Landore Regulatory News (LND)

17 Apr 2008 07:00

Landore Resources Limited17 April 2008 Landore Resources Limited ("Landore" or "the Company") Final results for the year ended 31 December 2007 The Board of Landore is pleased to announce its audited results for the year to31 December 2007. Chairman's statement Landore has made enormous progress in 2007 and early 2008 on its path tobecoming a nickel producer in the near term. The primary focus for the Companyhas been the Junior Lake Nickel project in the province of Ontario, Canada. Financial Results During the year to 31 December 2007 the Group incurred a loss of £2,627,315(£1,966,244 in 2006). The majority of these expenses represent direct andindirect investments in mineral exploration projects. The increase is almostwholly due to the large amount of drilling that took place during 2007. Junior Lake - Nickel project The principal focus of the Group's activities is the Junior Lake Nickel projectsituated approximately 235 kilometres northeast of Thunder Bay in the provinceof Ontario. The extensive drilling campaign on this project has recentlyculminated in the VW Nickel deposit being substantially upgraded. This can besummarised as follows: • Increasing the global resource base by 48 per cent. to 22,407 tonnes of Nickel Equivalent (NiEq) at 0.2 per cent. Nickel cut-off grade • Upgrading the resource estimate significantly with 91 per cent. now in the "Indicated" category. The resource estimate in 2007 by Scott Wilson Roscoe Postle Associates was all in the "Inferred category". • Improving the average grade of the resource by 25 per cent. to 0.45 per cent. NiEq at 0.2 per cent. Nickel cut-off grade. • Mineralization of the VW Nickel Deposit remains open along strike in both directions to the east and west as well at depth We believe that this substantially increased Resource confirms our view of thestrong economic potential of the VW Nickel deposit. We are now moving rapidlyahead with the scoping and feasibility studies with the aim of becoming a Nickelproducer and at the same time continuing to expand the Resource. In addition to the successes at the VW Nickel deposit further drilling work wascarried out on the nearby B4-7 Nickel deposit. The drilling produced some verypositive results which are set out in detail on the website, www.landore.com.These results are now being interpreted by an independent consultant in order toprepare an upgraded Resource estimate. Lessard - Copper-zinc project The Lessard project is centred on a historic VMS deposit located approximately107 kilometres north of Chibougamau in the province of Quebec. A substantialdrilling programme has just been completed in early 2008 in order to produce aResource estimate and carry out further exploration. Results are pending andwill be released in the near future. West Graham - Nickel project This property is optioned to First Nickel Inc and is situated in the Sudburybasin in the province of Ontario. First Nickel has recently completed the results of their third substantialdrilling programme on the West Graham Nickel project. The results are excellentand full details were included in a release in March 2008, again these can beviewed on our website. First Nickel are now in the process of preparing a 43-101Resource estimate for this project which will be available later this year. Funding In May 2007 we concluded a fund raising for approximately £2.1 million withConsolidated Press Group (CPG) of Australia. We are very pleased to welcome CPGas a substantial shareholder with a stake of approximately 17.5 per cent.. In the first quarter of 2008 options and warrants were exercised which producedin excess of £400,000. I was pleased to be able to exercise my own options foran investment of £294,700 and retain the shares and thereby increase myinvestment in the Company. More recently we announced on 8 April 2008 that wehad placed a further 13,342,000 new shares at 15p per share in order to raise £2million to finance further exploration activities. All of the above financings have been on a non-brokered basis incurring minimumexpenses ensuring that most of the proceeds are for the Company's benefit. Weare grateful to significant shareholders for their support and we will continueto require further funding as the Company progresses with its developmentprogramme. Outlook Landore is planning continued drilling on the Junior Lake projects together withtechnical and feasibility studies. We have developed a strong relationship withthe local communities and 2008 promises to be an exciting year. As usualshareholders will be kept informed as results are received. Once again, I would like to thank management and staff at Thunder Bay for theirexcellent contribution towards the Company's sound performance this past year. William HumphriesChairman16 April 2008 Operations report Introduction Landore Resources Limited through its 100 per cent. owned subsidiary, LandoreResources Canada Inc., is actively engaged in mineral exploration in EasternCanada. Landore owns or has the mineral rights to 11 properties owned 100 per cent. andhas option agreements on a further two properties. Landore's primary focus is the Junior Lake Nickel project followed by theLessard copper-zinc project. In addition, substantial exploration work is beingcarried out on the optioned West Graham nickel project by First Nickel Inc. The Junior Lake Property - Nickel The Junior Lake property is located in the province of Ontario, Canada,approximately 235 kilometres north-northeast of Thunder Bay and is situatedwithin the Caribou-O-Sullivan Greenstone Belt in the Wabigoon Subprovince. TheVW Nickel Deposit is located at Ketchikan Lake toward the south eastern end ofthe Junior Lake property and the B4-7 Deposit is located approximately 3kilometres to the north-west of the VW Deposit. The VW Nickel Deposit During 2007 an infill and extension drill programme, consisting of 63 NQ sizeholes for a total of 17,361 metres, was completed on the Junior Lake VW NickelDeposit, with one drill dedicated to extending the existing inferred resource atboth ends along strike and down dip with a second drill carrying out infilldrilling to advance the resource to 'Indicated' status. As a result of this drilling programme, a Resource upgrade was carried out andannounced in March 2008. In summary the global resource base has beensubstantially increased by 48 per cent. to 22,407 tonnes Nickel equivalent(NiEq) at 0.2 per cent. Nickel cut-off grade. 91 per cent. of the new resourceis now in the `Indicated' category and the average grade has improved by 25 percent. to 0.45 per cent. NiEq. Significantly the VW deposit remains open alongstrike in both directions to the east and west as well as at depth. This givesscope for expansion of the Resource base and confirms the strong economicpotential of the VW Nickel Deposit. Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA), Toronto, wasretained by Landore Resources Canada Inc. to independently carry out a CanadianNational Instrument 43-101 (NI43-101) compliant resource estimate for the VWNickel Deposit located at Landore's Junior Lake project, Ontario. VW resource estimate at 0.2 per cent. Nickel Cut-Off Grade. Extract from the resource estimate table produced by Scott Wilson RPA: Indicated Resource Cut-Off Grade Tonnes Co Pt Pd Au Ni% (000's) Ni% Cu% ppm ppb ppb ppb NiEq% 0.2% 4,490 0.393 0.054 155 28 36 11 0.453 Inferred Resource Cut-Off Grade Tonnes Co Pt Pd Au Ni% (000's) Ni% Cu% ppm ppb ppb ppb NiEq% 0.2% 473 0.380 0.050 147 30 35 11 0.437 Contained Metal Ni Cu Co Pt Pd Au NiEqTotal contained Tonnes Tonnes Tonnes Ounces Ounces Ounces Tonnes metal 19,443 2,661 765 4,498 5,729 1,755 22,407 The contained Nickel in the global resource base increased by 36 per cent.. Inthe 2007 resource estimate cobalt was not included. However, results fromdrilling in the recently completed campaign showed a marked increase in cobaltlevels in the western extension of the resource. Accordingly, cobalt has beenincluded in the new resource estimate and contributes to the increased globalresource. Drilling has now tested the VW deposit at approximately 25 x 50 metre spacingover a strike length of 450 metres and to a vertical depth of approximately 300metres. This close drill spacing has provided sufficient confidence for themajority of the resource to be advanced to the `Indicated' category, a necessaryrequirement for feasibility studies. Mineralization on the VW Nickel Deposit remains open along strike in bothdirections to the east and west as well as at depth. Scott Wilson RPA is currently preparing a Canadian National Instrument 43-101(NI43-101) compliant technical report on the resource upgrade for the VW NickelDeposit. B4-7 Nickel-Copper Deposit During the second half of 2007 an infill drill programme, consisting of 16 NQsize holes for a total of 3,580 metres, was completed on the historic B4-7nickel-copper-cobalt-platinum group elements (Ni-Cu-Co-PGE) deposit, locatedjust 3 kilometres from the VW Nickel Deposit. Drilling intersected wide zones (up to 10 metres true width) of nickelmineralization, with assay results frequently returning grades in excess of 1per cent. nickel together with substantial credits of copper, assaying up to1.65 per cent. and cobalt assaying up to 0.33 per cent.. The programme successfully filled the remaining gaps in the deposit and hasconfirmed the continuity of the mineralization. The deposit remains open downplunge to the West. The data has been collated and forwarded to Snowden Mining Industry Consultants(Snowden) of Perth, Australia, who have been engaged to independently prepare anAustralasian Joint Ore Reserves Committee (JORC) Code standard (2004) Resourceestimate and report on the B4-7 Nickel-Copper Deposit. Full details of all the drilling results on the VW Nickel Deposit and the B4-7Nickel Copper Deposit are set out on the website www.landore.com Memorandum of Understanding (MOU) In June 2007 Landore Resources Canada Inc. entered into an Memorandum ofUnderstanding (MOU) with the Whitesand First Nation and Animbiigoo Zaagi'iganAnishinaabek (First Nations) within the Robinson-Superior Treaty Area where bothmaintain overlapping traditional territories in the area north of Lake Nipigonwhich includes the Junior Lake area properties. This agreement formalizes the desire and commitment to develop a positive,mutually beneficial relationship amongst all parties and establishes the processby which this is to be accomplished while Landore is conducting exploration andadvanced exploration activities in the area. Landore recognizes and respects theAboriginal Treaty rights of the First Nations and the communities represented bythe Chiefs of the First Nations support the exploration and advanced explorationactivities of Landore. Included in the MOU is a provision to finalize an Impact and Benefits Agreementshould exploration results lead to completion of a positive Feasibility Studyand before commencement of any mine development. Metallurgical testing SGS Lakefield Research Limited of Lakefield, Ontario, is carrying out additionalmetallurgical testing in preparation for scoping and pre-feasibility studiesscheduled for the second half of 2008. Baseline studies Golder Associates of Sudbury, Ontario, commenced baseline aquatic studies inFebruary 2007 on lakes and drainage tributaries in the vicinity of Junior Lake.These studies, repeated three monthly, are proceeding well and will continuethrough feasibility. In addition Golders have completed a "Fish community and Fish habitat" survey ofLake Ketchikan, which is the lake closest to the VW and B4-7 deposits, inaddition to a "Bedrock resistivity" survey on the northern side of the lake todetermine depth of silt and bedrock competence. Junior Lake claim staking During 2007 Landore staked and recorded 20 new claims to the east and south-eastof the Junior Lake property. The new claims were staked as a direct result ofthe positive advancement of the VW Nickel deposit and the good potential for thediscovery of additional base and precious metal mineralization along strikewithin this geological setting in the East-Central Caribou Lake greenstone belt. The new claims extend the Junior Lake property almost 5 kilometres to the eastand south covering eastern strike extension of the structurally deformed geologyhosting the VW zone. The Junior Lake area properties now extend over a strikelength of 28 kilometres. In addition, Landore has staked and recorded 5 new claims to the north and southof the VW Zone for inclusion within the proposed area being advanced to Leasestatus, required for possible mining. The Junior Lake property now consists of 71 unpatented claims (774 unitscovering 12,384 hectares) plus 2 leases (52.97 hectares) totalling 12,437hectares. Planned works VW Nickel Deposit: Following receipt of the technical report, being carried outby Scott Wilson RPA, a Scoping/engineering study will be completed on the VWNickel deposit in preparation for pre-feasibility studies scheduled to becommenced fourth quarter 2008. In addition, drilling will recommence on the VW Nickel deposit, with 4,000metres being programmed for further extension and infill drilling plus 1,000metres for geotechnical work for open-pit design requirements. B4-7 Deposit: Following receipt of the Resource Estimate, being carried out bySnowden, drilling will recommence on the B4-7 deposit, with 4,000 metres beingprogrammed for further extension and infill drilling. Exploration: 3,000 metres of drilling has been programmed for exploration ofknown mineralized occurrences on the Junior Lake property, with a further 3,000metres allocated for drilling of the "Carrot top zone" and the "Grassy Pondsequence", located on the adjacent optioned Lamaune property. Lessard Property - copper-zinc: The Lessard property, located approximately 107 kilometres north of the town ofChibougamau in the province of Quebec, comprises 91 claims for 1,456 hectares.Lessard hosts a copper-zinc-silver deposit with a historic resource reported ina feasibility study in 1975 by Selco Mining Corporation Ltd of 1,463,835 tons at1.73 per cent. Copper, 2.96 per cent. Zinc, 1.1oz/t Silver and 0.019oz/t Gold,after allowance for dilution. (The resource is not compliant with NI43-101). In 2006 Landore completed a successful drilling campaign on the Lessard depositto confirm previous drilling results. In addition a Geotech VTEM penetratingtime-domain airborne electromagnetic and magnetic survey was carried out overthe entire property. The survey highlighted possible strike extensions of theexisting resource and also developed new targets for follow-up exploration. A second drilling campaign, consisting of 25 NQ diamond drill holes for a totalof 9,581 metres, has been completed on the deposit in early 2008 in order toprovide closer spacing to enable a JORC compliant Resource Estimation and totarget possible strike extensions of the existing deposit. In addition a further six exploration NQ diamond drill holes, for a total of1,056 metres, were drilled on other targets generated by the airborne survey. Drilling results are pending and will be issued in the near future. West Graham/First Nickel Option - Nickel The West Graham property consists of one patented lot owned outright by LandoreResources Inc. of 130 hectares, located in Northern Ontario, 17 kilometres fromSudbury on the southern rim of the Sudbury Intrusive Complex and contains thehistoric "Conwest deposit". The Conwest Deposit was estimated in the 1960's to have mineral inventory of 4.3million tons grading 0.53 per cent. nickel and 0.33 per cent. copper. Thishistoric resource predates the implementation of NI43-101 standards andguidelines and should be considered non-compliant. At depth the Conwest Depositis interpreted to be contiguous with the Lockerby East Zone. First Nickel Inc. entered into an option agreement in November 2005 with LandoreResources Canada Inc. to acquire a 70 per cent. interest in the West Grahamproperty which is strategically located immediately to the south of the EastZone of First Nickel's Lockerby Mine. The agreement provides for First Nickel tomake cash payments to Landore of C$150,000 and carry out exploration anddevelopment expenditures of C$6 million over a four-year period. First Nickel Inc. reported in March 2008 the results of 22 diamond drill holesrepresenting 5,469 metres of diamond drilling on the West Graham Property duringthe 2007 exploration programme and the first two holes of the 2008 explorationprogramme. Results to date have met expectations based on the previous explorationprogrammes completed by First Nickel. Highlights of the drill programme includeFN12045 with 0.59 per cent. Ni and 0.44 per cent. Cu over 70.20 metres,including 1.14 per cent. Ni and 0.60 per cent. Cu over 10.50 metres; and FN12050with 55 per cent. NI and 0.43 per cent. Cu over 86.70 metres, including 1.15 percent. Ni and 0.71 per cent. Cu over 12.70 metres. The current drill programme has been designed to provide the drill densityrequired to complete an NI43-101 compliant Resource Estimate on the ConwestDeposit (which forms part of the West Graham Property). The drill programme hassince been expanded to a total of 10,000 metres based on the results to date andis scheduled for completion in June 2008. The new NI43-10 Resource Estimate willbe completed after all analytical results have been received and modelled fromthe 2007-2008 drill programme. Full details of the drill results are set out on the Company's websitewww.landore.com Miminiska Lake Project - Gold The Miminiska Lake property is located 115 kilometres to the east of PickleLake, Ontario and 180 kilometres to the southeast of the Placer Dome MusselwhiteMine and has a total area of 5,445 hectares. Mineralization is hosted in iron formation in a similar setting to theMusselwhite gold deposit which has so far produced 2.17 million ounces withreserves currently estimated at over 1.77 million ounces. Landore has completed four drilling campaigns between 2003 and 2005 on theMiminiska gold occurrence with 47 NQ diamond drill holes for 9,349 metres,focusing on two potential shoots within a known 800 metres strike length.Excellent results were received with grades reporting up to 131g/t gold over 0.5metres and 40.2g/t over 2.3 metres. No further work has been carried during 2007 whilst the Company is focusing allof its efforts on Junior Lake and Lessard projects. Other properties The Company has other non-core exploration properties which includes grass rootsexploration and defined drill targets. The Company is actively seeking jointventure partners for all these projects. Consolidated income statementfor the year ended 31 December 2007 31 December 31 December 2007 2006 £ £Exploration costs (1,739,758) (1,206,156)Administrative expenses (986,572) (935,747) --------- ---------Operating loss (2,726,330) (2,141,903)Finance income 99,015 175,659 --------- ---------Loss before income tax (2,627,315) (1,966,244)Income tax expense - - --------- ---------Loss for the financial year (2,627,315) (1,966,244) --------- ---------Attributable to:Equity holders of the Company (2,627,315) (1,966,244) --------- ---------Loss per share for losses attributable to theequity holders of the Company during the year- basic (0.023) (0.021) --------- ---------- diluted (0.023) (0.021) --------- --------- The Group's operating loss relates to continuing operations. Consolidated balance sheetat 31 December 2007 At 31 December At 31 December 2007 2006 £ £AssetsNon current assetsGoodwill - -Property, plant and equipment 96,852 47,505Investments - - ---------- ---------- 96,852 47,505 ---------- ----------Current assetsTrade and other receivables 65,787 13,663Cash and cash equivalents 480,184 845,704 ---------- ---------- 545,971 859,367 ---------- ----------Total assets 642,823 906,872 ---------- ----------EquityCapital and reserves attributable to the Company's equity holdersShare capital 1,218,328 1,003,470Share premium 7,951,780 6,021,688Share options 501,163 397,905Warrants 43,571 43,571Retained earnings (9,446,194) (6,827,581)Cumulative translation adjustment 125,924 164,664 ---------- ----------Total equity 394,572 803,717 ---------- ----------LiabilitiesCurrent liabilitiesTrade payables 248,251 103,155 ---------- ----------Total liabilities 248,251 103,155 ---------- ----------Total equity and liabilities 642,823 906,872 ---------- ---------- Consolidated statement of changes in equityfor the year ended 31 December 2007 31 December 31 December 2007 2006 £ £ Loss for the financial year (2,627,315) (1,966,244)Translation adjustment on consolidation 38,740 142,042 ---------- ----------Net loss recognised directly in equity (2,666,055) (1,824,202)Issue of ordinary share capital 214,858 73,437Share premium arising on issue of ordinaryshare capital 1,930,092 631,562Issue costs - (20,000)Issue of share options 111,960 150,374 ---------- ----------Net decrease in shareholders' funds (409,145) (988,829)Opening shareholders' funds 803,717 1,792,546 ---------- ----------Closing shareholders' funds 394,572 803,717 ---------- ---------- Consolidated cash flow statementfor the year ended 31 December 2007 31 December 31 December 2007 2006 £ £Cash flows from operating activitiesOperating loss (2,726,330) (2,141,903)Finance income 99,015 175,659Depreciation of tangible fixed assets 23,200 16,560Foreign exchange (gain)/loss on non-cash items (130,495) 159,657Share based payment 111,960 150,374(Increase)/decrease in debtors (52,124) 9,167Increase/(decrease) in creditors 145,096 (42,459) ---------- ----------Net cash outflow from operating activities (2,529,678) (1,672,945)Cash flows from investing activities Purchase of property, plant and equipment (61,440) (11,653) ---------- ---------- (61,440) (11,653)Cash flows from financing activitiesIssue of ordinary share capital 2,144,950 704,999Issue costs - (20,000) ---------- ---------- 2,144,950 684,999Net decrease in cash and cash equivalents (446,168) (999,599)Cash and cash equivalents at beginning of year 845,704 1,848,807Exchange gains on cash and cash equivalents 80,648 (3,504) ---------- ----------Cash and cash equivalents at end of year 480,184 845,704 ---------- ---------- Accounting policiesBasis of accounting The financial statements have been prepared in accordance with thoseInternational Financial Reporting Standards ("IFRS") standards and InternationalFinancial Reporting Interpretations Committee ("IFRIC") interpretations issuedand effective or issued and early adopted as at the time of preparing thesefinancial statements (April 2008). The financial statements have been prepared on the historical cost basis. Thefunctional currency for the Group is considered to be UK Sterling. The principalaccounting policies adopted are set out below. The Directors consider the going concern basis of preparation to be appropriateas the Company has sufficient cash reserves to permit it to continue trading fora period of at least twelve months following the date of approval of theseaccounts. Landore Resources Limited is domiciled in Guernsey. Changes to accounting standards The Group has adopted IFRS 7 'Financial instruments: Disclosure' and theamendment to IAS 1 'Presentation of financial statements' which are mandatoryfor years ending 31 December 2007. This has resulted in additional disclosuresbut no impact on the reported results or financial position. The following standards and interpretations have been endorsed by the EU by theyear end but are not yet effective for the year ended 31 December 2007: ?International Financial Reporting Interpretations Committee 11 'Group andtreasury share transactions'; and ?International Financial Reporting Standard 8 'Operating Segments'. The Group has considered the impact of these new standards and interpretationsin future periods and no significant impact is expected on the Group's reportedresults or financial position. Neither of the new standards has been adoptedearly. Notes to the financial statementsfor the year ended 31 December 2007 1. Loss from operations 2007 2006 £ £Loss from operation is stated after charging:Depreciation of property, plant and equipment 23,200 16,560Auditors' remuneration - audit services 24,550 25,238 ---------- ---------- 2. Taxation In the year to 31 December 2007, Landore Resources Limited was eligible forexemption from income tax in Guernsey under the Income Tax (Exempt Bodies)(Guernsey) Ordinance 1989 and 1992 as amended. An annual fee of £600 is paid inthis respect. With effect from 1 January 2008, Guernsey abolished the exemptcompany regime. Therefore, the Company will be taxed at the company standardrate of 0 per cent. with effect from 1 January 2008. 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. That company has estimated non-capital losses ofCA$3,117,000 as at 31 December 2007 which expire between 2008 and 2015 (2006:CA$1,020,000 expiring between 2006 and 2009). Landore Resources Canada Inc alsohas a subsidiary, Brancote US Inc, which is subject to taxation in the UnitedStates. This subsidiary has estimated non-capital losses of US$819,000 whichexpire between 2010 and 2020. 3. Mineral properties Accumulated Net expenditure at 1 January expense 31 December 2007 in the year 2007Exploration costs £ £ £Miminiska Lake 1,130,068 1,709 1,131,777Junior Lake 1,911,884 1,782,640 3,694,524Frond Lake 68,304 (618) 67,686Wottam 61,558 - 61,558Lamaune 299,479 1,660 301,139Seeley Lake 86,663 2,423 89,086Lessard 173,157 (54,238) 118,919Other 25,570 6,182 31,752 --------- ---------- ---------- 3,756,683 1,739,758 5,496,441 --------- ---------- ----------3.1 Miminiska Lake Miminiska 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 Lake Junior 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. In addition, Junior Lake includes Auden, a nickel, copper, platinum group ofmetals and gold exploration project. The property consists of 71 staked miningclaims surrounding the two Junior Lake leases and is wholly owned by theCompany, except for a portion that is subject to a 2 per cent. net smelterreturn ("NSR"). 3.3 Frond Lake Frond 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 22 December 2005, the Company purchased the propertyoutright subject to underlying 2 per cent. NSR agreements. 3.4 Wottam The Wottam property is a gold exploration project located 120 kilometres east ofPickle Lake in Northern Ontario, Canada. The property is wholly owned by theCompany and includes 20 claims contiguous to the east of the Miminiska and Frondproperties. 3.5 Lamaune Lake Effective 5 September 2002, the Company entered into an Option Agreement withMichael Stares, Stephen Stares, James Dawson and Stares Contracting Corp.relating 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 earned 51 per cent. interest in the Lamaune Lakeproperty and has the ability to earn a further 29 per cent. subject to theconditions set forth in the Option Agreement. 3.6 Seeley Lake Seeley 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. 3.7 Lessard Lessard is a zinc, copper property comprised of 104 mining claims locatedapproximately 107 kilometres north of the town of Chibougamau, in the provinceof Quebec, Canada. The property is wholly owned by the Company. 3.8 Swole Lake Included in other properties, Swole Lake is a nickel, copper, platinum groupelement property comprised of one claim totalling 144 hectares, contiguous tothe north of the Auden claims. The property was optioned from Stares Corp. on 19June 2006. The Company can earn 100 per cent. interest in the property by makingpayments of $50,000 over three years, subject to a 2 per cent. NSR. 3.9 West Graham Included in other properties, West Graham is a nickel, copper, platinum groupmetals property comprised of one patented lot wholly owned by Landore. Theproperty is located 25 kilometres southwest of Sudbury and 1.5 kilometres eastof the Lockerby Nickel mine. First Nickel Inc. has optioned the property fromLandore and, under the terms of an agreement, can earn 70 per cent. by makingfurther payments and spending $6 million in exploration costs over four yearswith the possibility of earning a further 15 per cent. interest subject tocertain conditions. 4. Loss per share The calculation of the basic loss per share is based on the loss for thefinancial year divided by the weighted average number of shares being115,006,332 in issue during the year. Diluted loss per share The potential ordinary shares which arise as a result of the options in issueare not dilutive under the terms of IAS 33 because they would reduce the lossper share. Accordingly there is no difference between the basic and diluted lossper share. 5. Reconciliation of net cashflow to movement in net funds 2007 2006 £ £Opening net funds 845,704 1,848,807(Decrease)/increase in cash and cash equivalents (446,168) (999,599) ---------- ----------Net funds before foreign exchange 399,536 849,208Exchange gains/losses 80,648 (3,504) ---------- ----------Closing net funds 480,184 845,704 ---------- ---------- 6. Analysis of net funds At 1 January Exchange At 31 December 2007 Cashflow gains 2007 £ £ £ £Cash and cash equivalents 845,704 (446,168) 80,648 480,184 --------- --------- --------- ---------Total 845,704 (446,168) 80,648 480,184 --------- --------- --------- --------- 7. Subsequent events It was announced on 8 April 2008 that the Company had raised £2,001,300 byplacing 13,342,000 new ordinary shares at 1p each at a price of 15p per share tofinance working capital and exploration expenditure. 8. Publication of non statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts. The balance sheet at 31 December 2007 and the profit and loss account, cash flowstatement and associated notes for the year then ended have been extracted fromthe Group's 2007 statutory financial statements upon which the auditors' opinionis unqualified. 9. Annual Report The Annual Report for the year ended 31 December 2007 will be posted toshareholders shortly. The Annual General Meeting of the Company will be held atthe Cavalry & Guards Club, 127 Piccadilly, London W1V 0PX, on 14 May 2008 at11.00 a.m. This information is provided by RNS The company news service from the London Stock Exchange