VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/25/13 -- Western Copper and Gold Corporation ("Western" or the "Company") (TSX: WRN) (NYSE Amex: WRN) (NYSE MKT: WRN) has released its financial results for the year ended December 31, 2012.
This news release should be read in conjunction with the audited financial statements for the year ended December 31, 2012, and the notes thereto, and management's discussion & analysis ("MD&A") for the year ended December 31, 2012.
Western reported a loss and comprehensive loss of $3.9 million ($0.04 per common share) for the year ended December 31, 2012. This compares with a loss and comprehensive loss of $22 million ($0.24 per common share) for the year ended December 31, 2011. The loss reported for the year ended December 31, 2011 was unusually large due to a number of items relating to the plan of arrangement completed on October 17, 2011, including a loss on distribution of $19.7 million. Excluding items related to the plan of arrangement, the loss and comprehensive loss for the year ended December 31, 2012 is comparable to the prior year.
As at December 31, 2012, Western had $32.3 million in working capital, including $33.5 million in cash and cash equivalents.
On December 21, 2012, Western completed a royalty sale with 8248567 Canada Limited (the "Purchaser"), an arms' length party, whereby the Purchaser cancelled the 5% net profits interest royalty (the "NPI Royalty") on all claims comprising the Casino Project, other than the Casino B claims, and paid Western US$32 million in exchange for a 2.75% net smelter returns royalty (the "NSR Royalty") on the future sale of any metals and minerals derived from the Casino Project, other than the Casino B claims (the "Transaction").
The Purchaser had acquired the NPI Royalty, along with two other royalty interests, on August 10, 2012 from Strategic Metals Ltd. ("Strategic") for US$30 million. An additional US$6 million is due from the Purchaser to Strategic, contingent on the Casino Project meeting certain permitting targets by December 31, 2016 (see Strategic's news release dated August 10, 2012, available on SEDAR, for more information).
Western has the option to repurchase 0.75% of the NSR Royalty (resulting in a 2.00% remaining royalty) for the following amount:
a. US$39 million if the amount is paid on or prior to December 31, 2013; orb. US$59 million if the amount is paid on or after January 1, 2014 but on or before December 31, 2017.
The Company believes that the NSR Royalty sale was a superior financing option to a standard equity deal. Based on the Company's analysis, the valuation of the NSR Royalty represented a significant premium to the market valuation of the Company. The proceeds from the Transaction should provide Western with sufficient funds for the estimated period to permit the Casino Project without significantly diluting current shareholders or unduly affecting the returns of the project.
On January 7, 2013, the Company released the results of the feasibility study on its Casino Project and subsequently filed the technical report titled "Casino Project, Form NI 43-101F1 Technical Report Feasibility Study, Yukon, Canada - Revision 1" dated January 25, 2013 (the "Feasibility Study") on February 12, 2013.