Kemin Resources Regulatory News (KEM)

28 Sep 2006 07:05

GMA Resources PLC28 September 2006 28 September 2006 GMA Resources Plc ("GMA" or "the Company") Interim Results for the six months ended june 30, 2006 The Directors have pleasure in presenting the Company's unaudited accounts forthe six months ended June 30, 2006. Highlights: • Revised Feasibility Study undertaken to incorporate heap leaching option at Amessmessa and doubling of Tirek capacity • Successful fund raising of £5m in April 2006 • Construction decision for Amesmessa made in May 2006 • Assembly of expatriate team to deliver Amessmessa to full production in 2007 • Financing of 26 pieces of mine mobile equipment locally in Algeria and acquisition of a ball mill • Confirmation from Algerian Government on the elimination of VAT and Customs Duty • The awarding of all major contracts for process plant, crushing facility, assay lab and pipeline • Completion of aeromagnetic ("AeroMag") survey for exploration Douglas Perkins, Chief Executive Officer said: "Development continues apace forGMA as we progress the construction of Amesmessa, our second gold project to beput into production. Considering the challenging environment we are operating inand the logistical scale of a project of this size, it is only by the diligenceand perseverance of the team in Algeria, that we have come this far so quickly. "As the operator of the only producing gold mine in Algeria, we see hugepotential in the expansion of the gold industry in this vast country. Algeriawelcomes foreign investment, as evidenced by the recent tax breaks afforded tomining companies, and geologically we believe the country should produce somemajor new discoveries." Enquiries: GMA Resources Plc Grant Thornton Parkgreen CommunicationsDouglas Perkins Philip Secrett Cathy Malins / Annabel Leather+1 514 806 6788 +44 (0) 20 7383 5100 +44 (0) 20 7493 3713 Chairman's Statement Dear Shareholder, I am pleased to report on the progress made by your company in the six monthsended June 30 2006. Your company completed the 52% earn in of ENOR during this period and this wasapproved at the Annual Shareholders meeting of ENOR in May in Algiers. Thisimmediately aligned GMA and ENOR so that the two companies, under the directionof Douglas Perkins, now operate as a single entity in Algeria. Immediatelythereafter the Amessmessa expansion programme commenced based on the reviseddevelopment plan, which incorporated positive studies on the use of heap leachprocessing technology and also put in place a plan to double production capacityat Tirek. Good progress is being made and construction is now expected to becompleted in the second quarter 2007. Details of progress and highlights aremore fully described in Mr Perkins' report. The gold price continues to fluctuate in line with global tensions but remainssubstantially above the price of US$440.00 used in our Feasibility Study. Thisbodes well for the results that will be forthcoming from the expanded capacityat the mine. Your company is now selling its gold production in the spot marketinternationally and receiving benefits equally in local and hard currency. Operationally, the small plant at the Tirek mine has struggled to maintainconsistent production levels and produced only 7,743 ounces in the six months.However operation of this plant has been invaluable in providing a training basefor the locally recruited labour. It is not expected that production in thesecond half of the year will be significantly different as the new plant iscommissioned and construction activities dominate. The next four months arecrucial as plant and equipment are delivered from all parts of the globe andassembled, but we are dedicated to increasing the production as quickly aspossible. Sourcing of skilled labour continues to be one of the main challenges faced byyour company but we are working hard to train and develop a local workforce,with internal training under the supervision of an expanded expatriate team. Exploration both in the vicinity of the mine and on a wider front is now apriority with an aeromagnetic survey now complete and analysis in progress. Weare confident that systematic exploration will serve to significantly increasethe resource potential for your company. 