News Column

GEOVIC MINING CORP. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

August 12, 2014

The following discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the year ended December 31, 2013 as well as with the financial and related notes and the other information appearing elsewhere in this report. As used in this report, unless the context otherwise indicates, references to "we", "our", "ours" and "us" refer to Geovic Mining Corp. and its subsidiaries collectively.

Overview

This Management's Discussion and Analysis ("MD&A") is intended to provide an analysis of our capital resources and liquidity at June 30, 2014, and financial results for the three and six months ended June 30, 2014 compared to the prior period. All amounts are presented in United States dollars unless indicated otherwise. Reference should also be made to the financial statements filed with this report and the Company's other disclosure materials filed from time to time on www.sec.gov or www.sedar.com or the Company's website at www.geovic.net.

19



--------------------------------------------------------------------------------

Table of Contents

Business

We are engaged in the business of identifying, exploring and initially developing mineral exploration prospects. Our primary asset is a cobalt, nickel, and manganese mining project in Cameroon, Africa (the "Nkamouna Project") held by GeoCam, our majority-owned (60.5%) subsidiary incorporated under the laws of the Republic of Cameroon. We also explore for exploitable deposits of other minerals. We hold the following early stage exploration prospects: exploration licenses in New Caledonia (chromite); state exploration permits in Arizona (gold); mineral leases and mining claims in Colorado and Wyoming (uranium); mining claims in New Mexico and California (rare earth and other specialty metals); and an exploration license in Papua New Guinea (advanced and specialty metals).

Our ability to continue operations in the future will be largely dependent on our ability to arrange a strategic investment in the Nkamouna Project. We expect that such an investment would involve the sale of some or all of our interest in the Project. We do not have available financial resources necessary to construct and open the Nkamouna Project. We are proactively pursuing a strategic investment which, if completed, would result in our selling some or all of our interest in the Nkamouna Project to a third party.

On July 23, 2013 the Company announced that it had agreed to the terms and conditions of a Definitive Agreement ("DA") with Jiangxi Rare Metals Tungsten Holdings Group Company Ltd ("JXTC") of Nanchang, Jiangxi Province, China. JXTC is a state owned large-scale industrial enterprise with significant mining and industrial operations in cobalt, copper, tungsten, and other rare metals. The terms and conditions of the DA were agreed amongst JXTC, Societe Nationale d'Investissement du Cameroun ("SNI"), the National Investment Corporation of Cameroon that owns or represents 39.5% of GeoCam, the Company, Geovic Ltd. and GeoCam.

The transaction contemplated by the DA establishes JXTC's intent to acquire 60.5% of the existing shares of GeoCam pursuant to the execution of a share purchase agreement between JXTC and Geovic which is expected to be subject to a variety of conditions and approvals, many of which are outside our control. There is no assurance that this agreement will be finalized, or that the transaction contemplated therein will be completed. This proposed transaction would result in the complete disposition of the Company's interest in GeoCam and the Nkamouna Project. In addition to acquiring 60.5% interest in GeoCam, JXTC would also secure 100% of the mixed cobalt-nickel sulphide product to be produced by the Nkamouna Project. The share purchase agreement is not yet finalized and would require the approval of the stockholders of the Company.

The DA expired on March 31, 2014 and as at that date the parties had not entered into a share purchase agreement. The parties to the DA are working on an extension of the agreement to a future date. There can be no assurance that an extension of the DA will be agreed to among the parties to the DA, that a share purchase agreement will ultimately be entered into or that the transactions contemplated therein will be completed.

If an agreement is reached, it would be subject, among other matters, to approval of our stockholders. If we are unable to complete and close an agreement to sell a significant interest in the Nkamouna project to a strategic partner in a timely manner, our plan is to place the Nkamouna Project on a "care and maintenance" status and significantly further reduce our level of expenditures in Cameroon. In such event, we would not have sufficient resources to maintain our interest in the Project indefinitely and we could lose our interest in the Project. In such a scenario, our cash resources would likely be insufficient to sustain our other business activities.

