RNS Number:6454J
Marakand Minerals Limited
28 September 2006
Final For Immediate Release
28 September 2006
Preliminary results for the year ended 30 June 2006
Marakand Minerals Limited ("Marakand" or "the Company") announces its
preliminary results for the year ended 30 June 2006.
Uzbekistan: Khandiza Project
* the Company continued to seek final approvals from the Uzbek Government
regarding the development of the Khandiza deposit by way of a Joint Venture
('JV') with the State Committee of Geology of the Republic of Uzbekistan
("Goscomgeology").
* a recent decree of the Uzbek Government, transferring the Khandiza
mineral reserves from Goscomgeology to the state owned Almalyk Mining and
Metallurgical Combinat ("AMMC") has meant the previously proposed JV with
Goscomgeology falls away and Marakand is presently seeking to clarify the
nature of its continued role in the project with the Uzbek Government.
* regional exploration work was carried out in the South East Uzbekistan
exploration areas in the last year continuing to indicate encouraging
results.
Turkey: Copper - Gold Projects
* Marakand has entered into exclusive option arrangements to acquire
majority interests in two separate copper - gold exploration license areas
in southern Turkey.
* the two Turkish licences are located in the prospective southern Turkish
'ophiolite belt' related to the Cyprus Arc, and host 'Cyprus-type' copper -
gold mineralization.
* exploration works, including surface drilling, have previously been
undertaken on both license areas and the Company is now proceeding with
further exploration.
Tajikistan: Akjilga silver deposit
* Marakand has continued to express its interest in the exploration and
development of this deposit, however the Company is awaiting the official
issuance of a license before committing to any further funds to the project.
Uzbekistan, Khandiza
Further to completion and submission of the Khandiza Feasibility Study in
October 2004 for the economic development of the zinc, lead, copper, silver,
gold deposit, and exploration of surrounding areas in South East Uzbekistan,
Marakand, in the latter half of 2005 reached agreement in principle with its
nominated Uzbek partner, Goscomgeology, on the legal and financial
documentation for the project's development based on the requested Joint
Venture structure.
The Company, again at the request of Goscomgeology, also entered into
discussions with a major Korean interest pursuant to possible project financing
on competitive commercial terms, and in June 2006 signed a Negotiation Framework
Agreement to prepare the way for detailed negotiations.
In August 2006, the Uzbek Government issued Presidential Decree 442, specifying
the transfer of the Khandiza mineral reserves from Goscomgeology to AMMC, and
cancelling Decree 359, which had previously given Marakand exclusive rights to
negotiate to develop Khandiza on the basis of a concession contract or
production sharing agreement.
The Company has indicated to both Goscomgeology and AMMC that it is prepared to
participate jointly with AMMC on the project and is seeking meetings with senior
members of the Cabinet of Ministers to present a development proposal on the
joint exploitation of the Khandiza and Uch-kulach deposits that is mutually
beneficial and to be authorised to enter into detailed negotiations with AMMC.
Marakand's rights and investments to date are protected under the Uzbek Law on
Subsoil Use and On Guarantees and Measures to Protect Foreign Investors' Rights.
In the event that the Company cannot negotiate an acceptable role in the
development of the Khandiza project, the Company will alternatively seek the
appropriate compensation to which it is entitled under Uzbek law.
Through its efforts since 1996 the Company has come to understand the deposit in
detail and having completed a detailed Feasibility Study and Environmental and
Social Impact Assessment, has been in a position to proceed with project
financing and development of Khandiza for some time pending governmental
approvals.
Framework Agreements are in place for the toll smelting and sale of zinc, lead
and copper concentrates.
Khandiza - Resources and reserves
* The Soviet resource for the Khandiza Project was estimated in 1974 at 20.9Mt
at an average grade of 6.63% zinc, 3.28% lead, 0.84% copper,
114 g/t silver and 0.35 g/t gold.
* The JORC classified measured and indicated resource above a
2% zinc cut-off has been estimated in 2004 at 11.83Mt at an average grade of
7.66% zinc, 3.65% lead, 0.921% copper, 129 g/t silver and 0.38 g/t gold.
* The mineable reserve above a 4% zinc break-even cut-off, for the first
15 years of production, totals 9.61Mt at an average grade of 7.90%
zinc, 3.78% lead, 0.95% copper, 129 g/t silver and 0.37 g/t gold.
South East Uzbekistan Exploration
Limited regional exploration work was carried out in the South East Uzbekistan
exploration areas in the last year, with commencement of more intensive
exploration being deferred until completion of the final approval process of the
Khandiza Project and exploration strategy by the Uzbek Government.
