Chile Mining Technologies Provides Update for the First Quarter of Fiscal 2011
August 31 2010 - 11:32AM
Business Wire
Chile Mining Technologies, Inc. (OTCBB: LVEN) (“CMT”),
today provided the following business update for the first quarter
of fiscal 2011, ended June 30, 2010.
While CMT saw significant progress toward its overall business
plan during the first quarter of fiscal 2011, the company also
addressed several short term challenges. First, CMT management,
recognizing additional opportunities with the Ana Maria plant,
chose to take the facility off-line in May 2010 in order to
increase the facility’s overall capacity by 50%. Management
determined that the available supply of minerals at the Ana Maria
plant (including deliveries from third parties) was sufficient to
provide greater long-term benefits from the added capacity than the
short-term challenges of taking the facility off-line. The upgrades
took approximately 3 months and cost approximately $800,000. The
facility has now resumed production and the first batch of copper
is expected in early September 2010.
The Company determined that taking the facility off-line while
still ramping its production would result in significantly less
lost revenue than had it taken the plant off line toward the end of
its current fiscal year. The upgrades increased monthly output
capacity from 120 metric tons per month to 180 metric tons per
month. Assuming a copper price of $3.25 per pound, the spot price
of copper on the London Metal Exchange on August 24, 2010, the
added capacity alone would result in approximately $430,000 of
additional revenue per month. Therefore, due to the additional
opportunity, management determined the long-term benefits of the
added capacity outweighed the short-term disadvantages of taking
the plant off-line.
During the Company’s fiscal quarter ended June 30, 2010, in
accordance with generally accepted accounting principles in the
U.S., approximately $500,000 of the transaction costs associated
with the reverse merger and private placement transactions that
were consummated on May 12, 2010, were expensed during the quarter.
These one-time expenses are not expected to have a material effect
on future profitability.
There were many additional positives during the fiscal first
quarter. Management has been working with ENAMI, the state-run
mineral company in Chile designated to support the Chilean mining
industry, to amend the contractual relationship between CMT and
ENAMI to extend more flexible terms to CMT and potential support
for the Company’s operations. In addition, the Company has retained
a US based Vice President, Gerry Pascale, an expert at guiding
emerging companies through the process of operating as a publicly
traded US company, who will assist the Company by providing
financial management expertise and advisory services. The Company
has also elected Bill Thomson to serve as a member of its Board of
Directors and appointed him to serve as its Audit Committee
Chairman. Mr. Thomson is a seasoned professional with a long
history of experience as a CPA, financial executive and Audit
Committee Chairman of publicly traded companies, including Canadian
companies. The Company continues to make progress toward its
Canadian listing, and is working closely with its legal and
financial advisors, and the TSX toward this goal.
As discussed, the Ana Maria plant has resumed production and is
ramping up its production levels. Management expects the plant to
be operating at full capacity by December 2010. In addition,
construction is 65% complete on the Company’s second plant,
Filomena. This facility is expected to begin production by November
2010 and the Company anticipates that it will be operating at full
capacity by January 2011. At present, Management expects the
Company to be cash flow positive by December 2010.
About Chile Mining Technologies, Inc.
Chile Mining Technologies, Inc. (OTCBB: LVEN) (“CMT”) is a
mineral extraction company based in the Republic of Chile, with
copper as its principal “pay metal.” The Company has refined the
electrowin process in a way that permits it to be used at
relatively small mine and/or tailings sites. By utilizing Minimum
Intrusion Non-traditional Input plants (“MINI plants”), CMT is able
to build scalable, less expensive plants closer to source material
deposits, and operate where it is not economical for larger
open-pit mining companies to operate. As a result, CMT is able to
reduce costs and operate profitably with smaller deposits. Since
starting construction in the fall of 2008, CMT has successfully
completed its first scalable MINI plant, designated as the Ana
Maria plant, located about 30 kilometers northeast of the town of
Illapel, in the mining district of Matancilla.
Forward-Looking Statements
This press release contains statements that are forward-looking
in nature, including statements regarding the Company's results of
operations. These statements are based on current expectations on
the date of this press release and involve a number of risks and
uncertainties, which may cause actual results to differ
significantly from such estimates. The risks include, but are not
limited to, market demand for copper; market competition;
dependence on strategic partners; and the Company's ability to
manage its business effectively. Certain of these and other risks
are set forth in more detail in the Company’s current report on
Form 8-K filed on May 14, 2010, and other filings with the
Securities and Exchange Commission. The Company does not assume any
obligation to update or revise any such forward-looking statements,
whether as the result of new developments or otherwise.