We are endeavoring to arrange additional financing which would allow us to continue work on our mineral projects and pay our expenses. If we are unable to arrange adequate financing, we may seek to further reduce our operations, to the extent possible, while we continue efforts to monetize our investment in GeoCam, or we may cease operations, which could include a bankruptcy filing. Unless we arrange additional financing, we expect to nearly exhaust our cash during August 2014.

During 2014 and 2013 the Company entered into note purchase agreements (each a "Note Purchase Agreement" and collectively the "Note Purchase Agreements") with a number of parties (each a "Purchaser"). Pursuant to the Note Purchase Agreements, the Company agreed to issue promissory notes (each a "Note" and collectively the "Notes") to the Purchasers in the aggregate principal amount of $1,355 as at June 30, 2014 (December 31, 2013-$605) in consideration of the payment by each Purchaser of a purchase price equal to the principal amount of such Purchaser's respective Note.

Each Note matures one year from the date of issuance at which time the outstanding principal amount of each Note and all accrued and unpaid interest thereon is due and payable by the Company. Interest accrues on the outstanding principal balance of each Note at the rate of 200% per annum on the Notes issued in 2013 and January 2014 and 300% per annum on the Notes issued from February to June 2014.

20



--------------------------------------------------------------------------------

Table of Contents

In June 2014 the Company issued an additional note in the principal amount of $25 under similar terms as noted above except at an interest rate of 150% and due in six months at December 31, 2014.

The Company may prepay each Note, in whole or in part and without penalty, at any time upon 30 calendar days' prior written notice. The Company is required to prepay each Note, in whole and without penalty, within five business days following the consummation of any acquisition by JXTC or by any other entity of the Company's 60.5% interest in GeoCam or the consummation of the acquisition of the Company by another company. The Notes contain events of default and other terms and conditions.

In April 2014 the Company and the JS Group entered into a letter of agreement amending the original Wind Mountain Joint Venture ("WMJV") agreement whereby the JS Group have the option to acquire an additional 30% of the WMJV mining claims for a total consideration of $0.3 million upon the completion of the first phase of activities and funding related to WMJV. Further, upon payment of the $0.3 million consideration, Geovic is to convey and assign 90% of the interest in the mining claims to JS Group. Upon the JS Group electing to acquire the additional 30% from the Company, Geovic shall have an option to reacquire 15% of the interest for $150 upon written notice to the JS Group prior to the receipt of the assay results of the first core sample during the second phase of the project. In April 2014 upon completion of the first phase of activities and funding, the JS Group elected to exercise such option to acquire an additional 30% for $0.3 million for a total interest of 90%. Upon receipt of the $0.3 million consideration, the Company assigned the full 90% of the mining claims to the JS Group.

On April 29, 2014 the Company was contacted by the TSX regarding the issuance of the short term debt promissory notes and note purchase agreements, specifically regarding the interest rates of 200-300%. The Company was informed that in failing to notify the TSX prior to the issuance of the Notes the Company contravened Subsection 501(c) of the TSX Company Manual. TSX informed the Company that acceptance of the issuance of the Notes was subject to the following: the Company must immediately notify the lenders that interest on the Notes will not be paid until such time as disinterested shareholder approval is received; within one business day of approval by disinterested shareholders the Company must provide to the TSX (a) a certified resolution of the Board of Directors, excluding any Directors that subscribed for Notes, approving the issuance of the Notes; (b) a certified resolution of the disinterested shareholders approving the issuance of the Notes along with a copy of the scrutineers report evidencing such approval; and, (c) a commercial copy of the proxy statement sent to shareholders in connection with the 2014 Annual Meeting with the comments of the TSX incorporated therein. The Company received disinterested shareholder approval at its Annual Meeting of Stockholders in June 2014 and provided the TSX the required documentation.

