March 30, 2007
Vancouver, Canada ? Spur Ventures Inc. ("Spur" or the "Company") (TSX -SVU, NASDAQ OTC BB-SPVEF) today announced its results for the financial year ending December 31, 2006. Revenues for 2006 were up by 13.1% to $7,697,039 versus $6,802.849 in 2005 and $3,695,981 in 2004, resulting in gross profit of $174,381 versus $67,422 in 2005 and ($38,615) in 2004.
Management is required on an ongoing basis to determine if the undiscounted cash flows of each asset are less than its carrying value and, if so, to estimate and record an impairment charge. The carrying cost of YSC is justified when YSC production reaches 70,000 mt/yr. Over the last three years production has averaged less than 40,000 mt each year due a series of one-time events including interruptions in electrical supply, slowness in the transfer of the mining licenses and an undisclosed loan by its joint venture partner, YPCC plus plant down time for our Q01, 2006 debottlenecking project. Spur management has thus decided to take a conservative approach and has booked a non-cash impairment charge of $4,328,622, or 51% of the book value of YSC even though YSC should produce 70K mt/yr by 2008. As a result of this impairment charge, annual net income was ($6,469,804) or ($0.11) per share.
Before this impairment charge annual net income was ($2,161,523) or ($0.04) per share, a significant improvement compared to ($2,818,806) or ($0.06) per share in 2005 and ($1,864,038) or ($0.05) per share in 2004.
Revenues for the quarter ending December 31, 2006 were $2,381,878 versus $1,241,160 in 2005, a 92% increase. Net income for Q4, adjusted for the impairment charge, was ($4,764,608) or ($0.08) per share versus (711,477) or ($0.01) per share in Q4 2005.
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