CHICAGO Orbite Aluminae Inc. trimmed its losses in the third quarter as it slashed three vice president positions and limited exploration and development work in an effort to lower operating costs.
The Montreal-based company, which produces alumina from aluminous clay rather than traditional bauxite, trimmed its net loss to Canadian $2.1 million ($2 million) in the third quarter from a net loss of nearly C$4 million in the comparable year-ago quarter, according to earnings data released Nov. 14.
Orbite also cut its net loss for the first nine months of the year to C$6 million ($5.7 million) from a net loss of C$13.9 million a year earlier.
Orbite said it is a "development stage" company and, therefore, hasnt generated revenue.
"During the third quarter we continued to remain focused on building a new and more efficient Orbite," executive vice president and chief operating officer Glenn Kelly said in a statement released with earnings data. The company is concentrating on finishing its high-purity alumina facility in Cap-Chat, Quebec, and development of its "red mud" remediation project with Paris-based waste handler Veolia Environmental Services (amm.com, April 30).
Red mud is a caustic by-product of traditional aluminum production.
Orbite reported cash and short-term investments of C$4.4 million ($4.2 million) and positive working capital of C$3.8 million ($3.6 million) as of Sept. 30, but warned that those amounts were insufficient to complete construction and commissioning of its high-purity alumina plant. The company reported negative cash flow from operations of C$6.4 million ($6.1 million) in the first nine months of 2013 and lost C$11.9 million from operations for all of 2012.
Because Orbite has limited financial resources, management is seeking to raise capital to meet funding requirements, the company said, noting that it largely relies on issuances of shares, debt and other sources of financing to fund its overhead.
Orbite has announced a public offering of up to C$16 million ($15.3 million) in convertible unsecured debentures and share purchase warrants, which the company expects to complete in the fourth quarter, subject to regulatory approval. It also said it has received a binding subscription for C$40 million ($38.2 million) from Los Angeles-based institutional investor Crede Capital Group LLC (amm.com, Nov. 12).
But until those financing deals close on "acceptable terms," Orbite said it has moved to limit operating costs. "There can be no assurance that managements plans will be successful," it said. "Accordingly, it could result in a material uncertainty that may cast significant doubt about the corporations ability to continue as a going concern."