BPC.L Regulatory News (BPC)

10 Jun 2005 07:00

Falkland Gold and Minerals Ltd10 June 2005 FALKLAND GOLD AND MINERALS LIMITED Interim Results for the 6 months ended 31 March 2005 Highlights • Alternative Investment Market ('AIM') flotation raises £8.9 million after costs• Licence term has been extended to July 2009• 1st drill rig operational in early March 2005• 2nd drill rig operational during May 2005• More than 2,100 metres of core extracted by end of May 2005• Stanley office fully established - February 2005• Sample Prep Lab established at Goose Green in March 2005• Core cutting facility operational April 2005• Cash balances of approximately £8.45 million at 31 March 2005 Further information: Falkland Gold & Minerals LimitedRichard Linnell, Chairman +27 82 440 6710 Bell Pottinger Corporate & FinancialNick Lambert +44 (0) 20 7861 3232 CHAIRMAN'S INTERIM STATEMENT I am pleased to report on the activities of Falkland Gold and Minerals Limited("FGML" or "the Company") for the six month period ended 31 March 2005. On 9 December 2004, the Company's shares were admitted to trading on London'sAIM market. I would like to thank all the applicants and shareholders for theirsupport through the flotation process as the institutional placement and thepublic offer were both substantially oversubscribed and had to be scaled back to£8 million and £2 million respectively (before costs). Following the admission to AIM, the Falklands Islands Government has extendedthe period of our licence from January 2007 to July 2009. The licence gives FMGLexclusive exploration rights to substantially all of the onshore land mass ofthe Falkland Islands (approximately 12,000 km2). As part of Stage I of the exploration programme, last year, a considerableamount of exploration had already been conducted. This included an aeromagneticsurvey of the Falkland Islands that identified a number of magnetic anomalies.The presence of alluvial gold in several drainage systems was established aswell as the presence of kimberlitic indicator minerals and titanium rich gravel.The Company has now identified at least twenty three targets for investigationthough this number may increase as our knowledge of the islands' geology isenhanced. Good progress has been made and drilling is well underway on Stage II, where thefocus for the first 12,000 metres of the investigative drilling programme iscentred on nine of the twenty-three targets identified. To get our operating practices running smoothly, we commissioned the firstsurface drill rig, "Falklands 1", on Target 5 which is located north of GooseGreen. We specifically chose Target 5 as the first drill site due to its closeproximity to the Goose Green facilities. By the end of March 2005, over 600metres of 67mm diameter core had been extracted with a further 700 metres inApril. Drilling has now been completed in this area and we should receive ourfirst assay results from the laboratory later this month. Stage III of the exploration programme will involve a further 12,000 metres ofinvestigative drilling on the remaining targets identified during Stage I andany others that we subsequently identify. In March 2005, the Company retained GeoExplo Ltda of Santiago, Chile hasprogressed to carry out ground magnetic surveys. This work commenced in lateApril and has progressed well. The team has already completed the 1,500line-kilometre programme and the data is now being processed. Following the AIM flotation, the Company is in a good position financially andhas cash balances of approximately £8.45 million as at 31 March 2005. Our financial position has allowed us to bring forward the purchase of certainequipment. In particular, we acquired a second surface drill rig, "Falklands 2"in December 2004 to provide us with a back-up for Falklands 1 in the short termand, thereafter, the opportunity to accelerate the rate at which targets aredrilled. Given logistical delays in getting spare parts to the Falklands, we have alsopurchased a larger stock of spares for the rigs than was originally forecast.This, coupled with a decision to purchase certain operational equipment outrightinstead of leasing, has enhanced FGML's operational independence and shouldminimise drilling delays arising from mechanical failures. During the period, the Company returned a loss of £346k, has invested £459k inoperational equipment and has capitalised £239k of costs directly attributableto the exploration activities. The Company is just over three months into the three year exploration programmeoutlined in the 24 November 2004 Prospectus. By the end of May, around 2,100metres had been drilled out of the planned 24,000 metres. With a positiveoutlook for gold underpinning the resource potential of the Company the Boardremains optimistic about FGML's prospects. Richard Linnell, Chairman Profit and loss account for the 6 months ended 31 March 2005 6 months 8 month ended period ended 31/03/2005 30/09/2004 (unaudited) (audited) £ £ Administrative