On May 1, 2014, the Company received notice from the TSX that the TSX was reviewing the Company's eligibility for the continued listing of its shares of common stock on the TSX (the "Continued Listing Review"). The TSX granted the Company 30 days to demonstrate that it complies with all of the TSX continued listing requirements that are applicable to the Company. The TSX advised the Company that the Continued Listing Review was being conducted in connection with the Company's issuance of the Notes to certain related parties in 2013 and the first quarter of 2014. Specifically, the notice from the TSX states that the Company failed to seek the TSX's prior approval of the Notes transaction and prior disinterested shareholder approval for the issuance of the Notes, in each case as required under the Section 501(c) of the TSX Company Manual. The notice also stated that the Company appears to have breached the TSX's Timely Disclosure Policy for its failure to new release the key details of the Notes, including the interest rates, which the TSX believes are not commercially reasonable. The Company provided the TSX with written submissions addressing the deficiencies identified in the notice and received an extension to July 25, 2014 in order to put in place an orderly transition to another exchange. On July 25, 2014 the Company was delisted by the TSX and transitioned to the NEX, a separate board of the TSX Venture Exchange as of July 28, 2014 under the symbol "GMC.H".

A feasibility study for the Nkamouna Project was completed in April 2011, which estimated approximately $617 million of initial capital costs, including contingencies, to construct and start-up the Nkamouna Project. The GeoCam financial advisor estimated that the total of capital, financing, working capital, contingency and start-up costs would be approximately $698 million, based on estimates included in the feasibility study. Additionally, cost overrun requirements of lenders to the Nkamouna Project were projected to be approximately $100 million.

Since the feasibility study was completed, we have devoted most of our efforts to seeking and evaluating a means to finance the Nkamouna Project. We have considered many possible alternatives, including joint ventures or similar arrangements, which may include a sale of a significant portion or all of our interest in the Nkamouna Project to strategic investors who could assist in financing and would have an interest in purchasing the cobalt, nickel and manganese products produced from the Nkamouna Project. Beyond the Nkamouna Project financing we would also face other significant issues affecting development and operation of the Nkamouna Project. These include operating the Nkamouna Project through GeoCam as an autonomous Cameroonian entity, and GeoCam's ability to recruit, train and retain a team of qualified mining professionals and a stable local workforce to manage the development, construction and operation of the Nkamouna Project in a relatively undeveloped, remote area in Cameroon.

Since 2012 we have been seeking to 1) realize value for the Cameroonian assets and 2) shift the Company's focus to a prospect generation and strategic investment business model. Since our position in GeoCam will likely be significantly diminished or

21



--------------------------------------------------------------------------------

Table of Contents

completely eliminated through strategic investment upon completion of a financing transaction, the future direction for the Company will be to identify new exploration prospects, minimally develop and prioritize existing and new prospects, and sell or joint venture further exploration and development of those prospects to others. The Company expects to take prospects to a level where they can be timely monetized through strategic investments by others who have the resources and staying ability to complete advanced exploration, permitting and development.

We are the majority shareholder of GeoCam. Under the Shareholder Agreement, GeoCam is operated as an autonomous entity and governed by a Board of Directors to which we select three of the five directors and two directors are selected by the other shareholders. A strategic investment would necessitate agreement among Geovic, SNI, and the new investors, and approval by the GeoCam Board of Directors. While we represent the majority of Directors on the GeoCam Board, we generally have not taken major strategic actions or decisions without general concurrence by the other shareholders who are collectively represented by SNI. We view a good working relationship with the other shareholders of GeoCam as important to the future success of the Nkamouna Project.

Capital Resources and Liquidity

Our ability to access additional financing and to monetize the Nkamouna Project are critical to our future financial condition. Since the completion of the feasibility study in April 2011, spending activity for the Nkamouna Project has mainly been limited to securing the Nkamouna Project site and protecting assets, continuing environmental monitoring and community development programs, and assisting potential strategic investors with their due diligence activities. Given our limited financial resources, we plan to continue this approach until we are reasonably satisfied that an appropriate strategic transaction for the Nkamouna Project can be completed or the Project is put on "care and maintenance" basis.

