31st Mar 2008 12:00
Amur Minerals Corporation31 March 2008 31 March 2008 Amur Minerals Corporation (AIM: AMC) RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 Amur Minerals Corporation ("Amur" or the "Company"), an exploration and mineralresource development company focused on East Russia, announces its Final Resultsfor the year ended 31 December 2007. Highlights: •Pre-feasibility demonstrates Kun-Manie project economic at $16,500 per tonne nickel (post-tax NPV is projected to be approximately USD 800 million at today's nickel price) •Over 5,000 metres of new diamond core drill holes at Kun-Manie •Resource estimate increased to 341,000 tonnes Ni and 95,500 tonnes Cu. •Maly Krumkon deposit resource on the Kun-Manie licence increased by 140% •First filings with Russian government to obtain production licence for Kun-Manie •Acquired 25 year exploration and production licence at Kustak, immediately east of Kun-Manie •Exploration reconnaissance and soil sampling programme completed on Anadjakan, a copper-gold project Chairman Robert W. Schafer commented: "During the year Amur Minerals made significant advances on its flagshipKun-Manie project, in addition to encouraging exploration results at theAnadjakan copper-gold project and acquiring the Kustak nickel property next toKun-Manie. "The pre-feasibility study showed that the project is economic at a nickel priceof USD 7.50/lb. For every USD 1 above this, USD 100 million is added to the NPV.At today's price of USD 14/lb the NPV is in excess of USD 800 million. "Our successes continue to encourage us to move Kun-Manie forward with continuedresource drilling, aiming towards a bankable study, and by obtaining a mininglicence." Enquiries: Company Co-Broker Nomad and Public Relations Co-BrokerAmur Minerals Fox-Davies Capital RBC Capital BanksideCorp. Limited Markets Robin Young Daniel Fox-Davies Andrew Smith Michael PadleyCEO Martin Eales Louise Davis+7(495) 629 4418 +44(0) 20 7936 5200 +44(0) 20 7029 7881 +44(0) 20 7367 8881 Chairman's Statement I am pleased to present the annual report and results for Amur MineralsCorporation for the year ended 31 December 2007. During the year Amur Mineralsmade significant advances on its flagship Kun-Manie project, and, in addition tohaving encouraging exploration results from the Anadjakan copper-gold project,we also acquired the Kustak nickel property immediately to the east ofKun-Manie. We look back on 2007 as a year of considerable consolidation in the nickelindustry. We saw the acquisition of LionOre by Norilsk, as well as Inco by Vale(as CVRD is now called). Xstrata bought the rest of Falconbridge it did notalready own, meaning that for the first time since 1928 none of the major nickelproducers are headquartered in Canada. As we enter the second quarter of 2008,BHP-Billiton is bidding to acquire Rio Tinto and Rusal is attempting to acquireNorilsk Nickel. While Amur was not part of the global cross border takeovers of 2007, it wascertainly a year in which the Company made significant progress in thedevelopment of its projects. Whilst in previous years the focus had been onresource expansion, in 2007 we focused on upgrading the understanding of theresources we had previously identified. We are thus very pleased that, in thecourse of our work, we carried out a major expansion of resources in the MalyKrumkon area of our Kun-Manie licence. We are also pleased that independentconsultant SRK Consulting completed a pre-feasibility study showing that theresources defined to date at Kun-Manie are economic using both conservativeoperating considerations and market assumptions. Financial Results For the year ended 31 December 2007, Amur Minerals Corporation capitalised USD5.2 million of exploration and development expenditure, the overwhelmingmajority of which was related to the Kun-Manie project. Amur had consolidatedadministrative expenses of USD 1.8 million and the Company's net loss widened tojust under USD 2 million. However, Amur Minerals Corporation remains debt-free. Investing in People During the year we added two senior production based staff to the team.Recognising that we are moving towards becoming a mining company, we hired MrJack Swanson, a mining engineer with over 40 years' experience, including workat Nezdaninskoe in Yakutia and Suzdal in Kazakhstan. He is also a former vicepresident of operations of Bunker Hill Mining Company, as well as having minemanagement positions with several operations located worldwide. Jack's primaryresponsibility is to co-ordinate the multitude of activities associated withcompleting a feasibility study in addition to supporting our Khabarovskoperations. The other senior appointment was Mr Alex Evlasyev. Alex waspreviously the mine manager for the Condor platinum-palladium mine in Khabarovsk. Last year, he managed field operations at Kun-Manie and has now been appointedthe General Director of ZAO Kun-Manie, our Russian subsidiary. Dr. VladimirPrikhodko has become the Chairman of ZAO Kun-Manie and will continue to be a keysenior executive of the Company. Kun-Manie Nickel Copper Sulphide Project The principal focus of the Group's activities is the Kun-Manie nickel-coppersulphide project situated approximately 235 kilometres north-east of theBaikal-Amur railroad in the province of Amur. During 2007, we significantlyadvanced this project with successes in exploration and development: • we more than doubled the resource of the Maly Krumkon deposit from 50,000 tonnes of contained nickel in the inferred category to 136,500 tonnes of contained nickel, 54% of which is in the indicated category; • we received a positive independent pre-feasibility study on the Maly Krumkon, Vodorzdelny and