Goldstone Resources Regulatory News (GRL)

20 Jul 2007 14:45

Goldstone Resources Ltd20 July 2007 GOLDSTONE RESOURCES LTD ("Goldstone" or the "Company") ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007 CHIEF EXECUTIVE'S REPORT I am setting out below a review of GoldStone's activities during the year ended28 February 2007 which incorporates an update on the current status of theCompany's projects. SWARTDORING DIAMOND PROJECT In April 2007 GoldStone conditionally agreed to acquire a 70 per cent. interestin Xanadu Mining (Pty) Limited from GeoQuest Holdings Limited (the "Acquisition"). Xanadu Mining has, through its wholly-owned subsidiaries, GrindStone Mining(Pty) Limited and Multi-Direct Mining (Pty) Limited, filed applications forprospecting rights over the Swartdoring Diamond Project, all of which have beengranted by the Department of Minerals and Energy in the Republic of South Africaand subsequently notarially executed. Completion of the Acquisition is now conditional on: • The successful listing of GoldStone on the Alternative Exchange of the JSE Securities Exchange; and • The approval of the Acquisition by the South African Reserve Bank. Completion of the Acquisition will not take place until satisfaction of all ofthe conditions, which must occur before 30 October 2007. The Swartdoring diamond deposit is a preserved diamondiferous palaeochannel ofthe Swartdoring river in the Northern and Western Cape Provinces of SouthAfrica. The subsurface channel, which is buried beneath surficial sand cover,ranges from 400 to 2,000 metres in width and occupies an area of 1,345 hectares. An inferred resource of 12 million tonnes of loose, uncemented,diamond-bearing gravel, interpreted from drill hole records, lies beneath looseto slightly cemented sandy overburden at an average stripping ratio of 12.4.There is a possibility to extend this resource to approximately 49 milliontonnes of diamond-bearing gravel after analysis of results from further drillingwork and bulk sampling operations possibly to be conducted in the future. Statistical analysis of the gravel bulk sampling results from samples collectedat either end of the palaeochannel indicates an average grade of 3.2 cpht forboth ends of the palaeochannel. The last parcel of stones recovered at theeastern end of the channel was classified as very good gem quality and wasvalued at approximately US$475 per carat in current day terms. In order to advance the project, the Directors estimate that an investment ofapproximately US$500,000 will be required to fund direct exploration expenses.The exploration will be conducted in order to complete a mining feasibilitystudy on the inferred resource of the project. GOLD The low tenor of gold intersections made in the most prospective palaeoplacersduring the drilling programme in Lease Areas "A" and "B" in Guyana, led theBoard to conclude that the likelihood of finding economical grades was poor. In view of these results, the Company withdrew its prospecting licenceapplications during the second quarter of 2006 and therefore ceased the goldexploration programme in Guyana. BAUXITE In September 2005, GoldStone entered into an option agreement with BHP Billitonover the bauxite interests in Guyana. An initial programme was launched toexplore the bauxite potential in the lease areas. This programme confirmed thedeposits previously identified by GoldStone. BHP Billiton accordingly madepayment during September 2006 of the option fee of US$100,000 required tomaintain the option until 7 June 2007. Further, more detailed sampling was undertaken during the first quarter of 2007and this programme has been completed. The Company is awaiting the finalanalytical results of a bulk sample collected during the programme. In July 2007, BHP Billiton elected not to exercise the option, which had beenextended, and no further payments are due. BHP Billiton was obliged to make available and has delivered to GoldStone allinformation in its possession which relates to the exploration programme, aswell as a summarising geological report. The Company intends, subject to apositive evaluation of the information and report, to continue to hold theBauxite Reconnaissance Permission in good standing and to enter into discussionswith other major players in the bauxite industry. FINANCING The Company's cash resources are currently approximately US$2.8 million. BOARD Mr Mike Christie, a non-executive director of the Company sadly passed awayduring July 2006. APPROVAL Dr Lawrie Minter, who holds a PhD in palaeoplacer sedimentology, has reviewedand approved the content of this announcement. SUMMARY The Board looks forward to completing the acquisition of the Swartdoring Diamondproject, which has the potential to provide near-term production to the Company. The listing of GoldStone on the Alternative Exchange of the JSE SecuritiesExchange is