Last checked at 6 Jun 2011 07:00
Eurasia Mining Plc
("Eurasia" or the "Company")
Annual Results for the Twelve Months Ended 31 December 2010
Chairman's statement and business review
Once again I am pleased to report to you on steady progress over the last 12 months. The year has been marked by further success in Eurasia's platinum exploration work and an expansion of its activities into uranium in Kyrgyzstan through a joint venture company.
West Kytlim
Eurasia's plans for mining at West Kytlim are advancing, in that the Company continues to add new areas of potential alluvial platinum resources through ongoing drilling, pitting and bulk sampling. These new areas are being integrated into resource calculations that will be submitted to the authorities for approval, at which time a further announcement will be made. Meanwhile the original application for the production licence in this area, based on already approved reserves, is still awaiting approval from the Russian mining authorities, essential before exploitation can be commenced. At the time of writing, there has been no indication from the authorities as to when this approval may be forthcoming.
Despite this ongoing delay, the indications are that such permits for mining will be granted but we are not sure when this will happen as we understand that Eurasia is not the only operator to find itself in this situation in Russia. The Board believes that the eventual mine will achieve the low capital and operating costs inherent in alluvial mining with profitability enhanced by the strong improvement in platinum price experienced over the last year.
Kola
At our Kola projects, drilling in the third quarter of 2010 on the Monchetundra Licence, announced on 20 March 2011, outlined broadly stratabound mineralization dipping at 10-30° degrees to the east within an initial target area of approximately 1100m long and 700m wide. This potentially open pittable zone, called West Nittis, consists of sulphide mineralization containing base metals with PGM; it is additional to the mineralized zones already drilled further south in the Monchetundra licence area.
The drilling also identified separate near-surface high grade (PGM) mineralization above the West Nittis zone. This discovery was further confirmed by follow up drilling at the end of the year. The table below, also announced on 29 March 2011 shows the significant intersections obtained to date within this zone.
Hole No. | Total depth | Interval | Length | True width | Au, | Pt, | Pd, | Cu, | Ni, | Pd equiv |
(metres) | (metres) | (metres) | (metres) | g/t | g/t | g/t | g/t | g/t | g/t | |
MT-79 | 166.2 | 17.3 - 19.0 | 1.7 | 1.36 | 2.37 | 0.14 | 2.5 | 0.95 | 0.15 | 12.19 |
MT-79 | 37.3 - 43.2 | 5.9 | 5.41 | 0.26 | 2.66 | 8.2 | 0.06 | 0.07 | 15.96 | |
MT86 | 90 | 26.0 - 29.3 | 3.3 | 2.66 | 0.14 | 0.75 | 4.96 | 0.67 | 0.15 | 9.66 |
(includes) | 26.0 - 26.9 | 0.9 | 0.72 | 0.27 | 1.43 | 6.46 | 0.85 | 0.21 | 15.76 | |
MT-86 | 49.0 - 50.1 | 1.1 | 1.03 | 12.28 | 6.52 | 98.8 | 2.13 | 0.15 | 145.39 | |
MT-87 | 109.2 | 8.7 - 27.1 | 18.4 | 13.46 | 0.22 | 0.23 | 1.57 | 0.18 | 0.08 | 4.05 |
(includes) | 8.7 - 19.05 | 10.35 | 7.43 | 0.11 | 0.34 | 2.38 | 0.29 | 0.09 | 5.45 |
The directors believe that some of these grades are among the highest ever intersected in the Monchetundra area. The Cu-PGM mineralization is represented by a series of chalcopyrite-rich veins and veinlets in brecciated shear zones. The north-south trending mineralization remains open both along strike and down dip.
The grade and very shallow depth below surface of these intersections adds considerably to the potential for establishing an open pit mining project on the Monchetundra Licence.
As announced on 15 December 2010, the exploration licence at Monchetundra in the Kola Peninsula in Russia was extended for a further two years. It is the Company's intention to progress detailing the resource potential of the West Nittis zone together with the previously drilled resource at Loypishnun in the southern part of the licence area.
The Company intends to focus on developing mine plans to allow the application for a production licence to be made during the term of the extension.
New Projects
The Company is continuing to assess a number of quality project opportunities in Russia while keeping abreast of developments in mining and licensing legislation. It is hoped that the gold exploration licences applied for by Eurasia in the Far East of Russia will become available under reasonable terms during 2011 and if this progresses, a further announcement will be made.
