BHR.L Regulatory News (BHR)

26 Sep 2007 07:00

Carnegie Minerals plc26 September 2007 26 SEMPTEMBER 2007 CARNEGIE MINERALS PLC ("Carnegie" or the "Company" and its subsidiaries together "the Group") INTERIM RESULTS For the period ended 30 June 2007 Carnegie Minerals Plc (AIM: CME), the AIM listed miner and explorer ofindustrial minerals in West Africa, is pleased to announce its interim resultsfor the period ended 30 June 2007. HIGHLIGHTS The Gambia • Official mine site opening in July 2007 by Her Excellency Isatou NjieSadie, Vice President of The Gambia • Three dredges commissioned through to the half-year end with thefourth commissioned this month • Production of heavy mineral concentrate in line with our estimatesduring this start up phase Senegal • Mining reserve defined at the Niafarang deposit near the Gambianborder • Exploration drilling completed in southernmost part of the licence.Initial results imminent FINANCIAL HIGHLIGHTS • Gambian joint venture entity revenue of £417,522 with Group revenue of£55,750 • Gambian Joint venture entity had a maiden profit of £95,856 with CMEGroup loss of £420,507 for the six months • Closing cash balance was £771,009 as at 30 June 2007 Alan Hopkins Managing Director said: "We have made good progress bringing the wet mining and primary processingfacilities into production in The Gambia. As each unit has been brought onstream, production and revenues have increased incrementally. This isestablishing a solid financial platform for the repayment of the partnerprovided project finance utilised in developing this project. With thesecondary processing plant coming on stream in April 2008, followed by the planto bring into production the additional reserves over the border in Senegal inearly 2009, we are on track for steadily increasing production, revenues andcash flow. We value the support provided during this start up phase, and withthis ongoing support, we look to the future with confidence". CHAIRMAN AND CHIEF EXECUTIVE'S REPORT On behalf of the Board we are pleased to provide this interim report for theCompany and its subsidiaries (together the "Group"), for the six months ended 30June 2007. Financial Review During this start up period to 30 June 2007, we recorded revenue of £77,933comprising management fees, interest income and our 50% share of The Gambianjoint venture entity's profit. Our Gambian joint venture entity had turnover of£417,435 and a stockpile of 21,410 tonnes of heavy mineral concentrate ready forsale as at 30 June 2007. Production, while modest for this initial period, is inline with our forecasts for this stage of the Gambian project's development. Overall, the Group recorded a loss after tax for the period of £420,507 throughthis period of project start up. The Gambian joint venture entity had a profitof £95,856 for the six month period. Cash at bank as at 30 June 2007 was£771,009. The scale of the business has increased during the period as a result of thepositive exploration outcome from the Niafarang area of our license adjacent inSenegal. This established additional resources enabling higher productiontargets to be set for 2009 and onwards. The Group has invested heavily duringthis start up year in both its support of its production capability in TheGambia, and also the establishment of further resources in adjoining Senegal. Operational Review The period since 1 January 2007 has seen the development of the miningactivities in The Gambia in parallel with the undertaking of explorationactivities in adjoining Senegal. Mine Development and Mining Activity in The Gambia During the period, we have constructed and brought into production threeadditional wet mining and primary processing units, established water bores forthree separate mining areas, upgraded roads to all sites, and recruited andtrained an additional 105 workers, bringing the total workforce to 150 in TheGambia. A mine site office complex, including workshops, laboratories and storesfacilities was officially opened by the Gambian Vice President, Her ExcellencyIsatou Njie Sadie, on 24 July 2007 and the ongoing excellent relationship withThe Gambian authorities is of great assistance to the project. While production is on schedule, the processing of the primary combinedconcentrates into magnetically separated product is now scheduled for completionby April 2008. Prior to this fully processed product being available for sale,we have entered into an interim arrangement with our off take partner to buy thecombined primary concentrate. This generates earlier revenues but the pricingachieved during this interim stage will be necessarily lower than will apply tofinal product. Overall, the Group's target for the year ended 31 December 2007is to produce 15,000 tonnes of secondary non magnetic (i.e. zircon / rutile)concentrate. This equates to 77,000 tonnes of primary combined concentrate whichwe are on target to achieve. Exploration During the period, the Group completed the evaluation of the earlier drilling atthe Niafarang deposit in Senegal (just south of the Gambian border) and obtainedJORC-compliant independent estimates for a resource and mining reserve statementfor this deposit. It is planned for an environmental impact study to becommissioned and to convert this exploration area to a mining title so thatmining can commence early in 2009. In addition to the evaluation of the Niafarang deposit, the Group completed 8000meters of exploration drilling over some priority targets identified by theairborne geophysical survey undertaken in October 2006. The results of thisdrilling will be released to the market as soon as they are available. Anypositive intersections are planned to be followed up by drilling early in 2008when the rig is remobilised to complete the drilling of additional priorityexploration targets that have yet to be tested. Outlook We have made very good progress with the construction and bringing intoproduction the wet mining and primary processing facilities in The Gambia. Aseach unit has been brought on stream, production and revenues have increasedincrementally. This is establishing a solid financial platform for the timelyrepayment of partner provided project finance utilised in the development of TheGambian project. With the secondary processing plant coming on stream early