20th Sep 2006 09:31
Beowulf Mining PLC20 September 2006 BEOWULF MINING PLC CHAIRMANS STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2006 ___________________________________________________________________ The Board of Beowulf Mining PLC ("Beowulf") are pleased to report the interimresults to 30 June 2006. Beowulf concentrated the majority of its efforts on theRuoutevare iron titanium deposit and the Grundtrask gold deposit in the firstsix months of 2006. The main corporate developments in the first six months of 2006 were: i) On the 31st March 2006 City Equities arranged a private placingraising £500,000 before expenses via the issue of 10,000,000 shares at 5p pershare. ii) On the 29th June 2006 Beowulf appointed City Capital SecuritiesLimited as joint broker to the Company. This is in addition to King & ShaxsonCapital Limited who remain a broker to the Company. Beowulf now has interests in six areas of Northern Sweden: i) Ruoutevare - an iron titanium deposit on which Beowulf is investigating the ecomonics of development; ii) Grundtrask - a gold prospect which is returning high grade drill sections; iii) Ballek - an iron oxide copper gold (IOCG) prospect; iv) Jokkmokk - an iron oxide copper gold (IOCG) prospect; v) Kallek - an iron ore prospect; and vi) Ussalahti - a massive copper pyrite prospect. Beowulf was granted an exploration permit for Ruoutevare on the 26th March 2006.A previous resource estimate carried out by the Geological Survey of Sweden(Sveriges Geologiska Undersoknning -"SGU") in 1975 reported a resource of 116 Mtof material averaging 38% iron, 5.6% titanium and 0.17% vanadium based on 32drill holes. A richer section of 20 Mt is registered with a grade of 47% iron,10% titanium and 0.14% vanadium. Snowden Mining Industry Consultants Limited("Snowden") has completed a technical review of the previous work and has alsoundertaken a preliminary geostatistical analysis of the drill holes to supportthe preparation of a JORC-compliant resource report. Snowden concluded that thevolumes, tonnages and average grades of the 116 Mt resource are of the order ofmagnitude reported by the SGU in 1975. However they cannot be regarded as beingequivalent to a JORC-compatible inferred resource and Snowden has thereforesuggested additional work, which includes re-drilling of holes as well as thedrilling of additional, closer spaced, drill holes to assess the deposit. Ten totwelve drill holes are suggested and these are planned for early 2007. If thiswork confirms the previous estimates it is intended that a JORC compliantresource report will be produced. Beowulf has commissioned the Raw Material Group of Sweden, ("RMG" www.rmg.se) toprepare a scoping study of the Ruoutevare deposit. RMG will make an assessmentof the potential value of the iron, titanium, vanadium project and examinecapital costs, operational costs and the potential revenue receivable fromexploiting the Ruoutevare deposit at various mining outputs. The Raw MaterialGroup is one of Europe's leading groups of mineral economists. It has recentlypublished "The Iron Ore Market 2005-2007" which was compiled for the UnitedNations Conference on Trade and Development. If the scoping study and the additional drilling in 2007 prove positive Beowulfintends to prepare a feasibility study and apply for a Mining Licence over theRuoutevare deposit in 2007. In June 2006 Beowulf reported it had completed four diamond drill holes on theCompany's 100% owned Grundtrask gold project in the Skellefte Mining District,N. Sweden. The drill program tested the southern extension of the "Central GoldZone" outlined from earlier drilling by Beowulf. All four holes have encountered abundant sulphide mineralisation oversubstantial widths. The sulphides are composed of relatively fine grainedarsenopyrite, pyrite and chalcopyrite appearing as massive veins anddisseminations. Two drill holes 06-002 and 06-2003 both recorded gold grades inexcess of 2 g/t over 27 meters under overburden generally less than 12m thick."The Central Gold Zone" at Grundtrask is now known to extend for 750 metres withan average width of 25 metres. It is open at the southern and northernextensions. Further drilling will take place in 2006. Beowulf owns 7,500,000 ordinary shares (or 8.3%) of Agricola Resources PLC,which is engaged in uranium exploration in Finland, and 5,000,000 ordinaryshares (or 8%) of All Star Minerals PLC which is involved in thoriumexploration. Both of these companies are PLUS-quoted (OFEX). The directors are very encouraged by the developments in the first part of 