EVE.L Regulatory News (EVE)

29 Sep 2006 16:45

Everfor Diamonds PLC29 September 2006 Everfor Diamonds Plc Interim Results for the period ended 30 June 2006 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 interim results for the 6 months ended 30 June 2006. Highlights: • March 2006 Private placement of 38,755,000 ordinary shares to raise £1,630,200 • April 2006 AIM listing • May 2006 Drilling programme commenced with environmentally friendly equipment • June 2006 Sampling programme commenced - currently 95% complete as at 1st September • June 2006 Sources of geophysical anomalies explained Executive Chairman, Dr Sergey V Kurzin commented: "The funds raised from private placements early in the year have been applied tofurthering the company's exploration efforts, principally sampling and thedrilling of geophysical targets. The initial drilling programme is onlyone-third complete and many of the most interesting targets remain to bedrilled. "Overall, although drilling progress has been slower than expected due to delaysin the supply of equipment, exploration has continued as planned with new sampleresults expected in the next few months". 29th September 2006 For further information please contact: Dr Sergey V Kurzin, Executive Chairman, Everfor Diamonds Plc Tel: +44 (0) 20 7514 0590 Chairman's Statement We are very pleased that the Company's shares are now listed on AIM. This is asignificant achievement and the IPO fundraising was very successful and hasensured the continuation of the company's exploration efforts. The currentexploration programme comprises on-going sampling and the drilling ofgeophysical targets, which have been underway during the summer. Ourcontractors, the Central Kola Expedition, have invested heavily in new drillingand support equipment which can operate in the sensitive ecological environmentsof the Kola Peninsula with minimal disturbance to either flora or fauna. This laudable initiative has the additional benefit of allowing the traditionaldrilling season of mid-February to the end of April to be extended to much ofthe year, with the exception of the extremes of Polar winter. Drilling has so far not revealed any new kimberlites, however, the initialdrilling programme is only one-third complete and many of the most interestingtargets remain to be drilled. An aerial magnetic survey is currently underway in our northern mostTulomo-Teriberskaya licence. This will complete coverage of this relativelyunexplored area from which sampling has begun to produce kimberlite indicatorminerals, a number of which are of elevated interest. Although drilling progress has been slower than expected due to delays in thesupply of equipment, exploration has continued as planned with new sampleresults expected in the next few months. Recent articles in the Russianscientific press have reinforced and corroborated our view that the KolaPeninsula is highly prospective for diamonds. Dr Sergey V Kurzin Executive Chairman 29 September 2006 Review of Operations The 2006 Kola Peninsula exploration programme comprises three areas of activity: 1. the drilling of targets which have been generated from a combination of sample results and the interpretation of geophysical surveys; 2. the flying of an easterly extension of the Tulomo-Teriberskaya aerial magnetic survey to cover the remainder of the licence area; and 3. the collection of stream and soil samples in the Ermakovskaya, Tulomo-Teriberskaya and Varzugskaya licences. Drilling in earnest began in May, after two trial holes were drilled in theTulomo-Teriberskaya licence. Sampling began in June and the aerial magneticsurvey commenced in September. The late start to drilling was occasioned by adelay in the acquisition of a Russian-built "Geomash" rig and in the supply of aSwedish-built, tracked all-terrain-vehicle with which to supply and move therig. A second, self-propelled Finnish GMM-75 drill rig was commissioned inAugust. By the end of August, in excess of 800 samples had been collected, withapproximately 120 remaining to be taken in September. Drilling statistics show564 metres drilled in 16 holes, almost wholly in the Ermakovskaya licence; allexcept two of the initial planned targets have been drilled - access conditionspreclude drilling at this time. Drilling began in the Pulongskaya licence on 