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

August 05, 2011 | About:
10qk

10qk

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US Gold Corp. (UXG) filed Quarterly Report for the period ended 2011-06-30.

Us Gold has a market cap of $836.2 million; its shares were traded at around $5.99 .

Highlight of Business Operations:

As of June 30, 2011, we had working capital of $90.3 million, comprised of current assets of $94.9 million, which includes $34.2 million of gold and silver bullion, and current liabilities of $4.6 million. This represents an increase of approximately $76.8 million from the working capital of $13.5 million at fiscal year end December 31, 2010. At June 30, 2011, the fair value of our gold and silver bullion exceeded its book value by approximately $2.5 million.

Net cash used in operations for the six months ended June 30, 2011 increased to $22.3 million from $12.3 million for the corresponding period in 2010, mainly due to increases in cash paid to suppliers and employees. Cash paid to suppliers and employees increased to $22.4 million during the 2011 period from $12.4 million during the 2010 period, primarily reflecting increased exploration activities in Mexico and Nevada. Cash used in investing activities for the six months ended June 30, 2011 was $37.5 million, primarily due to additional purchases of gold and silver bullion of $31.3 million, additional land and drill rigs purchases of $7.2 million in Mexico, all partially offset by proceeds from the sale of gold bullion, as compared to a source of $9.6 million in the comparable period of 2010, primarily due to the redemption of our short-term US Treasury Bills of $12 million that matured during the period.

General and administrative expense during the 2011 period increased by $1.1 million to $3.7 million compared to $2.6 million for the same period in 2011. The reasons for the increase include costs related to the proposed business combination with Minera Andes of $0.4 million, an increase in stock-based compensation expense of $0.3 million, an increase in investor relations of $0.2 million, and an increase in salaries and benefits of $0.2 million.

Exploration costs for the first half of 2011 increased by $9.1 million to $17.5 million as compared to $8.4 million for the same period in 2010, 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 first six months of 2011, exploration spending in Mexico increased by $6.4 million from $5.6 million to $12.0 million. During the 2011 period, a total of 194,730 ft (59,009 m) was drilled in Mexico as compared to 93,568 ft (28,354 m) drilled in the same period in 2010. Since the feasibility study for the El Gallo project began in January 2011, total costs incurred to June 30, 2011 were $0.9 million, which was included in exploration costs. For the first six months of 2011, exploration spending in Nevada increased by $2.5 million from $2.5 million to $5.0 million. During the 2011 period, a total of 31,422 ft (9,522 m) was drilled in Nevada as compared to 18,576 ft (5,629 m) drilled in the same period in 2010. Total pre-feasibility costs incurred for the Gold Bar project for the first half of 2011 was $0.9 million as compared to $0.1 million for the same period in 2010.

General and administrative expense during the 2011 period increased by $1.1 million to $2.3 million compared to $1.2 million for the same period in 2011. The reasons for the increase include costs related to the proposed business combination with Minera Andes of $0.4 million, an increase in stock-based compensation expense of $0.3 million, an increase in investor relations of $0.2 million, and an increase in salaries and benefits of $0.2 million.

Exploration costs for the second quarter of 2011 increased by $6.4 million to $10.6 million as compared to $4.2 million for the same period of 2010, reflecting an increase in exploration activities at the Gold Bar and Limo projects in Nevada and at the El Gallo project in Mexico. During the second quarter of 2011, exploration spending in Mexico increased by $4.3 million from $2.9 million to $7.2 million. During the 2011 period, a total of 126,070 ft (38,203 m) was drilled in Mexico as compared to 38,141 ft (11,558m) drilled in the same period in 2010. Total feasibility study costs incurred for the El Gallo project during the second quarter of 2011 was $0.7 million. During the second quarter of 2011, exploration spending in Nevada increased by $2.0 million from $1.1 million to $3.1 million. During the 2011 period, a total of 18,859 ft (5,715 m) was drilled in Nevada as compared to 9,310 ft (2,821 m) drilled in the same period in 2010. Total pre-feasibility costs incurred for the Gold Bar project for the second quarter of 2011 was $0.3 million as compared to $0.1 million for the same period in 2010.

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