Landore Regulatory News (LND)

3 Apr 2007 17:25

Landore Resources Limited03 April 2007 Landore Resources Limited ("Landore" or "the Company") Final results for the year ended 31 December 2006 The Board of Landore is pleased to announce its audited results for the year to31 December 2006. Chairman's statement Landore has made significant advances in the development of its mineralresources in Canada during 2006 with the primary focus being on the Nickelproject at Junior Lake in the province of Ontario. Financial During the year to 31 December 2006 the Company incurred a loss ofresults £1,966,244 (£4,865,860 in 2005). The majority of these expenses are represented by direct or indirect investments in mineral exploration. The annual overhead for running expenses of the public company and administration costs are approximately £200,000 per annum. Junior Lake The principal focus of the Group's activities is the Junior Lake- Nickel Nickel project situated approximately 235 kilometres northeast ofproject Thunder Bay in the province of Ontario. During 2006 significant exploration success has been achieved on this project. This can be summarised as follows: - An infill drilling programme completed on the VW Nickel Zone has established a resource containing 14,300 tonnes of nickel and 2,100 tonnes of copper, as verified by an independent consultant. - The resource has excellent potential to be increased in size and improved in grade, being open at both ends and at depth together with significantly higher grades (+1 per cent. nickel) being reported at the western end of the drilled resource. - Metallurgical testing of composite material from the VW Zone has returned good recoveries of up to 82 per cent. nickel and 90 per cent. copper. - The historic B4-7 nickel deposit has been reassessed and shows the potential to become an economic deposit. The above successes have encouraged us to aggressively push forward this project to a scoping study and development plans for early production in order to take advantage of the current nickel price boom. Lessard - The Lessard project is centred on a historic VMS deposit locatedCopper-zinc approximately 107 kilometres north of Chibougamau in the province ofproject Quebec. A drilling programme in 2006 has confirmed high grade zinc mineralization, which includes a 0.5 metre section of 48 per cent. zinc. These results, together with other technical surveys, have given us encouragement to advance the Lessard deposit towards possible development. West Graham This property is optioned to First Nickel Inc. and is situated in- Nickel the Sudbury basin. First Nickel, having recently completed theirproject second substantial drilling campaign on Landore's West Graham property, continues to demonstrate its strong interest in the property. Excellent results were received from the above campaign, extending the known zone associated with the Conwest Deposit 200m to the east, together with discovering platinum group element (PGE) mineralization in the footwall granites. First Nickel has proposed a $900,000 exploration programme, primarily drilling, on West Graham this year. Nickel and Landore is fortunate to be developing three projects whose mineralmetal assets are predominantly in nickel, zinc and copper. All of theseprices metals are enjoying a price boom, driven largely by Chinese demand and limiting factors on supply. Nickel, which is mainly used in the manufacture of stainless steel, is performing extremely robustly. Recent price levels have been in excess of US$40,000 per tonne and the fundamentals remain strong for the forseeable future. Funding Funding of Landore's exploration programme for 2006 came firstly, from funds carried over from 2005 and secondly, by a private placement to subscribers of 7,343,748 shares for gross proceeds of £705,000 in November 2006. Further fund raising will be required in the near future to allow Landore to continue with its development programme on the highly prospective Junior Lake and Lessard properties. Outlook Landore is planning two further significant drilling campaigns both at the Junior Lake Nickel project and the Lessard copper / zinc project which will add shareholder value and advance the projects towards mine development. Shareholders will be kept informed as results