ECR Minerals Regulatory News (ECR)

6 Mar 2006 07:02

Mercator Gold PLC06 March 2006 FOR IMMEDIATE RELEASE 6 March 2006 MERCATOR GOLD PLC ("Mercator Gold" or the "Company") INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 Chairman's Statement to Shareholders I am pleased to present your Company's Interim Report for the six months to 31December 2005. This report covers the first six months of what has been a veryexciting period for the Company. We have built on our solid foundation ofexploration results at Meekatharra and negotiated successfully the acquisitionof St Barbara's (SBM) entire gold exploration and mining assets at Meekatharra.This acquisition included: • the 55 per cent interest in the Annean Joint Venture held by SBM; • the three million tonne per annum Yaloginda mill and gold processing facility, together with the associated infrastructure; • approximately 120 granted exploration tenements and 44 tenement applications along with associated intellectual property relating to these tenements and mining rights. This acquisition consolidates and enlarges the Company's holdings over theMeekatharra Belt, more than doubling the Company's gold resource base and addingsignificant additional exploration ground to the Yaloginda project area. TheCompany now has a total tenement holding of 1932 km(2) with defined goldresources totalling 1.94 Moz. The acquisition has provided the foundation for the company to raise a total of£10 million during December 2005 and January 2006 as well as a capitalreconstruction facilitating a ten for one share consolidation. This acquisition and its associated fund-raising were approved by shareholdersat an extraordinary general meeting on 18 January 2006 and consequently therelated balance sheet and ten for one share consolidation entries are notreflected in the financial results reported to 31 December 2005. The Companyincurred a loss of £763,425 for the six month period to 31 December 2005,largely attributed to ongoing exploration work at Meekatharra and the costsassociated with the recent acquisition and capital raising, all of which havebeen expensed in the period under review. The Company was recently pleased to announce the commencement of the 2006drilling programme with a 16,000 metre campaign at Bluebird. This programmetargets gold mineralisation with the potential to be mined in the near term andconstitutes part of the Company's primary objective for the year, namely, thedefinition of sufficient mineable ounces to support the commencement ofproduction at Meekatharra on a profitable and sustainable basis. The Company's second strategic objective for 2006 is the expansion of theresource base which presently stands at approximately two million ounces ofgold. The Maid Marion project, at Meekatharra North is an advanced explorationtarget and has the potential to add substantially to the Company's resourcebase. Therefore, following the completion of the drilling at Bluebird, theCompany will carry out a 10,000 metre reverse circulation drilling programme atthis site. Concurrent with the reverse circulation programmes at Bluebird and MeekatharraNorth the Company will commence diamond drilling in mid- March at the recentlyacquired Paddys Flat Project. This project presently contains gold resources inexcess of 1.1 million ounces of gold. Resources at the Mickey Doolan and theProhibition prospects contain ounces we consider likely to be mineable in theshort term and accordingly a number of diamond drill holes are planned torecover sufficient core sample to enable metallurgical and engineering studiesto be conducted. Additional resource extensions and exploration drilling are planned for thePaddys Flat area following the completion of the reverse circulation programmeat Bluebird and Meekatharra North. The Company's medium term objective is to recommence production as soon asfeasible. To this end a detailed analysis of the requirements for the plant andpower station refurbishment at the Yaloginda mill site is under way. This isexpected to be completed by April. Pit optimisations of the most advancedprojects are being carried out utilising the wealth of legacy data inheritedwith the asset purchase. Metallurgical and mining programmes are also beingdesigned to progress our knowledge and understanding of the prospects. The vast data base acquired from Saint Barbara Limited, covering 20 years ofexploration activity, is being rationalised and validated. The Company believesthis data base is a truly outstanding asset from which the Company will drawexploration potential for many years to come. The Company has an aggressive, committed and highly qualified team of geologistsworking to ensure the successful rejuvenation of the Meekatharra goldfield. I look forward to reporting to you on your Company's progress on a regular basisthroughout this exciting phase in our development. Terrence StrappChairman 3 March 2006 Consolidated Profit and Loss Account For the six months ended 31 December 2005 6 months to 22 March 2004 31 December to 2005 30 June 2005 (unaudited) (audited) £ £ Administrative expenses (725,476) (926,654)Total administrative expenses and (725,476) (926,654)operating lossNet Interest (payable) / receivable& similar items Net Interest receivable 5,503 29,718 Foreign exchange gain / (loss) (43,452) 29,617Loss on ordinary activities before (763,425) (867,319)taxation Taxation - -Loss on ordinary activities after (763,425) (867,319)taxationLoss per share (0.79)p (2.03)p All amounts relate to continuing activities Consolidated Statement