Dia Bras Announces Correction to Financial Results for 2011 and the First Quarter of 2012
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TSX Venture Exchange – DIB
Bolsa de Valores de Lima – DIB
TORONTO, Aug. 30, 2012 /PRNewswire/ – Dia Bras Exploration Inc. (TSXV: DIB) (BVL: DIB) (“Dia Bras” or the “Company”) announces that due to an accounting
miscalculation in its audited 2011 annual financial statements and its
unaudited 2012 first quarter financial statements, the Company has
filed restated financial statements and Management’s Discussion and
Analysis (“MD&A”) documents for both of these periods.
Daniel Tellechea, President and CEO of Dia Bras, commented: “Further analysis of our financial statements from our management team
has led to this amendment to the net loss for both periods as a result
of changes to non-cash items. Operating cash flows and cash balances
remain unaffected by this correction and the Company remains well
financed to conduct its exploration and development plans for the next
Restatement of 2011 Annual Financial Statements and MD&A
The effect of the restatement is principally a reduction in the net loss
attributable to shareholders from $18.7 to $13.3 million. The effect on
other key financial metrics for the year ended December 31, 2011 is
Year ended December 31, 2011 (In thousands of dollars, unless As previously stated) reported Change Revised Revenue $ 100,664 $ - $ 100,664 EBITDA 44,431 180 44,611 Cash flow from continuing 38,788 - 38,788 operations Gross profit 6,768 7,237 14,005 Depletion, depreciation and 53,319 (7,237) 46,082 amortization Income (loss) from operations (15,265) 7,237 (8,028) Net loss attributable to (18,688) 5,340 (13,348) shareholders Basic and diluted loss per share ($) From continuing operations (0.17) 0.04 (0.13) From discontinued operations 0.01 0.00 0.01 Year ended December 31, 2011 (In thousands of dollars, unless As previously stated) reported Change Revised Cash and cash equivalents $ 20,156 $ - $ 20,156 Net working capital 25,835 9,051 34,886 Assets 550,598 7,425 558,023 Liabilities 279,147 2,136 281,283 Equity 271,451 5,289 276,740 Non-current financial liabilities 84,685 (1,626) 83,059
The amendment and restatement for the year ended December 31, 2011 are
mainly a consequence of the following:
-- The capitalization of $7.2 million of depletion and depreciation charge which was previously expensed for the period ending December 31, 2011 related to unsold inventory at December 31, 2011. This resulted in an increase in inventory by $7.4 million, with the difference of $0.2 million being recognized in cumulative translation adjustment. The net effect of this adjustment for the year ended December 31, 2011 was to increase gross profit and reduce the loss from operations by $7.2 million, and to reduce the net loss attributable to shareholders by $5.3 million. The related deferred tax impact as at December 31, 2011 was to increase liabilities by $2.1 million. -- Allocation of $1.0 million of losses attributable to shareholders of the Company to the non-controlling interest that related to a reversal of an inventory fair value adjustment. In addition, the allocation of the inventory adjustment net of taxes discussed above to the non-controlling interest resulted in a decrease of losses attributable to the non-controlling interest by $0.8 million. Thus, the net impact of these adjustments was to increase the net losses attributable to the non-controlling interest by $0.2 million. This adjustment increased the previously reported EBITDA of $44.4 million to $44.6 million. -- Reclassification of $1.6 million from liabilities held for sale (current liabilities) to deferred taxes (non-current liabilities).
There were no changes in production, revenues or operating cash flows
recognized during the period.
The net effect of the amendments of the annual consolidated financial
statements for the year ended December 31, 2011 was to reduce the net
loss attributable to shareholders previously reported by the Company to
$(13.3) million from a previously recorded net loss attributable to
shareholders of the Company of $(18.7) million.
