RNS Number:4073X
Scarborough Minerals PLC
30 May 2007
SCARBOROUGH MINERALS PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED 31 MARCH 2007
30 May 2007
HIGHLIGHTS
* Recommended agreed merger with Mineral Securities ("Minsec"):
- Combining complementary management teams and assets to accelerate development of
the investment portfolio;
- 4 Minsec shares(1) for every 5 Scarborough shares;
- Shareholder meetings on 28 June 2007 at 11.00 a.m. in the offices of Jones Day,
21 Tudor Street London EC4Y 0DJ;
- expected to complete in July 2007, with Minsec listing on AIM and ASX.
* Key financial information:
- Revenue US$2.7 million (2006: US$4.2 million) down 35.7%;
- Loss before exceptional items attributable to members US$2.7 million (2006:
US$0.8 million);
- Net loss for the period attributable to members reduced by US$2.6 million (42.9%);
- Group financial assets total US$59.9 million (31 March 2006: US$13.6 million) of
which:
* cash and cash equivalents comprise US$33.3 million including US$2.4 million held
by listed subsidiary, Buka Gold (2006: US$5.2 million (US$4.7 million)); and
* Financial assets available-for-sale are US$26.5 million (2006: US$8.4 million);
- Tangible assets per Scarborough share(2) at 31 March 2007 have increased by 3.31
US cents (10.3%) to 35.28 US cents compared with 31 March 2006;
- No dividend has been declared for the period (2006: Nil).
* Operational developments:
- Acquired 12.2% stake in Chaarat Gold for US$6.9 million - gold exploration in
western Kyrgyzstan, expected stock market listing in next 12 months;
- Partnership with CVRD to progress Vostok project;
- Examining opportunities for Lady Loretta development synergies with Xstrata's
Mount Isa operations and resuming copper exploration;
- Sappes working towards submission of revised EIS;
- Solid progress for each of Minsec's key investments - Platmin, CopperCo and
Tianshan.
Robert Champion de Crespigny AC, Chairman of Scarborough said:
"This has been a year of progress and transformation for Scarborough Minerals.
We have progressed our projects and added new investments to our portfolio, but
most importantly we have negotiated the merger with Mineral Securities, which
your board has recommended on the basis that it will deliver the platform for
the long term growth and returns that our investors are looking for."
Your attention is drawn to the Chairman's Statement and note 2 to this
announcement which gives the context for, and basis of, preparation of the
information in this announcement.
For further information, please contact:
London
Robert J Champion de Crespigny AC, Chairman
Tel: +44 20 7152 6228
W James Haddock, Interim Chief Financial Officer
Tel: +44 20 7152 6204
Sydney
John Richards, Executive Director
Tel: +61 2 9264 5515
Media Enquiries - Finsbury Group
Robin Walker, Clare Strange
Tel: +44 20 7251 3801
(1) In the form of shares in Minsec BVI, a special purpose company that will
become that Group's holding company under the proposed restructuring of Minsec
on the basis of a one for one share exchange.
(2) After adjusting for the 2006 Three-Way Merger's share exchange ratio of 5.65
Buka shares for each Scarborough share.
SCARBOROUGH MINERALS PLC
RESULTS FOR ANNOUNCEMENT TO THE MARKET
US$000
Revenues from ordinary activities down 35.7% to 2,677
Loss from ordinary activities after tax
attributable to members up 224.1% to 2,713
Net loss for the period attributable to members down 42.9% to 3,500
DIVIDENDS AMOUNT PER FRANKED AMOUNT
SECURITY PER SECURITY
Interim dividend Nil c Nil c
Previous corresponding year Nil c Nil c
Record date for determining entitlements
to the dividend N/A N/A
TANGIBLE ASSET BACKING 31 March 2007 30 September 2006
USc USc
Tangible asset backing per share 35.28 31.97
Please refer to the Interim Financial Statements included in this report for
additional information and explanation of the figures reported above and the
results for the half year ended 31 March 2007.
