Landore Regulatory News (LND)

10 Apr 2006 07:01

Landore Resources Limited10 April 2006 Landore Resources Limited ("Landore" or "the Company") Final results for the period ended 31 December 2005 The Board of Landore is pleased to announce its audited results for the periodto 31 December 2005. Chairman's statement The last year has seen many positive changes for the Company both on a corporateand operational front. CorporateIn April 2005 the business moved its domicile from Canada to Guernsey by way ofa Scheme of Arrangement. At the same time the Company listed on AIM (tradingsymbol LND.L) and raised £2 million, before expenses, at 7p per share. Given thefact that the senior management is better known in London and Europe this movehas had a positive effect on the Company's profile and share performance.The Company has adopted International Financial Reporting Standards (IFRS) inthe preparation of its consolidated financial statements. This has resulted in aprovision required against carried exploration costs by the impairment ofgoodwill. Consequently this year's profit and loss statement has been chargedwith a one-off provision of approximately £3.5 million resulting in a loss forthe period of £4,865,860. In addition to exploration expenses for the period amounting to £713,986,administrative expenses of £727,709 included a charge of £169,855 relating toshare based option/payments as per IFRS. In November 2005 the Company received further funds of approximately £775,000 asa result of the exercise of certain warrants at 10.9p per share. This hasensured that the Company is well funded for its 2006 activities. OperationsLandore's exploration efforts this year have been directed mainly on Junior Lakeand the adjacent optioned Lamaune Lake properties, located approximately 235kilometres northeast of Thunder Bay. An initial drilling programme carried out on both properties, to test targetsidentified by previous exploration works, was highly successful and led to thesignificant nickel discovery at Ketchikan Lake, now known as the VW Zone. Follow up drilling in November both confirmed and extended this excitingdiscovery, intersecting wide sulphide mineralisation with assay resultsreturning high grades of up to 1.37 per cent. nickel over 4 metres including 3.7per cent. nickel over 0.7 metres. A substantial drilling programme (plus 10,000 metres) is scheduled to commencein late April to further test the VW Zone and to test several other promisingareas identified by earlier drilling. Excellent results have also been received on Landore's West Graham property,from drilling carried out by our joint venture partner, First Nickel Inc.Drilling consistently intersected wide mineralisation with assay results of upto 0.90 per cent. nickel and 0.33 per cent. copper over 14.25 metres including3.16 per cent. nickel over 0.5metres. First Nickel Inc. has scheduled 6,000metres of additional drilling on West Graham this year. ConclusionThe Company is now looking forward to the results of the 2006 drilling andexploration programmes, particularly on the Junior Lake and West Grahamprojects. Finally, I would like to take this opportunity to thank all staff members andour team of advisers for their efforts in 2005 and to the shareholders for theirsupport. William HumphriesChairman7 April 2006 Operations report IntroductionLandore Resources Limited through its 100 per cent. owned subsidiary, LandoreResources Canada Inc., is actively involved in mineral exploration in EasternCanada. Landore owns or has mineral rights to 10 properties owned 100 per cent. andoption agreements on a further two properties. The Company is concentrating the majority of its resources and efforts on theJunior Lake property and the Miminiska Lake property. In addition substantialexploration work is being carried out on the West Graham property by our jointventure partner The Junior Lake project - NickelThe Junior Lake - Lamaune Lake properties are located in the province ofOntario, approximately 235 kilometres north-northeast of Thunder Bay and aresituated within the Caribou-O-Sullivan Greenstone Belt in the WabigoonSubprovince. The property consists of three blocks: • Junior Lake - 34 unpatented and two leased, for a total of 5,397 hectares owned outright.• Lamaune Lake - eight unpatented, for a total of 1,616 hectares, option to purchase.