| April 30, 2012 |
| Kirrin Resources Reports 2011 Results and Provides Corporate Update |
CALGARY, ALBERTA--(Marketwire - April 30, 2012) - Kirrin Resources Inc. (TSX VENTURE:KYM) today reported its 2011 financial results and fourth quarter highlights and provided an outline of progress and developments since postponing a private placement in December. As announced at that time, Kirrin is reviewing its plans for 2012 and examining what options are available to maximise shareholder value. Summary financial data for the 2011 results is set out in tabular form below.
Kirrin recorded a net loss for the year of $1,716,986 (2010: loss $960,791) of which $912,833 (2010: $431,347) arose from the write-down of mineral interests and $398,600 from project development and current exploration expense (2010: $34,625). The balance sheet was weakened by the postponement of the private placement in December 2011 resulting in a failure to replenish treasury and leading to the year ending with a working capital deficit of $425,815 (2010: positive working capital $1,335,347). Current assets at year end amounted to $107,335 compared to $2,029,311 a year earlier. Excluding non-cash items, being stock based compensation and amortization, and interest income, general and administrative costs increased by 15% to $574,367 from $500,341 in 2010, largely as a result of an expanded Investor Relations program.
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2011 2010 2009
$ $ $
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Working capital (deficit) (425,815) 1,335,347 303,164
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Mineral interests 1,672,803 1,643,711 1,428,943
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Total assets 1,780,138 3,673,022 2,312,870
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Total long term financial liabilities 180,000 283,000 141,907
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Shareholders' equity 1,066,988 2,696,058 1,590,200
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Net income (loss) for the year (1,716,986) (960,791) (924,908)
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Loss per share 0.04 0.04 0.07
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Shares outstanding(1)(2) 46,559,930 46,268,263 20,599,673
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(1) All figures in Canadian dollars except for shares outstanding.
(2) 2008 has been revised to reflect the 1 for 10 share consolidation
approved May 1, 2009.
Highlights during the fourth quarter of 2011 include agreements on revisions to the option agreements for the Bottom Brook and Grevet rare earth elements (REE) projects, with extensions to the expenditure profiles for both projects, the surrender of the Key Lake SW uranium project option following failure to agree amendments to the governing agreement, the release of conclusions and results from Kirrin's extensive 2011 exploration program at Grevet, and the postponement of the $1.5 million private placement of announced in October 2011.
Corporate update
Kirrin President and CEO, Derek Moran, said: "Market sentiment has changed markedly over the past year and Kirrin must respond by utilising its assets, physical and human, more imaginatively. Investors' appetite for early stage exploration has diminished and Kirrin needs to provide a lower risk profile to attract funding." Mr Moran continued that while supply and demand fundamentals for uranium and REE remained robust, short term concerns are currently driving investor sentiment.
Kirrin's internal review has concluded that its uranium and REE exploration portfolio is essentially sound. The three remaining projects represent the outcome of three years exploration and 2012 and 2013 should be their determining years. The conclusive drilling plans across all projects require a budgeted cost of $2.0 million albeit that drilling only priority targets would cost some $1.2 million. Funding for such budget is not currently available without a strategic partner. As an alternative, Kirrin may rank its projects and proceed only with those ranked as priority. Kirrin had already renegotiated its 2012 work obligations under all three option agreements.
Management is also examining how Kirrin's risk profile may be reduced: new projects, particularly those at an advanced stage of development, are being reviewed. This review is not limited to small scale projects or the uranium and REE sectors, or, indeed, Canada, and Kirrin welcomes enquiries from potential partners. While this review is on-going, there can be no assurance that management will succeed in Kirrin acquiring or combining with projects or entities that will achieve the objective of reducing the Company's risk profile.
Kirrin also confirmed that it did not meet its entire 2011 flow-through expenditure obligation and anticipates expenditure in the order of $350,000 to settle the obligation. Expenditures have been curtailed to conserve cash resources and outstanding trade payables are in the order of $80,000.
Reg A. Olson, Ph.D., P. Geol., is the designated Qualified Person for Kirrin on the Alexis River, Bottom Brook and Grevet projects.
Annual General and Special Meeting
Kirrin will announce the date its annual meeting of shareholders in due course, along with the date of mailing the Annual Report, Proxy and Information Circular. The financial statements for the year ended December 31, 2011 and accompanying Management's Discussion and Analysis are available on www.kirrinresources.com and at www.sedar.com.
Kirrin operates two REE properties, Grevet in Quebec and Bottom Brook in Newfoundland, both of which have returned encouraging exploration results with REE grades exceeding 15% TREO, and a uranium project, Alexis River, in southeastern Labrador. Kirrin is also conducting due diligence on two new projects, a HREE property in Europe and a further uranium property in the Athabasca Basin in Saskatchewan.
Additional information on Kirrin is available on Kirrin's web site at www.kirrinresources.com and on SEDAR at www.sedar.com.
Cautionary Statement
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to certain future results and activities of Kirrin, including potential future financing and other potential corporate transactions or projects. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by Kirrin, including assumptions related to Kirrin's ability to complete any such financing in a reasonable timeframe, the receipt of regulatory approval and the availability of capital and other resources to maintain operations and to carry out contemplated exploration programs and other projects. Such forward looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results and developments to differ materially from those contemplated by these statements depending on, among other things, failure to complete any such financing or transaction, failure to obtain regulatory approval and insufficient funds or other resources to maintain operations or complete such projects. The forward-looking statements in this press release are made as of the date of this release and Kirrin undertakes no obligation to update publicly or revise any forward-looking statements whether as a result of new information or otherwise, except as required by applicable securities laws. Kirrin undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Kirrin or its financial or operating results or (as applicable) its securities.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. | |