29th Sep 2006 10:05
Ovoca Gold PLC29 September 2006 Ovoca Gold plc Interim Statement 2006 Ovoca Gold plc is pleased to report its interim, unaudited, results for the sixmonths ended 30th June 2006. Highlights. • Acquisition of a 74% interest in Ayax Prospectors Artel givesOvoca Gold a flagship project at Goltsovoye in the Magadan region of easternRussia. • Goltsovoye contains an estimated C1/C2 resource of 74m oz ofsilver classified under Russian reporting standards at an average grade of 934g/t of silver and 3.2% lead. • Feasibility study scheduled for completion in Q1/Q2 of 2007. • Proposed initial production rate of 6m oz per year would rankGoltsovoye among the world's ten largest primary silver producers by the end of2008. • Major exploration land position in the Kolmozero-Voronyagreenstone belt of the Kola Peninsula with addition of three new licenses. • Ovoca increases shareholding in Norplat Limited to 100%. Commenting on the results, Ovoca Gold's Chairman, Roger Turner, said "TheGoltsovoye acquisition provides Ovoca Gold with a project capable oftransforming the company into a globally significant silver producer within thenext 30 months. Goltsovoye is already well-explored and its high silver gradesgive the project considerable resilience. Our team relishes the opportunity tobring the mine to production". Goltsovoye Ovoca Gold's consultants, Wardell Armstrong International are already welladvanced in preparing the Bankable Feasibility Study which is expected to becompleted during the early part of 2007. In parallel a Feasibility Study is being carried out by Dalrudproyect of Magadanto ensure that the project fully complies with Russian requirements.Dalrudproyect and Wardell Armstong International are working very closelytogether with many sections of there respective studies being the result ofclose collaboration. Additionally other Russian organisations with experience of working on highprofile international mining projects are providing specialist work for the mainconsultants. Amongst these are Vnii-1 who are carrying out the Environmentalsections and completing the Environmental baseline study and Dalstroinzestkaniawho are providing the detailed underground and surface geotechnical sectionsfollowing a detailed geotechnical drilling program at the minesite. Diamond Drilling of the orebody is also underway to confirm the previousRussian work, which comprised of 66,000 metres of drilling and over 12 km ofunderground mine development. Initial planning suggests that Goltsovoye will produce around 6m oz per year ofsilver after it comes to production late in 2008. At this production rate,Goltsovoye would rank among the world's ten largest primary silver producers asreported by Gold Fields Mineral Services in their "World Silver Survey 2006". Goltsovoye underlies a small hill and Ovoca has already reopened and made safethe exploration adit tunnels on three levels. Our investigations show theexisting underground workings to be in good condition providing ready access andthe opportunity to fast-track development. A major underground metallurgical sample has now been taken under thesupervision of Wardell Armstrong International. The sample will be used forlarge scale proving of the metallurgical process. This work will be carried outat in Wardell Armstrong's test centre in Cornwall. As part of the resource confirmation work the waste dumps left after mining theexploration adits were sampled and tested. The results indicate the dumps arecarrying high silver grades and will provide additional mill feed in the earlyyears of production. Electrical power from the Kolyma hydroelectric grid and all weather highwayaccess is already available within 38 km of the site. Magadan Energy haveconfirmed that the local grid has sufficient capacity for the mines electricalrequirements and they are putting together a scheme to connect the mine. Kola Licenses Ovoca has now acquired a 100% equity interest in its subsidiary Norplat Limitedwhich has acquired three additional Exploration Licenses along the highlyprospective Kolmozero-Voronya Greenstone Belt in the Kola Peninsula of NorthwestRussia. Drilling and trenching has continued on its priority Oleninskoye, Nyalm