15th Nov 2006 07:01
Avocet Mining PLC15 November 2006 Avocet Mining PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 PRE-TAX PROFIT ALMOST DOUBLES FURTHER EXCELLENT EXPLORATION SUCCESSES HIGHLIGHTS 6 months to 6 months to Variance Year to 30 September 2006 30 September 2005 31 March Restated* 2006 Restated* US$'000 US$'000 US$'000 Turnover 54,858 42,697 28% 90,493Operating cash flow 10,980 8,886 24% 19,942Gross profit 9,618 5,680 69% 18,182Pre-tax profit 8,592 4,432 94% 15,905Retained profit 5,698 3,309 72% 10,819Earnings per share 4.82c 3.17c 52% 10.30c Average spot gold price US$625/oz US$433/oz 44% US$477/ozAverage realised goldprice US$583/oz US$402/oz 45% US$437/ozGold production (ozs) 92,120 104,270 -12% 208,530Average total cash cost US$433/oz US$289/oz 50% US$300/oz *Restated for FRS 20 adjustments • Turnover up 28% to US$54.9 million • Operating cash flow up 24% to US$11.0 million • Pre-tax profit increased 94% to US$8.6 million • Mike Norris appointed as CFO • Penjom resource increased another 15% to 1,024,400 ozs • Further exploration success at Bakan, Buffalo Reef and South Sulawesi projects • Strategic review in Tajikistan seeks to obtain best value Nigel McNair Scott, Chairman, commented: "Our project pipeline and development plans in Malaysia and Indonesia provideAvocet with excellent growth prospects in the short to medium term both in termsof reserve additions and production. In Tajikistan, the operations remain under review and the Board is assessing thevarious options to maximise value for shareholders through this process. The robust financial performance of the Group is a tribute to the team we havein place, and we look forward to a similar performance in the second half of theyear." Avocet will hold a group analyst meeting at 9.30am today at the offices ofBuchanan Communications, 45 Moorfields, London EC2Y 9AE.________________________________________________________________________________ For further information please contact: Avocet Mining PLC Buchanan CommunicationsJonathan Henry (Chief Executive) Bobby Morse, Director020 7907 9000 Ben Willey, Associate Directorwww.avocet.co.uk Tel: 020 7466 5000 www.buchanan.uk.com Notes to Editors Avocet is a mining company listed on the AIM market of the London Stock Exchange(Ticker: AVM). The Company's principal activities are gold mining andexploration in Malaysia (as 100% owner of the Penjom mine, the country's largestgold producer), Tajikistan (as 75% owner and operator of ZGC, Tajikistan'sprincipal gold mine), and Indonesia (as 80% owner of the North Lanut gold minein North Sulawesi). The Company has a number of advanced mining and explorationprojects in Asia and owns 26% of Dynasty Gold Corporation, a Canadian listedexploration company active in Western China. CHAIRMAN'S STATEMENT Continued strength in the gold price has allowed the Company to report strongfirst half profits with pre-tax profits up 94 per cent to US$8.6 millioncompared to the previous year. The Company successfully raised US$54 million inMay in order to further some of the exciting pipeline of projects we have inSouth-East Asia. Operations in Tajikistan have disappointed and this, togetherwith lower production and short term cost pressures at our mines in Indonesiaand Malaysia, presented an immediate challenge to the new management team but,nonetheless, business remains strong with a number of other projects underreview, cash of US$64.9 million and only US$1.1 million of debt at 30 September2006. Financial Results Turnover increased by 28% to US$54.9 million (2005: US$42.7 million) for the sixmonths ended 30 September 2006. Total gold sales were down at 93,734 ozs (2005:105,010 ozs), whilst the average realised price increased 45% to US$583/oz(2005: US$402/oz). The average realised price was 7% below the average spotprice, which increased by 44% to US$625/oz (2005: US$433/oz), as a result of theclose out of an historical hedge position during the first quarter. By the endof June 12,000 ozs of gold had been delivered at a price of $313/oz. As of todaythe Group has 290,000 ozs of potential commitments remaining at a rate of 10,000ozs per month through a US$450/oz put and US$700/oz call collar transaction withMacquarie Bank. At the current gold price all gold sales continue to be at spot. Gross profit was up 69% at US$9.6 million (2005: US$5.7 million) resulting in agross margin for the period of 18% (2005: 13%). Gross margin during the periodhas benefited due to an uplift of US$3.7 million in the carrying amount ofmedium grade stockpiles at Penjom, in Malaysia, which continue to be carried atthe lower