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SEC Filings, Earing Reports, Press Releases
Gold Reserve Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 12, 2011 06:45AM
Gold Reserve Inc (GRZ) filed Quarterly Report for the period ended 2011-06-30.
Highlight of Business Operations:
Liquidity and Capital Resources At June 30, 2011 the Company had cash and cash equivalents of approximately $60.9 million which represents an increase from December 31, 2010 of approximately $2.7 million. The increase was primarily due to proceeds from sales of equipment of $8.6 million and net proceeds from marketable securities transactions of $0.6 million offset by cash used by operations of $6.5 million. The components of changes in cash are more fully described in the “Operating,” “Investing” and “Financing” Activities section below.
As of June 30, 2011, our total financial resources, which include cash and cash equivalents and marketable securities, totaled approximately $62.2 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 on the balance sheet (as property, plant and equipment and assets held for sale) at its estimated fair value of approximately $28 million (historical cost of approximately $39 million).
Cash flow used by operating activities for the three and six months ended June 30, 2011 was approximately $4.1 million and $6.5, respectively, compared to approximately $6.3 million and $10.3 million for the comparative periods in 2010. Cash flow used by operating activities consists of net operating losses (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 2011 decreased from the prior comparable periods primarily due to: a net increase in accounts payable primarily related to the timing of payments to counsel and experts connected with the arbitration and non-cash compensation related to the issuance of stock options and restricted stock totaling approximately $3 million, partially offset by an adjustment for gain on sale of equipment.
During the three and six months ended June 30, 2011, net cash provided by investing activities (decreased) increased approximately $(3.8) million, and $0.5 million from the comparable periods in 2010. Investing activities primarily consist of the sale of Brisas Project related equipment and to a lesser extent transactions in marketable securities. As of June 30, 2011, the Company held approximately $21.2 million of Brisas project related equipment intended for future sale.
1 In May 2007, the Company issued $103,500,000 aggregate principal amount of its 5.50% convertible notes. As of June 30, 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 and six months ended June 30, 2011 was approximately $6.9 million and $12.0 million, respectively, representing increases of $2.6 million and $3.4 million over the comparable periods in 2010.
Stocks Discussed: GRZ,