1st Sep 2005 07:01
Sierra Leone Diamond Company Ld01 September 2005 For immediate release 1 September 2005 SIERRA LEONE DIAMOND COMPANY LIMITED ("SLDC" or the "Company") Interim Results for the six month period ended 30 June 2005 Sierra Leone Diamond Company Limited (AIM: SLD) is pleased to provide itsresults for the six month period ended 30 June 2005. Financial Highlights • Successful flotation on AIM, raising US$ 34.4 million• Cash on hand US$ 25.4 million, which is budgeted to cover explorationand corporate expenses to 31 December 2006• Exploration costs of US$ 6.2 million incurred during the first half2005• Net loss for the period US$ 1.8 million (2004: US$ 1.9 million) Operational Highlights • 44 "A" Rated targets were generated from the aeromagnetic program (HRAM) with follow up in progress• 4,021 Soil Samples taken and are being processed leading to - 169 HRAM follow-up samples taken in areas of interest - 51 Stream sediment follow-up samples• Kamakwie (North Western License Area) - Follow up soil sampling indicates two distinct kimberlitic anomalies• Yengema Kimberlite Fissure Bulk Sampling Results (Kono Area) - 3 Mini-Bulk Samples processed - Macro diamonds recovered from all three fissures - Preliminary diluted grades of up to 177 cpht (carats per hundred tons)• Sewa River Alluvial operations - Commissioning, in June 2005, of a Dense Media Separation (DMS) Sample Plant and the mining equipment to provide a 25,000 ton per month capacity - Drill intersected alluvial mineral deposits - 300,000 cubic meters• Diamonds recovered from Bulk Sampling Operations - During commission of the DMS Plant, a total of 75 stones, with an average size of 0.28 crts per stone were recovered David Gadd-Claxton, President and Chief Executive Officer, commented that: "The Company has undergone a significant transition, in that the management teamand appropriate skills are now in place to guide the expected growth phase inthe next 12 months. "I am delighted that the results in the Kamkawie area are continuing to show thedevelopment of a new diamond province and thus encouraging our efforts as wecarry out further exploration to develop hard rock diamond targets. "The Company's short term strategy to develop a cash positive operation from itsalluvial licenses on the Sewa River remains on track and achievable. In linewith this plan, a drill intersected mineral deposit of alluvial gravelscontinues to be developed." For further information please contact: Sierra Leone Diamond Company Limited 44 (0)20 7917 6245David Gadd-Claxton, President and Chief ExecutiveMartin Dunham, Chief Financial Officer Buchanan Communications 44 (0)20 7466 5000Bobby MorseBen Willey SLDC is a diamond exploration company wholly focused on Sierra Leone. It holds20 exploration and prospecting licences over 36,364 km2. The primary target isdiamond-bearing kimberlite pipes. Secondary objectives include alluvial diamondproduction, as well as exploration for gold, iron ore, bauxite, rutile, rareearths and other minerals. SLDC is exploring the mineral potential of thelicence areas through a long-term, systematic exploration programme beingcarried out by a dedicated team of geologists and support staff. Operational Review The strategy of the Company, stated at its flotation on AIM, was to explore fornew sources of hard rock diamondiferous kimberlites in Sierra Leone. Supportingthis long term exploration programme was the development of near term revenuesthrough alluvial diamond production and the exploitation of SLDC's othernon-diamond mineral potential. High Rock Diamond Exploration During the period, SLDC completed the annual contracted High ResolutionAeromagnetic survey (HRAM). Data interpretation from its 3 exploration blockshave commenced, including • Kamakwie, (North West Block)• Kono (North East Block)• Sewa River The HRAM survey has produced 578 potential targets with 44 "A" rated targets. Exploration activities in the Northwest Block license (Kamakwie area) havedetected two distinct kimberlitic anomalies as indicated by the spatialdistribution of significant quantities of unweathered, angular picro-ilmenites.This is the first time new kimberlitic anomalies have been found in this regionof Sierra Leone. SLDC will continue to develop its understanding of theseanomalies over the coming months to confirm the source rock types. Kono Fissure Mini-Bulk Sample Following the encouraging mineralogical samples results from microprobe analysisindicating potential high diamond grade, a Mini-Bulk Sample of the Fissures wasundertaken. Processing was carried out through the new DMS sample plant. Withthe following results; Sample Weight +4.0 +2.0 +1.5 Total Wt Calculated GradeKimberlite number (Kg) mm mm mm (Carats) (cpht)SLDC 1 5801 577 4 2 1.02 177SLDC 2 5802 2395 1 4 2 1.47 61SLDC 3 5803 2723 1 4 0.41 15 Diamonds from the samples are of gem quality, with 1 perfect octahedron of gemquality (0.23 ct, estimated US$ 140 per carat) being recovered. The Kimberlitic Indicator Mineral Sampling program has collected a total of3,412 stream sediment samples, representing 68% of the annual target. Since theinception of the programme in 2004, a total of 4,021 samples have been collectedrepresenting approximately 80% of the total planned programme. A total of 479follow up samples have been taken resulting from this program. Sewa Block Alluvial Operations A five ton per hour DMS sample plant was commissioned in June 2005, within thepotential alluvial diamond area along the Sewa River. The sampling plant andassociated mining equipment has the capacity to process 25,000 tons of gravelsper month. Closely spaced reverse circulation drilling has intersected an estimated 330,000cubic meters of alluvial gravels. The drilling program is designed to continueto demarcate alluvial mineral deposits from which larger samples can be takenfor testing in the Dense Media Separation diamond recovery plant. Non Diamond Exploration activities Snowden Industry Mining Consultants (Pty) Ltd have been retained to carry out anassessment of the iron ore potential within the Company's license areas. Theresults of this assessment will be known during the third quarter. An independent consultant was retained to carry out a similar assessment of theCompany's gold potential. This report is currently under review. Notice of NO auditor review of interim financial sTatements Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditorhas not performed a review of the interim financial statements they must beaccompanied by a notice indicating that the financial statements have not beenreviewed by an auditor. The accompanying unaudited interim financial statements of the Company have beenprepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financialstatements in accordance with standards established by the Canadian Institute ofChartered Accountants for a review of interim financial statements by anentity's auditor. Sierra Leone Diamond Company LimitedConsolidated Balance Sheets (Stated In United States Dollars) -------------------------------------------------------------------------------- June 30, 2005 December 31, 2004 (Unaudited) (Audited)--------------------------------------------------------------------------------AssetsCurrent assetsCash and cash equivalents $ 25,394,821 $ 2,692,087Accounts receivable 178,063 83,651Due from related parties (note 6) - 98,995Prepaid expenses 38,622 4,000Note receivable (note 3) 12,000 30,000-------------------------------------------------------------------------------- 25,623,506 2.908,733Deferred costs - 739,047Property and equipment (note 4) 5,523,536 2,929,859Mineral properties (note 5) 15,231,075 8,992,420-------------------------------------------------------------------------------- $ 46,378,117 $ 15,570,059-------------------------------------------------------------------------------- Liabilities and Shareholders' EquityCurrent liabilitiesAccounts payable and accruedliabilities $ 327,119 $ 1,390,645Due to related parties (note 6) - 325,044-------------------------------------------------------------------------------- 327,119 1,715,689-------------------------------------------------------------------------------- Shareholders' equityShare capital (note 7) 55,259,642 22,018,821Warrants (note 8) 586,804 186,804Contributed surplus (note 9) 472,760 147,297Cumulative translation adjustment (312,100) (311,744)Deficit (9,956,108) (8,186,808)-------------------------------------------------------------------------------- 46,050,998 13,854,370 Commitments (note 5)-------------------------------------------------------------------------------- $ 46,378,117 $ 15,570,059-------------------------------------------------------------------------------- Sierra Leone Diamond Company LimitedConsolidated Statements Of Loss And Deficit (Unaudited) (Stated In United States Dollars)-------------------------------------------------------------------------------- Six months ended June 30 2005 2004-------------------------------------------------------------------------------- RevenueInterest $ 450,952 $ ------------------------------------------------------------------------------- ExpensesGeneral and administrative 505,172 235,129Professional and other 140,557 106,748Travel 76,757 85,922Depreciation 346,887 52,805Shares