Anglo Asian Regulatory News (AAZ)

27 Oct 2005 07:01

Anglo Asian Mining PLC27 October 2005 For release at 7.00 a.m. on 27 October 2005 AIM: AAZ ANGLO ASIAN MINING PLC ("Anglo Asian" or "the Company") INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2005 Highlights for the period • Admission to AIM on 29 July 2005 • Raised gross proceeds of £20 million (US$35.2 million) Subsequent events • Access constructed to the Ordubad, Gosha and Gedebek contract areas • Drilling commenced at Piyazbashi (Ordubad) 10 September 2005 • Reconnaissance sampling underway at Gosha and Gedebek • Base camp for Ordubad under construction • 4,000 tonne per day CIL gold processing plant purchased • Richard Round appointed to the Board as Finance Director on 19 September 2005 • Dr. Ross Bhappu appointed to the Board as non-executive director from 1 November 2005 • Gerald Phillips appointment as Chief Operating Officer confirmed Commenting on the results, Reza Vaziri, Executive Chairman of Anglo AsianMining, said: 'The Admission to AIM of Anglo Asian was successfully completed on29 July 2005, raising US$30.7 million net of expenses. The operating loss forthe 6 month period to 31 July 2005 of $662,745 arose from chargingadministrative expenses and crediting an exchange gain primarily incurred in theperiod leading up to the Admission.' Mr Vaziri continued 'In the short period since Admission and injection of thenew capital, significant operational progress has been made. Whilst the resultof our first deep drill hole was disappointing, the resources quoted atflotation are unaffected by this result and with the addition of two more rigsthe drilling programme will continue at pace. In addition, progress has beenmade on procuring and relocating a 4,000 tonne per day CIL plant along with afurther strengthening of the Board and management team.' -Ends- Financial and operations review to follow. For further details, please contact: Anglo Asian Mining PLC Charles Hancock, Chief +44 20 7409 3232 Executive Numis Securities Limited John Harrison +44 20 7776 1590 Parkgreen Communications Justine Howarth +44 20 7493 3713 INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2005 Chairman's statement The Admission to AIM of Anglo Asian was successfully completed on 29 July 2005,raising US$30.7 million net of expenses. The operating loss for the 6 monthperiod to 31 July 2005 of $662,745 arose from charging administrative expensesand crediting an exchange gain primarily incurred in the period leading up tothe Admission. In the short period since Admission and injection of the new capital,significant operational progress has been made. Whilst the result of our firstdeep drill hole was disappointing, the resources quoted at flotation areunaffected by this result and with the addition of two more rigs the drillingprogramme will continue at pace. In addition progress has been made on procuringand relocating a 4,000 tonne per day CIL plant along with a furtherstrengthening of the Board and management team. Financial results The Group reported an unaudited operating loss of $662,745 ($357,977) for thesix months to 31 July 2005 (period from 5 February 2004 to 31 July 2004). The operating loss resulted from the charging of administrative expenses of $756,575 ($357,977) and crediting an exchange gain of $93,830 ($ nil). There was an interest charge in the six months of $4,718 ($ nil) arising onloans taken out prior to Admission. Exploration and evaluation expenditures of $1,199,199 ($ nil) were capitalisedin the period. On 24 June 2005, Anglo Asian Mining PLC became the ultimate parent company ofAnglo Asian Operations Limited in a share for share exchange. This agreement andsubsequent agreements dated 29 June 2005 and 19 July 2005 resulted in 73,171,700shares being issued. This acquisition has been accounted for as a groupreconstruction which allows a meaningful comparison to the previous periods. The gross proceeds raised from the issue of 26,000,000 new shares, amounting to$35,235,200, were received in the first week of August 2005 and therefore appearin the balance sheet at 31 July 2005 as a debtor and the share issue expenses of$4,498,300, that have since all been paid, appear as a creditor. Azerbaijan operations Baku and Nakhchivan offices Fully functional offices have been set up in both Baku and Nakhchivan.Expatriate management reporting to the Chief Operating Officer has been retainedby the Group to manage the geological, construction, environmental and healthand safety functions. Local staff has been recruited in Baku, Nakhchivan,Ordubad, Gosha and Gedebek to support activities including geology, plantrelocation construction and administration. The Group is very pleased with theskill level and commitment of the existing staff and is confident of obtainingappropriate additional staff within the locality of the operations as theCompany