2006. Dr. Robert Young ChairmanBeowulf Mining PLC20 September 2006 BEOWULF MINING PLC PROFIT AND LOSS ACCOUNTUNAUDITED RESULTS FOR THE 6 MONTHS TO 30 JUNE 2006___________________________________________________________________ (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year Ended 30 June 2006 30 June 2005 31 December 2005 £ £ £ Turnover Nil Nil Nil Administrative expenses (144,267) (224,843) (354,875) Loss on ordinary activities beforeinterest (144,267) (224,843) (354,875) Other interest receivable and similarincome 9,651 72,074 13,896 Loss on ordinary activities beforetaxation (134,616) (152,769) (340,979) Tax on loss on ordinary activities - - -_Loss on ordinary activities aftertaxation (134,616) (152,769) (340,979) Basic loss per share (0.22p) (0.31p) (0.65p) Diluted loss per share (0.15p) (0.20p) (0.42p) The profit and loss account has been prepared on the basis that all operationsare continuing operations. There are no recognised gains and losses other than those passing through theprofit and loss account. BEOWULF MINING PLC BALANCE SHEETUNAUDITED RESULTS AS AT 30 JUNE 2006___________________________________________________________________ (Unaudited) (Unaudited) (Audited) at 30 June at 30 June at 31 December 2006 2005 2005 £ £ £ Fixed assets Intangible assets 187,438 149,210 145,632 Tangible assets 2,413 438 402 Investments 222,250 178,125 351,563 412,101 327,773 497,597 Current assets Debtors 21,371 27,837 16,357 Cash at bank and in hand 735,083 553,932 439,982 756,454 581,769 456,339 Creditors: amounts falling duewithin one year (8,134) (15,420) (7,586) Net current assets 748,320 566,349 448,753 Total assets less current liabilities 1,160,421 894,122 946,350 Capital and reserves Called up share capital 663,982 560,732 560,982 Share premium account 2,362,982 1,986,856 1,987,982 Capital Contribution 46,451 46,451 46,451 Revaluation reserve 147,250 103,125 276,563 Profit and loss account (2,060,244) (1,803,042) (1,925,628) Shareholders' funds - equity interests 1,160,421 894,122 946,350 BEOWULF MINING PLC CASH FLOW STATEMENTUNAUDITED RESULTS FOR THE 6 MONTHS TO 30 JUNE 2006___________________________________________________________________ (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year Ended 30 June 2006 30 June 2005 31 December 2005 £ £ £ Net cash outflow from operating activities (128,486) (218,575) (323,061) Returns on investments and servicingof financeInterest received 9,651 6,449 13,896 Net cash inflow for returns on investmentsand servicing of finance 9,651 6,449 13,896 Capital expenditurePayments to acquire intangible assets (61,848) (63,304) (81,570) Payments to acquire tangible assets (2,216) (329) (350) Cost on disposal of assets - - - Net cash outflow for capital expenditure (64,064) (63,633) (81,920) Net cash outflow before management of liquid resources and financing (182,899) (275,759) (391,085) Financing Issue of ordinary share capital 503,000 653,492 654,869 Cost of share issue (25,000) (18,531) (18,532) Issue of shares 478,000 634,961 636,337 Net cash inflow from financing 478,000 634,961 636,337 Increase in cash in the period 295,101 359,202 245,252 BEOWULF MINING PLC NOTES TO THE CASH FLOW STATEMENTUNAUDITED RESULTS FOR THE 6 MONTHS TO 30 JUNE 2006___________________________________________________________________ (Unaudited) (Unaudited) (Audited)1 Reconciliation of operating loss to net 6 months to 6 months to Year Endedcash outflow from operating activities 30 June 2006 30 June 2005 31 December 2005 £ £ £ Operating loss (144,267) (224,843) (354,875) Depreciation of tangible assets 205 18 75 Amortisation of intangible assets 20,042 17,015 38,859 Profit on sale of intangible fixed assets - - - (Increase)/Decrease in debtors (5,014) (21,227) (9,748) Increase/(Decrease) in creditors within one year 548 10,462 2,628 Net cash outflow from operating activities (128,486) (218,575) (323,061) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year Ended2 Analysis of net funds 30 June 2006 30 June 2005 31 December 2005 £ £ £ Net cash at start of period 439,982 194,730 194,730 Increase in net funds from cash flows 295,101 359,202 245,252 Net cash at end of period 735,083 553,932 439,982 (Unaudited) (Unaudited) (Audited)3 Reconciliation of net cash flow to 6 months to 6 months to Year Endedmovement in net funds 30 June 2006 30 June 2005 31 December 2005 £ £ £ Increase in cash in the year 295,101 359,202 245,252 Cash (inflow)/outflow from- increase/(decrease) in debt - - - Movement in net funds in the period 295,101 359,202 245,252 Opening net funds 439,982 194,730 194,730 Closing net funds 735,083 535,932 439,982 BEOWULF MINING PLC NOTES TO THE FINANCIAL STATEMENTSUNAUDITED RESULTS FOR THE 6 MONTHS TO 30 JUNE 2006___________________________________________________________________ 1 Basis of preparation of interim accounts The accounts for the company for the six months ended 30 June 2006, which areunaudited, have been prepared on the basis of the accounting policies used inthe audited financial statements for the year end 31 December 2005 as set out innote 2 below. The financial information does not constitute statutory accounts within themeaning of Section 240 of the Companies Act 1985. 