• Pichette Claim - three unpatented, for a total of 96 hectares, option to purchase. The Junior Lake property is host to a nickel-copper-platinum group elements(Ni-Cu-PGE) deposit ('B4-7' zone of 2.3 million tons at 0.87 per cent. Ni and0.58 per cent. Cu), at least eight other Ni-Cu-PGE occurrences, a recentlydiscovered gold occurrence ('BAM' zone), several copper-zinc occurrences and achromium occurrence. These occurrences are hosted by several complex sequencesof Archean-age supracrustal and intrusive rocks. Exploration work over the last several years has indicated that the contiguousJunior Lake - Lamaune Lake properties have excellent potential to host anickel-copper-platinum group elements (Ni-Cu-PGE) massive sulphide deposit ofthe Noril'sk-Talnakh/Voiseys Bay type and/or a nickel (Ni) dominant komatiitehosted massive sulphide deposit of the Kambalda-type as well as the potential tohost shear zone related lode gold deposits. In June 2005, an exploratory drilling campaign was completed on the Junior Lake- Lamaune Lake properties to test targets identified by the previous explorationworks. Four areas drilled, returned significant results, the best being the VWZone discovery at Ketchikan Lake, towards the southeastern end of the JuniorLake property. Wide mineralised horizons were intersected varying in apparentthickness from 4 to 21 metres with nickel values of up to 0.95 per cent. Consultant's opinionFollowing a property visit and review of drill core from the Ketchikan area,Geological Consultant Dr. J Mungall from Toronto University commented thatfurther work should be directed on the Ketchikan occurrence ('VW' zone),indicating that the occurrence "has the appearance of a deformed, peripheralportion of a better mineralised komatiite-hosted system nearby." Hisrecommendations include additional prospecting and sampling along the strikeextension of the known occurrence and drilling the known structure where highconductance anomalies are evident. In late 2005 additional drilling at Ketchikan Lake confirmed this significantnickel discovery, consistently intersecting wide sulphide mineralisation withhigh nickel values. Hole 0405-40, drilled 75 metres to the west of discoveryhole 0405-36, intersected 0.44 per cent. nickel over 40.1 metres including threehigh grade intervals of 1.37 per cent. nickel over 4.0 metres, 0.86 per cent.nickel over 3.9 metres and 1.24 per cent. nickel over 2.6 metres. Drilling results from Junior Lake property Drill-hole From Width Nickel CopperNo metres metres per cent. per cent. 0405-35 28.9 16.1 0.30 0.06Includes 3.0 0.68 0.080406-36 36.0 7.5 0.21 0.05And 90.0 18.0 0.22 0.020406-37 31.5 26.5 0.31 0.06Includes 4.5 0.80 0.08And 63.0 4.5 0.27 0.09And 75.0 7.5 0.44 0.05Includes 1.5 0.95 0.030405-38 216.2 2.5 0.40 0.04Includes 0.4 1.01 0.160405-40 39.3 5.3 0.41 0.04 83.5 14.0 0.37 0.05Includes 4.3 0.62 0.02 129.0 11.8 0.28 0.03 171.0 8.0 0.31 0.06Includes 1.5 0.70 0.03 184.5 1.9 0.53 0.06 225.5 40.1 0.44 0.06Includes 4.0 1.37 0.16which includes 0.7 3.70 0.10Includes 3.9 0.86 0.16Includes 2.6 1.24 0.180405-43 144.0 0.4 0.12 1.160405-46 277.8 0.2 0.09 1.18 (All holes were inclined at -45 degrees) Lamaune Lake propertyLandore has given notice that it intends to increase its interest to 80 percent. by expending a further C$500,000 on exploration over the next three years.Lamaune Lake abuts the Junior Lake property to the west and contains the highlyprospective Carrot Top zone which returned grades of up to 0.45 per cent. nickeland up to 0.64 per cent. copper. Further drillingThe two drilling campaigns completed in May/June and October/November 2005 onthe Junior Lake and Lamaune Lake properties, successfully identified numerousnickel occurrences, including the significant discovery at the VW zone and thehighly prospective New, PQ and Carrot Top zones. A substantial drilling programme (plus 10,000 metres), is scheduled to commencein April 2006, to be carried out on the above targets. Miminiska Lake project - GoldThe Miminiska Lake property is located 115 kilometres to the east of PickleLake, Ontario and 180 kilometres to the southeast of the Placer Dome MusselwhiteMine. The property consists of three blocks: • Miminiska Lake - 28 patents and two claims for a total of 800 hectares, owned outright.• Wottam - 20 claims for a total of 4,160 hectares, contiguous and along strike from Miminiska, owned outright.