U3O8 at an average price of $49.97 per pound and for the year were 1,839,000 pounds U3O8 at an average price of $47.67 per pound. |
• | Vanadium sales in the quarter totaled 314,000 pounds of V2O5at an average price of $6.34 per pound and ferrovanadium (“FeV”) sales totaled 386,000 pounds at an average price of $12.70 per pound. Vanadium sales for the year totaled 541,000 pounds of V2O5 at an average price of $6.44 per pound and FeV sales totaled 1,003,000 pounds at an average price of $13.40 per pound. |
• | At December 31, 2010, the Company had 87,000 pounds U3O8 and 679,000 pounds V2O5 and 11,000 pounds FeV in inventory available for sale. Based on spot market prices at December 31, 2010, this inventory had a value of $9.8 million. |
• | The Company received initial estimates of mineral resources at Zones A and B at the Phoenix deposit at the Wheeler River project in the Athabasca Basin in northern Saskatchewan by SRK Consulting (Canada) Inc., which was retained to independently review and audit the resources in accordance with the requirements of NI 43-101. The report estimated indicated mineral resources at Zone A containing 35.64 million pounds (the Company’s share, 21.38 million pounds) at an average grade of 18.0% U3O8 and inferred mineral resources at Zone B containing 3.81 million pounds (the Company’s share, 2.29 million pounds) at an average grade of 7.3% U3O8 based on a cut-off grade of 0.8% U3O8. Denison is encouraged by these estimates for the potential of Wheeler River in terms of its high grade and its size. |
• | The Company began development of its Pinenut mine in Arizona in the fourth quarter. Production is expected to commence in 2012. |
• | In December 2010, the Company closed an underwritten private placement of 25,000,000 special warrants, at a price of CDN$2.45 per Special Warrant, and 1,400,000 special warrants issued on a “flow-through” basis under theIncome Tax Act(Canada), at a price of CDN$3.00 per FT Special Warrant. The offering raised aggregate gross proceeds for the Company of CDN$65,450,000. Each special warrant and flow-through special warrant entitled the holder thereof to receive one common share upon exercise. On December 20, the Company filed and obtained a receipt for its final short form prospectus qualifying for distribution the common shares issuable upon the exercise of the special Warrants and the flow through special warrants. The issuance of this receipt resulted in a deemed exercise of all of the special warrants and flow through special warrants for no additional consideration, and as a result, an aggregate of 26,400,000 common shares were issued to holders of the special warrants and flow through special warrants on December 23, 2010. |
• | Subsequent to the quarter end in February 2011, the Company entered into a Bid Implementation Agreement with White Canyon Uranium Limited (“White Canyon”). Under the agreement, the Company has agreed to make a takeover offer to acquire 100% of the issued and outstanding shares of White Canyon at a price of AUD$0.24 per share for total consideration of approximately AUD$57,000,000. Denison’s offer is subject to a number of conditions including the requirement that Denison acquire a relevant interest in at least 90% of White Canyon’s share capital during or by the end of the offer period. The bidder’s statement to White Canyon’s shareholders is expected to be available before the end of March 2011. |
• | In February 2011, the Company entered into an agreement with a syndicate of investment dealers who have agreed to purchase 18,300,000 common shares of the Company at a purchase price of CDN$3.55 per common share for aggregate gross proceeds of CDN$64,965,000. The offering is scheduled to close on March 15, 2011. |
Three Months Ended | Year Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue ($000s) | $ | 39,232 | $ | 31,052 | $ | 128,320 | $ | 79,170 | ||||||||
Net Loss ($000’s) | (12,297 | ) | (36,127 | ) | (14,235 | ) | (147,012 | ) | ||||||||
Loss Per Share ($) | (0.04 | ) | (0.11 | ) | (0.04 | ) | (0.51 | ) | ||||||||
Cash Provided By (Used By) Operations ($000’s) | 7,049 | 5,615 | 35,551 | (42,442 | ) |
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1 | Production costs include the costs of mining the ore fed to the mill in the period plus the costs of milling less a credit for vanadium produced in the period and excluding depreciation and amortization, which is a non-GAAP measure. |
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Ron Hochstein President and Chief Executive Officer | (416) 979-1991 Extension 232 | |
James R. Anderson | (416) 979-1991 Extension 372 |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
• | Denison’s 2010 production totaled 1,442,000 pounds uranium oxide (“U3O8”) and 2,347,000 pounds of vanadium blackflake (“V2O5”). |
• | Uranium sales were 1,839,000 pounds U3O8 at an average price of $47.67 per pound. |
• | Vanadium sales totaled 541,000 pounds V2O5 at an average price of $6.44 per pound and 1,003,000 pounds of ferrovanadium (“FeV”) at an average price of $13.40 per pound. |
• | At the end of 2010 the Company had 87,000 pounds U3O8 and 679,000 pounds V2O5 and 11,000 pounds FeV in inventory available for sale. Based on spot market prices at December 31, 2010, this inventory has a value of $9,800,000. |
• | Denison is essentially debt-free and has a cash balance of $97.6 million. |
• | The Company received initial estimates of mineral resources at Zones A and B at the Phoenix deposit at the Wheeler River project in the Athabasca Basin in northern Saskatchewan by SRK Consulting (Canada) Inc., which was retained to independently review and audit the resources in accordance with the requirements of National Instrument 43-101. The report estimated indicated mineral resources at Zone A containing 35,640,000 pounds (the Company’s share 21,380,000 pounds) at an average grade of 18.0% U3O8 and inferred mineral resources at Zone B containing 3,810,000 pounds (the Company’s share, 2,290,000 pounds) at an average grade of 7.3% U3O8 based on a cut-off grade of 0.8% U3O8. Denison is encouraged by these estimates for the potential of Wheeler River in terms of its high grade and size. |
• | The Company began development of its Pinenut mine in Arizona in the fourth quarter. Production is expected to commence in 2012. |
• | The Company completed equity issues in December raising aggregate gross proceeds of $64,769,000. |
• | In Zambia, the Company was granted mining licences for its Mutanga and Dibwe properties. These licences are for a period of 25 years. |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
Three Months ended | Year ended | Year ended | Year ended | |||||||||||||
Dec. 31 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||||
(in thousands) | 2010 | 2010 | 2009 | 2008 | ||||||||||||
Results of Operations: | ||||||||||||||||
Total revenues | $ | 39,232 | $ | 128,320 | $ | 79,170 | $ | 123,184 | ||||||||
Net income (loss) | (12,297 | ) | (14,235 | ) | (147,012 | ) | (80,648 | ) | ||||||||
Basic earnings (loss) per share | (0.04 | ) | (0.04 | ) | (0.51 | ) | (0.42 | ) | ||||||||
Diluted earnings (loss) per share | (0.04 | ) | (0.04 | ) | (0.51 | ) | (0.42 | ) |
As at Dec. 31, | As at Dec. 31, | As at Dec. 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Financial Position: | ||||||||||||
Working capital | $ | 137,098 | $ | 75,578 | $ | 34,655 | ||||||
Long-term investments | 2,955 | 10,605 | 10,691 | |||||||||
Property, plant and equipment | 714,458 | 691,039 | 717,433 | |||||||||
Total assets | 952,474 | 867,981 | 885,702 | |||||||||
Total long-term liabilities | $ | 131,373 | $ | 127,931 | $ | 249,716 |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
1 | Production costs include the costs of mining the ore fed to the mill in the period plus the costs of milling less a credit for vanadium produced in the period and excluding depreciation and amortization, which is a non-GAAP measure. |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
2010 | 2010 | 2010 | 2010 | |||||||||||||
(in thousands) | Q4 | Q3 | Q2 | Q1 | ||||||||||||
Total revenues | $ | 39,232 | $ | 39,883 | $ | 27,230 | $ | 21,975 | ||||||||
Net income (loss) | (12,297 | ) | (9,521 | ) | 16,672 | (9,089 | ) | |||||||||
Basic and diluted earnings (loss) per share | (0.04 | ) | (0.03 | ) | 0.05 | (0.03 | ) | |||||||||
2009 | 2009 | 2009 | 2009 | |||||||||||||
(in thousands) | Q4 | Q3 | Q2 | Q1 | ||||||||||||
Total revenues | $ | 31,052 | $ | 12,748 | $ | 13,372 | $ | 21,998 | ||||||||
Net income (loss) | (36,127 | ) | (91,343 | ) | (18,215 | ) | (1,327 | ) | ||||||||
