Last checked at 27 Jun 2008 11:33
27 June 2008 AIM:KYS Kryso Resources Plc Company Registration Number 05190505 FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
Kryso Resources Plc (`Kryso' or the `Company') is pleased to announce its final results for the year ended 31 December 2007. The results below are extracted from the Company's audited Annual report and Financial Statements.
Copies of the annual report and accounts will be posted to all shareholders by 30 June 2008 and will be available from the Company's website at www.kryso.com shortly. Further copies will be available from the Company's registered offices at Unit 3H, Cooper House, 2 Michael Road, London SW6 2AD, United Kingdom from the date of posting.
For further information, contact:
Kryso Resources plcVassilios Carellas/Craig BrownTelephone: 020 7371 0600Ruegg & Co. LimitedBrett MillerTelephone: 020 7584 3663Fox-Davies Capital LimitedRichard HailTelephone: 020 7936 5200Orbis Equity Partners LimitedChristian DennisTelephone: 020 3178 3977CHAIRMAN'S STATEMENT
I am pleased to report that since my last statement on 25 September 2007 Kryso Resources plc completed an internal Pre-Feasibility Study (`PFS') for the Pakrut Gold project (`Pakrut') in February this year based on the updated interim JORC compliant resource statement produced by GeoLogix Mineral Resource Consultants (Pty) Ltd (`GeoLogix'), the Company's geological consultants. In addition a TEM survey was completed at the Hukas nickel-copper project (`Hukas') in September 2007 by LOGANTEK, a geophysical services company primarily active in Asia; several interesting anomalies were outlined.
The projects, which are both located in Tajikistan, continue to reward the Company's investment in them, while Tajikistan, we believe, remains one of the most attractive operating environments in Central Asia.
At Pakrut, the highlight has been the completion of an internal PFS based on an interim resource estimate produced by GeoLogix in November 2007, which indicates that sufficient gold resources exist at the metal price forecast to make a significant return on the investment required for the project to go ahead.
The GeoLogix resource has been classified according to the JORC Code (2004), and the grade and tonnage of the resource, estimated at a 0.5g cut-off, are tabulated below.
Pakrut November 2007 GeoLogix Resource Summary
Cut-Off Tonnes Au Metal(Au g/t) (Metric) (g/t) (Oz) Measured0.5 9,361,011 2.49 749,669 Indicated0.5 2,771,667 1.62 144,033 Inferred0.5 2,914,053 1.74 162,885 Total0.5 15,046,730 2.18 1,056,587
As the mineral resource at Pakrut is still open in three directions and drilling is continuing to produce very encouraging intersections - particularly in the deeper sections of Ore Zone 1, Kryso confidently expects that this resource will increase further by year-end.
The PFS has addressed the various technical, environmental, infrastructure, administrative and financial aspects of Pakrut and concludes that the project is economically viable. Consequently Kryso is now committed to completing a definitive Bankable Feasibility Study before the end of the year.
At Hukas in the Gishun Licence Area, a TEM geophysical survey carried out by LOGANTEK was completed in September 2007. Consisting of 22 kilometres of fixed-loop surveying, the survey identified three significant conductivity anomalies. These conductors conform to the dip and the northeasterly strike of gabbro-norites, which are known to host the nickel copper sulphide mineralization in the area. An extensive 900 metres long anomaly was identified approximately 400 metres to the north of a small isolated mineralised lens from which sampling by the Soviets returned excellent average grades of 2.86% nickel, 1.26% copper, 0.084% cobalt and 2.3g/t platinum group metals. The depth below the surface at which the conductor occurs varies from between 60 metres to 100 metres and dips to the east. Its width is up to 50 metres, but may be smaller depending on the conductivity of the anomaly, and has a depth extension of over 200 metres. The anomaly is still open to the north as the terrain precluded surveying at the time. Two more anomalies were identified close to the Mandara stream, located a few kilometres to the north within the Company's licensed exploration area.
In June 2008, the Company commenced a 1,500 metres programme of diamond core drilling on targets identified by the geophysical survey. Depending on the results of this drilling, a further ground-based electromagnetic geophysical survey will be carried out on the rest of the Company's Gishun exploration area.
Trevor DavenportNon-Executive Chairman26 June 2008Report of the Directors
The Directors present their report and the audited Financial Statements of the Group for the year ended 31 December 2007.
Principal Activity
The principal activity of the Company during the year was that of a holding company. The principal activity of the Group is that of mineral exploitation.
Business Review
Introduction
Kryso Resources is an emerging mineral exploration Company that is principally focused on exploring for gold and other precious and base metal deposits previously discovered in Central Asia during the Soviet Union era and then, where appropriate, bringing them into production.