expenses (457,705) (111,445) ----------- -------------Operating Loss (457,705) (111,445)Other interest receivable and similar income 111,836 11,699 ----------- -------------Loss on ordinary activities before taxation (345,869) (99,746) Tax on loss on ordinary activities - - ----------- -------------Loss on ordinary activities after taxation (345,869) (99,746) ----------- -------------Loss retained for the financial period (345,869) (99,746) =========== ============= 6 months to 8 months to 31/03/2005 30/09/2004 Note (audited) Pence PenceBasic and diluted loss per ordinary share 2 (0.5) (0.3) =========== ============= There were no recognised gains or losses in the period other than those dealtwith in the profit and loss account above. All of the activities of the Company are classified as continuing. Balance sheet as at 31 March 2005 31/03/2005 30/09/2004 (unaudited) (audited) £ £ Fixed assetsIntangible fixed assets 941,367 702,130Tangible fixed assets 483,893 924 ---------- --------- 1,425,260 703,054 ========== =========Current assetsCash at bank and in hand 8,451,447 176,133Debtors 87,652 5,415 ---------- --------- 8,539,099 181,548 Creditors: amounts falling due within one year (186,425) (74,294) ---------- --------- Net current assets 8,352,674 107,254 ========== ========= Net assets 9,777,934 810,308 ========== ========= Capital and reservesCalled up share capital 1,565 763Share premium account 10,221,984 909,291Profit and loss account (445,615) (99,746) ---------- --------- Shareholders' equity funds 9,777,934 810,308 ========== ========= Cash flow statement for the 6 months ended 31 March 2005 Note 6 months to 8 month 31/03/2005 period ended (unaudited) 30/09/2004 (audited) £ £ Net cash outflow from operatingactivities 3 (418,291) (93,569) Returns on investments and servicing offinanceInterest received 111,836 39Foreign exchange gain - 11,660 Capital expenditure and financialinvestmentExpenditure in respect of fixedassets (731,726) (329,918) ---------- --------- Net cash outflow before financing (1,038,181) (411,788) FinancingIssue of ordinary share capital 10,413,570 536,671Issue costs (1,100,075) -Receipt of deferred share subscriptions - 51,250 ---------- --------- Increase in cash in the period 4 8,275,314 176,133 ========== ========= Reconciliation of movements in shareholders' funds for the 6 months ended 31 March 2005 Loss for the financial period (345,869) (99,746)New share capital subscribed (netof issue cost) 9,313,495 910,054 ---------- --------- Net increase to shareholders' funds 8,967,626 810,308Opening shareholders' equity funds 810,308 - ---------- --------- Closing shareholders' equity funds 9,777,934 810,308 ========== ========= Notes to the interim results for the 6 months ended 31 March 2005 1. Basis of preparation of the financial statements The interim financial information set out on pages 6 to 9 has been prepared onthe same basis and using the same accounting policies as were applied in drawingup the company's statutory financial statements for the 8 month period ended30th September 2004. The financial information for the 6 months ended 31st March 2005 is unaudited.In the opinion of the directors the financial information for this period fairlypresents the financial position, results of the operations and cash flows forthe period in compliance with Falkland Island Company Law and generally acceptedaccounting principles. The financial information for the 8 month period ended 30 September 2004 hasbeen derived from the Company's audited financial statements for the period asfiled with the Registrar of Companies and does not constitute the statutoryfinancial statements for that period. The auditors' report on the statutory financial statements for the 8 monthperiod ended 30th September 2004 was unqualified. Comparative figures for an equivalent 6 month period ended 31 March 2004 are notavailable. No dividends were proposed or paid during the period. 2. Loss per share The calculation of loss per ordinary share is based on losses of £345,869 (8months to 30 September 2004: loss £99,746) and the weighted average number ofordinary shares outstanding of 66,171,429 (30 September 2004: 33,493,388). Thereis no difference between the diluted loss per share and the basic loss per sharepresented. 3. Reconciliation of operating loss to net cash outflow from operatingactivities. Reconciliation of operating loss to net cash outflowfrom operating activitiesOperating loss (457,705) (111,445)Depreciation charge 9,520 247Increase in debtors (82,237) (5,415)Increase in creditors 112,131 23,044 ---------- ---------- Net cash outflow from operating activities (418,291) (93,569) ========== ========== Analysis of net funds 30/09/2004 Cash Flow 31/03/2005 £ £ £Cash at bank and in hand 176,133 8,275,314 8,451,447 ------------ ---------- ---------- Total 176,133 8,275,314 8,451,447 ------------ ---------- ---------- This information is provided by RNS The company news service from the London Stock Exchange