1 Oct 2007 07:00
COPPER RESOURCES CORPORATION("CRC" or the "Company")INTERIM REPORT
For the six months ended 30 June 2007
Copper Resources Corporation (AIM: CRC), the minerals exploration and mining company, today released its interim report for the six months ended 30 June, 2007.
Highlights from January-September, 2007:
* US$15 million (before expenses) was raised in February 2007 through a private placement. * US$7.5 million was raised through the conversion of warrants and options after 30 June 2007. * The Forrest Group agreed that US$7.5 million of its loan outstanding to MiniĬre de Musoshi et Kinsenda SARL ("MMK"), CRC's 75% owned subsidiary in the Democratic Republic of Congo, would be assigned to CRC, in exchange for the issue of 5,025,873 shares. The transaction has not yet taken place. * Kinsenda bankable feasibility study was completed. Status of Current Projects:(1) Kinsenda Project (DRC)
The independent bankable feasibility study ("BFS"), which was completed in June 2007, shows compelling project economics with an IRR to CRC estimated at 52%, and an NPV (10%) estimated at US$124 million based on a long-term copper price of US$1.30 per pound. At a copper price of US$1.75 per pound the BFS shows an IRR of 75% and an NPV of US$230 million.
MMK's dewatering programme at Kinsenda reached the 285 metre level, at which the dewatering is completed and at which operations will commence. Currently, operations are underway for cleaning up and securing the stopes for exploitation at that level, as well the installation of the permanent pump station to reach the 330 metre level, which will then allow the development of the mine to begin. The engineering for the construction of the concentrator has been completed and MMK is ready to place orders for major equipment as soon as funds are available.
MMK is currently exporting 15 tonnes of Cobalt content in white alloy per month originating from its Kimono deposit which is being treated at its electric arc furnace at Musoshi. It expects to increase production by about 20 percent in the coming months.
MMK currently employs 1,115 people in the DRC.
(2) Hinoba-an Project (Philippines)
CRC has commissioned a new scoping study by IMC Mining Solutions Pty Ltd ("IMC") of Brisbane (Australia) to determine the scope of infill drilling programmes needed and to help formulate the content of the BFS, in order to optimise project parameters such as mining and milling throughput rates to maximise project return. The scoping study is expected to be completed within two months, and the BFS will require an additional 18 months, including the new infill drilling.
(3) Haib Project (Namibia):
CRC has elected to cancel its option on the Haib project due to insufficient progress on the metallurgical testing program, and the investment has been written off in full.
We look forward to progressing the Kinsenda and Hinoba-an projects throughout the year.
Metorex Limited:
On 18 September 2007, Metorex Limited announced that it had completed the acquisition of the Forrest Group's interests in CRC and MMK and that it intended to make an offer for the remaining shares in CRC on the basis of 73 new Metorex shares for every 100 CRC shares with a cash alternative of 125p per share.
For further information please contact:
Copper Resources Nabarro Wells & Fox-Davies Capital GTH Corporation Co. Limited Limited Communications Mitchell Alland Hugh Oram Richard Hail Toby Hall Executive Vice Chairman +44 (0) +44 (0) +44 (0) 207 936 +44 (0) 5200 78 7569 5563 20 7710 7400 20 7153 8035
The accompanying unaudited consolidated Financial Information for the six months ended 30 June 2007 and 30 June 2006 is expressed in United States Dollars, and has an effective date of 29 September 2007.
COPPER RESOURCES CORPORATION
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2007
(Unaudited)Notes 30 June 31 December 2007 2006 2006 2005 $'000 $'000 $'000 $'000 Revenue 3,974 3,493 11,740 - Cost of Sales (1,494) (2,218) (11,932) - Gross Profit/(Loss) 2,480 1,275 (192) -
Interest receivable and similar 437 105 158 298income Administration expenses (7,400) (4,175) 661 (1,449) Unrealised foreign exchange gain/ 923 218 (4,195) 78
(loss) Share option expenses - - (243) (1,559) Impairment of mining assets 7 (650) - - - Warrant expenses - (3,877) - - Share issue costs (115) - - - Other write offs - - - (435) Loss on ordinary activities before (4,325) (6,454) (3,811) (3067)taxation Income tax expense (83) - - - Minority interest 398 311 722 1 Loss for the financial period (4,010) (6,143) (3,089) (3,066)
Basic and diluted loss per ordinary (5.9c) (12.0c) (5.4c) (13.6c) share 1
All amounts relate to continuing operations.