Issued for Past Services - 1,457,186Unrealized gain on foreign exchange 825,416 -Stock-based compensation (note 9) 325,463 ------------------------------------------------------------------------------- 2,220,252 1,650,227--------------------------------------------------------------------------------Net loss for the period (1,769,300) (1,650,227)Deficit, beginning of period (8,186,808) (800,098)-------------------------------------------------------------------------------- (9,956,108) (2,737,888)Charge to deficit for issuance of par valueshares for nil cash consideration - 125,000--------------------------------------------------------------------------------Deficit, end of period $ (9,956,108) $ (2,862,888)-------------------------------------------------------------------------------- Loss per shareBasic (0.01) (0.07)Diluted (note 7) (0.01) (0.05)-------------------------------------------------------------------------------- Sierra Leone Diamond Company LimitedConsolidated Statements Of Cash Flows (Unaudited) (Stated In United States Dollars)--------------------------------------------------------------------------------- Six months ended June 30 2005 2004----------------------------------------------------------------------------------Cash provided by (used in)Operating activities:Net loss for the period $ (1,769,300) $ (1,937,790)Items not involving cashShares Issued for past services 1,457,186Depreciation 346,887 52,805Unrealized foreign exchange gain 825,416 -Stock-based compensation 325,463 ----------------------------------------------------------------------------------- (271,534) (427,799)Changes in non-cash working capital(note 10) (938,403) (817)------------------------------------------------------------------------------------ (1,209,937) (428,616)------------------------------------------------------------------------------------Financing activities:Proceeds on note receivable 18,000 -(Repayment to) advance from relatedparties (226,049) 1,830,458Issuance of share capital 37,230,480 2,998,422Share issue costs (2,850,968) -Changes in non-cash working capital(note 10) (364,884) 40,000------------------------------------------------------------------------------------ 33,806,579 4,868,880------------------------------------------------------------------------------------Investing activities:Purchase of capital assets (2,940,564) (2,198,531)Mineral property expenditures (6,238,655) (2,760,233)Changes in non-cash working capital(note 10) 110,727 770,236------------------------------------------------------------------------------------ (9,068,492) (4,188,528)------------------------------------------------------------------------------------Unrealized foreign exchange gain (825,416) ----------------------------------------------------------------------------------Increase in cash 22,702,734 251,736Cash, beginning of period 2,692,087 4,529------------------------------------------------------------------------------------Cash, end of period $ 25,394,821 $ 256,265------------------------------------------------------------------------------------ Supplemental cash flow informationInterest paid $ - $ ------------------------------------------------------------------------------------ 1. Future operations: Sierra Leone Diamond Company Limited (the "Company"), is engaged in the businessof exploring for, and if successful, ultimately producing, diamonds from itsmineral properties located in Sierra Leone. The Company's interests are comprised of 20 mineral licenses. A period of civilunrest in Sierra Leone from 1997 to 2003 impaired the Company's ability to carryon its exploration activities in the past. The Company recommenced operations inSierra Leone in January 2003. All of the Company's mineral licenses are at theexploration stage. 2. Basis of Presentation: These unaudited interim consolidated financial statements have been prepared bymanagement in accordance with Canadian generally accepted accounting principlesand on a basis consistent with the audited December 31, 2004 consolidatedfinancial statements except certain disclosures have been condensed or omitted.Accordingly, these interim consolidated financial statements should be read inconjunction with the notes contained in the Company's audited December 31, 2004consolidated financial statements. Because a precise determination of manyassets and liabilities is dependent upon future events, the preparation ofperiodic financial statements necessarily involves the use of estimates andapproximations. Accordingly, actual results could differ from those estimates.The financial statements have, in management's opinion, been properly preparedusing careful judgment within reasonable limits of materiality and within theframework of the significant accounting policies. These consolidated financial statements include the accounts of the Company andits wholly owned subsidiaries SLDC (UK) Ltd., SLDC Management Limited and SLDCExploration Limited. The operating results for the six months ended June 30, 2005 may not beindicative of the results for the year ended December 31, 2005. Prior period comparative figures have been reclassified to conform to thepresentation used in the current period. 