TIDMVML
RNS Number : 3906Q
Vane Minerals PLC
09 April 2009
?
9 April 2009
VANE Minerals Plc (AIM:VML)
('VANE' or the 'Company')
Unaudited Preliminary Results for the year ended 31 December 2008
Vane Minerals Plc (AIM:VML), today announces its unaudited preliminary results
for the year ended 31 December 2008.
Highlights
* Optimisation of silver/gold at Diablito
* Wholly-owned 100 tonne/day flotation mill on stream
* Operational improvements at Diablito implemented in May 2008 resulting in
increased production rates to 1,430 tonnes/month or 47 tonnes/day
* 50-50 joint venture (JV) with Uranium One Exploration U.S.A. Inc. ("U1")
finalised - 50% ownership of 60-plus breccia pipe projects - northern Arizona
* Resource-grade mineralization at all three Utah uranium projects
* Yuma King copper project in west central Arizona optioned
* Closing cash balances across the group at year end of GBP3,308,016
Post year end highlights
* Northern Arizona - High grade results achieved at the Wate breccia pipe -
intersections of 30.5 feet of 1.87% eU308, including 12 feet of 3.67% eU308
* Northern Arizona - Mineralisation at the Tank 4½ pipe - 1305.0 to 1311.0 feet
and 1683.5 to 1691.5 feet that contained 6.0 feet of 0.07% eU308 and 8.0 feet of
0.07% eU308, respectively
* Northern Arizona - post drilling programme at Tank 4 ½, additional data obtained
on several mineralized holes including historic hole FO-9 that reportedly
intersected 48.5 feet grading 1.41% eU308 from 1346.0 to 1394.5 feet.
* Utah - Positive results at the Happy Jack mine in Utah - 7 holes reached
resource grade, verifying historic data
Steve Van Nort, Chief Executive Officer, commented "2008 proved to be a
productive year for VANE Minerals with silver/gold production benefiting from an
optimisation programme, and significant exploration work being conducted at our
uranium properties in the US that resulted in excellent drilling results.
Management's decision to arrange a GBP6.25 million private placement in November
2007 has provided the Company with a solid financial position which allows VANE
to continue to grow and develop its asset portfolio. In addition to shareholder
funds, VANE operations are financed by our Diablito mine in Mexico and have
provided us with revenues enhanced by favourable precious metal prices".
For further information, please contact:
+----------------+-----------+
| VANE | +44 |
| Minerals | (0) 20 |
| Plc | 7667 6322 |
+----------------+-----------+
| Matthew | |
| Idiens | |
| | |
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| | |
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| Ambrian | +44 |
| Partners | (0) 20 |
| Limited | 7634 4709 |
+----------------+-----------+
| Richard | |
| Brown | |
| | |
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| | |
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| | |
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| Threadneedle | +44 |
| Communications | (0) 20 |
| | 7653 9850 |
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| | |
+----------------+-----------+
| Laurence | +44 |
| Read/Beth | (0) 79 |
| Harris | 7995 923 |
+----------------+-----------+
CEO REPORT
Gold and silver production
The 100 tonne/day flotation mill at, San Dieguito de Arriba (SDA), came on
stream in January 2008, resulting in an immediate 50% reduction in milling costs
for Diablito ore. The combination of high precious metal prices during the first
and second quarters of 2008 and higher grade ore from Diablito, stockpiled
during the last half of 2007, in anticipation of the start-up of in-house
milling operations, provided favourable smelter returns. Operational
improvements at the mine were implemented in May 2008 and resulted in production
rates of 1,430 tonnes/month or 47 tonnes/day. At the Diablito Mine, a
reorganized and streamlined operations group completed a 20-hole programme of
development drilling, which successfully identified and confirmed future mining
resources in the area. We will continue to evaluate this in 2009.
We are continuing to evaluate several prospects in Mexico to provide additional
feed for the SDA Mill, as it is our plan to strengthen the company further by
increasing cash flow.
Uranium assets
On the uranium front a 50-50 joint venture (JV) with Uranium One Exploration
U.S.A. Inc. ("U1") was finalized giving VANE a 50% ownership interest and
exploration control over an additional 34 breccia pipe properties, one of which
has measured uranium resources (non-compliant NI 43-101). The JV now controls
over 60 breccia pipe targets with 10 known mineralized pipes.
Work continues on the Environmental Impact Statement, EIS, that we believe will
demonstrate that the effect exploration will have on the area will be minimal
and temporary.
In the SE Utah strata-bound district, the results of the drilling projects at
the North Wash, Happy Jack, and North Alice Extension properties indicated a
number of resource-grade mineralized intercepts that continue to be evaluated.
Copper assets
As well as uranium, silver and gold, management has extensive experience in
copper discovery and exploration. With this in mind, we will continue to explore
for porphyry copper deposits in south western USA, an area with which we are
very familiar.
Our Yuma King project in west central Arizona (optioned in late 2008), has the
potential to be an exciting discovery. Updating the historic NI 43-101 data with
mapping and further drilling is planned for 2009 and we look forward to
releasing further news on the target.
Outlook
Despite the favourable progress described above, VANE's share price, along with
many other similar mineral resource companies, fell to record lows by the end of
2008. We believe that with our continued commitment to the exploration,
development and drilling programmes the share price will readjust to reflect the
true value of the company.
Post the period we were particularly pleased with the significant high grade
results reported in January. At the Wate breccia pipe in northern Arizona we
reported an intersection of 30.5 feet of 1.87% eU308, including 12 feet of 3.67%
eU308. Such high grade results represent the potential to develop high value
uranium resources from the breccia pipe portfolio.
With silver/gold production underpinning our cash flow we are able to continue
our exploration programme without continued funding issues thus allowing us to
concentrate on operations. In 2009, we hope to increase cash flow from our
silver/gold operations in Mexico, increase the value of our uranium breccia pipe
portfolio, particularly through advancing the Wate project, and continue to
explore and develop our copper projects as well as investigating joint venture
and acquisition opportunities.
