Pacific Iron Ore Corp.
TSX VENTURE : POC

Pacific Iron Ore Corp.

August 26, 2011 19:33 ET

Pacific Iron Ore Corporation Release of June 30, 2011 Financial Statements and Management Discussion and Analysis

CALGARY, ALBERTA--(Marketwire - Aug. 26, 2011) - 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, 2011. These documents are now available on SEDAR.

2011 Drilling Activity

During the first six months of 2011 POC has drilled an additional 17 diamond drill core holes on the Port Renfrew Project. The locations for which were determined in consultation with Wardrop Engineering Inc., of Vancouver, British Columbia ("Wardrop"). Also in January 2011 Wardrop updated its 2009 resource estimate for the Bugaboo Creek Area located within the Pearson Project, to assess the results of the 2008 Exploration Program and provided recommendations for additional diamond drilling to be completed in 2011. In their report, Wardrop estimated that the Bugaboo Creek deposits which comprises a small component of the Port Renfrew Block, contain inferred resources of 14.2 million tonnes, grading 60% magnetite prior to any update required for the 2011 Exploration Program. See press release of April 6, 2011 for further details in this regard.

2011 Results

During the first six months of 2011 the Corporation incurred a net loss of $663,531 or $0.01 per common share as compared to a net loss of $703,814 or $0.01 per common share in the first six months of 2010.

The net loss for the three months ended June 30, 2011 amounted to $100,453 as a result of the individual items set out above as compared to a net loss of $196,249 in the same period in 2010.

Its major expenses inured in the six month period included:

Operating expenses totaled $75,965 in 2011 as compared to $83,412 in 2010 an decrease of $7,447. In 2011, the major categories of expenditure were as follows:

  • Amortization of equipment of $19,779 ($17,760 in 2010).
  • Consulting costs of $31,200 ($31,200 in 2010) relating to operational management services provide to the Corporation which did not pertain to exploration or financial services
  • Travel costs of $4,746 ($9,735 in 2010) incurred in transporting staff, advisors and investors to the Corporation's principal mining properties.
  • Office, rent and utility expenses of $10,458 ($11,197 in 2010).
  • Automotive related costs of $4,872l ($6,952 in 2010).
  • Insurance costs of $4,610 ($6,468 in 2010).

Mineral property acquisition costs and exploration costs expensed during the period totaled $101,616 as compared to $96,624 in 2010 due to higher costs associated with maintaining access to claims where significant exploration costs had not be incurred.

General and administrative expenses totaled $156,245 in 2011 as compared to $163,575 in 2010, a decrease of $7,330. In 2011, the major categories of expenditure included:

  • Legal and accounting fees $104,487 ($117,054 in 2010). The costs are associated with annual audit, adoption of International Financial Accounting Standards ("IFRS") and review procedures, filing of tax returns, consulting services provided in the preparation of interim statements and regulatory filings and general corporate advisory services. Also see disclosures with respect to related party transactions.
  • Advertising, Investor relations, corporate communication and security exchange fees totalling $43,568 ($19,254 in 2010).
  • Insurance costs of $7,171 ($7,906 in 2010).

Write downs of mineral properties totaled $nil in both 2011 and 2010 as a result of changes associated with the adoption of IFRS.

Stock based compensation expense totaled $155,883 ($78,512 in 2010) and arises from the issuance of stock options and broker warrants during the period.

Net financial expenses during the period totaled $2,846 as compared to $22,312 in the prior period. Financial income consists of interest earned on invested cash deposits. Cash deposits are comprised solely of bank investment certificates with a maturity date of less than one month and are on deposit with a Canadian Chartered Bank. Financial expenses are comprised interest and bank charges and accruals for Part XII taxes.

Income taxes during the year amounted to $170,976 as compared to a recovery of $259,379 in the prior year principally as a result of recognizing the deferred income taxes on flow through share obligations offset by the future benefit of discretionary income tax deductions and net operating losses carried forward for income tax purposes.

During 2011, subject to maintaining sufficient capital resources to support its activities, the Corporation anticipates spending approximately $1,500,000 on exploration activities to fulfill its flow through expenditure commitments. Limited amounts will be spent on the acquisition of mineral properties and equipment. During 2011, the Corporation will focus its efforts on the Port Renfrew property 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 strategic mineral deposits, located in the Port Renfrew area (iron resources) of Vancouver Island, British Columbia, as well as, in the Kenora area (gold resources) of Ontario. With the success of the previous exploration and the existence of sufficient capital resources to undertake additional exploration activities in 2011, the Corporation is well-positioned to continue its exploration efforts.

It is the objective of Pacific Iron Ore Corporation to delineate 20 million tonnes of high-grade iron ore in the existing deposits and complete a pre-feasibility study for the production of iron concentrates to be sold directly to the Far East. It is believed that the high-grade nature of the deposits, proximity to tide-water, and the existence of Port Facilities such as the Port of Naniamo Duke Point facility, will significantly benefit the potential projects economics along with the current high demand and pricing for iron concentrates. The Corporation has set an objective to identify sufficient resources to allow for a production capacity of 2 million tonnes per year of iron concentrates from the site.

Company Contacts:

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

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pacific Iron Ore Corporation
    Todd Montgomery
    CEO
    (403) 228-0607
    (403) 262-4860 (FAX)

    Pacific Iron Ore Corporation
    Jeffery Austin
    President
    (250) 763-4892
    (403) 265-2887 (FAX)
    www.pacificironorecorp.com