28th Apr 2005 07:00
Sierra Leone Diamond Company Ld28 April 2005 For immediate release 28 April 2005 Sierra Leone Diamond Company Limited ("SLDC" or the "Company") Preliminary Results for the year ended 31 December 2004 and Operational Review Sierra Leone Diamond Company (AIM : SLD), a diamond exploration company withlicence interests wholly focussed in the country of Sierra Leone, is pleased toannounce its preliminary results for the year ended 31 December 2004. Highlights for the year ended 31 December 2004: • Net loss for the year of US$ 3.1m (2003: US$ 0.3m) after charging US$1.5m (2003: Nil) for shares issued for past services • Cash position US$2.6m (2003: Nil) • US$ 14.2m (2003: Nil) raised from private equity financing • Acquisition of a further seven licence blocks in Sierra Leone covering 9,934 sq km giving a total of 36,364 sq km Highlights for current financial year: • The Company listed on the AIM market in February 2005 with a market capitalisation of £72m raising £20m • New Chief Executive and Chief Financial Officer appointed to the board adding over 25 years of diamond mining experience, predominantly with De Beers and extensive mining finance experience • 133,000 line kms of a planned 175,000 line kilometre High Resolution Air Magnetic Program ("HRAM") has being flown identifying in excess of 150 magnetic anomalies that are potential kimberlite targets • Diamonds are now being recovered from the alluvial deposits in the Sewa River Licence Block, the largest being a 0.83 carat stone with an estimated value of US$ 450 per carat • Numerous artisanal workings have been located with confirmed diamond recoveries which the Company believes represents undiscovered kimberlite occurrences Commenting on the preliminary results, Chief Executive Officer, DavidGadd-Claxton, said: "We are pleased to deliver the first set of results since the Companysuccessfully listed on the AIM market of the London Stock Exchange in February2005 raising in excess of £20m. 2004 was a turnaround year for the Company, withthe increased stability in Sierra Leone, the Company attracted US$ 14.2m ofinvestment during the year. This allowed the Company to commence a large scalesystematic exploration program and expend over US$ 6.3m on its licence blocks. "The Company's short term strategy is to develop a cash positive resource fromits alluvial licence blocks on the Sewa River. The fact that diamonds, similarto those recovered elsewhere in Sierra Leone, are being recovered from ouralluvial sampling operations gives me confidence as to the potential of the SewaRiver licence blocks. We will continue extensive exploration activities on ourother licence areas to develop further hard rock diamond targets for theCompany. The Company has 36,364 sq km of licence blocks representing in excessof 50% of the country, with the funds raised at the AIM listing the Company iswell placed with sufficient cash resources to achieve these objectives in theshort term. I am delighted with the progress being made in Sierra Leone and withthe quality and commitment of our exploration team." For further information please contact: Sierra Leone Diamond Company 020 7917 6245David Gadd-Claxton, Chief Executive Officer Allan Dolan, Vice ChairmanMartin Dunham, Chief Financial Officer Buchanan Communications 020 7466 5000Bobby MorseBen Willey Notes to the Editors: SLDC is a diamond exploration company focussed on the West African Country ofSierra Leone. Since 1996, SLDC has assembled what is currently the largestportfolio of mineral rights in Sierra Leone, covering some 36,364 squarekilometres, which rights include not only diamonds but in many cases preciousmetals, base metals, iron ore, rutile, bauxite and rare earths. SLDC isdeveloping Sierra Leone's diamond and mineral potential through a systematicexploration programme. Operational Review At its flotation in February 2005, the Company announced its strategic plans fordeveloping its asset portfolio. These plans included: • A systematic exploration of the Company's extensive licence blocks using High Resolution Air Magnetic Program ("HRAM") technology and regional drainage sampling program • The development of short term cashflow from alluvial mining on the Sewa River licence block • Assessing the potential of the multiple dyke (kimberlite fissures) systems in the Kono area • Assessing the potential of its non-diamond mineral deposits High resolution air magnetic program ("HRAM") O Over 133,000 line kms have been flown of the planned 175,000 line kms program. The HRAM program for the current dry season is due to be complete by the end of June 2005. O Independent geophysical consultants have completed interpretation of 5,700 square kms of Northern licence blocks data and have identified numerous magnetic anomalies that may indicate kimberlite occurrences. These are being prioritised for follow up soil sampling. O Over 16,000 line kms were flown in April 2004 to complete the planned survey of the Sewa River licence block. Geophysical interpretation identified numerous magnetic anomalies that are potential kimberlite targets. These have been prioritised for follow up soil sampling. Regional drainage sampling program. O On going regional drainage sampling program with 16 sampling teams operating in the Northern licence blocks have taken 2,370 of a projected 5,000 sample program O 500 of these samples have been washed, screened and jigged at the company's in-house lab, located in Bo and 400 samples have been sent to independent labs in South Africa for heavy liquid separation, acid-wash, grain-picking and analysis O Numerous artisanal workings have been identified with confirmed diamond recoveries which the company believes represents undiscovered kimberlite occurrences