BPC.L Regulatory News (BPC)

13 Dec 2005 13:10

Falkland Gold and Minerals Ltd13 December 2005 FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS for the year ended 30 September 2005 13 December 2005 HIGHLIGHTS • New Board constituted / Admission to AIM / Raising of £10 million(before costs) • Excellent progress on drilling - 5,950 metres drilled by 30 September2005 - initial exploration target of 23 drilling targets expected to becompleted by December 2006, a year ahead of the original schedule • Strategic review in October 2005 - reiteration of strategy announced atflotation and of the concept of economically viable gold deposits in theFalklands • Strong financial position - cash of £7.7m - company free of debt Enquiries: Falkland Gold and Minerals Limited Richard Linnell (Chairman) +27 82 440 6710 Bell Pottinger Corporate & Financial Nick Lambert +44 (0) 20 7861 3232 CHAIRMAN'S STATEMENT This first year of operation has been filled with a range of activities thathave been well managed and effectively completed. We conducted a successful placement and public offering on London's AlternativeInvestment Market ('AIM'). In doing this we placed 20 million shares withinstitutions raising £8 million before costs and a further £2 million beforecosts from the sale of 5 million shares in a public offering. After costs, this raised your Company £8.9 million which was available for theexploration activities as described in the November 2004 prospectus. Given the Company's financial strength, the Board decided that the originalexploration programme which anticipated the use of one drill rig could beaccelerated. The Board approved the purchase of a second rig which has allowedthe drilling programme to be replanned such that the initial exploration of thetwenty three drilling targets is now expected to be completed by the end ofcalendar year 2006, nearly a year ahead of the original schedule. This new programme has a budgeted monthly net cash outflow of a little under£140,000. Thus, after this expenditure, corporate costs, the initial capitaloutlay on fixed assets and set up costs, there should still be over £5 millionavailable for definition drilling and any other exploration activity that maybecome necessary such as flying aerial surveys and commissioning relevanteconomic studies. Whilst the Company is at this stage in its development, thisshould avoid the need for any additional shareholder funds. Our Operations Manager, Derek Reeves, is to be complimented on the rate at whichhe and the exploration team have established operations on the Islands and thebuild up of the work programme. His institution of a rigorous safety programmehas paid off with no safety failures and his rehabilitation programme hasreceived the plaudits of the Falkland Islands Administration and local farmers.Your Company remains in good standing with the Government and Islandinhabitants. Exploration and drilling went largely unhindered through the winter season. Theexploration programme this year has covered ground geochemistry, streamgeochemistry, ground geophysics and drilling. Results The ground geochemistry has been conducted using a probe which penetrates thepeat to take a sample of the soil and clay immediately below. This work hashelped refine target definition (improving our ability to accurately drillanomalies) in the Glorious Hill prospect (Target 11), in the Lafonia area ofsouthern East Falklands, and will be used in a similar manner for the Albemarleprospect (Target 18), the Leicester prospect (Target 21) and the Warrah prospectin West Falklands. Ground geophysics was carried out by contractors over targetsin both West and East Falklands also for refined target definition. The drilling programme which commenced in Area 6 just north of Goose Green hashad mixed success with some of the anomalies being explained by the intersectionof doleritic and gabbroic dykes. This occurred in Targets T5, T2S and T8W. In Targets T6, T7, T1N and T8E, the drilling was largely in tillite, withlimited quartz veining, and in carbonaceous shales. There has been no clearreason for the geophysical anomaly or for the gold evidenced in the streamsediment sampling although some subeconomic gold results were determined in thecarbonaceous shales. These results will be referred to outside consultants for areview of the geophysical model in the context of the drilling results to date. The drilling has however given our team a much better appreciation of thegeology and as a result three new targets namely T22, T23, and T24 have beengenerated to the south of Area 6 where there are linear features crosscuttingthe carbonaceous shale horizon. The rigorous drilling programme in Area 6 and the northern section of EastFalklands including the Malo prospect (Target 15) will continue through to early2006. Drilling of the Lafonia targets, Peat Banks (Target 10) and Glorious Hill(Target 11), both of which exhibit very different geological signatures, isscheduled in December 2005 and January 2006. Some 7,150 metres of drilling were completed by the end of November 2005. Analyses on the samples from the cores have been carried out by ALS Chemex inPerth, Australia and at this stage checks have been carried out for 51 elementsto ensure full coverage. Additionally, radioactivity is checked in each core andon other anomalous samples to identify any