5th Jun 2007 07:01
Hambledon Mining PLC05 June 2007 PRESS INFORMATION 5th June 2007 HAMBLEDON MINING PLC Final Results (All references to "£" are to the British Pound and "ounces" are to troy ounces) Hambledon Mining plc ("Hambledon" or the "Group" or the "Company"), anAIM-listed mining and exploration company developing precious metal deposits inKazakhstan, announces its results for the year ended 31 December 2006. Highlights •Processing facility nearing completion •Initial annual planned production 40,000oz •Gold content 18% higher than predicted from geological model •Total Inferred & Indicated Resource as at Sept. 2006: Au 2.5m ozs; Ag 3.6m ozs •Exploration activity continues •Ognevka processing plant acquired January 2007, expected on line late 2007 £€9m fundraising completed January 2007 - project now fully funded Nicholas Bridgen, Chief Executive of Hambledon Mining plc, commented: "We have made excellent progress towards completion of the processing facilitiesat Sekisovskoye and we are now on the brink of joining the ranks of goldproducing companies. It is gratifying that, in spite of the well publicisedlevels of inflation affecting the world's mining industry, the capital costs areexpected to be within the budget set in June 2006. "Evidence from grade control sampling shows that the contained gold beingencountered is some 18% higher than that predicted from the geological model andthis obviously impacts on our projected profitability. "The acquisition of the Ognevka processing plant gives the Company diversity ofoperations and a more robust financial future. Several options for the furtherdevelopment of Ognevka are being studied and we believe that it has thepotential to become a highly significant contributor to Group profits." Enquiries Hambledon Mining plcNicholas Bridgen, Chief Executive Telephone + 7 701 733 8915 +44 7791 327180Bankside ConsultantsMichael Spriggs / Michael Padley Telephone +44 207 367 8888 Seymour PierceNicola Marrin Telephone +44 20 7107 8000 Note to editors Hambledon Mining plc is an AIM-listed gold mining and exploration company whichis developing the Sekisovskoye gold deposit and owns the Ognevka processingplant, both of which are close to Ust Kamenogorsk in East Kazakhstan. At Sekisovskoye, the Company is mining from an open pit and constructing an850,000 tonnes per year treatment plant. Production from the open pit willaverage over 40,000 ounces per annum. After the start of open pit processing,the Company plans to develop the much larger underground resource which isexpected to lead to a combined production rate of around 100,000 ounces peryear. The Ognevka processing plant is being refurbished and will produce concentratescontaining gold, silver, copper, iron and coke from the retreatment of zincsmelter residues. CHAIRMAN'S STATEMENT Review Since my last report on 20 June 2006, we have made excellent progress towardscompletion of the processing facilities at Sekisovskoye, and we are now on thebrink of joining the ranks of gold producing companies. Mining started in June 2006, focused initially on the mining of waste for use inthe construction of the tailings dam but now including the creation of apre-start up stockpile of ore. This part of the operation is performing well andgenerally exceeds the planned mining rates. At the time of writing, over 1.1million cubic metres of material had been moved. We are now commissioning the crushing plant and the remainder of the processplant is nearing completion. The construction team has overcome considerabledelays in the delivery of some of the major equipment, including the two mainball mills, the first of which arrived on site nine months late and the secondof which is now expected in mid June. However, it is gratifying that in spite ofthe well publicised levels of inflation affecting the world's mining industry,the capital costs are expected to be within the budget set in June 2006. Thishas been achieved partly by bringing a substantial portion of the work in houserather than using subcontractors. Of major significance to the Company was the further evidence that the containedgold is some 18% higher than that predicted from the geological model. Equallyimportant has been the verification of the style of mineralisation contained inthe model by the much closer spaced sampling of the grade control drillingcompared with the previous exploration. The verification of the model allows usto be more confident in our mine planning and, of course, the higher goldcontent impacts considerably on our projected profitability. We acquired TOO Ognevka, owner of the Ognevka processing facility, in January2007. This facility has two main production lines. The first is a 350,000tonnes per year crushing, grinding and flotation circuit which has been adaptedfor the treatment of residues from zinc smelters which contain high values ofcopper, gold, silver, iron and carbon. The rehabilitation of this operation,which is currently shut-down, is ongoing. The second line is a 200,000 tonnesper year gravity concentrator formerly used to treat tantalum ore from anow-closed mine which used to operate at the site. Several options for thefurther development