SOURCE: Brazil Minerals, Inc.

Brazil Minerals, Inc.

May 20, 2013 08:00 ET

Brazil Minerals, Inc. Reports First Quarter 2013 Financial Results

Significant Progress Made in Operations and Management; Production at Duas Barras Resumes After Equipment Upgrades

SAO PAULO, BRAZIL--(Marketwired - May 20, 2013) - Brazil Minerals, Inc. (OTCQB: BMIX) ("Brazil Minerals" or "BMIX"), a diamond and gold producer with resources and assets in Brazil, reported its financial results for three months ended March 31, 2013 in its form 10-Q, filed with the SEC on May 14, 2013. A summary of BMIX's financial performance and business updates follows.

First Quarter 2013 Financial Results
For the period ended March 31, 2013 (results recorded in $USD)

Revenues   $5,763
Pretax Operating Loss   $176,825
Cash Outflows from Operations   $224,729
Cash and Cash Equivalents   $637,160
Shares Outstanding   69,963,434

Marc Fogassa, BMIX Chairman and CEO, stated, "As of March 31, 2013, BMIX had only the original 20% right to cash flows from just diamond sales in Duas Barras, and the first quarter of any given year is essentially a non-producing quarter for alluvial operators in Minas Gerais due to the heavy rain season. However, during Q2 2013, BMIX concluded the acquisition of a larger 55% stake in Duas Barras, which now includes gold revenues as well. Therefore we expect continual improvement in our financial results starting in Q2 2013."

As of March 31, 2013, BMIX owned two assets. The first asset was the right to receive 20% of the monthly diamond production, in cash or in kind, due to Brazil Mining, Inc. ("BMI"), a privately-held Delaware corporation and currently the largest shareholder of BMIX, with respect to BMI's 55% ownership of Mineração Duas Barras Ltda. ("Duas Barras"), a Brazilian alluvial diamond and gold producer located in the state of Minas Gerais, Brazil. The second asset is the entire mining exploration rights to a 38.6 square mile area, in the state of Amazonas, Brazil; this area is referred to by BMIX as the "Borba Project." While there is no formal geology on the Borba Project to date, the area in which it is located has had prospectors actively mining gold from within its limits, and gold is found in conglomerate form, near primary quartz veins.

During the first quarter of 2013, Duas Barras had revenues of $160,971 from the sale of alluvial gold and rough diamonds to Brazilian buyers. BMIX has described in its Form 10-K that the Q1 2013 result of Duas Barras was being impacted by a loss of generator for one month and the normal heavy raining season. The state of Minas Gerais, where Duas Barras is located, experiences heavy rains from December to March. During this period, local mining companies such as Duas Barras typically focus on refurbishing equipment and preparing the gravel fronts for processing during the dry season. Therefore, investors should expect the Q1 results to normally be seasonally lower than other quarters. In addition to the natural stoppage because of rains, in Q1 2013 one of the three main diesel-powered generators of the Duas Barras processing plant was upgraded by its manufacturer, Cummins, and the plant stopped operations for approximately one month as a result. 

As of March 31, 2013, BMIX had $0.6 million in cash compared to $0.9 million as of December 31, 2012. Working capital and shareholders' equity were $0.6 million and $1.4 million, respectively. Management believes it has sufficient capital to fund its operations for at least the next twelve months.

Business Updates

On April 30, 2013, BMIX acquired the entire 55% economic interest in Duas Barras from BMI, and thereafter on a going-forward basis, BMIX will consolidate the operations of Duas Barras in BMIX's financial statements.

During Q1 2013, Duas Barras purchased a large floating dredge vessel to be deployed during Q2 2013 in one of the most promising waterway locations within its mining concession. Additionally, Duas Barras is working with CEMIG, the Brazilian electric utility that serves the region, to directly access the local electric power grid. The cost of diesel to operate the plant in its current format is the highest operational cost, even greater than the cost of the entire Duas Barras labor force of ten employees. BMIX anticipates that bringing electric power directly to the plant instead of using diesel fuel will significantly decrease costs.

For its Q2 2013 production of rough diamonds and gold that has already been sold, Duas Barras received multiple offers from local Brazilian buyers. BMIX has since received unsolicited offers by email from other buyers interested in its Duas Barras production. BMIX believes that the world-recognized quality of its Jequitinhonha diamonds as well as the fact that it operates with all of the appropriate licenses makes its production attractive to buyers.