Basic and diluted earnings (loss) per share | (0.11 | ) | (0.27 | ) | (0.07 | ) | (0.01 | ) |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
Three Months | Three Months | Year | Year | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||
(in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Revenue | ||||||||||||||||
Management fees (including expenses) | 487 | 397 | 1,614 | 1,541 | ||||||||||||
Commission fees on purchase and sale of uranium | — | 239 | 962 | 981 | ||||||||||||
Total | 487 | $ | 636 | 2,576 | $ | 2,522 | ||||||||||
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
(a) | CICA Handbook Section 1582 “Business Combinations”, Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-Controlling Interests” which replace the former CICA 1581 “Business Combinations” and CICA 1600 “Consolidated Financial Statements” and establish a new section for accounting for a non-controlling interest in a subsidiary. These sections provide the Canadian equivalent to FASB Statements No.141(R) “Business Combinations” and No.160 “Non-Controlling Interests in Consolidated Financial Statements”. CICA 1582 is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period after January 1, 2011. CICA 1601 and CICA 1602 apply to interim and annual consolidated financial statements relating to years beginning on or after January 1, 2011 although early adoption is permitted. CICA 1582, which replaces Handbook Section 1581, Business Combinations, establishes standards for the measurement of a business combination and the recognition and measurement of assets acquired and liabilities assumed. CICA 1601, which replaces Handbook Section 1600, carries forward the existing Canadian guidance on aspects of the preparation of consolidated financial statements subsequent to acquisition other than non-controlling interests. CICA 1602 establishes guidance for the treatment of non-controlling interests subsequent to acquisition through a business combination. The Company has early adopted all three sections effective January 1, 2010. There was no impact to the Company’s financial statements from adopting these standards. |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
(a) | In February 2008, the Accounting Standards Board announced that Canadian publicly accountable enterprises will be required to adopt International Financial Reporting Standards (“IFRS”) effective January 1, 2011. As a result, the Company will publish its first consolidated financial statements, prepared in accordance with IFRS, for the quarter ending March 31, 2011. The Company will also provide comparative data on an IFRS basis including an opening balance sheet as at January 1, 2010. |
• | Initial diagnostic phase |
• | Impact analysis and design phase |
• | Implementation phase |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
Preliminary | ||||||||||||||||
As at | Effect of | as at | ||||||||||||||
December 31, 2009 | Conversion to | January 1, 2010 | ||||||||||||||
(in thousands) (unaudited) | REF | Canadian GAAP basis | IFRS | IFRS basis | ||||||||||||
ASSETS | ||||||||||||||||
Current | ||||||||||||||||
Cash and cash equivalents | 19,804 | — | 19,804 | |||||||||||||
Trade and other receivables | 13,773 | — | 13,773 | |||||||||||||
Inventories | 52,216 | — | 52,216 | |||||||||||||
Prepaid expenses and other | A | 1,607 | (3 | ) | 1,604 | |||||||||||
87,400 | (3 | ) | 87,397 | |||||||||||||
Inventories — ore in stockpiles | 1,530 | — | 1,530 | |||||||||||||
Investments | 10,605 | — | 10,605 | |||||||||||||
Prepaid expense and other | 287 | — | 287 | |||||||||||||
Restricted cash and investments | 21,656 | — | 21,656 | |||||||||||||
Property, plant and equipment | B | 691,039 | (369,644 | ) | 321,395 | |||||||||||
Intangibles | 4,436 | — | 4,436 | |||||||||||||
Goodwill | C | 51,028 | (51,028 | ) | — | |||||||||||
Total Assets | 867,981 | (420,675 | ) | 447,306 | ||||||||||||
LIABILITIES | ||||||||||||||||
Current | ||||||||||||||||
Accounts payable and accrued liabilities | D | 9,508 | 218 | 9,726 | ||||||||||||
Current portion of long-term liabilities Post employment benefits | 380 | — | 380 | |||||||||||||
Reclamation and remediation obligations | 752 | — | 752 | |||||||||||||
Debt obligations | 869 | — | 869 | |||||||||||||
Other long-term liabilities | 313 | — | 313 | |||||||||||||
11,822 | 218 | 12,040 | ||||||||||||||
Deferred revenue | 3,187 | — | 3,187 | |||||||||||||
Provision for post-employment benefits | 3,426 | — | 3,426 | |||||||||||||
Reclamation and remediation obligations | 17,154 | — | 17,154 | |||||||||||||
Debt obligations | 195 | — | 195 | |||||||||||||
Other long-term liabilities | 1,051 | — | 1,051 | |||||||||||||
Deferred income taxes | E | 102,918 | (88,856 | ) | 14,062 | |||||||||||
139,753 | (88,638 | ) | 51,115 | |||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Share capital | F | 849,488 | 848 | 850,336 | ||||||||||||
Share purchase warrants | 5,830 | — | 5,830 | |||||||||||||
Contributed surplus | 39,922 | — | 39,922 | |||||||||||||
Deficit | G | (242,494 | ) | (260,987 | ) | (503,481 | ) | |||||||||
Accumulated other comprehensive income | H | 75,482 | (71,898 | ) | 3,584 | |||||||||||
Total Liabilities and Equity | 867,981 | (420,675 | ) | 447,306 | ||||||||||||
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
A. | Prepaid and other assets Adjustment results from moving from the temporal to current rate method of foreign exchange translation for Zambia prepaid assets. |
B. | Property, plant and equipment |
Adjustment to property, plant and equipment assets to reflect impairment amount calculated in accordance with IFRS | (325,849 | ) | ||
Adjustment results from moving from the temporal to current rate method of foreign exchange translation for Zambia property, plant and equipment assets | (23,577 | ) | ||
Adjustment to reflect the unwind of a deferred tax gross-up related to the acquisition of assets of OmegaCorp. | (20,218 | ) | ||
Total adjustment to property, plant and equipment | (369,644 | ) |
C. | Goodwill Impairment of goodwill as calculated in accordance with IFRS. |
D. | Accounts Payable Effect of using US GAAP accounting for flow through shares due to the absence of IFRS specific guidance. Recognition of the liability related to the “premium” between the quoted price of the Company’s shares at the flow-through share closing date and the amount the investor pays for the actual flow-through shares. |
E. | Deferred income taxes |
Elimination of deferred tax liability related to the acquisition of OmegaCorp. | (20,218 | ) | ||
Tax effects of other IFRS adjustments | (68,638 | ) | ||
Total adjustment to deferred income taxes | (88,856 | ) |
F. | Share Capital Effect of using US GAAP accounting for flow through shares due to the absence of IFRS specific guidance |
G. | Deficit |
Adjustment results from moving from the temporal to current rate method of foreign exchange translation to opening balances of Zambia | (23,580 | ) | ||
Adjustment to reflect the unwind of a deferred tax gross-up related to the acquisition of assets of OmegaCorp. | (20,218 | ) | ||
Adjustment to property, plant and equipment assets to reflect impairment amount calculated in accordance with IFRS | (325,849 | ) | ||
Impairment of goodwill | (51,028 | ) | ||
Effect of using US GAAP accounting for flow through shares | (1,066 | ) | ||
Adjustment to deferred income taxes | 88,856 | |||
Reset of cumulative translation adjustment account to zero | 71,898 | |||
Total adjustment to deficit | (260,987 | ) |
H. | Accumulated Other Comprehensive Income Adjustment to reset cumulative translation gains to zero as per IFRS 1 election for cumulative translation differences. |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
1. | Business Combinations |
2. | Cumulative Translation Differences |
3. | Property, Plant and Equipment |
1. | Right to explore has, or will in the near future, expire and renewal is not expected; | ||
2. | Further exploration and evaluation expenditures are not budgeted or planned; | ||
3. | Decision was made to discontinue activities due to lack of discovery; or | ||
4. | Development is likely but the exploration and evaluation asset is unlikely to be recovered in full. |
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
In addition, the Company’s contractual obligations at December 31, 2010 are as follows:
After | ||||||||||||||||||||
Total | 1 Year | 2-3 Years | 4-5 Years | 5 Years | ||||||||||||||||
Debt Obligations | $ | 405 | 200 | 189 | 16 | $ | — | |||||||||||||
Operating lease and other obligations | $ | 22,167 | 13,551 | 6,526 | 2,090 | — |
manageable area, the scope and costs of final remediation have not yet been determined and could be significant.
