Redcorp Ventures Ltd.

Redcorp Ventures Ltd.

May 13, 2008 09:00 ET

Redcorp Ventures Ltd.: Financial and Operating Highlights for the First Quarter Ended March 31, 2008

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 13, 2008) - REDCORP VENTURES LTD. (TSX:RDV) and its wholly-owned consolidated subsidiaries Redfern Resources Ltd. and Redcorp Empreendimentos Mineiros Unipessoal Lda. (collectively, "Redcorp") will, on or before May 15, 2008, file on and mail to shareholders its interim report for the three month period ending March 31, 2008. In this release, we provide a comparative summary of the quarter's operational and financial highlights. Readers are advised that due to the summary nature of this release, the highlights should be read in conjunction with our interim MD&A and consolidated financial statements contained in our 1st Quarter 2008 report, once available.

Summary of Operational and Financial Highlights

The following table shows selected comparative consolidated financial information for the comparative first quarters ended March 31, 2008 and 2007.

2008-Q1 2007-Q1
($000's, unless otherwise stated)
Oil and gas revenue, interest and other income 1,035 76
Exploration expenses 697 1,936
General and administrative 1,024 465
Interest and financing charges 3,575 -
Stock compensation expense 131 114
Foreign exchange (gain) loss (418) (4)
Net loss, being comprehensive loss (4,161) (2,580)
Basic and diluted loss per share ($/share) (0.01) (0.02)
Capital expenditures (1) 26,094 37
Total assets 235,160 20,499
Total liabilities 132,313 5,033
Working capital 69,786 9,769
Shareholders' equity 102,846 15,467
(1) Includes expenditures in property, plant and equipment, and oil and gas

The following items summarize the key operational and financial highlights of the quarter:

- We signed a Memorandum of Understanding with MRI Trading AG of Zug, Switzerland governing the terms of sales agreements for all of the proposed production of zinc, copper and lead concentrates from the Tulsequah Chief Mine and including indicative terms for MRI's provision of a contingent credit facility of $25.0 million toward mine construction and working capital, subject to certain terms and conditions;

- We received appropriate governmental authorizations to move equipment and cut trees for an airstrip and limited site-access roadway;

- We received our first Mines Act permit for the cleanup of the old mine site and an amended Licence to Cut authorization to extend cutting operations throughout the 20-kilometer network of site-access roads;

- We incurred capital expenditures of $26.1 million, virtually all of which was related to the development of the Tulsequah Chief Mine;

- We drilled three holes totaling 1,737 meters on our concession at Lagoa Salgada, Portugal. The holes were designed to follow up on the semi-massive to massive pyrite mineralization that we discovered in 2007; and

- We appointed Mr. Gordon E. McKnight to the position of Vice President, Sales and Marketing. Mr. McKnight has considerable relevant expertise in concentrate sales contracts and administration.

2008-Q1 vs 2007-Q1

Oil and gas revenue - net of royalties, and interest and other income

In aggregate, we had an increase between comparative quarters of $0.9 million, to $1.0 million. This was due primarily to increased interest income generated from the significantly higher level of cash raised in mid-2007.

Exploration expenses

Exploration expenses decreased in 2008-Q1 by $1.2 million or 64%, to $0.7 million. The main reason for this significant decrease was due to costs incurred during 2007-Q1 on our 24,451 meter, 70-hole drilling program that commenced during 2006 in the greater Tulsequah area. We also incurred final costs in Q1-2007 on our 6,000 meter, ten-hole drilling program at Lagoa Salgada that commenced in late 2006. Comparatively, our exploration costs in 2008-Q1 related to a planned 4,000 meter, 6-hole exploration program that commenced mid-quarter and will complete early next quarter.

General and administrative expenses ("G&A")

During 2008-Q1, our G&A increased over 2007-Q1 by $0.6 million or 120%, to $1.0 million. Higher costs for investor and community relations, legal, office, and employee and board compensation accounted for most of the comparative increase. These variances were anticipated due to accelerated field activities and the growth in related administration.

Stock compensation expense

During 2008-Q1, our stock-based compensation expense remained at relatively the same level as in 2007-Q1.

Investment in ABCP

On March 17, 2008, conduits that initially issued Canadian non-bank asset backed commercial paper ("ABCP") filed for creditor protection under the Companies' Creditors Arrangement Act of Canada in the Ontario Superior Court of Justice, followed immediately by a proposed restructuring plan. The filing asked the Court to call a meeting of ABCP noteholders to vote on the restructuring plan involving 20 trusts affecting $32 billion in notes, including those trusts in which we hold notes. (See Subsequent Events below for further details).

Our fair value methodology utilized as at March 31, 2008 continues to support the estimated value of $68.3 million recorded under long-term investments as at December 31, 2007 for our ABCP. Management continues to assess alternatives and recourses to recover maximum value from the initial $91.0 million that we invested in ABCP. We did not hold ABCP in 2007-Q1.

Subsequent Events

Permitting Activities

On April 10, 2008 we received approval to extend tree-cutting enabling additional clearing of the airstrip and the borrow pit, which is the source of aggregate for the airstrip. In addition, we established a temporary crossing of Shazah Creek under the clear span operational statements of Fisheries and Oceans Canada, meaning the work was undertaken without the need of an authorization. This enabled work to begin on the northern end of the road such that multiple heads of construction can occur.