3. Note receivable: In December 2004, the Company advanced $30,000 to an employee by way of apromissory note. The principal amount of the note is repayable in equal monthlyinstallments of $3,000 beginning January 31, 2005. Interest is accrued at 5% perannum and is due on the final repayment date of October 31, 2005. The note issecured by 55,000 common shares and 150,000 options of the Company registered inthe name of the borrower. 4. Property and equipment: June 30, 2005 ---------------------------------------- Accumulated Cost depreciation Net------------------------------------------------------------------------------Furniture and fixtures $ 119,134 $ 25,463 $ 93,671Leasehold improvements 371,778 22,530 349,248Computers and communicationequipment 313,639 46,541 267,098Vehicles and heavy equipment 3,035,840 336,107 2,699,733Exploration equipment 2,100,986 265,081 1,835,905Other equipment 341,567 63,686 277,881-------------------------------------------------------------------------------- $ 6,282,944 $ 759,408 $ 5,523,536-------------------------------------------------------------------------------- December 31, 2004 ---------------------------------------- Accumulated Cost depreciation Net------------------------------------------------------------------------------Furniture and fixtures $ 95,688 $ 21,444 $ 74,244Leasehold improvements 354,209 5,902 348,307Computers and communicationequipment 146,043 21,906 124,137Vehicles and heavy equipment 1,071,370 147,806 923,564Exploration equipment 1,399,104 187,943 1,211,161Other equipment 276,052 27,606 248,446-------------------------------------------------------------------------------- $ 3,342,466 $ 412,607 $ 2,929,859-------------------------------------------------------------------------------- 5. Mineral properties: As at June 30, 2005, the Company held 20 exploration and prospecting licenses inSierra Leone. Pursuant to the terms of all licenses, the Company is required topay total annual license fees of approximately $449,300. In addition, thelicenses require the Company to meet certain conditions including incurringexploration expenditures in accordance with agreed budgets. All licenses may beextended at the discretion of the Ministry of Mineral Resources of Sierra Leoneto extend the time frame to perform the commitments, if required, to effectivelycomplete the proposed work programs. With respect to 12 of the licenses, the Company is required to incur qualifyingexpenditures totaling $10,610,000 prior to various dates between Feb 1, 2005 andJune 1 2005. Based on the outcome of previous expenditures, the Company mayelect to proceed with the remaining exploration expenditures in accordance withthe agreed budgets. As at June 30, 2005, the Company had incurred approximately$9,109,256 of qualifying expenditures on these 12 licenses. With respect to seven of the licenses, the Company is required to incur Phase 1qualifying expenditures of $1,442,000 prior to various dates between March 23,2005 and May 19, 2005 and additional qualifying expenditures of $565,000 priorto various dates between March 23, 2006 and May 19, 2006. As at June 30, 2005,the Company had incurred approximately $ 2,870,778 of Phase I qualifyingexpenditures on the seven new licenses. With respect to the remaining license, the Company is required to incurqualifying expenditures of $1,660,000 prior to October 8, 2005 and additionalqualifying expenditures of $325,000 prior to October 8, 2006. As at June 30,2005, the Company had incurred approximately $ 1,250,635 of qualifyingexpenditures on the new license. The Company's mineral licenses are as follows:-------------------------------------------------------------------------------- Additions December 31 (Allocations) June 30 2004 2005-------------------------------------------------------------------------------North East BlockAcquisition costs $ 835,576 $ 190,147 $ 1,025,723Exploration costs 5,125,418 2,571,006 7,696,424Sewa River BlockAcquisition costs 385,682 125,222 510,904Exploration costs 641,376 1,840,868 2,482,244North West BlockAcquisition