possibility of uranium or alliedmineralisation. To date there have been no results of economic significance. The new Mining Legislation was promulgated on 27 May 2005. As was referred to inour November 2004 prospectus, as a result of our admission to AIM, our licencewas extended to 31 July 2009, which takes us well beyond the current plannedexploration period, and as a result the Company is required to relinquish 50 percent. of the Company's licence area by 16 January 2007. Outlook I remain confident that the potential that was demonstrated in the prospectusremains valid and exciting and that the work we will conduct in the coming yearwill generate the solutions to the various anomalies. We remain hopeful thatthis will lead on to some discoveries of economic value. Richard Linnell Executive Chairman FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 PROFIT AND LOSS ACCOUNT for the Year Ended 30 September 2005 Year ended 8 month period ended 30/09/05 30/09/04 £ £Administrative expenses (1,108,203) (111,445)Operating loss (1,108,203) (111,445)Interest receivable and similar income 324,843 11,699Interest payable and similar charges (2,133) -Loss on ordinary activities before (785,493) (99,746)taxationTax on loss on ordinary activities - -Loss for the financial year after (785,493) (99,746)taxationRetained loss for the year (785,493) (99,746) Year ended 8 month period ended 30/09/05 30/09/04Basic and diluted loss per ordinary (1.09)p (0.30)pshare Continuing operations None of the Company's activities were acquired or discontinued during thecurrent year or previous period. Total recognised gains and losses The Company has no recognised gains or losses other than the losses for thecurrent year or previous period. FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 BALANCE SHEET at 30 September 2005 2005 2005 2004 2004 £ £ £ £Fixed assetsIntangible assets 1,158,218 702,130Tangible assets 537,938 924 1,696,156 703,054Current assetsDebtors 61,001 5,415Cash at bank and in hand 7,659,993 176,133 7,720,994 181,548Creditors: amounts falling due (91,642) (74,294)within one yearNet current assets 7,629,352 107,254Net assets 9,325,508 810,308Capital and reservesCalled up share capital 1,565 763Share premium 10,209,182 909,291Profit and loss account (885,239) (99,746)Shareholders' equity funds 9,325,508 810,308 . FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 CASH FLOW STATEMENT for the Year Ended 30 September 2005 Year ended 8 month period ended 30/09/05 30/09/04 £ £Net cash flow from operating activities (869,413) (93,569)Returns on investments and servicing offinanceInterest received 324,843 39Capital expenditurePurchase of intangible fixed assets (534,127) (317,087)Purchase of tangible fixed assets (686,886) (1,171)Cash outflow before financing (1,765,583) (411,788)FinancingIssue of Ordinary shares 10,362,925 536,671Share issue costs (1,113,482) -Cash call relating to deferred shares - 51,250Increase in cash in the period 7,483,860 176,133 FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Year ended 8 month period ended 30/09/05 30/09/04 £ £Operating loss (1,108,203) (111,445)Depreciation and amortisation 225,778 247Increase in debtors (55,586) (5,415)Increase in creditors 68,598 23,044Net cash outflow from operating activities (869,413) (93,569) FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' EQUITY FUNDS for the Year Ended 30 September 2005 Year ended 8 month period ended 30/09/05 30/09/04 £ £Loss for the financial year (785,493) (99,746)New share capital subscribed (net of issue 9,300,693 910,054costs)Net addition to shareholders' equity funds 8,515,200 810,308Opening shareholders' equity funds 810,308 -Closing shareholders' equity funds 9,325,508 810,308Equity interests 9,325,508 810,308 FALKLAND GOLD AND MINERALS LIMITED AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 NOTES TO THE FINANCIAL STATEMENTS 1. BASIS FOR FINANCIAL INFORMATION The financial information has been prepared in accordance with UK accountingstandards as adopted by the Company, using the accounting policies set out inthe Annual Report for the year ended 30 September 2005. The financial information set out above does not constitute the Company'sstatutory accounts for the periods ended 30 September 2005 or 2004 but isderived from those accounts. Statutory accounts for 2004 have been delivered tothe Registrar of Companies, and those for 2005 will be delivered following theCompany's Annual General Meeting. The auditors have reported on these accounts;their reports were unqualified and did not contain statements under theCompanies Act 1948, as applied in the Falkland Islands. 2. LOSS PER SHARE The basic and diluted loss per ordinary share is based on losses of £785,493 (8months to 30 September 2004: £99,746) and the weighted average number ofordinary shares outstanding of 72,227,260 (30 September 2004: 33,493,388). 3. DIVIDENDS The Directors do not recommend payment of a dividend (2004: £nil). Copies of the Annual Report and Accounts will be posted to all shareholders.Further copies will be available from the Company's head office at 5Charterhouse Square, London, EC1M 6PX, United Kingdom. Telephone +44 (0) 20 72537670. The Report will also be published on the Corporate website atwww.fgml.co.uk This information is provided by RNS The company news service from the London Stock Exchange