13th Jun 2006 07:00
Falkland Gold and Minerals Ltd13 June 2006 FALKLAND GOLD AND MINERALS LIMITED Interim Results for the 6 months ended 31 March 2006 13 June 2006 Highlights • Over 14,000 metres drilled up to end of May 2006;• British Geological Survey review conducted;• Cash balances of over £6.6 million;• Free of debt. I am pleased to report on the activities of Falkland Gold and Minerals Ltd ("FGML" or "the Company") for the six month period to 31 March 2006. During the period the Company returned a loss before tax of £490,517 (6 monthsto 31 March 2005: £345,869). A further £158,104 has been invested in tangiblefixed assets this period, most of which was spent on operating plant andmachinery. Current monthly cash expenditure is approximately £170,000. The Company is now well into the second year of its exploration programme in theFalklands. This programme has been designed to establish the source of alluvialgold discovered in some of the streams in the Islands and the operations aregoing well with over 14,000 metres of core having been drilled over ten targetsas at the end of May 2006. 3,900 metres of drilling is planned on four other targets that are drill readyand an additional 4,000 metres of drilling is planned on three further targetswhere we have yet to use ground sampling techniques to assist in focusing thedrill targeting. In addition to the investigative drilling campaign, we will be undertaking apeat soil geochemical sampling programme on two additional areas. This work isspecifically aimed at developing new drill targets and should generate around10,000 samples for analysis. Taken together, the drilling and sampling workprogramme is likely to take us well into 2007 and this can be financed fromexisting resources. The British Geological Survey completed a review of the exploration work carriedout up to the end of March 2006 and also of the methodologies employed. Theymade several constructive suggestions on the way forward and commentedpositively on the implementation of the exploration programme. Their servicesare being retained in order to provide additional interpretative capacity. Your Board continues to believe that the potential outlined in the prospectusissued in November 2004 remains and that the continuing work programme shouldidentify the geological model accounting for the various anomalies. We remainhopeful that this will lead on to some discoveries of economic value. Richard Linnell - Chairman Enquiries: Falkland Gold and Minerals LimitedRichard Linnell (Chairman) +27 82 440 6710FALKLAND GOLD AND MINERALS LIMITED Profit and loss account for the 6 months period ended 31 March 2006 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) Note £ £ £ Administrative expenses (648,357) (457,705) (1,108,203) Operating loss (648,357) (457,705) (1,108,203) Interest receivable 157,840 111,836 324,843 Interest payable - - (2,133) Loss on ordinary activities before (490,517) (345,869) (785,493)taxation Tax on loss on ordinary activities 2 (107,759) - - Loss for the financial period after (598,276) (345,869) (785,493)taxation Retained loss for the period (598,276) (345,869) (785,493) 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) Pence Pence Pence Basic and diluted loss per ordinary 3 (0.76) (0.52) (1.09)share There were no recognised gains or losses in the year other than those dealt within the profit and loss account above. All of the activities of the Company are classified as continuing. Balance sheet as at 31 March 2006 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) £ £ £ Fixed assetsIntangible assets 1,573,365 941,367 1,158,218Tangible assets 560,579 483,893 537,938 2,133,944 1,425,260 1,696,156 Current assetsDebtors 116,616 87,652 61,001Cash at bank and in hand 6,659,013 8,451,447 7,659,993 6,775,629 8,539,099 7,720,994 Creditors: amounts falling due within one (182,341) (186,425) (91,642)year Net current assets 6,593,288 8,352,674 7,629,352 8,727,232 9,777,934 9,325,508 Capital and reservesCalled up share capital 1,565 1,565 1,565Share premium account 10,209,182 10,221,984 10,209,182Profit and loss account (1,483,515) (445,615) (885,239) 8,727,232 9,777,934 9,325,508 Reconciliation of movements in shareholders' funds for the 6 months ended 31March 2006 Loss for the financial period (598,276) (345,869) (785,493) New share capital subscribed (net of issue costs) - 9,313,495 9,300,693 Net (decrease)/increase to shareholders' funds (598,276) 8,967,626 8,515,200 Opening shareholders' equity funds 9,325,508 810,308 810,308 Closing shareholders' equity funds 8,727,232 9,777,934 9,325,508 Cash flow statement for the 6 months period ended 31 March 2006 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) Note £ £ £ Net cash outflow from operating activities 5 (546,353) (418,291) (869,413) Returns on investments andservicing of finance 157,840 111,836 324,843 Capital expenditure (612,467) (731,726) (1,221,013) Net cash outflow before financing (1,000,980) (1,038,181) (1,765,583) Financing - 9,313,495 9,249,443 (Decrease)/increase in cash in period (1,000,980) 8,275,314 7,483,860 Notes to the interim accounts for the 6 months period ended 31 March 2006 1. Basis of preparation of the financial statement The interim financial information set out above has been prepared on the samebasis and using the same accounting policies as were applied in drawing up thecompany's statutory financial statements for the year ended 30 September 2005. The financial information for the 6 month periods ended 31 March 2006 and 31March 2005 are unaudited. In the opinion of the directors the financial information for the periods fairlyrepresents the financial position, results of the operations and cash flows forthe period in compliance with Falkland Island Company Law and generally acceptedaccounting principles. The financial information for the full year ended 30 September 2005 is extractedfrom the Company's audited financial statements for that year as filed with theRegistrar of companies. The auditors' report on those accounts was unqualified. 2. Taxation Analysis of the tax charge The tax charge on the loss on ordinary activities for the period was as follows: 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) £ £ £Current tax:UK corporation tax on profits of the period 30,417 - -Adjustments in respect of previous periods 77,342 - - Tax on loss on ordinary activities 107,759 - - UK corporation tax has been charged at 30% Factors affecting the tax charge The tax assessed for the period is higher than the standard rate of corporationtax in the UK. The difference is explained below: 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) £ £ £ Loss on ordinary activities before tax (490,517) (345,869) (785,493) Loss on ordinary activities multiplied by thestandard rate of corporation tax in the UK of30% (147,155) (103,761) (235,648) Effects of:Tax losses unavailable for current relief 107,579 100,905 157,940Depreciation and amortisation in excess ofcapital allowances 52,404 2,856 67,808Expenses not deductible for tax purposes 1,250 - 9,900Differences in tax rates 16,339 - -Adjustments in respect of previous periods 77,342 - - Current tax charge 107,759 - - 3. Loss per share The calculation of the basic loss per ordinary share is based on the losses of£598,276 (6 months to 31 March 2005: £345,869) and the weighted average numberof ordinary shares outstanding of 78,250,000 (6 months to 31 March 2005:66,171,429). There is no difference between the basic loss per share and thediluted loss per share presented. 4. Dividends The Directors do not recommend the payment of a dividend. 5. Reconciliation of operating loss to net cash outflow from operatingactivities 6 months 6 months Period ended Period ended Year ended 31/03/06 31/03/05 30/09/05 (unaudited) (unaudited) (audited) £ £ £ Operating loss (648,357) (457,705) (1,108,203)Amortisation and depreciation charges 174,679 9,520 225,778Increase in debtors (55,615) (82,237) (55,586)(Decrease)/Increase in creditors (17,060) 112,131 68,598 Net cash outflow from operating activities (546,353) (418,291) (869,413) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BPC.L