• Frond Lake, 24 patents for a total of 485 hectares, owned outright and purchased in December 2005. The mineralisation is hosted in iron formation in a similar setting to theMusselwhite gold deposit which has so far produced 1.4 million ounces withreserves currently estimated at over 2 million ounces. A drilling campaign, completed in the Miminiska property in February 2005,succeeded in providing the depth extension of the mineralised zones to avertical depth of 250 metres with high grade gold being intersected in mostholes. Landore has completed four drilling campaigns over the past two years on theMiminiska gold occurance with 47 NQ diamond drill holes for 9,349 metres,focusing on two potential shoots within a known 800 metre strike length. Significant Drill intersections include:• 40.2g/t gold over 2.4 metres; 9.7g/t gold over 4.3 metres;• 9.8g/t gold over 2.2 metres; 9.8g/t gold over 3.5 metres;• 132.1g/t gold over 0.5 metres A two thousand metres NQ diamond drill programme during late 2006 is planned onFrond to test the strike, down-dip and plunge extension of the historicalresource reported by Tandem (278,000t @7.4 gpt Au). West Graham/First Nickel option - NickelThe West Graham property consists of one patented lot owned outright by LandoreResources Inc. of 130 hectares. First Nickel Inc. entered into an option/joint venture with Landore ResourcesCanada Inc. to acquire a 70 per cent. interest in the West Graham property whichis strategically located immediately to the south of the East Zone of theLockerby Mine. The agreement provides for First Nickel to make cash payments toLandore of C$150,000 and carry out exploration and development expenditures ofC$6 million over a four-year period. Should First Nickel fully exercise theoption, Landore shall decide whether it wishes to participate to the extent ofits 30 per cent. working interest in the development of the property, failingwhich, First Nickel shall have the right to increase its interest to 85 percent. by completing a bankable feasibility study within two years thereafter.The West Graham property contains the historic Conwest Deposit, which representsthe up-plunge extension of First Nickel's Lockerby East Deposit. There is also felt to be significant potential for high grade footwall-typedeposits in the shadow of the Lockerby East-Conwest system on the West Grahamproperty given the identification of substantial amounts of Sudbury Breccia andanomalous platinum group metal values within the footwall stratigraphy. A resource estimate completed by the Conwest Exploration Company Limited in the1960's yielded 4.3 million tons at 0.52 per cent. nickel and 0.33 per cent.copper. This resource should be considered non-compliant with NationalInstrument 43-101. First Nickel drilling results Drill width Ni CuDrill Hole From (m) To (m) m (ft) per cent. per cent. FNI2001 268.40 276.35 7.95 (26.1) 0.66 0.46FNI2002 306.50 321.5 15.00 (49.2) 1.05 0.57Incl. 310.15 320.00 9.85 (32.3) 1.22 0.62and 331.50 32.55 1.05 (3.44) 1.23 0.58FNI2003 356.45 371.53 15.08 (49.5) 1.07 0.38Incl. 356.45 366.10 8.75 (28.7) 1.30 0.39FNI2004 356.80 356.60 8.80 (28.9) 0.60 0.32Incl. 362.4 363.8 1.40 (4.6) 1.00 0.22FNI2005 186.40 192.60 6.20 (20.3) 0.54 0.32FNI2006 144.40 188.00 42.70 (140.1) 0.63 0.36Incl. 159.33 159.90 0.57 (1.87) 3.22 0.14Incl. 166.40 167.60 2.26 (7.4) 1.30 0.36FNI2007 107.30 121.55 14.25 (46.8) 0.90 0.33Incl. 111.80 117.80 6.00 (19.7) 1.24 0.35Incl. 116.00 116.50 0.5 (1.6) 3.16 0.20And 133.10 134.60 1.50 (4.9) 1.11 0.31FNI2008 88.50 130.70 40.80 (133.9) 0.55 0.30Incl. 91.25 92.35 1.10 (3.6) 1.99 0.08Incl. 98.80 99.85 1.05 (3.4) 2.08 0.88FNI2009 101.50 131.25 29.75 (97.6) 0.60 0.29Incl. 102.95 103.85 0.90 (2.95) 2.99 0.39 First Nickel Inc. will also be examining the possibility that this entire systemcould represent a bulk tonnage underground mining situation given the 5 percent. to 9 per cent. nickel tenors (ie nickel in 100 per cent. sulphides), whichare present in this material. These tenors are very high by Sudbury standardsfor contact-type ores. An exploration programme is being developed to drill untested gradient IPanomalies along the contact to the northeast of the Conwest Deposit and to testthe underlying footwall rocks that cover approximately 75 per cent. of the WestGraham property. Six thousand metres of diamond drilling are scheduled for thisproperty in 2006. Lessard Property - Copper ZincThis property comprises 91 claims for a total area of 1,456 hectares and issituated in the Troilus greenstone belt, 100 kilometres north of Chibougamau,Quebec. The potential mineralisation is massive and disseminated sulphidesassociated with felsic volcanics. During 2006 a programme of data compilation and reconnaissance exploration isplanned. Seeley Lake - Glass-grade NephelineThis property comprised 18 leased claims for a total area of 289 hectares and issituated 256 kilometres east of Thunder Bay, Ontario.During 2005 four diamond drill holes totalling 802 metres were completed. Mount Fronsac - Lead - Zinc - CopperThis