Ikenskoe deposits on the Kun-Manie licence. The study indicates an $84 million post-tax NPV at a 10% discount rate with significant upside potential; • we conducted an infill drilling programme at Ikenskoe and Vodorazdelny; and • we undertook the first of a series of filings to obtain a mining permit at Kun-Manie. The above successes have encouraged us to ultimately move this project forwardby continued resource drilling, aiming towards a bankable study and proceedingthrough the Russian licensing system, resulting in a mining licence. Anadjakan Copper-Gold Project Our first full field season at Anadjakan was dedicated to a soil geochemicalsampling programme to verify some of the Soviet era data we inherited with theproperty. We implemented the programme internally and used third and fourth yeargeology students from leading universities in Russia to staff the field work. Itwas a strong learning opportunity for them. To date, the preliminary fieldresults are encouraging, although we have not yet received the finalisedanalytical results for copper and gold assays. Once this data is received, wewill define our future commitments and related work programmes at Anadjakan. Kustak Nickel Copper Molybdenum Project We acquired this 25 year exploration and production licence in February, givingAmur Minerals control over the newly discovered nickel district. It is locatedimmediately to the east of Kun-Manie and the southern half of the licencecontains an on-strike extension of the Krumkon trend. We completed limited fieldreconnaissance during the 2007 field season but did identify several structuresmeriting further investigation. Nickel and Metal Prices We are fortunate to be developing a large project where mineral assets arepredominately in nickel. Nickel is still enjoying historically strong pricingdespite its retreat from highs over $50,000 per tonne mid-year. This boom isbeing fuelled primarily by Chinese demand and limiting factors on the supply ofnickel. The fundamentals for nickel in general, in particular for sulphidenickel concentrates, appear to remain robust well into the next decade. Funding We began 2007 with just under $3 million in the bank from our Placing andAdmission to AIM in 2006. We supplemented this with a $5.6 million placement(gross proceeds) in April 2007. It had been our plan to complete an additionalplacement on the back of the pre-feasibility study. Contractor delays ondelivering the study meant that that fundraising had to be put off until 2008.Nonetheless, we were able to complete a new $5 million placing at a slightpremium to market in early 2008, a time of exceptional market volatility. The continuing development of the highly prospective Kun-Manie property isdependent on the Company's ability to raise further funds during 2008 andbeyond. Results will drive the project requirements both technically andfinancially and fund raising will be conducted as needed. Outlook Amur Minerals is planning a significant drilling campaign at the Kun-ManieNickel project, which we believe will add shareholder value and advance theproject towards mine development. We will also build on the positive results ofthe pre-feasibility study to realise the upside potential and to advance theproject to a bankable stage. We will also continue with the permitting process.Additionally, we will continue exploration work at Kustak to build additionalpotential for resource development in the future. Shareholders will be updatedas results flow from these programmes on a regular basis during 2008. I would like to thank management and staff at our base in Khabarovsk for theirexcellent contribution towards the Company's solid performance this past year.Many thanks are also extended to my fellow Directors. Finally, I would like towelcome John Haskell, who joined the Board on 5 March 2008. John is currentlyExecutive Chairman of Troika Agro, which owns and manages agricultural land incentral Russia. John is also the former CEO of the Vostok Fund LP, which was oneof the founding investors in the Company, and has extensive experience in Russia Robert W SchaferChairman31 March 2008 Copies of audited accounts will be sent to shareholders by 28 April 2006. Copiesof the annual report and accounts will be made available on the Company'swebsite www.amurminerals.com. AMUR MINERALS CORPORATION AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETAS OF 31 DECEMBER 2007 (Amounts in '000s US Dollars) 31 December 2007 31 December 2006 ------------ ------------NON-CURRENT ASSETSCapitalised exploration costs 11,465 6,275Property, plant and equipment 94 12 ------------ ------------Total non-current assets 11,559 6,287 ------------ ------------CURRENT ASSETSCash and cash equivalents 1,729 2,999Other receivables 68 61 ------------ ------------Total current assets 1,797 3,060 ------------ ------------ Total assets 13,356 9,347 ============ ============CURRENT LIABILITIESTrade and other payables 349 15 ------------ ------------Total current liabilities 349 15 ------------ ------------SHAREHOLDERS' EQUITYShare capital 12,719 7,143Share premium 8,310 8,838Share options 1,084 472Accumulated losses (9,106) (7,121) ------------ ------------Total shareholders' equity 13,007 9,332 ------------ ------------Total liabilities and shareholders'equity 13,356 9,347 ============ ============ Authorised on behalf of the Board on 31 March 2008 by Robin Young and DavidWood. AMUR MINERALS CORPORATION AND ITS SUBSIDIARIESCONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2007 (Amounts in '000s US Dollars) Note Year ended Year ended 31 December 31 December 2007 2006 --------------- --------------Administrative expenses (1,797) (1,388) --------------- --------------Operating