At June 30, 2014 we had approximately $99 of unrestricted cash and cash equivalents on a consolidated basis compared to $181 at December 31, 2013, a decrease of approximately $82 during the six months ended June 30, 2014. Our cash is invested in U.S. dollar deposits and in the Cameroon branch of a large international bank.

During 2014 and 2013 the Company entered into note purchase agreements with a number of parties. Pursuant to the Note Purchase Agreements, the Company agreed to issue promissory notes to the Purchasers in the aggregate principal amount of $1,355 as at June 30, 2014 (December 31, 2013-$605) in consideration of the payment by each Purchaser of a purchase price equal to the principal amount of such Purchaser's respective Note.

Each Note matures one year from the date of issuance, at which time the outstanding principal amount of each Note and all accrued and unpaid interest thereon is due and payable by the Company. Interest accrues on the outstanding principal balance of each Note at the rate of 200% per annum on the Notes issued in 2013 and January 2014 and 300% per annum on the Notes issued from February to June 2014.

In June 2014 the Company issued an additional note in the principal amount of $25 under similar terms as noted above except at an interest rate of 150% and due in six months at December 31, 2014.

The Company may prepay each Note, in whole or in part and without penalty, at any time upon 30 calendar days' prior written notice. The Company is required to prepay each Note, in whole and without penalty, within five business days following the consummation of any acquisition by JXTC or by any other entity of the Company's 60.5% interest in GeoCam or the consummation of the acquisition of the Company by another company. The Notes contain events of default and other terms and conditions.

The following table summarizes the principal amounts of the Notes issued and outstanding as of June 30, 2014 and December 31, 2013 and identifies the parties to which the Notes have been issued:

June 30, December 31, 2014 2013 Richard G. Buckovic $ 130 $ 100 Norman C. Rose 30 30 M N Rose Shelter Credit Trust 40 40 Paul D. Rose 60 60 Dragon's Fire Investments LLC 275 225 Thorne Bush Investments LLC 625 150 Airlie Road Investors LLC 75 - David/Bette McKibben 50 - John/Jean Anderson 20 - Bill Shaffer 25 - Decker JE Halstead, Revocable Living Trust 25 - Fintech Limited 25 - Total Short-Term Debt Notes $ 1,380 $ 605 22



--------------------------------------------------------------------------------

Table of Contents

The following table summarizes the maturity dates of the Notes issued and outstanding as of June 30, 2014 and December 31, 2013:

June 30, December 31, 2014 2013 September 30, 2014 $ 120 $ 120 October 31, 2014 110 110 November 30, 2014 125 125 December 31, 2014 275 250 January 31, 2015 125 - February 28, 2015 150 - March 31, 2015 50 - April 30, 2015 145 - May 31, 2015 230 - June 30, 2015 50 - Total Short-Term Debt $ 1,380 $ 605



On July 22, 2014, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement"), registration rights agreement (the "Registration Rights Agreement") and note purchase agreement (the "Note Purchase Agreement"), in each case with Tangiers Investment Group, LLC ("Tangiers").

Pursuant to the Securities Purchase Agreement, Tangiers has committed to purchase up to $3.0 million of the Company's common stock, par value $0.0001 per share (the "Common Stock"), from time to time upon the Company's advance written request over the course of a 36 month commitment period (the "Commitment Period"), contingent on the Company filing and obtaining an effective registration of the underlying shares with the Securities and Exchange Commission (the "SEC") and the Company timely complying with its reporting requirements under the Securities Exchange Act of 1934, as amended, and applicable SEC regulations. The Company is entitled to request such equity investments from Tangiers from time to time during the Commitment Period in an amount of up to $100,000 per request, and in connection with each request the Company will issue and sell to Tangiers, and Tangiers will purchase from the Company, that number of shares of Common Stock determined by dividing the amount of the advance requested by the Company by a purchase price equal to 85% of the lowest daily volume weighted average trading price of the Common Stock during the five consecutive trading days following the date of the Company's request. The Securities Purchase Agreement includes certain restrictions on the ability of the Company to issue or sell its capital stock or securities granting rights to acquire its capital stock for consideration less than the then current market price of the Company's Common Stock.

