Mundoro Capital Inc.
TSX : MUN

Mundoro Capital Inc.

November 09, 2010 09:16 ET

Mundoro Q3 2010 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 9, 2010) - Mundoro Capital Inc. (the "Company")(TSX:MUN) announces the filing of the Company's financial results for the quarter ended September 30, 2010. The highlights provided in this release should be read in conjunction with the Company's interim financial statements and Management Discussion and Analysis, which are available on SEDAR at www.sedar.com. All dollar amounts are in U.S. dollars unless otherwise stated.

Financial Highlights

The Company's loss for the quarter was $985,278 ($0.03 per share) compared with a net loss of $922,106 ($0.02 per share) for the same period in 2009.

The net loss in the quarter was attributable to the following:

  • Expenditures for Maoling Gold Project management activities of $91,180 in 2010, as compared to $59,003 in the third quarter of 2009; and,
  • Expenditures for corporate expenses of $508,819, as compared to $443,040 in the third quarter of 2009.

The non-cash items were:

  • Foreign exchange loss of $260,652, as compared to a foreign exchange loss of $332,767 in the third quarter of 2009; and,
  • Stock-based compensation expense of $139,964, as compared to expenditures of $89,428 in the third quarter of 2009.

The Company continues to carefully evaluate new resource opportunities at the project level and the corporate level and weigh these opportunities against the value they would create for shareholders and the necessity to conserve cash in order to maintain current activity in China and support future developments. The Company maintains a low share count of 38.3 million shares outstanding and is in a financially strong position with $10,059,132 in cash and cash equivalents, and no debt at the third quarter of 2010.

In the third quarter of 2010, the Company continued negotiations with various Chinese and other companies to preferably structure a strategic partnership transaction that could, depending on milestones, result in the sale of the majority of the Maoling Gold Project and/or MMI and to retain a minority interest, or a form of participation, in the event the Maoling Gold Project is developed in the future. There are no assurances that these negotiations will be successful or that a transaction can be completed. 

Although the Company made considerable effort to update the understanding of the technical and environmental aspects of the Maoling Gold Project as it relates to evolving mining and environmental regulations in China, and provided this information to its Chinese joint venture partner, Aidi, and senior officials in the Liaoning government, Mundoro received letters in March 2010 and July 2010 from its Chinese joint venture partner, suggesting that the parties immediately negotiate to terminate the Maoling Gold Project and liquidate the joint venture company. The reasons cited for the proposed termination and liquidation are that current Chinese environmental regulations related to water and nature reserve zoning and make it impossible for the joint venture company, Tianli, to conduct mining activities at Maoling. Mundoro responded to the Aidi March 2010 Letter with a letter in March 2010 ("Mundoro March 2010 Letter") explaining the reasons why Mundoro does not intend to terminate the joint venture or liquidate the joint venture company, which are based on the technical studies and review of the regulations, and presented a proposal for the renewal of the joint venture company's business license in order to be allowed to complete the Feasibility Study and the ESIA in order to demonstrate the Maoling Gold Project could be developed in a sustainable and environmentally responsible manner. The Aidi July 2010 letter is in all material respects similar to the Aidi March 2010 Letter and did not address any of the points raised by Mundoro in its response to the Aidi March 2010 Letter. Mundoro responded to the Aidi July 2010 Letter in August 2010 with a letter requesting to have an official board meeting to discuss Mundoro's proposal and again reiterating the Company believes the work completed to date by Chinese and international engineering and environmental firms demonstrates the project can be developed in a sustainable and responsible manner with no significant impact on the downstream water storage facilities supplying Yingkou City and Dalian City. Mundoro has received no official response to the Mundoro August 2010 Letter. The Company continues to evaluate legal alternatives in China; however, there is no assurance that the Company will be successful in any form of legal action with the Chinese government or the Chinese joint venture partner.

On behalf of the board of directors,

Teo Dechev, Chief Executive Officer and President

About Mundoro Capital Inc.

Mundoro Capital Inc. is a Canadian based company which operates as a mineral exploration, development and investment company. The 100% ownership of Mundoro Mining, and its Maoling Gold Project, remains the key asset of the Company. Mundoro Capital will also evaluate and invest in other resource assets or companies in the natural resources field, which can create value for Mundoro Capital and its shareholders, using management's years of specialized experience in the capital markets focused on evaluating exploration and production assets, resource investment opportunities.

About Mundoro Mining Inc.

Our vision is to create value for all of our stakeholders from responsible mining. Our mission is to build a state of the art large scale gold mine at Maoling meeting or exceeding all applicable Chinese and international environmental standards. Mundoro Mining has a 79% interest in Maoling through a Sino-Foreign co-operative joint venture with the corporate arm of the Liaoning provincial government which owns 21%. Maoling is a feasibility stage gold deposit located in Liaoning Province, China and is one of China's largest gold resource deposits with 4.8 million contained gold ounces in the Measured and Indicated category and an additional 4.4 million contained gold ounces in the Inferred category. In 2005 a Reserve of 2.8 million ounces in the Probable category was the basis for the Pre-Feasibility Study. Thus far, two deposits that outcrop at surface have been outlined at Maoling in which disseminated, free-milling gold mineralization occurs within a sequence of metasedimentary rocks. The renewal of the exploration license for Maoling has been deferred pending the renewal of a business license for Mundoro Mining's joint venture company, Liaoning Tianli Mining Company Ltd.

Investors are encouraged to review 'Risk Factors' associated with the Maoling project as outlined in the Company's prospectus documents and other regulatory filings, available on the SEDAR website at www.sedar.com.

The pre-feasibility described herein was prepared to broadly quantify the Maoling Zone 1 deposit's capital and operating cost parameters, and to further the development of the project. It was not prepared for use as a valuation of the deposits, nor should it be considered to be a final feasibility study. The information contained in the Study reflects various technical and economic conditions at the time of writing that can change significantly over relatively short periods of time. There can be no assurance that the potential results contained in the Study will be realized. The study was prepared by AMEC Americas Ltd. under the direction and oversight of Mr. Mark Pearson P.Eng. of Vancouver, BC, an 'Independent Qualified Person' as defined by National Instrument 43-101. Resource estimation for the Zone 1 area in 2006 was carried out in the Brisbane, Australia office of Golder Associates Pty Limited, an international earth sciences consulting group under the direction and oversight of Dr. Andrew Richmond, MAusIMM, an 'Independent Qualified Person' as defined by NI43-101. Resource estimation for the Zone 4 area in 2001 was carried out by Dr. Peter D. Lewis, P.Geo., (Lewis Geoscience Services Inc.), an 'Independent Qualified Person' as defined by NI43-101. NI43-101 compliant technical reports for the pre-feasibility study and all reserve and resource estimates have been filed on the SEDAR website at www.sedar.com.

The statements herein that are not historical facts are forward-looking statements. These statements address future events and conditions and so involve inherent risks and uncertainties, as disclosed under the heading "Risk Factors" in the company's periodic filings with Canadian securities regulators. Actual results could differ from those currently projected. The Company does not assume the obligation to update any forward-looking statement.

The TSX has neither approved nor disapproved of the information contained herein.

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