Great Western Minerals Q3 revenues spike 23%

Rare earth metals processor Great Western Minerals Group (CVE:GWG)(OTCQX:GWMGF) said Wednesday third-quarter revenue grew 23 percent as its processing units increased revenues and earnings.
Investors cheered the news with Great Western stock up 3.6 percent to 57 cents Wednesday afternoon.
For the quarter that ended September 30, Great Western posted revenue of $4.2 million compared to $3.4 million a year earlier.
Great Western highlighted the fact that processing operations at its Less Common Minerals unit in the UK and Great Western Technologies in the US achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of $728,629 for the third quarter, compared to an EBITDA loss of $50,852 a year earlier.
Less Common Metals and Great Western Technologies produce a variety of specialty alloys for use in the battery, magnet and aerospace industries. These “designer” alloys include those containing copper, nickel, cobalt and the rare earth elements.
Great Western’s president and chief executive officer, Jim Engdahl, said: “Great Western Minerals Group experienced continued growth in revenue and margin performance on both a third quarter’ and year-to-date basis.”
“With this type of positive financial performance from our alloy processing plants, combined with a stronger cash position than was the case at the same point last year, the company is well positioned to move ahead in its development of the company’s number one priority – the Steenkampskraal project.
“This type of revenue and margin performance is indicative of the capability of our team to execute our company’s business plan very effectively.”
Net loss for the third quarter, including stock-based compensation of $2.0 million, was $3.8 million, or $0.01 per share, compared to a loss of $1.1 million, or $.0004 a share, a year earlier.
Great Western completed the quarter with a consolidated cash balance of $5.3 million, compared to $1.9 million in 2010.
In the first nine months of the year, manufacturing and processing revenues from Less Common Metals and Great Western Technologies represented a 28 percent increase over the first nine months of 2010.
Gross margins on manufacturing and processing operations for the first nine months of 2011 represent an increase of 47 percent over the same year-to-date period of 2010.
The company, which plans to become a fully-integrated rare earth producer, has six rare earth exploration and development properties in North America and holds the Steenkampskraal mine in South Africa through its subsidiary Rare Earth Extraction Co.
On Tuesday, Great Western announced that it has completed 26 coreholes, totaling 2,307 metres on its Steenkampskraal rare earth mine.
The 26 coreholes are comprised of 19 holes dedicated to metallurgical mini-bulk sampling, with the remaining seven holes intended for geological resource delineation. Great Western said the 19 holes intersected mineralization ranging from a few centimetres in length to 3.55 metres.
The refurbishment of the Steenkampskraal mine shaft and ancillary facilities continues on schedule, toward an expected completion in December 2011.
The company is still in talks to form a joint venture (JV) with China-based Ganzhou Qiandong Rare Earth Group, in order to build a rare earths separation plant in South Africa, to be located near the former-producing Steenkampskraal mine.
Demand for rare earths is booming, and despite being used in relatively small amounts, the metals are necessary to the growing production of energy-efficient green products, mobile electronics and electric vehicles.
Deposits of the metals are not actually rare, but high capital costs, difficult metallurgy, marginal ‘heavy’ rare earths grades, and a lack of people with significant rare earths processing experience are major hurdles to bringing new mines to production, bringing Great Western’s advanced Steenkampskraal mine to investors’ attention.