Augen Capital Corp.
TSX VENTURE : AUG

Augen Capital Corp.

April 30, 2012 18:19 ET

Augen Capital Reports 2011 Results

TORONTO, ONTARIO--(Marketwire - April 30, 2012) - Augen Capital Corp. ("Augen" or the "Company") (TSX VENTURE:AUG) today announced its annual consolidated financial results for the year ended December 31, 2011.

In spite of operating income of $1,982,878 (2010 - operating loss of $3,631,235), the Company recorded a net loss of $4,087,759 (2010 - net earnings of $918,172) or a net loss of $0.05 (2010 - net earnings of $0.03) on a per share basis. This result was mostly due to changes in the value of the Company's investment portfolio, with a realized gain on sale of investments of $3,361,562 (2010 - $306,590) offset by an unrealized loss on investment of $6,054,506 (2010 - unrealized gain of $4,787,881).

The Company generates income primarily through capital appreciation of its investment portfolio, the value of which is closely related to global capital market conditions and the general economic environment. Management expects that capital market volatility, global economic problems and the economic slowdown of emerging markets will likely have a continued effect on the Company's investment portfolio.

Consolidated expenses during the year ended December 31, 2011 were $1,404,837 (2010 - $4,148,846), a decrease of $2,744,009 which was largely attributable to the write-down of exploration and evaluation assets of $751,160 and the termination of the Management Agreement with OreReserve in 2010. Through the termination of the Management Agreement with OreReserve effective October 31, 2010, the Company completely eliminated management fees in 2011 (2010 - $1,534,822) and corporate development expenses decreased by $221,429 to $19,873 (2010 - $241,302). Share-based compensation expense in 2011 was $75,541 (2010 - 261,561). As a result, the Company had income from operations of $1,982,878 (2010 - operating loss of $3,631,235), an increase of $5,614,113.

Consolidated Statements of Operations and Comprehensive Earnings (loss)
2011 2010
For the years ended December 31, $ $
Income (loss) 3,387,715 517,611
Expenses 1,404,837 4,148,846
Earnings (loss) from operations 1,982,878 (3,631,235 )
Share of earnings (loss) and capital transactions from equity-accounted investment - (192,160 )
Unrealized gain (loss) on FVTPL investments (6,054,506 ) 4,787,881
Earnings (loss) before income tax (4,071,628 ) 964,486
Income taxes
Current 16,131 40,823
Deferred - 5,491
16,131 46,314
Net earnings (loss) and comprehensive earnings (loss) (4,087,759 ) 918,172
Earnings (loss) per share
Basic and diluted (0.05 ) 0.03
Weighted average shares outstanding 73,950,314 36,659,023

For the three month period ended December 31, 2011, earnings from operations were $1,878,400 (2010 - loss from operations of $1,831,913) as a result of an increase in income of $1,958,292 and a decrease in expenses of $1,752,021. Income and expenses for the three month period ended December 31, 2011 were $2,342,747 (2010 - $384,455) and $464,347 (2010 - $2,216,368), respectively. The Company reported a net loss of $648,594 (2010 - net earnings of $1,340,487) as a result of an unrealized loss on investments of $2,545,562 (2010 - unrealized gain of $3,197,339).

Consolidated expenses during the three months ended December 31, 2011 was $464,347 (2010 - $2,216,368) and corporate development expenses was $Nil (2010 - $433), as the Company took a write-down of exploration and evaluation assets of $751,160 and paid management fee of $1,534,822 in 2010. Share-based compensation expense during the three months period was $2,328 (2010 - 217,266), as the Company recorded vesting of certain options. As a result, the Company had income from operations during the fourth quarter of $1,878,400 (2010 - operating loss of $1,845,221), an increase of $3,723,621.

Consolidated Statements of Operations and Comprehensive Earnings (loss)
2011 2010
For the three months ended December 31, $ $
Income (loss) 2,342,747 384,455
Expenses 464,347 2,216,368
Earnings (loss) from operations 1,878,400 (1,831,913 )
Unrealized gain (loss) on FVTPL investments (2,545,562 ) 3,197,339
Earnings (loss) before income tax (667,162 ) 1,365,426
Income taxes
Current 1,739 24,938
Deferred - -
1,739 24,938
Net earnings (loss) and comprehensive earnings (loss) (648,594 ) 1,340,487
Earnings (loss) per share
Basic and diluted (0.01 ) 0.04
Weighted average shares outstanding 73,950,314 36,659,023

New Focus on Colombia

During the year, the Company began to focus on mineral prospects in Colombia and acquired its first mineral concession through its subsidiary, Seven Stars Coal Corp. The concession consists of 1,557 hectares in the Yopal District of the Casanare Department, which is a prospective area for coking coal. Colombia is the world's fourth largest coal exporter.

Investment Portfolio

The Company's investments consists primarily of Canadian companies whose principal business is resource exploration and development. At December 31, 2011, the market value of the Company's investments was $2,168,100 (2010 - 6,002,143), a decrease of $3,834,043 or 63% during the past year. The decrease was due to a combination of lower market value and selling of certain investments during the year. The Company's most significant investment represented 75% of the investment portfolio as at December 31, 2011. The decline of its market value had a significant negative effect on the earnings of the Company.

Changes in Financial Reporting Standards

The consolidated financial statements for the year ended December 31, 2011 marked the Company's first annual consolidated financial statements prepared under International Financial Reporting Standards ("IFRS") issued by the governing body of the International Accounting Standards Board ("IASB"). Details on the changeover are contained in the Company's notes to the consolidated financial statements and the Management's Discussion and Analysis for the year ended December 31, 2011.

The full audited annual consolidated financial statements for the year ended December 31, 2011 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 provision of management, consulting and due diligence services to listed issuers in the mineral exploration, development and extraction sectors. Augen also assists in the financing of, and investment in, resource companies or projects.

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.

Shares outstanding: 77,837,039

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.

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