Minco PLC Regulatory News (MIO)

10 May 2007 07:01

Minco PLC10 May 2007 Minco Plc REPORTS FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 London: 10th May 2007 - Minco plc (MIO) is pleased to report its final resultsfor the year ended 31st December 2006. Considerable success at two importantprojects has focussed Minco's efforts towards early production and cashflow fromBilbao in Mexico and further exploring the Caherconlish zinc / lead discovery inthe Pallas Green licence area, Ireland. • The year has seen significant advances at the company's 75% ownedBilbao project with Shoshone Silver Mining near Zacatecas, Mexico, where wepublished an initial sulphide resource estimate in January and arecently-completed pre-feasibility study has demonstrated a robust projectcapable of producing lead and zinc concentrates with by-product silver from anunderground mining operation. The company is now moving towards a full "bankable Feasibility" study with a view to bringing Bilbao to production asexpeditiously as possible. • The company is also greatly encouraged by continuing success at itsPallas Green joint-venture with Xstrata in Ireland where Minco holds a 24%interest in an extensive lead-zinc exploration area in the southern part of theMidland orefield between Limerick and Tipperary. With around 70% of the licencearea still to be explored, five mineralised sulphide lenses have been discoveredand Minco recently reported the highest grade drill intersection encountered sofar at Pallas Green with a combined lead / zinc grade of 34.6% over 2.25metres. • In the light of lower than expected recoveries from vat leachingtestwork and the need to develop an effective mining method now that the lake isdry means that the Laguna tailings re-treatment is no longer the flagshipproject for the company. Although Minco continues to explore ways to bringLaguna to production in an efficient and environmentally responsible manner, thecompany believes that the interests of shareholders will be better served by thedevelopment of production at Bilbao and the pursuit of further explorationsuccess at Pallas Green. Similarly, further work at Minera Sisa will bedeferred, in the short term, to the development of Bilbao. Commenting on the results, Chairman and CEO, Roger Turner said "The importantachievement of our exploration team in Mexico allowed us to complete apre-feasibilty study and 9,000 metres of drilling on the Bilbao project lessthan a year after we acquired our interest in the property and has given Minco aproject which can be brought rapidly to production using established mining andprocessing techniques. Pallas Green, meanwhile, holds out the tantalisingprospect of hosting a new deposit comparable to those already in production atthe nearby Lisheen and Galmoy mines in Ireland." Highlights • Completion of the Bilbao sulphide pre-feasibility study demonstrates aneconomically viable and technically robust project which can be fast-tracked toproduction • Additional upside is available through exploitation of the overlyingoxide ores at Bilbao if further testwork demonstrates the viability ofrecovering silver and lead as well as zinc • Recent drilling at Pallas Green has intersected the highest metalgrades encountered so far and drilling activity is being stepped up with fivedrilling rigs to be deployed by early May Consolidated Profit and Loss Account for the Year Ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 US$'000 •'000 US$'000 •'000 General and administration expenses (1,041) (828) (1,314) (1,029) Foreign exchange (loss)/gain (127) (101) 479 376 (1,168) (929) (835) (653)Operating loss- Continuing activities (1,168) (929) (835) (653) Interest income 150 120 169 132 Loss before taxation (1,018) (809) (666) (521) Taxation - - (28) (22) LOSS AFTER TAXATION (1,018) (809) (694) (543) Basic and diluted loss per share (0.64c) (0.51c) (0.50c) (0.39c) The results above are derived from continuing activities. Consolidated Balance Sheet as at 31 December 2006 31 December 2006 31 December 2005 US$'000 •'000 US$'000 •'000FIXED ASSETSIntangible assets 17,057 14,955 12,526 11,310CURRENT ASSETSCash and bank 1,842 1,395 6,643 5,562Debtors 91 88 105 88 1,933 1,483 6,748 5,650CREDITORSAmount falling due within one year (694) (544) (796) (666) NET CURRENT ASSETS 1,239 939 5,952 4,984 NET ASSETS 18,296 