We wish to thank our investors for their continued support and look forward to
updating shareholders on progress made throughout 2009.
Steven D. Van Nort, CEO
9 April 2009
REVIEW OF OPERATIONS
Uranium exploration in USA
Exploration activities by VANE Minerals (US) LLC, VANE Minerals plc's
wholly-owned uranium subsidiary, including drilling and geophysics, continued in
both the northern Arizona breccia pipe and SE Utah strata-bound districts. 2008
was a productive year with the drilling of 149 holes for a total of 54,407 feet
(16,587m). The drilling was spread out over 16 projects; 13 of the 60-plus
breccia pipe projects in Arizona and three strata-bound projects in Utah. Eleven
(11) of these breccia pipe projects warrant further work while two of the
projects, CP3 on the south rim and NCP1 on the north rim, will be discontinued.
Positive drilling results were achieved from all three Utah projects;
North Wash, Happy Jack, and North Alice Extension. However, continued weakening
of the uranium price since the economic downturn requires another look at the
economics of these lower-grade Utah projects. Priority has now been given to the
higher grade breccia pipe projects of northern Arizona which look attractive
even at the present uranium spot price (US $42/lb). Detailed analysis of the
highlights of the drilling project results can be found in the regulatory
announcements issued during 2008 and are available on the Company's website.
Uranium joint venture - Northern Arizona
The 50-50 Joint Venture (JV) between VANE Minerals (US) LLC, and U1 was signed
on the 5th September 2008. This JV strengthened both companies' positions on the
south rim by resulting in a combination of over 60 breccia pipe properties which
includes 10 known mineralized pipes. While U1 had completed a major airborne
geophysical programme prior to signing the JV agreement, no drilling had been
completed. To date, VANE has completed drilling on 11 of the 33 pipe targets it
contributed to the JV with only one, CP3, having been eliminated. Upon signing
the JV, two of the properties U1 contributed, Tank 4½ and Wate Pipes, which had
historic drilling results, were re-drilled by year end. Significant intercepts
were encountered in the drilling as previously announced, including 30.5ft @
1.87% eU3O8 at Wate and some limited but detailed historic data was obtained
relating to Tank 4½ by Union Pacific Resources on the project in 1990 which
revealed several mineralized holes including historic hole FO-9 that reportedly
intersected 48.5 feet grading 1.41% eU3O8 from 1346.0 to 1394.5 feet which we
intend to investigate further with confirmation drilling. Recent investigations
have located detailed data held by a previous unrelated owner of the Wate Pipe
that are currently the subject of ongoing negotiations. If these data are
obtained and combined with our recent drilling results on the Wate pipe the JV
could commence a mining prefeasibility study. The JV continues to progress the
project and steps have been taken to proceed as quickly as possible should the
data not be available. The JV also secures VANE's access to U1's Ticaboo Mill in
Utah, which is in the re-permitting stage, for ore developed on JV properties.
Following completion of the third hole on the Eastern Star target in early 2008,
drilling equipment was moved to targets in the Kaibab National Forest for which
USFS had approved and issued permits. Drilling commenced on three of the seven
targets approved before the issuance of a Temporary Restraining Order ("TRO") in
response to a lawsuit brought by three environmental groups. VANE believes that
this law suit was entirely without merit and that the issuance of a TRO is
against well-established permitting procedures. However, in order to alleviate
concerns over the environmental impact of the small scale, low impact drilling
programmes required to test breccia pipes, we in conjunction with USFS
personnel, decided to complete further assessment beyond that which has
historically and prudently been required and proved sufficient. The drilling
inside the Kaibab National Forest was suspended pending the filing of the EIS
and the drill rig was moved to the north rim targets (outside the JV and 100%
owned by VANE). Four targets were drilled with favourable pipe characteristics
noted in three of the four target areas.
The EIS being completed on projects in the Kaibab National Forest was expanded
from 7 to some 25 projects and includes several projects contributed by U1 to
the JV. The anticipated completion date for this EIS process is late 2009, but
realistically, drilling may not start until after the winter season.
Zonge Engineering and Research Organisation based in Tucson, AZ, completed
down-hole time domain electromagnetic surveys on six drill holes on four
projects; one at Big Red, two at Miller, one at Miller Southwest, and two at Red
Dike. The purpose of the programme is to locate sulfide zones, often associated
with uranium mineralization, thus providing data to help position future drill
holes therefore improving the chances of discovery. The data interpretation is
in progress and preliminary results indicate the technique has detected some
zones of interest that will become drilling targets.
The Company continues to place emphasis on the high-grade breccia pipe potential
of the Arizona Strip. During 2009, a number of drilling projects will be
developed and placed in the pipeline for a long sustained period of drilling.
This combined with the favourable prospects for developing an NI 43-101
compliant resource at the Wate Pipe, provides good potential for the future.
Utah assets
In the SE Utah strata-bound district, the results of the drilling projects on
the North Wash, Happy Jack, and North Alice Extension properties intersected a
number of resource-grade mineralized intercepts that continue to be evaluated.
All of the mineralized intercepts at Happy Jack are proximal to existing
workings.
Also in Utah a large land position, the Abajo project, was acquired by VANE
(100%) via federal claims and Utah state leases along the projected southwest
trend of the Uravan Mineral Belt (uranium-vanadium). The Uravan Mineral Belt has
historic production of 60 million pounds uranium and 400 million pounds
vanadium. The land package totals 7,478 acres consisting of 3,678 acres of Utah
State Mineral Leases and 3,800 acres of Federal lode claims. The potential for
by-product vanadium for which the Belt is known offers added economic benefit
during periods of weak uranium prices.
