Birch Mountain Stock Up Despite Disappointing 2007 Results

What's done is done. That appears to be the message from Birch Mountain Resources Inc. (BMD) investors on Thursday after shares in the precious metals explorer rose 9% despite the release Wednesday of Birch Mountain's disappointing 2007 financial results.

Shares were up C$0.04 to C$0.56 nearing market close after the company reported that it incurred a net loss of C$24.5-million for the year or C$0.29 per share compared with a loss of C$10.2-million or C$0.13 per share in 2006.

Total sales for 2007 were C$7.7-million versus C$1.54 million for 2006, and significantly below management's expectations because anticipated orders did not materialize, particularly in the second half of the year.

While Thursday's mild increase was a step in the right direction, it pales in comparison to the stiff drop the stock has taken since hitting a 52-week high of C$4.56 in April of last year.

In a message from the president, Joel Jarding, its president and COO stated:

Fiscal year 2007 was very challenging for Birch Mountain. The overall financial results and ongoing losses incurred throughout the year were disappointing. As a result, we have made significant changes to our business and we are dedicated and focused on improved performance in 2008.

He stated that Birch Mountain's two major challenges in 2007 were anticipated sales to customers did not materialize and the cost structure was too high. Looking ahead, the company expects to produce and market high margin concrete rock and reagent limestone to potential new markets during the year and expects financial performance for 2008 to improve, helped by reduced G&A and quarry operations costs. The company said it will also focus on obtaining regulatory approval for the Hammerstone Project.

He said:

The quality of the product and the location of the quarry with respect to the various oil sands projects are second to none, our aggregate and environmental limestone products are well-positioned to contribute to the long term sustainability of the oil sands and the real value of the asset remains as high as ever.

The company also announced the signing of a three-year aggregate supply agreement with Suncor Energy Inc. (SU) to supply various construction aggregates from the Muskeg Valley Quarry, during 2008.

Comments

[User 115296:]

The Suncor work will keep the company busy and should give it a good boost in 2008. Reduced operating costs should produce nice positive results. What a opportunity the shares are right here!

2008 Apr 10 08:08 PM