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SEC Filings, Earing Reports, Press Releases
Gold Reserve Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 13, 2011 12:17PM
Gold Reserve Inc (GRZ) filed Quarterly Report for the period ended 2011-03-31.
Highlight of Business Operations:
Liquidity and Capital Resources At March 31, 2011 the Company had cash and cash equivalents of approximately $64.2 million which represents an increase from December 31, 2010 of approximately $6.1 million. The increase was primarily due to proceeds from sales of equipment of $8.3 million offset by cash used by operations of $2.4 million. The components of changes in cash are more fully described in the Operating, Investing and Financing Activities section below.
As of March 31, 2011, our total financial resources, which include cash and cash equivalents and marketable securities, totaled approximately $66.3 million. In addition to cash and cash equivalents and investments, the Company holds Brisas Project related equipment that it intends to dispose of in 2011. This equipment is carried at its estimated net realizable value of approximately $28.1 million (historical cost of approximately $39 million).
Cash flow used by operating activities in the quarter ended March 31, 2011 was approximately $2.4 million compared to approximately $4.1 in 2010. Cash flow used by operating activities in the quarter ended March 31, 2011 consisted of a net operating loss of approximately $5.2 million (the components of which are more fully discussed below) adjusted for certain non-cash income and expense items primarily related to gains on sale of equipment and marketable securities, accretion of convertible notes, stock options and common shares issued in lieu of cash compensation and certain non-cash changes in working capital. Cash flow used by operating activities during the quarter ended March 31, 2011 represented a decrease from the prior comparable period of approximately $1.7 million which is primarily attributable to: 1) a decrease in costs associated with arbitration as a result of the reduction in hours incurred by arbitration counsel and 2) a net increase in accounts payable and accrued expenses which is related to the timing of payments for costs already incurred but not yet paid.
1 In May 2007, the Company issued $103,500,000 aggregate principal amount of its 5.50% convertible notes. As of March 31, 2011, $102,349,000 remains outstanding. The notes pay interest semi-annually and are due on June 15, 2022. The notes are recorded on the balance sheet at amortized cost of approximately $101 million. Subject to certain conditions, the notes may be converted into Class A common shares of the Company, redeemed or repurchased.
Consolidated net loss for the three months ended March 31, 2011 was approximately $5.2 million or $0.09 per share compared to a net loss for the three months ended March 31, 2010 of $4.4 million or $0.08 per share.
Total expenses increased to $5.8 million from $4.7 million in the three months ended March 31, 2011 and 2010, respectively, a net increase of approximately $1.0 million. This increase was primarily comprised of a non-cash increase in costs associated with the issuance of stock options and restricted shares from both Plans totaling approximately $1.8 million partially offset by a decrease in arbitration costs of approximately $0.8 million. Substantially all of the increase in corporate general and administrative and corporate communications expense is due to non-cash costs associated with the issuance of stock options and to a lesser degree restricted shares.
Stocks Discussed: GRZ,