of cost or net realisable value but at a spot price of US$450/oz(2005: US$270/oz). At Penjom the cost of gold sold increased to US$391/oz (2005:US$271/oz). This cost includes depreciation of US$17/oz (2005: US$30/oz) and anadditional charge of US$4/oz (2005: US$8/oz) representing waste stripping coststhat were previously capitalised and are now being amortised over the mine'slife. In Tajikistan, ZGC's cost of gold sold was US$754/oz (2005: US$625/oz)inclusive of US$13/oz of depreciation (2005: US$12/oz). At North Lanut inIndonesia the cost of gold sold was US$426/oz (2005: US$270/oz) inclusive ofdepreciation of US$92/oz (2005: US$78/oz). Further details on operational costsare explained in the operational review below. The Group has applied the requirements of FRS 20 (share based payments), inaccordance with the transitional provisions, to all equity instruments grantedafter 7 November 2002 and not vested at 1 April 2006. This has resulted in acharge of US$281,000 in the six months to 30 September 2006. The results havebeen restated for the charge of US$135,000 for the six months to 30 September2005 and the charge of US$341,000 for the year to 31 March 2006. Pre-tax profit increased by 94% to US$8.6 million (2005: restated US$4.4million). Administrative costs, including share based payments, have increasedto US$2.1m from US$1.2 million in the previous year. The increase predominantlyarose following payments to current and former executive directors, togetherwith increased activity at the London head office. The Group made a profit after tax and minority interests of US$5.7 million(2005: restated US$3.3 million). As a result, basic earnings per share increasedby 52% to 4.82 cents (2005: restated 3.17 cents). Operating cash flow increased by 25% to US$11.0 million (2005: US$8.9 million).Cash uses included tax payments of US$2.1 million (2005: US$4.2 million) andinvestments in fixed assets and exploration totalling US$10.0 million (2005:US$7.2 million). Capital expenditure was higher through increased explorationactivities on an increasing pipeline of projects and the purchase of an owneroperated mining fleet at Penjom. On 10 May 2006 the Group issued 15,250,000 shares, in connection with an equityplacing, raising net proceeds of US$54.4 million. In September 2006 theCompany's Employee Benefit Trust purchased one million shares at a cost ofUS$1.8 million. By the end of the period the Group's cash resources hadincreased to US$64.9 million. The Group has access to US$10 million under arevolving credit facility and a US$5.0 million overdraft facility both of whichremain un-drawn. Apart from equipment finance leases totalling US$1.1 million,the Company had no debt outstanding at the end of the period. Operations and projects Penjom, Malaysia 6 months to 6 months to Year to 30-Sep-06 30-Sep-05 31-Mar-06 Production Statistics:Tonnes Mined (ore and waste) 10,256,000 10,461,000 19,556,000Tonnes Processed 272,000 285,400 573,700Grade Processed (g/t) 6.17 7.39 7.1Recovery Rate 92% 90% 91% Gold Produced (ozs) 50,760 60,530 117,680Cash Costs (US$/oz):Mining 233 135 141Processing 79 62 60Admin. & Royalties 58 37 41Total Cash Costs (US$/oz) 370 234 242 Gold production from the Penjom mine in Malaysia was 50,760 ozs in the firsthalf of the year, a decrease of 16% from the previous period. Exploration overthe last year has increased the resource at Penjom to 1,024,400 ozs whichrepresents an increase of 141,300 ozs, after depletion, or 15% on that reportedin the 2006 annual report. This has in turn allowed for an increased mine lifewhich will be detailed shortly. In accordance with the current mine plan waste stripping was increased in thefirst half of the year. In September the Company decided to extend wastestripping through the second half of the year using the existing expanded miningfleet for efficiency. The waste-to-ore stripping ratio for the first six monthswas 58:1 with only 175,400 tonnes of ore mined while waste mining activitiesconcentrated on the east and west wall cut backs of the main Kalampong open pit.This measure required the processing of lower grade stockpiles to supplementproduction with resulting lower gold production. This has resulted insignificantly higher short term unit cash costs which have increased to US$370/oz (2005: US$234/oz). Higher consumable prices have also exacerbated the unitcosts at Penjom. Diesel and kerosene now account for 19% of total cash costs atthe mine. From January 2006 the State of Pahang, in which the mine is located,made changes to the royalty regime which added approximately 2.4% of totalrevenue to the