US Gold Corp. Reports Operating Results (10-Q)
U.S. GOLD CORP. is primarily engaged in the precious metal mining business in the continental United States however it may also evaluate properties outside the United States. US Gold Corp. has a market cap of $180.1 million; its shares were traded at around $2.24 . Highlight of Business Operations: The company-wide exploration budget for 2009 is approximately $10.5 million which may be re-evaluated during the year and is contingent on successful completion of the financing announced on April 29, 2009. The initial allocation between Nevada and Mexico for exploration spending is $3.5 million for Nevada and $7 million for Mexico which is also subject to re-evaluation based on actual exploration results. Corporate general and administrative overhead costs for 2009 is anticipated to be approximately $3.9 million with property holding costs projected to be an additional $3.6 million.
As of March 31, 2009, we had working capital of $6,141,998, comprised of current assets of $7,851,363 and current liabilities of $1,709,365. This represents a decrease of approximately $4,129,063 from the working capital of $10,271,061 at fiscal year end December 31, 2008. This excludes amounts which can be drawn under the credit facility.
Net cash used in operations for the three months ended March 31, 2009 decreased to $3,402,420 from $4,449,883 for the corresponding period in 2008. Cash paid to suppliers and employees decreased to $3,402,420 during the 2009 period from $4,660,589 during the 2008 period, primarily reflecting reduced exploration and general and administrative expenses. Cash provided by investing activities for the three months ended March 31, 2009 was $29,764, compared to cash used in investing activities of $111,536 in the comparable period of 2008.
For the three months ended March 31, 2009, we recorded a net loss of $4,810,316, or $0.05 per share, compared to a net loss for the corresponding period of 2008 of $5,917,269 or $0.06 per share.
Property holding costs during the 2009 period increased to $1,485,811 compared to $1,239,522 in 2008. Exploration costs for the first quarter of 2009 were $1,723,926 as compared to $2,291,361 for the same period of 2008, reflecting a reduction in exploration activities at the Tonkin project.
Accretion of the asset retirement obligation in Nevada and Mexico for the three months ended March 31, 2009 slightly decreased to $132,921 compared to $140,385 in the same period of 2008. Interest income in the 2009 period decreased to $34,759 compared to $211,808 in 2008, reflecting lower average levels of interest-bearing deposits during the 2009 period as well as lower interest rates. During the first quarter of 2009, we recorded a foreign currency exchange loss of $285,109, reflecting a stronger US dollar against the Canadian dollar and its effect on the net monetary assets or cash that are denominated in Canadian dollars.
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