O Detailed grid-sampling and pitting in the Kamakwie area produced abundant kimberlitic ilmenites associated with pyrope garnets and chromites. The recovered grains show no signs of mechanical abrasion which is highly indicative of local, primary kimberlite sources Alluvial development and production in the Sewa River. The purpose of developing production from the alluvial deposits in the SewaRiver is to generate short term cash flow for the Company. O Diamonds have been recovered from the sampling program in the Sewa River Licence Blocks. These are of high quality which are consistent with previous diamonds recovered in Sierra Leone, the largest being a 0.83 carat stone with an estimated value of US$ 450 per carat. O Exploration dredging operations will commence in May 2005 to sample diamonds from the Sewa River bed O The Company plans to commission by August 2005 a dense media separation diamond recovery plant ("DMS"), with the capacity to process up to 25,000 tonnes per month, in order to sample the alluvial deposits along the Sewa River licence block. Capital costs for the plant are estimated at US$ 1m. The purpose of the DMS plant is to develop an economic alluvial resource before commissioning a larger DMS plant to mine the alluvial deposits Assessment of Non Diamond Mineral Deposits In addition to diamonds the Company also holds the rights to gold, rutile,bauxite and iron ore in its licence block areas. A non-diamond geological andcorporate team have been tasked with identifying the potential of thesenon-diamond assets with a view to attracting joint venture partners or otherassets disposal opportunities. SIERRA LEONE DIAMOND COMPANY LIMITEDConsolidated Profit and Loss (Stated in US$) Un-audited Year Ended 31 Eight-month December period ended 31 Year Ended 2004 December 2003 30 April 2003 US$ US$ US$Interest income - - -Expenses General and administrative 404,769 200,495 79,482 Professional and other 331,903 48,404 30,690 Travel 215,895 67,555 31,334 Depreciation 388,606 5,073 431 Unrealised gain on foreign exchange (140,593) (13,998) - Interest (6,243) - - Write-off of equipment 234,114 - - Settlement of debt 110,064 - - Shares issued for past services 1,488,619 - - Settlement of prior obligations - - (138,221) Stock-based compensation 147,297 - - 3,174,431 307,529 3,716Net loss for the period (3,176,431) (307,529) (3,716)Deficit, beginning of period (800,098) (492,569) (488,853)Charge to deficit (168,491) - -Charge to deficit (4,043,788) - -Deficit, end of period (8,188,808) (800,098) (492,569)Loss per share Basic and diluted (0.07) (0.01) - SIERRA LEONE DIAMOND COMPANY LIMITED Consolidated Balance Sheets (Stated in US$) Un-audited 2004 2003Assets US$ US$Current Assets Cash and cash equivalents 2,692,087 4,529 Accounts receivable 83,651 3,946 Prepaid expenses 4,000 10,452 Notes receivable 30,000 - 2,809,738 18,927 Deferred costs 739,047 -Capital Assets 2,929,859 385,160Mineral Properties 8,992,420 2,646,594 15,471,064 3,050,681 Liabilities and Shareholders' EquityCurrent Liabilities Accounts payable and accrued liabilities 1,390,645 141,251 Due to related parties 226,049 2,838,274 Notes payable - 19,776 1,616,694 2,999,301 Shareholders' equityShare capital 22,018,821 1,163,222Warrants 186,804 -Contributed Surplus 147,297 -Cumulative translation adjustment (311,744) (311,744)Deficit (8,186,808) (800,098) 13,854,370 51,380 15,471,064 3,050,681 SIERRA LEONE DIAMOND COMPANY LIMITEDConsolidated Statements of Cash Flows (Stated in US$) Un-audited Year Ended 31 Eight-month December period ended 31 Year Ended 2004 December 2003 30 April 2003 US$ US$ US$Cash provided by (used in)Opearting activities:Net loss for the period (3,174,431) (307,529) (3,716)Items not involving cash Consulting fees 31,433 - - Depreciation 388,606 5,073 431 Unrealised foreign exchange gain (140,593) (13,998) - Write-off capital asset 234,114 - - Settlement of debt 110,064 - - Shares issued for past services 1,488,619 - - Settlement of prior obligations - - (138,221) Stock-based compensation 147,297 - - (914,891) (316,454) (141,506) Change in non-cash working capital 167,265 54,022 43,889 (747,626) (262,432) (97,617)Financing activities:(Repayment to) advance from related parties (1,870,675) 2,111,049 538,368Notes payable (19,776) - -Issuance of share capital 14,201,551 - -Share issue costs (110,244) - -Deferred costs (739,047) - -Change in non-cash working capital 602,836 - - 12,064,645 2,111,049 538,368Investing activities:Purchase of capital assets (3,167,419) (372,798) (16,172)Mineral property expenditures (6,008,675) (871,848) (872,808)Change in non-cash working capital 406,040 (613,440) 447,853 (8,770,054) (1,858,086) (441,127)Unrealised foreign exchange gain 140,593 13,998 -Increase (decrease) in cash 2,687,558 4,529 (376)Cash, beginning of period 4,529 - 376Cash, end of period 2,692,087 4,529 - Notes: 1. The financial information set out above does not constitute the Company's statutory accounts for the period ended 31 December 2004 but is derived from those accounts. The un-audited financial statements for the year ended 31 December 2004 have been prepared in accordance with Canadian generally accepted accounting principles. The report of the auditors on the financial statements for the period ending 31 December 2003 and the year ended 30 April 2003 was unqualified. 2. The basic loss per common share of US$ (0.07) is based on the net loss for the period US$ (3,174,431) and 45,662,969 basic weighted average number of common shares outstanding during the year. 3. Copies of the full financial statements will be posted to all shareholders in May 2005. Further copies can be obtained from the Company's website www.sierrleonediamond.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMI.L