Beowulf Regulatory News (BEM)

20 Mar 2006 08:00

Beowulf Mining PLC20 March 2006 BEOWULF MINING PLC CHAIRMAN'S STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- Your directors are pleased to report the final results for Beowulf Mining plc("Beowulf") for the year to 31st December 2005. The past twelve months have seenconsiderable progress in developing Beowulf into a diversified natural resourcecompany focused on Sweden. Whilst substantial progress has been made, there havealso been some disappointments and setbacks, most notably the decision by PhelpsDodge Exploration Sweden AB ("Phelps Dodge") to withdraw from its joint ventureagreement on the Jokkmokk copper-gold property in northern Sweden. However, thedisappointment at Jokkmokk has been offset by the granting of the Balleklicences in northern Sweden, now the subject of a joint venture with theCanadian based Vismand Exploration Inc., and the more recent granting of theRuoutevare titanium concession. Sweden, with its favourable fiscal legislation for mining and exploration, isstill experiencing an exploration boom. There is an increased demand forcommodities from the newly-emerging BRIC group of nations, in particular Indiaand China. A funding round raising £110,000 in February 2005 and a £500,000 placing withRAB Capital plc's Special Situations Fund in April, provided Beowulf withsufficient equity to join London Stock Exchange plc's AIM Market in May. Beowulfenjoyed just under two years of steady development on the Ofex market, andjoining AIM in May 2005 has provided the company with access to a greater sourceof capital and a larger number of investors, from institutions to our valuedprivate shareholders. The company would like to extend its gratitude forassistance in the AIM floatation to its Nominated Adviser, Ruegg & Co Ltd., andto its house-broker, King & Shaxon Capital Ltd. In conjunction with its move toAIM the company changed its name from Beowulf Gold to Beowulf Mining, in orderto better reflect its diversified activities. Beowulf continues to look for a major Iron Oxide Copper Gold (IOCG) deposit inSweden. The initial diamond drill intersection of 110 metres of 0.82% copper equivalenton the Majves 1 exploration permit, in the Jokkmokk area of Northern Sweden in2004, was unfortunately not replicated by Phelps Dodge's drilling efforts onother targets in 2005. Phelps Dodge, which used mobile metal ion geochemistry toguide their drilling, was disappointed by the results and subsequently withdrewfrom the joint venture. Beowulf has now received all the drilling data and iscompiling the results into a map information and discovery software package. Ithopes to continue the drilling of the deposit in 2006 via another joint venture,if a suitable partner can be found or, subject to the Company's explorationbudget, by itself. The directors still believe that the Majves 1 projectharbours the potential for an IOCG deposit. Shortly after joining AIM in May 2005, Beowulf acquired additional licences atBallek, Arjeplog County, Northern Sweden. A further licence at Ballek wasacquired in August. The Ballek licences contain several copper gold deposits,including the Lulepotten deposit which was drilled by the Geological Survey ofSweden (SGU) between 1960 and 1971, and was found to contain 5.1 million tonnesof copper at a grade of 0.73% and 0.25 grams per tonne of gold. Significantlyall the prospects overlie a large gravity anomaly. In December Beowulf signed anoption and earn-in agreement with Vismand Exploration Inc. ("Vismand") on theBallek properties. Under this agreement Vismand has agreed to undertake a deepsensing Titan 24 geophysical study over the area and conduct 3000 metres ofdiamond drilling in order to acquire a 50% interest in the licences. A Titan 24survey includes induced polarization, resistivity and magnetotelluric methods.It is hoped that an IOCG deposit will belocated in the area. Vismand is a private Canadian company which has a strong,experienced board and exploration team, and which recently raised C$15,800,000. Early in 2005 diamond drilling was undertaken on the Grundtrask licences inthe Skellefte Mining District. An intersection of 30 metres of 1.14 grams pertonne of gold was obtained. In July 2005 Beowulf undertook helicopter-assisted geological studies on theUssalahti licences and located high grade copper boulders overlying geophysicalanomalies. Diamond drilling is planned on both the Grundtrask