of Ognevka are being studied including the expansion of thezinc residues treatment facility and the re-treatment of existing tailings whichstill contain commercial quantities of feldspar, lithium and beryllium as wellas other by-products. This acquisition now gives the Group diversity ofoperations and a more robust financial future than could be guaranteed from anysingle operation In April this year, we welcomed Baurzhan Yerkeyev to the board as an ExecutiveDirector in charge of operations. Baurzhan has been playing an increasinglyimportant role in the management of the Group, having originally been our ChiefGeologist and more recently the Director of all the Sekisovskoye operations. Heis a Kazakh national, with long experience of working with western companies.Meanwhile, Alzhan Shomaev has decided to step down in order to pursue otherbusiness opportunities. Alzhan was a founding partner in the original company in1998 and has provided invaluable help in a non-executive capacity since theCompany's flotation in June 2004. We wish him every success for the future. Outlook Commissioning of the Sekisovskoye process plant has started with the crushingfacility this June and will progress through the milling and gold recoverysections throughout July. Legislation in Kazakhstan requires certain reagenthandling storage and mixing equipment to have been built and inspected beforeapplications can be made for the appropriate licences. Whilst no delay isexpected, it is impossible to be exact about the date of first production. Once production starts, it is expected that the design capacity of 850,000tonnes per annum will be reached fairly quickly. The grade of gold to be treatedin the first year is slightly lower than the predicted average for the wholeopen pit, but this is likely to be compensated by the higher gold grades whichare now being encountered in the grade control sampling. Production is thereforelikely to be around the predicted average annualised rate of 40,000 ounces peryear. As the open pit deepens, the grade will rise so that by the second andthird year, production from the open pit is likely to be around 50,000 ouncesper annum on the same basis. Development of plans for the underground mine have also been progressed.Underground production is likely to start later next year and increaseprogressively to substitute for the lower grade open pit feed, thereby extendingthe open pit life. Detailed design and scheduling has not yet been completed butconceptual plans indicate that production is expected to rise to around 100,000ounces from the existing plant, although some addition to milling and leachcapacity is likely to be required. Output may rise to 150,000 ounces per yearafter suitable plant upgrading and mine development. Further increases may bepossible given successful exploration in the surrounding areas. We expect Ognevka to start production before the end of the year. Whilst we hopefor a very fast recovery of our investment, the operating performance is not yetproven and it would be safer to wait for actual results before making anypredictions. Nonetheless, the many opportunities for future development that weare currently studying lead us to believe that Ognevka has the potential tobecome a highly significant contributor to Group profits. It was unfortunate that the negotiations for the proposed acquisition of asecond gold mining company that were in progress in the early part of this yearcould not be completed. However, the Company's current commitments are now fullyfunded and we will be able to utilise our strong financial position togetherwith our broad experience of Kazakhstan to acquire new expansion opportunitiesand further enhance shareholder value. I would like to thank all of our employees for their hard work and commitment inprogressing the development of Hambledon's first mine. We look forward to thenext twelve months with great optimism. George EcclesChairman REVIEW OF OPERATIONS Sekisovskoye Group structure In mid-2006 the Group formed a new local company, TOO Altai Ken-Bayitu ("AKB"),to conduct the ore processing activities at the Sekisovskoye minesite. Thisfurther allows the facilities at Sekisovskoye to be used for custom processingof ores sourced externally while providing some longer term tax benefits for theGroup. AKB owns the mill processing facilities and related infrastructure, whileSekisovskoye Mining Company ("SMC") holds the mining rights and owns the miningfleet, the main powerline and substation, the tailings facility and thelaboratory. Exploration activities are also carried out by SMC. Permitting Following negotiations with the Kazakhstan Ministry of Energy and MineralResources in October and November 2006 and payment of the Commercial DiscoveryBonus in December 2006, SMC received a supplement to our subsoil use agreementwhich allows exploitation of the Sekisovskoye deposit through open pit andunderground mining and processing activities. The licence fixed our royaltypayment at 1% of revenue. SMC has received numerous additional licences and permits for surface landaccess and use, ecological clearances, water supply, mine planning and design,blasting, as well as a