Kemin Resources Regulatory News (KEM)

30 Jun 2005 07:01

GMA Resources PLC30 June 2005 For Immediate Release 30 June 2005 GMA Resources Plc PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 Chairman's Statement Dear Shareholder Once again it is my pleasure to present to you the annual report of GMAResources plc (the Company), for the year ended 31 December 2004. It has been a year of substantial achievements for your Company, as it continuesto build a solid foundation for growth into a major gold mining company. Theseachievements and the significance to the Company are: • The Company acquired its 52% interest in ENOR Spa on 1 July 2003. Since then the Company has continued to comply with its obligations, as defined under the Subscription Agreement, and has completed approximately 75% of subscription payment obligations to date. • The Board's strategy is to complete a development plan for the substantial Tirek and Amesmessa gold deposits owned by ENOR with a view to significantly expand the existing gold mining operation. With this in mind, the Company commenced a major exploration drilling programme during the December 2003 quarter, which continued throughout the year 2004. In the first quarter of 2004, the CEO of GMA Resources, Mr Colin Ikin, announced the commencement of a Bankable Feasibility Study (BFS) for the construction of a new 300,000 tonne per annum gold mining and mineral processing plant at Amesmessa. • A significant amount of work has been performed, both prior to and since that announcement, such that the Company has recently announced a JORC compliant resource statement for Amesmessa and has completed the design and cost estimates for the new plant and associated infrastructure. The ability to develop the Amesmessa deposit using open cast mining techniques rather than underground mine development has been a strategically important outcome due to the lower cost and risk of open cast mining. • During the year, the Company continued to operate and optimise the existing pilot plant operation at the Tirek mine-site. The past year has been one of mixed results for the Company. The performance improvement measures introduced at ENOR has seen gold production for the 2004 year significantly increase compared with the 2003 year. Gold production for the second half of 2004 was almost double that of the first half. Unfortunately the overall result was below plan and other factors combined to produce a situation where ENOR's financial performance for the year was disappointing. The Company is continuing to work with ENOR management to improve performance and the financial results and we remain confident that the business can continue to improve its production and financial performance. • The improvement in safety performance at the ENOR operations at Tirek has been particularly good with a reduction in lost time injuries and a significant reduction in injury rates. Towards the end of 2003 ENOR embarked on a process to achieve international recognition for its Health, Safety and Environmental Management programme. It was decided that the National Occupational Safety Association (NOSA) system was the most appropriate to demonstrate the Company's commitment to continual improvement at the operations. In November 2004, the site was audited by a NOSA representative and subsequently awarded a NOSA 3 Star Rating which was a significant achievement for its first assessment. At the Annual General Assembly of the Shareholders of ENOR Spa, held in Algierson 7th June 2005, the Company presented on the progress made to date on itscommitments under the Subscription Agreement, and in particular on theFeasibility Study. The establishment of substantial open cast ore reserves atAmesmessa, and the prospect of increasing these once modeling of the main veinsat Tirek has been completed, was considered as a significant step forwardtowards implementing the new project. At the meeting ENOR's other main shareholders, Sonatrach and the Bank ofAlgeria, confirmed their support for the development of the new mine andprocessing plant at Amesmessa, and indicated that they would fund their share ofthe development costs. Furthermore, Sonatrach confirmed that they would increasetheir holding in ENOR Spa from 16% to 32%, through the purchase of the minorityshareholders' interests. Subsequently, the Company has had meetings and discussion with banks, brokersand other capital providers regarding the raising of funds later this year. Theresponse has been positive. In addition, the Company's share holder structurehas improved with RAB Capital plc holding approximately 30% of the Company'sissued share capital which should assist a future capital raising. The board and management are now focussing on completing the Amesmessa study andfinancing the development of this exciting project. Accordingly, the Company iscurrently preparing a "Project Brief" and presentation for the market, and withthe completion of the Feasibility Study forecast for August 2005, expects to beable to commence project construction in the first quarter 2006. Richard LinnellChairman29 June 2005 GMA RESOURCES PLCConsolidated Profit and Loss Accountfor the year ended 31 December 2004 Note 2004 2003 £'000 £'000 Turnover 4,333 1,293 Cost of sales (7,552) (3,071) Gross loss (3,219) (1,778) Administrative expenses (1,030) (1,135) Operating loss (4,249) (2,913) Net interest (72) (985) Loss on ordinary activities before (4,321) (3,898)taxation Tax on loss on ordinary activities - - Loss on ordinary activities after (4,321) (3,898)taxation Minority interest 1,855 892 Net loss attributable to shareholders 4 (2,466) (3,006) Loss per ordinary share 3 (1.90p) (4.39p) All operations are continuing. GMA RESOURCES PLCConsolidated Balance Sheetat 31 December 2004 Note 2004 2003 £'000 £'000Fixed assetsIntangible assets 1,504 1,941Tangible assets 6,081 5,560 7,585 7,501Current assetsStocks 2,124 1,307Debtors 578 382Cash at bank and in hand 1,839 4,669 4,541 6,358Creditors: amounts falling due within one (4,544) (2,787)period Net