ECR Minerals Regulatory News (ECR)

30 Mar 2007 15:26

Mercator Gold PLC30 March 2007 For immediate release 30 March 2007 Mercator Gold Plc Plc ("Mercator" or the "Company") Ticker- AIM:MCR INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2006 CHAIRMAN'S REPORT I am pleased to present your Company's Interim Report for the six months to 31December 2006. Mercator continues to advance towards its target of producing gold bymid-2007 and having at least four years of mineable reserves in place. The Companyhas already defined a mining reserve of 75,000 ounces of gold at Surprise and anindicated resource of 380,000 ounces of gold at Prohibition-Vivian-Consols. Furtherdrilling is being conducted at Prohibition to extend the existing resources andstudies are currently underway to defining a probable reserve to allow for a decisionwith regard to the second stage production planned for early 2008. The recentfund-raising of £4.49 million provides the capital required to achieve the aboveobjectives. Refurbishment of the Yaloginda Plant is nearing completion with re-commissioningexpected to commence during May. All of the plant components starting with thecrushing circuit, milling circuit, leaching and finishing with the gold elutioncircuit will have been fully tested before full scale production is achieved. Lowgrade ore from existing stockpiles and from the pre strip material for the Surpriseopen pit will provide the initial re-commissioning ore source. Full scale productionwould follow the build up of gold inventory in the Carbon in Leach circuit.Updated Resource estimates for Prohibition-Vivian-Consols are under review togetherwith various mining scenarios that will lead to Probable Reserve announcements in thecoming weeks. Plans are being developed to optimise the use of Mercator's extensive tenementholdings at Meekatharra, which presently cover 1,932km2 with contained gold resourcesof 2,160,000 ounces. The Board believes there is considerable potential to utilisethese ground holdings in the current positive gold-mining environment. The Board ispresently considering a number of alternatives in this regard.Your Company's professional team continues to deliver positive results on all frontsand I am confident they will continue to deliver at similarly high standards in thefuture. To compliment the existing team, three new production orientated appointments havebeen made: a highly skilled and experienced Mining Engineer to the position ofOperations Manager, the appointment of an equally experienced Metallurgist as ProcessManager, and appointment of a Mine Planning engineer. At a time when skilledprofessionals are highly sought after in Western Australia, Mercator has been mostfortunate to attract the calibre of these professionals who are also locating to siterather than electing a fly in fly out roster. I look forward to reporting to you on your company's progress on a regular basisthroughout this exciting phase in our development. Terrence StrappCHAIRMAN Consolidated Profit and Loss AccountFor the six months ended 31 December 2006 6 months to 6 months to 12 months to 31 December 31 December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) £ £ £Administrative expenses (1,341,210) (725,476) (2,127,615)Other income 102,865 - 233,469---------------------------- --------- -------- --------Operating loss (1,238,345) (725,476) (1,894,146)Interest payable and similar items (92,022) (47,881) (94,682)Interest receivable & similar items 315,098 9,932 152,203---------------------------- --------- -------- --------Loss on ordinary activities beforetaxation (1,015,269) (763,425) (1,836,625)Taxation - - ----------------------------- --------- -------- --------Loss on ordinary activities aftertaxation (1,015,269) (763,425) (1,836,625)---------------------------- --------- -------- --------Loss per share (1.9)p (7.9)p (7.5)p---------------------------- --------- -------- -------- All amounts relate to continuing activities The loss per share for the 6 months ended 31December 2005 has been re-stated to take account of the subsequent 10:1 share consolidation Consolidated Statement of Total Recognised Gains and LossesFor the six months ended 31 December 2006 6 months to 6 months to 12 months to 31 December 31 December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) £ £ £Loss for the financial year (1,015,269) (763,425) (1,836,625)Exchange adjustments on foreigncurrency net investments 30,095 4,135 (929,394)---------------------------- --------- -------- --------Total recognised gains and lossesfor the financial year (985,174) (759,290) (2,766,019)---------------------------- --------- -------- -------- Consolidated Balance SheetAt 31 December 2006 31 December 31 December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited)Fixed assetsIntangible 14,168,042 2,118,990 10,529,014Tangible 3,738,268 59,541 2,859,412---------------------------- --------- -------- --------Total fixed assets 17,906,310 2,178,531 13,388,426---------------------------- --------- -------- --------Current assetsStocks 91,810 - 91,687Debtors 390,017 299,287 403,524Cash at bank and in hand 7,406,500 1,059,011 13,297,216---------------------------- --------- -------- --------Total current assets 7,888,327 1,358,298 13,792,427Creditors - amounts falling duewithin one year (672,155) (309,472) (1,140,995)---------------------------- --------- -------- --------Net current assets 7,216,172 1,048,826 12,651,432---------------------------- --------- -------- --------Total assets less currentliabilities 25,122,482 3,227,357 26,039,858---------------------------- --------- -------- --------Creditors - amounts falling dueafter more than one year (900,681) (811,226) (854,784)Provisions for liabilities (1,207,200) - (1,205,594)---------------------------- --------- -------- --------Net assets 23,014,601 2,416,131 23,979,480---------------------------- --------- -------- --------Capital and reservesCalled -up share capital 5,358,598 996,198 5,355,215Share premium account 22,545,572 3,317,599 22,528,660Merger reserve (399,831) (399,831) (399,831)Other reserves 128,774 128,774 128,774Profit and loss account (4,618,512) (1,626,609) (3,633,338)---------------------------- --------- -------- --------Equity shareholders' funds 23,014,601 2,416,131 23,979,480---------------------------- --------- -------- -------- Consolidated cash flow statementFor the six months ended 31 December 2006 6 months to 6 months to 12 months to 31 December 31 December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) £ £ £Net cash outflow from operatingactivities (1,605,355) (1,062,707) (376,588)Returns on investments andservicing of finance 289,269 5,503 138,752Capital expenditure and financialinvestment (4,586,958) (684,800) (11,988,877)---------------------------- --------- -------- --------Net cash outflow before managementof liquid resources and financing: (5,903,044) (1,742,004) (12,226,713)Management of liquid resources 5,460,796 (153,000) (12,939,994)Financing - 1,890,000 25,426,774---------------------------- --------- -------- --------Increase / (decrease) in cash inthe period (442,248) (5,004) 260,067---------------------------- --------- -------- --------Reconciliation of net cash flow tomovement in net fundsIncrease / (decrease) in cash inthe period (442,248) (5,004) 260,067Movement in short term deposits (5,460,796) 153,000 12,939,994Exchange differences 12,328 (43,452) (857,312)---------------------------- --------- -------- --------Increase in cash and short termdeposits 5,890,716) 104,544 12,342,749Increase in debt due after morethan one year (45,897) (811,226) (854,784)---------------------------- --------- -------- --------Movement in net funds in the period (5,936,613) (706,682) 11,487,965Net funds at beginning of period 12,442,432 954,467 954,467---------------------------- --------- -------- --------Net funds at end of period 6,505,819 247,785 12,442,432---------------------------- --------- -------- --------Reconciliation of operating loss tooperating cash flowsOperating loss (1,238,345) (725,476) (1,894,146)Depreciation and amortisationcharges 86,840 21,048 48,187(Increase) / decrease in debtors 13,506 (104,315) (208,552)(Increase) / decrease ininventories (122) - (91,687)Increase / (decrease) in creditors (467,234) (253,964) 1,769,610---------------------------- --------- -------- --------Net cash flow from operatingactivities (1,605,355) (1,062,707) (376,588)---------------------------- --------- -------- -------- Shareholders' FundsFor the six months ended 31 December 2006 6 months to 6 months to 12 months to 31 December 31 December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) £ £ £Loss for the period (1,015,269) (763,425) (1,836,625)Exchange adjustments on foreigncurrency net investments 30,095 4,135 (929,394)Equity reserve arising on issue ofconvertible loan notes - 128,774 128,774New share capital issued 20,295 950,000 24,520,078---------------------------- --------- -------- --------Net addition to shareholders' funds (964,879) 319,484 21,882,833Opening shareholders' funds 23,979,480 2,096,647 2,096,647---------------------------- --------- -------- --------Closing shareholders' funds 23,014,601 2,416,131 23,979,480---------------------------- --------- -------- -------- 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 period and on a weighted average of 53,568,566 ordinary shares in issue during the 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 year ended 30 June 2006. 5 Creditors falling due after more than one year 31 December 30 June 2006 2006 Convertible unsecured loan stock: £ £ Redemption value at 31 December 2006 1,000,000 1,000,000 Un-amortised issue costs and equity reserve (99,319) (145,216) ---------------------------------------------------------------------- Convertible loan stock balance at of period 900,681 854,784 ---------------------------------------------------------------------- On 14 December 2005, the Company issued two-year convertible loan notes carrying a coupon rate of 9.25% interest, payable quarterly in cash or, at the holder's option, by the issue of shares at £0.60 each. At any time after one year, the holders have the option to convert the face value of their holdings to shares at a price of £0.60 per share. After one year, the Company has the option to redeem the notes at face value plus double the accrued interest outstanding at the time of giving notice. The holder could elect to receive the redemption ayment in cash or shares at the rate of £0.60 per share. Any notes remaining on the second anniversary of their issue will be repaid in cash, plus accrued interest. The allocation of redemption face value between liability and equity components has been accounted for in accordance with Financial Reporting Standard FRS 25. 6 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 2006 Statutory Accounts has been filed with the Registrar of Companies. The auditors' opinion on those Statutory Accounts was unqualified and did not contain a statement under section 237 of the Companies Act 1985. 7 The Interim Report for the six months to 31 December 2006 was approved by the Directors on 29 March 2007. Enquiries to: Mercator Gold plcPatrick Harford, Managing Director Tel: +44 (0) 20 7929 1010Terry Strapp, Chairman Tel: +61 (0) 412 228 422Email: info@mercatorgold.comWebsite: www.mercatorgold.com Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888Keith Irons This information is provided by RNS The company news service from the London Stock Exchange