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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Management’s Discussion and Analysis
Year Ended December 31, 2010
(Expressed in U.S. Dollars, Unless Otherwise Noted)
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“Ron F. Hochstein” | “James R. Anderson” | |
Ron F. Hochstein | James R. Anderson | |
President and Chief Executive Officer | Executive Vice-President and | |
Chief Financial Officer | ||
March 10, 2011 |
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Toronto, Ontario
March 10, 2011
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Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents | $ | 97,554 | $ | 19,804 | ||||
Trade and other receivables (note 3) | 20,236 | 13,773 | ||||||
Inventories (note 4) | 32,387 | 52,216 | ||||||
Prepaid expenses and other | 1,917 | 1,607 | ||||||
152,094 | 87,400 | |||||||
Inventories — ore in stockpiles (note 4) | 2,204 | 1,530 | ||||||
Investments (note 5) | 2,955 | 10,605 | ||||||
Prepaid expenses and other | 104 | 287 | ||||||
Restricted cash and investments (note 6) | 22,946 | 21,656 | ||||||
Property, plant and equipment (note 7) | 714,458 | 691,039 | ||||||
Intangibles (note 8) | 3,794 | 4,436 | ||||||
Goodwill (note 9) | 53,919 | 51,028 | ||||||
$ | 952,474 | $ | 867,981 | |||||
LIABILITIES | ||||||||
Current | ||||||||
Accounts payable and accrued liabilities | $ | 13,753 | $ | 9,508 | ||||
Current portion of long-term liabilities: | ||||||||
Post-employment benefits (note 10) | 402 | 380 | ||||||
Reclamation and remediation obligations (note 11) | 641 | 752 | ||||||
Debt obligations (note 12) | 200 | 869 | ||||||
Other long-term liabilities (note 13) | — | 313 | ||||||
14,996 | 11,822 | |||||||
Deferred revenue | 3,339 | 3,187 | ||||||
Provision for post-employment benefits (note 10) | 3,617 | 3,426 | ||||||
Reclamation and remediation obligations (note 11) | 16,924 | 17,154 | ||||||
Debt obligations (note 12) | 205 | 195 | ||||||
Other long-term liabilities (note 13) | 1,105 | 1,051 | ||||||
Future income tax liability (note 14) | 106,183 | 102,918 | ||||||
146,369 | 139,753 | |||||||
SHAREHOLDERS’ EQUITY | ||||||||
Share capital (note 15) | 910,484 | 849,488 | ||||||
Share purchase warrants (note 16) | 5,830 | 5,830 | ||||||
Contributed surplus (notes 17 and 18) | 41,658 | 39,922 | ||||||
Deficit | (256,729 | ) | (242,494 | ) | ||||
Accumulated other comprehensive income (note 19) | 104,862 | 75,482 | ||||||
806,105 | 728,228 | |||||||
$ | 952,474 | $ | 867,981 | |||||
Issued and outstanding common shares (note 15) | 366,200,665 | 339,720,415 | ||||||
Subsequent events (note 26)
“Ron F. Hochstein” | “Catherine J. G. Stefan” |
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Consolidated Statements of Operations
(Expressed in thousands of U.S. dollars except for per share amounts)
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
REVENUES(note 21) | $ | 128,320 | $ | 79,170 | ||||
EXPENSES | ||||||||
Operating expenses (note 20) | 122,549 | 98,145 | ||||||
Sales royalties and capital taxes | 2,325 | 1,675 | ||||||
Mineral property exploration | 7,526 | 10,120 | ||||||
General and administrative | 14,312 | 13,883 | ||||||
Stock option expense (note 18) | 1,831 | 3,847 | ||||||
Mineral properties impairment (note 7) | — | 100,000 | ||||||
Intangibles impairment (note 8) | — | 359 | ||||||
Goodwill impairment (note 9) | — | 22,136 | ||||||
148,543 | 250,165 | |||||||
Loss from operations | (20,223 | ) | (170,995 | ) | ||||
Other income (expense) (note 20) | 5,812 | (14,551 | ) | |||||
Loss before taxes | (14,411 | ) | (185,546 | ) | ||||
Income tax recovery (expense) (note 14): | ||||||||
Current | (355 | ) | 1,691 | |||||
Future | 531 | 36,843 | ||||||
Net loss for the year | $ | (14,235 | ) | $ | (147,012 | ) | ||
Net loss per share | ||||||||
Basic | $ | (0.04 | ) | $ | (0.51 | ) | ||
Diluted | $ | (0.04 | ) | $ | (0.51 | ) | ||
Weighted-average number of shares outstanding (in thousands) | ||||||||
Basic | 340,826 | 286,421 | ||||||
Diluted | 340,826 | 286,421 | ||||||
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Consolidated Statements of Shareholders’ Equity and Comprehensive Loss
(Expressed in thousands of U.S. dollars)
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Share capital | ||||||||
Balance at beginning of year | $ | 849,488 | $ | 666,278 | ||||
New shares issued-net of issue costs | 61,091 | 185,034 | ||||||
New shares issued under stock option plans | 159 | — | ||||||
Fair value of stock options exercised | 95 | — | ||||||
Renunciation of flow-through share liabilities | (349 | ) | (1,824 | ) | ||||
Balance at end of year | $ | 910,484 | $ | 849,488 | ||||
Share purchase warrants | ||||||||
Balance at beginning of year | $ | 5,830 | $ | 11,728 | ||||
Warrants expired | — | (5,898 | ) | |||||
Balance at end of year | $ | 5,830 | $ | 5,830 | ||||
Contributed surplus | ||||||||
Balance at beginning of year | $ | 39,922 | $ | 30,537 | ||||
Stock-based compensation expense | 1,831 | 3,847 | ||||||
Fair value of stock options exercised | (95 | ) | — | |||||
Warrants expired | — | 5,898 | ||||||
Warrants expired-tax effect | — | (360 | ) | |||||
Balance at end of year | $ | 41,658 | $ | 39,922 | ||||
Deficit | ||||||||
Balance at beginning of year | $ | (242,494 | ) | $ | (95,482 | ) | ||
Net loss for the year | (14,235 | ) | (147,012 | ) | ||||
Balance at end of year | $ | (256,729 | ) | $ | (242,494 | ) | ||
Accumulated other comprehensive income (loss) | ||||||||
Balance at beginning of year | $ | 75,482 | $ | (4,709 | ) | |||
Unrealized gain (loss) on investments change-net of tax | (2,490 | ) | 3,368 | |||||
Foreign currency translation change | 31,870 | 76,823 | ||||||
Balance at end of year | $ | 104,862 | $ | 75,482 | ||||
Total shareholders’ equity | $ | 806,105 | $ | 728,228 | ||||
Comprehensive income (loss) | ||||||||
Net loss for the year | $ | (14,235 | ) | $ | (147,012 | ) | ||
Unrealized gain (loss) on investments change-net of tax | (2,490 | ) | 3,368 | |||||
Foreign currency translation change | 31,870 | 76,823 | ||||||
Comprehensive income (loss) for the year | $ | 15,145 | $ | (66,821 | ) | |||
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Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
CASH PROVIDED BY (USED IN): | 2010 | 2009 | ||||||
OPERATING ACTIVITIES | ||||||||
Net loss for the year | $ | (14,235 | ) | $ | (147,012 | ) | ||
Items not affecting cash: | ||||||||
Depletion, depreciation, amortization and accretion | 60,598 | 36,324 | ||||||
Investments impairment | 181 | 149 | ||||||
Mineral properties impairment | — | 100,000 | ||||||
Intangibles impairment | — | 359 | ||||||
Goodwill impairment | — | 22,136 | ||||||
Stock-based compensation | 1,831 | 3,847 | ||||||
Gains on asset disposals | (2,739 | ) | (5,679 | ) | ||||
Losses (gains) on restricted investments | (207 | ) | 809 | |||||
Non-cash inventory adjustments | (12,655 | ) | 4,290 | |||||
Future income tax recovery | (531 | ) | (36,843 | ) | ||||
Foreign exchange | 8,003 | 17,476 | ||||||
Net change in non-cash working capital items (note 20) | (4,695 | ) | (38,298 | ) | ||||
Net cash provided by (used in) operating activities | 35,551 | (42,442 | ) | |||||
INVESTING ACTIVITIES | ||||||||
Decrease (increase) in notes receivable | (880 | ) | 200 | |||||
Purchase of investments | (17 | ) | (711 | ) | ||||
Proceeds from sale of investments | 8,118 | 11,128 | ||||||
Expenditures on property, plant and equipment | (27,310 | ) | (38,850 | ) | ||||
Proceeds from sale of property, plant and equipment | 1,566 | 1,914 | ||||||
Increase in restricted cash and investments | (949 | ) | (797 | ) | ||||