costs 99,644 66,754 166,398Exploration costs 935,896 419,016 1,354,912Gori Hills BlockAcquisition costs 51,633 39,012 90,645Exploration costs 80,607 365,848 446,455Coastal BlockAcquisition costs 94,183 - 94,183Exploration costs 682,920 567,715 1,250,635Joint Venture PropertiesAcquisition costs 59,485 - 59,485Exploration costs - 53,067 53,067-------------------------------------------------------------------------------- $ 8,992,420 $ 6,238,655 $ 15,231,075-------------------------------------------------------------------------------- 6. Due to related parties: (a) As at December 31, 2004, the Company had a receivable from acompany (the "related company") related to an officer and director of theCompany in the amount of $98,995. These amounts were repaid in June 2005. (b) As at December 31, 2004, the Company had amounts due toother related parties in the amount of $325,044. These related parties consistof shareholders, officers and directors of the Company and companies controlledor significantly influenced by shareholders and officers of the Company. Thesesamounts were repaid in June 2005. 7. Share capital: a) Issued: -------------------------------------------------------------------------------- NumberCommon Shares of Shares Amount------------------------------------------------------------------------------ Balance, December 31, 2004 70,063,242 $ 22,018,821Private placement for cash (i) 26,700,000 37,528,149Share issue costs - (4,287,328)--------------------------------------------------------------------------------Balance, December 31, 2004 96,763,242 $ 55,259,642-------------------------------------------------------------------------------- (i) On February 10, 2005, the Company completed an equityissue of 26,700,000 common shares at U.S.$1.39 (75 pence) for total grossproceeds of U.S.$37,528,149 (£20,025,000). 1,335,000 broker's warrants wereissued as commission on the equity issue and have been included in share issuecosts at an ascribed value of $400,000 (see note 8). The warrants areexercisable at U.S.$ 1.35 (75 pence, converted at the June 30, 2005 exchangerate) and expire in August 2006. b) Options On February 10, 2005, the Company granted 250,000 share purchase optionsexercisable in U.K. pence to an employee at an exercise price of U.S.$1.35 (75pence) per share, expiring December 2009. The options vest upon certainperformance milestones being met, none of which had been met as at June 30,2005. The fair value of these options has not been estimated as the vestingperiod is not determinable. On March 30, 2005, the Company granted 2,000,000 share purchase optionsexercisable in U.K. pence to two employees at an exercise price of U.S.$1.35 (75pence) per share, expiring March 2010. The options vest as to one-third on thefirst, second and third year anniversaries of the grant date. The fair value ofthese options has been estimated at $624,580. The related stock-basedcompensation expense for the six months ended June 30, 2005, is not significantand as a result, has not been recorded. The fair value of options granted during the period was estimated using theBlack-Scholes fair value pricing model with the following significantassumptions:--------------------------------------------------------------------------------Expected life (years) 5.0Risk-free interest rate 3.5%Volatility 40%Weighted average fair value per option $0.31-------------------------------------------------------------------------------- For the purposes of recording stock-based compensation, the estimated fair valueof the options is recognized over the vesting period of the option. The following summarizes information about stock options outstanding as at March31, 2005: -------------------------------------------------------------------------------- Number of Weighted-Average Options Exercise Price U.S.$ Pence--------------------------------------------------------------------------------Opening 6,975,000 0.94 (1) 52Forfeited (150,000) 0.90 50Granted 2,250,000 1.35 75--------------------------------------------------------------------------------Closing 9,075,000 1.04 58-------------------------------------------------------------------------------- (1) As the options are exercisable in Pence, the opening U.S.$ price has beenupdated to reflect the conversion to U.S.$ using the exchange rate as at theJune 30, 2005 balance sheet date. ------------------------------------------------------------------------------- Weighted averageExercise Number of remaining Weighted averageprice options contractual exercise price NumberU.S.$ Pence outstanding life (years) U.S.