Hatay and Karakilise Projects in Turkey
Marakand has entered into exclusive option arrangements to acquire majority
interests in two separate copper - gold exploration license areas in southern
Turkey. Both license areas are located in the prospective southern Turkish
'ophiolite belt' related to the Cyprus Arc, and host 'Cyprus-type' copper - gold
mineralization. Exploration works, including surface drilling, have previously
been undertaken on both license areas and the Company is now proceeding with
further exploration.
Hatay Exploration License
Marakand holds a 25% interest in a newly formed joint venture company, Hatay
Madencilik AS, with the option to increase its holding to a 66.7% interest at
Marakand's election, following further exploration and feasibility studies.
The Hatay Exploration License was formally transferred by the Turkish General
Directorate of Mining Affairs into Hatay Madencilik AS on the 19th July 2006.
The Hatay License, covering 1204.8 hectares, is located in the Antakya Region
and has previously been explored for gold. Ancient Roman workings are extensive.
Mineralization in the area explored so far, extends over at least 1,600m along
strike. Grab samples collected by the Company confirm significant levels of gold
and copper. Analyses of samples from the eastern end of the area indicated the
presence of up to 9.48 g/t gold and 3.09 % copper, whilst samples from the west
of the area indicate up to 17.28 g/t gold but with less copper (0.15 %). A
stream sediment sampling programme, together with further rock sampling, is
expected to increase the overall strike extent of mineralization.
Marakand has established a technical office in Antakya and has commenced
satellite image interpretation of the area. A programme of geological mapping,
sampling and surveying has commenced, to be followed by surface drilling before
the end of 2006.
Karakilise Exploration License
Marakand has also entered into an exclusive option agreement to acquire a 100%
interest in the Karakilise Exploration Licence in the Isparta Region, on or
before 2nd February 2007. In a previous exploration exercise four shallow
drill-holes are reported to have intersected copper - gold mineralization with
average grade 3.39 % copper and 1.7 g/t gold.
Grab samples of outcropping massive sulphides confirm significant levels of
copper and gold. Analyses of two of these samples indicate the presence of
3.87% copper with 0.99 g/t gold, and 2.31% copper with 3.10 g/t gold.
Akjilga Silver Project in Tajikistan
The Company remains interested in the exploration and development of the Akjilga
Silver Deposit, however is examining ways of participating with local partners
in securing a license for exploration and mining before committing to any
further expenditure on the project.
Compilation of data on the Akjilga Silver Project by Marakand illustrates high
silver grades encountered during Soviet adit development and encouraging results
from metallurgical testwork on Akjilga silver ores.
The Soviet resource for the Akjilga Project was estimated at 988,300t at an
average grade of 2,114 g/t silver, 0.71% copper and 0.78% antimony. A number of
high grade veins, of 0.5 to 2.0m in width, were explored in the 1980's by two
adits and associated drives.
Preliminary metallurgical testwork carried out in Moscow in 1991, on a sample
grading 996 g/t silver, indicated that 97.2% of the silver could be recovered to
a gravity / flotation concentrate grading 30,410 g/t silver, 23.0% copper and
3.5% antimony.
Corporate
Whilst continuing to seek and clarify a meaningful role in Khandiza with the
Uzbek Government, Marakand will proceed with exploration of its Turkish
licences, and consider further acquisitions in Turkey.
Management has completed a review of its cost structure in light of the
immediate exploration focus in Turkey, delays and uncertainty concerning the
development of Khandiza and the increased Oxus ownership of the Company. Oxus
plays more active role in the day to day dealings of Marakand.
Financial Results
The Company had $131,000.00 cash at the end of the review period. Marakand's
anticipated funding needs for the year end 2007, principally for exploration in
Turkey, will be met by a loan agreement with Oxus Gold plc, dated 22 September
2006 which provides for Marakand to borrow up to USD 500,000, of which $240,000
is to repay accrued fees payable to Oxus as at 30 June 20, and is renewable by
mutual agreement. Interest is payable at 3% above 1 month LIBOR and the loan is
secured by pledge or mortgage over the Company's assets.
Marakand Minerals is a mining exploration and development company focused in
Central Asia and Turkey, and listed on the Alternative Investment Market (AIM)
in London, stock exchange symbol MKD.L.