Chairman's statement
Dear fellow shareholder,
I am pleased to present Scarborough's Interim Report for the six month period
ended 31 March 2007. The major activity during that period was negotiation of
the terms of and the subsequent announcement of the proposed merger with Mineral
Securities ("Minsec"), of which Scarborough is the largest shareholder. You
should by now have received the Scheme Document for that merger. Your Board of
Directors unanimously recommend that holders of Scarborough shares and CDIs vote
in favour of the resolutions to be proposed at the Court Meeting and EGM to give
effect to the merger.
Nothing in this Interim Report changes the rationale or the Directors' support
for that transaction, which we believe offers the opportunity to create
significant value for the shareholders of both companies.
To remind you, the merger is structured as a share for share offer by Minsec
(BVI) (a newly incorporated holding company formed in connection with a 1:1
restructuring of Minsec) for Scarborough on the basis of 4 Minsec (BVI) shares
for every 5 Scarborough shares. Assuming the shareholders' meetings on 28 June
(Scarborough) and 25 June (Minsec) approve the transaction, the Merger will be
implemented by way of a Court-approved scheme of arrangement under section 425
of the Companies Act of England and Wales.
The merged group will:
* be owned 55.7% by the existing shareholders of Scarborough and 44.3% by the
existing shareholders of Minsec. Shareholders should note that for accounting
purposes this means that Scarborough is deemed to be the acquirer and so should
the transaction proceed, it will be accounted for as a "reverse acquisition" in
the financial statements for periods ending after the completion of the
Merger;
* retain the successful and complementary management teams of the two businesses
and be chaired by me and managed by Keith Liddell (Executive Chairman of
Minsec);
* have a combined asset portfolio of a size which allows hands-on involvement but
also benefits from diversification of:
- commodity - platinum, gold, copper, zinc;
- geography and political risk - Australia, Europe, Central Asia, Southern Africa
and South America; and
- stage of development - exploration, feasibility, mine development;
* continue to focus on making new early stage equity investments in resource
companies and projects. The management of the enlarged group intends to take a
hands-on approach and inject its range of technical and commercial skills to
maximise the value of these investments; and
* it is expected, commence trading on ASX and AIM in July 2007.
For full details of the merger, shareholders should refer to the Scheme
Document, which is available from the websites of Scarborough (www.scrbmin.com)
and ASX (www.asx.com.au)
The resources industry environment remained especially buoyant during the period
with most commentators, including the heads of the major mining companies,
predicting continued strong market conditions into the foreseeable future.
Against this background, Scarborough made a significant new investment in the
US$6.9 million acquisition of a 12.2% interest in Chaarat Gold. Our investment
will fund an increased exploration effort by Chaarat in 2007 aimed at
capitalising on successful exploration results in 2005 and 2006 at its 100%
owned gold project in western Kyrgyzstan, where the 2007 field season has now
commenced. Chaarat anticipates seeking a stock exchange listing in the next 12
months and we look forward to working with the Chaarat team to make that a
success.
Also during the period, at Vostok we are in the final stages of completing a
partnership agreement with CVRD, one of the world's largest mining companies,
under which they will conditionally acquire an 85% interest in the 111 square
kilometre exploration licence, spending an initial US$4 million over two years
to bring the project to a pre-feasibility study. The 2007 work programme at
Vostok is aimed at completing an additional 10 diamond drill holes at Vostok 1
in order to permit the calculation of an inferred resource estimate for the
upper 300 metres of that prospect and at commencement of grass roots exploration
of the areas outside Vostok 1 and 3 for additional copper and copper-gold
resources.
At Lady Loretta, evaluation of the possible benefits which might result from the
use of our partner, Xstrata's Mount Isa ore processing facility continues. A
two-hole metallurgical drilling programme was completed and samples have been
sent to two laboratories for flotation testwork with the aim of understanding
how the Lady Loretta ores will respond in a Mount Isa-style flowsheet.
Separately, exploration for copper below CopperCo's Lady Annie oxide deposit
(the Lady Loretta Joint venture holds title below a depth of approximately 150
metres below surface) and elsewhere on the Lady Loretta mining lease resumed.
Buka Minerals previously announced a sulphide resource of 3.3 million tonnes at
1.2% copper (no longer JORC compliant) at "Lady Annie Deeps".
At Sappes, work continues towards submission of a revised Environmental Impact
Study while discussions with potential partners continue as part of our efforts
to add value to this project.
