Minco PLC Regulatory News (MIO)

19 Jun 2006 11:18

Minco PLC19 June 2006 Press Release Minco Plc Reports Final Results for the Year Ended 31 December 2005 London: Monday, 19th June 2006 - Minco plc ("MIO") is pleased to report itsfinal results for the year ended 31st December 2005. The year is characterisedby solid progress on all fronts as the Company continues on its path towardsproject constructions and production. In Mexico, key milestones were achieved. The Laguna Bankable Feasibility Studywas completed and the project now advances towards construction; the acquisitionof the Bilbao interest will provide additional potential with the existingZacatecas properties; and encouraging exploration results at Minera Sisa. In Ireland, the Pallas Green property has returned excellent drilling results,which have continued in to the 2006 financial year as we work to outline thepotential resources on the property. Commenting on the results, Chairman and CEO, Roger Turner said, "Minco has madeconsiderable progress during 2005. Our teams on the ground in Mexico andIreland have worked hard to advance our projects, and I am confident that we aremoving firmly in the right direction towards project construction and ultimatelyproduction." Highlights: Laguna (100% owned) Laguna has achieved a number of key milestones during the year: • Completion of the Bankable Feasibility Study. • Minco believes that the Bankable Feasibility Study can be furtherenhanced, notably through modifications to the proposed tailings disposalsystem. This may offer significant savings to shareholders in both capital andoperating costs. • Additional drilling has increased the resource base (Canadian NI43-101) of Laguna by 1.4 million tonnes to 9 million tonnes, clearing the wayfor an increased annual throughput of 1.25 million tonnes compared to originalestimate of 1 million tonnes while maintaining the mine life. • Resource increased by 23% to 32 million silver equivalent ounces fromprevious 26 million silver equivalent ounces (Canadian NI 43-101). • Granting of operating permit, thereby completing the local approvalprocess: all local regulatory approvals have now been obtained. • Final development decisions are anticipated following the completionof the internal project review which is currently underway. • Receipt of several indicative term sheets from a variety ofinternational financial institutions to provide debt finance, demonstrating theproject's robust economics. Pallas Green (23.6% owned) • Excellent drilling results at Pallas Green take us a step closer tooutlining a resource. • Drilling has now outlined a northwest oriented area 3 km long by 2-3km wide containing occurrences of widespread disseminated to massive sulphidemineralisation with associated zinc-lead mineralisation. • Results from hole 636-24 has opened up a large area of ground whichcould be mineralised south of the Tobermalug prospect towards the BallyneetyFault, a distance of about 1,100 metres. The borehole intersected a zone ofsignificant zinc mineralisation with grades of 11.27% zinc and 0.82% lead over awidth of 1.05 metres from 348.50 to 349.55 metres depth. • Drilling over the winter and early spring has been directed atdefining the outer limits of the mineralised area at Caherconlish. • Follow-up work on the two zones of high grade zinc mineralisation atCaherconlish and Tobermalug will recommence next month and continue throughoutthe summer and autumn months. Minco and its partner at Pallas Green, Falconbridge, have allocated anexploration budget of €1,060,000 (Minco's share €250,000) for 2006. Bilbao (option to acquire up to 75%) • Acquiring an option on Bilbao, a project with a pre-feasibility studycompleted adjacent to Minco's other Zacatecas, Mexico properties. • Historical (non-JORC compliant) oxide resource of 2.44 million tonnes(to a depth of 80m) at an average grade of 92.3 g/t (g/t) silver, 0.39% copper,3.73% zinc and 3.3% lead together with a cadmium by-product. • Minco's option vests in three stages: 1. Already completed, required the issue of 1.2 million shares and thepayment of $100,000 for the right to conduct 6 months initial exploration to aminimum value of $500,000. 2. The second stage provides for of further payment of $300,000 and$500,000 of exploration over a 12 month period. 3. This will lead to the final stage: the vesting of a 75% interest inBilbao. • Initial exploration suggests the presence of copper-silver-zinc-goldbearing sulphide mineralisation occurring beneath the oxide deposits whichcomprise the existing resource. Recent drilling yielded a 15.25 metreintersection, within a 35.0 metre (true width) zone of massive to semi-massivesulphide mineralisation, averaging 2.43% zinc, 0.56g/t gold, 69.0g/t silver,0.29% lead and 0.37% copper. Minera Sisa (50% owned) • Preliminary drilling and sampling on the Minera Sisa project hasconfirmed our confidence in the historic data, confirming the mineralisation tobe low-sulphidation type consistent with many of the other silver-gold depositswithin the Sierra Madre Occidental province of Mexico. • At Zambranena, in the western part of the Santa Cruz property,refurbishment of two underground levels has allowed the completion ofunderground channel sampling at 5 metre intervals on two levels of the JesusMaria vein. • The mean grade of the vein on the main access adit level is 1.58 gramsper tonne gold with 132 grams per tonne. Mean grades on an internal levelaccessed from the main adit level (the Upper Level) are somewhat higher at 2.31grams per tonne gold and 375 grams per tonne silver. • Individual sections of the vein are; however, higher-grade and thedisposition of higher precious metal values suggest that a richer shoot mightcross-cut the main vein with a north-northwest trend. • In addition to the Zambranena prospect, two other areas of interesthave been identified with significant silver-gold (and base metal) potential.These include the San Pablo area in the central part of the Santa Cruz propertyand the La Fragua-Orozco area located further to the east. Other less welldeveloped zones of interest have also been identified. • Minco has designed a drill programme to provide preliminary testing ofthe Zambranena prospect which will commence following the completion of anaccess road, the start of the rainy season and agreement with our partners. Additional cash of £2.7m (€4 million) from exercise of warrants and options • Exercise of 100% of the 20.5 million warrants issued in December 2004,at 12.5p per share totalling to £2.6 million. • Exercise of 2.8 million options resulted in cash proceeds of £160,000. • Increase of the Company's issued share capital to 159,186,580 (from135,884,378) ordinary shares of €0.0125 following the allotment of the newshares. The above information has been reviewed and verified by Mr. Roger Turner, CEOand Chairman of Minco, for the purposes of the Guidance Note for Mining, Oil andGas Companies issued by the London Stock Exchange in March 2006. Mr. Turner,with 40 years of mining engineering, management and consulting experience,graduated as a mining engineer from the Camborne School of Mines, has an MScdegree in Economic Geology from Leicester University and is a member in goodstanding with the Institute of Mining and Metallurgy and a UK CharteredEngineer. Consolidated Profit and Loss Account for the Year Ended 31 December 2005 Year ended 8 Months ended 31 31 December 2005 •'000 December 2004 •'000 General and administration expenses (976) (396) Impairment charge (388) Foreign exchange gain/(loss) 376 (65) Operating loss (600) (849) - Continuing activities (600) (849) Interest income 132 56 Loss before taxation (468) (793) Taxation (22) - LOSS AFTER TAXATION (490) (793) Basic and diluted loss per share (0.35c) (0.79c) The results above are derived from continuing activities. Consolidated Balance Sheet as at 31 December 2005 31 December2005 31 December2004 •'000 •'000 FIXED ASSETS Intangible Assets 11,310 6,527 CURRENT ASSETS Cash and bank 5,562 6,644 Debtors 88 44 5,650 6,688CREDITORS Amount falling due within one year (666) (542) NET CURRENT ASSETS 4,984 6,146 NET ASSETS 16,294 12,673 CAPITAL & RESERVES Called-up share capital 4,365 4,074 Share premium account 17,604 13,870 Profit and loss account - deficit (5,721) (5,315) Capital conversion reserve fund 44 44 SHAREHOLDERS' FUNDS 16,292 12,673 MINORITY INTEREST 2 - 16,294 12,673 Analysed as: EQUITY 13,881 10,261 NON-EQUITY 2,413 2,413 16,294 12,673 Consolidated Cash Flow Statement for the Year Ended 31 December 2005 Year ended 8 months ended 31 December 31 December 2005 2004 •'000 •'000 Net Cash Outflow from operating activities (456) (286) Returns on investments and servicing offinance Interest received 132 56 Capital Expenditure and financial investment Payment in respect of intangible assets (4,781) (1,104) Net Cash outflow from capital investment and (4,649) (1,048)financial investment Acquisitions and disposals Purchase of subsidiary (2) - Net Cash Outflow from acquisitions and (2) -disposals Net Cash Outflow before use of liquid (5,107) (1,334)resources and financing Financing Share Capital issued for cash 4,025 6,419Cost of issue of share capital (389)Net Cash Flow from financing 4,025 6,030 Increase/(decrease) in cash (1,082) 4,696 Consolidated Statement of Total Recognised Gains and Losses for the Year Ended 31 December 2005 Year ended 8 months ended 31 December 2005 31 December 2004 •'000 •'000 Loss for the period (490) (793) Exchange gains on foreign currency net investments 84 6 Total recognised loss for the period (406) (787) Notes: 1. These do not constitute statutory accounts as defined in the CompaniesActs. Statutory accounts for the year ended 31 December 2005 together with areport from the auditors will be filed with the Irish regulatory authorities indue course. 2. The Directors have decided not to pay dividend. 3. Basic earnings per share is computed by dividing the profit or lossafter taxation for the period available to ordinary shareholders by the sum ofthe weighted average number of ordinary shares in issue and ranking for dividendduring the period. Diluted earnings per share is computed by dividing theprofit or loss after taxation for the period by the weighted average number ofordinary shares in issue, adjusted for the effect of all dilutive potentialordinary shares that were outstanding during the period. For twelve months to 31.12.2005 (and eight months to 31.12.2004) thebasic and diluted loss per share were the same, as the effect of the outstandingshare options was anti-dilutive, and was therefore excluded. The computation for basic and diluted earnings per share (EPS) is asfollows: 31 December 2005 31 December 2004 •'000 •'000 Numerator Numerator for EPS - loss (490) (793) Denominator Number ('000) (Number '000) Denominator for basic and diluted EPS 139,802 99,818 Basic and Diluted EPS (0.35c) (0.79c) The annual report and accounts for the company for the year ended 31 December2005 will be posted to shareholders on or before 30 June 2006 and copies ofreport and accounts will be available from that date at Company's registeredoffice at 162 Clontarf Road, Dublin 3, Ireland. For further information please visit www.minco.ie or contact: Danesh Varma, CFO & Secretary +44 (0)20 7397 8154 dvarma@minco.ie Simon Beardsmore, Commercial Manager +44 (0)20 7397 8159 sbeardsmore@minco.ie Chris Rollason, Collins Stewart +44 (0)20 7523 8350 crollason@collins-stewart.com Nick Bias, Buck Bias +44 (0)7887 920 530 nick@buckbias.com Minco Plc is an AIM-quoted precious and base metals exploration and development company with silver projects in Mexico and zinc exploration in Ireland. Ticker Symbol "MIO", www.minco.ie This information is provided by RNS The company news service from the London Stock Exchange