The Securities Purchase Agreement also requires that the Company issue to Tangiers restricted Common Stock equal to 2.5% of Tangier's $3.0 million commitment as a commitment fee. The commitment fee Common Stock is issuable by the Company to Tangiers in two 50% tranches, with the first tranche due upon the execution of the Securities Purchase Agreement and the second tranche due 60 days following the execution of the Securities Purchase Agreement. The number of shares of restricted Common Stock issuable in each tranche is calculated by dividing the dollar amount of each tranche by the average volume weighted average trading price of the Common Stock during the five business days preceding the date on which the shares for such tranche are due to be issued.

Pursuant to the Registration Rights Agreement, the Company agreed to prepare and file with the SEC a registration statement on Form S-1 or on such other form as is available and to cause such registration statement to be declared effective by the SEC prior to the first sale to Tangiers of the Company's Common Stock pursuant to the Securities Purchase Agreement.

Pursuant to the Note Purchase Agreement, the Company agreed to issue a 4% convertible promissory note (the "Convertible Note") to Tangiers, in the original principal amount of $44,000, in consideration of the payment by Tangiers of a purchase price equal to $40,000, with $4,000 retained by Tangiers as original issue discount for due diligence, document preparation and legal expenses in connection with the transactions contemplated by the Note Purchase Agreement. The Company issued the Convertible Note on July 22, 2014.

23



--------------------------------------------------------------------------------

Table of Contents

The Convertible Note matures on July 22, 2015, at which time the outstanding principal amount of the Convertible Note and all accrued and unpaid interest thereon is due and payable by the Company. The Convertible Note provides for "guaranteed" interest on the principal balance thereof at the rate of 4%, which interest is deemed earned as of the date of the Convertible Note's issuance, to the extent such principal amount and interest have been repaid or converted into the Company's Common Stock. The Convertible Note is convertible into shares of the Company's Common Stock at the option of Tangiers at a conversion price equal to 50% of the lowest trading price of the Company's Common Stock during the 20 consecutive trading days prior to the date on which Tangiers elects to convert all or part of the Convertible Note.

The Convertible Note contains certain events of default, including with respect to defaults in payment obligations, the commencement of bankruptcy proceedings and certain failures relating to the listing, trading and bid price of the Company's Common Stock, the occurrence of which may result in acceleration of the Company's obligation to pay the outstanding principal amount of the Convertible Note and all accrued and unpaid interest thereon. Upon the occurrence and during the continuance of any event of default, additional interest will accrue at the rate equal to the lower of 20% per annum or the highest rate permitted by law and liquidated damages will accrue at the rate of $1,000 per day. In the event of any acceleration following an event of default, the amount due and owing to Tangiers under the Convertible Note will be increased to 150% of the outstanding principal amount of the Convertible Note plus all accrued and unpaid interest, fees and liquidated damages, if any.

Our plan for the Nkamouna Project before early 2012 had been to attempt to finance the capital costs, startup expenses and financing costs of the Project using a combination of debt secured by the project and owners' equity. In conventional project debt financing, GeoCam would be required to furnish, as equity, more than 40% of the total estimated capital and financing costs and expenses for the Nkamouna Project as a condition to securing loans for the balance of such costs and expenses. Based on the estimated capital and start-up costs of the Nkamouna Project, GeoCam's financial advisor estimated that our share of GeoCam equity to complete such debt financing for the Nkamouna Project would be approximately $225 million, which reflects the amount of equity capital we would be required to contribute to GeoCam as a condition to conventional debt financing. We do not have sufficient capital resources available to meet that estimated equity requirement. Our ability to raise additional capital for this purpose would depend on a number of factors, which are partly or wholly outside of our control, including the state of worldwide financial, commodity and other markets, the market trading price of our common stock and demand for future access to the cobalt resources in the Nkamouna Project.

