26th Sep 2006 07:02
Aurum Mining PLC26 September 2006 For immediate release 26 September 2006 AURUM MINING PLC ("Aurum" or "the Company") Preliminary results for the 12 months ended 31 March 2006 Aurum Mining plc (AIM: AUR), the company formed to acquire gold and othermineral extraction projects in the Former Soviet Union (FSU) and whose principalasset is the Andash project in the Kyrygz Republic, is pleased to announce itspreliminary results for the 12 months ended 31 March 2006. Highlights post the period end • Upgrade of resource base at Andash Zone 1 to give a resource of 17.1 million tonnes containing 624,000 ounces of gold and 72,000 tonnes of copper in Measured and Indicated categories • Submission of local feasibility study to Kyrgz authorities in preparation for application of a Mining Licence • Extensive mineralisation confirmed in Andash Zones 2 and 3 and start of work on new Andash exploration area, Tokhonysay • Placing to raise £2.5 million net of expenses in May 2006 Highlights in the period • Considerable progress in the period at the Andash project, both at Zone 1 and in the other Andash exploration areas • Extension of Exploration Licence until December 2010 awarded by Kyrgyz authorities Sean Finlay, Aurum Mining's Chairman, said: "I am delighted by the progress madeduring the period, which laid the foundations for the upgrading of the AndashZone 1 resource to include 17.1 million tonnes containing 624,000 ounces of goldand 72,000 tonnes of copper in Measured and Indicated categories. Andash Zone 1is on track to produce gold in 2008 and we look forward to progressing our otherexploration opportunities in the Andash licence area." For further information: Aurum Mining plc Tel: 020 7478 9050Mark Jones, Chief Executive Arbuthnot Securities Tel: 020 7012 2000Graham Swindells Buchanan Communications Tel: 020 7466 5000Mark Court Notes to editors Aurum Mining joined the AIM market of the London Stock Exchange in May 2004 withthe strategy of seeking, evaluating and acquiring gold and other mineralextraction projects in the Former Soviet Union (FSU). In January 2005 theCompany completed its first acquisition, giving the Company an explorationlicence over the Andash gold and copper project in the Kyrgyz Republic. Miningconsultant Wardell Armstrong International has confirmed a JORC resourceestimate of 1.49 million ozs of gold and gold equivalent in Andash Zone 1 inMeasured and Indicated categories. The Andash project also includes the Zone 2and Zone 3 along with Tokhonysay and three other additional exploration areas. CHAIRMAN'S STATEMENT The year to the 31 March 2006 has been a year of tremendous progress at AurumMining. It was a year in which the foundations were firmly laid for thedelivery, in 2008, of the Company's strategic objective of transforming itselffrom a junior gold explorer to a cash-generating gold producer. It was also ayear in which Aurum continued its rapid development. By way of background, Aurumjoined the AIM market in May 2004 as a specially formed vehicle to target theacquisition of gold assets in the Former Soviet Union (FSU). It successfullycompleted its first acquisition in January 2005, gaining an exploration licenceto the Andash gold and copper project in the Kyrgyz Republic. Our work continues to reinforce the fact that the Andash asset is highlyattractive in terms of the gold resources in Zone 1 of the licence area, theeconomics of gold recovery and the exploration potential of other regions withinthe licence area. The resources in Zone 1 have been endorsed by WardellArmstrong International, aleading UK independent mining consultant, whichconfirmed a JORC resource estimate of 624,000 ozs of gold and 72,000 tonnes ofcopper Our strategy is to begin production at the earliest opportunity at Zone 1,thereby providing the cash flow to finance further exploration work in thelicence area. We have completed some exploration drilling in Zones 2 and 3,which has confirmed extensive mineralisation, and are continuing to test theextent of the resource in these two zones. We have continued to work closely with the Kyrgyz authorities to advance theAndash project. In February this year the Kyrgyz government extended ourexploration licence to 31 December 2010, which will allow us to carry outfurther assessment of Zones 2 and 3 and to begin work on Tokhonysay, a newopportunity in the Andash licence area. In June this year, we submitted ourlocal feasibility study to the Kyrgyz government, an important step towards theapplication to Kyrgyz authorities for a Mining Licence for Andash Zone 1. Thestudy covers the economic, mining, metallurgical, legal, environmental andsocial factors for the project. Wardell Armstrong International is preparing a full style feasibility study forZone 1, which will form the basis of discussions for the project financing ofthe Andash mine. This will be of an open pit design with the potential forproduction rates of approximately 120,000 ozs of gold and gold equivalent perannum. It is anticipated that the full western feasibility study will becompleted by December 2006. Personnel Aurum's management team has been