Pacific Iron Ore Corp.
TSX VENTURE : POC

Pacific Iron Ore Corp.

August 26, 2009 18:51 ET

Pacific Iron Corporation Announces 2009 Exploration Update and Release of June 30, 2009 Financial Statements and Management Discussion and Analysis

CALGARY, ALBERTA--(Marketwire - Aug. 26, 2009) - Pacific Iron Ore Corporation (TSX VENTURE:POC), announces that it has filed its Financial Statements and Management Discussion and Analysis for the three and six months ended June 30, 2009. These documents are now available on SEDAR.

Pacific Iron Ore Corporation also announces that it has commenced diamond core drilling on the Pearson project in British Columbia and continues with the previously announced 2009 Exploration Program with respect to the St. Anthony's project. Furthermore, the Corporation is now seeking potential partners to further its exploitation of the Separation Lake project. The current status of each is as follows:

Pearson Project:

POC has recently commenced a 33 hole diamond drill program focusing on the Bugaboo Creek and Granite areas located within the Pearson Project. Initial results remain promising and the Corporation is focusing its efforts on expanding the initial iron ore resource estimates obtained from the 2008 Exploration program.

St. Anthony's Project:

Initial prospecting and mapping is well underway with channeling and grab samples providing promising results. Management believes this project exhibits potential for gold, silver, minor copper, zinc and lead.

Separation Project:

The Corporation is now receiving expressions of interest from third parties to joint venture this property. If successful a joint venture would enable exploration of this project to commence earlier than originally planned and would preserve the Corporation's capital. Management believes it may exhibit the potential for the rare metal pegmatite of Petalite (lithium), tantalum and tin.

Results for the six months ended June 30, 2009

Revenue of $5,355 consists of interest income earned on invested cash deposits.

General and administrative expenses totaled $202,658 in 2009 as compared to $122,984 in 2008, an increase of $79,674. These expenditures are incurred in respect to the ongoing general administrative activities of the Corporation. The increase in expenditures were associated with management of the corporation, daily accounting activities, filing of tax returns, consulting services provided in the preparation of interim statements, audit fees and regulatory filings and general corporate advisory services. In 2008, the Corporation did not have consultants and staff in place to perform these duties prior to April 2008. In addition the Corporation incurred additional costs associated with investor relations, insurance and Part XII tax which did not occur in 2008.

Write downs of mineral properties totaled $16,100 in 2009 as compared to $124,621 in 2008. After accessing the preliminary results of the 2008 Exploration Program, the remaining financial resources of the Corporation, the ability to raise additional capital and management's believe of the future potential of certain mining claims in British Columbia, the Corporation surrendered its rights to claims with a book value of $16,100 as management did not believe they were suited for development.

Stock based compensation expense totaled $98,261 ($48,275 in 2008) and arises from the issuance of stock options and broker warrants by the Corporation in prior periods. In 2008, the Corporation issued 2,879,334 options and warrants, at the weighted average exercise price of $0.38206. The Black-Scholes valuation model was applied in determining the expense for the period.

Income taxes during the period amounted to a recovery of $336,700 as compared to a recovery of $87,744 in the prior year principally as a result of recognizing the future benefit of discretionary income tax deductions and net operating losses carried forward for income tax purposes.

The net income for the six months amounted to $24,286 as a result of the individual items set out above as compared to a net loss of $193,419 in the same period in 2008.

Liquidity

Pacific Iron has historically relied upon advances from its shareholders and the equity capital markets to raise sufficient funds to finance its mineral property acquisitions and exploration programs. In 2009 the Corporation began the year with a cash balance of $2,174,847 and working capital of $181,992, excluding cash. During the period, Pacific Iron repaid advances from its shareholders totaling $17,500 and set aside $27,645 in cash balances to secure exploration permits in British Columbia and Ontario. The Corporation also invested $507,036 into its exploration program. As of June 30, 2009 the Corporation has a cash and short term deposit balance of $1,638,684 and a working capital surplus (excluding cash and short term deposits and those liabilities to be settled through the issuance of common shares) of $53,227 to fund its future activities, flow through obligations and repay shareholder advances.

During 2009, subject to maintaining sufficient capital resources to support its activities, the Corporation anticipates spending a further $1,400,000 on exploration activities to fulfill its flow through expenditure commitments. Limited amounts will be spent on the acquisition of mineral properties and equipment. During 2009, the Corporation will focus its efforts on the Pearson Project in British Columbia and the St. Anthony Project in Ontario. These expenditures will be financed with the Corporation's existing working capital balances. Should equity markets permit, the Corporation will consider the issuance of additional equity to finance these activities.

Corporate Direction and Strategy

Pacific Iron Ore Corporation is dedicated to the development of its iron ore deposits, located in the Port Renfrew area of Vancouver Island, British Columbia. With the success of the 2008 Exploration Program and the existence of sufficient capital resources to undertake additional exploration activities in 2009 the Corporation is well positioned to manage these difficult times. In order to maximize the returns on future exploration activity, the Corporation has initiated a detailed review of its claims located on Vancouver Island and in Ontario, with the intention of identifying other areas with similar potential to the Pearson Project.

Company Contacts:

For further information please refer to the Corporations profile on SEDAR which can be accessed at www.sedar.com, or visit our website at www.pacificironorecorp.com.

Forward Looking Statements:

The TSX.V Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release includes certain statements that may be deemed "forward looking statements". All statements in this release, other than statements of historical facts, that address future production, reserves potential, exploration drilling, exploration activities and events or developments that the Corporation expects are forward looking statements. Although the Corporation beliefs the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could cause results to differ materially from those in the forward looking statements include, but are not limited to: market prices; exploitation and exploration successes; continued availability of capital, financing and personnel; government regulation and laws; the Corporations relationship with First Nations; environmental developments; and general economic, market or business conditions. Investors are cautioned that such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements. For more information on Pacific Iron Ore Corporation, Investors should review the Corporation's registered filings which are available at www.sedar.com.

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

Contact Information

  • Pacific Iron Ore Corporation
    Todd Montgomery
    President
    (403) 228-0607
    (403) 262-4860 (FAX)
    or
    Pacific Iron Ore Corporation
    Leonard Cornez
    Chief Financial Officer
    (403) 218-0294 or Toll Free: 1-866-682-5812
    (403) 265-2887 (FAX)
    or
    Pacific Iron Ore Corporation
    Jeffery Austin
    President
    (250) 763-4892
    (403) 265-2887 (FAX)
    Website: www.pacificironorecorp.com