licence to conduct design and construction activitiesusing SMC in-house personnel and resources. The latter has become very importantfor both time and cost savings. AKB has received licences and permits from the East Kazakhstan Water Authority,Land Control Department, Emergency Situations Department, Fire Authority, andSanitation & Disease Control Department and has submitted an overall SafetyDeclaration which was recently approved by all departments. Outstanding licences and permits include: 1) Overall Environmental Approvalafter submission of final, life of mine, tailings storage facility (TSF) design,2) the mineral processing licence for AKB and 3) approvals for use of hazardousand poisonous materials. Status of plant construction The AKB 850,000 tonnes per annum carbon-in-pulp process plant and relatedfacilities are nearing completion after 3 years of planning, design andconstruction. Site works began in earnest in June 2006. Delays have beenencountered mainly in mill building construction due to the poor performance oflocal contractors and in the receipt of the two 1.2 MW ball mills which werefabricated in Russia. These delays added 2 to 3 months to the start-up schedule. Over the period, site access roads were constructed and area roads wereupgraded. A 5.5km 110 kV high voltage powerline and a 16 MW substation have beenbuilt and connected. A long-term electricity supply contract has been negotiatedwith Kazakhmys Corporation. The site office building purchased in 2005 wasupgraded and fitted out for our mining, survey, geology, process, engineering,maintenance, exploration and administration personnel. We also set up ananalytical laboratory which is now in operation on exploration and grade controlsamples. At the initial phase of construction, the site area was cleared and over 320,000m3 of topsoil was stockpiled. This was no mean feat as the area at the minesitehas topsoil over 2 metres thick in places. Several contracts were let for thevarious construction activities. The crushing plant is a 220 tonne per hour,3-stage plant that will be commissioned very shortly. It was built mainly by alocal group from nearby Semipalatinsk using crushing and screening equipmentsourced from China. The main mill building construction contract was awarded to a local buildingcontractor. At this time, all equipment foundations have been completed and themill building itself is nearing completion. The main leach tanks have beeninstalled and structural steel work platforms, pipe racks, etc. are beingfabricated. All process equipment items have been ordered, with all major andthe majority of minor equipment items received or currently in transit. The mainstores building has been completed and is now being filled with new equipment,spare parts and other consumables. All other buildings are in an advancedconstruction phase. Overall, the mill facility is expected to be ready for anAugust start-up. At the TSF, the first cell earthworks are complete and ready for geomembranelining in early July. Preparations for the second cell, including clearing oftopsoil, excavation of underdrain trenches, and initial wall construction arealso well advanced. Process equipment has been sourced from a mix of Western and local suppliers.Key items include a Falcon concentrator (Canada), Kemix agitators and inter-tankscreens (South Africa), Warman slurry pumps (South Africa), Grundfos solutionpumps (Germany), Symons crushers (Chinese manufacture), Ramsey belt weigh scales(supplied from Holland), Weir cyclones (UK), Schenck vibrating screens(Australia), TyazhMash ball mills (Russia), PromSnabComplekt blowers (Russia),Danfoss vari-speed controllers (Denmark), and ABB and Schneider electricalswitchgear (Italy and France). All fabrication for tanks and structural steelhas been conducted by local groups. In addition, supply contracts for reagents,grinding balls and other consumables have all been finalised. Mining operations The mining department has accomplished much over the last 12 months, includingdeveloping the open pit mine and related control systems, providing assistancein obtaining key licences and approvals, preparing and submitting numerous openpit mine design documents and short- mid-, and long-term mine plans whileproviding key assistance in plant construction and earthworks. In addition, theyhave prepared plans and designs for rapid development of the initial phases ofunderground mining to access the near-surface, high grade Orebody 11 at the westside of Sedukha Hill (the main deposit). The initial mine plan was based on an orebody model, developed in Datamine in2005, which was optimised using Whittle4D software to produce an optimum pitshell. A 4,000 metre underground drilling programme was completed in early 2006which resulted in the development of a new orebody model. In order to maintainuse of existing underground development, the pit depth was restricted to the 340level. Optimisation on this basis produced a pit shell from which the currentmine design was developed. The design is for an open pit containing 4.2 milliontonnes of ore at an average grade of 1.59 g/t Au and 2.58 g/t Ag, for a total of213,000 contained ounces of gold (equivalent). The mine strip ratio is 4.7 to 1.At an ore processing rate of 850,000 tonnes per year, this gives a mine life of5 years. However, development of the higher grade underground mine begins in2008 and should allow substitution of this material on an increasing basis forthe following years. A study was carried out in 2005 to determine the best way for mining to proceed.Quotes were obtained from local mining contractors while a "first principles"estimate of the unit mining cost was conducted. This study showed that therewere significant cost savings to be generated by purchasing the mining fleet andcarrying out the mining on an owner-operator basis. The decision to purchase ourown mine fleet was made in November 2005 and orders were placed immediately. The majority of the mining fleet was delivered over the period of May toSeptember 2006, including an Atlas Copco ROC L7CR blasthole drill rig, twoHitachi Zaxis 850H excavators, six 45-tonne Belaz haul trucks, a Dressta 534Cfront-end loader, a XCGM TY 320B dozer (larger than a Cat D-8R), a Xuzhou GR215grader plus various support vehicles including a water truck, service truck,sheepsfoot compactor, and 25-tonne crane. Two additional Belaz trucks andanother dozer were received in early 2007. Mining activities were initiated in June 2006 and have continued throughout thewinter months, with mining targets exceeded in all but one month to May 2007.Blasting was initiated in November 2006 using a local contract blasting groupand is continuing as required. In addition to providing support for the construction of the mill facilities,mining-related activities over the period included construction of the main minehaul roads, the ROM pad for ore storage (100,000 tonne ore storage capacity),sedimentation control dams, and foundations for the main waste dump. Currentactivities include construction of the main TSF walls. The majority of the mining so far has been waste material for construction,although mining of ore for stockpiling ahead of commissioning of the processplant has now started. The North Pit cutback is nearing completion and the mainaccess road to the top of Sedukha Hill (the Main Pit) was completed inpreparation for ore mining in this area which began in June 2006. Both areaswill be mined simultaneously until early 2008, whereupon North Pit miningactivity will be suspended until mining at Sedukha reaches the same level andthe two pits will combine to the ultimate depth. Up to the end of May 2007, 0.73 million m3 of waste rock have been mined plusanother 0.41 m3 of in situ materials were moved as part of constructionactivities (mainly topsoil and subsoils). Ore mined to the end of May 2007totals some 35,000 tonnes, with additional small stockpiles of various gradesleft over from previous trial mining and underground exploration activities. The formal mine workshop and related facilities are nearing completion adjacentto the mill facilities. Fuel and other mining supplies and maintenance contractshave been put in place. Additional fleet items were recently ordered, includinga second blasthole drill rig and a small civil earthworks fleet for on-goingtailings dam construction. This fleet is expected to save some $3 million incontractor fees over the life of the open pit operation. During the course of setting up the on-going mining activities, our geology teamhave collected trench samples and analysed blast hole drill cuttings to developan effective grade control strategy. The results of the sampling were put intothe mining and orebody models with a perhaps not surprising result: the goldcontent in the ore zones examined are showing an 18% increase as compared to theprevious geological model. This is consistent with previous drilling programmeswhere recent drilling has revealed increases in contained gold of 17% to 21%compared with results based on Soviet drilling. Our independent geologicalconsultant has verified the result and believes it is now likely that theincrease will apply to the entire deposit EXPLORATION Exploration activities continued throughout the year. After completion of acontract drilling programme in September 2006, our Diamec underground drill rigwas converted to a surface rig and continued drilling throughout winter. Intotal some 3,300 metres of diamond core were drilled from 1 May 2006 to 30 April2007. This represents 35 drill holes, 26 of which were drilled in the area ofthe Tserkovka deposit. The remaining holes were drilled around the base ofSedukha Hill as part of an investigation into extensions of the known ore zones- in particular around Orebody 11 which is the initial target for undergroundmining. At the time of writing, 189 sample results have been received from the surfaceDiamec drilling programme that is targeting updip extensions of modelled orezones along the upper western fringes of the Sekisovskoye deposit. Initialassessment of the gold grades with the modelled resource supports the integrityof the model with a number of zones showing updip extensions, including Orebody11. So far, a total of 872m of Diamec drilling has been completed and anyremodelling will be undertaken after the conclusion of the drilling and