Horizonte Minerals Regulatory News (HZM)

29 Sep 2006 09:04

Horizonte Minerals PLC29 September 2006 Horizonte Minerals plc / Index: AIM / Epic: HMZ / Sector: Mining Horizonte Minerals plc ('Horizonte' or 'the Company') Interim Results London: 29 September 2006 - Horizonte Minerals plc, the AIM listed explorationand development company focused on Brazil and Peru, is pleased to announce itsresults for the six months ended 30 June 2006. Overview • Listed on AIM having raised £2.3 million to focus on the discovery and development of world-class precious and base metal projects in South America • Control of over 500km2 of exploration land in proven precious metal regions in Brazil and Peru • Drilling of multiple targets underway at the Tangara gold project in Brazil following identification of anomalies within a 2.5 km trend. • Drilling underway at El Aguila silver-lead-zinc project in Central Peru • Model of identifying quality early stage projects before securing a partner to assume high financial exposure of development and production now proven • Successful JV with Troy Resources of Australia to explore the Goias Velho ground holdings in Brazil targeting gold • Evaluating additional opportunities to expand exploration portfolio Horizonte Managing Director Jeremy Martin said: "It has been a very excitingfew months since the Company's listing on AIM. We have completed the initialwork programmes on the core projects, Tangara and El Aguila, generating multipledrill targets, which we have gone on to test. We are now nearing the finalstages of a 1,500m diamond drill programmes on El Aguila and a 1000 metreprogramme at the Tangara gold project and hope to announce the initial resultsin the next few weeks. Importantly, the signing of a joint venture with TroyResources not only demonstrates the mineral potential of the Goias Velho goldproject but also highlights our ability to attract world class partnersfollowing the identification and evaluation of early stage projects. With ourexciting portfolio and potential pipeline of new projects, I believe we are in astrong position to reward shareholders in the future." Chairman's Statement It gives me great pleasure to address you so early after the successful listingon AIM of Horizonte Minerals plc. Your Company has hit the ground running,making considerable progress in a short period of time and I believe is alreadygenerating increased value for shareholders through the advancement of itsprojects. We are focussed on the discovery and development of world-classprecious and base metal projects in South America and already have an excitingportfolio in Brazil and Peru covering in the region of 530 km2. Theseexploration areas are located within strategic mining provinces with a historyof exploration success. Work has commenced at our 300 km2 Tangara exploration block, which is overlayinga greenstone belt in the world class Carajas Mineral Province in Brazil.Detailed geological mapping, ground geophysics and auger drilling helped tovector in on the drill targets and confirm our three target mineral stylesnamely, high grade veins, gold associated with massive sulphide replacementbodies, and a low grade gold halo around these. Drilling is underway at the timeof writing and we look forward to receiving results in the coming weeks. At El Aguila, which is located in the prolific Cerro de Pasco mineral belt,Horzionte completed geological mapping, surface and underground sampling. Highgrades were returned from sampling of the mineralized structures at variouslevels with the average grade of 20 rock channel samples being 10.2 oz/t Ag,8.6% Pb and 3.5% Zn. To put these values in perspective, using $10.50/oz Ag,US$550/Au, $3,000/t Zn and Pb at $1,000/t, the average is in the region of 16.79g/t Au equivalent, which is high grade. We have commenced a 1,500 metre drillprogramme with a view to rapid resource definition and adding considerable valueat El Aguila. In addition to Pacos Hill where the work has focused to date,there are two other attractive target areas on the property for furtherfollow-up. As shareholders will be aware we have a model of identifying quality early stageprojects before securing a partner to assume the high financial exposure ofdevelopment and production while maintaining upside for Horizonte. This model Ibelieve has already been proven, when in July we signed a joint venture withAustralian gold producer Troy Resources NL's 70% owned local subsidiarySertao Mineracao Ltda ('SML') to advance Horizonte's Goias Velho goldexploration project in Brazil. The concession area, that has yielded positivegold anomalies, is contiguous to SML's projects, which also includes theoperating Sertao gold mine. It is the intention of the two parties todelineate further economic open-pit resources in close proximity to the mine. A key factor in exploration success is the quality of the team. Horizonte has ateam with over 50 years management experiences primarily in South America withthe ability to both