Gemfields Grou. Regulatory News (GEM)

3 Nov 2006 07:00

Gemfields Resources Plc Final results for the year ended 30 June 2006 3 November 2006Gemfields Resources Plc ("Gemfields" or "the Company", Ticker "GEM") is pleasedto report its final results for the year ended 30 June 2006.Highlights * The acquisition of the Kamakanga Mine, Zambia and its related assets. * The acquisition of a gemstone licence from Arinus Mine, Zambia. * The acquisition of Almizan Limited and its six exploration licences in the Ndola Rural Emerald Restricted Area, Zambia. * Admission to AIM after a placing which raised ‚£12m before expenses. * The awarding of the mining contract at the 100% owned Mbuva-Chibolele Mine and the commencement of overburden stripping. * The appointment of Peter Kitchen as Chief Executive Officer. * The awarding of the contract to construct phase I of the washing plant. * US$12.9m held in cash at 30 June 2006. * The commencement of trial mining and the valuation of an initial sample of emeralds since the year end. The Chairman's Statement and the primary financial statements are set outbelow. The full financial statements have been sent to shareholders and theycan also be viewed on the company's website at www.gemfields.co.uk.For more information:Peter Kitchen, CEO peter.kitchen@gemfields.co.ukRichard James, CFO richard.james@gemfields.co.ukGemfields Resources Plc Tel: +44 (0)20 7016 9416Laurence Read/ Leesa Peters Tel: +44 (0) 207 429 6605Conduit PR Mob: +44 (0) 7974 982 512Chairman's statement__________________________________________________________________________________________Dear Shareholder,Welcome to the consolidated financial statements for Gemfields Resources PLC("the Company"). A great deal has been achieved in the year ended 30 June 2006.Admission to trading on AIMOn 28 November 2005 the Company commenced trading on AIM after a placingraising ‚£12.5 million before expenses, of which ‚£12 million was receivable bythe Company. The Company issued 26,666,667 shares at 45p per ordinary share and1,111,111 existing shares were sold as part of the placing also at 45p perordinary share.OperationsThe mining contract at the Mbuva-Chibolele Mine was awarded to Chantete EmeraldLtd (Zambia) in December 2005 with overburden stripping commencing in January2006. This remains ahead of schedule.The contract to build phase I of the washing plant at Mbuva-Chibolele wasawarded to Consulmet (Pty) from South Africa in May 2006. Phase I involves theerection of a primary crushing and screening circuit which will enable emeraldproduction to be greatly enhanced. The construction is progressing well andthis phase of the plant will be fully operational before the end of 2006.Trial mining commenced in July 2006. Emeralds which can be visually seen arecurrently being extracted by hand during mining while the greater balance ofthe mined emerald contact bearing zone is being stockpiled awaiting theestablishment of the washing plant.The initial sample parcel of emeralds mined has been independently valued andso far expectations have been exceeded. Our first emerald sales are targetedfor November.AcquisitionsThe following acquisitions were completed during the year: * Kamakanga On 4 July 2005, Gemfields signed an agreement covering CL002 and GL78 on PlotNo 6/1 in the Kafubu Emerald area under which Gemfields acquired the Kamakangamine in the Ndola Rural Emerald Restricted Area ("NRERA") and its assets(infrastructure, plant, property and offices in Kitwe) for a totalconsideration of US$2,451,000, of which US$1,351,000 was deferred. Theconsideration has now been fully paid. * Arinus On 21 September 2005, Gemfields signed an agreement to acquire Licence GL 744on Plot 10B/1 from Arinus Mine in the NRERA for a total consideration ofUS$700,000 of which US$540,000 was deferred. The consideration has now beenfully paid. * Almizan Limited ("Almizan") On 26 September 2005, the Gemfields acquired 100% of the share capital ofAlmizan for US$4,500,000 consideration which was payable in the form of9,000,000 shares in the Company issued at US$0.50 per share. Almizan has sixlicences to explore for emeralds in the NRERA.CEO AppointmentThe Company appointed Peter Kitchen as Chief Executive Officer on 1 March 2006following the resignation of Jeremy Clarke.OutlookThe future is looking very positive for the Company. * The Mbuva-Chibolele Mine will be operating at full capacity by the end of 2006. * Further exploration of Gemfields' properties has produced very encouraging results. * Negotiations are continuing for additional acquisitions in the NRERA. Graham Mascall31 October 2006Consolidated profit and loss account for the year ended 30 June 2006 Year ended Year ended 30 June 30 June 2006 2005 