During Q2 2013, BMIX polished some of its rough diamonds. Because of their high quality, the revenue potential on a per-carat basis for a polished gem is eight to ten times that of a rough diamond. Brazilian bottlenecks exist in identifying quality polishers and ensuring safety of transport, and therefore BMIX is only in the early stages of evaluation as to whether selling a small percentage of its production as polished diamonds would be feasible. The main positives would be much higher margins as well as differentiation and branding based on the quality of its polished diamond product. 

New York Non-Deal Road Show, May 14-16, 2013

Between May 14 and 16, 2013, BMIX's Management Team and its Board of Directors conducted a multi-day, non-deal road show whereby they met with metals and mining analysts, and current and prospective investors. In addition, BMIX was invited for a visit and talks at the New York Stock Exchange (NYSE) on May 15, 2013, which was hosted by both the MKT and Latin American teams at NYSE. BMIX is currently evaluating improved listing platforms for BMIX shares on both the OTCQX and NYSE MKT.

Outlook

During Q2 2013, BMIX expects to begin operating its newly-acquired dredging vessel at Duas Barras, which would increase the revenue potential of the operation. It also expects to finalize a plan of bringing electrical power from the national grid, and naming a contractor chosen for such work by the end of the second quarter. Eventually moving from diesel-powered generators to electric power will lower costs significantly.

During Q2 2013, BMIX expects to have initial geochemical results from several samples collected by its geological team at the Borba Project area, in order to plan further developments in the area.

The BMIX management team is actively reviewing a number of other exploratory Brazilian territories and mining concessions in phosphate, zinc, lead, and niobium, in addition to adding some specific, additional diamond and gold assets. 

About Brazil Minerals, Inc.

Brazil Minerals, Inc. (OTCQB: BMIX), a U.S. corporation, is a precious minerals producer with resources and assets in Brazil. Its mining assets include an interest in Duas Barras, a diamond and gold producing mine located in the state of Minas Gerais, as well as 100% ownership of a gold producing area, Borba, in the State of Amazonas, Brazil. BMIX also has a pipeline of opportunities in diamonds, gold, and other minerals throughout Brazil. Its Brazilian headquarter is in São Paulo, the financial hub of Latin America, with an operational office in Belo Horizonte, the capital of the state of Minas Gerais; "Minas Gerais" means "General Mines", and serves as reminder of the strength of that premier region of Brazil for natural resources. More information on BMIX, including an investor presentation, can be found at www.brazil-minerals.com.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon the current plans, estimates and projections of Brazil Minerals, Inc.'s management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of production, reserves, sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in Brazil, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Therefore, you should not place undue reliance on these forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in Brazil, general economic conditions; geopolitical events and regulatory changes, availability of capital, the BMIX's ability to maintain its competitive position and dependence on key management. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

 
 
BRAZIL MINERALS, INC.
(FORMERLY, FLUX TECHNOLOGIES, CORP.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2013 AND DECEMBER 31, 2012
             
    March 31, 2013     December 31, 2012  
ASSETS                
Current Assets                
  Cash and cash equivalents   $ 637,160     $ 863,189  
  Accounts receivable- Brazil Mining, Inc.     5,763          
Total Current Assets     642,923       863,189  
                 
Capital Assets                
Computer equipment, net of accumulated amortization of $ 108     1,192       -  
                 
Other Assets                
  Interest in mineral production rights     800,000       -  
  Loan receivable-related party     -       800,000  
                 
Total Assets   $ 1,444,115     $ 1,663,189  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Liabilities                
Current Liabilities                
  Accrued expenses   $ 18 ,850     $ 67,362  
  Due to Brazil Mining, Inc.     6,263          
  Loan from Director     100       100  
Total Liabilities     25,213       67,462  
                 
Stockholders' Equity                
  Series A Preferred Stock, $0.001 par value, 10,000,000 shares authorized; 1 share issued and outstanding     -       -  
  Common stock, $0.001 par value, 150,000,000 shares authorized; 69,963,434 shares issued and outstanding (December 31, 2012- 69,963,434)     69,963       69,963  
  Additional paid-in-capital     37,370,516       37,370,516  
  Stock Warrants     117,765       117,765  
  Deficit accumulated during the development stage     (36,139,342 )     (35,962,517 )
Total Stockholders' Equity     1,418,902       1,595,727  
                 
Total Liabilities and Stockholders' Equity   $ 1,444,115     $ 1,663,189  
                 
                 
 
 
BRAZIL MINERALS, INC.
(FORMERLY, FLUX TECHNOLOGIES, CORP.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2013 and 2012
FOR THE PERIOD FROM DECEMBER 15, 2011 (DATE OF INCEPTION) TO MARCH 31, 2013
                   