strengthened during the period, particularly bythe appointment of Mark Jones, an executive with considerable internationalmining and management experience, as Chief Executive in June 2005. At the timeof his appointment John Webster, formerly Aurum's Managing Director, became aNon-Executive Director of the Company, a role in which he is able to continue toprovide the Company with his vast experience of mining in the Former SovietUnion. In September 2005, Dr Colin Knight, a mining professional with aformidable track record, also joined Aurum's Board as a Non-Executive Director. To control overheads, Aurum retains a small team of key people and I would liketo thank the entire team, both in the UK and the Kyrgyz Republic, for theircontribution to the Company's successful development. Robust Environmental and Health and Safety policies are fundamental to Aurum'ssuccess; a proactive interaction with community groups has been initiated onthese matters. I acknowledge with thanks the contribution of my fellow directors and that ofthe dedicated staff of Aurum's Kyrgyz subsidiary, Andash Mining Ltd., under theleadership of Mr Oleg Kim. Financial For the year to 31 March 2006 the Company reported a loss after tax of £1.25million. In May 2006, the Company successfully raised £2.5 million before expensesthrough a Placing of new ordinary shares by Arbuthnot Securities, the proceedsof which are being used primarily for working capital to allow completion of thefull feasibility study for Zone 1 and to fund further exploratory drilling workat Zones 2 and 3. The new shares were admitted to AIM on 12 May 2006, resultingin the Company having 12,365,468 shares in issue. Outlook The current year has started well across the business. From an operationalviewpoint we have submitted the local feasibility study for Andash Zone 1 to theKyrgyz authorities and drilling work has provided further details of the Zone 1resource and the potential of Zones 2 and 3. From a financial perspective, ourbalance sheet has been strengthened by the May 2006 fundraising. We are now entering a very exciting phase in the development of Andash with theexpected completion of the full feasibility study by December 2006. We remainconfident that Aurum Mining will make the transition to a gold producer in 2008and therefore look forward to the future with confidence. Sean FinlayChairman26 September 2006 CHIEF EXECUTIVE'S REVIEW Aurum Mining acquired the Andash project in January 2005, just before the startof the 12 month period under review to 31 March 2006. In summary, the Andashgold and copper project is in the Talas Valley in the North West of the KyrgyzRepublic on the border with Kazakhstan. The project is situated in the Tien Shangold belt, which stretches across Central Asia from Uzbekistan in the westthrough to China in the east. The Andash project is 260km west of the capital Bishkek and the nearest village,Kopero Bazar, is 1.5km away. The licence area is at an elevation of between2,100m and 2,400m and can be accessed year round by a combination of tar anddirt road. Major power lines are within 15km of the deposit. Zone 1 of the project contains 624,000 ounces of gold and 72,000 tonnes ofcopper in a porphyry style orebody that has a core of unusually high grade ore.The ore body lies close to the surface and has a low strip ratio, which,combined with the site's location close to appropriate infrastructure, shouldsee a low cost mining operation developed in 2007 for production in 2008. The exploration licence covers an area of 53km(2) and is valid until December2010, following an extension awarded to Aurum by the Kyrgyz authorities inFebruary 2006. There is an undemanding work commitment of $60,000 in thiscalendar year as a condition of the licence extension, which the recent drillprogramme and feasibility work has already exceeded. Kyrgyzstan mining lawstipulates that on discovery of a mineable deposit the licensee will haveexclusive rights to obtain a mining licence. Exploration in Zones 2 and 3 plus additional targets Andash has three known mineralised zones and four additional explorationopportunities located within the 53km(2) exploration licence area. Toinvestigate these opportunities and increase the size of the resource, theCompany has embarked on an exploration programme to test the extent of Zones 2and 3, which lie to the west of Zone 1, and to look at the possible faultedextension of Zone 1 itself. Previous work has indicated that the distance between orebodies is approximately200m. They have variable thickness and can be traced along strike for more than1km. The gold and copper content also appears variable from near backgroundlevels up to tens of g/t gold and 1.5% copper. To test this, Aurum has embarked on a preliminary exploratory drilling programmeon a 200x80-280m grid, with sections aligned across the known mineralised zones,and to intersect the large IP anomaly identified to the north of Zones 2 and 3.Aurum plans to drill 5-6 sections with 3-4 holes per section to a depth of150-250m, giving a total distance of some 3,000m. However, this programme willbe constantly evolving as new geological