Weda Bay Minerals Inc.

Weda Bay Minerals Inc.

November 14, 2005 19:06 ET

Weda Bay Minerals Inc. Releases Third Quarter Report

TORONTO, ONTARIO--(CCNMatthews - Nov. 14, 2005) - The Board of Directors of Weda Bay Minerals Inc. (TSX:WDA) (the "Company") today released the Company's third quarter report to September 30, 2005.

Cash balances at the end of the third quarter totalled $9,065,628 compared to $1,982,791 at December 31, 2004. At September 30, 2005 a working capital surplus (current assets less current liabilities) of $8,608,800 was available due to the two placements completed during this quarter. Through the placements the Company issued 17,500,000 Units for gross proceeds of $12,675,000. Each Unit consisted of one common share of the Company and one-half of one common share purchase warrant. Share issue costs incurred in connection with the two placements totalled $1,456,197 and included $513,309 in value ascribed to the broker warrants issued as part of the transactions. The Company has allocated $2,402,931 of the net proceeds to the fair value of share purchase warrants issued as part of the placements.

For the quarter ended September 30, 2005 the Company incurred a loss of $4,790,372 (or $0.12 per share) compared with a loss of $273,537 for the corresponding period in 2004. For the nine-month period to September 2005, the Company incurred a loss of $6,261,908 (or $0.17 per share) as compared to a loss of $1,556,381 for the corresponding period in 2004.

The loss in this quarter was largely due to the accounting treatment of the renegotiated US dollar loan with OM Group Inc. (OMG), which has been in place since 2000. Weda Bay and OMG reached conditional agreements on May 24, 2005 on new and revised terms for the loan advanced by OMG and on termination of the Product Sales Agreement and other agreements between the companies. On September 23, 2005 the Company made a payment of loan principal to OMG of US$2.5 million. This payment was a condition precedent to a Revised Loan Agreement, which replaces the previous Subscription and Loan Agreement. The Company has applied the principles of the Emerging Issues Committee Abstract - 88 "Debtors Accounting for a Modification or Exchange of Debt Instruments" (EIC-88) to revalue the terms of the loan with OMG. For accounting purposes the amendment to the loan agreement has been accounted for as a debt settlement. The result has been a charge to the income statement of $4,652,690. This is more fully explained in Note 2 to the unaudited consolidated financial statements.

In the third quarter, operating expenses (including interest but before foreign exchange movements) increased by $250,210 to $898,929 compared to $648,719 for the same period last year.

Weda Bay President and CEO Patrick Evans commented: "The termination of the OMG Product Supply Agreement is a significant development for the Company and has enabled us to accelerate our engagement with major mining companies with a view to unlocking shareholder value. In addition, the two private placements have provided the needed funding to enable us to proceed towards the Definitive Feasibility Study by mid 2006. The Company's prospects have been significantly enhanced during the quarter."

Subsequent to quarter-end, Weda Bay announced its decision to fast-track preparations for the commencement of a Definitive Feasibility Study on the Halmahera Nickel/Cobalt Project. It also began work on the update to the Pre-Feasibility Study from 2002. The Company also announced that in addition to the preparatory work for the Definitive Feasibility Study, it will conduct a wide-spaced drilling campaign over those portions of the Halmahera Project where nickel/cobalt laterite has been mapped but has yet to be drilled. This campaign is expected to increase the size of the Halmahera resource from its current 278 million tonnes to over 500 million tonnes, which would result in the Halmahera Project being the largest known undeveloped nickel/cobalt laterite deposit globally.

Please refer to the Company's website ( to view the full financial results for the third quarter of 2005.

Weda Bay Minerals Inc. (WDA) is an exploration and development company that controls the Halmahera Nickel Cobalt Project which is globally one of the largest undeveloped nickel projects. The project resources are: 16 million tonnes grading 1.27% Ni and 0.18% Co of measured resources; 139 million tonnes grading 1.47% Ni and 0.08% Co of indicated resources; and 123 million tonnes grading 1.53% Ni and 0.08% Co of inferred resource. Resource estimates are at a cutoff grade of 1.0% Ni. The Company has completed an independent Pre Feasibility Study which concludes that the Halmahera project is highly viable.

NOTE: Certain statements contained herein are "forward-looking" and are based on the opinions and estimates of management, or on the opinions and estimates provided to and accepted by management. These opinions and estimates include those that relate to all the geological, development, mining and commodity price and market parameters used by management. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ, possibly significantly. Readers are therefore cautioned not to place undue reliance on any forward-looking statement.

Shares Issued and Outstanding: 53,128,535

Contact Information

  • Weda Bay Minerals Inc.
    Patrick Evans
    President and CEO
    BarnesMcInerney Inc.
    Capital Market Communications
    Tanis Robinson, Senior Account Executive
    416-367-5000 ext. 252