continues to advance its projects. Ordubad (Piyazbashi) Access to the Piyazbashi mining area has been completed and a base camp is underconstruction for the entire Ordubad contract area. Step out drilling has started in the Piyazbashi area and two holes to depth of360 and 300 metres have been completed. The results of the first drill hole arecovered under a separate press announcement released today. Two further rigs have been scheduled by Skeptra, a major Turkish drillingcontractor, to commence drilling in Piyazbashi during the same month. This willresult in three diamond core rigs being in operation, one of which will be dualpurpose and can be set up for rotary drilling. The drilling contract is being performed by Skeptra at rates below thoseanticipated in the AIM Admission Document. We have retained the services of ALSChemex (part of the Alex Stewart Group) to conduct analytical work on currentsampling from the drilling programme. ALS Chemex operate laboratories whichspecialise in analysing mineral samples including soil and sediment samples,mineralised rock and drill cuttings in addition to core samples. ALS Chemexoperates in sixteen countries worldwide and provides services to major miningand mineral exploration companies. As previously announced, the Company has purchased a 4,000 tonne per day goldprocessing plant. This plant is currently located in Australia and a dismantlingcontract is currently being negotiated. The plant will be refurbished inAustralia prior to being shipped to Ordubad via Turkey. The plant is expected toarrive at the Piyazbashi mining area in Ordubad during the first half of 2006.The fast track feasibility study for this mining area will be completed beforethe location of the plant site is finalised. The plant purchased is Carbon-in-Leach (CIL), which is considered to be moresuitable than the Carbon-in-Pulp (CIP) plant previously referred to in theAdmission Document and the purchase incorporates a crushing and grinding plantand a Carbon Adsorption-Desorption-Recovery (ADR) plant which will produce dorebullion on site. It is also fully inclusive of a laboratory facility. Gosha and Gedebek Access routes to the Contract Areas have been completed and adit cleaning isongoing. Confirmatory and reconnaissance sampling has been initiated todetermine the boundaries of the area. We have also retained the services of ALSChemex to complete analytical work on samples from these development projects. Board We are pleased to announce that Dr. Ross Bhappu has agreed to join the Board ofDirectors as a non-executive director with effect from 1 November 2005. Dr. Bhappu, a Principal with Resource Capital Funds, which currently hold 2.2million shares in Anglo Asian Mining PLC, has over 20 years' experience in themining industry working for both senior and junior mining companies. Prior tojoining Resource Capital Funds in early 2001, he was chief executive officer ofa start-up copper mining company, GTN Copper Corporation. Prior to joining GTN,Dr. Bhappu was Director of Business Development for Newmont Mining Corporation.In that role, he was involved in merger and acquisition activities, themarketing of copper concentrates to smelters all over the world, businessdevelopment activities and the commercialization of Newmont's proprietarymetallurgical technologies. Before joining Newmont, he served in both technicaland financial roles for Cyprus Minerals Company. He serves on the board ofResource Capital Funds' portfolio company Constellation Copper Corporation. Dr.Bhappu holds a Ph.D. in Mineral Economics from the Colorado School of Mines andB.S. and M.S. degrees in Metallurgical Engineering from the University ofArizona. Save as disclosed below, there is nothing further to disclose in relation to theappointment of Dr. Ross Bhappu, aged 45, under schedule two, paragraph (g) ofthe AIM Rules: Previous directorships or partnerships in the last five years: Dr Bhappu currently serves on the boards of Constellation Copper Corporation, anRCF portfolio company listed on the Toronto Stock Exchange, and Mountain StatesR&D International, a private metallurgical consulting firm. He was previously adirector and officer of GTN Copper Corporation. Management We are pleased to confirm the appointment of Mr Gerald Phillips as ChiefOperating Officer of the Group. Mr. Phillips has over 35 years of experience constructing and directing open pitand underground mining operations. He has held the position of Chief OperatingOfficer at Sanyati Mining and Roan Antelope Mining Corporation. He has also helddirectorships of Roan Antelope Mining Corporation of Zambia, Frame Minera deHonduras, Greenstone Canada Limited, Curragh Resources Incorporated of Canadaand has been involved at an operational level with numerous other miningcompanies. Mr Phillips has supervised multi-disciplinary teams from concept of projectsthrough