- The net loss for the quarter ended January 31, 2010 increased to $4,152,000 or $0.07 per common share compared with a loss of $35,000 or $0.00 per common share for the same period in 2009. The increase in loss for the quarter ended January 31, 2010 is due to increased corporate activity related to the transformation from a shell company to a company with a development stage asset and a corresponding growth in employees, including an increase in stock-based compensation expense resulting from a grant of stock options to directors and employees during the quarter.
- As at January 31, 2010, the Company had $71,732,000 of cash on hand and a working capital position of $71,361,000. During and subsequent to the quarter ended January 31, 2010, the Company completed two equity offerings. These transactions were completed to fund the purchase of the Morelos Gold Project and to raise sufficient working capital to fund future exploration and development programs and corporate costs.
SIGNIFICANT EVENTS AND TRANSACTIONS
- On November 12, 2009, the Company completed a private placement of 241,500,000 special warrants (the “Special Warrants”) issued at a price of $1.00 per Special Warrant for gross proceeds of $241,500,000. Each Special Warrant was subsequently deemed exercised for no additional consideration to acquire one unit comprised of one common share in the capital of the Company (a “Unit Share”) and one-quarter of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). The Company received net proceeds of $227 million related to this transaction.
- On November 16, 2009, the Company completed an acquisition of 78.8% of the Morelos Gold Project from Teck Resources Limited (“Teck”) for a purchase price of $157,254,000 (US$150,000,000), the issuance of 1,560,857 common shares, and the issuance of 12,443,218 Special Warrants.
- Subsequent to the quarter ended January 31, 2010, the Corporation completed a public offering of 50,000,000 common shares issued at a price of $1.00 per common share for gross proceeds of $50,000,000. After deducting the agents’ fees and expenses of the offering, the Company received net proceeds of approximately $47.2 million.
- On February 24, 2010, the Company acquired, from a subsidiary of Goldcorp Inc., the remaining 21.2% of the Morelos Gold Project, for $52,000,000. As a result of this transaction the Company now holds 100% of the Morelos Gold Project, through its wholly-owned subsidiaries.
- On February 24, 2010, the Company began trading its common shares and the Warrants on the Toronto Stock Exchange (the “TSX”) and delisted its common shares from the TSX Venture Exchange.
- On March 1, 2010, the Company reactivated two key land access agreements at the Morelos Gold Project with Rio Balsas Ejido and Puente Sur Balsas Ejido. The signing of these agreements will allow immediate access to the highly prospective lands that are the focus of the Company’s upcoming exploration program.
- Also subsequent to the quarter ended January 31, 2010, the Company entered into exploration related contracts to enable drilling to begin on property-wide targets outside the existing resource areas and the commencement of various other exploration activities. The first drill rig has been mobilized to site with drilling expected to begin by the middle of April 2010. The Company’s intention is to mobilize additional drill rigs at a rate of one every two months to reach a total of six drill rigs actively drilling on the property. The first results from this drill program should be available by the end of July 2010. In addition, the Company began updating its pre-feasibility study for the Morelos Gold Project.
A complete set of GRL’s Financial Statements, Notes to the Financial Statements and Management’s Discussion and Analysis for the three months ended January 31, 2010 will be posted on the Company’s website at www.gleichenresourcesltd.com and will be filed on Sedar at www.sedar.com.
Gleichen Resources Ltd., is a well funded, growth oriented Canadian mining company engaged in the exploration and development of precious metal resources with a focus on gold. It owns 100% of the Morelos Gold Project, an advanced stage gold exploration property, located 180km southwest of Mexico City. The Company’s Board of Directors has approved a change of the Company’s name to Torex Gold Resources Inc., pending approval at its next annual and special meeting of shareholders.
For further information, please contact:
GLEICHEN RESOURCES LTD.
President and CEO
Tel. (647) 260-1502
Vice President Investor Relations
Tel. (647) 260-1503
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release contains “forward looking statements” and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the future exploration and development plans concerning the Morelos Gold Project, the adequacy of the Company’s financial resources, business plans and strategy and other events or conditions that may occur in the future. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks associated with the exploration, development and mining industry generally such as economic factors as they effect exploration, future commodity prices, obtaining financing, market conditions, changes in interest rates, actual results of current exploration activities, government regulation, political, social or economic developments, environmental risks, insurance risks, capital expenditures, operating or technical difficulties in connection with development activities, personnel relations, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of resources and reserves, contests over property title, and changes in project parameters as plans for the Morelos Gold Project continue to be refined as well as those risk factors included herein and elsewhere in the Company’s public disclosure. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Although the Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this MD&A, assumptions have been made regarding, among other things: the Company’s ability to carry on its exploration and development activities planned for the Morelos Gold Project, the timely receipt of any required approvals, the price of gold, the ability of the Company to obtain qualified personnel, equipment and services in a timely and cost-efficient manner, the ability of the Company to operate in a safe, efficient and effective manner, the ability of the Company to obtain financing on acceptable terms, the accuracy of the Company’s resource estimates and geological, operational and price assumptions on which these are based and the regulatory framework regarding environmental matters. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company’s expected financial and operating performance and the Company’s plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.