nextyear, followed by the plan to bring into production the additional reserves overthe border in Senegal in early 2009, we are on track for steadily increasingproduction, revenues and cash flow. We have also been offered otheropportunities for further expansion, which are currently being evaluated. Wevalue the support provided during this start up phase, and with this ongoingsupport, we look to the future with confidence. Alan R BurnsChairman Alan G HopkinsManaging Director Registered Office The Company also announces that it has changed its registered office to 1Arbrook Lane, Esher Surrey KT10 9EG. END For further information please contact: Alan G. Hopkins (Carnegie Minerals Managing Director),enquiries@carnegiemins.com Olly Cairns (Blue Oar Securities Plc), T: +61 (0) 8 6430 1631 Billy Clegg / Edward Westropp (Financial Dynamics), T: +44 (0) 20 7831 3113 The Carnegie Minerals Website is www.carnegiemins.com Consolidated Income Statement for the period ended 30 June 2007 Note Unaudited Unaudited Audited period ended period ended period ended 30 June 2007 30 June 2006 31 December 2006 £ £ £ Revenue - management fees 7,822 - 25,844Administrative expenses (498,440) (416) (471,640)Other operating income - - 183,970Operating Loss (490,618) (416) (261,826)Share of profit in joint venture 47,928 - (73,369)Interest income 22,183 1,117 26,670(Loss)/profit before taxation (420,507) 701 (308,525)Tax expense - - -(Loss)/Profit for the period attributable to equity holders of theparent entity (420,507) 701 (308,525) (Loss)/earnings per share attributable to equity holders of the parent entityBasic and diluted 2 (0.765)p 0.02p (1.187)p Consolidated Statement of Recognised Income and Expense for the period ended 30June 2007 Unaudited Unaudited Audited period ended period ended period ended 30 June 2007 30 June 2006 31 December 2006 £ £ £ (Loss)/profit for the period (420,507) 701 (308,525)Foreign exchange gain on retranslation of 6,972 -overseas operations 6,768Total recognised income and expense for the (413,535) 701 (301,757)period Attributable to:Equity holders of the parent (413,535) 701 (301,757) Consolidated Balance Sheet at 30 June 2007 Unaudited Unaudited Audited 30 June 2007 30 June 2006 31 December 2006 £ £ £ NoteAssetsNon-current assetsIntangible assets 448,288 - 448,288Property, plant and equipment 80,594 - 84,366Interests in joint ventures 766,263 - 656,150 1,295,145 - 1,188,804 Current assetsDebtors 35,213 65,189 78,637Cash at bank and in hand 771,009 59,231 1,205,322 806,222 124,420 1,283,959 Total assets 2,101,367 124,420 2,472,763 LiabilitiesCurrent liabilitiesTrade and other payables (76,035) (9,373) (108,200) Total liabilities (76,035) (9,373) (108,200) Net assets 2,025,332 115,047 (2,364,563) Capital and reservesCalled up share capital 550,000 50,000 550,000Share premium 969,851 64,346 969,851Merger reserve 4 839,346 - 839,346Foreign exchange reserve 4 13,740 - 6,768Warrant reserve 4 250,000 - 250,000Retained earnings 4 (597,605) 701 (251,402) Total equity 2,025,332 115,047 (2,364,563) Consolidated Cash Flow Statement for the period ended 30 June 2007 Unaudited Unaudited Audited period ended period ended period ended 30 June 2007 30 June 2006 31 December 2006 £ £ £ Net cash flow from operating activitiesLoss for the period (420,507) (416) (308,525)Depreciation and amortisation 3,447 - 7,648Share-based payment expense 74,304 - 57,123Share of profit of joint venture (47,928) - 73,369Capitalised exploration expenses (62,185) - -Interest received (22,183) - (26,670)Foreign exchange gains 5,736 - (21,966)Movement in working capital:- trade and other receivables 43,424 (65,189) (78,399)- trade and other payables (32,165) 9,373 (163,560)Cash flow from operations (458,057) (56,232) (460,980) Cash flow from investing activitiesPurchase of property, plant and equipment (8,209) - (80,536)Disposal of property, plant and equipment 9,770Net funds acquired with subsidiary undertakings - 192,028 225,317Creditors assumed with subsidiary undertaking - (77,682) -Interest received 22,183 1,117 26,670Net cash flow from investing activities 23,744 115,463 171,451 Cash flow from financing activitiesIssue of shares - - 2,025,000Listing expenses and share issue costs - - (530,149)Net cash flow used in financing activities - - 1,494,851 Net (decrease)/increase in cash and cash (434,313) 59,231 1,205,322equivalentsCash and cash equivalents at beginning of period 1,205,322 - -Cash and cash equivalents at end of period 771,009 59,231 1,205,322 NOTES TO THE INTERIM RESULTS 1. Accounting policies Basis of accounting The interim financial information for the six months ended 30 June 2007 and thatfor the equivalent period in 2006 is unaudited. The comparatives for the fullyear ended 31 December 2006 are not the Group's full statutory accounts for thatyear. A copy of the statutory accounts for that year has been delivered to theRegistrar of Companies. The auditors' report on those accounts was unqualified,did not include references to any matters to which the auditors drew attentionby way of emphasis without qualifying their report and did not contain astatement under section 237(2)-(3) of the Companies Act 1985. The interim financial information has been prepared in accordance with theaccounting policies and presentation required by International FinancialReporting Standards, incorporating International Accounting Standards andInterpretations (collectively "IFRS") as endorsed by the European Union. The interim report is presented and prepared in a form consistent with thatwhich has been adopted in the Group's annual accounts having regard to theaccounting standards applicable to such accounts. 2. Loss per share The calculation of loss per ordinary share is based on a loss of £420,507 (2006:profit £701) and on 55,000,000 (2006: ordinary shares, being the number ofordinary shares in issue during the period. 3. Dividends The directors do not recommend the payment of a dividend. 4. Reserves Merger reserve Foreign exchange Warrant reserve Retained earnings reserve £ £ £ £ At 1 January 2007 839,346 6,768 250,000 (251,402) Gain/(loss) for the period - 6,972 - (420,507)Fair value of share based - - - 74,304paymentsAt 30 June 2006 839,346 13,740 250,000 (597,605) This information is provided by RNS The company news service from the London Stock Exchange