UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
May 15, 2012
Date of Report (Date of
earliest event reported)
NORD RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE | 1-08733 | 85-0212139 |
(State or other jurisdiction of | (Commission File Number) | (IRS Employer Identification No.) |
incorporation) |
1 West Wetmore Road, Suite 203 | |
Tucson, Arizona | 85705 |
(Address of principal executive offices) | (Zip Code) |
520-292-0266
Registrant's telephone
number, including area code
Not applicable.
(Former name or former
address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
[ ] |
(17 CFR 240.14d-2(b)) |
[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item | Description |
7.01 | Regulation FD |
9.01 | Financial Statements and Exhibits |
2.
SECTION 7 REGULATION FD
Item 7.01 Regulation FD Disclosure
On May 15, 2012, Nord Resources Corporation (Nord) issued a news release, a copy of which is attached as Exhibit 99.1, which includes disclosure of certain financial results for the quarter ended March 31, 2012, as reported in Nords quarterly report on Form 10-Q.
SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits
Exhibit No. | Exhibit |
99.1 | News release dated May 15, 2012** |
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NORD RESOURCES CORPORATION
By: | |
DATE: May 15, 2012 | /s/ Wayne Morrison |
Wayne M. Morrison | |
Chief Financial Officer |
3.
NEWS RELEASE
For Immediate Release
Nord Resources Reports 2012 First-Quarter Results
TUCSON, AZ, May 15, 2012 Nord Resources Corporation (OTC Pink Market: NRDS), which is producing copper at its Johnson Camp Mine in Arizona, today announced its unaudited financial results for the first quarter ended March 31, 2012. The condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles and all currency amounts are in U.S. dollars.
Since July 2010, when we suspended mining new ore in order to reduce our expenses and maximize cash flow, we have been producing copper by leaching the ore previously placed on our three pads and processing it through the Johnson Camp Mines SX-EW plant, said Wayne Morrison, Chief Executive and Chief Financial Officer. Our financial results through the first three months of 2012 reflect the expected continuing decline in copper production from the leaching process, the recent decline in the average price of copper, and the need to recognize abnormal production costs.
Nord continues to have to recognize for accounting purposes abnormal production costs reflecting the underutilization of the Johnson Camp Mines plant capacity. In the 2012 first quarter, these abnormal costs amounted to $2.5 million ($3.94 per pound), resulting in an average cost of copper sold during the period of $5.39 per pound. The average realized price of copper sold during the quarter was $3.81. This significantly contributed to the net loss that the company incurred for the 2012 first quarter, Mr. Morrison said.
A key part of our operating strategy going forward remains our previously announced plan to build a new leach pad that we expect will enable us to achieve our target production rate of 25 million pounds of copper per year. The new pad will require an estimated capital investment of approximately $18 million. We continue to work on obtaining new financing that would enable us both to restructure our debt and to resume mining and processing new ore. While we continue to make progress on this, we have not completed an agreement and cannot be certain of success until that is accomplished, Mr. Morrison continued.
Financial Highlights
First-quarter 2012 net sales were $2,378,014 from the sale of 624,372 pounds
of copper. The average realized price of copper sold during the three-month
period was $3.81. This compares with net sales of $2,503,354 in the 2011
fourth quarter from the sale of 720,764 pounds of copper. The average price
of price of copper sold during the 2011 fourth quarter was $3.47.
For the 2011 first quarter, net sales were $4,753,344 from the sale of 1,083,618
pounds of copper. The average realized price of copper sold during the 2011
three- month period was $4.39 per pound.
Costs applicable to sales in the 2012 first quarter amounted to $3,368,426
(including $2,461,415 in abnormal production costs due to the underutilization
of plant capacity). The average cost of copper sold during the first quarter
of 2012 was $5.39 per pound. The average cost of copper sold during the
first quarter of 2012 excluding abnormal production costs was $1.45 per
pound.