US$ US$ Turnover Group and share of joint venture 1,171,332 993,760 Less: share of joint venture (1,171,332) (993,760)turnover ________ ________ - - - ________ ________ Administration expenses (2,682,240) (3,916,365) ________ ________ Group operating loss (2,682,240) (3,916,365) Share of operating (loss)/profit in: Joint venture (228,131) 2,132 ________ ________ Loss on ordinary activities before interest and taxation (2,910,371) (3,914,233) Interest receivable - group 371,310 9,120 Interest payable - group (8,025) (153,000) Interest payable - share of joint (37,684) -venture ________ ________ Loss on ordinary activities (2,584,770) (4,058,113)before taxation Taxation on loss on ordinary 48,106 - -activities ________ ________ Loss on ordinary activities after (2,536,664) (4,058,113)taxation Minority interest - - 34,292 ________ ________ Loss for the year (2,536,664) (4,023,821) Loss at beginning of year (4,073,821) (50,000) ________ ________ Loss at end of year (6,610,485) (4,073,821) ________ ________ Loss per share Basic and diluted US$(0.03) US$(0.09) ________ ________ All amounts relate to continuing activity. Consolidated statement of total recognised gains and losses and reconciliationof movements in shareholders' funds for the year ended 30 June 2006 2006 2005 US$ US$ Statement of total recognised gains and losses Loss for the financial year - Group (2,318,955) (4,025,953) - Joint venture (217,709) 2,132 ________ ________ Total gains and losses for the year before currency adjustments for translation differences on consolidation in respect of exchange translation (2,536,664) (4,023,821)differences Exchange translation differences 52,802 583 ________ ________ Total recognised gains and losses for (2,483,862) (4,023,238)the financial year ________ ________ Consolidated balance sheet at 30 June 2006 2006 2006 2005 2005 US$ US$ US$ US$ Fixed assets Intangible assets 10,834,190 8,844,177 Tangible assets 10,357,816 256,858 Investment in joint venture - share of gross assets 696,823 650,024 - share of gross (572,724) (361,018) liabilities ________ ________ 124,099 289,006 ________ ________ 21,316,105 9,390,041 Current assets Debtors 734,084 965,921 Stocks 12,270 - Cash at bank and in hand 12,873,317 4,019,802 ________ ________ 13,619,671 4,985,723 Creditors: amounts falling due within one year (2,700,111) (3,059,025) ________ ________ Net current assets 10,919,560 1,926,698 ________ ________ Total assets less current 32,235,665 11,316,739liabilities ________ ________ Capital and reserves Called up share capital 1,685,128 1,062,255 Share premium account 28,011,141 9,571,926 Merger reserve 9,096,496 4,755,796 Profit and loss account (6,557,100) (4,073,238) ________ ________ Shareholders' funds - 32,235,665 11,316,739equity ________ ________ Company balance sheet at 30 June 2006 2006 2006 2005 2005 US$ US$ US$ US$ Fixed assets Tangible assets 4,390 2,776 Investments 9,937,776 5,437,776 ________ ________ 9,942,166 5,440,552 Current assets Debtors 19,675,183 9,264,625 Cash at bank and in hand 11,843,680 875,347 ________ ________ 31,518,863 10,139,972 Creditors: amounts falling due within one year (6,325,657) (2,713,347) ________ ________ Net current assets 25,193,206 7,426,625 ________ ________ Total assets less current 35,135,372 12,867,177liabilities ________ ________ Capital and reserves Called up share capital 1,685,128 1,062,255 Share premium account 28,011,141 9,571,926 Merger reserve 9,096,496 4,755,796 Profit and loss account (3,657,393) (2,522,800) ________ ________ Shareholders' funds - 35,135,372 12,867,177equity ________ ________ Consolidated cash flow statement for the year ended 30 June 2006 Year ended Year ended 30 June 30 June 2006 2005 US$ US$ US$ US$ Cash outflow from operating (2,785,824) (2,230,978)activities Capital expenditure and financial investment Payments to acquire (2,448,853) - intangible fixed assets Payments to acquire tangible (2,434,076) (319,444) fixed assets Proceeds from disposals of - 86,400 fixed assets Exploration and development (2,743,805) (1,688,189) expenditure Further investment in joint - (10,201) venture ________ ________ (7,626,734) (1,931,434) Acquisitions and disposals Cash paid for acquisitions - (2,550,000) Cash received for disposals - 7,116 ________ ________ Net cash (outflow) /inflow from acquisitions - (2,542,884) ________ ________ Cash outflow before use of liquid resources and (10,412,558) (6,705,296)financing Financing Issue of shares (net of 18,902,788 10,029,110issue costs) Return on investments and servicing of finance Interest received 371,310 - Interest payable (8,025) - ________ ________ 363,285 - ________ ________ Increase in cash 8,853,515 3,323,814 ________ ________ ENDGEMFIELDS RESOURCES PLC