In addition, as announced on 17 January 2011, as an early outcome of Eurasia's expanded search for near to production mining projects in the former Soviet Republics; the Company executed a legally binding Memorandum of Understanding ("MOU") to acquire an interest in the Kamushanovsky Uranium Project in Kyrgyzstan. The project is located 60 kilometres northwest of the capital Bishkek. It has been the focus of a five-year exploration programme and is currently estimated to contain at least 1,775 tonnes of uranium oxide.
The MOU was assigned by Eurasia to Energy Resources Asia Limited ("ERA") in March 2011. ERA is a new private company currently managed by Eurasia; it was co-founded with Afrasia Mining & Energy Investment Holdings Ltd, (AME) who have access to a number of other uranium exploration licences in Kyrgyzstan.
As announced on 14 March 2011, financing is now being sought to further establish ERA and complete the MOU on Kamushanovsky. At this stage the anticipated fundraise referred to in the announcement has not completed, but the Directors believe that the necessary funds will be located in due course.
A bankable feasibility study ("BFS") for the project incorporating pilot work directed at optimizing uranium extraction is in preparation. It is the intention that the BFS will be completed by the end of 2011 in advance of project development.
Kyrgyzstan was one of the centres of uranium mining before independence from the former Soviet Union. Although most mines closed in the early 1990's, ore processing is still active; a plant with capacity for processing concentrates is located approximately 60 kilometers from the Kamushanovsky Deposit.
Conclusion
In conclusion, I want to thank shareholders for their continued patience in weathering the slow pace of the administrative system in Russia and with our dedicated staff and board, I am hopeful that the continuing build up of good news must deliver capital growth in the near future.
Michael Martineau
Chairman
For more information please contact:
Eurasia Mining |
|
Christian Schaffalitzky / Michael de Villiers
| Tel: +44 (0) 207 932 0418 |
Katy Mitchell, WH Ireland Limited | Tel: +44 (0) 161 832 2174 |
Consolidated statement of comprehensive income
for the year ended 31 December 2010
| Note | Year to 31 December 2010 | Year to 31 December 2009 |
|
| £ | £ |
|
|
|
|
Impairment loss |
| - | (1,116,921) |
Administrative costs |
| (558,918) | (724,824) |
Result from equity accounted investments | 13 | (353) | 31 |
Finance income |
| - | 49 |
Finance costs |
| - | (191,170) |
Other financial result | 9 | 36,716 | (223,443) |
|
|
|
|
Loss before tax |
| (522,555) | (2,256,278) |
Income tax expense | 10 | - | - |
Loss for the period |
| (522,555) | (2,256,278) |
|
|
|
|
Other comprehensive income/(loss): |
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations |
| (36,500) | 46,273 |
Other comprehensive income/(loss) for the period, net of tax |
| 36,500 | 46,273 |
Total comprehensive loss for the period |
| (559,055) | (2,210,005) |
|
|
|
|
|
|
|
|
Loss for the period attributable to: |
|
|
|
Equity holders of the parent |
| (522,555) | (2,159,149) |
Minority interest |
| - | (97,129) |
|
| (522,555) | (2,256,278) |
|
|
|
|
Total comprehensive loss for the period attributable to: |
|
|
|
Equity holders of the parent |
| (559,055) | (2,106,417) |
Minority interest |
| - | (103,588) |
|
| (559,055) | (2,210,005) |
|
|
|
|
Loss per share |
|
|
|
Basic and diluted loss (pence per share) | 22 | (0.12) | (0.92) |
|
|
|
|
The loss for the Parent Company for the year was £562,353 (2009: £2,085,385)
Consolidated statement of financial position
as at 31 December 2010
| Note | 31 December 2010 | 31 December 2009 |
|
| £ | £ |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment | 11 | 25,166 | 26,345 |
Investments in equity accounted investees | 13 | 31,485 | 35,003 |
Other financial assets | 14 | 1,148,586 | 262,766 |