At Gympie, Buka Gold announced in March the proposed suspension of production at
its Monkland mine operations due to the expected exhaustion of economically
recoverable ore reserves. This resulted in a US$1,018,000 writedown of plant and
exploration costs and provision for US$329,000 of redundancy costs being charged
in the period. On April 18, it was further announced that mining would end in
early May. Buka Gold continues surface and underground exploration on the Gympie
goldfield and newly acquired acreage elsewhere in South-East Queensland. The
future level of activity is not expected to result in any impairment of assets
beyond those already recognised.
Scarborough has maintained its investment in Minsec although after the period
end our ownership was diluted from 17.4% to 15.2% as a result of Minsec
acquiring further shares in CopperCo and Tianshan by means of share issues. Each
of Minsec's major investee companies made significant progress during the half
year:
* Platmin announced increased resources at its two key South African platinum
group metals projects, M'Phatlele and Pilanesberg, the latter as part of a
bankable feasibility study due for completion shortly;
* CopperCo commenced construction of its Lady Annie project and expects production
of copper cathode to commence in July 2007;
* Tianshan began a pre-feasibility study of an open pit/heap leach operation at
its 90% owned Gold Mountain project.
We also maintain our interests in Desire Petroleum and, through the Kolsen
consortium, in Iluka Resources.
The accounting loss of US$4,738,000, reported for the period reflects operating
losses at Gympie and the increased costs of operating the group following
completion of the Three-Way Merger last April.
On the balance sheet, in addition to the direct interests in mining projects
described above, we have cash reserves of US$33,345,000 (A$41,281,000;
#16,991,000), (of which Buka Gold and its subsidiaries account for US$2,419,000
(A$2,995,000; #1,233,000)), equivalent to 32.85 US cents per share (40.67
Australian cents; 16.74 pence). We also have financial assets available-for-sale
(excluding our 58.4% interest in Buka Gold) of US$26,533,000 (A$32,848,000;
#13,520,000) equivalent to 26.14 US cents per share (32.36 Australian cents;
13.32 pence).
Finally, I should like to thank again my fellow directors, our staff and our
advisers for all their efforts over the past months particularly on the proposed
merger with Minsec, and to urge you my fellow shareholders to vote in favour of
that transaction at the meetings scheduled for 28 June 2007.
Robert J Champion de Crespigny AC
Chairman
30 May 2007
INDEPENDENT REVIEW REPORT TO SCARBOROUGH MINERALS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2007 which comprises the Group Income Statement,
Group Statement of Recognised Income and Expenses, Group Balance Sheet, Group
Cash Flow Statement and the Reconciliation of Movements in Group Equity together
with the related notes 1 to 9. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding Annual Report except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices
Board. A review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A review
excludes audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2007.
Ernst & Young LLP
London
30 May 2007
Group income statement (unaudited)
6 months to 31 March 2007 6 months to
Before Exceptional 31 March
Exceptional Items 2006
items (see note 4) Total Total
US$000 US$000 US$000 US$000
Revenue 2,677 - 2,677 4,161
Cost of sales (3,789) - (3,789) (4,272)
----------------------------------------------------------------------------
Gross loss (1,112) - (1,112) (111)
Direct project costs (962) - (962) (1,380)
Administrative expenses (3,011) - (3,011) (666)
Winding down mining - (1,347) (1,347) (9,055)
operations at Gympie
Share based long term (466) - (466) -
incentives
----------------------------------------------------------------------------
Trading loss (5,551) (1,347) (6,898) (11,212)
Disposal of financial assets 1,161 - 1,161 -
available-for-sale
Disposal of non-current - - - (23)
assets
Other operating income 827 - 827 37
----------------------------------------------------------------------------
Operating loss (3,563) (1,347) (4,910) (11,198)
Finance revenue 1,692 - 1,692 282
Finance costs (929) - (929) (40)
----------------------------------------------------------------------------
Loss before taxation (2,800) (1,347) (4,147) (10,956)
Current tax - - - -
Deferred tax (591) - (591) 654
----------------------------------------------------------------------------
Loss for the period (3,391) (1,347) (4,738) (10,302)
----------------------------------------------------------------------------
Attributable to:
Group shareholders in 2007 (2,713) (787) (3,500)
Minority interest in 2007 (678) (560) (1,238)
------------------------------------------------------------------
(3,391) (1,347) (4,738)
------------------------------------------------------------------
Group shareholders in 2006 (837) (5,291) (6,128)
Minority interest in 2006 (410) (3,764) (4,174)
------------------------------------------------------------------
(1,247) (9,055) (10,302)
------------------------------------------------------------------
Loss per share (see note 5)
2007 2.67c 0.78c 3.45c
Basic and diluted per
Scarborough Share
2006 2.54c 16.09c 18.63c
Basic and diluted per
Scarborough Share
Basic and diluted per Buka 0.45c 2.85c 3.30c
Share
All income and expenses relate to continuing operations.
