For the third quarter ended August 31, 2015, NovaCopper reported a net loss of $4.2 million or $0.04 basic and diluted loss per common share.
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This compares to a net loss of $2.9 million for the corresponding period in 2014 or $0.05 basic and diluted loss per common share.
This variance was primarily due to an increase in mineral properties expense and professional fees offset by a decrease in salaries.
Mineral properties expense increased to $2.9 million in the three months ended August 31, 2015 from $0.8 million for the three months ended August 31, 2014 due to the differing magnitude of the field programs in 2015 and 2014. In 2015, the company completed fourteen diamond drill holes amounting to 3,055 meters at the Arctic Project, as well as engineering and environmental site investigations.
In 2014, the company completed a re-sampling program and re-assayed approximately 13,000 meters of drill core at the Bornite Project. Professional fees increased by $0.3 million due to the closing of the Sunward acquisition and related transaction costs during the three months ended August 31, 2015.
Offsetting the increase in mineral property expenses and professional fees is a decrease in salaries due a cost reduction plan implemented in the 3rd quarter of 2014 that reduced the number of employees in the corporate office. The salaries in 2014 also included a one-time severance cost of $1.3 million paid to former employees.
Other differences in the three months ended August 31, 2015 compared to the three months ended August 31, 2014 resulted from a reduction in amortization, general and administrative, and an increase in stock-based compensation.
Amortization expenses decreased by $0.08 million due to the timing of capital asset purchases and resulted amortization expense. General and administrative costs during the three months ended August 31, 2015 was consistent with the corresponding period in 2014. Stock-based compensation increased by $0.1 million largely due to no options being granted during the nine months ended August 31, 2014.
For the nine months ended August 31, 2015, NovaCopper reported a net loss of $7.4 million (or $0.10 basic and diluted loss per common share) compared to a net loss of $7.6 million for the corresponding period in 2014 (or $0.14 basic and diluted loss per common share).
This variance was primarily due a reduction of salary expense to $0.8 million compared to $2.7 million in 2014, and offset against an increase in mineral properties expense of $1.6 million.
The mineral properties expense increased to $3.5 million in the nine months ended August 31, 2015 from $1.9 million for the nine months ended August 31, 2014. As discussed above, the difference relates to the magnitude of the field programs undertaken in 2015 and 2014.
In the first half of 2014, the company was engaged in the update to the Bornite Project resource estimate, a report involving technical and engineering consulting; no comparable expenditure was incurred in 2015.
Other differences in the nine months ended August 31, 2015 compared to the nine months ended August 31, 2014 resulted from a reduction in amortization expenses and general and administrative expenses offset by an increase in stock-based compensation expense and professional fees. As noted above, amortization expense decreased due to the timing of capital asset purchases.
General and administrative costs were reduced from $1.2 million in the nine months ended August 31, 2014 to $1.1 million in the nine months ended August 31, 2015 due to continued cost reduction efforts mainly as a result of the reduced corporate office size and lower travel expenditures. Offsetting the reduction in expenses is an increase in non-cash stock-based compensation charge of $0.3 million, and an increase in professional fees of $0.3 million.
Total stock-based compensation expense recognized for the nine months ended August 31, 2015 was $0.6 million which included expense of $0.5 million from options granted to directors, employees and service providers under the NovaCopper stock option plan and $0.1 million DSUs granted to directors during the period.
For the comparable nine months ended August 31, 2014, no stock based compensation grants occurred resulting in minimal expense from previously granted options and RSU units being expensed in the period. Total professional fees of $1.2 million were incurred during the nine months ended August 31, 2015, of which $0.8 million was related to transaction costs related to the closing of the Sunward acquisition, and the remaining relating to general legal and professional expenses.
For the comparable period of 2014, the company incurred $0.8 million of professional fees primarily related to the financing preparation costs including the filing of a preliminary prospectus supplement on February 19, 2014 which was not completed. ■