Canadian gold miner Fronteer Development Group Inc. (FRG), on Monday posted a net profit for the third quarter, compared to a loss last year, helped by gains on equity portfolio investment.
For the third quarter, the Vancouver, Canada-based company posted net income of C$12.00 million or C$0.09 per share, compared to a net loss of C$5.09 million or C$0.06 per share reported in the same period last year.
During the quarter, the company recognized a significant gain on a equity portfolio investment, resulting in cash proceeds of C$11.8 million.
Other income for the quarter, which primarily consisted of a gain on the sale of its investment in East Asia, foreign exchange gains or losses, interest income and mark to market adjustments on share purchase warrants acquired in 2009 totaled C$18.9 million, compared to a loss of C$1.2 million in the same period last year.
Fronteer Development Group indicated that it has no revenue-producing operations at present, but by fiscal year 2009, absent an acquisition or other initiatives, the company expects to have around C$164.5 million in cash, cash equivalents and short term deposits.
Operating expenses for the quarter rose 81% to C$8.1 million from C$4.5 million last year. Cash generated by financing activities for the quarter was C$152 thousand.
Fronteer noted that it has achieved promising drill results from two priority Nevada gold projects in Sandman and Long Canyon. The company anticipates completion of the sale of the Agi Dagi and Kirazli projects to Alamos by the end of December 2009, which will increase its cash position by US$16 million and investments by nearly C$16 million.
Fronteer Development Group also hired a Chief Operating Officer and a Vice President for business development.
At September 30, 2009, Fronteer Development Group had cash, cash equivalents and short-term deposits of C$159.4 million and working capital of C$159.1 million as compared to C$81.0 million and C$78.4 million at December 31, 2008. The change in cash, cash equivalents and short-term deposits and working capital is primarily due to its acquisition of and consolidation of Aurora and its financial results since March 3, 2009, offset by cash exploration expenditures of C$10.9 million and cash used in operations of C$8.9 million.
For the nine-month period, net income was C$7.92 million or C$0.07 per share, compared to a net loss of C$12.67 million or C$0.15 per share in the year ago period.
FRG closed Friday's trading at C$4.38 on the TSX, while at AMEX it closed trading at US$4.20.
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