property, located about 65 kilometres southwest of Bathurst, New Brunswick,comprises 31 claims for a total area of 471 hectares. Exploration targetsinclude lead, zinc and copper with associated gold and silver. This property iscurrently under option to Noranda Mining and Exploration Inc. Brancote US Inc.In addition Landore, through its wholly owned subsidiary Brancote US Inc., holdsnine mineral properties in Nevada USA. These properties include grass rootsexploration areas as well as defined drill targets. Four of these properties areoptioned to third parties. Landore is actively seeking to option or selloutright the remaining five properties. Consolidated income statementfor the period 16 February 2005 to 31 December 2005 Notes Period ended 31 December 2005 £ Exploration costs 3 (713,986)Administrative expenses (727,709)Impairment of goodwill (3,486,377) Operating loss (4,928,072)Interest receivable 62,212 Loss before income tax (4,865,860)Income tax expense 2 - Loss for the period 1 (4,865,860) Attributable to:Equity holders of the Group (4,865,860) Earnings per share for loss attributable to the equityholders of the Group during the period (expressed in £ per thousand shares)- basic 4 (0.066)- diluted 4 (0.066) The Group's operating loss relates to continuing operations. Consolidated balance sheetat 31 December 2005 Group Company At 31 At 31 December December 2005 2005 £ £ AssetsNon current assetsGoodwill - -Property, plantand equipment 63,573 -Investments - 94,889 63,573 94,889Current assetsTrade and otherreceivables 24,653 273,502Cash and cashequivalents 1,848,807 1,839,644 1,873,460 2,113,146 Total assets 1,937,033 2,208,035 EquityCapital and reserves attributable to the Company's equity holdersShare capital 930,033 930,033Share premium 5,410,126 5,410,126Share options 247,531 247,531Warrants 43,571 43,571Retained earnings (4,861,337) (4,479,531)Cumulativetranslationadjustment 22,622 - Total equity 1,792,546 2,151,730 LiabilitiesCurrent liabilitiesTrade payables 144,487 56,305 Total liabilities 144,487 56,305 Total equity andliabilities 1,937,033 2,208,035 Consolidated statement of changes in equity31 December 2005 Period ended 31 December 2005 £ Loss for the financial year (4,865,860)Lapse of warrants credited to reserves 4,523Translation adjustment on consolidation 22,622 Net loss recognised directly in equity (4,838,715)Issue of ordinary share capital 930,033Share premium arising on issue of ordinary share capital 5,875,204Issue costs (465,078)Issue of warrants 43,571Issue of share options 247,531 Net increase in shareholders' funds 1,792,546Opening shareholders' funds - Closing shareholders' funds 1,792,546 Consolidated cash flow statementFor the period ended 31 December 2005 31 December 2005 £Cash flows from operating activitiesOperating loss (4,865,860)Depreciation of tangible fixed assets 36,696Impairment of goodwill 3,486,377Share based payment 169,855Decrease in debtors 566Increase in creditors 18,437 Net cash outflow from operating activities (1,153,929)Cash flows from investing activitiesAcquisition of subsidiary, net of cash acquired 693,642Purchase of property, plant and equipment (50,078) 643,564Cash flows from financing activatesIssue of ordinary share capital 2,803,084Issue costs (447,829) 2,355,255Net increase in cash and cash equivalentsCash and cash equivalents at beginning of period -Exchange gains/(losses) on cash and cash equivalents 3,917 Cash and cash equivalents at end of period 1,848,807 Accounting policiesBasis of accountingThe preliminary announcement has been prepared in accordance with thoseInternational Financial Reporting Standards ("IFRS") and International FinancialReporting Interpretations Committee ("FRIC") interpretations issued andeffective or issued and early adopted as at the time of preparing thesefinancial statements (February 2006). The financial statements have been prepared on the historical cost basis. TheGroup has adopted UK Sterling as its functional currency. The principalaccounting policies adopted are set out below. The Directors consider the going concern basis of preparation to be appropriateas the Group has sufficient cash reserves to permit it to continue trading for aperiod of at least twelve months following the date of approval of theseaccounts. Notes to the financial statementsfor the period ended 31 December 2005 1. Loss from operations 2005 £Loss from operation is stated after charging:Impairment of goodwill 3,486,377Depreciation of property, plant and equipment 36,696Auditors' remuneration - audit services 27,500 2. TaxationLandore Resources Limited is a