During 2012 we continued meetings with various large international businesses with respect to investment in the Nkamouna Project or the potential purchase of future off-take from the Project. The Company and the other GeoCam shareholders discussed possible strategic investment arrangements with several companies. Since the latter part of 2012 these discussions focused on JXTC. As discussed above, the DA with JXTC expired on March 31, 2014. The parties to the DA are working on an extension of the agreement to a future date. There can be no assurance that an extension of the DA will be agreed to among the parties to the DA, that a share purchase agreement for the sale of our interest in GeoCam to JXTC will ultimately be entered into or that the transactions contemplated therein will be completed. Any cash paid by JXTC or another strategic investor for part or all of our interest could be available to satisfy our obligations under the notes and fund all or a portion of our remaining project equity requirements, if any, and for other corporate purposes. Under such an arrangement our interest in the Nkamouna Project could be eliminated. We may consider putting the Nkamouna Project on a "care and maintenance" status later in 2014 if we have been unable to finalize and close an acceptable strategic investment arrangement.

GeoCam's ongoing cash expenditures are presently expected to total approximately $0.9 million for the last two quarters of 2014, for which Geovic is responsible to fund 60.5%. However, we may not be successful in completing a sale of all or part of our interest in GeoCam on a timely basis, or in entering into sale or joint venture transactions involving our other exploration prospects on acceptable terms. Further, possible transactions to raise additional capital through the issuance of equity may not be available and would be dilutive to our stockholders. If we are unable to obtain additional capital, we may not be able to pay for our portion of GeoCam's cash expenditures and we will need to seek to further curtail our operations, to the extent possible, in order to preserve working capital, which could materially harm our business and our ability to achieve cash flow in the future, and we may need to cease operations, which could include a bankruptcy filing. Unless we arrange additional financing, we expect to nearly exhaust our cash during August 2014.

As described in Part II, Item 1, Legal Proceedings, five judgments originally totaling approximately $1.8 million against GeoCam are outstanding four of which are under appeal. In June 2014 the appeal in the fifth matter was heard and the earlier court judgment for CFA 118,804,219 (approximately $0.2 million at June 30, 2014) was overturned. However, the claimant may file an appeal or civil claim to another court.

24



--------------------------------------------------------------------------------

Table of Contents

Two separate attachments totaling approximately $0.33 million were allowed in two court proceedings and the funds in those amounts were restricted until resolution of the cases. In December 2013 attached funds related to one claim in the amount of approximately $0.1 million were released to GeoCam. In January 2014 attached funds related to two more of the remaining claims in the amount of approximately $0.09 million were released to GeoCam. In May 2014 attached funds related to one claimant of CFA 20,215,058 (approximately $0.04 million at June 30, 2014) were released to GeoCam. GeoCam has sought to have the one remaining restriction of approximately $0.1 million lifted. The matter was adjourned to September 25, 2014 however GeoCam has requested the restriction be immediately lifted based on the fact that the judgment for the entire claim has been overturned.

Should the judgments be upheld in full or in part upon exhaustion of final appeals, GeoCam would be required to satisfy the judgments. Funding the Geovic share would adversely affect our remaining capital resources.

In May 2014 GeoCam received information that family members of an employee of a GeoCam who passed away are alleging that the individual's death was due to worksite conditions and that they plan to take legal action. As of the date of filing no formal notice of legal action has been received. GeoCam plans to defend against the allegations should legal action be taken.

GeoCam's operating expenses are paid through capital increases approved by the shareholders of GeoCam and funded in accordance with the respective ownership interests prior to the capital increase. We will be obligated to fund 60.5% of future GeoCam capital increases while we remain a 60.5% shareholder. GeoCam completed a capital increase in October 2012 of which our share was approximately $0.4 million. An additional capital increase totaling approximately $1.2 million was approved by GeoCam shareholders in January 2013, and an initial cash call totaling approximately $0.4 million to fund an initial portion of the capital increase was completed in February, 2013. Our share of the total capital increase was approximately $0.7 million, and our share of the initial cash call was approximately $0.24 million. On April 17, 2013 the second cash call totaling approximately $0.4 million, of which Geovic paid approximately $0.24 million, was completed. On July 31, 2013 the third cash call totaling approximately $0.4 million, of which Geovic paid approximately $0.2 million, was completed and there are no remaining authorized calls to be made.

