CALGARY, Alberta, Canada (Marketwire – March 27, 2017) – New Millennium Iron Corp. (“NML” or the “Company”) (TSX:NML) announced today its financial results for the fourth quarter and year ended December 31, 2016.
The following review of the Company’s financial performance is based on the audited Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the year ended December 31, 2016, which have been filed on the SEDAR website at www.sedar.com. The Financial Statements have been prepared in accordance with International Financial Reporting Standards.
NML’s principal activities in the fourth quarter and year were as follows:
On NML’s principal asset – its taconite properties: 1) Completion of the NuTac initiative pre-feasibility study, under which the Company carried out an in-house analysis of an approach to taconite development that considers all of NML’s taconite deposits, applies transferable information from the 2014 Taconite Project feasibility studies, contemplates using existing rail and port infrastructure as opposed to the slurry transportation mode assumed in the earlier studies, and is sized for a smaller market entry position; 2) filing on SEDAR of the NuTac NI 43-101 Technical Report prepared in collaboration with a group of Independent Qualified Persons; and 3) a retrospective change in accounting policy regarding mineral exploration and evaluation expenditures in order to recognize these expenditures directly to profit or loss instead of capitalizing them as mineral exploration and evaluation assets.
At the general NML corporate level: 1) Appointment of Mr. Howard Lutley as the new Chair of the Board of Directors; 2) changes to the Board at the Annual General Meeting, with appointments of two independent successor directors; 3) formation of special committee at Board level to focus on strategic options for the Company; 4) further corporate restructuring, including the appointment of Mr. Ernest Dempsey as CEO on an interim basis; 5) earlier requisitioned Special Meeting of shareholders and vote against Director Removal Resolution; and 6) notice of termination of the July 2012 contract with the Sept-Îles in respect of the multi-user dock, including its take-or-pay provisions.
On Tata Steel Minerals Canada Ltd. (“TSMC”), in which NML owns a 4.32% equity interest and includes ownership and operation of a direct shipping ore (“DSO”) project: 1) regular shipping of crushed and screened ore to Europe and China, with 10 cargoes totaling approximately 1.6 million tonnes in the 2016 operating season; and 2) completion of a $175 million transaction through which agencies of the Government of Quebec provided $50 million of debt and $125 million equity financing to TSMC, acquiring an 18% ownership interest as a result.
The Company’s net loss for the three months ended December 31, 2016 is $1,184,000 ($0.01 per share) compared to a restated net loss of $1,659,000 ($0.01 per share) for the comparative period in 2015. The reduction in net loss was mainly due to a decline in mineral exploration and evaluation expenses from $394,000 in Q4 2015 to a recovery of $14,000 in Q4 2016. The general and administrative expenses decreased from $1,321,000 in Q4 2015 to $1,271,000 in Q4 2016 despite an increase in restructuring charges from $91,000 in Q4 2015 to $689,000 in Q4 2016. The remaining general and administrative expenses decreased by $648,000 from $1,230,000 in Q4 2015 to $582,000 in Q4 2016. The most significant items affecting general and administrative expenses are a decline in salaries, wages and benefits to $265,000 in Q4 2016 from $551,000 in Q4 2015, a decline in consulting, legal and professional fees to $147,000 in Q4 2016 from $336,000 in Q4 2015 and a decline in office and general to $40,000 in Q4 2016 from $107,000 in Q4 2015.
NML’s working capital at December 31, 2016 is $14,435,000, a decrease of $5,076,000 from the restated December 31, 2015 total of $19,511,000.
The Company’s net loss for the year ended December 31, 2016, was $5,573,000 ($0.03 per share) compared to a restated net loss of $32,611,000 ($0.18 per share) for the 2015 fiscal year. The most significant difference between the years is that in 2015 there was an impairment of the investment in TSMC in the amount of $26,798,000 for which there was no impairment in 2016. The 2016 loss is comprised of general and administrative expenses of $5,536,000 (2015 - $5,319,000) and mineral exploration and evaluation expenses of $591,000 (2015 - $1,338,000), net of investment income of $209,000 (2015 - $559,000), service fee revenue of $345,000 (2015 - $Nil) and reversal of provision of $Nil (2015 - $285,000). The increase in the 2016 general and administrative expenses is due to an increase in restructuring charges from a 2015 recovery of $19,000 to an expense of $1,209,000 in 2016 and that there was no recovery from Tata Steel in 2016 while there was a $1,292,000 recovery in 2015. The remainder of the 2016 general and administrative expenses declined to $4,327,000 from $6,630,000 in 2015. The largest changes in these expenses were salaries, wages and benefits decreasing from $2,436,000 in 2015 to $1,572,000, consulting, legal and professional fees decreasing from $1,890,000 in 2015 to $1,576,000 in 2016 and office and general expenses decreasing from $750,000 in 2015 to $354,000 in 2016.