identify and advance projects. I believe CEO Jeremy Martin,COO Nick Winer in Brazil with Exploration Manager Dr. Titus Haggan and myself asChairman, have the ability to add to Horizonte's early success. They have puttogether an active programme of pipeline development and are constantlyevaluating new opportunities. To this end, we hope to report shortly on theaddition of new exploration areas to our current portfolio. We believe we have a very strong model that will reap rewards for ourshareholders. The increasing need of mining companies to obtain new reserves andresources is highlighted by the recent acquisition by Yamana Resources, aBrazilian producer, of Viceroy Resources for its Gualcamayo project inArgentina. This deal converted to an approximate acquisition cost of US$300 perresource ounce. Horizonte's aim is to place itself as the main provider of quality explorationprojects to the mining sector. The Board recognises that to achieve maximumjoint benefits from exploration, mining and E&D companies need to take advantageof their synergies and create an environment of trust and mutual benefit. Asmentioned earlier, the deal with Troy Resources represents a start to anassociation that will enhance shareholder value. It already has two gold miningoperations, one at Sandstone in Western Australia the other at Goias in Brazil,which produced 110,263 ounces in the 2005/06 year. Finally, I'd like to thank all those involved with Horizonte, our shareholdersfor their continuing support and I look forward to updating the market onfurther positive developments in the near future. David J HallChairman29 September 2006 FINANCIAL STATEMENTS a. Consolidated Income Statement Period Period Period 1-Jan-06 14-Jun-05 14-Jun-05 30-Jun-06 30-Jun-05 31-Dec-05 Unaudited Unaudited Unaudited Note £ £ £ Turnover - - - Other operating expenses (69,019) (175) (73,897) Gain on Foreign exchange 33,845 - - Loss from operations 3 (35,174) (175) (73,897) Finance Income 17,656 2,960 - Loss from ordinary activities (17,518) (175) (70,937) before taxation Taxation - - - Retained loss for the period (17,518) (175) (70,937) attibutable to shareholders Loss per share (pence) 10 (0.10) 0.00 (0.41) b. Consolidated Balance Sheet 30-Jun-06 30-Jun-05 31-Dec-05 Note £ £ £ ASSETS Non-Current Assets Intangible Assets 893,686 - 152,770 Property, plant and equipment 944 - - 894,630 - 152,770 Current Assets Other receivables 6 21,322 467 - Bank balances and cash 2,102,995 - 499,195 2,124,317 - 499,662 Total Assets 3,018,947 652,432 - EQUITY AND LIABILITIES Equity 8 Issued Capital 295,077 218,410 218,410 Share Premium 1,826,894 - - Reserves (829,135) (218,585) 346,653 2,951,106 (175) 565,063 Current Liabilities Borrowings - - 55,580 Trade payables and accrued expenses 7 67,841 31,789 175 67,841 87,369 175 Total Liabilities 67,841 87,369 175 Total Equity and Liabilities 3,018,947 - 652,432 c. Consolidated Statement of Changes in Equity Share Share Retained Merger Capital Premium Reserve Reserve Total £ £ £ £ £ As at 1 January 2006 218,410 - (70,937) 417,590 565,063 Issue of Ordinary Shares 76,667 2,223,333 2,300,000 - - Issuance Costs - (396,439) (396,439) - - Movement on merger reserve - - - 500,000 500,000 Loss for the period - - (17,518) - (17,518) As at 30 June 2006 295,077 1,826,894 (88,455) 917,590 2,951,106 d. Consolidated Cash Flow Statement Period Period Period 1-Jan-06 14-Jun-05 14-Jun-05 30-Jun-06 30-Jun-05 31-Dec-05 Unaudited Unaudited Unaudited £ £ £ Cash flows from operating activities Loss before taxation (17,518) (175) (70,937) Interest income (17,656) - (2,960) Depreciation 113 - - Operating loss before changes in (35,061) (175) (73,897) working capital Increase in other receivables and (20,855) - (467) prepayments Increase in trade payables and 36,052 175 31,789 accrued expenses Net cash outflow from operating (19,864) - (42,575) activities Cash flows from investing activities Purchase of intangible assets (240,916) - (152,770) Purchase of property, plant and (1,057) - - equipment Interest received 17,656 - 2,960 Net Cash used in investing activities (224,317) (149,810) - Cash flows from financing activities Proceeds from issue of ordinary - shares 2,300,000 636,000 Issue Costs (396,439) - Short term Borrowings (55,580) - 55,580 Net cash inflow from financing activities 1,847,981 - 691,580 Net increase in cash and cash equivalents 1,603,800 - 499,195 Cash and cash equivalents at - beginning of period 499,195 - Cash and cash equivalents at end of period 2,102,995 - 499,195 Consisting of: Company Cash 2,102,995 - 499,195 Note: During the period £500,000 of intangible assets were purchased by the issue of 10 million shares. NOTES TO FINANCIAL STATEMENTS 1. Basis of preparation This financial information has been prepared in accordance with International Financial Reporting Standards(IFRS) and IFRIC interpretations, as adopted by the European Union and those parts of the Companies Act1985 applicable to companies reporting under IFRS. The financial information