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Friday, 17 May 2013
Great Western Minerals advances toward production at Steenkampskraal
Great Western Minerals Group (CVE:GWG) emphasized the centrality of the development of its low-cost, high-grade critical rare earth asset, the Steenkampskraal project (SKK) in South Africa, to its plans for the rest of the year following the release of the Saskatoon-based explorer and developer’s first quarter results.
In a conference call with investors the day after the figures were released, president and CEO Marc LeVier spoke of the need to secure a source of rare earth elements beyond that emanating from China, saying “security of supply is the ultimate goal,” and then highlighted the progress continuing at the SSK site in South Africa in advancement of that goal.
“The best way to attract investors is to continue to move forward; that includes increasing the certainty of capital cost estimates. The best way to attract institutional investors is to move forward with derisking the project.”
To that end, the company, which ends the quarter with $43.9 million cash on hand, plans to move forward on only “the most critical initiatives,” with vice president of finance and chief financial officer Jim Davidson, speaking on the same call, reiterating the company’s intention to monitor its cash burn rate with the intention of reducing it in the second half of the year. Davidson also emphasized the company’s plans to continue to move the SKK project forward, saying the company was focusing its activities on the project.
LeVier went on: “For 2013 our strategy and priority is clear to us. We are moving forward with development in South Africa by careful management of resources and looking for the means to develop the mine.”
The SKK site benefits from excellent infrastructure as well as access to road, rail and sea-ports and an existing electrical grid close by.
For the three months ending March 31, the company, which plans on becoming a rare earths producer and processor, reported a net loss of $3 million, narrowed from the loss reported a year ago, of $5.2 million, for a loss per share of 0.7 cents for the quarter, compared to a loss of 1.3 cents per share a year earlier.
Revenue for the first quarter of 2013 was $3.5 million, down from $4.5 million during the prior-year period but up by $0.7 million from the fourth quarter of 2012, a spike of 26 per cent. Company revenue was primarily attributable to production from subsidiary Less Common Metals Limited, where it makes rare earth alloys.
Other highlights announced for the quarter just past was the $2.2 million decrease in operating loss from the prior year.
"We are making progress as we implement initiatives aimed at supporting our strategy which is to expand our opportunity as a metal and alloy producer by developing a secure source of rare earth elements through our SKK project," said LeVier, in a company statement released with the figures.
"We are also focused on reducing general overhead expenses, reducing exploration expenses and funding only required activities that support our objectives. We plan to reduce our burn rate to conserve our cash and spend on activities that de risk our project, all with the intent of achieving our goals."
Stock in the company was trading down the morning of the release, dropping from an open of 15 cents per share to hit 14 cents per share.