Guernsey registered company and is eligible forexemption from income tax in Guernsey under the Income Tax (Exempt Bodies)(Guernsey) Ordinances 1989 and 1992 as amended. An annual fee of £600 is paid inthis respect. The Company's subsidiary, Landore Resources Canada Inc., is subject to CanadianFederal tax. No tax has been provided in the accounts due to losses incurred bythat company to date. 3. Mineral properties April Expenditure Accumulated 2005 in expenditure at the 31 December period 2005 £ £ £ Miminiska Lake 1,117,599 9,615 1,127,214Junior Lake 544,684 395,495 940,179Frond Lake 33,917 23,874 57,791Wottam 60,128 1,430 61,558Lamaune Lake 68,953 202,409 271,362Seeley Lake - 80,431 80,431Other 11,260 732 11,992 1,836,541 713,986 2,550,527 Mineral properties at 5 April 2005 represent accumulated costs to date incurredby Landore Resources Canada Inc., a subsidiary of Landore Resources Limited. Onacquisition of Landore Resources Canada Inc., on 5 April 2005 the fair value ofthose costs incurred to date was considered to be £nil (see note 8). Allsubsequent expenditure has been charged to the income statement in accordancewith the Group accounting policy. 3.1 Miminiska LakeMiminiska Lake, wholly owned by the Company, is a gold exploration projectlocated approximately 115 kilometres east of Pickle Lake in Northern Ontario,Canada. The property consists of 28 patented and 2 staked claims. 3.2 Junior LakeJunior Lake is a nickel, copper, platinum group metals and gold explorationproject located approximately 250 kilometres north of Thunder Bay in NorthernOntario, Canada. The property consists of two leased claims wholly owned by theCompany. A portion of the project is subject to a 2 per cent. net smelter return("NSR"). 3.3 Frond LakeFrond Lake is a gold property located about 125 kilometres east of Pickle Lake,Ontario. The property is comprised of 24 patented claims contiguous to the eastof the Wottam property. On December 22, 2005, the Company purchased the propertyoutright subject to underlying 2 per cent. NSR agreements. 3.4 WottamThe Wottam property is a gold exploration project located 125 kilometres east ofPickle Lake in Northern Ontario, Canada. The property is wholly owned by theCompany and includes claims contiguous to the east of the Miminiska Lakeproperty. 3.5 Lamaune LakeEffective 5 September 2002, the Company entered into an Option Agreement withMichael Stares, Stephen Stares, James Dawson and Stares Contracting Corprelating to eight mining claims located near Lamaune Lake, Ontario. The LamauneLake property is contiguous with the Auden and Junior Lake property claims heldby the Company. The Company has the ability to earn up to an 80 per cent.interest in the Lamaune Lake property subject to the conditions set forth in theOption Agreement. 3.6 Seeley LakeSeeley Lake is an industrial minerals nepheline-syenite property, located 250kilometres to the east of Thunder Bay, Ontario, on the north of Lake Superior.The property is comprised of 18 leased claims wholly owned by the Company. 4. Loss per shareThe calculation of the basic loss per share is based on the loss for thefinancial period divided by the weighted average number of shares being73,657,371 in issue during the period. Diluted loss per shareThe fully diluted loss per share is based on the loss for the financial perioddivided by the weighted average number of shares and potential shares being73,785,547 in issue during the period: 2005 No. of shares Ordinary shares 73,657,371Effect of options and warrants issued at fair value 128,176 73,785,547 5. Reconciliation of net cash flow to movement in net funds 2005 £Increase in cash 1,848,807Change in net funds resulting from cash flows 1,848,807Closing net funds 1,848,807 6. Analysis of net funds At Cashflow At 16 February 31 December 2005 2005 £ £ £Cash at bank and inhand - 1,848,807 1,848,807Total - 1,848,807 1,848,807 7. Publication of non statutory accountsThe financial information set out in this preliminary announcement does notconstitute statutory accounts. The balance sheet at 31 December 2005 and the profit and loss account, cash flowstatement and associated notes for the period then ended have been extractedfrom the Company's 2005 statutory financial statements upon which the auditors'opinion is unqualified. 8. Annual ReportThe Annual Report for the period ended 31 December 2005 will be posted toshareholders shortly. The Annual General Meeting of the Company will be held atLa Tonnelle House, Les Banques, St Sampson, Guernsey at 11.00 a.m. on Tuesday 23May 2006. 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