2ndSeptember and resumed on 3rd September in Tulomo-Teriberskaya. With the exception of two targets ERM 50 and ERM41, the sources of thegeophysical anomalies were satisfactorily explained by, in the case ofelectromagnetic targets, thicknesses of clay and in the case of magnetictargets, by magnetite-bearing gneiss, pyroxenites and gabbros. No kimberliteshave been intersected to date. A contract for flying 1750 km2 in the eastern half of the Tulomo-Teriberskayalicence was awarded to Aerogeophysica of Moscow. A time over-run for a previousclient, coupled with security exercises in the general area and an engine changein the survey aircraft delayed the beginning of flying until the first week inSeptember. Consolidated Profit and Loss Account for the period ended 30 June 2006+--------------------+---+-----------+----------+----------+| | | | | || | | | | || | | 6 months| 6 months| Year|| | | | | || | | ended| ended| ended|| | | | | || | | 30 June| 30 June| 31 Dec|| | | | | || | | 2006| 2005| 2005|| | | | | || | |(Unaudited)|(Restated)|(Restated)|| | | | | || | | £000| £000| £000|+--------------------+---+-----------+----------+----------+|Exploration expenses| | (124)| (218)| (584)|+--------------------+---+-----------+----------+----------+|Other administrative| | (341)| (437)| (692)||expenses | | | | |+--------------------+---+-----------+----------+----------+|Administration | | (465)| (655)| (1,276)||expenses and | | | | ||operating loss | | | | |+--------------------+---+-----------+----------+----------+|Interest receivable | | 21| 25| 38||and similar income | | | | |+--------------------+---+-----------+----------+----------+|Loss on ordinary | | (444)| (630)| (1,238)||activities before | | | | ||taxation | | | | |+--------------------+---+-----------+----------+----------+|Taxation on loss on | | -| -| -||ordinary activities | | | | |+--------------------+---+-----------+----------+----------+|Loss on ordinary | | (444)| (630)| (1,238)||activities after | | | | ||taxation | | | | |+--------------------+---+-----------+----------+----------+|Minority Interest | | 21| 21| 85|+--------------------+---+-----------+----------+----------+|Retained loss | | (423)| (609)| (1,153)|+--------------------+---+-----------+----------+----------+| | | | | |+--------------------+---+-----------+----------+----------+| | | | | |+--------------------+---+-----------+----------+----------+|Loss per share - | | (0.51)p| (1.05)p| (1.98)p||basic and diluted | | | | |+--------------------+---+-----------+----------+----------+ All amounts relate to continuing activities. Consolidated Balance Sheet for the period ended 30 June 2006+-------------------------+-----------+-----------+---------+| | At 30 June| At 30 June|At 31 Dec|| | | | || | 2006| 2005| 2005|| | | | || |(Unaudited)|(Unaudited)|(Audited)|| | | | || | £000| £000| £000|+-------------------------+-----------+-----------+---------+|Fixed assets | | | |+-------------------------+-----------+-----------+---------+|Tangible assets | 4| 8| 6|+-------------------------+-----------+-----------+---------+|Intangible assets | 3,407| 3,182| 3,182|+-------------------------+-----------+-----------+---------+| | 3,411| 3,190| 3,188|+-------------------------+-----------+-----------+---------+|Current assets | | | |+-------------------------+-----------+-----------+---------+|Debtors: amounts due | 326| 148| 250||within one year | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Cash and short term | 1,114| 1,187| 448||deposits | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Creditors: amounts | (102)| (146)| (78)||falling due within | | | || | | | ||one year | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Net current assets | 1,338| 1,189| 620|+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Total assets less current| 4,749| 4,379| 3,808||liabilities | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Net assets | 4,749| 4,379| 3,808|+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Capital and reserves | | | |+-------------------------+-----------+-----------+---------+|Called up share capital | 989| 581| 581|+-------------------------+-----------+-----------+---------+|Share premium account | 3,821| 3,122| 3,122|+-------------------------+-----------+-----------+---------+|Merger reserve | 