data emerges. The drilling results from the first section of the new programme were receivedin May 2005. Three holes, P15, P16 and P17, drilled approximately 50m apart allintersected mineralisation in zones 2 and 3, with hole P17 testing the nearsurface ore zone and holes P15 and P16 intersecting the structure further downdip. Holes P15 and P16 proved the presence of blind mineralisation. Results from the 3 holes show the ore zone intersections vary in thickness. Inhole P17, where the ore zone comes close to surface, mineralisation is seen tooccur as thin stringers in a clay rich formation. This becomes more coherentdown dip as seen in holes P15 and P16. The ore zone is seen to increase inthickness and grade in the down dip portion to approximately 50m in hole P15,with gold values varying between 1.5g/t and 0.31g/t. Although the average gradefrom the 3 holes is 0.49g/t, initial interpretation indicates that selectivemining of the ore zone would be possible. Intersections of higher grade in holeP15 (26m at 1.51g/t) suggests that gold grade improves down dip. This confirmswhat has been seen in previous drilling, which has shown that the gold contentincreases to an average of 1.4-1.5g/t to a maximum of 2.23-2.35g/t. Higher leveltargets analogous to this are the aim of this exploration programme.Encouragingly, dozer road preparation for hole P37 (the next hole to be drilled)has already cut previously unknown surface mineralisation. The results greatly improve our understanding of the structural andmorphological characteristics of these zones. Most mineralised zones areconfined to approximate east-west trending, gently northerly dippingstructural-tectonic zones, with thickness variations from (tens to hundreds ofmetres). These zones appear further localised by cross-faults. Exploration drilling was temporarily suspended post the period end in June 2006,owing to a review by the Company of the procurement of drilling services. TheCompany decided to work independently from drilling contractors and haspurchased its own wire line core drilling equipment, which is currently beingshipped to the Kyrgyz Republic. It is anticipated that drilling will recommenceshortly. Meanwhile, surface pits and trenching operations have been initiated at one ofthe 4 additional exploration opportunities, Tokhonysay. In-fill drilling in Zone 1 Wardell Armstrong International (WAI) was contracted in 2005 to generate anindependent resource estimate for Zone 1 in digital format in accordance withthe JORC resource classification. At that time 9.94 million tonnes wereclassified as Measured and Indicated, with 7.61 million tonnes in the inferredclassification. Under the direction of WAI, an in-fill drilling programme wasinitiated early in 2006 to increase the resource estimate within Zone 1 andtransfer inferred resources through to Measured and Indicated. This was done byclosing the drill hole spacing down to 25m thereby improving the confidence ingrade estimation. A total of 2652m of core drilling comprising 19 holes wascompleted. In addition, the Company completed 5 HQ core holes totalling 713mfor geotechnical and resource purposes in and around the proposed pit. As a result of the drilling programme WAI upgraded the JORC resource estimate,and we now have a total Measured and Indicated resource of 17.1 million tonnes,with a further 200,000 tonnes in the inferred category. Total metal content hasincreased, giving improved grades when calculating the resource with a cut-offof 1.25g/t of gold and gold equivalent. The resource now has 624,000 ozs of goldand 72,000 tonnes of copper. The results are tabulated below: Andash Resources @ 1.25g/t Aueq Cut-Off (September 2006) Category Type Tonnage (kt) Au (g/t) Cu(%) Au (kg) Cu (kt) Measured Oxide 835 0.89 0.51 741 4.2Measured Sulphide 2,980 1.21 0.47 3,599 14.1 Total measured 3,815 1.14 0.48 4,340 18.3 Indicated Oxide 855 0.85 0.42 726 3.6Indicated Sulphide 12,400 1.16 0.40 14,353 50.0 Total indicated 13,255 1.14 0.40 15,080 53.06 Total measured and 17,070 1.14 0.42 19,420 71.9indicated Mining The gold-copper orebody at the deposit comprises a northwest-southeast striking,gentle southeast plunging mineralised porphyry-style body which is present atsurface, making it eminently suited to open pit mining methods. Initialmodelling by WAI allows for production rates of 2,000,000 tonnes per annum withlow stripping ratios. Metallurgical test work A 2,100kg bulk sample was compiled from four of Aurum's new drill holes and sentto WAI for metallurgical testing. The grade of this sample was 1.3g/t gold and0.51% copper, which the Company believes to be representative of the likelyfuture production. The results of this test work demonstrated gold recoveries of75% in a circuit of gravity and flotation and copper recoveries of 70% inflotation. Additionally a further 25% of the gold could be recovered by cyanideleaching of the flotation tails but due to the presence of copper, cyanideconsumption would be high. The oxides show good recovery of copper in acid leachtests, recovering 86% of copper with low acid consumption. However since testwork has confirmed that