Also during April 2008, we submitted an application for all surface and subsurface development, except for the tailings facility which will be submitted in May 2008.

Financing and Investing Activities

On April 21, 2008, we signed a letter agreement with HSBC Bank Canada ("HSBC") offering to provide a demand non-revolving bridge loan in the maximum principal amount of $64.0 million. As a condition of the loan, we must pledge and grant as security, a first-priority interest in our ABCP investments. The maximum loan amount outstanding is restricted to 70% of the value of the ABCP holdings. Completion of the loan arrangement is subject to approval by our existing noteholders.

On April 25, 2008, investors holding non-bank Canadian third-party ABCP voted in favour of a financial restructuring plan that was filed in conjunction with a filing for creditor protection under the Companies' Creditors Arrangement Act of Canada. If the Court sanctions the plan and it remains free of legal impediments, it is expected to be implemented by the end of May 2008. We continue to examine the plan with our legal and financial advisors to determine what avenues best suit maximum recovery of our investments.

Appointment of Officer

Effective April 1, 2008, we appointed Mr. Neil Jones to the position of Vice President, Human Resources. Mr. Jones will be responsible for human resource and organizational development strategies, implementation of rotational work schedules and travel logistics, and community and First Nations policies.

Contract Termination Dispute

On April 29, 2008 we were served by Merit Consultants International Inc. ("Merit") with a writ of summons claiming damages for alleged breach of contract in our termination of Merit's contract on April 1, 2008. We consider Merit's claim to be inappropriate under the circumstances and will vigorously defend the action and counterclaim alleging negligence and breach of contract on the part of Merit that has caused damage to Redfern, and for costs.

Redfern terminated Merit on April 1, 2008 as construction management contractor for its Tulsequah Project due to dissatisfaction over the performance of Merit's services. Sandwell Engineering Inc. has been retained to perform these services going forward. A statement of claim has not been filed by Merit.

Mining exploration, mining and processing activities involve a high degree of risk. There are several risk factors that may cause actual results to differ materially from the forward-looking information included in this news release, or which otherwise affect our business. Such other factors are discussed in detail in our Interim Report for the quarter ended March 31, 2008, and our Annual Information Form and MD&A for the year ended December 31, 2007 as filed by us on

Redcorp Ventures Ltd. is a Vancouver-based mineral exploration and development company with active projects in British Columbia and Portugal. Further information on Redcorp and the Tulsequah Project can be obtained on the Company's website at and at Redfern's website at or by calling toll-free to Troy Winsor, Manager of Investor Relations, at 1-888-225-9662.


Terence Chandler, President and CEO

Certain of the statements made and information contained herein is "forward- looking information" within the meaning of the Securities Act (Ontario) and the Securities Act (Alberta). Forward-looking information includes disclosure regarding possible or anticipated events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future oriented financial information with respect to prospective results of operations or financial position that is presented either as a forecast or a projection. Forward looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend"; statements that an event or result is "due" on or "may", "will", "should", "could", or "might" occur or be achieved; and, other similar expressions.

More specifically, forward looking information contained herein includes, without limitation, statements concerning our plans at our Tulsequah Project (inclusive of the Big Bull Project), the net present value of the Tulsequah Project, the timing and amount of estimated future production and mine life, expected future prices of gold, silver, copper, lead and zinc, mineral reserve and mineral resource estimates, estimated capital and operating costs of the project, estimated capital pay-back period, estimated asset retirement obligations, timing of development and permitting time lines; all of which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

Forward-looking information contained herein is based on material factors and assumptions and is subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from a conclusion, forecast or projection in the forward-looking information. These include, without limitation, material factors and assumptions relating to, and risks and uncertainties associated with, the availability of financing for activities when required and on acceptable terms, the accuracy of the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the consistency of future exploration, development or mining results with our expectations, metal price fluctuations, the achievement and maintenance of planned production rates, the accuracy of component costs of capital and operating cost estimates, current and future environmental and regulatory requirements, favourable governmental relations, the availability of permits and the timeliness of the permitting process, the availability of shipping services, the ultimate recovery amount, if any, of our investment in non-bank third-party asset-backed commercial paper (ABCP) that is currently undergoing liquidity restructuring by the Committee representing the Montreal Accord, the availability of specialized vehicles and similar equipment, costs of remediation and mitigation, maintenance of title to our mineral properties, industrial accidents, equipment breakdowns, contractor's costs, remote site transportation costs, materials costs for remediation, labour disputes, the potential for delays in exploration or development activities, timely completion of future NI 43-101 compliant reports, timely completion of future feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, continuing global demand for base metals, expectations and beliefs of management and other risks and uncertainties, including those described under Risk Factors Relating to Our Business in our Annual Information Form, filed on SEDAR on March 31, 2008, and in each subsequent Management's Discussion and Analysis. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate.
Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the forward-looking information. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, we undertake no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

News Release 08-10

Contact Information

  • Redcorp Ventures Ltd.
    Troy Winsor
    Manager of Investor Relations
    1-888-225-9662 or (604) 466-8934
    Redcorp Ventures Ltd.
    Salina Landstad
    Manager, Public Relations & Corporate Communications
    1-888-669-4775 or (604) 639-0135