EVE.L Regulatory News (EVE)

30 Jun 2006 17:11

Everfor Diamonds PLC30 June 2006 FOR IMMEDIATE RELEASE 30 June 2006 Everfor Diamonds Plc Final Results for the year ended 31 December 2005 Everfor Diamonds Plc ('Everfor', or the 'Company') (AIM:EVE), the AIM-listeddiamond exploration company developing deposits in the North-West of the RussianFederation, announces its audited results for the year ended 31 December 2005. Highlights: • Private placements of 38,755,000 ordinary shares in March 2006 to raise £1,630,200 • Carry forward tax loss benefits of £538,000 • AIM listing April 2006 • Drilling programme commenced May 2006 Annual General Meeting: The annual general meeting of the Company will be held at Ground Floor, 1 RedPlace, London W1K 6PL at 10.30 am on 27 July 2006 Financial Report: The full Annual Report of the Company is available for download from theCompany's website (www.everfor.com) and will be mailed to shareholders on Friday30 June 2006" Executive Chairman, Dr Sergey V Kurzin commented: "The monies raised to date are being used to fund the continued explorationprogramme on the four territories within the Kola Peninsula, North-WesternRussia. The vigorous start to diamond exploration which began in 2004, continuedinto and was maintained throughout 2005, with a mix of exploration activitiesdesigned to provide a first round of drilling targets for testing in 2006. "Everfor's strategy of building a solid exploration footing in a highlyprospective region is designed to allow the company to take advantage of salesof a commodity expected to be in future high demand". 30th June 2006 For further information please contact: Everfor Diamonds Plc Tel: +44 (0) 20 7514 0590Dr Sergey V Kurzin, Executive Chairman www.everfor.comGavin Dallas, Marketing and PR Bankside Consultants Tel: +44 (0) 20 7367 8888Michael Padley/Daniela Hale Chairman's Statement I am delighted to present Everfor Diamond Plc's financial results for the yearended 31 December 2005. After a private placement in 2004 which raisedapproximately GB£3 million, Everfor listed on the London Stock Exchange AIM(Alternative Investment Market: EVE) in April 2006. After successful rounds of private placements on AIM, the Company raisedapproximately GB£1,630,000 which, in addition to the previously raised funds, isbeing used to fund the continued exploration programme on the four territorieswithin the Kola Peninsula, North-Western Russia. Everfor is the first company to have obtained diamond exploration licences inthe Kola Peninsula. Totalling approximately 12,500 km2 the licences are locatedin one of the most prospective territories for diamond exploration. The vigorous start to diamond exploration began after fund-raising in 2004,continued into and was maintained through 2005, with a mix of explorationactivities designed to provide a first round of drilling targets for testing in2006. At the end of 2005, over 40 high priority targets from a total exceeding120 of possible interest were deemed suitable for investigation in 2006. Everfor was particularly fortunate to secure the services of Barry Hawthorne asa non-executive director in mid-year. With over 30 years working with AngloAmerica/De Beers Consolidated Mines Group, Barry's scientific achievements inthe understanding of kimberlites and diamonds, coupled with a truly world-widenetwork of colleagues and board-level management experience provides us with alevel of technical guidance rarely equalled in a small exploration company. Project Status Exploration has been undertaken in over 50% of our total ground-holdings.Sub-areas within each project (licence) have been and continue to be identifiedwhere further work has taken or will take place. The sampling and geophysicalresults received to date vindicate the initial choices of licence area, withsubordinate evidence in the form of new licences being applied for by competitorcompanies in the Varzugskaya and Pulongskaya areas. A considerable amount of geophysical and sample results have been gathered overthe past 12 months. Current work is encompassing general exploration and thefollow-up of targets generated from the combination of those results. Most ofthe sampling will be concentrated in Varzugskaya, in the northern remainder ofErmakovskaya and in the north-west of Pulongskaya. It is planned to relinquishthose areas which have been proved to be devoid of positive samples orgeophysical targets towards the end of the 2006 and 2007 work programme. Outlook Everfor's strategy of building a