Horizonte Minerals Regulatory News (HZM)

29 Apr 2008 07:01

Horizonte Minerals PLC29 April 2008 Horizonte Minerals plc / Index: AIM / Epic: HMZ / Sector: Mining 29 April 2008 Horizonte Minerals plc ('Horizonte' or 'the Company') Final Results Horizonte Minerals plc, the AIM listed exploration and development companyfocused on Brazil and Peru, is pleased to announce its results for the yearended 31 December 2007. Overview • Strong balance sheet with £2.4 million cash available to focus on generative project acquisition and development • Fast-tracked the Lontra Nickel Laterite project in the Carajas Mineral Province of Northern Brazil, from a grassroots discovery in early 2007 through to drill target definition • Successful 1,600m drilling programme completed over two separate zones at El Aguila silver-lead-zinc project in Peru. Drilling returned: • Zona Sur target area - 7 holes drilled, best intersections including 12.09m at 112.9g/t Ag, 5m at 199.04g/t Ag and 0.29m at 627.9g/t Ag • Pacos Hill - 3 holes drilled, returned best silver grades of 18m at 133.70g/t Ag, 5.74m at 176.62g/t Ag and 0.30m at 531g/t Ag • Signed US$2.8 million Option Agreement with Troy Resources for Tangara gold project in Brazil - potential value, subject to resource definition, could be in the region of US$15 million • Entered into an option agreement with Amarillo Gold Corporation for Mara Rosa gold project in Brazil. Amarillo currently undertaking a feasibility study on the Posse deposit just 8km to the north • Pipeline of new generative projects being developed in Brazil and Peru Chairman's Statement 2007 saw Horizonte succeed in adding value to its gold, silver and base metalsexploration portfolio in South America. During the year, we implemented anaggressive exploration and development programme across our three primaryprojects, have proven our business model by signing a farm-out agreement for ourTangara gold project in Brazil and broadened our portfolio of generativepipeline projects for the future. However, regretfully this has not yet beenreflected in the share price despite continuing record commodity prices,particularly of gold, which is now in new territory. In the 27 years of my career as a geologist, the market has not seen US$900+ perounce gold, US$18 per ounce silver, or US$2,000 per ounce platinum. Theresurgence in worldwide demand led by China has left the markets of most mineralcommodities tight, with the subsequent high prices reflecting the lack ofexploration and significant mine development in the late 1990s and early 2000s. On the flip side, the global effect of the U.S. induced credit crisis and thepotential recession in the world's economy is expected to soften most metalprices in 2008, as reported by the Mineral Economics Group, in its SpecialReport for PDAC 2008. However, continued strong economic growth andinfrastructure development in the so-called BRIC countries (Brazil, Russia,India and China) and the rising need to upgrade and replace ageinginfrastructure in many established economies, should keep demand robust, therebykeeping commodity markets tight and in turn, supporting metal prices above theirlong term averages. The critical need for reserve replacement requirements and the growthaspirations of the major and intermediate producers, as well as the increasedcompetition and rising costs of replacing reserves through acquisition, shouldensure that exploration continues to be of prime importance going forward. Our biggest challenge is to get the London market, especially investors on AIM,to recognise companies such as Horizonte. At the moment it does not seem to bereflecting the demand for new reserves and is instead targeting production.Stock prices are being influenced by general market forces, rather than by theunderlying fundamentals of the companies themselves. Yet in fact theopportunities with a Company such as yours have never been better. It is my belief that our business model of discovering and then developingexploration projects before joint venturing them out to the mining majors is aneffective way to add value. We have proven this model when we successfullydiscovered new gold mineralisation at the Tangara project in Brazil,fast-tracked development through exploration and drilling, and in December 2007signed a farm-out agreement with Troy Resources to realise value. At Tangara, Horizonte invested circa US$ 1 million in the securing anddevelopment of the project. The three-year option agreement signed with Troyprovides regular cash payments to the Company totalling US$800,000. If overtime, Troy develops production at Tangara, there will also be medium term cashflow to Horizonte - US$2 million cash to exercise the option after expendingUS$2 million in the ground and a royalty of US$30 per ounce