Stans Energy Corp. (TSX-V: HRE, OTCQX: HREEF), (“Stans” or the
“Company”), is pleased to announce that it has completed and filed its
Q3 2013 Financial Statements and accompanying MD&A, and CEO and CFO
certificates with the Ontario Securities Commission (“Commission”).
The Company had previously announced on November 28, 2013 that it was
unable to complete these Q3 filings on a timely basis, that it was
considering impairment charges against its assets, and required more
time to complete its analysis. Application was made and granted for a
management cease trade order (“MCTO”) to be issued, prohibiting trading
in securities of the Company by certain insiders of the Company. On
February 3, 2014, the Company announced that the MCTO had been extended.
The MCTO remains in effect until two days after receipt by the
Commission of all the required filings.
The Company tested its assets for indicators of impairment in accordance
with IFRS 6 and International Accounting Standards 36 (“IAS 36”). The
Company determined that as of September 30, 2013 there were indicators
of impairment for its Exploration and Evaluation Assets and Property,
Plant and Equipment and other assets in Kyrgyzstan. The indicators of
impairment result from the political uncertainty in Kyrgyzstan, the
current economic uncertainty and the downturn in the mining industry in
particular, the depressed prices for rare earth and other elements,
legal challenges the Company is facing with respect to its Kutessay and
Kalesay exploration licenses and the Company’s decision to significantly
reduce future exploration expenditures until there is greater certainty
with respect to the Company’s legal situation in Kyrgyzstan and the
As a result, the Company has recorded a provision for impairment loss
for the three and nine months ended September 30, 2013 of $ 8,250,840
relating to its interests in the Kyzyluraan, Aktyuz, Kutessay II and
Kalesay properties, $7,836,201 relating to the Kashka rare earth element
processing facility, and write off of $1,544,512 in prepaid expenses
related to mineral properties and Kashka plant, and various consumables.
Since 2012, the Kyrgyzstan Government has taken a series of measures
making it impossible to carry out activities at Kutessay II. In March
2013, the General Prosecutor’s Office of the Kyrgyz Republic filed a
statement of claim against the State Agency for Geology and Mineral
Resources of the Kyrgyz Republic (“SGA”) to invalidate the process by
which Stans acquired the mining license for Kutessay II. Subsequently,
the Inter-district Court of Bishkek issued an injunction dated April 15,
2013, which bars the SGA and its officials from taking actions related
to the execution and/or extension of the Company’s licenses for Kutessay
II and Kalesay projects. These actions are aimed to impede the Company
from executing its responsibilities under its license and have actually
created conditions for termination of the operations of Kutisay Mining
LLC, the Company’s wholly owned subsidiary. As a result the Company has
curtailed the further exploration and development of all of its Mineral
Properties in Kyrgyzstan until there is greater legal certainty.
The Kashka Rare Earth Processing Facility was acquired in 2011 and is
being modernized and re-commissioned to process rare earth elements from
the Kutessay II, Kalesay and other mineral properties in Kyrgyzstan.
Given the Company’s current inability to further develop its Kutessay
II, Kalesay and other mineral properties and the inability to date to
identify a feasible alternate source of rare earth elements that could
be processed at this facility, it is expected that this Kashka will
remain idle for an indefinite period.
Under IAS 36, at the end of each future reporting period the Company is
required to re-evaluate whether this impairment still exists. If there
has been a favourable change in the estimates used by the Company to
determine the recoverable amount of these assets, then the impairment
loss will be reduced or reversed.
About Stans Energy
Stans Energy Corp. is a resource
development company focused on progressing Heavy Rare Earth (HRE)
properties in areas of the Former Soviet Union. In December 2009, Stans
acquired a 20-year mining license for the past-producing Kutessay II
rare earth mine from the Kyrgyz Republic. On May 26, 2011 Stans
completed the purchase of the Kashka Rare Earth Processing Plant (KRP)
the same plant that previously refined REEs historically from Kutessay
II. The KRP was the only hard rock plant to produce all rare earth
elements outside of China, producing 120 different metals, alloys, and
oxides. For over 30 years, Kutessay II produced 80% of the rare earth
metals for the former Soviet Union.
We seek safe harbour.
Stans Energy Corp
Interim - President & CEO
Stans Energy Corp
VP Corporate Development
FORWARD LOOKING STATEMENTS: This document includes forward-looking
statements as well as historical information. Forward-looking statements
include, but are not limited to, use of proceeds from the Offering, the
completion of the Offering, the continued advancement of the company's
general business development, research development and the company's
development of mineral exploration projects. When used in this press
release , the words “will”, “shall”, "anticipate", "believe",
"estimate", "expect", "intent", "may", "project", "plan", "should" and
similar expressions may identify forward-looking statements. Although
Stans Energy Corp.
believes that their expectations reflected in these
forward looking statements are reasonable, such statements involve risks
and uncertainties and no assurance can be given that actual results will
be consistent with these forward-looking statement. Important factors
that could cause actual results to differ from these forward-looking
statements include the potential that fluctuations in the marketplace
for the sale of minerals, the inability to implement corporate
strategies, the ability to obtain financing and other risks disclosed in
our filings made with Canadian Securities Regulators.
Stans Energy CorpRodney Irwin
President & CEO
Source: Stans Energy Corp.