Kryso Resources, which has its head office in London, is a public company that was admitted to AIM in December 2004 in order to continue funding the development of the Pakrut Gold Deposit, further explore the Pakrut Licence Area and to obtain and acquire other gold and base metal deposits in Tajikistan and elsewhere in Central Asia. The Group's Executive Directors and senior management are normally based in Dushanbe.
The Company's Executive Directors have a proven track record of operating in Tajikistan and they believe that Kryso Resources is the first foreign company to obtain a 100% interest in a mining and exploration project in the country.
Strategy
Kryso's strategy is to maximise shareholder value through the development of the Group's exploration properties, through proving up additional resources, completing feasibility studies on the properties and, where and when appropriate, putting the projects into production.
The Group's long-term objective is to provide growth through exploration and to acquire advanced stage projects within the Commonwealth of Independent States (CIS), part of the Former Soviet Union.
Kryso believes it has high quality senior and local management who have the right technical skills and in-country experience to develop current and future projects into profitable mining projects.
Operating ReviewSince listing on AIM in December 2004 the Company has:
- Outlined an initial JORC resource of over 1,000,000 ounces at the Pakrut gold project (`Pakrut').
- Commenced a bankable feasibility study on an open pit and underground mining operation at Pakrut.
- Acquired the exploration licence for the Hukas nickel-copper project (`Hukas') and completed a surface trenching programme as well as TEM geophysical survey over part of the property.
- Formed a strategic alliance with Great Basin Gold (`Great Basin'), formerly part of the Hunter Dickinson group of companies, and cemented this through a non-brokered private placement of Kryso shares worth GBP1,000,000 to Great Basin. This was the first financing carried out by Kryso since its listing, when GBP2,600,000 was raised.
- Completed close to 12,000 metres of diamond core drilling at the Pakrut Gold project.
- Completed over 2,500 metres of surface trenching at Pakrut and Hukas.
- Developed over 600 metres of underground adit at Pakrut. Re-established access to over 4 kilometres of Soviet-developed underground adit at Pakrut.
- Re-established approximately 25 kilometres of access and site roads up to and around Pakrut.
- Acquired 3 diamond drill rigs, one reverse circulation drill rig with compressor, 4 bulldozers, numerous support vehicles, underground mining equipment and various workshop machinery and tools.
- Built an 85-person camp at Pakrut, including workshops, fuel depot, storage facilities etc.
- Established its own sample preparation and analytical laboratory in Tajikistan's capital city Dushanbe.
- Prepared and assayed close to 21,000 samples, of which almost 4,500 have been sent to South Africa to be fire assayed by SGS Lakefield.
- Completed initial metallurgical testwork on Pakrut material in co-operation with SGS Lakefield.
- Commenced with a comprehensive metallurgical testwork program at SGS Lakefield's laboratory in South Africa.
- Completed an environmental baseline study for Pakrut to World Bank Environmental Guidelines.
- Completed an internal pre-feasibility study on the Pakrut gold deposit that demonstrates a robust project.
Pakrut Gold Deposit and Licence Area In April 2004, LLC Pakrut, a wholly owned subsidiary of the Company, was granted a licence and geological lease to explore and exploit the Pakrut Licence Area which comprises the Pakrut gold deposit and the surrounding 6,300 hectare exploration area located in the metalliferous southern Tien-Shan Fold Belt. This belt is reputed to have the second largest known gold resource after the Witwatersrand in South Africa.
The Company is currently conducting a bankable feasibility study on the Pakrut gold deposit to put the deposit into production and also intends to explore identified mineralization in the Pakrut Licence Area.
The Hukas Ni-Cu-Co-PGM Project In June 2006 the Company was awarded an exploration licence for the Hukas Nickel-Copper deposit. During 2007 the Company carried out a TEM geophysical survey that identified a shallow conductor, 900 metres in length, still open to the north and commencing 400 metres to the north of the lens of mineralisation that crops out in the property. In addition, another two conductors were identified in an area called Manadara. A drilling programme has been planned for 2008 to test these conductors.
Financial ReviewThe results for the year ended 31 December 2007 and the year ended 31 December2006 were as follows: 2007 2006 USD000 USD000Turnover - -Exploration costs capitalised as intangible assets 2,605 1,754Administrative expenses 993 589Total costs 3,598 2,343% Administrative expenses 27.6% 25.1%Operating loss 941 432Less: interest received 71 95Loss on ordinary activities before taxation 870 336Loss per share (cents) 1.25 0.59
The main financial Key Performance Indicator (`KPI') for the Company is administration costs, as a percentage of total costs. This KPI allows the Company to monitor costs. The KPI was lower in 2006 and increased in 2007 due to additional corporate costs and expenditure on public and investor relations.
