Goldstone Resources Regulatory News (GRL)

RNS Number : 8283R

Goldstone Resources Ltd

31 August 2010

 

GOLDSTONE RESOURCES LIMITED

 

("GoldStone" or the "Company")

 

GoldStone Resources (AIM: GRL), the AIM quoted company focused on gold in West Africa, announces its final results for the period ended 28 February 2010.

 

In the period under review Goldstone signed joint ventures with two Ghanaian companies in respect of two properties: Homase, located in the Ashanti Gold Belt and Manso Amenfi which lies along strike of two major gold trends. The Company also acquired a prospecting permit in Senegal at the southern end of an area that has historically yielded more than 20 million ounces of gold.

 

Highlights since year end

 

Strategic Alliance

 

·; Entered into a strategic alliance with Bendigo Mining Limited (ASX: BDG) ("Bendigo"), a mid-tier Australian gold producer. Through a placing of £2.1 million, at a 45% premium to the then market price, Bendigo acquired a 20% stake in Goldstone. Bendigo will provide support to GoldStone in respect of the development and mining of GoldStone's exploration assets.

 

Homase

 

·; Announced JORC compliant gold resource of 282,608 ounces. Total gold resource of 6.32 million tonnes of ore at an average grade of 1.4 g/t gold applying cut off of 0.5 g/t gold.

 

·; After publication of JORC compliant resource and payment of agreed option fees to the JV partner, GoldStone earned a 51% interest in the licence.

 

Gabon

 

·; Gabonese company formed, 100% owned by GoldStone.

 

·; Applications for two licences filed.

 

Placing

 

·; Successful placing in June 2010 which raised £2.06 million at 3.5p each . Bendigo subscribed for 20% of the placing, thereby maintaining its interest. Funds to be used to further the Homase project and to expedite exploration on the Sangola licence in Senegal.

 

·; Total placing since year end has generated a composite amount of £4.16 million.

 

 

Jurie Wessels, GoldStone's Chief Executive commented: "We are very happy to have established GoldStone as a West African gold explorer. The defining of a JORC resource at Homase was very satisfying and work is underway to increase the resource. We were pleased to gain Bendigo as a major shareholder and believe they share the optimism we have in our West African assets."

 

 

Enquiries

 

GoldStone Resources Limited	+27 21 551 9009
Jurie Wessels (Chief Executive Officer)
Westhouse Securities Limited	+44 20 7601 6100
Tim Feather / Matthew Johnson
Optiva Securities Limited
Jason Robertson	+44 20 3137 1906
Jeremy King	+44 20 3137 1904
Walbrook PR	+44 20 7933 8788
Leah Kramer

 

Chief Executive's Report

 

During the year ended 28 February 2010 the Company established itself as a West African gold explorer and made significant progress in creating value for shareholders. At the Homase Licence in Ghana, the Company owns 51% of the current JORC compliant resource of 282,000 oz of gold with the prospect of adding significant value in the future, and has the ability to increase its ownership to 85%. In Senegal (the Sangola Licence), Ghana (Manso Amenfi Licence) and potentially Gabon, the Company has prospective grassroots exploration properties and the opportunity to make significant discoveries. Through its alliance with Bendigo Mining Limited, the Company not only received a vote of confidence in its projects and skills from one of its peers, but also gained the support of a mid-tier gold miner as a long term shareholder which has the skills to help realise the value of the Company's assets. In completing its activities during the financial year the company has spent £609,779 (2009: £1,110,650).

 

GHANA

 

The Company entered into joint venture agreements with Cherry Hill Mining Company Ltd ("Cherry Hill") in respect of the Homase prospecting licence and with Asaasemu Mining Ltd ("Asaasemu") concerning the Manso Amenfi prospecting licence. Under the terms of these agreements, the Company has the right to earn an interest in the Licences of up to 85% by expending funds towards exploration costs or reaching certain exploration targets.

 

In April 2010 the Ghanaian Minerals Commission ("GMC") confirmed that both the Ghanaian licences (Homase and Manso Amenfi) are in good standing and the Company obtained the necessary statutory consent from the Minister of Mines and Forestry.

 

Homase

 

The Homase Licence area is located approximately 20 km from Anglo Gold Ashanti's ("AGA") Obuasi mine and is situated within the well known Ashanti Gold Belt. The Homase property was explored and open cast mined by AGA during the period 1999 to 2003. On 21 April 2010 the Company reported a Joint Ore Reserves Committee of Australasia (JORC) compliant gold resource of 282,608 ounces on the Homase property. The total gold resource is 6.32 million tonnes of ore at an average grade of 1.4 g/t gold applying a cut off of 0.5 g/t gold:

 

	Tonnage	Grade (g/t)	Contained Gold (ozs)
Measured	3,032,617	1.61	157,298
Indicated	1,699,102	1.33	72,531
Inferred	1,585,282	1.04	52,779
TOTAL	6,317,000	1.39	282,608

 

 

Approximately 196,000 oz, or 69%, of the resource is contained within the transitional and sulphide zones and 86,500 oz in the oxide zone. Overall metallurgical recoveries reported by previous explorers were encouraging at 93% for the oxide material and 84% for the sulphides.

