29th Nov 2006 07:01
African Consolidated Resources Plc29 November 2006 African Consolidated Resources Interim results for the six months ended 31 August 2006 African Consolidated Resources, the AIM listed gold and minerals explorationcompany operating in Zimbabwe today announces its maiden interim results for thehalf year ended 31 August 2006. Highlights • Admission to AIM, raising GBP 4m at a price of 12p per share • Inferred resource of 820,500 JORC ounces of gold as reported in the Admission Document. Revised Resource calculation to include new drilling is in progress • Good progress made in first phase drilling at Pickstone Peerless and Giant mines - including discovery of southern extension to the Giant Mine and confirmation of gold lodes on Duchess Hill at Pickstone. Comprehensive soil geochemistry has been completed on the Renco target in the Lowveld • Acquisition of the eastern block of Snakes Head platinum project agreed. Geological mapping completed on the west block. Mapping has identified the only known gabbro cap on the Great Dyke which appears to be fully intact - encouraging sulphide mineralisation observed in reconnaissance rockchips • Three primary nickel targets acquired, with work programmes either planned or commenced. State of the art Mobile Metal Ion geochemistry programme planned for extensive holding in Chakari • Diamond find - some teething issues - bulk sampling programme planned • Peter Vanderspuy has agreed to join the Board as Chairman Financial • Loss of £1.09m to 31 August 2006 as exploration programmes progressed to plan • Cash balance of £3.35m as of 31 August 2006 Outlook • Work progressing on our portfolio of existing and new projects • Continuing buoyancy in metals and commodities markets fuelled by consumption and development of China and India Andrew Cranswick, Chief Executive of ACR commented: "This has been a very successful year for ACR. Not only have we listed on AIM,raising valuable development capital, but we have progressed from a gold play todeveloping a multi mineral, multi property portfolio. Whilst gold remains the core of our portfolio, the international commoditiesmarket provides considerable optimism for our future. With exposure to gold,copper, platinum, nickel and diamonds, ACR is well placed to take advantage ofthe predicted continued growth in metals and mineral prices as we look tofurther develop our portfolio both in strategic scope and operational depth." 29 November 2006Enquiries: African Consolidated ResourcesAndrew Cranswick Chief Executive + 44 79 2018 9010Roy Tucker Finance Director + 44 1622 816 918Ian Fisher Executive Director + 44 79 2018 9011 EvolutionSimon Edwards + 44 20 7071 4330 College HillNick Elwes / Paddy Blewer + 44 20 7457 2020 Chief Executive's statement The year is drawing to a close and I take great pleasure in updating you ondevelopments and progress in the prospects and projects of African ConsolidatedResources. 2006 was indeed an important year for us and saw the company successfullylisting on the AIM Market of the London Stock Exchange amidst severe marketangst and turbulence. While an achievement that remains a credit to the qualityof our assets, management and strategy, the listing was not an end in itself butrather the laying of an important foundation stone in a major exploration playupon an under-explored terrain. I am happy to announce that Peter Vanderspuy has agreed to join the Board of ACRin the capacity of Chairman (non-executive). Confirmation is pending regulatoryproceedings. Peter has a wealth of knowledge and trail of success stories inexploration behind him, including the founding of Delta Gold and Zimplats. Webelieve the guidance and input he will offer will provide an invaluablecontribution to the success of ACR. Since July we have continued and almost completed the first phase drilling ofour most advanced gold projects, the Pickstone Peerless and Giant mines. Thedefinition envelope of mineralised ground has been expanded in severaldirections and some exciting intercepts encountered. Limitations of the assaylabs have yet to be fully overcome and we continue to work with our partnerstoward an improvement in that processing capacity. Local bureaucracy makesexport of samples difficult but that has now been largely overcome. Exploration Highlights are as follows: Gold: A total of 32,100 metres of RC drilling and 10,600m of RAB drilling has beencompleted at the Pickstone-Peerless project (including the Concession, Duchess,Blue Streak and St Kilda prospects) since the drilling that was taken intoaccount for the Resource statement in the Admission Document. The majority ofholes have returned results from the assay labs and the remainder are expectedover the coming six weeks. Further drilling of 1500 metres is required tocomplete first phase on the project