feasibility studies, financing, permitting and construction tocommercial production. Projects include open pit and underground mines in NorthAmerica and two new heap-leach-CIL operations in Central America. He hasextensive experience in ADR, CIL, CIP, solvent extraction and electrowinningprocessing operations. The Board, as outlined in the AIM Admission Document, is continuing a search fora new Chief Executive with extensive experience in the resources sector toreplace Charles Hancock, who will remain on the Board in a non executivecapacity after he steps down as Chief Executive. Ends Anglo Asian Mining PLC Consolidated profit and loss account for the 6 months ended 31 July 2005 Unaudited Unaudited Unaudited 6 months to period from period from 31.7.2005 5.2.2004 5.2.2004 to 31.7.2004 to 31.1.2005 Note US$ US$ US$ Turnover - - - Administration (756,575) (357,977) (1,348,814)expenses Exchange gain 93,830 - - Operating loss (662,745) (357,977) (1,348,814) Interest 986 216 3,328receivable andsimilar income Interest payable (4,718) - -and similarcharges Loss on ordinaryactivitiesbefore taxation (666,477) (357,761) (1,345,486) Tax on loss on - - -ordinaryactivities Loss for the (666,477) (357,761) (1,345,486)period Basic and 3 0.67 0.36 1.36diluted lossper ordinaryshare (US cents) There is no difference between the loss on ordinary activities before taxationand the loss for the financial period stated above and their historical costequivalents. There are no recognised gains or losses other than those stated above. Anglo Asian Mining PLC Consolidated balance sheet at 31 July 2005 Unaudited Unaudited Unaudited 31.7.2005 31.7.2004 31.1.2005 Note US$ US$ US$ Fixed assetsIntangible assets 4 48,124,462 - 31,067,688Tangible assets 53,977 - 5,091Total fixed assets 48,178,439 - 31,072,779 Current assetsDebtors - amountsfalling duewithin one year 5 35,523,679 - 1,139 Cash at bank 81,966 8,666 972,306 35,605,645 8,666 973,445 Creditors -amountsfallingdue within one year 6 (7,616,338) (115,067) (2,381,428) Net current assets/ 27,989,307 (106,401) (1,407,983)(liabilities)Net assets/ 76,167,746 (106,401) 29,664,796(liabilities) Capital andreservesCalled up share 7 1,782,605 1 2capitalShare premium 8 30,279,300 - -accountMerger reserve 46,206,391 251,359 31,010,280Profit and loss (2,100,550) (357,761) (1,345,486)account Capital employed 76,167,746 (106,401) 29,664,796 Anglo Asian Mining PLC Consolidated cash flow statement for the 6 months ended 31 July 2005 Unaudited Unaudited Unaudited 6 months to period from period from 31.7.2005 5.2.2004 5.2.2004 to 31 7 2004 to 31.1.2005 Note US$ US$ US$ Net cash outflow fromoperating activities 9 (303,293) (214,710) (1,042,622) Returns on investmentandServicing of financeInterest received 986 216 3,328Net cash inflow fromreturns oninvestmentsand servicing of 986 216 3,328finance Capital expenditureandfinancial investmentPurchase of tangible (52,373) - -fixed assetsExploration and (1,199,199) - -evaluationexpenditurePurchase of - (28,200) (109,040)subsidiaryNet cash outflow fromcapitalexpenditure andfinancialinvestment (1,251,572) (28,200) (109,040)Net cash outflowbefore use ofliquid resources and (1,553,879) (242,694) (1,148,334)financing Issue of ordinary 30,736,900 - 2shares, net ofexpensesFunds due from shareissue, net ofexpenses (30,736,900) - -Shares issued for 663,539 251,360 2,062,358cash in subsidiaryIssue of loans - - 58,280 (Decrease)/increasein cash forthe period (890,340) 8,666 972,306Reconciliation ofcash balancesCash at start of 972,306 - -periodCash at end of the 81,966 8,666 972,306period Anglo Asian Mining PLC Notes to the financial statements 1. Basis of preparation Anglo Asian Mining PLC ("Anglo Asian" or the "Company") was incorporated on 9September 2004 and its Ordinary Shares were listed on the AIM market of theLondon Stock Exchange on 29 July 2005 (the "Listing") having become the newparent company of Anglo Asian Operations Limited Group on 24 June 2005. AngloAsian Operations Limited was incorporated on 5 February 2004. To provide information which is meaningful to the Company's shareholders, theDirectors believe that it is necessary to prepare the results on the basis thatthe Anglo Asian Group had existed from the date of incorporation of Anglo AsianOperations Limited. The Directors believe that this information reflects theongoing operations of the Group more clearly. The combination of Anglo Asianwith the Anglo Asian Operations Group has been accounted for as a groupreconstruction under the provisions of FRS 6 ("Mergers and Acquisitions") and ispresented as if the Company had been the holding company and intermediateholding company, respectively, of the Group for each period presented. The consolidated financial information for the Group has been prepared under thehistorical cost convention and in accordance with applicable United Kingdomaccounting standards. 