LeadFX Reports 2015 Loss of $12.9 Million

Lead Investing

LeadFX (TSX:LFX) reported its fourth quarter and full year results for 2015 on Wednesday, reporting a net loss of $12.9 million for the year and $1.7 million for the fourth quarter. The company is currently in discussions with a number of interested parties regarding potential financing options for LeadFX including funding for a potential restart of the Paroo Station mine.

Operational
The Paroo Station mine is on care and maintenance due to sustained depressed LME lead prices, an unfavourable AUD:USD exchange rate and higher treatment charges. Mining operations ceased in January and milling ceased in early February. The final shipments of lead concentrate left the Fremantle port in March.
A minimum complement of care and maintenance staff is at the Paroo Station mine site full-time to maintain the site in a restart ready state.
We sold 15,700 tonnes of lead metal contained in concentrate in the first quarter and produced 9,900 tonnes of lead metal contained in concentrate before ceasing milling operations.
On March 10, 2015, following completion of work supporting a new independent NI 43-101 technical report effective as at December 31, 2014, we reported an approximate 18% and 54% decrease in contained metal in estimated total Measured and Indicated Mineral Resources and total Proven and Probable Mineral Reserves, respectively, with a mine life of approximately 4 years.
Financial
Gross loss of $7.5 million for the year and $1.3 million for the fourth quarter.
Net loss of $12.9 million for the year and $1.7 million for the fourth quarter.
Cash used in operations of $4.4 million for the year and $2.0 million for the fourth quarter.
On November 13, 2015, the Company merged with Geo Zone Exploration Limited (“Geo Zone”) and acquired 100% of the outstanding common shares of Geo Zone by issuing 20.9 million LeadFX common shares to the former shareholders of Geo Zone (the “Merger”). The net assets of Geo Zone were valued at $30 million based on an independent valuation of Geo Zone carried out by Roscoe Postle Associates Inc. (“RPA”).
In connection with the Merger, Enirgi Group Corporation (“Enirgi Group”) converted approximately C$12.464 million ($9.4 million) of outstanding debt owed by the Company to Enirgi Group into LeadFX common shares, which together with the Merger are collectively referred to herein as the “Transaction”.
Following the completion of the Transaction, the Company changed its name to “LeadFX Inc.” and effected a share consolidation of the issued and outstanding common shares of LeadFX at ratio of 75:1.
On December 18, 2015, the Company refinanced the debt owed to Sprott Resource Lending Partnership (“Sprott”) through the assignment of the debt to Enirgi Group and amendment of certain terms of the debt agreement eliminating the Company’s obligations to Sprott. Under the Enirgi Group Bridging Facility (see MD&A), the maturity of the debt was extended to March 31, 2016, the interest rate was reduced from 12% to 10% and monthly interest payments were deferred until the maturity date. In addition, Enirgi Group has agreed to forbear from enforcing its rights under the Enirgi Group Bridging Facility until March 31, 2016 providing the Company time to arrange alternative financing arrangements.