Restatement of First Quarter 2012 Financial Statements and MD&A
The effect of the restatement on key financial metrics for the quarter
ended March 31, 2012 is summarized below:
Three months ended March 31, 2012 (In thousands of dollars, As previously unless stated) reported Change Revised Revenue $ 46,288 $ - $ 46,288 EBITDA 25,146 (3,227) 21,919 Cash generated from operations 7,827 - 7,827 Gross profit 6,331 (1,511) 4,820 Depletion, depreciation and (22,463) (563) (23,026) amortization Income (loss) from operations (147) (1,511) (1,658) Net loss attributable to (771) (3,121) (3,892) shareholders Basic and diluted loss per share ($) From continuing operations (0.03) - (0.03) From discontinued operations (0.02) (0.02) - Three months ended March 31, 2012 (In thousands of dollars, As previously unless stated) reported Change Revised Cash and cash equivalents $ 58,454 $ - $ 58,454 Net working capital 28,434 7,983 36,417 Assets 521,479 5,800 527,279 Liabilities 255,194 2,870 258,064 Equity 266,285 2,930 269,215 Current financial liabilities 77,738 (1,823) 75,915
The restated first quarter financial statements and MD&A for 2012 have
been amended to reflect the following non-cash adjustments:
-- Increase in inventory by $5.8 million as at March 31, 2012 as a result of the capitalization of depletion and depreciation expense for the three-month period ended March 31, 2012 related to unsold inventory. The decrease in the depreciation expense capitalized net of taxes during the three-month period ended March 31, 2012 was exceeded by the increase in the depreciation expense released during the period related to the inventory adjustment as at December 31, 2011. Accordingly, the net effect of both of these adjustments for the three month period ended March 31, 2012 was to reduce gross profit and increase loss from operations by $0.6 million, and to reduce net loss attributable to shareholders by $0.2 million. -- Decrease in inventory and cost of sales by $0.9 million related to a concentrate shipment sold during the three month period ended March 31, 2012 and not recognized within cost of sales. The net impact of this adjustment was to reduce gross profit and increase loss from operations by $0.9 million, and to reduce net loss attributable to shareholders by $0.7 million. -- Decrease in net income from discontinued operations by $1.4 million which resulted from an error in the calculation of the taxes payable and deferred taxes upon disposal of the discontinued operation net of an adjustment made in the restated consolidated financial statement for $1.6 million related to the liabilities held for sale. -- Decrease in EBITDA by $3.2 million that resulted from the net impact of the adjustments discussed above to the total loss attributable to shareholders for the three month-period ended March 31, 2012. There were no changes in production or revenues recognized during the period or operating cash flows. The net effect of the amendments of the interim and annual consolidated financial statements for the three-month period ended March 31, 2012 was to increase the net loss attributable to shareholders previously reported by the Company to ($3.9) million from a previously recorded net loss attributable to shareholders of the Company of $(0.8) million.
The above-noted restated financial statements and MD&A documents for
2011 and the first quarter of 2012 are available under the Company’s
profile at www.sedar.com.
About Dia Bras
Dia Bras Exploration is a Canadian mining company focused on precious
and base metals in Chihuahua State, other areas of northern Mexico, and
at its Yauricocha silver-lead-zinc-copper-gold mine in Peru. The
Company is accelerating exploration at the Yauricocha property as well
as pursuing the development and exploration of its most advanced
Mexican assets – the Bolivar Property (copper zinc silver) and the Cusi
Property (silver) and is exploring in Mexico several precious metal
targets such as La Sidra gold project at the Bolivar Property, the Las
Coloradas silver project at Melchor Ocampo (Zacatecas State), the
Bacerac silver project (Sonora State), and the La Verde gold project at
the Batopilas Property (Chihuahua State). Dia Bras is also exploring
base metal projects in Mexico such as the Corralitos intrusion-hosted
molybdenum deposit (Chihuahua State).
The Company’s shares trade on the Bolsa de Valores de Lima and TSX
Venture Exchange under the symbol “DIB”.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
Except for statements of historical fact, all statements in this news
release without limitation regarding new projects, acquisitions, future
plans and objectives are forward-looking statements which involve risks
and uncertainties. There can be no assurance that such statements will
prove to be accurate; actual results and future events could differ
materially from those anticipated in such statements. The Company
assumes no obligation to update the forward-looking statements, or to
update the reasons why actual results could differ from those reflected
in the forward-looking statements, unless and until required by
security laws applicable to the Company. Additional information
identifying risks and uncertainties is contained in filings by the
Company with the Canadian Securities regulators, which filings are
available at www.sedar.com
SOURCE Dia Bras Exploration Inc.