$ Pence exercisable----------------------------------------------------------------------------- 0.90 50 6,325,000 3.75 0.90 50 - 1.35 75 2,750,000 4.68 1.35 75 ------------------------------------------------------------------------------- 9,075,000 4.08 1.04 58 ------------------------------------------------------------------------------ c) Per share amountsPer common share calculations are based on 90,715,176 (2004 - 23,162,912) basicweighted- average number of common shares outstanding during the year. Incomputing diluted per share amounts, all of the Company's outstanding optionsand warrants have been excluded as they are anti-dilutive. 8. Warrants: The following tables summarize information about common share purchase warrantsexercisable as at June 30, 2005: --------------------------------------------------------------------------------- Weighted Average Exercise Price Number U.S. CAD Pence Fair value-------------------------------------------------------------------------------Balance, December31, 2004 13,200,001 $ 0..89 (1) $ 1.10 - $ 186,804 Issued February 2005 1,335,000 1.35 - 75 400,000--------------------------------------------------------------------------------Balance, March 31,2005 14,535,001 $ 0.93 $ 1.10 75 $ 586,804--------------------------------------------------------------------------------- (1) As the opening balance of options is exercisable in Canadian dollars, theopening U.S.$ price has been updated to reflect the conversion to U.S.$ usingthe exchange rate as at the June 30, 2005 balance sheet date. The fair value of warrants issued, measured on the date of issue, was determinedusing the Black-Scholes fair value pricing model with the following weightedaverage assumptions: --------------------------------------------------------------------------------Expected life (years) 1.5Risk-free interest rate 3.5%Volatility 40%Weighted average fair value per option $0.30-------------------------------------------------------------------------------- The following summarizes information about common share purchase warrantsoutstanding as at June 30, 2005: --------------------------------------------------------------------------- Weighted Weighted Average AverageExercise Price Number Remaining Exercise Price Outstanding Contractual and LifeU.S. CAD Pence Exercisable (years) U.S. CAD Pence-----------------------------------------------------------------------------------$ $ 9,250,001 0.59 $ 1.25 -1.02 1.25 1.02$ $ 3,950,000 1.00 0.60 0.75 -0.60 0.75$1.35 - 75 1,335,000 1.11 1.35 - 75-------------------------------------------------------------------------------- 14,535,001 0.75 $ 0.93 1.10 75-------------------------------------------------------------------------------- 9. Contributed surplus: Contributed surplus relates to the estimated fair value of options recognized asstock-based compensation over the vesting period of each option grant. -------------------------------------------------------------------------------- March 31 2005--------------------------------------------------------------------------------Opening $ 147,297Options granted in 2004 327,052Forfeiture of options granted in 2003 (1,589)-------------------------------------------------------------------------------- $ 472,760-------------------------------------------------------------------------------- 10. Changes in non-cash working capital: -------------------------------------------------------------------------------- Six months ended June 30 2005 2004 -------------------------- --- ----------- --- ----------Accounts receivable $ (94,412) $ (4,230)Prepaid expenses (34,622) -Accounts payable and accrued liabilities (1,063,526) 3,413-------------------------------------------------------------------------------- $ (1,192,560) $ (817)-------------------------------------------------------------------------------- The change in non-cash working capital relates to the following activities: -------------------- --- -------------------- Six months ended June 30 2005 2004 -------------------- --- ----------- --- ----------Operating $ (938,403) $ (817)Financing (364,884) -Investing 110,727 --------------------------------------------------------------------------------- $ (1,192,560) $ (817)-------------------------------------------------------------------------------- 11. Related party transactions: (a) During the six months ended June 30, 2005, the Company incurred $18,407 (six months ended June 30, 2004 - $13,450) for administrationservices by a company related to an officer and director of the Company. (b) During the six months ended June 30, 2005, the Company incurred $93,026 (six months ended June 30, 2004 - $3,418) for financialconsulting services by a shareholder of the Company. 