African Eagle Resources Regulatory News (AFE)

1 Jun 2005 07:00

African Eagle Resources PLC01 June 2005 AFRICAN EAGLE RESOURCES plc PROGRESS REPORT AND ACCOUNTS OF AFRICAN EAGLE RESOURCES plc TO 31st DECEMBER 2004 NOTICE OF ANNUAL GENERAL MEETING Chairman's statement During the past few years we have seen a trend for the big mining companies toacquire new reserves more by merger and acquisition than by exploration.Acquisition budgets have grown at the expense of exploration budgets and in nocase has the exploration budget of a new consolidated entity exceeded the sum ofits parts. This strategy presupposes that specialist exploration companies willrefill the pool of new assets. At the same time we have seen a major resurgence in demand and prices formineral products, coupled with declining discovery rates and decreasing size ofnew discoveries. The price of copper, for example, has doubled over the last twoyears and most analysts expect prices to remain high. These factors have greatly increased the importance of junior explorationcompanies in the discovery of mineral assets and have led in the last two yearsto a major revival of junior exploration investment and activity, particularlyin areas considered to offer long term operational security, better than averagemineral potential and favourable investment regimes. African Eagle's focus on gold and copper, our substantial portfolio of projectsin Tanzania, Zambia and Mozambique, and our combination of expertise, experienceand local knowledge position us extremely well to succeed under theseconditions. Mkushi in Zambia is a particularly attractive target in the current market andAfrican Eagle has prioritised the project, with core drilling and surfacesurveys now underway to confirm and if possible increase a resource of 30 million tonnes of 1.25% copper reported there by earlier explorers. At the Eagle Eye iron oxide copper gold (IOCG) project in eastern Zambia, theyear's mapping and first phase drilling revealed that copper mineralisationextends over a strike length of at least 25km, confirmed that the mineralisationreaches potentially economic grades and widths, and identified a new prioritytarget at Ndomba. As I write, geophysical and other surveys are underway whichwill help the Company's geologists to finalise this year's drill targets. The gold price remains high, and in Tanzania's Lake Victoria Goldfields, ourdiscovery of the Faida zone transformed the Miyabi project from pure explorationto a resource drilling project, leading to a new independent gold resourceestimate of 400,000 ounces. Drilling to increase this resource restarted atMiyabi in early 2005 and the Company looks forward to the results of theprogramme over the coming months. Our discovery cost to date of the 400,000 ounce Miyabi resource has been justUS$6.25 per ounce, and we expect this to fall as drilling continues and moreresources are added. This is a great tribute to the cost effectiveness andexpertise of our Tanzanian exploration team, as, the average discovery cost ofgold resources worldwide over the past 10 years has been of the order of US$25to $30 per ounce. Also in Tanzania, early shallow drilling at the Igurubi gold project revealednarrow but high-grade gold veins of considerable promise and further drillingwill follow a programme of surface surveys, including ground magnetics, inducedpolarisation and geochemistry. We are very much an "ideas" company and our teams have come up with someextremely promising new ventures for the future. One particularly excitingdevelopment has been our application for ca. 800 square kilometres of ground inwestern Mozambique containing rocks and mineralisation similar to those at EagleEye. Thanks to our growing understanding of the geological setting of Iron OxideCopper Gold (IOCG) mineralisation in southwest Zambia, we now hold a substantialIOCG portfolio on both sides of the border, covering large areas oflittle-explored ground containing many reported copper and gold occurrences. Clearly, in seeking to add value to what we believe to be our most importantprojects, we cannot prioritize everything in the African Eagle portfolio and theCompany is actively seeking partners for both new and existing ventures. Thesigning of participation agreements with MSA over the Lunga licence in Zambiaand with Resolute over the Kakumbi licence in Tanzania, which we have recentlyannounced, are products of this strategy. Discussions are also underway withpotential partners for other projects in the Company's portfolio. The availability of cash is always a high priority for an exploration companyand as I write, African Eagle is well funded, with £2.7 million in the bank,more than sufficient to cover its planned exploration programmes through 2005.The exercise of warrants during 2004 and early 2005 brought almost £2 millioninto the treasury, while a placing in December 2004 added another £1 million. I am very pleased to report that in 2004, 80 pence of every £1 spent went intoexploration, despite the one-off costs of establishing our London office, afterthe costs of our AIM admission in 2003 drove overheads during that year somewhathigher than our target. In conclusion I'd say that an additional effect of high metals prices has beenthe increase in the number of exploration companies entering the market. Thereare now more than 100 quoted on AIM alone and we are noticing more competitionfor licences in Africa. African Eagle, with funding available, a portfolio of both advanced andgrassroots projects, its sound knowledge of the region and its skilled,cost-effective exploration teams, is far better placed than most to maximisebenefits from current market conditions. John Park, Chairman. AFRICAN EAGLE RESOURCES plc - AUDITED CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR FROM 1 JANUARY 2004 TO 31 DECEMBER 2004 PROFIT AND LOSS ACCOUNT Year to Year to 31 Dec 2004 31 Dec 2003 £ £Turnover - -Administrative expenses (569,175) (378,321)Operating loss (569,175) (378,321)Interest receivable and similar income 78,904 13,237Loss on ordinary activities before taxation (490,271) (365,084)Tax on loss on ordinary activities - -Loss for the financial year (490,271) (365,084) Loss per share (pence) (0.6p) (0.9p) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year to Year to 31 Dec 2004 31 Dec 