produced up to500,000 oz. In summary, a small operation of 50,000 oz per annum would translateinto a benefit to your Company of US$1.5 million per annum. The potential value, subject to a resource definition, could be in the region ofUS$15 million. We have demonstrated added value through early stage exploration,and Troy are taking the added financial exposure to develop the project, whichfits with their development of the Andorinhas Mine nearby. We hope to repeatsimilar agreements for our primary and pipeline projects to help realiseHorizonte's true economic potential. This funding will contribute to Horizonte continuing to do what it is best at,generating and defining new projects at the low end of the cost spectrum of theresource business by discovery. The Horizonte team has continued to create morevalue in its portfolio during 2007 and early this year. The Lontra nickelproject in Brazil has developed rapidly with very encouraging early results.This project will continue to be advanced this year and we have interest alreadyfrom potential partners. We continue to advance our other Brazilian projectsincluding Falcao, which we hope the market will recognise going forward. Latin America continues to be a popular destination for exploration andHorizonte is active in two of the big five - Brazil and Peru, the others beingChile, Argentina and Mexico. The El Aguila project in Peru continues to showencouraging high-grade silver-zinc-lead drill intersections. It is thecharacteristic that these systems extend to great depths. The drilling to datehas shown continuity and most encouragingly increased width at depth. We arereviewing the latest results with a view to undertaking further deep drilling ifmerited. In the meantime we are engaged in discussions with potential partners. Peru is still a country with massive discovery potential and I am delighted tosay we have strengthened the team there with a view to expanding ourexploration. We already are reviewing a number of opportunities that willhopefully have the ability to add further value to the Company. Despite the London market's reluctance to acknowledge the increased value thatHorizonte has added in 2007, we are continuing to engage investors with theHorizonte story. The appointment of Fairfax as our new Nominated Adviser andBroker is part of this initiative. Fairfax's mining and metals team is led bythe highly respected John Meyer, one of the leading London analysts. The factthat they have agreed to take on Horizonte surely shows that they appreciate thepotential value of the Company and want to see it better recognised in themarket. Finally it remains to thank you for your continuing support for the Company. Iwould like to acknowledge the efforts of my fellow Board members, and especiallyyour incredibly dedicated and hard working C.E.O. Jeremy Martin, only matched byan equally dedicated and little seen, Nick Winer, C.O.O. on the ground. David J. Hall Chairman 28 April 2008 Consolidated Income StatementFor the year ended 31 December 2007 Year ended Year ended 31 31 December 2007 December 2006 £ £ Revenue - - Cost of Sales - - Gross Profit - - Administration Expenses (513,551) (240,475) Gain/(Loss) on Foreign Exchange 3,180 (6,580) Loss from Operations (510,371) (247,055) Finance Income 96,859 58,999 Loss before Taxation (413,512) (188,056) Taxation - - Retained Loss for the Year attributable to Equity (413,512) (188,056) Shareholders Loss per Share (pence) - Basic and diluted (1.20) (0.76) There are no recognised gains or losses other than the results for the year asset out above. Consolidated Balance SheetAs at 31 December 2007 As at As at 31 December 31 December 2007 2006 £ £ ASSETS Non-Current Assets Intangible Assets 2,285,037 1,445,195 Property, Plant & Equipment 1,169 972 2,286,206 1,446,167 Current Assets Trade and Other Receivables 104,552 2,793 Cash and Cash Equivalents 2,390,398 1,427,044 2,494,950 1,429,837 Total Assets 4,781,156 2,876,004 EQUITY AND LIABILITIES Equity Issued Capital 404,477 295,077 Share Premium 5,771,728 3,793,147 Other Reserves (1,048,100) (1,048,100) Retained Earnings (618,755) (255,687) Total Equity 4,509,350 2,784,437 Current Liabilities Trade and Other Payables 271,806 91,567 Total Liabilities 271,806 91,567 Total Equity and Liabilities 4,781,156 2,876,004 Consolidated Statement of Changes in Equity Share Share Accumulated Other Total Capital Premium Losses Reserves £ £ £ £ £ As at 1 January 2006 218,410 1,965,690 (70,937) (1,548,100) 565,063 Issue of Ordinary Shares 76,667 2,223,333 - - 2,300,000 Issue Costs - (395,876) - - (395,876) Merger Reserve - - - 500,000 500,000 Share options - value of - - 3,306 - 3,306 employee services Loss for the Period - - (188,056) - (188,056) As at 31 December 2006 and 1 295,077 3,793,147 (255,687) (1,048,100) 2,784,437 January 2007 Issue of Ordinary Shares 109,400 2,078,600 - 2,188,000 Issue Costs - (100,019) - - (100,019) Share options - value of - - 50,444 - 50,444 employee services Loss for the Period - - (413,512) - (413,512) As at 31 December 2007 404,477 5,771,728 (618,755) (1,048,100) 4,509,350 Consolidated Cash Flow StatementFor the year ended 31 December 2007 Consolidated Cash Flow Statement Year ended 31 Year ended 31 December 2007 December 2006 £ £ Cash flows from operating activities Loss before taxation (413,512) (188,056) Interest income (96,859) (58,999) Employee share options charge 50,444 3,306 Project impairment 50,888 - Depreciation 381 254 Operating loss before changes in working capital (408,658) (243,495) Increase in trade and other receivables (101,759) (2,326) Increase in trade and other payables 180,239 59,778 Net cash outflow from operating activities (330,178) (186,043) Cash flows from investing activities Net purchase of intangible assets (890,730) (792,425) Purchase of property, plant and equipment (578) (1,226) Interest received 96,859 58,999 Net cash used in investing activities (794,449) (734,652) Cash flows from financing activities Proceeds from issue of ordinary shares 2,087,981 1,904,124 Change in short term borrowings - (55,580) Net cash inflow from financing activities 2,087,981 1,848,544 Net increase in cash and cash equivalents 963,354 927,849 Cash and cash equivalents at beginning of year 1,427,044 499,195 Cash and cash equivalents at end of the year 2,390,398 1,427,044 Consisting of: Group cash 2,390,398 1,427,044 NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation This financial information above has been prepared in accordance withInternational Financial Reporting Standards (IFRS) and IFRIC interpretations, asadopted by the European Union and those parts of the Companies Act 1985applicable to companies reporting under IFRS. The financial information has beenprepared under the historical cost convention and on a going concern basis. Thefinancial information is in conformity with generally accepted accountingprinciples and requires the use of estimates and assumptions that affect thereported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those estimates. 2. Dividends No dividend has been declared or paid by the Company during the year ended 31December 2007 (2006:nil). 3. Loss per share The basic loss per share is 1.20p (2006: 0.76p) and the diluted loss per shareis 1.20p (2005:0.76p). The basic loss per share is calculated by dividing the loss for the year of£413,512 (2006: £188,056) by 34,513,091 (2006:24,656,525) ordinary shares, beingthe weighted average number of shares in issue. The diluted loss per share is the same as the basic loss per share as theoptions that were in existence have an anti-dilutive effect on the loss pershare and therefore have not been taken into account. 4. Copies of the Annual Report Copies of the Annual Report and Accounts will be sent to shareholders in duecourse and further copies will be available on the Company's website,www.horizonteminerals.com, or from the Company's registered office, 22 GraftonStreet, London W1S 4EX. * * ENDS * * For further information visit www.horizonteminerals.com or contact: Jeremy Martin/David Hall Horizonte Minerals plc Tel: 020 7495 5446Jeremy Porter/Laura Littley Fairfax I.S. PLC Tel: 020 7598 5368Hugo de Salis/ Felicity Edwards St Brides Media & Finance Ltd Tel: 020 7236 1177 Notes to Editors: Horizonte Minerals plc is an AIM listed exploration and development company witha portfolio of gold, nickel, silver, lead and zinc projects in producing mineraldistricts in Brazil and Peru. It has three primary projects working towards aresource definition including the 22,556 hectare Lontra nickel project situatedin the Araguaia mobile belt, which flanks the eastern margin of the CarajasMineral Province of northern Brazil, the silver-zinc-lead project El Aguilia inPeru, located in the historic mining district of Cerro de Pasco and the 300 sqkm Falcao gold project located near the Lontra project. In addition it has agenerative pipeline of early stage projects in development. The Company is focused on generating and rapidly advancing exploration projectsbefore joint venturing them with a major mining company to further develop theprojects and provide mid-term cash flow, which can be fed back into the businessand its other projects. This model was proven in December 2007 when Horizontesigned an option agreement with Troy Resources (ASX:TRY), to operate and developits Brazilian Tangara gold project by expending a total US$2.8 million onexploration and development as well as a royalty payment on production. This information is provided by RNS The company news service from the London Stock Exchange