30th Sep 2005 07:01
Eurasia Mining PLC30 September 2005 Eurasia Mining PLC Interim Report 2005Interim Statement • Drilling commences at West Kytlim • AngloGold Ashanti Strategic Alliance initiated • New Project areas identified The first six months of 2005 have seen the first fruits of our re-orientation ofthe Company. We have an exciting new joint venture with AngloGold Ashanti ingold exploration based on our groundwork over the past eighteen months withseveral specific prospects under joint investigation and negotiation. We havecontinued to work with Anglo Platinum on our Urals platinum group metals (PGM)joint venture and expect to report encouraging results from the initial work onWest Kytlim shortly. In addition we have expended a lot of effort in developinga number of new projects of which shareholders will hear in the coming quarters. The Urals (PGM) The administrative delays that had held up our work for two years at West Kytlimwere resolved during the summer and field work commenced immediately. In thisproject we are operating in conjunction with a Russian partner who is currentlyproducing platinum by means of dredging on another project nearby. Drilling isunderway as part of our feasibility study on the first of three target areas andwill continue through the winter. Together the targets are for a large potentialalluvial platinum resource, based on early results from the area. The targetareas comprise river terraces potentially containing un-mined platinum-bearingsediments, as well as the 'tailings' of earlier mining operations that can bereworked to recover residual platinum using modern processing technologies. There are three drainage systems with potential for economic platinummineralization, two on the Tylai River and the other one on the Kosva. Previousresults have given values of up to 500 milligrams per cubic metre (mg/m3), wellabove the 180 mg/m3 required to be economic. The first drilling programmecommenced on the upper reaches of the Tylai and will work down the valley overthe winter. In parallel, a bulk test sample is planned before the end of thefield season, both to assess the platinum potential of one of the targets and totest the performance of a mobile concentrator rig constructed by the EurasiaUrals team. Next year the Kosva River will also form part of the feasibility study work.Here the target will be for economic zones of partially worked sediments as wellas gravel terraces above the main valley which have not been worked in the past.Most mined river systems have been worked three or more times in the past astechnology improved, but tailings at Kosva have only been reworked oncepreviously. The Urals has been an important source of platinum metal over the past 150years. The Urals was the largest producing area until the discovery of theBushveld and is estimated to have produced at least 16 million ounces over thisperiod. Production continues today from small producers. From EurasiaOs previousassessment work, West Kytlim is the last area of major potential remaining inthe central Urals. The alluvial programme in the Urals forms part of the Anglo Platinum jointventure, in which Anglo is earning a 50% interest through funding work tocompletion of a feasibility study. Also in the Urals, the company has applied for a new reduced licence area tocover the drill defined bedrock PGM and gold discoveries at Kluevsky andBaronskoye. Assessment work on metallurgical and mining characteristics ofpotential near surface bulk mineable low grade resources is underway. East Siberia (Gold) On 15th April 2005 Eurasia signed a Heads of Agreement for an explorationalliance with AngloGold Ashanti Limited, the world's number two gold producer,covering gold and related mineral exploration and possible development projectsin eastern Siberia. The alliance combines our country experience and explorationmanagement skills in the region with Anglo Gold Ashanti's resources. The Eastern Siberian geological environment, particularly in the vicinity of theintersection of the Siberian and Mongolia/China tectonic plate marginsrepresents one of the best endowed, yet least systematically explored regions ofthe world for hard rock gold deposits. Historic production in the region wasdominated by placer mining of alluvial gold. Since the mid 20th Century a numberof large hard rock deposits have been explored and developed. Total resources inthese deposits, including previous production and known reserves, stands well inexcess of 65 million ounces, or 2,000 tonnes of Gold. The new agreement gives Anglo Gold Ashanti the exclusive right to participatein projects proposed by Eurasia, which has been appraising potential prospectsover a period of 18 months in conjunction with local companies and government inthe region. Anglo Gold Ashanti will pay an entry fee in recognition of Eurasia'spast costs, and fund the first $2 million of exploration spending. Subsequentspending will be shared equally. Our objective is to participate in the rapid advancement of a number of projectstowards feasibility study. The exploration alliance very considerably extendsthe range and type of projects that Eurasia can gain a participation in, in thishighly prospective but increasingly more competitive environment for goldproject development. A number of projects are forming the core of our jointactivities this summer and we hope to update shareholders on success in the nearfuture. Kola (PGM) Eurasia is continuing its plan to acquire three exploration licences on the KolaPeninsula in north-west Russia, where early exploration results indicate thepresence of potentially commercial grades of PGM. Negotiations have beenprotracted and the Company will only agree to final acquisition terms that offergood value for shareholders. New Projects For some time Eurasia has been working on the identification and acquisition ofadvanced projects, which will provide a boost to the capitalization of thecompany. These efforts are being made both independently and in conjunction withRussian partners, focused on advanced projects at or near production. TheCompany has invested considerable time and funds in the detailed evaluation ofseveral projects and we believe that this work will come to fruition in therelatively near future. Your Board looks forward