For the 2011 first quarter, Nord incurred $4,382,805 (including $2,874,185
in abnormal production costs due to the underutilization of plant capacity)
of costs applicable to sales from the sale of copper. The average cost of
copper sold during the first quarter of 2010 was $4.04 per pound. The average
cost per pound of copper sold excluding abnormal production costs was $1.39
per pound.
The increase in the average cost per pound of copper sold during the 2012
three- month period versus the same period in 2011 is primarily due to the
absorption of increased abnormal production costs resulting from the continuing
decrease in the utilization of plant capacity.
General and administrative (G&A) expenses decreased to $398,962 for the 2012 first quarter, compared with $517,833 for the 2011 period. The decrease was primarily due to a $54,421 reduction in professional fees and a $45,339 decrease in employee compensation expense mainly related to reductions in salaries and wages and a reduction in compensation expense related to employee stock options that vest over time.
Depreciation, depletion, and amortization (DD&A) expenses decreased to $212,271 in the 2012 first quarter from $259,304 in the 2011 period. The decrease was primarily due to the reduction in the amount of copper produced in comparison to the same period in the prior year.
The decrease in other income (expense) to $906,243 in the 2012 first quarter, compared with $1,870,782 in the 2011 period was primarily due to a decrease in gains (losses) on derivatives classified as trading securities. The company recorded a gain of $28,681 in the 2012 period, compared with a net loss in the same period in 2011 of ($1,004,678). Interest accrued increased by $61,148 to ($950,356), compared with ($889,208) in the 2011 first quarter.
Liquidity and Cash Flow
As noted, Nord's copper production in 2011 and through the first quarter of 2012 was significantly below earlier expectations for the reasons previously disclosed as well as the July 2010 decision to suspend mining and crushing new ore. This shortfall adversely affected the company's working capital and cash flow, causing Nord to be unable to meet some of its debt obligations in 2010, 2011, and first quarter of 2012.
As announced on May 14, 2010, Nedbank Limited (Nedbank), the company's senior lender, declined to extend a forbearance agreement regarding the scheduled quarterly principal and interest payments that were due between March 31, 2010 and March 31, 2012 under Nord's $25 million secured term-loan facility. Accordingly, the company has been in default of its obligations under the Credit Agreement with Nedbank since May 14, 2010, and the full amount of the outstanding principal of $23,257,826 is included in the company's current liabilities.
Nedbank Capital also declined to extend the forbearance agreement regarding the company's failure to make the timely monthly settlement payments beginning in March of 2010 through March 31, 2012 under the copper hedge agreement. As of March 31, 2012, the amount due to Nedbank Capital related to these settlements is $16,106,691 and is included in copper derivatives settlement payable within the condensed consolidated balance sheet.
As previously disclosed, given this default, Nedbank has full authority to exercise its rights under the Credit Agreement, including the acceleration of the full amount due thereunder and the institution of foreclosure proceedings against the Johnson Camp Mine. In accordance with the Credit Agreement, upon an event of default the interest rate on the outstanding debt and unpaid accrued interest is increased by 3.00% to the three-month United States Dollar London Interbank Offered Rate (LIBOR) plus 9.06% (9.53% at March 31, 2012).
About Nord Resources
Nord Resources Corporation is producing copper at the Johnson Camp Mine, the company's primary asset, which is located approximately 65 miles east of Tucson, Arizona. For further information, please visit our website at nordresources.com.
Forward-Looking Statements
All statements in this release, other than those of historical facts, may be considered to be "forward-looking".
Nord's continuation as a going concern is dependent upon its ability to refinance the obligations under its Credit Agreement with Nedbank and the Copper Hedge Agreement with Nedbank Capital, raise additional capital, and on its ability to produce copper to sell at a level where the company becomes profitable and generates cash flows from operations. To succeed, Nord must be able to proceed with its plans to build additional leach pad capacity, resume full operations, and achieve its operating plan. If management cannot achieve its operating plan because of the company's inability to obtain the required financing, or because of sales shortfalls, a reduction in copper prices, or other unfavorable events, the company may find it necessary to dispose of assets, or undertake other actions as may be appropriate.
Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, Nord's ability to refinance the company, the market price of copper, general economic, market, and business conditions, the company's ability to reach full production rates, and other factors that may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. In addition, Nord's business and operations are subject to the risk factors set forth in Nord's most recent Form 10-K and other SEC filings which are available through EDGAR at www.sec.gov, and in Nord's prospectus and other filings with the British Columbia and Ontario Securities Commissions, which are available through SEDAR at www.sedar.com. Nord assumes no obligation to update the forward-looking statements except as may be required by law.
For further information:
Wayne Morrison
Chief Executive Officer and Chief Financial Officer
Nord Resources Corporation
(520) 292-0266
www.nordresources.com
Investor and Media Relations
Richard Wertheim
Wertheim + Company Inc.
(416) 594-1600 ext.223
or
(416) 518-8479 (cell)
or by email at wertheim@wertheim.ca
NORD RESOURCES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2012 AND DECEMBER 31, 2011
March 31, | December 31, | |||||
2012 | 2011 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | - | $ | 118,058 | ||
Accounts receivable | 212,810 | 345,382 | ||||
Inventories | 3,251,506 | 3,763,892 | ||||
Prepaid expenses and other assets | 149,146 | 159,986 | ||||
Total Current Assets | 3,613,462 | 4,387,318 | ||||
Property and Equipment, at cost: | ||||||
Property and equipment | 50,597,099 | 50,518,198 | ||||
Less accumulated depreciation, depletion and amortization | (6,444,488 | ) | (6,313,728 | ) | ||
Net Property and Equipment | 44,152,611 | 44,204,470 | ||||
Other Assets: | ||||||
Deposits | 146,079 | 146,079 | ||||
Restricted marketable securities | 686,476 | 686,476 | ||||
Debt issuance costs, net of accumulated amortization | 282,192 | 368,684 | ||||
Stockpiles and ore on leach pads | 5,934,083 | 6,347,012 | ||||
Total Other Assets | 7,048,830 | 7,548,251 | ||||
Total Assets | $ | 54,814,903 | $ | 56,140,039 |
NORD RESOURCES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2012 AND
DECEMBER 31, 2011
(Continued)
March 31, | December 31, | |||||
2012 | 2011 | |||||
(Unaudited) | ||||||
LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 4,389,063 | $ | 4,163,041 | ||
Accrued expenses | 1,413,503 | 1,316,074 | ||||
Accrued interest | 5,686,544 | 4,933,337 | ||||
Copper derivatives settlement payable | 16,106,691 | 16,106,691 | ||||
Current maturity of long-term debt | 6,185,999 | 6,190,999 | ||||
Current maturities of senior long-term debt | 23,257,826 | 21,481,183 | ||||
Current maturities of derivative contracts, at fair value | 26,215 | 54,896 | ||||
Senior long-term debt accelerated due to default | - | 1,776,643 | ||||
Other current liabilities | 152,652 | 147,634 | ||||
Total Current Liabilities | 57,218,493 | 56,170,498 | ||||
Long-Term Liabilities: | ||||||
Deferred revenue, less current portion | 4,638,649 | 4,646,868 | ||||
Accrued reclamation costs | 3,294,736 | 3,195,497 | ||||
Other long-term liabilities | 6,135 | 14,635 | ||||
Total Long-Term Liabilities | 7,939,520 | 7,857,000 | ||||
Total Liabilities | 65,158,013 | 64,027,498 | ||||
Commitments and contingencies | ||||||
Stockholders Deficit: | ||||||
Common stock: $.01
par value, 400,000,000 shares
authorized, 112,488,604 and 112,177,627 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively |
1,124,887 | 1,121,777 | ||||
