RENO, Nevada, April 22 /PRNewswire/ -- Lou Schnur, a major shareholder of Altair Nanotechnologies, Inc. (Nasdaq: ALTI), today called on Altair's directors to instruct management to immediately sell or mothball its chronically unprofitable mining operations and focus exclusively on nanotechnology opportunities. Altair is a company engaged in developing nanomaterials, titanium dioxide pigment technology, and materials science focused on nanostructures. Schnur has filed a Schedule 13D with the Securities and Exchange Commission outlining generally the views expressed in this release. Schnur, a CPA, longstanding Altair investor, and 9.9% beneficial owner of Altair's outstanding stock and warrants, said Altair's mining operations appear to have generated economic losses of $30 million from 1973 through 2003. Also, Schnur criticized the proposed action by Altair to spin off the mining operations as a further distraction and waste of corporate assets. Schnur said, "The continuing costs to maintain mining personnel and operations, together with attendant legal, accounting and shareholder solicitation costs necessary to implement a spin-off, are economic losers. The assets are carried on Altair's books at zero value, have never produced significant revenues, much less profits, and they should either be sold or mothballed quickly." Schnur said he supports Altair's December 19, 2003 announcement of a restructuring program whereby the two development stage mining projects would be terminated, so that Altair could focus 100% of its personnel and other resources on its most promising business enterprise, the Reno, Nevada Materials/Nanotechnology Division. But he says that a March 16, 2004 Altair announcement is contradictory to the stated goals of the restructuring in that there would be a continued focus on mining activities. That release states in part: "Altair plans to distribute (or spin off) to its shareholders the capital stock of a subsidiary holding the assets of the current Mineral Recovery Systems (MRS) division. Altair intends to solicit shareholder approval for the spin off and complete the filings necessary to make MRS a reporting company. MRS will hold the rights to the exploration-stage mineral deposit in Camden, Tennessee, the ownership of the Altair centrifugal jig and related intellectual property for agglomeration of titanium dioxide. Dr. William P. Long will resign his position as Chief Executive Officer and member of Altair's board of directors as of May 1, 2004. Dr. Long is expected to serve as the President of MRS ... " Altair's SEC report on Form 10-K for the fiscal year ended December 31, 2003 disclosed aggregate losses of $17.6 million, by subsidiaries, relating to the centrifugal jig and the Tennessee mining projects. Schnur said he believes the reporting of "subsidiaries losses," as being indicative of total mining losses, is understated and misleading. Schnur also said, "After reviewing the financial statements in the SEC filings, and as an active shareholder (and a CPA, formerly employed by Price Waterhouse & Co.), it is my opinion that a more realistic economic assessment of Altair's $46 million loss, from inception in 1973 to December 31, 2003 (30 years) is: Mining development projects division - 30 years $30 million Reno materials/nanotech division - 3 years $16 million Altair's total loss from 1973 - December 31, 2003 $46 million." Schnur said he believes shareholder value will be maximized by the immediate termination of mining personnel and of all controllable mining expenditures, and the disposal of the mining projects by public auction, prior to December 31, 2004. The auction should be advertised in "The Northern Miner," with project descriptions mailed to potential interested companies and investors. Altair alumni, suppliers, business prospects and others would have equal opportunity in a public auction. A definitive, comprehensive disposal of the mining projects will bring closure to a long-term, failed business venture (and to Altair's team of mining directors and managers), maximize Altair's chances for commercial success, and hopefully set the stage for a long overdue return on investments made by Altair shareholders, Schnur said. To explain his reasoning in estimating Altair's mining losses, Schnur noted that Altair's only business until November 1999 was mining, and that it did not have significant nanotech expenses until 2001. In November 1999, Altair purchased certain technology assets from BHP Minerals International, Inc. (BHP), including, for a one-year period, the services of certain BHP personnel involved in the development of the acquired technology. Accordingly, Altair did not incur salary expenses for the technology operation from November 15, 1999 through November 15, 2000, since these expenses ($1,535,985) were part of the total $9,625,560 purchase price Altair paid BHP. Altair reported in its Form 10-K for 2000 that it had accumulated deficits during the development stage of $21,606,378, virtually all of which, Schnur says, was attributable to mining. As to years following 2000, Altair reported in its annual report for 2003 that "management views the company as being three business segments: Nanomaterials and Titanium Dioxide Pigment Technology, Tennessee Mineral Property, and the Jig." The following "Loss from Operations" was also reported: Unallocated Tennessee Jig Mining Total 2003 $2,778,885 $155,709 $27,729 $183,438 2002 1,871,953 598,977 2,929,010 3,527,987 2001 2,006,198 930,777 300,913 1,231,690 TOTALS $6,657,036(B) $1,685,463 $3,257,652 $4,943,115(A) Mining Deficits from April 9, 1973 through December 31, 2000 $21,606,378 Mining Deficits from 2001 through 2003 (A) 4,943,115 Estimated allocation of one-half of the $6,657,036 "unallocated expense" to the Tennessee Mineral Property and the Jig. (B) 3,328,518 Actual Mining Loss from inception through 2003 $29,878,011 Together with the Reno building and cash realized from the exercise of warrants (as a result of investor enthusiasm for Altair's Nanotech Division), the nanotech assets are the only significant assets on the December 31, 2003 Balance Sheet. The mining projects were written off. Schnur said he believes that Altair should have established a "Reserve for Loss on Disposal of Mining Projects" at December 31, 2003. Schnur noted that the President's Message in Altair's 2000 annual report stated " ... the Camden titanium deposit, with its tremendous resource value, remains the financial underpinning of the company. We have continued with our deliberate development of the property as the world capacity for extraction of titanium mineral resources has continued to decline." "After $30 million of losses, and diminished odds of obtaining necessary mining permits, as well as a viable operating partner," Schnur said, "it is time to cut the mining loss and give 100% to Materials/Nanotech. In my opinion, the losses actually attributable to the mining operations are greater than the amounts that have been reported." All of Altair's directors and senior management were mining personnel until Rudi Moerck was hired in March 2002, a move Schnur supports. The mining division had offices, in Cody, Wyoming and Reno, Nevada (complete with jig). The Tennessee pilot plant and tailings pond were constructed and operated in 2000-2001. The BHP purchase was mostly paid from $8,904,029 received for common stock sold in 2000 (at an average price of $2.36). Altair's proceeds from the Doral 18 LLC loan provided very little net cash to Altair; the loan carried a very high interest rate; and the loan resulted in significant dilution since warrants were issued as part of the loan, and significant repayments were made in common stock, at historically low prices. Schnur said that four months after the December 2003 restructuring announcement, Altair continues the mining payroll, lease payments to Tennessee landowners, engineering support for the jig in Africa, maintenance and environmental exposure for the pilot plant and tailings pond, an office in Cody, etc. Moreover, the spin-off might generate another $500,000 of expenses to be borne by Altair. Shareholders should demand that Altair directors order the immediate termination of this wasteful spending. This release is not intended, and does not constitute a solicitation of proxies by Schnur or any other person or group. Instead, in the interest of open shareholder communications, and in accordance with applicable SEC rules, it is intended to promote open communication among all shareholders concerning their views on the policies and decisions of Altair's management.
SOURCE Lou Schnur