golddeposits and the Pellapahk copper-molybdenum deposit. Surface prospecting andgeochemical sampling trenching and deep overburden sampling continues on thethree new licenses to define drilling target for the 2007 exploration season. Oleninskoye Results have been positive not as dramatically high as encountered in the 2005drilling programme. Nevertheless, medium to high grade mineralisation continuesto be intersected. As seen in the following table of drill hole and trenchintersection: Eight of the holes drilled on Oleninskoye intersected pegmatite within the areawhere the vein intersection was anticipated. These pegmatite veins are known tocut across the veins and are seen at surface. These holes will be relocated toavoid intersecting these cross-cutting pegmatite veins. Nyalm The preliminary results from drilling at Nyalm have defined a wide zone ofcontinuous gold mineralisation over 14 metres in bore hole BF-107 with highgrade intersections of 11.2 grammes per tonne gold over an intersection of 2.0metres in hole BF-107; 10.8 grammes per tonne over 1.0 metres in hole BF-110 and7.5 grammes per tonne gold over 1.1 metres in hole BF-108. Drill hole assayresults from Nyalm are tabled below: Kolmozero-Voronya Project Drill & Trench Results (31 August 2006)Deposit Drill Hole Trench Depth/Length(m) Intersect(m) Gold (g/t) From ToOleninskoyee BF-058 53.8 55.8 2.0 2.29 BF-061 87.9 89.4 1.5 1,24 BF-061 90.4 91.4 1.0 2,57 BF-075 43.8 45.3 1.5 13.70 K-BF-091 1.1 2.50 K-BF-091 1.0 19.9 K-BF-091 1.0 1.09 K-BF-90 1.0 2.54 K-BF-90 1.0 3.95 K-BF-092 1.0 2.83 K-BF-509 1.3 2.44 K-BF-509 1.3 5.47Nyalm BF-107 24.6 26.6 2.0 3.08 BF-107 85.0 87.0 2.0 11.20 BF-107 30.4 32.4 2.0 4.69 BF-107 36.6 38.6 2.0 1.36 BF-107 40.6 42.6 2.0 1.71 BF-107 44.6 75.0 30.4 1.50 BF-108 37.2 38.30 1.1 7.50 BF-106 60.0 6.0 2.0 2.31 Pellapahk Copper-Molybdenum Deposit Drilling results from the Pellapahk copper-molybdenum deposit to the northwestof Oleninskoye has produced significant intersections and indicate a extensivezone of copper, molybdenum mineralisation. The Pellapahk deposit was exploredto a limited degree during the Soviet period and results from Ovoca's drillinghave extended the area of known mineralisation to over 3 kilometres and over awidth of not less than 500 metres. Previous Soviet drilling had producedaverage grades of from: 0.1% to 0.75% copper; 0.035% to0.125% molybdenum and0.01 to 0.57 grammes per tonne gold. Borehole C-BF-67B contained multipleintersections containing the following: From To Interval metres Copper % Molybdenum %26.0m 44.0m 18.0 0.11 0.05770.6m 84.1m 13.5 0.17 0.03194.6m 119.8m 25.2 0.16 0.035 Such results compare favourably with similar deposits such as Mineral Park inNorthern Arizona with grades of 0.13% copper and 0.037% molybdenum. Allintersections were from within 100 metres from surface. Sweden A reverse circulation percussion drilling programme was completed on the Klippenconcession as a follow up on previously defined areas of mineralisation. Theonly intersection of note was 9.78g/t over an intersection of 1.0 metre at adepth of 7.0 to 8.0 metres from surface within a zone of mineralisationpreviously outlined by trenching. Other reported results from previous drillingand trenching conducted by Terra Mining were not confirmed during this drillprogramme. Glossary: Greenstone Belt - an elongated group of specific rocks derived from molten lavaintruded into pre-existing rock or extruded onto surface. Geotechnical:- pertaining to the physical characteristics and strength of rocks Geochemical Sampling:- the sampling of rock, soil or water which will bechemically analysed. Pegmatite Veins:- a light coloured coarse grained crystalline rock in the formof linear sheet-like bodies. Reverse Circulation Percussion Drilling:- a drilling technique which producessmall chips of rock as it drills for later chemical analysis. Consolidated Profit and Loss Account 30 June 31 August for the six months to 30 June 2006 2006 2005 • • Administration expenses (325,629) (223,363) Other operating income 19,159 Operating loss - continuing operations (325,629) (204,204) Investment income (net) 25,193 12 Loss on ordinary activity before tax (300,436) (204,192) Tax Retained (loss) for the period (300,436) (204,192) Profit and loss at beginning of period (8,314,063) (5,849,618) Profit and loss at end of period (8,614,499) (6,053,810) Attributable to Equity holders of the parent (8,166,411) (5,641,545) Minority interest (448,088) (412,266) (8,614,499) (6,053,810) Basic loss per ordinary share (0.19)c (0. 