a portion of the oxides can be recovered in flotationthe Company believes that to keep capital costs to a minimum and to bringproduction in the shortest time, a combined gravity flotation circuit isoptimal. The ore also contains low silver grades, which would be payable in thecopper concentrate. Environmental The Company has secured comprehensive baseline study for the environmentalaspects of the project. We now have more than one year's continuous monitoringof the flora, fauna and water quality that will be included in the environmentalimpact study managed by WAI. All technical aspects of the proposed project havebeen carefully considered to ensure the highest environmental standards.Cognisance is taken of new technological opportunities to reduce environmentalrisk where appropriate. Social Impact The Company has taken a number of initiatives to develop a good workingrelationship with both the local population as well as regional and localgovernment. As Kopero Bazar is located within view of the proposed miningventure, we have sought the opinions of individual groups representing the localpopulation, local government and NGOs to monitor and minimise any negativeimpact on social structures. In accordance with good governance, we have set up a social fund which hasactively participated in both local health and education projects, and we arecurrently negotiating with representative parties to further advantage the localpopulation. Our future recruitment policy will be to educate, train and employthe local labour force where possible. Education levels in the region are high,but Aurum intends to augment this to ensure the local population benefit mostfrom the increased economic activity that a successful mining project willcreate. Local feasibility study Post the period end, in May 2006, Aurum submitted a local feasibility study tothe Kyrgyz government covering the economic, mining, metallurgical, legal,environmental and social factors for the first phase of Andash, which is a keystep in the application for a mining licence. All aspects of the study have nowbeen approved by the Kyrgyz authorities. Kyrgyz mining law stipulates that ondiscovery of a mineable deposit the exploration licence holder will haveexclusive rights to obtain a mining licence. Full feasibility study To take the project through to production, Aurum has contracted WAI to author acomprehensive feasibility study with work on plant design and tailings disposalwhich is being carried out in conjunction with GBM and Golder Associates. Thefull feasibility study will upgrade the resource to a proven and probable miningreserve and be used to raise project finance. Initial discussions with banks andother recognised financial institutions have indicated an enthusiasm to workwith Aurum, and the intention is to further these discussions with a view totailoring the final study to meet the needs of specific investors for projectfinance. The study is expected to be completed before the end of 2006, which should allowproject finance to be arranged in the first quarter of 2007. The successful implementation of this strategy should see Aurum bringing theAndash project on stream in the first half of 2008, just 3 years from initialacquisition. Conclusion The period under review has been one of rapid progress during which the Andashacquisition has been transformed from an exploration opportunity to a clearlydefined resource which it is expected will allow Aurum to become a goldproducing, and therefore cash generating, company in 2008. We anticipate furtherimportant milestones in the coming weeks and months, notably completion of ourfull feasibility study and the securing of project finance. Mark JonesChief Executive26 September 2006 Aurum Mining plc Consolidated profit and loss account for the year ended 31 March 2006 Note Year ended Period 31 March ended 2006 31 March £'000 2005 £'000 Administrative expenses - exceptional items (252) -Administrative expenses - other (1,006) (389) Total administrative expenses and operating loss (1,258) (389) Interest receivable and similar income 21 45Interest payable (14) - Loss on ordinary activities before taxation (1,251) (344) Tax on loss on ordinary activities - - Loss on ordinary activities after taxation (1,251) (344) Retained loss for the financial year (1,251) (344) Loss per share - basic and diluted 2 (13.16p) (4.23p) All amounts relate to continuing activities. All recognized gains and losses in the current and prior period are included inthe profit and loss account Aurum Mining plc Consolidated Group balance sheet as at 31 March 2006 Group Group 2006 2005 £'000 £'000Fixed assetsIntangible fixed assets 1,305 819Tangible fixed assets 263 189Investments in subsidiary undertakings - - 1,568 1,008Current assetsStocks 11 -Debtors: amounts falling due within one year 85 265Debtors: amounts falling after one year - - Total Debtors 85 265Cash at bank and in hand 321 944 417 1,209Creditors: amounts falling due within one year (339) (281) Net current assets 78 928 Convertible loan notes (643) - Net assets 1,003 1,936 Capital and reservesCalled up share capital 95 95Other