Last checked at 23 Sep 2009 07:00
23rd September 2009
Connemara Mining Company PLC
Interim Results for the Six Month Period to 30th June 2009
Connemara is having a good year. The exciting 2008 drilling results at Stonepark and Stonepark North in Limerick were supported by excellent results on the first hole of the 2009 drilling campaign.
Grades of 13.07% zinc and 2.23% lead over 22 feet were reported from a drillhole 1.5 kilometres Northwest of the 2007 discovery at Stonepark and 280 metres Southeast of the 2008 discovery at Stonepark North.
The first drill hole of the current programme (TC-2638-026) intersected 7.2 metres grading 13.07% zinc and 2.23% lead from 216.05 metres depth, including 3.75m grading 17.06% zinc and 3.5% lead. The mineralisation consists of massive sphalerite, galena and pyrite and the ore-textures are typical of an "Irish-type" deposit such as Lisheen or Galmoy.
| Hole ID | Drillhole Angle (degrees) | From (m) | To (m) | Thickness (m) | Zinc (%) | Lead (%) |
| TC-2638-026 | -90 | 216.05 | 223.25 | 7.2 | 13.07 | 2.23 |
| including: | ||||||
| TC-2638-026 | -90 | 216.05 | 219.80 | 3.75 | 17.06 | 3.50 |
Hole 26 was drilled 1.5 km northwest of the Stonepark zone, in an area referred to as Stonepark North. This is the second hole at Stonepark North and is located 280 metres southeast of TC-2638-012, which in mid-2008, intersected a zone of colloform-textured limonite (after sulphide) and returned 0.95m grading 2.73% zinc and 4.73% lead from 203.15m. This weathered sulphide zone intersected beneath deep overburden and within karstically weathered limestone/dolostone that was characterised by low core recovery in the hole.
The map below shows the zinc zones discovered in the Limerick region, two on the Connemara / Teck licences and three on Minco / Xstrata ground, and the location of the recent drillhole. The five discoveries outlined on the map are all within a couple of kilometres of each other.
To view the map, please click below or paste into your web browser.
http://www.rns-pdf.londonstockexchange.com/rns/4877Z_-2009-9-22.pdf
Drillhole TC-2638-026 and the ore contained in it are significant for a number of reasons:
| • | We have now discovered two separate zones of commercial grade zinc ore 1.5 kilometres apart; |
| • | The discovery is on a proven trend that extends from the Minco / Xstrata discoveries; |
| • | Both Stonepark zones still have ore potential in all directions; |
| • | The ore is similar to that reported from discovery holes at the adjacent Minco / Xstrata ground; |
| • | The ore was encountered at the shallowest depth (216 metres) of the discovery holes in the area; |
| • | The ore is typical of an Irish style zinc deposit such as those found at the Lisheen and Galmoy mines located to the Northeast. |
The immediate exploration plan is to find more zones. This will be done using a combination of geophysics, drilling and geological modelling. The target is to define the overall size of the mineralised system and then drill out individual zones.
It is important that shareholders understand this approach. Ireland has a history of very large world class zinc discoveries. The Tara mine at Navan, after 30 years of operation, is still the fifth largest zinc mine in the world. The Anglo American owned zinc mine at Lisheen is the twelfth biggest zinc mine in the world.
The target for Connemara and their partner, Teck, is a world class world ranking zinc mine in Limerick.
The mineralised trend in Limerick stretches over 20 kilometres Northwest to Southeast. On the Minco / Xstrata ground, over 200 holes have been drilled, and significant discoveries made at Tobermalug, Caherconlish and Strahane West. The Connemara / Teck block of nine licences, adjacent to Minco / Xstrata, has to date found two significant zinc zones on very little drilling.
Continuous work is being done to get a better understanding of the geological structures in the Limerick area. Every drillhole adds to that knowledge base as does geophysics and modelling. A further 5,000 plus metres of drilling, in possibly 15 holes, will be undertaken in the remaining months of 2009. It is an axiom in mining that mines are made not found.
Other Exploration Activities
The excitement surrounding the Stonepark activities has overshadowed good results on the 100% owned Connemara licences. Drilling has commenced on our Castlemaine Licence block in Kerry. Earlier this year, we reported the discovery of large boulders containing high grades of zinc and lead, including one grading over 50% zinc. Geophysics, mapping and modelling have identified anomalies which will be drill tested in the coming weeks. Earlier work on the five licence block Lough Sheelin area found significant zinc mineralisation. More drilling is needed.
