CALGARY, May 16 Birch-Mount-Q1-result
CALGARY, May 16 /PRNewswire-FirstCall/ - Birch Mountain Resources Ltd.
("Birch Mountain" or the "Company") (BMD: TSX and AMEX) today reported
financial results for the first quarter ended March, 31st, 2008, and these are
available on the Company's website at www.birchmountain.com, and are filed at
www.sedar.com and at www.sec.gov.
Message from the President
The construction season is now underway in the Fort McMurray Region and I
am optimistic about our business opportunities this year. Oil sands
development continues to be supported by crude oil prices above $100 US per
barrel.
Our order pipeline is robust at the early stages of the construction
season for the supply of aggregates from the Muskeg Valley Quarry (the "MVQ").
Orders have been received from one of the multi-year contracts signed in 2007
and from our spot market customers following quotations supplied through Q1
and to date in Q2. We have been quoting on a significant number of projects of
variable size with varying timing requirements for 2008 and 2009. Aggregate
deliveries from the quarry have been steady with the quarry operating one
12-hour day shift. I am pleased and commend our quarry operations team for the
increase in productivity at the MVQ based on the significant volumes we have
been able to produce and deliver with the reduced workforce.
Birch Mountain's crushing spread is operating reliably and producing high
quality aggregates to customers' specifications. The loading and scaling
operations are operating efficiently and effectively and customer feedback is
very positive with respect to product quality, performance and customer
service. Our customers have specifically mentioned that limestone supplied by
Birch Mountain meets or exceeds their expectations, provides cost savings over
alternative engineering design options, is easily workable, readily achieves
full compaction, produces a very solid working surface, and is particularly
valuable when constructing under wet conditions.
I believe real progress is being made toward our top two priorities for
2008: (i) to increase sales and customer relations, and (ii) to contain costs
and operate the quarry efficiently. A milestone event has also been achieved
with our third priority for 2008: (iii) to achieve regulatory approval for the
Hammerstone Project. As we recently announced, Alberta Environment ("AENV")
has declared the Hammerstone Project Environmental Impact Assessment ("EIA")
to be "complete" meaning that the EIA has fully met the Terms of Reference for
the EIA issued by AENV. We now move into the next phase of the regulatory
process, the approvals phase.
Turning to Q1 2008, market conditions for construction products were slow,
as is normally the case in the winter months. Sales revenues in the first
quarter of 2008 were below those for the same period in 2007, as prolonged
cold weather this year delayed the start of road building projects into the
second quarter. Similar projects began in March of 2007.
Key quarry staff and rented equipment were maintained at minimum levels in
Q1 to contain costs. The Quarry, however, remained open so that we could
continue working to expand our product offering and demonstrate the quality of
our limestone aggregates to prospective customers. The opportunity was taken
to blast and construct a ramp down into the deepest, 13-metre thick, Unit 1
limestone. Processed construction aggregates meeting customers' specifications
were produced for the first time from Unit 1, confirming aggregate production
on a commercial scale from all units of our 45-metre thick, one billion tonne
limestone deposit.
A trial aggregate wash plant has been sourced and is now being installed
to enable the Company to produce concrete rock and washed aggregates to allow
market entry into this important part of our business.
I look forward to sharing our continued progress throughout the year.
Financial Results (unaudited)
The Company reports a loss for the first quarter of 2008 of $6.2 million
as compared to a loss for the first quarter of 2007 of $3.6 million.
Summarized unaudited consolidated financial statements as at and for the
three months ending March 31, 2008 are reported in the tables below. The
Company encourages readers to review our complete First Quarter 2008 Financial
Report and other informational disclosures on SEDAR and/or EDGAR at
www.sedar.com and www.edgar.com.
Table A.
Birch Mountain Resources Ltd.
Consolidated Balance Sheets
Canadian Dollars (000's) UNAUDITED
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As At March 31, December 31,
2008 2007
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Assets
Current
Cash and cash equivalents 4,517 9,493
Accounts receivable 582 1,821
Inventory 4,694 4,741
Prepaids and deposits425 224
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10,21816,279
Long-term prepaid 137 137
Restricted cash 3,000 3,000
Property, plant and equipment 21,63621,857
Mineral properties 54,88254,765
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Total Assets89,87396,038
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Liabilities
Current
Accounts payable and accrued liabilities 4,904 5,094
Current portion of long term debt 1,082 1,065
Deferred charges 129 129
Other current liabilities 2,012 2,389
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8,127 8,677
Long term debt 4,679 4,939
Asset retirement obligation 1,680 1,680
Convertible debentures 59,10658,699
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73,59273,995
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Shareholders' equity
Share capital 49,71049,632
Contributed surplus 14,73114,404
Deficit(48,160) (41,993)
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16,28122,043
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Total Liabilities and Shareholders' Equity 89,87396,038
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Table B.
Birch Mountain Resources Ltd.
Consolidated Statements of Loss, Comprehensive Loss and Deficit
Canadian Dollars (000's)
For the three months ended March 31UNAUDITED
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2008 2007
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Revenue
Sales281 859
Cost of Sales (excluding amortization
of property, plant and equipment) 1,369 875
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(1,088) (16)
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Expenses
Amortization, Accretion and Depletion157 221
Interest, bank charges and
foreign exchange (gain)/loss 1,787 939
Mineral exploration costs - 108
Office 556 122
Professional fees515 309
Indirect quarry costs533 551
Salaries, wages and benefits 1,135 263
Shareholder services and marketing 162 325
Stock-based compensation 327 816
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5,172 3,654
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Loss before other income 6,260 3,670
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Interest and other income 9342
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Net loss and comprehensive loss for the period 6,167 3,628
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Deficit, beginning of period41,99317,484
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Deficit, end of period 48,16021,112
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Forward Looking Statements: This news release contains certain
forward-looking statements. All statements, other than statements of
historical fact, included herein, including without limitation, statements
regarding resources and reserves, exploration and development plans and
results, anticipated capital expenditures and financing thereof, anticipated
outcomes and timing of regulatory applications and approvals and the future
plans and objectives of Birch Mountain are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Certain
amounts in the financial statements are based on estimates using the best
currently available information and assumptions of management. Important
factors that could cause actual results to differ materially from Birch
Mountain's expectations are disclosed elsewhere in documents that are
available to the public at www.sedar.com and www.sec.gov.
SOURCE Birch Mountain Resources Ltd.
