Geomark Exploration Ltd.
TSX VENTURE : GME

Geomark Exploration Ltd.

November 18, 2011 17:30 ET

Geomark Announces Third Quarter 2011 Results

CALGARY, ALBERTA--(Marketwire - Nov. 18, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Geomark Exploration Ltd. (Geomark or the Company) (TSX VENTURE:GME) is pleased to announce its operating and financial results for the third quarter ended September 30, 2011. The quarterly report is summarized in this release, with the complete version of the related condensed consolidated financial statements and notes, as well as management's discussion and analysis, available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Geomark's website at www.geomark.ca

Highlights

As at and for the periods ended Three months Nine months
September 30, 2011 September 30, 2010
Restated (1)
September 30, 2011 September 30, 2010
Restated (1)
Financial ($ 000s, except $ per share)
Revenue
Mineral Division (2) 178 13,636 530 13,779
Oil and Gas Division 521 526 1,482 1,785
Funds Flow (3) 193 60 585 223
Per Share Basic and Diluted (4) 0.00 0.00 0.01 0.00
Cash Deficiency from Operations (104 ) (182 ) (290 ) (398 )
Per Share Basic and Diluted (4) (0.00 ) (0.00 ) (0.01 ) (0.01 )
Net Earnings (Loss) (281 ) 13,274 (167 ) 13,096
Per Share Basic and Diluted (4) (0.01 ) 0.26 (0.00 ) 0.25
Capital Expenditures
Mineral Division 501 47 1,793 47
Oil and Gas Division 11 1 26 158
Total Assets
Mineral Division 41,266 40,174
Oil and Gas Division 11,015 10,796
Oil and Gas Operations
Barrels of Oil Equivalent (BOE) per day (5) 125 161 129 156

(1) The comparative highlights have been restated with the adoption of International Financial Reporting Standards (IFRS).

(2) Geomark is a junior mineral exploration company with mineral revenue currently from non-production sources.

(3) Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations after including investment dividend and interest income and the changes in non-cash investing working capital related to these sources of investment income.

(4) Geomark issued one common share upon incorporation on April 20, 2010, and on July 6, 2010 issued 52,039,760 common shares as consideration for the net investment in Geomark Operations with an ascribed net book value of $21,152,000 as at December 31, 2009 and cancelled the original common share. For purposes of the per share calculations, it was assumed that all 52,039,760 shares issued have been outstanding since January 1, 2010.

(5) Barrels of Oil Equivalent (BOE) are calculated using a conversion ratio of 6 MCF to 1 barrel of oil. The conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and as such may be misleading if used in isolation.

Business Development

  • Geomark's business strategy is to acquire either early stage or smaller advanced precious metal mineral properties and operate exploration programs on them to advance the prospects into defined economic deposits or producing assets.
  • The Geomark team has been very actively seeking mineral exploration opportunities (projects and/or companies) in North America. Many precious metal properties have been examined with a significant number advancing through to Confidentiality Agreements and detailed analysis and property visits.
  • In this current environment of record high commodity prices and related, but overheated property valuations, Geomark is committed to maintaining its prudent approach to joint venture and M&A activity. Recent market volatility in the last several months, however, appears to have tightened credit markets somewhat, leading to concern by junior exploration companies over their ability to finance their projects going forward. Geomark's large cash position of approximately $40 million, its current very liquid investments of approximately $10 million and cash flow derived from its oil and gas (O&G) production, dividends and interest income provide the Company many investment advantages compared to its peers.

Financial

  • The Company's solid financial position provides it with the means and flexibility to act quickly in any future potential deal. Working capital at September 30, 2011 was approximately $48.0 million, including the value of liquid investments of $9.2 million. Geomark's anticipated annual cash flow from its O&G operations and interest and investment income will be more than adequate to pay all general and administrative costs on a yearly basis and to provide a portion of the funding for property acquisitions and/or exploration.

Operations

  • Geomark completed a $1.65 million exploration program on four of its Ontario gold properties in 2011. This included a 6,500 meter drill program (11 drillholes) on two of the Company's Timmins area properties. Results indicated generally low gold tenor in the eleven drillholes, however, the degree of alteration and shearing observed suggested proximity to a potential mineralized system (see press releases dated June 28, 2011 and September 18, 2011 for additional information). Further assessment of these results will be undertaken prior to any additional programs on the properties.

Outlook

  • The Company's main focus continues to be the pursuit of new precious metal properties that can be added to the Company's portfolio. Geomark has very experienced management and a strong technical team with a history of success and an enviable balance sheet. The Company will continue to direct its efforts toward precious metal targets in jurisdictions with low geopolitical risk.

Cautionary Statement

This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with Geomark Exploration Ltd. and should not be considered in any way as a substitute for reading the full report.

For the full report, please go to www.geomark.ca

Use of non-IFRS financial measures

Included in this MD&A we use the term "funds flow" to analyze the Company's operating performance. Funds flow is not a standardized measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. This funds flow calculation is considered by management to be informative for shareholders and analysts. This measure may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies.

Geomark's funds flow is calculated by adding investment dividend and interest income and the changes in non-cash investing working capital related to these sources of investment income to cash flow (deficiency) from operating activities.

Forward-Looking Statements

Certain statements contained in this MD&A include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this MD&A includes, but is not limited to: expected cash provided by continuing operations; future capital expenditures, including the amount and nature thereof; mineral prices and demand, oil and natural gas prices and demand; expansion and other development trends of the mineral and oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of mineral companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived therefrom. Except as required by law, Geomark disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The forward-looking information contained herein is expressly qualified by this cautionary statement.

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

Contact Information

  • Geomark Exploration Ltd.
    George F. Fink
    CEO and Chairman of the Board
    403-262-1400
    403-232-1421 (FAX)

    Geomark Exploration Ltd.
    Mark J. Balog
    President and COO
    403-262-1400
    403-232-1421 (FAX)

    Geomark Exploration Ltd.
    Robb D. Thompson
    CFO and Secretary
    403-262-1400
    403-232-1421 (FAX)

    Geomark Exploration Ltd.
    Kirsten Lankester
    Manager, Investor Relations
    403-262-1400
    403-232-1421 (FAX)
    info@geomark.ca
    www.geomark.ca