Group statement of recognised income and expense (unaudited)
6 months to 6 months to
31 March 31 March
2007 2006
US$000 US$000
Income and expense recognised directly in equity
Gains now realised and recognised in income (1,044) -
statement
Net unrealised gain on financial assets 596 2,179
available-for-sale
Deferred tax* 142 (654)
Currency translation 5,404 (1,813)
-----------------------------------------------------------------------
Net income recognised directly in equity 5,098 (288)
Loss for the period (4,738) (10,302)
-----------------------------------------------------------------------
Total recognised income and expense for the period 360 (10,590)
Attributable to:
Group shareholders 1,331 (6,113)
Minority interest (971) (4,477)
-----------------------------------------------------------------------
360 (10,590)
-----------------------------------------------------------------------
* These tax effects have been offset by a deferred tax credit in the Income
statement due to the availability of unrecognised deferred tax assets in the
jurisdictions concerned.
Group balance sheet (unaudited)
31 March 30 September 31 March
2007 2006 2006
Notes US$000 US$000 US$000
Non-current assets
Exploration and evaluation 35,235 31,033 8,425
expenditure
Property, plant and equipment 572 2,045 2,181
Financial assets 26,533 15,710 8,360
available-for-sale
Deferred tax asset - 443 -
--------------------------------------------------------------------------
62,340 49,231 18,966
--------------------------------------------------------------------------
Current assets
Trade and other receivables 2,064 3,380 3,383
Inventories 413 554 381
Cash and short term deposits 6 33,345 44,264 5,239
35,822 48,198 9,003
--------------------------------------------------------------------------
Total assets 98,162 97,429 27,969
--------------------------------------------------------------------------
Current liabilities
Trade and other payables 2,832 2,849 998
Financial liabilities 94 192 112
Tax 480 443 -
Provisions 692 529 516
--------------------------------------------------------------------------
4,098 4,013 1,626
--------------------------------------------------------------------------
Non-current liabilities
Financial liabilities 35 68 339
Provisions 1,129 1,240 836
--------------------------------------------------------------------------
1,164 1,308 1,175
--------------------------------------------------------------------------
Total liabilities 5,262 5,321 2,801
--------------------------------------------------------------------------
Net assets 92,900 92,108 25,168
--------------------------------------------------------------------------
Capital and reserves
Equity share capital 7 112,007 106,861 29,985
Treasury shares 7 (4,084) (3,896) -
Share-based payments 7 6,910 6,233 -
Accumulated losses 8 (22,438) (18,938) (10,176)
Net unrealised gains 8 840 1,061 1,528
Currency translation 8 (3,239) (3,042) 195
--------------------------------------------------------------------------
Group shareholders' equity 89,996 88,279 21,532
Minority interests 2,904 3,829 3,636
--------------------------------------------------------------------------
Total equity 92,900 92,108 25,168
--------------------------------------------------------------------------
Group cashflow statement (unaudited)
6 months to 6 months to
31 March 31 March
2007 2006
US$000 US$000
Operating activities
Operating loss (4,911) (11,198)
Adjustments to reconcile operating
profit to net cash flow from operating
activities
Amortisation of exploration and evaluation 103 477
expenditure
Depreciation of property, plant and 193 171
equipment
Winding down mining operations at 1,347 9,055
Gympie
Share based long term incentives 466 -
Other share based costs - 182
Profit on disposal of property plant (2) -
and equipment
Profit on disposal of financial assets (1,161) -
available-for-sale
Loss on disposal of non-current assets - 23
Decrease in inventories 180 264
Increase in trade and other (807) (58)
receivables
Decrease in trade and other payables (214) (1,151)
Other movements in provisions (419) (139)
--------------------------------------------------------------------
Cash generated from operations and (5,225) (2,374)
