Great Western Minerals reports loss
Properties writedown contributes to $16.3M loss; processing earnings strong
By Cassandra Kyle, The StarPhoenix April 4, 2011 Great Western Minerals Group Ltd. (GWMG) earned more in 2010 from processing rare earth materials than it did in 2009, but ended the fiscal year with a net loss.
The Saskatoon-based company, which is working to develop several rare earths properties in addition to processing the elements, reported a net consolidated loss of $16.3 million, or 6.2 cents per share, for the 2010 year. In 2009, GWMG noted a consolidated net loss of $7 million, or 4.2 cents per share.
An $8.1 million writedown of mineral properties contributed to the 2010 loss, the company said.
GWMG also reported a $5.1 million, or two cent per share, cash loss for 2010 -a slight improvement over its 2009 cash loss of $5.3 million, or three cents per share.
However, its revenue from manufacturing and processing work through wholly owned subsidiaries Less Common Metals and Great Western Technologies Inc. significantly improved in 2010. GWMG saw a 26 per cent increase in such revenue last year, rising to $15.1 million from nearly $12 million in 2009.
The company also recorded a 48 per cent increase in gross margins from its manufacturing and processing sector, reaching $4.5 million in 2010 compared to $3 million in the year prior.
"Great Western Minerals Group had a very strong financial and operating year in 2010. Our company was able to increase revenues by 26 per cent and margins by 48 per cent for the year from our rare earths processing operations. This is of significance given our plans to be a fully integrated producer," said Jim Engdahl, the company's president and CEO.
"GWMG also saw a significant improvement in the company's cash position with $9.2 million as at Dec. 31, 2010, compared to $1.2 million as at Dec. 31, 2009.
"In addition, subsequent to year end, the company has received and executed 17,492,828 warrants for common shares of the company. This contribution of $8,215,781 to the cash position of GWMG is highly relevant to our ability to bring the Steenkampskraal property into mining production."
The Steenkampskraal rare earth property, located in South Africa, is the focus of much of GWMG's current attention. The local company hopes to bring the site into production in 2013, making it the first rare earths producer outside of China.
China produces the majority of the world's rare earths -in the neighbourhood of 97 per cent -but will soon use as much as it mines, leaving none left for export.
Rare earths are found in everything from day-today items such as televisions and cameras to hightech military applications and medical lasers.
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