Last checked at 25 Sep 2007 11:35
25 September 2007 Kryso Resources plc `Kryso' or `the Company' AIM: KYS Company Registration Number 0519050 Interim Results for the six month period ended 30 June 2007 Highlights
- Feasibility study on Pakrut gold project is proceeding well with completion anticipated in Q1 2008
- Geophysical survey at Hukas nickel-copper project is completed, drill targets now being generated
- Highly encouraging gold intersections received from diamond drilling at Pakrut, further results pending
Kryso Resources' Non-Executive Chairman Dr. Trevor Davenport comments:
`The company has achieved a great deal since I last reported to shareholders.We continue to make good headway with the Pakrut feasibility study as well aswith the exploration of the Hukas nickel-copper project. In the light of theexceptional recent drill results from the Pakrut gold project, with moreresults due in the near future, we feel justified in looking to the comingmonths with great optimism.'
For further information, please contact:
Vassilios Carellas/Craig Brown, Kryso Resources plc.
Tel: 020 7371 0600Brett Miller, Ruegg & Co Ltd.Tel: 020 7584 3663
Richard Hail, Fox-Davies Capital Limited.
Tel: 020 7936 5200
Stephen Clayson/Ron Marshman/John Greenhalgh, City of London PR Limited.
Tel: 020 7628 5518 KRYSO RESOURCES PLC Company Registration Number 0519050 Interim Results for the six month period ended 30 June 2007 25 September 2007Chairman's StatementI am pleased to report that since my last statement on 13 June Kryso Resourcesplc has been very active with both the ongoing feasibility study and resourcedevelopment programme at the Pakrut gold project (`Pakrut') and with theinitial exploration of the Hukas nickel-copper project (`Hukas').
The projects, which are both located in Tajikistan, continue to reward the Company's investment in them, while Tajikistan remains one of the most attractive operating environments in Central Asia.
At Pakrut, the highlight has been further positive results from diamond core drilling of Ore Zone 1. Analysis of the samples was carried out by the internationally accredited SGS Lakefield laboratory in South Africa.
Highlights of drilling in Ore Zone 1 include intersections of:
42m @ 11.17g/t Au (including 6m @ 18.3g/t, 4m @ 28.15g/t, 3m @ 10.68g/t, 5m @ 34.04g/t)
50m @ 5.67g/t Au (including 5m @ 41.54g/t)
41.5m @ 4.08g/t Au (including 16m @ 8.49 g/t)
4.5m @ 10.33g/t Au
13.5m @ 7.92 g/t Au
These results are from drilling down to 100-150m below the existing adit leveland support the interpreted trend of the mineralization in Ore Zone 1, which isstill open at depth, to the east and to the north. The drilling, which hasmostly targeted hitherto untested areas, indicates that both the width andgrade of the mineralization are significantly increasing with depth.Recently, core samples from thirteen new diamond drill holes, PKDD 64 to 76,were shipped from Tajikistan to SGS Lakefield for analysis. Three of thesedrill holes are from Ore Zone 3, while the remainder are from Ore Zone 1 onparallel sections to those from which the above analyses were obtained. Inaddition, the mineralised zones within the adit have been channel-sampled andthe samples will soon be dispatched to SGS Lakefield for analysis.The Company plans to drill the deeper extensions of Ore Zone 1 from surface inthe near future. Results from these deeper drill holes, the thirteen drillholes recently completed, the adit channel sampling, together with theexcellent results of the latest press release, will be included in an update ofthe JORC-compliant resource estimate for the Pakrut deposit. This estimatecurrently stands at nearly 600,000 ounces, and the updated figure is expectedto be significantly greater.
Ore samples from Pakrut have also been sent to South Africa for metallurgical testwork, and geotechnical drilling has begun on site. Overall, the Pakrut feasibility study is steadily progressing towards an anticipated date of completion during the first quarter of next year.
At Hukas, geophysical contractor LOGANTEK completed a ground basedelectromagnetic survey during July and August covering 8 square kilometres ofthe Hukas Licensed Area, which extends over a total of 17 square kilometres.The data generated by this survey is currently being processed and initialanalysis has revealed several significant anomalies, which the Company plans todrill as soon as possible.We also intend to undertake a shallow diamond core drill programme later thisyear on the exposed mineralised section discovered within the Hukas LicensedArea during the times of the Soviet Union.
KRYSO RESOURCES PLC CHAIRMAN'S STATEMENT (CONTINUED)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
The 2007/2008-work programme at Hukas is the initial phase of a full evaluation of the licensed area's economic potential, while at Pakrut Kryso remains focused on reaching production within the shortest achievable time.
These interim financial statements and all comparative figures for previous periods have been converted to comply with International Financial Reporting Standards (IFRS) in accordance with the mandated adoption of IFRS by all AIM-listed companies. This change means that the comparative figures are different to those previously reported.