2003 £ £ Loss for the financial period (490,271) (365,084)Currency differences on foreign currency net investments (103,143) (73,361)Total recognised gains and losses (593,414) (438,445) BALANCE SHEET At 31 Dec 2004 At 31 Dec 2003 £ £Fixed assets Intangible assets Note 1 3,224,310 1,999,022 Tangible assets 85,522 55,678Investments 13,591 13,591 3,323,423 2,068,291Current assetsDebtors 149,293 24,311Cash at bank and in hand 2,296,217 2,426,474 2,445,510 2,450,785Creditors - amounts falling due within one year (171,201) (68,508)Net current assets 2,274,309 2,382,277Total assets less current liabilities 5,597,732 4,450,568 Capital and reservesCalled up share capital 928,747 756,895Share premium account 5,962,574 4,393,848Other reserves 705,723 705,723Profit and loss account (1,999,312) (1,405,898)Shareholders' funds 5,597,732 4,450,568 Notes 1. The increase in intangible assets represents exploration expenditure in the period 2. See the Company's Annual Report of 1 June 2005 for a full set of notes to these accounts, including details of accounting policies. The report can be downloaded at www.africaneagle.co.uk/downloads.html 3. The financial information set out above does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The consolidated profit and loss account and balance sheet have been extracted from the Group's 2004 statutory financial statements upon which the auditors' opinion is unqualified 4. The calculation of basic loss per share is based on the loss attributable to ordinary shareholders £490,271 (2003: £365,084) divided by the weighted average number of shares in issue during the year 78,243,027 (2003: 41,069,155). There is no dilutive effect of share options on the basic loss per share. African Eagle Resources plc NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the Annual General Meeting of the Company will beheld at the Company's offices at 2nd Floor, 6-7 Queen Street, London EC4N 1SP on28th June 2005 at 2:00pm for the following purposes: Ordinary business 1. To receive the annual report and financial statements for the year ended 31 December 2004 2. To re-elect Mr E Worthington who is retiring by rotation under the Articles of Association as a director of the Company 3. To re-elect Mr B Metcalf who is retiring in accordance with the Articles of Association as a director of the Company 4. To reappoint Grant Thornton UK LLP as Auditors and to authorise the directors to fix their remuneration Special business To consider and if thought fit to pass the following resolutions: Ordinary Resolution 5. THAT the directors be generally and unconditionally authorised for the purposes of Section 80 of the Companies Act 1985 ("the Act") to exercise all powers of the Company to allot relevant securities (within the meaning of Section 80(2) of the Act), up to an aggregate nominal amount of the authorised but unissued share capital of the Company. The authority will expire on the date of the Company's next Annual General meeting (or if sooner the expiry of 15 months after the passing of this Resolution) except as regards an allotment made pursuant to an offer or agreement made by the Company before such date, such authority to be in substitution for all existing authorities granted to the directors in respect of the allotment of relevant securities. Special Resolution 6. THAT the directors be empowered pursuant to Section 95 of the Companies Act 1985 (" the Act") to allot and to make offers or agreements to allot equity securities (as defined by Section 94(2) of the Act) for cash, pursuant to the authority conferred by Resolution 5 above, as if section 89(1) of the Act did not apply to any such allotment, provided that such power is limited to: (i) allotment of equity securities up to the nominal amount of the authorised but unissued share capital of the Company from time to time; and (ii) the allotment of equity securities in connection with any offer by way of rights in favour of the holders of ordinary shares in the Company where the equity securities respectively be attributed to the interests of the ordinary shareholders proportionate to the respective numbers of ordinary shares held by them subject to only such exclusions or other arrangements as the directors deem necessary or expedient to deal with fractional entitlement, legal or practical problems arising in any overseas territory or the requirements of any regulatory body or Stock Exchange. Such power (unless previously revoked, varied or renewed) to expireat the conclusion of the Annual General Meeting to be held in 2006, (or ifsooner the expiry of 15 months after the passing of the Resolution) save thatthe Company may before such expiry make an offer or agreement which would ormight require equity securities to be allotted after such expiry and thedirectors may allot equity securities pursuant to any such offer or agreement asif the power conferred thereby had not expired. The following special business will be conducted at the meeting: 1. Authority to allot shares An Ordinary Resolution (No 5 in the Notice of the Annual General Meeting) and aSpecial Resolution (no.6 in the Notice) will be proposed to empower the directors to issue and allotshares up to the nominal but unissued share capital of the Company. The proposed power will expire on the date of the next AGM or 15 months from thedate of approval of the Resolutions, whichever is sooner. By order of the Board1 June 2005 Bevan MetcalfCompany Secretary Registered Office:2nd Floor, 6-7 Queen Street, London EC4N 1SP, UK For further information Tel MobileJohn Park (Chairman) African Eagle 020 7248 6059 077 7980 1159 or Mark Parker (MD)Leesa Peters or Amanda Harris Conduit PR 020 7618 8534 07900 322 022 Simon Leathers or Evolution Securities 020 7071 4315Lloyd Thomas 020 7071 4389 Note to editors African Eagle is an AIM-listed exploration company active in East Africa. TheCompany's strategy is to build up an asset base by discovering or acquiring goldand other mineral deposits, and to realise value for shareholders by selling orspinning-off successful projects or though a takeover of the Company. See our web site www.africaneagle.co.uk for information about the company andits projects, and to view past news releases. This information is provided by RNS The company news service from the London Stock Exchange