Net cash used in investing activities | (19,472 | ) | (27,116 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Decrease in debt obligations | (685 | ) | (99,620 | ) | ||||
Issuance of common shares for cash: | ||||||||
New share issues | 61,091 | 185,034 | ||||||
Exercise of stock options and warrants | 159 | — | ||||||
Net cash provided by financing activities | 60,565 | 85,414 | ||||||
Net increase in cash and cash equivalents | 76,644 | 15,856 | ||||||
Foreign exchange effect on cash and cash equivalents | 1,106 | 742 | ||||||
Cash and cash equivalents, beginning of year | 19,804 | 3,206 | ||||||
Cash and cash equivalents, end of year | $ | 97,554 | $ | 19,804 | ||||
Cash and cash equivalents comprised of: | ||||||||
Cash | 46,846 | 19,804 | ||||||
Cash equivalents | 50,708 | — | ||||||
$ | 97,554 | $ | 19,804 | |||||
Supplemental cash flow disclosure: | ||||||||
Interest paid | 27 | 1,576 | ||||||
Income taxes paid (recovered) | (1,369 | ) | 450 | |||||
- 44 -
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars, unless otherwise noted)
1. | NATURE OF OPERATIONS |
2. | SUMMARY OF SIGNIFICANT MINING INTERESTS AND ACCOUNTING POLICIES |
Ownership | ||||||
Location | Interest | |||||
Through majority owned subsidiaries | ||||||
Arizona Strip | USA | 100.00 | % | |||
Henry Mountains | USA | 100.00 | % | |||
Colorado Plateau | USA | 100.00 | % | |||
Gurvan Saihan Joint Venture | Mongolia | 70.00 | % | |||
Mutanga | Zambia | 100.00 | % | |||
As interests in unincorporated joint ventures, or jointly controlled assets | ||||||
McClean Lake Joint Venture | Canada | 22.50 | % | |||
Midwest Joint Venture | Canada | 25.17 | % |
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- 46 -
- 47 -
- 48 -
- 49 -
• | Cash and cash equivalents (including restricted cash and investments) are classified as held-for-trading and any period change in fair value is recorded through the results from operations. | ||
• | Trade and other receivables and Notes receivable are classified as loans and receivables and are measured at amortized cost using the effective interest rate method. Interest income is recorded in net income, as applicable. | ||
• | Investments are classified as available-for-sale and any period change in fair value is recorded through other comprehensive income. Where the investment experiences an other-than-temporary decline in value, the loss is recognized in the results of operations. | ||
• | Accounts payable and accrued liabilities and Debt obligations are classified as other financial liabilities and are measured at amortized cost using the effective interest rate method. Interest expense is recorded in other income, as applicable. |
a) | CICA Handbook Section 1582 “Business Combinations”, Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-Controlling Interests” which replace the former CICA 1581 “Business Combinations” and CICA 1600 “Consolidated Financial Statements” and establish a new section for accounting for a non-controlling interest in a subsidiary. These sections provide the Canadian equivalent to FASB Statements No.141(R) “Business Combinations” and No.160 “Non-Controlling Interests in Consolidated Financial Statements”. CICA 1582 is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period after January 1, 2011. CICA 1601 and CICA 1602 apply to interim and annual consolidated financial statements relating to years beginning on or after January 1, 2011 although early adoption is permitted. CICA 1582, which replaces Handbook Section 1581, Business Combinations, establishes standards for the measurement of a business combination and the recognition and measurement of assets acquired and liabilities assumed. CICA 1601, which replaces Handbook Section 1600, carries forward the existing Canadian guidance on aspects of the preparation of consolidated financial statements subsequent to acquisition other than non-controlling interests. CICA 1602 establishes guidance for the treatment of non-controlling interests subsequent to acquisition through a business combination. The Company has early adopted all three sections effective January 1, 2010. There was no impact to the Company’s financial statements from adopting these standards. |
a) | In February 2008, the Accounting Standards Board announced that Canadian publicly accountable enterprises will be required to adopt International Financial Reporting Standards (“IFRS”) effective January 1, 2011. As a result, the Company will publish its first consolidated financial statements, prepared in accordance with IFRS, for the quarter ending March 31, 2011. The Company will also provide comparative data on an IFRS basis including an opening balance sheet as at January 1, 2010. |
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3. | TRADE AND OTHER RECEIVABLES |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Trade receivables—mineral concentrate sales | $ | 5,631 | $ | 9,422 | ||||
Trade receivables-other | 6,903 | 2,114 | ||||||
Trade and other receivables in joint ventures | 375 | 928 | ||||||
Sales tax receivables | 228 | 1,127 | ||||||
Sundry receivables | 6,242 | 182 | ||||||
Note and lease receivables | 857 | — | ||||||
$ | 20,236 | $ | 13,773 | |||||
4. | INVENTORIES |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Uranium concentrates and work-in-progress(1) | $ | 9,769 | $ | 19,921 | ||||
Vanadium concentrates and work-in-progress(2) | 4,390 | 442 | ||||||
Inventory of ore in stockpiles | 14,772 | 28,366 | ||||||
Mine and mill supplies | 5,660 | 5,017 | ||||||
$ | 34,591 | $ | 53,746 | |||||
Inventories—by duration: | ||||||||
Current | $ | 32,387 | $ | 52,216 | ||||
Long-term—ore in stockpiles | 2,204 | 1,530 | ||||||
$ | 34,591 | $ | 53,746 | |||||
(1) | The Uranium concentrates and work-in-progress inventory is presented net of a write-down of $nil as at December 31, 2010 and $5,910,000 as at December 31, 2009. | |
(2) | The Vanadium concentrates and work-in-progress inventory is presented net of a write-down of $21,000 as at December 31, 2010 and $7,302,000 as at December 31, 2009. |
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5. | INVESTMENTS |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Investments | ||||||||
Available for sale securities at fair value | $ | 2,955 | $ | 10,605 | ||||
$ | 2,955 | $ | 10,605 | |||||
6. | RESTRICTED CASH AND INVESTMENTS |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Cash | $ | 504 | $ | 23 | ||||
Cash equivalents | 6,459 | 3,066 | ||||||
Investments | 15,983 | 18,567 | ||||||
$ | 22,946 | $ | 21,656 | |||||
Restricted cash and investments — by item: | ||||||||
U.S. mill and mine reclamation | $ | 20,315 | $ | 19,564 | ||||
Elliot Lake reclamation trust fund | 2,631 | 2,092 | ||||||
$ | 22,946 | $ | 21,656 | |||||
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7. | PROPERTY, PLANT AND EQUIPMENT |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Plant and equipment: | ||||||||
Cost | $ | 182,523 | $ | 172,675 | ||||
Construction-in-progress | 21,376 | 11,861 | ||||||
Accumulated depreciation | (38,638 | ) | (27,915 | ) | ||||
$ | 165,261 | $ | 156,621 | |||||
Mineral properties: | ||||||||
Cost | $ | 721,338 | $ | 686,457 | ||||
Impairment | (103,441 | ) | (103,441 | ) | ||||
Accumulated amortization | (68,700 | ) | (48,598 | ) | ||||
$ | 549,197 | $ | 534,418 | |||||
Net book value | $ | 714,458 | $ | 691,039 | ||||
Net book value—continuity summary: | ||||||||
Opening | $ | 691,039 | $ | 717,433 | ||||
Additions | 30,909 | 44,254 | ||||||
Depreciation and amortization | (28,983 | ) | (27,171 | ) | ||||
Impairment | — | (100,000 | ) | |||||
