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
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
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
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
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