to being able to makeannouncements of new developments at the earliest opportunity. Michael MartineauChairman 29 September 2005 Consolidated Profit and Loss AccountFor the six months ended 30 June 2005 6 months to 6 months to 12 months to 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £Impairment of assetscontinuing operations (58,942) (71,941) (1,008,003)discontinued operations - - (453,374) (58,942) (71,941) (1,461,377) Other administrative expenses - continuing operations (540,481) (325,748) (726,811)Total administrative expenses and operating loss (599,423) (397,689) (2,188,188)Gain on disposal of subsidiaries continuing operations - - 569,627 discontinued operations - - 199,992 - - 769,619 Loss after disposal of subsidiarycontinuing operations (599,423) (397,689) (1,165,187)discontinued operations - - (253,382) (599,423) (397,689) (1,418,569)Net Interest (payable) / receivable & similar itemsNet Interest receivable 4,554 10,079 12,763Foreign exchange gain / (loss) 69,101 (8,575) (82,002)Loss on ordinary activities before taxation (525,768) (396,185) (1,487,808) Taxation - - -Loss on ordinary activities after taxation (525,768) (396,185) (1,487,808)Minority interest (11,481) 1,657 16,018Retained loss for the period (537,249) (394,528) (1,471,790)Loss per share (0.57)p (0.47)p (1.74)p Consolidated statement of total recognised gains and lossesFor the six months ended 30 June 2005 6 months to 6 months to 12 months to 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £Loss for the financial period (537,249) (394,528) (1,471,790)Exchange adjustments on foreign currency net investments 41,617 (11,665) (88,511) Total recognised gains and losses for the period (495,632) (406,193) (1,560,301) Shareholders' FundsFor the six months ended 30 June 2005 6 months to 6 months to 12 months to 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £Total recognised gains and losses for the (495,632) (406,193) (1,560,301)periodNew share capital issued 871,500 - 48,000 Net addition / (reduction) in shareholdersO funds 375,868 (406,193) (1,512,301)Opening shareholders' funds 2,180,149 3,692,450 3,692,450 Closing shareholders' funds 2,556,017 3,286,257 2,180,149 Consolidated Balance Sheet As at 30 June 2005 30 June 2005 31 December 2004 (unaudited) (audited) £ £Fixed assetsIntangible - exploration, development and production 1,383,275 1,316,485interestsTangible 40,729 40,160Interest in joint venture 670,680 628,280Other investments 110,059 154,018Total fixed assets 2,204,743 2,138,943Current assets Debtors 300,222 247,074Cash at bank 265,387 83,162Total current assets 565,609 330,236Creditors - amounts falling due within one year (147,398) (237,442) Net current assets 418,211 92,794 Total assets less current liabilities 2,622,954 2,231,737 Creditors - amounts falling due after more than one year (88,911) (82,390) Net assets 2,534,043 2,148,447 Capital and reserves Called-up share capital 5,188,086 4,250,586Share premium account 7,034,374 7,100,374Capital redemption reserve 3,539,906 3,539,906Profit and loss account (13,206,349) (12,710,717)Equity shareholdersO funds 2,556,017 2,180,149Minority interest (21,974) (31,702) 2,534,043 2,148,447 Consolidated Cash Flow Statement For the six months ended 30 June 2005 6 months to 6 months to 12 months to 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £ Net cash outflow from operating activities (680,188) (368,586) (697,149)Returns on investments and servicing of finance 4,554 10,079 12,763Capital expenditure and financial investment (60,288) (254,434) (443,584)Acquisitions and disposals 43,968 - 157,500Net cash outflow before financing (691,954) (612,941) (970,470)Financing:Issue of ordinary shares 871,500 - 48,000Increase / (decrease) in cash in the period 179,546 (612,941) (922,470) Reconciliation of net cash flow to movement in net fundsNet funds at beginning of period 83,162 1,005,632 1,005,632Change in net funds resulting from cash flows 179,546 (612,941) (922,470)Exchange difference 2,679 - -Net funds at end of period 265,387 392,691 83,162Reconciliation of operating loss to operating cash flowsOperating loss (599,423) (397,689) (2,188,188)Depreciation charges 2,561 7,030 46,139Impairment charge 58,942 71,941 1,461,377(Increase)/decrease in debtors (52,076) (55,441) (27,960)Increase/(decrease) in creditors (90,192) 5,573 11,483Net cash outflow from operating activities (680,188) (368,586) (697,149) Notes: 1 No dividend is proposed in respect of the period. 2 The results for the period are derived from continuing activities. 3 The calculations of loss per share have been based on the retained lossafter taxation for the period and on a weighted average of 94,210,224 ordinaryshares in issue during the period. 4 The unaudited results have been prepared on a going concern basis and onthe basis of the accounting policies adopted in the audited accounts for theyear ended 31 December 2004. 5 The interim report is unaudited and does not constitute Statutory Accountsas defined in section 240 of the Companies Act 1985. A copy of the GroupOs 2004Statutory Accounts has been filed with the Registrar of Companies. TheauditorsO opinion on these Statutory Accounts was unqualified. 6 The Interim Report for the six months to 30 June 2005 was approved by theDirectors on 29September 2005. Company Information Advisers Directors Auditors J A Mitchell (Non Executive Chairman) Grant Thornton UK LLPM P Martineau (Executive Deputy Chairman) Manor CourtC Schaffalitzky (Managing Director) Barnes Wallis Road SegensworthW B Anderson (Operations Director) FarehamG C Fitzgerald (Non Executive) Hampshire PO15 5GT Secretary Registrars M J de Villiers Capita IRG Plc The Registry 34 Beckenham Road BeckenhamHead Office and Registered Office Kent BR3 4TU 14-16 Regent StreetLondon SW1Y 4PHTelephone: +44 (0) 20 7976 1222Facsimile: +44 (0) 20 7976 1422 BankersE-mail: [email protected] National Westminster Bank plcwww.eurasia-mining.plc.uk 1 Princes Street London EC2R 8PHRussian Office 194 Lunacharsky Street SolicitorsEkaterinburg Eversheds LLPRussia Senator HouseTelephone: +(7) 3432 615187 85 Queen Victoria StreetFacsimile: +(7) 3432 615924 London EC4V 4JL Company Number 3010091 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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