Write-down | — | (382 | ) | |||||
Disposals | (2,159 | ) | (1,371 | ) | ||||
Reclamation asset adjustment | 448 | 349 | ||||||
Foreign exchange | 23,204 | 57,927 | ||||||
$ | 714,458 | $ | 691,039 | |||||
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a) | Wheeler River — the Company has a 60% interest in the project (located in the Athabasca Basin); | ||
b) | Moore Lake — the Company has a 75% interest in the project (located in the Athabasca Basin) subject to a 2.5% net smelter return royalty; | ||
c) | Wolly — the Company has a 22.5% interest in the project (located in the Athabasca Basin); and | ||
d) | Park Creek — In the first quarter of 2006, the Company entered into an option agreement to earn up to a 75% interest in the Park Creek project. The Company is required to incur exploration expenditures of CDN$2,800,000 over three years to earn an initial 49% interest and a further CDN$3,000,000 over six years to earn an additional 26% interest. As at December 31, 2010, the Company has incurred a total of CDN$4,218,000 towards the option and has earned a 49% ownership interest in the project under the phase-in ownership provisions of the agreement. |
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8. | INTANGIBLES |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Cost | $ | 8,189 | $ | 7,791 | ||||
Impairment | (359 | ) | (359 | ) | ||||
Accumulated amortization | (4,036 | ) | (2,996 | ) | ||||
$ | 3,794 | $ | 4,436 | |||||
Net book value-by item: | ||||||||
UPC management services agreement | ||||||||
Cost | 7,439 | 7,041 | ||||||
Accumulated amortization | (3,645 | ) | (2,605 | ) | ||||
Urizon technology licenses | ||||||||
Cost | 750 | 750 | ||||||
Accumulated amortization and impairment | (750 | ) | (750 | ) | ||||
$ | 3,794 | $ | 4,436 | |||||
Net book value—continuity summary | ||||||||
Opening | $ | 4,436 | $ | 4,978 | ||||
Impairment | — | (359 | ) | |||||
Amortization | (862 | ) | (855 | ) | ||||
Foreign exchange | 220 | 672 | ||||||
$ | 3,794 | $ | 4,436 | |||||
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9. | GOODWILL |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Goodwill, beginning of year | $ | 51,028 | $ | 63,240 | ||||
Impairment charge | — | (22,136 | ) | |||||
Foreign exchange | 2,891 | 9,924 | ||||||
Goodwill, end of year | $ | 53,919 | $ | 51,028 | ||||
Goodwill-by business unit: | ||||||||
Canada mining segment | $ | 53,919 | $ | 51,028 | ||||
10. | POST-EMPLOYMENT BENEFITS |
Discount rate | 7.50 | % | ||
Initial medical cost growth rate per annum | 11.00 | % | ||
Medical cost growth rate per annum decline to | 5.00 | % | ||
Year in which medical cost growth rate reaches its final level | 2014 | |||
Dental cost growth rate per annum | 4.00 | % |
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December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Accrued benefit obligation | $ | 3,820 | $ | 3,594 | ||||
Unamortized experience gain | 199 | 212 | ||||||
$ | 4,019 | $ | 3,806 | |||||
Post-employment benefits liability-by duration: | ||||||||
Current | $ | 402 | $ | 380 | ||||
Non-current | 3,617 | 3,426 | ||||||
$ | 4,019 | $ | 3,806 | |||||
Post-employment liability—continuity summary: | ||||||||
Opening | $ | 3,806 | $ | 3,357 | ||||
Benefits paid | (266 | ) | (281 | ) | ||||
Interest cost | 286 | 221 | ||||||
Amortization of experience gain | (24 | ) | (18 | ) | ||||
Foreign exchange | 217 | 527 | ||||||
$ | 4,019 | $ | 3,806 | |||||
11. | RECLAMATION AND REMEDIATION OBLIGATIONS |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Reclamation and remediation liability-by location: | ||||||||
U.S. Mill and Mines | $ | 6,383 | $ | 8,609 | ||||
Elliot Lake | 9,451 | 8,155 | ||||||
McClean Lake and Midwest Joint Ventures | 1,731 | 1,142 | ||||||
$ | 17,565 | $ | 17,906 | |||||
Reclamation and remediation liability—by duration: | ||||||||
Current | $ | 641 | $ | 752 | ||||
Non-current | 16,924 | 17,154 | ||||||
$ | 17,565 | $ | 17,906 | |||||
Reclamation and remediation liability-continuity summary: | ||||||||
Opening | $ | 17,906 | $ | 19,346 | ||||
Accretion | 1,309 | 1,482 | ||||||
Expenditures incurred | (1,249 | ) | (1,051 | ) | ||||
Liability adjustments — income statement | (1,391 | ) | (3,478 | ) | ||||
Liability adjustments — balance sheet | 448 | 350 | ||||||
Foreign exchange | 542 | 1,257 | ||||||
$ | 17,565 | $ | 17,906 | |||||
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12. | DEBT OBLIGATIONS |
At December 31 | At December 31 | |||||||
(in thousands) | 2010 | 2009 | ||||||
Notes payable and other financing | $ | 405 | $ | 1,064 | ||||
$ | 405 | $ | 1,064 | |||||
Debt obligations—by duration: | ||||||||
Current | 200 | 869 | ||||||
Non-current | 205 | 195 | ||||||
$ | 405 | $ | 1,064 | |||||
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(in thousands) | ||||
2011 | $ | 200 | ||
2012 | 111 | |||
2013 | 78 | |||
2014 | 16 |
13. | OTHER LONG-TERM LIABILITIES |
At December 31 | At December 31 | |||||||
(in thousands) | 2010 | 2009 | ||||||
Unamortized fair value of sales contracts | $ | — | $ | 313 | ||||
Unamortized fair value of toll milling contracts | 1,005 | 951 | ||||||
Other | 100 | 100 | ||||||
$ | 1,105 | $ | 1,364 | |||||
Other long-term liabilities—by duration: | ||||||||
Current | — | 313 | ||||||
Non-current | 1,105 | 1,051 | ||||||
$ | 1,105 | $ | 1,364 | |||||
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14. | INCOME TAXES |
(in thousands) | 2010 | 2009 | ||||||
Combined basic tax rate | 31.0 | % | 33.0 | % | ||||
Loss before taxes | $ | (14,411 | ) | $ | (185,546 | ) | ||
Income tax expense (recovery) at basic tax rate | (4,467 | ) | (61,230 | ) | ||||
Non-deductible amounts | 3,833 | 12,569 | ||||||
Non-taxable amounts | (2,730 | ) | (3,936 | ) | ||||
Previously unrecognized future tax assets | (359 | ) | (2,579 | ) | ||||
Difference in foreign tax rates | 2,600 | 3,874 | ||||||
Change in valuation allowance | 26 | 15,557 | ||||||
Impact of legislative changes | — | (2,292 | ) | |||||
Other | 921 | (497 | ) | |||||
Tax recovery per consolidated financial statements | $ | (176 | ) | $ | (38,534 | ) | ||
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Future income tax assets: | ||||||||
Inventory | $ | — | $ | 2,500 | ||||
Property, plant and equipment, net | 8,646 | 9,277 | ||||||
Investments | — | 772 | ||||||
Deferred revenue | 1,378 | 1,302 | ||||||
Post-employment benefits | 1,081 | 1,015 | ||||||
Reclamation and remediation obligations | 5,643 | 5,994 | ||||||
Other long-term liabilities | 270 | 367 | ||||||
Tax loss carryforwards | 58,367 | 41,687 | ||||||
Other | 9,602 | 9,079 | ||||||
84,987 | 71,993 | |||||||
Future income tax liability: | ||||||||
Inventory | (3,089 | ) | (918 | ) | ||||
Long-term investments | (188 | ) | (143 | ) | ||||
Property, plant and equipment, net | (146,928 | ) | (132,939 | ) | ||||
Intangibles | (1,021 | ) | (1,182 | ) | ||||
Other | (1,877 | ) | (1,688 | ) | ||||
Future tax liabilities — net | (68,116 | ) | (64,877 | ) | ||||
Valuation allowance | (38,067 | ) | (38,041 | ) | ||||
Net future income tax liabilities | $ | (106,183 | ) | $ | (102,918 | ) | ||
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Amount | ||||||
Country | (in thousands) | Expiry | ||||
Australia | $ | 485 | Unlimited | |||
Canada | 39,679 | 2028–2030 | ||||
Mongolia | 504 | 2011–2018 | ||||
United States | 112,282 | 2026–2030 | ||||
Zambia | 5,813 | 2011–2020 |
15. | SHARE CAPITAL |
Number of | ||||||||
Common | ||||||||
(in thousands except share amounts) | Shares | Amount | ||||||
Balance at December 31, 2008 | 197,295,415 | $ | 666,278 | |||||
Issued for cash: | ||||||||