1,950| 1,950| 1,950|+-------------------------+-----------+-----------+---------+|Other reserves | 197| (9)| (32)|+-------------------------+-----------+-----------+---------+|Profit and loss accounts | (2,668)| (1,802)| (2,281)|+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Shareholders' funds - | 4,289| 3,842| 3,340||equity | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Minority interests - | 460| 537| 468||equity | | | |+-------------------------+-----------+-----------+---------+| | | | |+-------------------------+-----------+-----------+---------+|Total equity | 4,749| 4,379| 3,808||shareholder's funds | | | |+-------------------------+-----------+-----------+---------+ Consolidated Cash Flow Statement for the period ended 30 June 2006 +--------------------------+-----------+-----------+---------+| Note| | | || | | | || | 6 months| 6 months| Year|| | | | || | ended| ended| ended|| | | | || | 30 June| 30 June| 31 Dec|| | | | || | 2006| 2005| 2005|| | | | || |(Unaudited)|(Unaudited)|(Audited)|| | | | || | £000| £000| £000|+-----------------------+--+-----------+-----------+---------+|Net cash outflow from | | (463)| (551)| (1,367)||operating activities | | | | |+-----------------------+--+-----------+-----------+---------+|Returns on investments | | | | ||and servicing | | | | || | | | | ||of finance | | | | |+-----------------------+--+-----------+-----------+---------+|Interest received | | 21| 25| 38|+-----------------------+--+-----------+-----------+---------+|Net cash inflow from | | 21| 25| 38||returns on investments | | | | ||and servicing of | | | | ||finance | | | | |+-----------------------+--+-----------+-----------+---------+| | | | | |+-----------------------+--+-----------+-----------+---------+|Capital expenditure and| | | | ||financial investment | | | | |+-----------------------+--+-----------+-----------+---------+|Purchase of tangible | | -| (4)| (3)||fixed assets | | | | |+-----------------------+--+-----------+-----------+---------+|Net cash outflow from | | -| (4)| (3)||capital expenditure and| | | | ||financial investment | | | | |+-----------------------+--+-----------+-----------+---------+|Cash outflow before | | (442)| (530)| (1,332)||management of liquid | | | | ||resources and financing| | | | |+-----------------------+--+-----------+-----------+---------+| | | | | |+-----------------------+--+-----------+-----------+---------+|Financing | | | | |+-----------------------+--+-----------+-----------+---------+|Issue of ordinary | | 1,630| -| -||shares | | | | |+-----------------------+--+-----------+-----------+---------+|AIM admission and share| | (524)| -| -||issue costs | | | | |+-----------------------+--+-----------+-----------+---------+|Cash inflow from | | 1,106| -| -||financing | | | | |+-----------------------+--+-----------+-----------+---------+|Increase / (decrease) | | 664| (530)| (1,332)||in cash for | | | | || | | | | ||the period | | | | |+-----------------------+--+-----------+-----------+---------+ Notes to the Interim Reportfor the period ended 30 June 2006 1. Accounting policies Basis of preparation of Financial Statements The interim financial information set out in pages 4 to 9 has been prepared onthe same basis and using the same accounting policies as were applied in drawingup the Group's statutory financial statements for the year ended 31 December 2005, with the exception outlined below. The Group has applied the requirements of FRS 20 (share based payments), inaccordance with the transitional provisions, to all equity instruments grantedafter 7 November 2002 and unvested at 1 January 2006. The impact of adoption of FRS 20 is detailed in note 6. The financial information for the six months ended 30 June 2006 and six monthsended 30 June 2005 is unaudited and within the meaning of section 240 of theCompanies Act 1985, such accounts do not constitute full statutory accounts ofthe Group. 2. Basic and diluted (loss) per share The basic loss per share of 0.51 pence (2005: 1.05 pence) is calculated inaccordance with FRS22 (earnings per share) on a loss on ordinary activities of£423,000 (2005: £609,000) and on 82,417,192 ordinary shares (2005: 58,099,290),being the weighted average number of ordinary shares in issue during the period.There is no difference between the diluted loss per share and the loss per sharepresented. 