reserve 304 -Share premium 1,687 1,687Merger Reserve 498 498Profit and loss account (1,581) (344) Shareholders' funds 1,003 1,936 Consolidated cash flow statement for the year ended 31 March 2006 Year ended Period ended 31 March 2006 31 March £'000 2005 £'000 Net cash outflow from operating activities (953) (487) Returns on investments and servicing of financeInterest received and similar income 21 45Interest paid (14) - Net cash inflow from returns on investments and servicing of 7 45finance Capital expenditure and financial investmentPurchase of tangible fixed assets (138) (179)Deferred exploration expenditure (486) (56) Net cash outflow for capital expenditure and financialinvestment (624) (235) AcquisitionsPurchase of subsidiary undertaking - (160)Cash acquired with subsidiary - 5 Net cash outflow from acquisitions - (155) Cash outflow before management of liquid resources & financing (1,570) (832) FinancingIssue of ordinary shares - 2,150Issue of Convertible Loan Notes (net of issued costs) 947 - Cash inflow from financing 947 1,776 (Decrease)/increase in cash in the year (623) 944 1 Accounting policies Basis of preparation The financial statements have been prepared in accordance with currentlyapplicable Accounting Standards in the United Kingdom, which have been appliedconsistently, and under the historical cost convention. The figures of the year ended 31 March 2006 do not constitute full accountswithin the meaning of Section 240 of the Companies Act 1985. They have beenprepared under the accounting policies set out on the Company's statutoryaccounts for the year ended 31 March 2005. The figures for the year ended 21March 2004 have been extracted from the full accounts of that period, which havebeen delivered to the Registrar of Companies on which the auditors gave aqualified report in relation to limitation of scope and included a statementunder section 237 (2) and (3). A copy of the Company's annual report is available on Aurum Mining's website,www.aurummining.net. Basis of consolidation Aurum Mining Plc, together with it's subsidiary as detailed in note 9, is a goldexploration group that is focused on opportunities in the territories of theFormer Soviet Union. The consolidated financial statements incorporate the results of Aurum MiningPlc and all of its subsidiaries as at 31 March 2006 using the acquisition methodof accounting as required. Under the acquisition method, the results ofsubsidiary undertakings are included from the date of acquisition. The Company has taken advantage of Section 230 of the Companies act 1985 in notpresenting its own profit and loss account. The Company's loss for the year was£954,892 (2005 loss of £335,357). Stocks Stocks are stated at the lower of cost and net realisable value. Fixed asset investments Investments held as fixed assets are stated at cost less provision for anyimpairment to their carrying value. Tangible fixed assets Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less the estimated residualvalue of each asset over its expected useful economic life, as follows: Office and computer equipment: - 3-5 years on a straight-line basisPlant and equipment: - 3-5 years on a straight-line basis Unevaluated mining properties All costs associated with mining development and investment are capitalised on aproject-by-project basis pending determination of the feasibility of theproject. Costs incurred include appropriate technical and administrativeexpenses but not general overheads. If a mining development project issuccessful, the related expenditures will be amortised over the estimated lifeof the commercial ore reserves on a unit of production basis. Where a licenceis relinquished, a project is abandoned, or is considered to be of no furthercommercial value to the Company, the related costs will be written off. The recoverability of deferred mining costs and mining interests is dependentupon the discovery of economically recoverable reserves, the ability of theCompany to obtain necessary financing to complete the development of reservesand future profitable production or proceeds from the disposition of recoverablereserves. Costs on productive areas are amortised over the life of the area of interest towhich such costs relate on a unit of production output basis. Environmental provisions Appropriate and adequate provision is made for rehabilitation costs over theestimated year of exploration activity. As at 31 March 2006 no environmentaldamage had occurred and hence no provision has been made. Operating leases Amounts payable under operating leases are charged against income on astraight-line basis over the lease term. Foreign currency transactions Monetary assets and liabilities denominated in foreign currencies are translatedinto sterling at rates of exchange ruling at the balance sheet date.Transactions in foreign currencies are translated into sterling at the rate ofexchange ruling at the date of the transaction. Exchange differences are takento the profit and loss account as they arise. Results of overseas subsidiariesand their balance sheets are translated at year end rate. Exchange differenceswhich arise