Additional paidincapital | 122,182,373 | 122,133,246 | ||||
Accumulated deficit | (133,650,370 | ) | (131,142,482 | ) | ||
Total Stockholders Deficit | (10,343,110 | ) | (7,887,459 | ) | ||
Total Liabilities and Stockholders Deficit | $ | 54,814,903 | $ | 56,140,039 |
NORD RESOURCES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE
THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited)
2012 | 2011 | |||||
Net sales | $ | 2,378,014 | $ | 4,753,344 | ||
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below) | 3,368,426 | 4,382,805 | ||||
General and administrative expenses (includes stock based compensation of $52,237 and $82,199, respectively) | 398,962 | 517,833 | ||||
Depreciation, depletion and amortization | 212,271 | 259,304 | ||||
Loss from operations | (1,601,645 | ) | (406,598 | ) | ||
Other income (expense): | ||||||
Interest expense | (950,356 | ) | (889,208 | ) | ||
Gains (losses) on derivatives classified as trading securities | 28,681 | (1,004,678 | ) | |||
Miscellaneous income | 15,432 | 23,104 | ||||
Total other income (expense) | (906,243 | ) | (1,870,782 | ) | ||
Loss before income taxes | (2,507,888 | ) | (2,277,380 | ) | ||
Provision for income taxes | - | - | ||||
Net loss | $ | (2,507,888 | ) | $ | (2,277,380 | ) |
Net loss per basic and diluted share of common stock: | ||||||
Weighted average number of basic and diluted common shares outstanding | 114,320,260 | 113,310,388 | ||||
Basic and diluted loss per share of common stock | $ | (0.02 | ) | $ | (0.02 | ) |
NORD RESOURCES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE
THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited)
2012 | 2011 | |||||
Cash Flows From Operating Activities: | ||||||
Net loss | $ | (2,507,888 | ) | $ | (2,277,380 | ) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||
Depreciation, depletion and amortization | 212,271 | 259,304 | ||||
Accretion expense on accrued reclamation costs | 99,239 | 114,784 | ||||
Amortization of debt issuance costs | 86,492 | 86,493 | ||||
Issuance of stock options for services rendered | 25,987 | 55,949 | ||||
Issuance of deferred stock units for services rendered | 26,250 | 26,250 | ||||
Unrealized gain on derivatives classified as trading securities | (28,681 | ) | (1,538,242 | ) | ||
Changes in assets and liabilities: | ||||||
Accounts receivable | 132,572 | 419,389 | ||||
Inventories, stockpiles and ore on leach pads | 843,804 | 1,222,659 | ||||
Prepaid expenses and other assets | 10,840 | (53,876 | ) | |||
Accounts payable | 161,844 | 19,049 | ||||
Accrued expenses | 97,429 | 32,013 | ||||
Accrued interest | 753,207 | 276,027 | ||||
Copper derivatives settlement payable | - | 2,157,739 | ||||
Deferred revenue | (8,230 | ) | (14,283 | ) | ||
Other liabilities | (8,500 | ) | (8,631 | ) | ||
Net Cash Flows from Operating Activities | (103,364 | ) | 777,244 | |||
Cash Flows From Investing Activities: | ||||||
Capital expenditures | (14,723 | ) | (303,568 | ) | ||
Net Cash Flows from Investing Activities | (14,723 | ) | (303,568 | ) | ||
Cash Flows From Financing Activities: | ||||||
Principal payments on long-term debt | (5,000 | ) | (151,068 | ) | ||
Borrowings (principal payments) on capital lease | 5,029 | (4,201 | ) | |||
Net Cash Flows from Financing Activities | 29 | (155,269 | ) | |||
Net Increase (Decrease) in Cash and Cash Equivalents | (118,058 | ) | 318,407 | |||
Cash and Cash Equivalents at Beginning of Period | 118,058 | 1,120,023 | ||||
Cash and Cash Equivalents at End of Period | $ | - | $ | 1,438,430 |