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 all the groundwork for an exciting 2007. Richard Linnell Chairman28 September 2006 Chief Executive Officer's Statement I would like to hereby give a more detailed update on your company's operations. Construction All major contracts have been signed and construction is underway at variouslocations around the globe. We are convinced that our idea of "plug and play",whereby all major plant is constructed offshore and then shipped and reassembledat site, will save a considerable amount of time in the construction process andthe various plant components will all come together at site within the next sixmonths. To date the only major deviation from the original revised Feasibility Study isthe purchase of a new electrical plant at Amessmessa. Technical analysishighlighted that the current equipment might not provide an adequate reliabilityfactor so it was decided to replace this with new equipment. The new CATequipment will be delivered to site in Q1 2007 and will be used to power the newball mill and crushing facility at Tirek. We have taken other measures to ensurepower supply for the start up of heap leaching at Amessmessa and so we stillforesee a Q1 2007 start up of the heap leach operation. Unfortunately, thepurchase of a new electrical plant will delay the commissioning of the new ballmill at Tirek until near the end of Q2 2007. The total cost increase of thisdevelopment will be in the vicinity of $2.5 million USD. The acquisition of the 26 piece fleet and a ball mill at such short notice wasextremely fortuitous, given current world market conditions, and we expect allequipment to be at site before the end of 2006. Furthermore, we have been ableto arrange local financing for the complete fleet within Algeria. As previously reported, we have signed training agreements with CAT France for a24 month training programme at site at both the Tirek and Amesmessa operationsand maintenance of the new equipment. At the same time we signed a comparableagreement for two years with Sandvik in France for the new Tamrock drills. GMAand ENOR have made a commitment to training local workers from the south ofAlgeria and these two contracts will go a long way towards meeting this goal.Both company representatives are now on site. At the same time, the Board ofENOR made a commitment to undertake a comprehensive training programme for theentire operation and this process has already begun. Exploration GMA believes that there is excellent exploration potential for Tirek / Amesmessagold project and an AeroMag survey was completed by FUGRO during the first halfof 2006. The data is currently in Australia undergoing analysis and will beavailable to us before the end of 2006. This, combined with the soil and streamsampling programmes undertaken so far, will serve as a basis for the explorationwork we will do going forward. Regardless of waiting for the results, theexploration has already identified new veins that were previously not known atboth Amessmessa and Tirek. Whilst not yet part of our resource calculation,these discoveries are significant and will play a part in production in the nearfuture. We are also pleased to announce that we have hired Jean Francois Sauvage whowill be responsible for new project generation for GMA. Jean Francois is wellknown in West Africa, having worked there and in Latin America for the pasttwenty five years. Jean Francois will report to Yves Buro, GMA / ENOR's ChiefGeologist and will also help out with the training local geologists at ENOR. Production Production for the first six months (ounces) is as follows: Month Production (ounces) January 1,225.24 February 1,324.66 March 892.99 April 1328.65 May 1399.95 June 1,571.72 Total for period 7,743.21 The production rate has been lower than we initially expected and this isrelated to the lack of stripping that was undertaken in 2005. We have also dealtwith long lead times for spare parts, currently running at around 6 months, soit is taking time to restock the stores and keep the existing mining fleetrunning until the new fleet arrives. It was decided not to attempt to catch upwith the stripping until the new equipment is on site, but as already stated, weare looking to improve our production rates dramatically and are implementingthe changes needed in order to enable this to happen. It is worth noting thatthe new and highly skilled expatriate team has only been on the ground at Tireksince May. Financial results The loss for the half year to June 30 2006 after accounting for minorityinterests was £859,000 (2005 first half loss £570,000). The operating loss was£1,621,000 (2005 first half £1,728,000). Douglas Perkins Chief Executive Officer28 September 2006 GMA RESOURCES PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTFor the six months ended 30 June 2006--------------------------- --------- --------- --------- Six months Six months Year ended ended ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000Operating income (695) (556) (1,843)Administrative expenses (926) (1,172) (912) --------- --------- ---------Operating loss (1,621) (1,728) (2,755)Net interest 44 (68) (137) --------- --------- ---------Loss on ordinary activities beforetaxation (1,577) (1,796) (2,892)Tax on loss on ordinary activities - - - --------- --------- ---------Loss on ordinary activities aftertaxation (1,577) (1,796) (2,892)Minority interest 718 1,226 714 --------- --------- ---------Net loss attributable toshareholders (859) (570) (2,178) ========= ========= =========Basic and diluted loss perordinary share (0.5p) (0.43p) (1.48p) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 30 June 2006--------------------------- --------- --------- Six months Six months ended ended 30 June 2006 30 June 2005 £'000 £'000-------------------------------------------------------------------------Loss sustained for the period (859) (570)Exchange gain/(loss) on foreign currencynet investment 351 520 --------- --------- Total recognized gains and losses forthe period (508) (50) ========= ========= GMA RESOURCES PLCBALANCE SHEETSAT 30 JUNE 2006--------------------------- --------- --------- --------- Group Group Group 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000--------------------------------------------------------------------------------Fixed AssetsIntangible assets 1,029 1,550 1,103Tangible assets 6,529 7,513 6,797Investments - - - --------- --------- --------- 7,558 9,063 7,900 --------- --------- ---------Current AssetsStocks 3,039 2,275 2,622Debtors 3,844 2,027 613Cash at bank and in hand 10,957 972 8,608 --------- --------- --------- 17,840 5,274 11,843 --------- --------- ---------Creditors : amounts falling due withinone year (2,951) (5,736) (5,725) --------- --------- ---------Net current assets/ (liabilities) 14,889 (462) 6,118 --------- --------- ---------Total assets less currentliabilities 22,447 8,601 14,018 Creditors : amounts falling due aftermore than one year (5,169) - (237)Minority interests (2,153) (4,665) (2,875) --------- --------- ---------Net Assets 15,125 3,936 10,906 ========= ========= ========= Capital and ReservesCalled up share capital 3,171 1,337 2,610Share Premium Reserve 20,350 8,816 16,184Profit and loss account (8,396) (6,217) (7,888) --------- --------- ---------Shareholders' funds 15,125 3,936 10,906 ========= ========= ========= GMA RESOURCES PLCCONSOLIDATED CASH FLOW STATEMENTFor the six months ended 30 June 2006--------------------------- --------- --------- --------- Six months Six months Year ended ended ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000---------------------------------------------------------------------------------------Net cash inflow/(outflow) fromoperating activities (1,552) 85 (1,015) Returns on investment and servicing of financeInterest received 130 10 59Interest paid (86) (78) (196) --------- --------- --------- 44 (68) (137) Capital expenditure Payments to acquire tangible fixedassets (1,219) (1,478) (1,282)Payments to acquire intangiblefixed assets - - (52) --------- --------- --------- (1,219) (1,478) (1,334) --------- --------- ---------Net cash inflow/(outflow) beforefinancing (2,727) (1,461) (2,486) FinancingIssue of ordinary share capital 5,054 - 8,908Share issue expenses 22 - (267)Loan repayments - (361) (59)Loan advances - 956 - --------- --------- ---------Net cash inflow/(outflow) fromfinancing 5,076 595 8,582 Increase/(decrease) in cash 2,349 (866) 6,096 ========= ========= ========= NOTES TO THE INTERIM REPORT Accounting policies and basis of preparation The interim financial information has been prepared on the basis of accountingpolicies consistent with those set out in the Group's statutory accounts for theyear ended 31 December 2005 which can be downloaded from the Company's website. The impact of FRS20 regarding share based payments has not yet been reflected inthe Company accounts. This will be completed before year end 2006. Any stockoptions or warrants must be valued and incorporated in the accounts in therelevant period via a prior period adjustment, if necessary. The interim financial information has not been audited nor has it been reviewedunder Bulletin 99/4 of the Auditing Practices Board. The above unauditedfinancial information does not constitute statutory accounts as defined inSection 240 of the Companies Act 1985. The financial information for the yearended 31 December 2005 has been extracted from the statutory accounts for thatyear, which included an unqualified auditors report, have been filed with theRegistrar of Companies. This information is provided by RNS The company news service from the London Stock Exchange