 

The resource on the Homase property includes areas where high grade shoots are evident, which may continue to plunge steeply beyond their currently known extent of 150 metres below the bottom of the main pit. Testing potential extensions of these high grade shoots and expanding the resource is the main focus of the upcoming drilling programme, which will commence on completion of ongoing discussions with local communities regarding access rights and crop compensation. The Company intends to foster good working relationships with local communities and is confident the process of community involvement will be concluded to everyone's satisfaction. As part of the upcoming exploration programme, a mineralised trend that is evident from a gold in soil anomaly and which extends along strike of the Homase open pits for over two kilometres to the north and other regional targets, may also be investigated.

 

As a result of achieving the publication of a JORC compliant resource on the Homase Licence area and after payment of the agreed option fees to Cherry Hill, GoldStone earned a 51%. interest in the Homase Licence. GoldStone may increase its interest to 65% in the Homase Licence by either expending a minimum of US$1 million on exploration work or by conducting a pre-feasibility study over the permit area. After the completion of a successful feasibility study over the licence area, GoldStone's interest would increase to 85%.

 

The Company completed an airborne electromagnetic survey (VTEM system) over the southern part of the Homase Licence with the objective of potentially finding extensions of the known ore body along strike to the north and below the presently known gold resource. The directors expect to receive the results of this survey shortly. The results may necessitate further detailed interpretation by a geophysicist.

 

Manso Amenfi

 

Confirmation of the large soil anomaly present on the Manso Amenfi property will be the focus of exploration during the next few months. A regional desktop study and first field assessment are presently in progress and a geological mapping and sampling programme will commence shortly. The results of this programme may define targets for follow-up soil sampling or trenching.

 

SENEGAL

 

Sangola

 

The Company entered into a Convention de Recherché on 9 September 2009 with the Senegalese Ministry of Mines over the licence area. The decree, which is necessary to allow the Company to commence with exploration activities, remains outstanding but is expected to be granted within the coming months.

 

The Sangola Licence covers an area of approximately 471 km² and is situated 60 km south east of Tambacounda, the largest city in eastern Senegal. The directors believe the licence area to be highly prospective because it is largely unexplored and covers the southern part of the Main Transcurrent Fault Zone ("MTZ") of the Kenieba Inlier of Birimian Formation. Historic exploration of the Kenieba Inlier resulted in the discovery of more than 20 million ounces ("Moz") of gold. North of the Sangola Licence the MTZ yielded large gold deposits/mines such as the 3.4 Moz Masawa deposit (Randgold Resources), the 2.2 Moz Sabodala mine (Mineral Deposits Limited), the 2 Moz Yatela mine and the 10 Moz Sadiola mine (both IAMGOLD and AngloGold Ashanti).

 

The exploration programme for the permit will commence with a structural and regolith study based on remotely sensed data. A first field visit will serve to identify and map known artisanal gold mining sites. The results of this work will help to focus initial stream sediment and/or soil sampling onto promising structural targets and areas of artisanal gold mining.

 

GABON

 

The Company filed applications for two licences that exhibited promising soil anomalies from interpretation of the recently published SYSMIN data compiled by the French and South African Geological Surveys and the Gabonese Mining Department. The Gabonese Department of Geology and Mining ("DGMG") acknowledged the Company's application over both areas and informed the Company that a Convention de Miniere will be entered into with GoldStone upon compliance with certain formalities, including the formation of a Gabonese registered corporate entity. A Gabonese company named GoldStone Resources Ltd Gabon has now been formed with the Company as the only shareholder and provided certain formalities are met the granting of a permit in Gabon is expected to occur soon.

 

MALI

 

The Company held short term gold exploration permits over Baroya and Metedia-Est and under Malian law GoldStone had the exclusive right to apply for long term prospecting licences over the areas once it had conducted its evaluative exploration. After GoldStone had conducted such exploration and applied for long term prospecting licences over the area, the directors were informed by the Minister of Mines of Mali that the Company's applications had been refused and that prospecting permits over these licence areas had been granted to another applicant. No reasons were given for this decision.

