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US Gold Corp. Reports Operating Results (10-Q/A)

February 03, 2011 | About:
10qk

10qk

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US Gold Corp. (UXG) filed Amended Quarterly Report for the period ended 2010-06-30.

Us Gold Corp has a market cap of $772.2 million; its shares were traded at around $6.57 . Mutual Fund and Other Gurus that owns UXG: Murray Stahl of Horizon Asset Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The company-wide exploration budget for 2010 is approximately $17.4 million. The allocation between Nevada and Mexico for exploration spending is $4.0 million for Nevada and $13.4 million for Mexico which is subject to re-evaluation based on actual exploration results and permitting status. These amounts also include expenditures for resource updates and Preliminary Economic Assessments for our projects. As of June 30, 2010, we spent approximately $2.5 million and $5.7 million in exploration costs in Nevada and Mexico, respectively. Corporate general and administrative overhead and property holding costs for 2010 are anticipated to be approximately $4.8 million and $4.1 million, respectively. As of June 30, 2010, we spent approximately $2.6 million and $2.1 million on general and administrative and property holding costs, respectively.

As of June 30, 2010, we had working capital of $28.5 million, comprised of current assets of $30.7 million, which includes $3.6 million of gold bullion, and current liabilities of $2.2 million. This represents a decrease of approximately $14.0 million from the working capital of $42.5 million at fiscal year end December 31, 2009.

Net cash used in operations for the six months ended June 30, 2010 decreased to $12.3 million from $5.6 million for the corresponding period in 2009, mainly due to increases in cash paid to suppliers and employees. Cash paid to suppliers and employees increased to $12.4 million during the 2010 period from $5.6 million during the 2009 period, primarily reflecting increased exploration activities in Mexico and Nevada. Cash provided by investing activities for the six months ended June 30, 2010 was $9.6 million, primarily due to the redemption of our short-term US Treasury Bills of $12 million that matured during the second quarter of 2010 and partially offset by additional purchases of gold bullion and land in Mexico, compared to cash used in investing activities of $0.1 million in the comparable period of 2009.

For the six months ended June 30, 2010, we recorded a net loss of $17.6 million, or $0.16 per share, compared to a net loss for the corresponding period of 2009 of $8.7 million or $0.09 per share. The increase for the first half of 2010 compared to the first half of 2009 reflects our accelerated exploration efforts, especially in Mexico. Excluding the write-off of mineral property interests recorded during the second quarter of 2010 of $3.9 million (net of future income taxes recovery of $2.0 million), the net loss for the first half of 2010 would have been $13.7 million or $0.11 per share.

Property holding costs during the first half of 2010 increased by $0.3 million to $2.1 million compared to $1.8 million for the same period in 2009, mainly due to an increase in our annual royalty payment to our lessors of our Nevada properties as a result of the increase in gold prices in January 2010. Exploration costs for the first half of 2010 increased by $4.8 million to $8.4 million as compared to $3.6 million for the same period of 2009, reflecting an increase in exploration activities at the Gold Bar and Limo projects in Nevada and at the El Gallo project in Mexico.

For the three months ended June 30, 2010, we recorded a net loss of $10.7 million, or $0.10 per share, compared to a net loss for the corresponding period of 2009 of $3.9 million or $0.04 per share. The increase for the second quarter of 2010 compared to the second quarter of 2009 reflects our accelerated exploration efforts, especially in Mexico. Excluding the write-off of mineral property interests recorded during the second quarter of 2010 of $3.9 million (net of future income taxes recovery of $2.0 million), the net loss for the second quarter of 2010 would have been $6.8 million or $0.06 per share.

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