royalty level previously paid. Forecasts indicate that thecurrent unit cash costs will remain high for the current year, whilst the highstripping remains and production continues mainly from lower grade stockpiles.Unit costs should fall next year as the rate of waste stripping under thecurrent mine plan reduces to levels similar to those of the previous five years,which have averaged approximately 24:1. We also expect to see cost savings fromthe new owner operated truck fleet which is currently being commissioned at themine. The new, larger capacity trucks are expected to reduce mining costssignificantly, through lower diesel usage and increased efficiency. The newtruck fleet should be fully operational next year when the existing contractorfleet will be stood down. North Lanut, Indonesia 6 months to 6 months to Year to 30-Sep-06 30-Sep-05 31-Mar-06 Production Statistics:Tonnes Mined (ore and waste) 1,659,600 1,338,000 3,134,400Tonnes Leached 579,600 536,000 1,326,600Average Ore Head Grade (g/t) 1.77 1.81 1.65Recovery Rate 71% 83% 75%Gold Produced (ozs) 23,480 25,740 54,520Cash Costs (US$/oz):Mining 178 95 96Processing 62 31 39Admin. & Royalties 94 65 66Total Cash Costs (US$/oz) 334 191 201 The North Lanut mine produced 23,480 ozs in the first half year, a decrease of9% from the previous year. Unit operating costs were adversely affected by anumber of factors. Firstly, the rainfall at the mine was un-seasonally high witha number of 100 year events. The impact was widespread in the region withseveral communities devastated. Actual rainfall during the first half of thisfinancial year was recorded at the Riska pit as 1.90 metres, double thatestimated in the original feasibility study of May 2003. Management rapidlyundertook re-engineering works on the waste dumps and storm water ponds in orderto maintain full environmental compliance. These additional costs have beenexpensed. The mine continues to fully comply with all environmentalrequirements. Secondly, government diesel subsidies were steadily removed over the last year.Whereas diesel accounted for 9.3% of total cash costs for the year to 31 March2006, this had increased to 17.2% for the half year period to 30 September 2006.Finally, the mine plan required a higher waste-to-ore stripping ratio this yearas well as the treatment of approximately 15% transitional ore which hasresulted in lower gold recoveries. JV Zeravshan LLC, Tajikistan (ZGC) 6 months to 6 months to Year to 30-Sep-06 30-Sep-05 31-Mar-06 Production Statistics: Tonnes Mined (ore and waste) 3,694,600 3,771,700 7,604,000 Tonnes Processed 885,400 780,600 1,426,500 Grade Processed (g/t) 0.68 0.80 0.87 Recovery Rate 84% 86% 84% Gold Produced from Dump Leach (ozs) 3,032 - 3,090 Gold Produced (ozs) 17,880 18,000 36,330 Cash Costs (US$/oz): Mining 393 308 318 Processing 196 183 185 Admin. & Royalties 152 122 131 Total Cash Costs (US$/oz) 741 613 634 ZGC in Tajikistan produced 17,880 ozs in the six months to 30 September 2006.This production included 3,032 ozs from the dump leach facility which becameoperational last year. High waste stripping from the high wall of the Jilau open pit, costs of whichhave all been expensed, continued throughout the period with production and unitcosts being adversely affected by the continued treatment of low gradestockpiles supplemented by limited amounts of higher grade ore mined from theJilau and Khirskhona pits. Consumable cost inflation also had a detrimentalaffect, particularly diesel which now accounts for 16% of total costs at ZGC. Higher grade areas of the Jilau deposit are beginning to be mined. However,adverse equipment availability and multiple periods of downtime in theprocessing plant severely reduced the ore tonnage delivered. Further operationaland management changes have recently been made to increase efficiency and a fullstrategic review of the operation was initiated in September. Initial results from this strategic review are under discussion by the Board ofthe Company in order to maximise value from the Company's investment in ZGC.Initial conclusions from this strategic review indicate that the existing Jilauoperation holds the potential to produce up to 120,000 ozs per year given afurther net investment of US$25 million over the short term. The Company is nowin discussions with a number of potential partners or investors in the project.Meanwhile, metallurgical test work on the Taror and Chore underground miningprojects continues, where there is a JORC compliant resource of almost threemillion ounces. Following initial review of the options open to the Company wewill also consider