3. Reconciliation of operating loss to net cash outflow from operating activities +---------------------------+---------+--------+--------+| | | | || | | | || | 6 months|6 months| Year|| | | | || | ended| ended| ended|| | | | || | 30 June| 30 June| 31 Dec|| | | | || | 2006| 2005| 2005|| | | | || | £000| £000| £000|+---------------------------+---------+--------+--------+|Operating loss | (465)| (655)| (1,276)|+---------------------------+---------+--------+--------+|Depreciation of tangible | 2| 2| 3||fixed assets | | | |+---------------------------+---------+--------+--------+|Foreign exchange movements | -| 69| |+---------------------------+---------+--------+--------+|Increase in debtors | (76)| (58)| (161)|+---------------------------+---------+--------+--------+|Increase/(decrease) in | 24| 46| (24)||creditors | | | |+---------------------------+---------+--------+--------+|Share based payment | 52| 45| 91|+---------------------------+---------+--------+--------+| | | | |+---------------------------+---------+--------+--------+|Net cash outflow from | (463)| (551)| (1,367)||operating activities | | | |+---------------------------+---------+--------+--------+ 4. Reconciliation of net cash flow to movement in net funds 6 months 6 months Year ended ended ended 30 June 30 June 31 Dec 2006 2005 2005 £000 £000 £000Net cash at the start of 448 1,808 1,808the periodIncrease/(decrease) in net 664 (530) (1,332)cash during the periodMovement in net cash 1,112 1,278 476arising from cash flowsForeign exchange movement 2 (91) (28)Net cash at end of the 1,114 1,187 448period 5. Reconciliation of movements in shareholders' funds +---------------------------+---------+--------+--------+| | | | || | | | || | 6 months|6 months| Year|| | | | || | ended| ended| ended|| | | | || | 30 June| 30 June| 31 Dec|| | | | || | 2006| 2005| 2005|| | | | || | £000| £000| £000|+---------------------------+---------+--------+--------+|Opening equity | 3,340| 4,425| 4,425||shareholders' funds | | | |+---------------------------+---------+--------+--------+|Loss for the year | (423)| (609)| (1,153)|+---------------------------+---------+--------+--------+|Foreign exchange movements | 214| (19)| (23)|+---------------------------+---------+--------+--------+|Issue of shares | 1,106| -| -|+---------------------------+---------+--------+--------+|Share based payments | 52| 45| 91|+---------------------------+---------+--------+--------+| | | -| -|+---------------------------+---------+--------+--------+|Closing equity | 4,289| 3,842| 3,340||shareholders' funds | | | |+---------------------------+---------+--------+--------+ 6. Share based payments The Group issues share based payments to certain individuals, which are measuredat fair value at date of grant. The fair value determined at the grant date isexpensed on a straight line basis over the vesting period, based on the Group'sestimate of shares that will eventually vest. Fair value is measured by use of a binomial valuation model. The expected lifeof the instrument used in the model is adjusted, based on management's bestestimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The resulting value is charged to the consolidated profit and loss account overthe vesting period of the share based payment. The adoption of FRS 20 has resulted in a change to the accounting policy forshare based payments. Until 31 December 2005 the provision of share options toindividuals did not result in a charge to the profit and loss account. Thecomparative profit and loss accounts for the periods ended 30 June 2005 and 31December 2005 have been restated. This change in accounting policy has resulted in an increase in the loss onordinary activities for the six months ended 30 June 2005 and the year ended 31December 2005 of £45,215 and £90,558 respectively. In the current period thechange in accounting policy has resulted in an increase in the loss on ordinaryactivities of £52,004. Any profit and loss charge in a period in respect of share based payments iscredited to the Group's reserves. The change in accounting policy has thereforehad no effect on the consolidated balance sheets of the Group at 30 June 2005and 31 December 2005. This information is provided by RNS The company news service from the London Stock Exchange