15,894 18,478 16,294 CAPITAL & RESERVESCalled-up share capital 4,449 4,380 4,431 4,365Share premium account 20,936 17,850 20,639 17,604Revenue reserves 365 141 1,292 83Share option reserve 168 141 158 132Profit and loss account - deficit (7,664) (6,664) (8,083) (5,936)Capital conversion reserve fund 39 44 39 44SHAREHOLDERS' FUNDS 18,293 15,892 18,476 16,292MINORITY INTEREST 3 2 2 2 18,296 15,894 18,478 16,294 Analysed as:EQUITY 15,882 13,480 16,064 13,881NON-EQUITY 2,413 2,413 2,413 2,413 18,296 15,894 18,478 16,294 Consolidated Cash Flow Statement for the Year Ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 US$'000 •'000 US$'000 •'000 Net cash outflow from operating activities (882) (769) (1,584) (456) Returns on investments and servicing of finance Interest received 150 120 169 132 Capital expenditure and financial investmentPayment in respect of intangible assets (4,216) (3,385) (5,907) (4,781) Net cash outflow from capital investment andfinancial investment (4,066) (3,265) (5,738) (4,649) Acquisitions and disposals Purchase of subsidiary - - (3) (2) Net cash outflow from acquisitions and disposals - - (3) (2) Net cash outflow before use of liquid resources andfinancing (4,948) (4,034) (7,325) (5,107) Financing Share capital issued for cash - - 4,819 4,025Cost of issue of share capital - - - -Net cash flow from financing - - 4,819 4,025 Decrease in cash (4,948) (4,034) (2,506) (1,082) Consolidated Statement of Total Recognised Gains and Losses for the Year Ended 31 December 2006 Year ended Year ended 31-Dec-06 31-Dec-05 US$'000 •'000 US$'000 •'000Loss for the period (1,018) (810) (666) (490)Exchange gains/(losses) on foreign currency 365 141 1,292 85Net investmentsTotal recognised (losses)/gains for the period (653) (669) 626 (404) Notes: 1 These do not constitute statutory accounts as defined in the CompaniesActs. Statutory accounts for the year ended 31 December 2006 together with areport from the auditors will be filed with the Irish regulatory authorities indue course. 2 The company has changed the reporting currency from Euros to US Dollarseffective January 1 2006 and the resulting increase in Total recognised gains of$285,000 has been credited to the Profit & loss account-deficit. Figures havebeen presented both in Euros and US Dollars for ease of comparison. 3 FRS 20 'Share-based Payments' requires the recognition of share-basedpayments (which in the case of the group during the period are share optionsonly) at fair value at the date of grant. Prior to the adoption of FRS 20, thegroup did not recognise the financial effect of share-based payments. Thestandard has been applied retrospectively to all grants of share options after29 July 2003 which had not vested by 1 January 2006. The fair value of theoptions to be expensed had been determined using the Black Scholes optionpricing model using a volatility factor of 65.28% and an option life of 7 yearsas the significant assumptions. For the year ended 31 December 2006, the adoption of the new accounting policyhas resulted in a charge of US$ 10,000 (€8,000) (2005 - originally nil, US$71,000 or • 56,000 when restated) to the Profit and Loss account. The BalanceSheet at 31 December 2005 has been restated to reflect share-based paymentsprior to 1 January 2006 of US$ 158,000 (• 132,000), resulting in a cumulativeadjustment of US$ 168,000 (• 140,000) in December 2006 shown as share optionreserve in the Balance Sheet under Capital & Reserves. 4 The Directors have decided not to pay dividend. 5 Bas ic 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 the year ended 31 December 2006 (and 2005) the basic and dilutedloss per share was the same, as the effect of the outstanding share options wasanti-dilutive, and was therefore excluded. The computation for basic and diluted earnings per share (EPS) is asfollows: 31.12.2006 31.12.2005 $'000 •'000 $'000 •'000NumeratorNumerator for EPS - loss (1,018) (809) (694) (490) DenominatorDenominator for basic and diluted EPS (No. of shares) 160,041,000 139,802,000 Basic and Diluted EPS (0.64c) (0.51c) (0.50c) (0.35c) The annual report and accounts for the company for the year ended 31 December2006 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 65-68 St Stephen's Green, Dublin 2, Ireland. This information is provided by RNS The company news service from the London Stock Exchange