Connemara, with thirty nine licence blocks, is the fourth largest ground holder in Ireland. Block selection was based on historical evidence of base metal mining, and results from recent prospecting. Apart from Limerick, where we hold sixteen licences, in joint venture with Teck Cominco, and the five licences at Lough Sheelin on the Meath / Cavan border, we have highly prospective ground in Thurles, Moate and Nenagh. The Thurles block of three licences is 5 kilometres from the Lisheen mine. The Nenagh block of four licences is 1.2 kilometres from the old Silvermines mine. The Moate block of four licences includes previously discovered non-commercial zinc deposits and lies 40 kilometres from the former Tynagh mine.
Mines are not found in offices. This explains the very tight financial control. Losses for the 6 months were EUR€111,000. Expenditure in the coming months will rise as we contribute to the drilling cost in Limerick. We have cash for our immediate needs.
John Teeling
Chairman
23rd September 2009
| Enquiries: | |
| Connemara Mining Company Plc | |
| John Teeling, Chairman | +353 (0)1 833 2833 |
| Jim Finn, Financial Director | |
| Smith & Williamson Corporate Finance Limited | |
| Nick Reeve | +44 (0) 117 376 2213 |
| Barrie Newton | +44 (0) 117 376 2213 |
| College Hill | |
| Nick Elwes | +44 (0) 20 7457 2020 |
www.connemaramining.com
| Financial Information (Unaudited) | |||||||||||||
| Six Months Ended | |||||||||||||
| 30 June 09 | 30 June 08 | 31 Dec 08 | |||||||||||
| unaudited | unaudited | audited | |||||||||||
| Condensed Consolidated Income Statement | €'000 | €'000 | €'000 | ||||||||||
| Revenue | 0 | 0 | 0 | ||||||||||
| Operating Costs | (159) | (181) | (347) | ||||||||||
| Foreign Exchange Profit/(Loss) | 43 | (69) | (157) | ||||||||||
| Operating Loss | (116) | (250) | (504) | ||||||||||
| Interest Receivable | 5 | 14 | 31 | ||||||||||
| Loss on ordinary activities before taxation | (111) | (236) | (473) | ||||||||||
| Taxation | 0 | 0 | 0 | ||||||||||
| Loss for the period | (111) | (236) | (473) | ||||||||||
| Loss per share | (0.73c) | (1.55c) | (3.11c) | ||||||||||
| Condensed Consolidated Balance Sheet | 30 June 09 | 30 June 08 | 31 Dec 08 | ||||||||||
| unaudited | unaudited | Audited | |||||||||||
| €'000 | €'000 | €'000 | |||||||||||
| Assets | |||||||||||||
| Intangible Assets | 625 | 513 | 564 | ||||||||||
| Current Assets | |||||||||||||
| Other receivables and prepayments | 45 | 72 | 44 | ||||||||||
| Cash and cash equivalents | 353 | 793 | 472 | ||||||||||
| Total Current Assets | 398 | 865 | 516 | ||||||||||
| Total Assets | 1,023 | 1,378 | 1,080 | ||||||||||
| Liabilities | |||||||||||||
| Current Liabilities | |||||||||||||
| Trade and other payables | (108) | (115) | (54) | ||||||||||
| Total Liabilities | (108) | (115) | (54) | ||||||||||
|
| |||||||||||||
| Net Assets | 915 | 1,263 | 1,026 | ||||||||||
| Equity | |||||||||||||
| Share Capital and Reserves | 915 | 1,263 | 1,026 | ||||||||||
| Total Equity | 915 | 1,263 | 1,026 | ||||||||||
| Condensed Consolidated Statement of Changes in Shareholders Equity | |||||||||||||
| Six Months Ended 30 June 09 | |||||||||||||
| Share | Share | Other | Retained | Total | |||||||||
| Capital | Premium | Reserves | Losses | Equity | |||||||||
| €'000 | €'000 | €'000 | €'000 | €'000 | |||||||||
| As at 1 January 2008 | 151 | 1,919 | 56 | (627) | 1,499 | ||||||||
| Loss for the period | (236) | (236) | |||||||||||
| As at 30 June 2008 | 151 |
| 1,919 |
| 56 |
| (863) | 1,263 | |||||
| Loss for the period | (237) | (237) | |||||||||||
| As at 31 December 2008 | 151 |
| 1,919 |
| 56 |
| (1,100) | 1,026 | |||||
| Loss for the period | (111) | (111) | |||||||||||
| As at 30 June 2009 | 151 |
| 1,919 |
| 56 |
| (1,211) | 915 | |||||
| Six Months Ended | |||||||||||||
| 30 June 09 | 30 June 08 | 31 Dec 08 | |||||||||||
| unaudited | unaudited | audited | |||||||||||
| Condensed Consolidated Cash Flow | €'000 | €'000 | €'000 | ||||||||||
| Cash flows from operating activities | |||||||||||||