 

ALLIANCE WITH BENDIGO MINING

 

On 6 May 2010 the Company entered into a strategic alliance with Bendigo Mining Limited (ASX: BDG) ("Bendigo"). Bendigo subscribed for 32,704,166 ordinary shares in the Company at a price of 6.5p per share which raised £2,125,771. In addition to this placing the strategic alliance provided that Bendigo is entitled to nominate a director to the board of the Company and that Bendigo is to provide support to GoldStone in respect of any development and mining of GoldStone's exploration assets. In addition, Bendigo undertook not to dispose of any shares subscribed for in the placing for a period of 12 months. In addition, GoldStone issued non tradable and non transferrable warrants to Bendigo in two tranches. The first tranche entitles Bendigo to subscribe for 10,901,389 shares in GoldStone at 8.5 pence per share between 18 and 30 months from the date of issue and the second tranche entitles Bendigo to subscribe for 10,901,389 shares at 11.5p per share between 24 and 36 months from the date of issue.

 

Following implementation of the strategic alliance agreement and the placing, Bendigo holds 20% of the issued share capital of GoldStone.

 

Through this transaction the Company gained a mid-tier miner as a significant shareholder in an alliance that has the potential to add significant value as the Company endeavours to advance its exploration projects up the value curve.

 

GEOQUEST DIVESTMENT

 

GeoQuest Holdings Limited, which owned 40,000,000 ordinary shares in the Company, divested its holding in the Company during the last week of February 2010.

 

DIRECTORSHIP CHANGES AND APPOINTMENT OF JOINT BROKER

 

During recent months, the Company has gained the expertise and experience of Messrs Gennen McDowall and Tim Churcher, both of whom were appointed as non-executive directors. Mr. McDowall is a geophysicist and has over 30 years of experience in the exploration industry. Mr. Churcher is the nominee for Bendigo, was appointed following the strategic alliance agreement and has considerable experience in corporate affairs and mining in Australasia.

 

Optiva Securities Limited (formerly Orbis Equity Partners Limited) was appointed as Joint Broker during May 2010. Westhouse Securities Limited continues to act as Nominated Adviser and Joint Broker.

 

PLACING

 

On 14 June 2010 the Company raised approximately £2.06 million (before expenses) through a placing of 58,857,142 new ordinary shares at a price of 3.5 pence per share. The Company intends to use the cash, together with the funds from the Bendigo placing, to continue the exploration programme on its current projects, in particular the Homase project and the Sangola Licence, and to investigate newly acquired projects in Gabon, when and if permits are granted.

 

Bendigo, which held 32,704,166 ordinary shares before the placing, representing 20% of the issued share capital of the Company, maintained its position by subscribing for 11,785,000 ordinary shares in the placing.

 

OUTLOOK

 

Since May 2009 the Company has acquired some prospective exploration projects and has raised sufficient finance to undertake meaningful exploration. The Company's focus is now to test potential down dip and along strike extensions of the Homase deposit in order to increase the gold resource. In addition the Company will carry out exploration work to better define any regional exploration targets on the Homase permit. The considerable grass roots potential of Manso Amenfi and Sangola (once the decree is granted) will be investigated by means of various desk top studies, geological mapping and soil sampling.

 

The board looks forward to reporting further progress in due course.

 

 

Jurie Wessels

Chief Executive Officer

Cape Town, South Africa

30 August 2010

 

 

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 28 February 2010

 

	Note			Year ended 2010 $	Year ended 2009 $
Revenues
Interest receivable				867	42,983
				867	42,983
Exploration expenses
Exploration expenses				(134,508)	(145,189)
Gross (loss)/profit				(133,641)	(102,206)
Other operating expenses				(476,138)	(1,008,444)
COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR				(609,779)	(1,110,650)
Loss per ordinary share
Basic and diluted loss per share (cents per share)	2			(0.5)	(0.8)

 

BALANCE SHEET 28 February 2010
				Year ended 2010 $	Year ended 2009 $
FIXED ASSETS
Tangible assets				18,282	12,026
CURRENT ASSETS
Receivables and prepayments				-	19,195
Cash at bank				699,890	1,233,834
				699,890	1,253,029
CREDITORS: amounts falling due within one year
Creditors and accruals				104,462	41,566
Net current assets				595,428	1,211,463
TOTAL ASSETS LESS CURRENT LIABILITIES				613,710	1,223,489
CAPITAL AND RESERVES
Share capital				2,354,482	2,354,482
Share premium				13,849,554	13,849,554
Capital contribution reserve				555,110	555,110
Profit and loss account - (deficit)				(16,145,436)	(15,535,657)
SHAREHOLDERS' FUNDS				613,710	1,223,489

 