Diablito mine and milling operations, Nayarit, Mexico
The 100% owned Mexican subsidiary, Minerales VANE SA de CV, performed well
during 2008 at its Diablito Mine at Las Lumbres and the San Dieguito de Arriba
Mill (SDA) at San Dieguito de Arriba, State of Nayarit, Mexico.
Diablito mine
Operations at the mine and the mill continue to run smoothly; however, dilution
of the ore is causing difficulties due to the width and angle of the vein but
management now believes we have done as much as possible to minimize the
dilution. Production of Direct Milling Ore (DMO) averaged 1,228 tonnes per month
or 14,738 tonnes for the year. This is below our targeted amount of 1,500 tonnes
per month or 50 tonnes per day, but improvements were implemented in May which
brought the last eight months of the year's production to 1,430 tonnes per month
or 47 tonnes per day. In general, DMO is designated as material with precious
metals values of +$150 per tonne at prevailing metal prices. Lower grade
material designated as Stockpiled Ore (SO), +$75 per tonne, totalled 7,154
tonnes for the year or 596 tonnes per month. Since the mill operating capacity
is 100 tonnes per day, the SO grade material mined on a daily basis starting in
January 2009 is shipped directly to the mill along with the necessary tonnes
from the 15,829 tonnes SO stockpile thus enabling the mill to operate at full
capacity.
A 20-hole diamond drill programme was completed during 2008. The programme was
designed to upgrade the inferred resources to indicated status in the area south
and east of the current workings and determine the ultimate extent of the
mineralization to the south. Based on the polygon method of estimating resources
32,200 tonnes of indicated/inferred resource were outlined in the south and
21,500 tonnes in the east. The mineralization apparently weakens to the south
therefore limiting our ability to expand the resource estimate in that
direction. At the mining rate of 50 tonnes/day, the mine life, main plus east
plus south zones, is now estimated to be approximately 4 years, with the
ultimate mine life depending on the pillar requirements during the final phases
of the operation.
Other opportunities to find supplemental mill feed within reasonable trucking
distance of our SDA mill have been and continue to be investigated. One such
property evaluated during 2008 was the Bonanza vein system located 30km
southeast of the SDA mill. Six diamond drill holes were completed with visual
encouragement observed in the core. This translated into marginally economic
once the core and underground sample assays were received. It was decided to
discontinue our work programme thereby eliminating our obligation to continue
option payments on the property. However, talks continue with the property owner
in an attempt to reach an agreement that takes into account the difficult and
expensive access issues and the marginal precious metals grades anticipated.
Planned production for 2009 will be at a similar rate to 2008, targeting 1,500
tonnes per month of DMO plus 500 tonnes per month of SO material.
San Dieguito de Arriba mill
The flotation mill was commissioned on the 14th January 2008, and has been
operating as designed. Mill feed during the first nine months of the year came
from daily DMO production from the mine and stockpiled DMO that was mined during
the last half of 2007. Milled tonnes during 2008 were 27,757 tonnes for a
monthly average of 2,313 tonnes. Head grades for the year averaged 302.2 g
Ag/tonne and 3.04 g Au/tonne. Recoveries for silver and gold were 85% and 83%
respectively. Produced concentrates totalled 514.5 tonnes which were shipped to
the Penoles smelter in Torreon. Average precious metal prices received were
$13.76 and $860.75 per ounce for silver and gold respectively.
In May 2008, Penoles doubled their smelting and refining fees. In response we
have been looking into using Grupo Mexico's smelter in San Luis Potosi as well
as evaluating the concept of leaching the concentrates on site at the SDA mill
and then shipping the very high grade silver-gold precipitates to a refinery in
the USA. The high-grade nature of the precipitates leads to security issues
which are being addressed along with the development of the appropriate flow
sheet, associated economics and timing for the construction of the 2-4 tonne/day
leach plant.
Plans for 2009 are to operate the mill at maximum economic efficiency utilizing
a combination of DMO and SO material with the ultimate tonnes and ratio
depending on precious metal prices.
Copper exploration - Southwest USA
Three porphyry copper targets, Sierrita, Mayflower and Headquarters, were
drilled during 2008 with unfavourable results. Three holes were drilled, one on
each property, for a total of 2,955 feet. Two of the targets were based on
finding copper beneath thin post-mineral, volcanic cover and the other was
designed to evaluate an IP anomaly below a regional thrust fault along a major
porphyry copper trend southwest of Tucson.
It is management's belief that successful discovery of a porphyry copper deposit
in the southwest USA depends upon VANE's ability to drill a number of similar
type targets, 8-15, over the course of the next 3-5 years. An option to lease
agreement signed in late 2008 on the Yuma King property in west central Arizona
has the potential to be the next big discovery.
Arizona Department of Mines and Mineral Resources historic production records
estimate production from the Yuma King Mine at 8,700 tons at 2.60% copper plus
an unknown amount of lapidary grade copper oxides/carbonates.
Exploration by the last lease holder of the Yuma King property consists of
detailed mapping and sampling of both surface and extensive underground
workings, ground and airborne magnetic surveys and the drilling of 19 surface
diamond drill holes. This work has outlined a potential copper oxide resource
and intersected porphyry style copper-molybdenum alteration and mineralization
in several of the deeper drill holes.
Paraguay exploration
VANE began its work in Paraguay in 2005 with a series of hand dug trenches and
hand drilled augur holes to investigate an area delineated by alluvial gold in
stream sediment samples. This area is also the site of a regional aeromagnetic
high implying an igneous body at depth underlying the area of interest. An
exploration license was obtained and a series of 12 diamond drill holes
totalling 1,496 metres was started in October, 2008 and completed in February,
2009. The drilling revealed a series of faults and shear zones with the last
drill holes indicating possible lateritic gold mineralization. We are awaiting
assay results from these drill holes to confirm these conclusions.