theassessment of the results. Overall, the Tserkovka drilling has been less encouraging. The last batch ofresults, just received, represent five inclined drillholes with grades rangingfrom 0.01g/t to 3.04g/t Au. The best intersection is seen in Z184 with drilledthickness of 2.1m grading at 2.1g/t Au. The continuity of this zone remains openand a full assessment is required. It is possible that this mineralisation is anupper expression of deeper mineralised breccias and a follow-up drillingprogramme may be warranted to target potential at depth. There are severalprospective targets for exploration within the lease planned for this currentseason. Currently, there is one contract drill rig on site plus the Company'sDiamec unit. This coming season's drilling target is 2,000 metres. MINERAL RESOURCES Resource statement This mineral resource estimate for the Sekisovskoye deposit has been preparedunder the JORC Code and is unchanged since the update reported in September2006. Location Resource Tonnes Au g/t Contained Ag g/t Contained Au g/t Cut-off Category (millions) Metal Metal Au oz * Ag oz * Open pit Indicated 9.55 1.8 552,671 3.0 921,119 0.5 area Inferred 6.06 1.8 350,700 2.0 389,667 (b)Underground Indicated 2.21 5.1 362,371 6.2 440,529 2.0 Inferred 7.16 5.2 1,197,036 7.1 1,634,415 (b) Marginal Indicated 3.40 0.7 76,519 1.4 153,037 0.5underground (a) Inferred 0.96 0.6 18,519 1.2 37,038 Totals Indicated 15.16 2.0 991,561 3.1 1,514,685 Inferred 14.18 3.4 1,566,255 4.5 2,061,120 Total Indicated & Inferred 29.34 2.7 2,557,816 3.8 3,575,805 \* Troy oz = 31.10348grammes(a) underground low grade material associated with high grade gold zones.(b) includes resources that have been defined beyond the current limits of thegrade model. Note: "Inferred" resources cannot be used for ore reserves untilthey have been upgraded. The updating of the resource estimate (announced in September 2006) was basedupon the analysis of the Diamec drilling results from the underground 441m leveland the remodelling at that time was confined to the open pit area at +250melevation. There was a slight increase in contained gold within the "indicated"category but lower in the "inferred" low confidence category. The Diamecdrilling supported a better understanding of the gold distribution trends andcontinuity, and the model reflected this greater confidence. This model updatecontained 244 separate gold zones indicating the complexity of the golddistributions above the 0.5g/t Au cut-off level. This complexity was alsoexhibited by the occurrence of additional gold intersections that could not bemodelled because of limited continuity problems and which could be expected toadd an additional 6% of contained gold within the planned open pit. Current ongoing assessment of the grade control sampling basically confirms theoverall spatial distribution style of the mineralised zones, as delineated inthe resource model. It also confirms that gold distributions can be quitecomplex locally. An initial blast-hole grade sample model showed a containedgold increase of 18% compared with the resource model and supports earlierstatistical indications. In light of this result, and from a recent graphicalinteractive assessment of additional grade control sample results, we shouldanticipate that this positive trend would continue for the resource as a whole.This increase in gold is believed to be associated with the relatively poor corerecoveries from the historical Soviet drilling, compared with the results fromHambledon's drilling using modern hydraulic drill rigs. The resource model was last updated in September 2006. It would be premature atthis stage to further update the model in respect of the additional informationbeing assessed from the grade control sampling due to the relatively smalltonnage and, therefore, its negligible impact on the overall model. Results so far from the exploration of the Tserkovka licence area have beendiscouraging, but it is quite possible that some of the declared Soviet-basedresources totalling 740,000 ounces of gold in the C2 and P1 categories could becategorised under the JORC Code after additional target results and assessment. Reserve estimate This ore reserve estimate for the Sekisovskoye open pit deposit has beenprepared under the JORC Code. Reserve Tonnes Contained Contained Category (million) Metal Metal Au g/t Location Au g/t Au oz Ag g/t Ag oz Cut-off Open pit area Probable 4.19 1.6 213,352 2.6 346,665 0.5Underground Probable 0.83 5.1 13,384 7.4 19,615 0.2 Total 226,736 366,280 \* Troy oz = 31.10348grammes The Sekisovskoye Open Pit ore reserve model is based on the ordinary kriging ofthe mineral resource model using a 0.5grammes per tonne cut-off, taking intoconsideration the expected dilution and losses. In the absence of undergroundmining considerations, Whittle optimisations would have resulted in a pit shellcontaining 7.25 million tonnes of ore representing a conversion of 76 per centof the indicated resource to probable reserve in this area. However, developmentof this pit shell would have resulted in the loss of the existing undergroundinfrastructure and made the process of bringing the underground operation intoproduction