We expect our general and administrative expenses for the last two quarters of 2014 to total approximately $1.6 million, including administrative expenses related to other resource entity exploration activities but not including any transaction costs related to a strategic partner transaction related to the Nkamouna Project as well as impairment, or other non-cash items, interest expense related to the short term debt balance at June 30, 2014 of $1.38 million, deferred salary incentives and related employee benefits and that during the last two quarters of 2014 expenditures for exploration of mineral properties, or investment in other resource entities, in the United States and elsewhere will total approximately $0.2 million. We expect that our cash balances will be nearly exhausted during August 2014. Based on our current planned 2014 expenditures we will require additional financing or completion of a strategic transaction to continue our operations. We continue to implement cash conservation measures for the Company and GeoCam. If we complete a strategic partner transaction involving the Nkamouna Project or any of our other exploration prospects, this estimate would be adjusted appropriately.

We have budgeted a lower level of general and administrative and other expenditures for 2014 to reflect our limited cash. We have implemented a number of cash conservation strategies for the Company and GeoCam that we have described in earlier reports that we have filed. These efforts were implemented to reduce financial commitments and overheads and preserve our cash.

The Company and its subsidiaries have material debt and other similar obligations or commitments from the short-term debt and related interest expense under the Notes, the deferred accrued payroll and related incentives, other deferred payments and any additional amounts that may become due under pending litigation in Cameroon. The Company has delayed payment of liabilities and has accrued, but been unable to fully pay GeoCam payroll and related benefits of approximately $0.2 million for the months of April to July 2014. As of the date of filing these liabilities remain outstanding. Due to the delayed payment of these liabilities the Company may be charged penalties in Cameroon, the amount of which cannot be currently estimated. In May 2014 the Company received notification that GeoCam employees were threatening to strike as of May 15, 2014 unless all compensation arrears were been paid in their entirety and health insurance reinstated. As of the date of this filing no formal strike has taken place. The Company has also been unable to fully pay Geovic Mining Corp. payroll and related benefits of approximately $0.15 for the months of June and July 2014. Further, effective August 1, 2014 the Company laid off three non-executive employees. These employees have not been paid July 2014 payroll, related benefits and unused vacation pay.

As of the date of filing these liabilities remain outstanding. We believe there is substantial doubt whether our present capital resources will be sufficient to satisfy the Company's existing capital and liquidity requirements described above, not including any equity requirements in connection with any Nkamouna Project financing by GeoCam or satisfaction of any judgments that may be upheld in final appeals of the pending litigation. We have no standby financing arrangements currently in place. If we are unable to obtain additional capital, we will need to seek to further curtail our operations, to the extent possible, in order to preserve funds, which could materially harm our business and our ability to achieve cash flow in the future, and we may need to cease operations, which could include a bankruptcy filing. Unless we arrange additional financing, we expect to nearly exhaust our cash during August 2014.

25



--------------------------------------------------------------------------------

Table of Contents

Results of Operations

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013:

The Company had no revenue from operations and incurred losses from operations during the second quarters of 2014 and 2013, and has had no revenue from operations since inception. Until and unless we sell some or all of our interest in the Nkamouna Project or project financing for the Project is secured and construction commences, we expect to continue to reduce our operating and other expenditures.

We had a net loss attributed to the Company's stockholders of $1,876 for the quarter ended June 30, 2014, compared to the net loss of $1,646 in the quarter ended June 30, 2013.

Exploration expenses decreased by $254 in the quarter compared to the year earlier period mainly due to the sale of property interests in New Mexico ($300), a decrease in exploration expense in Cameroon ($95) and a decrease in other Company projects primarily in New Caledonia ($61), offset by an increase in exploration expenses in Arizona ($210).