Principal risks and uncertainties
The directors believe that the immediate principal matters which could affect
the performance of the Group in the future are:-
* The Company currently generates its only income from the Diablito Mine and so in
that respect it is dependent upon its smooth operation. We have an excellent
relationship with the mining contractor, and others are available if needed.
* The mill at San Dieguito de Arriba is operating smoothly with supplies readily
at hand and spare components, mainly pumps and motors, have been sourced.
* The concentrates are transported and presently sold to a third party smelter and
we are therefore subject to commercial charges of those parties and continuity
of labour.
* While drill rig availability has historically been tight, VANE has secured rigs
to cover all of the ongoing exploration programmes in Mexico, southwestern USA,
the Colorado Plateau and Paraguay.
* Additional drilling permits are under application and the timing on receiving
these can vary to a large degree.
* Changes to the US Mining Law of 1872, in legislation currently before the US
Congress, may affect future operations in that royalties on minerals obtained
from Federal Lands (lode claims) may be imposed.
* Political risk appears low in all our areas of operation. As Paraguay lacks a
history of mining, matters related to property acquisition, permitting, bonding,
etc. have moved very slowly but are now in place.
* The dispute between the USFS and various environmental groups may delay the
approval of the necessary permits in some of our areas of interest.
* The prices of gold and silver have risen over the last six months and, given the
current economic climate, we do not anticipate a precipitous drop in the near
future. Uranium oxide prices have fallen from their high of $135 per pound in
early 2007, but with world-wide demand for uranium on the increase again, we do
not expect a dramatic price change in the near term.
Other important factors that could affect any one of the Group's many
operations, including Diablito, are unanticipated mining, milling and other
processing problems, accidents that lead to personal injury or property damage,
persistent commodity price reductions, changes in political, social or economic
circumstances, variance in ore grades, labour relations, adverse weather
conditions and other adverse financial market conditions. We continue to monitor
all aspects of our programmes with a view to ensuring their continued success.
The full Report and Financial Statements, when published, will set out
additional risks and uncertainties to the business.
Relationships
The Group enjoys good relationships with all of its suppliers and professional
advisers. The relationship with the Mexican mining contractor, COMINVI SA de CV,
the principal drilling contractors in Mexico, Landdrill International Mexico SA
de CV and the principal drilling contractors in the USA, Del Rio Drilling and
Pump, Bob Beeman Drilling and WDC Exploration & Wells Company, are key to our
ongoing operations.
FINANCIAL REVIEW
Revenues
Revenues from the Diablito mine during the year have been lower than expected
owing to a combination of factors:
* Continued, unpredicted dilution of grades;
* Falling precious metal prices in the middle of the year;
* Increased smelting/refining costs as of May 2008;
* Declining concentrate ratio due to supplementing mill feed (to keep the mill
running at 100% capacity) with stockpiled material particularly as some material
had oxidized in the pile. That caused our concentrate grades to decrease and our
concentrate tonnes to increase resulting in higher transportation costs, with
recoveries staying the same.
* Mine production has continued at approximately 1,430 tonnes per month during the
year.
Results for the year
Under its second full year of IFRS reporting, the Group reported a net loss
after tax of GBP1,726,821 or 0.91 pence per share in 2008 (compared with
GBP7,056,889 or 4.58 pence per share as reported in 2007). Of the total net loss
for the period, GBP534,636 was due to the impairment of exploration assets.
+--------------------------+----------------------------------------+
| | Expenses Written-Off |
+--------------------------+----------------------------------------+
| Uranium Projects | GBP94,340 |
+--------------------------+----------------------------------------+
| Copper Projects | GBP197,563 |
+--------------------------+----------------------------------------+
| Gold/Silver Projects | GBP242,733 |
+--------------------------+----------------------------------------+
| Total | GBP534,636 |
+--------------------------+----------------------------------------+
Employee recruitment and retention
Although the company has no quantitative target for the number of employees it
needs or retains, this metric is closely monitored. The company has an excellent
record of retaining key staff.
During the year founder member Frank Nelson retired. No new members have been
added to the uranium team and none have departed.
Significant equity events
During the year there have been no new shares issued as a result of fund raising
or options exercised.
There were a total of 190,108,108 ordinary shares in issue at the year end.
During the year share options were granted over a total of 9,400,000 shares to
two directors, an employee and one service provider.
Cash position
The Company had closing cash balances across the group at year end totalling
GBP3,308,016.
Key performance indicators
There are a number of key performance indicators that are reviewed regularly by
the Board as set out below in respect of 2008:-
+--------------+-----------+-----------+--------------------------------------------+
| |
+--------------+
| Item | Actual | Target | Comment |
+--------------+-----------+-----------+--------------------------------------------+
| Item | Actual | Target | Comment |
+--------------+-----------+-----------+--------------------------------------------+
| Production | 1,362 | 1,500 | The average monthly production for the |
| monthly | | | whole of 2008 was below the target but |
| tonnage | | | following improvements the last 8 months |
| | | | of the year averaged 1,430 tonnes per |
| | | | month. |
+--------------+-----------+-----------+--------------------------------------------+
| Maintenance | 3.02g | 3.50g | We continue to experience significant |
| of Mineral | Au | Au | dilution of the anticipated grades and |
| Grades | 308g | 400g | average grades were lower than anticipated |
| | Ag | Ag | for 2008. |
+--------------+-----------+-----------+--------------------------------------------+
| Gross Margin | $87 | $146 | Gross margin per tonne of milled output |
| per tonne of | | | was much lower than planned owing to the |
| production | | | dilution of mined ore with previously |
| | | | stock-piled ore in order to keep the mill |
| | | | running at or near its full capacity, |
| | | | coupled with higher transport and smelting |
| | | | costs and lower metal prices in mid 2008. |
+--------------+-----------+-----------+--------------------------------------------+
| Cash | GBP3.308m | GBP3.622m | Closing cash balances were lower than |
| balances | | | forecast owing to increased cost of |
| | | | smelting and reduced revenue owing to |
| | | | grade dilution. |
+--------------+-----------+-----------+--------------------------------------------+
Outlook
The current market conditions have resulted in most, if not all, junior mining
companies quoted on AIM having a depressed share price. VANE is no exception and
your directors are working diligently to enhance the value of our proven assets
and generate cash flow from our operations which, if successful, will place us
in a strong position when world stock markets recover.