Total non-current assets | 1,205,237 | 324,114 | |
|
|
| |
Current assets |
|
| |
Inventories | 926 | 1,375 | |
Trade and other receivables | 15 | 44,803 | 26,025 |
Cash and cash equivalents | 943,636 | 137,757 | |
Total current assets | 989,365 | 165,157 | |
| |||
Total assets | 2,194,602 | 489,271 | |
EQUITY |
|
| |
Issued capital | 16 | 18,461,150 | 16,240,544 |
Reserves | 18 | 3,037,083 | 3,077,523 |
Accumulated losses | (19,480,722) | (18,973,243) | |
Total equity | 2,017,511 | 344,824 | |
| |||
LIABILITIES | |||
Current liabilities |
|
| |
Trade and other payables | 19 | 177,091 | 144,447 |
Total current liabilities | 177,091 | 144,447 | |
|
|
| |
Total liabilities | 177,091 | 144,447 | |
| |||
Total equity and liability | 2,194,602 | 489,271 |
Consolidated statement of changes in equity
| Note | Share capital | Share premium | Deferred shares | Capital redemption and other reserves | Foreign currency translation reserve | Accumulated losses | Total attributable to owners of parent | Minority interest | Total |
|
| £ | £ | £ | £ | £ | £ | £ | £ | £ |
Balance at 1 January 2009 |
| 7,068,860 | 7,020,549 |
| 4,010,174 | (743,142) | (16,872,373) | 484,068 | 2,855 | 486,923 |
Issue of ordinary shares for consulting services performed and cancellation of consultants warrants under the same transaction | 16 | 100,000 | (70,000) |
| (12,574) | - | - | 17,426 | - | 17,426 |
Share capital restructure |
| (7,025,483) | - | 7,025,483 | - | - | - | - | - | - |
Issue of ordinary shares on conversion of loan notes |
| 154,184 | 1,308,100 | - | - | - | - | 1,462,284 | - | 1,462,284 |
Issue of ordinary shares on exercise of warrants |
| 51,276 | 534,075 | - | (72,587) | - | - | 512,764 | - | 512,764 |
Issue of ordinary shares for cash |
| 7,500 | 67,500 | - | - | - | - | 75,000 | - | 75,000 |
Share issue cost |
| - | (1,500) | - | - | - | - | (1,500) | - | (1,500) |
Recognition of equity component of convertible loan notes |
| - | - | - | 21,726 | - | - | 21,726 | - | 21,726 |
Utilised equity component of convertible loan notes on conversion |
| - | - | - | (120,527) | - | - | (120,527) | - | (120,527) |
Reversal of un-utilised equity component of convertible loan notes |
| - | - | - | (44,868) | - | 44,868 | - | - | - |
Reversal of warrant valuation reserve on cancellation of warrants |
| - | - | - | (13,411) | - | 13,411 | - | - | - |
Setting off minority shareholder loan |
| - | - | - | - | - | - | - | 100,733 | 100,733 |
Transactions with owners |
| (6,712,523) | 1,838,175 | 7,025,483 | (242,241) | - | 58,279 | 1,976,173 | 100,733 | 2,067,906 |
Loss for the period |
| - | - | - | - | - | (2,159,149) | (2,159,149) | (97,129) | (2,256,278) |
Exchange differences on translation of foreign operations |
| - | - | - | - | 52,732 | - | 52,732 | (6,459) | 46,273 |
Total recognised income and expense for the period |
| - | - | - | - | 52,732 | (2,159,149) | (2,106,417) | (103,588) | (2,210,005) |
Balance at 31 December 2009 |
| 356,337 | 8,858,724 | 7,025,483 | 3,767,933 | (690,410) | (18,973,243) | 344,824 | - | 344,824 |
Balance at 1 January 2010 |
| 356,337 | 8,858,724 | 7,025,483 | 3,767,933 | (690,410) | (18,973,243) | 344,824 | - | 344,824 |
Issue of ordinary shares on exercise of warrants |
| 81,434 | 786,652 | - | (53,752) | - | - | 814,334 | - | 814,334 |
Issue of ordinary shares for cash |
| 145,575 | 1,310,175 | - | - | - | - | 1,455,750 | - | 1,455,750 |
Share issue cost |
| - | (103,230) | - | - | - | - | (103,230) | - | (103,230) |
Cancellation of options by forfeiture |
| - | - | - | (15,076) | - | 15,076 | - | - | - |
Recognition of share-based payment |
| - | - | - | 64,888 | - | - | 64,888 | - | 64,888 |
Transactions with owners |
| 227,009 | 1,993,597 | - | (3,940) | - | 15,076 | 2,231,742 | - | 2,231,742 |
Loss for the period |
| - | - | - | - | - | (522,555) | (522,555) | - | (522,555) |
Exchange differences on translation of foreign operations |
| - | - | - | - | (36,500) | - | (36,500) | - | (36,500) |