New issue gross proceeds | 142,425,000 | 193,646 | ||||||
New issue gross issue costs | — | (8,612 | ) | |||||
Renunciation of flow-through share liability | — | (1,824 | ) | |||||
142,425,000 | 183,210 | |||||||
Balance at December 31, 2009 | 339,720,415 | $ | 849,488 | |||||
Issued for cash: | ||||||||
New issue gross proceeds | 26,400,000 | 64,769 | ||||||
New issue gross issue costs | — | (3,678 | ) | |||||
Exercise of stock options | 80,250 | 159 | ||||||
Renunciation of flow-through share liability | — | (349 | ) | |||||
Fair value of stock options exercised | — | 95 | ||||||
26,480,250 | 60,996 | |||||||
Balance at December 31, 2010 | 366,200,665 | $ | 910,484 | |||||
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16. | SHARE PURCHASE WARRANTS |
Weighted Average | Number of | Fair | ||||||||||
(in thousands except share amounts | Exercise Price | Common Shares | Value | |||||||||
and price per share) | Per Share (CDN$) | Issuable | Amount | |||||||||
Balance outstanding at December 31, 2008 | 8.70 | 9,564,915 | $ | 11,728 | ||||||||
Warrants expired(2) | 5.21 | (3,156,915 | ) | (5,898 | ) | |||||||
5.21 | (3,156,915 | ) | (5,898 | ) | ||||||||
Balance outstanding at December 31, 2009 | 10.42 | 6,408,000 | $ | 5,830 | ||||||||
Balance outstanding at December 31, 2010 | 10.42 | 6,408,000 | $ | 5,830 | ||||||||
Balance exercisable at December 31, 2010 | 10.42 | 6,408,000 | $ | 5,830 | ||||||||
Balance outstanding — by warrant series March 2006 series(1) | 10.42 | 6,408,000 | 5,830 | |||||||||
Balance outstanding at December 31, 2010 | 10.42 | 6,408,000 | $ | 5,830 | ||||||||
(1) | The March 2006 series had an effective exercise price of CDN$10.42 per issuable share (CDN$30.00 per warrant adjusted for the 2.88 exchange ratio associated with the Denison and IUC merger) and expired on March 1, 2011. Upon expiry, 6,408,000 (or 2,225,000 before adjusting for the exchange ratio) of the warrants expired unexercised. | |
(2) | The November 2004 series had an effective exercise price of CDN$5.21 per issuable share (CDN$15.00 per warrant adjusted for the 2.88 exchange ratio associated with the Denison and IUC merger) and expired on November 24, 2009. Upon expiry in 2009, 3,156,915 (or 1,096,141 before adjusting for the exchange ratio) of the warrants expired unexercised. |
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17. | CONTRIBUTED SURPLUS |
December 31, | December 31, | |||||||
(in thousands) | 2010 | 2009 | ||||||
Balance, beginning of year | $ | 39,922 | $ | 30,537 | ||||
Stock-based compensation expense (note 18) | 1,831 | 3,847 | ||||||
Fair value of stock options exercised | (95 | ) | — | |||||
Warrant expiries | — | 5,898 | ||||||
Warrant expiries-tax | — | (360 | ) | |||||
Balance, end of year | $ | 41,658 | $ | 39,922 | ||||
18. | STOCK OPTIONS |
2010 | 2009 | |||||||||||||||
Weighted- | Weighted- | |||||||||||||||
Average | Average | |||||||||||||||
Exercise | Exercise | |||||||||||||||
Number of | Price per | Number of | Price per | |||||||||||||
Common | Share | Common | Share | |||||||||||||
Shares | (CDN $) | Shares | (CDN $) | |||||||||||||
Stock options outstanding, beginning of year | 8,084,990 | $ | 2.97 | 5,536,384 | $ | 7.11 | ||||||||||
Granted | 407,000 | 1.43 | 5,491,500 | 2.08 | ||||||||||||
Exercised | (80,250 | ) | 2.03 | — | — | |||||||||||
Expired | (2,125,651 | ) | 3.78 | (2,942,894 | ) | 9.09 | ||||||||||
Stock options outstanding, end of year | 6,286,089 | $ | 2.61 | 8,084,990 | $ | 2.97 | ||||||||||
Stock options exercisable, end of year | 4,299,671 | $ | 2.85 | 4,962,689 | $ | 3.32 | ||||||||||
Weighted | Weighted- | |||||||||||
Average | Average | |||||||||||
Remaining | Exercise | |||||||||||
Range of Exercise | Contractual | Number of | Price per | |||||||||
Prices per Share | Life | Common | Share | |||||||||
(CDN$) | (Years) | Shares | (CDN $) | |||||||||
Stock options outstanding | ||||||||||||
$1.37 to $4.99 | 3.47 | 5,288,825 | $ | 2.03 | ||||||||
$5.00 to $9.99 | 3.98 | 996,439 | 5.72 | |||||||||
$10.00 to $11.84 | 0.12 | 825 | 11.84 | |||||||||
Stock options outstanding, end of year | 3.55 | 6,286,089 | $ | 2.61 | ||||||||
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Weighted | Weighted- | |||||||||||
Average | Average | |||||||||||
Remaining | Exercise | |||||||||||
Range of Exercise | Contractual | Number of | Price per | |||||||||
Prices per Share | Life | Common | Share | |||||||||
(CDN$) | (Years) | Shares | (CDN $) | |||||||||
Stock options outstanding | ||||||||||||
$1.37 to $4.99 | 4.38 | 6,609,675 | $ | 2.07 | ||||||||
$5.00 to $9.99 | 4.93 | 1,107,639 | 5.71 | |||||||||
$10.00 to $15.30 | 0.57 | 367,676 | 10.97 | |||||||||
Stock options outstanding, end of year | 4.28 | 8,084,990 | $ | 2.97 | ||||||||
2010 | 2009 | |||||||
Risk-free interest rate | 2.48% – 2.49 | % | 1.78% – 2.40 | % | ||||
Expected stock price volatility | 87.4% –90.1 | % | 83.4% –89.6 | % | ||||
Expected life | 3.7 – 3.8 years | 3.5 years | ||||||
Expected forfeitures | 5.4 | % | — | |||||
Expected dividend yield | — | — | ||||||
Fair value per share under options granted | CDN$0.88 – CDN$0.90 | CDN$0.89 – CDN$1.36 |
(in thousands) | 2010 | 2009 | ||||||
Operating expenses | $ | 595 | $ | 612 | ||||
Mineral property exploration | 174 | 148 | ||||||
General and administrative | 1,062 | 3,087 | ||||||
$ | 1,831 | $ | 3,847 | |||||
19. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
(in thousands) | 2010 | 2009 | ||||||
Cumulative foreign currency translation gain (loss) | ||||||||
Balance, beginning of year | $ | 71,898 | $ | (4,925 | ) | |||
Change in foreign currency translation | 31,870 | 76,823 | ||||||
Balance, end of year | 103,768 | 71,898 | ||||||
Unrealized gains on investments | ||||||||
Balance, beginning of year | 3,584 | 216 | ||||||
Net increase (decrease) in unrealized gains, net of tax(1) | (2,490 | ) | 3,368 | |||||
Balance, end of year | 1,094 | 3,584 | ||||||
Accumulated other comprehensive income (loss), end of year | $ | 104,862 | $ | 75,482 | ||||
(1) | Unrealized gains (losses) on investments deemed available-for-sale are included in other comprehensive income (loss) until realized. When the investment is disposed of or incurs a decline in value that is other than temporary, the gain (loss) is realized and reclassified to the income statement. During 2010, approximately $3,333,000 of gains from asset disposals and $181,000 of other than temporary losses were realized and reclassified to the consolidated statements of operations within other income (expense). During 2009, approximately $5,532,000 of gains from asset disposals and $149,000 of other than temporary losses were realized and reclassified to the consolidated statements of operations within other income (expense). |
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20. | SUPPLEMENTAL FINANCIAL INFORMATION |
(in thousands) | 2010 | 2009 | ||||||
COGS — mineral concentrates | $ | 111,161 | $ | 76,771 | ||||
COGS — mineral concentrates — NRV adjustments | (21,315 | ) | (8,071 | ) | ||||
Mining and development | 31,381 | 50,848 | ||||||
Less: absorption to stockpiles, mineral properties | (30,202 | ) | (48,200 | ) | ||||
Mineral property amortization and stockpile depletion | 47,202 | 38,738 | ||||||
Milling and conversion | 50,190 | 46,364 | ||||||
Less: absorption to concentrates | (91,399 | ) | (82,450 | ) | ||||
Reclamation — accretion / adjustments | 91 | (1,938 | ) | |||||
Post-employment — accretion / adjustments | 262 | 203 | ||||||
Selling expenses | 1,592 | 1,357 | ||||||
Cost of services | 14,926 | 12,161 | ||||||
Inventory — non-cash adjustments | 8,660 | 12,362 | ||||||