net cash flow from operating
activities
Investing activities
Interest received 922 149
Acquisition of Gympie - 81
Purchase of financial assets (6,925) (141)
available-for-sale
Proceeds from sale of financial assets 443 -
available-for-sale
Exploration and evaluation costs (1,869) (1,285)
capitalised
Purchases of property, plant and (107) (51)
equipment
Proceeds from sale of property, plant 30 -
and equipment
Prepaid costs of Three-Way Merger - (125)
--------------------------------------------------------------------
Net cash flow from investing (7,506) (1,372)
activities
Financing activities
Interest paid (40) (39)
Net proceeds from Buka share issues - 1,383
Net proceeds from Buka Gold initial - 8,113
public offering
Repayment of capital element of (147) (193)
finance leases
--------------------------------------------------------------------
Net cash flow from financing (187) 9,264
activities
--------------------------------------------------------------------
(Decrease) Increase in cash and cash (12,918) 5,518
equivalents
Effect of exchange rate movements 1,999 (449)
on cash and cash equivalents
Cash and cash equivalents at the 44,264 170
beginning of the period
--------------------------------------------------------------------
Cash and cash equivalents at the balance sheet 33,345 5,239
date
--------------------------------------------------------------------
Reconciliation of movements in Group equity (unaudited)
Net
equity Total group
share shareholders' Minority Total
capital Reserves equity interests equity
US$000 US$000 US$000 US$000 US$000
30 September 2006 109,198 (20,919) 88,279 3,829 92,108
Share based long term 387 - 387 46 433
incentives
Gains now realised and - (1,044) (1,044) - (1,044)
recognised in income
statement
Net unrealised gain on - 596 596 - 596
financial assets
available-for-sale
Deferred tax - 142 142 - 142
Loss for the period - (3,500) (3,500) (1,238) (4,738)
Currency translation 5,248 (112) 5,136 267 5,403
-------------------------------------------------------------------------------
31 March 2007 114,833 (24,837) 89,996 2,904 92,900
-------------------------------------------------------------------------------
Net
equity Total group
share shareholders' Minority Total
capital Reserves equity interests equity
US$000 US$000 US$000 US$000 US$000
30 September 2005 20,917 (3,917) 17,000 - 17,000
Acquisition of Gympie 9,532 (452) 9,080 - 9,080
Buka Gold initial - - - 8,113 8,113
public offering
Issues of Buka Shares 1,565 - 1,565 - 1,565
Net unrealised gain on - 2,179 2,179 - 2,179
financial assets
available-for-sale
Deferred tax - (654) (654) - (654)
Loss for the period - (6,128) (6,128) (4,174) (10,302)
Currency translation (2,029) 519 (1,510) (303) (1,813)
--------------------------------------------------------------------------------
31 March 2006 29,985 (8,453) 21,532 3,636 25,168
--------------------------------------------------------------------------------
Net equity share capital (see note 7)
The balance classified as share capital includes the total net proceeds (i.e.
both nominal value and share premium) from issues of equity share capital by
Buka Minerals Limited prior to 19 April 2006 and thereafter by Scarborough
Minerals plc, net of the Treasury shares arising on the Three-Way Merger, and
now comprises 30 pence ordinary shares in Scarborough Minerals plc.
The preference shares issued to Danae's shareholders and the deferred shares
owned by Greenwich's shareholders are both considered to have negligible value.
Reserves (see note 8)
The Group maintains separate reserves for accumulated losses, net unrealised
gains on financial assets available-for-sale and foreign currency differences.
Minority interests
Represents the 41.57% of Buka Gold not owned by Group shareholders.
Dividends
No dividends have been or are proposed to be declared in respect of either
period.
Notes
1. Corporate information
Scarborough Minerals plc (the 'Company') is a public limited company
incorporated and domiciled in England & Wales. The Company's ordinary shares are
traded on the London Stock Exchange (Company code: SCRB) and, in the form of
Chess Depositary Interests, on the Australian Securities Exchange ("ASX")
(Company code: SRB).
