Dia Bras Exploration Inc.

Dia Bras Exploration Inc.

August 30, 2010 15:35 ET

Dia Bras Releases Second Quarter 2010 Results

MONTREAL, QUEBEC--(Marketwire - Aug. 30, 2010) - Dia Bras Exploration Inc. (TSX VENTURE:DIB) ("Dia Bras") ("the Company") announces the results for the three and six-month periods ended June 30, 2010. All currency in this release is in Canadian dollars unless otherwise indicated. For a full explanation of results, the unaudited Interim Consolidated Financial Statements, Management Discussion & Analysis of the Company and mining statistics, please visit the Company's website at www.diabras.com or on SEDAR at www.sedar.com.

Daniel Tellechea, President and CEO, commented, "We are encouraged with the results for the first half of 2010 and the foundation that has been created for growth. We are excited to be moving forward with the construction of the Piedras Verdes Mill at the Bolívar Property and to having completed the warrants exercises and the Rights Offering which together provided $20,605,125 in the six months of 2010 for the construction of the Piedras Verdes Mill and other capital programs Dia Bras has for this year."

Q2 2010 Highlights

  1. During the six-month period ended June 30, 2010, the Company recorded a net loss of ($27,641), which includes a non-cash, non-recurring write down of $611,927, compared with a loss of ($2,449,719) in 2009. For the three months ended June 30, 2010, the Company recorded a net loss of ($1,180,052), including the write down above, compared with a loss of ($521,226) in 2009.

  2. Bolívar Mine pilot-mining cost of sales for the three months ended June 30, 2010 were 1.7% lower than in the first three months of 2010, even though the Company processed 4.3% more tonnage, and costs of diesel, transportation and general costs continue to rise from quarter to quarter.

  3. Bolívar Mine pilot-mining sales were $10,939,000 for the first half of 2010, up 66% compared with $6,593,000 in the same period of 2009. The increase from 2009 is primarily due to a 53% increase in production as well as stronger commodity prices.

  4. The Company incurred a non-cash write-down of mining assets of $611,927 and stock-based compensation expense of $223,078 during the first half of 2010, with $0 and $95,361 respectively in 2009.

  5. The Company had Adjusted EBITDA(1) of $1.899 million for the six months ended June 30, 2010, of $1,738 million for the three months ended March 31, 2010 and of $1.944 million for the year ended December 31, 2009.

  6. The Company shows positive net working capital of $18.6, (including cash of $14.9 million at June 30, 2010 and $2.8 million at December 31, 2009), compared with a net working capital of $2.8 at December 31, 2009, showing a positive change in working capital of $15.8 million for the six months ended June 30, 2010.

  7. Operating Cash Costs(2) were US$87.70 per metric tonne milled in the second quarter of 2010, as compared to US$100.04 for the second quarter of 2009, and US$91.10 during the year ended December 31, 2009 for the Bolívar pilot-mining activities. This represents a (12.34%) decrease from the second quarter of 2009.

  8. During the three- and six-month periods ended June 30, 2010, copper production increased 43.66% and 15.36% respectively, compared to the three and six months ended June 30, 2009. Zinc production increased by 81.03% and by 32.95%, over the same periods of 2009, mainly due to an increase in tonnage processed through the mill.

  9. During the first half of 2010, the Company had installed a new electric line to the plant site, completed most of the site preparation for the plant, acquired $2.6 million of process equipment, completed engineering and initiated construction for the new facilities and initiated the work for the eventual water supply for the Piedras Verdes Mill.

(1) "Adjusted EBITDA" is a non-GAAP measure in which standard EBITDA (earnings before interest expense, taxes, and depreciation and amortization) is adjusted for stock-based compensation expense and nonrecurring items.
(2) "Operating Cash Costs" is a non-GAAP measure defined as the costs of mining, transport to the mill and milling divided by the tonnes milled.

Mr. Tellechea further commented, "The Bolívar pilot-mining operations continue to provide strong results and cash flow for exploration and corporate responsibilities. The Sales net of Cost of Sales, Transportation of concentrates and Net Loss for variation of commodity market prices, for the six months ended June 30, 2010, generated a net of $4.546 million for the Company. That, along with the tremendous support of our shareholders, who provided us with $20.6 million of financing in the first half of 2010, leaves us in a strong position to complete our mission of building the Piedras Verdes Plant and commissioning the first commercial-scale operations for the Company. As well, we are funded for the exploration of the many projects we have in highly prospective areas of Mexico, from which we intend to generate discoveries and value for our shareholders. I want to acknowledge our employees and teams who have achieved much in the past year, under quite challenging circumstances."

"Dia Bras looks forward to completing our projects and entering a new phase in our growth by the year 2011", he concluded.

New Developments

Dia Bras announces that two new actions have been undertaken against the Company since the end of the second quarter.

The Company was notified in July 2010 of a suit filed in the Courts of Mexico for the collection of fees by a Mexican law firm. The Company maintains that all fees due have been previously paid, has not accrued for any additional charges, and will vigorously defend this action.

In August 2010, the Company received notification that a lawsuit had been filed against one of its Mexican subsidiaries, EXMIN, S.A. de C.V., claiming unpaid compensation under an option contract for the acquisition of property rights, which contract had expired. The Company maintains that all payments due under the contract had been paid and will vigorously defend this action.

About Dia Bras

Dia Bras is a Canadian exploration mining company focused on precious and base metals in Chihuahua State and other areas of northern Mexico. The Company is committed to developing and adding value to its most advanced assets – the Bolivar Property and the Cusi Property. The Company's shares trade on the TSX Venture Exchange under the symbol "DIB". 

For further information on Dia Bras Exploration Inc. visit www.diabras.com.

Forward-looking Statements

This news release contains certain statements that constitute forward-looking statements. Forward-looking information includes, but is not limited to, information concerning Dia Bras' 2009 guidance respecting pilot-mining production and potential plans for Bolivar and Cusi projects, as well as the acquisition of EXMIN Resources Inc. Forward-looking statements are subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in the mining industry including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; the potential for and effects of labour disputes or other unanticipated difficulties or shortages of labour or interruptions in production; actual rocks mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty of pilot-mining activities and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties. Refer to "Risk and Uncertainties".

Forward-looking information is, in addition, based on various assumptions including, without limitation, the expectations and beliefs of Management, the assumed long-term price of zinc, copper, lead and silver; the regulatory and governmental approvals for the Company's projects and other operations on a timely basis; access to financing, appropriate equipment and sufficient labour. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Although the forward-looking statements contained in this MD&A are based upon what Management believes to be reasonable assumptions, the Company cannot guarantee that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this MD&A, and the Company does not assume any obligation to update or revise them to reflect new events or circumstances, except as required under applicable securities regulations.

Neither the 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 news release.

Contact Information

  • Dia Bras Exploration Inc.
    Daniel Tellechea
    President & CEO
    Dia Bras Exploration Inc.
    Karl J. Boltz
    Vice President, Corporate Development