Total recognised income and expense for the period |
| - | - | - | - | (36,500) | (522,555) | (559,055) | - | (559,055) |
Balance at 31 December 2010 |
| 583,346 | 10,852,321 | 7,025,483 | 3,763,993 | (726,910) | (19,480,722) | 2,017,511 | - | 2,017,511 |
Company statement of changes in equity
|
|
|
|
|
|
|
|
| Note | Share capital | Share premium | Deferred shares | Other reserves | Retained loss | Total |
|
| £ | £ | £ | £ | £ | £ |
Balance at 1 January 2009 |
| 7,068,860 | 7,020,549 |
| 4,010,174 | (16,403,447) | 1,696,136 |
|
|
|
|
|
|
| |
Issue of ordinary shares for consulting services performed and cancellation of consultants warrants under the same transaction |
| 100,000 | (70,000) | - | (12,574) | - | 17,426 |
Share capital restructure |
| (7,025,483) | - | 7,025,483 | - | - | - |
Issue of ordinary shares on conversion of loan notes |
| 154,184 | 1,308,100 | - | - | - | 1,462,284 |
Issue of ordinary shares on exercise of warrants |
| 51,276 | 534,075 | - | (72,587) | - | 512,764 |
Issue of ordinary shares for cash |
| 7,500 | 67,500 | - | - | - | 75,000 |
Share issue cost |
| - | (1,500) | - | - | - | (1,500) |
Recognition of equity component of convertible loan notes |
| - | - | - | 21,726 | - | 21,726 |
Utilised equity component of convertible loan notes on conversion |
| - | - | - | (120,527) | - | (120,527) |
Reversal of un-utilised equity component of convertible loan notes |
| - | - | - | (44,868) | 44,868 | - |
Reversal of warrant valuation reserve on cancellation of warrants |
| - | - | - | (13,411) | 13,411 | - |
Transactions with owners |
| (6,712,523) | 1,838,175 | 7,025,483 | (242,241) | 58,279 | 1,967,173 |
Loss for the period |
| - | - |
| - | (2,085,385) | (2,085,385) |
Balance at 31 December 2009 |
| 356,337 | 8,858,724 | 7,025,483 | 3,767,933 | (18,430,553) | 1,577,924 |
Balance at 1 January 2010 |
| 356,337 | 8,858,724 | 7,025,483 | 3,767,933 | (18,430,553) | 1,577,924 |
|
|
|
|
|
|
| |
Issue of ordinary shares on exercise of warrants |
| 81,434 | 786,652 | - | (53,752) | - | 814,334 |
Issue of ordinary shares for cash |
| 145,575 | 1,310,175 | - | - | - | 1,455,750 |
Share issue cost |
| - | (103,230) | - | - | - | (103,230) |
Cancellation of options by forfeiture |
| - | - | - | (15,076) | 15,076 | - |
Recognition of share-based payment |
| - | - | - | 64,888 | - | 64,888 |
Transactions with owners |
| 227,009 | 1,993,597 | - | (3,940) | 15,076 | 2,231,742 |
Loss for the period |
| - | - |
| - | (562,353) | (562,353) |
Balance at 31 December 2010 |
| 583,346 | 10,852,321 | 7,025,483 | 3,763,993 | (18,977,830) | 3,247,313 |
Consolidated statement of cash flows
for the year ended 31 December 2010
| Note | Year to 31 December 2010 | Year to 31 December 2009 |
|
| £ | £ |
Cash flows from operating activities |
|
|
|
Loss for the period |
| (522,555) | (2,256,278) |
Adjustments for: |
|
|
|
Depreciation of non-current assets |
| 1,345 | 2,239 |
Impairment of intangible assets |
| - | 1,116,921 |
(Profit)/loss on disposal of non-current assets |
| - | (129) |
(Profit)/loss on disposal of investments |
| 162 | - |
Share of loss of associates |
| 353 | (31) |
Net foreign exchange loss |
| (36,878) | 223,572 |
Investment income |
| - | (49) |
Finance costs |
| - | 191,170 |
Expense recognised in income statement in respect of equity-settled share-based payments |
| 64,888 | 17,426 |
|
| (492,685) | (705,159) |
Movement in working capital |
|
|
|
Decrease/(increase) in inventories |
| 449 | (6) |
Increase in trade and other receivables |
| (18,778) | (740) |
Increase/(decrease) in trade payables |
| 32,317 | (430,673) |
Cash outflow from operations |
| (478,697) | (1,136,578) |
|
|
|
|
Interest paid |
| - | (9,679) |
Net cash flow from operating activities |
| (478,697) | (1,146,257) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Advanced to joint venture |
| (882,323) | (139,694) |
Purchase of property, plant and equipment | 11 | - | (971) |
