Kemin Resources Regulatory News (KEM)

26 Sep 2007 17:37

GMA Resources PLC26 September 2007 26th September 2007 GMA Resources Plc ("GMA" or "the Company") Interim Results for the six months ended June 30, 2007 The Directors of GMA have pleasure in presenting the Company's unaudited interimaccounts for the six months ended June 30, 2007. Highlights: •Progress with site construction at Amesmessa on schedule. All mining equipment now on site •Leach tests at both Amesmessa Project and Tirek, indicate heap leach Au recovery of 80% will be possible (versus financial model assumption of 72%) •Board approval of budget and comprehensive exploration programme on concession further to geophysical surveys in 2006 and site visit in April 2007 •Successful fund raising of £4.1m (before expenses) through placing of shares in January 2007 •Successful fund raising of £5.7m through issue of loan stock in May 2007 •Hitchens Harrison & Co plc appointed in April 2007, as second broker to work alongside primary broker, Mirabaud Securities Limited Douglas Perkins, Chief Executive Officer said: "The period has seen goodprogress with site development at Amesmessa aided by a firm board commitment toadvancing this second project towards production, a well-functioning jointventure partnership with Sonatrach, and smooth successful financing. Thesefactors have permitted progress even with occasional hiring and logisticalchallenges and with that, we are very pleased. We have directed resources where necessary to progress at Amesmessa, and nowlook forward to a resumption of activity at the Tirek Property and continuedprogress at Amesmessa." Enquiries: GMA Resources Plc John East & Partners Parkgreen CommunicationsDouglas Perkins Simon Fox / Bidhi Bhoma Louise Goodeve / Justine Howarth+1 514 806 6788 +44 (0) 20 7628 2200 +44 (0) 20 7851 7480 Chairman's Statement I am pleased to report on the progress made by your company in the six monthsended June 30, 2007. The Company was pleased to announce the appointment to the Board of Directors ofFrancois Gauthier in July. Francois will certainly bring tremendous value to theCompany as a geologist and business executive with over 15 years of experiencein Algeria and in his roles in the oil industry and his experience with ourjoint venture partner Sonatrach. As of the date of this communication, virtually all equipment required for thedevelopment and start up of the Amesmessa plant are at site. Any small piecesmissing are being air freighted to Algeria currently. The crews brought in forassembly at site are either finished or will be coming back early October forthe last push towards commissioning. A summary of financial data is included below. I am pleased to informshareholders that your Company has been able to meet the requirements of IFRSand that our financial statements are now IFRS compliant and restated back toJanuary 1 2006, as required by the London Stock Exchange within the time lineprescribed by the Exchange. 6 months to 6 months to Year to 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) £'000s £'000s £'000sSales revenue 2,284 1,636 3,943Loss before tax (2,276) (1,577) (2,841)Cash and cash equivalents 7,307 10,957 7,477 GBP GBP GBPLoss per share - basic (0.4p) (0.3p) (0.7p) The gold price has been rising in conjunction with the uncertainties of theinternational financial markets of late. As with all mining companies, we mustbe aware of inflation in the costs of our consumption. We cannot sit back andenjoy a rise in revenue without addressing efficient cost control. We based ourmodels on a $440 US gold price and came up with robust economics. We reviewedthe capital costs continually during the project and have reacted to increasesin operating costs with blanket orders of consumables where possible. Wereviewed projected operating costs for Amesmessa in early 2007 and are confidentthat our costs will still be below $300/oz, given the foreign exchange rates atthe time of the review. With the current price over $700 and most forecastsbeing that gold will continue to be in a bull market for the next couple ofyears, all we need is production to commence. The market for qualified expatriate personnel continues to be a major challengein the industry and at GMA we face the same issues. We are being aggressive inour recruitment and retention policies and are able to effectively staff theCompany. There still exists a large requirement for continual training ofAlgerian staff at site. This is a major component of each expatriates mandate tothe Company. Also we are continually entering into training arrangements withsuppliers to reinforce the level of expertise of our workforce. This brings us to the next step. Strategic planning of where we will take thecompany, both within the ENOR concession in Algeria and for GMA elsewhere. TheBoard of ENOR has approved an extensive exploration program that includes 20,000meters of exploration drilling as soon as we can get the necessary equipment tosite. We are also compiling all information available on the ENOR concessiononto