Augen Capital Corp. ("Augen" or "the Company") (TSX VENTURE:AUG) today announced
its unaudited consolidated financial results for the third quarter ended
September 30, 2009.
For the three month period ended September 30, 2009, Augen's loss was $143,896
compared to income of $301,193 in 2008, and net loss was $778,668 in 2009
compared to $1,252,569 in 2008. The negative income of $143,896 in 2009 was
comprised of $48,872 of fee income and $933 of interest and dividends, offset by
realized capital losses of $193,701. Although the Company did not generate as
much income in 2009 as it did in 2008, the Company was able to partially offset
the decrease in income by a reduction in expenses of $117,006 in 2009. At
September 30, an impairment loss of $966,004 was recorded, which is part of the
$999,907 share of loss and capital transactions and impairment loss from the
equity-accounted investment line of the consolidated statement of operations.
The increase in the net loss which resulted from the impairment loss has been
partially offset by the increase of $666,661 in the value of the Company's
Merchant Banking portfolio.
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For the three
months ended Merchant Banking Managed Products Total
September 30, 2009 2008 2009 2008 2009 2008
$ $ $ $ $ $
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Income (loss (173,727) 120,671 29,831 180,522 (143,896) 301,193
Expenses 325,424 382,118 168,358 228,670 493,782 610,788
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Earnings (loss)
Before
undernoted
items (499,151) (261,447) (138,527) (48,148) (637,678) (309,595)
Share of
(earnings) loss
and capital
transactions,
and impairment
loss from
equity-accounted
investment 999,907 31,864 - - 999,907 31,864
Unrealized (gain)
loss on
investments
held for
trading (666,661) 1,244,848 - - (666,661) 1,244,848
Non-recurring
charges - 5,582 - 5,582 - 11,164
Adjustment to
fair value
of liabilities - (132,899) - - - (132,899)
Amortization 2,574 5,641 2,574 5,640 5,148 11,281
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Earnings (loss)
before income
taxes (834,971)(1,416,483) (141,101) (59,370) (976,072)(1,475,853)
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Income taxes
Current (7,714) (63,595)
Future (189,690) (159,689)
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(197,404) (223,284)
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Net earnings
(loss) and
comprehensive
earnings (loss) (778,668)(1,252,569)
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For the nine month period ended September 30, 2009, Augen's loss was $39,169
compared to income of $1,202,807 in 2008, and net loss was $1,380,084 in 2009
compared to $2,957,367 in 2008. The year-to-date results improved for similar
reasons to the third quarter as described above. In addition to the identified
reasons, the results improved due to the Company recording $38,959 of
non-recurring charges in 2009 compared to $514,876 in 2008, a decrease of
$475,917. In 2009, the Company did not record a recovery from the adjustment of
fair value of liabilities as it did in 2008.
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For the nine
months ended Merchant Banking Managed Products Total
September 30, 2009 2008 2009 2008 2009 2008
$ $ $ $ $ $
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Income (loss) (137,336) 566,961 98,167 635,846 (39,169)1,202,807
Expenses 1,109,115 1,045,224 523,519 961,905 1,632,634 2,007,129
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Earnings (loss)
before
undernoted
items (1,246,451) (478,263)(425,352)(326,059) (1,671,803) (804,322)
Share of
(earnings)
loss and
capital
transactions,
and impairment
loss from
equity-
accounted
investment 1,223,394 6,674 - - 1,223,394 6,674
Unrealized
(gain) loss on
investments
held for
trading (1,082,006) 2,521,038 - - (1,082,006) 2,521,038
Non-recurring
charges 19,480 257,438 19,479 257,438 38,959 514,876
Adjustment to
fair value of
liabilities - (220,380) - - - (220,380)
Amortization 7,723 8,843 7,723 8,843 15,446 17,686
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Earnings (loss)
before income
taxes (1,415,042)(3,051,876)(452,554)(592,340)(1,867,596)(3,644,216)
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Income taxes
Current (15,341) (322,985)
Future (472,171) (363,864)
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(487,512) (686,849)
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Net earnings
(loss) and
comprehensive
earnings (loss) (1,380,084)(2,957,367)
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Merchant Banking Portfolio
The Company's investment portfolio had a fair value of $1,161,046 as at
September 30, 2009, having increased by $518,901 since December 31, 2008. As a
result of the increase in value of the Merchant Banking portfolio and
transactional activity during the period, a net realized and unrealized gain of
$857,059 was reported during the nine month period ended September 30, 2009,
compared to a net realized and unrealized loss of $2,412,116 during the same
period in 2008.
Investment in Augen Gold Corp. ("AGC")
Impairment loss
The carrying amount of the Company's equity-accounted investment in AGC has
decreased since December 31, 2008 by $101,543 of which an increase of $1,121,851
represents the shares-for-debt conversion of an amount due from AGC which is
discussed below, partially offset by $257,390 which represents the Company's
proportionate share of AGC's loss and capital transactions for the period and
further offset by $966,004 which represents a loss in the carrying value of the
investment. At the end of the period, the Company assessed the carrying value of
its investment in AGC and determined that a decline in the carrying value which
was other than temporary had occurred and as such, the impairment loss of
$966,004 was recorded.
Shares-for-debt transaction
At a special meeting of the shareholders of AGC held on March 13, 2009, AGC
shareholders approved a shares-for-debt transaction for the conversion of debt
owed by AGC to Augen Capital Corp., into common shares. On April 7, 2009, AGC
issued 7,479,010 common shares to settle $1,121,851 of debt. Augen Capital Corp.
now owns 11,519,010 shares of AGC or approximately 32% of the currently issued
and outstanding common shares of AGC. The Company recorded a corporate
development expense of $169,412 as a result of this transaction during the nine
months ended September 30, 2009.
Non-revolving secured loan facility
In a press release dated November 12, 2009, the Company announced that it has
agreed to provide a non-revolving secured loan facility to a maximum of
$1,100,000 to AGC at an interest rate of 12% per annum.
The full unaudited consolidated financial statements for the period ended
September 30, 2009 are available at www.augencc.com or at www.sedar.com.
About Augen Capital
Augen Capital Corp. ("Augen") (TSX VENTURE:AUG) is a Toronto-based public
merchant bank specializing in the financing of and investment in emerging
resource companies. Augen manages a merchant banking hard dollar portfolio of
emerging resource stocks.
For more information on Augen Capital, visit our website at www.augencc.com
The Company's public documents may be accessed at www.sedar.com
This news release contains forward-looking statements. These statements are
based on certain factors and assumptions as set forth in this news release
including expected growth, results of operations, performance and business
prospects and opportunities. While the Company considers these factors and
assumptions to be reasonable based on information currently available, they may
prove to be incorrect. A number of factors could cause actual results to differ
materially from those in the forward-looking statements, including, but not
limited to results of exploration, project development, reclamation and capital
costs of the companies in the merchant banking portfolios ("investee
companies"), and the Company's financial condition and prospects, could differ
materially from those currently anticipated in such statements for many reasons
such as: changes in general economic conditions and conditions in the financial
markets; changes in demand and prices for the minerals the investee companies
expect to produce; litigation, legislative, environmental and other judicial,
regulatory, political and competitive developments; technological and
operational difficulties encountered in connection with the activities of the
Company and investee companies. Additional risks and uncertainties can be found
in our Management's Discussion and Analysis and in filings with the Canadian
provincial securities commissions. Forward-looking statements are given only as
at the date of this news release and the Company disclaims any obligation to
update or revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
Shares outstanding: 36,615,615
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