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Powertech releases quarterly financial statements

Cumulative losses reach $18 mil, cash burn rate increases to $1.5 mil per month, only $5 mil working

capital left

Posted February 8, 2008



Powertech Uranium Corp. recently released its third quarter financial statements and related Management Discussion & Analysis report.  Highlights from the December 31, 2007 financial statements include (all amounts are in Canadian dollars):


- Cumulative losses for the company increased to $18,322,388.  The loss for the 3-month period was $1,113,576.


- Cash flow for the quarter was negative $4,480,279.  The average monthly burn rate was $1,493,426.


- Working capital (current assets less current liabilities) at December 31, 2007 was $5,037,570.  Using the last quarter's cash burn rate and assuming no new financing, that $5 mil in working capital would be exhausted in less than four months.  Of course, the company may be close to securing new financing and could also reduce spending to conserve cash.


The Management Discussion and Analysis report includes the following disclosures to investors:

The Company has limited financial resources. The Company will continue to make substantial capital expenditures related to exploration, development and production. In particular the Company will have further capital requirements as it proceeds to expand its present exploration activities at its uranium projects, or to take advantage of opportunities for acquisitions, joint ventures or other business opportunities that may be presented to it.  In addition, the Company may incur major unanticipated liabilities or expenses. There can be no assurance that the Company will be able to obtain necessary financing in a timely manner on commercially acceptable terms, if at all.


Amendments to current laws and regulation governing operations or more stringent implementation thereof could have a substantial impact on the Company and cause increases in exploration expenses, capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in development of new mining properties.


The Company has no history of mineral production or mining operations.  The Company has never had uranium producing properties.


Sales of a large number of Common Shares in the public markets, or the potential for such sales, could decrease the trading price of the Common Shares and could impair the Companys ability to raise capital through future sales of Common Shares.

After reviewing Powertech's financial reports, I have a few questions for my neighbors:


Given Powertech's questionable financial position, does it make sense to allow this company to begin ISL and possibly open pit uranium mining in our community?  If it results in the contamination of our well water and land, will Powertech be financially able to compensate us for our losses?  Do we want to assume these risks?   





POWERTECH URANIUM CORP. - INTERIM CONSOLIDATED FINANCIAL STATEMENTS - December 31, 2007 - Stated in Canadian Dollars -Unaudited (pdf)




Historical financial statements