flow from these programmes on a regular basis during 2007. I would like to thank management and staff at Thunder Bay for their excellent contribution towards the Company's sound performance this past year. My thanks are extended to my fellow Directors. William HumphriesChairman3 April 2007 Operations report IntroductionLandore 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. andoption 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 The Junior Lake properties are located in the province of Ontario,Lake project approximately 235 kilometres north-northeast of Thunder Bay and are- Nickel situated within the Caribou-O-Sullivan Greenstone Belt in the Wabigoon Subprovince During 2006 a diamond drilling campaign significantly advanced both the VW Zone nickel deposit and the adjacent B4-7 nickel-copper deposit towards possible mining development. The VW Zone Discovered only in November 2005, is located at the southeasternNi end of the Junior Lake property. The Zone has been drilled with 45Resource diamond NQ drill holes for a total of 11,366m at a general grid spacing of 50m x 50m over 300m of strike length x 200m wide and to an average depth of approximately 250m. The VW Zone contains 5 sub-zones, the widest and most continuous being 'Katrina', which lies along the southern contact with the ultramafic sequence. The westernmost section drilled on the Katrina horizon has 16 intersections greater than 1 per cent. Ni. The Katrina zone remains open to the east and west and at depth. Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"), Toronto, have prepared a resource estimate / NI 43-101 compliant technical report for the VW Zone. VW Zone InferredResource Ni Cu Nickel Copper Tonnes per cent. per cent. tonnes tonnes 4,202,776 0.34 0.05 14,300 2,100 Based on Scott Wilson RPA's review of metal prices, mill recoveries, generic smelter recoveries and terms, preliminary transport costs and estimate of preliminary open pit mine operating costs likely to apply at the VW Zone site, the 0.2 per cent. Ni cut-off grade is reasonable for the statement of Inferred Resources at this time. Mineral resources were estimated by Scott Wilson RPA using assumed long term metal US$ prices of $7.00/lb nickel (Ni), $1.50/lb copper (Cu), $875/oz platinum (Pt), $300/oz palladium (Pd) and $500/oz gold (Au). Current metal prices are significantly higher than the assumed prices. These results are very encouraging, particularly as the Inferred Resource has been delineated on just 300m of strike length and to an average depth of approximately 250m. The VW Zone remains open along strike at both ends and to depth where there is potential to develop additional resources. Accordingly, Scott Wilson RPA have been engaged to undertake a scoping study (preliminary assessment) to determine potential economics for mining the VW and B4-7 Zones and to identify the target resource base that will support mining at the Junior Lake project. Scott Wilson RPA has recommended additional exploration drilling to expand the resources to depth, particularly on the northern side of the VW deposit where the sub-zones are tested to shallower depths compared to the southerly sub-zones, and on the west side, following which the VW Zone modelling and resource estimate should be updated. Contingent on results from the above drilling and the outcome of the Scoping Study, Scott Wilson RPA has recommended that we carry out in-fill drilling where necessary to bring the spacing in the VW Zone to 25m x 25m in order to upgrade resources to Indicated Resources. The B4-7 Lies 3 kilometres west of the VW Zone and has been delineated by 63Ni-Cu diamond drill holes, drilled over a period from 1969 to 2006, for adeposit total of 14,388m over 520m of strike length and to an average depth of approximately 250m. An independent estimate of exploration potential was prepared for the B4-7 Zone by Scott Wilson RPA in March 2006. 