Mines Management Inc Reports Operating Results (10-Q)
Mines Management Inc is a U.S.-based mineral development company focused on the exploration and development of silver dominant deposits. Mines Management Inc has a market cap of $38.9 million; its shares were traded at around $1.71 . Highlight of Business Operations: The Company reported a net loss for the quarter ended March 31, 2009 of $3.0 million, or $0.13 per share, compared to a net loss of $1.8 million, or $0.08 per share, for the quarter ended March 31, 2008. The $1.2 million increase in net loss in the first quarter of 2009 is attributable to increases in technical expenses of approximately $0.8 million over the first quarter of 2008, principally due to payments to underground mining contractor SMD for site rehabilitation, sump construction and dewatering, and for EIS technical consultants , environmental expenses, and permitting. General and administrative expenses increased $0.1 million due to the addition of supervisory mine site employees since the first quarter of 2008 and normal annual wage increases, offset by decreases of $0.1 million in legal, accounting and consulting expenses in the first quarter of 2009 over the comparable 2008 period. As a result of adopting a new accounting standard, the Company had a loss from the change in fair value of warrants classified as derivative instruments of $0.3 million for the quarter ended March 31, 2009. Interest income also decreased by $0.2 million, as the Companys interest-bearing bank balances declined.
During the quarter ended March 31, 2009, the net cash used for operating activities was $2.0 million, which consisted largely of permitting and technical expenses associated with increased activities at the Montanore Project site. The net cash used in investing activities during the quarter was $0.1 million, for construction in progress.
We are taking steps to reduce activity levels, including capital expenditures, until the timing of the Record of Decision becomes more clear. We anticipate expenditures of approximately $9.0 million the final three quarters of 2009, which will consist of $1.5 million per quarter for general and administrative expenses and $4.5 million for ongoing expense of preparation for the delineation drilling program and addition mine scoping studies. Given our current cash position of
$17.9 million on March 31, 2009, we will require approximately $10.0 million of external financing in 2010 to fund the final phases of the advanced exploration program and delineation drilling program and completion of a bankable feasibility study. The Company will investigate financing opportunities and options from equity and debt financing during the current year.
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