involving third parties to help us develop the high gradeTaror gold-copper deposit as a combined open pit-underground mine, fed into theJilau mill after suitable upgrades. Exploration The Group has spent US$5.0 million on exploration projects in the first half ofthe year, double that spent in the equivalent period last year. This hasincluded 46,400m of drilling at seven projects and 8,100m of trenching at sixprojects. One of the Group's main focuses of exploration drilling continues to be atPenjom where 23,000m of reverse circulation drilling has been carried out so farthis year in order to further increase the resource. The results of the latestphase of drilling were announced on 11 October 2006 and these generated revisedMeasured, Indicated and Inferred resources of 9.02 million tonnes with a gradeof 3.53 g/t, above the economic cut-off of 0.8 g/t Au used at the mine, for atotal resource of 1,024,400 ozs, including stockpiles. Elsewhere in Malaysia the Company has been reviewing the Buffalo Reef project.Buffalo Reef is wholly-owned and located 27 kilometres north-west of the Penjomgold mine. An updated geological model and resource estimate, including theresults from a drilling programme completed in 2005, has led to a doubling ofthe last reported resource of 92,500 ozs to 185,300 ozs. Furthermore, around 85%of the project ounces are now categorised as Indicated. The table belowsummarises the distribution of resources by category. Tonnes Grade Attributable (millions) (g/t Au) Ounces (1)Oxide + TransitionIndicated 0.572 2.31 42,400Inferred 0.275 1.60 14,200 Subtotal 0.847 2.08 56,600FreshIndicated 1.372 2.57 113,300Inferred 0.293 1.63 15,400 Subtotal 1.665 2.40 128,700Oxide + Transition + FreshIndicated 1.944 2.49 155,700Inferred 0.568 1.62 29,600 Total 2.512 2.29 185,300 (1) The Company owns 100% of Damar Consolidated Sdn Bhd, the owner of theBuffalo Reef project Gold mineralisation at Buffalo Reef is structurally controlled within theRaub-Bentong Suture, which is a major regional shear zone. The deposit isdivided into three zones (south, central and north) that occur within the 200metre wide shear zone. The resource estimate now integrates all available datafor the Buffalo Reef project. This data is limited to the upper 80 metres of theBuffalo Reef deposit; however, mineralisation extends much deeper than this. TheSelinsing gold mine, located one kilometre to the south and part of the samemineralised system, has published an Indicated and Inferred resource of 537,000ozs that extends over a 200 metre vertical extent (Moncoa Resources (TSXV: MON)12 September 2006). The Company's tenements at Buffalo Reef cover a greatermineralised strike length than that covered by the Selinsing tenements. Avocet is currently conducting a mining and metallurgical review of the BuffaloReef project prior to deciding how to proceed with the property. This includesthe Company's nearby exploration properties at Panau and Satak to the north. Exploration at ZGC continued to focus on infill drilling at the open pits ofJilau and Khirskhona. Limited surface exploration work was undertaken at theSaursai project, where the potential for a large tonnage, low grade dumpleachable deposit exists. Saursai is located to the west of Jilau. At Bakan, in Indonesia, drilling continues on the Durian and Osela depositswhere the Company has outlined an Inferred resource of 18.2 million tonnesaveraging 0.9 g/t Au (533,000 ozs) broken down as follows: Deposit Tonnes Grade Gold Attributable (millions) (g/t Au) Ounces Ounces (1)Durian 13.4 0.8 335,000 268,000Osela 4.8 1.3 198,000 158,400 Total 18.2 0.9 533,000 426,400 (1) The Company owns 80% of PT Avocet Bolaang Mongondow, the operator of the CoW Current drilling is aimed at bringing the resource to the Measured and Indicatedcategory as well as expanding on the already defined resource. Followingcompletion of this programme the project will move to feasibility work on thedevelopment of a new mine. This phase is expected to commence within the nextsix months. Elsewhere in Indonesia, exploration trenching continues at the Company's whollyowned prospect in South Sulawesi where trenching results were announced inAugust. Further mineralisation has been intersected in continued trenching atthe Mangkaluku prospect. These results are currently being compiled and shouldbe announced shortly. Drilling has recommenced at the Idenberg property in WestPapua and results should be available in the coming months. The Company is closeto its expenditure of US$2.5 million for which it is entitled to earn a 51%interest in the Contract of Work company. The