Gold and silver prices are still relatively strong at over $870 per ounce for
gold and over $12.40 per ounce for silver, which will help to boost revenues
from our Mexican gold and silver mining operations.
The Group has a strong cash position which will enable us to continue our
exploration and evaluation activities in the Colorado Plateau uranium province,
southwestern USA porphyry copper district,, Mexico and Paraguay. We will report
any developments in these areas of activity as soon as they occur.
Your board would like to take this opportunity to thank you, our shareholders,
for your continued support.
L Clark Arnold Kristopher K HeftonSteven D Van Nort
Director of Exploration COO Vane Minerals (US) LLC CEO, Vane Minerals plc
CONSOLIDATED INCOME STATEMENT (Unaudited)
For the year ended 31 December 2008
+-----------------------------------------------+-------+-------------+--+-------------+
| |Notes | 2008 | | 2007 |
| | | GBP | | GBP |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Revenue | 4 | 1,710,807 | | 1,370,735 |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Cost of sales | | (2,317,210) | | (1,570,849) |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Gross loss | | (606,403) | | (200,114) |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Operating and administrative expenses | | (1,271,209) | | (1,480,114) |
+-----------------------------------------------+-------+-------------+--+-------------+
| Impairment of exploration costs | | (534,636) | | (7,693,747) |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Operating loss | | (2,412,248) | | (9,373,975) |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Income from investments | | 244,787 | | 40,367 |
+-----------------------------------------------+-------+-------------+--+-------------+
| Finance costs | | (142,157) | | (100,924) |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Loss before taxation | | (2,309,618) | | (9,434,532) |
+-----------------------------------------------+-------+-------------+--+-------------+
| Taxation | | 582,797 | | 2,377,643 |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Loss for the year - attributable to equity | 4 | (1,726,821) | | (7,056,889) |
| holders of the parent | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| All the above group's results relate to | | | | |
| continuing operations. | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Loss per share | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| | | | | |
+-----------------------------------------------+-------+-------------+--+-------------+
| Basic & Diluted | 6 | (0.91p) | | (4.58p) |
+-----------------------------------------------+-------+-------------+--+-------------+
CONSOLIDATED BALANCE SHEET (Unaudited)
31 December 2008
+-----------------------------------------------+--------------+--+--------------+
| | 2008 | | 2007 |
| | GBP | | GBP |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Non current assets | | | |
+-----------------------------------------------+--------------+--+--------------+
| Investments | 213,571 | | 213,571 |
+-----------------------------------------------+--------------+--+--------------+
| Intangible assets | 2,803,654 | | 925,015 |
+-----------------------------------------------+--------------+--+--------------+
| Property, plant and equipment | 3,216,525 | | 3,644,707 |
+-----------------------------------------------+--------------+--+--------------+
| | 6,233,750 | | 4,783,293 |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Current assets | | | |
+-----------------------------------------------+--------------+--+--------------+
| Inventories | 20,157 | | 545,016 |
+-----------------------------------------------+--------------+--+--------------+
| Trade and other receivables | 497,105 | | 249,263 |
+-----------------------------------------------+--------------+--+--------------+
| Cash and cash equivalents | 3,308,016 | | 5,813,353 |
+-----------------------------------------------+--------------+--+--------------+
| | 3,825,278 | | 6,607,632 |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Total assets | 10,059,028 | | 11,390,925 |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Current liabilities | | | |
+-----------------------------------------------+--------------+--+--------------+
| Trade and other payables | (361,833) | | (269,436) |
+-----------------------------------------------+--------------+--+--------------+
| Taxation | (12,518) | | (10,358) |
+-----------------------------------------------+--------------+--+--------------+
| | (374,351) | | (279,794) |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Non current liabilities | | | |
+-----------------------------------------------+--------------+--+--------------+
| Convertible loan notes | (1,406,976) | | (1,386,129) |
+-----------------------------------------------+--------------+--+--------------+
| Obligations under finance leases | (2,270) | | (6,825) |
+-----------------------------------------------+--------------+--+--------------+
| Deferred tax | (174,993) | | (396,892) |
+-----------------------------------------------+--------------+--+--------------+
| Provisions | (37,500) | | (37,500) |
+-----------------------------------------------+--------------+--+--------------+
| | (1,621,739) | | (1,827,346) |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Total liabilities | (1,996,090) | | (2,107,140) |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Net assets | 8,062,938 | | 9,283,785 |
+-----------------------------------------------+--------------+--+--------------+
| | | | |
+-----------------------------------------------+--------------+--+--------------+
| Equity attributable to equity holders of the | | | |
| parent | | | |
+-----------------------------------------------+--------------+--+--------------+
| Share capital | 19,010,811 | | 19,010,811 |
+-----------------------------------------------+--------------+--+--------------+
| Share premium account | 2,359,071 | | 2,359,071 |
+-----------------------------------------------+--------------+--+--------------+
| Share option reserve | 231,210 | | 195,203 |
+-----------------------------------------------+--------------+--+--------------+
| Other reserves | 261,220 | | 261,220 |
+-----------------------------------------------+--------------+--+--------------+
| Cumulative translation reserve | 207,281 | | (262,686) |
+-----------------------------------------------+--------------+--+--------------+
| Retained loss | (14,006,655) | | (12,279,834) |
+-----------------------------------------------+--------------+--+--------------+
| Equity | 8,062,938 | | 9,283,785 |
+-----------------------------------------------+--------------+--+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
For the year ended 31 December 2008
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | Share | Share | Share | Other | Cumulative | Retained | Total |
| | capital | Premium | Option | reserves | translation | loss | |
| | | | reserve | | reserves | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Balance at 1 | 14,614,382 | - | 143,769 | 79,628 | (233,822) | (5,273,325) | 9,330,632 |
| January 2007 | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Changes in | | | | | | | |
| equity for | | | | | | | |
| 2007 | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Exchange | - | - | - | - | (28,864) | - | (28,864) |
| differences | | | | | | | |
| arising on | | | | | | | |
| translation of | | | | | | | |
| foreign | | | | | | | |
| operations | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Loss for the | - | - | - | - | - | (7,056,889) | (7,056,889) |