has been prepared under the historical costconvention. The financial information is in conformity with generally accepted accounting principles and requires theuse of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Although these estimates arebased on management's best knowledge of the amount, event or actions, actual results ultimately may differ from thoseestimates. The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of theCompanies Act 1985. It has been prepared on a going concern basis in accordance with the International FinancialReporting Standards. The accounting policies applied in preparing the financial information are consistent with thosethat will be adopted in the Group's 2006 statutory accounts. The financial information for the periods ended 30 June 2005 and 31 December 2005 and the six months ended 30 June 2006has not been audited and no accounts have yet been filed at Companies House. Basis of consolidation Horizonte Minerals plc was incorporated on 16 January 2006. On 23 March 2006 Horizonte Minerals plc acquired the entireissued share capital of Horizonte Exploration Ltd Limited by way of a share for share exchange. The transaction has beentreated as a group reconstruction and has been accounted for using the merger accounting method. Accordingly thefinancial information for the current period and comparatives has been presented as if HE Limited had been owned byHorizonte Minerals plc throughout the current and prior periods and therefore the information presented for the periodto 30 June 2005 and the period to 31 December 2005 represents the activity of HE Limited and its subsidiaries. 2. Summary of significant accounting policies a) Intangible assets The Company recognises expenditure as exploration and evaluation assets when it determines that those assets will besuccessful in finding specific mineral resources. Expenditure included in the initial measurement of exploration andevaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore,topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activitiesto evaluate the technical feasibility and commercial viability of extracting a mineral resource. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carryingamount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration andevaluation assets to cash generating units which are based on geographical areas. Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discoveryof commercially viable quantities of mineral resources and the Company has decided to discontinue such activities ofthat unit, the associated expenditures will be written off to the Income Statement. b) Property, plant and equipment Fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties underconstruction, over their estimated useful lives, using the straight-line method, on the following bases: Office equipment 25% Software 33% c) Impairment At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determinewhether there is any indication that those assets have suffered an impairment loss. If any such indication exists, therecoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where itis not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amountof the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, thecarrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately, unless the relevant asset is land or buildings at a revaluedamount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased tothe revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) inprior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carriedat a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. d) Foreign currency translation i) Functional and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary economicenvironment in which the entity operates (the 'functional currency'). The financial statements are presented insterling, which is the Company's presentation currency. ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at thedates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and fromthe translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies arerecognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying netinvestment hedges. Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reportedas part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified asavailable-for-sale financial assets, are included in the fair value reserve in equity. e) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other financialinstitutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash andwhich are subject to an insignificant risk of changes in value.f) Taxation The charge for current tax is based on the results for the period, as adjusted for items which are non-assessable ordisallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising fromdifferences between the carrying amount of assets and liabilities in the financial statements and the corresponding taxbasis used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxabletemporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Suchassets