| Loss for the Year | (111) | (236) | (473) | ||||||||||
| Investment Revenue | (5) | (14) | (31) | ||||||||||
| Exchange Movements | (47) | 67 | 210 | ||||||||||
| (163) | (183) | (294) | |||||||||||
| Movements in Working Capital | 53 | (49) | (82) | ||||||||||
| Cash used by Operations | (110) | (232) | (376) | ||||||||||
| Returns on Investments and Servicing of Finance | 5 | 14 | 31 | ||||||||||
| Net Cash Used in Operating Activities | (105) | (218) | (345) | ||||||||||
| Cash Flow from Investing Activities |
| ||||||||||||
| Capital Expenditure | (61) | (106) | (157) | ||||||||||
| Net Cash used in Investing Activities | (61) | (106) | (157) | ||||||||||
| Financing Activities | |||||||||||||
| Proceeds from issue of equity shares | 0 | 0 | 0 | ||||||||||
| Net Decrease in Cash and Cash Equivalents | (166) | (324) | (502) | ||||||||||
| Cash and Cash Equivalents at beginning of the period | 472 | 1184 | 1184 | ||||||||||
| Effects of Exchange rate changes on cash held in foreign currencies | 47 | (67) | (210) | ||||||||||
| Cash and Cash Equivalents at end of the period | 353 | 793 | 472 | ||||||||||
Notes:
| 1 | Information |
| The financial information for the six months ended June 30th, 2009 and June 30th, 2008 is unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 148 of the Companies Act 1963. | |
| The interim financial report has been prepared in accordance with IAS 34 Interim Financial Reporting and the accounting policies and methods of computation used in the interim financial statements are consistent with those used in the Group 2008 Annual Report, which is available at www.connemaramining.com | |
| The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information. |
| 2 | No dividend is proposed in respect of the period. |
| 3 | Loss per share | ||||
| 30 June 09 | 30 June 08 | 31 Dec 08 | |||
| € | € | € | |||
| Loss per share - Basic and Diluted | (0.73c) | (1.55c) | (3.11c) | ||
|
|
|
| |||
| Basic and diluted loss per share | |||||
| The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows: | |||||
| Loss for the year attributable to equity holders of the Parent | (110,522) | (235,588) | (472,795) | ||
|
|
|
| |||
| Weighted average number of ordinary shares for the purpose of basic earnings per share | 15,176,710 | 15,176,710 | 15,176,710 | ||
|
|
|
| |||
| 4 | Intangible Assets | |||||
| 30 June 09 | 30 June 08 | 31 Dec 08 | ||||
| Exploration and evaluation assets: | €'000 | €'000 | €'000 | |||
| Cost at 1 January | 564 | 407 | 407 | |||
| Additions to 30 June | 61 | 106 | 157 | |||
| _________ | _________ | _________ | ||||
| Cost at 30 June | 625 | 513 | 564 | |||
|
|
|
| ||||
| Deferred Exploration and Evaluation expenditure at 30 June 2009 represents spend on projects in Ireland. | |
| The group's activities are subject to a number of significant potential risks including; |
| - | Uncertainties over development and operational costs | |
| - | Political & legal risks, including arrangements with governments for licences, profit sharing and Taxation; | |
| - | Liquidity risks |
| The realisation of this intangible asset is dependent on the successful development of economic reserves, including the ability of the Group to raise finance to develop the project. Should this prove unsuccessful the value included in the balance sheet would be written off. | ||
| The directors are aware that by its nature there is an inherent uncertainty in such exploration and evaluation expenditure as to the value of the asset. Having reviewed the deferred development expenditure at 30 June 2009, the directors are satisfied that the value of the intangible asset is not less than carrying value. | ||
| 5 | The Interim Report for the six months to June 30th 2009, was approved by the Directors on 23rd September 2009 |
| 6 | Copies of this announcement will be sent to shareholders and will be available for inspection at the Companies Registered Office at 162 Clontarf Road, Dublin 3, Ireland. The Interim Report may also be viewed at Connemara Mining Company Plc's website at www.connemaramining.com |