one database to support decisions on how to further develop production. As everyone is no doubt aware, the worldwide exploration drilling situation iscritical with the shortage of drills available in the world, particularlyreverse circulation drills. As such, GMA decided to purchase a new drill rig toaid in its exploration activities. The rig is currently being customized for ourneed in the United States and will begin by completing the exploration programfor ENOR. We are confident that the difficult period that you as shareholders have gonethrough is coming to an end, we thank you for your continued support and we arelooking forward to completing the groundwork for an exciting future together. Richard LinnellChairman 26 September 2007 Chief Executive Officer's Statement Dear Shareholder, I would like to hereby give a more detailed update on your company's progressover the period under review. Finance At this point of time, GMA has furnished all the money required for thecompletion of the Amesmessa heap leach project. The Company has £4,000,000 inthe bank. We still have expenditures to incur for the exploration capitalinvestment and we are still carrying all expatriate wages for the project andassisting with some deposits with suppliers and purchase payments where theAlgerian system cannot react efficiently in this market. Getting GMA consolidated reporting in IFRS format without the engagement ofoutside consultants and in a timely fashion was an achievement of the team. Both the equity finance issued in February 2007 and the convertible debt issuein May was reported on in the 2006 Annual report that all shareholders shouldhave received. The Company will make its first interest payment to subscribersof the 10% convertible debenture in December 2007. The Company has 28,000,000warrants at 13p exercisable until April 2008 which could inject another£3,600,000 into the Company coffers for future exploration and development. The Group reported a loss of £2,276,000 (0.4p basic loss per share) for thefirst six months of the year. The Company reported revenue of £2,284,000 fromthe sale of 7,031 ounces of gold. The Company started the year with 27 kg. ofdore in stock and ended the reporting period with approximately 45 kg. of goldunsold and still in stock. Construction Commissioning of the project is now scheduled for the fourth quarter 2007. Thereare still a number of small critical parts needed to complete the constructionand they have been identified and are being air freighted to Algeria at present.All contractors have left site now either because they have completed the workor they will be returning to Algeria October 5th to complete the project. The installation of the drainage pipe on the heap leach pad is virtuallycomplete and the pumps are being installed with a view to starting to load thepad in October. There is an accumulation of water already in the sump due toheavy rains during the month of August. A local contractor was engaged to construct the three explosives magazines. Atthis time work is 50% complete and scheduled to be complete end of October. Wecan start up without mining as we have a 100,000 tonnes ore stock pile besidethe crusher already. That should be good for 50 days of full production at thecrusher. We are at present taking delivery of most consumables required for start up andthe development of the minimum stock levels for the stores. Exploration The Board of ENOR approved a $3,000,000 US exploration program to identifyresources for the next couple of years specifically around the TIREK operationand other known indices on the whole concession. The goal of the program is toidentify ore bodies that can be turned into production in the near future if theCompany decides to expand operations. The drill rig GMA purchased from Sandvikis undergoing customization in USA at present. It is hoped that the drill willbe shipped to Algeria in December. GMA is creating a separate subsidiary inAlgeria to perform drilling operations. Production A decision was taken at the end of June to halt production at the TIREK CILplant. This was done to focus all efforts on the construction project and toreduce the cash burn rate until we are in full production at Amesmessa. Tirekwill be re started when we have access to high grade ore from ongoing miningoperations at Amesmessa, from stripping operations at Tirek or from deposits notpreviously exploited. Administration During 2007 our joint venture partner elected to reposition their holding of 48%of ENOR from one division to another to be in line with the Government desire toput all mining holdings of Sonatrach under one subsidiary. GMA and Sonatrach arenow working together to establish official service contracts going forward forthe offshore support of ENOR by GMA and to supply expatriate technical andtraining support to ENOR. Your Company takes security very seriously. The Government provides militaryattachments at both Tirek and Amesmessa to ensure the security at site. Allexpatriate personnel that travel outside of City areas