ECR Minerals Regulatory News (ECR)

3 Oct 2005 12:37

Mercator Gold PLC03 October 2005 Audited Results for the period ending 30th June 2005 LONDON - 3rd October 2005 - The Directors of Mercator Gold plc (AIM: MCR), theUK based gold exploration company, announces final results for the period ending30th June 2005: Highlights • Admission to AIM on 8 October 2004 at 6 pence • Completed first resource assessments at Bluebird and Surprise outlining 467,000 ounces • Total company resources to date 690,100 ounces • Additional fund raising of £1.25 million at 8 pence • SpaDis technology successfully applied to historical data Post 30 June 2005 • Early exercise of warrants raised £1 million For more information www.mercatorgold.com Mercator Gold plc Patrick Harford, Managing Director Tel: +44 (0) 7786 486645Terry Strapp, Chairman Tel : +61 (0) 8 9322 7422Michael de Villiers, Finance Director Tel: +44 (0) 20 7929 1010Julian Vearncombe, Exploration Director Tel: +61 (0) 8 9316 9400 Beaumont Cornish LimitedRoland Cornish / Felicity Geidt Tel: +44 (0) 7628 3396 Ocean Equities Limited Tel: +44 (0) 20 7786 4375Will Slack King & Shaxson Capital LtdNick Bealer Tel: +44 (0) 20 7426 5986 Parkgreen CommunicationsJustine Howarth / Ana Ribeiro Tel: +44 (0) 20 7493 3713 CHAIRMAN'S STATEMENT It is with pleasure that I report on Mercator Gold plc's inaugural year as anAIM-listed company. Mercator was formed to take advantage of a substantialbusiness opportunity (the Annean joint venture) in the gold-rich Meekatharraregion of Western Australia. The company has completed its first resourceassessments at Bluebird and Surprise where 467,000 ounces have been outlined. Iam pleased to inform you that residual low-grade ounces which our explorationteam used as pathfinders have now been substantially upgraded. Total resourcesof the company stand at 690,100 ounces. Mercator Gold plc aims to acquire quality ground holdings each of substantialsize with potential to host more than two million ounces of gold. The Anneanjoint venture covers an exciting greenstone region that has historicallyproduced more than 3.5 million ounces of gold, about half of which was producedfrom within the joint venture tenements, from relatively shallow depths. The company believes the success in our first year and its anticipated ongoingsuccess stem from the conjunction of geological excellence, focus andcommitment, maximising the value of the historic data base and the use of theSpaDIS(TM) technology developed by Vearncombe & Associates Pty Ltd. Targetgeneration is followed by carefully planned drilling programs, results fromwhich have already lead to the definition of new ore resources. Throughout, thecompany is geology-focused. Exploration activities to date have been very successful. In the first elevenmonths from listing, drill programmes totalling 31,000 metres have defined newand exciting resources at Bluebird and Surprise. These resources are 2 milliontonnes@4.4 g/t Au for a total of 282,000 ounces. In addition, the companyidentified another 185,000 ounces of lower grade gold resources, surrounding andadjacent to the high-grade resources, at grades ranging 0.7 to 2 g/t. Thesefinds were made at a cost of less than A$10 (US$7, £4.20) per ounce. The newresources are located within 1.5 kilometres of a major 3 million tonne per annumplant owned by our joint venture partner St. Barbara Mines Ltd. In terms of theAnnean joint venture agreement the company has earned a 45% stake in theMeekatharra properties. This will increase to 51% in calendar 2005. The data verification and analysis programme has highlighted the areaimmediately south of Bluebird, at South Junction, and the Great Northern Highwayarea (also known as Bluebird East) as the more immediate targets for resourceenlargement. In addition to the new resources, exploration continues atMeekatharra North (including Maid Marion and Nottingham with 7km of strikelength), Hawk Hill and Stakewell, all of which are giving positive results atthe time of writing. In the coming year the company intends to: • upgrade and enlarge resources • assess mining suitability at Bluebird and Surprise • focus exploration on the Great Northern Highway and South Junction pits • add to initial drilling successes at Stakewell and Hawk Hill • aggressively explore and define new and additional open pit resources at Meekatharra North • use SpaDIS(TM) technology to identify targets and define resources • continue the process of data validation, target generation and discovery in the Meekatharra area • review and assess new projects. Exploration activity and results are regularly reviewed by our independentgeological director. The board of the company meets regularly bytele-conference, avoiding the need for expensive air travel. The company hasfully functioning Audit and Remuneration committees. Executive andadministrative staff, and their performance are carefully monitored. The companyis fully cognizant of the corporate governance codes in the UK and Australia towhich it strictly adheres. We look forward to the next year's activities with a sense of keen anticipation. Terrence StrappChairman CONSOLIDATED PROFIT AND LOSS ACCOUNT For the period from 22 March 2004 to 30 June 2005 £Administrative expenses (926,654) Operating loss (926,654)Net interest receivable & similar items 59,335 Loss on ordinary activities before taxation (867,319)Taxation - Loss on ordinary activities after taxation (867,319) Loss per share (2.03)p All amounts relate to continuing activities The Group has no recognised gains or losses other than the loss of £867,319 forthe period CONSOLIDATED BALANCE SHEET At 30 June 2005 2005 £ Fixed assets Intangible 1,453,885Tangible 65,934 Total fixed assets 1,519,819 Current assets Debtors 194,972Cash at bank