Group continues to look at otheropportunities in Indonesia. In China the Company has spent over US$1.0 million on its US$1.8 million earn-infor 36% of Dynasty's interest in the Hatu project and is awaiting results from arecent drilling programme and associated metallurgical testwork. Dynasty isreviewing the current mining licence held by a third party over the main Qi-2project that the Company is focused on with a view to consolidating theinterests held by the Chinese joint venture company over the property. All references to resources and exploration results have been approved forrelease by Mr Peter Flindell, BSc (Hons) MAusIMM, Chief Geologist for Avocet,who has more than 20 years experience in the field of activity concerned and isa Competent Person as defined by the JORC Code (2004). He has consented to theinclusion of the material in the form and context in which it appears. Allreference to Measured, Indicated and Inferred resources are according to thedefinitions outlined in the JORC Code of 2004 (Australasian Joint Ore ReservesCommittee). Outlook The Group has seen short term cost inflation in a high gold price environment.This has pushed up costs but our mines continue to operate at a good margins. Inthe medium term, given current gold prices and our plans in Indonesia andMalaysia, cash flow and profitability should increase as unit costs fall. Thehigh gold price still allows us to restructure our gold collar hedge to increasedownside price protection and underpin the business. This option remains underreview by the Board. Our project pipeline has shown rewards during the year, particularly inIndonesia at Bakan and South Sulawesi, and we envisage further progress duringthe second half of the year. Bakan should enter the feasibility stage by the endof the year and we expect to have drill targets available at the Mangkalukuprospect in South Sulawesi. Ongoing drilling at Idenburg will be announced asthe results become available and we expect to earn our 51% of this project inthe short term. We continue to review a number of other projects in Indonesiawhich could add immediate resources and bring the potential of additionalproduction in a 3-5 year timeframe. In Malaysia, continued drilling at Penjom has further increased the resource. Mine planning work is currently finalising the revised life of mine plan andthis, together with updated proven and probable reserves, should be announcedprior to the calendar year-end. A revised resource estimate at Buffalo Reef,together with recent positive results from ongoing metallurgical test work, willallow the Company to revisit this project with a view to further exploration ordevelopment of the oxide resources located close to surface. At ZGC, the initial results of a strategic review, with operational optionscompleted at scoping study level, have given the Company a number of optionswith regard to expansion of the project in order to mitigate the risks theCompany may face if it were to proceed on its own. Operationally, the mine inTajikistan continues to produce at a high cost and all technical aspects of theoperation are under review in order to increase efficiency and return to cashbreakeven. In Indonesia, the mine at North Lanut is likely to produce at a similar level inthe second half year with production and cost benefits likely to be seen in thenext financial year. Recent rainfall events and higher waste stripping are seenas one off events that should allow the operation to return to a lower cost basenext year. In Malaysia, Penjom is expected to produce just under 100,000 ozs for the yearand costs will remain high as the additional waste stripping is expensed. Costsare likely to decrease next year and production increase as higher grade areasof the orebody are mined and the new truck fleet becomes fully operational. Operational cash flow remains strong and Avocet continues to keep fundingongoing operational and mine development work out of operating cash flow,meanwhile maintaining a strong cash balance with access to additional fundingoptions. In July the Board announced that Jonathan Henry, who was previously the Group'sFinance Director, had taken over the position as Chief Executive Officer andthat Eric Vesel became the Group's Chief Operating Officer. We are pleased toannounce that Mike Norris will be joining the Group as Chief Financial Officerwith a start date of 1 February 2007. After graduating from CambridgeUniversity, Mike worked in strategic management consultancy before qualifying asa chartered accountant with Coopers & Lybrand. Since then he has held a numberof senior