Proceeds from disposal of property, plant and equipment |
| - | 609 |
Payments for intangible assets |
| - | (5,058) |
Interest received |
| - | 49 |
Net cash (used)/generated in investing activities |
| (882,323) | (145,065) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issue of equity shares | 16 | 2,166,854 | 586,264 |
Net proceeds from issue of convertible loan notes |
| - | 247,500 |
Net cash proceeds from financing activities |
| 2,166,854 | 833,764 |
Net increase/(decrease) in cash and cash equivalents |
| 805,834 | (457,558) |
Effects of exchange rate changes on the balance of cash held in foreign currencies |
| 45 | 993 |
Cash and cash equivalents at beginning of period |
| 137,757 | 594,321 |
Cash and cash equivalents at end of period |
| 943,636 | 137,757 |
|
|
|
|
Company statement of cash flows
for the year ended 31 December 2010
| Note | Year to 31 December 2010 | Year to 31 December 2009 |
|
| £ | £ |
Cash flows from operating activities |
|
|
|
Loss for the period |
| (562,353) | (2,085,385) |
Adjustments for: |
|
|
|
Depreciation of non-current assets |
| 1,007 | 1,324 |
Profit on disposal of non-current assets |
| - | (129) |
Impairment loss |
| - | 1,184,162 |
Net foreign exchange loss |
| (673) | 296 |
Investment income |
| - | (49) |
Finance costs |
| - | 191,170 |
Expense recognised in income statement in respect of equity-settled share-based payments |
| 64,888 | 17,426 |
|
| (497,131) | (691,185) |
Movement in working capital |
|
|
|
(Increase)/decrease in trade and other receivables |
| (19,602) | 168 |
Increase/(decrease) in trade payables |
| 37,654 | (414,137) |
Cash outflow from operations |
| (479,079) | (1,105,154) |
|
|
|
|
Interest paid |
| - | (9,679) |
Net cash flow from operating activities |
| (479,079) | (1,114,833) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment | 11 | - | (970) |
Proceeds from disposal of property, plant and equipment |
| - | 609 |
Amounts advanced to related party | 23 | (884,234) | (160,846) |
Interest received |
| - | 49 |
Net cash used in investing activities |
| (884,234) | (161,158) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issue of equity shares | 16 | 2,166,854 | 586,264 |
Net proceeds from issue of convertible loan notes |
| - | 247,500 |
Net cash proceeds from financing activities |
| 2,166,854 | 833,764 |
Net increase/(decrease) in cash and cash equivalents |
| 803,541 | (442,227) |
Effects of exchange rate changes on the balance of cash held in foreign currencies |
| 580 | (13,852) |
Cash and cash equivalents at beginning of period |
| 135,722 | 591,801 |
Cash and cash equivalents at end of period |
| 939,843 | 135,722 |
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1. General information
Eurasia Mining Plc (the "Company") is a public limited company incorporated and domiciled in Great Britain with its registered office and principal place of business at Suite 139, Grosvenor Gardens House, 35-37 Grosvenor Gardens, London SW1W 0BS. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of platinum group metals, gold and other minerals in Russia.
Eurasia Mining Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.
The financial information contained in this document does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The figures for the year ended 31 December 2010 have been extracted from the audited statutory financial statements. The financial statements for the year ended 31 December 2010 received an unqualified auditors' report which did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
2. Annual Report and Notice of Annual General Meeting
The Annual Report and Accounts will be dispatched to shareholders on 7 June 2011 and will also be available on the Company's website from that date: www.eurasiamining.co.uk .
The Annual General Meeting of the Company has been convened at 11.00am, on 30 June 2010, at The East India Club, 16 St. James's Square, London SW1Y 4LH.