International Nickel Ventures Corporation Reports Results for the Three and Nine Months Ended September 30, 2006
TORONTO, ONTARIO – (CCNMatthews – November 14, 2006) – International Nickel Ventures Corporation (“INV”) (TSX:INV) reports its results for the three and nine months ended September 30, 2006. (See INV’s unaudited interim financial statements and MD&A for the three and nine months ended September 30, 2006 filed on SEDAR at www.sedar.com and on the Company’s website at www.nickelventures.com).
INV is a Canadian mineral resource company focused on the acquisition, exploration and development of nickel projects in Brazil. Its primary asset is an option to acquire, with partner and operator Teck Cominco, a 75% interest in two advanced-stage nickel laterite deposits, Santa Fe and Ipora, in the Goias nickel camp of Brazil. In addition, INV has 100% ownership in an extensive land package of prospective nickel properties in Goias, Para and Tocantins States which now totals over 300,000 hectares.
As the company’s mineral properties are at the exploration stage and are not in production, INV did not have any operating revenues and incurred a loss of $406,803, or $0.01 per share, for the three months ended September 30, 2006 and a loss of $1,490,041, or $0.05 per share, for the nine months ended September 30, 2006. This compares to a loss of $281,723 or $0.19 per share, and $541,831, or $0.19 per share, respectively, in the corresponding periods of 2005. General and administration expenses of $261,993, as well as general exploration of $159,013 and stock-based compensation expenses of $143,174 accounted for most of the quarter’s expenses, while interest income of $187,493 partially offset the expenses. For the nine months ended September 30, 2006, general and administrative expenses of $1,100,810 accounted for most of the expenses in addition to general exploration of $344,939 and stock-based compensation expenses of $442,045, while interest income of $434,030 partially offset the expenses.
On March 17, 2006, INV completed an initial public offering (IPO) and became listed on the Toronto Stock Exchange under the trading symbol “NVC”, and subsequently changed to trading symbol “INV” on July 6, 2006. In connection with the IPO, and after the exercise of the over-allotment option on April 6, 2006, INV issued 21,120,000 common shares for gross proceeds of $25,344,000. As at September 30, 2006, INV had 34,452,300 common shares issued and outstanding, an increase of 22,919,900 common shares from year end 2005.
The net change in cash balances as a result of operations, financing and investing activities was a net outflow of $2,871,017 for the quarter ended September 30, 2006 compared to a net inflow of $23,955 for the same period in 2005. For the nine months ended September 30, 2006, the net inflow was $17,565,062 as a result of the IPO, compared to a net inflow of $216,740 in the equivalent 2005 period. Cash flow from operating activities was an outflow of $430,543 during the quarter ended September 30, 2006 and an outflow of $1,057,357 for the nine months ended September 30, 2006, compared to an inflow of $29,056 and an outflow of $71,771 for the respective periods in 2005. Financing activities, primarily from common share issuances in the first nine months of 2006, saw a net cash inflow of $23,204,652, compared to $3,948,970 during the equivalent period in 2005. Investing activities in the third quarter of 2006 on the Santa Fe/Ipora joint venture and mineral property and deferred exploration resulted in a net cash outflow of $2,440,474 compared to an outflow of $1,434,761 in the third quarter of 2005. During the first nine months of 2006, the net outflow from investing activities was $4,582,233 compared to $3,660,459 in the equivalent period in 2005. As a result of the proceeds from the IPO in March 2006, cash balances and working capital at September 30, 2006 were significantly higher at $17,565,062 and $17,389,594, respectively, compared to $nil and a deficiency of $199,574 at December 31, 2005.
Teck and INV originally budgeted a $10.1 million work program for the Santa Fe/Ipora properties in 2006. In August, 2006, based on encouraging drilling results, the $10.1 million program was increased to $13.7 million of which INV’s 27% share is $3.7 million. The additional funding was used for more drilling and to complete scoping studies on the properties. The scoping studies have been initiated to confirm the commercial and technical viability of the properties. The scoping studies are expected to be completed in late November 2006. INV is also updating its resource calculations on the Santa Fe and Ipora properties, which are also expected to be completed in November 2006.
The US$5.0 million Santa Fe/Ipora option payment, originally due August 16, 2006 and deferred for three months, was paid November 14, 2006, plus an additional US$0.3 million in interest costs. At INV’s request, Teck Cominco agreed to waive its rights, for this one payment only, to subscribe for additional shares of INV for INV’s 27% share of this payment. INV, therefore, paid cash of US$1.43 million for its share and did not issue additional shares.
In addition, INV has increased its budget for the acquisition for additional mineral properties and/or the exploration of its other mineral properties in 2006 by approximately $1.2 million to a total of $2.5 million.
INV is well positioned to conduct all of its currently planned business activities in 2006.
This press release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond INV’s ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Such risks and uncertainties include, but are not limited to: the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters, future price of nickel, changes in labour costs or other costs of production, failure of plant equipment or processes to operate as anticipated, possible variations in mineral grade or recovery rates and other general risks of the mining industry. Accordingly, readers should not place undue reliance on forward-looking statements. For a more detailed discussion of such risks and other factors, refer to INV’s filings with Canadian securities regulators available on www.sedar.com or the Company’s website at www.nickelventures.com.
All currencies are stated in Canadian Dollars, except where indicated otherwise.