3D computer block modelling and cut-off grade of 0.25 per cent. nickel equivalent were used for the estimate. B4-7 Deposit Tonnes Ni Cu Co Au Pt Pd Nickel Copperestimate of millions per cent. per cent. ppm ppb ppb ppb tonnes tonnespotential 1.5 to 0.6 0.40 606 40 90 460 9,000 6,000tonnage 2.0 0.7 0.48 670 50 95 525 14,000 9,600and grade The estimate of the exploration potential in March 2006, assumed long term metal US$ prices of $3.50/lb nickel (Ni), $1.10/lb copper (Cu), $750/oz platinum (Pt), $275/oz palladium (Pd) and $400/oz gold (Au). Again it should be noted that current metal prices are significantly higher than the assumed prices. The potential quantity and grade of the B4-7 Zone is conceptual in nature and there has been insufficient exploration, primarily metallurgical work, to permit defining a mineral resource. It is uncertain if further exploration work will result in the B4-7 Zone being delineated as a mineral resource. Scott Wilson RPA recommended at the time that additional drilling be carried out to in-fill gaps in the zone and to provide material for modern metallurgical work to improve nickel recovery. A 7 hole diamond drill programme was completed late last year on the B4-7 deposit which successfully in-filled several of the gaps and extended the deposit to the west. A composite of ore has been submitted for preliminary metallurgical testing for the recovery of Ni.-Cu.-PGE minerals. Results are pending. Proposed A 15,000m NQ diamond drill campaign is scheduled to commence in works April on the VW and B4-7 deposits, of which: 9,000m is allocated programme for extension and partial in-fill on the VW deposit; 3,000m for 2007 in-fill on the B4-7 deposit; 2,000m for metallurgical testing on both deposits and 1,000m for geotechnical work on the VW deposit for open-pit design requirements. Additional metallurgical flotation testing is scheduled for the VW and the B4-7 deposits to optimize recovery and concentrate grades. Golder Associates have been retained by Landore to carry out Base Line Aquatic studies on the lakes and drainage tributaries in the vicinity of the Junior Lake projects. Lessard - The Lessard property, located approximately 107 kilometres north Copper-zinc of the town of Chibougamau, in the province of Quebec, comprising project 91 claims for 1,456 hectares, hosts a copper-zinc-silver deposit with a historic resource reported in a feasibility study in 1975 by Selco Mining Corporation Ltd of 1,463,835 tons at 1.73 per cent. Cu, 2.96 per cent. Zn, 1.1oz/t Ag and 0.019oz/t Au after allowance for dilution. (The resource is not compliant with 43-101). A Geotech VTEM penetrating time-domain airborne electromagnetic and magnetic survey was carried out, in late April 2006, over the entire property. The survey highlighted possible strike extensions of the existing resource and also developed new targets for follow-up exploration. A drilling campaign consisting of 7 holes of NQ size core for 1,731m has recently been completed along the extent of the historic resource. The results generally confirmed the previous drilling carried out by Selco Mining. Mineralised intersections Drill-hole From Width Zinc Copper Silver GoldInclude No metres metres per cent. per cent. gpt gpt 0906-02 85.2 0.9 7.13 1.15 107.0 0.46 0906-03 143.8 9.2 5.33 0.89 23.3 0.30 includes 149.1 2.3 16.94 0906-04 286.8 1.6 1.42 2.06 68.3 0.80 0906-05 381.5 2.9 5.61 2.42 122.0 0.60 0906-06 220.7 6.1 5.96 1.89 39.1 0.70 0906-07 337.5 3.4 12.36 0.22 15.6 0.10 includes 381.5 0.5 48.00 In addition, hole 0906-07 which was designed to target a large gap in the previous drilling, intersected sulphide breccia over 3.4m including semi massive sphalerite over the lower 0.5m (assayed 48 per cent. zinc). The historical and current drilling results indicate that the resource is open along strike to the south and north at depth. Proposed A second drilling campaign is planned for 2007 in order to drill works at closer spacing to enable resource estimation, to target programme possible strike extensions of the existing resource, exploration 2007 of other targets generated by the airborne survey and to provide core for metallurgical studies. The positive results from the recent confirmation and infill drilling, is sufficiently encouraging to advance the Lessard deposit towards possible development. West Graham The West Graham property consists of one patented lot owned /First outright by Landore Resources Inc. of 130 hectares. Nickel Option - First Nickel Inc. entered into an option agreement with Landore Nickel Resources Canada Inc. to acquire a 70 per cent. interest in the West Graham property which is strategically located immediately to the