and obtain assays for same. Thereafter,detailed cross-sections will be produced and the Company will calculate arevised resource and undertake ore body modelling. It is the intention of themanagement to seek preliminary mine costing and economic grade analyses for apit design or series of pit designs within this project area. This will assistin the planning of a second phase drilling campaign to advance resources to apre-feasibility stage. Hole ID Easting Northing Prospect From Thickness AV Grade m m g/t BSRC014 22600 9594 BLUE STREAK 47 9 15.9 BSRC011 22440 9681 BLUE STREAK 74 13 5.8 BSRC013 22520 9603 BLUE STREAK 47 16 1.4 BSRC007 23560 9319 BLUE STREAK 55 4 2.9 CHRC101 21275 9589 CONCESSION 139 9 3.4 CHRC052 20880 9652 CONCESSION 145 4 6.8 CHRC051 20960 9671 CONCESSION 61 4 6.7 CHRC088 20960 9819 CONCESSION 112 7 3.6 CHRC047 21760 9706 CONCESSION 72 3 7.2 CHRC058 21838 9590 CONCESSION 71 5 3.1 CHRC053 20960 9779 CONCESSION 97 7 2.1 CHRC039 21041 9752 CONCESSION 46 3 3.6 CHRC101 21275 9589 CONCESSION 131 5 2.0 DHRC019 22840 9262 DUCHESS 44 18 3.8 DHRC053 22520 9290 DUCHESS 85 11 3.4 DHRC023 22832 9233 DUCHESS 78 14 2.6 DHRC051 22760 9356 DUCHESS 66 11 2.0 DHRC015 22280 9311 DUCHESS 102 5 3.8 DHRC038 22279 9288 DUCHESS 124 10 1.7 DHRC049 22521 9448 DUCHESS 65 11 1.5 DHRC020 23000 9266 DUCHESS 88 5 2.9 DHRC015 22280 9311 DUCHESS 85 7 2.0 DHRC023 22832 9233 DUCHESS 100 6 2.2 PFRC029 22840 10146 PEERLESS FAR EAST 138 12 1.5 SKRC002 19040 9981 ST KILDA 7 8 3.3 SKRC013 19160 10090 ST KILDA 91 9 2.9 SKRC008 19160 10032 ST KILDA 7 17 0.9 SKRC013 19160 10090 ST KILDA 82 5 2.3 At the Giant Mine, drilling intersected a broadening (east and west) andsouthern extension of the diorite body which forms part of the mineralisedenvelope in the historical resource definition. While significant sulphidealteration was witnessed throughout the diorite, the gold-mineralised portionappears to be localised on the margins, and the centre is low-grade or barren.The drilling has extended the known mineralisation about 150m to the south.Similarly to the north, mineralised banded ironstone was regularly intersectedover several hundred metres of strike beyond the existing Resource, but thecomplete assay database is yet to be collated. Final definition of the ore gradeenvelope will be completed in the coming months. ACR has drilled a total of10,164 metres to date and anticipates a further 2000 metres before finalisationof a revised resource. It is the intention of the management to seek preliminarymine costing and economic grade/tonnage analyses for a pit design within thisproject area. Significant Intercepts since the previous Resource upgrade in June include:- Hole ID Easting Northing Prospect From Thickness AV Grade m m g/t GNRC082 198217 8004561 GIANT 84 7 17.9 GNRC013 198089 8004150 GIANT 40 31 1.7 GNRC065 198120 8004125 GIANT 100 8 2.1 GNRC096 198379 8005200 GIANT 1 3 3.6 GNRC016 198119 8004147 GIANT 70 10 1.1 RAB drilling continues at the Blue Rock prospect (south of Giant in the sameGreenstone system) and over which ACR has an option. Results are awaited. Extensive soil analysis has been completed at a wide variety of gold targetsincluding along the Renco trend in the Lowveld of geophysical and structuraltargets defined for acquisition and pegged over the latter half of 2006. Some2500 soil samples were taken in the region and we are awaiting results. Geochemistry will be applied on a large scale to gold prospects in Chakari Northand Chakari West. This is a relatively unexplored greenstone belt with many ofthe right indicators from historical data. While extensive agricultural use ofland has in the past inhibited exploration, much of the farming land is now idleand hence open for prospecting. Platinum Group: The Snakes Head project, a PGE project on the northern part of the Great Dyke,has been consolidated and the Company has carried out detailed geologicalmapping on the west block. The exercise was headed by a recognised expert on theGreat Dyke which hosts the world's second largest reserves of PGE metals. The geological mapping has identified the presence of what appears to be theonly known occurrence of the original, intact gabbro cap that is believed tohave once overlain the entire length of the Great Dyke. This discovery is ofsignificant interest as it is believed that the magnetite-rich upper levels ofthe gabbro could contain sulphide zones of PGE's, nickel, gold or copper. Suchmineralisation would be in addition to known PGE-bearing reefs below. TheCompany intends to complete a reconnaissance geochemical programme to cover thisnewly identified target which has similarities to the Skaergaard intrusion inGreenland and Stella intrusion in South Africa style of mineralisation. Meanwhile the primary, known PGE bearing zones of the Great Dyke remain a targetfor resource