                For the period  
                from December  
    For the three     For the three     15, 2011 (Date  
    months ended     months ended     of Inception) to  
    March 31, 2013     March 31, 2012     March 31, 2013  
                         
REVENUES   $ 5,763     $ -     $ 5,763  
                         
OPERATING EXPENSES                        
  Professional fees     22,000       -       116,658  
  Management fee     92,063       -       92,063  
  General and administrative expenses     20,600       -       24,485  
  Compensation and related costs     47,817       -       101,929  
  Depreciation     108       -       108  
TOTAL OPERATING EXPENSES     182,588       -       335,243  
                         
LOSS FROM CONTINUING OPERATIONS     (176,825 )     -       (329,480 )
LOSS FROM DISCONTINUED OPERATIONS     -       (4,712 )     (26,520 )
                         
LOSS BEFORE PROVISION FOR INCOME TAXES     (176,825 )     (4,712 )     (356,000 )
                         
PROVISION FOR CORPORATE INCOME TAXES     -       -       -  
                         
NET LOSS   $ (176,825 )   $ (4,712 )   $ (356,000 )
                         
NET LOSS PER SHARE: BASIC AND DILUTED   $ (0.00 )   $ (0.00 )        
                         
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED     69,963,434       1,930,130          
                         
                         
 
 
BRAZIL MINERALS, INC.
(FORMERLY, FLUX TECHNOLOGIES, CORP.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012
FOR THE PERIOD FROM DECEMBER 15, 2011 (DATE OF INCEPTION) TO MARCH 31, 2013
                   
                For the period  
    For the three     For the three     from December  
    months ended     months ended     15, 2011 (Date  
    March 31,     March 31,     of Inception) to  
    2013     2012     March 31, 2013  
                         
CASH FLOWS FROM OPERATING ACTIVITIES:                        
  Net loss for the period   $ (176,825 )   $ (4,712 )   $ (356,000 )
  Loss from discontinued operations     -       4,712       26,520  
  Loss from continuing operations     (176,825 )     -       (329,480 )
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:                        
Depreciation     108       -       108  
Change in assets and liabilities:                        
  Increase in accounts payable to Brazil Mining, Inc     6,263       -       6,263  
  Increase in accounts receivable from Brazil Mining, Inc.     (5,763 )     -       (5,763 )
  Increase (decrease) in accrued expenses     (48,512 )     -       17,600  
Net Cash Used in Continuing Operating Activities     (224,729 )     0       (311,272 )
Net Cash Used in Discontinued Operations     -       (712 )     (25,270 )
Net Cash Used in Operating Activities     (224,729 )     -       (336,542 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:                        
  Acquisition of capital asset     (1,300 )     -       (1,300 )
  Advances to a related party     -       -       (800,000 )
Net Cash Used in Investing Activities     (1,300 )     -       (801,300 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:                        
  Loans from officers     -       -       100  
  Net proceeds from the sale of common stock     -       -       2,000,033  
  Cash paid for share offering costs     -               (253,500 )
Net Cash Provided by Continuing Financing Activities     -       0       1,746,633  
Net Cash Provided by Discontinued Financing Activities     -       22,200       28,369  
Net Cash Provided by Financing Activities     -       22,200       1,775,002  
                         
Net Increase in Cash and Cash Equivalents     (226,029 )     21,488       637,160  
                         
Cash and equivalents, beginning of period     863,189       -       -  
                         
Cash and equivalents, end of period   $ 637,160     $ 21,488     $ 637,160  
                         
SUPPLEMENTAL CASH FLOW INFORMATION:                        
  Cash paid for interest   $ 0     $ 0     $ 0  
  Cash paid for income taxes   $ 0     $ 0     $ 0  
                         
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION:                        
  Loan receivable converted to interest in mineral property rights   $ 800,000             $ 800,000  
  Shares issued for exploration rights and mineral property option   $ 0     $ 0     $ 35,783,342  
  Shares and warrants issued as stock offering costs   $ 0     $ 0     $ 2,923,245  
  Forgiveness of shareholder debt recorded as contributed capital   $ 0     $ 0     $ 6,169  
                         
                         

Contact Information

  • CONTACTS

    For BMIX

    Marc Fogassa
    CEO
    Brazil Minerals, Inc.
    324 S Beverly Drive, Suite 118
    Beverly Hills, CA 90212 USA
    Telephone: +1 (213) 590-2500
    Email Contact
    www.brazil-minerals.com

    For Investors or Prospective Investors

    John Mattio
    SVP
    MZ North America
    61 Broadway, Suite 3035
    New York, NY 10016
    Telephone: +1 (212) 301-7130
    Email Contact
    www.mzgroup.us