25)c Consolidated Balance Sheet 30 June 31 August at 30 June 2006 2006 2005 • •Fixed Assets Intangible assets 8,748,834 9,035,425 Tangible assets 85,818 4,917 Financial assets Minority interest (448,088) (412,266) 8,386,564 8,628,077 Current Assets Debtors 1,091,973 76,641 Bank 6,209,636 1,321,521 7,301,609 1,398,163 Creditors: Amounts falling due within one year 1,439,573 465,525 Net current assets 5,862,036 932,638 Net Assets 14,248,600 9,560,715 Financed byCapital and Reserves Called up share capital 7,870,325 2,830,844 Share premium 14,981,292 12,772,199 Other reserves 11,482 11,482 Revaluation reserve Profit & loss account (8,614,499) (6,053,810) 14,248,600 9,560,715 Consolidated Cash Flow Statement 30 June 31 August for the six months to 30 June 2006 2006 2005 • • Net cash inflow/(outflow) from operating activities 443,780 469,625 Returns on investment and servicing of finance Investment income (net) 25,193 12 Sale of tangible asset 22,000 Net cash (outflow)/inflow from returns on investment and servicing of finance 25,193 22,012 Tax Paid Capital expenditure and financial investment Purchase of tangible assets (79,874) (586) Purchase of intangible assets (594,549) (471,842) Net cash (outflow) from capital expenditure and financial investment (674,423) (472,428) Acquisition and Disposals Purchase of subsidiaries (2,505,140) (231,425) Net cash outflow from acquisitions and disposals (2,505,140) (231,425) Net cash outflow before financing and management of liquid resources (2,710,590) (212,216) Financing and management of liquid resources Proceeds from issue of share capital 6,850,688 1,517,348 Net cash transferred from liquid resources - - Net cash inflow from financing and use of liquid resources 6,850,688 1,517,348 Increase in cash in the period 4,139,729 1,305,132 Group Recognised Gains and Losses 30 June 31 August for the six months to 30 June 2006 2006 2005 • • Loss for the period (300,436) (204,192) Exchange loss on foreign currency net investments (35,984) (13,430) Realisation of property revaluation gain of previous years 16,874 (336,420) (200,748) Notes 1. No dividend is proposed in respect of the period. 2. The calculations of loss per share have been based on theretained losses after taxation and on a weighted average of 155,605,257 ordinaryshares (2004 -83,333,623 ordinary shares) in issue during the period. 3. The Unaudited results have been prepared on a going concern basisand on the basis of the accounting policies adopted in the Annual accounts forthe year ended 31 December 2005. 4. The interim report is Unaudited and does not constitute StatutoryAccounts as defined in S.148 of the Companies Act 1963. A copy of the Group's2005 Statutory Accounts has been filed with the Irish authorities. Theauditors' opinion on these Statutory Accounts was unqualified. 5. The interim report for the six months to 31 August 2006 wasapproved by the Directors on 28 September 2006. 6. The company changed it's financial year end to 31 December 2005during 2005. 7. The Purchase of subsidiaries relates to the acquisition costs ofa further 23% of Norplat Limited for 13,323,798 ordinary shares in January 2006,and 74% of CJSC Prospectors Artel Ayax, a Russian joint stock company, for110,001,518 ordinary shares in June 2006. Minority interest refers to theportions of these and other companies that the Group does not own. The Profitand loss accounts at the beginning of the period has been restated to show theunowned portions. 8. The Proceeds from issue of share capital represent a privateplacing of 60,408,652 ordinary shares for €6,850,688 net of costs. For further information contactMr. John O'Connor + 353 1 633 0523 Copies of this report are available at the Company's offices at:2nd Floor, 36 Dame Street, Dublin 2. 29 September 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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