progressing as planned and the Board expects that this process willbe concluded to enable completion of the Acquisition before 31 October 2007. In addition, on an ongoing basis the Board is investigating and reviewing otherpotential exploration projects which may fall within the ambit of sedimenthosted minerals. Nico van der Hoven Chief Executive Officer Enquiries: GoldStone Resources Ltd 00 27 21 794 4004 Nico van der Hoven Hanson Westhouse Limited 0113 246 2610 Tim Feather tim.feather@hansonwesthouse.comMatthew Johnson matthew.johnson@hansonwesthouse.com PROFIT AND LOSS ACCOUNT Note Year ended Year ended 28 February 28 February 2007 2006 US$ US$ TURNOVERExploration expenses - discontinued operations (759,626) (2,498,919) Gross loss (759,626) (2,498,919 Management fees - discontinued operations 139,722 55,556Other operating expenses - continuing operations (490,857) (1,361,673)Interest receivable - continuing operations 141,583 87,161 OPERATING LOSS FOR THE FINANCIAL YEARFrom discontinued operations (619,904) (2,443,363)From continuing operations (349,274) (1,274,512) (969,178) (3,717,875) Profit on disposal of fixed asset - discontinued operations 290,929 - LOSS FOR THE FINANCIAL YEAR (678,249) (3,717,875) Loss per ordinary share 1Basic, from continuing operations (cents per share) (0.3) (1.3)Basic, from discontinued operations (cents per share) (0.2) (2.5) There are no other recognised gains or losses for the current or precedingfinancial year other than as stated in the profit and loss account. BALANCE SHEETS Note 28 February 28 February 2007 2006 US$ US$ FIXED ASSETSTangible assets 30,490 135,826 CURRENT ASSETSDebtors and prepayments 48,540 394,563Cash at bank 3,103,109 3,321,151 3,151,649 3,715,714CREDITORS: amounts falling due within one year Creditors and accruals (78,679) (69,831) Net current assets 3,072,970 3,645,883 TOTAL ASSETS LESS CURRENT LIABILITIES 3,103,460 3,781,709 CAPITAL AND RESERVESShare capital 2,354,482 2,354,482Share premium 13,849,554 13,849,554Capital contribution reserve 555,110 555,110Profit and loss account - (deficit) (13,655,686) (12,977,437) EQUITY SHAREHOLDERS' FUNDS 3,103,460 3,781,709 CASHFLOW STATEMENT Year ended 28 Year ended 28 February 2007 February 2006 $ $ Net cash outflow from operating activities (705,657) (4,460,469) Returns on investment and servicing of financeInterest received 141,583 87,155Capital expenditure and financial investmentsPurchase of fixed assets (3,968) (5,362)Sale of fixed assets 350,000 250,000 (218,042) (4,128,676) FinancingIssue of shares net of expenses and capital contribution - 3,583,236 Decrease in cash (218,042) (545,440) (i) Reconciliation of net cash flow to movement in net debt Decrease in cash (218,042) (545,440)Net funds brought forward 3,321,151 3,866,591 Net funds carried forward 3,103,109 3,321,151 (ii) Reconciliation of operating loss to net cash outflowfrom operating activitiesOperating loss (969,178) (3,717,875) Adjusted for: Depreciation & impairment loss 50,233 81,004Finance raising cost - 111,263Interest received (141,583) (87,155)Decrease/(increase) in debtors 346,023 (392,034)Increase/(decrease) in creditors 8,848 (455,672) Net cash outflow from operating activities (705,657) (4,460,469) NOTES: 1. LOSS PER SHARE Basic earnings per share is calculated by dividing the losses attributable toordinary shareholders by the weighted average number of ordinary shares in issueafter the placing on the AIM. Diluted earnings per share is calculated usingthe weighted average number of ordinary shares in issue as adjusted to assumeconversion of all dilutive potential ordinary shares. FRS 22: Earnings Per Share ('EPS'), requires presentation of diluted EPS when acompany could be called upon to issue shares that would decrease net profit orincrease net loss per share. For a loss making company with outstandingwarrants, net loss per share would only be increased by the exercise of out-ofthe-money warrants. Since it seems inappropriate to assume that option holderswould act irrationally, no adjustments has been made to diluted EPS forout-of-the-money warrants. The warrants expired on 30 September 2006. 2007 2006 $ $Earnings per share Loss attributable to share holders from continuing operations (349,274) (1,274,512)Loss attributable to share holders from discontinued operations (328,975) (2,443,363) Weighted average number of ordinary shares 130,816,633 96,608,315 Basic, from continuing operations (cents per share) (0.3) (1.3)Basic, from discontinued operations (cents per share) (0.2) (2.5) 2. Annual report The annual report and accounts for the year ended 28 February 2007 will beposted to shareholders on or around 15 August 2007 and will be available fromthe Company's website at www.goldstoneresources.com from the date of posting. This information is provided by RNS The company news service from the London Stock Exchange