solid exploration footing in a highlyprospective region is designed to allow the company to take advantage,geological, political and economic factors permitting, of sales of a commodityexpected to be in future high demand. The growth in demand for rough diamonds, as stated by several independentanalysts, is expected to continue; by 2014 an additional US$3-5billion of roughproduct would be required to meet the expected demand. This equates to more thanthe current annual production from Botswana. For diamond exploration companies such as Everfor, there has rarely been a moreapposite time to put in place sound exploration programmes. Economic discoveriesshould be selling their future product to a market both willing and able toabsorb all production at premium prices. Dr Sergey V KurzinExecutive Chairman30 June, 2006 Group profit and loss account for the year ended 31 December 2005 Note 2005 2004 £'000 £'000 Exploration expenses (584) (645)Other administrative expenses (601) (684)Operating loss (1,185) (1,329) ------- -------Interest receivable and similar income 38 32 ----- ------Loss on ordinary activities before taxation (1,147) (1,297) Tax on loss on ordinary activities - - ----- ------Loss on ordinary activities after taxation (1,147) (1,297) Minority interest 85 78 ------ -----Retained loss for the financial year (1,062) (1,219) ====== ===== Loss per share - basic and diluted 2 (1.83)p (3.47)p All amounts relate to continuing activities. Group statement of total recognised gains and losses for the year ended 31December 2005 2005 2004 £'000 £'000 Loss for the financial year (1,062) (1,219) Foreign exchange differences (23) (9) Total losses recognised for the ------- -------year (1,085) (1,228) ======= ======= Group balance sheet as at 31 December 2005 2005 2004 £'000 £'000Fixed assetsIntangible fixed assets 3,182 3,182Tangible fixed assets 6 6 ----- ----- 3,188 3,188 Current assetsDebtors 250 89Cash at bank and in hand 448 1,808 ---- ----- 698 1,897 Creditors: amounts falling duewithin one year (78) (102) ---- -----Net current assets 620 1,795 ----- -----Total assets less current liabilities 3,808 4,983 ===== =====Capital and reservesCalled up share capital 581 581Share premium 3,122 3,122Merger reserve 1,950 1,950Profit and loss account - deficit (2,313) (1,228) Total shareholders' ----- -----funds 3,340 4,425 Minority interests 468 558 ----- ----- 3,808 4,983 ===== ===== Group cash flow statement for the year ended 31 December 2005 Note 2005 2004 £'000 £'000 Net cash outflow from continuing operating activities 3 (1,367) (1,276) Returns on investments and servicing of financeInterest received 38 32Net cash inflow from returns on investments and ---- ----servicing of finance 38 32 Capital expenditure and financial investmentPurchase of tangible fixed assets (3) (7)Net cash outflow for capital expenditure and financial ---- ----investment (3) (7) AcquisitionsPurchase of subsidiary undertaking - (305) --- ----Net cash outflow from acquisitions - (305) Cash outflow before management of liquid resources & ----- -----financing (1,332) (1,556) Management of liquid resourcesMovement on deposits - (60) --- ----Cash outflow from the management of liquid resources - (60) FinancingIssue of ordinary shares - 3,403 ----- -----Cash inflow from financing - 3,403 ------ -----Decrease)/increase in net cash in the year 4,5 (1,332) 1,787 ====== ===== Notes forming part of the financial statements for the year ended 31 December2005 1. Principal accounting policies Basis of preparation The financial statements have been prepared in accordance with currentlyapplicable Accounting Standards in the United Kingdom, which have been appliedconsistently, and under the historical cost convention. Basis of consolidation Everfor Diamonds plc, together with it's subsidiaries as listed in note 8, is adiamond exploration group that is focused on opportunities in the territories ofthe Former Soviet Union. The consolidated financial statements incorporate the results of EverforDiamonds plc and all of its subsidiaries as at 31 December 2005 using theacquisition method of accounting as required. Under the acquisition method, theresults of subsidiary undertakings are included from the date of acquisition. Goodwill Goodwill arising on acquisition of a subsidiary undertaking is the differencebetween the fair value of the consideration paid and the fair value of theassets and liabilities acquired. Fixed asset investments Investments held as fixed assets are stated at cost less