and Ussalahti licences. In January 2006 Beowulf registered a claim in the Ruoutevare area within theJokkmokk County, approximately 50 km west of Beowulf's Majves' claims innorthern Sweden. The permit covers the Ruoutevare titaniferous iron deposit,which has been known of since the 18th century and which has been the subject ofseveral investigations during the last century. However, as yet no productionhas occurred. The investigated part of the deposit is relatively flat lying, andcovers an area of 387,000 square metres. Most of the deposit is outcropping orat shallow depth. The reserves from the most recent study in 1975 by theGeological Survey of Sweden (SGU) are estimatedat 116 million tonnes, with an average grade of 38.2% Fe (iron), 5.6% Ti(titanium) and 0.17% V (vanadium). A richer section of 20 million tonnes isregistered with a grade of 47% Fe, 11% TiO2 and 0.15% V2O5. Beowulf will obtaina bulk sample of the titaniferous iron deposit either from outcrop or acomposite from the previous diamond drilling to work with LKAB, the Swedish IronOre Company, in order to see if a titanium and iron metallurgical separation canbe obtained economically. Beowulf continues to hold 7.5 million shares in Ofex-listed Agricola Resourcesplc, representing 6.95% of the issued share capital. Agricola is rapidlyadvancing its uranium projects in Finland, which show signs of delivering realshareholder value. In addition to its holding in Agricola, in early 2006 Beowulf was gifted 5million shares in All Star Minerals plc, which is anticipated to commencetrading on the Ofex market in the near future. All Star Minerals' intends tofocus on the exploration and production of thorium, an element which itsdirectors believe will be used as a near-term fuel in nuclear reactors. I would like to thank our shareholders for their support and my fellow directorsfor their efforts during 2005. I am optimistic of progress in 2006 and thedirectors of Beowulf will continue their efforts to increase the value of theCompany. Robert YoungChairman20 March 2006 BEOWULF MINING PLC PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- 2005 2004 as restated £ £ Administrative expenses (354,875) (166,530) Operating loss (354,875) (166,530) Profit on sale of assets - 69,488 - 69,488 Loss on ordinary activities before (354,875) (97,042)interest Other interest receivable and similar 13,896 1,222income Loss on ordinary activities before (340,979) (95,820)taxation Tax on loss on ordinary activities - - Loss on ordinary activities after (340,979) (95,820)taxation Loss per share (0.65)p (0.26)p Diluted loss per share (0.42)p (0.16)p The profit and loss account has been prepared on the basis that all operationsare continuing operations. BEOWULF MINING PLC STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- 2005 2004 as restated £ £ Loss for the financial year (340,979) (95,820) Unrealised surplus on trade investment 239,063 37,500 Total recognised gains and losses relating tothe year (101,916) (58,320) BEOWULF MINING PLC BALANCE SHEETAS AT 31 DECEMBER 2005-------------------------------------------------- 2005 2004 as restated £ £ £ £ Fixed assetsIntangible assets 145,632 102,921Tangible assets 402 127Investments 351,563 112,500 497,597 215,548Current assetsDebtors 16,357 6,609Cash at bank and in hand 439,982 194,730 456,339 201,339Creditors: amounts falling duewithin one (7,586) (4,958)year Net current assets 448,753 196,381 Total assets less current liabilities 946,350 411,929 Capital and reservesCalled up share capital 560,982 420,896Share premium account 1,987,982 1,491,731Revaluation reserve 276,563 37,500Capital contribution 46,451 46,451Profit and loss account (1,925,628) (1,584,649) Shareholders' funds - equity 946,350 411,929interests BEOWULF MINING PLC CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- 2005 2004 £ £ £ £ Net cash outflow from operating activities (323,061) (152,420) Returns on investments and servicingof financeInterest received 13,896 1,222 Net cash inflow for returns oninvestments and 13,896 1,222servicing of finance Capital expenditurePayments to acquire intangible (81,570) (54,847)assetsPayments to acquire tangible assets (350) -Cost of disposal of assets - (5,512) Net cash outflow for capital (81,920) (60,359)expenditure Net cash outflow before managementof liquid (391,085) (211,557)resources and financing FinancingIssue of ordinary share capital 654,869 297,850Cost of share issue (18,532) (8,010) Issue of shares 636,337 289,840 Net cash inflow from financing 636,337 289,840 Increase in cash in the year 245,252 78,283 BEOWULF MINING PLC NOTES TO THE CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- 1 Reconciliation of operating loss to net cash 2005 2004 outflow from operating activities £ £ Operating loss (354,875) (166,530) Depreciation of tangible assets 75 48 Amortisation of intangible assets 38,859 14,865 (Increase)/decrease in debtors (9,748) 131 Increase/(decrease) in creditors within one 2,628 (934) year Net cash outflow from operating activities (323,061) (152,420) 2 Analysis of net 1 January 2005 Cash flow Other non-cash 31 December funds changes 2005 £ £ £ £ Net cash: Cash at bank and in 194,730 245,252 - 439,982 hand Bank deposits - - - - Net funds 194,730 245,252 - 439,982 3 Reconciliation of net cash flow to movement in 2005 2004 net funds £ £ Increase in cash in 245,252 78,283 the year Movement in net funds in the year 245,252 78,283 Opening net funds 194,730 116,447 Closing net funds 439,982 194,730 BEOWULF MINING PLC NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2005-------------------------------------------------- 1 InformationThe financial information set out in this report, which was approved by thedirectors on 20 March 2006 does not constitute the Company's statutory accountsfor the year ended 31 December 2005 or 31 December 2004 but is derived from those accounts.Statutory accounts for 2004 have been delivered to the Registrar of Companies and those for 2005 will be delivered following the Company's Annual GeneralMeeting.The auditors have issued an unqualified report in respect of the 2005 accounts. The report and accounts for the year ended 31 December 2005 will be sent toshareholders shortly. The Annual General Meeting of the Company will be held on21 April 2006. 2 Accounting policies 2.1 Accounting convention The financial statements are prepared under the historical cost convention modified to include the revaluation of investments. 2.2 Intangible fixed assets - exploration costs Expenditure on the acquisition costs, exploration and evaluation of interests in licences including related overheads are capitalised. Such costs are carried forward in the balance sheet under intangible assets and amortised over the maximum period of the licences in respect of each area of interest where: a) such costs are expected to be recouped through successful development and exploration of the area of interest or alternatively by its sale. b) exploration activities have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active operations in relation to the areas are continuing. An annual impairment review is carried out by the directors to consider whether any exploration or development costs have suffered impairment in value and if necessary provisions are made accordingly. Accumulated costs in respect of areas of interest, which have been abandoned are written off to the profit and loss account in the year in which the area is abandoned. Exploration costs are carried at the lower of cost and net realisable value. Exploration costs were re-categorised in 2004 from tangible fixed assets.2.3 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows: Plant and equipment 25% on reducing balance 2.4 Investments Fixed asset investments are stated at open market value. The revaluation adjustment is taken to the revaluation reserve. 2.5 Deferred taxation The accounting policy in respect of deferred tax has been changed to reflect the requirements of FRS19 - Deferred tax. Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted. A deferred tax asset is not recognised unless recovery is expected in the foreseeable future. 2.6 Foreign currency translation Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account. 3. Earnings per shareBasic loss per share has been calculated using the weighted number of shares of52,711,888 (31 December 2004 - 37,119,333). Diluted loss per share has beencalculated using the weighted average number of shares of 81,908,246 (31 December 2004 - 60,718,998). For further information contact : Dr Robert Young, Beowulf Mining plc Tel. +44 (0) 1353 649 701 Mr Gavin Burnell, Ruegg & Co Limited Tel. +44 (0) 207 584 3663 Mr Gary Middleton, St. Swithins PR Tel. +44 (0) 207 929 4391 Mr. Nick Bealer, King & Shaxson Tel. +44 (0) 207 426 5986 This information is provided by RNS The company news service from the London Stock Exchange