| year | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Total | - | - | - | - | (28,864) | (7,056,889) | (7,085,753) |
| recognised | | | | | | | |
| income and | | | | | | | |
| expense for | | | | | | | |
| the year | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Issue of share | 4,396,429 | 2,359,071 | - | - | - | - | 6,755,500 |
| capital | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Equity | - | - | - | 123,216 | - | - | 123,216 |
| component of | | | | | | | |
| convertible | | | | | | | |
| loan note | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Share based | - | - | 101,814 | - | - | - | 101,814 |
| payment | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Gain on | - | - | - | 58,376 | - | - | 58,376 |
| conversion of | | | | | | | |
| convertible | | | | | | | |
| loan note | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Transfer on | - | - | (50,380) | - | - | 50,380 | - |
| share option | | | | | | | |
| exercise | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Balance at 31 | 19,010,811 | 2,359,071 | 195,203 | 261,220 | (262,686) | (12,279,834) | 9,283,785 |
| December 2007 | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Changes in | | | | | | | |
| equity for | | | | | | | |
| 2008 | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Exchange | - | - | - | - | 879,874 | - | 879,874 |
| differences | | | | | | | |
| arising on | | | | | | | |
| translation of | | | | | | | |
| foreign | | | | | | | |
| operations | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Deferred tax | - | - | - | - | (409,907) | - | (409,907) |
| effect of | | | | | | | |
| exchange | | | | | | | |
| differences | | | | | | | |
| arising on | | | | | | | |
| translation of | | | | | | | |
| foreign | | | | | | | |
| operations | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Loss for the | - | - | - | - | - | (1,726,821) | (1,726,821) |
| year | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Total | - | - | - | - | 469,967 | (1,726,821) | (1,256,854) |
| recognised | | | | | | | |
| income and | | | | | | | |
| expense for | | | | | | | |
| the year | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Share based | - | - | 36,007 | - | - | - | 36,007 |
| payment | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
| Balance at 31 | 19,010,811 | 2,359,071 | 231,210 | 261,220 | 207,281 | (14,006,655) | 8,062,938 |
| December 2008 | | | | | | | |
+----------------+------------+-----------+----------+----------+-------------+--------------+-------------+
CONSOLIDATED CASH FLOW STATEMENT (Unaudited)
For the year end 31 December 2008
+-----------------------------------------------+------+-------------+--+---------------+
| | | 2008 | | 2007 |
| | | GBP | | GBP |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash flow from operating activities | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Loss before taxation | | (2,309,618) | | (9,434,532) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Income from investments | | (244,787) | | (40,367) |
+-----------------------------------------------+------+-------------+--+---------------+
| Finance costs | | 142,157 | | 100,924 |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Adjustments for: | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Depreciation of property, plant and equipment | | 591,698 | | 537,039 |
+-----------------------------------------------+------+-------------+--+---------------+
| Impairment of intangible assets | | 534,636 | | 7,693,747 |
+-----------------------------------------------+------+-------------+--+---------------+
| Share based payments | | 36,007 | | 101,814 |
+-----------------------------------------------+------+-------------+--+---------------+
| Effect of foreign exchange rate changes | | 370,641 | | (320) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Operating cash outflow before movements in working | (879,266) | | (1,041,695) |
| capital | | | |
+------------------------------------------------------+-------------+--+---------------+
| Decrease in inventories | | 524,859 | | 34,652 |
+-----------------------------------------------+------+-------------+--+---------------+
| Increase in trade and other receivables | | (247,842) | | (20,273) |
+-----------------------------------------------+------+-------------+--+---------------+
| Increase in trade and other payables | | 90,247 | | 69,999 |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash used in operations | | (512,002) | | (957,317) |
+-----------------------------------------------+------+-------------+--+---------------+
| Income tax (paid) / recovered | | (16,432) | | 159 |
+-----------------------------------------------+------+-------------+--+---------------+
| Interest paid | | (120,219) | | (89,123) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Net cash used in operating activities | | (648,653) | | (1,046,281) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash flow from investing activities | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Interest received | | 244,787 | | 40,367 |
+-----------------------------------------------+------+-------------+--+---------------+
| Purchase of property, plant and equipment | | (120,559) | | (407,132) |
+-----------------------------------------------+------+-------------+--+---------------+
| Purchase of investments | | - | | (213,571) |
+-----------------------------------------------+------+-------------+--+---------------+
| Purchases of intangible assets | | (2,116,087) | | (804,957) |
+-----------------------------------------------+------+-------------+--+---------------+
| Net cash used in investment activities | | (1,991,859) | | (1,385,293) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash flow from financing activities | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Repayment of obligations under finance leases | | (3,496) | | (6,374) |
+-----------------------------------------------+------+-------------+--+---------------+
| Proceeds from the issue of share capital | | - | | 6,510,000 |
+-----------------------------------------------+------+-------------+--+---------------+
| Issue costs paid | | - | | (379,500) |
+-----------------------------------------------+------+-------------+--+---------------+
| Proceeds from the issue of convertible loan | | - | | 1,500,000 |
| notes | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Net cash (used in) / from financing | | (3,496) | | 7,624,126 |
| activities | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Net (decrease) / increase in cash and cash | | (2,644,008) | | 5,192,552 |
| equivalents | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash and cash equivalents at beginning of | | 5,813,353 | | 624,374 |
| year | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Effect of foreign exchange rate changes | | 138,671 | | (3,573) |
+-----------------------------------------------+------+-------------+--+---------------+
| | | | | |
+-----------------------------------------------+------+-------------+--+---------------+
| Cash and cash equivalents at end of year | | 3,308,016 | | 5,813,353 |
+-----------------------------------------------+------+-------------+--+---------------+
Notes to the Financial Statements
1. The above financial information does not constitute statutory accounts, as
defined in section 240 of the Companies Act 1985. The above figures for the year
ended 31 December 2008 are an abridged version of the Company's accounts which
will be reported on by the Company's auditors before dispatch to the
shareholders and filing with the Registrar of Companies.