and in hand 954,467 Total current assets 1,149,439 Creditors - amounts falling due within one year 572,611 Net current assets 576,828 Total assets less current liabilities 2,096,647 Capital and reservesCalled-up share capital 871,198Share premium account 2,492,599Merger Reserve (399,831)Profit and loss account (867,319) Equity shareholders' funds 2,096,647 COMPANY BALANCE SHEETAt 30 June 2005 2005 £ Tangible 5,622Investment 450,000Long term loan - subsidiary 1,720,442 Total fixed assets 2,176,064 Current assetsDebtors 60,539Cash at bank and in hand 681,246 Total current assets 741,785Creditors - amounts falling due within one year 125,216 Net current assets 616,569 Total assets less current liabilities 2,792,633 Capital and reservesCalled-up share capital 871,198Share premium account 2,492,599Profit and loss account (571,164) Equity shareholders' funds 2,792,633 CONSOLIDATED CASH FLOW STATEMENTFor the period from 22 March 2004 to 30 June 2005 2005 £ Net cash outflow from operating activities (526,834)Returns on investments and servicing of finance 29,718Capital expenditure and financial investment (1,541,831) Net cash outflow before management of liquid resources and financing: (2,038,947)Management of liquid resources (647,000)Financing:Issue of ordinary shares 2,963,797 Increase in cash in the period 277,850 Reconciliation of net cash flow to movement in net fundsIncrease in cash in the period 277,850 Change in net funds resulting from cash flows 277,850Exchange differences 29,617Movement in short term deposits 647,000 Movement in net funds in the period 954,467Net funds at 22 March 2004 - Net funds at 30 June 2005 954,467 SHAREHOLDERS' FUNDSFor the period from 22 March 2004 to 30 June 2005 2005 £ Loss for the period (867,319)Merger reserve arising on consolidation (399,831)New share capital issued 3,363,797 Net addition to shareholders' funds 2,096,647Opening shareholders' funds - Closing shareholders' funds 2,096,647 Notes The above financial information does not constitute statutory accounts withinthe meaning of section 240 of the Companies Act 1985. The financial informationhas been extracted from the Group's Annual Report for the period ended 30 June2005 on which the auditors have given an unqualified opinion. The Annual Report will be posted to shareholders on 3rd October 2005 and theReconvened Annual General meeting will be held on 26 October 2005. Statutoryaccounts for the period will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. Accounting policies Accounting convention and basis of preparation of financial statements and goingconcern The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards. The principal accountingpolicies of the Group are set out below. These financial statements are prepared on a going concern basis,notwithstanding the loss for the period to 30 June 2005 of £867,319, which theDirectors believe to be appropriate for the following reasons: In common with many exploration companies, the Company raises finance for itsexploration and appraisal activities in discrete tranches to finance itsactivities for limited periods only. Further funding is raised as and whenrequired, the most recent being in September 2005. The Directors are of the opinion that the Company will need to raise additionalfinancial resources to enable the Group to undertake an optimal programme ofexploration and appraisal activity over the next twelve months. Accordingly, theDirectors intend to raise further funds during the course of the next twelvemonths. Whilst the Directors are confident that the Group will be able to secureadditional funding to enable it to continue to meet its debts as they fall dueand to undertake the programme described above for at least the next twelvemonths from the date of approval of these financial statements, there can be noguarantee that this will be the case. The financial statements do not includeany adjustments, particularly in respect of fixed assets, investments, loans andprovisions for winding up which would be necessary if the Company and Groupceased to be a going concern. Basis of consolidation The Group accounts consolidate the accounts of Mercator Gold plc and itssubsidiary undertakings. The acquisition by the Company of Mercator GoldAustralia Pty Ltd in August 2004 was accounted for in accordance with theprincipals of Merger accounting set out in Financial Reporting Standards 6 on "acquisitions and mergers". Accordingly, the consolidated financial statementsare presented as if Mercator Gold Australia Pty Ltd has been controlled by theCompany throughout the period from its incorporation on 19 January 2004. Exploration and development costs All costs associated with mineral exploration and investments are capitalised ona project-by-project basis, pending determination of the feasibility of theproject. Costs incurred include appropriate technical and administrativeexpenses but not general overheads. If an exploration project is successful, therelated expenditures will be transferred to mining assets and amortised over theestimated life of the commercial ore reserves on a unit of production basis.Where a licence is relinquished or a project abandoned, the related costs arewritten off. Where the Group maintains an interest in a project, but the valueof the project is considered to be impaired, a provision against the relevantcapitalised costs will be raised. The recoverability of all exploration and development costs is dependent uponthe discovery of economically recoverable reserves, the ability of the Companyto obtain necessary financing to complete the development of reserves and futureprofitable production or proceeds from the disposition thereof. This information is provided by RNS The company news service from the London Stock Exchange