south of the East Zone of the Lockerby Mine within the Sudbury basin. The agreement provides for First Nickel to make cash payments to Landore of C$150,000 and carry out exploration and development expenditures of C$6 million over a four-year period. Should First Nickel fully exercise the option, Landore shall decide whether it wishes to participate to the extent of its 30 per cent. working interest in the development of the property, failing which, First Nickel shall have the right to increase its interest to 85 per cent. by completing a bankable feasibility study within two years thereafter. Deposit A resource estimate completed by the Conwest Exploration Company Limited in the 1960'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 Canadian National Instrument 43-101. 2006 In December 2006, First Nickel completed their second drilling exploration programme on the West Graham Property, consisting of 21 diamond programme drill holes for a total of 9,731m. First Nickel's drilling programme was successful in discovering "no seeum" or low sulphide type platinum group element (PGE) mineralization, hosted in the footwall granites stratigraphically below the Conwest deposit and associated with a Subury breccia and less than 5 per cent. sulphides. Drill hole FNI2020, drilled sub parallel to the Sudbury Igneous Complex (SIC) contact in the footwall of the Conwest deposit, intersected several zones of elevated PGE mineralization including 1.35m of 1.82 gpt Pt, 1.17 gpt Pd and 0.77 gpt Au and 0.57m of 2.7 gpt Pt, 1.93 gpt Pd and 0.13 gpt Au. In addition, drilling successfully extended the disseminated sulphide zone associated with the Conwest deposit approximately 200m to the east of the previously interpreted edge. Several holes intersected significant widths of disseminated nickel-copper mineralization, including hole FNI2028 that intersected 71.50m of 0.51 per cent. Ni and 0.34 per cent. Cu including 4.80m of 1.04 per cent. Ni and 0.31 per cent. Cu, and FNI2016 that intersected 19.05m of 0.52 per cent. Ni and 0.38 per cent. Cu. Significant Drill Intercepts in the 2006 West Graham Diamond Drill Hole Programmes Hole From To Length Ni Cu Co Au Pt Pd Ag Metres per per per ppm ppm ppm Gpt cent. cent. cent.FNI2010 450.00 451.10 1.10 1.79 0.20 0.040 0.05 0.46 0.08 1.00FNI2011 425.95 426.45 0.50 1.59 0.07 0.030 0.01 0.34 0.09 0.70FNI2012 297.90 309.10 11.20 0.43 0.36 0.016 0.04 0.08 0.03 1.78FNI2013 460.60 461.30 0.70 1.98 0.41 0.060 0.15 0.06 0.18 1.60FNI2015 378.30 379.60 1.30 1.39 0.65 0.040 0.09 0.17 0.37 3.40FNI2016 430.80 449.85 19.05 0.52 0.48 0.019 0.05 0.09 0.03 2.23Incl. 447.25 447.60 0.35 3.77 0.36 0.090 0.01 0.36 0.04 2.70FNI2020 663.60 664.95 1.35 0.18 0.14 0.001 0.77 1.82 1.17 3.31 673.70 674.00 0.30 0.08 0.04 0.001 0.24 1.05 0.56 0.70 675.43 676.00 0.57 0.21 0.07 0.001 0.13 2.70 1.93 2.10 683.95 684.90 0.95 0.06 0.00 0.001 0.04 1.00 0.69 1.00FNI2028 163.00 234.50 71.50 0.51 0.34 0.018 0.02 0.06 0.02 1.70Incl. 189.00 203.30 14.30 0.83 0.44 0.029 0.02 0.07 0.03 1.85Incl. 189.00 189.70 0.70 2.29 0.93 0.080 0.02 0.06 0.06 4.00Incl. 198.50 203.30 4.80 1.04 0.31 0.033 0.02 0.07 0.03 1.29FNI2029 157.70 169.70 12.00 0.51 0.31 0.023 0.02 0.06 0.02 1.53 All assay intervals reported are core length and do not represent true widths (defined as being measured at right angles to the direction of extension of the sulphide body). Proposed A $900,000 exploration programme has been proposed for the West works Graham Property in 2007. The exploration programme will consist programme primarily of diamond drilling with associated borehole geophysics2007 and may include a component of surface stripping and trenching. Miminiska The Miminiska Lake property is located 115 kilometres to the eastLake project of Pickle Lake, Ontario and 180 kilometres to the southeast of - Gold the Placer Dome Musselwhite Mine. 