PhosCan Chemical Corp. (TSX: FOS) announces its financial and operating results for the quarter ended July 31, 2009.

Financial Results

PhosCan reported a net loss for the quarter ended July 31, 2009 of $704,661 compared to $832,574 during the same period of the previous year. The decrease in net loss of $127,913 was due to decreases in general and administrative expense and stock-option compensation expense, offset partly by increases in professional and legal fees, a write-off of forfeited advances, and a decrease in other income.

General and administrative expense decreased by $129,114 during the quarter primarily due to cost-cutting measures implemented by management and lower levels of corporate activity related to the reduced level of development of the Martison Phosphate Project. Stock-option compensation expense fell by $214,089 as no new stock options were granted during the quarter.

Professional and legal fees increased by $58,499 during the quarter primarily due to the engagement of professional advisors to help PhosCan source and evaluate corporate development opportunities. The Company wrote-off $118,750 of advances that were forfeited following the termination of certain contracts that were entered into prior to the decision by the Company on December 8, 2008 to defer several tasks related to the development of the Martison Project.

The decrease in other income was primarily due to a $118,733 increase in foreign exchange losses, which consisted of unrealized losses net of realized gains. During the three months ended July 31, 2009, the Company purchased U.S. dollars in part to fund anticipated U.S. dollar-denominated expenditures on the Martison Project and in part because it viewed an opportunity to sell U.S. dollars at a later time for a gain. At quarter-end, the Company held US$9 million to fund the anticipated expenditures and the unrealized foreign exchange losses were due to the effect of an appreciating U.S. dollar on this U.S. dollar cash balance. During the current quarter, the Company realized on the opportunity to sell a portion of its U.S. dollars for a gain, which resulted in the realized foreign exchange gains.

Cash and cash equivalents plus short-term investments decreased by $3,069,648 during the six months ended July 31, 2009 to $69,691,789 while working capital decreased by $2,652,992 to $69,299,620.