Augen Capital Corp.
TSX VENTURE : AUG

Augen Capital Corp.

August 28, 2009 12:19 ET

Augen Capital Reports Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 28, 2009) - Augen Capital Corp. ("Augen" or "the Company") (TSX VENTURE:AUG) today announced its unaudited consolidated financial results for the second quarter that ended June 30, 2009.

For the three month period ended June 30, 2009, Augen's income was $27,198 compared to $694,099 in 2008, and net loss was $201,892 in 2009 compared to $958,814 in 2008. Although the Company did not generate as much income in 2009 as it did in 2008, the Company was able to partially offset the decrease in income by a reduction in expenses of $275,124 in 2009. Further, the Company reported an increase in the value of its Merchant Banking portfolio of $247,111.

       
       
  Merchant Banking Managed Products Total 
For the three months ended June 30,2009 2008 2009 2008 2009 2008 
  $ $ $ $ $ $ 
Income (loss)(9,312)458,923 36,510 235,176 27,198 694,099 
Expenses351,973 300,772 179,939 506,264 531,912 807,036 
   
Earnings (loss) before undernoted items(361,285)158,151 (143,429)(271,088)(504,714)(112,937)
Share of (earnings) loss and capital transactions from
equity-accounted investment

37,870
 
(8,874

)

-
 
-
 
37,870
 
(8,874

)
Unrealized (gain) loss on investments held for trading(247,111)707,426 - - (247,111)707,426 
Non-recurring charges1,038 251,856 1,040 251,856 2,078 503,712 
Adjustment to fair value of liabilities- (60,769)- - - (60,769)
Amortization2,574 1,601 2,575 1,601 5,149 3,202 
Earnings (loss) before income taxes(155,656)(733,089)(147,044)(524,545)(302,700)(1,257,634)
Income taxes                  
 Current            6,439 (204,939)
 Future            (107,247)(93,881)
              (100,808)(298,820)
Net earnings (loss) and comprehensive earnings (loss)         (201,892)(958,814)
            

For the six month period ended June 30, 2009, Augen's income was $104,727 compared to $901,614 in 2008, and net loss was $601,416 in 2009 compared to $1,704,798 in 2008. The year-to-date results improved for similar reasons to the second quarter as described above. In addition to the identified reasons, the results improved due to the Company recording $38,959 of non-recurring charges in 2009 compared to $503,712 in 2008, a decrease of $464,753.

   
  Merchant Banking Managed Products Total 
For the six months ended June 30,2009 2008 2009 2008 2009 2008 
  $ $ $ $ $ $ 
Income36,391 446,290 68,336 455,324 104,727 901,614 
Expenses783,691 663,106 355,161 733,235 1,138,852 1,396,341 
   
Earnings (loss) before undernoted items(747,300)(216,816)(286,825)(277,911)(1,034,125)(494,727)
Share of (earnings) loss and capital transactions from
equity-accounted investment
223,487(25,190)--223,487(25,190)
Unrealized (gain) loss on investments held for trading(415,345)1,276,190 - - (415,345)1,276,190 
Non-recurring charges19,479 251,856 19,480 251,856 38,959 503,712 
Adjustment to fair value of liabilities- (87,481)- - - (87,481)
Amortization5,149 3,202 5,149 3,203 10,298 6,405 
Earnings (loss) before income taxes(580,070)(1,635,393)(311,454)(532,970)(891,524)(2,168,363)
Income taxes                  
 Current            (7,627)(259,390)
 Future            (282,481)(204,175)
              (290,108)(463,565)
Net earnings (loss) and comprehensive earnings (loss)         (601,416)(1,704,798)
            

Merchant Banking Portfolio

The Company's investment portfolio had a fair value of $1,219,594 as at June 30, 2009, having increased by $577,449 since December 31, 2008. As a result of the increase in value of the Merchant Banking portfolio and transactional activity during the period, a net realized and unrealized gain of $384,100 was reported during the six month period ended June 30, 2009, compared to a net realized and unrealized loss of $1,167,268 during the same period in 2008.

Shares-for-debt transaction

At a special meeting of the shareholders of Augen Gold Corp. ("AGC"), an investee company in the Merchant Banking portfolio, held on March 13, 2009, AGC shareholders approved a shares-for-debt transaction for the conversion of debt owed by AGC to Augen Capital Corp., into common shares. On April 7, 2009, AGC issued 7,479,010 common shares to settle $1,121,851 of debt. Augen Capital Corp. now owns 11,519,010 shares of Augen Gold Corp. or 35.5% of the issued and outstanding common shares of AGC. Augen recorded a corporate development expense of $169,412 as a result of this transaction during the six months ended June 30, 2009. The Company records its investment in AGC using the equity accounting method. The carrying amount of the investment has increased since December 31, 2008 by $898,364. The increase is comprised of $1,121,851 which represents the shares-for-debt conversion, partially offset by the Company's proportionate share of AGC's loss and capital transactions of $223,487.

The full unaudited consolidated financial statements for the period ended June 30, 2009 are available at www.augencc.com or at www.sedar.com.

About Augen Capital

Augen Capital Corp. ("Augen")(TSX VENTURE:AUG) is a Toronto-based public merchant bank specializing in the financing of and investment in emerging resource companies. Augen manages a merchant banking hard dollar portfolio of emerging resource stocks including private companies and is an industry performance leader in tax-advantaged flow-through investments in Canada's resource sector having raised over $80 million in flow- through limited partnership assets since inception. Augen holds over one hundred gold, base metals and uranium exploration and development public and private companies with direct holdings in its Merchant Banking portfolio and consulting assets in flow-through limited partnerships.

Shares outstanding: 36,615,615

For more information on Augen Capital, visit our website at www.augencc.com The Company's public documents may be accessed at www.sedar.com

This news release contains forward-looking statements. These statements are based on certain factors and assumptions as set forth in this news release including expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to results of exploration, project development, reclamation and capital costs of the companies in the merchant banking portfolios ("investee companies"), and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for the minerals the investee companies expect to produce; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company and investee companies. Additional risks and uncertainties can be found in our Management's Discussion and Analysis and in filings with the Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this news release and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information