definition in the future. While the grades anticipated in the knownreefs of the northern chamber are most likely sub-economic at current PGEprices, the longer term strategy under consideration by the Board would allowfor definition and accumulation of contained ounces, effectively constituting alow-cost option on higher metal prices. Nickel: ACR has three primary nickel targets; one a very large, layered ultramaficintrusive, the second is an Archaean ultramafic intrusive into the Chakarigreenstone belt, while the third is a laterite prospect. The former and largestof the three is the Chewore inlier where a geochemistry programme has beenprepared as a first-pass targeting of this greenfield prospect. The second ultramafic is the Chakari West serpentinite, incorporating thebrownfield target of the old Perseverance mine. The mine itself operated for alimited period in the 1970's and produced some 4,000 tonnes of nickel at 1% oregrade with 0.4% copper credits until it was closed due to low metal prices andexhaustion of known Reserves in 1980. ACR has secured the entire original siteas well as all known and interpreted extensions defined by mapping and / oraeromagnetic surveys. ACR has commenced a state-of-the-art Mobile Metal Ion(MMI) soil geochemistry programme under the guidance of an independentconsultant from Perth. This technology has a history of significant discoverysuccess in such terrain. With extensive ground under claim in the area, thedirectors and technical staff consider this a promising project. Sample analysiswill be completed in Canada. Satellite data and historical research has led us to some very interestingnickel laterite targets. Soil sampling shows very encouraging nickel enrichmentand a more extensive acquisition and sampling programme is envisaged. Diamonds: The discovery of an occurrence of diamonds was announced by ACR to the market on24 September 2006. The occurrence which is in the south east of Zimbabwecomprises alluvial diamonds found in an unusual setting of Precambrianconglomerates containing diamonds. The project has gradually taken shape amidsome teething problems. An influx of artisanal miners disrupted proceedings forsome time. They have now been largely cleared from the area by the police andshould shortly be stopped entirely by fencing. In addition there has beendisagreement between the Company and the Mining Commissioner's office regardingthe validity of ACR's claims and this remains an ongoing issue. The Company hastaken legal advice in this regard and has cause for hope that the deposit(Marange deposit) will be worked commercially in the short to medium term to thebenefit of the Company. A bulk sampling programme is being planned and isexpected to establish an indication of the extent and potential economicsignificance of mineralisation. Copper: The Company has begun discussions with the owner of Umkondo copper prospect inthe south east of Zimbabwe. Preliminary studies suggest a low-cost, largeopen-pit operation could be viable. Zimbabwe has excess copper smeltingcapacity. The area is considered prospective for sediment-hosted copper depositsand there is potential for iron oxide copper-gold style deposits in the greaterregion. Outlook: The metals and commodity markets have been steadily holding their own in mostpart. The recent decline in precious metal prices were, I believe, a healthycorrection and I look to a long-term rising market which I believe we have yetto fully enjoy. PGE's continue to test all time highs. Base metals have beensomewhat jittery in parts but nickel's performance remains stellar. Given theanticipated strength of our nickel projects, we are indeed excited by thesetrends. I believe that the continued strength and growth rates of the demandwhich is fuelled largely by consumption and development of China and India isset to continue and thereby support prices in the medium to long term. Notwithstanding Zimbabwe's struggling economy the country's skill base continuesto be excellent and provides a good working environment. Politically, thecountry approaches Presidential elections in 2008 while talks of succession aregiven little official acknowledgement. In the case of all target mineral projects we have had discussions with severalinternational mining and exploration companies with a view to possible jointventures where a synergy of skills or availability of specific capital couldenhance shareholder value. We continue to engage in such discussions and anyfirm agreements would be announced in due course. Finance: The Company raised £4 million (£3.2m net of expenses) of new money through asuccessful placement simultaneous with a listing on AIM on 29 June 2006. The results for the period 1 March through 31 August 2006 show a loss of£1,086,714 as exploration programmes progress to plan. At 31 August 2006 