RAB Special Situations (fka RAB)

[Tackler]

CCH Campbell Resources Q1 loss grows to $2.67-million

2005-05-11 11:47 ET - News Release

Mr. Andre Fortier reports

CAMPBELL RESOURCES ANNOUNCES A $5,000,000 CONVERTIBLE NOTE FINANCING AND ITS FIRST QUARTER RESULTS FOR 2005

Campbell Resources Inc. has confirmed that, subject to receipt of regulatory approval, it will be concluding a private placement of convertible unsecured promissory notes to RAB Special Situations (Master) Fund Ltd., a Cayman Islands registered hedge fund managed by RAB Capital PLC, for total gross proceeds of $5-million.

The notes shall bear interest at 1 per cent per calendar month and are convertible into units at the option of the holder at the conversion price of 38 cents per unit at any time prior to the third anniversary of the notes. Each unit consists of one common share in the capital stock of Campbell and one-half share purchase warrant. Each full warrant entitles the holder to acquire one additional common share at an exercise price of 38 cents, exercisable for a period of three years from the date of issuance of the warrant. An underwriting fee of $1.5-million is payable in shares on closing of the financing. The maximum number of common shares to be issued upon conversion of the notes, interest and exercise of all of the warrants will be 30,789,421 for a total proceed of $8.4-million (27.3 cents per share).

Closing is scheduled to be held on or around June 6, 2005. Proceeds from this financing will be used for working capital purposes as Campbell used its working capital to finance the completion of the Copper Rand project. The company's balance sheet will thus be improved accordingly.

For the first quarter, Campbell recorded a net loss of $2.7-million or two cents per share in the first quarter of 2005, compared with a net loss of $1.8-million or two cents per share for the same period in 2004. The main reasons are a lack of improvement in the performance of the Joe Mann mine and the delay in the start-up of the Copper Rand mine.

Gross metal sales for the first quarter of 2005 were $5.5-million (9,365 ounces of gold) compared with $4.4-million (7,570 ounces) for the comparable period in 2004. The average market price for gold in the first quarter was $427 (U.S.) ($524) compared with $409 (U.S.) ($537) for the first quarter of 2004. The average sale price was $523 per ounce of gold compared with $542.31 in the first quarter of 2004.

Mining expenses for the first quarter 2005 were $5.6-million compared with $4.5-million for the corresponding period of 2004. Amortization costs were $1.7-million compared with $1.2-million in the first quarter of 2004. Total cost per ounce produced was $565 (U.S.) ($693) compared with $455 (U.S.) ($598) in 2004.