22nd Sep 2006 07:01
Cluff Gold PLC22 September 2006 22 September 2006 Cluff Gold plc ("Cluff Gold" or "the Company") Interim Results for the Six Month Period to 30 June 2006 Highlights • Equity Placing by BMO Nesbitt Burns raised £15.4m before expenses • Encouraging drilling results from the Baomahun project ("Baomahun") in Sierra Leone provide further indication of what could potentially be the discovery of a high-grade multi-million ounce deposit, as reported by L.R. Kilpatrick Associates Inc. • Exploration work at the Angovia project ("Angovia") in Cote d'Ivoire confirmed mineralisation previously reported by COGEMA and reported high grade, near surface oxide ores • Work programmes on track to expand the resource base at both the Baomahun and Angovia projects • Cash of £13.4 million (equivalent to US$24.8 million) at 30 June 2006 Post Period Events • Updated resource estimate from the Baomahun Project - resource increased by 70% from 518,000 gold ounces to 880,000 gold ounces • Further reverse circulation drilling at Angovia confirms the continuity of mineralisation, good gold grades and the discovery of a fourth satellite orebody Algy Cluff, Chairman, said: "We continue to be very pleased with thedevelopments across our portfolio and our progress is serving to steadilyincrease our resource base. Our exploration success is a vindication of ourstrategy to concentrate upon West Africa, a region which we feel combinesexceptional geology with investor friendly mining codes and a regard for foreigninvestment. We have high hopes for the development of both Baomahun in SierraLeone and Angovia in Cote d'Ivoire and are also keen to push the Kalsaka depositin Burkina Faso towards production." For further information, please contact: Cluff Gold WH Ireland Parkgreen Communications J.G. Cluff / Douglas Chikohora David Youngman Cathy Malins / Annabel Leather Chairman / Technical Director Tel: +44 (0)20 7340 9790 Tel: +44 (0)161 832 2174 Tel: +44 (0)20 7493 3713 CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT Since I last reported to you, your Company has made solid progress at all of ourWest African gold prospects and we are now entering a new phase as a golddevelopment and exploration company. At the Baomahun Project in Sierra Leone, an extensive drilling programmecontinues along the defined strike length of some 3.4 kilometres. Last Decemberwe reported a JORC compliant resource estimate of 518,000 gold ounces as auditedby SRK (UK) Ltd ("SRK"). A revised resource calculation has just been completedwhich increases the resource by 70% to 880,000 gold ounces. Drilling willrecommence in October after the cessation of seasonal rains and we would expectto announce a further resource update early next year. A projectpre-feasibility study will be commissioned during 2007. In Cote d'Ivoire our drilling programme at Angovia has yielded good results andwe are now, whilst conducting additional infill drilling, in the process ofbringing the deposit into development. A resource calculation is presentlybeing audited by SRK. As you will recall we were able to acquire from theprevious owner most of the Angovia plant and general infrastructure for a veryreasonable sum. Accordingly we anticipate being able to fund mine developmentfrom our own cash reserves and expect the mine to be developed in a shorterperiod than would usually be achieved. We would expect initial production fromthe oxide material of up to 40,000 gold ounces per annum. In Burkina Faso, at the Kalsaka Deposit, we also expect to undertake adevelopment programme with the intention of producing approximately 60,000 goldounces from oxide ore per annum. We hope to receive a formal offer of projectfinance this month, leading to a development programme which we expect to takeapproximately 12 months to complete. In Mali, at the Karbasso joint venture, we are planning to begin our explorationprogramme before the year end. Your management raised £15.4 million by way of a placing in April this yearmostly with North American investors. This provides us with sufficient funds toadd value to our earlier stage exploration projects by defining furtherresources as well as to provide direct equity into the development of advancedprojects. The four West African countries where we currently operate not only benefitgreatly from foreign investment but they actively want it. The foreign investoris accordingly welcome. We intend to repay this welcome by contributing to theeconomic development of these countries by advancing our projects intoproduction. Management has long standing experience of the West African regionand a strong line up of local staff on the ground at each project site whichwill ensure that we fully realise the potential of each of our projects andcreate further shareholder value. J G CluffChairman and Chief Executive22 September 2006 INDEPENDENT REVIEW REPORT TO CLUFF GOLD PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated profit andloss account, the consolidated statement of total recognised gains and losses,the consolidated balance sheet, the consolidated cash flow statement and relatednotes. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company and in accordance with Bulletin 1999/4issues by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report in accordance with the rules ofthe London Stock Exchange for companies trading securities on the AIM whichrequire that the half-yearly report be presented and prepared in a formconsistent with that which will be adopted in the company's annual accountshaving regard to the accounting standards applicable to such annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data based thereon, assessingwhether the accounting policies and presentation have been consistently appliedunless otherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with AuditingStandards and therefore provides a lower level of assurance than an audit.Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. PKF (UK) LLP Chartered Accountants London, UK 22 September 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the period ended 30 June 2006 Restated Restated Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) Notes £ £ £ Administration ExpensesOther (873,636) (445,684) (1,094,920)Share option charge (249,682) (173,299) (357,775)Loss on foreign exchange (82,761) - - Operating loss (1,206,079) (618,983) (1,452,695)Interest receivable and similar income 133,178 47,320 35,786 (1,072,901) (571,663) (1,416,909)Profit on disposal of a subsidiary undertaking - - 23,741 Loss on ordinary activities after taxation (1,072,901) (571,663) (1,393,168) Tax on loss on ordinary activities - - (450) Loss on ordinary activities after taxation 4 (1,072,901) (571,663) (1,393,618) Loss per share- undiluted 3 (0.03) (0.03) (0.07) All transactions arise from continuing operations. CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the period ended 30 June 2006 Restated Restated Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £ £ £ Loss for the financial period (1,072,901) (571,663) (1,393,618)Exchange translation differences on consolidation 5,484 (12,060) (58,766) Total recognised loss for the period (1,067,417) (583,723) (1,452,384) Prior year adjustment - share option charge (387,444) Total recognised losses since the last annual report (1,454,861) CONSOLIDATED BALANCE SHEET At 30 June 2006 Restated Restated At 30 June At 30 June At 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) Notes £ £ £ FIXED ASSETSIntangible 6,014,537 3,993,939 4,859,348Negative goodwill (51,237) - (51,237)Tangible 232,226 32,552 46,433 6,195,526 4,026,491 4,854,544 CURRENT ASSETSDebtors 104,020 320,825 873,626Cash at bank and in hand 6 13,407,309 1,541,848 431,883 13,511,329 1,862,673 1,305,509 CREDITORS: amounts falling due within one year (502,493) (229,743) (376,740) NET CURRENT ASSETS 13,008,836 1,632,930 928,769 NET ASSETS 19,204,362 5,659,421 5,783,313 CAPITAL AND RESERVESCalled up share capital 455,536 210,157 229,536Share premium account 20,480,558 5,679,076 6,467,774Other Reserve 637,138 202,980 387,456Merger reserve 1,320,151 1,320,151 1,320,151Profit and loss account (3,689,021) (1,752,943) (2,621,604) EQUITY SHAREHOLDERS' FUNDS 4 19,204,362 5,659,421 5,783,313 CONSOLIDATED CASH FLOW STATEMENT For the period ended 30 June 2006 Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) Notes £ £ £ Net cash outflow from operatingactivities 5 (627,509) (1,174,156) (1,598,571) Returns on investments andservicing of financeInterest received 133,178 47,320 35,786 Taxation - - (450) Capital expenditurePurchase of intangible fixed assets (1,149,705) (764,241) (1,655,293)Purchase of tangible fixed assets (209,555) (27,629) (58,219) Net cash outflow from capital expenditure (1,359,260) (791,870) (1,713,512) Acquisitions and disposalsAcquisition of subsidiary undertakings - (2,421,718) (2,421,718)Net cash acquired with subsidiary undertakings - - 10,088Disposal of subsidiary undertaking - - 28,882 Net cash outflow from acquisitions andDisposal of subsidiary undertakings - (2,421,718) (2,382,748) Net cash outflow before managementof liquid resources and financing (1,853,591) (4,340,424) (5,659,495) Management of liquid resources(Increase)/decrease in short term deposits (12,888,341) 4,360,137 5,427,945 FinancingIssue of ordinary share capital 16,021,970 - 209,998Issue costs (1,192,953) (37,790) (38,682) Net cash inflow/(outflow) from financing 14,829,017 (37,790) 171,316 Increase/(decrease) in cash 6 87,085 (18,077) (60,234) 1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The interim financial information set out on pages 3 to 8 has been prepared onthe same basis and using the same accounting policies as were applied in drawingup the group's statutory financial statements for the year ended 31 December2005. The financial information for the six months ended 30 June 2006 and six monthsended 30 June 2005 is unaudited. In the opinion of the directors the financialinformation for these periods fairly presents the financial position, results ofoperations and cash flows for the period and is in conformity with generallyaccepted accounting principles. This interim financial information does notcomprise statutory accounts within the meaning of section 240. The financial information for the period ended 31 December 2005 has beenextracted from the groups audited financial statements for that period whichhave been filed with the Registrar of Companies. The auditors report on thesefinancial statements was unqualified and did not contain a statement underSection 237(2) of the Companies Act 1985. Nature of business The group is in the exploration and development stage and its