from the translation of the opening net assets of foreignsubsidiaries are taken to reserves. Deferred Taxation FRS 19 'Deferred tax' requires deferred taxation to be recognised in full inrespect of transactions or events that have taken place by the balance sheetdate and which could give rise to an obligation to pay more or less taxation inthe future. Deferred tax assets are only recognised to the extent they aredeemed recoverable. The Group has chosen not to discount deferred tax balances,as permitted by FRS 19. Convertible Debt In accordance with FRS4 and FRS25, the Company has classified the convertibledebt in issue as a composite financial instrument. Accordingly, the Companypresents the liability and equity component separately on the balance sheet. Theclassification of the liability and equity component is not reversed as a resultof a change in the likelihood that the conversion option will be exercised. Nogain or loss arises from initially recognising the components of the instrumentseparately. Interest on the debt element of the loan is accreted over the termof the loan. Costs associated with raising debt are set off against the grossvalue of monies received. Financial instruments • short term debtors and creditors are not treated as financial assets or financial liabilities except for the currency disclosures; and • the Group does not hold or issue derivative financial instruments for trading purposes. Share based employee remuneration When shares and share options are awarded to employees a charge is made to theprofit and loss account based on the difference between the market value of theCompany's shares at the date of grant and the option exercise price inaccordance with UITF Abstract 17 (Revised 2004) 'Employee Share Schemes'. 2 Loss per ordinary shares The calculation of loss per share of 13.16 pence (2005 - 4.23 pence) is basedon the loss for the year of £1,251,000 (2005 - £344,000) and on the weightedaverage number of shares in issue during the year of 9,505,775 (2005 -8,144,579). Due to the loss in the year the effect of all potential ordinary shares isantidilutive. 3 Exceptional Items On 7 December 2004 the Company entered into an agreement with Geocentr wherebythe Company agreed to make available a facility of up to $170,000. The loancarries an interest rate of 5% and was due for repayment not later than 31 March2006. The amount lent to Geocentr was £89,366. The purpose of the Loan was toenter into a strategic relationship with a view to acquire a substantial equitystake in Geocentr. The acquisition of Geocentr could not be completed within theconditional agreement's terms and therefore was terminated. As part of theconditional agreement entered into with Loyal Wealthy, it was agreed that thebenefit of an outstanding loan of £89,366 to Geocentr would be assigned to LoyalWealthy. The board have made full provision against this balance to reflect theuncertainty regarding the eventual recovery of the balance outstanding. On 3 August 2004 the Company entered into an agreement with Power ProductsInternational ("PPI"). Under which the Company would make available to PPI aninterest free loan of up to £150,000 to assist in the refurbishment of adrilling rig owned by PPI in consideration for the right to require PPI to carryout drilling into the last quarter of 2005. The debt is to be repaid by theprovision of drilling services at the Andash mine in Kyrgyzstan to the Companyat cost price. Following repayment of the debt the Company will have the rightto require PPI to carry out drilling in Central Asia at any time for year ofthree years on three months notice at a discounted rate of 120% of cost. The board are currently considering the future drilling programme and thesuitability of available drilling rigs. There is some uncertainty as to whetherthe equipment available from PPI will be the most suitable for some of thedrilling targets and therefore whether the Company will utilise the PPIagreement and eventually recover the above amount. The board have thereforeprovided at this stage against the balance but will review this once thedrilling programme is further defined. 4 Post Balance Sheet Events The Company announced on 8 May 2006 that a placing of 2,777,778 new ordinaryshares of 1 pence each have been placed by Arbuthnot Securities Limited withinstitutional investors at a price of 90 pence per share to raise £2.5 Millionbefore expenses. The placing shares represent approximately 22.5 per cent of theenlarged issued share capital of the Company. The net proceeds of the placing will be used primarily for working capitalpurposes in order to complete the engineering design work required to completethe feasibility study and conduct further drilling on exploration zones 2 and 3at the Company's Andash project On 20 April 2006, application was made for the admission to trading on AIM of81,915 ordinary shares of 1p each in the Company pursuant to the exercise ofoptions. The shares rank pari passu with the Company's existing issued ordinaryshares. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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