12. Segmented information: The Company's activities are conducted in following geographic segments. Allactivities relate to the exploration of diamonds from its mineral properties. -------------------------------------------------------------------------------- Sierra Bermuda Great Total Leone Britain $ $ $ $--------------------------------------------------------------------------------Six months ended June 30, 2005RevenueInterest 447 174,324 276,181 450,952ExpensesGeneral and - 317,140 188,032 505,172administrativeProfessional - 135,954 4,603 140,557Travel - 42,807 33,950 76,757Depreciation 343,163 1,166 2,558 346,887Foreign exchange 1,052 (551,998) 1,376,362 825,416Stock-based compensation - 325,463 - 325,463Loss for the period (343,768) (96,208) (1,329,324) (1,769,300)Capital expenditures 9,117,207 - 62,012 9,179,219Total assets 20,887,069 25,345,183 145,865 46,378,117Six months ended June 30, 2004Expenses 1,736,938 174,006 26,846 1,937,790Loss for the period (1,736,938) (174,006) (26,846) (1,937,790)Capital expenditures 4,945,561 8,820 4,383 4,958,764Total assets 5,731,897 2,781,766 4,055 8,517,718-------------------------------------------------------------------------------- 13. Reconciliation to United States Generally Accepted AccountingPrinciples: The consolidated financial statements of the Company are prepared usingaccounting principles that are generally accepted in Canada. These principlesdiffer in some material respects from those that are generally accepted in theUnited States ("U.S. GAAP") the Company's audited December 31, 2004 consolidatedfinancial statements. The effects of measurement differences between Canadian and U.S. GAAP, includingpractices prescribed by the SEC, on the consolidated balance sheets, statementsof loss and deficit and cash flows are summarized as follows: -------------------------------------------------------------------------------- June 30 December 31 2005 2004--------------------------------------------------------------------------------AssetsAssets, Canadian GAAP $ 46,378,117 $ 15,570,059Adjustment for mineral properties (15,231,075) (8,992,420)--------------------------------------------------------------------------------Assets, U.S. GAAP $ 31,147,042 $ 6,577,639--------------------------------------------------------------------------------DeficitDeficit, Canadian GAAP $ (9,956,108) $ (8,186,808)Adjustment for mineral properties (15,231,075) (8,992,420)Adjustment for stock-basedcompensation 325,463 80,058--------------------------------------------------------------------------------Deficit, U.S. GAAP $ (24,861,720) $ (17,099,170)-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Six months ended June 30 2005 2004--------------------------------------------------------------------------------Loss and loss per shareLoss for the period, Canadian GAAP $ 1,769,300 $ 287,563Adjustment for expenditures onmineral properties 6,238,655 532,693Adjustment for stock-basedcompensation (325,463) ---------------------------------------------------------------------------------Loss for the period, U.S. GAAP $ 7,682,492 $ 820,256--------------------------------------------------------------------------------Loss per share, basic and diluted,U.S. GAAP $ 0.08 $ 0.04--------------------------------------------------------------------------------Weighted average number of shares(basic and diluted) 90,715,176 23,162,912-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Six months ended June 30 2005 2004--------------------------------------------------------------------------------Operating activitiesFunds used in operatingactivities,Canadian GAAP $ (1,209,937) $ (259,538)Adjustment for expendituresonmineral properties (6,238,655) (532,693)Adjustment for change innon-cashworking capital related toexpenditureson mineral properties 110,727 ---------------------------------------------------------------------------------Funds used in operatingactivities,U.S. GAAP $ (7,337,865) $ (792,231)-------------------------------------------------------------------------------- Investing activitiesFunds used in investingactivities,Canadian GAAP $ (9,068,492) $ (1,474,310)Adjustment for expendituresonmineral properties 6,238,655 532,693Adjustment for change innon-cashworking capital related toexpenditureson mineral properties (110,727) -------------------------------------------------------------------------------Funds used in investingactivities,U.S. GAAP $ (2,940,564) $ (941,617)-------------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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