Mar 29, 2011, Vancouver, British Columbia - Canaf Group Inc. (TSXV: CAF) ("Canaf" or the "Company") the Canada-registered mining group, today released its Financial Statements and Management Discussion and Analysis for the 3 months ended January 31, 2011.
For the 3 months ended January 31, 2011 sales increased 5% to $2,753,589 from $2,623,902 for the same period of the previous year, reflecting higher prices and marginally higher volume sales. Cost of sales at $2,572,874 reduced the operating margin to 6.6% or $180,715. The lower than traditional margin was caused by a planned major maintenance shutdown to re-line an emissions stack and complete other preventative maintenance on the refractories of both kilns. The net book loss after allowing for provisional tax during the period was $48,229.
At January 31, 2011, the Company had cash of $732,820. During the quarter the Company made further progress on its debt reduction plans, reducing commitments by $70,000 to $726,860.
The Company is planning to use coal gasifiers to heat the kilns to vastly reduce the cost of electricity. Consulting engineers who designed and commissioned both kilns are expected to complete their proposals to switch the number two kiln to lower cost gasifiers over the next six months. Once that kiln is completed and operating successfully for a trial period then the Company would look to switch the number one kiln to gasification. The Company expects to fund the cost of this switch to lower energy costs out of operating cash flow. The resulting reduction in operating costs will have a positive impact on gross margin. Further details will follow regarding the proposed timescale for the conversion works.
The Financial Statements and Management Discussion and Analysis can be viewed on www.sedar.com or the Company's website, www.canafgroup.com. All reference to dollars herein are to US dollars.
Canaf Group Inc. is a junior mining group based in Vancouver, Canada, and with subsidiary offices in the United Kingdom. Canaf owns 100% of Quantum Screening and Crushing (Pty) Ltd., a carbon producing company based in South Africa.
Quantum Screening and Crushing (Pty) Ltd's is one of South Africa's largest producers of calcined anthracite, a product used as a replacement to coke in the manufacturing process of steel and manganese. The company's two largest clients are Mittal Steel and BHP Billiton, world leaders in steel and manganese production respectively. Quantum has a plant in Newcastle, KwaZulu Natal, where its two kilns operate around the clock devolatising the raw material anthracite. The majority of Quantum's feedstock anthracite is supplied by Springlake Colliery, which has reserves in excess of 30 years and is located in the nearby town of Dundee.
Certain information regarding Canaf contained herein may constitute forward looking statements. Forward looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although Canaf believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward looking statements. Canaf is under no obligation to update or alter any forward looking statement. These risks include operational, political, currency and geological risks and the ability of Canaf to raise or obtain funds for its operations. Canaf's forward-looking statements are expressly qualified in their entirety by this cautionary statement.
For further information on Canaf Group, visit www.canafgroup.com or see contacts below.
Canaf Group Inc.
Phone: +44 1273 492100
Fax: +44 1273 492175
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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