COPPER RESOURCES CORPORATIONCONSOLIDATED BALANCE SHEETAs at 30 June 2007(Unaudited) Notes As at 30 As at 30 As at 31 June 2007 June 2006 December 200 (unaudited) (unaudited) 6 (audited) $'000 $'000 $'000 Assets Non-current Assets Property, plant and equipment 3 6,640 6,525 6,941 Development, exploration and 2 44,067 31,178 37,820evaluation Investment in other company - 200 200 Total non-current assets 50,707 37,903 44,961 Current Assets Inventories 7,801 4,165 7,483 Trade and other receivables 6,135 3,119 4,487 Cash and cash equivalents 5,386 12,497 1,334 Total current assets 19,322 19,781 13,304 Total assets 70,029 57,684 58,265 Equity and liabilities Shareholder's equity Share capital 4 57,469 43,024 42,969 Contributed surplus 2,817 2,817 2,817 Other reserves 1,750 6,406 736 Retained earnings (11,072) (10,116) (7,062) Total equity 50,964 42,131 39,460 Minority interests 3,184 3,993 3,582
Net funds available to shareholders 54,148 46,124 43,042
Non-current liabilities Deferred tax liabilities - 18 -
Deferred purchase consideration - 500 475
Total non-current liabilities - 518 475 Current Liabilities Trade and other payables 8,342 3,383 7,059
Deferred purchase consideration - 150 150
Borrowings 5 7,539 7,509 7,539 Total current liabilities 15,881 11,042 14,748 Total liabilities 15,881 11,560 15,223 Total equity and liabilities 70,029 57,684 58,265COPPER RESOURCES CORPORATIONCHANGES IN EQUITY STATEMENTFor the six months ended 30 June 2007(Unaudited) Share Contributed Other r Retained Total Capital surplus eserves earnings $'000 $'000 $'000 $'000 $'000 At 31 December 2005 30,365 2,817 1,576 (3,973) 30,785 Additional contribution of 12,604 - - - 12,604capital Loss arising in the period - - - (3,089) (3,089) Share based transactions - - 243 - 243 Foreign exchange loss - - (1,083) - (1,083) At 31 December 2006 42,969 2,817 736 (7,062) 39,460 Loss for the period - - - (4,010) (4,010) Additional contribution of 14,500 - - - 14,500capital Foreign exchange gain - - 1,014 - 1,014 At 30 June 2007 57,469 2,817 1,750 (11,072) 50,964 COPPER RESOURCES CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS
For the six months ended 30 June 2007(Unaudited) 30 June 31 December 2007 2006 2006 2005 $'000 $'000 $'000 $'000 Operating Loss (4,765) (6,559) (3,969) (3,364) Adjusted for: Taxation payable (83) - - - Share based transactions 3,877 243 1,559
Depreciation on property plant and 1,160 347 722 13
equipment Impairment of mining assets 650 - - - Foreign exchange loss - (218) - -
Operating cash flows before movement in (3,038) (2,553) (3,004) (1,792) working capital
Change in receivables/inventories (1,965) 439 (4,248) 1,814
Change in payables 1,285 (1,468) 1,949 (5,218) Net movement (680) (1,029) (2,299) (3,404)
Net cash used in operating activities (3,718) (3,582) (5,303) (5,196) Cash flows from investing activities
Interest received 437 105 158 298 Acquisition of subsidiaries - - - (12,914)
Cash acquired in acquisition of - - - 2,454subsidiaries Investment in exploration costs (7,163) (3,746) (11,342) (4,363) Investment in associates 200 - - (200) Purchase of property, plant and (1,218) (1,346) (2,137) (217)equipment
Net cash generated used in investment (7,744) (4,987) (13,321) (14,942) activities
Cash flows from financing activities Share capital issued (net of costs) 14,500 7,249 12,604 30,355
Contributions by shareholder - 75 - - Drawdown of loans - 2,177 (3,128) -
Net cash from financing activities 14,500 9,501 9,476 30,355 Effect of exchange rate changes on cash 1,014 - (1,083) - Net increase in cash and cash 4,052 932 (10,231) 10,217equivalents
Cash and cash equivalents at beginning 1,334 11,565 11,565 1,348 of period
Cash and cash equivalents at end of 5,386 12,497 1,334 11,565period 1. Nature of operations
Copper Resources Corporation ("CRC" or the "Company") is the holding company of a mineral exploration and development group of companies (the "Group"). The Group is involved in the exploration, evaluation and development of copper deposits in the Philippines, Namibia and Democratic Republic of the Congo ("DRC").