For further information please visit www.marakand.co.uk or contact:
Marakand Minerals Limited
Alasdair Stuart, CEO Tel: + 998 71 120 7162
Joanna Solino, Investor Relations Officer Tel: +44 (0)20 7907 2000
CONSOLIDATED INCOME STATEMENT
------------------------------ ------ ----------- ------------
(US$000) Note Year Year
ended ended
30 June 2006 30 June 2005
------------------------------ ------ ----------- ------------
Revenue
Gross revenue 132 25
Expenses
Administration expenses (720) (720)
Deferred exploration and evaluation
expenditure 8 (1,224) (2,281)
------------------------------ ------ ----------- ------------
Gross loss (1,812) (2,976)
Stock-based compensation 10 (59) (93)
Foreign exchange (loss) gain 4 (42) 55
------------------------------ ------ ----------- ------------
Loss from operations (1,913) (3,014)
Interest receivable 35 136
------------------------------ ------ ----------- ------------
Loss before taxation (1,878) (2,878)
Taxation 5 (1) (1)
------------------------------ ------ ----------- ------------
Loss for the year (1,879) (2,879)
------------------------------ ------ ----------- ------------
Loss per share (US cents) 11
Basic (1.86) (2.85)
------------------------------ ------ ----------- ------------
Diluted (1.86) (2.85)
------------------------------ ------ ----------- ------------
CONSOLIDATED BALANCE SHEET
----------------------------- ------ ---------- ----------
(US$000) Note As at 30 June As at 30 June
2006 2005
----------------------------- ------ ---------- ----------
ASSETS
Current assets
Cash and cash equivalents 6 131 1,715
Trade and other receivables 7 1 1
----------------------------- ------ ---------- ----------
132 1,716
Non-current assets
Exploration and mining properties 8 28,456 28,456
----------------------------- ------ ---------- ----------
28,588 30,172
----------------------------- ------ ---------- ----------
LIABILITIES
Current liabilities
Trade and other payables 9 332 96
Shareholders' Equity
Capital stock 10 1,781 1,781
Reserves 26,475 28,295
----------------------------- ------ ---------- ----------
28,256 30,076
----------------------------- ------ ---------- ----------
28,588 30,172
----------------------------- ------ ---------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS
-------------------------------- ----------- -----------
(US$000) Year Year
ended ended
30 June 2006 30 June 2005
-------------------------------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year (1,879) (2, 879)
Adjustments for:
Depreciation and assets written off - -
Stock-based compensation 59 93
Salaries and bonuses converted to shares - 11
-------------------------------- ----------- -----------
Operating loss before working capital changes (1,820) (2,775)
Decrease in trade and other receivables - 217
Increase in trade and other payables 236 50
-------------------------------- ----------- -----------
Cash used for operations (1,584) (2,508)
-------------------------------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Warrants and options exercised - -
Shares issued - -
-------------------------------- ----------- -----------
Net cash provided by financing activities - -
-------------------------------- ----------- -----------
Net decrease in cash and cash equivalents (1,584) (2,508)
-------------------------------- ----------- -----------
Cash and cash equivalents as at 1 July 1,715 4,223
-------------------------------- ----------- -----------
Cash and cash equivalents as at 30 June 131 1,715
-------------------------------- ----------- -----------
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
------------------------ ------- --------- ----------- -------
(US$000) Share Capital Accumulated Total
capital reserve loss
Note 10 2 2
------------------------ ------- --------- ----------- -------
Balance as at 1 July 2004 1,781 32,598 (1,528) 32,851
Shares issued - - - -
Warrants and options - - - -
exercised
Conversion of directors'
remuneration to shares - 11 - 11
Stock-based compensation - 93 - 93
Loss for the year - - (2,879) (2,879)
------------------------ ------- --------- ----------- -------
Balance as at 1 July 2005 1,781 32,702 (4,407) 30,076
Shares issued - - - -
Warrants and options - - - -
exercised
Stock-based compensation - 59 - 59
Loss for the year - - (1,879) (1,879)
------------------------ ------- --------- ----------- -------
Balance as at 30 June 2006 1,781 32,761 (6,286) 28,256
------------------------ ------- --------- ----------- -------
NOTES
1. The above financial information for the year ended 30 June 2006 is audited,
with an unqualified opinion. It does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985. The financial
information for the year ended 30 June 2005 has been extracted from the
accounts for that year, which has been delivered to the Registrar of
Companies and on which the auditors gave an unqualified opinion, as amended
for the first time adoption of IFRS. Statutory accounts for the year ended
30 June 2006 will be delivered to the Registrar of Companies. The Annual
Report will be posted to shareholders in early November 2006 and the Annual
General Meeting will be held on 07 December 2006.
2. The basic and diluted loss per share has been calculated by reference to a
loss, after taxation, of $1,879,000 (2005: $2,879,000 loss) and the
weighted average number of ordinary shares in issue of 101,023,490 (2005:
101,015,157).
3. The Directors do not recommend the payment of a dividend in respect of this
period (2005 - nil).
4. The Consolidated Financial Statements, including comparatives, have been
prepared in accordance with International Financial Reporting Standards
(''IFRS'\') issued by the International Accounting Standards Board
(''IASB'') and the interpretations issued by the Standing Interpretations
Committee of the IASB.
5. Khandiza Services Limited, a 100% subsidiary, has been consolidated within
the financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
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