much more difficult and on a much longer timeframe. It has thereforebeen decided to leave the existing 320 level intact and access this level from adecline developed from outside the pit limit. This will allow the western orebodies to be mined from underground concurrent with the open pit and other orezones below the pit bottom at the 340 level, which might otherwise have beenincluded in the open pit mine plan. The resultant reserve estimate is calculated by applying mining costs, miningdilution (4 per cent) and recoveries (97.5 per cent) to that portion of theIndicated Resource falling entirely within the optimised open pit design. Thearea of this open pit reserve is contained within the mineral resource asreported above. The Sekisovskoye underground ore reserve has been determined from the minedesign work carried out as a part of the approval of the General ResourceEstimate by the Kazakh authorities using a 2.0grammes per tonne cut-off. TheGeneral Resource Estimate covered both the open pit resource and undergroundresource. Mine designs were therefore required for both the open pit and theunderground areas. The underground design was carried out in detail on theresources from Elevation 250 up and in less detail in the lower areas. Thedesign on some of the orebodies, notably Orebody 11, included stope design downto detailed stope blast ring design. This level of design and financial analysishas allowed for the ore tonnages in these orebodies to be classified as aprobable reserve. It is anticipated that as further detailed design andfinancial evaluation is carried out on the indicated resources in these areasthen these too will be convertible to reserves. The underground reserve estimate is calculated by applying mining costs, miningdilution (8 per cent) and recoveries (96 per cent) to that portion of theIndicated Resource falling entirely within the stope design. The area of thisunderground reserve is contained within the underground mineral resource asreported above. Qualified Person These resource and reserve estimates have been prepared by Roger Rhodes BSc,MSc, MIMMM, independent geological consultant with Computer Resource Services.He has over 35 years of relevant experience and is a qualified person for thepurpose of reporting resources under the JORC Code and the AIM rules. Consolidated profit and loss accountFor the year ended 31 December 2006 2006 2005 restated Notes £000 £000 Administrative expenses (774) (846) ---------- -----------Operating loss (774) (846)Net interest and similar items 94 249 ========== ===========Loss on ordinary activities before and after taxation retained for the year (680) (597) =========== ============ Loss per ordinary share (UK pence per share)Basic 3 (0.19)p (0.24)pDiluted 3 (0.19)p (0.24)p All results are derived from continuing activities. The Company has taken advantage of Section 230 of the Companies Act 1985 not topublish its individual profit and loss account. Consolidated balance sheet31 December 2006 2006 2005 restated £000 £000 Fixed assets 152 52Intangible assets 10,416 3,060 ---------- -----------Tangible assets 10,568 3,112 ---------- ----------- Current assetsStock 201 -Debtors 165 213Cash at bank and in hand 4,352 4,021 ---------- ----------- 4,718 4,234 ---------- -----------Creditors: amounts falling due within one year (503) (444) ---------- -----------Net current assets 4,215 3,790 ---------- -----------Provisions for liabilities (789) (1,127) ---------- -----------Net assets 13,994 5,775 ========== ===========Capital and reservesCalled up equity share capital 366 262Share premium account 16,690 6,820Merger reserve (148) (148)Accumulated losses (2,914) (1,159) ------------ ------------Equity shareholders' funds 13,994 5,775 ============ ============ These financial statements were approved by the board of directors on 4 June2007 and signed on its behalf by Nicholas BridgenChief Executive Consolidated cash flow statementFor the year ended 31 December 2006 2006 2005 £000 £000 ---------- -----------Net cash outflow from continuing operating activities (1,311) (889) ---------- -----------Return on investments and servicingof financeInterest received 280 150Interest paid (24) (21)Miscellaneous non-operating income - 17 ---------- ----------- 256 146 ---------- -----------Capital expenditure and financialinvestmentPayments to acquire intangible fixed assets (100) (988)Payments to acquire tangible fixed assets (8,487) (277) ---------- ----------- (8,587) (1,265) ---------- ----------- ---------- -----------Net cash outflow before financing (9,642) (2,008) ---------- -----------FinancingIssue of ordinary share capital in the year (net of share issue expenses) 9,974 4,813Share issue expenses relating to previous years - (47) ---------- ----------- 9,974 4,766 ---------- ----------- ---------- -----------Increase in net cash in the year 332 2,758 ========== =========== Analysis and reconciliation of net funds Net 1 January 2006 Cashflow 31 December 2006 £000 £000 £000 Cash at bank and in hand 4,021 331 4,352Debt due within one year (303) 1 (302) ------------ ---------- --------------Net funds 3,718 332 4,050 ============ ========== ============== Consolidated