2. Basis of preparation and accounting policies
The interim condensed financial statements of the Group for the six months ended
31 March 2007 were authorised for issue in accordance with a resolution of the
directors on 30 May 2007.
The interim condensed consolidated financial statements for the six months ended
31 March 2007 have been prepared in accordance with IAS 34 'Interim Financial
Reporting'.
The interim condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Group's annual financial statements for
the periods ended 30 September 2006, hard copies of which are available from
Companies House or Scarborough's registered office: soft copies are available on
Scarborough's website (www.scrbmin.com) and also the ASX website www.asx.com.au.
As with the full financial statements, due to the treatment of the Three-Way
Merger as a reverse acquisition the comparatives relate to the results of Buka
Minerals and its subsidiaries only. These comparatives cover the period 1
October 2005 to 31 March 2006 which means that they have not been presented
before and so no reconciliation of the effect of the adoption of IFRSs is
included.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the period ended 30
September 2006, except for the adoption of the following amendments mandatory
for annual periods beginning on or after 1 January 2007.
* IFRS 7 'Financial Instruments: Disclosures' and consequential amendments to IAS
'Presentation of Financial Statements'.
The adoption of these amendments did not affect the Group's reported results or
financial position.
3. Segment information
Primary segmentation - Business line
No segmental analysis has been presented since the Group operates within a
single business line: resource evaluation and exploitation.
Secondary segmentation - Geographical
Australia Rest of world Total
US$000 US$000 US$000
2007
Revenue 2,677 - 2,677
Total assets 56,402 41,760 98,162
Capital expenditure
Exploration and evaluation 1,277 592 1,869
expenditure
Property, plant and equipment 22 85 107
2006
Revenue 4,161 - 4,161
Total assets 27,969 - 27,969
Capital expenditure including the
acquisition of Gympie
Exploration and evaluation 7,206 - 7,206
expenditure
Property, plant and equipment 2,874 - 2,874
Intangible assets including 6,050 - 6,050
goodwill
4. Exceptional item
On 6 March 2007, Buka Gold announced a further impairment of its assets as
follows.
31 March 31 March
2007 2006
US$000 US$000
Redundancy costs 329 -
Impairments of assets
Exploration and evaluation 827 2,708
expenditure
Property, plant and equipment 191 375
Goodwill - 5,785
Other intangible assets - 187
-------------------------------------------------------
1,347 9,055
-------------------------------------------------------
5. Loss per share
31 March 31 March 2006
2007 Scarborough Buka
US$000 US$000 US$000
Net loss attributable to Group 4,308 6,781 6,781
Shareholders
Thousands Thousands Thousands
Basic weighted average number of 101,499 32,893 185,848
shares
Dilutive potential ordinary shares
Share options 9,532 17,699 100,000
Convertible preference shares* 3,601 - -
--------------------------------------------------------------------
Diluted weighted average number of 114,632 50,592 285,848
shares
--------------------------------------------------------------------
* The Group considers that the event that permits conversion and hence dilution
(a decision prior to 26 October 2010 to conduct a definitive feasibility study
at Zarmitan) is very unlikely to happen.
6. Cash and short term deposits
31 March 30 September 31 March
2007 2006 2006
US$000 US$000 US$000
Cash held by listed subsidiary
(Buka Gold)
Cash at bank and in hand 244 592 549
Short term deposits 2,175 4,365 4,188
------------------------------------------------------------------
Total cash held by listed 2,419 4,957 4,737
subsidiary
Cash held by other group
companies
Cash at bank and in hand 30,926 39,307 115
Short term deposits - - 387
------------------------------------------------------------------
Total cash held by other group 30,926 39,307 502
companies
------------------------------------------------------------------
Total cash and cash equivalents 33,345 44,264 5,239
------------------------------------------------------------------
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying periods of between one day and three
months depending on the immediate cash requirements of the Group, and earn
interest at the respective short term deposit rates. The fair value of cash and
cash equivalents is US$33,345,000 (2006:US$5,239,000).