and liabilities are not recognised if the temporary difference arises from goodwill (or negative goodwill) orfrom the initial recognition (other than in a business combination) of other assets and liabilities in a transaction,which affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries andassociates, and interests in joint ventures, except where the Company is able to control the reversal of the temporarydifference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or theliability is settled. Deferred tax is charged or credited in the income statement, except when it relates to itemscredited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authorityand the Company intends to settle its current tax assets and liabilities on a net basis. g) Share capital Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net oftax. Incremental costs directly attributable to the issue of equity instruments as consideration for the acquisition ofa business are included in the cost of acquisition. h) Operating leases Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor areclassified as operating leases. Operating lease payments are charged to operating profit on a straight-line basis overthe period of the respective leases. i) Financial instruments Financial assets are recognised in the balance sheet at the lower of cost and net realisable value. Provision is madefor diminution in value where appropriate. Interest receivable and payable is accrued and credited/charged to the profitand loss account in the period to which it relates. Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and theinterest rates applicable. 3. Loss from operations Loss from operations is stated after charging the following: £ Depreciation 113 4. Taxation No charge to taxation arises due to the tax losses incurred. No deferred tax asset has been recognised on accumulatedtax losses as the recoverability of any assets is not likely in the foreseeable future. 5. Employees As at 30 June 2006 the Company and its subsidiaries employed 12 people 6. Other receivables £ VAT due 21,3227. Other payables Trade payables and accrued expenses consist of: £ Professional fees 3,109Administration expenses 6,700Financing costs 58,032 67,841 All of the other payables expenses are expected to be settled within one year of the balance sheet date 8. Share capital Number of Shares £Authorised Ordinary shares of £0.01 each 100,000,000 1,000,000Allotted, Called up and Fully PaidOrdinary shares of £0.01 each 29,507,700 295,077 During the period the Company allotted a total of 7,666,666 ordinary 1p shares for an aggregateconsideration of £2,300,000 The difference between the total consideration and the total nominal value of£2,223,333 has been credited to the share premium account. 9. Dividends No dividend has been declared or paid by the Company during the period ended 30 June 2006. 10. Loss per share The loss per share is 0.10 p (2005: 0).The loss per share is calculated by dividing the loss for the period of £17,517 (2005: £175) by 17,413,744(2005:17,413,744) ordinary shares, being the weighted average number of shares in issue. There is no difference betweenthe diluted loss per share and the loss per share shown. Independent review report to the Directors of Horizonte Minerals plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated statement of changesin equity and the consolidated cash flow statement and the related notes to theaccounts and we have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for theCompany for the purpose of the AIM Rules of the London Stock Exchange and for noother purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come, save where expressly agreed by ourprior consent in writing. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the Directors. The Directorsare responsible for preparing the interim report in accordance with the AIMRules of the London Stock Exchange which require that the accounting policiesand presentation applied to the interim figures should be consistent with thoseapplied in preparing the annual accounts except where any changes, and thereasons for them, are disclosed. Review Work Performed We conducted our review in accordance with the guidance contained in Bulletin1999/4; the review of interim financial information issued by the AuditingPractices Board for use in the United Kingdom. A review consists principally ofmaking enquiries of management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. CLB Littlejohn FrazerChartered Accountants1 Park PlaceCanary WharfLondon E14 4HJ * * ENDS * * For further information visit:www.horizonteminerals.com or contact: Jeremy Martin/David Hall Horizonte Minerals plc Tel: +44 (0)20 7495 5446David Paxton Hichens Harrison Tel: +44 (0)20 7382 7785Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477John Frain/Fergal Meegan Davy Tel: +353 1 679 6363 This information is provided by RNS The company news service from the London Stock Exchange