2 Accounting policies 2.1 Accounting convention The financial statements are prepared under the historical cost convention. 2.2 Intangible fixed assets - exploration costs Expenditure on the acquisition costs, exploration and evaluation of interests inlicences including related overheads are capitalised. Such costs are carriedforward in the balance sheet under intangible assets and amortised over themaximum period of the licences in respect of each area of interest where: a) such costs are expected to be recouped through successful development andexploration of the area of interest or alternatively by its sale. b) exploration activities have not yet reached a stage that permits a reasonableassessment of the existence or otherwise of economically recoverable reservesand active operations in relation to the areas are continuing. An annual impairment review is carried out by the directors to consider whetherany exploration or development costs have suffered impairment in value and ifnecessary provisions are made accordingly. Accumulated costs in respect of areas of interest, which have been abandoned arewritten off to the profit and loss account in the year in which the area isabandoned. Exploration costs are carried at the lower of cost and net realisable value. Exploration costs were re-categorised in 2004 from tangible fixed assets. 2.3 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less estimated residual valueof each asset over its expected useful life, as follows: Plant and equipment 25% on reducing balance 2.4 Investments Fixed asset investments are stated at open market value. The revaluationadjustment is taken to the revaluation reserve. 2.5 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timingdifferences between the treatment of certain items for taxation and accountingpurposes. The deferred tax balance has not been discounted. A deferred tax assetis not recognised unless recovery is expected in the foreseeable future. 2.6 Foreign currency translation Monetary assets and liabilities denominated in foreign currencies are translatedinto sterling at the rates of exchange ruling at the balance sheet date.Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. All differences are taken to profit and loss account. 3 Earnings per share Basic loss per share has been calculated using the weighted number of shares of61,809,297 (30 June 2005 - 49,261,639 and 31 December 2005 - 52,711,888).Diluted loss per share has been calculated using the weighted average number ofshares of 91,658,246 (30 June 2005 - 78,119,582 and 31 December 2005 -91,908,246). BEOWULF MINING PLC INDEPENDENT REVIEW REPORTUNAUDITED RESULTS FOR THE 6 MONTHS TO 30 JUNE 2006___________________________________________________________________ Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprises the profit and loss account,balance sheet, cash flow statement and related notes. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatement or material inconsistencies with the financialinformation. Our responsibilities do not extend to any other information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim report and for no other purpose. We donot, therefore in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown. Directors Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report and ensuring that the accountingpolicies and presentation applied to the interim report are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with Auditing Standards and therefore provides a lower level ofassurance than an audit. Accordingly, we do not express an audit opinion on thefinancial information. Review conclusion On the basis of our review we are not aware of any material modification thatshould be made to the financial information as presented for the six monthsended 30 June 2006. Price Bailey LLP Chartered Accountants Richmond House Broad Street Ely, Cambs. 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