financial and operational roles within Rio Tinto plc and AngloAmerican plc. He was CFO at two of Rio's mines in the US and was productionmanager at one of them, an open pit gold operation. As Head of FinancialPlanning & Analysis at Anglo, Mike was responsible for group performancereporting, where he made a significant contribution to the development of theplc finance function and to strengthening plc relationships with theoperations. More recently, as Head of Business Performance of Anglo IndustrialMinerals, Mike has led the restructuring of performance reporting for thedivision, focusing on new frameworks to drive business improvement. The Group has an increasing team of high class mining professionals dedicated toexpanding the business and to increasing shareholder value and I would like tothank them for their dedicated hard work over the last six months. Nigel McNair ScottNovember 2006 Avocet Mining PLC Consolidated Profit and Loss Account note 6 months to 6 months to Year to 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited US$000 Restated Restated US$000 US$000Turnover 54,858 42,697 90,493Cost of sales (45,240) (37,017) (72,311)-------------------------- ----------- ---------- ----------Gross profit 9,618 5,680 18,182Administrative expenses (1,832) (1,078) (3,280)Share based payments 1 (281) (135) (341)-------------------------- ----------- ---------- ----------Total administrative expenses (2,113) (1,213) (3,621)-------------------------- ----------- ---------- ----------Operating profit 7,505 4,467 14,561Profit on disposal of fixed assetinvestments - - 1,423Net interest and similar charges 1,087 (35) (79)-------------------------- ----------- ---------- ----------Profit on ordinary activities beforetaxation 8,592 4,432 15,905Tax on profit on ordinary activities (2,854) (1,775) (5,750)-------------------------- ----------- ---------- ----------Profit on ordinary activities aftertaxation 5,738 2,657 10,155Equity minority interest (40) 652 664-------------------------- ----------- ---------- ----------Profit for the financial periodretained 5,698 3,309 10,819-------------------------- ----------- ---------- ----------Basic earnings per share 2 4.82c 3.17c 10.30c-------------------------- ----------- ---------- ----------Diluted earnings per share 2 4.75c 3.12c 10.13c-------------------------- ----------- ---------- ---------- Avocet Mining PLC Consolidated Balance Sheet 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited US$000 US$000 US$000Fixed assets Positive goodwill 4,095 3,482 4,395---------------------------- ----------- ---------- --------Negative goodwill (1,386) (1,463) (1,424)---------------------------- ----------- ---------- -------- 2,709 2,019 2,971---------------------------- ----------- ---------- --------Other Intangible assets 11,319 5,986 6,521---------------------------- ----------- ---------- --------Tangible assets 39,371 36,428 37,670---------------------------- ----------- ---------- --------Investments 1,937 - 1,937---------------------------- ----------- ---------- -------- 55,336 44,433 49,099---------------------------- ----------- ---------- --------Current assets 23,279 21,066 23,783Stocks 4,659 4,335 3,073Debtors due within one year 1,589 2,216 1,773Debtors due after more than one year 64,904 9,298 12,918Cash at bank and in hand---------------------------- ----------- ---------- -------- 94,431 36,915 41,547Creditors: amounts falling due inless than one year (13,421) (14,223) (12,526)---------------------------- ----------- ---------- --------Net current assets 81,010 22,692 29,021---------------------------- ----------- ---------- --------Total assets less current liabilities 136,346 67,125 78,120Creditors: amounts falling due aftermore than one year (525) (1,049) (793)Provision for liabilities and charges (6,602) (4,130) (6,748)---------------------------- ----------- ---------- -------- 129,219 61,946 70,579---------------------------- ----------- ---------- --------Capital and reservesCalled up share capital 9,867 41,547 8,445Share premium account 52,834 43,280 133Other reserves 17,909 17,909 17,909Investments in own shares (2,130) (748) (732)Profit and loss account 49,701 (41,053) 43,826---------------------------- ----------- ---------- --------Equity shareholders' funds 128,181 60,935 69,581Equity minority interests 1,038 1,011 998---------------------------- ----------- ---------- -------- 129,219 61,946 70,579---------------------------- ----------- ---------- -------- Avocet Mining PLC Consolidated Cash Flow Statement 6 months to 6 months to Year to 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited US$000 US$000 US$000----------------------------- ---------- ---------- --------Net cash inflow from operatingactivities 10,980 8,886 19,942----------------------------- ---------- ---------- --------Returns on investment and servicingof finance 1,080 112 228Interest received (62) (74) (181)Interest paid----------------------------- ---------- ---------- --------Net cash inflow from returns oninvestment and servicing of finance 1,018 38 47----------------------------- ---------- ---------- --------Taxation (2,067) (4,165) (6,254)Capital expenditure and financialinvestment (5,007) (4,764) (6,365)Purchase of fixed assets (4,970) (2,422) (5,268)Deferred exploration costs----------------------------- ---------- ---------- --------Net cash outflow from capitalexpenditure and financial investment (9,977) (7,186) (11,633)----------------------------- ---------- ---------- --------Acquisitions and disposalsSale of investments - - 1,423Purchase of investments - - (1,937)Deferred consideration (593) - (812)----------------------------- ---------- ---------- --------Net cash outflow from acquisitionsand disposals (593) - (1,326)----------------------------- ---------- ---------- --------FinancingProceeds from issue of ordinaryshares 56,734 180 935Costs of issue of ordinary shares (2,327) - -Investment in own shares (1,794) (306) (307)Capital repayments on finance leases (283) (164) (440)----------------------------- ---------- ---------- --------Net cash inflow/(outflow) fromfinancing 52,330 (290) 188----------------------------- ---------- ---------- --------Increase/(decrease) in cash 51,691 (2,717) 964----------------------------- ---------- ---------- -------- Avocet Mining PLC Other Primary Statements 6 months to 6 months to Year to 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited US$000 Restated Restated US$000 US$000Consolidated statement of total recognisedgains and losses ----------- ---------- ------------------------------------Profit attributable to shareholders 5,698 3,444 11,160Exchange translation adjustments (104) - 159---------------------------- ----------- ---------- --------Total recognised gains and losses 5,594 3,444 11,319Prior year adjustment - share basedpayment (FRS20) - (135) (341)---------------------------- ----------- ---------- --------Total recognised gains and lossessince last annual report 5,594 3,309 10,978---------------------------- ----------- ---------- --------Reconciliation of movements in Group 5,594 3,309 10,978shareholders' funds 54,123 180 935Total recognised gains and losses (1,398) (35) (19)New capital subscribed (net of costs) 281 135 341Investment in own sharesShare based payments---------------------------- ----------- ---------- --------Net change in shareholders' funds 58,600 3,589 12,235Opening shareholders' funds 69,581 57,346 57,346---------------------------- ----------- ---------- --------Closing shareholders' funds 128,181 60,935 69,581---------------------------- ----------- ---------- -------- Notes: 1. The interim financial information has been prepared on the same basis andusing the same accounting policies as were applied in drawing up the Group'sstatutory financial statements for the period ending 31 March 2006, with theexception outlined below. The Group has applied the requirements of FRS 20 (share based payments),in accordance with the transitional provisions, to all equity instrumentsgranted after 7 November 2002 and unvested at 1 April 2006. This has resulted ina charge of US$281,000 for the interim period. The periods to September 2005 andMarch 2006 have been restated to include charges of US$135,000 and US$341,000respectively 2. The calculation of earnings per share is based on after-tax profits ofUS$5,698,000 (restated 2005: US$3,309,000) and on the weighted average number of118,230,628 shares in issue (2005: 104,396,306). The fully diluted calculation of earnings per share is based on after-taxprofits of US$5,698,000 (restated 2005: US$3,309,000) and on the weightedaverage number of shares in issue and exercisable under share options of119,976,368 (2005: 106,014,075). 3. The financial information contained in this interim statement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985.The financial information for the year ended 31 March 2006 is an abridgedversion of the full accounts, which received an unqualified auditors' report andhave been filed with the Registrar of Companies. 4. This statement is being sent to shareholders and will be available from theCompany's Registered Office. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AVM.L