are escorted bydetachments of Gendarmes. The Company participates in the local OSAC group forcountry security to stay informed of events that are happening and we are indiscussion with various private security groups for information. We believe thatthe Government is on top of the security situation and are confident that oursecurity measures are in line with other companies operating in Algeria. We are confident that the difficult period that you as shareholders have gonethrough is coming to an end, we thank you for your continued support and we arelooking forward to completing the groundwork for an exciting future together. Douglas PerkinsChief Executive Officer 26 September 2007 Condensed consolidated interim income statement 6 months to 6 months to Year to 30 June 30 June 31 December 2007 2006 2006 £'000s £'000s £'000s Continuing operationsRevenue 2,284 1,636 3,943Cost of sales (3,619) (2,331) (5,457) --------------- --------------- ---------------Gross loss (1,335) (695) (1,514)Finance income 76 44 195Administrative costs (651) (926) (1,288)Finance costs (366) - (234) --------------- --------------- ---------------Loss before tax (2,276) (1,577) (2,841)Income tax expense - - - --------------- --------------- ---------------Loss for the period (2,276) (1,577) (2,841) =============== =============== ============== Attributable to:Equity holders of the parent (1,460) (856) (2,001)Minority interest (816) (721) (840) --------------- --------------- --------------- (2,276) (1,577) (2,841) =============== =============== =============== Loss per share:Basic and diluted loss per share (0.4p) (0.3p) (0.7p) =============== =============== =============== Condensed consolidated interim balance sheet 30 30 June 31 December June 2007 2006 2006 £'000s £'000s £'000sASSETS Non-current assets Property, plant andequipment 30,873 6,530 17,838Intangible assets 27 38 26 --------------- --------------- --------------- 30,900 6,568 17,864 --------------- --------------- --------------- Current assets Inventories 2,361 3,039 1,792Trade and otherreceivables 5,638 3,844 2,591Cash andcash equivalents 7,307 10,957 7,477 --------------- --------------- --------------- 15,306 17,840 11,860 --------------- --------------- --------------- Total assets 46,206 24,408 29,724 =============== =============== =============== LIABILITIES Current liabilities Trade and other payables 8,466 2,951 4,034Short-term borrowings 1,568 - 1,582Short-term finance lease 1,215 - 536 --------------- --------------- --------------- 11,249 2,951 6,152 --------------- --------------- --------------- Non-current liabilities Long-term borrowing 1,940 5,169 16Long-termfinance lease 3,883 - 1,944Unsecured convertibleloan stock (UCLS) 4,829 - - Loan from minorityshareholder 8,041 - 7,850 --------------- --------------- --------------- Total non-currentliabilities 18,693 5,169 9,810 --------------- --------------- --------------- Total liabilities 29,942 8,120 15,962 --------------- --------------- --------------- Net assets 16,264 16,288 13,762 =============== =============== =============== EQUITY Equity attributable to equity holders of the parent Share capital 5 3,544 3,171 3,171 Sharepremium account 23,810 20,350 20,469 Other reserves- share options 203 - 106 Other reserve- equityelement of UCLS 871 - - Currency translationreserve (655) 417 (710) Profit andloss account (12,410) (9,804) (10,950) -------------------- -------------------- --------------------- 15,363 14,134 12,086 Minority interest 901 2,154 1,676 -------------------- -------------------- ---------------------Total equity 16,264 16,288 13,762 ================== ================== ================== Condensed consolidated interim cash flow statement 6 months to 6 months to Year to 30 June 30 June 31 December 2007 2006 2006Cash flows from operating activities £'000s £'000s £'000s Loss after taxation (2,276) (1,577) (2,841) Adjustments for: Depreciation 1,293 - 1,124 Foreign exchange loss (349) 1,909 105 Share based payments 97 - 106 Investment income (76) (130) (195) Interest expense 366 86 234 Increase in trade and other receivables (3,047) (3,231) (1,978) Decrease in inventories (569) (417) 830 Decrease in trade payables 4,465 (671) 380 --------------- --------------- --------------- Cash generated fromoperations (96) (4,031) (2,235) Interest paid (366) (86) (234) --------------- --------------- --------------- Net cash fromoperatingactivities (462) (4,117) (2,469) --------------- --------------- --------------- Cash flows from investing activities Purchase of property,plant and equipment (10,654) (1,219) (10,110) Interest received 76 130 195 Write off of intangibleasset - - 19 --------------- --------------- --------------- Net cash used in investingactivities (10,578) (1,089) (9,896) --------------- --------------- --------------- Cash flows from financingactivities Proceeds fromissue of share capital 5 3,714 4,727 4,846 Proceeds from long-term borrowing 1,910 2,828 (70) Payment of finance lease liabilities (621) - (752) Unsecured convertible loan stock 5,700 - - Loan from minority interest 191 - 7,850 --------------- --------------- --------------- Net cash usedin financingactivities 10,894 7,555 11,874 --------------- --------------- --------------- Net increasein cash and cash equivalents (137) 2,349 (491) Cash and cashequivalents atbeginning of period 7,444 8,608 7,935 --------------- --------------- --------------- Cash and cashequivalents atend of period 7,298 10,957 7,444 =============== =============== =============== Notes to the condensed consolidated interim financial statements 1 Nature of operations and general information The interim financial information has not been audited nor has it been reviewedunder Bulletin 99/4 of the Auditing Practices Board. The financial informationset out in this interim report does not constitute statutory accounts as definedin Section 240 of the Companies Act 1985. The Group's statutory financialstatements for the year ended 31 December 2006, prepared under UK GAAP, havebeen filed with the Registrar of Companies. The auditor's report on thosefinancial statements was unqualified and did not contain a statement underSection 237(2) of the Companies Act 1985. 2 Basis of preparation These unaudited interim consolidated financial statements are for the six monthsended 30 June 2007. They have been prepared in accordance with the accountingpolicies set out below which are based on the recognition and measurementprinciples of IFRS in issue as adopted by the European Union (EU) and areeffective at 31 December 2007 or are expected to be adopted and effective at31 December 2007, our first annual reporting date at which we are required touse IFRS accounting standards adopted by the EU. They do not include all of theinformation required for full annual financial statements, and should be read inconjunction with the consolidated financial statements of the Group for the yearended 31 December 2006. From 1 January 2006 the Group has adopted International Financial ReportingStandards (IFRS) in the preparation of its consolidated financial statements.Comparative financial information previously published under UK GenerallyAccepted Accounting Principles has been restated on an IFRS basis for theopening balance sheet as at 1 January 2006, interim accounts as at 30 June 2006and for the year end 31 December 2006 (see note 7). The change in the groupsreported performance and financial position on adopting IFRS is fully disclosedin these interim consolidated financial statements. The consolidated financial statements have been prepared under the historicalcost convention. First time adoption The opening IFRS balance sheet as at the date of transition on 1 January 2006has been prepared in accordance with IFRS 1 'First time adoption'. The mostsignificant optional exemptions adopted are set out below:- a) Business combinations prior to 1 January 2006, the Group's date of transition to IFRS, have not been restated to comply with IFRS 3 "Business Combinations". Goodwill arising from these business combinations of £2,198,000 has not been restated other than as set out below. b) Cumulative translation differences on foreign operations are deemed to be nil at 1 January 2006. Any gains and losses recognised in the consolidated income statement on subsequent disposal of foreign operations will exclude translation differences arising prior to the transition date c) The entity has elected not to apply IAS 21 "The Effects of Changes in Foreign Exchange Rates" retrospectively to goodwill and fair value adjustments arising on business combinations before the Group's date of transition to IFRS. Such goodwill and fair value adjustments are not treated as foreign currency assets and so are not retranslated at each reporting date. 3 Loss per share 6 months to 30 June 2007 Loss Weighted Per share average number amount of shares £'000s '000s PenceLoss after tax attributable to the equity holders of the parent (1,460) --------------- Weighted averagenumber of shares 348,206 --------------- Basic and diluted loss per share (0.42p) =============== 6 months to 30 June 2006 Loss Weighted Per share average number amount of shares £'000s '000s PenceLoss after tax attributable to the equity holders of the parent (855) --------------- Weighted averagenumber of shares 285,325 --------------- Basic and diluted loss per share (0.30p) =============== Year to 31 December 2006 Loss Weighted Per share average number amount of shares £'000s '000s PenceLoss after tax attributable to the equity holders of the parent (2,001) --------------- Weighted averagenumber of shares 301,607 --------------- Basic and diluted loss per share (0.66p) =============== There is no diluted loss per share due to the loss for the year and the optionsbeing anti-dilutive.cash flow statement presented under UK GAAP. 4. A complete set of financial statements and notes may be found on theCompany's web site. 5. Dividend No dividend has been declared for the six months ended 30 June 2007. This information is provided by RNS The company news service from the London Stock Exchange