February 15, 2002…..(TSE..BWR) Breakwater Resources Ltd. announces that in the fourth quarter of 2001, the Corporation changed its accounting policy for revenue recognition. Under the new policy, which has been adopted retroactively with restatement of prior periods, revenue is recognized following the transfer of title of metal concentrate and the determination of the final settlement price in accordance with the contractual arrangements with customers. Normally, the final settlement price is computed based on the average quoted metal prices for a specified period of time, normally one to three months, subsequent to shipment to the customer.
Provisional payments made by customers upon receipt of shipments of metal concentrate are classified on the Balance Sheet as current liabilities captioned as “Provisional payments for concentrate inventory shipped and not priced”. Concentrate inventory is valued at the lower of cost and net realizable value. Cost represents the average cost, and includes direct labour and material, mine site overhead and depreciation and depletion.
Previously, revenue was recognized when the ore was mined, processed and in a deliverable form as concentrate. This change is consistent with the trend in the industry.
The effects of this change on the consolidated financial statements were as follows:
|
Nine months ended |
|
Increase (decrease) in: |
September 30
(unaudited) |
Years ended December 31
|
|
($000’s) |
2001 |
2000 |
2000 |
1999 |
1998 |
|
Gross sales revenue |
23,022 |
(13,376) |
(19,144) |
(19,837) |
(3,994) |
|
Treatment and marketing costs |
8,151 |
(4,600) |
(8,486) |
(7,968) |
(1,752) |
|
Net revenue |
14,871 |
(8,776) |
(10,658) |
(11,869) |
(2,242) |
|
Direct operating costs |
10,674 |
(7,683) |
(16,025) |
(2,079) |
(4,638) |
|
Earnings |
4,197 |
(1,093) |
5,367 |
(9,790) |
2,396 |
|
Deficit beginning of period |
6,677 |
12,044 |
12,044 |
2,254 |
4,650 |
|
Loss per share |
($0.05) |
- |
($0.06) |
- |
($0.03) |
|
Earnings per share |
- |
($0.01) |
- |
($0.13) |
- |
|
Increase (decrease) in: |
September 30,
2001
(unaudited) |
December 31,
2000 |
December 31,
1999 |
|
Assets |
|
|
|
|
Accounts receivable – concentrate |
(3,347) |
(3,364) |
(3,667) |
|
Concentrate inventory |
19,952 |
18,428 |
12,574 |
|
Mineral properties and fixed assets |
- |
(2,629) |
- |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Provisional payments for concentrate inventory
shipped and not priced |
18,967 |
19,062 |
20,779 |
|
Deficit |
2,480 |
6 ,677 |
12,044 |
|
Cumulative translation adjustments
|
118 |
51 |
172 |
Restated financial statements for the periods ended September 30, 2001 and 2000 are being filed on www.sedar.com concurrently with the issue of this release and will be made available from the Company’s website at www.breakwater.ca as soon as possible.
Should you require further information please contact:
C. K. Benner
President and Chief Executive Officer
416-363-4798 Ext. 269
cbenner@breakwater.ca
René R. Galipeau
Executive Vice President and Chief Financial Officer
416-363-4798 Ext.260
rgalipeau@breakwater.ca
|