STATEMENT OF CHANGES IN EQUITY 28 February 2010
				Year ended 2010 $	Year ended 2009 $
SHARE CAPITAL - £0.01 per value
Authorised - 250,000,000 shares
Issued and fully paid up - 130,816,663 shares				2,354,482	2,354,482
SHARE PREMIUM				13,849,554	13,849,554
CAPITAL CONTRIBUTION RESERVE				555,110	555,110
ACCUMULATED DEFICIT
Balance at beginning of year				(15,535,657)	(14,425,007)
Total Comprehensive expense				(609,779)	(1,110,650)
Balance at end of year				(16,145,436)	(15,535,657)
				613,710	1,223,489

 

CASH FLOW STATEMENT 28 February 2010
				Year ended 2010 $	Year ended 2009 $
Loss for the financial year				(609,779)	(1,110,650)
Adjusted for:
Depreciation				4,095	16,018
Interest received				(867)	(42,983)
Decrease in debtors				19,195	-
Increase/(decrease) in creditors				62,896	(953)
Net cash outflow from operating activities				(524,460)	(1,138,568)
Returns on investment and servicing of finance
Interest received				867	42,983
Purchase of fixed assets				(10,351)	(7,028)
Decrease in cash				(533,944)	(1,102,613)
Cash at beginning of the year				1,233,834	2,336,447
Cash at end of the year				699,890	1,233,834

 

 

 

NOTES

1. RELATED PARTY TRANSACTIONS

The interests of the Directors in the share capital of the company, whether beneficial or non-beneficial, were held, as at the end of the financial year, as follows:

 

Name No. of No. of

Ordinary Ordinary Shares

Shares Under Option

Nico van der Hoven 7,300,000 -

Jurie Wessels 2,100,000 4,900,000

Hendrik Schloemann 1,000,000 4,900,000

 

Loxbeare Ltd, a company owned by a discretionary trust of which Mr. van der Hoven is a potential beneficiary, purchased 7,300,000 ordinary shares in the Company at a price of 1.1p per share on 02 March 2010. Whether or not Mr. van der Hoven will, in fact, benefit from the shares held by this trust, which represents his only interest in the issued share capital of GoldStone, is at the discretion of the trustees. On 02 March 2010, Russell Brookes Ltd, a company owned by a discretionary trust of which Mr. Wessels is a potential beneficiary, purchased 2,100,000 ordinary shares in the Company at a price of 1.1p per share and on the same day Marais Services Ltd, a company owned by a discretionary trust of which Dr. Schloemann is a potential beneficiary, has today purchased 1,000,000 ordinary shares in the Company at a price of 1.1p per share. Whether or not Mr. Wessels or Dr. Schloemann will, in fact, benefit from the shares held by these two discretionary trusts, which represent their only interests in the issued share capital of GoldStone, is at the discretion of the respective trustees. 

 

In May 2009 and following Sir Michael Oliver's resignation, the Board had to be reconstituted with the result that options to subscribe for a total of 3,000,000 ordinary shares in equal proportions to Jurie Wessels and Hendrik Schloemann were the only valid and enforceable options in force. The options were granted to Jurie Wessels and Hendrik Schloemann on the 15th of August 2008. The closing price of the company's shares on the date of grant of the options was 0.875 pence per share which were lower than the exercise price. Thus, the fair value of the options is nil at the date of grant. On 22 February 2010 Jurie Wessels and Hendrik Schloemann were each granted options to subscribe for a total of 3,400,000 ordinary shares of 1p each in the Company. The closing price of the company's shares on the date of grant of these options was 1.52 pence per share which were lower than the exercise price. Thus, the fair value of the options is negligible.at the date of grant. 

 

The aforesaid options are exercisable as follows:

 

Director Number of options Exercise price Exercise period

 

 Jurie

Wessels 1,500,000 1.5p 16 August 2009 - 15 August 2013

1,700,000 3.0p 22 February 2011 - 22 February 2016

1,700,000 5.0p 22 August 2011 - 22 August 2016

 

Hendrik

Schloemann 1,500,000 1.5p 16 August 2009 - 15 August 2013

1,700,000 3.0p 22 February 2011 - 22 February 2016

1,700,000 5.0p 22 August 2011 - 22 August 2016

 

2. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average number of ordinary shares in issue after the placing on AIM. Diluted earnings per share is calculated using the weighted average number of ordinary shares in issue as adjusted to assume conversion of all dilutive potential ordinary shares.

				2010 $	2009 $
Loss per ordinary share
Loss attributable to share holders				(609,779)	(1,110,650)
Weighted average number of ordinary shares				130,816,633	130,816,633
Basic and diluted loss per share				(0.5)	(0.8)

 

3. ANNUAL REPORT

The annual report and accounts for the year ended 28 February 2010 will be posted to shareholders today and will be available from the Company's website at www.goldstoneresources.com shortly. 

 

 

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