statement of total recognised gains and lossesFor the year ended 31 December 2006 2006 2005 restated £000 £000 Loss for the financial year (680) (597)Share based payment 32 10 ---------- -----------Currency translation differences on foreign currency net investments (1,107) - ========== ===========Total recognised losses relating to the year (1,755) (587) =========== ============ Reconciliation of movements in equity shareholders' fundsFor the year ended 31 December 2006 2006 2005 £000 £000 Total recognised losses (1,755) (587)New capital subscribed (net of costs) 9,974 4,813 ---------- -----------Net increase in equity shareholders' funds 8,219 4,226Equity shareholders' funds - start of year 5,775 1,549 ---------- -----------Equity shareholders' funds - end of year 13,994 5,775 ========== =========== NOTES 1 Basis of presentation and statutory accounts The financial information presented does not constitute statutory accounts asdefined in Section 240 of the Companies Act 1985 as amended. The results havebeen extracted from the consolidated financial statements of the Company for theyear ended 31 December 2006. The financial information contained herein has been prepared in accordance withall relevant financial reporting standards. The accounting bases and policiesare applied on a basis consistent with those set out in notes 1 and 2 in theAnnual Report and Accounts for the Group for the year ended 31 December 2005.From 1 January, 2006 the Group has adopted Financial Reporting Standard 20,"Share-based payment" as set out in note 2. The Company's annual report and audited accounts for the year ended 31 December2006 are being sent to shareholders and delivered to the Registrar of Companiesin due course. The annual report will contain complete notes to the consolidatedfinancial statements. 2 Change in accounting policy and comparatives for share based payment. The Group has adopted Financial Reporting Standard 20 ("FRS 20"), "Share-basedPayment" which is effective for accounting periods commencing on or after 1January 2006. Prior to the adoption of FRS 20, the Group did not recognise anycharge or credit in its profit and loss account in respect of any grant ofequity instrument. The Group had not granted any equity instruments prior to 7November 2002, and therefore FRS 20 has been applied to all grants of equityinstruments that had not vested as of 1 January 2006. The Group issues equity-settled share based payments in the form of shareoptions to certain employees. Equity-settled share-based payments are measuredat fair value at the date of grant. The fair value determined at the grant dateof the equity-settled share-based payments is expensed on a straight line basisover the vesting period, based on the Group's estimate of shares that willeventually vest. Fair value is estimated by an independent third party using a proprietarybinomial probability valuation model. The expected life used in the model hasbeen adjusted, on the basis of management's best estimate for the effects ofnon-transferability, exercise restrictions and behavioural considerations. The new accounting policy for share based payment has been adoptedretrospectively and the comparative profit and loss account for the year ended31 December 2005 has been restated. This change in accounting policy hasresulted in an increase in administrative expenses and accordingly the loss onordinary activities for the year ended 31 December 2005 of £10,000. Any profit and loss charge in a year in respect of share-based payments is takento the Group's accumulated losses. The change in accounting policy has thereforehad no effect on the consolidated balance sheet of the Group at 31 December2005. 3 Basic and diluted loss per share The calculation of basic and diluted earnings per share is based on the retainedloss for the financial year of £680,000 (2005 as restated - £597,000). The weighted average number of ordinary shares for calculating the basic lossper share and diluted loss per share after adjusting for the effects of alldilutive potential ordinary shares are as follows: 2006 2005Basic and diluted 348,931,995 246,854,369 4 Post Balance sheet events Issue of sharesOn 26 January 2007 a placing of 57,022,000 new ordinary shares at 15p per shareraised £8.6 million before expenses of £0.4 million. The funds will be used todevelop the Sekisovskoye and Ognevka projects. Acquisition of TOO OgnevkaIn January, 2007 the Group announced the acquisition of TOO Ognevka("Ognevka"). Ognevka owns a processing facility in East Kazakhstan to treat upto 350,000 tonnes per year of copper, gold and silver containing residues (slag)from Zinc smelters. The facility had been closed for two years and Ognevka wasundergoing a process of rehabilitation under court protection from creditorswhich had a total debt outstanding of £1.9 million. The Group acquired the debtof the principal creditor with a nominal value of £1.4 million for a cashpayment of £0.9 million and then acquired 100 per cent. of the share capital ofOgnevka for a nominal amount. 5 Dividend The directors do not recommend the payment of a dividend. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Altyngold