7. Net equity share capital
Equity Treasury Net Share-
share shares Ordinary based Net equity
capital Shares payments capital
US$000 US$000 US$000 US$000 US$000
30 September 2006 106,861 (3,896) 102,965 6,233 109,198
Share based long term - - - 387 387
incentives
Currency translation 5,146 (188) 4,958 290 5,248
-----------------------------------------------------------------------
31 March 2007 112,007 (4,084) 107,923 6,910 114,833
-----------------------------------------------------------------------
Equity
share
capital
US$000
30 September 2005 20,917
Acquisition of Gympie 9,532
Issues of Buka shares 1,565
Currency translation (2,029)
-----------------------------------------------------------------------
31 March 2006 29,985
-----------------------------------------------------------------------
Equity share capital
The balance classified as share capital includes the total net proceeds (i.e.
both nominal value and share premium) from issues of equity share capital by
Buka Minerals Limited prior to 19 April 2006 and thereafter of Scarborough
Minerals plc and now comprises 30 pence ordinary shares in Scarborough Minerals
plc.
The preference shares issued to Danae's shareholders and the deferred shares
owned by Greenwich's shareholders are both considered to have negligible value.
Treasury shares
The balance relates to the shares owned at 19 April 2006 by Danae and its
Employee Share Ownership Plan ("ESOP"), which was subsequently closed and its
shares transferred to Danae, less shares issued for cash to Directors to allow
them to participate in the LTIP announced at the time of Merger.
8. Reserves
Net
Accumulated unrealised Currency Total
losses gains translation Reserves
US$000 US$000 US$000 US$000
30 September 2006 (18,938) 1,061 (3,042) (20,919)
Gains now realised and - (1,044) - (1,044)
recognised in income
statement
Net unrealised gain on - 596 - 596
financial assets
available-for-sale
Deferred tax - 142 - 142
Loss for the period (3,500) - - (3,500)
Currency translation - 85 (197) (112)
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31 March 2007 (22,438) 840 (3,239) (24,837)
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Accumulated
Net
Accumulated unrealised Currency Total
losses gains translation Reserves
US$000 US$000 US$000 US$000
30 September 2005 (3,596) 69 (390) (3,917)
Acquisition of Gympie (452) - - (452)
Net unrealised gain on - 2,179 - 2,179
financial assets
available-for-sale
Deferred tax - (654) - (654)
Loss for the period (6,128) - - (6,128)
Currency translation - (66) 585 519
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31 March 2006 (10,176) 1,528 195 (8,453)
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Accumulated losses
Represents the net historic losses made by Buka Minerals and its subsidiaries up
to 19 April 2006 and thereafter the net losses of Scarborough Minerals plc and
its subsidiaries.
Net unrealised gains
This reserve holds the cumulative fair value changes on the Group's financial
assets available-for-sale.
Currency translation
This reserve is used to record exchange differences arising from the translation
of the financial statements into the Group's presentation currency, US Dollars.
9. Post balance sheet events
a) Mineral Securities Merger
On 13 April 2007, Scarborough announced that it had agreed the terms of a share
exchange offer by Minsec (BVI) which, subject to shareholders' approval, was
expected to complete in July 2007. If the transaction proceeds, it is expected
that it will be accounted for as a reverse acquisition by Scarborough of Minsec
BVI. A proforma balance sheet for the merger group was included in the Scheme
Document sent to shareholders on 23 May 2007. Costs incurred to date have been
capitalised and will be accounted for as part of the cost of acquisition.
b) Suspension of mining at Gympie
On 18 April 2007, Buka Gold announced that it was bringing forward the
suspension of mining operations to early May 2007. However, no further
redundancy costs or impairment of the Group's assets are expected to result from
this decision.
c) Vostok disposal
On 4 May 2007, Scarborough announced that the Government of Kazakhstan had
authorised the conditional disposal of 85% of Scarborough's 100% interest in
Multiplex Resources Kazakhstan Limited ("MRK"), the company that holds the
exploration licence at Vostok. This transaction is expected to complete in early
June and will result in the deconsolidation of MRK.
Final proceeds are still being calculated but on completion Scarborough will
receive A$740,000 (US$597,000) in cash and subsequently will also receive
complete reimbursement of all costs incurred since 1 January 2006. All receipts
will be accounted for as a realisation of the existing capitalised exploration
costs with the balance treated as the cost of the residual 15% stake which will
be classed as a financial asset available for sale.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KBLBXDEBFBBV
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