current (liabilities)/assets (3) 3,571 Total assets less current liabilities 7,582 11,072 Creditors: amounts falling due after more (452) (808)than one period Minority interest (3,144) (4,999) Net assets 3,986 5,265 Capital and reservesCalled up share capital 1,337 1,173Share premium account 8,816 7,013Profit and loss account (6,167) (2,921)Equity shareholders' funds 4 3,986 5,265 This preliminary statement was approved by the Board of Directors on 29 June2005. GMA RESOURCES PLCConslidated Cash Flow Statementfor the year ended 31 December 2004 Note 2004 2003 £'000 £'000 Net cash outflow from operating activities 5 (2,449) (812) Returns on investment and servicing offinanceInterest received 64 22Interest paid (136) (122)Expenses paid in connection with issue of - (885)loan stock (72) (985) Capital expenditurePayments to acquire tangible fixed assets (2,869) (1,111) AcquisitionsPurchase of subsidiary undertakings - (2,155)Net cash acquired with subsidiaries - 2,550 - 395 Net cash outflow before financing (5,390) (2,513) FinancingIssue of ordinary share capital 1,967 3,505Loan advances 1,069 4,000Loan repayments (476) (149)Expenses paid in connection with share - (174)issuesNet cash inflow from financing 2,560 7,182 (Decrease)/increase in cash 6,7 (2,830) 4,669 GMA RESOURCES PLCNotes for the year ended 31 December 2004 1. General The financial information herein does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The financial information has been extracted from the company's 2004 statutoryfinancial statements upon which the auditors reported on 29 June 2005. Theiropinion is unqualified and does not include any statement under section 237 ofthe Companies Act 1985, but refers to the uncertainties surrounding the abilityof the Group to continue as a going concern (as described in note 2). The financial statements have been prepared in accordance with applicable UnitedKingdom Accounting Standards and under the historical cost convention. Theprincipal accounting policies of the group have remained unchanged from theprevious annual report. Copies of the annual report are being posted to shareholders and copies will beavailable from the company's registered office at 30 Farringdon Street, London,EC4A 4HJ. 2. Basis of preparing the financial statements The group has incurred losses in the year, due mainly to costs associated withdeveloping and expanding the mine operated by the group's subsidiary in Algeria. The group meets its day to day working capital requirements through a positivecash balance and has no agreed uncommitted borrowing facilities at present. The company's brokers have indicated that they may be able to raise further funds through an issue of equity shares. The nature of the group's business is such that there is significant capitalinvestment required as well as the balance of the purchase consideration for the acquisition of the subsidiary, ENOR and currently the group is still incurringlosses. Bearing this in mind, the directors have prepared projected cash flowinformation for the period ending 30 June 2006 that includes a requirement to raise further funds during the remainder of 2005. On the basis of this cash flow information and the expectation that the companywill be able to raise additional funds through an issue of shares of not lessthan £3.5 million, the directors consider that the company will have sufficientfunds for the foreseeable future and at least a period of 12 months from thedate of these financial statements. However, the margin of facilities over requirements is not large and there canbe no certainty that an issue of equity shares would be successful. On this basis, the directors consider it is appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from the inability to raise the required funding. 3. Loss per ordinary share 2004 2004 2004 2003 2003 2003 Loss for Number Loss per Loss for the Number Loss per the year of shares share period of shares share £'000 '000 p £'000 '000 p Loss for the year (2,466) (3,006)Weighted average number of 129,488 68,522sharesBasic loss per share (1.90p) (4.39p) GMA RESOURCES PLCNotes for the year ended 31 December 2004 4. Reconciliation of movements in shareholders' funds 2004 2003 £'000 £'000 Shareholders' funds at 1 January 2004 5,265 -Loss for the financial year (2,466) (3,006)Exchange differences (780) 85Receipts from issue of shares 1,967 8,186Shareholders' funds at 31 December 2004 3,986 5,265 5. Reconciliation of operating loss to net cash outflow from operating activities 2004 2003 £'000 £'000 Operating loss (4,249) (2,913)Depreciation and amortisation 2,303 1,712Loss on disposal of fixed assets - 67Non-cash expenses - 300Exchange differences (371) 117Increase in stocks (817) (903)(Increase)/decrease in debtors (196) 92Increase in creditors 881 716Net cash outflow from operating activities (2,449) (812) 6. Reconciliation of net cash flow to movement in net funds 2004 2003 £'000 £'000 (Decrease)/increase in cash (2,830) 4,669Loans acquired with subsidiaries - (1,281)Convertible loan stock issued - (4,000)Loan stock converted to ordinary shares 2 3,998New loans (1,069) -Loans repaid 386 162Exchange differences 88 (13)Change in net funds in the year (3,423) 3,535Net funds at 1 January 2004 3,535 -Net funds at 31 December 2004 112 3,535 GMA RESOURCES PLCNotes for the year ended 31 December 2004 7. Analysis of movements in net funds At 1 At 31 January Non-cash Exchange December 2004 Cash flow items movement 2004 £'000 £'000 £'000 £'000 £'000 Cash in hand and at bank 4,669 (2,830) - - 1,839Debt due within one year (326) 386 (1,423) 88 (1,275)Debt due after one year (808) (1,069) 1,425 - (452) 3,535 (3,513) 2 88 112 The non-cash items comprises £2,000 of loan stock converted into ordinary sharesof 1p each in the year and £1,425,000 reallocation of the bank loan from dueafter one year to within one year. ENDS For further information contact:GMA Resources Tel: + 61 400 228 234Colin Ikin, Chief Executive This information is provided by RNS The company news service from the London Stock Exchange