The income statement shows an increased loss of $315,000 for the six monthsended 30 June 2007, compared to $104,000 during the six months ended 30 June2006. The increased loss is due to a decrease in the Company's foreign exchangegains and interest income by $52,000 and an increase in corporate costs of$159,000. The increased corporate costs are associated with the employment ofadditional administration staff, additional regulatory costs and investment inthe improvement of the Company's profile through various public relationsinitiatives.During the six month period ended 30 June 2007, $991,000 of site expenditurewas capitalised. This site expenditure consisted of drilling, trenching,underground development, laboratory costs, including the export of samples forexternal assay, along with mining, engineering, metallurgical and environmentalconsultants. These costs are part of the ongoing feasibility study for thePakrut project.
On a final note, with the gold price reaching highs not seen for decades, I expect the Pakrut project to attract more attention as the Company approaches the completion of the feasibility study, and assuming a positive outcome, proceeds thereafter to the financing and construction of what we hope will become one of Central Asia's most important new gold mines.
Dr. Trevor Davenport
Chairman
KRYSO RESOURCES PLC CONSOLIDATED UNAUDITED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Audited Year ended Six months to Six months to 31 December 30 June 2007 30 June 2006 2006 Note US$'000 US$'000 US$'000Group Revenue - - -Cost of sales - - - ______ ______ ______ Gross Profit - - -Administrative expenses (387) (226) (589)Development expenditure - (2) -
Exceptional gain/(loss) on foreign exchange
31 61 157 ______ ______ ______ Operating Loss (356) (167) (432)Finance income 41 63 95 ______ ______ ______
Loss on Ordinary Activities before Taxation 2 (315) (104) (336)Tax on (loss) on ordinary activities
- - - ______ ______ ______
Loss on Ordinary Activities after Taxation
(315) (104) (336) ______ ______ ______
Loss Per Share - basic and diluted
(0.0047) (0.0019) (0.0059) ______ ______ ______
All of the activities of the Group are classed as continuing.
KRYSO RESOURCES PLC CONSOLIDATED UNAUDITED BALANCE SHEET
AS AT SIX MONTHS ENDED 30 JUNE 2007
Audited Year ended Six months to Six months to 31 December 30 June 2007 30 June 2006 2006 US$'000 US$'000 US$'000Non-current AssetsIntangible assets 8,508 6,511 7,517Tangible assets 425 801 601 ______ _____ _____ 8,933 7,312 8,118 ______ _____ _____Current AssetsInventories 393 188 224Debtors 274 264 236
Cash and cash equivalents
1,120 1,618 2,493 ______ _____ _____ 1,787 2,070 2,953Current Liabilities (83) (103) (119) ______ _____ _____Net Current Assets 1,704 1,967 2,834 ______ _____ _____
Total Assets less Current Liabilities
10,637 9,279 10,952 ______ _____ _____Equity
Called-up equity share capital 1,227 1,035 1,227Share premium account
10,554 8,865 10,554Retained earnings (1,144) (621) (829) ______ _____ _____Total Equity 10,637 9,279 10,952 ______ _____ _____
KRYSO RESOURCES PLC CONSOLIDATED UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Audited Year ended Six months to Six months to 31 December 30 June 2007 30 June 2006 2006 US$'000 US$'000 US$'000
Net Cash Outflow from Operating Activities (594) (317) (535)
Returns of Investments and Servicing of Finance
Interest received 41 63 95 ______ _____ _____
Net Cash Inflow from Returns on Investments
and servicing of finance 41 63 95
Capital Expenditure and Financial Investment
Payments to acquire intangible fixed assets (790) (560) (1,375)Payments to acquire tangible fixed assets
(30) (33) (38) ______ _____ _____
Net cash outflow from Investing Activities
(820) (593) (1,413) ______ _____ _____
Cash Outflow before Financing Activities
(1,373) (847) (1,853) ______ _____ _____Financing
Issue of Equity Share Capital (Net of Issue Costs)
- - 1,881 ______ _____ _____
Net Cash Inflow from Financing Activities
- - 1,881 ______ _____ _____
Decrease in Cash and Cash Equivalents
(1,373) (847) 28 ______ _____ _____
Reconciliation of Operating Loss to Net Cash
Outflow from Operating Activities
Operating loss (356) (167) (432)Depreciation 5 13 27Share based payments - - 25
Decrease/(increase) in inventories
(169) 27 (9)Increase in debtors (38) (142) (114)Decrease in creditors (36) (48) (32) ______ _____ _____
Net Cash Outflow from Operating Activities
(594) (317) (535) ______ _____ _____
KRYSO RESOURCES PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Capital Share Retained Total premium earnings equity US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2006
1,035 8,865 (517) 9,383 ______ ______ ______ ______
Recognised income and expenses
- - (104) (104)Balance at 30 June 2006 1,035 8,865 (621) 9,279 ______ ______ ______ ______
Recognised income and expenses
- - (232) (232)Share based payment - - 25 25New Shares issued 192 1,689 - 1,881
Balance at 31 December 2006
1,227 10,554 (829) 10,952 ______ ______ ______ ______
Recognised income and expenses - - (315) (315)Balance at 30 June 2007
1,227 10,554 (1,144) 10,637 ______ ______ ______ ______
KRYSO RESOURCES PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
1. Accounting Policies
Basis of Accounting
These unaudited interim financial statements were approved for issue by the Kryso Resources plc Board of Directors on 24 September 2007.