2. Accounting policies and basis of consolidation The accounting policies are consistent with those disclosed in the Accountant'sReport for Anglo Asian Operations Limited as presented in the AIM AdmissionDocument dated 26 July 2005. The consolidated financial information incorporates the Financial Statements ofthe Company and all of its subsidiaries, being the companies that it controls.This control is normally evidenced when the Group is able to govern a company'sfinancial and operating policies so as to benefit from its activities or wherethe Group owns, either directly or indirectly, the majority of a company'sequity voting rights. The results of subsidiaries acquired or sold during the year are consolidatedfor the periods from, or to, the date on which control passed. Acquisitions areaccounted for under the acquisition method. Excess purchase consideration, being the difference between the fair value ofthe consideration given and the fair value of the identifiable assets andliabilities acquired, is capitalised as an asset on the balance sheet. To the extent that such excess purchase consideration relates to the acquisitionof mining properties and leases, that amount is capitalised as mining rightswithin intangible fixed assets and will be amortised on a unit of productionbasis. Provision is made for any impairment. Anglo Asian Mining PLC Notes to the financial statements (continued) 3. Earnings per ordinary share Basic earnings Unaudited Unaudited Unauditedper share on theloss for the period 6 months to period from period from 31.7.2005 5.2.2004 to 5.2.2004 to 31.7.2004 31.1.2005 Loss for the (666,477) (357,761) (1,345,486)financial period(US$) Weighted averagenumber of sharesof theCompany in issue 99,171,800 99,171,800 99,171,800 Loss per share 0.67 0.36 1.36for the period(US cents) The earnings per share ("EPS") calculation, has assumed that the number ofOrdinary Shares in issue immediately after Listing (being 99,171,800) had beenin issue from 5 February 2004. The Directors believe that this pro forma EPSprovides a more meaningful comparison of the Group's ongoing business than usingthe statutory EPS which would only reflect shares issued at the date of Listing.Basic and dilutive EPS are the same because the only outstanding share optionsare anti dilutive as the Group has made a loss 4. Intangible fixed assets Unaudited Unaudited Unaudited 1.2.2005 Additions 31 7.2005 US$ US$ US$ Mining 31,067,688 15,857,575 46,925,263rightsExploration - 1,199,199 1,199,199andevaluationexpenditure 31,067,688 17,056,774 48,124,462 5. Debtors amounts falling due within in one year Unaudited Unaudited Unaudited 31.7.2005 31.7.2004 31.1.2005 US$ US$ US$ Prepayments and 96,003 - -accrued incomeVAT recoverable 177,899 - -Other debtors 14,577 - 1,139Share capital 35,235,200 - -receivable 35,523,679 - 1,139 The share capital raised on the Admission to trading on AIM on 29 July 2005 wasreceived during the first week of August 2005. Anglo Asian Mining PLC Notes to the financial statements (continued) 6. Creditors amounts falling due within one year Unaudited Unaudited Unaudited 31.7.2005 31.7.2004 31.1.2005 US$ US$ US$ Trade creditors 758,676 115,067 261,248Other creditors 394,879 - 43,100Deferred 2,000,000 - 2,000,000purchaseconsiderationAccruals and 4,404,503 - 18,800deferred incomeLoans 58,280 - 58,280 7,616,338 115,067 2,381,428 Trade creditors and accruals include amounts owing for the expenses of the shareissue on the 29 July 2005 amounting to $4,498,300. These amounts were paidfollowing receipt of the share capital. 7. Share capital Authorised Number 31.7.2005 Number 31 1.2005 £ £ Ordinary shares 600,000,000 6,000,000 - -of £0.01 eachOrdinary shares - - 100 100of £1.00 each Allotted Number 31.7.2005 Number 31.1.2005 US$ US$Fully paidAt the beginning 1 2 1 2of the periodSubscriber sharesubdividedinto shares of 99 - - -£0.01Shares issued inconsiderationfor sharesin Anglo Asian 73,171,700 1,325,003 - -OperationsLimited Cash receivedafter 31.7.2005Shares placed 26,000,000 457,600 - -for cashAt the end of 99,171,800 1,782,605 1 2the period 8. Share premium Shares issued US$ Placing for cash 34,777,600Costs (4,498,300)31.7.2005 30,279,300 Anglo Asian Mining PLC Notes to the financial statements (continued) 9. Reconciliation of operating loss to net cash flow from operating activities Unaudited Unaudited Unaudited 6 months to 6 months to period from 31.7.2005 31.7.2004 5.2.2004 to 31.1.2005 US$ US$ US$ Operating loss (662,745) (357,977) (1,348,814)Depreciation 3,487 - -Goodwill - 28,200 28,200amortisation(Increase)/ (287,340) 115,067 -decrease indebtors andprepaymentsIncrease in 731,892 - 277,992creditors andaccrualsExchange (88,587) - -differencesNet cash outflow (303,293) (214,710) (1,042,622)from operatingactivities This information is provided by RNS The company news service from the London Stock Exchange