of Total Recognised Gains and Losses For the six months ended 31 December 2005 6 months to 22 March 2004 31 December to 2005 30 June 2005 (unaudited) (audited) £ £Loss for the financial year (763,425) (867,319)Exchange adjustments on foreign 4,135 -currency net investmentsTotal recognised gains and losses (759,290) (867,319)for the financial year Consolidated Balance Sheet As at 31 December 2005 31 December 30 June 2005 2005 (unaudited) (audited) £ £Fixed assetsIntangible 2,118,990 1,453,885Tangible 59,541 65,934Total fixed assets 2,178,531 1,519,819Current assets Debtors 299,287 194,972 Cash at bank and in hand 1,059,011 954,467 Total current assets 1,358,298 1,149,439 Creditors - amounts falling due within one 305,164 572,611year Net current assets 1,053,134 576,828 Total assets less current liabilities 3,231,665 2,096,647 Creditors - amounts falling due after more 944,308 -than one year(convertible loan stock) Net assets 2,287,357 2,096,647 Capital and reserves Called-up share capital 996,198 871,198Share premium account 3,317,599 2,492,599Merger Reserve (399,831) (399,831)Profit and loss account (1,626,609) (867,319)Equity shareholders' funds 2,287,357 2,096,647 Shareholders' Funds For the six months ended 31 December 2005 6 months to 22 March 2004 31 December to 2005 30 June 2005 (unaudited) (audited) £ £Loss for the period (759,290) (867,319)Merger reserve arising on consolidation - (399,831)New share capital issued 950,000 3,363,797Net addition to shareholders' funds 190,710 2,096,647Opening shareholders' funds 2,096,647 -Closing shareholders' funds 2,287,357 2,096,647 Consolidated Cash Flow Statement For the six months ended 31 December 2005 6 months to 22 March 2004 31 December to 2005 30 June 2005 (unaudited) (audited) £ £ Net cash outflow from operating (1,062,707) (527,002)activitiesReturns on investments and servicing of 5,503 29,718finance Capital expenditure and financial (684,800) (1,541,832)investment Net cash outflow before management of (1,742,004) (2,039,116)liquid resources and financingManagement of liquid resources (153,000) (647,000)Financing:Issue of ordinary shares 950,000 2,963,966Issue of convertible debentures 940,000 -Increase / (decrease) in cash in the (5,004) 277,850period Reconciliation of net cash flow tomovement in net fundsIncrease / (decrease) in cash in the (5,004) 277,850periodChange in net funds resulting from cash (5,004) 277,850flowsExchange differences (43,452) 29,617Movement in short term funds 153,000 647,000Movement in net funds for the period 104,544 954,467Net funds at beginning of period 954,467 -Net funds at end of period 1,059,011 954,467 Reconciliation of operating loss tooperating cash flowsOperating loss (725,476) (926,654)Depreciation and amortisation charges 21,048 22,013(Increase)/decrease in debtors (104,315) (194,972)Increase/(decrease) in creditors (253,964) 572,611Net cash outflow from operating (1,062,707) (527,002)activities Notes: 1 No dividend is proposed in respect of the period. 2 The results for the period are derived from continuing activities. 3 The calculations of loss per share have been based on the retained loss after taxation for the 6 month period and on a weighted average of 96,462,372 ordinary shares in issue during the period. (The loss per share for the prior period of 14 months was based on a weighted average of 42,807,238 ordinary shares in issue during that period). 4 The unaudited results have been prepared on a going concern basis and on the basis of the accounting policies adopted in the audited accounts for the period ended 30 June 2005. 5 The interim report is unaudited and does not constitute Statutory Accounts as defined in section 240 of the Companies Act 1985. A copy of the Group's 2005 Statutory Accounts has been filed with the Registrar of Companies. The auditors' opinion on these Statutory Accounts was unqualified and did not contain a statement under section 237 of the Companies Act 1985. 6 The Interim Report for the six months to 31 December 2005 was approved by the Directors on 3 March 2006. 7 The Interim Report will be posted to Shareholders and will be available, free of charge, for a period of at least one month, from Peek House, 3rd Floor, Eastcheap, London EC3M 1EB Company Information Joint BrokersCompany Number 05079979 King & Shaxson Capital Limited 6th FloorDirectors Candlewick HouseT J Strapp 120 Cannon StreetNon-executive Chairman London EC4N 6ASP A HarfordManaging DirectorM J de Villiers Ocean Equities LimitedFinance Director 3 Copthall AvenueJ R Vearncombe London EC2R 7BHExploration Director D GeldardOperations Director M Elias AuditorsNon-executive Director PKF (UK) LLPR N Allen Farringdon PlaceNon-executive Director 20 Farringdon Road London EC1M 3AP RegistrarsSecretary and Registered Office Capita RegistrarsM J de Villiers The RegistryPeek House 34 Beckenham Road3rd Floor Beckenham20 Eastcheap Kent BR3 4TULondon EC3M 1EBTel: +44 (0)20 7929 1010 Principal BankersFax: +44 (0)20 7929 1015 Barclays Bank plcEmail: info@mercatorgold.com Town Gate HouseWebsite: www.mercatorgold.com Church Street East Woking Surrey GU21 6XW Nominated Adviser UK Solicitors to the CompanyBeaumont Cornish Limited Cobbetts LLP5th Floor Ship Canal House10-12 Copthall Avenue King StreetLondon EC2R 7DE Manchester M2 4WB Australia officeMercator Gold Australia Pty Ltd41 Kishorn RoadApplecross 6153Western AustraliaTel: +61 (0) 8 9316 9400Fax: +61 (0) 8 9316 9455Email: admin@mercatorgold.com.au This information is provided by RNS The company news service from the London Stock Exchange