the Group had a cash balance of £3,352,343. No dividend has been proposed for the period. Conclusion: Your Board continues to look to the future with optimism for the fortunes andprojects of the Company. We expect results to keep flowing from our explorationefforts and shall issue new releases whenever possible or necessary. I wish to congratulate the employees, Board and management of ACR for anefficient and diligent effort in all facets of the Company's operations. I wouldalso extend my sincerest gratitude and appreciation to the shareholders andinvestors. We have had solid, loyal support for our strategy and game plan whichwe continue to follow towards our stated goal of becoming an established mininghouse in Africa. It pleases me immensely that few have lost sight of the longterm vision while maintaining the belief and patience required to achieve thatvision. Andrew CranswickChief Executive Officer29 November 2006 Consolidated profit and loss accountsix months ended 31 August 2006 Notes Group Unaudited £000 Turnover - Administrative expenses (1,132) Operating loss (1,132) Interest receivable 46 Loss on ordinary activities before and after taxation (1,086) Loss per share - basic 3 (0.66) pence Consolidated balance sheetSix months ended 31 August 2006 Note Group £000 Fixed assets Intangible assets 2 4,011 Tangible assets 2 209 Fixed asset investments 2 20 4,240 Current assets Inventory 87 Receivables 60 Cash at bank 3,352 3,499 Creditors - amounts falling due within one year 545 Net current assets 2,954 Total assets less current liabilities 7,194 Capital and reserves Called-up share capital 1,900 Share premium account 6,622 Profit and loss account (1,427) Share option reserve 99 Equity shareholder's funds 4 7,194 Consolidated cash flow statementSix months ended 31 August 2006 Group £000CASH FLOW FROM OPERATING ACTIVITIES Loss after tax (1,086) Adjustments for: Share option charge 46 Depreciation 22 Finance income (46) (1,064)Changes in working capital: Increase in receivables (6) Increase in stock (36) Decrease in payables (438) (480) Cash outflow from operations (1,544) Investing activities: Payments to acquire intangible assets (1,682) Payments to acquire property, plant and equipment (89) Reduction in fixed asset investments 23 Interest received 46 (1,702) (3,246)Financing Activities:Issue of share capital 4,772 Less pro rata share issue expenses written off share premium (149) 4,623 Increase in cash and cash equivalents 1,377Cash and cash equivalents at beginning of period 1,975 Cash and cash equivalents at end of period 3,352 Interim Report notes 1. Interim Report The information relates to the period from 1 March 2006 to 31 August 2006. Nocomparatives are included as there was no corresponding period in the precedingfinancial year. The interim report was approved by the Directors on 29 November 2006. The interim report is unaudited. 2. Basis of Accounting a. The report has been prepared using accounting policies that the Group and its subsidiaries adopted and used for its first accounting period to 28 February 2006. The information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. b. These interim financial statements consolidate the financial statements of the Company and all its subsidiaries. c. Intangible Fixed Assets • Expenditure on the acquisition, exploration, development and evaluation of interests in projects including related overheads are capitalised. Such costs are carried forward in the balance sheet under intangible fixed assets. • The Group adopts a 'project area' method of accounting whereby all exploration and development costs relating to a project area are capitalised and carried forward until abandoned. In the event that a project area is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. • Recoupment of capitalised exploration and development costs is dependent upon successful development and commercial exploitation of each project area and are amortised over the expected commercial life of each project area once production commences. d. Tangible fixed assets are stated at cost less depreciation. e. The Company and Group will report again for the full year to 28 February 2007. 3. Loss per share Six months ended 31 August 2006 Unaudited £000 Loss per share has been calculated on loss of: (1,086) The weighted average number of shares used was 164,791,364 Basic loss per share (0.66) pence 4. Reconciliation of movements in shareholders' funds Six months ended 31 August 2006 Unaudited £000 Opening shareholders funds 3,611 Losses for the period (1,086) Proceeds of share issues 4,772 Less pro rata share issue expenses written off share premium (149) Increase in share option reserve 46 Closing shareholders funds 7,194 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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