Rare earths processor Great Western Minerals Group (CVE:GWG)(OTC:GWMGF) reported Thursday first quarter financial results, increasing manufacturing and processing revenue by 9%.
Revenue for the first three months of the year grew to $4.24 million, compared to $3.89 million a year earlier. The results include manufacturing and processing revenue from two of the company's subsidiaries, UK-based Less Common Metals, and US-based Great Western Technologies.
Quarterly gross margins on manufacturing and processing operations rose over 3%.
However, net losses widened to $3.23 million, or $0.009 per share, versus $0.7 million, or $0.003 per share, a year earlier. The company said the latest quarter included stock-based compensation expenses of $1.7 million, versus nil, a year prior.
The company's UK-based Less Common Metals (LCM) subsidiary, where its specialty alloys are produced, generated revenue of $4.08 million, up from $3.60 million in the prior year period. Gross margins increased 20.0% compared to the first quarter of 2010, while earnings before interest, taxes, depreciation and amortization rose 30.8%.
"Great Western Minerals continues to see significant improvements in revenue and margin performance in our LCM alloy processing operations," said president and CEO Jim Engdahl.
"As well, our improved cash position relative to the same time last year is important given our company's aggressive development plans at Steenkampskraal and our expansion plans for Less Common Metals.
"The influx of cash from the exercise of outstanding warrants continues to put our company in a much stronger position than has been the case in the past."
Indeed, the company finished the quarter with $14.9 million in cash, which it plans to use to develop its Steenkampskraal rare earth mine in South Africa. In addition to a planned exploration program at Steenkampskraal, Great Western also holds interests in six rare earth exploration properties in North America.
The company's specialty alloys are used in the battery, magnet and aerospace industries, and are produced at its subsidiaries, Less Common Metalsin Birkenhead, U.K., and Great Western Technologies in Troy, Michigan. These alloys contain aluminium, nickel, cobalt and rare earth elements.