provision for anyimpairment to their carrying value. Tangible fixed assets Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less the estimated residualvalue of each asset over its expected useful economic life, as follows: Office and computer equipment: 3-5 years on a straight-line basis Mining rights and deferred exploration Initial exploration and other expenditure incurred in relation to the projectareas to which the licences and rights relate are charged to the profit and lossin the year in which they are incurred. When a project reaches a stage whereby apositive assessment of its economic viability can be reasonably determined, thento the extent that they are recoverable, all further exploration and developmentcosts are carried forward as an asset in the balance sheet. Costs on productive areas are amortised over the life of the area of interest towhich such costs relate on a unit of production output basis. Environmental provisions Appropriate and adequate provision is made for rehabilitation costs over theestimated period of exploration activity. As at 31 December 2005 noenvironmental damage had occurred and hence no provisions exist. Operating leases Amounts payable under operating leases are charged against income on astraight-line basis over the lease term. Foreign currency transactions Monetary assets and liabilities denominated in foreign currencies are translatedinto sterling at rates of exchange ruling at the balance sheet date.Transactions in foreign currencies are translated into sterling at the rate ofexchange ruling at the date of the transaction. Exchange differences are takento the profit and loss account as they arise. Results of overseas subsidiariesand their balance sheets are translated at year end rate. Exchange differenceswhich arise from the translation of the opening net assets of foreignsubsidiaries are taken to reserves. Deferred Taxation FRS 19 'Deferred tax' requires deferred taxation to be recognised in full inrespect of transactions or events that have taken place by the balance sheetdate and which could give rise to an obligation to pay more or less taxation inthe future. Deferred tax assets are only recognised to the extent they aredeemed recoverable. The group has chosen not to discount deferred tax balances,as permitted by FRS 19. Financial instruments In relation to the disclosures made in note 19: • short term debtors and creditors are not treated as financial assets or financial liabilities except for the currency disclosures; and • the group does not hold or issue derivative financial instruments for trading purposes. Share based employee remuneration When shares and share options are awarded to employees a charge is made to theprofit and loss account based on the difference between the market value of thecompany's shares at the date of grant and the option exercise price inaccordance with UITF Abstract 17 (Revised 2004) 'Employee Share Schemes'. Liquid resources For the purposes of the cash flow statement, liquid resources are defined asshort term deposits. 2. Loss per ordinary share The basic and diluted loss per share of 1.83 pence (2004: 3.47 pence) iscalculated, in accordance with FRS22 (Earnings per share), on a loss on ordinaryactivities of £1,062,000 (2004: £1,219,000) and on 58,099,290 ordinary shares(2004: 35,091,719), being the weighted average number of ordinary shares inissue for the year ended 31 December 2005. 3. Reconciliation of operating loss to net cash outflow from operatingactivities 2005 2004 £'000 £'000 Operating loss (1,185) (1,329)Depreciation of tangible fixed assets 3 1Increase in debtors (161) (89)(Decrease)/increase in creditors (24) 102Foreign exchange differences - 39 ----- ------Net cash outflow from operating activities (1,367) (1,276) ===== ===== 4. Reconciliation of net cash flow to movement in the net cash 2005 2004 £'000 £'000 Net cash at the start of the year 1,808 -(Decrease)/increase in net cash in the year (1,332) 1,787Liquid resources - cash deposit - 60 ----- -----Movement in net cash arising from cashflows 476 1,847Foreign exchange movement (28) (39) --- -----Net cash at end of the year 448 1,808 === ===== 5. Analysis of net funds At 1.1.05 Cash flow Foreign At 31.12.05 Exchange £'000 £'000 £'000 £'000 Cash and short term deposits 1,748 (1,332) (28) 388Liquid resources 60 - - 60 ----- ------- ------ ---- Net funds 1,808 (1,332) (28) 448 ===== ======= ====== ==== ENDs This information is provided by RNS The company news service from the London Stock Exchange