planned activitiesare the acquisition, exploration and development of gold resource properties inseveral countries in West Africa. On 12 April 2006 the Company raised £15.4 million before expenses by way of aplacing of 22,600,000 ordinary shares at 68p per share. The Company plans to usethe funds raised to add value to earlier stage exploration projects throughresource addition as well as to provide direct equity into the development ofadvanced projects. Available working capital should be sufficient to allow the Company to financeits business internally and to source project finance when required. Intangible fixed assets-deferred exploration and evaluation costs All costs associated with mineral exploration and investments are capitalised ona project-by-project basis, pending determination of the feasibility of theproject. Costs incurred include appropriate technical and administrativeexpenses, as well as associated finance costs, but not general overheads. If anexploration project is successful, the related costs will be transferred tomining assets and amortised over the estimated life of the commercial orereserves on a unit of production basis. Where a project is relinquished,abandoned, or is considered to be of no further commercial value to the Company,the related costs are written off. The recoverability of deferred exploration costs is dependent upon the discoveryof economically recoverable ore reserves, the ability of the Company to obtainnecessary financing to complete the development of ore reserves and futureprofitable production or proceeds from the disposal thereof. 2. SHARE BASED PAYMENTS TRANSACTIONS 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 unvested at 1 January 2006. The Group issues share based payments to certain individuals, which are measuredat fair value at date of grant. The fair value determined at the grant date isexpensed on a straight line basis over the vesting period, based on the Group'sestimate of shares that will eventually vest. Fair value is measured by use of either a binomial or a Black-Scholes valuationmodel, whichever is more appropriate to the instrument granted. The expectedlife of the instrument used in the model is adjusted, based on management's bestestimate, for the effects of non-transferability, exercise restrictions andbehavioural considerations. The adoption of FRS 20 has resulted in a change in the accounting policy forshare based payments. Until 31 December 2005 the provision of share options toindividuals did not result in a charge in the profit and loss account. A prioryear adjustment has been made to the financial information set out for theperiod ended 30 June 2005 and 31 December 2005 to apply charges to the profitand loss account for share options granted at these dates. The charge to theprofit and loss account for the six months to 30 June 2006 is £249,682. Accountsfor prior periods have been restated to show the following charges: year ended31 December 2005 - £357,775; six months ended 30 June 2005 - £173,299, periodended 31 December 2004 - £29,681. Between 30 November 2004 and 27 April 2006 the Company granted 5,128,784 shareoptions. A total of 4,410,410 options had not vested at 1 January 2006 and, inaccordance with FRS 20, have been valued at between 5.0p and 36.8p each. 3. LOSS PER SHARE The calculation of loss per ordinary share is based on losses of £1,072,901 to30 June 2006 (restated loss of £571,663 to 30 June 2005; restated loss of£1,393,618 to 31 December 2005) and the weighted average number of ordinaryshares outstanding of 32,942,514 at 30 June 2006 (20,977,229 at 30 June 2005;21,092,466 at 31 December 2005). No diluted loss per share is presented as theeffect on the exercise of share options would be to decrease the loss per share. 4. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Restated Restated Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £ £ £ Loss for the financial period (1,072,901) (571,663) (1,393,618)Exchange translation differences on consolidation 5,484 (12,060) (58,766)New share capital subscribed 15,368,000 75,000 845,287Listing expenses paid (1,129,216) (37,790) -Other Reserve- credit arising on share options 249,682 173,299 357,775 Net increase in shareholders' funds 13,421,049 (373,214) (249,322)Shareholders' funds at beginning of the period 5,783,313 6,032,635 6,032,635 Shareholders' funds at end of period 19,204,362 5,659,421 5,783,313 5. NET CASH OUTFLOW FROM OPERATING ACTIVITIES Restated Restated Six months Six months Period to to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £ £ £ Operating loss (1,206,079) (618,983) (1,452,695)Depreciation 23,762 8,430 25,139Exchange differences arising on consolidation 82,761 - -Share options charge 249,682 173,299 357,775Shares issued to directors - - 20,002Decrease/(Increase) in debtors 51,901 (104,784) (102,150)Increase/(Decrease) in creditors 170,464 (632,118) (446,642) Net cash outflow from operating activities (627,509) (1,174,156) (1,598,571) 6. RECONCILIATION OF CASH TO NET FUNDS Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £ £ £ Cash at bank and in hand 103,913 58,985 16,828Short term deposits (included within cash atbank and in hand in the balance sheet) 13,303,396 1,482,863 415,055 Net funds 13,407,309 1,541,848 431,883 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Amara Mining