2. The consolidated financial information has been prepared in accordance with
the recognition and measurement principles of International Financial Reporting
Standards (IFRS) as endorsed by the European Union (EU). The accounting policies
applied in 2008 are consistent with those applied in the Financial Statements
for 2007.
3. The statutory accounts for the year ended 31 December 2007 have been lodged
with the Registrar of Companies. These accounts received an audit report which
was unqualified and did not include any reference to matters to which the
auditors drew attention by way of emphasis without qualifying their report or a
statement under section 237(2) or section 237(3) of the Companies Act 1985.
4. SEGMENTAL INFORMATION
For management purposes, the Group is organised into four operating divisions:
UK, USA, Paraguay and Mexico. These divisions are the basis on which the Group
reports its primary segment information.
Segment information about these divisions is presented below. The tables show
the geographic segmentation of the Group. Activities in Mexico are currently
concerned with gold and silver mining and exploration. Activities in the USA are
split between research for further gold, silver and copper properties, and
research and evaluation of potential uranium properties. Activities in Paraguay
are concerned with gold and copper exploration. Activities in the United Kingdom
are concerned with administration and management of the Group.
+-----+----------------------------------------+---------------+---------------+
| | | 2008 | 2007 |
| | | GBP | GBP |
+-----+----------------------------------------+---------------+---------------+
| Revenue | | |
+----------------------------------------------+---------------+---------------+
| | UK | - | - |
+-----+----------------------------------------+---------------+---------------+
| | USA | - | - |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 1,710,807 | 1,370,735 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | - | - |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | 1,710,807 | 1,370,735 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| Segmental results | | |
+----------------------------------------------+---------------+---------------+
| | UK | (389,054) | (612,125) |
+-----+----------------------------------------+---------------+---------------+
| | USA | (801,960) | (1,275,920) |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | (1,118,604) | (7,335,757) |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | - | (210,730) |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | (2,309,618) | (9,434,532) |
+-----+----------------------------------------+---------------+---------------+
| | Current and deferred tax | 582,797 | 2,377,643 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | Loss after taxation | (1,726,821) | (7,056,889) |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
+-----+----------------------------------------+---------------+---------------+
| Depreciation | | |
+----------------------------------------------+---------------+---------------+
| | UK | - | - |
+-----+----------------------------------------+---------------+---------------+
| | USA | 5,485 | 2,542 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 586,213 | 534,497 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | - | - |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | 591,698 | 537,039 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| Impairment | | |
+----------------------------------------------+---------------+---------------+
| | UK | - | - |
+-----+----------------------------------------+---------------+---------------+
| | USA | 291,903 | 1,118,232 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 242,733 | 6,493,022 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | - | 82,493 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | 534,636 | 7,693,747 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
The average number of employees for the year for each of the Group's principal
divisions was as follows:
+-----+----------------------------------------+---------------+--+-------------+
| | | 2008 | | 2007 |
| | | Number | | Number |
+-----+----------------------------------------+---------------+--+-------------+
| Employees | | | |
+----------------------------------------------+---------------+--+-------------+
| | UK | 1 | | 2 |
+-----+----------------------------------------+---------------+--+-------------+
| | USA | 5 | | 5 |
+-----+----------------------------------------+---------------+--+-------------+
| | Mexico | 24 | | 24 |
+-----+----------------------------------------+---------------+--+-------------+
| | Paraguay | 4 | | - |
+-----+----------------------------------------+---------------+--+-------------+
| | | | | |
+-----+----------------------------------------+---------------+--+-------------+
| | | 34 | | 31 |
+-----+----------------------------------------+---------------+--+-------------+
| | | | | |
+-----+----------------------------------------+---------------+--+-------------+
+-----+----------------------------------------+---------------+---------------+
| | | 2008 | 2007 |
| | | GBP | GBP |
+-----+----------------------------------------+---------------+---------------+
| Balance Sheet | | |
+----------------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| Segment Assets | | |
+----------------------------------------------+---------------+---------------+
| | UK | 3,462,610 | 5,948,076 |
+-----+----------------------------------------+---------------+---------------+
| | USA | 2,355,560 | 892,841 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 3,681,618 | 4,393,017 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | 559,240 | 156,991 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | Total Assets | 10,059,028 | 11,390,925 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| Segment Liabilities | | |
+----------------------------------------------+---------------+---------------+
| | UK | 1,490,953 | 1,541,884 |
+-----+----------------------------------------+---------------+---------------+
| | USA | 105,899 | 41,152 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 211,727 | 116,854 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | - | - |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | Segment Liabilities | 1,808,579 | 1,699,890 |
+-----+----------------------------------------+---------------+---------------+
| | Current and Deferred Tax | 187,511 | 407,250 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | Total liabilities | 1,996,090 | 2,107,140 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| Capital Additions | | |
+----------------------------------------------+---------------+---------------+
| | UK | - | - |
+-----+----------------------------------------+---------------+---------------+
| | USA | 1,530,751 | 693,738 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 361,947 | 380,179 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | 343,948 | 148,480 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | 2,236,646 | 1,222,397 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
+-----+----------------------------------------+---------------+---------------+
| Net Assets | | |
+----------------------------------------------+---------------+---------------+
| | UK | 1,971,655 | 4,406,192 |
+-----+----------------------------------------+---------------+---------------+
| | USA | 2,249,661 | 851,689 |
+-----+----------------------------------------+---------------+---------------+
| | Mexico | 3,282,382 | 3,868,913 |
+-----+----------------------------------------+---------------+---------------+
| | Paraguay | 559,240 | 156,991 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
| | | 8,062,938 | 9,283,785 |
+-----+----------------------------------------+---------------+---------------+
| | | | |
+-----+----------------------------------------+---------------+---------------+
All the assets of the group relate to the mining operations in Mexico, USA and
Paraguay or for administration operations to support the mining. The group
carries on operations in only one business segment namely the exploration and
mining of minerals and so no secondary segment disclosures are given. The
business segmentation effectively follows the geographic segmentation given
above.