General and administrative expenses decreased $81 in the quarter, when compared to the second quarter of 2013. The decrease is largely due to lower insurance, audit and legal expenses. Lower salaries in the second quarter of 2013 were offset by the salary deferral incentives in the second quarter of 2014. The Company continues to reduce general and administrative expenses.

Interest and bank charges have increased by approximately $643 due to interest accrued on the short term debt in the second quarter of 2014. Other income decreased due to no equipment rental income in Cameroon in the second quarter of 2014.

The gain on disposal increased by $98 mainly due to the sale of assets in Cameroon in the second quarter of 2014.

As an exploration stage company, we have charged our exploration and pre-construction expenses incurred for GeoCam to operations in the periods incurred and no such expenditures have been capitalized. We expect to continue this practice until a final development and mining plan is adopted and project financing is committed.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013:

The Company had no revenue from operations and incurred losses from operations during the six months ended June 30, 2014 and 2013, and has had no revenue from operations since inception. Until and unless we sell some or all of our interest in the Nkamouna Project or project financing for the Project is secured and construction commences, we expect to continue to reduce our operating and other expenditures.

We had a net loss attributed to the Company's stockholders of $3,702 for the six months ended June 30, 2014, compared to the net loss of $3,540 in the six months ended June 30, 2013.

Exploration expenses decreased by $489 in the six months ended June 30, 2014 compared to the year earlier period mainly due to the sale of property interests in New Mexico ($300), decrease in exploration expense in Cameroon ($159), and a decrease in other Company projects primarily in New Caledonia ($120), offset by an increase in exploration expenses in Arizona ($103).

General and administrative expenses decreased $273 in the six months ended June 30, 2014, when compared to same period of 2013. The decrease is largely due to lower insurance, audit and legal expenses. Lower salaries in the six months ended June 30, 2013 were offset by the salary deferral incentives in the six months ended June 30, 2014. The Company continues to reduce general and administrative expenses.

Interest and bank charges have increased by approximately $1,020 due to interest accrued on the short term debt during the first six months ended June 30, 2014. Other income decreased due to no equipment rental income in Cameroon in the six months ended June 30, 2014.

The gain on disposal increased by $99 mainly due to the sale of assets in Cameroon in the first six months ended June 30, 2014.

As an exploration stage company, we have charged our exploration and pre-construction expenses incurred for GeoCam to operations in the periods incurred and no such expenditures have been capitalized. We expect to continue this practice until a final development and mining plan is adopted and project financing is committed.

Off-Balance Sheet Arrangements

We have no off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

26



--------------------------------------------------------------------------------

Table of Contents

Safe Harbor Statement

Certain statements in this report constitute "forwarding-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and applicable Canadian securities laws. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "would", "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.

All statements other than statements of historical fact, included in this report regarding our financial position, business and plans or objectives for future operations are forward-looking statements. Without limiting the broader description of forward-looking statements above, we specifically note the forward looking statements with respect to exploration and mine development, construction and expansion plans, costs, grade, production and recovery rates, permitting, financing needs, the availability of financing on acceptable terms or other sources of funding, the timing of additional tests, feasibility studies and environmental permitting, estimates of mineral reserves and mineralized material; our expectations regarding the amount of capital required prior to production at the Nkamouna Project and our ability to source the required capital; success of exploration activities; permitting time lines; construction and capital costs; operating expenses; currency fluctuations; requirements for additional capital; our expectations regarding processing and marketing of future production from the Nkamouna Project; our ability to enter into off-take arrangements; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; limitations on insurance coverage; commencement of mine production, anticipated expenditures for the remainder of 2014; and our expectations regarding securing a potential strategic investor for, or a sale of our interest in, the Nkamouna Project and future debt and equity financing for the Project, and our ability to satisfy our cash requirements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, the risk factors discussed in "Risk Factors," and other factors described in other filings with the U.S. Securities and Exchange Commission (the "SEC") and Canadian securities regulatory authorities. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this annual report speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect new information, events or circumstances except as may be required under applicable securities laws.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters