BlackRock Ventures Inc. Reports Third Quarter 1998 Results

Strategic Insights -

BlackRock Ventures Inc. today reported its third quarter 1998 results, with the Cold Lake pilot project reaching a milestone as October average production exceeded 600 barrels of bitumen per day. The company's equity share of Rayrock's losses for the first nine months of 1998 contributed to a $8.2 million loss, or $0.17 per share. BlackRock also announced its support for the agreement between Rayrock and Glamis Gold Ltd., valued at $31.3 million to BlackRock.

Key Takeaways:

  • The Cold Lake pilot project achieved a milestone in October, averaging 616 barrels of bitumen per day, exceeding the target production rate of 600 barrels per day.
  • Well head prices for bitumen produced by BlackRock averaged $12.50 per barrel in September, up significantly from $1.25 per barrel earlier in the year.
  • BlackRock's equity share of Rayrock's losses for the first nine months of 1998 was $7.1 million.
  • BlackRock has agreed to vote in favor of the agreement between Rayrock and Glamis Gold Ltd., valued at $31.3 million to BlackRock.
  • The expansion of the pilot project remains dependent on additional financing.
  • BlackRock has entered into a $3 million line of credit with Rayrock, which can be increased to $5 million in the event the Glamis/Rayrock arrangement is not completed.
  • The company reported a loss of $8.2 million for the nine months ended September 30, 1998, or $0.17 per share, compared to earnings of $1.4 million, or $0.03 per share, in the first nine months of 1997.

Statistics:

  • Average production from the Cold Lake pilot project in October was 616 barrels of bitumen per day.
  • Well head prices for bitumen produced by BlackRock averaged $12.50 per barrel in September.
  • BlackRock's equity share of Rayrock's losses for the first nine months of 1998 was $7.1 million.
  • The value of the agreement between Rayrock and Glamis Gold Ltd. to BlackRock was approximately $31.3 million.
  • The line of credit with Rayrock has a maximum amount of $5 million.
  • The convertible debentures issued by BlackRock will bear interest at an annual rate of prime plus 1%.
  • The debentures will be repayable in full on June 30, 2000.

Sources:

  • Business Wire, November 24, 1998
  • BlackRock Ventures Inc. press release, November 24, 1998