loss (1,797) (1,388) Investment provision - (110) Share based payments (412) (224) Foreign currency exchange gain 88 143 Bank interest received 136 71 --------------- --------------Loss before tax (1,985) (1,508) Taxation - - --------------- --------------Loss after taxation for the year (1,985) (1,508) =============== ==============Loss per share: basic & diluted 3 USD (0.02) USD (0.02) AMUR MINERALS CORPORATION AND ITS SUBSIDIARIESCONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2007 (Amounts in '000s US Dollars) ------------ ------------ Year ended Year ended 31 December 31 December 2007 2006 ------------ ------------Cash flow from operating activities:Net Loss before Taxation (1,985) (1,508)Adjustments to reconcile loss before tax to net cashused in operating activities:Depreciation 9 9Share based payment 412 224Investment income (136) (71)Investment provision - 110Increase in accounts receivable (7) (60)Increase/(decrease) in accounts payable 334 (660) ------------ ------------Net cash used in operating activities (1,373) (1,956) ------------ ------------Cash flow from investing activities:Exploration expenditure (5,190) (2,581)Purchase of property, plant andequipment (91) (10)Interest received 136 71Investment - (110) ------------ ------------Net cash used in investing activities (5,145) (2,630) ------------ ------------Cash flow from financing activities:Proceeds from issue of share capital 5,283 6,433(Repayment of) proceeds from prepaidshare capital - (125)Financing costs associated with shareissues * (35) (765) ------------ ------------Net cash from financing activities 5,248 5,543 ------------ ------------ Net change in cash and cash equivalents (1,270) 957 Cash and cash equivalents broughtforward 2,999 2,042 ------------ ------------Cash and cash equivalents carriedforward 1,729 2,999 ============ ============Material non-cash transactions Proceeds from issue of shares retainedby broker 293 686Expenses paid by broker (293) (686) ============ ============ * Includes commissions paid on financing raised and costs associated withlisting AMUR MINERALS CORPORATION AND ITS SUBSIDIARIESSTATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2007 (Amounts in '000s US Dollars) -------- --------- ----------- -------- ------ Share Share Accumulated Options Total capital premium losses Reserve account -------- --------- ----------- -------- ------Balance at 31December 2005 15 10,108 (5,613) - 4,510 Net loss forthe year - - (1,508) - (1,508) Shares issued 7,128 - - - 7,128 Premium onshares issued - 316 - - 316 Issue of shareoptions - - - 472 472 Costsassociated withissue of sharecapital - (1,586) - - (1,586) -------- --------- --------- -------- -------Balance at 31December 2006 7,143 8,838 (7,121) 472 9,332 -------- --------- --------- -------- -------Net loss forthe year - - (1,985) - (1,985) Shares issued 5,576 - - - 5,576 Costsassociated withissue of sharecapital - (328) - - (328) Issue of shareoptions - (200) - 612 412 -------- --------- --------- -------- -------Balance at 31December 2007 12,719 8,310 (9,106) 1,084 13,007 ======== ========= ========= ======== ======= Notes to the preliminary statement of results for the year ended 31 December2007 1. Basis of preparation The financial information has been prepared in thousands of United StatesDollars in accordance with International Financial Reporting Standards ("IFRS").The accounting policies applied in preparing the financial information areconsistent with those adopted and disclosed in the Group's accounts for the yearended 31 December 2006. 2. Going Concern The consolidated financial statements have been prepared on a going concernbasis. The Group is engaged in the exploration and development of mineraldeposits in Eastern Russia and has no trading revenues. For the foreseeablefuture the Group will remain dependent on its ability to raise further funds andultimately develop and successfully exploit commercial reserves. The Group raised a further USD 5 million in March 2008 through the issue of newshares, which the directors consider to be sufficient to allow the Group to meetits obligations over the next twelve months. The consolidated financialstatements do not include any adjustments to reflect the possible future effectson the recoverability and classification of assets and liabilities that mayresult from the outcome of this uncertainty. 3. Loss per share Basic loss per share is based on a loss of $1,985 thousand (2006: loss of $1,508thousand) and a weighted average number of shares in issue of 96,905,308 (2006:80,796,286). The diluted loss per share has been calculated on the same basis asbasic loss per share because the effect of the potential ordinary shares (shareoptions) reduces the net loss per share and is therefore anti-dilutive. 4. Annual General Meeting The Company's Annual General Meeting will be held at the offices of BanksideConsultants, 1 Fredericks Place, London EC2R 8AE on 19 May 2008 at 15:00. 5. Dividends The directors do not recommend the payment of a dividend for the period. 6. Qualified person review The information contained in this announcement has been reviewed and approved bythe CEO of Amur, Robin Young. Mr. Young is a Geological Engineer (cum laude) whois a qualified person for the purposes of the AIM Guidance Note for Mining, Oiland Gas Companies. Mr. Young is Chief Executive Officer of Amur MineralsCorporation and has over 31 years' experience in mineral exploration, resourcemanagement and mining. Mr. Young is a Qualified Professional Geologist, asdefined by the Toronto and Vancouver Stock Exchanges. This information is provided by RNS The company news service from the London Stock Exchange