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 the Musselwhite gold deposit which has so far produced 1.4 million ounces with reserves currently estimated at over 2 million ounces. Landore has completed four drilling campaigns over the past two years on the Miminiska gold occurrence with 47 NQ diamond drill holes for 9,349m, focusing on two potential shoots within a known 800m strike length. Significant drill intersections include: • 40.2g/t gold over 2.4m; • 9.7g/t gold over 4.3m; • 9.8g/t gold over 2.2m; • 9.8 g/t gold over 3.5m; • 132.1 g/t gold over 0.5m No further work has been carried during 2006 whilst the Company is focusing all of its efforts on Junior Lake and Lessard projects. Other The Company has other non-core exploration properties which properties includes grass roots exploration and defined drill targets. The Company is actively seeking joint venture partners for these properties. Consolidated income statementfor the year ended 31 December 2006 Notes Period from 16 February 2005 to 31 December 31 December 2006 2005 £ £Exploration costs 3 (1,206,156) (713,986)Administrative expenses (935,747) (727,709)Impairment of goodwill - (3,486,377) __________ ___________ Operating loss (2,141,903) (4,928,072)Interest receivable and otherincome 175,659 62,212 ___________ ___________ Loss before income tax (1,966,244) (4,865,860)Income tax expense 2 - -Loss for the period 1 (1,966,244) (4,865,860) ___________ ___________ Attributable to:Equity holders of the Company (1,966,244) (4,865,860) ___________ ___________Earnings per share for profitattributable to the equity holders ofthe Company during the year (expressedin £ per thousand shares)- basic and diluted 4 (0.021) (0.066) ___________ ____________ The Group's operating loss relates to continuing operations. Consolidated balance sheetat 31 December 2006 Group Group At 31 At 31 December December 2006 2005 £ £AssetsNon current assetsGoodwill - -Property, plant and equipment 47,505 63,573Investments - - ____________ ___________ 47,505 63,573 ____________ ___________Current assetsTrade and other receivables 13,663 24,653Cash and cash equivalents 845,704 1,848,807 ____________ ___________ 859,367 1,873,460 ____________ ___________Total assets 906,872 1,937,033 ____________ ___________EquityCapital and reserves attributable to theCompany's equity holdersShare capital 1,003,470 930,033Share premium 6,021,688 5,410,126Share options 397,905 247,531Warrants 43,571 43,571Retained earnings (6,827,581) (4,861,337)Cumulative translation adjustment 164,664 22,622 ____________ ____________Total equity 803,717 1,792,546 ____________ ____________LiabilitiesCurrent liabilitiesTrade payables 103,155 144,487 ____________ ____________Total liabilities 103,155 144,487 ____________ ____________Total equity andliabilities 906,872 1,937,033 ____________ ____________ Consolidated statement of changes in equityfor the year ended 31 December 2006 Period ended 31 December 31 December 2006 2005 £ £ Loss for the financial year (1,966,244) (4,865,860)Lapse of warrants credited to reserves - 4,523Translation adjustment on consolidation 142,042 22,622 ____________ ____________ Net loss recognised directly in equity (1,824,202) (4,838,715)Issue of ordinary share capital 73,437 930,033Share premium arising on issue ofordinary share capital 631,562 5,875,204Issue costs (20,000) (465,078)Issue of warrants - 43,571Issue of share options 150,374 247,531 ____________ ____________Net (decrease)/increase in shareholders' funds (988,829) 1,792,546Opening shareholders' funds 1,792,546 - ____________ ____________Closing shareholders' funds 803,717 1,792,546 ____________ ____________ Consolidated cash flow statementfor the year ended at 31 December 2006 31 31 December December 2006 2005 £ £Cash flows from operating activitiesOperating loss (1,966,244) (4,865,860)Depreciation of tangible fixed assets 16,560 36,696Impairment of goodwill - 3,486,377Foreign exchange loss on non-cash items 159,657 -Share based payment 150,374 169,855Decrease in debtors 9,167 566(Decrease)/increase in creditors (42,459) 18,437 ____________ ___________ Net cash outflow from operating activities (1,672,945) (1,153,929)Cash flows from investing activitiesAcquisition of subsidiary, net of cash acquired - 693,642Purchase of property, plant and equipment (11,653) (50,078) ____________ ___________ (11,653) 643,564Cash flows from financing activitiesIssue of ordinary share capital 704,999 2,803,084Issue costs (20,000) (447,829) ____________ ___________ 684,999 2,355,255Net increase in cash and cash equivalentsCash and cash equivalents at beginning of year 1,848,807 -Exchange (losses)/gains on cash andcash equivalents (3,504) 3,917 ____________ ___________Cash and cash equivalents at end of year 845,704 1,848,807 ____________ ___________ Accounting policiesBasis of accounting The financial statements have been prepared in accordance with thoseInternational Financial Reporting Standards ("IFRS") and interpretations of theInternational Financial Reporting Interpretations Committee ("IFRIC")interpretations in force or adopted early, as at the time of preparing thesefinancial statements (February 2007). 