Operating expenses | $ | 122,549 | $ | 98,145 | ||||
(in thousands) | 2010 | 2009 | ||||||
Interest income | $ | 680 | $ | 785 | ||||
Interest expense | (27 | ) | (1,438 | ) | ||||
Gains (losses) on: | ||||||||
Foreign exchange | (8,003 | ) | (17,476 | ) | ||||
Land, plant and equipment disposals | (594 | ) | 147 | |||||
Investment disposals | 3,333 | 5,532 | ||||||
Investment other than temporary losses | (181 | ) | (149 | ) | ||||
Restricted cash and investments — fair value change | 207 | (809 | ) | |||||
Contract settlement fee income(1) | 11,000 | — | ||||||
Other | (603 | ) | (1,143 | ) | ||||
Other income (expense) | $ | 5,812 | $ | (14,551 | ) | |||
(1) | In June 2010, the Company agreed to terminate one of its sales contracts in exchange for a termination fee of $11,000,000 payable in two installments — $6,000,000 in June 2010 and $5,000,000 in March 2011. The June 2010 installment has been received and the $5,000,000 March 2011 installment has been included in the Company’s trade and other receivable as a sundry receivable (see note 3). |
(in thousands) | 2010 | 2009 | ||||||
Net change in non-cash working capital items: | ||||||||
Trade and other receivables | $ | (5,176 | ) | $ | 344 | |||
Inventories | (1,877 | ) | (22,229 | ) | ||||
Prepaid expenses and other assets | (283 | ) | (284 | ) | ||||
Accounts payable and accrued liabilities | 4,004 | (15,071 | ) | |||||
Reclamation and remediation obligations | (1,249 | ) | (1,051 | ) | ||||
Deferred revenue | 152 | 274 | ||||||
Post-employment benefits | (266 | ) | (281 | ) | ||||
Net change in non-cash working capital items | $ | (4,695 | ) | (38,298 | ) | |||
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21. | SEGMENTED INFORMATION |
Canada | U.S.A | Africa | Asia | Services | ||||||||||||||||||||
(in thousands) | Mining | Mining | Mining | Mining | and Other | Total | ||||||||||||||||||
Statement of Operations: | ||||||||||||||||||||||||
Revenues | 32,820 | 77,432 | — | — | 18,068 | 128,320 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Operating expenses | 37,335 | 70,289 | — | — | 14,925 | 122,549 | ||||||||||||||||||
Sales royalties and capital taxes | 2,251 | — | — | — | 74 | 2,325 | ||||||||||||||||||
Mineral property exploration | 5,946 | 566 | 44 | 970 | — | 7,526 | ||||||||||||||||||
General and administrative | — | 4,832 | 1,071 | 1,035 | 7,374 | 14,312 | ||||||||||||||||||
Stock option expense | — | — | — | — | 1,831 | 1,831 | ||||||||||||||||||
45,532 | 75,687 | 1,115 | 2,005 | 24,204 | 148,543 | |||||||||||||||||||
Income (loss) from operations | (12,712 | ) | 1,745 | (1,115 | ) | (2,005 | ) | (6,136 | ) | (20,223 | ) | |||||||||||||
Revenues — supplemental: | ||||||||||||||||||||||||
Uranium concentrates | 32,820 | 55,158 | — | — | — | 87,978 | ||||||||||||||||||
Vanadium related concentrates | — | 16,934 | — | — | — | 16,934 | ||||||||||||||||||
Environmental services | — | — | — | — | 15,492 | 15,492 | ||||||||||||||||||
Management fees and commissions | — | — | — | — | 2,576 | 2,576 | ||||||||||||||||||
Alternate feed processing and other | — | 5,340 | — | — | — | 5,340 | ||||||||||||||||||
32,820 | 77,432 | — | — | 18,068 | 128,320 | |||||||||||||||||||
Long-lived assets: | ||||||||||||||||||||||||
Plant and equipment | ||||||||||||||||||||||||
Cost | 101,781 | 96,500 | 973 | 533 | 4,112 | 203,899 | ||||||||||||||||||
Accumulated depreciation | (5,543 | ) | (30,155 | ) | (559 | ) | (381 | ) | (2,000 | ) | (38,638 | ) | ||||||||||||
Mineral properties, net | 332,217 | 80,775 | 127,624 | 8,581 | — | 549,197 | ||||||||||||||||||
Intangibles | — | — | — | — | 3,794 | 3,794 | ||||||||||||||||||
Goodwill | 53,919 | — | — | — | — | 53,919 | ||||||||||||||||||
482,374 | 147,120 | 128,038 | 8,733 | 5,906 | 772,171 | |||||||||||||||||||
Capital additions: | ||||||||||||||||||||||||
Property, plant and equipment | 965 | 26,929 | 1,353 | 550 | 1,112 | 30,909 | ||||||||||||||||||
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Canada | U.S.A | Africa | Asia | Services | ||||||||||||||||||||
(in thousands) | Mining | Mining | Mining | Mining | and Other | Total | ||||||||||||||||||
Statement of Operations: | ||||||||||||||||||||||||
Revenues | 26,211 | 38,211 | — | — | 14,748 | 79,170 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Operating expenses | 32,024 | 53,908 | — | — | 12,213 | 98,145 | ||||||||||||||||||
Sales royalties and capital taxes | 1,688 | — | — | — | (13 | ) | 1,675 | |||||||||||||||||
Mineral property exploration | 7,726 | 252 | 2,054 | 88 | — | 10,120 | ||||||||||||||||||
General and administrative | 16 | 3,968 | 1,384 | 1,073 | 7,442 | 13,883 | ||||||||||||||||||
Stock option expense | — | — | — | — | 3,847 | 3,847 | ||||||||||||||||||
Mineral property impairment | — | — | 100,000 | — | — | 100,000 | ||||||||||||||||||
Intangibles impairment | — | 359 | — | — | — | 359 | ||||||||||||||||||
Goodwill impairment | 22,136 | — | — | — | — | 22,136 | ||||||||||||||||||
63,590 | 58,487 | 103,438 | 1,161 | 23,489 | 250,165 | |||||||||||||||||||
Loss from operations | (37,379 | ) | (20,276 | ) | (103,438 | ) | (1,161 | ) | (8,741 | ) | (170,995 | ) | ||||||||||||
Revenues — supplemental: | ||||||||||||||||||||||||
Uranium concentrates | 26,211 | 33,678 | — | — | — | 59,889 | ||||||||||||||||||
Vanadium related concentrates | — | 4,480 | — | — | — | 4,480 | ||||||||||||||||||
Environmental services | — | — | — | — | 12,226 | 12,226 | ||||||||||||||||||
Management fees and commissions | — | — | — | — | 2,522 | 2,522 | ||||||||||||||||||
Alternate feed processing and other | — | 53 | — | — | — | 53 | ||||||||||||||||||
26,211 | 38,211 | — | — | 14,748 | 79,170 | |||||||||||||||||||
Long-lived assets: | ||||||||||||||||||||||||
Plant and equipment | ||||||||||||||||||||||||
Cost | 98,248 | 81,991 | 940 | 523 | 2,834 | 184,536 | ||||||||||||||||||
Accumulated depreciation | (5,481 | ) | (20,278 | ) | (372 | ) | (287 | ) | (1,497 | ) | (27,915 | ) | ||||||||||||
Mineral properties, net | 321,306 | 78,765 | 126,306 | 8,041 | — | 534,418 | ||||||||||||||||||
Intangibles | — | — | — | — | 4,436 | 4,436 | ||||||||||||||||||
Goodwill | 51,028 | — | — | — | — | 51,028 | ||||||||||||||||||
465,101 | 140,478 | 126,874 | 8,277 | 5,773 | 746,503 | |||||||||||||||||||
Capital additions: | ||||||||||||||||||||||||
Property, plant and equipment | 4,674 | 34,933 | 2,975 | 1,410 | 262 | 44,254 | ||||||||||||||||||
22. | RELATED PARTY TRANSACTIONS |
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(in thousands) | 2010 | 2009 | ||||||
Revenue | ||||||||
Management fees (including expenses) | $ | 1,614 | $ | 1,541 | ||||
Commission and transaction fees | 962 | 981 | ||||||
$ | 2,576 | $ | 2,522 | |||||
23. | JOINT VENTURE INTERESTS |
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(in thousands) | 2010 | 2009 | ||||||
Operating expenses | $ | 35,160 | $ | 29,922 | ||||
Mineral property exploration | 5,664 | 7,616 | ||||||
General and administrative | 145 | 178 | ||||||
Impairment — intangibles | — | 359 | ||||||
Net other expense (income) | 655 | 363 | ||||||
Loss for the year before taxes | 41,624 | 38,438 | ||||||
Current assets | 6,135 | 24,059 | ||||||
Plant and equipment | 95,969 | 92,343 | ||||||
Mineral properties | 340,772 | 329,323 | ||||||
Current liabilities | (1,600 | ) | (3,120 | ) | ||||
Long-term liabilities | (2,836 | ) | (2,193 | ) | ||||
Net investment in joint ventures | $ | 438,440 | $ | 440,412 | ||||
24. | CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENT RISK |
At December 31 | At December 31 | |||||||
(in thousands) | 2010 | 2009 | ||||||
Cash and cash equivalents | $ | (97,554 | ) | $ | (19,804 | ) | ||
Debt obligations — current | 200 | 869 | ||||||
Debt obligations — long term | 205 | 195 | ||||||
Net debt (cash and cash equivalents) | (97,149 | ) | (18,740 | ) | ||||
Shareholder’s equity | 806,105 | 728,228 | ||||||
Total capital | $ | 708,956 | $ | 709,488 | ||||
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(in thousands) | 2010 | |||
Cash and cash equivalents | $ | 97,554 | ||
Trade and other receivables | 20,236 | |||
Investments | 2,955 | |||
Restricted cash and investments | 22,946 | |||
$ | 143,691 | |||
Within 1 | 1 to 5 | |||||||
(in thousands) | Year | Years | ||||||
Accounts payable and accrued liabilities | $ | 13,753 | $ | — | ||||
Debt obligations (Note 13) | 200 | 205 | ||||||
$ | 13,953 | $ | 205 | |||||
• | For each 10 percent increase in the USD$ to CDN$ foreign exchange rate (from 0.9946 at year-end to 1.0941), the Company’s net income increases by $16,654,000; and | ||
• | For each 10 percent increase in the USD$ to ZMK$ foreign exchange rate (from 4,928.30 at year-end to 5,421.13), the Company’s net income decreases by $3,400,000. |
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Change in | ||||||||
Change in | Comprehensive | |||||||
(in thousands) | Net Income(1) | Net Income(1) | ||||||
Equity price risk | ||||||||
10% increase in equity prices | $ | — | $ | 296 | ||||
10% decrease in equity prices | $ | — | $ | (296 | ) |
(1) | In the above table, positive (negative) values represent increases (decreases) in net income and comprehensive net income respectively. |
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; | ||
• | Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and | ||
• | Level 3 — Inputs that are not based on observable market data. |
Fair | ||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Value | ||||||||||||
Financial assets at fair value: | ||||||||||||||||
Investments-Available for sale securities(1) | $ | 2,955 | $ | — | $ | — | $ | 2,955 | ||||||||
Restricted investments(2) | 15,983 | — | — | 15,983 |
(1) | Classification designated as “available-for-sale”. | |
(2) | Classification designated as “held-to-trading”. See note 6 for amount of restricted investments within restricted cash and investments asset amount. |
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25. | COMMITMENTS AND CONTINGENCIES |
(in thousands) | ||||
2011 | $ | 13,551 | ||
2012 | 3,269 | |||
2013 | 3,257 | |||
2014 | 1,722 | |||
2015 | 368 | |||
2016 and thereafter | — |
26. | SUBSEQUENT EVENTS |
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27. | MATERIAL DIFFERENCES BETWEEN CANADIAN AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES |
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December 31, 2010 | ||||||||||||||
Canadian | U.S. | |||||||||||||
GAAP | Adjustments | GAAP | ||||||||||||
Cash and cash equivalents | $ | 97,554 | (a) | $ | (4,106 | ) | $ | 93,448 | ||||||
Inventories | 32,387 | (b) | (3,691 | ) | 28,696 | |||||||||
Restricted cash and investments | 22,946 | (a) | 4,106 | 27,052 | ||||||||||
Property, plant and equipment | 714,458 | (b) | (91,102 | ) | 623,356 | |||||||||
Accounts payable and accrued liabilities | 13,753 | (e) | — | 13,753 | ||||||||||
Future income tax liability | 106,183 | (b) | 3,079 | 109,262 | ||||||||||
Share capital | 910,484 | (d) | (616 | ) | ||||||||||
(e) | 1,198 | 911,066 | ||||||||||||
Additional paid-in capital | — | (f) | 9,814 | 9,814 | ||||||||||
Deficit | (256,729 | ) | (b) | (93,995 | ) | |||||||||
(b) | (3,079 | ) | ||||||||||||
(d) | 616 | |||||||||||||
(e) | (855 | ) | ||||||||||||
(f) | (9,814 | ) | (363,856 | ) | ||||||||||
Accumulated other comprehensive income | 104,862 | (b) | (798 | ) | ||||||||||
(e) | (343 | ) | 103,721 |
December 31, 2009 | ||||||||||||||
Canadian | U.S. | |||||||||||||
GAAP | Adjustments | GAAP | ||||||||||||
Cash and cash equivalents | $ | 19,804 | (a) | $ | (1,177 | ) | $ | 18,627 | ||||||
Inventories | 52,216 | (b) | (3 | ) | 52,213 | |||||||||
Restricted cash and investments | 21,656 | (a) | 1,177 | 22,833 | ||||||||||
Property, plant and equipment | 691,039 | (b) | (86,377 | ) | 604,662 | |||||||||
Accounts payable and accrued liabilities | 9,508 | (e) | 39 | 9,547 | ||||||||||
Future income tax liability | 102,918 | (b) | 3,328 | 106,246 | ||||||||||
Share capital | 849,488 | (d) | (616 | ) | ||||||||||
(e) | (39 | ) | 848,833 | |||||||||||
Additional paid-in capital | — | (f) | 9,814 | 9,814 | ||||||||||
Deficit | (242,494 | ) | (b) | (86,019 | ) | |||||||||
(b) | (3,328 | ) | ||||||||||||
(d) | 616 | |||||||||||||
(f) | (9,814 | ) | (341,039 | ) | ||||||||||
Accumulated other comprehensive loss | 75,482 | (b) | (362 | ) | 75,120 |
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2010 | 2009 | |||||||||
Net loss for the year, Canadian GAAP | $ | (14,235 | ) | $ | (147,012 | ) | ||||
Adjustments to U.S. GAAP: | ||||||||||
Mineral property capitalized amounts | (b) | (4,288 | ) | (40,896 | ) | |||||
Mineral property impairment amounts | (b) | — | 17,717 | |||||||
Inventory valuation | (b) | (3,688 | ) | 906 | ||||||
Tax effect of above adjustments | (b) | 249 | (4,701 | ) | ||||||
Flow-through share renunciation adjustment | (e) | (855 | ) | — | ||||||
Net loss for the year, U.S. GAAP | $ | (22,817 | ) | $ | (173,986 | ) | ||||
Deficit, beginning of year, U.S. GAAP | $ | (341,039 | ) | $ | (167,053 | ) | ||||
Deficit, end of year, U.S. GAAP | $ | (363,856 | ) | $ | (341,039 | ) | ||||
Comprehensive income (loss), U.S. GAAP | ||||||||||
Net loss for the year, U.S. GAAP | $ | (22,817 | ) | $ | (173,986 | ) | ||||
Unrealized gain (loss) on available-for-sale securities | (2,490 | ) | 3,368 | |||||||
Cumulative foreign currency translation gain | 31,090 | 75,894 | ||||||||
Comprehensive income (loss), U.S. GAAP | 5,783 | (94,724 | ) | |||||||
Basic net loss per share, U.S. GAAP | $ | (0.07 | ) | $ | (0.61 | ) | ||||
Diluted net loss per share, U.S. GAAP | $ | (0.07 | ) | $ | (0.61 | ) | ||||
2010 | 2009 | |||||||||
Net cash provided by (used in) operating activities: | ||||||||||
Under Canadian GAAP | $ | 35,551 | $ | (42,442 | ) | |||||
Adjustment for capitalized mineral property amounts | (b) | (14,305 | ) | (25,104 | ) | |||||
Under U.S. GAAP | $ | 21,246 | $ | (67,546 | ) | |||||
Net cash used in investing activities: | ||||||||||
Under Canadian GAAP | $ | (19,472 | ) | $ | (27,116 | ) | ||||
Adjustment for capitalized mineral property amounts | (b) | 14,305 | 25,104 | |||||||
Under U.S. GAAP | $ | (5,167 | ) | $ | (2,012 | ) | ||||
Net cash provided by financing activities: | ||||||||||
Under Canadian GAAP | $ | 60,595 | $ | 85,414 | ||||||
Restricted cash from flow-through financings | (a) | (4,106 | ) | (1,177 | ) | |||||
Under U.S. GAAP | $ | 56,489 | $ | 84,237 | ||||||
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a) | Amendments to Accounting for VIEs — In 2009, the FASB issued an amendment to its guidance on Variable Interest Entities (“VIE”). Although not effective until first quarter 2010, this new guidance makes significant changes to the model for determining who should consolidate a VIE by specifically eliminating the quantitative approach to determining the primary beneficiary. The amendment requires the use of a qualitative approach to determine the primary beneficiary, based on the power to direct activities of the VIE that most significantly impact its economic performance and an obligation to absorb losses or to receive benefits of the VIE. If the power is shared, then no party is the primary beneficiary. This amendment did not have an impact on the Company’s financial statements. |
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