These consolidated interim financial statements for the six months ended 30June 2007 have been prepared in accordance with the Listing Rules of theFinancial Services Authority and with IAS 34, `Interim financial reporting' asadopted by the European Union ("EU"). The interim financial statements shouldbe read in conjunction with the financial statements for the year ended 31December 2006 which have been prepared in accordance with UK Generally AcceptedAccounting Principles ("UK GAAP").The Group now prepares its financial statements in accordance with applicableInternational Financial Reporting Standards ("IFRS") as adopted by the EU. Thisis the first financial information on the Group to have been prepared underIFRS and the disclosures required by IFRS 1 "First time adoption of IFRS"concerning the transition from UK GAAP to IFRS have been included in thesenotes.The Group has applied consistent accounting policies in preparing theconsolidated interim financial statements for the six months ended 30 June2007, the comparative information for the six months ended 30 June 2006, thefinancial statements for the year ended 31 December 2006 and the preparation ofthe opening IFRS balance sheet at 1 January 2006, the date of transition.These interim results are unaudited and do not constitute statutory financialstatements as defined in section 240 of the Companies Act 1985.The functionalcurrency of the Group is US dollars and accordingly the amounts in the interimresults are denominated in that currency. The balance sheet rates of exchangefor the US dollar to UK Sterling were US$2.0039 to: ‚£1.The statutory financial statements for Kryso Resources plc for the year ended31 December 2006 received an unqualified Auditors Report and have been filedwith the Registrar of Companies.
Basis of Consolidation
The consolidated interim results incorporate the interim results of the Companyand all Group undertakings. These are adjusted, where appropriate, to conformto Group accounting policies. Acquisitions are accounted for under theacquisition method and goodwill on consolidation is capitalised and the valueof this goodwill is reviewed on a periodic basis. The results of companiesacquired or disposed of are included in the Group profit and loss account afteror up to the date that control passes respectively.
Exploration and Development expenditure
Exploration expenditure is written off in the year in which it is incurred.When a decision is taken that a mining property becomes viable for commercialproduction, all further pre-production development expenditure is capitalised.Capitalisation of pre-production expenditure ceases when the mining property iscapable of commercial production.
Capitalised research and development expenditure is amortised upon commencement of production using a suitable method based on the volumes of proved and probable reserves of ore and are written off if the property is abandoned.
KRYSO RESOURCES PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
2. Operating Loss
Operating loss is stated after charging/(crediting):
Year ended Six months to Six months to 31 December 30 June 2007 30 June 2006 2006 US$'000 US$'000 US$'000
Depreciation of owned fixed assets 206 202 431Less transfer to exploration cost (201) (189) (404)Auditors' remuneration - as auditors
8 8 22- non-audit services 2 0 23. Comparative period
The corresponding amounts in the prior interim period for the six months ended 30 June 2006 and the audited financial statements for the year ended 31 December 2006 have been adjusted for the effects of changes to accounting policies on transition to IFRS as follows:
a. Goodwill arising on the acquisition of Kryso Resources Limited by Kryso
Resources plc was amortised over a ten year period in previous accounting
periods. In accordance with International Financial Reporting Standards the
write off of goodwill has been reinstated; which has resulted in the Group
carrying the goodwill, which is included in intangible assets, at its
original acquisition value.
b. The effect of reversing the amortisation of goodwill on the financial
statements for the six months ended 30 June 2006 is a decrease in operating
loss from $354,000 to $104,000.
c. The effect of reversing the amortisation of goodwill on the financial
statements for the year ended 31 December 2006 is a decrease in operating
loss from $841,000 to $336,000.
d. Equity under previous GAAP at the end of 30 June 2006 was $8,448,000
compared to equity under IFRS's at that date of $9,279,000.
e. Equity under previous GAAP at the date of transition, 1 January 2006 was
$8,802,000 compared to equity under IFRS's at that date of $9,383,000.
f. Equity under previous GAAP at the end of 31 December 2006 was $9,866,000
compared to equity under IFRS's at that date of $10,952,000.
KRYSO RESOURCES PLC