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. Notes to the financial statementsfor the year ended 31 December 2006 1. Loss from operations 2006 2005 £ £Loss from operation is stated after charging:Impairment of goodwill - 3,486,377Depreciation of property, plant and equipment 16,560 36,696Auditors' remuneration - audit services 25,238 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) Ordinance 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. That company has estimated non-capital losses ofCA$1,020,000 as at 31 December 2006 which expire between 2006 and 2009. 3. Mineral properties 1 January 2006 Expenditure in Accumulated the year expenditure at 31 December 2006 £ £ £Miminiska Lake 1,127,214 2,854 1,130,068Junior Lake 940,179 971,705 1,911,884Frond Lake 57,791 10,513 68,304Wottam 61,558 - 61,558Lamaune 271,362 28,117 299,479Seeley Lake 80,431 6,232 86,663Lessard 2,455 170,702 173,157Other 9,537 16,033 25,570 ----------------- ---------------- ------------------ 2,550,527 1,206,156 3,756,683 ----------------- ---------------- ------------------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. In addition, Junior Lake includes Auden, a nickel, copper, platinum group ofmetals and gold exploration project. The property consists of 34 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 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 22 December 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 120 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 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 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. 3.7 LessardLessard is a zinc, copper property comprised of 103 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 LakeIncluded in other properties is an amount of $7,566 for Swole Lake, which is anickel, copper, platinum group element property comprised of one claim totalling144 hectares, contiguous to the north of the Auden claims. The property wasoptioned from Stares Corp. on 19 June 2006. The Company can earn 100 per cent.interest in the property by making payments of $50,000 over three years. 4. Loss per shareThe calculation of the basic loss per share is based on the loss for thefinancial year divided by the weighted average number of shares being 93,767,865in issue during the year. Diluted loss per shareThe potential ordinary shares which arise as a result of the options in issueare not dilutive under the terms of IAS33 because they would not increase theloss per share. Accordingly there is no difference between the basic anddilutive loss per share. 5. Reconciliation of net cashflow to movement in net funds 2006 2005 £ £Opening net funds 1,848,807 -(Decrease)/increase in cash (999,599) 1,848,807 ------------- --------------Change in net funds resulting from cash flows 849,208 1,848,807Exchange losses (3,504) - ------------- --------------Closing net funds 845,704 1,848,807 ------------- -------------- 6. Analysis of net funds At 1 January Cashflow Exchange At 31 December 2006 £ losses 2006 £ £ £Cash at bankand in hand 1,848,807 (999,599) (3,504) 845,704 ------------ ------------ ------------ --------------Total 1,848,807 (999,599) (3,504) 845,704 ------------ ------------ ------------ -------------- 7. Publication of non statutory accountsThe financial information set out in this preliminary announcement does notconstitute statutory accounts. The balance sheet at 31 December 2006 and the profit and loss account, cash flowstatement and associated notes for the year then ended have been extracted fromthe Company's 2006 statutory financial statements upon which the auditors'opinion is unqualified. 8. Annual ReportThe Annual Report for the year ended 31 December 2006 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 1 May 2007 at11.00 a.m. This information is provided by RNS The company news service from the London Stock Exchange