The accompanying interim consolidated financial information is prepared by management in accordance with International Financial Reporting Standards ("IFRS"). Selected information and disclosures required in notes to annual consolidated financial statements has been condensed or omitted. This interim consolidated financial information should be read in conjunction with the Company's audited annual consolidated financial statements and notes for the year ended 31 December 2006. The interim financial information has been prepared following the same accounting policies and methods of computation as the annual consolidated financial statements for the year ended 31 December 2006.
Basic and Diluted Loss per Share
The calculation of basic and diluted loss per ordinary share for the six months ended 30 June 2007 is based on the loss on ordinary activities after taxation of $4.010 million (2006: $6.143 million) and on 67,482,036 ordinary shares being the weighted average of ordinary shares in issue and ranking for dividend during the period.
Details of warrants and share options in issue which could potentially dilute earnings per share in the future are shown in Note 5.
Impairment
The Company assesses whether impairment exists in any of its exploration projects and writes down that project to its estimated recoverable value when such impairment is found to exist.
Risks
The exploration and exploitation of natural resources are speculative activities that involve a high degree of risk for the Company and its shareholders. The risk factors which should be taken into account in assessing the Company's activities should include, but are not limited to, those set out below:
* Copper price volatility * Currency fluctuations
* Normal risks of mining operations
* Political risks * Government regulations
2. Exploration, evaluation and development
$'000 At 31 December 2005 26,478 Additions 11,342 At 31 December 2006 37,820 Additions 7,163 Impairment charges (291) Adjustment to costs represented by (625) deferred compensation no longer payable At 30 June 2007 44,067
Intangible assets consist of capitalised exploration, evaluation and development costs in relation to each of the Company's mining assets.
3. Property, plant and equipment
Freehold Heavy Plant and Total properties Equipment Equipment $'000 $'000 $'000 $'000 Cost At 31 December 2006 568 6,793 700 8,061 Additions and reallocations 116 1,461 (360) 1,217 Impairment charge (358) - - (358) At 30 June 2007 326 8,254 340 8,920 Depreciation At 31 December 2006 59 936 125 1,120 Charge and reallocation for the (13) 1,248 (75) 1,160period At 30 June 2007 46 2,184 50 2,280 Net book value At 31 December 2006 509 5,857 575 6,941 At 30 June 2007 280 6,070 290 6,640 4. Share Capital Number Amount US$'000 Authorised Ordinary Shares of no par value 500,000,000 - Number Amount US$'000 Issued At 31 December 2006 60,594,191 42,969 Ordinary Shares issued on exercise of 100,000 100options
Ordinary Shares issued on private placement 10,000,000 14,400
At 30 June 2007 70,694,191 57,469
5. Share Options and Warrants
The total number of options outstanding at 30 June 2007:
Share Options Held Share options Held Date of Option Exercise
at 30 at 31 December 200 Grant Period 6 Price per June 2007 Share 4,790,675 4,890,675 Various Various April 2008-December 2010 Warrants Warrants Date of Warrant Price Exercise Grant per Share Period Held at 30 Held at 31 December 2006 June 2007 7,019,929 6,869,929 Various Various 28 March 2008 6. Borrowings Current $'000 At 30 June 2006 7,509 Loan drawdown 30 At 30 June 2007 7,539 7. Subsequent events
During the period, the Company elected to cancel its option on the HAIB Project, due to insufficient progress on the metallurgical testing program, which has led to the write-offs in full of both the associated fixed assets and the related exploration and development expenses.
As announced on 9 July, 2007, Options over 312,500 Shares lapsed subsequent to the period end.
8. Related party transaction
There were no related party transactions during the period.
COPPER RESOURCES CORPORATION