Consolidated Income Statement - Year ended 31 December 2007
2007 2006 USD000 USD000Turnover - -Cost of sales - -Gross Profit - -Administrative expenses (993) (589)Gain on foreign exchange 52 157Operating Loss (941) (432)Interest receivable 71 96Loss on Ordinary Activities before Taxation (870) (336)Tax on loss on ordinary activities - -Loss on Ordinary Activities after Taxationattributable to equity holders of the Company (870) (336)Basic and Diluted Loss per Share attributableto equity holders of the Company USD(0.0125) USD(0.0059)
All of the activities of the Group are classed as continuing.
The Company has taken advantage of section 230 of the Companies Act 1985 not to publish its own Profit and Loss Account.
The Group has no recognised gains or losses other than the results for the years as set out above.
Consolidated Balance Sheet - As at 31 December 2007
2007 2006 USD000 USD000Fixed AssetsIntangible assets 10,122 7,517Tangible assets 462 601 10,584 8,118Current AssetsInventories 621 224Debtors 327 236Cash and cash equivalents 1,586 2,493 2,534 2,953Creditors: amounts falling due within one year (281) (119)Net Current Assets 2,253 2,834Total Assets less Current Liabilities 12,837 10,952EquityCalled-up share capital 1,481 1,227Share premium account 13,033 10,554Retained earnings (1,677) (829)Total Equity 12,837 10,952
Consolidated Statement of Changes in Equity - Year ended 31 December 2007
Share Share Retained capital premium earnings Total USD000 USD000 USD000 USD000Balance at 1 January 2006 1,035 8,865 (517) 9,383Recognised income and expenses - - (336) (336)Share based payments - - 24 24Issue of ordinary shares 192 1,689 - 1,881Balance at 31 December 2006 1,227 10,554 (829) 10,952Recognised income and expenses - - (870) (870)Share based payments - - 22 22Issue of ordinary shares 254 2,673 - 2,927Costs of share issue - (194) - (194)Balance at 31 December 2007 1,481 13,033 (1,677) 12,837
Consolidated Cash Flow Statement - Year ended 31 December 2007
2007 2006 USD000 USD000Net Cash Outflow from Operating Activities (1,213) (535)Cash flows from Investing ActivitiesPayments to acquire intangible fixed assets (2,187) (1,375)Payments to acquire tangible fixed assets (311) (38)Interest received 71 95Net Cash Outflow from Investing Activities (2,427) (1,318)Cash flows from Financing ActivitiesIssue of equity share capital (net of issue costs) 2,733 1,881Net Cash generated from Financing Activities 2,733 1,881Net (Decrease)/Increase in Cash and cash equivalents (907) 28Cash and cash equivalents at beginning of the year 2,493 2,465Cash and cash equivalents at end of the year 1,586 2,493
Notes to the Consolidated Cash Flow Statement - Year ended 31 December 2007
2007 2006 USD000 USD000Reconciliation of Operating Loss to Net Cash Outflowfrom Operating ActivitiesOperating loss (941) (432)Depreciation 32 27Share based payments 22 25Increase in stocks (397) (9)Increase in debtors (91) (114)Increase/(Decrease) in creditors 162 (32)Net Cash Outflow from Operating Activities (1,213) (535)
Notes to the Financial Statements
Basis of Accounting These Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The Financial Statements have been prepared under the historical cost convention.
First Time Adoption of International Financial Reporting Standards (IFRS) The Company and Group have adopted IFRS for the first time in their respective Financial Statements. The date of transition was 1 January 2006 and all comparative information in these Financial Statements has been restated to reflect the Company's and Group's adoption of IFRS. The transition to IFRS reporting has resulted in a number of changes to the Financial Statements, the notes thereto and the accounting policies, compared with previous annual reports. These changes are set out in the notes to the Financial Statements. The accounting policies that have been applied in the opening balance sheet have also been applied throughout all periods presented in these Financial Statements.
Basis of Consolidation The consolidated Financial Statements incorporate the Financial Statements of the Company and all Group undertakings. These are adjusted, where appropriate, to conform to Group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised. The results of companies acquired or disposed of are included in the Group profit and loss account after or up to the date that control passes respectively. As a consolidated Group profit and loss account is published, a separate profit and loss account for the parent company is omitted from the Group Financial Statements by virtue of section 230 of the Companies Act 1985. All significant intercompany transactions and balances between group undertakings are eliminated on consolidation.
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