5. TAXATION
+------+-----------------------------------------------+------------+-------------+
| | | 2008 | 2007 |
| | | GBP | GBP |
+------+-----------------------------------------------+------------+-------------+
| Current tax: | | |
+------------------------------------------------------+------------+-------------+
| | Utilisation of foreign tax losses | (409,907) | |
+------+-----------------------------------------------+------------+-------------+
| | Foreign Tax | 18,592 | 6,092 |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| | Total current tax | 391,315 | 6,092 |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| Deferred tax: | | |
+------------------------------------------------------+------------+-------------+
| | Origination and reversal of timing | (63,600) | (247,420) |
| | differences | | |
+------+-----------------------------------------------+------------+-------------+
| | Fair value adjustment on business | (127,882) | (127,882) |
| | combinations | | |
+------+-----------------------------------------------+------------+-------------+
| | Reversal from impairment review | - | (2,008,433) |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| | | (191,482) | (2,383,735) |
+------+-----------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
| | | |
+------------------------------------------------------+------------+-------------+
| Tax on loss for the year | (582,797) | (2,377,643) |
+------------------------------------------------------+------------+-------------+
| | | | |
+------+-----------------------------------------------+------------+-------------+
+------+-----------------------------------------------+-------------+-------------+
| The charge for the year can be reconciled to the loss per the income statement |
| as follows: |
| |
+----------------------------------------------------------------------------------+
| Loss before tax | (2,309,618) | (9,434,532) |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| Loss multiplied by the rate of corporation tax for | (658,179) | (2,830,360) |
| companies of 28.5% (2007: 30.0%) | | |
+------------------------------------------------------+-------------+-------------+
| | Effects of: | | |
+------+-----------------------------------------------+-------------+-------------+
| | Expenses not deductible for tax purposes | 62,937 | 63,044 |
+------+-----------------------------------------------+-------------+-------------+
| | Tax relief on share options exercised | - | (38,250) |
+------+-----------------------------------------------+-------------+-------------+
| | Share based payments | 10,261 | 30,544 |
+------+-----------------------------------------------+-------------+-------------+
| | Unrelieved tax losses carried forward | (26,434) | 310,103 |
+------+-----------------------------------------------+-------------+-------------+
| | Other adjustments | 16,648 | 76,913 |
+------+-----------------------------------------------+-------------+-------------+
| | Foreign Tax | 11,970 | 10,363 |
+------+-----------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| Tax credit for year | (582,797) | (2,377,643) |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
Unrelieved UK tax losses of GBP2,100,199 (2007: GBP2,363,373) carried forward
have not been recognised as a deferred tax asset, as there is currently
insufficient evidence that the asset will be recoverable in the foreseeable
future. The losses must be utilised in relation to the same operations. Tax for
other jurisdictions is provided at rates prevailing in those countries.
The income tax charge to equity during the year is:
+------+-----------------------------------------------+------------+------------+
| | | 2008 | 2007 |
| | | GBP | GBP |
+------+-----------------------------------------------+------------+------------+
| | Foreign tax on exchange gain | 409,907 | - |
+------+-----------------------------------------------+------------+------------+
| | | | |
+------+-----------------------------------------------+------------+------------+
6. LOSS PER ORDINARY SHARE
The calculation of basic and diluted loss per ordinary share is based on the
following loss and number of shares.
+------+-----------------------------------------------+-------------+-------------+
| | 2008 | 2007 |
| | GBP | GBP |
+------------------------------------------------------+-------------+-------------+
| Earnings | | |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| Earnings for the purpose of basic loss per share | (1,726,821) | (7,056,889) |
| (net loss for the year) | | |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| Number of shares | | |
+------------------------------------------------------+-------------+-------------+
| Weighted average number of shares for the purposes | 190,108,110 | 154,084,234 |
| of basic loss per share | | |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| Share options in issue | | |
+------------------------------------------------------+-------------+-------------+
| Weighted average number of shares for the purposes | 190,108,110 | 156,419,217 |
| of diluted loss per share | | |
+------------------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
| | | | |
+------+-----------------------------------------------+-------------+-------------+
As a result of the losses incurred, there is no dilutive effect from the
subsisting share options.
7. Dividends
The directors do not recommend a dividend for the year.
8 Annual General Meeting
The Annual General Meeting of the company is scheduled to take place on Thursday
14 May 2009.
9. Full Financial Statements
It is anticipated that full Audited Financial Statements will be posted to
shareholders during the week commencing 13 April 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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